COVID-19 is taking a toll on dealmaking globally and India is no exception. In February, for instance, risk capital investors recorded a 24-month funding low, investing $1.7 billion in Indian startups.
In contrast, private equity and venture capital firms had invested as much as $2.8 billion in India in February last year, according to data from the Indian Private Equity and Venture Capital Association and consulting firm EY.
“Yes, transactions are taking more time… New discussions are not starting, except in rare cases,” said K Ganesh, serial entrepreneur, partner of GrowthStory.in, and promoter of online grocery store BigBasket, healthcare provider Portea Medical, and foodtech startup HungerBox. “Not just because of on-site due diligence getting delayed but also because everyone is busy handling some urgent priorities on their end. People are trying to close existing deals,” he said in a chat with DealStreetAsia.
Ganesh set up GrowthStory, a venture builder platform, in 2011 to focus on next-generation businesses. “The problems [that these companies are trying to solve] are everyday issues that consumers face in their lives surrounding core sectors such as grocery, food, healthcare, housing, among others,” he said.
“The idea was to look at a parallel entrepreneurship model, similar to the Rocket Internet business model. We look at next 5 to 10 years, what are the big themes, where is the maximum pain point, where can we build large businesses and create value.”
Today, Ganesh is also the promoter of Bluestone, an online jewellery store; HomeLane, an interior design startup; Housejoy, an online service provider that caters to all home needs; food tech startup Freshmenu; and Verloop.io, a conversational platform, among others.
“The challenge today is keeping track of changing consumer behaviour. Most of these businesses are pioneers and have no established role models to copy from. The talent pool has to be created from scratch, business practices have to be learnt and perfected and there is no prior playbook that can be copied. This means lots of mistakes, trials and errors before we come up with workable solutions. So it needs patience, stamina, capital and persistence.”
Among his portfolio companies, BigBasket recently made headlines for raising $50 million in debt funding from China’s e-commerce giant Alibaba. The new round came in shortly after the company raised $60 million as part of a new bridge round from existing investors Alibaba, Mirae Asset and CDC Group.
Edited excerpts of an interview with Ganesh: