Ishan Singh has a few buzz words and inflection point is one. He will repeat it until he is blue in the face because he believes in it. Singh, part of the Mumbai Angels network, believes the start-up community has reached an inflection point where it has evolved and will see smarter companies with original ideas, and not those with a similar model in developed markets, crop up all over the country. Mumbai Angels is a network based out of here that provides starting capital for tech companies

“Entrepreneurs will now look towards Tier-II cities for solutions because that’s where the high-spending consumers actually reside,” said Singh. The former vice-president of WNS Global Services explained that companies such as Zivame, a lingerie e-commerce portal, see more sales in Tier-II cities than metros because of growing product awareness. Consumers in smaller towns may not have access to the product in brick and mortar stores but have disposable income to rival the metros and can increase volume growth. “Niche e-commerce companies will also find a lot of traction in Tier-II cities, Babychakra being one,” he said.

Not only does the portal allow customers to shop for baby products but also creates a community, which in turn generates content, making it sticky. A lot of the activity is by those from Tier-II cities.

“Technology-led inclusion will have a tremendous impact on the ecosystem,” he said.

Budding entrepreneurs trying to solve pain points, which will serve a bigger market, will get a further shot in the arm as the number of incubators has also increased. “Microsoft, for example, is trying to institutionalise new ideas,” Singh added. Microsoft Ventures Accelerator in Bengaluru, for example, offers a mentor network of over 150 people, technology and access to investors. The accelerator has a self-publicised success rate of 65 per cent.

The angel networks in smaller cities have started to mushroom. “The number of people becoming angels has increased as well. These networks have now become more structured. They have staff with specialized expertise and a centralized decision making approach,” he said.

Singh made nine investments in 2015 and expects to make a similar number in 2016. “I invest about Rs 10-15 lakh if the company works. One of my latest was BookEventz,” he said.

Bookeventz, formerly Urbanresto, is an event organising company which helps customers find venues for events, and provides the vendor a tool to build its internal system and packages to present to the customer. A transparent system, he explained, means price-rigging goes out of the window. The company tries to organise a market populated by agents and inflated fees. “The investment didn’t come easy. The company approached us six months ago and we kept an eye on their sales. We put in money when we were satisfied,” he said. He refused to comment on the size of the investments.

While bullish on the future of certain companies, he believes that start-ups specializing in robotics will still have to bide their time. “Labour is still cheap in India and unlike developed markets, we can afford to hire people to do what a machine can do,” he said.

Singh does expect to make some exits soon. “Typically, exits come when the company reaches Series-C round of funding. A few are approaching the stage and I have a few offers,” he said as he signed off.

Source: Business Standard

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