Looking Beyond Mobile

Date:   Wednesday , September 05, 2012

Nokia Growth Partners (NGP) is a global growth stage venture firm focused on technology entrepreneurs creating companies at intersection of mobile, internet and computing. As a growth stage venture investor, NGP prefers to invest in companies that have a commercially launched product or service with a customer validated business model. From its offices in U.S., Europe, China and India, it makes investments and prefers to work with other value added investors with complementary skills and perspectives. In India, NGP has invested in organizations such as Deals&You, Innovis, Fashion&You, Netmagic, Network18, Quikr, and TechProcess.

Upal Basu is the managing director of NGP India Advisors. Upal also founded mFormation Technologies, a U.S. based mobile device management software company. Prior to this, he was a strategic management consultant for McKinsey & Company in New York and London. He holds an MBA from Harvard Business School.

Current Trend

The market is currently witnessing extraordinary levels of innovation in internet, both mobile and desktop, worldwide. The advent of ultra-cheap cloud computing has dramatically lowered the cost of starting a company. On the other hand, the massive growth in smartphones and tablets has created billions of new technology consumers hungry to communicate, inform, entertain and work with each other. These two phenomena are feeding off each other to create rapid innovation and business models that are spreading across the globe.
NGP sees significant innovation in areas such as Local Services, Mobile and e-commerce, Digital Payments, Multi-Screen Entertainment, Data Analytics and Cloud Computing. While in India, e-commerce has been the most funded sector, NGP is beginning to see entrepreneurs looking beyond, to create interesting businesses built on cloud platforms, leveraging existing offline businesses with mobile and new monetization and service delivery models.

Next wave in Mobile sector

With the advent of tablets and full-touch feature and smartphones; the distinction between PC and mobile experiences has started blurring as consumers seamlessly experience their internet applications in both PC and mobile mode. The faster uptake of wireless broadband and smartphones in U.S., Europe and China has made mobile internet apps mainstream. Hence we are seeing the acceleration of innovation towards direct to consumer mobile internet models away from operator-led Value Added Services (VAS) and SMS. The effect of touch based phones in India will be transformational, allowing people to finally communicate in their local languages using soft-keys, opening up significant new innovations. We are therefore very bullish on mobile internet in India, and expect the majority of new devices sold in India to be touch and internet enabled within three years.

Indian Investment ecosystem: Then, Now and Future

India has always been a mother of brilliant engineers and entrepreneurs who have proved their innovation ability and success in the most risk taking culture of Silicon Valley. We have seen tremendous progress in the last decade in the venture ecosystem here, but India is still early in this development. Recently, a vibrant angel community has emerged in India willing to back more risky ideas. However, there still remains a dearth of early stage institutional investors with the patience to build and nurture these businesses over the long haul, for a decade or more. The Indian regulatory environment for venture investments and exits remains ambiguous. By global standards, it is still extremely expensive and time consuming to create or close businesses in India. Finally, the Indian public securities market is not yet willing to back high growth companies with limited cash flows, and the number of acquirers for Indian businesses without a global footprint remains limited.
We believe that ‘The Indian Entrepreneur’ has tremendous potential and does not need government support to succeed. On the contrary, the best thing would be to have government step out of the way and reduce or even eliminate the red tape which challenge entrepreneurs every day.

The Hard Task: Founder or Investor

Having been both an entrepreneur and investor, I have strong empathy for entrepreneurs and the long journey that building a company entails. There is no greater satisfaction than starting a company, creating a winning team, satisfying customers, and delivering value to society. However, to build a successful company requires tremendous resilience and fortitude. It is rare to find entrepreneurs who have the tenacity to overcome adversity and build large businesses. Investing has a different set of challenges. As custodians of our Limited Partner’s capital, we have tremendous responsibility to deploy capital to entrepreneurs with integrity and businesses that generate a meaningful return for them. We invest significant energies, not only in finding the right company for our fund, but also in the time we put in to our portfolio companies to help them scale up and make key strategic and operational decisions.Being an entrepreneur has certainly helped me to be an investor. My experiences have helped me recognise patterns that help in identifying quality entrepreneurs and supporting businesses through their challenging times.

Road map

We aim to be recognized as the preferred investors in the mobile industry. As mobility becomes the core to everyone's personal and professional lives, we see unlimited investment opportunities ahead across both consumer and enterprise markets, in India and around the world. As always, we continue to look for those special entrepreneurs with the passion, experience, talent, integrity and commitment to pursue large opportunities and build leading global businesses in the mobile industry. If you are one of those, we look forward to hearing from you!