Good morning, it's Thursday and we have a lot to unpack. India's kingmaker is back with his new fund and has made his first investment in the country after a couple of years, and are Indian companies really ready to go public?
➡️ Former Tiger Global exec Lee Fixel's new VC firm Addition has led a $35M funding round into new media company Inshorts. Lee Fixel is one of India's most-well known growth stage investors and is famous for backing Flipkart very early on. He started Addition in September last year, which is a $1.2B fund.
➡️ Addition has also been quite active in the US leading developer security company Snyk & mental care Lyra Health's Series D rounds in the last month alone. They are also apparently raising a second fund of $1.5B so might be looking to deploy a lot more capital in a short period of time.
➡️ Inshorts plans to use this capital for their newly launched location-based social network called Public. Public is an app with over 60M+ installs, which lets users follow news & updates of their cities in their local languages. The app somewhat reminds me of the YC-backed Lokal which is a platform for hyperlocal content & news.
➡️ While it seems like Public has gotten off to a big start (0 - 60M) just this year, I'm sure the focus will be on building an engaging community with great content, user contribution and retention, so let's see if Lee's first new investment in India will become a major new news org or goes bust.
2. https://bit.ly/2G6G0ep: Is India ready to go public?
➡️ From talking about a product called Public, we're on to companies going public (or a lack of companies going public). Until recently Indian companies couldn't go public overseas until they'd listed publicly in India itself.
➡️ And that comes with its own set of complications: showing at least Rs 15 Cr in profits for 3 years leading up to the IPO (which would disqualify nearly every single company). And after the government's announcement to relax norms, a lot of Indian companies have publicly come out to say that they plan to go public in the next 2-3 years.
➡️ This has previously been a huge problem with the Indian venture ecosystem, as with companies not going public or exiting- they don't generate cash on cash returns for their investors and it's hard to continually back companies if there is no real way to make gains on those investments.
➡️ Going public in America will also result in Indian companies being subjected to greater scrutiny and they will need to have better accountability and corporate governance in place. We have seen the likes of Theranos, Luckin Coffee & Nikola Motors (allegedly) commit fraud as public companies.
➡️ The American market is also better equipped for loss-making high growth startups to go public in, and I do hope we see some Indian companies go through an IPO or go public via SPACs in the near future.
Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/deepakabbot/status/1311509949843873793
This post is only for paying subscribers, but it’s ok to forward every once in a while. If you received this as a forward, consider subscribing here 👉🏽 https://keepingupwithindia.com/