What does venture capital company Sequoia look in startups? While this question takes away the sleep of the founders of numerous startups across the world, Mohit Bhatnagar, managing director at Sequoia, finally revealed information that will be useful for founders.
Speaking on the sidelines of the 14th Digital India Summit organised by IAMAI, Bhatnagar said that the VC company looks for startups that have the potential to not just become great but legendary. He further explained that startups turn legendary when they have the patience to grow and has the potential to change the status quo.
Addressing the audience, which included startup founders and other investors, Bhatnagar listed out the important factors which help a startup to grow big. Citing the example of Amazon, which battled for nearly two decades to finally take over its largest competitor Walmart, he said that the company should have the potential to stay there in the industry for a much longer period.
On the part of value creation, Bhatnagar gave the example of Pine Labs, which started as a fintech SaaS company and is now engaging all the stakeholders of the retail payments ecosystem. Recently, Pine Labs has raised an undisclosed amount from the global payments giant Mastercard.
Another important factor for startups to come and hit the market straightway is the time of incorporation, according to Bhatnagar. “For instance, BharatPe, which has been backed by Sequoia came at the right time when unified payments interface (UPI) led payments has just become an attractive opportunity,” he added.
One of the key elements that startups across the world are now bringing to the table of investors is the opportunity of adding the next 200-300 Mn users, which still remains underserved. Citing one such example, Bhatnagar highlighted that neobanks are coming as a promising opportunity as they are bringing value in the lives of users which have been neglected by traditional banks. Notably, Sequoia has recently invested in neobank Nupay.
During his key speech, Bhatnagar also acclaimed the journey of SaaS giants Freshworks and Zoho, which became successful in India and then continued the spree in other countries as well. “If you can make a profit in India then you can make a profit anywhere in the world,” Bhatnagar reiterated the narrative.
Highlighting how technology has disrupted all the industries across the world, Bhatnagar said that in 2007 all the top 10 companies in terms of value-size belonged to different industries such as manufacturing, petrochemical, and infrastructure. However, in just a span of a decade, all the companies, which have the highest market cap, now belong to the tech industry, Bhatnagar added.