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India Startups
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7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 1/22
Private and Confidential
Investing in Emerging Markets
India Blume Ventures
Pre Money Conference,San Francisco, June 2
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 2/22
Private and Confdential
Incredi!le India "#$y it Matters
Section credits: Citibank (India) Technology Banking
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 3/22
%is E&'ected to Pro'el Consum'tion to (e)*eig$ts
Source+ $e #orld Fact!ook and Economist Intelligence -nit.
*ig$ /0P /ro)t$, #it$ a 1.1 !illion /ro)ingPo'ulation%
India Continues to *ave a Favoura!le Macro3Economic Profile
Bu!!le Si4e CurrentPo'ulation
5 g g r e g a t e C o n s u m ' t i o n
I n - S 6 ! n
Source+ Mc7insey /lo!al Institute Consumer 0emand
AggregateConsumptionto Quadruple
1,889
Calendar :ear
F0I flo)s in India continue to remain strong;-S6 !n<
Source+ Economist Intelligence -nit.(ote+ Figures in -S6 !n
$ere are Concerns = !ut also Confidence
• Currency devaluation
• Political uncertainty given general
elections in 2>1?• @ack of 'olitical consensus
• -ncertain ta& environment
• $at said, /ro)t$ 'roAected to !e 839,and if t$e a!ove concerns are alleviatedand a more investor3friendly /ovt is in
Po)er, t$is could !e $ig$er
7/21/2019 India Startups
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5ttractive Economic 0emogra'$ic rends%
2>1> #orld Po'ulation ;mm of Peo'le<
Deal /0P 'er Ca'ita /ro)t$ ;2>11 = 2>2> C5/D<
Source+ -S Census Bureau ;2>1><.
Total Population: 6.9 Billion People
Sources+ $e Economist Intelligence -nit, CI5 Fact Book and Citi Investment Desearc$ as of Marc$ 2>11.
Just t$is mont$ ;June 2>1<, Fitch upgradedIndia’s Rating utloo! to "ta#le = driven !y/overnment ste's to contain t$e deficit,sta!ili4e t$e ru'ee and ot$er 'ositive reform3
oriented actions
7/21/2019 India Startups
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5ttractive Economic 0emogra'$ic rends ;Contd<%
ProAected S$ift in Com'osition of #orld Economy 2>1> G 2>>E /lo!al /0P Com'osition
ProAected Evolution of t$e /lo!al Economy;6 in trillion, 'urc$asing 'o)er<;1<
Ran! Countr$ %&'&
1 -S 61?.12
% China 9.9( Ja'an ?.
) India *.9%
8 /ermany 2.H1
6 Russia %.%&
+ Bra,il %.'6
-7 2.19
H France 2.12
1> Italy 1.8
Ran! Countr$ %&*&
' China -*(.)9
2 -S 2?.92* India %*.%+
? Ja'an 8.88
Bra,il .%(
6 Russia ).(%
+ Indonesia ).%(
/ermany ?.>8
H -7 .9
'& /e0ico *.%&
Sources+ $e Economist Intelligence -nit, CI5 Fact Book and Citi Investment Desearc$ as of Marc$ 2>11.;1< PPPK stands for Purc$asing Po)er Parity, )$ic$ is a t$eory of long3term eLuili!rium e&c$ange rates !ased on relative 'rice levels of t)o countries t$e 'urc$asing 'o)er of differentcurrencies is eLuali4ed for a given !asket of goods.
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 6/22
%0riven By Dising Middle ClassK and 0omestic Consum'tion
India is Nne of t$e #orlds :oungest (ations%
. . . #it$ a Da'id Increase in -r!ani4ation;in millions<
% #it$ t$e Most 0iverse Society
%&'&A 1 %&*&2 CA3R: %.64
%&*&2 1 %&&2 CA3R: &.4
5nnual *ouse$old Income ;-S0<
O62,>>> 62,>>> 3 68,>>>
618,>>>3628,>>> 628,>>>
68,>>> 3 618,>>>
?9 middleclass !y 2>>
Nver >>mm Peo'le #it$in
t$e arget 5ge /rou'
5o 5ssameseBengali
/uAarati*indi7annada7onkani7as$miri7$asi /aroMarat$iMani'uriMalayalamMi4o(issiG0affiaNriyaPunAa!i
amilelegu
5ammu7ashmir
Pun8a#
ar$ana
R a8 as th an tt ar Pr ad es h
;elhi
ttaranchal
Bihar Assam
<est Bengal
rissa/aharashtra
/adh$a Pradesh
Andhra Pradesh
7arnata!a
Tamilnadu
=epal
Bhutah
Arunachal Pradesh
=agaland
/anipur
/i,oramChhattisgarh
7erala
/ahe>Pondicherr$?
3u8arat
imachalPradesh
"i!!im
/eghala$a
BangladeshTripura
Andman =ico#ar Island
5har!hand
@anam >Pondicherr$?
7arai!al >Pondicherr$?
Pondicherr$>Puduchcherr$?
5 /ro)ing Middle Class
Sources+ Street Desearc$, Mckinsey Estimates and $e Economist Intelligence -nit
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 7/22
India is 5mong t$e Most 5ttractive Internet Markets /lo!ally
@o) Internet Penetration Presents Furt$er -'side
-niLue Internet users in India India+ 2nd @argest #ireless Market /lo!ally
Source+ Internet #orld Stats, as of 0ecem!er 2>11.
Internet Penetration (%), As on December !, "#!!
($ireless sbscribers as o& December "#!!, in millions)
%) 6' +9 '* %%6+ '&'6 '%'Q of Internet
-sers ;mm<
?? H
29
1>
-S Dussia Bra4il C$ina #orld 5sia India
Source+ #CIS and D5ISource+ Street Desearc$
7/21/2019 India Startups
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Da'idly /ro)ing Smart P$one Penetration
Smart P$one of all Cell P$ones
Sorce: TomiAhonen Conslting Analysis December "#!!, Citi In'estment esearch and
Analysis
5ctive Internet Ena!led Smart P$ones;1<
Sorce: *P+ in India Analysis
9>
1>
29
1>
2>12E 2>1E 2>1?E 2>18E
Early / num!ers are encouraging and 'oint to medium3term u'side
5nalysts 'roAect a c. / 'enetration !y 2>18, )$ic$ )e !elieve isconservative
!% "% -%.%Penetration
/ G ?/ 5do'tion a 7ey /ro)t$ 0river%;2<
%Su''orted !y Increasing Smart P$onePenetration
;Su!scri!er !ase in mm<
Source+ 5nalysys Mason, I0C
(otes+ ;1< Includes #i3Fi and G ?/ ena!led smart '$ones. ;2< Includes G ?/ ena!led smart '$ones.
7/21/2019 India Startups
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India $e Mo!ile FirstK 0igital Economy )ill kick in ;very< soon
Sorce: /alcomm, *PCB e0ort
7/21/2019 India Startups
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Early Stage VC in IndiaVenture 2.> !uilding ground3u' t$is time
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 11/22
Why “India early stage”?
Blume entures
Private and Confidential
Early stage venture in India can oer higher risk-adjusted returns relative
to other asset classes. Investors can otentially get earlier and !ultilee"it otions # $esides IP% or &'() stakes could otentially $e ac*uired $y+C,PE investors across various fnancing rounds
Pu!lic markets
Private eLuity
Venture ca'ital
2arl$ stage
Asset class
1?31
1322
2>328
%4
Target IRRreturns
I n cr e a si n g C om p e t i t i on
1>>s
8>
R 28
D'&
E o rgani,edFunds >India?
I n c r e a
s i n g R e t u r n s
/orecompetitioninlated
Galuationscapital
deplo$mentpressures
aluations
are stillattractiGeInGestors
colla#orate cooperate
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 12/22
India - Early tage unding
Private and Confidential
Many VCs in India $ave moved u'stream, into t$e realm of /ro)t$ VC and PE.$is $as created a ga' for startu's t$at need critical seed and angel funding
Blume’s focus ( !ajority o/ +Cs have !ovedustrea!
Pre -
Series
A
5ngel grou's
Individual angels 5ngel funds Incu!ators 5ccelerators
Inventus 5ccel *elion SeLuoia Ca'ital I0/ Ventures Saama ;formerly SVB< 7alaari ;formerly Indo-S< Matri& (irvana Nmidyar
Tualcomm
(e&us Canaan (E5 Bessemer (or)est S5IF @ig$ts'eed Fidelity iger Verte&
Intel Cisco
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 13/22
India # hi/t /ro! 0112 to 0134
Private and Confidential
Pre -
Series A
Burst of accelerators, seed funds, su'erangels ; t$eir Luasi3funds<
Blme 1as &irst o& its si2e in this cycle 3 at
least a do2en more emerged in last "4 months
Deduced attractiveness of t$e 2>>93>vintage angel grou's
5ragmented angel net1orks don6t 1ork 1ellas yet (close7knit net1orks only)
@ack of a net)ork G market'lace of mentors,advisors, domain e&'erts, service 'roviders;)e may !uild it like FDC G U8>><
5lmost (N c$ange in t$e set of Series 5 G B G C 'layers
Some )ind3do)ns, some re!randing,some s'lits amongst larger VCs
Most of t$em on ne) funds limitede&its large active 'ortfolios
IPN market as dormant as ever intec$, focussed only on e&ce'tionallylarge cas$3flo) or gross rev !i4 models
rickle of M5 )e need a flood
Blume Ventures
8ack o& trans0arency arond 9C 0er&ormance
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 14/22Private and Confdential
!orgas$oard o/ Invest!ent tylesBlume Ventures
the PreD(&’s st$le smallunds small inGestments>not too man$ deep tech
pla$s though?
the %&&H disruptorunds such as the entire
audience at preDmone$
the %&&(H neJaccelerator models
>@C K T" clones and #adones at that? D more
ocussed on demo da$sthan Galue
D
the preD%&& incu#ator
models D legac$ college#ased goGt unded
the JeDareDtheDdomainDe0perts accelerators li!etandem and angelprime
the letLsDcop$DtheDGalle$model >classic -'&D%&mill unds all the usual
suspects?
all models coe0isting and 8ostling or space D Jhat Je
haGe is a smorgas#ord o
st$les lots o noise eGer$oneJaiting or the music to #egin
7/21/2019 India Startups
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India # the 5uances
Private and Confidential
DedBus ;Bus icketing<
Tally (Acconting So&t1are on CD)
5''s0aily ;offline 5'' Store<
har0ay, Delhi'ery (e7comm nly
8ogistics and Payments)
Just0ial ;yello) 'ages on Voice<
MadDat /ames ;Indic language, localc$aracter design = !oard games<
@arge Cas$ Economy, cardsunder'enetrated, 'ayment infra $ig$lyregulated
0o3it3for3me 0I:
rans'ort Infrastructure creaking =over!urdened as its !eing !uilt
Every Citys ec$ culture is Luite
different
Broad!and Infra )ell !elo) o'timal
Mo!ile Service Providers $ave toomuc$ control over a'' economy
Blume Ventures
;'ery challenge is an o00ortnity, bt nanced<
"ome Mocali,ed "tartup Ideas Mocali,ed pro#lems thatInGestors need to #e aJare o
7/21/2019 India Startups
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India # so!e $ig ideas ' the!es
Private and Confidential
Mo!ile First ;device and access 'enetration muc$ $ig$er<
Fi& t$e SMB 'ro!lems ;83?> million small !usinesses<
@ocation tracking and services
Fi&ing e3commerce !ackends = B2B commerce, 'ayments
Video !igger t$an te&tW
5udio G Video Indic languages content !igger t$an Englis$
/aming = )ill lea'frog consoles to Mo!ile and a!lets
Cro)dsourcing = Surveys, Information, asks, Ca'ital
Deimagine traditional 'lays = travel, Ao!s, $ousing, datingGmarriage
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 17/22Private and Confdential
Blume VenturesU t$e $eart and center of t$e microVC
movement
Blume Ventures
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 18/22Private and Confdential
6lu!e # a short history
Blume Ventures Fund I is a 2>11 vintage -%& mil IndiaDocused seed
stage und
*el'ing Indian tec$ startu's seeking a round !et)een -'&&&&& to-&&&&& in a seedKangel round
Blume’s sJeet spot is -'&&D-%&7 >in rounds t$at it M2A;"N &4 ofround?
5nd -&D-%&7 in "$ndicates >O*4 of round?
#e t$en support our #est companies Jith #ridges ;mostly convertnotes to ne&t rounds< H proDrata participation in "eries A rounds 1)it$ an additional -%&&D-+&7
Stakes postD"eries A are '&D' 4 ;in @eads< and D'& 4 ;in
Syndicates<, )it$ a fe) e&ce'tions on eit$er end of t$e range
7/21/2019 India Startups
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6lu!e Per/or!ance
Private and Confidential
9 u'3roundsK ;Series 5 G green s$ootsK Series 5s< in Blumes 'ortfolio
to date = from VCs including 5ccel, *elion, 7alaari ;formerly Indo-SVentures<, (irvana Ventures and Jungle Ventures ;Singa'ore<
Blume Ventures
%%5not$er in term s$eet stage
%%%..5verage multi'le ac$ieved Une&t round &
%%%%%..2 s$utdo)ns, !ot$ cos assets !eing sold for a small 'rice
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 20/22
6lu!e - Invest!ents ' ectors Blume Ventures
*D G Skills GEm'loya!ility
Internet Mo!ile3 Infra
Platforms
5d ec$ GMarketing G
Mkt Desearc$
Consumer;ot$er<
Consumer;e3Com 3/oods
ena!lers<
Content GPu!lis$ing
SaaS
Internet G
Mo!ile G0igital Media
Clean G/reen ec$
IeServices
ther =iches
>%4?
@ife Sciences
Consumer;e3Com =Svcs
ena!lers<
Manufacturing GDo!otics
Core >+4?
#e invest in t$e c$ange )e )ant to see in India and founders )$o !elieve t$e same InGestments >as o /ar %&'* %+ months rom launch?
5!out ?> )ill gro) out into or cater to international markets = more B2B, some B2C '&&H ounders '&4 <omen 4 =onDIndian citi,ens?> Bangalore, > Mum!ai, 2> 0el$i (CD ;Dest in Pune, *ydera!ad, C$ennai<6&H MPs >all entrepreneurs? inGest -%& millN 'st C und JK'&&4 Indian mone$
? mem!er Investment eam, ? mem!er Su''ort team, mem!er 'latform teamPlatorms #eing #uilt out 1 'st hac!er on pa$roll
IeServicesEducation
7/21/2019 India Startups
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6lu!e &antra 7 6ack to $asics 8 $est-o/-$
India’s need:to bild a classic bottom70 9entre ;cosystem model 1ith best7o&7breed
0ractices ado0ted &rom disr0tor &nds 7 both &rom =S Inno'ators and
ther +arkets (China > ;ro0e > Israel)
<e ta!e inspiration rom all the godathers3 -SV G FDC G Felicis G U8>> teac$ing us riskGca'ital allocn3 First Dound teac$ing us !uilding automation of ecosystems3 5ngelist )ill ena!le future !uilding of co3investment syndicates3 Innovation #orks 5ndreesen *oro)it4 teac$ us scaling o's
3 @earning from Israel on $o) to Build in India, S$i' to t$e PlanetK
<e Jill urther adapt or India3 Build 'ro'rietary angel net)ork for $ig$ Luality co3investors3 Build 'ro'rietary mentor and advisor net)orks
3 Build o)n M5 'latform for systematic e&it strategy
7/21/2019 India Startups
http://slidepdf.com/reader/full/india-startups 22/22
$ank you U8>>:oull see a lot more of India and Blume soon
Blume Ventures