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Business Going from 'Hi-Touch' To 'Hi-Tech'

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Mumbai based Unicorn India Ventures is an early stage VC fund established by Bhaskar in 2015. A seasoned entrepreneur as well as an established early stage investor and advisor, within the UK and India, Bhaskar has earlier held senior corporate positions with Times of India, Zee Telefilms and Altavista UK. Through Unicorn India Ventures, he has invested in over 20 businesses with a combined Equity Value of $ 3 billion and growing rapidly.

In a candid conversation with the StartupCity team Bhaskar speaks to us about the lessons learnt from 2020 and Unicorn Ventures’ aspirations for 2021.

Q. 2020 threw a curve ball to the Indian startup ecosystem and the entire year was a topsy-turvy ride with some highs and lows. What were some of the most striking observations that you made throughout the year as an investor?
A. 2020 no doubt will be a year remembered for a long time and it has left us with many lessons. As an investor, for us the year was pretty good as some of our portfolio companies reacted quickly to the unfolding pandemic and got into cash conserve mode.

The overall funding sentiment were at a low but we saw domestic VC ecosystem come together stronger than ever. Angels and early stage VCs continued with the funding momentum.

Our 2nd fund of Rs 400 crore reached its first close of $12 million in March end and since then we have made 6 fresh investments through this fund alone.

Founders learnt the importance of cash flow and working capital management, as they knew that runway should be extended to 12 – 24 months. Path profitability is now a mainstream concept for even many young startups.

At Unicorn, our investment strategy has always been to identify startups who are solving a real problem with the use technology. We further refined this strategy and have actively started seeking startups which are digitizing the current processes focused on problem areas like supply chain, fintech, e-gaming/e-sports, affordable medical services, government technology. In the wake of the pandemic, these businesses have scaled up.

We believe other investors would also look at business ideas where technology is being used to take an existing business from hi-touch to hi-tech. We are calling it ‘Social distancing tech’.

Q. The onset of the global pandemic has taught us all a lesson that things can change at any given point. What are your suggestion to startups and entrepreneurs in terms of being better prepared for unforeseen circumstances?
During the Pandemic, we met all our portfolio companies, virtually of course and asked them to limit their cash burns and preserve the cash they have. We had advised our portfolio companies to stay focused, no new business line, no expansion, increase runaway by conserving cash and cut non-essential services.

Going forward, founders have to show investors a clear path to profitability and a business disaster management plan. More importantly, they have to demonstrate that they have strong backs to withstand anything that comes their way with a never say die attitude.

Q. In your opinion which industry sectors will experience the most growth in 2021? What areas will Unicorn India Ventures focus more on during 2021?
A. We believe anything that helps in digitization of existing processes will see a potential growth. From our current portfolio, companies like Pharmarack, Sequretek, Smartcoin, Openapp, Open Bank are seeing massive growth.

We feel sectors like cyber security, fitness, healthcare, pharma, e-gaming will see a good growth in 2021.

For us at Unicorn India, we are looking for more tech solutions, which are impacting things at scale. We are looking forward to continue our track record of identifying innovative business models with faster scalability.

Q. Having been an entrepreneur yourself who built and scaled up organizations of your own, how does that experience lend to the judgment calls that you make as an investor today? What are some of the major factors you take note of about an enterprise before backing it?
A. Apart from evaluating business ideas on multiple financial parameters, as you rightly said, my own experience of entrepreneur does help me in understanding the mindset of the founder. I look for certain critical personality traits like his/her ability to think fast and implement faster, vision for growth of the company, ability to not only understand his/her product but market it well among its target audience.

As a fund, we believe that the entrepreneur should always be in the driver’s seat and as investors, we should be his mentors and advisors who he can call upon whenever faced with a challenge.

Q. Given your years of experience in the digital media and other media sector, what are some major trends that will be seen developing in the said industry in the near future?
A. Change from one size fits all to customised content - all in all move from content preferences to content creations. Other trends include, Rise of short form content; Influencer marketing being a dominant part of the marketing budgets from brands; and Big tech taking over Big media.