'Seed funds need to refuel,' Rajesh Sawhney on investing and GSF's specialized accelerator programs

Rajesh Sawhney has been a prominent figure in the India startup space. Building Indiatimes.com in the early 2000's, Rajesh has seen how the internet and technology scene in India has evolved in India. He also served as the founding President of Reliance Entertainment and is on the board of companies like Microland, Neilsoft, Indiamart, Reliance Broadcast Network, etc. In 2012, he decided to entrench deeper in the startup space and started GSF Accelerator. GSF has accelerated 33 companies over three batches till now and has recently started setting up separate specialized accelerator programs like the M-Accelerator for mobile companies and Digital Media Labs for Digital Media and Ad-Tech startups. We got in touch with Rajesh to get a piece of his mind on the current early stage investing scene and GSF's new strategy.YS: GSF is coming up with sector specific funds. What's the thought process here?

Rajesh Sawhney: GSF is a launching a few Specialized Accelerator programs in 2015. We have announced two programs so far: M-Accelerator for mobile startups and Digital Media Labs for digital media and ad-tech startups.

We believe Indian digital economy is inflecting and changing rapidly. India is mobile.. .and we want to focus on the biggest value driving sector, hence decide to launch M-Accelerator.

As far as digital media is concerned!, twin tailwinds of smartphones adoption and broadband availability will drive a massive shift of consumer behaviour. We are seeing the early evidence of this behavior in younger demographics and in sectors such as music. We believe conditions are ripe for innovative startups in the space of video, music, gaming and ad-tech.

YS: You're also taking in international companies for the accelerator programs, will we see more of this?

Rajesh: Majority of our startups have been Indian and will be Indian in the future too. We do invite one or two startups in every batch from different countries to mix things up a bit. Given building global tech brands out of India is one of our key themes, we believe this initiative of ours helps founders to learn and mature faster in a multi-cultural environment.

YS: How do you look at the early stage investment scene in India? What's working, what is not?

Rajesh: Early stage investment is now maturing. We are seeing the maturation of older angel groups like IAN and Mumbai Angels, at the same type new angel groups are coming in. Many VCs have set-up seed stage investment programs. However, I am concerned about the lack of seed stage funds. Many seed funds have run out of money and have slowed in investing, they need to refuel.

YS: what kind of exits are you looking for your portfolio companies, how much of a time horizon do you give them?

Rajesh: It depends on the company and the aspirations of the founders. We love founders who have aspiration to build a big company and with them we have a very long term horizon for exits. However, we do understand that mid-size M&A would be a good outcome for many companies in our portfolio and we welcome it. GSF has built direct linkages with top 25 Tech companies in the world and I am sure, interesting deals will emerge in coming years.

YS: Other investors in the country you admire.

Rajesh: India is full of smart investors of different flavours. Our VCs have matured in the last 10 years as they have gone through two cycles. Accel, Sequoia, Helion, Nexus, Kalaari have all matured superbly into Multi-Fund franchises. Now, we have a few smart angel investors who are backing good companies early on, and finally we have a number of tech founders who are doing a great job in supporting startups. I admire GSF Superangels like K Ganesh of Growthstory/Tutorvista, Anupam Mittal of people group, Naveen Tewari of Inmobi, Dinesh Agarwal of IndiaMart , Murugavel of Bharatmatrimony, Aloke Bajpai of Ixigo, Roshan Abbas of Encompass. Kunal Bahl and Rohit Bansal of Snapdeal invested in Gigstart.

YS: Any companies you wish you had invested in?

Rajesh: I have no regrets. We have a great portfolio of companies in GSF which will create enormous value for the investors. I started angel investing post 2010 and missed investing in some of the great stories of e-commerce in india.

YS: Where are the biggest gaps in the market at the moment? Where should startups focus?

Rajesh: There are huge opportunities unleashed by mobile technology. There are so many sectors in India that are unorganized but are huge in size. Mobile technology can play a big part in re-organizing these markets and creating value for all stakeholders. I also see huge potential in digital media opportunities. Internet of things and cloud are other two global opportunities for startups.