Dr. Apoorv Ranjan from Venture Catalyst On Opportunity In FinTech and Investment Predictions Of 2017
EdTech found itself on the top shelf, followed by FinTech in 2016. India has become a hotbed for innovation as tech startups are disrupting ideas in virtual reality, artificial intelligence, online classrooms and counselling, eCommerce and apparel.
Dr. Apoorv Ranjan Sharma, Co-founder at Venture Catalyst, covered a varied range of investments in Fynd, Beardo, Absentia, Innov8, Siftr and many more. In this exclusive conversation with BW Businessworld, he discloses reasons why FinTech may receive more rounds of investment and cities to focus on in 2017.
EdTech and FinTech received the highest amount of investment in 2016. What do you think will be the trend of funding in 2017? Do you think any specific sector will receive more attention from the investors?
We believe that in 2017 there will be a robust focus on disruption and on unit economics. EdTech and Fintech markets are certainly big at this moment with demonetisation unlocking immense opportunity for the latter in particular. These sectors will continue to enjoy the attention of investors this year along with a few other high-potential ones such as Artificial Intelligence, Virtual Reality/Augmented Reality, Real-time smart data analytics and The Internet of Things.
In the aftermath of the demonetisation in India, would you opine that India has become more focused on FinTech startups?
Demonetisation has radically altered the economic order in the country and if there is one sector it has given unbridled mileage to, it is fintech. With cash suddenly out of fashion, leading fintech players, such as Paytm, MobiKwik, and FreeCharge, have reported exponential growth in their transactional volumes. Naturally, then, most investors and even HNIs are betting big on this space. It is also important to remember that fintech has shown exponential growth in the country for the last 2 years, even before the 500 and 1000 rupee notes were put out of circulation. This is because India, a country where the majority of the population is underbanked or unbanked, has a huge potential for fintech ventures. Within the fintech space, however, we expect lending-centric businesses to attract more funding than mobile payments due to higher burn rates of the latter.
What has been the best investment of Venture Catalyst in 2016? Are there any exclusive services being given by Venture Catalyst?
We certainly think ‘Don't scratch your head (DSYH)’ has been one of our best investment decisions in the past year. It is now an Amazon-trained e-commerce specialist and also a service partner of Amazon for accounts and reconciliation. The team is doing phenomenal work such as signing up with Fortune 500 enterprise client Reliance Digital and other marquee clients like Spherehot - part of Edelweiss Investee. The platform is crossing 2.5 million orders with GMV of $55 million compared to 7 lakh orders three months ago. Sellers using DSYH are spread across 15 cities of India in North, East, West as well as the South.
VCats is providing DSYH with services like facilitating fund raising and structuring the deal. It is also helping the team to build connections and networks that help the company to augment its stakeholder community.
Are there any specific market areas where Venture Catalyst aims to focus in 2017?
Our key focus geographies this year are Nagpur, Ahmedabad, Pune, Nagpur, Bangalore, Hyderabad, Kochi, Bhubaneshwar and 3 overseas location.
According to you, what are the best ways to analyse a company before investing in it?
The most important factors to be taken into consideration are strong business fundamentals such as sustainability and profitability of a venture. In 2015, massive investments were made on the basis of hyper growth mapped as per user traction, downloads etc which weren’t clear enough indicators of a business’s viability. Instead, entrepreneurs and investors alike have to focus on the value the business brings to the life of the consumer.
They must focus on its capability to create disruption in the market by benchmarking it against other players with similar models in the same sector or other sectors. Strong IP strategies which can help the business create a monopoly in the market are generally a good indicator of its survival and success. Most importantly, what needs to be analysed is the team behind the venture, their background, academic and professional credentials and of course their vision and passion for their idea.
