 "Indian software start-ups might see glorious exits in 3 yrs: Promod Haque")
Having spent 25 years as a venture capitalist with dozens of successful investments, Promod Haque, senior managing partner of Norwest Venture Partners, a multi-stage venture capital and growth equity investment firm, says he is bullish on the Indian software product ecosystem. US-based Haque, in Bengaluru recently to attend Nasscom's Product Conclave, spoke to Itika Sharma Punit about the Indian ecosystem, the technologies that interest him, and his view on investor exits from start-ups. Edited excerpts:
Which are the new areas you would bet on in the technology space?
There is a lot of strength in the analytics space. We have two companies in this area that we have invested in - Manthan Systems and Capillary Technologies - which are both focused on what you call data analytics in retail. Both the companies are doing quite well. Like the challenge I mentioned before, there are only so many companies you can have in a given space. Just because you have 30 analytics companies in India, it doesn't mean all 30 would be successful. That is just the way the market works where two-three will succeed and the rest will be gone. So I think there would be refinement. As the entrepreneurs learn more, they will adopt, pivot and a lot of them would be morphing based on the advice they get and the kind of people they associate with.
I'm bullish on the start-up ecosystem. The key issue is going to be how these companies scale and that is something to watch over the next few years. It will also be interesting to note the kind of venture money they will get or the support will they get. Will they be able to get customer validation and customer acceptance? And, how fast will they ramp up? Each of them will be different.
How do Indian start-ups fare vis-à-vis their global peers?
I think it's still pretty early here. Entrepreneurs are in the process of learning and refine their strategies. Every year there will be refinement, which is a natural process everywhere.
Alibaba had recently made an initial public offering (IPO) that attracted global attention. Do you think Indian software product companies or e-commerce ones could see such glorious exits?
I think so. We already have some past examples such as MakeMyTrip.com, which got listed a few years ago. The last time I checked, the company's market cap was $1.3 billion. However, there are not a lot of examples like that, but I think they will happen. On the enterprise side, I think that piece is early for India. But even there we have examples like Manthan Systems and Mu Sigma, which have made a lot of progress. So in the next three-four years, we will see some exits there. The exits could be through M&As (mergers and acquisitions) or IPOs.
What's your take on the many $1-billion babies that the Indian software product ecosystem boasts of?
Some of the large players such as Flipkart would go public at some point. It is hard to tell if that will happen next year or later. You do want to see more of that activity because that will excite foreign investors even more. That is the reason several private players are coming to India because they sense there will be IPOs happening here.
Which are the new areas you would bet on in the technology space?
There is a lot of strength in the analytics space. We have two companies in this area that we have invested in - Manthan Systems and Capillary Technologies - which are both focused on what you call data analytics in retail. Both the companies are doing quite well. Like the challenge I mentioned before, there are only so many companies you can have in a given space. Just because you have 30 analytics companies in India, it doesn't mean all 30 would be successful. That is just the way the market works where two-three will succeed and the rest will be gone. So I think there would be refinement. As the entrepreneurs learn more, they will adopt, pivot and a lot of them would be morphing based on the advice they get and the kind of people they associate with.
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What's your view on the Indian software product start-up ecosystem?
I'm bullish on the start-up ecosystem. The key issue is going to be how these companies scale and that is something to watch over the next few years. It will also be interesting to note the kind of venture money they will get or the support will they get. Will they be able to get customer validation and customer acceptance? And, how fast will they ramp up? Each of them will be different.
How do Indian start-ups fare vis-à-vis their global peers?
I think it's still pretty early here. Entrepreneurs are in the process of learning and refine their strategies. Every year there will be refinement, which is a natural process everywhere.
Alibaba had recently made an initial public offering (IPO) that attracted global attention. Do you think Indian software product companies or e-commerce ones could see such glorious exits?
I think so. We already have some past examples such as MakeMyTrip.com, which got listed a few years ago. The last time I checked, the company's market cap was $1.3 billion. However, there are not a lot of examples like that, but I think they will happen. On the enterprise side, I think that piece is early for India. But even there we have examples like Manthan Systems and Mu Sigma, which have made a lot of progress. So in the next three-four years, we will see some exits there. The exits could be through M&As (mergers and acquisitions) or IPOs.
What's your take on the many $1-billion babies that the Indian software product ecosystem boasts of?
Some of the large players such as Flipkart would go public at some point. It is hard to tell if that will happen next year or later. You do want to see more of that activity because that will excite foreign investors even more. That is the reason several private players are coming to India because they sense there will be IPOs happening here.