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1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal of March Capital Partners (Part 6)

Posted on Sunday, May 19th 2019

Sramana Mitra: The immediate one is that all the carriers who are dealing with the last mile customers. If there is a real problem, they have still to send technicians in and that’s a very cumbersome model.

We are all at the receiving end of that. It’s very frustrating. If something goes wrong, it’s very expensive for them to manage this incident.

Sumant Mandal: And no one’s ever happy. That’s why cloud is a good enabler for that.

Sramana Mitra: I know based on your fund size, you’re probably looking for more of that unicorn-style company. Is that a correct observation or am I missing something?

Sumant Mandal: Yes. I think any company that enters our portfolio needs to have the potential to be meaningful to us. By that very nature, one company should return you $100 million to $200 million.

Sramana Mitra: If you look at the last 12 to 18 months of your deal flow, what are the trends that you see in that deal flow that have that kind of potential? What problems? What types of companies are you seeing that are venture scale segment or venture scale problems?

Sumant Mandal: As mentioned, most billion dollars equity value enterprise software companies that have been created in the last 10 years are being reimagined with AI. We think that area has that potential.

Take ServiceNow which is an IP company that has gone from a billion or two when it went public to a $40 billion company. It has gone up that much in the last 10 years. IT service desk has been completely transformed using AI.

We have now a couple of companies going after that. Take the call center industry where $350 billion is spent every year. There you have the potential of building unicorns because there’s hundreds of billions of equity value that’s completely being created by these new technologies. There are 14 companies that are worth over a billion dollars today that are venture funded.

My estimate is that the number will be three times in the next five years. You have the potential of investing in companies that could be unicorns. We have a couple in our portfolio already. Then you look at the industrial space.

Now think about a nation’s GDP. 25% to 50% of the country’s GDP is industrials. They still have the internet age. That’s coming at a very massive and fast pace. In fact, I think this year and next year is when we will see hundreds of millions of dollars of revenue coming in from these companies.

We have a smattering of companies. You can take various different versions and see how big these markets and their revenue potential are. Then you can have a point of view on whether you can actually build a company of size and scale with that method.

Sramana Mitra: Thank you very much for your perspective here. I’m sure we’ll have a chance to connect afterwards.

Sumant Mandal: Yes, thank you.

Sramana Mitra: Thank you for your time.

This segment is part 6 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal of March Capital Partners
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