There is a second set of companies scaling up rapidly. These include Oyo Rooms, Byju’s, Udaan, ShareChat. ‘‘Many are close to breaking out,” says the founder of one of the investee firms. Oyo, for instance, is likely to turn profitable next year and is going abroad.
There is yet another set of firms, which are innovative — OneAssist, Shuttl, LimeRoad, Fresh Menu. Not early-stage but not fully discovered yet, says an observer. Finally, there are young companies such as Freight Tiger, DarwinBox and MagicPin all are doing well.
Lightspeed invests from seed-stage to Series-B; often in pre-product or pre-revenue and then works closely with the company.
In India, the VC entity was investing through its global funds till 2015, when it raised the $135-million Lightspeed India Partners-I for early-stage investment. For later-stage deals, it invests through Lightspeed Venture Partners XI and Lightspeed Select, its global expansion stage fund.
Relative to peers, Lightspeed operates at a steady pace, investing only in two to four companies a year. How is its approach in India different than in the US? ‘‘It is broadly the same. We are comfortable with the ambiguity of early-stage investing,” says Bejul Somaia, partner, Lightspeed India.
Except, in the US, it makes two-thirds of its bets on enterprises and a third of these in consumer companies; in India, 60 per cent of its bets are in the consumer space and 40 per cent in the enterprise one. While it invests in global themes like fintech, software-as-a-service and marketplaces, it follows in India a very bottom-up, first principles approach in terms of what companies it needs to build.
That is why many of those it has backed, such as Tutor Vista, Oyo Rooms, Udaan, do not have analogues in other markets, and cannot be called the ‘X of India’. Rather, it tries to find what businesses will work in India, and then backs these globally till they scale up. For instance, there was no
VC-backed energy exchange that has scaled up, and yet it decided to back IEE, as it felt there was a need for it in India. Similarly, Oyo’s strategy is different from an Airbnb in the way it has implmented its business model. While both help people monetise their properties, Oyo saw its role beyond aggregation, in refurbishing and standardising the supply and providing the promise of a brand.