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How Sandeep Murthy picks future Unicorns
April 22,2016

When Aileen Lee, venture capitalist and founder of Cowboy Ventures, coined the term ‘unicorn’ for billion-dollar startups, the implication was clear: Like the mythical creature, these companies, too, were rare. In 2013, when Lee wrote a post for the online publisher of technology industry news TechCrunch, there were just 39 unicorns globally.

Not any more. Unicorns have transcended geography and have sprouted across multiple locations, most notably in China and India. As of March 2016, says CB Insights, a database that tracks venture capital investments into private companies, there are 155 unicorn companies, and seven (excluding InMobi, which is incorporated in Singapore) among them are Indian. The latest home-grown entrant to this list is online marketplace ShopClues.

The rising number of unicorns may have democratised the billion-dollar benchmark for startups, but it’s still not easy to sniff the unicorn potential in young ventures and sift the wheat from the chaff. Unless you are Sandeep Murthy.

In June 2005, when Murthy arrived in India as the sole representative of Sherpalo Ventures (he was also representing the Silicon Valley-based VC firm Kleiner Perkins Caufield & Byers [KPCB]), his plan was to lead an investment into an online travel company called Cleartrip, which hadn’t yet gone live. What he was going to do beyond that wasn’t clear.

“I came here with a Blackberry and laptop thinking, ‘Let’s see where it goes’,” says Murthy, 39, seated in the Mumbai office of Lightbox Ventures, the early stage venture capital firm of which he is a founding partner. The company was set up when Sherpalo and KPCB exited India in 2014. Murthy started the firm along with partners Jeremy Wenokur, Prashant Mehta, Sid Talwar and Sunny Rao. They began with the acquisition of a portion of Sherpalo’s and KPCB’s India portfolio. The firm has gone on to invest in companies like the online food delivery platform Faasos and refurbished goods retailer GreenDust.

Murthy’s knack for businesses, though, predated his arrival in India. In 2000, when he was 24, Murthy and a friend started a tech company in Silicon Valley. “It was Spotify a few years too early,” recalls Murthy, an MBA from Wharton School and a former investment banker with Credit Suisse. The idea was to create a “digital living room” by letting people upload their music collection on the internet, so that it could be accessed from anywhere, he says.

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