First, news of the cavalry. In succession, partners have left the firm between 2013 and 2015 with no new names replacing the old guard. So, today, Bessemer Venture Partners (BVP) in India is down to two people—vice-president Raghav Bahl and managing director Vishal Gupta. Safe to say that things have been in flux for a while. In the short span of 2013-15, the firm saw the departure of two managing directors. Siddharth Nautiyal, who was associated with BVP from the early days in 2006, left in 2013. And Subramanya S V quit to set up a financial technology company called Fisdom in 2015. The latest one to leave the rolls is Aakash Goel. He was vice president at BVP India and has moved to venture debt fund, Trifecta Capital. The India legal counsel at BVP, Karan Pahwa has replaced Goel on the board of portfolio companies temporarily.
Second, deals. According to data from research platform Venture Intelligence, the number of deals by BVP has shrunk from 10 in 2016 to six in 2017.
Word on the street among funds with which BVP co-invests and founders of portfolio companies is that BVP’s interest in India is waning. For now.
The slow down also means that the India story will take a backseat, as BVP hits the road to raise its next fund in six to nine months. BVP is one of the few Silicon Valley funds which invest from a common global pool in the country; the other being Norwest Partners. A lot of it has to do with the fact that the India story stands in stark contrast to BVP’s experience in the US. “In case of funds which invest from a common global pool, the comparison on exits is too stark within the fund,” said a venture capital investor who has worked with multiple funds. He requested not to be named. “The long wait for exits in India and the entry of large investment firms, SoftBank and Alibaba, has led to a shift in the markets preferred by new funds of IDG, Kalaari, Accel and Sequoia.”
It will be fair to say that where BVP finds itself in the country is proof that justifying returns on a dollar spent in India versus mature markets like the US continues to be challenging. This is similar to the slow down witnessed by Norwest Venture Partners in 2015-16. Or think about it like this. Over the last year, Nexus Venture Partners has been reportedly investing in US-based companies out of its $450 million India fund raised in 2015. All due to the poor performance of its India bets.
A detailed email query sent to BVP’s global media team did not elicit a response. Vishal Gupta, managing director of BVP India declined to comment citing impending IPO of portfolio companies.
The story of BVP India is important to understand not just how quickly fortunes change in the country, but also because it is a quintessential, blue-blooded VC story.