GGV Capital remains bullish on India despite a short-term inflation in asset value here compared to other markets, the venture capital firm’s Silicon Valley-based investor Hans Tung told ET in an exclusive interaction.
Tung is in third spot in the latest Forbes Midas list and has 18 unicorns under his belt globally.
This acceleration in valuation, about 12-18 months ahead of time, is due to the increased availability of liquidity chasing a limited number of companies that are typically market leaders in a sector, ET reported on August 17.
A record 25 startups have become unicorns this year so far, while the total capital raised by Indian startups stood at $21.2 billion across 627 deals as of September 3, according to industry data tracking platform Venture Intelligence.
“You do see that there is a bit of hot money chasing these deals. So, short term, you can argue that asset value is higher in India on a relative basis compared to other countries,” Tung, managing partner at the fund, said.
“When you have revenue at about $10 million to $20 million, the asset value could be anywhere between half a billion and $1 billion, which is a lot higher than what you've seen in other places. But because India has such a good potential, over time, companies can grow into those valuation beyond,” he said, adding that inflation was not necessarily a bad thing in the current scenario.
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