Indian Startup Ecosystem is growing hugely. India stands third in global start-up ecosystem. With the changing trends in the Indian startup ecosystem, investors are getting attracted towards investing in startups. We founder Circle is a startup that provides investment service to help early stage startups.
Here is excerpt of the interview with Mr. Neeraj Tyagi, CEO & Co-founder of We Founder Circle (WFC) about Indian startup ecosystem.
Tell us briefly about yourself?
We Founder Circle (WFC), a founders-led early stage startup investment platform born in the midst of the pandemic, plans to invest in 70 start-ups in FY 2023. Since the launch in 2020, WFC has become one of the fastest-growing angel networks with 33+ startup investments in a span of 12 months. WFC has already facilitated funds worth $150 million across 33+ startups by the end of December 2021 and became the 2nd largest Angel Investor of the Country. Platform's key investment includes Zypp, ObenEV, Lissun, Healthysure, Hesa, Glamyo Health, Geekster, YPay Card, EsportsXo and Settl.
How was the year 2021 for you as an investor/VC?
In its first year of operation, We Founder Circle (WFC), a founder-led early-stage start-up investment platform, has successfully invested in 33+ start-ups spanning across 10 industries. Our community is strong by 2000 members that combines the extensive experience from angel investors, corporate leaders and unicorn founders. Our efforts were also recognized by the industry as we became #2 active Angel Investor Network in India. Our portfolio expanded to cover 10 sectors including EV, Agritech, Fintech, Edtech and D2C.
How often do you bet on the entrepreneurs and not on the ideas? And when/if you do that, what quality of the entrepreneur usually makes you do that?
An entrepreneur should be a high-energy, high-motivated individual. He or she should be on the move all of the time. At the same time, great degrees of commitment is required. A person can only do justice to his/her line of work if he/she is driven. Entrepreneurs are defined by their passion, resourcefulness, readiness to improvise and listen to others, and a strong desire to succeed.
What is a warning sign for you when investing in a startup?
1. Low quality products. Distinguishing oneself from the competition is a regular difficulty for any startup company. A company that is unable to deliver a high-quality or specialty product will most certainly be steamrolled by competitors that are already well-established.
2. Loss of vision. A good business plan detailing the targeted markets, as well as a vision statement stating how the market will be penetrated, are required for a company to survive.
3. A lack of progression. To thrive, a young firm needs rapid, yet scalable, growth. The reason is straightforward. There's no guarantee that their loyal consumers will return the next day. It's critical to seek out new ones as frequently as possible.
What are some common biases you find in the Indian Startup ecosystem?
Despite certain programmes aimed at promoting the growth of female entrepreneurs, there are still gender prejudices in the startup environment. Traditionally, India has shied away from professional risk and entrepreneurship. Though there has been a recent movement in young people's attitudes, society still has a hard time accepting entrepreneurs. Instead of solving a consumer need with a fantastic product, the current generation is motivated to make money.
Failure is also looked down upon in today's society. Being an entrepreneur is like sleeping on a bed of thorns in a country that despises hard work and failure. The majority of parents compel their children to work hard in order to acquire a stable career, and they view entrepreneurial efforts with suspicion. It is difficult to build a vibrant startup ecosystem in any country when the youth are not inspired to pursue their own companies.
What are your views on the SharkTankIndia Episodes until now?
We definitely think Shark Tank India is taking entrepreneurship to every Indian household and is making conversations around startups the new normal. The business reality show is giving a much needed boost to the burgeoning Indian startup ecosystem and comes across as a platform to transform dreams into reality for all the budding entrepreneurs.
We are seeing many startups exiting with IPO, what’s your opinion on that? How is it going to change the ecosystem?
Because of lockdowns and other safeguards, the Covid-19 epidemic has aided the technology startup sector by driving more transactions online.
Other factors include India having some of the world's lowest data prices and an increase in smartphone ownership, which has allowed technological start-ups – many of which were created less than a decade ago – to reach a considerably broader audience. With a young population and internet penetration that is still well below its full potential, these businesses have a lot of room to develop.
Companies aim to use the capital from new proceeds to expand as demand in the post-pandemic world is predicted to increase by a factor of ten. Overall, this is a very encouraging indicator for the Indian economy's future prospects.
More than 42 unicorns in 2021. What do you think caused this wave? Is the valuation justified according to you?
This year was a wonderful year for Indian businesses, with 42 achieving unicorn status. In 2021, more startups joined the club than in the previous five years combined. The record fundraising boom is projected to continue in the coming year, thanks to India's increasing embrace of technology and new startup products. With only nine days left in the year, there's a good chance we'll see a few more surprises. It's true that financing for 2021 is at an all-time high. The enormous number of unicorns, as well as a succession of successful IPOs, has piqued the curiosity of investors from all over the world." I also credit India's huge talent pool, quick technological adoption, and COVID-generated tailwinds for the increasing number of Indian enterprises making an impact on the global economy.
How can we support/ enable entrepreneurs in tier2 and tier 3 cities?
Close to 30% of our portfolio startups come from Tier 2-3 cities. We are big believers of ideas that are thought locally and aim to reach markets globally. In order to support these local entrepreneurs all we need is to build a strong startup ecosystem that offers co-working spaces, right mentors and angel investor networks, startup weekends and some business partnerships for these startups to grow.
What are a few sectors you think would be hot in the upcoming year?
For 2022, EV, Health Tech, D2C, Automobile Tech, Fintech, EdTech, Food Tech are going to be the hottest sectors. Keeping the same in mind, WFC is focused on start-ups in such sectors to help them grow.
One learning that you would like to share with founders who are looking to raise funds?
Always focus on your pitch and business model. Before approaching any investor, you should be thorough with the scope of your industry and start-up. The clearer your vision is, the better the impact on your investors.