The Best Valuation Need Not Be the Highest

Info Edge founder and veteran start-up investor Sanjeev Bikhchandani talks to Deepsekhar Choudhury about high valuations and corporate governance in start-ups. Edited excerpts

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Are you doing more deals now as the so-called funding winter seems to be receding?

We kept doing deals. In fact, according to us, when there is a slowdown in capital, it is actually a better time to invest. When we invested in Zomato in 2010, it was the nadir of the global financial crisis. When we invested in Policybazaar in 2008, it was just before the global financial crisis. Slowdowns are good. It's a part

of the business cycle. And start-up investing is done with a 10-12 year time horizon. When you invest in a start-up, you don't look at what the current environment is. You look at what the prospects of the company are, how good the founders are.

One of the things investors bet on is the founder. What does this really mean?

Betting on the founder means how committed they are, how capable they are, can they stay the course? When the company grows from 10 to 5,000 people, can they handle large teams? Can they attract enough talent? As a start-up typically has multiple founders, do they bring complementary skillsets to the table? Let's take Deepinder's [Goyal, Zomato founder] example. When we invested, he was 28-years-old. He hadn't handled a large team. But he had great customer insight, he had great product clarity, he had initiative, he had enterprise. Very often it's a judgment call.

Are valuations rising once again?