Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Karthee Madasamy was recorded in December 2019.
Karthee Madasamy is Founder and Managing Partner at Mobile Foundation Ventures. He discusses issues related to startups selling deep tech to enterprises.
Sramana Mitra: Let’s get you introduced to our audience. Tell us a bit about your background and a bit about Mobile Foundation Ventures.
Karthee Madasamy: We are a $75 million early-stage venture fund. We have a seed and Series A focus. We invest in deep technology. The phrase is a little bit odd. We look at tech-differentiated companies. These are companies that have tech as the primary differentiation factor. We look at companies that are trying to disrupt traditional industries like automotive, manufacturing, agriculture using tech. We started last year. We’ve done about seven investments.
Before this, I spent 11 years at Qualcomm Ventures. I was the Managing Director there. I started at the office in Israel and started exploring Southeast Asia at that time. Before that, I spent 10 years doing startups in Silicon Valley in the mid-90’s. I come from a technology background.
About 23 years ago, my Master’s thesis was in AI. It was not a proven tech at that time. It’s funny how things come back in a circle. Now, AI is applied everywhere. At that time, it was still underperforming.
Sramana Mitra: I completely resonate with you in the mid to late 90’s. I was doing AI companies. It was too early. I remember this journalist who was a friend of mine who was making fun of me because I was doing AI. Now AI is all the rage.
Let’s talk a bit about the kinds of companies you are investing in and the stage at which you like to come in. You talked about deep tech. Is it all B2B, or do you also do B2C?
Karthee Madasamy: It’s primarily B2B. It’s not necessarily B2B but it’s largely B2B. Back at Qualcomm, I invested in Waze even if it was a B2C application. We look at B2C companies that have significant technology element as the differentiator. 90% would probably be B2B tech.
Sramana Mitra: How about stage? What do you like to see in companies before you’re willing to write a check?
Karthee Madasamy: We look at both seed and Series A. There is a gap in Series A. There’re a lot of seed stage funds who are writing smaller checks. The first $2 million to $3 million can get filled by venture funds out here.
Tech-differentiated businesses need larger amounts of capital. They have some early product-market fit but still have a ways to go. That’s where our focus is. We don’t invest in concepts or PowerPoint slides. We look at companies that have gotten to a product and early customer discussions.
Early product-market fit is what we’re looking for. Sometimes they have revenues. There are some hard tech companies where they may be pre-revenue. What we look for are companies that have taken steps towards the product and have some early product-market fit. That’s where we also see the gap in the market. We focus largely in the United States.