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Alok Mittal: CEO of Indifi, Founding member and Angel Investor at Indian Angel Network. Ask Him Anything
Will like to see you here more often :)
Who will win the fight?
On ecommerce side, I do not see it as a winner takes all market. Flipkart's new found focus back on customer service is a great one. On the transportation side, there are real network effects - my sense is both these companies have critical scale now.
So unless the capital imbalance becomes too wide, I would think they can all thrive
PS: I am a UPSC aspirant so I look at things from analytical perspective.
I would urge you to look at Infoedge balance sheet when it went public in 2006, and value it basis that. Then see what has happened to that company and stock. And this is the challenge - many of these startups work on a market dominance and operating leverage model that is not conventional. So as long as you analyse them with that framework (and associated risks), I would think that would be a fair approach.
I also think that many of these startups would start to justify their valuations when we do that - for many people to say the least. And yes, I do expect there will be many detractors - the lack of consensus is what makes startup investing fun!
The second way is to "follow" initially - i.e. work with other lead investors to see deals, make investments. Then start doing your independent investments as you feel comfortable. One channel to do these is through angel investments like Indian Angel Network.
And then it depends on why you want to invest in startups. If you are looking to do this purely for investment reasons, and not for involvement, I would suggest you might also want to look at possibility of investing in some angel/VC funds, rather than doing it yourself.
Whatever you do, my one advice will be that don't take yourself too seriously. Be open to experimenting - that is the fun of youth. If you do a startup and it doesn't work out, you can find a job. If you do a job and feel bored, go travel. If you are done with travel, get back to a startup. My own belief is that careers are not planned, they happen when you do what you want to do next.
One layer deeper, Fintech is many different areas - alternate lending, payments, wealth management, remittances, ... And each of these space are subject to different trends - so partly it is about picking what one believes is at inflection point. On the alternate lending side, the investments that have gone into the infrastructure (like eKYC, UPI etc) as well as in enterprise systems (hence making more data available electronically) are some of the key drivers I am excited about.
Non-tech - has not been as successful for me. So that one will take some convincing.
- India is a "white space" market rather than disruption. Businesses hence can take longer to build
- Indian entrepreneurs like to own large spaces rather than excel in a part of that market. Hence what we are seeing built today qualitatively are still mediocre businesses on excellence scale
- I would bet on some experience in founding team. I have not had great success backing teams just out of college - perhaps, my own shortcomings, but nevertheless
I am sure there are other learnings, which would take time to list down.
I don't think most (reputed) investment bankers misrepresent - they understand that their credibility with investors will keep them in business.
Of late, there has been more emphasis amongst Indian startups to create software for the world. I think that is an interesting opportunity, especially if the founding team has strong globally-relevant product management skills. Companies like freshdesk are good examples.
This year, some of my investments include Lifcare, Realbox, Xprime, Hyperfluc and Lawrato - so not really stopped :-)