“It took us nine months to close the investment as these issues kept coming up,“ said Avnish Bajaj, managing director at Matrix Partners India that finally led a $20 million (Rs 128 crore now) investment in Ola, convinced by Aggarwal’s perseverance. “Bhavish was determined that he will be able to resolve the issues and make the model work.“
Since that deal in 2013, Ola’s cab network has increased by over 10 times towering over Uber in India and its valuation has surged nearly 50 times to about $2.5 billion.
Aggarwal represents a new breed of Indian internet entrepreneurs younger, superaggressive and ambitious, without much of a corporate baggage, unafraid to chase big markets and challenge established firms or authority.
“The new breed is in their mid-20s, fearless, trying to work on innovative business ideas and may not have any work experience that clutters their thinking,“ said Bajaj, 44, a Harvard MBA who worked at Goldman Sachs and Apple for a combined five years before starting online auction website Baazee in 2000.“This set of entrepreneurs I would put up against the Silicon Valley peers at any time.“
Which means these young founders, untouched by memories of downturns, are the kind looking to build robust global solutions with innovations in both technology and business models, as opposed to relatively smaller and tamer markets chased by earlier generations. Investors may find that admirable, but the test will lie in how equipped these entrepreneurs are to navigate downtimes as well as success.
While idols of the previous generation such as MakeMyTrip’s Deep Kalra (46, ex-GE Capital) and Naukri’s Sanjeev Bikhchandani (52, ex-GlaxoSmithKline) had corporate careers stretching nearly a decade before they turned entrepreneurs, Ola’s Aggarwal and Zomato’s Deepinder Goyal, 31, had only a couple of years of work experience before starting up.
If that’s seen as an advantage, an even younger tribe of entrepreneurs is in a bigger hurry, starting up right after college, or even before Housing.com’s Rahul Yadav, 26; TinyOwl’s Harshvardhan Mandad, 25; News In Shorts’ Azhar Iqubal, 22; Grabhouse’s Prateek Shukla, 25; and OYO Rooms’ Ritesh Agarwal, 21.
Unlike a decade earlier, for this lot, trading the safety of a high-paying job for the chance to launch a business right out of campus is no longer a life-deciding debate. “It was an abrupt decision. I did not want to start up since my IIT days, but after seeing the environment and successful entrepreneurs out of IIT Bombay, I got inspired,“ said Mandad, chief executive and cofounder of 18-month-old food delivery app TinyOwl.
Fuelling the ambitions of this new wave of entrepreneurs are venture capital investors betting big money on them. Around 80% of the 15-20 startup teams SAIF Partners has funded as part of its seed program in the past 15 months are in the 20-30 age group.
With money pouring in, many of these entrepreneurs are braving global aspirations, not content with domestic success. Goyal has expanded his restaurant discovery business Zomato to 22 countries through acquisitions and is gearing up to take on established players such as US-based Yelp in their home markets.
“Founders are now ambitious at a global level…when we were starting out we were ambitious at a national level,“ said Sanjeev Bikhchandani, 52, who founded Info Edge, the parent company of Naukri, about two decades ago. “Today, entrepreneurs don’t think twice about taking a company global from India.“ Probably as a way to make up, Bikhchandani owns more than half the stake in Zomato.
Part of the explanation for the swagger could lie in the fact that India’s startup industry is on an up-cycle where opportunities are ever-increasing. “The current crop has not seen recession, got the best jobs out of college and raised funding quickly after setting up their startups,“ said Mukul Singhal of venture capital firm SAIF Partners. Obviously, then, “they are more aggressive in nature and nothing is impossible for them.“
These characteristics become evident in the strategic decisions the young entrepreneurs make for instance, Zomato’s $52 million (Rs 332 crore) acquisition of US-based Urbanspoon in January. “We spent most of our last round of funding on this acquisition but we’ve always believed that the edge of our comfort zone is where the magic happens,“ Goyal blogged after the deal.
That’s the kind of self-belief and risktaking typical of entrepreneurs in more mature ecosystems. Silicon Valley’s legend is built on college dropouts-turned-entrepreneurs such as Apple’s Steve Jobs and Facebook’s Mark Zuckerberg, with tales of their arrogance becoming part of the folklore. For India’s young founders to reach that level, though, their scale of innovation and business acumen has to magnify multiple levels.
“At this point of time, China has more younger, fresh out-of-college technology entrepreneurs as compared to India. There are many billiondollar companies already in China that have been started by entrepreneurs below 30 years,“ said Anand Prasanna, Shanghai-based director of private markets at Morgan Creek Capital Management.
Silicon Valley venture capitalist Bill Gurley’s caution that young entrepreneurs securing millions of dollars from investors have no `muscle memory’ of a scarcity, downturn or previous tech bubbles holds true for India’s young startup founders as well. The biggest ask of them is to mature quickly, build a sustainable culture, and be prepared for tough times.
“The expectations are highly unrealistic,“ said K Ganesh, a serial entrepreneur who has built and sold four businesses since 1990. “When a correction happens, I think there will be a reality check of the new-age entrepreneur in terms of what it takes to build a company and raise funding, and why $100 million is a phenomenal valuation.“