‘India is not for the faint-hearted but it is worth it’: Lightspeed partner on investing in the country

American venture capital firm Lightspeed Venture partner Bejul Somaia, in a recent social media post, spoke about how investing in India is a challenge in itself but it is all worth it in the end. Somaia’s post was in context to the Sequoia split and the creation of the Indian entity Peak XV Partners. “India is not for the faint hearted. India is tough. But India is worth it,” said Somaia in his post. 

He said that at Lightspeed, they believe that India’s importance as the world’s third largest digital market should not be underestimated. He predicted that significant value will be created and that a new generation of founders would be key in this value creation. 

Somaia also cautioned that while all this stands true, the only firms and founders that can make it in a country like India are the ones with “underlying conviction, long-term orientation, and staying power”. 

“India has always, and will always, test our conviction (and sometimes logic). You can’t force this market, you can’t time this market, you can’t be short-term. Instead, you have to be patient, quality oriented, disciplined, selective and prepared to play the long game,” he said. 

The partner at Lightspeed also compared India from a decade ago to India right now, with internet connections growing from 155 million to 825 million, increase in 3G/4G users from 70 million to approximately 740 million, and the transition from no UPI and Aadhaar to 1.2 billion Aadhaar holders and 3.2 million UPI users.

Somaia said that the potential of India remains “incredibly compelling” with its sizable market, high quality founders, and one-way adoption of technology. “The question is not whether there is potential, but how best to navigate this potential,” said the Lightspeed partner in his post.

He also spoke about the challenges in India. He said that not everything is hunky-dory in tech in India, success will not be a straight line and that all the companies will not be a success either. He said that governance in startups should improve, and that investors should stop cheerleading and hyping companies. 

Somaia added that Lightspeed started investing in India in 2007 and increased its pace after 2011. “Since our firm started investing in India, we have invested $1.6 billion, returned ~$1 billion to our investors and hold assets valued at $3.4 billion,” he said.  

Bejul Somaia’s post came after Sequoia split into three parts – Sequoia Capital (US/Europe), HongShan in China, and Peak XV Partners for India and Southeast Asia, to be headed by Roelof Botha, Neil Shen and Shailendra Singh, respectively.