Sriram Krishnamoorthy

Commoditization of AI models Yesterday evening I had the pleasure of watching Aravind Srinivas' (founder of Perplexity) interview with Aarthi Ramamurthy and Sriram Krishnan . It's a great interview and I would recommend AI founders to watch it if possible. https://lnkd.in/gnM2NeS8 Couple of things that stuck me from the interview: 1. Aravind believes in the commoditization of AI models in the long run. His take his firms like Perplexity which focus on user problems and solve for it using relevant models will win. Perplexity does it quite well, do check them out if you haven't already. This is something that AI entrepreneurs should think about. Creating foundational models is freaking expensive! and for conservative capital allocators like us it is too risky a bet (not betting on AI is even riskier 😅, I guess we need to learn more) I am going to tag the platform Guru and distinguished IIMB alumnus Sangeet Paul Choudary for his take on this. 2. The initial employees (5-10) have to be truth seekers rather than social affirmers(?) It was great hearing him talk about the culture at Perplexity of seeking the truth through open conversations and arguments on Slack rather than provide positive affirmation. I think it's something that every founder should strive for. Truth will prevail in the longer run. This works in technology, finance, politics, society, anywhere. (Satyamev Jayate is true in itself!) But to be able to have an open conversation, the founders need to have depth themselves. This is something that I feel the Indian ecosystem lacks, as most of the founders seem to be managerial in nature. I find them shifting to jargons rather than simplicity when questioned deeper. (By the way this is a classic test to check whether someone really knows it, people who know what they are talking about will make it simpler, those who don't take the cover of jargons to increase complexity and portray intelligence) I understand my analysis could be biased due to self-selection, and I would love to be proven wrong. It's pretty cool that Aravind chose Larry Page as his favourite entrepreneur due to their common background of coming from academic research to entrepreneurship. What I definitely don't agree with Aravind on The idea that luck doesn't play a role in outcomes. Successful people generally attribute success to their hard work/smartness / enterprise without understanding their privilege. For e.g. A smarter/more hardworking/more enterprising Dalit girl from Bihar will never have the kind of opportunities that I had as a Tam Bram born in a lower-middle class but very well educated family in Chennai. One has tried to solve for it using our Sakhi Scholars programme, which supports gifted girls from underprivileged communities to achieve their dream through financial support. On a lighter note, Aravind is a 2017 IIT-M alum and has already built a $8 billion company, what the hell am I doing with my life? 🤔

1

1 Comment

If you doubted the rise of India as a powerhouse, Pine Labs, a significant fintech player, is now relocating its headquarters from Singapore to India following approval from a Singapore court. This strategic shift mirrors other successful Indian startups like PhonePe, Razorpay, and Groww, embracing the trend of ‘reverse flipping’. The move signifies growing confidence in the Indian market and its potential. Key factors enabling this move include: - Favorable economic policies - Growing domestic market - Increasing investor confidence - Greater certainty of an exit at a higher valuation - Ease of accessing capital - Regulatory changes - Maturing capital markets - Cost-effective listing process All great signs for India! #India #Fintech #PineLabs #Startups #BusinessGrowth

91

2 Comments

Like to order deliveries from the comfort of your own home? Zepto's recent $665 million funding will now allow the company to set up even more store across India to serve you better. Read all about it only in my new article at Entrepreneur India. . . . Follow and connect for more industry news and updates . . . #News #Update #Zepto #Funding #Investment #EntrepreneurIndia #AdityaPranMahanta https://lnkd.in/gYvATrUE

1

Rebalance is India's first angel community that's 51% women with 27 investments across fintech, biotech, consumer, drones, Gen AI, deeptech healthcare, climate, energy, edtech and more. 🔥 Aishwarya is hosting a limited-seating, candid chat for women who invest in startups (would like to invest with Rebalance) and for women who want to learn about startup investing. No question is too trivial or small, this is a safe space to ask anything about startup investing! When: 26 May 2024 [Sunday] Where: Somewhere in Delhi ☕ Timings: 4:30 pm - 6:30 pm 2 days to go!! RSVP here: https://shorturl.at/EoYLN If you're already an investor or not based in Delhi/Gurgaon - you can directly sign up here to be part of the investing community: https://lnkd.in/g7taCdkc

44

4 Comments

Indian venture market has exploded. Someone reported that there are 800+ funds/networks/syndicates/ accelerators active in Indian venture market now. Not sure, if that number is correct but if you are an early stage tech founder on your fundraise journey, chances are, you would meet hundreds of people. While majority of the fund houses are doing incredible work and shaping the ecosystem. There are certain kinds of investors you need to identify & avoid to save time and stay focused: Sharing from my personal experience, top 5 such cohorts to avoid and the takeaways for the founders: 1. Data collectors: At early stage, you don't have historical data to present. Your projections are just that, Projections. I wasted one whole week discussing with a prospective angel investor on why the CLTV to CAC ratio is x, and not y. Takeaway: Discuss high level strategic numbers only without going into the details. None of the projections would be accurate anyway when rubber hits the road. 2. Document collectors: Met few folks, who would watch from the fences and ask for n number of documents, data rooms, statements without sharing the purpose of the ask or even revealing their investment intent. Takeaway: It is supposed to be a bi-directional conversation. Say 'no' often, till the time, an official relationship is established. 3. Valuer (! investor): At early stage, valuation is a function of multiple parameters, the opportunity itself, the team, or anything else except steady cash flows, because you don't have much. I wasted another week with a prospective investor trying to justify valuation, had to shut down that conversation, after both of us started quoting Aswath Damodaran and his valuation principles. Takeaway: Too much content on the internet for both parties anyway. Shouldn't be a bone of contention at early stages. 4. Facilitators posing as investors: Met numerous people, who would go to any lengths to pose themselves as serious investors, even buying paid media articles. Only to reveal at the last: The success fee. Takeaway: Avoid facilitators until Series A 5. Brokers posing as market makers: People posing as market makers sharing tons of gyaan on LinkedIn but are actually deal brokers looking to make quick %. Personal experience: Two rounds of conversation happened and then out of blue, they added a third party in the mail trail, someone who facilitates mergers & acquisitions. There wasn't even a single instance in the past conversations where we indicated any such intent. Takeaway: Avoid name & shame in public but at least share within founder communities. #venture #fundraise #startups #investing

18

Celebrating One Year at Elev8 Venture Partners! What started as humble beginnings at co-working spaces like Axilor and WeWork, has finally culminated into our second home at Elev8 VP. Exactly one year ago, we inaugurated our new office on 12th Main in Indiranagar, marking a significant milestone in our journey. Initially, I was hesitant about large offices or high rentals, especially on the high street. However, thanks to Dr. Apoorva Ranjan Sharma, Anuj Golecha, and Gaurav Jain, Anil G Jain, we took the plunge. We secured an office space that was more than I initially thought we could afford. Today, I can confidently say it was one of the best decisions for Elev8 Venture Partners. In the world of venture capital, office location and décor surprisingly play a crucial role, especially for a first-time fund. It's not about extravagance or lavish spending but about creating a welcoming, professional environment. Our beautifully done office, complete with lush plants, has greatly contributed to building a positive external perception. This perception & vibe, is our reality. Home is not built by bricks but by memories. Over the past year, we've made incredible strides. Our investments in IDfy and Astrotalk have been pivotal, marking the beginning of our journey to support high-quality tech companies at the growth stage. This journey wouldn’t have been possible without my incredible team, whose dedication and hard work have turned our office into a second home. Here’s to many more years of growth, innovation, and impactful investments. Thank you to everyone who has been part of this journey with Elev8 Venture Partners. #Elev8VP #Anniversary #VentureCapital #Investment #TechStartups #GrowthStage #Teamwork #Innovation #Success Divy Chopda, Ashwini Khemka, Aman Ahmed, Abhisekh Shah, Parth Doshi, Mayank Jajoo, Komal Vichoor, Zaveria Mohammad, Mitali Rai, Eric (Jung Ho) Yoo, Donghyun Kim

510

48 Comments

💲💲 If you are a D2C Consumer Brand Startup you should know this VC that invests in pre-revenue stage Startups! 💰 VC Background: Meet Sauce VC a Cat II VC that launched their first fund in 2019 with a modest corpus of INR 60 Cr and since then launched 3 more funds and made 33 investments. Their recent INR 365 cr Fund launched in Aug'24 plans to invest in 20-25 consumer brands. They pick 6-7 selective investments annually out of 3000+ deck they get. However, their Fund I has a success rate of 50% (not a bad idea to invest in the fund if you are a UHNI). Infact their Fund IV was oversubscribed 3 times. 💰Notable Investments: Mokobora, Hocco Ice cream, Supertails, Innovist, The Whole Truth etc 💰Stage at which they invest: They invest even at pre-revenue stage to early traction stages. Ideally this VC invests at pre-seed to Series A. 💰What do they look for: Taking call at pre-revenue stage is really tough, especially in Consumer Brand segment. Hence, they look for founders who have deep experience in the segment either by the family background or by the founder's professional background. However, if the founder is not well-versed with the D2C game, they are cool with it. But the founder should know the segment, scope for new brands and plan to differentiate the brand. 💰Ideal cheque size: $ 1 Mn. But can go up to $ 5 Mn. 💰Investment Style: Sauce VC prefers working along with the founders to ensure the success of the Startup. They lead the rounds at pre-seed and Series A stages. Once the Startup is into Series B, they take a back seat and only participate in the following rounds. 💡 Hope this helps. Share it with some great founder of a consumer brand who is at early stages and needs to know this. If you want a warm-introduction, DM me or let me know in the comments. Bhavesh K Jatania Raunaq JaisinghaniAshish SharmaMohit Kanjwani

43

8 Comments

There’s one bias that I see almost all potential founders around me fall prey to: The Consumer Product Idea Bias. As founders, we are often biased to look for problems with products around us. We screen problems that are visible, quite literally, on the consumer end and overlook what’s behind the scenes. This restricts us to solve for problems using end-user products or apps only. ⭐️⭐️✅ Problems are everywhere. Sometimes biggest problems lie in the supply chain, financing, manufacturing, aggregating, which is largely invisible in our everyday lives. 👉This is what I call “ The Consumer Product Idea Bias” ⭐️A super light and sleek professional camera sounds great and glamorous for an entrepreneur to launch. However, a camera for waste segregation, automated traffic light optimisation based on traffic, thermal imaging, flood alarming, etc. is just as useful 🎥🎥 Let’s think beyond💫💫☄️ 🤔 Why do I have to boil milk if it has already been pasteurised? Is there a problem with the cold chain? 🤔What if the shoes I just ordered online turn out to be fake? 🤔Why do I need to rely on informal credit lines or intermediaries to finance my inputs or inventory?👇👇 ➡️ Can the premium paid for sourcing (trader margin) be separated from the premium (interest cost) for working capital financing? All of the problem statements above are to do with supply chain and not the end product itself. Let’s think of solutions: Maybe I can make a reliable cold chain which customers can trust. If my seal is on the packet, you can trust it. Or I can make a system which enables verification of authenticity throughout the channel. If you see an iceberg, think of what’s underneath. Everyone can see the iceberg; only a few can imagine the unobvious Some examples: OfBusiness is streamlining raw material procurement and providing easy cash flow financing for buying these raw materials 🏦🏭🏭 WayCool Foods is making an integrated cold chain for agro products 🧊🧊 And there are many more such examples. There are many more such problems too. So dive under the iceberg, find your niche, and set an example, just like the ones above 🚀🚀 #startups #venturecapital #india

10

1 Comment

Many critics and casual observers have been vocal about their concerns regarding the Indian tech ecosystem and recent IPOs. Currently, tech excluding ITES forms a very small portion of our $4 trillion stock market. While some of the criticism is valid, having a myopic view of the future of new-age tech companies and their contribution to a developed India overlooks the fact that if India is to become a developed economy by 2047, tech will be one of the biggest contributors. This is akin to missing the forest for the trees. Despite a few lackluster IPOs, the future of tech is bright, and this sector will be the shining star that lifts the nation and brings us closer to our goal of a $30 trillion economy. In this blog, Utkarsh Pande analyzes the dilemma of the IPO question for Indian startups and attempts to answer it. While the tech sector currently holds a small market share, its broader contributions to the national ecosystem, especially in areas like AI and skill development, underscore its critical importance. By understanding these nuances, we can better appreciate the sector's true value and its role in shaping a prosperous future for India. https://lnkd.in/d9sQMasQ

14

Portfolio for 2050 I am building a new portfolio from scratch. I will allocate mostly in India specific index funds, select midcap, smallcap and maybe 2-3 startups ( if I can find good ones, never easy unfortunately ...). I would like to create the portfolio in say 5 years. By 2050 I would like to grow > 50x. When we create portfolios from scratch we would like fresh ideas. Anyone with suggestions? Thank you Arnab #investor #portfolio #equities #capitalmarket #stocks #nifty #sensex

3

In startup ecosystem, fundings are very common and exits are very very rare. If founders have a chance of funding v/s exit - they should optimise for what's rare and not what is common. Running a business everyday also means surviving everyday. On somedays, exits make sense for founders. Cash in bank v/s valuation on paper is what it comes down. Yes - there will always be a VC who advices you to take money and build a long-lasting company; remember that VC is optimising for their funds markups and returns, as founder you should optimise what works for you and your team! Founders, be selfish. VCs anyway are!

196

8 Comments

Last month, Ram and I participated in a one-of-a-kind 10km run. It wasn't the run but the organizers who made it special. Every year, Runner's High conducts ‘Ananda Yana’ - a 10 km run that aims to promote fitness with zero environmental impact. Why was it special? - Funds were raised to support charitable causes. - No additional infrastructure was made, such as expo centers; Instead, bibs were collected at existing offices - Bibs were handwritten on cloth and collected back after the race - Runners could drink from reusable steel glasses, instead of plastic - Post-race, breakfast was served on eco-friendly plates - Each medal was handmade from sustainable materials It was entirely set up by a group of passionate and cheerful volunteers. Why was this event a success? Because the message stuck with us - ‘Every small step counts towards a sustainable future’. Studies indicate that 90% of Indians today are vulnerable to climate change. At these hard times, here’s a community event carrying messages of sustainability, along with raising funds for a cause! The best thing about Ananda Yana is that they are already training children as young as 4. Have you participated in events that follow sustainability practices? If so, what was your experience, and how has it helped your community? Share in the comments below.

225

13 Comments

Great to see Account Aggregator entering general conversations. UPI moment for financial data is here. See the magic - https://lnkd.in/dMgieE2G https://lnkd.in/gcRUpQat (clip from Nikhil Kamath’s latest podcast episode with Nandan Nilekani) DigiSahamati Foundation #accountaggregator #personalfinance

79

Someone from a Tier 1 Indian VC told me a couple of weeks ago that their 10-year-old fund has a total paper return (illiquid) of ~3x. That happens to be exactly the same return as the Sensex over the past decade.* And an ETF tracking the Sensex is liquid, marked to market daily, and has lower costs. VC funds raised mega-funds of $200M+ on the India story during 2010 to 2020. Most of them are now unable to deliver the promised returns to their investors, which are usually 4-6x on the total sum invested. Contrast this with disciplined domestic funds like Blume and Sauce who did not succumb to the temptation of raising mega-funds to earn more management fees - even as they grew more successful. It’s easier to return funds when they are smaller—but you have to be willing to accept lower salaries and management fees as VCs. Blume’s founder Karthik illustrates this perfectly with a graph of his salary over time below. :) * Another metric to measure returns is IRR which takes into account when the money was actually invested investments. VCs don’t take all the committed money from LPs upfront; rather it’s in installments over time.

59

1 Comment

【India Startup × Corporate Co-Creation Case ①: Softbank (PayPay) & Paytm】 Have you ever imagined that in 2023, a staggering 63 million registered users —60% of Japan's adult population— are using Paytm's technology under the name PayPay? At lease, most of Japanese use them everyday without knowing this fact. SoftBank and Yahoo Japan JV Launched “PayPay” in 2018, in Collaboration with India's Paytm and disrupted Japanese cash (bank notes and coins) culture, which was still the mainstream payment methodology, remaining at 80%.. This is an unprecedented example of reverse innovation, showcasing how Indian technology is making waves globally. Japan’s SoftBank has invested $11Bn in Indian startups from November 2018, through SoftBank Investment Advisers. This has been in renowned names such as Paytm, Delhivery, Lenskart, Meesho, PolicyBazaar, OfBusiness, and others. Moreover it has already recorded exits of about $6.2Bn over the past 5 years, with 4 IPOs (including Paytm) in 2023 itself and 3 new IPOs - Swiggy, FirstCry, and Ola, geared for 2024. One of its marquee investments was in Paytm with a cumulative investment of $1.4Bn in 2017. In a statement issued in early 2018, SoftBank also held a sizable stake in Yahoo! Japan, which ran its own Yahoo! Japan wallet even during 2018. However, at that time, the smartphone payment settlement service involved the user showing a barcode to the store staff, who then proceeded to scan the code, requiring a handheld barcode reader in the store. This is where SoftBank, which has been continuously leveraging its global late-stage tech investments, came in with a technological partnership with its portfolio company Paytm. The partnership with a portfolio company that SoftBank had been working with for some time, and knew from the inside out alleviated the risk it was bearing by relying on Paytm for the tech-stack. Together, the three companies developed PayPay, a payment platform which allowed users to scan QR codes in shops to make payments. The team which comprised of members from India, Japan, and Canada, launched the product in 3 months from the ideation to the launch! There is a common saying in India - ‘If you can drive in India, you can drive anywhere in the world’. This is because India’s roads are challenging and dynamic to say the least. Similarly, PayPay leveraged Paytm’s reliable digital and security infrastructure, which had been battle-tested in the challenging digital landscape of India. It showed how technology that can survive in India, can survive anywhere in the world! Continue to read from here: https://lnkd.in/gtnC95Rq #Softbank #PayPay #Paytm Alex Lin Akul Jindal, CFA Priya Mohan Hemant Agarwal ソフトバンクグループ PayPay株式会社 PayPay India Yahoo Mohannad El-Khairy Saya I. Tushar Agarwal Joshua Soo Benny Tjia Koshu K. Milan Thakkar Tanmay Deshpande

22

1 Comment

When Karthik, Rohit, and I were laying down the foundation of PeerCapital, the most important question we asked was: “Why are we doing this?” The answer didn’t just appear out of thin air; it took work. The thing is you cannot invent your why. You cannot manufacture it. You only discover it by curiously observing what is dysfunctional in the world and how you can uniquely contribute to making it better. I meet tons of founders who often aren’t madly in love with the problem but are somewhat mildly convinced about solving it. But to play for the long haul, the calling must come from within. External motivation runs out. And that's where the why is important. Gravity wasn’t invented—it was discovered because someone dared to ask “why?” This led humanity to build foundations of advanced physics and engineering. Because innovation is an action, and ‘the why’ is the intention that drives the action. Some questions we asked ourselves that helped surface our why: • What’s a niche/industry/idea I cannot stop thinking about?  • How do I envision changing my world? Where can I contribute the most with my current skill set and passion?  • What are my key motivations in life?  • Which problem pushes me to enter my flow and makes me feel alive? How connected a founder is to their purpose is the most underrated success-determining factor. Dare to ask - “why?”

394

34 Comments