Sandeep Farias, founder and managing partner at Elevar Equity, agrees that his global venture capital fund is “non glamourous.”
“Usually, we are not very popular with the media, we don’t have any headlines to give,” Farias said.
“$400 million round, $600 million exits, I don’t have any of that. But I have great companies that will do well. This is happening because we are so focused on such few companies,” he said.
Farias’ fund focuses on essential services. It invests in companies that provide services in the financial services, education, agricultural supply chain, and micro small business space with attention specially on low-income communities.
He acknowledges that they’re not like most funds. Large funds such as Sequoia Capital, Tiger Global Management LLC. and the ilk are large investors that invest in companies such as Lenskart, Cred, or companies that target a demographic that is concentrated in very few, Tier-I pockets of the country.
“This is the reason you have to focus on essential services because that expenditure on their part is not going to change,” he said. “So, because they use limited resources on their end, they are going to demand accountability from the companies that we invest in. That is how we decide that our companies are adding value. So, it’s affordable margins and massive scales,” he said. “I call this the impact imperative and the scale imperative. But you’re absolutely right, we are not targeting the 1% or even the 10%. We are focusing on the low-income mass market,” he said.
Elevar Equity has invested in about 30 companies in India and 14 in Latin America, both regions with large populations that are still developing. Some of the big names Elevar has backed are edtech unicorn LEAD, agri-commerce firm Samunnati, lender Indifi.
“Ujjivan would be another name,” said Farias. “We were one of the largest shareholders in series A and we were made the largest shareholder all the way till the pre-IPO time. So, fairly important investment for us,” he said.
Farias is optimistic even as the startup ecosystem grapples a funding winter. “Since we have always focused on a few startups and earlier stages of company building, our portfolios haven’t been impacted by the down-turning of the markets,” he said.
“If the general market condition is sober in a funding winter, then even my company can find it hard to raise money,” he said. “But given that everyone is in search of profitable deals, hopefully, our companies will be able to raise money.”
Some of Elevar’s portfolio companies are “having very good conversations” which might turn out “pretty well”. “We need to focus on what is happening on the ground and find aligned investors who understand customer-centric products,” he said. “We need a space where customer metrics feed business metrics and business metrics feed financial metrics.”