This VC fund will dedicate $100 million to invest in Indian B2B startups
The Indian startup ecosystem has witnessed the business-to-consumer (B2C) startups garner all the limelight and investor attention. However, the case is quite different when it comes to business-to-business (B2B) firms. And now, there is a venture capital fund that wants to dedicate around $100 million to nurture, support, and grow these startups.
Season Two Ventures, an early-stage venture fund based in Southern California, founded by Sajan Pillai, is now in the process of raising a $100 million fund, which will dedicate exclusively to the funding of B2B startups in India.
Sajan Pillai is among the established figures in the global technology industry. As the CEO of a technology services company, UST Global, he took the firm from a 20 member team to more than 25,000 people, today.
As the CEO and Managing Partner of Season Two Ventures, Sajan believes this is an opportune time to not just invest in the B2B startups in India but also, nurture them onto the high growth path.
“This is the time to discover B2B startups in India whose innovations can be applied on a global scale, and we believe this the right time, as there is a tremendous opportunity,” says Sajan.
The CEO of the venture capital fund believes that many B2B startups in India struggle to break into the global 500 companies list and take more than a decade to clock revenue in the range of $10-15 million.
“Many of these startups have the talent, technology, and business expertise but do not have the distribution network. We have the expertise in reaching out to the Global 500 corporations, and can help startups reduce the number of years taken to reach multi-million dollar in revenue,” says Sajan.
Given the background of Sajan in handling and interacting with the top global corporations and understanding their requirements, he believes that they are better positioned to guide the Indian B2B startups on how to reach that goal.
The VC firm strongly believes that this is the opportune time to invest in B2B startups, as other factors have contributed to make the country an ideal ground to invest and nurture such firms. The long history of the Indian technology industry has given the experience of interacting with global corporations and has created a very vibrant digital platform.
“The talent and business acumen exists among the B2B startups in India but, we have not taken it to the innovation-driven productised model, yet,” says Sajan.
He also believes that the return of experienced Indian technologists from developed economies like North America and Europe will fuel the growth of B2B startups in India.
Season Two Ventures will focus on four industry segments for investments in the B2B startups. These will be banking, energy & utilities, logistics & retail, and healthcare.
“We will not worry about the technology domain of these B2B startups but, look at the solutions they have which can solve the real problems of the Global 500 corporations,” adds Sajan.
As a part of the plan, the VC fund has a differentiated strategy on how it will go about funding the startups. About one-third of its corpus will be devoted to a foundry model, where it will come up with business use cases and throw open the challenge to the startups to come up with innovative solutions.
The second big focus will be to bet on the ideas and teams, and a smaller part will be on the startups which have already got the traction in terms of customers or revenue.
“If you want to nurture somebody, the earlier you catch it, the better for you. Our business model is about nurturing, validation, and helping the B2B startups to grow,” says Sajan.
Season Two Ventures will have a more targeted approach towards investing where it has a prior understanding of the startups and more importantly, it will take their technology solution to the global corporations for validation.
The VC fund will primarily invest in the Indian B2B startups and may look at a few opportunities in the US market. The average ticket size of these investments will be around $2 million.
Sajan strongly believes the time has arrived for the B2B startups from India to be showcased across the world, similar to what Israel had been able to achieve over the last decade.
“The country did not have the digital platform culture but now, there is so much confluence of things which makes India an ideal opportunity. It is also important to remember that, for overseas investors, India enjoys a high degree of trust when compared to other nations,” says Sajan.
The venture capitalist thinks that one may not see many billion-dollar revenue B2B firms from India but, there will be many who can reach a size of hundreds of millions of dollars.
“Our idea to start this VC fund is to send a message to the B2B founders and entrepreneurs that, they do not have to feel lonely or helpless if they have a great idea. We are there to help them,” concludes Sajan.
(Edited by Suman Singh)