For venture capital funds, millennials drive investment decisions

Bombay : With two in three Indians under the age of 30, venture capital funds are increasingly turning to startups that tap into the large millennial consumer population, several investors said.

A recent report by private equity firm KKR said Asian millennials are set to reshape the global consumer market, as the continent has more than six times as many millennials as the US and Europe combined. This will have far-reaching implications in healthcare, well-being, leisure, financial services and entertainment, according to the report.

“We’re interested in companies that target customers who have shown a willingness to try new things,” said Sandeep Murthy, Founder and Managing Partner of Lightbox Ventures. “Millennials have repeatedly demonstrated their comfort with technology and their openness to new products and services. This makes them a segment that we are excited to see startups address,” says Murthy, whose portfolio includes the website furniture rental company Furlenco and online kitchen brand Faasos, both of which have a large millennial customer base.

In a recent report, the World Economic Forum said domestic consumption, which today powers 60% of India’s GDP, is set to become a $6 trillion opportunity by 2030, driven by a population younger than that of India. any other major economy. .

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A number of trends in the startup industry today – the sharing economy, growing health awareness and growing use of technology as an enabler – are driven by millennials, who are digitally savvy and has high disposable income.

“I think most investors would target millennial consumers across all investment segments,” says Kanwaljit Singh, managing partner of Fireside Ventures, a consumer-focused fund. For Fireside, we believe most of our brands will be millennial brands,” he added.

VCs have invested over $10 billion in Indian startups in each of the previous two years. Indian startups raised $12.7 billion in 2018, down 12% from the $14.5 billion raised in 2017, according to Tracxn, a data tracker.

New-age startups seem to reflect Millennials’ preference for brands that deliver quality and are environmentally and socially conscious. The dominant presence of millennials on social media and the ease of access to them through digital channels makes them even more relevant for startups.

“Millennials are a cross section of highly active internet users and high discretionary income spenders. Due to high urbanization and changing consumer behavior, this generation is the most lucrative for content and commerce players,” says Karan Sharma, Executive Director and Co-Head of Digital and Technology, Avendus Capital.

The role of millennials even extends to software or B2B startups, which have gone from clunky and relatively boring interfaces in the 1990s to easy-to-use software.

“The consumerization of IT has been a decade-long trend in the West and is now in play in India as the majority of the workforce are millennials – they expect enterprise applications to be as easy to use as WhatsApp and Facebook,” said Dev Khare, Partner, Lightspeed Venture Partners India. training courses,” he added.

Startup investors are well aware that millennials could tip the scales for or against a company, and want their portfolio companies to understand and thrive in this ecosystem. “Millennials are agents of change. They are ready to rethink old ways and in India, where incumbent services did not exist, they are often the ones who define how products and services will be consumed,” says Murthy of Lightbox.

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