Info Edge's Sanjeev Bikhchandani on his investment plans and more

Q1: Welcome to the Morning Show. Recently you have announced around Rs 370-crore investment in your subsidiaries. Can you help us understand -- many of these subsidiaries do not even have revenues -- what is the plan now with these investments?
Ans:  
* The subsidiaries are vehicles to invest in different startups
* The purpose of the fund is to continue investing in startups
 
Q2: You have started with a Rs 750-crore fund and made many investments in the last few years. How has been the growth this far? How is the success rate?
Ans:
* Rs 750-crore fund was created two years ago
* With Zomato for 11 years and still holding
* With Policybazaar for 13 years and still holding
* It takes 3-4 years to determine if an investment is working
 
Q3: Which are the startup areas you are looking at?
Ans:
* Broad domains: Consumer internet, B2B, SaaS, mobile, emerging technologies like machine learning, AI, analytics, etc
* Look at 1,000 startups in a quarter before investing in two or three of them
 
Q4: What is the change that you see in today’s startups compared to a decade or more back?
Ans:
* Many more startups
* New technologies
* Ambitious founders
* More investors coming in
* More capital being deployed
 
Q5: Private equity funds usually look for an exit route within 5, 6 or 7 years. You are different by way of sticking around for a longer period…
Ans:
* Continued to invest over the years
* Indian startups need capital
* It takes a decade to build a company
* Private equities put undue pressure on a company with their 6-7-year horizon.
* 6-7-year horizon may also mean early exit by the private equity
* In India, private equities should engage with a long-term approach
  
Q6: If you look at the interest for IPOs among startups, and the series of big-valuation companies that announced going for IPOs, the valuation of those companies (for example Byju’s at $18.5 billion, with the expectation of Paytm), a lot of people ask if these companies are overvalued.
Ans:
* Each company is different and valued accordingly
* Investors made money in a lot of IPOs
* Some companies debut softly, like Paytm
* Valuation comes back if a company is fundamentally strong and growing
             
Q7: People are used to looking for profitability, on which there is no clarity for many companies. If you look at some recent IPOs, they have not given a clear picture of when they will become profitable. Is that an area of concern for investors?
Ans:  
* SEBI rule for loss-making companies going public – 75% of the IPO should be allotted to institutional investors
* Institutional investors do the research thoroughly
* Institutional investors don’t go in without diligence and study
* IPOs have done well because institutional investors must be seen potential in them
* Companies often prioritise growth over profit

Watch Video