Why Startup Investment Specialist Deepak Gupta believes Vernacular Content will Grow Significantly in 2021
The Indian tech startup landscape is an exciting place to be in. The world’s third largest startup eco-system, India has been churning out exciting startups that have answered Prime Minister Modi’s call for creating an ‘Atmnirbhar’ India. With the government banning short video format app, TikTok along with some other Chinese apps in the content space, there has been an upsurge in homegrown short video app market. Mumbai based WEH Ventures, a seed stage fund has been bullish about this sector’s growth.
The StartupCity team spoke to Deepak Gupta, Founding Partner at WFH Ventures. An investments specialist with over 20 years of experience in investments and finance, Deepak has seen it all, be it the great financial crisis of 2008 or the NASDAQ meltdown of 2000. He weights in on how WEH Ventures reacted to the global pandemic and the economic crisis that ensued. Deepak also gives us a low down on how the market for vernacular content will grow in the future along with rounding up some of the most exciting startups on the block.
Q. The Indian startup landscape witnessed turbulent times owing to the pandemic all through 2020. What lessons did this experience bring along for you as an investor? Also, how did WEH Ventures support its portfolio companies to navigate through the turbulent times?
A. I have been around for long enough to see other tough times, such as the GFC of 2008 and even the 2000 Nasdaq meltdown- yet every crisis is different. The important thing is to react to a developing situation calmly and rationally and not try to predict too far ahead. So we had a section of our portfolio which scaled down for a while as they saw headwinds while the majority of companies saw positive tailwinds and began to address the market semi-aggressively as things became clearer. We sat and apprised the situation with each company and guided them on the stance to be taken, we also supported companies with capital as the situation warranted. Many of the companies which were not negatively impacted also raised substantial follow-ons which we participated in whole heartedly.
Q. How do you envision the Indian tech startup landscape growing through 2021? Which industry verticals will experience massive growth through the year? What will be WEH Ventures’ areas of focus while looking for seed stage startups to back?
A. 2021 is still seeing the clouds of Covid hover, although the eco-system at early stage has bounced back already. Some of the sectors which will likely see more growth (accelerated due to Covid) include e-commerce, consumer brands and education. At WEH Ventures we are relatively sector- agnostic and are more excited about individual companies than mega-sectors, so it depends upon the actual opportunity set we see.
Q. Given WEH Ventures’ expertise as a seed stage VC fund that has invested in vernacular content based startups, how do you see this market growing in the near future? In your opinion what factors will drive growth for this sector?
A. With the success of Tik Tok and the bumper IPO of Kuaishou, there is a fair amount of optimism about this sector. Both local and overseas companies (eg. Snap) and bringing their best game to the table and innovating. Capital is also flocking to the sector as we are seeing multiple $100M+ rounds to back the breakout companies. Those who can innovate continuously and show strong retention and improvement in monetization will likely be more value. The sector should grow significantly this year.
Q. You have been a catalyst in the early stage ecosystem for the past few years; what are some of the major factors you take note of about an enterprise before backing it?
A. We look for a problem which is being solved which is large, with a unique solution and is not in hot pursuit by others (negative social proof). And backed by very driven and passionate founders.
Q. In your opinion which are some of the most innovative or exciting startups in the Indian startup landscape currently? What about these startups caught your eye?
A. There are far too many to name. Some of the interesting ones are: Rupeek, Zetwekr and Animall (WEH Venture Portoflio Company). Each of them is solving massive problems with India-first solutions and have seen rapid traction.
Q. Do you have any words of advice for tech startups and entrepreneurs looking for investors?
A. If you have a choice, be mindful of what kind of investor you are partnering with and do your diligence on them. At the same time, one must respect capital even when it’s easily available- because the tough times are invariably not far away, and one will need all the support one can muster.
The StartupCity team spoke to Deepak Gupta, Founding Partner at WFH Ventures. An investments specialist with over 20 years of experience in investments and finance, Deepak has seen it all, be it the great financial crisis of 2008 or the NASDAQ meltdown of 2000. He weights in on how WEH Ventures reacted to the global pandemic and the economic crisis that ensued. Deepak also gives us a low down on how the market for vernacular content will grow in the future along with rounding up some of the most exciting startups on the block.
Q. The Indian startup landscape witnessed turbulent times owing to the pandemic all through 2020. What lessons did this experience bring along for you as an investor? Also, how did WEH Ventures support its portfolio companies to navigate through the turbulent times?
A. I have been around for long enough to see other tough times, such as the GFC of 2008 and even the 2000 Nasdaq meltdown- yet every crisis is different. The important thing is to react to a developing situation calmly and rationally and not try to predict too far ahead. So we had a section of our portfolio which scaled down for a while as they saw headwinds while the majority of companies saw positive tailwinds and began to address the market semi-aggressively as things became clearer. We sat and apprised the situation with each company and guided them on the stance to be taken, we also supported companies with capital as the situation warranted. Many of the companies which were not negatively impacted also raised substantial follow-ons which we participated in whole heartedly.
Q. How do you envision the Indian tech startup landscape growing through 2021? Which industry verticals will experience massive growth through the year? What will be WEH Ventures’ areas of focus while looking for seed stage startups to back?
A. 2021 is still seeing the clouds of Covid hover, although the eco-system at early stage has bounced back already. Some of the sectors which will likely see more growth (accelerated due to Covid) include e-commerce, consumer brands and education. At WEH Ventures we are relatively sector- agnostic and are more excited about individual companies than mega-sectors, so it depends upon the actual opportunity set we see.
Q. Given WEH Ventures’ expertise as a seed stage VC fund that has invested in vernacular content based startups, how do you see this market growing in the near future? In your opinion what factors will drive growth for this sector?
A. With the success of Tik Tok and the bumper IPO of Kuaishou, there is a fair amount of optimism about this sector. Both local and overseas companies (eg. Snap) and bringing their best game to the table and innovating. Capital is also flocking to the sector as we are seeing multiple $100M+ rounds to back the breakout companies. Those who can innovate continuously and show strong retention and improvement in monetization will likely be more value. The sector should grow significantly this year.
Q. You have been a catalyst in the early stage ecosystem for the past few years; what are some of the major factors you take note of about an enterprise before backing it?
A. We look for a problem which is being solved which is large, with a unique solution and is not in hot pursuit by others (negative social proof). And backed by very driven and passionate founders.
Q. In your opinion which are some of the most innovative or exciting startups in the Indian startup landscape currently? What about these startups caught your eye?
A. There are far too many to name. Some of the interesting ones are: Rupeek, Zetwekr and Animall (WEH Venture Portoflio Company). Each of them is solving massive problems with India-first solutions and have seen rapid traction.
Q. Do you have any words of advice for tech startups and entrepreneurs looking for investors?
A. If you have a choice, be mindful of what kind of investor you are partnering with and do your diligence on them. At the same time, one must respect capital even when it’s easily available- because the tough times are invariably not far away, and one will need all the support one can muster.
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