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Diving into the investment ecosystem can be challenging for the aspiring angels and advice from the leading investors and experts is extremely valuable to gain a practical understanding of the ever-changing market.
However, as much as budding angels wish, it can be difficult to get hold of the illustrious investors for wise words and advice from their experience.
This is probably why LVInsights, our series of interactive AMA sessions with expert investors from the ecosystem became a favorite monthly virtual gathering among our investor community. And rightly so as we saw experienced angels break down trends and recall interesting stories in many a freewheeling chat throughout the year.
Here is a glimpse into the year in our AMA sessions.
The depths of gaming and metaverse
Sameer Pitalwalla, Head of Gaming, APAC, Google Cloud, and Arvind Neelakantan, Head of Technology, EPIC Games, are bullish on the opportunity that lies in the interactive entertainment and gaming industry. In an AMA session a few months ago, he shared how the industry will be among the first ones to tap the metaverse in India.
The duo believes that almost every internet user – over 560 million of them – will eventually engage in some form of 3D entertainment on their phone. As such, they view metaverse as a successor to the mobile internet that will not fundamentally replace the internet but build upon it and relatively transform it.
In fact, Sameer mentions that India is emerging as one of the world’s largest gaming markets after multiple coronavirus-induced lockdowns with the domestic market expected to become a $7 B industry by 2026. He emphasizes that the tools will significantly affect other industries such as architecture, healthcare, and automotive, among others.
Tapping India’s SaaS powerhouse
The Indian software-as-a-service (SaaS) industry is not dampened by global inflation as investors shell out capital for a software business. While SaaS promises much opportunity generating $2.6 billion in revenue, Bhavish Sood, General Partner at Modulor Capital, cautions investors to be wary of identifying ‘SmaS’, Services masquerading as software.
As he breaks down the key metrics of investing in SaaS startups, he advises investors to evaluate if the company is leveraging tech to grow revenue, reduce cost, or improve the service efficiency.
Today, there are Indian SaaS startups for every thinkable sector and themes. For investors, Bhavish emphasizes that looking for Minimum Viable Product (MVP) at pre-seed and seed stage is not enough and that it is high time investors look for SaaS products that are simple, loveable, and complete (SLC).
Investing in the AI ecosystem
Artificial intelligence (AI) is drawing more curiosity as it becomes more and more real. Rahul Agarwalla, Managing Partner, SenseAI Ventures, breaks down investing in AI-based businesses as the modern tech is reeling in long-term, structural shifts in our daily life.
He believes that the AI ecosystem needs to be built and India is at the J-curve of it and is a keen investor in people providing the tool to enable the entire AI ecosystem.
For investors, he maintains that the key is to identify businesses with a real use case for AI because data and processing power are expensive. At the end of the day, access to high-quality data can make all the difference in whether businesses scale.
“Without great data, you don’t have great AI,” he quips.
Focussing on the fundamentals
In our Ask-Me-Anything (AMA) session with active angel investor and Speedinvest partner Deepali Nangia, she focuses on the basics of investment , from asset allocation to setting up an investment thesis and deal evaluation.
As an angel investor in over 30 female-founded brands, Deepali believes angel investing is as much about investing in people as it is in the business, especially in the early stages.
While angels should bring more than just capital to the table, she advises that an investor may not know as much as the entrepreneur who is in the thick of things, building the business.
On betting on the next big thing
Vivek Khare, an angel investor backing tech startups in India since the late nineties, has built his expertise around helping founders in their zero-to-one stage. He believes that angel investors must spot and invest in trends that are likely to go big in the next ten years. Any business or sector getting the majority nod is too late for angels to invest.
During the live interaction, Vivek shares investment practices that work for him and he also believes that passive investing is a myth in the private market ecosystem. Aligned with his belief that one can’t pick winner startups but make them, he details the many ways in which he works with startups including donning the hats of a salesperson, investment banker, or hiring agent.
An early investor in Zomato, Vivek says that staying updated on the latest technology and getting to work with some of the smartest people is the motivator to investing in startups.
Impact investing for business and social good
Impact investment is a highly misunderstood form of investment, according to Shruthi Cauvery Iyer and Sachindra Rudra, Founders and Partners of global impact investment and policy advisory firm CaHa Capital.
Shruthi shares that even seasoned venture capitalists have the misconception that impact investments will not generate massive returns when in fact some of their deals actually fall under impact investments.
However, more investors are betting on the opportunities in clean energy and green economy and that socially beneficial businesses have greater promise of reaching a wider audience.
The key is to ensure that ‘impact’ is built into the DNA of the enterprise as companies go on to scale greater heights. They usually assess the team’s diligence to face challenges head-on and whether they truly care about the company’s beneficiary, and if they have a business mindset, among other things.
(If you’ve enjoyed our AMA sessions this year, we have more insightful conversations in store this coming year. sign up on LEARN and be the first to know about the upcoming sessions and learn all about angel investment trends and practices.)
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