In Venture Capital, valuable companies are hard to come by. You’ve probably heard this far too often.If not, here’s a neat post explaining the math on why 95% of Venture Capital firms fail. No one can predict valuable companies at early stages. Venture capital has become about spreading your (investment) net far and wide to catch these few valuable ones along the way. It’s true, hindsight vision is 20/20 – early investors of successful companies are highly regarded. Albeit, in retrospect.
There are far too many average companies and too few valuable ones. On an average I personally evaluate over 700 investment opportunities a year. Of those, I’ve had the privilege of evaluating, in my opinion, a few such valuable companies. Time will tell whether they truly are business that are highly valued for scale, consumer loyalty or any other metric. I believe, these companies will be truly successful and I have missed the opportunity of partnering with them in that journey.
Here’s My Portfolio That Wasn’t:
|Airpay: Payments solutions provider
I first started evaluating Airpay back in late-2013, when financial services was not the flavour of the season. Fintech was not a buzzword. Hence, convincing my team was that much tougher. Kalaari later invested in the company.
Why I like Airpay:
1. Business Model: Airpay is agnostic to payment type, mode, medium or form - making it scalable and future-proof
2. Founders: The founders of the company are solid! Simple, passionate, motivated guys who work without looking for the media fame
3. Large Market Size: With the large scale of India, digital payments was just picking up. Potential to build a company of scale, with low capital requirement was huge
4. What Else? Add on lending (SME and Retail) and you have a highly valuable company. The company is taking baby steps at building this (late-2017)
|Creditmate: Used Two-wheeler financing
By the time I reached out to Creditmate (mid-2016), Fintech was a buzzword. Payments businesses were the darling of investors. Lending opportunities were being overlooked. The used two-wheeler financing market was largely overlooked by everyone in the industry. This was because cost of operations didn't justify the low ticket item (bikes). This resulted in an absolutely fragmented system to buy a used bike. The company was later (mid-2017) acquired by Paytm
Why I like Creditmate:
1. Business Model: Creditmate had gone the dealer route, building technology to bring efficiency in the way a used two-wheeler was sold. That model of offline to online was unique. Would take time to scale, but if done right, is an elegant solution to the middleman dominated Indian market.
2. Founders: The founders are savvy. They really understand their market and customers. Better yet, they are perfectly suited to innovate for India.
3. Large Market Size: India is the largest two-wheeler market in the world. We love our bikes. It's the first material purchase most families make. 'Nuff said.
4. What Else? You don't need anything else. The market is big enough to lend off one's own balance sheet. Yet, these guys are doing more: insurance, four-wheeler lending, white-label solutions etc.
|MCura: Digitising healthcare delivery at hospitals (OPD)
MCura was a rather unique case. It is in healthcare. I've not the faintest idea about the healthcare space. Yet this company stuck out for me. They have a huge market that needs digitisation. The way technology is built for hospitals today is pathetic at best. Only the largest hospitals (> 1,000 beds) in India have some semblance of technology, but of the kinds banks still use and we are all familiar with. MCura is completely transforming that. I didn't push MCura hard enough at my committee meetings.
Why I like MCura:
1. Business Model: MCura built the platform that provided an integrated solution for all stakeolders i.e. doctors, hospitals, patients, testing centres & pharmacy. With a tightly knit platform as this, one can do a ton of things. The rich data collected is more than just valuable to more than one stakeholders
2. Founder: The founder here is intelligent, simple, humble and hard working. She knew everything you asked her about her business. From things like accurate sales numbers and patient data points to risks in her business. She was candid.
3. Large Market Size: Less than 2% of the hospitals in India are digitised. Let alone being integrated and giving a holistic view of patient health data.
This post is in no way complete. Will be updated regularly for valuable companies I’ve been unable to back.