For Indian startups, 2014 was a watershed year; a record number of fundings came into the country, Flipkart became one of the most valuable private companies in the world, and India became home to the third largest startup community in the world.
Anand Chandrasekaran, who was the chief product officer of Airtel at the time, witnessed this exciting period up close. He’d already been on the scene in Silicon Valley having founded mobile apps startup Aeroprise — later acquired by BMC Software — but 2014 was when he “seriously started” investing in Indian startups.
2014 – Start of a Cycle
Speaking to Inc42, Anand Chandrasekaran revealed which startups he has invested in lately, and which sectors look the brightest from an angel investor’s point of view. But first, we discussed why 2014 is considered significant for the Indian startup ecosystem.
“Currently India has the lowest cost for gigabyte, but 2014 was the beginning of that cycle of cheaper data and every year since then, the data business has doubled or tripled.”
Another factor, according to Chandrasekaran, was Indian entrepreneurs following Silicon Valley principles in building products. “If you look at Silicon Valley, one of the things that drives a lot of growth and success is that founders tend to build products they themselves use or they see people use.”
“I think 2014 was the start of that cycle as well where the products that were being built were for users in India rather than abroad, which was a significant shift also because very smart people who earlier used to move abroad and work at MNCs were starting to stay back in India and developing solutions,” he added.
Chandrasekaran has been at the forefront of that shift, building products for the Indian market since before 2014. He was the director of platforms and product partnerships for Facebook Messenger till November last year, having built products at Yahoo, Snapdeal and Airtel (Wynk Music and My Airtel apps) previously.
Investment in Sattviko and ConvertFox
Chandrasekaran told Inc42 that he has invested undisclosed amounts in Delhi-based health food startup Sattviko and Hyderabad-based marketing platform ConvertFox. The two investments are part of his extensive portfolio, which covers nearly 30 companies. Chandrasekaran also teased another announcement soon and said he is in talks with a company that helps explain why and how decisions (often referred to as black box decisions) are taken by AI solutions.
Investing between $25,000 (INR 17.3 lakh) and $50,000 (INR 34.5 lakh), Chandrasekaran’s portfolio has grown at a very healthy rate for the past four years. His investments include coworking space provider Innov8, recently acquired by OYO; offline-to-online fashion ecommerce platform Fynd, which is said to have caught the eye of Mukesh Ambani’s Reliance Industries Limited (RIL), and cloud marketing platform MoEngage that recently raised $9 million (INR 63.4 Cr) in a Series B round. Another company he has invested in is Audius (formerly Whale), a token-based music streaming service backed by blockchain.
How Chandrasekaran Identifies Startups to Invest In
So it’s clear that Chandrasekaran has an extensive portfolio, ranging across sectors and categories, but how does he go about identifying his bets?
“Of late I have been investing in B2B companies along with other investors and funds such as SaaS startup Verloop with K Ganesh of Growthstory, and Moengage with Matrix Partners. The sectors I choose are largely the places where consumers are spending and where there is work to be done from a consumer perspective. One of the things looking back, whether it is Rupeek, Lucideus, Fynd. all of these had a fundamental insight about the business which was not trivial or obvious.”
That strategy has seemingly paid off too. Ten of the companies in Chandrasekaran’s portfolio have raised Series A or Series B rounds. Many describe it as his ‘midas touch’, and it’s hardly an exaggeration when five of the products he has worked on have crossed 10 million monthly active users (MAU).
Bright Future for B2B and India-First Solutions
About the much-rumoured Fynd acquisition by RIL, Chandrasekaran said, “I think they are on the road for investment conversations and there is likely a lot of interest for the company.”
If you think that’s a guarded response, is largely due to the fact that he has lived through the experience of guiding companies to such large acquisitions in the past. “There have been three acquisitions in my portfolio to unicorns; Creo and Pulse by Hike Messenger and Innov8 being acquired by OYO.”
Despite this serial success, Chandrasekaran isn’t mulling joining or starting a VC fund. “The combination of being an operator and investor is something I really enjoy and being close to the trenches also helps.” Going forward, his investments will focus on B2B solutions powered by deeptech built in India, and ready to be scaled globally.
“I would categorise my future India opportunities into four categories — India-first fintech services, SaaS focused on consumer solutions, communities catering to women users, and offline-to-online services.”
Chandrasekaran’s bets are somewhat against the grain, and that also extends to how he accesses or finalises deals. “I don’t normally reply to cold calls/messages, I have this story about how I completely ignored a LinkedIn message from the Nobroker founder (which I ended up investing in later). I invest in entrepreneurs who I know through my network.
“When I invested in Fynd, or Rupeek, I had never physically met the founders and I invested in them without ever meeting them in person.”
The Indian startup ecosystem definitely needs more angel investors such as Chandrasekaran. According to a recent report, startups in India are losing angel investors fast due to reasons ranging from problematic tax law to arbitrary exits and the rise of incubators and accelerators. These and more factors have led to a steep decline in the number and value of angel investments.
With that in mind, angels such as Anand Chandrasekaran are even more vital for those entrepreneurs who are averse to VC money and need a more hands-on mentor. If angels need any inspiration, they only need to look at Chandrasekaran’s successful track record.