- Kaushik Gala

Note: The views & opinions expressed in these essays are strictly my own, and not those of any entity I may be associated with as an employee, consultant, promoter, investor, etc.




Technology Venture Investors in Pune


Technology Entrepreneurship in India - Teams

Entrepreneurial traits

Picking cofounders


Technology Entrepreneurship in India - Generating Revenue

Is your business model well-defined?

Your industry's value chain

What is your value proposition?

Which distribution channels will you use?

Who will drive business development?


Technology Entrepreneurship in India - Raising Capital

Venture capital & venture capitalists (VCs)

Corporate venture capital

Angels & angel networks in India

Government support for Indian startups

Proof-of-concept funding

Do you need a business plan?

How much money should you raise?

Startup valuation

Pitching to investors

Figure out the term sheet

Negotiating with investors

Due diligence - A necessary evil

Time to sign the investment agreements


Equities, ETFs, F&O

› Oct 2011: Equity Risk Premium for India

› Jun 2011: Investing in Indian equities


Technology Enterprises in India

› Nov 2010: Technology investment in India - WATER

› Aug 2010: Technology enterprises in India - 3 avatars


Risk Capital for MSMEs

› Mar 2010: Risk mitigation for investors in MSMEs

› Mar 2010: Why don't (Indian) MSMEs get risk capital?

› Feb 2010: Angel investing - Will it work for Indian MSMEs?

› Feb 2010: What's so special about innovative MSMEs?

› Feb 2010: Where do Indian/NRI (V)HNIs invest?

› Feb 2010: Funding options for innovative MSMEs in India

› Jan 2010: Innovative MSMEs in India

Broad spectrum technology investing in India - WATER

(Last revised 20-Nov-2010, Send comments to

For investors seeking technology investments in India, the reality is that there is a scarcity of true science / hi-tech enterprises – from early-stage startups all the way to the largest publicly traded companies.

Given India’s ‘developing status’, per-capital GDP/wealth, demographics, capital availability, etc. – the reality is that there is much more economic value to be created in education, infrastructure, healthcare, telecom, retail, banking etc. – before we see a sustainable boom in science & hi-tech enterprises.

Of course, there's huge scope for technology to make an impact in the above sectors – for example, would we have the mobile boom if not for GSM/CDMA technology? But the issue is that few ground-breaking technology platforms were/are built in India.

One approach for technology investors in India then is to pick a large industry/sector and invest across a variety of stages, technologies, business models, and areas of impact. In this essay, I’ll elaborate on this idea in the context of the Water industry.

Why Water?

The water industry, with an estimated global size of ~ $500B, offers a range of challenges & opportunities for investors and entrepreneurs in India. Several (increasingly critical) factors drive growth in this industry – the usual suspects include population, urbanization, pollution, industrialization, Westernization and geo-politics. The strong nexus between energy, water and food will create booms in the markets for water purification, waste water treatment & reuse, water privatization, etc. More importantly, this industry faces considerable exposure to national & international government policies – further politicized by the fact that water is essential for life and is considered a human right.

Water Industry in India

The water industry in India is expected to cross $30B by 2012, with most of the water consumed by agriculture (especially flood irrigation) and most of the revenue linked to municipal markets. Going forward, urbanization and the growth in the manufacturing sector will lead to a steady rise in the share of water consumed by the industrial sector. For a bird's eye view of global and Indian markets, see this presentation - unfortunately, accurate & detailed data for Indian market segments isn't easy to come by.

On the face of it, the water sector is quite appealing – consider that water is widely estimated to be undervalued by 10-fold to 100-fold. A comparison between government subsidized tap water and privately sold water (eg. tanker water, bottled water) shows that water is severely underpriced. The experience of many for-profit ventures shows that poor and/or rural households are willing to pay 10x prices - the health & time benefits that they get due to a steady supply of potable water are potentially worth much more than the ‘market’ price that they have to shell out for water.

Investment Opportunities across the World

World-wide, there are over 400 publicly traded companies that have a relatively large portion of their business tied to water. Since 50-60% of the water industry is tied to municipalities, investors also have access to muni bonds via the capital markets. There are water indices, ETFs, even venture capital and private equity firms that specialize in water startups.

Investment Opportunities in India

As for India, there is a very small set of companies that derive a meaningfully large percentage of revenue from water. Amongst the publicly listed ones, the key ones are:

There are also several others (eg. Tata Chemicals, Finolex, Titanor, KSB pumps) that derive some of their revenue/profits from water. But there are not enough to warrant a water ETF/index solely for India.

Of late, there have been several investments in private firms by VCs/PEs, such as:

Some early-stage water startups in India have also managed to attract funding, especially from socially oriented venture funds like Aavishkar and Acumen. But the general dearth of early-stage risk capital in India - as explained in my previous essays - applies to the water industry as well, especially when it comes to startups that take science/technology risks.

Investment Challenge

The question then is – why do water investments not attract anywhere near as much capital as oil, gas and clean energy? Note that barely 2-3% of cleantech venture funding goes to water startups, and that too is subject to sharp drops during recessions. Similarly, when compared to the oil industry, there is barely much visibility of the water industry amongst most (retail) investors.