Sramana Mitra: Let’s talk about your portfolio. What are some of the highlights that you’re proud of that are illustrative of how you operate? At what stage did they come to you? Why did you pick them over others?
Anup Jain: I’ll probably start with the principles. All our companies have to cross those barriers. We’re proud of having invested in each one of them. We look at the early stage for the quality of founders and the level of cohesion. When they pitch to us, we look for a well-crafted and well-communicated storyline. That is extremely important. In there is the rational and the emotional stuff.
It’s not just a founder who gets up one day and decides to start a company. The passion has to come from somewhere. The passion is often a personal experience of having worked somewhere or having seen a gap. Along with it is something deeply personal which is usually about making an impact or achieving potential.
It’s important for us to know how deeply committed the founders are to building their dreams despite the pitfalls of entrepreneurship, disappointments and late nights, and missing family and personal time. That’s something we look forward to. We go for a founding team that has more than one founder although it’s not a hard and fast rule. Sometimes, a single founder can blow your socks off.
It’s always good to have the yin and the yang. It’s good to have the business end and good to have someone looking at the backend. It’s a good combination that holds the company in good stead. It also brings realism in terms of strategy and execution. We look for cues where the two of them are moving in tandem and complement each other. That’s one part of it.
I’d be repeating what many investors would say. We look for a large market. We look for valid problem statements. Since we are focused on India, we have a deep knowledge of the country. All the partners have traveled across India. I’ve taken every possible means of transport and lived beyond the major cities. We should be able to see a genuine problem being solved for a large number of stakeholders which can then lead to a viable and sustainable business. That’s very important as well. Funding is only in the initial period of establishing the company.
Beyond that, the business model has to sustain the company. Investors can’t keep coming in after you’ve scaled to a certain level. That’s very important for us to be able to get a conviction on. The root cause of that is the sizing of the market and problem statement which defines how much pain is being felt with current methods and solutions. That’s the second bit.
The third is we would like to see some early signs of some experiments, learnings, successes and failures, and how founders deal with it. I think the last part is extremely important. Hacking is extremely important. When you get stopped in your tracks, what do you do? You have to find a different route. You have to find the optimized way to reach the destination. You don’t have unlimited resources. These are the three things.
The more popular companies are PharmEasy, Country Delight, Go Mechanic. We now have Factory Smart in the area of electric mobility. We have Carbon which is in corporate cards and SME banking. We have NextWave which is in the area of educating India’s engineers. These are some of the companies. They are, by no means, a comprehensive list but each one of the companies and founders tend to pass by all these filters.