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Investments Churning the Consumer-led Market

Anurakt Jain
Anurakt Jain
Analyst, 
Draper Fisher Jurvetson India
Draper Fisher Jurvetson focuses on two broad investment themes in India: the first is the customer-led demand space, which includes sectors and large markets with robust growth such as TMT (Technology, Media, Telecom), healthcare, education, retail, and financial services and the second focuses on clean tech. The first space includes a broad variety of sectors that are experiencing rapid growth with the end-customers growing the market largely due to untapped potential. This is particularly relevant for India. The second space is a natural bias that DFJ has towards clean tech – about a quarter of our portfolio, including that in India, is dedicated to clean tech. Apart from the broad investment themes, in India DFJ is targeting companies across different stages and lifecycles. The investment focus is size agnostic and we are increasingly looking at companies that are in the mid-to-growth phase, apart from those in the seed to early stages.

India is still fairly nascent on the high-end IP development and product innovation curve as compared to Silicon Valley. However, we are now seeing some encouraging signs. Companies have come up with solutions that are directed towards the Indian market, while having a global application. These solutions can be across sectors, removing demand-side or supply-side inefficiencies, targeting consumers and or enterprises. This is a very encouraging trend in moving up the product innovation curve. Differentiation will play a key role here as multiple companies come up in the same space.

There are three broad metrics, called the 3Ts – Traction, Technology, and Team, that we internally apply to gauge a company and which entrepreneurs can use to rate their ideas.

Traction: As a company, ample thought should be given to how large the market is, what the market potential is, and how quickly can the solution scale.

Technology: What is the company working on or how will the company scale with the use of technology.

Team: This is the secret sauce that makes all the moving pieces fit together. A complementary and well-oiled team makes the best company tide over the worst of times.

Also, venture capital is not the end-goal in the growth of the company, but a good milestone to have. Nothing can replace the revenue generated from customers and the cash flow generated from operations.

Last but not the least, entrepreneurs are compulsive risk-seekers and passionate risk-takers. For every ten people who do not understand or support, there will be one person who will. Let the judgment of ten not be a deterrent, and let the sound advice of one be well heard.
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