India Not For The Faint-Hearted; Tough, But Worth It: Lightspeed India Partner Bejul Somaia

Many Indian startup founders and investors talked about the great Sequoia breakup earlier this month when Sequoia India broke away from Sequoia Capital to form Peak XV Ventures. Joining the line is Bejul Somaia, a partner at Lightspeed India Partners, expressing his confidence in the India story.

“While I can’t comment on their [Sequoia’s] decision, I do want to share Lightspeed’s views on the broader opportunity for innovation and entrepreneurship in India,” wrote Somaia in a tweet on Thursday (June 15).

Listing off some of the milestones India has crossed over the past decade, the Lightspeed partner said India’s importance as the third-largest digital market should not be underestimated, adding that significant value will be created in the transition of a digital economy. 

Somaia added that the next generation of startup founders will be central actors in this value creation.

“India has always, and will always, test our conviction (and sometimes logic). You can’t force this market, you can’t time this market, you can’t be short-term. Instead, you have to be patient, quality-oriented, disciplined, selective and prepared to play the long game,” said Somaia.

“India is not for the faint-hearted. India is tough. But India is worth it,” Somaia added.

To be sure, India’s startup ecosystem has witnessed dizzying highs and lows, going from raising $3.6 Bn in a single day in 2021 to just $3 Bn in the entirety of the first quarter of 2023. Even so, investor confidence remains high, as priorities changed from growth-at-all-costs to sustainable growth with a clear path to profitability.

India is also the third largest startup ecosystem in the world, home to more than 60K startups, which have collectively raised $140 Bn in funding between 2014 and May 2023, per data compiled by Inc42.

Asking several questions of the venture capital fraternity, the Lightspeed partner said the situation remains the same, calling for better governance at startups, more ‘real’ discussions at board meetings and for investors to stop being ‘cheerleaders’.

“The potential of India remains incredibly compelling: a sizable market, high-quality founders and one-way adoption of technology. The question is not whether there is potential, but how best to navigate this potential,” said Somaia.

Talking about the Lightspeed India story, Bejul Somaia said the India arm of the US-based VC firm raised its first dedicated set of funds in 2015, having entered India in 2007.

“Since our firm started investing in India, we have invested $1.6 Bn, returned $1 Bn to our investors and hold assets valued at $3.4 Bn. We’re here for the long term,” added Somaia.

To be sure, Lightspeed has backed the likes of Acko, BYJU’S, CredAvenue, GlobalBees, OYO Rooms, Razorpay, Udaan, ShareChat and Zetwerk. The VC firm has backed nearly 50 startups in the country overall. Lightspeed closed its last fund, the Lightspeed India IV, at $500 Mn to invest in startups in India and SEA in July 2022.

Recently, Chamath Palihapitiya, a former executive at Facebook and CEO of the VC firm Social Capital, also talked about the Sequoia split. In a podcast episode, he said that Sequoia’s exit from India was ‘baffling’, adding that China is ‘largely uninvestable’ for the next 30-40 years, so an exit from there was understandable.