Prashanth Prakash, managing director of Accel Partners India, is one of the most successful early stage investors in India. His firm has invested in more than 100 startups in the country and has never veered off its early stage tech focus. Prakash, along with his partner and college mate Subrata Mitra, formed the Indian arm of the US venture capital firm Accel Partners in 2008 after merging their seed investment firm Erasmic Ventures.
They back startups early on. And their bets include multiple unicorns like Flipkart and Mu Sigma, and other success stories like Freshdesk and TaxiForSure, which were all garage startups when Prakash's firm invested in them.
In a conversation with Techcircle at the recently concluded Techcircle E-commerce Summit, Prakash spoke about a host of issues ranging from consolidation to profitability in the e-commerce industry, the role of omni-channels and the phenomenon of internet-first brands evolving in India.
Prakash also shed light on the fundraising environment saying that 2016 will be a tough year for entrepreneurs.
“People starting out now will find a different reality as the investors will be a lot more circumspect,” he said, adding that entrepreneurs who are starting out now need to be more creative and innovative.
Prakash added that it is easy to be a frugal entrepreneur in B2B e-commerce, but it's tough to do in a consumer business.
Prakash dismissed there is a bubble and said the noises of a bust are natural in hyper valuation cycles. “We will see a little bit of lull here and there and it could last for 12-24 months,” he said.
Profitability has been like a mirage for the startups. However, as the market is ripening, the path to profitability doesn’t seem like a remote proposition. Prakash said it is possible to build a very large profitable company. “We are at a stage where we have surpassed the habit forming hurdle and as we are at a critical mass of consumers, it is possible to make a company profitable,” he said.
Borrowing lessons from China where the offline to online has been a buzzword, Prakash said the era of lead generation is game over. “People today want to be hand-held and there is no room for a hands off approach. A true O2O business is one where you are close to the transaction and in control of the customer’s journey. It is important to leverage the mobile and integrate the touch points between the online and the offline business,” he said.
He warned that entrepreneurs should stay away from the bad habits of subsidising and discounting which is being rehearsed in the Chinese market in a prolific way.
When asked is there still juice left in the e-commerce business, Prakash said without batting an eyelid, there is ‘plenty’.
For more, watch the interview.