Despite COVID-19, this VC firm is busy with more funding deals and new initiatives

While COVID-19 has considerably slowed down several economic aspects, this venture capital (VC) firm says it is busier than ever before.

Elevation Capital, formerly known as SAIF Partners, one of the leading VC firms in the Indian startup ecosystem, concluded more deals during the COVID-19 period than last year.

“Overall, we have closed more deals with many of them in the COVID-19 period. This is one of the best times,” says Ravi Adusumalli, Managing Partner, Elevation Capital.

At the same time, the firm launched several initiatives aimed at strengthening bonds with new entrepreneurs.

This increased number of transactions for Elevation Capital rests on its fundamental principles — spotting opportunities very early and building long-term relationships with the founders or startups to see that they become category leaders over a period of time.

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Long-term relationships

Ravi says, “What sets us apart is that we strive for long standing relationships with the founders. In fact, on average, our partners do about two deals a year.”

This philosophy has paid rich dividends for Elevation Capital over the last 18 years. The core focus of this VC firm has always remained on seed stage investments into startups going all the way up to Series A.

Some of the leading names of the Indian startup ecosystem like Paytm, Swiggy, Unacademy, Meesho, ShareChat, FirstCry, etc., count Elevation Capital as one of their first investors.

Many of these startups are now unicorns or category leaders in their respective fields. Further, these companies also received backing from leading global corporates. For example, Twitter invested in ShareChat while Meesho was Facebook’s first investment in India.

“What we are excited about is our ability to back future leaders at a very early stage,” says Mayank Khanduja, Managing Director, Elevation Capital.

The VC firm today has assets of over $2 billion under its portfolio, having made around 100 investments in close to two decades. It has got about 20 exits, with some them going through the public route like MakeMyTrip and Just Dial.

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No obstacle from COVID-19

Unsurprisingly, Elevation Capital continues to remain very active in scouting opportunities very early even in the COVID-19 environment.

Mukul Arora, Managing Director, Elevation Capital, says, “Ever since the lockdown in March, the pace at which founders have course corrected has been phenomenal. It has been inspiring and we learnt a lot.”

He adds, “Most of our portfolio companies have come out healthier in last seven to eight months and the profitability journey has accelerated. It has been very encouraging.”

Elevation Capital will continue to remain sector agnostic, with overarching themes of investing in technology companies or those startups that have tech at their core.

Mridul Arora, Managing Director, Elevation Capital, says, “Our breadth of coverage in terms of sectors will not go down. While cycles come and go, winners emerge in these periods.”

The broad sectors or segments where Elevation Capital is betting on a stronger traction given the pandemic are global Software as a Service (SaaS), digitisation for the SMEs, content and gaming, and consumer brands.

Amidst this heightened activity, the firm believes that it has three core pillars to which it remains steadfastly committed — seeking to partner with startups in their early days, no competing investment in the same segment, and building long standing deep relationships.

According to Ravi, COVID-19 brought about a lot of introspection among startups on how to build long-term viable businesses that do not depend too much on external capital.

“Startups are taking logical actions to bring their cash burn down. We are likely to see more IPOs in the next three years from technology segment,” adds Ravi.

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New initiatives

In order to strengthen linkages with the startup ecosystem, especially with new entrepreneurs or founders, Elevation Capital unveiled fresh initiatives. These include reaching out to the firm in a frictionless manner and a knowledge hub to provide insights, information, as well as serve as a source of inspiration.

Mayank says, “At Elevation Capital, we are focused on how to reach out to early-stage founders in the most conducive manner and make it friction free.”

The firm has largely relied on outbound communication and referrals, and expects this to change with the creation of a separate section for any entrepreneur to be able to pitch to them.

“We should be very accessible to every founder,” adds Mayank.

Elevation Capital also wants to publicly share how it works by providing select case studies of portfolio companies and the whole investing process.

For example, when the firm signed a term sheet with Swiggy in October 2014, the foodtech startup was doing just 35 orders a day with 25 restaurants in its fold. These case studies are expected to help propagate a better understanding about the VC in terms of its investment thesis.

According to Mayank, Elevation Capital plans to add many more elements in the near future, which will be a knowledge hub and learning centre. The team believes that the entrepreneurial fervour in the Indian startup ecosystem remains strong with the ever-improving quality of founders and startups.