HTBV Podcast: Unlocking the trillion dollar Indian startup ecosystem with Nikhil Marwaha
Episode Transcript
Happy Anniversary to our Hard Truths by Vertex podcast! We are one!
Thank you for listening and supporting through the year.
Who we are
Vertex Ventures Southeast Asia & India is a pioneer in investing in tech start-ups in this region and has helped to build a number of unicorns. In this podcast, we want to share and uncover Hard Truths — raw, unfiltered insights and venture capital experience across Southeast Asia & India. Tune in to hear from leading founders, innovators, venture capitalists and industry experts in the region and to gain industry insights from those in the know.
Our Guest, Nikhil Marwaha’s Bio:
Nikhil Marwaha joined Vertex Ventures Southeast Asia & India team in 2023 and is based in Gurgaon, India. Nikhil brings with him a wealth of experience in investing at later stage companies, across consumer, digital businesses, b2b and healthcare. Prior to Vertex, he was Director for Investments for a US$200M growth equity fund sponsored by Avendus, a leading Indian investment bank. He also worked at Mega Delta and New Enterprise Associates Inc. (NEA) India.
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In this episode, Nikhil Marwaha, Senior Executive Director, shares his extensive investment journey spanning early and later-stage companies in sectors like consumer, B2B enterprise, and healthcare. Learn about his experiences with growth equity funds, insights into venture investing, and the exciting trends in the Indian startup ecosystem. Based in Gurgaon, he sees a different set but nevertheless exciting venture opportunities.
Stay tuned for discussions on emerging themes, including enterprise B2B SaaS, manufacturing in India, and the rise of electric vehicles in India. Discover the unique stories of Vertex’s portfolio companies, such as Ace Turtle, Certa and Pilgrim Beauty, and gain valuable advice for early-stage entrepreneurs navigating the dynamic Indian market!
IN THIS EPISODE
(00:00) Introduction and Background
(01:28) Investment Experience and Transition to Venture Capital
(06:27) Overview of the Indian Startup Ecosystem
(10:11) Key Investment Trends in India
(14:45) Metrics and Assessments for Venture Capital Investing
(20:54) Vertex Portfolio Companies in India
(23:14) Ace Turtle and Progress in Consumer Segment
(25:21) Advice for Early Stage Entrepreneurs in India
(30:21) Market Sizing and Challenges in India
(32:00) Exciting Areas in Venture Capital for 2024
Elise: Hi, I’m Elise Tan, and I’m your host for this episode of Hard Truths by Vertex Podcast. Today I have my colleague and senior executive director, Nikhil Marwaha with me. So Nikhil brings with him a wealth of investing experience across, later and early stage companies. So he’s very experienced in sectors such as consumer, B2B, enterprise companies, as well as healthcare.
So prior to Vertex Ventures, Nikhil was with a growth equity fund, 200 million, which is sponsored by one of the leading India investment banks called Aventus. Before Aventus, he worked for companies such as Mega Delta, as well as New Enterprise Associates, NEA, in India.
Hi Nikhil.
Nikhil: Hi, Elise. How are you?
Elise: Good. Yeah. Thanks for taking time for this podcast. Firstly, maybe you could give us a bit more about your background.
Nikhil: Sure, I’d be happy to, Elise. So I think I’ve spent close to about 12 years now on the investment side. I started my love for investing when I interned with Goldman Sachs in London.
So I was a part of their special situations group. So this is essentially Goldman’s own prop investment arm. I was one of the very few interns who actually got the opportunity to work on live deals and that started my love for investing. Obviously I graduated in 2009, which was the peak of the financial crisis.
So financial jobs were difficult to get by. I got my first break into India PE investing with a firm called Baring Private Equity Partners. So this is a growth equity fund, a billion dollar AUM growth equity fund. I was a part of the healthcare and life sciences practice, moved to NEA sometime in early 2012, spent close to about seven, eight years with them.
I was involved in a lot of consumer healthcare investments. So First Cry (Vertex Ventures SEA & India’s portfolio company), for example, is one of the investments that I worked on, Nova medical is another one right? So I’ve got a very rich experience across technology, consumer healthcare, B2B. I moved from that to another fund called Mega Delta, which was on the growth equity side, then to Avendus and finally joined Vertex in January of this year (2023).
Elise: Yeah, we’re definitely very happy to have you on board. You mentioned about First Cry. We (Vertex) also were invested in First Cry in India. Is that how you got to know Vertex as well?
Nikhil: Yeah. So that was my first introduction to Vertex. So from NEA, we invested in FirstCry in, I think, 2015, early 2015. Vertex was already an investor, so Vertex was there on the cap table. We got to know Vertex on board meetings, (I) interacted with Joo Hock who used to be, I think, involved with the company at that point of time.
My other experience with Vertex is also, Ben (Mathias, Managing Partner, VVSEAI) used to be my boss at NEA, right. So I worked very closely with Ben for about four years while Ben was at NEA and I was at NEA. So that’s another reason how I got to know Vertex. It turns out that Piyush Kharbanda, General Partner, VVSEAI (Listen to Piyush’s podcast episode here), who is also a general partner now at Vertex, he’s also a good friend.
I have a deep association with Vertex in that sense.
Elise: Yeah, it’s really a small world. And I believe that for NEA, Ben was the one who started the India office.
Nikhil: That’s true. That’s true. So Ben was the first India employee for NEA. Ben actually was involved with NEA in the Valley. Then he decided to move to India and he set up the India office. When I left NEA, we were a team of about six people on the ground.
Elise: Wow, it’s grown a lot. Yes. So I think one question is, you have been in private equity growth capital area. So what brings you to, you know, early stage?
What brings Nikhil to the early stage?
Nikhil: Sure. No, I think that’s an interesting question, Elise, because both asset classes invest on the private side, right? I think one or two key differences that I would want to point out is that when you talk about growth investing, this is a lot more mature investing. The company’s scaled up a lot more, right? There are metrics that you can look at, right? The founders have also kind of scaled up along with the company. So the founders are also a lot more mature, as an individual or as an investor.
A lot of times what it comes down to is that you are getting capital onto the table. And capital becomes something which is very, very critical at a growth stage. But when you look at a venture state, these are young founders, these are young companies. There are a lot of unanswered questions.
So I think personally, as an individual, I like being in such situations because this is like being one of the co-founders. So you are entering at a stage where the company is really young, right? A lot of the trajectory, the journey of the company still has to take place. And you were a very active part of that entire journey, right?
It kind of gives you, let’s say a front seat view of how the startup scales. And also I think the other really rewarding part of it is that when you do see companies scale and you’ve been associated with those companies from a really early stage, I think the satisfaction that it gives you is a lot higher when you talk about venture versus maybe growth, when you’re entering, when the company is a lot more stable, right?
So that’s what excites me about doing venture investing, right? So it’s like, you are one of the co-founders in a way.
Elise: Yeah, definitely. And I think for Vertex, we really pride ourselves as a co-founder to our founders because we really work so closely with them, having calls as frequent as every other week or every week even. Yeah. I think it’s really, really fulfilling to be able to be part of this, you know, high growth journey with them.
I think most of our team is based in Bangalore, but for you, you are in Gurgaon.
Nikhil: That’s correct.
Elise: Yeah, and tell us more about this region because, you know, many of the startups are based in Bangalore, but I think where you are now is growing very quickly as a startup hub too.
Gurgaon is rapidly growing as a startup hub
Nikhil: No, so that’s correct. So I think I always wanted to be in Gurgaon. I spoke to Ben sometime I think late last year and Ben also told me that look, as Vertex we’re also kind of planning to expand to Gurgaon, right?
By that time, Vertex already had three portfolio companies in Gurgaon, right? So I think that is something that really worked well for me. But I think what is happening now in Gurgaon is something that maybe happened in Bangalore five, six years back. So for any startup region to thrive, I think there are three key things that you need. One of them is a very vibrant ecosystem. And when I talk about an ecosystem, this is founders, this is mentors, this is angel and seed investors, right?
So what has happened in the last five, seven years in Gurgaon is that you’ve had two or three very, very successful companies getting created. Obviously, Zomato is one of them. Paytm is one of them, right?
So we have a very strong founder set, which is coming out of these established companies trying to build something on their own, right? You have an angel set from these companies who have done it in these startups want to help founders do it. So I think overall, if you look at it, the ecosystem is definitely developing.
So I think that’s one large part of it, right? The second part of it, typically what a startup will look for is access to resources, right? And these are like human resources. Gurgaon is a very, very strong hub. There are a lot of IT professions in Gurgaon, right?
So I think from a second standpoint, you are very sorted when it comes to talent. I think the third key part obviously is cost of living, right. So Gurgaon is still not as crazy as Mumbai when it comes to cost of living.
So Gurgaon in that sense is not up there, right? So there are a lot of people who actually want to move to the city because it’s easier to live now, it’s kind of become a lot more developed. So I think these three factors play very well. So Bangalore, if accounts for like 50, 60 percent of all startups, Gurgaon today might get 25 to 30.
But that is definitely something that’s growing.
Elise: Very interesting. And if you could actually look at the kind of sectors that do relatively well in Gurgaon versus Bangalore, how would you highlight the major industries?
Nikhil: So, I think Gurgaon traditionally has been a lot more consumer and B2B commerce facing, right? For example, Zomato is based in Gurgaon. This is a strong agri tech (company) and a lot of agri tech companies end up starting up here, right? Bangalore has always been a very strong traditional IT hub. So a lot of SaaS companies that you will see, would have been started in Bangalore, right? But I think that is also now shifting to India. So for example, as Vertex, we are, fingers crossed, very close to closing an investment in the B2B SaaS space, the company is based in Delhi NCR. So I think Gurgaon as a hub is catching up on the tech wave.
And this goes back to availability of talent, right. And IT talent is something that is very well available in Gurgaon as well. So we’ll see a lot more tech companies also start in Gurgaon, right. But obviously Bangalore has a head start.
So it’s difficult to catch up to Bangalore, but I think we are, we are getting there.
Elise: Yeah, got it. And I think if you were to compare, perhaps you can say that Bangalore is like a SandHill of India. Yeah, super interesting. And I think, as we look across this region, India is definitely a market that is rapidly developing, is growing, GDPs are soaring, it’s never a better time to be investing into India.
What are some of the interesting trends that you have been observing recently?
What are some of the interesting trends in India right now?
Nikhil: There are a lot of things that are working right for India, right? I think the biggest factor that works for us is we are a very strong consumption driven economy. So that helped us during a lot of crises, right? So that keeps India doing relatively well, right? But I think from a VC standpoint, I am really attracted or really interested in three or four key themes that are playing out in India.
One, obviously, like I spoke about earlier also is the entire enterprise B2B SaaS site. So there are some really valuable startups that have been created out of India but sell globally.
And I think two key factors that are driving this, obviously, India has a lot of good tech talent. We have a lot of people in Silicon Valley. We have a lot of offices of companies, large tech companies like Google, Facebook in India. A lot of these people also want to do something on their own or join startups and are a lot more open to doing that, right?
So tech talent to build products that are world class. What also helps us is that obviously the cost base is a lot lower, right? So we can create these products that can compete globally at costs which are much lower than what they are today, as compared to let’s say in the U.S. or in Europe, right? So from an end client perspective, the ROI that you get when you engage an Indian enterprise B2B SaaS company, that’s a lot higher. So I think there are a lot of spaces where this is going to happen. In fact, we already have, we have one company that we’ve invested in on the B2B SaaS side from Fund 5.
So I think that continues to be a strong theme. The other theme that is also working very well for India is the entire manufacture in India piece. What is happening to supply chains is that China used to be a very large part of a lot of global supply chains. Everyone today, given what happened in the last three years, is looking for a China plus one strategy.
And India is definitely one of them, right? So startups who are doing this in a capital efficient manner can extract high gross margins. I think those are the kind of startups that we are definitely looking for. The other one obviously continues to be consumer, like I said, India is a very consumption driven economy.
GDP increase leads to people wanting a higher brand, wanting more brand affinity, wanting premiumisation, right? So a lot of those themes are also playing out. So in fact, we’ve been a very active investor in India Consumer. We were, like you said, investors in First Cry. We’re also investors in Licious as Vertex, right?
So I think that theme and kind of looking for new sub-sectors, looking for new behavioural patterns.
Elise: Thanks, Nikhil. Yeah, I think India is definitely super exciting right now. I think you gave us quite a bit of a download in terms of how consumer businesses are going to grow and some overarching trends.
So tell us more about the other sectors, what do you think is going to happen and how would that influence venture capital investing?
Nikhil: Sure. In Vertex, we have six broad themes globally that we focus on. I think I spoke about a few of them, right? One other emerging theme that we’re also looking at very closely is the entire EV space, right? EV and sustainability.
All countries globally. are moving towards net zero goals, right? If not 2030, 2040, 2050. But people need a path to get to net zero, and obviously, EV is one of them, right? You have a lot of other sustainability platforms. We’re trying to move companies towards adopting policies or adopting procedures that help them get to net zero carbon emissions, right?
EV as a space in India has already seen a lot of interest. So we are now the leading EV two wheeler manufacturer today, right?
So that we’re doing it both for personal consumption as well as commercial consumption. There are companies using two wheeler EVs to do deliveries at the end of the day. So that entire space is also something interesting that we are also monitoring.
Elise: Yeah, I think India being a highly populous country, and whatever the country wishes to do or managed to do will have a huge implication on climate and environment. Yeah. So I think, it’s been a really positive hearing about what India aims to do, you know, in terms of getting to net zero.
Yeah. So I think that aside, whenever I listen to our investment discussions, I’m always really intrigued by the question that you ask, in terms of looking at the metrics, looking at how we can better assess a particular company for investments.
How to better assess companies for investments?
Nikhil: No, so I think there is no one size fits all in a way, right? But I think three, four key metrics that remain constant across sectors. Obviously off the bat, market size is one large part and when you typically do market sizing, the first cut that you get will obviously be a very large addressable market, right? You just multiply the number of people with a certain price, you get a very large market opportunity for everything. But that’s not the typical way to kind of look at it.
You need to dive, slice a lot more to figure out which is the target segment that will actually end up maybe going for it, right? Which people can actually maybe afford this, right? So I think market sizing and how you do it is a very crucial part of what we do. Because if it’s not a large market or it’s not a large need that is being sold or met, you can’t create a large company. And maybe I’ll just take a step back and say that look, because we are early stage investors, we only have a limited amount of data. But I think the key data points that we do look at would obviously be around unit economics. When you talk about startup investing, you can’t expect startups today to be profitable, right? What you have to definitely look at is at a unit level, so when you scale that to 10 units, 100 units, 1000 units, right, and if you do it properly, you should be able to attain your end goal of profitability, right?
So what unit economics today tells you is that, okay, there is someone who is willing to pay you a price that makes sense for you to operate that business in. So it is kind of a proxy for product market fit. So what you’re making, someone is paying you something more than what you’re making it for.
And therefore you can build a sustainable business as you scale.
So I think the other thing that we definitely look for is a lot of repeatability and reference-ability, given that we are coming in at a fairly early stage, right? The company will not have a lot of customers, right? But I think it’s important for us to understand the customers that the company has today — How do they look at the company or how do they look at the product, right? Is the product something that really works or really solves a very critical need for them. So I think these things kind of help us in our entire investment decision making and obviously goes without saying the founder team, their clarity of thought, their quality, their ability to attract talent, right?
So I think that’s how I would maybe summarise it in like five minutes.
Elise: Yeah, definitely. You know, in the beginning you mentioned about market sizing. So, you know, market sizing to certain founders — They may not have a clear picture, like how big is enough?
How big should your market size be?
Nikhil: There’s no prescriptive answer here, right? Your market size can be a billion, your market size can be 5 billion, can be 10 billion, right? But I think the way that we look at it is that — Can you build a business which tomorrow will be attractive for someone to acquire or maybe for the public markets to invest in, right?
That threshold is something that people have said as maybe a business that is doing a hundred million dollars of top line, right? So I think that’s the way we like to maybe back triangle it. Can you build a business that can tomorrow be a hundred million dollars plus in this sector? If that’s the case, then that is something that we will definitely evaluate a lot more.
The idea is to build a business where, like I said, there is acceptability at the end of the day.
Elise: Yeah, got it. One of the things that we emphasise on, is unit economics. So that’s something that you brought as well is very important, you know, to be making money. And then I think the other concept that we have been bringing up is capital efficiency. So could you explain a bit on what do you mean by, what do we mean by capital efficiency?
What is Capital Efficiency?
Nikhil: So I think the very basic way to understand it is how much money have you spent to get where you are. So if you spend 100 million to get to 5 million in revenue, right, then clearly you haven’t spent it the right way.
It is also a very sector dependent phenomena, right? Because the capital efficiency in a B2B SaaS company will be very different from a consumer company. So I think the lens that you typically have to wear when you look at capital efficiency is how are the founders thinking about it?
Are they going about doing tasks, activities in the most capital efficient manner, right? It basically means that if you need to hire a resource worth 50k to do something, are you spending 250k on that resource just because you have capital available? So I think it comes down a lot more to the decisions that have been taken by the founding team, what the mindset is.
Unfortunately, in the last two, three years, founders have had access to a lot more capital than maybe what was required, right?
So the spending that was done, maybe if it were a more capital constrained manner in which people were building businesses, right? You would have had different outcomes. But what I think is important for us is to understand is the mindset, right? Are we squeezing every dollar for what we can squeeze it for?
Elise: Yeah, I think this is super clear. I’m also curious about, you know, how Vertex companies are doing in India. You are a portfolio company of several companies. Would you like to share what they are and what they are working on now? And what makes you excited about their growth?
How are Vertex’s portfolio companies doing now?
Nikhil: Sure, sure. One of the recent companies that we’ve closed and it also came in the press is a company called Certa. So they are essentially building a compliance platform for enterprises, such as large fortune 3000 companies, right?
A lot of these fortune 3000 companies have a host of vendors that they work with, right? So imagine someone with a turnover of let’s say 500 billion might have actually 10,000 vendors that they actually manage, right? And every year, they onboard 500 plus vendors. So there are a lot of parties involved when it comes to onboarding a vendor, right? You’ll have someone from procurement, you’ll have someone from finance, someone from legal, someone from IT, right? A lot of these people ended up operating in their own different silos. And how did they come together was either through emails or through Google forms, right?
So not the best way to kind of communicate when you’re doing such a critical activity, because what’s happening in the U.S. also is that a lot of corporations are getting fined for non-compliance by vendors. Certa essentially brought everyone onto the same platform. So it’s like an orchestration layer that sits on top of all solutions, gets all stakeholders onto the same platform. So that the vendor onboarding journey is a lot more smoother. So what people were earlier doing in three months sort of helps them do it in less than like three days, right?
So the company has a very good client roster, right? So I think that’s one company that we are definitely excited by. Other than that, I think on the consumer side, we recently invested in a company in the B2C space called Pilgrim — beauty space, right?
They’re bringing a lot of international ingredients into beauty products and getting them into India, right? So Korean beauty is something that they are definitely doing very well on, right? So I think that’s another company in the consumer space that I’d be really excited by.
Like I said, that people are now becoming a lot more brand-conscious. There’s a lot more brand affinity that is getting built as consumers go ahead. So I think these are a few of the bets. Obviously, we have a portfolio of like 18, 19 active companies. But I think Certa and Pilgrim is something that we should definitely watch out for.
Elise: Another portfolio company that’s in the consumer segment is Ace Turtle. Tell us more about Ace Turtle and the progress that it’s making.
Nikhil: Sure. No, happy to Elise and glad you touched on that because that’s also one of the companies that we are really excited by. So we recently closed around there. So think of it like they essentially deliver India on a platter to international brands. So, as India as an economy grows, as disposable incomes grow, there are a lot of international brands who are looking to enter India, tap or get a portion of the Indian consumer’s wallet, right?
Ace Turtle essentially just gives them an end to end distribution technology platform where all they have to do is sign up with Ace Turtle and we will launch that brand in India for them. And we will take over the entire responsibility of India as a country, right? This will be right from designing products that are very specific to India, right?
That’s one of the pain points that a lot of brands have faced. They have international product catalogues, but not a lot of them cater it to the Indian audience. So that is what Ace Turtle helps them do. So we have designers who work with international designers of brands and help them curate merchandise for India.
Then this merchandise, we help them get it manufactured for India. We also help them actually distribute the product across various channels, be it e-commerce, be it physical commerce, right? Be it opening your own branded stores, right? What we’ll also do is we’ll take over the entire marketing.
Right? Because international marketing campaigns is something that won’t work from an India context, right? It’s obviously very different when you look at the Indian consumer and his mindset. So I think that’s what Ace Turtle does. They have done it very well with two very large international brands.
So we are very hopeful that they can continue on this growth journey.
Elise: Yeah, it’s really exciting times for them now. And Nikhil, you have really seen companies from the very early stage to the much later stage. And so with your experience, you know, what do you think are some of the hard truths that you would tell an early stage entrepreneur, particularly building something in India?
Hard Truths for an early stage entrepreneur in India
Nikhil: Sure. Founders anyways have a very, very tough job, right? Just keeping aside their own personal ambitions to create something big, right? They also have a responsibility for a lot of other things, right?
So for example, employees, employees’ families, right? So being an entrepreneur, I think is very hard in itself, right? So I wouldn’t want to advise or prescribe anything, right? But I think some of the things that I would definitely want people to think about and spend a little more time on would be that today the environment that we are in is obviously a capitalist scarce environment, right?
There are reports of a lot of dry powder sitting on the sidelines, not getting invested. But the fact of the matter is that it is a capital starved environment today. People are taking a lot longer to make decisions to build convictions, right? So from an entrepreneur perspective in such an environment, what happens is that you necessarily do not get the best outcome when you are out fundraising, right?
This might mean a down round from what you’ve already done, right? The only thing that I would urge founders to think when something like this happens is that — Look, company building is a marathon, it’s not a sprint, right? You don’t want to capture all the value in one year, right?
You want to build something valuable. Unfortunately, what also happened in the last few years was that the yardstick for success moved to valuation, right? Which I think is still playing on in some of the minds of founders, right?
It’s important for you today to get that money to execute on what you’re building, rather than thinking about these points which in the long run if the company ends up succeeding really won’t make much of a difference, right? Another thing that I would definitely want them to spend more time on is surrounding or hiring the right people.
Founders typically wear multiple hats, right? And that is something that you need to do when you’re an early stage founder. But what happens in that process is that when you also end up hiring people you don’t want to take off that hat, right? You have someone who’s working, but you don’t give them the delegation or the autonomy to run.
I think that’s something that founders really need to think about when they’re hiring — Is this person someone that I can delegate to and sleep peacefully, right? Not just take off my hat off sales and marketing or take off my hat off technology, right? And focus on the other things. So I think that’s something that they should definitely think about.
One more thing that I would maybe want to spend a little more time on is the importance of building systems, processes, and compliance right from a very early stage. I think one of my earlier bosses had given me an analogy that companies like an F1 car, right?
So there is a car, there’s an engine, there’s a driver, but there is also the pit stop crew. And what a lot of times decides the races is how much time you spend in the pit stop, right? Because your margin of victory is like seconds, right? So if you can change how much time you spend in the pit stop, you can actually end up doing very well, right?
So I think systems processes and compliance should be viewed as that pit stop. And it is easier for you to build it when you are at an early stage than when you are maybe later, when you’re also struggling with growth, you’re struggling with hiring. It always becomes difficult to do it then, right? The good thing today is that there are a lot of external resources that can help you build those, right?
You don’t need to hire someone for it, right? There are outsource firms who can actually help you build the entire process around compliance. You can have someone who can take control of sales systems, of finance systems, right?
Think about this at an early stage rather than thinking of it as something that I’ll fix later. So build that in your funding requirement, but definitely do spend time on it in the early stages.
Elise: I love the racing car analogy. In the recent Business Times article in November 2023, our colleague Himanshu wrote about the importance of having financial HR processes set up, even at the early stage. Yeah. It’s a really interesting article (Read it here).
Nikhil: I would urge all founders who are listening to this to definitely go and read that article. There was a lot of thought that went behind it, right?
Elise: As I look at the GDP per capita, the average number is 2000 plus USD per capita. So in that sense, there’s a range they’re really looking at in India, so when you talk about, let’s say consumer products, what do you think works and what doesn’t doesn’t work, you know, given the kind of consumers’ ability to pay?
Which consumer products work in India?
Nikhil: I think that it will be a little difficult to answer because India is like three Indias, right? When you obviously look at the average number, that takes a lot of people who will be below the poverty line as well, right?
So about 30 odd percent, right? If you take that out, that number goes up to close to about $4,000, right? Even in that $4,000, you will have people in tier one cities doing really well, right? And that is kind of the target segment for guys like Licious. But when you go down to tier two, right, obviously they won’t be able to afford it.
If I look at Pilgrim, right, so Pilgrim will be one third the pricing of a MAC, right? And maybe one sixth the pricing of a YSL, right? So India, there are multiple products across multiple price points that cater to the 3 different India that we have, right?
So there is a possibility of building a large brand across these segments. So mass premium is where Pilgrim fits in, which is a larger segment but lower paying capacity. Premium is obviously a lesser segment, but a higher paying capacity. So from a TAM perspective, both of these kind of balances out.
Elise: Yeah. Nikhil, thank you for sharing so much about not just yourself, why you moved from private equity to venture capital, as well as the various exciting segments of India and how quickly India is growing. So, you know, now we are in the beginning of 2024, a whole new year. What are you excited about in terms of, you know, venture capital and startup industry?
How does 2024 look for the venture capital and startup industry?
Nikhil: So, no, no, thanks. And, wish you a happy new year as well, Elise.
Elise: Thank you.
Nikhil: 2024 definitely should be exciting, right? From Vertex’s standpoint, we raised our fifth fund. We announced it last year, there is a large corpus that we have and are very keen to deploy, right?
There are a bunch of companies in these sectors that we are closely working with, so we’re hoping for some of the transactions in these sectors to close. So I think that’s something that is definitely interesting from what Vertex is doing.
What we’re also fairly excited about is that if you look at the way the public markets have done till now. There, at least in the Indian market, there is a very good amount of buoyancy is what I’ll say, right? There are people who are very actively looking at public markets. In fact, the return for the Indian stock market over the last 12 months has been highest across the globe.
So there are public investors who are coming back into stories that seem interesting. So I think from our own portfolio perspective, that goes down very well. Because we do have a few scaled up companies who will look to maybe tap some of these markets, some of these funds, right? So I think that is something that excites us.
So we work with them to see how we can make use of this entire buoyancy of the Indian stock market. The hope for us is that the markets turn a bit in 2024, right? If that happens, then obviously it’s great, right? But, from our standpoint, I think, like I said, you’re keenly looking at deploying in the sectors that we look at, as well as keenly looking at some exit opportunities opportunistically that might come.
Elise: I think as we look back in 2023, it seems like we enter winter. So definitely for 2024, we hope for spring and even the summer towards the end of the year.
Nikhil: yeah, yeah. No, that’s absolutely true. It’s really been nice talking to you. I would look forward to doing more of these in the future. Thanks a lot for taking your time for this.
Elise: Thank you so much Nikhil for spending time with us and so sharing with us your thoughts.
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