Sequoia Capital’s accelerator fund ‘Surge’ has backed 15 startups across India and Southeast Asia, at a time when new deals globally are far and few.
The $200-million fund has made seven investments in the country across sectors in its third batch, taking its overall Surge portfolio to 52 startups. The program is co-led by Shailendra Singh and Rajan Anandan.
The latest batch includes Atlan, which helps teams in large enterprises collaborate on data projects, community management platform Convosight, subscription-based smart water purifier product DrinkPrime, online fitness app Fittr, digital procurement platform Procol, site reliability engineering platform Last9, and a consumer brand in stealth.
The hands-on approach of the accelerator and its highly resourceful community of investors and mentors could be key for startups to deal with the many challenges in a tough global business environment, some Surge entrepreneurs said.
“The (Sequoia) network has been incredibly hands-on – right from making customer introductions to hiring…the (Surge) program itself is MBA on steroids for entrepreneurs…it is a privilege to learn from partners who’ve backed the most legendary global technology companies of our times from Zoom to Github,” said Prukalpa Sankar, cofounder of Atlan. A third of Surge’s latest batch have at least one female founder.
Surge is a 16-week accelerator programme, wherein startups receive scaleup support, along with $1-2 million in capital from Sequoia, besides co-investments from other investors.
Sequoia, through this accelerator, is building a tight-knit resourceful community which the Silicon Valley blue chip firm hails as the next phase of differentiation in early-stage deals at a time when capital has largely commoditized cash.
Founders that ET spoke with said Surge has built a full-stack product based community to engage with its portfolio founders – the first such in India mirrored on the Y Combinator model.
On the Surge app, founders can now seek help to hire talent, brainstorm growth hacks, rate investor interactions, and seek mentorship in a closed setting.
“The collective community aspect of Surge makes it a lot more powerful. We’ve had instances where Surge founders share with each other feedback on investors, reference checks for senior hires enabling them to avoid bad actors,” said Ravish Naresh, founder of Khatabook, a digital ledger app for entrepreneurs.
Mirroring this sentiment, Abhimanyu Saxena, cofounder of Scaler Academy, a Surge 01 startup said, “everyone participates in discussions and shares resources, which are particularly valuable in the current situation with Covid-19.”
Since its launch in March last year, Surge has grown into a community of more than 110 founders from 52 startups, spread across six countries. According to Sequoia, Surge startups have raised more than $250 million after completing their program in subsequent financing rounds.
“We are proud to be able to partner with this current cohort of ambitious founders who are building their companies in one of the most challenging periods in modern history”, said Rajan Anandan, Managing Director, Surge and Sequoia Capital India LLP. Other companies in the current cohort from Southeast Asia include Pencil, Pentester Academy, Tigerhall, Tinvio, BukuKas, CoLearn, Hangry, and Thuocsi.
However, even as Sequoia continues to invest, new cheques for early-stage startups in the overall ecosystem are likely to be paused or significantly cut in the coming quarter as investors disproportionately conserve cash for their existing portfolio companies.
In fact, multiple ongoing deals have been pulled back, citing force majeure, which in turn has led to a rising fear amongst founders on runway for survival.
According to data shared by Tracxn, the number of seed and early-stage deals fell 37% in 2020 to 228 in the first quarter of the year ended March 31.