Comments
Backer of Snap and Airbnb, General Catalyst expects 10-20 per cent of its new $4.6 billion fund to go towards Indian start-ups, the firm’s Managing Partner, Hemant Taneja told businessline.
The global VC firm has increased its focus on the Indian market in the past few years. It has also appointed Anand Chandrasekaran in early 2022 to focus on India/US opportunities. Chandrasekaran noted that over the past 3-4 years, General Catalyst has invested in 25 Indian companies. Out of which, 10 investments were at the seed and pre-seed stages. However, the VC firm intends to invest in companies across all stages. The average ticket size of its investments can range from $1 million to even a billion dollars. Chandrasekaran estimated that the firm has invested about $250 million in India over the past 3-4 years.
Also read: VC funding for start-ups plunges to six-year low
General Catalyst’s India portfolio companies include CRED, Uni, Spinny, Orange Health, FarMart, and Loop Health, among others. Further, talking about the slowdown in growth investing, Taneja said, “I think it will probably be 9 to 12 months before the market environment stabilises. I believe that growth investing will pick up then as there is a lot of capital available to be invested. The ongoing macroeconomic uncertainty has sent investors into a wait-and-watch mode leading to this slowdown in funding activity.”
He added that once the market opens up, the market will see a bunch of down rounds. This is because many companies will not be able to grow into the valuations that they were given in the past. In the past few years, most companies have raised three or four years ahead of their progress on normal multiples basis. Now, when the market slowed down, these companies cut down their cash burn, resulting in a slowing down of their growth.
“There is no way these companies are going grow into their old valuations. So, I think down rounds will happen. Honestly, it is good for the system to flush it out, and normalise companies so that employees have a sense of what they are dealing with and you can rehire them on the new market conditions and build discipline. This happens after every bubble. This is not the first time we are seeing this,” Taneja added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.