<div><table align="left" border="1" cellpadding="2" cellspacing="2" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/arvind-large.jpg" style="width: 200px; height: 252px; margin: 1px; float: left;"></td></tr><tr><td><strong>Arvind Mathur</strong></td></tr></tbody></table>There is a lot of innovation in the internet space today and there are too many players as well. What’s more, the ecosystem has also significantly improved for startups in the country, says <strong>Arvind Mathur</strong>, President, Indian Private Equity and Venture Capital Association (<strong>IVCA</strong>) . While the sector is today garnering a lot of investor interest, success stories will emerge only from those who are able to beat competition, says Mathur talking to BW|Businessworld’s <strong>Paramita Chatterjee</strong></div><div> </div><div> </div><div><strong>What is your overview of the private equity sector in India? Do you think the industry is now at an inflection point?</strong></div><div>The private equity and venture capital market has definitely evolved over the last couple of years and has thrown open several opportunities across various sectors and different investment ticket sizes. Take startups for instance. Today, the amount of investments that you see going into this space is something new and there are various reasons for that. One, definitely the ecosystem has improved for startups in the country. Two, the talent pool from premier engineering institutes are extremely capable of taking on new ventures especially in the technology field – in fact, that is one sector where businesses are most scalable. And within technology, if you see internet, it is still grossly under-penetrated. So definitely, there is immense scope going forward. The investor fraternity knows the opportunities that lie ahead and are therefore, constantly scouting for good businesses that can change the contours of technology tomorrow.</div><div> </div><div><strong>Talking about internet, China has seen some major success stories like Alibaba that grew from $5 million in 1999 to $225 billion in 2014. Do you think ecommerce firms in India have the capability to replicate such success models? </strong></div><div>Why not? There is a lot of innovation in the internet space and of course, there are too many players as well. While there is a lot of talent in this sector, going forward there will be a few success stories that will emerge. Needless to mention, the sector may undergo massive consolidation and the ones who will survive are the ones who will beat competition. And risk capital investors are aware of this model. They are looking for that one big company which will give them the return that will overshadow all their other investments. In fact, there lies the beauty and challenge for venture capital investors too.</div><div> </div><div><strong>What is your take on the government’s initiative to facilitate private equity and venture capital investments? Are they doing enough?</strong></div><div>Well, the fundamental growth impulses are currently very attractive and these include demographics, high calibre engineers, talent/managerial pool, outsourcing industry and strong foreign exchange reserves, to mention a few. These factors are crucial in playing a role in attracting private equity and venture capital investors. Besides, the government also took certain progressive measures for the private equity industry, the announcements for which were made during the Annual Budget. These include steps like ‘safe harbour’ for India focussed offshore fund managers or funds of funds as they are called to set shop in India and tax pass through status for alternate investment funds. While the government has already pushed the envelope, further fine-tuning of this reform is still required that will make India an ideal investment destination.</div><div> </div><div><strong>What is your take on the current exits and fundraising in the industry?</strong></div><div>Well, I would say that exits and fundraising go hand in hand. Fund raising is not tough for those investors who have proven track record of exits. But yes. Overall fundraising in the sector may still be a challenge even as investments are taking place in full swing. Also, exits depend on a lot of factors, one of them being on capital markets. So, in a lot of ways, it is not in our hands. However, what we as investors and businesses can focus on is developing a strong business models and not think of exits alone. After all, if a business is great, exits automatically will take place.</div><div> </div>
