Mint Interview: Speed of Value Creation in India Set to Accelerate, Says Peak XV's Mohit Bhatnagar
India is poised for a significant acceleration in value creation over the next decade, driven by a confluence of factors including a thriving startup ecosystem and increasing domestic investments. This is the view of Mohit Bhatnagar, Managing Director at Peak XV Partners, a leading venture capital firm with a keen focus on the Indian market.
In a recent interview, Bhatnagar highlighted the transformative changes witnessed in the Indian stock market, which has increasingly embraced startups, allowing investors like Peak XV to distribute large exits and attract further capital. He emphasized that the IPO market is enabling founders to build enduring, independent companies capable of long-term success. Bhatnagar noted that Peak XV has already seen 40-45 of its startups go public, with approximately 30 of those listings occurring during the pandemic.
Bhatnagar believes India's relative position compared to other global investment destinations is a key driver. He pointed out that India has risen from the 10th largest economy to the 5th largest in a relatively short period and is growing faster than any other major economy. This growth trajectory is attracting global investors who are eager to deploy capital and capitalize on the immense opportunities present in the Indian market. Peak XV itself raised around $2.8 billion in its last funding cycle, and many competing venture capital firms have also secured their largest-ever funds.
Peak XV is particularly interested in sectors such as consumer, fintech, and software, and is also exploring new areas for investment. Bhatnagar underscored the importance of identifying and partnering with the right companies, emphasizing that while valuation is a factor, it's more crucial to back companies with the potential for substantial growth and impact. He used the example of Meesho, a social commerce platform, in which Peak XV invested when it had a valuation of about $30 million.
Bhatnagar is also closely watching the trend of Indian startups redomiciling back to India, a move that would allow them to go public in the Indian market. He anticipates a significant number of Indian startups will tap into the IPO market in the next 12-24 months.
Bhatnagar also expressed his belief that the startup ecosystem has the power to solve India's societal problems at scale, and that founders can build successful businesses while simultaneously creating a better world.
Looking ahead, Bhatnagar anticipates an active investment cycle in 2024 and 2025, fueled by India's strong economic position and the increasing availability of capital. He also noted that despite perceptions of a slowdown, there were approximately 250 early-stage investments between June 2022 and December 2023, demonstrating the continued vibrancy of the Indian startup scene.
