India was brought to the centrestage of the venture capital ecosystem in 2015 with Saif Partners opening a $350-million India-focused fund in March.
It was all rosy until start-ups began to shut shop. Investments were drying up and companies of scale were few and far between.
"A correction means the quality of entrepreneur and their ideas go up," said Alok Goel, managing director, Saif Partners. Goel, formerly of Freecharge and RedBus, prides himself in identifying an idea before others and making successful exits. Freecharge was bought out by Snapdeal and RedBus has become a guide on how to build a start-up.
"We've learnt how to code and we've now learnt how to make products," he added.
Despite the slowdown in the market, Saif Partners is bullish on their plans in India. While it refused to reveal the number of investments it has made from the fund since it started, the company plans to make three or four investments by the end of FY16. "Education, transport and fintech will be the big explosions in 2016," added Goel.
Despite the presence of the likes of Uber and Ola, Goel believes there will be companies that will further crack the market.
Goel said there would be an influx of shuttle-like services in the country, as cabs solved only one problem and congestion is an issue yet to be solved. "There will be roadblocks such as licences and permits as the government will not allow us to pick people off the streets. But, these are opportunities that will be explored and answers will be found soon."
While the number of players in the mass transport segment in metros is not as many, a lot of companies are trying to get a slice of the education pie. "Not many are in the vocation training space. There are one million people a month who enter the workforce. Most of them have not completed training. Look at how huge that market will be," Goel noted.
Another market Saif Partners is eyeing is fintech. The fund along with Accion, a financial inclusion company, recently infused Rs 10 crore as fresh capital into Aye Finance. "We should aim to demolish the shadow banking sector," said Goel. While the 38-year-old knows the fund isn't in the business to solve social evils, the gap in the market makes for a great business opportunity.
The Delhi-based company said despite the environment, it wouldn't change its spots. "Our ticket size will remain consistent: $500,000 to $15 million," he said.