We recently visited the capital to meet our portfolio companies, attend a VC meet, and make new connections.
Sharing our learnings from the visit:
There is no doubting the enormous scale of the American market, which continues to be the ultimate target market for Indian businesses. It is still the most competitive, though!
Enterprises + SMBs in the USA are the ‘most catered’ consumers in the world and demand a high level of sophistication and quality from their sellers. This is particularly difficult to achieve for early Indian businesses.
We met early-stage founders at 2 different businesses and were surprised to learn that they collect more than 50% of revenues from abroad, yet only 10-15% of it comes from North America! Both sets of founders realised early that the USA market is a tough nut that requires lots of initial cash burn and focused on different geographies namely LATAM and MENA!
Several countries within these places have similar demographics to India and are looking for value-driven products. Also, Indian founders + products are looked upon as reliable partners especially in the IT space – thanks to the likes of TCS, Infosys, etc. We urge early-stage founders to think more innovatively on their course for global dominance!
While VCs have record dry powder, new investments are yet to still pick pace despite moderated valuations. A broader reset is underway in the world of venture capital and our interactions lead us to believe that several investors are rethinking some assumptions:
Several sectors which benefited from the covid-led online boom are now witnessing slowing growth. VCs are now wary of investing in the likes of Ed-tech, D2C businesses, etc. in the face of rising CACs.
However, there is no denying that the last couple of years has unearthed new potential opportunities for businesses – A significant chunk of Bharat (India SMB, housewives, farmers) have now decent exposure to digital goods and are willing consumers of payments, software, audio content, etc.
We believe that there is a clear flight of VC capital to perceived safer avenues (Read B2B SAAS) at least in the short term.
Account-based marketing (ABM) is a focused growth strategy in which Marketing and Sales collaborate to create personalized buying experiences for a mutually-identified set of high-value accounts. This involves businesses identifying the right ICP, targeting the most relevant, and developing a targeted campaign to gain direct access to potential customers and likely convert some of them.
In our view, Indian startups continue to treat ABM as a lead generation and mass emailing campaign. We spoke to a couple of experts in the space and were astounded to learn the results of some efficiently run campaigns. ABM is easily one of the most cost-effective ways for a startup to receive first-hand feedback and can potentially help startups figure out if they really enjoy PMF!
We're eager to connect with other early-stage ecosystem participants around the nation and share what we've learned with you.
Write to us at pitch@malpaniventures.com!