After Facebook acquired Bangalore-based Little Eye Lab, Rajesh Sawhney, the founder of GSF Accelerator and GSF Superangels was flooded with Tweets and congratulatory messages. GSF, being an investor in the startup firm, may not have bagged multibillion dollars in value but the deal puts Indian software product development on the global map. In a conversation with eWorld , Sawhney, the former Reliance Entertainment executive talks about what he saw in Little Eye Labs, future investments and the need for Indian software product development to target a global market.
How did you come across Little Eye Labs?
It was from our multi-city accelerator programme ( term borrowed from the software lingo which means helping ambitious businesses achieve rapid, high and sustainable growth, akin to a software that helps in improving performance of an application) that has been in place since 2012. We always wanted to focus on technology companies who have a differentiated thought and approach. In one of our programmes, we came across Little Eye Labs.
We along with Ventureeast invested around 1.5 crore rupees in two tranches and have a 15 per cent stake in Little Eye Labs. More than the money, it is the thought that this company thought of going global opens up lots of opportunities for us in the future.
Was there anything about the founder or team that gave you the impression that this will be a success?
Like I mentioned we look for companies with differentiated thoughts and Little Eye Labs struck as one such company. What is interesting about the company is that it is seasoned. It is not run by out of college kids but by people who have a good grasp on the space they are in such as performance measurement of Apps. The founder, profile of work, the drive and clarity of thought were all there. It also fitted in very well with our strategy of investing in companies who specialise in mobile-related technologies.
Would you say that as a startup, Little Eye Labs had clarity right from the word go?
I am saying the vision was there. It needed tweaks like the time when we suggested that the company should broaden its scope of work from developing assessment tools that measure power management to look beyond at things like memory issues, app crash reports and such things. The team listened to our suggestions and it has paid off. We have seen instances of startups be rigid about the ideas and not open to third-party views. The ability to listen to others and also be open enough to listen to the suggestions, pickup signals and change strategy if needed are all important. In this aspect, Kumar is a great listener and deal maker.
Since you run an accelerator across different cities, what kinds of companies do you see from different parts of India?
This area is new to us but we have seen the following trends. In the NCR region, we have seen a lot of e-commerce companies due to the successes of MakeMyTrip and the likes. In Mumbai, we see a lot of startups focussed on media and financial technology related products. In Bangalore, it is all technology- like cloud computing or software-as-a-service. Overall, we have invested in around 24 companies in all these cities and what we see is that every region has a legacy that it wants to build on – whether its on the financial, technology or other aspects of business. We have 30 entrepreneurs in residence. During this period, they work with our accelerator and they work on their own start-up ideas. It is more like an incubation programme. To each startup we give Rs 15 lakh. With some we have a seed round, which means we invest Rs 1-2 crore.
Will this deal change things for you?
Yes. So far, most of the companies have been focussed at India as a market. After this, we feel that Indian talent can use this country to build products and do what Infosys or Wipro did to the services segment. So far the focus of most homegrown companies has been the domestic market. However, one has to bear in mind that business is global and it should have the ability to sell, be it here or in Timbaktu. We will begin this transition and I am confident that India can we build something like Salesforce.com.
Critics say that this could be a flash in the pan…
I agree that in software product technology development, India has not had success when compared to software services. Facebook’s acquisition will inspire other companies and inspire others. we just need to refocus and put capital behind smart people and rest will follow. However, I am not saying it is easy. In the global market, opportunities are big but are difficult. We should build on this momentum.
How do you see early stage investment scenario in the country?
By no stretch is it a perfect evolution. At best, it’s a bumpy ride forward like everything else in India. It has already had its share of bubbles and busts, highs and lows. It has seen a rush of investor money, and subsequent stretches of drought. It has been regarded as the "hottest" new market and also rejected as the one to be wary of. However, there is forward momentum. We find that both venture capitalists and angel investors are investing across stages now, and are collaborating in deals. This signifies the emergence of a new hybrid investment paradigm for companies needing early stage investments who are interdependent on each other.
In which sectors will investments b made in 2014?
The last two years have been about e-commerce, this year will be about mobility-related technologies along with cloud computing.