San Francisco-based Propel Venture Partners started its India venture story with fintech player Groww. Rohit Bodas, Head of Propel’s international fund, spoke to YourStory about why India is a key market and what startups seeking funding from Propel should keep in mind.Sindhu Kashyaap
In January 2019, Propel Venture Partners, an early-stage investment firm based out of San Francisco, made its first investment in India, led by Rohit Bodas. It participated in the $6 million funding raised by data science-based investment platform, Groww. Worldwide, Propel focuses on opportunities in the fintech space, and its portfolio includes the likes of Coinbase, DocuSign, Hippo, and Personal Capital.
Rohit himself is no stranger to helping a company enter India. An engineer with an MBA degree from Kellogg School of Management, Rohit had earlier helped American Express Ventures launch its Indian operations in 2011. He also managed and led the firm’s investments in Latin America, India, Europe, and Asia Pacific.
With Propel, Rohit aims to help entrepreneurs build transformative financial services companies. Apart from Bengaluru-based Groww, he has also led the VC firm’s investment in the UK-based Trussle. In a free-wheeling chat with YourStory, he spoke about why they found Groww to be the right fit, his take on the Indian startup ecosystem, and what he looks for in a startup.
Edited excerpts of the interview:
YourStory: Tell us about Propel’s first investment in India. What was it about Groww that attracted you?
Rohit Bodas: My colleague Greg Thome and I started studying India’s wealth management sector at the beginning of 2018. After analysing the market, we found an information gap among Indian consumers regarding benefits of financial market-related investment products, such as mutual funds. These products have traditionally been confusing, expensive, and clunky to use.
Groww’s customer-friendly platform helps users discover, and invest in, the best mutual funds for their specific profile. The product’s superiority has been validated by very rapid growth. Their customer traction and stickiness are much better than the competition. We tracked the company for several months before investing.
Groww is one of the fastest growing companies we have had the privilege to work with globally. Most importantly though, we were aligned with the founding team on product philosophy and future strategy. We are very excited to be a part of Groww’s Series A funding round.
YS: What is your take on the Indian market and startups in India?
RB: It is an exciting time to be a VC investor in India right now. While the size of the market and scale of potential investment opportunities have always been attractive, other recent developments such as the affordability/growth of mobile data, and - from a fintech perspective - initiatives such as the India Stack are significant drivers of innovation.
The most important change in the past few years, in my opinion, has been the growth of the early-stage “support network”. Recent exits and a growing “give back” mentality have helped create a broader ecosystem of advisors and angel investors. While capital is certainly important, having access to smart advice that can help nurture ideas at the earliest stages is taking the quality of startups to the next level.
The continued pace of venture capital investment is a testament to how VC investors view India. We don’t see anything slowing it down in the near term.
YS: How important is India to Propel’s operations and long-term plans?
RB: Propel has a global mandate. We seek to partner with entrepreneurs rethinking and building businesses at the intersection of technology and financial services in various parts of the world. Since 2016 we have made investments in Europe, LATAM, Israel, and now India.
Overall, we view India as an extremely important market for the next several decades. While we do not have specific capital allocations by region, we expect to increase our investment activity in India.
YS: What are the key areas in Indian fintech that interest you and why?
RB: We are thematic investors and, over the past year, our efforts have been primarily focused on wealth management and investment platforms in India. This led to our eventual investment in Groww. Other active areas of interest include insurance, payments, and lending.
YS: What do you see in a startup and the founders when you invest?
RB: A great founding team targeting a large market opportunity is a given. We also look for proof of efficient customer acquisition and some early evidence of momentum. These factors, in combination with capital, can take early stage companies to the next level. Finally, alignment with the founding team and other co-investors on short and long-term objectives and pace of growth is critical.
YS: What kind of investments are you looking at?
RB: We are early stage investors and prefer to invest at the company’s formative stages. In India, our focus is on Series A and Series B with a typical check size of $2 million to $5 million. We will lead rounds, but in most cases with international investments prefer to collaborate with other local venture capital investors as a co-lead.
YS: What advice would you give startups in India when they pitch to you?
RB: There are two key factors you need to keep in mind: