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Sunday, September 10, 2023

This VC’s Insights on Fundraising, Attracting Talent and the Funding Winter

1337 Venture’s Bikesh Lakhmichand shares his insights on startup challenges, from securing investments to attracting the right talent

Bikesh Lakhmichand has always been fascinated with technology and digital disruption. He got his first exposure to the startup world while developing training programmes for iOS and Android app developers with his company iTrain, which he started over a decade ago. 

“At the time, I met many app developers leaving their jobs and starting their own companies to embark on interesting projects. I thought it was an interesting space, so in 2012 I started an early-stage venture capital firm 1337 Ventures,” he shares. 

“Our objective is to create a programme that identifies and invests in the best ideas. We want to create a vibrant ecosystem with successful entrepreneurs who perhaps, one day, may want to be angel investors and invest in new startups themselves.”

Here, the Gen.T Tribe member shares with us insights on Southeast Asia’s startup landscape and why it is an excellent time to raise funds despite the gloomy economic conditions. 

Read more: Red Flags That VCs Should Look Out For

How has the current economic situation impacted venture capitalists’ appetite to invest in startups?

Bikesh Lakhmichand (BL): The [economic] situation today is not as bad as people make it out to be. Though a so-called “funding winter” is happening now, this has not dampened the spirit of investors.  

Investors are also being more cautious when selecting startups they want to invest in. They are less likely to be influenced by trends or the fear of missing out on a good deal. Many of them want to make deals they otherwise would not have considered. They want to ensure they’ve identified the best startups to invest in and get their money’s worth. 

Fundraising is generally challenging, especially in a country like Malaysia, which has few active venture capitalists. But if you’re solving an issue that matters and can [clearly] articulate [your value proposition], then getting investors interested won’t be too difficult.

Do you have any advice for new startups looking to make their mark in the world?

BL: Any startup working to solve a problem needs to ensure they are solving a problem that the market is yearning for. Ask yourself if the problem you are solving is big enough in the market you are targeting or whether it is something that is experienced by multiple markets.

Take your time to ensure product-market fit. This means understanding if there is market demand for what you want to sell and people who are willing to pay for it. Focus on getting that right and once you do, you can start to grow your business rapidly.

Read more: 500 Global’s Vishal Harnal Shares The Trends VCs Are Banking On In Southeast Asia

What are some of the biggest challenges you hear from startup founders and what is your take on overcoming them?

BL: Funding will always be one of the main challenges startups face. If you have found the right problem to address and there is a sizeable market demanding it, you have a better chance of finding investors. 

The second challenge is access to talent. This is especially true for technology talents and it can be competitive in certain sectors. From what we have seen in our portfolios, if you’re telling the right story on why your startup should exist, you would be able to attract talent who believes in your purpose and want to help you grow your business.

It can be tough for early-stage startups to have to compete with giants like Grab or Gojek when it comes to attracting the right talent. If you don’t have the funds or people, how do you fight back against larger startups or corporates? Well, the first thing you never want to do is get into an ultra-competitive market.

Instead, focus on what you can do that others can’t. Apply that to a niche market and slowly grow from there.

More corporations are investing in startups. Why do you think this is happening?

BL: There is growing interest among large corporations in the startup space as they prioritise speed to market and how quickly they can get new products and solutions to their customers. Many are focused on running their core business and need more time and resources to set up a brand-new division dedicated to developing a new solution.

Both corporations and startups bring their unique strength to the table. Corporations have established their reputation, trust and ability to distribute solutions to their existing customer base. Startups have the talent and access to new technologies that engage their user base.

There are now more hackathons and accelerator programmes happening. I hope there are more Corporate Venture Capital (CVC) arms keen to invest and integrate startups into the infrastructure of their companies.

Although it doesn’t always work out well, there’s a better chance to pull this off when the corporates begin piloting startups and getting the buy-in and trust from their board before investing in them via a CVC.

Read more: 6 Gen.T Honourees Who Are Funding Indonesia’s Startups

What sectors are you paying close attention to right now?

BL: The pandemic has shown us that the threat of not digitalising a business is real, hence solutions that aid companies—especially small and medium enterprises—to do so with as little friction as possible would be great for this region.

There are also significant issues to be solved in financial literacy. The region still has a relatively large population of underbanked and unbanked people. During the pandemic, we saw how people’s ability to save and spend was affected.

Two other areas I’m looking at are more accessible healthcare and food security via agritech solutions.

The Gen.T Tribe is a panel of industry experts from across Asia who help to nominate and review the Gen.T List each year. See who else is in the 2022 Tribe .

BFIA Admin
BFIA Admin
The big boss.

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