Inside Titan Capital’s ‘gardening’ approach to investing in early-stage startups

In this week’s 100X Entrepreneur Podcast, Bipin Shah, Partner at Titan Capital, speaks about the investor’s journey in identifying and supporting early-stage startups, and decodes the decade that belongs to Indian entrepreneurs.
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Indian startups are marching towards the coveted unicorn club at an unprecedented pace, with Hyderabad-based SaaS startup Darwinbox being the latest entrant. Underneath the ever-growing list of unicorns, the valuation of early-stage startups also increased in the last two years, noted Bipin Shah, Partner at Titan Capital.

Since its inception in 2015, Titan Capital has identified and seed invested in more than 200 startups including six unicorns Ola, Mamaearth Urban Company Razorpay Snapdeal and Ofbusiness

In a conversation with Siddhartha Ahluwalia, Founder and Host of 100x Entrepreneur Podcast, Bipin said, “Until 2019, a great startup idea with an awesome team would be valued around $2-3 million, which has now gone up to more than $10 million.”

Gardening early-stage startups

Titan Capital’s deals were traditionally classified as Titan Seed Deals (TSD) where the valuation is less than Rs 20 crore and High Valuations Deals (HVD) for valuations between Rs 20 crore and Rs 100 crore.

“By mid of 2021, our TSDs were zero that year and it was all HVDs every month. So, we had to remove that demarcation because you hardly get companies with valuation of Rs 13-14 crore. Recently, when I was studying all our portfolio performance, the average valuation for startups invested in the last four or five months was around Rs 40-41 crore,” Bipin explained.

Through LinkedIn and emails, as well as on-going internal reviews, Titan Capital has reviewed over 3,500 startups last year. Out of this, Bipin went through a funnel of 500 startups and Titan Capital made over 90 investments with an average check size of Rs 75-80 lakh.

While they may not be huge checks, Bipin said entrepreneurs seek Titan Capital’s backing for their network and guidance, revealed most founders shared in their feedback surveys.

“We are very clear as a joint consensus that our team needs to be available for our portfolio companies wherever they need and we are not someone who forces founders to do board meetings or impose our thesis. In fact, Titan’s thesis is not to join any board as a director and we generally join as observers and remain very silent,” he added.

He stated that Titan Capital’s approach to seed investing is purely like gardening: it takes the time, stress, and focus to help portfolio companies that are not doing well.

Lessons in startup investing

When most of his peers were happy landing roles as financial analyst and consultants at global brands, Bipin pursued his interest in startups and worked with Susanto Mitra in the angel investing field after graduating from IIT Bombay in 2013, where he served at the Entrepreneurship Cell for two years during college.

From there began his journey of scanning through startups and there has been no looking back. Bipin said his learning is to jump at the right time and to work with founders who are truly passionate about their ventures.

He added that this decade truly belongs to entrepreneurs in India and startups across sectors are going global.

To know more, listen to the podcast here:

01:18 – Joining Titan Capital

06:10 – Finding soonicorns and unicorns

08:27 – How did Titan Capital manage to make 90+ investments in a year?

12:02 – What support does Titan Capital offer to portfolio companies?

15:58 – Thesis: Focus on bottom 50 percent of companies

28:10 – Change in valuation at the seed-stage

31:20 – Learnings in the last six years as an investor

Edited by Saheli Sen Gupta

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