Why VC Shailesh Ghorpade chose to focus on and invest in SaaS, enterprise tech startups

In this episode of 100X Entrepreneur Podcast, Shailesh Ghorpade, Managing Partner and CIO at Exfinity Venture Partners, talks about his journey, why he likes to identify mega trends, and the decision to focus on enterprise technology startups.
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Shailesh Ghorpade, Managing Partner and CIO at Exfinity Venture Partners, has more than 23 years of experience in project and corporate finance, M&A strategy, and private equity across various financial companies, energy, IT, real estate, and other sectors.

After having worked in senior positions in companies such as Birla Global Finance, Tata Finance, and Infosys Technologies among others, Shailesh first launched Azure Capital, a boutique real estate private equity fund.

In 2013, when the Indian tech startup ecosystem began to evolve, he started his journey with Exfinity Venture Partners.

The Bengaluru-based early-stage VC fund is promoted by IT industry veterans, including Mohandas Pai (CFO, Infosys), V Balakrishnan (CFO, Infosys), Girish Paranjpe (CEO, Wipro), and Deepak Ghaisas (CEO, iflex). 

Shailesh says that the advent of cloud in 2013 was a game-changer for startups and “democratised entrepreneurship.”

“In 2013, we were discussing with Mohandas Pai and Bala that we should really look at the VC space. We only know the enterprise tech space; we don’t know the B2C space. So, we decided to focus on enterprise tech and build a team with people with strong operating backgrounds, who have built companies, who have sold globally, who can actually add value to startups apart from just providing capital,” he says. 

Shailesh Ghorpade, Managing Partner and CIO at Exfinity Venture Partners [Image Credit: LinkedIn]

Focus on B2B

Shailesh believes Exfinity is yet to achieve its milestones, and that it launched small with its first fund of Rs 125 crore.

He says at the time of its launch, Exfinity was probably the first completely focused B2B tech fund. “There were many funds that did B2B investments or enterprise tech investments, but they formed a small portion of the overall corpus; their focus was largely on consumer tech. But we were focusing on enterprise tech,” he says.

Exfinity counts several B2B and SaaS startups such as Mad Street Den, Hippo Video, MoEngage, Locus, CloudSek, and others as its portfolio startups.

The managing partner says the VC firm invested in the early stages of the startups, when many of them were in stealth mode and working from garages. They have now gone big.

He adds that the VC firm first identifies mega trends across the globe and examines how companies fit into these trends.

“Our first fund was Rs 125 crore; we funded nine companies and wrote down two of them. We launched a second fund in 2016, a Rs 300 crore fund, and funded 19 companies. We are on the third fund now and raising a sum of Rs 500 crore. We have done our first close already, and are looking at a second close by the end of December.

Our thesis has remained steadfast and we will continue to focus on enterprise tech. With the third fund, we anticipate creating a portfolio of about 20 to 22 companies.”

In the previous funds, we did seed and seed-plus investments but with the third fund, given that the corpus is a little larger, we will do more of pre-series and Series A while making few selective bets on seed and seed-plus companies. That’s how our portfolio construct is going to be,” Shailesh says. 

In the recent episode of 100X Entrepreneur Podcast, a series featuring founders, venture capitalists, and angel investors, Shailesh spoke to Siddhartha Ahluwalia on his experience with Exfinity Venture Partners and its focus on enterprise tech.

Listen to the podcast here:

Time stamps from the conversation:

02:31 - Intro of Shailesh

03:25 - Background in the VC ecosystem

06:07 - Major milestones at Exfinity Venture Partners

08:36 - Fund growth over time and thesis change

09:50 - Investing early in AI startups like Mad Street Den

13:29 - Identifying mega trends while looking out for potential portfolio companies

17:33 - Differentiating factor between top portfolio companies vs other portfolio companies funded around the same time

19:59 - Essential fundamentals to get from 0 to $1M ARR early on

22:52 - Standing out amongst thousands of SaaS businesses in India

25:47 - Approaching enterprises to validate problem statements as a SaaS founder

35:23 - Challenges restricting founders in between $1M and $10M ARR

39:50 - India market not completely ready for SaaS offerings

48:39 - Hiring the right people for Enterprise SaaS startups

59:55 - Book recommendation: Jonathan Livingston Seagull by Richard Bach

Edited by Teja Lele Desai