Cybersecurity Investments Ready to Take Off in India: Vishal Gupta of Bessemer

The segment has been “fertile” for Bessemer globally, with VCs making more than 30 investments. It is now starting to mature in India in terms of scale, enough for Bessemer to launch a roadmap for it, Vishal Gupta, partner at Bessemer Venture Partners, told Mint.

Bessemer invests in companies based on its investment “roadmaps,” which are a company’s outlook or an investment thesis on a segment. Its longest-running roadmap is consumer internet, which has seen it invest in Indian startups like Swiggy (from which it exited), Bharat Matrimony, Snapdeal, BigBasket and Urban Company, among others. Other roadmaps in India include fintech, healthtech and software as a service (SaaS).

Roadmaps to success

“Cybersecurity has been fertile ground for us around the world — we’ve invested in more than 30 companies,” he said, adding that one of the industry’s leading companies, VeriSign, was founded in the Bessemer office.

“The cybersecurity issue has been around for 50 years, but in the roadmap you always try to answer — when will this take off? We think from an Indian ecosystem perspective (the perspective) the time looks good today — given that the data protection act has been passed and the regulations are on the way. The fact that a lot of frauds in mobile transactions, a lot of frauds in lending, a lot of frauds in insurance are happening — now is the time where a lot of such ecosystems are emerging and the market is big enough (for investment),” he said.

The VC has evaluated several investments in this space but has not yet closed a deal. Other new roadmaps it is trying to develop include D2C (Direct to Consumer), health-insurance tech, he said.

Gupta started his career as an assistant CEO at HCL Technologies, spent several years building the private equity arm of Reliance Capital (backed by Anil Ambani) before joining Bessemer in 2006 to open its India office. The firm initially invested in scale-ups looking for growth capital, long before venture investing became common in India, he says.

But it has since evolved, writing from seed to Series B or Series C checks ($5 million to $50 million). Through Bessemer’s Century Fund, it can also look at larger, ticket-sized investments.

Platform Strategy

Not every roadmap becomes an investment, he said. In addition to roadmaps, one of the company’s successful strategies has been “platforms,” Gupta said.

“One of the topics I love is platform play. All the deals I’ve done in fintech, software (like Lentra or Perfios) have been platform plays,” he said, describing it as a “pickaxe and shovel strategy — where the investor is betting on the company that enables manufacturing, not the manufacturers themselves. This strategy has allowed Gupta to invest in the fintech and insurtech segments without taking on the credit risk of a fintech lender or an insurance company,” he added.

“As the saying goes, in a gold rush, it’s better to sell your shovels than to dig yourself, because you may find it or you may not,” he added.

Many of the portfolio companies invested in under these themes have already achieved sufficient scale to go public.

“We have a big list of companies that could go public,” Gupta said, though he declined to name them.

Nine of its portfolio companies have gone public in the last few years — from Motilal Oswal, Indian Energy Exchange, Home First Finance Co., IL&FS Transportation Networks (ITNL) to Medi Assist and Bharat Matrimony.