Homecoming?
June 14
Hey y'all, hopefully everyone had a great weekend. We're still getting in the motions of writing the newsletter more regularly so apologies for the irregular daily newsletters. Feedback is always appreciated, and today we're also covering a couple of stories that been in the news and a couple of topics that's been top of mind.
Also, Vedica is hosting Dr. Shashi Tharoor on Clubhouse today at 7PM IST discussing the technology, policy and politics trilemma for countries like India and what India’s approach should be to build a new normal post-pandemic.
Big rounds in Classplus and Slintel
While Tiger has been very active in India, they aren't the only global investors making moves in the country. In the last week Slintel and Classplus have raised (or in advanced stages) of raising multi-million dollar rounds led by global investors.
First up we have Slintel raising a $20M Series A led by GGV Capital. Existing investors Sequoia Capital India, Accel and Stellaris Venture Partners. As part of the round, GGV's Hans Tung and Madhu Yalamarthi will join the company's board. The company had also just raised their seed round in November last year, and the COVID tailwinds have certainly helped them grow (5x last year in the middle of the worst of the pandemic according to the company's founder). Slintel helps sales teams at companies selling to the enterprise predict which customers are more likely to convert. The round's dynamics seems to be part of a growing trend in the country- investors pre-empting rounds before companies have really used the capital from their previous rounds or thought about raising their next. The company plans to use the capital to accelerate their growth, improve their product and invest more into marketing.
In another probable Tiger round, Classplus is in talks to raise $30M in a round that would value the company at over $250M. This follows another ~$30M investment led by GSV (which also hasn't been reported or confirmed either yet). The company has clearly been on a fundraising tear and rightly-so as edtech companies are building war chests. The company is also quite unlike the EdTech unicorns in the country (namely BYJUs, Unacademy and soonicorn Vedantu) as it doesn't create any of its own content but is a SaaS platform for hundreds of thousands of local tuition centers all over the country who use Classplus to run their operations online. Classplus can somewhat be viewed like the Shopify for coaching centers or tuition teachers and is a Business-in-a-box platform. While companies like BYJUs and Unacademy are somewhat centralizing the best educators on their platform and selling that bundled education to students, Classplus lets educators and teachers stay independent but also run their operations digitally.
Homecoming?
A couple years ago, the cries for "coming home to build" were really loud as Indians in the US looked to move back to India. The startup ecosystem was hot and in the US Trump was mouthing dangerous and racist rhetoric against immigrants . But as the pandemic hit, I have anecdotally been hearing a lot less about folks who want to move back to the country. A lot of the folks I had met in my first couple of years in SF who were strongly considering moving back to India don't seem as inclined to do so anymore. And the other thing that I've been hearing is that an increasing number of folks, at least those who can afford to do so, are looking to leave the country.
This anecdotal data is supported by some numbers. There has been an increase of 20% in queries at visa and immigration service providers just in the last 2 months as folks as Indians look to move to countries with better healthcare and infrastructure after witnessing what happened in India. Students, too, are looking back at moving internationally for their studies- 94% of the students on Leverage Edu, a platform that helps Indians study abroad, who had dropped plans to join an international college in 2020 are now reconsidering the plans in 2021. Unsurprisingly, the company is also in the news for raising $2M in venture debt this week, .
A recent BBC report also suggested that the second wave of the pandemic in the country had accelerated the exodus of millionaires. A 2018 report suggested that 23,000 Indian millionaires had left the country since 2014 and another stated that 5,000 (2% of all HNWIs) left the country in 2020 alone. Experts also expect this number to rise in 2021. The brain drain from the country seems to be increasing as citizens continue to vote with their feet.
But this isn't necessarily bad for the country. People should be able to migrate to places where they feel they can truly realize their potential and grow. Some of the most successful people of Indian origin were able to build their businesses as immigrants in their adopted nations - for example, Vinod Khosla (Sun Microsystems) and Jyoti Bansal (AppDynamics) in the US. Indian Immigrants (mostly male) also make up a large part of executive teams at technology and software businesses in the US. And while we might vilify them and claim they don't care about their home country, the fact of the matter is that immigrating abroad arguably provided them with a much better opportunity.
It isn't all bad for the country either. Indian expats have definitely helped raise the profile of the country internationally. And India benefits from its strong pravasi community as well. They contribute significantly to the country via remittances and from a start-up perspective the phenomena actually helps bring more venture dollars into India. Of course, that people feel that they can't do so in India is sad and needs addressing. And we'll have to see how this trend actually plays out over the next few years.