india startups

7/21/2019 India Startups

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Private and Confidential

Investing in Emerging Markets

India Blume Ventures

Pre Money Conference,San Francisco, June 2

Blume Ventures



Private and Confdential

Incredi!le India "#$y it Matters

Section credits: Citibank (India) Technology Banking

Blume Ventures



%is E&'ected to Pro'el Consum'tion to (e)*eig$ts

Source+ $e #orld Fact!ook and Economist Intelligence -nit.

*ig$ /0P /ro)t$, #it$ a 1.1 !illion /ro)ingPo'ulation%

India Continues to *ave a Favoura!le Macro3Economic Profile

Bu!!le Si4e CurrentPo'ulation

5 g g r e g a t e C o n s u m ' t i o n

I n - S 6 ! n

Source+ Mc7insey /lo!al Institute Consumer 0emand

AggregateConsumptionto Quadruple

1,889

Calendar :ear

F0I flo)s in India continue to remain strong;-S6 !n<

Source+ Economist Intelligence -nit.(ote+ Figures in -S6 !n

$ere are Concerns = !ut also Confidence

• Currency devaluation

• Political uncertainty given general

elections in 2>1?• @ack of 'olitical consensus

• -ncertain ta& environment

• $at said, /ro)t$ 'roAected to !e 839,and if t$e a!ove concerns are alleviatedand a more investor3friendly /ovt is in

Po)er, t$is could !e $ig$er



5ttractive Economic 0emogra'$ic rends%

2>1> #orld Po'ulation ;mm of Peo'le<

Deal /0P 'er Ca'ita /ro)t$ ;2>11 = 2>2> C5/D<

Source+ -S Census Bureau ;2>1><.

Total Population: 6.9 Billion People

Sources+ $e Economist Intelligence -nit, CI5 Fact Book and Citi Investment Desearc$ as of Marc$ 2>11.

Just t$is mont$ ;June 2>1<, Fitch upgradedIndia’s Rating utloo! to "ta#le = driven !y/overnment ste's to contain t$e deficit,sta!ili4e t$e ru'ee and ot$er 'ositive reform3

oriented actions



5ttractive Economic 0emogra'$ic rends ;Contd<%

ProAected S$ift in Com'osition of #orld Economy 2>1> G 2>>E /lo!al /0P Com'osition

ProAected Evolution of t$e /lo!al Economy;6 in trillion, 'urc$asing 'o)er<;1<

Ran! Countr$ %&'&

1 -S 61?.12

% China 9.9( Ja'an ?.

) India *.9%

8 /ermany 2.H1

6 Russia %.%&

+ Bra,il %.'6

-7 2.19

H France 2.12

1> Italy 1.8

Ran! Countr$ %&*&

' China -*(.)9

2 -S 2?.92* India %*.%+

? Ja'an 8.88

Bra,il .%(

6 Russia ).(%

+ Indonesia ).%(

/ermany ?.>8

H -7 .9

'& /e0ico *.%&

Sources+ $e Economist Intelligence -nit, CI5 Fact Book and Citi Investment Desearc$ as of Marc$ 2>11.;1< PPPK stands for Purc$asing Po)er Parity, )$ic$ is a t$eory of long3term eLuili!rium e&c$ange rates !ased on relative 'rice levels of t)o countries t$e 'urc$asing 'o)er of differentcurrencies is eLuali4ed for a given !asket of goods.



%0riven By Dising Middle ClassK and 0omestic Consum'tion

India is Nne of t$e #orlds :oungest (ations%

. . . #it$ a Da'id Increase in -r!ani4ation;in millions<

% #it$ t$e Most 0iverse Society

%&'&A 1 %&*&2 CA3R: %.64

%&*&2 1 %&&2 CA3R: &.4

5nnual *ouse$old Income ;-S0<

O62,>>> 62,>>> 3 68,>>>

618,>>>3628,>>> 628,>>>

68,>>> 3 618,>>>

?9 middleclass !y 2>>

Nver >>mm Peo'le #it$in

t$e arget 5ge /rou'

5o 5ssameseBengali

/uAarati*indi7annada7onkani7as$miri7$asi /aroMarat$iMani'uriMalayalamMi4o(issiG0affiaNriyaPunAa!i

amilelegu

5ammu7ashmir

Pun8a#

ar$ana

R a8 as th an tt ar Pr ad es h

;elhi

ttaranchal

Bihar Assam

<est Bengal

rissa/aharashtra

/adh$a Pradesh

Andhra Pradesh

7arnata!a

Tamilnadu

=epal

Bhutah

Arunachal Pradesh

=agaland

/anipur

/i,oramChhattisgarh

7erala

/ahe>Pondicherr$?

3u8arat

imachalPradesh

"i!!im

/eghala$a

BangladeshTripura

Andman =ico#ar Island

5har!hand

@anam >Pondicherr$?

7arai!al >Pondicherr$?

Pondicherr$>Puduchcherr$?

5 /ro)ing Middle Class

Sources+ Street Desearc$, Mckinsey Estimates and $e Economist Intelligence -nit



India is 5mong t$e Most 5ttractive Internet Markets /lo!ally

@o) Internet Penetration Presents Furt$er -'side

-niLue Internet users in India India+ 2nd @argest #ireless Market /lo!ally

Source+ Internet #orld Stats, as of 0ecem!er 2>11.

Internet Penetration (%), As on December !, "#!!

($ireless sbscribers as o& December "#!!, in millions)

%) 6' +9 '* %%6+ '&'6 '%'Q of Internet

-sers ;mm<

?? H

29

1>

-S Dussia Bra4il C$ina #orld 5sia India

Source+ #CIS and D5ISource+ Street Desearc$



Da'idly /ro)ing Smart P$one Penetration

Smart P$one of all Cell P$ones

Sorce: TomiAhonen Conslting Analysis December "#!!, Citi In'estment esearch and

Analysis

5ctive Internet Ena!led Smart P$ones;1<

Sorce: *P+ in India Analysis

9>

1>

29

1>

2>12E 2>1E 2>1?E 2>18E

Early / num!ers are encouraging and 'oint to medium3term u'side

5nalysts 'roAect a c. / 'enetration !y 2>18, )$ic$ )e !elieve isconservative

!% "% -%.%Penetration

/ G ?/ 5do'tion a 7ey /ro)t$ 0river%;2<

%Su''orted !y Increasing Smart P$onePenetration

;Su!scri!er !ase in mm<

Source+ 5nalysys Mason, I0C

(otes+ ;1< Includes #i3Fi and G ?/ ena!led smart '$ones. ;2< Includes G ?/ ena!led smart '$ones.



India $e Mo!ile FirstK 0igital Economy )ill kick in ;very< soon

Sorce: /alcomm, *PCB e0ort


http://slidepdf.com/reader/full/india-startups 10/22Private and Confdential

Early Stage VC in IndiaVenture 2.> !uilding ground3u' t$is time

Blume Ventures



Why “India early stage”?

Blume entures


Early stage venture in India can oer higher risk-adjusted returns relative

to other asset classes. Investors can otentially get earlier and !ultilee"it otions # $esides IP% or &'() stakes could otentially $e ac*uired $y+C,PE investors across various fnancing rounds

Pu!lic markets

Private eLuity

Venture ca'ital

2arl$ stage

Asset class

1?31

1322

2>328

%4

Target IRRreturns

I n cr e a si n g C om p e t i t i on

1>>s

8>

R 28

D'&

E o rgani,edFunds >India?

I n c r e a

s i n g R e t u r n s

/orecompetitioninlated

Galuationscapital

deplo$mentpressures

aluations

are stillattractiGeInGestors

colla#orate cooperate

Blume Ventures



India - Early tage unding


Many VCs in India $ave moved u'stream, into t$e realm of /ro)t$ VC and PE.$is $as created a ga' for startu's t$at need critical seed and angel funding

Blume’s focus ( !ajority o/ +Cs have !ovedustrea!

Pre -

Series

A

5ngel grou's

Individual angels 5ngel funds Incu!ators 5ccelerators

Inventus 5ccel *elion SeLuoia Ca'ital I0/ Ventures Saama ;formerly SVB< 7alaari ;formerly Indo-S< Matri& (irvana Nmidyar

Tualcomm

(e&us Canaan (E5 Bessemer (or)est S5IF @ig$ts'eed Fidelity iger Verte&

Intel Cisco

Blume Ventures



India # hi/t /ro! 0112 to 0134


Pre -

Series A

Burst of accelerators, seed funds, su'erangels ; t$eir Luasi3funds<

Blme 1as &irst o& its si2e in this cycle 3 at

least a do2en more emerged in last "4 months

Deduced attractiveness of t$e 2>>93>vintage angel grou's

5ragmented angel net1orks don6t 1ork 1ellas yet (close7knit net1orks only)

@ack of a net)ork G market'lace of mentors,advisors, domain e&'erts, service 'roviders;)e may !uild it like FDC G U8>><

5lmost (N c$ange in t$e set of Series 5 G B G C 'layers

Some )ind3do)ns, some re!randing,some s'lits amongst larger VCs

Most of t$em on ne) funds limitede&its large active 'ortfolios

IPN market as dormant as ever intec$, focussed only on e&ce'tionallylarge cas$3flo) or gross rev !i4 models

rickle of M5 )e need a flood

Blume Ventures

8ack o& trans0arency arond 9C 0er&ormance



!orgas$oard o/ Invest!ent tylesBlume Ventures

the PreD(&’s st$le smallunds small inGestments>not too man$ deep tech

pla$s though?

the %&&H disruptorunds such as the entire

audience at preDmone$

the %&&(H neJaccelerator models

>@C K T" clones and #adones at that? D more

ocussed on demo da$sthan Galue

D

the preD%&& incu#ator

models D legac$ college#ased goGt unded

the JeDareDtheDdomainDe0perts accelerators li!etandem and angelprime

the letLsDcop$DtheDGalle$model >classic -'&D%&mill unds all the usual

suspects?

all models coe0isting and 8ostling or space D Jhat Je

haGe is a smorgas#ord o

st$les lots o noise eGer$oneJaiting or the music to #egin



India # the 5uances


DedBus ;Bus icketing<

Tally (Acconting So&t1are on CD)

5''s0aily ;offline 5'' Store<

har0ay, Delhi'ery (e7comm nly

8ogistics and Payments)

Just0ial ;yello) 'ages on Voice<

MadDat /ames ;Indic language, localc$aracter design = !oard games<

@arge Cas$ Economy, cardsunder'enetrated, 'ayment infra $ig$lyregulated

0o3it3for3me 0I:

rans'ort Infrastructure creaking =over!urdened as its !eing !uilt

Every Citys ec$ culture is Luite

different

Broad!and Infra )ell !elo) o'timal

Mo!ile Service Providers $ave toomuc$ control over a'' economy

Blume Ventures

;'ery challenge is an o00ortnity, bt nanced<

"ome Mocali,ed "tartup Ideas Mocali,ed pro#lems thatInGestors need to #e aJare o



India # so!e $ig ideas ' the!es


Mo!ile First ;device and access 'enetration muc$ $ig$er<

Fi& t$e SMB 'ro!lems ;83?> million small !usinesses<

@ocation tracking and services

Fi&ing e3commerce !ackends = B2B commerce, 'ayments

Video !igger t$an te&tW

5udio G Video Indic languages content !igger t$an Englis$

/aming = )ill lea'frog consoles to Mo!ile and a!lets

Cro)dsourcing = Surveys, Information, asks, Ca'ital

Deimagine traditional 'lays = travel, Ao!s, $ousing, datingGmarriage

Blume Ventures



Blume VenturesU t$e $eart and center of t$e microVC

movement

Blume Ventures



6lu!e # a short history

Blume Ventures Fund I is a 2>11 vintage -%& mil IndiaDocused seed

stage und

*el'ing Indian tec$ startu's seeking a round !et)een -'&&&&& to-&&&&& in a seedKangel round

Blume’s sJeet spot is -'&&D-%&7 >in rounds t$at it M2A;"N &4 ofround?

5nd -&D-%&7 in "$ndicates >O*4 of round?

#e t$en support our #est companies Jith #ridges ;mostly convertnotes to ne&t rounds< H proDrata participation in "eries A rounds 1)it$ an additional -%&&D-+&7

Stakes postD"eries A are '&D' 4 ;in @eads< and D'& 4 ;in

Syndicates<, )it$ a fe) e&ce'tions on eit$er end of t$e range



6lu!e Per/or!ance


9 u'3roundsK ;Series 5 G green s$ootsK Series 5s< in Blumes 'ortfolio

to date = from VCs including 5ccel, *elion, 7alaari ;formerly Indo-SVentures<, (irvana Ventures and Jungle Ventures ;Singa'ore<

Blume Ventures

%%5not$er in term s$eet stage

%%%..5verage multi'le ac$ieved Une&t round &

%%%%%..2 s$utdo)ns, !ot$ cos assets !eing sold for a small 'rice



6lu!e - Invest!ents ' ectors Blume Ventures

*D G Skills GEm'loya!ility

Internet Mo!ile3 Infra

Platforms

5d ec$ GMarketing G

Mkt Desearc$

Consumer;ot$er<

Consumer;e3Com 3/oods

ena!lers<

Content GPu!lis$ing

SaaS

Internet G

Mo!ile G0igital Media

Clean G/reen ec$

IeServices

ther =iches

>%4?

@ife Sciences

Consumer;e3Com =Svcs

ena!lers<

Manufacturing GDo!otics

Core >+4?

#e invest in t$e c$ange )e )ant to see in India and founders )$o !elieve t$e same InGestments >as o /ar %&'* %+ months rom launch?

5!out ?> )ill gro) out into or cater to international markets = more B2B, some B2C '&&H ounders '&4 <omen 4 =onDIndian citi,ens?> Bangalore, > Mum!ai, 2> 0el$i (CD ;Dest in Pune, *ydera!ad, C$ennai<6&H MPs >all entrepreneurs? inGest -%& millN 'st C und JK'&&4 Indian mone$

? mem!er Investment eam, ? mem!er Su''ort team, mem!er 'latform teamPlatorms #eing #uilt out 1 'st hac!er on pa$roll

IeServicesEducation



6lu!e &antra 7 6ack to $asics 8 $est-o/-$

India’s need:to bild a classic bottom70 9entre ;cosystem model 1ith best7o&7breed

0ractices ado0ted &rom disr0tor &nds 7 both &rom =S Inno'ators and

ther +arkets (China > ;ro0e > Israel)

<e ta!e inspiration rom all the godathers3 -SV G FDC G Felicis G U8>> teac$ing us riskGca'ital allocn3 First Dound teac$ing us !uilding automation of ecosystems3 5ngelist )ill ena!le future !uilding of co3investment syndicates3 Innovation #orks 5ndreesen *oro)it4 teac$ us scaling o's

3 @earning from Israel on $o) to Build in India, S$i' to t$e PlanetK

<e Jill urther adapt or India3 Build 'ro'rietary angel net)ork for $ig$ Luality co3investors3 Build 'ro'rietary mentor and advisor net)orks

3 Build o)n M5 'latform for systematic e&it strategy



$ank you U8>>:oull see a lot more of India and Blume soon

Blume Ventures

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