RBI’s Involvement Won’t Deter Lightspeed Venture Partners from Investing in Indian Fintech, Says MD
In a recent statement, Anuj Bhargava, the Managing Director and Head of Corporate and Strategic Development for India and Southeast Asia at global venture capital firm Lightspeed Venture Partners, expressed the firm’s steadfast commitment to investing in the heavily regulated fintech industry in India, despite regulatory scrutiny from the Reserve Bank of India (RBI). Bhargava praised the RBI’s wider mandate and clarified that it is not against any company. He emphasized that **good companies will always stay on the right side of regulations**.
Bhargava’s comments come in the wake of the RBI’s crackdown on Paytm, a prominent fintech player. Paytm has faced criticism for its poor governance standards, highlighting the importance of adhering to regulatory requirements in the fintech space. However, Bhargava believes that the RBI’s actions are justified and that **responsible companies will continue to thrive in the industry**.
Having joined Lightspeed in 2021 after a successful 20-year career as an investment banker, Bhargava remains optimistic about the growth prospects of the Indian and Southeast Asian markets. Lightspeed has already invested in several promising companies, including Acko, Razorpay, Zolve, Incred, Uni, and Xflow. These investments reflect the firm’s confidence in the potential of the region.
Lightspeed also backs companies in other sectors such as consumer, business-to-business (B2B), edtech, and enterprise tech. In the edtech space, Lightspeed has been a strong supporter of Byju’s, one of the leading edtech firms in India. While Lightspeed has reduced its stake in the company to less than 1%, it continues to believe in the sector’s potential. Bhargava revealed that the firm is yet to decide whether it will participate in Byju’s upcoming rights issue.
Lightspeed’s commitment to the Indian market is evident in its recent fundraising success. The firm reached the maximum amount raised, or hard cap, of $500 million for its Lightspeed India IV fund in 2022. This India-focused fund is an integral part of Lightspeed’s global fund, which totals $7 billion and supports both early and growth-stage entrepreneurs.
Lightspeed has invested approximately $1.5-1.6 billion in venture and growth-stage firms in India, including well-known names like Oyo, Udaan, Sharechat, the Indian Energy Exchange, Acko, Darwinbox, Globalbees, InnovAccer, OkCredit, Apna, Pocket FM, Teachmint, and Zetwerk. Over the past year, the firm has struck 18 new deals in India, deploying over $250 million across different stages of funding.
Despite the challenging economic climate caused by the COVID-19 pandemic, Lightspeed remains optimistic about India’s future. Bhargava believes that valuations have corrected significantly in the past 18-24 months and have returned to pre-pandemic levels. With valuations still under pressure, Lightspeed plans to invest more through 2024 and support both new and existing portfolio companies.
Furthermore, Bhargava noted that consolidation efforts are underway across various industries. Stronger market players are utilizing their cash reserves and stock to acquire smaller competitors and solidify their positions in the market. Businesses that struggle to achieve profitability may face consolidation as operating on a standalone basis becomes increasingly challenging.
In conclusion, Lightspeed Venture Partners’ presence in India’s fintech and broader startup ecosystem remains strong. The firm’s unwavering commitment to investing in the region, regardless of regulatory scrutiny, highlights its confidence in the long-term potential of Indian and Southeast Asian markets.
Analyst comment
Positive news. Lightspeed Venture Partners expresses commitment to investing in Indian fintech despite regulatory scrutiny. They believe responsible companies will thrive in the industry. Lightspeed has already invested in promising companies and reached the maximum amount raised for its India-focused fund. They remain optimistic about India’s future and plan to continue investing and supporting portfolio companies. Market outlook is positive for the fintech and broader startup ecosystem in India.
