US and India:Key Investment Opportunities
Date: Monday , August 01, 2011
Trends and Technologies: VC Perspective
We focus on themes in Advanced Materials, Cleantech, Biosciences and some niche areas of Mobile Media/ IT. We track trends in these sectors but specially focus on innovations that are enablers. For example in Cleantech, Energy Storage technologies are critical to competitiveness, and volume implementation of alternate energy solutions. There is a long way to go in terms of finding an enabling energy storage solution. Innovations in batteries, capacitors, etc are particularly of interest. We are also looking at some early stage Solar PV technologies. Although, the major trend in solar is of consolidation, funding going to later stage deals etc., there is still room for innovations enabling cost efficient manufacturing, elimination of toxics in thin film PVs, etc. In Biosciences, there are developments in Metabolomics related with Personalized Medicine that we find interesting. We are looking at some innovations in metabolic biomarkers and drug delivery technologies for cancer treatment. In Mobile Media, the trend is clearly towards increasing adoption of tablets and smart phones over PCs. We feel that Haptics is going to be a major area of innovation and thus opportunities in this space.
Opportunities for Innovation: India and U.S.
Opportunities for innovation always exist. My favorite example is electronics industry. Both incremental and disruptive innovations keep happening in that industry have enabled several technologies and products in related sectors. Flexible electronics and displays, haptic technologies mentioned earlier, 3D imaging, and more, are few examples with opportunities. A lot of innovation is happening in India related to IT and Software and I think that is very close to what is happening here. Where as in non-IT sectors, there is a need to more innovation. U.S. has a blend of innovation culture. From universities to government laboratories, technology giants of Silicon Valley or just a garage, innovation happens every where. The same did not happen in India earlier, but these trends are now on rise in India. Indian government is taking steps to prosper entrepreneurship innovation. They are looking to work with National Laboratories and Universities and that is why we see very similar kind of approach and programs that are developing in India, something that happened in U.S. 20-30 years back. The trend is not only limited to setting up venture capital firms but also incubators, accelerators, technology centers are establishing in India which will help especially in the long IT sector.
India Market: Focus as a VC
I see a lot of innovation happening in the field of media IT, but comparatively less innovation is seen in the healthcare IT sector. Indian market needs it at a substantial level. One of the companies we would like to advice and help sustain will be related to healthcare IT market as many countries do not provide healthcare insurance. There is a large section of the population which is not getting healthcare insurance and the documentation related services are not even automated. Automation in that sector is going to be more important.
Advice to Entrepreneurs
I believe entrepreneurs are like cholesterol ó good and bad. Many entrepreneurs often only consider innovation and capital. Most of the time, an innovative idea with an experienced team gets funding more easily than those with non-experienced team. Many entrepreneurs, especially those who have not enough time in the industry or who not really understand how to take technology or products to market, they cover interesting idea but lacks experience. At the same time they are not willing to go to share that with other and more experienced co-founders and that is where one gap can happen. That is essential because in most cases you need a sort of a committed team or a lean.
In IT, one can make one or two mistakes, come back and rectify it and restart all over again. But this cannot be the case in other sectors. Take the case of solar or doing something that is more capital intensive, in bio-tech or medical devices, you donít have the luxury of making that mistake and then coming back. You can initially crunch your capital even if it comes from angel, VC and then the startup would fall through the crack.
An experienced team is required that is willing to work with the entrepreneur in good as well as bad times. A co-founding team willing to put in sweat equity before capital come in, makes a big difference. Entrepreneurs especially those that are doing a startup for the first time should be willing to share equity to bring in this experience. VCs also look for a good team first and then the business idea.