On the sidelines of India Internet Day Summit organised by TIE, a non-profit organization that promotes entrepreneurship globally, Techcircle caught up with Vani Kola, head of the India arm of Indo-US Venture Fund. IUVP has actively invested in many internet companies including Snapdeal, Myntra, Indiaplaza, Via and Magzter. Vani tells us about the future of e-commerce and how the proposition will change. Talking about exits Vani said the popular e-commerce companies are shrouded in hype. She also gives us an insight about the current mood of an investor.
Is the Indo-US strategy still relevant for your fund?
Since 2006, we have really focused on investing into domestic India companies. That is our core focus area. We have already invested in 6-7 companies and they are all Indian companies, Indian entrepreneurs. So while our name says Indo-US we are primarily an India-focused fund.
Your focus has been more towards e-commerce and internet retail. Any particular strategy there?
It’s actually a question of what gets the publicity. E-commerce has only been around 1/4th of our total investments. But because there is so much energy around it that is what usually is picked up by the media.
What is your view on the whole consolidation spree that is going on currently?
I think that the consolidation will keep on happening, but there will also be companies that will build themselves into the vertical. As it is I don’t think the number 1 company is getting consolidated in any vertical it will be the second, third because then it makes the whole ecosystem much leaner. Consolidation will continue but we will also see many companies trying to compete for leadership.
As an investor, do you think there is a certain gloom in the market?
That would be the case mostly in the growth space. When companies are trying to raise $20-30 million the problem is that those companies have not scaled up that much to raise that kind of money. There was a period last year when such companies could still raise this kind of money because it was still early time in the market cycle. The early-stage companies, there is no gloom. I think when companies are going to market for a large capital raise, that is where the constraint is because that kind of capital is not that freely available right now in India.
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(Edited by Prem Udayabhanu)