Ganesh Rengaswamy is a seasoned entrepreneur and venture investor. He leads the investments of Quona Capital in India and Southeast Asia.
Quona Capital is the first global VC focused on fintech for access to finance. We back innovators enhancing the quality and availability of financial products and services for underserved consumers and enterprises through business model innovation, smart leveraging of technology, and a passion for making a positive change in the world. Quona is focused on Asia, Latin America, and Sub-Saharan Africa, leveraging a strategic relationship with Accion, a global leader in microfinance. Quona is an investment manager for the Accion Frontier Inclusion Fund – the world’s first, dedicated global fintech fund for inclusion.
Before co-founding Quona, Ganesh led Accion Frontier Investments’ work in India. Before his time with Accion, Ganesh was a General Partner of Lok Capital, a venture growth fund that invests in financial inclusion and social enterprises. Ganesh previously served as the Asia Director for Unitus Inc., a global organization investing in sustainable solutions in financial inclusion. During these stints, Ganesh invested and advised leading financial institutions and banks including SKS/Bharat Financial Inclusion Ltd, Ujjivan, Equitas, IFMR/NorthenArc, Vistaar, TechProcess and Bandhan.
Ganesh is a frequent speaker at global industry events including Asia Investment Conference, SuperReturn, Global Impact Investing Network (GIIN), India-China Fintech Summit, and LendIt. Ganesh’s exits include Coins.ph (Go-Jek), Shubham (Premji Invest), IFMR, TechProcess (Ingenico), Vistaar, Rural Shores, and Securent (Cisco). Ganesh’s current and past investment and entrepreneurial advisory roles include Village Capital, Accion Venture Lab, GSF Accelerator andIIM-Ahmedabad, and he has been featured in Bloomberg, CNBC, The Economic Times, The Mint, and others.
In an exclusive interview with AsiaTechDaily, Ganesh says:
I’m pretty motivated at home by my family—they keep me on my toes, especially my daughter! Professionally I’m motivated by the founders and Quona team who keep working away on challenging problems, in their efforts to make things better for others. If Quona can play a small role in their success, that’s terrific.
- Be persistent and consistent.
- Have clarity of purpose, and know your “zone of impact”
- Take a sales or service job at some point in your life—it’s the best way I know to learn a lot about people and develop some humility!
Read on to know more about Ganesh Rengaswamy and his journey.
When did you first think about starting a fund?
Ganesh Rengaswamy: I have aspired to be an entrepreneur for over 20 years. With the launch of Travelguru in 2004/2005, that ambition was fulfilled. But the fundraising process led me to believe in the opportunity to develop an entrepreneurial friendly venture fund. That was the genesis of the idea to start a fund someday.
What kind of startups/ sectors have you invested in till now?
Ganesh Rengaswamy: In my first-generation portfolio at Greylock Partners in the valley included fintech (like Bill Junction acquired by Ingenico) and software (like Securent acquired by Cisco).
The next generation in Asia/India included the pioneering financial inclusion and microfinance investments, several of which eventually went public and became market leaders.
At Quona, we have invested in Coins.ph (exit to Go-Jek), CreditMantri, Fisdom, IndiaMART (exit through IPO), JULO, KoinWorks, NeoGrowth, Shubham (exit to Premji Invest), SME Corner, Sunday, ZestMoney, BukuWarung and Ula in Asia.
What types of companies do you look to invest in? And What’s your mental model for investing?
Ganesh Rengaswamy: We invest in companies that leverage financial and digital innovation to deliver solutions that fulfil the needs of unserved or underserved consumer and SME segments of society. These could be companies in core financial services or embedded finance startups in logistics, mobility, education, health, digital commerce, agriculture, etc.
Aside from the typical traits that investors look for, we look for entrepreneurs who understand the system well enough (nuances of financial services, regulations, risk models, KYC etc.) and are determined to change it.
What is your typical investment range and how many startups you invest in per year in general? Additionally, overseas headquartered startups get funding from you?
Ganesh Rengaswamy: We typically start with an investment anywhere between $2- $10M, but our sweet spot is in the $3-5M range. Over the life of the investment, we may invest 2-3 times the initial investment. We invest in about 4-5 startups a year in the Asia region. The firm’s coverage spans all emerging markets, covering about 14 countries across Asia, Africa and Latin America.
What would be the KPI that you usually check about the startups’ growth?
Ganesh Rengaswamy: It may be diverse in each industry like LTV, CAC, MoM, etc. but it will be helpful to understand more about your additional investment factors.
Metrics like growth and LTV: CAC is always important. But our thematic approach forces us to dive deeper into business-specific KPIs, which depend on the fintech sub-sector. For example, for a lending company, the NPA, RoE, etc. are important. For a payments company, we would look at transaction volume, net margin, etc. Given our focus on financial inclusion, we always pay attention to the impact created on underserved segments, whether through access or quality or market development.
How do you handle this COVID-19 outbreak situation for your fund’s survival in the future?
Ganesh Rengaswamy: We have a dedicated COVID-19 Taskforce at Quona, led by my colleague Dan Bertoli, that tracks the impacts of COVID across our portfolio companies and the markets they serve, from Latin America to Sub-Saharan Africa and Asia/SE Asia. The Taskforce analyzes data across the portfolio and facilitates COVID-related initiatives. In many ways, COVID represents a tailwind for digital-first fintech products that make financial services more accessible in emerging markets.
Like everyone, our Quona team has missed seeing our teammates, investors, and portfolio companies in person—we have moved all offices to 100% remote work for the near future, but the work continues!
We closed our second fund in March, just as COVID wrapped itself around the globe, and we are preparing now for our Fund III raise, in which we anticipate beginning fundraising in early 2021. Most of our LPs are repeat investors with us since the beginning in 2015. Our financial and impact performance has been strong—the latest exit being IndiaMART with its phenomenal performance post IPO—so that’s attractive to new LPs.
Do you have advice for anyone looking to start a fund?
Ganesh Rengaswamy: For our team, it’s been essential to be thesis-driven investors who are motivated by more than money. People thinking of starting a fund should find like-minded partners and investors because launching a fund is quite entrepreneurial and challenging. It’s a lot more fun to work with people who principally believe in the same things you believe in.
What’s your general thought about the term “Global” and What are the important factors (criteria) for local startups to consider for international expansion?
Ganesh Rengaswamy: The key factors are founder outlook, team capabilities, market similarities, product transferability and scalability.
What kind of startup or tech industry will impact the world in the future like 2-3 years locally in your view?
Ganesh Rengaswamy: Embedded finance will be transformational across verticals. Financial innovation applied appropriately, can catalyze key sectors like agriculture, digital commerce, education, healthcare, mobility, supply chain, etc.
What are the top-three books or movies (TV series) that changed your life and why?
Ganesh Rengaswamy: I’ve always liked the book A Long Walk to Freedom by Nelson Mandela. Persistence is a prized virtue, but one that isn’t talked about enough. My favourite quote: “Do not judge me by my successes, judge me by how many times I fell and got back up again.”
How do you keep yourself motivated every day?
Ganesh Rengaswamy: I’m pretty motivated at home by my family—they keep me on my toes, especially my daughter! Professionally I’m motivated by the founders and Quona team who keep working away on challenging problems, in their efforts to make things better for others. If Quona can play a small role in their success, that’s terrific.
What are the top- three life lessons that you want your daughter to know?
Ganesh Rengaswamy: I just wrote a piece about this topic after speaking to my alma mater. If I had to pick 3 out of 10, I’d say:
- Be persistent and consistent.
- Have clarity of purpose, and know your “zone of impact”
- Take a sales or service job at some point in your life—it’s the best way I know to learn a lot about people and develop some humility!
What would you like to be remembered for?
Ganesh Rengaswamy: I believe legacy is overrated. If anything, I would like to be remembered for having a “pay it forward” approach and contributing in some small way to the success of my colleagues, founders, the startup ecosystem and to financial inclusion.
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