ETtechMumbai: Even at the seed stage, General Catalyst had to fight about four term sheets to lead a $2.5 million round in Web3 startup Stan, says Anand Chandrasekaran, partner at the US-based venture capital fund.
This investment marks General Catalyst’s first – of many, he says – investments in the Web3 and crypto sector in India at a time when the region has attracted large and small crypto native and traditional capital locally and from around the world. This unprecedented interest has resulted in Web3 startups in India raising north of $900 million this year.
“Most of the employees and the teams are still very much based in India. And so from a job creation perspective, founders building great products out of India is very much real,” Chandrasekaran says in an interview with ET.
General Catalyst, which has backed tech firms like Stripe, Snap and Airbnb, will back Web3 founders across early to late-stage from its recent haul of $4.6 billion across three funds. The fund is increasing its focus on India as it looks to bolster its presence in one of the biggest emerging markets, ET reported on March 31.
Better Capital also participated in the seed round of Stan, a Web3 esports fan engagement platform founded by Parth Chadha (who previously co-founded and ran eWar Games) and Akshat Rathee. The two are joined by angel investors from Coinbase Ventures, OpenSea, Kaleyra, among others. Stan is an esports fan engagement platform that leverages digital collectibles and nonfungible tokens.
Chandrasekaran is overseeing the fund's web3 strategy in the region along with managing director Niko Bonatsos.
“As we build a practice in India, one of the areas that we've been spending a lot of time in is actually in Web3 and crypto startups building for the world category, like business to business Software as a Service,” Chandrasekaran said.
He added that they have a thesis around backing Gen Z founders building products for themselves, which Stan is also doing, “where the Gen-Z and Web2 product and entrepreneurial talent are choosing to focus on building incredible web3 product experiences,” he wrote in a blog post.
“We have been huge believers in the thesis (of backing Gen Z founders). This is happening in Silicon Valley as well, where some of the best products were created because the founders wanted to build something for themselves and their friends. This is happening in Web3, and it is happening in India, which has one of the largest populations of young people,” he said.
General Catalyst will back projects across decentralised finance, layer-one infrastructure, developer tooling, and payments, among others. Globally it has made multiple Web3 bets, including Circle Internet Financial, the firm behind the stablecoin USDC, which was last valued a $9 billion.
It is entering India at a time when VCs like Coinbase Ventures, FTX Ventures, Jump Capital, Andreessen Horowitz, and traditional institutions like Sequoia Capital India and Lightspeed are aggressively backing founders at an early stage in Web3. Of the 28 early-stage deals as of April 30 this year, 24 were in the early stage, according to Venture Intelligence.
Chandrasekaran said they have decided to operate as one global fund as opposed to a fund based on each geography, and that will be one of the differentiators for them amid competition.
“I think the big differentiator in addition to that the global firm approach is that, I think in the early stage, more than capital, you need people who believe in the founders, so from my time doing very early stage investing and angel deals in India for the last seven plus years we're bringing that early stage believer mindset to supporting these companies,” he said.
Chandrasekaran is an angel investor in startups like Mudrex, Dealshare, NoBroker, among others.
On macro factors like the Russia-Ukraine conflict and other economic headwinds, which have hit valuations have caused a liquidity crunch, Chandrasekaran said that it is a great time to build companies.
“Times like these make both tourist founders and tourist investors leave, and fortunately for us, innovation doesn't stop in a downturn. And so it's actually, I think, an exciting time for great companies to get built,” he said.
This investment marks General Catalyst’s first – of many, he says – investments in the Web3 and crypto sector in India at a time when the region has attracted large and small crypto native and traditional capital locally and from around the world. This unprecedented interest has resulted in Web3 startups in India raising north of $900 million this year.
How you define “ investment in India” is a grey area when it comes to Web3 startups, as more and more founders move out or set up entities in friendlier geographies like Singapore and Dubai. However, Chandrasekaran says the capital is flowing into the Indian teams.
“Most of the employees and the teams are still very much based in India. And so from a job creation perspective, founders building great products out of India is very much real,” Chandrasekaran says in an interview with ET.
General Catalyst, which has backed tech firms like Stripe, Snap and Airbnb, will back Web3 founders across early to late-stage from its recent haul of $4.6 billion across three funds. The fund is increasing its focus on India as it looks to bolster its presence in one of the biggest emerging markets, ET reported on March 31.
Better Capital also participated in the seed round of Stan, a Web3 esports fan engagement platform founded by Parth Chadha (who previously co-founded and ran eWar Games) and Akshat Rathee. The two are joined by angel investors from Coinbase Ventures, OpenSea, Kaleyra, among others. Stan is an esports fan engagement platform that leverages digital collectibles and nonfungible tokens.
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Chandrasekaran is overseeing the fund's web3 strategy in the region along with managing director Niko Bonatsos.
“As we build a practice in India, one of the areas that we've been spending a lot of time in is actually in Web3 and crypto startups building for the world category, like business to business Software as a Service,” Chandrasekaran said.
He added that they have a thesis around backing Gen Z founders building products for themselves, which Stan is also doing, “where the Gen-Z and Web2 product and entrepreneurial talent are choosing to focus on building incredible web3 product experiences,” he wrote in a blog post.
“We have been huge believers in the thesis (of backing Gen Z founders). This is happening in Silicon Valley as well, where some of the best products were created because the founders wanted to build something for themselves and their friends. This is happening in Web3, and it is happening in India, which has one of the largest populations of young people,” he said.
General Catalyst will back projects across decentralised finance, layer-one infrastructure, developer tooling, and payments, among others. Globally it has made multiple Web3 bets, including Circle Internet Financial, the firm behind the stablecoin USDC, which was last valued a $9 billion.
It is entering India at a time when VCs like Coinbase Ventures, FTX Ventures, Jump Capital, Andreessen Horowitz, and traditional institutions like Sequoia Capital India and Lightspeed are aggressively backing founders at an early stage in Web3. Of the 28 early-stage deals as of April 30 this year, 24 were in the early stage, according to Venture Intelligence.
Chandrasekaran said they have decided to operate as one global fund as opposed to a fund based on each geography, and that will be one of the differentiators for them amid competition.
“I think the big differentiator in addition to that the global firm approach is that, I think in the early stage, more than capital, you need people who believe in the founders, so from my time doing very early stage investing and angel deals in India for the last seven plus years we're bringing that early stage believer mindset to supporting these companies,” he said.
Chandrasekaran is an angel investor in startups like Mudrex, Dealshare, NoBroker, among others.
On macro factors like the Russia-Ukraine conflict and other economic headwinds, which have hit valuations have caused a liquidity crunch, Chandrasekaran said that it is a great time to build companies.
“Times like these make both tourist founders and tourist investors leave, and fortunately for us, innovation doesn't stop in a downturn. And so it's actually, I think, an exciting time for great companies to get built,” he said.
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