Since October 2016, Ashutosh Sharma has been head of investments for India at Prosus Ventures, the corporate venture capital (CVC) arm of Prosus, a Netherlands-listed consumer internet company last year spun out of South Africa-based Naspers.
Prosus Ventures, also previously called Naspers Ventures after its parent, invests across a range of markets, including next-generation e-commerce, education, health and blockchain and is one of the largest technology investors in the world, having bought and held a large stake in China-based Tencent for nearly 20 years. Sharma added: “Prosus Ventures’ mission is to invest in companies around the globe that empower people, enrich communities and have long-term growth potential.”
Prosus Ventures told Global Corporate Venturing (GCV): “India is a top priority for the company and [as] the head of investments in India for Prosus Ventures, Ashutosh has been with the group in India for three years and in that time has spearheaded several key investments.”
Prosus group CEO Bob van Dijk also told The Economic Times (ET) that India was crucial for the firm, having already injected $4bn into the ecosystem in the past five years.
A notable exit from India was e-commerce marketplace Flipkart, whose $80m series E round in May 2017 was led by Prosus Ventures. The unit provided $71m and invested alongside corporates including software producer Microsoft, online marketplace eBay and internet company Tencent. Flipkart was acquired by retail group Walmart for $16bn in August 2018.
Van Dijk clarified, however, that Prosus Ventures does not need, nor does it focus on exits, telling ET: “If you look at our portfolio in India, [they] are companies that we think have a lot of runway to go. So, [we are] not interested in exiting at all. If somebody comes in with a massive offer, then things could change. Generally, our organic expectations of our businesses in India are really, really positive, and so no exit plans at all.”
Larry Illg, chief executive of the unit, told GCV: “Prosus Ventures’ mission is to invest in early-stage companies around the globe that empower people, enrich communities and have long-term growth potential. We invest across a range of markets, and the ventures team brings in-depth experience, knowledge and resources from around the world to help entrepreneurs build, grow and scale their businesses.
“Over the last several years in India, Ashutosh has demonstrated a deep passion and keen talent for seeking out innovative, high-potential businesses led by impressive entrepreneurs that are solving uniquely Indian needs.”
The portfolio companies in question are food delivery platform Swiggy, education technology company Byju’s, social commerce marketplace Meesho, last-mile delivery services provider ElasticRun and carpooling platform operator QuickRide. “We have great expectations for the fast-growing businesses that Ashutosh has introduced to Prosus Ventures,” Illg said.
Sharma confirmed that Prosus was already comfortable with India and he has invested approximately $1.5bn on behalf of Prosus Ventures. Two of the five companies have reached unicorn status – Swiggy and Byju’s – and both have raised multiple rounds afterwards.
Prosus holds nearly 40% stake in Swiggy because the unit economics are excellent, according to Van Dijk, who told ET: “If you go back a few years, Harsha Majety, Swiggy co-founder and CEO, already ran a unit economic profitable business in his core markets. Our confidence in the business model is very high, and probably, if I have to pick one model that we have gotten into the last few years which is the most attractive, it is probably food delivery.
“I think the reason why we are so comfortable with Swiggy is basically that Harsha and his team have shown their ability to execute really well. I think we have bet on the winner, and the market potential is huge. There is competition, and particularly in India, where there are huge opportunities and expect others to go after that as well. In terms of the numbers, Swiggy is still miles ahead of [India-based peer] Zomato, in terms of orders.”
Early-stage investments are still new for Prosus Ventures. Sharma told TechCircle: “Early stage is still a long shot for us. It is not a natural affinity. But, when we see an opportunity that checks the buckets of large market size, societal impact, a strong team and a proven product-market fit, we are willing to take the bet.
“Prior to last year (2018), I never made an early-stage bet in India. Last year was the first when we did QuickRide, which is an $8m cheque and slightly early.
“As an average investor, you want to be on the safer side. Over time you build comfort with the geography, ecosystem and founders. Once that happens, it gives you enough confidence to take risks early on. That understanding over time has come to us.”
Sharma also represents Prosus Ventures on the boards of the five India-based portfolio companies, adding value on strategic, mergers and acquisitions (M&A) and growth aspects. He said: “Prosus invests for the long term, in platforms with global potential with exceptional founders and gives us a great shot at success. We structure our deals to be extremely founder-friendly and those terms combined with the operational support and access to our global portfolio has been shown to be very useful for founders looking to build big, potentially global businesses.”
Sharma, who is the only team member based in India, highlighted the benefits of being a part of an international group, saying: “Prosus Ventures is a global company with a team that works 24 hours a day, in offices around the world, not alongside me in India. This is an advantage because we are always working and able to pass the baton overnight.”
In the long run, Sharma hopes to propel the Indian portfolio to be among the best returns cohort, and at the same time, he wants to make sure the investments are impacting the market cap for Prosus, while also creating a meaningful impact on society – changing how people eat, learn, travel and shop. He is also keen on helping the Indian portfolio expand beyond India and become global players.
Sharma was quick to point out that CVCs should think about returns first. He said: “Investing is more for strategic value for some of us. It will be great if we think returns first. In my view, if an investment is not generating returns there is little value that can be generated otherwise.”
He also believes CVCs should be more open to building the portfolio long-term instead of using strategic investments as a means to M&A.
Sharma has been investing in India since 2010, starting off with US-headquartered mobile semiconductor technology provider Qualcomm’s CVC unit, Qualcomm Ventures, in India.
Having worked at venture and growth equity investment firm Norwest Venture Partners and CVC units Qualcomm Ventures and Prosus Ventures, Sharma enjoys CVCs more because of its long-term view.
He said: “Unlike a [traditional VC] fund, CVCs are not investing to flip the company. We have a longer-term horizon and can allow the company and business models to mature. This helps a professional like me to observe and contribute to the full business cycle.”
Sharma is also keen on CVC’s operating chops, adding: “Beyond capital, CVCs bring operational expertise to the portfolio which gives the professionals like me the opportunity to make a more meaningful impact on portfolio companies by learning from the operational experts.”
In addition to being an avid reader and exercise enthusiast, Sharma used to be a software coder before earning his MBA from University of Chicago’s Booth School of Business.
