Sandeep Singhal: Pioneering India’s Venture Capital Revolution
I live in what is called the “startup capital” of the nation. While we have witnessed the voracious swallowing of erstwhile villages into a mushrooming city, many of us peer from the rims into a dizzying vortex of startups founded, run, IPOed, sold or shut down. So it was illuminating to converse with Sandeep Singhal, who’s been one of India’s venture capital pioneers. And who’s kickstarted and sold many legendary enterprises, all of which he describes with a nonchalance that we might confer on the morning’s breakfast or weather report.
Idyllic Early Years in Kanpur
Singhal’s earliest memories are rooted in the sprawling greens of the GSVM Medical College, Kanpur, where his father, a cardiologist, had joined in the Medicine Department. His family was fortunate to be allotted a cozy two-bedroom apartment, nestled inside a corner plot ringed by gardens and a play area.
Sandeep recalls a utopic childhood, darting in and out of friends’ homes, romping outdoors and befriending a rambunctious bunch across ages: “There was a strong sense of trust in the community because everyone knew each other. We would vanish for three or four hours, and no one worried.” Cars were few in the 1970s. Walking and cycling across the bucolic setting was commonplace.
Mornings, they carpooled to school, sharing tiffin box contents and exam jitters. Evenings were punctuated by cricket and football games, played across vast campus fields. Group celebrations for festivals like Holi, where they would collect donations, light a crackling fire, share sweets and stories, created a camaraderie that ripples into present-day interactions: “We have a WhatsApp group for all the GSVM kids,” chuckles Singhal.
From IIT Dreams to Stanford Scenes
An offshoot of belonging to such a close-knit circle was that Sandeep had many role models. Older kids who had cracked the IIT or PMT (pre-medical) exams, and strutted into revered engineering or medical careers. Quite naturally then, he found himself gravitating towards those paths.
At the Methodist High School, he was drawn by Maths and Physics. In hindsight, he believes good teachers might have made those subjects enthralling. He also revelled in words, but not so much in Biology lessons. Despite attempts by his Doctor father to foster an interest in medicine, Singhal plunged into preparations for the IIT.
Around then, he encountered a student who had recently moved into their school from Darjeeling. That boy was flipping through a hefty Barron’s Guide. An intrigued Sandeep learned that one could apply to American universities after the 12th Grade. While still swotting for the IIT, he decided to give those faraway universities a shot. Already deft in Maths and English, the SAT felt like a breeze.
Soon he found himself spoiled for choice. He was admitted to IIT Kanpur as well as Stanford University, among other colleges. While awaiting Stanford’s intimation on financial aid – there wasn’t any question of affording the high fees – he joined IIT Kanpur. He remains grateful to IIT professors who encouraged him to head to the U.S. on a scholarship, rather than stay at Kanpur.
Tags, Jeans and Culture Shock
Landing in the U.S. in 1983 was a culture shock. Growing up in Kanpur, even other parts of India were alien to him. To cushion the impact, his father had him travel to Bangalore, the city already considered more cosmopolitan and hip. Later, despite landing in New York to spend a week with his uncle, Singhal recalls how untutored he was in American or even big city ways. For instance, in that first week, his uncle bought him a pair of jeans. Sandeep proudly wore it to the Rockefeller Center, when a kind stranger instructed him: “Son, in our country, we take the tags off after we buy a new pair of jeans.”
This was only one of many slip-ups, prescient of adjustments he would have to make as he settled into “The Farm” (a nickname for the Stanford campus). Still, he was grateful that the University had organized a pick-up – someone who awaited him with a placard at the airport. Later, sessions on cultural divides and encounters with fellow foreigners at the international student orientation dispelled hard-to-voice doubts. He also chose to stay in the Asian American dorm, where seniors guided younger cohorts through the roughs.
Despite this, he recalls feeling homesick in the early stages. This was only alleviated by letters from his mother, who wrote daily, on thin blue aerogrammes, recounting her Kanpur every days. “Every week, there would be like three or four letters that would show up.” His mother’s disciplined correspondence persisted for six months, softening his alienation with the comforting grooves of home. By then, he started making friends and feeling at ease in the new environs.
Lessons in Trust and Integrity
At college he opted to major in Electrical Engineering and Computer Science, also called EECS and pronounced EEKs! His IIT prep helped him place out of several first year classes, all of which boosted his confidence.
An event from his Stanford years has been etched in memory and shaped his core life principles. The University, like many other American institutions, had an academic honor code. This implied that students were trusted to not cheat on take-home exams, or break other test-taking rules. During a particular three-hour Maths exam, Sandeep finished his paper ahead of peers. After checking his answers, he submitted his paper in an hour-and-fifteen minutes. The Professor asked: “Are you sure you’re done with everything?” Singhal replied: “Yes, I’ve already checked it twice. I’m comfortable.”
On the bike ride home, Sandeep sensed that one of his answers was incorrect. He rushed back to the exam center, breathlessly explained the situation and asked if he could correct his mistake. Without a second’s hesitation, the Professor handed back his exam, trusting that Singhal had not sought any outside help.
This experience profoundly impacted Sandeep, exemplifying the honor code and reinforcing how integrity and trust were braided into a dialectic. He gleaned how value systems are forged by small actions, and how such doctrines can have a lasting impact. At “frosh send-offs” from India, he recounts this experience to incoming freshmen, underlining that some of their more valuable takeaways won’t involve coursework. As he puts it: “In life, no one monitors you. You must be your own invigilator.”
Exploring India’s Business-scape
During his junior year, Singhal landed an internship at Daisy Systems, a leader in computer-aided engineering software. He could have worked there after his four-year degree, or in any other budding Silicon Valley firm. But his heart was tugged by India. During his freshman year, he had bought two old Atari computers and carted them to Kanpur. Where he imparted the ABCs of coding to students at his former high school. He sensed how much hunger there was in the country to better one’s circumstances. He had also observed how Daisy Systems had been funded by the charismatic Indian American venture capitalist, Vinod Khosla. He wondered if he could usher such capital into India to spark similar enterprises.
Landing in the country in the late ‘80s, he bumped into tough obstacles. While communities like the Marwadis and Gujaratis supported each other with funds, working professionals with ideas could not easily access capital. Despite knocking on many doors, kickstarting anything felt impossible.
A Valley Startup to European Adventures
Around then, ex-colleagues from Daisy Systems offered him a job at a Valley startup, so he headed back. As Employee #27 at EDA Systems, he got a taste of startup culture – the heady excitement, but also late-night huddles and weekend crunches. He was the youngest in the team, not old enough to drink. At TGIF beer bashes, the joke was: “Who’s taking care of Sandeep?”
When Philips in Germany needed support, Singhal was dispatched to problem-solve. The client liked him so much, the team repeatedly extended his stay. He was thrilled to be accorded a company car and apartment. Around then, he applied to Wharton and was admitted into the MBA program. In the meanwhile, Digital Equipment (DEC) acquired EDA and offered to promote him, if he could remain in Munich for two-plus years. Deferring his admission, he zigzagged across the continent, handling business development.
Starting a Pioneering VC Fund
Post-Wharton, he transitioned into consulting, joining McKinsey in New York. Returning to India in 1997 with the consulting firm, he realized that the nation had changed significantly in a decade. Opportunities had opened up post-liberalization, and a buzzy optimism surrounded entrepreneurship. Partnering with McKinsey colleagues, he set up a venture fund – eVentures – in 1999. Focusing on the Internet in India and on cross-border services, they made fourteen investments.
They also felt the market was ripe for an Indian travel portal. But they needed the right talent to head such a venture. Egon Zehnder found Deep Kalra, who was running AMF Bowling (an operator of bowling centers and equipment) and had experience at GE. Appointing Deep as CEO of MakeMyTrip and ploughing $2 Million into the idea, they launched a fabled journey.
In the early eVenture years, finding skilled entrepreneurs was a struggle, prompting the firm to assume an incubation role like with MakeMyTrip. Attracting talented professionals to startups was a challenge in a nascent ecosystem with perceived high risks. Moreover, capital was still scarce, complicating the search for subsequent investors to support scaling. Then 2001 heralded the dot-com bust. Softbank, one of eVenture’s investors, chose to cease new investments in India. Managing the existing portfolio no longer felt like a full-time job to Singhal.
Leveraging his experience in cross-border services and healthcare from his time at McKinsey, he kickstarted a healthcare outsourcing company, Medusind Solutions.
Co-founding Nexus Venture Partners
During this time, eVentures continued to manage and exit its investments, selling Mentorix to Lionbridge, CustomerAsset to ICICI (Firstsource), and MakeMyTrip’s stake to SAIF Partners. Medusind had turned cashflow positive, enabling his transition to a new venture. Keen on returning to venture capital, he founded Nexus Venture Partners with Suvir Sajan and Naren Gupta.
The focus was on cross-border technology, not just services but also product and technology IP for the global market. The firm started fostering visible successes – companies like dimdim, PubMatic, Snapdeal, Druva, Delhivery, and Postman. After deploying five funds, Sandeep’s interests shifted towards impact investments in health, education, and climate. Observing the rise of large climate investment platforms in the U.S., he felt the need for a similar platform in India. Besides, he had gained personal expertise in agritech through Nexus.
Since Nexus was still centered on technology and digitization, a fund with a climate focus didn’t mesh well with its strategy. So he chose to work on it outside Nexus. After discussions with his wife, Anjali Bansal, Founding Partner of Avaana Capital, he realized that Avaana already had a platform that could support climate-based investments and became a Senior Advisor with them.
Current Multi-pronged Pursuits
He is currently engaged in four distinct activities:
· He collaborates with the Avaana team, advising them on building the fund, assembling the team, strategizing investments and constructing a portfolio — something that comes second nature given his roles at eVentures and Nexus.
· Secondly, he’s focused on digital health in India as a philanthropic venture. He works with ACT Grants, a platform initiated during COVID-19 for relief efforts, which now addresses areas like tuberculosis, oncology, mental health, and comprehensive primary rural care. ACT Grants funds private companies aiming to innovate in public health, encouraging them to collaborate with the government and charitable institutions. Under his guidance, ACT Grants has disbursed over a dozen grants ranging from INR One Crore to INR Five Crores and has seen significant traction in healthcare outcomes.
· Additionally, Sandeep is involved with a few independent investment committees. He works with a large Japanese bank investing in late-stage Indian ventures and with the Gates Foundation’s strategic investment fund. Furthermore, he’s on the boards of Titan and Hindustan Times, lending his expertise in navigating technological disruptions and digitization.
· He also engages in angel investing in non-competitive areas, maintaining a portfolio of about 30 companies, which, as he puts it mildly, “keeps him quite busy.”
Travelling and Bonding With the Family
On the personal front, Sandeep said that travel has been a way for his family to bond. Since he and Anjali have juggled intense and high-profile careers, while also parenting two boys – both of whom headed to Stanford for their Bachelor’s, with the older one recently graduating with a Master’s in Computer Science (from, yes, gasp! Stanford) – they have been conscious about spending time together.
Memorable jaunts include Disneyland, where they enjoyed ferrying saucer-eyed kids, the Gold Coast in Australia, summer in the Cotswolds, a cruise to Alaska and safaris in Maasai Mara and Serengeti. They have been avid users of Airbnb, involving the whole family in chores. Their first stop on any trip is a local grocery to stock up the fridge. “Since Anjali and I have lived in the US and are used to doing our own chores, we wanted to ensure that the kids didn’t always rely on staff.”
He also credits his professional success to the strong partnership he shares with Anjali. While they have both started and run their own ventures, they have always ensured one was stable while the other explored riskier options. Moreover, they’ve raised their kids with a keen sense of personal accountability, trusting them to chart their own futures. Singhal says the Stanford honor code had a rub-off even on their parenting approach.
Moreover, he intends to age positively like his father, who runs an active medical practice at 85. And who can read and recall the contents of recent medical papers with remarkable veracity.
Reflections on the Startup Ecosystem and Advice to Founders
Singhal observes that the Indian startup ecosystem largely developed post-2009. Nexus began in 2006-2008, and much investment occurred during a period of low interest rates. Unlike China, where domestic companies grew within a closed ecosystem and benefitted from a lack of external competition, India remains an open economy. This means the Uber of India is Uber, not a domestic alternative like Didi in China. Consequently, the market in India is more competitive, and advertising dollars often go to global giants like Google and Facebook, unlike in China, where they stay within domestic confines.
Hence Indian entrepreneurs need to think differently when building their businesses. They must be competitive without relying on capital as their primary advantage. There was a period in India when capital was a key driver — those with more money believed that they could outpace competitors. Sandeep emphasizes that the real focus should be on how one’s product or offering can outshine others, rather than on simply garnering the most funds.
Currently, there is greater discipline in how capital is spent and competitive differentiation created. This shift is happening as the ecosystem evolves. But the change is not yet widespread. Many companies still chase funding rather than build superior products.
Companies that raised large amounts of capital but haven’t delivered anticipated results will eventually get cleaned up. As this shakeout occurs, capital will be freed up to invest in the next generation of companies. Till then, some capital stays locked in these ventures.
With Zomato going public, capital has been freed up and returned to LPs (Limited Partners) and GPs (General Partners), who are now reinvesting it. The same is expected to happen when Swiggy goes public. Recycling of capital is happening with a new mindset: companies need to be capital efficient.
The past 25 years have also given rise to serial entrepreneurs who are role models and mentors for the next generation. Founders like Sanjeev Bhikchandani, Deep Kalra, Binny Bansal and Kunal Bahl, who have successfully scaled businesses, are re-entering the ecosystem to help others. Increased involvement from veteran entrepreneurs, combined with more disciplined capital, will drive the next wave of innovation and business success.
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