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According to SAIF, startups are maintaining capital efficiency and improving unit economics, as uncertainty grows. (REUTERS)
According to SAIF, startups are maintaining capital efficiency and improving unit economics, as uncertainty grows. (REUTERS)

SAIF Partners boosts investments despite coronavirus impact

  • SAIF’s recent investments include fintech startup Jodo, which provides education loans for middle-income households, and enterprise SaaS startup Zomentum
  • With pandemic presenting new opportunities, SAIF Partners said it has not changed its investment thesis and continues to back early-stage startups

Venture capital fund SAIF Partners has doubled down on investments in India in the last seven months, and seeks to tap into new segments including edtech, healthtech enterprise software-as-a-service (SaaS), entertainment platforms and direct-to-consumer startups.

SAIF’s recent investments include fintech startup Jodo, which provides education loans for middle-income households, and enterprise SaaS startup Zomentum. It has also backed several unicorns and large ventures including Rivigo, Swiggy, Paytm, MakeMyTrip, Bookmyshow and Sharechat, and has closed 15 deals in 2020, 13 of which were early-stage startups.

With the pandemic presenting new opportunities, SAIF Partners said it has not changed its investment thesis and continues to back early-stage startups providing solutions for newer opportunities emerging from covid-19, in a bid to catch them early. “Our confidence is just growing, since startups are also becoming more resilient and working towards building for the new opportunity, which the pandemic has posed and improving financial efficiencies," Deepak Gaur, partner, SAIF Partners, said in an interview.

“For sectors where there is structural impact, like travel, and are against the tide, we have taken a pause, and are struggling to find conviction to invest in these businesses. Same applies for businesses where there is high-discretionary spend," he added.

According to SAIF, startups are maintaining capital efficiency and improving unit economics, as uncertainty grows, leading to investors being bullish on their investments in such companies. However, this positive sentiment remains concentrated around early-stage investing.

“Since there is distancing, digitization is no longer a discretion or choice, but has become mandatory, and that has led to a fundamental change in the trajectory of several businesses. We have seen the tailwinds in sectors including gaming, education, especially the test preparation space; remote diagnostics and telemedicine. There is further digitization in Indian small-and medium-enterprise space through digital customer relationship management tools, retail analytics or digitizing ordering systems," Gaur said.

While investors continue to be upbeat about early-stage startups, for late-stage, the realities are different, as VC funds operating in this space are expected to be even more selective in the coming months.

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