India is seeing cash being returned and recycled: Blume Ventures’ Sanjay Nath

Indian startups have raised over $28 billion so far this year, according to Venture Intelligence. In the process, India has created a unicorn every 10 days with 34 startups now being part of the billion dollar club, not just that the deals are getting bigger and bigger every day.

While ecommerce is the clear favourite, followed by fintech and edtech, these sectors have also been the top benefactors of the lockdown life. Sectors like enterprise tech, logistics, healthcare have also attracted serious interest and big moneys and of course, SaaS has now become the Indian success story globally quite evident after the stellar debut of FreshWorks.

India's food tech Zomato led the IPO bandwagon and now there is a queue of homegrown tech startups ready to light up the stock markets.

Just this week we have Nykaa and PolicyBazaar and India's biggest startup IPO Paytm opens next week to be followed by Delhivery, PharmEasy, Mobikwik and many more.

Talking about the big buzz we cannot ignore the kind of currency crypto is gaining in India, with both investors and consumers looking to get a bite of the shining new star on the horizon.

In this episode of ‘Young Turks – Diwali Special’, CNBC-TV18’s Shereen Bhan spoke to Sanjay Nath, Co-founder & Managing Partner at Blume Ventures, Nimesh Kampani, Cofounder & CEO of Trica and Rehan Yar Khan, Managing Partner at Orios Venture, to take stock of the year that has gone by and what lies ahead.

Talking about the IPO trend Nath said, “What is interesting is that this is a real recycling of cash. If you think about it, I have lost track of the number of unicorns that we have had. Mind you a lot of that has been paper value and what is interesting, starting from Zomato, here in India, and with FreshWorks in the US and with the upcoming IPOs what India has not really shown which is happening now, is this cash being returned. The reason that is important is that when the cash is recycled, and at that scale, it just creates a more vibrant ecosystem.”

Talking about standout theme this year Nath said, “Earlier SaaS mainly was restricted to enterprise SaaS, and just, let us say, built in Bangalore for the world. But today, SaaS has become a model, you have a pricing model, a business model, you have vertical SaaS, you have horizontal SaaS, it has also being applied to different verticals. It has become a business model in and of itself so that is one. I will also say that the digital tailwinds have also impacted tier-2 and tier-3 cities. So you see, you see sectors like agri tech, we have got Stellapps and Jai Kisaan beneficiaries of the sector. You also have vernacular gaming entertainment, which was earlier maybe restricted to let us say Rummy and gaming/gambling. But today, you have got tier-2 and tier-3 cities becoming active users and also willing to pay for that I think those are huge beneficiaries.”

On liquidity Khan said, “The liquidity story is a very interesting one. It shows that if Indian entrepreneurs are given liquidity, the market certainly exists to build large companies. It all started about a decade back when venture capital entered India, and started providing capital to companies and that has now gone on and increased yes courtesy central bankers from across the world in the last 18 months. But it just shows the power of what can be built in our country if our people are given the financing. That is very, very heartening, because the market certainly exists, the entrepreneurial zeal has always existed in this country. The innovation has always existed in this country, we were always short of capital and now that we have the capital, look at what we are doing with it.”

On standout theme this year he said, “E-sops and coming of the age E-sops has been a big one this year because with the IPOs it is not just investors which are seeing liquidity, it has employees which are seeing liquidity back and that is fuelling more and more talent into this ecosystem. So to my mind that has been a very big one.”