Creating the Future
Investors who are putting billions of dollars in Indian startups are also increasingly setting the agenda for sector-specific growth. We discuss this trend and the milestones in the Indian investment journey with Prashanth Prakash, an early investor in tech startups in the country.
Currently, a founding partner of the Indian arm of US venture capital firm Accel Partners, Prakash plays a key role in the startup ecosystem as a VC and a Social Evangelist. In the earlier part of his career, this techie turned entrepreneur founded Netkraft, one of the first internet based companies in the country. As CEO, he built it into a leading offshore solution company focused on the retail and healthcare verticals.
Venturing into investing, along with Subrata Mitra and Mahendran Balachandran, Prakash started Erasmic, one of the first tech-seed funds in the country in 2004. In an interview with Aditya Mendonca, Prakash recalls about investing in Indian technology startups much before they attracted global attention, “Those were very early days in the Indian tech ecosystem, and the number of entrepreneurs and the number of funds were very low compared to today”.
Erasmic invested in interesting companies like Mu-Sigma, which has grown into the world’s largest analytics and decision science solutions provider and Myntra, a fashion ecommerce company that was acquired by Flipkart for $370 million in the first of the big acquisitions in 2014. That came about later as a consequence of the gradual evolving of the industry and the first wave of tech entrepreneurship began growing in 2007-2008.
That was also the time that Erasmic merged with the US venture capital firm Accel Partners, with Mitra, Balachandran and Prakash as co-founders and key partners of its Indian arm. Accel’s most successful bet in India to date is Flipkart, India’s largest homegrown ecommerce company which was acquired by US retail giant Walmart for $16-billion in August 2018.
Accel was the first institution to invest $1 million in 2009, when it was just concepting its initial framework..The decision to invest in Flipkart was based on the clarity of thought of the co-founders, Sachin Bansal and Binny Bansal, says Prakash. “To make online commerce work in India, they had to gain the trust of the Indian consumer and to do so they had to be customer focused. We were very convinced by what these guys were talking about – that they wanted to change how people shopped in the early days. These guys were very clear that they wanted to change the game”.
Other success stories that the partners at Accel India helped script by scaling garage startups to unicorns include business software company Freshdesk, and cab aggregator TaxiForSure (later acquired by Ola for $200 million). Prakash now focuses on consumer internet services, online marketplaces and SaaS. He has led investments in Agrostar, BlueStone, BookMyShow, Clevertap, FabHotels, Healthcare Magic, HolidayIQ, HolidayMe, HomeLane, PropTiger, Rentomojo, TeaBox, QwikCilver/GiftBig, Qikpod and other early-stage companies.
About the factors that drive Accel India’s investment decisions, he says, “ We don’t look at what other people are investing in and what are the current trending games. We take very early bets and invest in brands before anybody else realises that they could go on to become billion dollar businesses. We try to set the agenda in a particular space – we try to Create the Future.We look at emerging spaces and sectors and we do internal deep dives.”
He notes that there are challenges unique to India and companies are increasingly pursuing India specific opportunities. Among them are “BlackBuck that is trying to solve the logistics and trucking problem in the country and Agrostar which is trying to solve problems of farmers who are digitally empowered and want the full stack solution with the right inputs, knowledge, credit and output linkages, that helps farmers really double their income.”
Consumer products has become a very interesting space with millennials becoming the prime consumers in the market. He points to TeaBox which has taken the traditional business of selling tea online to a global audience quicker “a very unique Indian phenomenon”.
These investments apart, Prakash is actively involved in social entrepreneurship ventures that work to improve the quality of education and the environment. He is the Chairman of the Shikshana Foundation, an NGO set up in 2002 to ensure quality education in government schools. A child-centric program, it aims at evolving a sustainable and replicable model for the Public Education System(PES). Over the last 10 years, Shikshana has expanded to over 40,000 government schools, reaching out to millions of children.
He is also the Chairman of United Way of Bengaluru, a unique social organization which brings together corporates, government bodies and community members to address environmental challenges in the community. Its ‘Wake The Lake’ campaign is a joint initiative with the civic authority and 25 communities to rejuvenate and preserve lakes in the city – the Ulsoor Lake, the Uttarahalli Lake, the Kaikondaranahalli Lake and the Chinnapanahalli Lake.