TechSparks 2019: Sequoia's Rajan Anandan urges startups to be authentic, look at sectors where they can create impact
Rajan Anandan, the man who was the Managing Director at Microsoft India and Vice President India and Southeast Asia at Google, is now an important player in the Indian startup ecosystem. As the Managing Director of Sequoia Capital, he leads Surge, the firm’s accelerator programme for early-stage startups in India and Southeast Asia, and has a ringside view of India’s entrepreneurial ecosystem.
In conversation with Shradha Sharma, Founder and CEO, YourStory, at TechSparks 2019, Rajan said he felt that the Indian startup ecosystem’s time has come.
“We have entered a new phase; I would call it Indian Internet startup ecosystem 2.0." He added that things were falling in place for startups in India with the proliferation of internet and smartphones, which have created new business use cases.
Rajan cited the example of Khatabook, which now has 3.5 million merchants. “I could not have predicted all this even a year ago,” he said.
On being asked why Indian startups had not produced the outcomes as expected, Rajan said the ecosystem is “getting a little more broad-based” with newer and more innovative companies emerging. These include segments such as social commerce, fintech, and SaaS to name a few.
“Many billion-dollar brands are going to be built in the next 10 years, and it is going to start with digital,” he said.
The evolving entrepreneurial ecosystem
As an angel investor, over the last 15 years, Rajan has also witnessed the evolution of the ecosystem and seen many changes, including the fact that many founders with experience are now entering the ecosystem and consumer internet companies are talking about going global.
“As an angel investor, I wanted to see a company that can be an Indicorn, which I define with Rs 1,000 crore. However, as an institutional investor, the idea is to touch Rs 7,000-10,000 crore,” Rajan said.
Speaking in detail about Sequoia’s Surge programme, Rajan said the venture capital firm was making its own contribution to the startup ecosystem.
“It is very difficult for early-stage founders to raise funding. They end up spending an enormous amount of time on this when they should be devoting themselves to other things,” he remarked.
Surge works in an open architecture model with other institutional investors and angels participating in the round. Almost 80 percent of Surge 02 companies have co-investors.
Surge works as a rapid scale programme for early-stage startups. The VC firm takes care of not just the initial funding but also brings in other critical elements like mentorship, market exposure, framework to build business, guidance through growth stage etc.
“Sequoia wants to address all this in a systematic manner,” said Rajan, adding that it was crucial for startups to get the right investors on board. The firm, which is keen to tap into the entrepreneur pool, is sector-agnostic and its cohorts include B2B companies, direct-to-consumer brands, and more.
“We always look at the quality of the team and see if they are in a space that is large enough,” Rajan said.
Rajan ended the conversation with some advice to founders and entrepreneurs. “Look for sectors where an impact can be made and that have the potential to create a large enough business. Be passionate about what you are doing and be very authentic”.
“Startups are not perfect and we understand that. So, it is ok to not to be okay, but it is not okay to not say it the way it is,” Rajan said.
(Edited by Teja Lele Desai)
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