Silicon Valley’s Fenox VC arrives in India, wants to invest in cutting-edge tech startups

You’ve been hearing the winter-is-coming refrain for some time now. And in India, an early sign of it is in the venture capital investment figures for the first quarter of 2016. They have fallen by 19 percent compared to the first quarter of 2015. You’ve been seeing some much-needed corrections in valuations as well – Morgan Stanley marked down Indian ecommerce leader Flipkart’s shares by 26.90 percent. And industry insiders often talk of how many once-heavily funded startups are currently struggling to raise the next round of capital.

Well, that’s a whole lot of bad news. But not all is gloom and doom. Investor interest in Indian startups is far from waning. In fact, new players are still betting on the massive market opportunity in the country with 1.3 billion people and 350 million internet users. Silicon Valley-based Fenox Venture Capital is the latest VC entrant in India.

Top colleges … are fully capable of building world class technology in the robotics, VR, and AR spaces and compete on the global level.

Fenox has roped in Venktesh Shukla, chairman of TiE Global, as a general partner to look for investment opportunities in the country, as well as the rest of Asia. (TiE was founded in Silicon Valley by entrepreneurs with roots in India.)

“Of course this might initiate a fund, but we have not announced a dedicated fund yet,” Anis Uzzaman, co-founder and general partner at Fenox, tells Tech in Asia.

Fenox is one of the few Silicon Valley VCs with a ground team in seven other countries. Its Asian sojourn began in Japan, and expanded to Korea, Taiwan, Indonesia, Singapore, Bangladesh, and now India. It manages several multi-million dollar funds and invests in technology startups from artificial intelligence, robotics, and big data to virtual reality, fintech, and healthtech domains.

It will be looking at these spaces closely in India as well.

See: Why Google and Accel see hyper growth for Indian SaaS startups

Why now? And why India?

One could say this is a strange time to enter India. After all, biggies like Tiger Global have burnt their fingers with many of their bets in India going awry. The markdowns for Flipkart and a few others have put pressure on big investors like Tiger Global.

There are even talks of the fund cutting off the cord for some of its Indian startups. Last year’s active dealmakers like Sequoia Capital and IDG Venture Capital have been relatively quiet this year.

But Fenox is looking at the bright side, and beyond ecommerce.

“India is the third largest startup market in the world and no one can ignore India when it comes to startup investment and growth,” Anis says. He points out that besides ecommerce, there are success stories like Paytm in fintech, Mu Sigma in data analytics, and Grey Orange in robotics. “Initially, Fenox wants to support companies that leverage the huge market potential of the country across all these sectors,” he says.

He feels that India is going to become one of the largest consumer bases for many of the upcoming technologies like virtual reality, augmented reality, and robotics. And these areas are right up Fenox’s alley. Its portfolio has some of the top companies in these spaces. An example is MIT professor Cynthia Breazeal’s social robotics startup Jibo and augmented reality company Meta from the Y Combinator stable.

“I feel that India has the capability and talent to flex its muscle in these top trend technology spaces as well. India has some of the best top technology universities such as the Indian Institutes of Technology (IITs) which are fully capable of building world class technology in the robotics, VR, and AR spaces and compete on the global level,” Anis says.

Seasoned entrepreneur, experienced investor

“Fenox has already introduced many Silicon Valley startups to Asia and connected them with large corporations for exponential growth. I feel that I will be able to add value to this existing model,” he says.

What’s it eyeing in India?