The managing director of the venture capital arm of Ontario Teachers’ Pension Plan, the US$183 billion Canadian pension fund, has singled out opportunities in India in the technology space.
“We need to do our homework properly and get to know people on the ground, but there are massive opportunities [from] the population growth and the digital transformation that is happening there. [They are] leaping some of the hurdles that we had [in the west] because the tech is there,” Avid Larizadeh Duggan, senior managing director of Teachers’ Venture Growth (TVG), part of the Ontario Teachers’ Pension Plan (OTPP), said speaking at the Financial Times Weekend Festival in London on 2 September.
TVG, which was launched in 2019 by OTPP, is looking carefully at investment opportunities in the country, she said.
TVG opened an office in Mumbai in September 2022
Asked for investment tips by a member of the audience, Larizadeh Duggan, pointed to “companies that deal with the infrastructure around data” in public and private markets across the world.
“There’s this proliferation of data, you need to store it [more cheaply] … it’s quite expensive, in Amazon [Amazon Web Services], to hold data and to constantly pull on it. What are the technologies, the new paradigms that allow you to do that in a more efficient way?” she said, adding that companies that supported the transition of artificial intelligence (AI) into the cloud would also be important.
Data processing is also important, she added.
Larizadeh Duggan detailed her investment approach – which applied across all sectors, she said – highlighting the team, the impact of a product and its potential market.
“You want to invest in people and products solving difficult problems,” she said.
“Who are the entrepreneurs? Are they resilient enough to go through the ups and downs of creating a company. Are they operating in a very large market where I believe in the future that will continue growing - in this case, the explosion of data – and what role they play. Then, is there a moat they can build – maybe it’s not there but it will be in the future,” she added.
“This is the same across everything, whether it’s AI, whether it’s climate – in climate, the barriers to entry are much higher; in AI, they are a bit higher today but they are coming down,” Larizadeh Duggan said.
She also emphasised the appeal of the current environment in California’s Silicon Valley, which was been driven by companies connected with processing and analysing data, including those in the fast-growing AI sector.
She said on a recent visit, she was struck by the optimism, energy and level of interaction between entrepreneurs, investors academics and corporates, comparing Silicon Valley today with the period of the late 1990s-early 2000s during the first internet boom.
“The excitement behind it and the belief that anything is possible … with everyone actually helping each other … It’s the first time since then that I have truly felt that energy in terms of what’s happening with AI, with data and the tools around it,” she said.
Larizadeh Duggan saids that the development of AI is at “the beginning of the beginning”, noting that large language models (LLMs) or generative AI provided “building blocks that work in some cases” but not in others, and that much more research was needed to create more breakthroughs.
The applications of AI, including large language models were at an early stage, however, and winners could take year to emerge, she cautioned.
“The question is: what are you going to use it for today,” she said, pointing to early applications in increasing productivity. “It’s really good at productivity because you control it, it’s not playing in a deterministic outcome, it’s helping you become more productive,” she noted.