Three year almost to the day after launching Surge, Sequoia Capital India is today unveiling the sixth cohort of its scale-up program for startups based in India and the wider Asia Pacific region. The program will feature 20 new technology-enabled start-ups from across the region, ranging from a Bangladeshi educationalist to an agriculture specialist in India.
“This region is booming,” says Rajan Anandan, managing director of both Surge and Sequoia India. “The base of innovation just continues to accelerate and the quality of our entrepreneurs keeps improving.”
It is what Sequoia hoped to see when it first launched Surge in 2019. “We were determined to address some of the constraints that were holding Indian entrepreneurs back,” Anandan recalls. “In particular, it was very difficult for early-stage start-up businesses to raise meaningful amounts of capital, so founders were spending all their time fund-raising, and there was a real shortage of the type of mentoring those founders needed.”
Anandan and his colleagues could see the potential of start-ups in the region, but were frustrated so many of them did not seem to be achieving what was possible because of these issues. Surge was launched to close some of the gaps.
Businesses securing access to the programme typically receive investment of $1m-$2m directly from Sequoia – and often funding from co-investors. This gives founders the runway they need to concentrate on scaling the business to the stage where it is ready to raise Series A finance.
In addition, each Surge participant gets direct mentoring from Sequoia’s network of established entrepreneurs. They take part in a 16-week training and development course designed to build the skills and knowledge required to move from start-up to successful scale-up business. Advice and support is also available from the community of start-ups in the program – and those that have already been through it.
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The recipe has proved remarkably successful. Including the cohort announced today, Surge has supported 246 founders at 112 start-ups across 15 sectors. Many former cohort members have already gone on to raise additional funding, with 45 companies from the first four groups of participants having unveiled support.
Sequoia actively supports those fund-raisings with bi-annual “Upsurge” initiatives, through which it introduces firms to prolific Series A investors.
Competition to get into Surge is tough – Anandan says the program has now run its slide rule over more than 10,000 potential entrants. “We’re effectively working with the very best of the start-ups in our region,” he says. “We invest in less than 1% of these businesses, though we are also committed to supporting entrepreneurship more widely and we publish a great deal of content and advice.”
This year’s entrants have a great deal to live up to, but the evolution of the Surge cohorts tells its own tale of how entrepreneurship across the Asia Pacific region is evolving at pace.
“This is the most geographically dispersed portfolio of companies we’ve picked so far,” Anandan says. It includes Surge’s first Malaysian company, as well as the first constituents from Thailand and Taiwan.
“Another striking feature of the cohort is how many of them are building a business aimed at the whole world, rather than just their home market,” Anandan adds. “These companies are born global.” At least 13 of the 20 companies picked this year can be described in this way.
In part, that reflects the large number of software-as-a-service businesses that have made this year’s selection. The SaaS business model effectively enables a company to sell in any market where the problem it solves is relevant.
That is part of the selection process, explains Anandan. “We’re looking for awesome founders who are solving a genuine problem,” he says. “But that problem also has to be large enough.”
India’s Aggromalin is one good example. It has built a technology platform with the potential to help millions of farmers diversify into animal husbandry and aquaculture in order to increase their income. Australia’s Checkbox is another: its no-code automation platform enables business users to develop their own tools and software using intuitive drag and drop techniques.
Not every cohort member will achieve its ambitions, Anandan concedes – that is the nature of backing start-ups. But with access to Sequoia’s capital, and a broader range of support services, their chances should improve. “It’s all about equipping founders with the ability they need to make the right decisions at an early stage – and ultimately improving the odds of their success.”
The full detail of Surge’s cohort members can be found here.