{"id":9768,"date":"2020-02-06T00:32:04","date_gmt":"2020-02-05T19:02:04","guid":{"rendered":"http:\/\/udaen.info\/?p=9768"},"modified":"2020-02-06T00:32:04","modified_gmt":"2020-02-05T19:02:04","slug":"angel-investor-raj-mashruwala-says-startups-should-focus-on-profitability","status":"publish","type":"post","link":"https:\/\/udaen.info\/?p=9768","title":{"rendered":"Angel investor Raj Mashruwala says startups should focus on profitability"},"content":{"rendered":"
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Angel investor Raj Mashruwala says startups should focus on profitability<\/h2>\n
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Angel investor\u00a0<\/strong>and Partner Emeritus at early-stage fund\u00a0Prime Venture Partners’ Raj Mashruwala\u00a0<\/strong>believes startups should have\u00a0a clear runway and path to profitability and growth<\/strong>, which can be achieved as the company grows.<\/p>\n

Based out of Silicon Valley in the US, Raj\u00a0helps Prime\u2019s portfolio companies explore business synergies in the US market<\/strong>, supporting their growth and leveraging the base network in these markets.<\/p>\n

Speaking to\u00a0YourStory<\/em><\/strong>, Raj says,<\/p>\n

\u201cOne-third of our (Prime\u2019s) portfolio sees US as a target market and having synergies on both sides (India and US) can only help founders grow better. Further, from a base network standpoint, having a strong presence in the Valley or the US gives founders more advantage.\u201d<\/p><\/blockquote>\n

Raj adds that from a\u00a0growth standpoint<\/strong>, companies looking at the US for a customer base are also reaching a point where it is better for them to derive\u00a0the next stage of equity funding from US-based investors<\/strong>.<\/p>\n

This tends to help Prime portfolio companies go deeper into these newer markets and get the right guidance to spread their consumer base.<\/p>\n

An\u00a0IIT-Bombay<\/strong>\u00a0and\u00a0University of California, Berkeley<\/strong>\u00a0alumnus, Raj has been an active angel investor himself.\u00a0At present, he\u00a0serves on the boards of<\/strong>\u00a0Indian online fitness platform\u00a0HealthifyMe<\/strong>\u00a0and Palo Alto-based non-profit land trust\u00a0Peninsula Open Space Trust<\/strong>.<\/p>\n

An advisor to several early startups in the areas of telecommunication, medical technology, and internet, Raj has also served on the boards of enterprise business\u00a0Syntel<\/strong>, Silicon Valley-based software product company\u00a0Kovair Software<\/strong>, and San Jose-based big data analytics venture\u00a0Guavus Inc<\/strong>.<\/p>\n

In 2008, he founded Mashruwala Investments<\/strong>, which focuses on\u00a0deep tech angel and pre-seed investments<\/strong>\u00a0in the US. The fund identifies tech opportunities and locates potential entrepreneurs, and is involved with the entrepreneur even before the company is incorporated.<\/p>\n

Raj was also the\u00a0Chief Operating Officer at TIBCO Software<\/strong>\u00a0and led its initial public offering in July 1999 before retiring from the company as Executive Vice President. Before that, he co\u2010founded\u00a0YieldUp International<\/strong>, a semiconductor equipment manufacturing company;\u00a0Media Computer Technology<\/strong>, an ASIC design house; and\u00a0Consilium<\/strong>, a Manufacturing Execution Systems (MES) software provider.<\/p>\n

Raj led Consilium\u2019s R&D and professional services operations since the company’s inception.<\/p>\n

On investments in India<\/strong><\/h2>\n

After mentoring entrepreneurs and seeing Indian startups evolve over the years, Raj believes that\u00a0the ecosystem has matured considerably<\/strong>.<\/p>\n

He says that there are multiple phases of a startup\u2019s journey.<\/p>\n

\u201cThe first base continues to be\u00a0application-based<\/strong>, whether it is a particular problem that the startup is solving like transportation or hotel bookings, which also resonates with the investors. The second phase of growth is\u00a0platformisation<\/strong>, where a startup keeps solving newer problem statements and brings these applications, on one platform. The third phase is where\u00a0technologies of the future drive these platforms<\/strong>; these include deep tech, virtual reality, artificial intelligence, or even autonomous vehicles.\u201d<\/p><\/blockquote>\n

Raj believes that the Indian startup ecosystem is at present at the second phase of \u201cplatformisation\u201d.<\/p>\n

His investment thesis<\/strong><\/h2>\n

The\u00a0horizontal play<\/strong>\u00a0continues to be a part of Raj\u2019s investment thesis.<\/p>\n

An early backer of India\u2019s fintech revolution, and\u00a0the Chief Biometric Coordinator of UIDAI during the early days of Aadhaar<\/strong>, Raj believes that\u00a0fintech can help power the growth and proliferation of crucial segments<\/strong>\u00a0like healthcare.<\/p>\n

Prime Venture Partners, back in 2016, first invested in\u00a0Affordplan<\/strong>, a parallel financial product that aims to make healthcare accessible and affordable.<\/p>\n

Apart from fintech, Raj is\u00a0bullish on healthcare, automobiles, and automation<\/strong>.<\/p>\n

\u00a0\u201cIndia is going to\u00a0spend more on healthcare<\/strong>; a large part of India\u2019s GDP will go in this sector and it is imperative. Second, with rapid urbanisation, there is\u00a0a need for electric vehicles,<\/strong>\u00a0and India will play this out differently, considering the unique challenges it faces. Finally,\u00a0automation is more of a horizontal play and aims to remove friction<\/strong>, whether it is segments of security or others,\u201d Raj says.<\/p><\/blockquote>\n

Prime\u2019s recent investments in startups like\u00a0apartment security management solution MyGate<\/strong>\u00a0or\u00a0reconciliation software startup Recko<\/strong>\u00a0are examples of automation removing friction.<\/p>\n

Indian corporates still not \u2018strategic\u2019<\/strong><\/h2>\n

However, Raj believes there is still room for improvement when it comes to investments from Indian corporates in startups. He feels\u00a0Indian corporates seem to miss the \u201cstrategic\u201d value startups bring<\/strong>.<\/p>\n

\u201cIndian corporates don\u2019t look at a startup as a strategic play, and what they can add to the ecosystem holistically. This is reflected in the amount of corporate investments Indian multinational conglomerates make in Indian startups. The way financial institutions like\u00a0Goldman Sachs<\/strong>\u00a0or technology majors like\u00a0Cisco<\/strong>\u00a0or\u00a0Intel do it in the US<\/strong>\u00a0is so different and planned out,\u201d Raj says.<\/p><\/blockquote>\n

The problem with mid-stage funding<\/strong><\/h2>\n

When it comes to funding, Raj opines that there was a\u00a0need for startups to look at their fundamentals<\/strong>, especially in the mid and growth stage, and\u00a0refrain from hyping metrics<\/strong>.<\/p>\n

Globally, it is no secret that\u00a0Softbank\u2019s investment<\/strong>\u00a0in ride-hailing giant\u00a0Uber<\/strong>\u00a0and real estate company\u00a0WeWork<\/strong>\u00a0hasn\u2019t paid off, forcing the Japanese conglomerate to rethink its plans.<\/p>\n

To counter this, Raj urges the need for\u00a0healthy metrics and a focus on profitability<\/strong>for companies raising funds at the mid stage.<\/p>\n

\u201cThe mid stage has the bottleneck.\u00a0Good companies don\u2019t need massive funding<\/strong>, if they are really focused on building the business, with profitability in mind. And if this happens, then the business grows and funds (even at a late-stage) come in gradually. The\u00a0root cause of the problem is always over-hyping<\/strong>.\u201d<\/p><\/blockquote>\n

He believes a healthy pipeline of mid-stage companies can correct the effects of late-stage hyped investment<\/p>\n

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Angel investor Raj Mashruwala says startups should focus on profitability Angel investor\u00a0and Partner Emeritus at early-stage fund\u00a0Prime Venture Partners’ Raj Mashruwala\u00a0believes startups should have\u00a0a clear runway and path to profitability and growth, which can be achieved as the company grows. Based out of Silicon Valley in the US, Raj\u00a0helps Prime\u2019s portfolio companies explore business synergies […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_monsterinsights_skip_tracking":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[14],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/posts\/9768"}],"collection":[{"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/udaen.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9768"}],"version-history":[{"count":1,"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/posts\/9768\/revisions"}],"predecessor-version":[{"id":9769,"href":"https:\/\/udaen.info\/index.php?rest_route=\/wp\/v2\/posts\/9768\/revisions\/9769"}],"wp:attachment":[{"href":"https:\/\/udaen.info\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/udaen.info\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/udaen.info\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}