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Investing in Internet Startups

Many new global venture capital investors with abundance of funds and a longterm view of the market are stepping up to back Indian Internet companies at a time when those who poured money into the sector in recent years are slowing down pace of investments.
New York-based Stripes Group and Thrive Capital, and Sands Capital from Virginia, US, are among those taking a bet on a slew of companies such as ticketing platform BookMyShow, healthcare technology venture Practo and grocery portal Bigbasket.
“This was not a deal which happened with a gun to everyone’s head,” said Dan Marriott, managing partner at Stripes Group.

Sands Capital, which focusses on “concentrated growth” investments over the long term, has over $47 billion under management. Entrepreneurs who have engaged with the firm say metrics sought for evaluation include NPS (Net Promoter Score, a measure of customer satisfaction), while the firm also commissions independent surveys of customers.

“We haven’t come across any investor (seeking) such deep analysis of the sector and company,” said an entrepreneur whose company has been evaluated by the firm twice in the past four months. “We are still engaging with them, since they take their time before making bets,” he added.

India’s most valuable startup Flipkart was also evaluated by Sands Capital in regard with an investment. These investments will prove to be beneficial and spurt the growth of internet startups in India.

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