• A New Venture Firm Bets on India

    Vispi_Daver_400x400One of the biggest venture fundings ever was confirmed yesterday, a billion-dollar round for the India-based e-commerce company, Flipkart.

    Vispi Daver and Murli Ravi hope it’s a good omen for their new venture capital firm, Unicorn Venture Capital — named not after a popular blog post, they say, but a mythological creature in East Asian culture associated with prosperity. Indeed, with a little luck, they’ll raise the $50 million they’re targeting for their debut fund, which they intend to invest in early-stage tech startups in India, Singapore and Southeast Asia.

    Their backgrounds should help. Daver spent eight years at Sierra Venture Partners, where he led several deals in India-based companies, including Makemytrip, one of India’s largest online travel companies. (It went public on Nasdaq almost exactly four years ago.) Ravi, meanwhile, spent the last five years as the head of South Asia investments for JAFCO Asia in Singapore. I spoke with Daver earlier this week about the duo’s plans.

    Murli is staying in Singapore while you move from the U.S. to India. What’s the competition like where you’re headed?

    There are only about 40 people on the tech side of VC with early-stage investing experience in India and that’s probably across 10 groups, from indigenous funds to Sand Hill Road firms. It’s still very early there. MakeMyTrip is just one of three [India-based] venture-backed public tech companies, and the only one on Nasdaq.

    Do LPs think it’s still too early? I’d read that $190 million was invested in early-stage tech firms in India last year, up 25 percent from 2012. But those are still small numbers.

    No, the growth metrics are too exciting. Talk with any tech bellwether – Facebook, Google, Evernote, Dropbox, Salesforce – and they’ll tell you about downloads from India. Growth on the smart phone side has wowed everyone. Facebook already has 100 million users in India – the second biggest base of users after the U.S. If you take into consideration [other] app stats, the Philippines, Bangladesh, Vietnam – they’re all in the top 30 [in terms of users] and they’ll be in the top 10 soon, based on economic and population [trends].

    How well do you and Murli know each other? Have you made investments together?

    We’ve known each other for a year and looked at 75 companies together — two of which we’ve invested in and will grandfather into the new fund. We both grew up in Mumbai. He was one of those really smart kids who the Singaporean government sucks into the system, sending them to premier educational institutions and to a premier investment house after. [Before joining JAFCO, Ravi was a senior associate at Singapore’s sovereign wealth fund Temasek Holdings.]

    Why does it make sense to operate from two different posts?

    No tech company is focused on Singapore alone, where just five million people live, and similarly we think that Indian startups will be expanding into Southeast Asia and that having a presence there will be helpful. From a legal and regulatory perspective, it makes a lot of sense for India companies to [plant their] headquarters there. It’s very developed, with a government that works really well. There are also lots of positives in terms of easy living.

    How do you feel personally about returning to India?

    I’m excited. The environment in India is interesting. Entrepreneurship is generally in a lot of people’s blood. There weren’t as many professional jobs for the last generation, so a lot of people were entrepreneurs and it’s not a big convincing act to get people to [take the plunge]. It’s also the case the young developers are less and less different than their counterparts elsewhere. They’re using the same apps and learning the same ways to code. Big ideas can come out of India, too.

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