Is The Winter Chill In VCPE Coming To India? 10 Secular Trends Suggest Otherwise – Aniruddha Nazre

As per the Organization for Economic Co-activity and Development (OECD), India is at number 15 on the planet as far as absolute funding/private value (VCPE) speculations got in 2015, with the US in the top spot. There is a huge amount of media concerning why ventures are backing off and it is a slaughter reminiscent of the atomic winter of 2000. Here are 10 common patterns that help the contention that speculations will increment and will move India to be in the best 10 inside the following five years:

1) Investments in 4G LTE will have at any rate 2X returns when contrasted with those in 2G/3G

The $87 billion put somewhere in the range of 2000 and 2014 in 2G and 3G has prompted increment of the Telecom part from $14 billion (1.9% of India’s GDP) in 2005 to $118 billion (6.1% of India’s GDP) in 2014.

$35 billion has been put resources into 4G LTE. NASCOM is anticipating that Telecom and new age businesses, (for example, web based business) will make 7.7 million new openings by 2020. As per McKinsey Global Institute, the broadband venture could build the Indian economy by three to multiple times by 2022.

2) 4G cell phones will beat highlight telephones in 1 year

As expenses of 4G cell phones continue dropping (over half of cell phones delivered in 2015 cost under $100) and request continues rising, cell phones will beat highlight telephones.

3) Smartphones will change the telecom plan of action

Portable information plans are overwhelmingly present paid interestingly on voice plans which are generally paid ahead of time. 1GB of portable information is ₹250 versus ₹50 for 1GB of fixed broadband and costs are falling quick. Changing from paid ahead of time to postpaid models implies that telecom organizations need to know their clients and treat them better. Information income will overwhelm voice and SMS income in three years and portable promoting related income will end up noteworthy with the ascent in the application economy.

4) Young and proficient India will drive digitization of money related administrations

Of 1.2 billion Indians, 66% are under 35 years of age and versatile first. With better network budgetary consideration has expanded to 571 million financial balance holders in 2015 contrasted with 235 million of every 2011. The electronic installment framework (ATMs and POS terminals) has multiplied in size since 2011. Versatile wallets have checked 255 million exchanges in FY15 contrasted with 107 million in FY14 and 33 million in FY13. Cashless exchanges are empowering web based business and m-trade. Purchaser spending is on the ascent as simple buyer credit has developed. The vast majority of the credits exceptional have multiplied in recent years with most elevated increments found in the lodging, individual and vehicle advances separately.

5) Ecommerce will make everything fair among urban and rustic shopping

There are an expected 79 million online business clients spending generally $2 billion. The retail business is experiencing an ocean change as a greater amount of its disorderly retailers begin utilizing internet business to achieve their clients on the web. Around 65% of the clients setting orders online originate from level 2 and 3 urban areas and towns. Besides, it is assessed that 35 to 40% of the merchants are today from level 2 and level 3 urban areas and towns. Everything from attire and footwear to staple goods and shopper durables are sold on the web.

6) Digital circulation of motion picture and TV substance will detonate throughout the following decade

In 2015, a normal Indian went through 169 minutes on his/her cell phone and 118 minutes sitting in front of the TV to get news and amusement. In spite of India being the biggest maker (1700 motion pictures in 2014) and shopper of films (52 billion motion picture confirmations), Indians are immensely underserved as motion picture watchers. India has seven film screens for each million, contrasted with 125 in the US and 13 in China. Computerized media has an enormous chance to achieve the majority.

7) Foodtech still remains underinvested with immense upside potential

Sustenance is a colossal channel on the Indian buyer’s wallet, with 43% of the pay for the urban shopper and 53% for the rustic purchaser spent on nourishment. The numbers are much more prominent if cooking fuel is considered. In the course of the most recent two years, 221 new companies focusing on the nourishment part have gotten near $500 million in subsidizing. The biggest ventures are in shopping for food and conveyance. Different classifications, for example, web based requesting and nourishment planning have additionally gotten subsidizing.

8) Mass urbanization and extended urban foundation will keep on being a noteworthy speculation opportunity

In 2010, about 66% of India was country. By 2050, the greater part of India will be urban. This mass urbanization is putting a great deal of weight on urban framework, particularly observable in transportation, wellbeing, lodging, and air and water quality. Driving occasions in the top metros keep on expanding as the framework can’t keep pace with the expanding populace and the quantity of vehicles sold each year increments (1.88 million of every 2014). In 2015 India had the questionable respect of having 13 of the best 20 most contaminated urban communities on the planet. The interest for moderate lodging in urban zones is additionally going up.

9) A “made in India application” will have >100M downloads in the following 2 years

With expansion of advanced mobile phones, versatile applications are on the ascent in online business, computerized media, urban transportation, nourishment, wellbeing, money, and so on. India is the fourth biggest portable application advertise as far as downloads after the US, China and Indonesia. The day when India has a “made in India application” that has over 100M downloads is not too far off.

10) Startups are drawing in top ability

Private interests in beginning time organizations (VC) just as late stage organizations (PE) have been rising relentlessly both in number and speculation sum. India has a lot of unicorns (to date seven unicorns) in the top worldwide 100 with middle age of their originators at 32. These unicorns and their organizers fill in as good examples for business people and youthful experts. New companies in training, diversion, account, sustenance, medicinal services, coordinations, retail, transportation and the travel industry are pulling in top building and the executives ability. The legislature is additionally finding a way to expand the effect of business on the Indian economy by decreasing administration and extricating control.

Entrepreneurs-guide Aniruddha Nazre

Entrepreneurs-guide Aniruddha Nazre

2017 saw another year in the increase of corporate investing in startups across the globe.

$31.2B was invested across 1791 deals in 2017. The secular trend is an increasing appetite for risk among corporates as they make bets across a number of strategic areas, whether it is e-commerce for retail, autonomous navigation for car manufacturers, fintech for the traditional financial services companies or artificial intelligence and machine learning for the overall tech sector.

The two by two matrix: “strategic fit” or “financial returns” on the y-axis and “eyes and ears” or “leveraged R&D” on the x-axis still holds good for most CVCs. A few CVCs such as Sapphire ventures (formerly SAP ventures) have changed their model to focus entirely on financial returns and have even diversified their LP base from the corporate balance sheet to external LPs.

However, key differences still remain compared to institutional venture capital, where financial returns is the one and only goal and compensation is highly aligned with that goal. CVCs have had a tough time attracting the top talent because of the compensation challenges they face compared to traditional VCs.

Nevertheless, the decision to choose to take money from either CVCs or institutional VCs has some nuances for an entrepreneur. There are four considerations:
1. Talent: As much as CVCs tout their ability to company building, they would rather hire the top talent themselves than let their portfolio companies. Also, most CVCs just don’t have the same panoply of professionals that help their portfolio companies in recruiting top talent.

2. Top line: CVCs can open doors to their internal business groups which can be helpful for startups to secure OEM or revenue sharing contracts. Nothing like having a channel sales deal that leverages a large existing sales force to sell products.

3. Technology: a CVC can bring major resources from its parent company to perform technology due diligence which a normal VC cannot. A validation of such sort can be very comforting to other investors which may lead to securing capital in fund raising, especially when the startup does not have a large revenue base.

4. Timing: CVCs are notorious in taking their sweet time to get approvals from their countless committees and checks and balances from their organizational labyrinth. So unless it is the last resort, as in the case of most hardware startups, it is easier for startups to raise money faster from traditional VCs. 5. T’s & C’s: if the strategic fit with the startup is right, then the T’s and C’s are very important when it comes to ROFR (right of first refusal), ROFO (right of first offer), ROFI (right of first information), not to mention the veto rights, and dragging rights, depending on how much capital CVCs invest. Most corporates want explicit or implicit exclusivity and it is the entrepreneurs responsibility to stay clear of all tie ups that limit their upside.

Having said this, CVCs offer a genuine alternative to VCs in certain sectors and it would be foolhardy of an entrepreneur not to consider taking money from CVCs.

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Aniruddha Nazre-Intermediaries to enhance trust in the Sharing Economy

Aniruddha Nazre-Intermediaries to enhance trust in the Sharing Economy

Is there a role for Intermediaries to enhance trust in the Sharing Economy?
Trust is the social lubricant that enables collaborative consumption marketplaces and the sharing economy to function without friction. Sharing saves people time, money and aggravation but trust is what allows someone to take a ride from a stranger or rent a room in a house from someone they’ve never met. Yet it’s also one of the biggest concerns of using sharing economy services.


 Aniruddha nazre sharing economy article

Aniruddha nazre sharing economy article

According to a PWC survey conducted in December 2014, only 19% of the US adult population has engaged in a sharing economy transaction. Of the 1000+ surveyed, 72% want to participate in the sharing economy in the next 24 months. However, 69% say that they will not trust sharing economy companies. According to Pew Research, only 19% of Millennials believe most people can be trusted, compared to 31% of GenX’ers.Data from the General Social Survey, the National Opinion Research Center’s poll of American attitudes, found that only 32 percent of respondents agreed that people could generally be trusted, down from 46 percent in 1972. An October 2013 AP-GfK poll of more than 1,200 Americans found that just 41 percent of respondents express “a great deal” or “quite a bit” of trust in the people they hire to work in their home, only 30 percent trust the cashiers who swipe their credit or debit card, and a mere 19 percent trust “people you meet when you are traveling away from home.”

Sharing Economy by aniruddha nazre

Sharing Economy by aniruddha nazre

To increase adoption and engender trust, sharing economy companies have developed a sophisticated series of mechanisms, algorithms, and finely calibrated systems of rewards and punishments such as reputation systems, social graph integration, and behavior analysis. It is the next step in the evolution of the person-to-person marketplace pioneered by eBay: a set of digital tools that enable and encourage us to trust our fellow human beings.The online setting presents an entirely new context in which trust must be negotiated without many of the normal antecedents and indicators. With its many variables and unknowns, the Internet can be seen as a setting in which the conventional rules and knowledge of everyday experience do not apply, and as such is perceived as a place of high risk. Users face privacy risks in that personal information can end up in the hands of the wrong people, and financial risks through transacting with unreliable parties. So the real question is whether the sharing economy companies are doing enough to establish trust? According to several experts in the field they are not. The reputation systems and social graph integrations are necessary but not sufficient to establish trust.

Traditional brick and mortar commerce has a long history of face-to-face contact, and for many years, has been conducted predominantly among parties that knew each other or were in close physical proximity. More recently, however, transactions have increasingly taken place between parties hundreds of miles away, without the possibility for personal contact between transacting parties. Third party neutral intermediaries that provide information about transacting parties in the marketplace have made a huge impact in establishing trust and increasing liquidity and volume. A great example is the financial services industry where third party agencies such as the credit rating agencies (e.g., Experian and Equifax) have widely expanded the use of consumer credit. If left to lending banks they would only lend to customers with big deposits with whom the banks have a personal relationship.

A similar role for third party information intermediaries is missing in the online sharing economy. Sharing economy companies need third parties to provide checks for identity, creditworthiness, driving records, criminal records, education, employment, legal status, etc. depending on the context of the transaction the parties engage in. Companies such as Onfido have a first mover advantage in enhancing trust through their online background checking services. Onfidoprovides authenticated checks for identity, driving records, criminal records, education, employment and credit to both sharing economy companies and traditional brick and mortar industries. By relying on services such as Onfido’s sharing economy companies can enhance trust and increase adoption.

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Aniruddha Nazre sharing economy