Rajat Tandon: Chinese May Help When American Funds Slow Down
Rajat Tandon discusses at BW Disrupt Dialogues why he left Nasscom and his attempts to get investors to deploy 100,000 crores (3.3x more) to fund startups
“It’s been phenomenal. The reason being I have entered into the venture capital space at a time when startups need the VCs to empathize with them. This time last year I was still associated with 10,000 startups and we heard of a lot of pain the startups had to go through. They were all facing the same conundrum, ‘great products – no money (to build them)’. So that got me thinking whether I could possibly step to the VC side and make the pains a little more bearable.”
“Is that why you left 10,000 Startups?”, he has been asked.
“What else?” shrugged Tandon. “Of course (that’s why I left). Here was this opportunity to help the startups from the venture capital and private equity side of things. It was an automatic next step of progression to build on the work I had already been doing. Where I am right now is the heart of money for startups in India.”
IVCA has around 120 VC and PE members. And these folks are among the top investors of the country. 60 to 70 percent of the members are PE firms and around 30 percent are VC firms. IVCA is an advocacy body that represents investors to the government and Tandon plays an ambassadorial role there as well. “We have made over 50 representations to the Government, 25 of them have been accepted. So you can see this was an opportunity where I can help handle regulatory matters as well,” Tandon said.
Tandon will be keeping true to his mission to help startups by working with investors to increase their capital deployed. “We are seeing a lot of action in the VC space but there’s a slowdown in angel funding, and in series A and B rounds.” So if Tandon as an evangelist of startups to the VC and PE firms can convince them to invest early on, that will be a lifesaver to the struggling yet promising startups.
Tandon further said, “We have had investments in the country since 2012 and deployed close to 30,000 crores. And now we are trying to deploy 100,000 crores worth of funds.”
In one word, that’s phenomenal.
Chinese money can pick up where Americans left off
The Chinese investors coming in can be an additional life line to the startups.
“The Chinese have been investing close to 3.7 to 4 billion dollars a year compared to the 15 billion dollars the Americans have been investing a year. 3.7 versus 15 billion, it’s a big difference – most of the VC/PE money as you can see is coming from the US,” Tandon said.
Doesn’t mean the Chinese don’t have a large pool of money with them (ever heard of Alibaba and Fosun?). Tandon feels it’s an excellent opportunity for some mutually beneficial investments to take place. “The slow down in American money coming in can be ramped up by new incoming Chinese funds. There is potential and opportunity to induce more investments from China. Certain areas like infrastructure, analytics, healthcare, even education are important to India and historically investible sectors for the Chinese.
Hopefully the governments work together and that ripple effect will touch the investors overseas as well.”
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