Indian companies seem to require a lot more people and capital than what their global peers do. An oft quoted example is that of Uber, which launched with a skeleton staff in India and even now has just over 1,000 employees, compared to Ola’s 7,000-plus. Flipkart has raised more equity to build its Indian business than what Amazon has done for its much larger global business. Historically, this has been justified by the need to drive change in habit—buy online, book a cab, pay using your phone, and to overcome inherent friction.
However, we believe that the time has come to back technology- and product-first companies, which rely less on building a physical footprint. We call these “thin" start-ups. The Indian consumer is getting used to digital modes of action and is increasingly expecting more from their smartphones. While we believe in building for “Bharat" and “vernacular" trends, as much as any other fund, we also believe that there is a large opportunity to further serve the first 50-100 million digizens who are ready to do a lot more online. These constitute a large market (top 5 globally by number) and coupled with their purchasing power and propensity to pay will be very attractive to serve. We also believe that a lot of rails (logistics, payments, trust) are already in place for this segment, so attaining scale will be easier for these “thin" start-ups. While this trend is still early, we believe that it has the potential to result in newer, more efficient companies across several sectors, including e-commerce, real estate, financial services, education and consumer services.
Today’s leaders may not be eventual winners. Just like what Facebook did to Orkut, Google to Yahoo Search, Alibaba to eBay in China, Amazon to Snapdeal, ShopClues and, maybe, even Flipkart, “thin" companies will leverage investments already made and make pioneers pay the price
Reverse Pitch is like a normal investors pitch, but the roles are reversed; that means, the start-up doesn’t present its business to investors, but investors and companies pitch their business concepts, challenges and the like to start-ups.