With the Indian startup ecosystem rapidly expanding, a division of Wall Street investment bank Goldman Sachs announced on April 12 that it is bullish on the space and will be looking to invest up to USD 10 million in domestic financial technology companies. Goldman Sachs Principal Strategic Investments (GSPSI), which invests from the bank’s balance sheet, has two “legacy investments” in India, including the NSE and NCDEX, according to its head Alokik Advani.
While GSPSI continues to manage these investments, the arm is excited about new opportunities and is looking to invest between USD 2-10 million for a minority stake, he said, adding that it is in talks with some companies.
PSI, according to Advani, seeks businesses in the financial technology space that can benefit from partnering with its parent. Typically, before taking a stake in a startup, Goldman Sachs becomes a client, according to him. GS already has a significant presence in Bengaluru, India’s startup capital, and PSI sees the city as a centre for innovation, he said. PSI is interested in companies in the data analytics and machine learning space, according to Advani, despite the fact that it invests in a wide range of segments.
Among other things, it is looking into trading technology, market infrastructure, information services, security software, and payments. When asked about valuations, he stated that people’s expectations are decreasing as they become more realistic. PSI, which has 75 investments in its portfolio, including 12 in the Asia Pacific region, stays invested for more than five years. He also added
Advani, on the other hand, refused to give any investment targets, claiming that PSI does not operate like a private equity fund, is very opportunistic, and generally takes longer to close deals. PSI is already in talks with organisations such as Nasscom and the startups think tank iSpirit, according to Advani, and partnering with colleges and educational institutions that produce new ventures makes sense for it in India as well.
It currently has a 20-person global team overseeing operations, and the Indian investments will be made by a team based in Hong Kong. Advani declined to comment on its investment in the NSE, which is preparing for an IPO, but stated that it “continues to work with NSE management in any shape and form we can on their strategic roadmap.”
