India has been witnessing a surge in startup activity over the past decade, with a growing number of entrepreneurs launching innovative businesses across various sectors. However, despite the abundance of talent and potential, many startups struggle to secure the funding they need to scale and succeed. This is where the SMBS Series GIC by Sequoia Capital India comes in as a game-changer for Indian startups.
What is SMBS Series GIC?
SMBS Series GIC is a unique investment vehicle launched by Sequoia Capital India in 2020. The acronym stands for “Sequoia Capital India’s Small and Medium Businesses Surge Growth Investment Series.” The fund is designed to provide growth capital to Indian startups that have demonstrated strong potential but are yet to achieve profitability.
Unlike traditional venture capital funds that focus on early-stage startups, SMBS Series GIC targets companies that have already achieved product-market fit and are generating revenue. The fund typically invests between $10 million to $30 million in each startup, with the aim of helping them scale rapidly and become market leaders in their respective sectors.
Why is SMBS Series GIC important for Indian startups?
Securing funding is one of the biggest challenges faced by Indian startups, particularly those in the growth stage. Many investors are risk-averse and prefer to invest in established companies with a proven track record. This makes it difficult for startups to access the capital they need to expand their operations, hire top talent, and invest in research and development.
SMBS Series GIC addresses this gap in the market by providing growth-stage startups with access to institutional capital from a reputable investor like Sequoia Capital India. This not only helps startups overcome the funding hurdle but also provides them with the credibility and network needed to attract further investment from other sources.
Moreover, SMBS Series GIC is a long-term investment vehicle that is not focused on short-term returns. This means that startups can focus on building sustainable businesses without the pressure of meeting quarterly targets or exiting within a specific timeframe.
Success stories of SMBS Series GIC
Since its launch in 2020, SMBS Series GIC has already made several successful investments in Indian startups across various sectors. Let’s take a look at some of the success stories:
1. OfBusiness: OfBusiness is a B2B e-commerce platform that connects small and medium-sized enterprises (SMEs) with suppliers of raw materials and other industrial goods. The company raised $110 million in a funding round led by Sequoia Capital India’s SMBS Series GIC in February 2021. With this investment, OfBusiness plans to expand its operations across India and enter new markets.
2. Zerodha: Zerodha is India’s largest retail brokerage firm, with over 4 million clients. The company raised $25 million from SMBS Series GIC in December 2020, which valued it at $1 billion. Zerodha plans to use the funds to expand its product offerings and enter new markets.
3. ShareChat: ShareChat is a social media platform that allows users to create and share content in regional languages. The company raised $502 million in a funding round led by Tiger Global and Lightspeed Venture Partners, with participation from SMBS Series GIC, in April 2021. With this investment, ShareChat plans to expand its user base and launch new products.
4. Urban Company: Urban Company is a home services marketplace that connects customers with service providers for various tasks such as cleaning, plumbing, and beauty services. The company raised $190 million in a funding round led by Prosus Ventures and Dragoneer Investment Group, with participation from SMBS Series GIC, in July 2021. With this investment, Urban Company plans to expand its operations globally and invest in technology and talent.
The future of SMBS Series GIC
SMBS Series GIC has already established itself as a major player in the Indian startup ecosystem, providing growth-stage startups with the capital and support they need to scale rapidly. With the fund’s long-term investment horizon and focus on sustainable growth, it is well-positioned to continue making successful investments in the future.
Moreover, SMBS Series GIC’s success has also paved the way for other investors to enter the Indian startup market and support the country’s growing entrepreneurial ecosystem. This is a positive development for Indian startups, as it provides them with more options for funding and support.
The SMBS Series GIC by Sequoia Capital India is a game-changer for Indian startups, providing growth-stage companies with access to institutional capital and support from a reputable investor. The fund’s success stories demonstrate its ability to identify promising startups and help them scale rapidly. With its long-term investment horizon and focus on sustainable growth, SMBS Series GIC is well-positioned to continue making successful investments in the future and contribute to the growth of India’s entrepreneurial ecosystem.