Archive for August, 2010

Navigating through M&A

Interesting account of how Backblaze navigated through an M&A discussion, and what to watch out for,

read here.

Early stage entrepreneurs will see huge opportunities

Peerzada has done a great job of reflecting our thoughts on early stage entrepreneurship, and what excites us about the Indian market.

Its interesting that while we pride ourselves in being able to leverage our operating experience and help build companies, the best entrepreneurs know enough to run their businesses, and tend to involve us in very specific issues where we can add perspective.

Mobile services for agriculture

Seems like there is growing interest in mobile information services for farmers. TCS has mKrishi, Intuit had another application to get mandi prices etc, and IFFCO Kisan Sanchar Ltd has a mobile information business with Airtel… Looks like a great application area given the number of farmers out there. The notion also extends to other large occupational communities like dairy farming and so on.

Canaan invests in Equitas and Naaptol

Pleased to announce our investment in Equitas, the fastest growing top-10 micro finance company in India; and Naaptol, a leading home shopping business. We are very excited to participate in high-growth consumer services opportunities, with high-caliber entrepreneurial teams.

Journalistic over reach – why are we surprised?

Finally we were able to come out and share our perspectives on our investment in Naaptol. Over past few weeks, as the news leaked first in ET, then picked by various blogs; and then a second round in VCCircle, we received several enquiries on the same. I would like to thank media persons who resorted to responsible journalistic practices, and allowed us an opportunity to express our views on the same.

Some of the earlier misreports, perhaps especially the one at pluggd.in drew stark reactions from people questioning whether this was responsible journalism. Honestly, I do not feel anger that “our news had been leaked” – media in general has leaned in favor of sensationalism over past many years, and there is no reason to expect that online blogging will be any different. There will be certain sources that will lose credibility over time, and there will be others which will be relied upon for authenticity – that strategy choice belongs to owners of those sources. As an audience, the choice that belongs to us is who we go to and for what. In the print and television media, business success has not necessarily been maximized by credibility, but by “breaking news”, and I consider it a valid incentive in the startup space as well. The mistake that we have made and feel undone for, is to consider startup bloggers as “friends of startups” – that mistake is entirely ours. These businesses have no obligation to care about interests of entrepreneurs, which can be severely damaged if deals “reported” in media do not go through. These are businesses like any other, and are free to set their ethical standards where they would like to – if we dont like that as customers of these businesses, we should defect.

There is one primary reason for me to write this post though. At pluggd.in, there were several revisions of the story, and I think most of them misquoted me, including the last one of my having denied the investment altogether. I consider this as deliberate falsification of information on part of the author – my credibility is important for me, and I am reproducing my response to Ashish in toto – as the readers will notice, I had refrained from denying or confirming specifically the news of an investment being made. There was also no express refutation of the numbers reported by ET – I can now confirm that the numbers reported by ET were wrong.

Nothing to share right now Ashish. The ET report is factually incorrect – journalistic over reach!

Will definitely share anything that we have to share with you :)

Alok Mittal

which got reported as “[Alok] mentioned that the numbers aren’t correct at all”, and the followup

As I said, no issues from my end, cheers

Its not just the data, the news itself might be incorrect

which got reported as a denial of the investment – “It seems the news itself isnt correct, as per my conversation with Alok”.

I am perfectly fine with any journalist reporting standards. One thing that does apply even to that world – Please do not misquote.

A Billion Dollar Indian Internet Company

I have always (after coming into the VC industry) heard the concept of $1 bn company while evaluating early stage businesses. “Can it become a $ 1 bn company?” has been a perpetual question. I always doubted on the concept of $ 1 bn market cap internet company out of India. However; last week our portfolio company, MakeMyTrip IPO made me a big believer of early stage investing.

Early last week, the IPO was oversubscribed by a big margin. My team at SAIF Partners in India was happy that the company will get listed at higher price range of the band giving us a 10x return. It was a joyous moment specially because MakeMyTrip is one of our very early stage investment. Thursday turned out to be a different day for us. All of us checked MMYT (MakeMyTrip NASDAQ ticker) multiple times at night. The stock went through a crazy day and finally closed 89% up on the debut day itself. By this time MMYT was already a $800 MN Market Cap company

MMT

It zoomed again yesterday and according to Nikhil (MediaNama) “the first instance of an Indian Internet company crossing the $1 billion Market Cap”

Though I have joined SAIF very recently but I feel privileged to be a part of the joyous moment. I strongly believe MakeMyTrip IPO will go a long way in contributing to the Indian Internet and start up ecosystem.

1.) It will reinforce investors’ confidence in Internet in India. Couple of days back, Alok bounced if more money will flow to Indian early stage businesses. I didn’t have an answer that time. However; now I believe that it will. I am already seeing lot more deals cooking with various VCs

2.) Hiring senior level talent would be easy in growing Indian Internet/Mobile companies. After Naukri, MakeMyTrip would become another example of wealth creation through ESOP. I am seeing great interest in senior level hiring in our other portfolio companies like HomeShop18 and One97. I think ESOP story will become more credible to sell

Personally, it has created lot of energy and motivation in the team and we will see many more SAIF investments in early stage companies in India. One97 would be another early stage investment of ours going to hit markets soon.

Launching GrexIt – Your shared email memory

I have been working for the last couple of months building this tool: www.grexit.com. If you use Google Apps for your email, you’ll most likely find it useful. A small description of where we are trying to get at with GrexIt follows (It uses a browser plugin that we currently build only for FF 3.x):

This is what you can do with GrexIt:

  • When you have an email thread in your inbox that you think can be of importance/relevance to other people you work with, now or sometime in the future, you can add the email thread to GrexIt by pressing the “Send to GrexIt” button on your email interface.
  • This also triggers an email to all participants of the email discussion. You can continue your discussion on email by responding to this automatically triggered mail, and the complete discussion keeps getting saved in GrexIt.
  • You can search the content on GrexIt by typing in the box that is rendered just above your chat box in Gmail/GoogleApps mail.
  • You can also login to GrexIt at http://grexit.com and access the content that your group has added.

How to use GrexIt: http://blog.grexit.com/using-grexit

The kind of content for which GrexIt is relevant (some generic points):

  • Technical set-up/configuration information that might be needed later by anyone in the team
  • Announcements that might be of relevance to people who join the team later
  • Discussions where someone asked a question and the problem got resolved on email
  • Links to articles etc. on the internet which might be useful later – example: all the gang discussions that we have
  • As a thumb-rule, anything in your inbox that you think might be needed by others now/later, belongs in GrexIt

Currently, the plugin works only on FF 3.x and is for Google Apps users. Also, you might see some problems with the attachment support as of now. We’re working to fix it.

Would look forward to knowing from the community here what they think about the tool. A lot of features, including gmail like labels, but shared within the group, are coming soon.