Nandan Nilekani Says He Is Not An Active Investor. Here’s Why

As an active policy and technology enthusiast, Nandan Nilekani is a well-known contributor to India’s policy making, as well as the implementation of Aadhaar. He has been a prolific investor as well with personal investments in startups such as ShopX, Tracxn, RailYatri, Power2SME and his investment fund, Fundamentum.

However, Nilekani has now emphasised that he is not such an active investor. In an interview with ET Now, Nandan Nilekani said that he does have a few investments but has stopped making new ones.

“I don’t generally invest in areas where I am doing work policy-wise because I don’t want any issues,” he said.

It is notable that healthtech startup PharmEasy was the last startup Nilekani invested in via Fundamentum in September 2018. The investments in the Indian startup ecosystem have been growing yearly, despite policy challenges and contradictory movements.

DataLabs by Inc42 noted that from 2014 to H1 2019, a total of $1.26 Bn was poured into seed stage startups across 2,419 deals. The funding amount is growing at 23.44% (2015-2018), but the deal count has a negative growth at 14.43% — showcasing that the opportunity for new ventures to get capital infusion at seed stage is shrinking.

Nilekani has been a prolific supporter of the Indian startup ecosystem working and collaborating with the government.

In January, the Reserve Bank of India constituted a five-member committee named ‘High-Level Committee for Deepening of Digital Payments”, led by Nilekani. The committee was to look to review the existing status of digitisation of payments in the country, identify the current gaps in the ecosystem and suggest ways to bridge them.

Nilekani has now reportedly said that with the pace at which innovation happens around the world, it is “very difficult for the government and the regulator to keep pace with that, it is just the nature of the beast.”

In April 2018, the RBI had issued a circular asking all payment system operators in the country to store data – pertaining to their customers – within India. The move was geared towards ensuring that user details remain secure against privacy breaches. The payment system companies had been given six months to comply with the localisation norms.

Nilekani said he believes that while technology and innovation are going back and forth, India will have a far better regime of both of them to deal with the modern issue of these things. “RBI has taken a view that as India has more and more digital payments, having uninterrupted digital payments is vital,” Nilekani said.

Talking about data localisation in the country, Nilekani added, “India is both doing technology innovation and enabling legal infrastructure around this technology. This (data localisation) is a global issue as sometimes innovation goes ahead of technology, law and so on.”