Philosophy

Nirvana’s investment philosophy is focused around being an early investor in internet, mobile and network companies in India, that are riding the boom in the digitization of the Indian economy.

Ideally, we like to be the first institutional investors, early enough in the lifecycle of the company to help make a meaningful contribution to the outcome of these companies. As we take the risk of investing early, we look to back opportunities that could provide us outsized returns. Our investment decisions focus on the entrepreneurs we invest in and the dynamics of the industry that they operate in. Markets that excite us have the potential for strong long-term growth.

We look for competent entrepreneurs who either have a compelling consumer insight or expertise into an industry that creates a competitive edge. Ideally, these entrepreneurs will also have experience in building strong teams. We spend time with companies early in their life cycle providing help around business strategy, team, and financing, as appropriate. The blend of investing and operating experience of our team, positions us well to add value to our portfolio companies and thereby investors of choice for quality teams in India.

Strategy

The Fund proposes to make early stage, as well as early growth investments, in companies focused on the nascent mobile, internet and electronic payment markets in India. We believe that these markets are at an inflection point of growth and will benefit tremendously from a favourable young demographic, rapid consumerization and increasing penetration of always-on internet. The Fund would be managed by an experienced Indian team and is supported by the Patni Family, promoters of a top 5 Indian IT company who are the anchor investors in the Fund.

While the market is rapidly growing there is still a stark absence of institutional venture funds writing the first cheque into promising young companies. Our strategy is to bridge this gap and write the first cheque to best-in-class entrepreneurs, addressing large opportunities with unique products and great business models. Our team’s experience in the internet and IT ecosystems in India positions us strongly to add value to investee companies in terms of strategy, team build-out, future financing and exit.

We expect to invest in companies across e-Commerce, Online Travel, Online Advertising and Marketing, Mobile and Digital Content, Electronic Payments and other interesting areas that leverage internet for scale, distribution or low cost customer acquisition.

While the Fund’s focus is clearly early-stage companies, we also expect to make few investments in companies that have established business models, demonstrated market presence and are widely perceived to be among the winners in their industry.

Market Opportunity

An important contributor and beneficiary of the phenomenal 7%+ growth of Indian economy over the last decade has been the Indian mobile telephony sector, which has grown 250 fold over the last decade. However with the declining voice ARPU’s, telecom operators are now betting big on data consumption growth through 3g and 4g networks. We expect that this big shift will drive both reach and usage and also provide a huge fillip to the mobile web and internet sector.

These industry shifts are being accompanied by a shift in the Indian demographic where greater than 65% of the population is under the age of 35 years. The young urban consumer has been a beneficiary of the globalization of India and the rapid growth of the markets and is more aspirational than his parents’ generation. We expect this young ‘digital native’ to be very comfortable with technology and to spend significant time consuming new media and purchasing goods online.

While the urban consumer has chosen to use the internet for mostly aspirational reasons, folks in Indian small towns have started seeing the benefits of reach and distribution that the internet provides and are using the internet to solve significantly utilitarian problems. Beneficiaries will be the education, healthcare and financial product sectors, which could be significantly benefited on account of reach, distribution and digitization of analog data and content. We expect to see a new generation of entrepreneurs to develop propositions that’ll both complement and disrupt existing offerings in the space.

We believe that this mix of consumer demand, outstanding local innovation and development of soft infrastructure for the consumer web, represent the perfect storm for early-stage investing in the internet and mobile space in India and are excited about backing opportunities in this space.

Value Addition - Nirvana as a business partner

We invest in companies in which we feel comfortable that we can add value through our domain knowledge and networks.

Many early-stage entrepreneurs need assistance building out their management team and we use our extended network and brand to help entrepreneurs attract the right talent. Further, these companies face important questions related to their strategy and business model and we work with them to help them think through these issues. We expect our investee companies will often need follow-on financing and we help them think about the right amount of capital to raise and position them for future rounds of capital.

We typically maintain open communications with all members of a company’s executive team, and can directly contribute marketing, sales and operations expertise as well as refer external resources for projects in any functional area. We also introduce our companies to strategic partners and prospective customers. We expect portfolio CEOs will find their Nirvana director to be their most active non-executive board member.