Sumir Chadha has been literally going up the investing curve. Kicking off his investing career with Goldman Sachs, the capitalist in him quit that highly lucrative and cushy job to co-found his own India-focused venture fund called WestBridge Capital in 2000. Chadha and his partners grew the fund before it merged with Sequoia Capital in 2006. In early 2011 he spun off from Sequoia to reboot WestBridge but this time with a bigger canvas in mind. Having been there, done that in venture investing, if there was one notable takeaway for Chadha, it was that as a startup you got to play for scale.
Taking that lesson to heart, Chadha took the conscious choice to deep-dive into the bigger public market instead of ventures in the private space. WestBridge now manages about $1.5 billion, and has created an enviable mid-cap investing track record. Interestingly, despite having cut his teeth in technology and being based in Silicon Valley, Chadha is averse to investing in tech for reasons he explains to us when we meet him at his office at 400 South, the tallest building in San Mateo.
After moving out of Sequoia Capital, you rebooted WestBridge in 2011. At that point of time, one of the things you mentioned was that the PIPE [private investment in public equity] opportunity seemed to be quite bigger. Was it driven by the market condition then or was the underlying thought different?
It was driven by a couple of things. First and foremost, in investing you also want to focus on a big market. India has a huge number of listed companies — over 4,000 — which means there is a massive opportunity to find good stocks. In other countries you don’t find this — in Brazil, there may be 500 listed companies, in Indonesia, it’s a couple of hundred. In India, for historical reasons, it is easy to get listed and we don’t have Sarbanes-Oxley and all that stuff that inhibits promoters from coming to the public market, like in the US.
We like to focus on high quality mid-caps and there are a lot of them in India. Second, the Indian market is highly volatile. So, if you are a patient lon