Sequoia heats up early-stage startup investments in India and Southeast Asia

On a recent winter morning in New Delhi, Rajan Anandan and Pieter Kemps were pacing the floor of a five-star hotel, quizzing a group of over two dozen young startup founders about their goals. One founder set eyes on getting the most downloads in the mobile gaming category. Another pledged to reach an annual recurring revenue of $100 million in a few years.

“When you think about how big you want to get, don’t think about $100 million or $200 million in revenue,” Anandan told the gathering, now fully silent.

“Doesn't matter what company you’re building; that’s not thinking big enough at all. There’s no enduring company on the planet that is a $100 million revenue company. An enduring company is one that generates $100 million in free cash flow a week,” he said.

The Sequoia India and SEA partners spent the next two hours walking founders through a dozen slides, emphasizing that consistent growth over a long period of time -- even if not skyrocketing quarter over quarter -- can conjure trillion-dollar companies.

Undergirding their strong conviction is a bet that India and Indonesia and other markets in South Asia will double and triple their GDPs in the next 10 to 15 years, and the public markets and tech companies stand to take a significantly broader role in that surge.

The combined market cap of top-five tech companies in the U.S. is over $7 trillion, contributing to over a quarter of the nation’s GDP. The top five tech firms in China, with a market cap of over $1 trillion, contribute 7% to the nation’s GDP. But top five tech companies in India and Southeast Asia have a market cap of just $140 billion, accounting for only 2% of their GDPs.

The 12 startups gathered in the presentation hall had been hand-picked from about 3,600 applicants for the latest cohort of Sequoia’s four-year-old early-stage-focused Surge program. Surge launches two cohorts every year, featuring between 10 and 20 startups each.

The new cohort features startups operating in a wide-ranging space: Calyx Global is helping businesses choose better carbon credits and reimagining the ratings system; Arintra is an AI-powered autonomous medical coding platform to help U.S. hospitals get paid better and faster by automating their insurance claims submission; Meragi is making it easier for couples to access wedding-related services; Vaaree is a curated marketplace for high-quality home products; AltWorld is building a metaverse gaming platform to help Gen Z gamers create custom 3D worlds; and Bifrost is building virtual worlds and synthetic datasets that AI teams can use to train their models for applications.

Diri Care offers on-demand, affordable products and services for a range of health and beauty needs; Masterchow wants to help people prepare Asian meals at home; Metastable Materials is attempting to pioneer a low-cost, clean and highly scalable method of recycling lithium-ion batteries; RedBrick AI is a SaaS platform to help companies build medical imaging AI; Requestly wants to help developers and quality-assurance engineers test and debug web applications in real time; and Tentang Anak is building a parenting ecosystem in Indonesia.

The sessions on a Thursday morning, attended by TechCrunch, were among a few dozen that these founders will take part in over the coming months as Sequoia partners walk them through different aspects of building a startup. Workshops will teach founders about how to think about the total addressable market. They will be given guidance on piecing together their tech architecture. Another will help them build mental models for when to switch from chasing growth to improving unit economics. And there is also a session to help founders pencil the vision and tagline for their firms. (In a few words, explain the problem you're solving and how you're solving it, and don't make things sound boring, off-brand or long.)

Sequoia has “codified” its learning from over 50 years to assess the areas where a founder needs help in their journey and the roadblocks they will likely encounter, said Anandan in an interview. The storied firm’s vast resources — there are about 30 people who work diligently with these founders for months, offering them help in scores of areas — set it apart from its rivals in India even in the early-stage of venture. There are very few venture firms operating in India that have such a large team at all, let alone for one of the focus areas.