Need More Domestic Capital To Participate In India’s Startup Ecosystem: Vijay Shekhar Sharma

Despite India emerging as an attractive destination for global investors, the participation of domestic capital is low in the country’s startup ecosystem and it needs to increase, Paytm founder Vijay Shekhar Sharma said.

“We need both (international and domestic) capital, but domestic capital has an obligation to participate,” Sharma added.

He was speaking during a session titled, Founders Backing Founders — Supercharging Startup Growth, during the first edition of Inc42’s MoneyX conference.

Sharma also said that he would have liked to raise capital for Paytm from India, however, the domestic capital resides in very few pockets.

“… it’s always better to have domestic capital and access to a domestic network of investors, especially founders supporting founders,” he added.

The Paytm founder also said that a lot of founders of other startups, including Zomato’s Deepinder Goyal, bought shares of his fintech company after the stock reached its lowest levels on the bourses.

Besides being an entrepreneur, Sharma is also an active investor. He has invested in over 50 startups, including the likes of Raaho, GoQii, People, Hood, Upraised, Innov8, InnerChef, Zapr, and Hiver.

Talking about his first investment, Sharma said, “My first investment was in my friend’s chocolate company. I stand by my reason – I help my friends.”

Sharma advised startups to build products to solve the problems of Indians, irrespective of whether they are from urban areas or rural areas. He also said that while it is believed that most Indians won’t pay for products, customers are more than willing to pay for the right product.

Speaking about domestic capital at MoneyX earlier in the day, WaterBridge Ventures’ Mainsh Kheterpal also said that the participation of this capital is less than 5% in the Indian startup ecosystem.

The comments come at a time when the Indian startup ecosystem has been hit hard by the ongoing funding winter, leading to layoffs and many startups shutting operations. However, Peak XV Partners Rajan Anandan said at MoneyX that there is no funding winter and there is no lack of capital for Indian startups.

Presented in partnership with Peak XV Partners, supported by Venture Catalysts, JSA, Samsung, IVCA Associates, Indian Angel Network, JIIF and Marwari Catalysts, MoneyX is aimed at bringing the driving forces of the Indian startup ecosystem under a single roof.