Matrix Partners India (aka Z47) rebrands to Z47. It is surreal to imagine how far the Indian entrepreneurial ecosystem has come since 2004. There was a time not long ago, if Flipkart had a successful fundraise, the entire ecosystem knew it was a bull year. It is insane to imagine how much the gen 1 entrepreneurs & VCs have put in to keep the fire on. Here are 10 phases where OG VC/entrepreneurs pulled off something shape-shifting for the entire ecosystem. 1. Subrata Mitra and Prashanth Prakash (founders of Erasmic, now Accel in India) make their 1st investment in Dhiraj Rajaram [Mu Sigma Inc.] This was where it all began. 2. Vani Kola started Indo-US venture partners with New Enterprise Associates (NEA) which became Kalaari Capital Sudhir Sethi & TCM Sundaram start Chiratae Ventures with IDG (International Data Group). Naren Gupta, Sandeep Singhal & Suvir Sujan start Nexus Venture Partners Matrix enters the market with Avnish Bajaj. This is the first time global capital believed the India tech story. 3. Tiger invests $9 million in Flipkart in 2009! This is when we learn about potential global investors who can put in large follow-on checks. Before this, noone knew anything about follow-ons. 4. Between 2008-2014: Other funds start popping up at different stages. Liquidity increases. Blume Ventures, Orios Venture Partners, Kae Capital. 5. Myntra acquired by @Flipkart for $300M. Snapdeal acquires Freecharge for $400M Zomato acquires Runnr to open up delivery. We learn that we can create our own liquidity. 6. Flipkart, Housing.com, Swiggy, Zomato start paying massive premiums to get access to top talent in good institutes. This is when a new gen of talent flooded the ecosystem. 7. Between 2008-2016: Sequoia misses the e-commerce wave, gets aggressive. Lightspeed India enters. Softbank enters. Elevation Capital (Saif) starts early tech. Tencent invests in Practo. This is when capital increases at every stage - our risk appetite increases as well. 8. Flipkart sells to Walmart for $17 billion. We realize that India tech can also have generous exits. 9. 2015-2024: Housing.com goes bust. BharatPe defrauds. GoMechanic.in misstates numbers. We learn the importance of corporate governance. 10. 2019-2023: - Surge is launched, with unprecedented velocity & seed valuations. - Large funds realize they need a seed fund to get early access. - YC gets aggressive in India. - Markets go frenzy - cheap capital, new normal of covid, bloated valuations. Founders learn how to play the information arbitrage game to pump up valuations. 2024, we realize, valuations are not correlated with value creation. As I look back to the last 20 years, we would never have been here as an ecosystem if not for the above pioneers and several other unsung heroes who worked day and night to make entrepreneurship a tad bit easier. It is key to remember these lessons and build on top of these as we take on even harder battles in the coming years.
Wonderfully articulated Nayrhit B
“Its amazing to have come so far from a time when Flipkart had a successful fundraise, the entire ecosystem knew it was a bull year. To the time whenever Flipkart(Walmart) has a buy back then land prices go soaring in Bengaluru. On a serious note, its really amazing post this, celebrating and lauding the anchors of the capitalist ecosystem of India.”
Very well summarised, although I feel that you focused only on institutional funds and could add points on: 1. The roles of Angel Investors (include vehicles like Titan Capital, Rainmatter by Zerodha, and more) 2. The impact of Shark Tank India
A lot has happened in the Indian startup space over the last 2 decades, which leaves us with a plethora of knowledge to learn from.
Extremely Interesting!
Excellent Sum up Nayrhit B … important for non VC to learn and understand how it works. Great stuff
Loved reading about the evolution of the Indian Startup/VC ecosystem, Nayrhit B. Glad it's burgeoning now.
"2024, we realize, valuations are not correlated with value creation." Beautifully penned and so insightful, Nayrhit!
And this is just the beginning, they say! Very well summarized Nayrhit!
Although I wasn’t grown up enough to first hand witness all of this happening, all of this feels so real and close. The Indian Ecosystem has indeed come a long long way! Always grateful to be a tiny part of it.