,.111""/11"1111"1 VENTURE CAPITAL I Kripa Mahalingam t was a balmy day in No­ vember last year when Lakshmanan Narayan. CEO ofUnmetric, flew down from Chennai to Mumbai to make his presentation to the formi­ dable team at Nexus Venture Part­ ners. Present at the meeting were its three founders, Suvir Sujan, Sandeep Singhal and Naren Gupta - while their combined business acumen would have made any en­ trepreneur nervous, Narayan was both anxious and hopeful. A few hours ofgrilling. and a sleepless ••• night later. Narayan had a term Nexus has been prominently able to manage sheet for S3 million from Nexus. '1 smart exits, thanks to its early-birdstrategy could have fished around for a bet· for makinginvestments ter bargain with other funds but I felt that the team at Nexus under­ stood our business really well. and would also be the ideal partners available for VCs, aren't easy ei­ to help us scale the business," says ther because there are too many "There are times when you Narayan. He was right. Not only variables involved. But Nexus is think the company may not go did Nexus help shape Unmetric's making exits look like a walk in business strategy. it also assisted the park - it has made six erits anywhere, but a year later. they are in building the company's senior over the past two years and. except the star in your portfolio management team as well as the one. all ofthem have raked in good -SANDEEP SINGHAl (8) advisory board. Unmetric is a profits (see: On a roJI). Sure, it part­ Co-founder, Nexus Venture Partners benchmarking company that tells nered with other VCs in most deals brands how they stack up against but its track record. stands outs in their competitors based on their an industry where you are only as social media strategy. good as your last exit. That Nexus is helping companies It's a combination ofskills that's "A good partner is one who scale up in every possible way ­ working for Nexus. Sujan, Singhal prevents the other from making and that in futuristic businesses and Gupta, who founded Nexus in a bad Investment like Unmetric, which are still their 2006. believe in consensus - all of infancy - is only part ofthe story. them have to agree before making -SIMR SIIIAN (M) What's amazing is how the VC firm an investment and "a good partner Cooloundef, News Venture Pllrtnefs is building something ofa formi­ prevents the other from making a dable reputation for. hold your bad investment," says Suvir Sujan. horses. exits. Here's how. co-founder. Nexus Venture Part­ Ask any venture capitalist and ners. They also tend to invest in "We mostly help in building the they'll tell you exits are not easy themes ahead ofthe market. and team and attracting people. When in India. Actually, it's mostly not which are yet to be proven. we approach people, it validates even in their hands. Unlike the us, They started investing in enter­ India is yet to see a slew ofbig. prise solutions and cloud com­ the team and the idea bang IPO exits for VCS - MakeMy­ panies in 2008. much before it -ANUP GUPTA (T) Trip and Naukri are exceptions. became fashionable to do so. ·We MarwlgIna; director, Nexus Venture Partners M&As, almost the only-exit route look at somewhat futuristic mar- 18 August 2012 / OutJook BUSINESS SOUIIlIKIWI ~"lrrprlM" I VENTURE CAPITAL I ON A ROLL Nuw 1uu.fUn ma.rimum uitJ in the mterprUe andcloud &paCe w GenerlII cmIyst. Bessemer\tiltltlft Par1nIls Founders Fund IIIld ON Capbl ~ q20tD 28.5 NA ..... -........ I/IdeII; \lentUres and Draper RIchards : Jan 2011 ae 31 '"""""'os i Valra : AuIl2011 1., NA CllltAl"", """ I,. \lentUres .nd RedpoInt \lentures i July 2011 11.6 2()()'250 QIlSJIR ..... ,_- i Oct2011 12.5 136 I<l,"", , NlTDommo FldeIty ~. NokilI Growth Paftnel5, Clsro Syst!m$ f Jan2012 ... 180 ..........._--_ ... ""'~._- --- keta that may not exist today but raise $300 million as part ofa third products nor customers to show for will be a natural progression some· fund, and the announcement can when he starts off. time soon," says co-founder Naren be expected in the next couple of As with Unmetric, "We mostly Gupta, who leads investments in months. Nexus has already invest­ help in team building and at­ Silicon Valley with Jishnu Bhat· ed almost 75% ofits funds across tracting people," says managing ta.charjee, principal. "In 2008, the 4O-odd firms. The team at Nexus director Anup Gupta. "When we need for storage was exploding sifts through upto 1,000 proposals approach people, it validates the and the costs were very high. We a year to pick out six to eight ven­ team and also the idea." felt people would need flexibility tures for investment. It doesn't come as & surprise that in capacity and cloud is the only The bet is always on the entre­ Sujan, Naren Gupta and Singhal solution that can give them that." preneur. "The business plan he have a strong history ofentre­ Their conviction has paid off' and presents in the beginning is always preneurship. Sujan co-founded Nexus is seeing some ofits biggest different from what the business Baazee, which merged with e&y exits in this space - Citrix Systems finally evolves into," says Sujan. in 2004 to form eBay India. Gupta took over the portfolio company, "The entrepreneur has to have the co-founded the embedded software Cloud.com. for over $200 million ability to listen to what the market company Integrated Systems Inc, in July 2011. Storage management is ..ying. adapt and make chang­ which he took public before merg­ company Gluster was taken over es." He must also have the abil- ing with Wind River SysteI1J5, in by Red Hat for $136 million in ity to hire and keep good penon­ turn acquired by Intel. Singhal an all·cash deal in October 2011. nel. especially when he has neither co-founded the Rupert Murdoch­ "Nexus is one ofthe few funds in backed eVentures, one ofthe earli­ India Uml invested in enterprise est VC" Mlt up in India in 1999 - it application and cloud companies," shut in 2003 and Nexus took over "Y' Panlg Dbol. managingdine­ its remaining investee portfolio tor, Inventus (India) Advisors. in 2007. Between eVentures and "They have leveraged their exper­ Nexus, Singhal also co-founded a tise in this area to identify some healthcare outsourcing finn, Me· winners early on and it has paid off dusind Solutions. The three know very well for them." enterprise is a roller coaster ride. Nexus operates out ofa combined "Since most ofthem at Nexus have corpus of1320 million. It has al­ eIperienee in building businesses, ready raised money twice, the first they know what it takes and the time in 2007. when Nexus India "We look at somewhat ups and downs that come with Capital I raised $100 million; its futunstic markets that may not it," says Amar Goel, founder and second fund, Nexus India Capi- exist today but will be a natural chairman, Komli Media, a firm in tal II, raised $220 mi.llion in 2008. which Nexus invested in 2007. Although the part.ne" refwe to progression sometime soon disclose their fundraising plans cit­ -NAREN GUPTA IKE FUTURE IS NOW ing regulatory constraints. indus­ Co-loundef, Ne:ws YentunI PMners Nexus primarily looks to invest try sources say Nexus is likely to in companies focused on huge op- 18 AuCust 2012 I Outlook BUSINESS " Exits are essential for the then, another segment where Nex­ start-up ecosystem to thrive. us has invested aggressively, cloud Nexus seems to have perfected computing, is estimated to grow to $130 billion by 2013, according to the art of X1t, Ig Gartner estimates. -PARAG DHOl That apart, Nexus has invested Managing director, Inventus (India) AdYiSOfS in Suminter Organics, which pro­ cures organic farm produce from local farmers and exports to inter­ ing revenues ofSIOO million in 2013 national marketsj Sohan Lal, an and is valued at $500 million. agri-Iogistics provider; and EyeQ, There's also Pubmatic, which has a chain ofeye hospitals focused on developed a platform that allows northern and western India. large publishers to manage their Right now, ofcourse, the finn is ad inventory on a real time basis betting big on social media. Gart­ to optimise pricing and maximise ner estimates put the revenues of revenues. Pubmatic has raised $63 social media firms at around 110 portunities, be they domestic or million so far. Nexus invested $7 billion in 2011, and expect it to global. Market opportunity is im­ million in it in 2008 along with He­ grow to $14.9 billion in 2012. -Till portant because it is impossible to lion Ventures and Draper. An IPO now, social media has been more build scale without it. "When we from the firm is said to be in the about fun. In future, it will have a set out in 2006, we believed there would be global companies coming out ofIndia," says Sandeep Sing­ NEXUS IS BETTING BIG ON SOCIAL MEDIA. GARTNER hal. "We are now seeing more ofit ESTIMATES SOCIAL MEDIA FIRMS WILL GROW FROM because entrepreneur confidence is high here and they [the entrepre­ $10 BILLION IN 2011 TO $14.9 BILLION IN 2012 neurs] can pick up international trends and work with them." offing, alongside rumours ofa $300 big use in business as well. It is still Another investment criterion for million buyout offer from Amazon. early days - it may not happen in Nexus is capital efficiency. "We are NeIlls' bet on both Komli and the neIt sil: months to a year," says typically an early stage vc fund Pubmatic stem from the strong Naren Gupta.