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INTERVIEW | Investments from US, Middle East set to make up for Chinese capital: Prashanth Prakash

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Express News Service

BENGALURU: As China has put breaks on its investment plans in India following stringent FDI norms brought in by the Indian government, investors believe that the start-up ecosystem is seeing a renewed interest from venture capitalists (VC) of North America, Middle-East and Europe.

Silicon valley-based VC firm Accel’s founder partner in India, Prashanth Prakash who also heads Karnataka’s Vision group for start-ups told TNIE in an interaction that the firm is actively seeking start-ups in B2B, consumer goods and agri-tech spaces which have innovations for global markets. Excerpts:

Is the investment market back on track after COVID?

In the early months of Covid pandemic, investors were keenly observing start-ups in terms of their evolution through the crisis. Post August , now we are getting a better sense of what kind of investments will drive in the new normal.

In our portfolio, we saw edtech firms like Vedantu, agri-tech startup, Ninja cart doing well throughout the pandemic. They have been able to weather the storm and come back strongly. Overall there was a six-months lag in the investment market due to the pandemic-led disruption.

Going forward, what kind of firms is Accel looking to invest in?

We are looking for enterprise start-ups (B2B) which are catering to global markets in the wake of accelerated digital adoption during the pandemic.

There is a little bit of shift towards global digital businesses. Investors are looking at product companies from India, but not necessarily catering to the Indian market, but more to the global market. I think those are definitely being favored today.

But, Chinese capital dried up. Wouldn’t that  impact the startup ecosystem?

There is a significant increase in investments from North American and Europe into 
India and even the Middle East. So I think that there has been good shift in interest from these parts of the world post the government not thinking it is easy to get funds from some of these other countries, but it would be good,  if there is access to capital from more countries. The simple answer is, no.

I think these are moves in the right direction… But you also need to ensure that the intent followed by actual action. Overall, the Jan-March FY21 quarter is likely to see a significant jump in investments.