E-commerce ventures are not over-valued: Alok Goel

Interview with Managing director, SAIF Partners

Alok Goel has been the poster boy for entrepreneurs in India. Goel was at the helm of two of the biggest exits the Indian start-up ecosystem witnessed in the recent past - redBus and FreeCharge. Having donned the entrepreneurial hat, Goel switched sides in July to join SAIF Partners as managing director. He spoke to Shivani Shinde Nadhe and Kalpana Pathak about his focus at SAIF, the quality of entrepreneurs and the mad rush among venture capitalists to fund start-ups. Excerpts:

What will be your focus at SAIF Partners?

SAIF is a tech-focused fund, with 80-90 per cent of its investment being in companies. I would personally be looking for companies in the consumer internet space, mobile and SAAS (software as a service) areas. In today's world, tech has become a way of doing things. It is not an independent business; you deploy to make your business grow and make it accessible to millions of people. In the current role, my focus will also be to connect with entrepreneurs.

How do you plan to connect with entrepreneurs?

Having been one, I can easily empathise with what entrepreneurs go through while building their businesses. I am aware of the ups and downs associated with the entrepreneurial journey. It is draining, both on the emotional and physical level. Sometimes when you're not in the operating role, you cannot bring in the empathy entrepreneurs need. I hope I will be able to do that. I have been lucky to be part of two of the big exits India has seen in recent times. I want to bring my experience to the table for the good of entrepreneurs.

Does that mean SAIF would be approaching more entrepreneurs?

We all have limited bandwidth. I can appreciate why people think it's difficult to get hold of investors. I think both sides want access to good teams. We have a large team on the ground interacting with entrepreneurs. We go through a couple of hundreds of ideas every month.

It is believed that only IITians make good entrepreneurs. Are you also looking at funding ventures only by IITians?

The perception that entrepreneurs from IITs are better is unfortunately true in the larger ecosystem. But, we keep it actively in our mind that entrepreneurs should be evaluated on the basis of what he brings to the table - his vision. Why it's specific to India is because when you talk to someone for the first time, the business does not exist; you don't know whether the person is a great thinker. So, you look at the past record and if that involves being an IITian, it becomes a good parameter to judge. Besides, seeking admission to an IIT is difficult and requires perseverance through years of study. It is taken that an IITian would have these inherent qualities. People pick IITians not because of IIT's brand name, but as an indication of the quality of entrepreneurs. This, however, does not mean people with a non-IIT background will not get access to funding.

There is serious concern among the investment community that e-commerce ventures are over-valued...

I don't think the ventures are over-valued. If you look at any area, there are 10-20 start-ups being funded. Investors are investing because they feel the new company can out-innovate the previous company. You can question the assumption that they can break the previous company. If there are 20 companies getting funded, roughly four will get make it big and 16 will fail. But, no one knows which one and, hence, investors will put early bets.