Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Rahul Chowdhri was recorded in March 2019.
Rahul Chowdhri, Investor at Stellaris Venture Partners, shares some fascinating examples of consumer ventures catering to the next 400 million consumers in India.
Sramana Mitra: Let’s start by introducing our audience to yourself as well as Stellaris. Tell us about the fund. What is the size of the fund? What is the focus? Let’s get to know one another.
I’ve been investing since 2007. Stellaris was started about three years back. Prior to that, I was in another fund called Helion Ventures. Before that, I spent seven years in three different companies as a product manager.
Sramana Mitra: Tell us a bit about what you like to invest in from Stellaris.
We all know that in life, things don’t go as expected. Startups go through a lot during their journey and only a few
As far as companies are concerned, there are three broad themes that we like. Two of them are India-specific. Between 2005 and 2015, about 100 million internet users came online. In the last three to four years, the number has jumped to 500 million users due to Jio and the Internet prices coming down. Because of that, there are a lot of people who were getting online for the first time in their lives. The first 80-100 million users are very similar to global consumers. They have access to global apps and understand how the apps are operating. There’s a large opportunity to target the next 400 million internet users. The product they like will be the same but the way they consume could be different, the user interface could be different, or the price point could be different. The broad theme that the team is very excited about is building businesses or backing businesses catering to this new generation of internet users.
The second broad theme is on similar lines but targeted more towards SMEs in India. These include SOHO kind of an SME or an SME with 5-10 employees. Their behavior is similar to consumers, so they would also be using smartphones. But most of them would use consumer apps to run their business. Then there comes a time when they need business solutions. That’s the second theme that we’re backing. In India, people don’t pay readily for software. So most of these companies that we’re backing aren’t going to earn money from the software. They’ll earn money when the client sees an increase in revenue and is ready to pay for the service.
The third broad theme is building global integrated software that is from India and sold from India. They are tied to two trends, one trend is the ability to collect technology talent in India and the ability to remotely sell software at $10,000 to $25,000 a year, but doing it remotely from India.
Sramana Mitra: In what you described, there’s one term that I didn’t hear which I would like to actually ask you about, which is the first 100 million consumers. That’s more a mature consumer in India, right?
The luxury consumer is in there. Anybody who is in the luxury segment who has a good disposable income is in that segment. In that segment, people have been on the internet for a while.
They have the
A lot of those problems are already getting addressed by the existing stage of startups. So the larger problems are most likely already getting addressed. Hence, we see a big gap in the next 400 million consumers. If you see our investments, I would say 4 out of 11 in the list target these next 400 million consumers.