India not for the fainthearted, but worth it: Lightspeed’s Bejul Somaia after Sequoia’s exit

In the lengthy message, Somaia elaborated on Lightspeed’s views on broader opportunities for entrepreneurship in India. His post comes in the backdrop of Sequoia Capital’s India partnership being spun off into an independent entity, now known as Peak XV Partners.

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“In light of last week’s announcement by Sequoia that its India affiliate will become an independent entity, there has been speculation around whether this development is a reflection of the venture opportunity in India. While I can’t comment on their decision, I do want to share Lightspeed’s views on the broader opportunity for innovation and entrepreneurship in India,” Somaia wrote.
Lightspeed Venture Partners, which has backed several unicorn startups in India, including Razorpay, Byju’s, ShareChat and Udaan, has invested $1.6 billion in the Indian startup ecosystem and holds assets worth around $3.4 billion. The venture capital firm has returned approximately $1 billion to its investors.

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Hinting that a large number of private companies in India are overvalued and that governance at startups should improve, Somaia said, “The start-up and venture model is predicated on learning and adapting fast, navigating to high upside and understanding that the few companies that really succeed drive economies and humanity forward, and create enormous value. And those that don’t succeed contribute to a cycle of creative destruction that is essential to the development of an innovation economy.”

“India is not for the faint hearted. India is tough. But India is worth it,” he added.

Somaia added that at Lightspeed, the belief is that “India’s importance as the world’s third largest digital market should not be under-estimated, that significant value will be created in the transition to a digital economy, and that a new generation of founders will be central actors in this value creation”.

In his post, the investor also questioned whether there were 102 unicorns in India. His comments come at a time when the macroeconomic slowdown has led to a slump in funding for late- and growth-stage startups globally.