Anupam Mittal, angel investor and founder of People Group and Shaadi.com is well known for his early investments in successful companies such as Ola Cabs, Druva, BigBasket, and others. In an interview with FE’s Salman SH, he speaks out about the undeniable risk in angel investing and his thoughts about emerging sectors such as Web3, and state of his current portfolio. Excerpts:
You have multiple start-ups in your portfolio adding up to more than 150 companies over the past 15 years of your investment cycle. So why is it that you never thought of doing some of your investments using a structured VC fund of your own?
Right now to run a structured fund and to take on the obligations of a limited or general partner is a very large fiduciary responsibility. And one has to be structured and designed for it, because as a VC fund partner, you are basically managing other people’s money, and you become answerable to them. But if you look at some of my investments, I’ve made them because of pure instinct. And providing instinct as a reason for investment decisions isn’t going to sit very well when managing a VC fund. And secondly, I didn’t really want to take on the obligation of reporting to anyone. I’d just rather do my own investment with my own capital and let it speak for itself. But that does not mean that I would never launch a VC fund in the future, I’ll do it on my own terms.
Recently, there were a bunch of angel syndicates which popped up in India, and most of them are successful in pooling in cash and investing in early stage companies. What is the role that syndicates can play in the coming years? And what are the advantages for a startup founder in raising funds using a syndicate rather than going direct?
I think that syndicates are obviously here to stay. Whether it is AngeList in the US or LetsVenture in India, in which I’m an investor, they have done a tremendous job in organising angel investing. When a founder goes through the syndicate route to raise funding, much of the formal processes such as compliance checks and monitoring are taken care of by the angel syndicate itself. Also with syndicates, you can avoid having multiple investors on your captable, and just have a single entry which makes it much easier to manage future funding and exits. And for angel investors themselves, syndicate platforms are a huge advantage, because not every angel investor has access, and platforms such as LetsVenture provide access to quality founders and a large pool of pitch decks, that investors may find hard to come by.
We have the emerging Web3 and crypto segment that have come out with new forms of investment instruments using the concept of decentralisation, and some of these Web3 startups are also looking to completely disrupt traditional banking. Do you plan to invest in these emerging Web3 categories?
Some of these Web3 start-ups are just the wild, wild west…I mean if people want an anonymous way to do criminal activities, that’s not a world that I, as an investor, would be comfortable with. And, frankly, if you ask me, I don’t understand whether Web3 would live up to its hype although I’ve invested in a few companies there. I also don’t think that the metaverse concept is meant for the masses, because it has to satisfy the need of entertainment, or money generation or at least solve for social connections.
Most Indian internet users were stuck indoors for the good part of the last two years? How did this translate in terms of traffic and new sign-ups for Shaadi.com?
Our online engagement went up like never before on Shaadi.com. But the average revenue per order went down because people were a little risk averse. But the online matrimony industry actually did relatively well when compared to many consumer internet categories that suffered from de-growth. But we actually witnessed a healthy growth post pandemic period. But obviously, when it came to paid transacting users, there was a bit of a downplay. Now that’s changed. So after Covid, we are seeing a massive resurgence. And we’re pretty excited about the next couple of years.