Kiyan Zandiyeh of Sturgeon Capital discusses the macroeconomic profile and market opportunity in South Asia ex-India.
Insight
Zandiyeh: Tech startups face lower expropriation risk than frontier industrial assets
“The difference is that you have a tangible asset that it relatively is operationally simple to run. There's a positive correlation between the success of it and the willingness of the government to ultimately want to take it off you at some point in time, beca…”
Opinion
Zandiyeh: VC fixation on product-market fit ignores underlying business economics
“For many years now, what I think has been a disservice to the venture industry is this concept of product market fit. What it effectively has entailed from an investment strategy perspective is that when a company reaches or sees some level of demand, Irrespec…”
Assertion Not checkable as stated
Zandiyeh: Major fashion brands quadruple volume with Bangladeshi portfolio startup within year one
“Now, in this case, and specifically, the company has already the relationships of the likes of the Inditex, the H&Ms, the large brands of the world, where what we see is basically in the first year, as soon as these brands start working with them, they almost …”
Assertion Contradicted
Zandiyeh: Average upper-quartile venture capital DPI is only 1.76
“I think it explains why the average upper quartile DPI is 1.76. The fund sizes cannot even cope with generating that much enterprise value.”
Assertion Partly supported
Zandiyeh: Bangladesh has 170M people, 8th largest smartphone base, only 2 VCs
“So you take a country like Bangladesh, hundred and seventy million people, eighth largest smartphone user base in the world. As I said, GDP per capita higher than India. You only have two VCs in the whole country.”
Assertion Partly supported
Zandiyeh: Uzbek banks ignore SMEs despite driving 60% of GDP
“If you look at the banking sector, effectively, 80% of that banking sector only does corporate and government lending. There's no real retail banking. There's no real banking to small to mid-sized businesses. Small to mid-sized businesses are about 60% of the …”