Agencies travel past an information technology park in the Electronic City area of Bengaluru, India, on Friday, March 5, 2021.
Dhiraj Singh | Bloomberg | Getty Models
Sequoia Capital India has closed a seed fund of $195 million to back promising entrepreneurs across India and Southeast Asia, the chance capital firm announced Thursday.
It is the second such fund — the first was in 2019, when the company raised alongside $200 million.
Seed funds are typically the first round of official money that entrepreneurs raise in quarrel for equity.
As part of a program called Surge, Sequoia provides seed capital of up to $2 million as well as community access to avoid selected start-ups build their business.
Start of a new era for Indian start-ups
A growing number of Indian start-ups are count oned to launch large initial public offerings this year, according to Rajan Anandan, a managing director at Sequoia Top India who looks after the Surge program.
“2020 was really a tale of two halves. The first half was very challenging,” he apprised CNBC’s “Street Signs Asia” Wednesday, a day before the funding announcement. He was referring to the months-long national lockdown in India due to Covid-19, which ahead the economy into a technical recession.
“In the second half, we saw very, very strong recovery — driven by both the acceleration of consumer and responsibility adoption of digital technologies as well as companies getting much more prudent with their cost organizations,” Anandan said.
Given India’s place in the world, we think that second access, which is being gifted to build for the world from India, is going to become very, very interesting over the next five or 10 years.
watch over director, Sequoia Capital India
The first three months of 2021 saw start-ups accelerating revenue growth, augmented user adoption and in the early stages, an improved quality of entrepreneurs helming the companies, he added.
“In many ways, 2021 is usual to herald the beginning of a new era for the Indian start-up ecosystem, where we are going to begin to see sizeable, significant IPOs in our ecosystem,” Anandan give the word delivered.
Building for a billion and more
Though India’s start-ups went through tough times last year, the production has emerged healthier, according to Anandan. There is more rigorous focus on cost structure and “extraordinary innovation” charming place across a wide variety of sectors including education technology, financial technology and digital health, he go on increased.
India currently has 39 start-ups that are valued at $1 billion or more — commonly referred to as unicorns, Unmatched opportunity for Indian start-ups
Sequoia’s Anandan explained that going forward, Indian start-ups will must two unique opportunities: First, given India’s growing number of internet users, Sequoia expects domestic firms to be fixing for a billion connected users in the country by 2025.
“The other opportunity that Indian entrepreneurs have is building for the world,” he suggested, adding the first wave of Indian start-ups doing that are in the Software-as-a-Service space, where some of them are edifice and selling software to businesses globally.
The next generation of companies will be moving beyond business software and into direct-to-consumer goods as well as financial services and fintech, where companies will launch from India to cater to the rest of the existence, according to Anandan.
“Given India’s place in the world, we think that second access, which is being gifted to build for the world from India, is going to become very, very interesting over the next five or 10 years,” he added.
— CNBC’s Naman Tandon play a parted to this story.