Saif Partners, which has invested in at least 40 companies in India and has start-ups such as MakeMyTrip, Paytm, UrbanLadder in its portfolio, has appointed Alok Goel as its managing director. Goel is known for playing a key role in the acquisition of Freecharge by Snapdeal and redBus by Naspers. He talks to FE’s Avanish Tiwary about his new role as an investor at Saif Partners and the investment eco-system. Edited excerpts:
What will be your role and focus at Saif Partner?
At Saif, we look at the early stage investment and my job will be to look at start-ups, meet entrepreneurs and decide where to invest. I will be looking at great entrepreneurs who are going to create great businesses. I will also be working with them over time and help them build their business.
How has early stage investment changed over the years?
Early stage investments have changed a quite a lot in the last few years. Two things that has been happening is that three-four years ago, there were just a few players who would do early stage investments. But now there are many funds out there doing early stage investments, some of them are VC funds, a lot of them are angel investors and there are a lot of typical late stage investors who have started investing in early stage as well. In that sense the desire to find a company early in its life cycle has significantly become more aggressive in the last few years. The second thing that has happened is as more people are coming up to invest, the money itself is becoming more and more like a commodity.
How has the investor-entrepreneur relationship or scouting process changed?
As there are multiple investors who are putting money simultaneously, entrepreneurs are typically going to choose the investor in terms of not just money. They are going to accept money from investors who will add value to their venture. Entrepreneurs are now much more savvy in terms of who they get as investor rather than just getting money.
How fierce is the competition among investors?
Yes, there is competition, I should not deny that at all. But this market works on co-operation. In many cases, two to three funds end up investing in a single company. Or maybe in another round one more fund will come and join them. Overall, there is a lot of co-operation that happens among funds.
What are the sectors you will be looking at?
We will do early stage investments and as India is a mobile economy right now, we are focusing on mobile start-ups currently. At the end of the day, picking a start-up is like picking a right team which is working on solving a large size problem. Typically, in an early stage investments we see two things: First, the market they are in and how big its size and scope is. Secondly, we see the team that is working on it. The team has to be passionate about solving the problem at hand.