A slingshot for Asia’s giant-slayers

We held a brainstorm session to explore moonshot ideas on how we could give the startups we work with an outsized advantage in the complex new world of mega-rounds. The answer, writes Shailendra Singh: our Strategic Development team.

Shailendra Singh

Published September 24, 2018

At Sequoia India, we’re passionate about company building. The work we do to help our founders nurture their start-ups is the most gratifying part of our jobs, and an insane privilege. Whether it’s holding a recruiting drive for a portfolio company over a weekend or problem-solving a technology issue late into the night, we all love to roll up our sleeves and pitch in. We cannot do everything for every founder, but we always want to push the boundaries on how we can help. Over the years, we have assembled a portfolio services team of more than 20 accomplished professionals across major functional areas, including recruiting, technology, PR, legal and finance who work closely with our founders to support their startups as they grow.

In 2016, the Sequoia India and SEA team held a brainstorm session to explore moonshot ideas on how we could give the startups that we work with an outsized advantage in the complex new world of mega-rounds. This has been a game changing trend in the last half decade in technology investing. The scale and size of technology financings is unprecedented. Fund sizes and industry structure haven’t evolved to keep pace.

Additionally, the diversity of technology investors has become truly multifaceted over the last few years. Regional and global corporates, technology companies, family offices and cross-over investors that normally focus on public markets are now playing an increasingly prominent role. At the same time, this diverse group of corporate and strategic investors needs assistance to better understand the startup landscape in India and ASEAN.

We decided to create a capability to connect the dots. In 2017 we set up a Strategic Development team, based in Singapore. The task: to help founders in our India and Southeast Asia portfolio chart new growth, drive M&A and build relationships with the growing array of corporate and strategic investors who want a stake in Asia’s technology sector.

Creating a new capability to drive synergies

We brought in Piyush Gupta, who was the Head of Technology, Media and Telecom Investment Banking for India and Southeast Asia at Deutsche Bank, as Managing Director of our new SD team in June 2017. During his 17-year investment banking career, he helped raise billions in equity and debt financing for clients, and advised on major M&A transactions. What’s more, his experience spans China as well as India and ASEAN. We also hired Ben Zhang, an ex-Bain consultant who cofounded Airizu in China, and had worked at KKR for three years. Ben, who is the true definition of the upbeat extrovert, has connections all over Asia. The third person to join the team was Aakash Kapoor, a TMT associate from Deutsche Bank Singapore who had also run his own startup in India.

They hit the ground running, and within 90 days it was obvious that we should have done this years ago. The founders were thrilled to have this kind of expertise on their side.

The SD team spends 50% of their time with founders, digging deep into their business, their product, the competitive landscape, as well as their capital and strategic roadmap. They work with founders to fine-tune their company’s positioning, help identify the kind of partners that are likely to bring the most value, and help drive and negotiate both capital raises and M&A. The lion’s share of this work is around bringing new partners to a startup’s cap table and unlocking value for the portfolio company. In most of these situations, Sequoia India remains a long-term investor with an eye firmly on the next stage of growth.

They spend the other 50% of their time building relationships with global and regional corporates and growth funds that have strong interest in India or SEA, developing a deep understanding of their growth roadmaps and appetite for investments.

They also help founders select and manage relationships with investment bankers, and weigh in where need be. When EXL acquired SCIO Health Analytics in May, for example, our SD team helped SCIO pick an advisor – and when EXL was shortlisted as the partner, they also directly managed the negotiations on SCIO’s behalf. I received an email from Siva Namasivayam, the founder of Scio – and another from Rohit Kapoor, the CEO of EXL – commending Piyush & team for their incredible work. They both credited our team as a key enabler in reaching the finish line. It’s not often both the buyer and seller walk away with such positive feelings.

The home team advantage

In some very selective cases, our SD team takes a more hands-on approach to capital raises as well. That proved particularly important when Pine Labs, a hidden gem in our portfolio, raised its most recent round.

Lokvir Kapoor, the founder of Pine Labs, built a terrific payments platform company with little fanfare, PR or marketing. Piyush and the SD team were very excited about educating the investor community about Pine Labs and their category-defining approach to payments. Because Sequoia India is a long-term shareholder, there was a level of transparency, collaboration and sense of partnership between the SD and Pine teams that created a special bond. Such teamwork was only possible because of the trust and appreciation a ‘home team’ brings.

After a six month long process, our SD team helped to close ~$200M of investments from Temasek, Actis, PayPal and Altimeter – a set of high-value investors hand-picked from among many others the company could have chosen. More importantly, we think this process essentially reset the narrative around the strategic nature of Pine Labs’ offerings.

Up Next

The Sequoia India family is excited by the early success of our SD team. Our startups, and global tech companies, have quickly grasped how the SD team is uniquely positioned to help them. The requests for help from founders, and their interest in engagement with global corporates, is heartening. We have just hired two new members to join this team as we expand our capacity to help more companies in our portfolio.

We are also launching new initiatives. Our SD team is hosting a “Meet the Founders Day” on September 27 in Singapore. Over 100 founders from our India and SEA portfolio will be interacting with more than 150 senior executives from 60 of the largest investors in technology, including the biggest global technology companies and funds. There are requests from investors for over 600 individual meetings with our founders on that day, and we have had to upsize the event venue twice.

It’s taken us months of planning, and we hope the event results in new connections for founders as well as a chance to share their progress and strategy with potential partners. For us, it’s one small step toward our goal: to do a little bit extra for founders that have chosen to partner with Sequoia India.

This column was originally published on LinkedIn.