June 2025 | Athera's Odyssey: Landmark Moments in Indian VC
Understanding the origins, evolution, and growth of Indian venture capital
Odyssey readers,
For many months, we’ve covered several industries at the intersection of technology and venture capital. We’ve explored the insides of classrooms to the frontiers of space, the health of our bodies and the complexities of Indian commutes.
Now, we’re stepping back. Instead of looking at industries that VCs invest in, we want to chart the evolution of Indian venture capital, looking at landmark moments that saw it become the force it is now.
In this issue, we bring you
A conversation with Prof. Sabarinathan G., Nitin Deshmukh, and Parag Dhol, three investors from TDICI, India’s first VC firm
An in-depth interview with Parag Dhol, on the maturation of Indian venture capital in the mid-2000s, and the entry of US firms in this ecosystem
The perspectives of two entrepreneur-turned-VCs, Gagan Goyal and Rutvik Doshi, on their experience switching sides of the cap table
The dawn of a revolution
Into uncharted territory
When Prof. Sabarinathan G., Nitin Deshmukh, and Parag Dhol joined the Technology Development and Information Company of India (TDICI), they were witnessing a landmark change in Indian entrepreneurship.
TDICI, a joint venture between ICICI Limited and Unit Trust of India (UTI) was India’s first venture capital (VC) fund. Established in 1988, the firm was born just before the economic churn of India’s liberalisation.
There was little precedent for what they were doing. “The only thing I knew about VC was the definition in management textbooks,” Nitin Deshmukh remarks. “Only after joining I started exploring India, finding emerging sectors and opportunities.”
Prof. Sabarinathan was apprehensive in these years. “I worked with P. Sudarshan (TDICI’s President) and Kiran Nadkarni (a TDICI founding executive). We all felt liberalisation brought freedom for business and control over our destinies,” he recalled, “but worried how it would affect our existing investments. There weren't any parallels from other countries we could learn from.”
Parag Dhol says he was part of the batch of liberalisation – he studied at IIM from 1991 to 1993 – and on joining Prof. Sabarinathan’s team at TDICI, saw companies like Transmatic Systems, Armaan Electric, and VXL Instruments lose their monopoly over the Indian market to international competition. “Taiwan manufactured keyboards at 1/3rd the cost, and we couldn’t compete!” he remarks.
Forced to accept sunk costs for some early investments, they waded into unknown waters.
International competition wasn’t their sole challenger. As the pioneers of venture capital, they faced heavy suspicion from bureaucrats who doubted their models and intentions.
“Many thought VC funds were money laundering fronts,” Prof. Sabarinathan says. “The only exception was PJ Nayak – later Axis Bank Chairman – who thought they could be a force for good and tried freeing them up.”
In these early years, and in the face of great uncertainty, all three credit one man with propelling India’s fledgling VC ecosystem forward – Narayanan Vaghul, the former Chairman and Managing Director of ICICI.
“That man was remarkable,” Deshmukh says with a smile. “Unlike other Banks and Development Financial Institution CEO’s at that time, Mr Vaghul was futuristic . To set up CRISIL (a credit rating institution), TDICI, a venture capital institution and SCICI, a shipping finance institution – these were radical things.”
“He included “Technology Development” and “Information” in TDICI’s name to emulate what was being done in Silicon Valley and the USA’s scientific institutions. That’s why he got P. Sudarshan, from ISRO (Indian Space Research Organisation) on board as President – to steer funding startups from scientific institutions.”
Though bureaucrats may have seen VC unfavourably, they respected Mr. Vaghul. “He became a public sector bank’s Executive Director at a very young age – unthinkable in those days – and walked away at the prime of his career over disagreements with Delhi’s leadership,” Prof. Sabari adds.
“He had the highest raw IQ I’ve known and was quite wily as well. He released ICICI from the clutches of the bureaucracy by diluting government shareholdings through a rights issue and got UTI to subscribe. He also got UTI to lend their tax-exempt status, giving us a tremendous advantage as well as respectability, because we could promote ourselves as a UTI scheme. He knew the system’s boundaries and how to push them.”
“Venture capital was his gift to India, and it was a pleasure for a young guy like me to see him operate,” Dhol added, fondly.
A tough sell
“My first deal was actually a Rs. 5 lakh investment in Biocon,” Prof. Sabarinathan recalls. “We met Kiran Mazumdar Shaw – then just Kiran Mazumdar – at Taj Residency. You could see she was an extraordinary lady with a lot of character, putting a lot on the line. But I didn’t know then what Biocon would become. I was still figuring this space out, and thought it was an exciting space to work in.”
In this infant industry, investors learned on the job. Skill requirements were unclear, so the firm sought curious people with eclectic reading habits and a desire for continuous learning.
“My interview with Sudarshan and Nadkarni turned into a quiz, because Sudarshan was a quiz master,” Deshmukh laughs. “I was asked who discovered penicillin, and other questions about inventions, because of my research background. Luckily, I knew enough to pass his test.”
“I was given a Dosa King case study for preparation, and we went back and forth on it during the interview,” Parag recounts. “That was quite original back then.”
Prof. Sabarinathan admits to limitations in what they looked for. “We hired people who knew the techniques of the business – making good spreadsheets and pricing calculations. But we didn’t search for original thinkers who truly understood the philosophy of business. The only one in our midst was Mr Vaghul.”
It wasn’t just investors who needed education, though. Venture capital was, after all, unknown in India – Dhol recalls being asked the interest they charged - so they often taught industry bodies and companies the intricacies of VC investments.
“While searching for innovation from scientific institutions, I went to IITs, the National Chemical Laboratory and other research institutions but couldn’t make headway,” Deshmukh mentions. “I used to land up in Pune, Baroda and other cities, looked through the hotel’s directory, booked a cab and knocked on companies’ doors. They didn’t grasp exchanging equity for capital, and thought VC was another cheap lending instrument.”
“We were under pressure, even with a small fund of Rs 20 crore,” Deshmukh continued. “Telling people to part with equity, that we’d exit at some point, it took years for them to digest. It was an extensive education process through local industry and management associations besides meeting companies repeatedly.
“For example, I regularly travelled on the overnight Vadodara express from Bombay to Baroda to meet Dilip Sanghvi of Sun Pharmaceuticals – but took from 1989 to 1992 to get the deal done.”
Over time, they found traction in manufacturing, pharmaceuticals. Retail, media and other import substitution opportunities . These were stable sectors, and risks were partially mitigated because they weren’t looking for cutting-edge companies.
“Most companies returned capital to us, several with significant multiples,” Deshmukh highlights. “TDICI specifically dominated pharma and led in IT services , investing in companies like Sun Pharmaceuticals, Intas Pharma, Gland Pharma, Neuland Laboratories, Fem Care Pharma , Advanced Enzymes, Morepen Labs, Vimta Labs, Lupin Biotech, and Bangalore Genei, among others. In IT services TDICI led investments in Kale Consultants, Mastek, Geometric Software, etc.”
In other sectors TDICI invested in companies like like Praj Industries, Temptation Foods, DCW Home Products – they made the first branded atta in India, Captain Cook – Jaysynth Dyechem, Diamond Dyechem, Crest Animation, Peninsula Polymers, IM gears, Indian Container Leasing Company, Zicom Electronics, Rishabh Instruments, Datar Switchgear and also AFCONS-Pauling, the company that recently built the Chenab Bridge.”
“Whenever I see AFCONS, I feel that TDICI doesn’t get enough credit for what it did,” Prof. Sabarinathan interjects. “It was a ‘betting-the-company' kind of transaction – a crore rupees back then.”
The art of the deal
While it took time to convince entrepreneurs to part with equity, the deals themselves were relatively straightforward.
“You knew everyone in this small ecosystem,” Dhol notes. “Sabari [Prof. Sabarinathan] instilled the discipline of due diligence in us and put us in touch with the right people for help. If I needed to understand processors, he got Janakiraman/Jani at Wipro to sit with me for 45 minutes.”
Detailed appraisals guided these deals. “ICICI’s project finance background gave us this rigour,” Deshmukh continued. We’d appraise right from land and building costs, site development costs, plant & machinery costs, going to minute details. Domain industry experts also advised us. But we didn’t outsource financial and legal diligence; that happened in-house. The final documents were max 30-pages long, not the 300-page agreements of today.”
Given VC’s American origins, investors learned from US firms’ practices. “We went to the US on internships, and one colleague followed their ways to the extent that he put his feet up on desks and bit into apples at lunch because US VC partners did that,” Prof. Sabarinathan recalls, jokingly.
“Following them, we later incorporated reference checks. ICICI never had provisions for evaluating promoters; even if they were crooks, you couldn’t factor that into your decision. But we had the luxury of doing so. If someone wasn’t up to scratch, couldn’t grow a business, or was cantankerous and couldn’t lead a team, we’d turn down transactions.”
Deals were small in those early days; their first fund was Rs. 20 crores, the second was Rs. 100 crores.
The third Fund , though, marked a turning point. At USD 50 million, it was the first to be expressed in dollars, not rupees - partly because it was in partnership with an American Company, the Trust Company of the West (TWC Group).
“It was down to a guy called Michael Sheldon, who thought measuring in rupees was like counting in moon beans,” Prof. Sabarinathan chuckled. “You could tell their limited familiarity with India – they once booked tickets to Bagdogra instead of Bangalore, serendipitously correcting their mistake just before travelling."
Through this TCW-ICICI Fund investments grew in scale. “We invested in Biocon, Syngene, Ajanta Pharma, Medicorp, Pantaloons, Shoppers Stop, Crossword, Trinethra, TV18, Aaj Tak, Miditech, and Pizza Corner,” Deshmukh recounts.
“Our biggest deal then was in Biocon at USD 4 million in 2000 – it was just a Rs. 40 crore company then, but at IPO our stake would have been worth almost $ 240 million. In general, TDICI dominated Pharma and IT Services, generating good returns.”
Dhol identifies several second-order effects of their early successes. “Objectively, companies like Praj Industries, Sun Pharmaceuticals, Biocon, AFCONS, Geometric Software, Intas Pharmaceuticals, Gland Pharma, Ajanta Pharma became huge. 13-14 of us stayed in the industry, starting other funds. It was also then that Udayan Sen of Deloitte, along with ICICI Venture, developed the valuation thoughts that we still use. Investment banking networks were also seeded thanks to ICICI Venture’s presence.”
“It’s why many feel that ICICI Venture deserves more respect. Unfortunately, because of our fascination with American names, most believe Indian VC started in 2005. That’s absolutely false. Without ICICI Venture, Indian VC might still have existed, but it would definitely be poorer, and far more Americanised,” he concludes.
An Ecosystem Matures
Conceptualising Inventus
Following his time at ICICI Venture and stints at GE Equity and Intel Capital, Parag Dhol joined Inventus India (now Athera Venture Partners) in 2008.
“The firm was conceptualised by Kanwal [Rekhi] & John [Dougery] in the US and Samir [Kumar] in India. Almost every US company that Kanwal & John invested in had an India office either for software development or as a BPO,” Dhol explains. “They realised that India and the US were joined at the hip, Hence they conceptualized Inventus, along with Samir, to invest in US companies with an Indian presence; and Indian companies serving Indian or US/overseas markets.”
Though almost 2 decades had passed since TDICI’s creation, Indian VC was still in its infancy. “There were 15-20 funds; everyone knew everyone. At each firm’s annual meeting, where they’d invite the larger VC ecosystem, I knew all firms and 90% of people. Today, I don’t know 60-70% of the crowd. At an event last Saturday, they counted 228 micro-VCs – one can’t keep track.”
“Back then,” he recalls, “maybe three law firms nationwide could draft venture capital agreements. Now, you have three in every Bangalore neighbourhood, along with specialised chartered accountants, valuation experts, and other support functions.”
In this environment, Inventus emerged with a clear priority - technology investing .
“Between 2000 to 2004, Airtel went from adding 250,000 new connections every month to 2-3 million,” Dhol recollects. “It was clear that mobile phones, and eventually the Internet, would be big. Some entrepreneurs spotted this – MakeMyTrip started in 1999, redBus in 2005. That’s when I’d say the VC took the quantum leap from being a cottage industry till then.”
Inventus had partners with tech. backgrounds and searched for enterprise tech (now SaaS) companies, investing in the likes of MoveInSync, and consumer tech companies, including redBus and PolicyBazaar. In Fund 3, they expanded to DeepTech, betting on companies like Pixxel, BluArmor, Euler etc.
“Funds became increasingly Bangalore-centric,” Dhol explains. “Delhi was a close second, especially for consumer-tech. like Zomato and PolicyBazaar. Mumbai focussed on private equity but had a brief VC blip with the so called ‘Powai Valley’. Chennai and Pune had some startups, but almost no VCs. It’s because Bangalore attracted tech. talent. You have to be here for DeepTech because of the government labs – if you needed to test in a thermal vacuum chamber, for instance, only ISRO and IISc. had that facility”
Understanding the entrepreneurs
By 2004/5, entrepreneurs were more comfortable trading equity for investment, though as first-time founders they were taken off guard by some parts of the term sheet. “They were surprised by things like anti-dilution clauses, or provisions for what happened to their equity in case they suffered disability for life through an unfortunate accident,” Dhol recalls.
Early on, most entrepreneurs were seasoned operators in their 40s, starting a venture after achieving seniority and financial stability at multinational tech. firms. “But by 2005, we saw Founders between 28-35, generally from tier 1 cities and colleges, who’d had brief stints in US companies operating in India. Phani [Phanindra Sama, redBus’ founder] was at Texas Instruments for three years, Sachin and Binny Bansal were both at Amazon.”
“But the understanding of entrepreneurship was still nascent in the larger society, by and large. We had to serve as reference for one of our Founders’ marriages, because the girl’s family didn’t trust that he could provide a stable life for their daughter!” he recounted with a laugh.
Cultural compromises
Inventus’ conceptualisation as an Indo-US fund was part of a larger trend – others like Kalaari, IDG/Chiratae, Helion and Nexus emerged at this time – as India became one of three countries that US funds looked to set-up in. The others were Israel (for its technological prowess) and China (as a manufacturing powerhouse and large market). India’s large pool of English speakers and strengths in IT services gave it a unique appeal.
With American investment came changes in culture and technique. “I firmly believe that investing is fairly contextual,” Dhol emphasises, “so things can’t work exactly the same here as in the US.”
“They found our speed of operation slow – a deal that took three weeks there took three months here. Things were cut and dry for them. Yet, many Indian founders were seeing term sheets for the first time, so it took us longer to work through things. We also needed to delve into people’s backgrounds, and education, more deeply than in the US.”
The pace also went beyond investment, to the management of portfolio companies. Dhol cites the example of team changes – “in the US, if you thought the company had the right product and market but wrong leadership to succeed, they’d call a board meeting and boom! - you’re out.”
“In India, you nudge people, take intermediate steps like bringing in external consultants. Only if that doesn’t work, you change the team. We’ve made one change across 43 companies; a US VC would likely have made 4-5 changes on a similar base.”
American investment culture was also far less tolerant of middling companies. “If an investment’s not succeeding, there’s a greater desire to get it out of the system. That’s why there are decent numbers of early 40-cents-to-the-dollar exits. That proactive monitoring didn’t exist in my time at ICICI, GE, or even Intel. It was perpetual money, anyway. In a VC fund structure (as opposed to corporate VC), as you need to close your fund and move on after 10 years, you treat every exit opportunity seriously.
He also mentioned US investors tendency to be swayed significantly by market sentiment. Yesterday’s news determined today’s investments. “With every crisis, you saw them withdraw,” he noted.
“We saw this in 2008. We were halfway through raising a $125 million dollar fund and did the first close in end-2007. There was hardly any movement between the first and the second close (a year later) as Lehman Brothers collapsed in the meantime. It’s funny because that was the moment to invest – company valuations fell, and we made some of our best bets, like redBus, during that time.”
One unquestionably positive change that US involvement brought, Dhol feels, was the normalisation of failure. “This is a great characteristic of the US system,” he emphasises. “They believe that failure isn’t the end, that it teaches you something. And that helped Indians see entrepreneurship in a different way. They were happy to spend 7-10 years in their 20s and 30s building something, because funded companies would pay enough to run their household. They knew they could get jobs if their ventures didn’t work, so they began taking risks.”
The normalisation of entrepreneurship has trickled down to college campuses. “We couldn’t spell entrepreneurship when we were at IIT, but students today are brainstorming companies and talking to VCs by their 4th year. You particularly see that at BITS – their culture of entrepreneurship is excellent – and we’ve funded many people like Phani/team (redBus) and Awais/Kshitij (Pixxel) from there.”
redBus and the first wave of success
In 2013, redBus was acquired in its entirety by the Ibibo/Naspers group (now part of MakeMyTrip). It was a ~$100 million sale – unheard of at that time – with all shareholders paid in cash.
“It was one of the first instances where the promise of the Internet paid off,” Dhol recalls. “MakeMyTrip went public shortly thereafter, and in 2018 the Flipkart exit happened – that was really off the charts.”
“But before redBus’ sale, no one thought you could exit businesses like these. Even today, the Indian VC industry hasn’t proven itself emphatically in terms of completing the cycle (of investments and exits). We’ve put in more money than we’ve got out. But at that redBus exit moment, people began realising what was possible. You had a company hit Rs. 60 crores in revenue, Rs. 600 crores in market cap, and have an all-cash buyout.”
To contextualise its importance, Dhol points to its media coverage. “There were some problems with ESOPs around the sale, and Mint devoted a full page’s coverage to it. Now, there’s not enough space to even mention a $100 million exit.”
Its ripple effects changed VC and entrepreneurship in India. Several of redBus’ CXO team started new ventures. Their head of marketing, Mayank Bidawatka, for example, started Koo (a native Twitter rival) and Billion Hearts (creating digital products for global users; backed by Athera).
Having seen the investment loop completed for the first time, larger players entered territories that previously only small investors inhabited. Even banks, who earlier refused to open accounts for startups, now created dedicated startup desks. “They realised that if you don’t catch a redBus or Flipkart early, you’ll miss the boat entirely. They couldn’t let that happen,” Dhol concluded.
Switching Sides at the Cap Table
Entrepreneurial experiments
Gagan Goyal, now a General Partner at India Quotient, wasn’t academically gifted by his own admission. His grades were middling, and it took him two tries to crack the IIT entrance. But when he reached IIT, he was gripped by a passion for robotics.
“In 3rd year, I went to the US for a competition and that changed my life. It was my first time outside India; I couldn’t believe how easy it was to build robots here. You could buy every component at RadioShack, while I had to do everything manually – made wheels, cut gears, prepared circuits. I could do this as a mechanical engineer, but not everyone could.”
Inspired by this problem, he founded ThinkLABS in 2006, taking robotics to school students. By getting kids to build robots, he wanted to groom the next generation of engineers and innovators.
Though he’s now a VC himself, his first engagement with investors while building ThinkLABS went poorly.
“We started well while incubated out of IIT. In 3 years we hit Rs. 2 crores in revenue and were profitable,” he explains. “VCs approached me but asked hard questions that I didn’t like. I had an ego – I was a 26-year-old running the only profitable company in the incubator – so I told them I didn’t need their money.”
“I had no clue what VC was, or how to exchange money for equity, not interest. Honestly, it took me some years to spell entrepreneurship correctly. But Anand Lunia, then at Seedfund, comforted me. He told me that these questions were just testing my reliability. Eventually we took their money, but it took time to figure out the logistics, the SHA (Shareholders Agreement), and all the procedures. This was all new, we had no one to guide us.”
Rutvik Doshi, General Partner at Athera Venture Partners, took the plunge into entrepreneurship in 2010. After 3.5 years at Google in the US and India, he founded Taggle, a daily deals and e-commerce platform.
“By 2010, I’d seen India’s internet usage grow from nothing to 100 million users,” he says. “Companies like Flipkart and Redbus had emerged; we’d clearly moved beyond the days of Cricinfo and Rediff. Silicon Valley VCs like Sequoia, Accel, and Lightspeed were entering India. There was a rising tide and the capital to fund it. Though my Google job was cushy – I’ve not sat in Hermann Miller chairs since – the entrepreneur in me wanted to latch on.”
Having raised a million dollars from a Silicon Valley VC (though he later felt that an India-based VC might have been better suited), he started building Taggle.
“From finding the cheapest lawyers to getting SHAs drafted, we were constantly learning. I underestimated the infrastructural challenges - just getting payment gateways took 3 months and visits to banks in Bombay. Today, you can register with Razorpay in the morning and get going in the evening. Most people also didn’t have credit cards, and Sachin and Binny Bansal hadn’t yet invented the cash-on-delivery models.”
He was convinced that e-commerce could work in India, a belief borne out over time, but greatly underestimated the capital it needed. “Our VCs were supportive and even after burning $1 million dollars, I had people offering me another million. But I realised it wasn’t enough; we’d need hundreds of millions to succeed here.”
Goyal’s switch to the other side
Eventually, both ended their entrepreneurial stints, choosing to invest in companies instead of building them.
Goyal’s journey to VC was entirely unplanned. After some years of tapering growth, in 2016 ThinkLABS wrapped up. The difficult decision to close was prompted by limited funding for growth and complicated by challenging obligations to venture debt providers.
He powered through, supported by investors and his team, then took a break.
He still had a self-avowed ‘anti-VC’ mindset. He partially blamed their refusal to fund ThinkLABS for its closure. He was still tuned in to VC networks, though, and had been an angel investor in 20+ companies, including housing.com.
During his break, Anand Lunia convinced him to workshop his next idea (a new-age school with hands-on learning) out of India Quotient’s office.
“I got to know them in that period,” he recalls. “I didn’t want to join them, and they didn’t plan to hire me. With our guards lowered, I could make sense of how they operated and invested.”
Goyal recalled early lessons he appreciated from the VC’s perspective that weren’t obvious as an entrepreneur. He understood that losses weren’t bad for companies with hyper-growth. He learned why some businesses weren’t venture-fundable, no matter how passionate their founders, and how some founders weren’t suitable for VC money, no matter how sound their business. He saw that VCs were always searching for home run companies, and were willing to pay over the odds for massive returns.
He also identified shortcomings in his approach to business. “Within a year of becoming a VC, I realised that at ThinkLABS I needlessly pitched for a Series A. My vision was limited to a few 100 crores, which didn’t make sense from a fund’s ROI perspective,” he admits.
Rutvik Doshi’s early VC years
Rutvik Doshi’s foray into VC was similarly fortuitous. He joined at a time when Athera (then Inventus India) was expanding and in search of someone with a background in tech and entrepreneurship, and experience working in the US.
“I liked entrepreneurship but couldn’t put my family through that again – 2 to 3 years of uncertainty and no salary,” he admits. “I entered VC accidentally; I wanted to stay close to this ecosystem and happened to meet Samir [Kumar] and Parag [Dhol] in 2012, who were raising a new fund at Athera.”
He, like Goyal, came armed with the experience of entrepreneurship, making him empathetic to founders’ challenges.
“Founders go through a sinusoidal wave of emotions,” he explains. “Sometimes the company’s thriving, sometimes they need to lay people off and pivot. All are challenging, not just in implementation but in emotional labour.”
“I don’t need to give solutions. I need to be a sounding board and a shoulder to cry on 24/7, and I think those who didn’t succeed as entrepreneurs have the experience and empathy to do this well.”
In 2012, when he joined Inventus India [now Athera], venture capital was a small ecosystem. “There were a handful of us, and everyone saw every deal,” he notes. “In a good month, there were 30-40 we all saw. Today, even if I see 200, I know that’s only 30-40% of what’s happening.”
Starting up still wasn’t mainstream, and Indian founders were largely replicating what worked abroad. They saw companies that helped people find apartments and created Housing.com. Because someone succeeded selling used cars, CarDekho emerged. When ride hailing became popular in the US, Ola pivoted to this.
VCs happily funded them, assuming that Amazon or Uber wouldn’t enter India because of the challenges in building physical infrastructure, unlike purely digital companies like Facebook or Google.
“A rare exception to this was redBus, a uniquely Indian idea that grew and succeeded in that era,” Doshi comments, highlighting one of the first major exits in Indian VC history. “When we made a $100 million exit, we were jumping!”
Around 2016, though, Doshi noticed a change in the kinds of entrepreneurship emerging.
“I have a hypothesis – founders who graduated from college after 2010-12 have a vastly different outlook from those before them,” he starts. “Those who graduated before could generally access fast internet only in engineering college campuses, not at home. Their everyday lives were non-digital.”
“But if they graduated after 2010 - 2012, they had internet in their homes as teenagers. By 2013, they had smartphones. They weren’t digital natives like Gen Z, but had grown up with digital lifestyles. Because companies like Ola and Flipkart had become big, their role models were Sachin and Binny Bansal, not Narayan Murthy. This was the end of the copycat era. Founders had bold ideas and were willing to bet on themselves.”
Investors were similarly evolving, he acknowledges. “Earlier, we thought a $100 million dollar exit was great. We’d shy away from capital intensive businesses. None of us had seen a company IPO. Even though venture capital required backing moonshots, we had to be cautious.”
Post-2015, things changed. “Companies scaled, global investors like Softbank brought billions of dollars in funding. Consumer bases grew beyond metro cities - though companies were increasingly based in Bangalore. VCs more confidently took bigger bets. Exits were still unknown then, but the last 3-4 years changed even that with over 20 IPOs.”
Investing, India-first
What Doshi termed the rise of ‘uniquely Indian companies’ became Goyal’s focus at India Quotient. They searched for companies that reached small towns and even rural India.
“We looked for mobile-first companies because those were growing fast, especially after Jio came up,” he explained.
“Tally was meant for accountants, so we funded Vyapar that helped companies that helped businesses work on mobiles. We had LendingKart as a business that gave small loans remotely. We invested in FRND, a dating app for Bharat, because we knew that most Indians weren’t comfortable with Tinder and its picture-first interface.”
“I knew that Indians like me came from communities that didn’t drink but wanted options at parties, so we invested in Coolberg, a non-alcoholic beer company.”
“In agriculture, we’ve backed marketplaces that connect fertilizer and seed manufacturers to retailers. Our other companies give farmers advice on pesticide application, fertilizer usage, etc. to farmers through tech and are gaining traction – something I never thought would happen,” he elaborated.
“Given our fund size, we need to be ahead of the trends and write the first cheques for these companies. We also don’t go for copycats or e-commerce platforms, it just doesn’t work for us. At India Quotient, we need to find problems we connect with, that’s how we make the investment,” he concludes.
Pathways
Since we’ve been talking about venture capital, a field dedicated to scaling good ideas and companies, we’re starting this month’s Pathways with an interview of John List, the author of The Voltage Effect. In the interview, conducted by Stephen Dubner on the Freakonomics Radio podcast, List talks about why some ideas fail, others fizzle out, and how to land on the side of success. You can catch it on Apple Podcasts, Spotify, or wherever you listen on your way to work tomorrow.
Speaking of scale and success, spend your lunch break or evening watching WIRED’s documentary on Shenzhen, a Chinese city with no global parallel. A small fishing village not too long ago, it’s now known as China’s Silicon Valley. It’s the global hub of hardware, with some estimates claiming it's the source of 90% of the world’s electronics.
Finally, if you want something India-centric to spend a week with, pick up Midnight’s Machines by Arun Sukumar. In the book, Sukumar traces how independent India approached technology, from Nehru’s alleged penchant for technology to Bangalore’s emergence as a global IT hub.
That’s it for this month from us. If you’re new and want the next issue of Odyssey in your inbox, subscribe above. Share this with people you know who are curious about everything at the intersection of tech, VC, and innovation in India.