Cloud Capital: 2021 Rewind
This is Cloud Capital’s second year of actively investing. After spending 2020 as a solo GP and investing in 9 startups, this year I am excited to bring aboard Manjot Pal Singh (Manji) as a fellow Partner in our shared endeavor to back exceptional teams. As Cloud Capital, we can now interact with more founders while still retaining our agility and nimbleness. Moreover, our portfolio now has cross-border access as we are split across India and US.
Our first order of business was to identify themes that we both were drawn to and decided to use them as our investment tenets:
- Community as a moat: community leveraged as a propeller for business; ie-threedots, Avalon Scenes, FrontRow, etc
- Productivity: B2B or B2C products that boost productivity for its customers; ie- Chronicle, Airmeet, ByteLearn, Omnify, SuperBeings, etc
- Inclusion: unlocking access with technology; ie-Mahila Money, OneCode, Rupifi, Redwing Labs, etc
- Pick-and-shovel plays: underlying technology for emerging businesses; ie- DataKrew, Chace, Kitchens Centre, Lysto, etc
We also launched a hybrid investment vehicle where both our angel fund and syndicate would collectively invest anywhere from $50,000 to $300,000 in startups.
Unwrapping our 2021 activity:
- Invested $2.4M in 2021 (1.4x of 2020 deployment)
- Backed 20 companies across 22 rounds
- Fresh investments (18): 4 Pre-seed + 12 Seed + 2 Series A
Disclosed investments: Datakrew (w/ Beenext), ByteLearn (w/ Chiratae, Goodwater Capital), kWh Bikes (w/ angels), Avalon Scenes, OneCode (w/ Sequoia Surge, Nexus Ventures, etc), FrontRow (w/ Eight Roads, Elevation Capital, Lightspeed Venture Partners), Lysto (w/ Beenext, Polygon founders, etc)
- Our follow-on investments (4): 1 Seed + 2 Pre-Series A + 1 Series B
Disclosed investments: Rupifi (w/ Quona Capital, Binny Bansal), ByteLearn (w/ Goodwater Capital, Earlsfield Capital, etc)
- Acquisition channels: 44% referrals, 28% outbound, and 28% inbound
Cloud Capital in a snapshot:
- Top sectors of investment: Fintech, SaaS, EdTech, and Health amongst others
- 27 companies in the portfolio with a total market cap of $400M+
- 41% of investments in rounds without any institutional investor
- 6 companies have raised follow-on capital from the likes of Sequoia Capital, Accel Partners, General Catalyst, Quona Capital, Redpoint Ventures, etc (over the last 24 months)
- Participated in 66% of follow-on rounds within the portfolio
- 43% of the founders are repeat entrepreneurs
- Portfolio split of 52% B2B + 48% B2C
- Median cheque size of ~$130k
- Max # of investments in a portfolio company so far (doubling down on our conviction): 3
- 1 complete exit: Fitso acquired by Zomato
Learnings & Experiences:
- Play long-term games with long-term people. As Cloud Cap, we can proudly say that there are investments where we are the first to commit without any ‘lead’ or an institutional signal in the round. Moving fast and throwing our absolute weight behind our conviction is an investor trait that high-integrity founders truly value. Both investors and founders benefit from such a relationship that is built on pure conviction and mutual admiration.
- Earning the right to invest: With an abundance of capital, both domestic and international, it’s not a cakewalk to invest in competitive rounds. You have to establish your value add and should earn your right to. We have helped startups construct their rounds, made cross-border investor connections, made customer and talent introductions, and helped close high-quality candidates. In some cases, we have done all of the above without investing a single dollar, only to eventually get the founders to give us the right to invest.
Summarizing this year in a single blog post is quite the challenge. While the pandemic introduced itself to us last year, unfortunately, 2021 has been far more calamitous than we would have hoped for. It is not my wish to end this year-round reflection post with a disparaging tone, but it’s important to remind ourselves of all that we have witnessed and endured earlier this year. The current perplexing frenzy and the bullish nature of the market slip you into a euphoria where it’s all about web3, unicorns, capital deployed, etc. We too are highly ecstatic about the next generation of companies being built out of India, but it’s also important to remind ourselves that there were far greater challenges that we were able to collectively overcome.
We are grateful to all of our LPs who backed our judgment, as well as all the founders who allowed us to come aboard on their journeys 🙏
Here’s to hoping that 2022 treats us all better!
Kashish & Manji 🥂