Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Arihant Patni as recorded in February 2019.
Arihant Patni is Managing Director at Ideaspring Capital, a fund focused on enterprise companies born in India and selling to the global market.
Sramana Mitra: Let’s get you and Ideaspring introduced to our audience. Tell us a bit about yourself as well as Ideaspring. What fund size are you working with? What kind of investments do you like to make?
Arihant Patni: I’m an engineer by academic training but, very early, got involved with our family business Patni Computers, which was one of the early software technology businesses in India. I grew up with that business around me. I’m very happy and very fortunate to have seen that business go from inception to execution to scale over a period of 30 to 35 years. We finally sold that business in 2011.
When we sold it in 2011, it was an all-cash deal and really gave us the opportunity to explore new transformative business models. Having ridden one wave of transformation through the software consulting journey, that’s when we started actively investing in startups in India. In 2011, it was still very early days as far as the startup ecosystem is concerned.
Flipkart wasn’t what it is today. It was still the first cycle of venture capital in India. We chose to anchor certain funds within specific domains like Consumer Internet and Big Data. There is a Palo Alto based incubator called The Hive that we run in India. Ideaspring Capital is our latest fund that we launched in 2016 with emphasis on investing in enterprise startups based out of India.
Sramana Mitra: Ideaspring is what size fund and focused on what stage?
Ariant Patni: All of our work is early stage. That’s where the passion is. That’s where we make the most difference and where we have the best insight. Ideaspring is a fund that is backed by entrepreneurs and that’s run by entrepreneurs. That’s the very key DNA in our system. We invest early in companies, maybe even at the POC stage.
The first check ranges from $500,000 to $1,000,000, and then of course, we reserve some capital for follow on checks as well. Our ethos is to promote enterprise innovation out of India. India has seen a great rise of the consumer internet space. But of late, we’ve seen some terrific founders building SaaS companies, enterprise product companies using AI, machine learning, deep learning, and all of that good stuff that you hear about in the Silicon Valley. That has started to show roots in India as well.
The fund size is small. We would call ourselves a micro fund. The fund size is about $20 million to $25 million. At this time, we have close to about 10 investments and are actively making more. We do have room for about four or five more investments.