Why Ola is in Norwest Venture Partners’ anti-portfolio
Niren Shah of Norwest Venture Partners on the various reasons why the venture capital firm passed on investing in Ola, run by Bhavish Aggarwal-led ANI Technologies
Ola is definitely a company in our anti-portfolio. We looked at this company multiple times and came very close to investing, but unfortunately, we always eventually passed it up for a number of reasons!
On the positive side, we really found Bhavish (Aggarwal), the founder, to be a strong disruptor and felt that he could execute and scale the business, innovate and take this very far. We also felt that the space was going to be huge in India, given the under-resourced public transportation.
Unfortunately, we had seen far too many offline cab companies and were concerned that scaling this business would require a huge quantum of capital.
Further, on the unit economics, we had significant concerns that this space would bleed for a very long time and found it hard to understand how the space would become significantly margin positive. Lastly, we saw a lot of regulatory friction in India which we felt could be binary (Uber was still very tiny).
Ola has done very well so far and has been largely able to surmount most of the concerns that we had initially anticipated. They have been certainly able to find capital, they have made progress on the unit economics, and the Indian regulatory framework hasn’t held them back as we had anticipated.
The key learning for me from this anti-portfolio was that once you find (1) really strong teams, (2) demonstrated execution (in the current company or a previous track record), and (3) a large market space, which is here and now; it makes sense to move quickly and invest, rather than focusing on what else could go wrong!
While we continue to remain very selective at Norwest India, we have been able to put some of these learnings to good use in our subsequent Internet investments of Pepperfry and Swiggy!
Niren Shah is managing director at the India arm of global venture capital and growth equity investment firm, Norwest Venture Partners.
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