1Mby1M AI Investor Forum: Piyush Kharbanda, General Partner at Vertex Ventures (Part 6)

Sramana Mitra: Interesting. I gave a talk recently at Kellogg about Indian startups: Past, Present, and Future. The recording will be available soon. We’ll publish it and you can take a look. One of the things I said is that India has this background in the services industry; the services industry came out of low-end services, BPO, et cetera. But now with human-in-the loop AI services, wherever there is a do-it-for-me scenario, this is actually to India’s advantage, especially if the services can be done from India.

Piyush Kharbanda: I couldn’t agree more. I think a lot of VCs in the Valley are sounding a death knell for the BPO industry. I think if the BPO industry, for instance, or the services industry does not innovate and partner with a bunch of these product platforms, they will struggle.

But what we are very excited by is the fact that a bunch of new services companies will emerge out of it. That’s an area of interest for us as well.

Sramana Mitra: It’s going to be a different kind of BPO.

Piyush Kharbanda: Exactly.

Sramana Mitra: It’s going to be a higher end BPO, it’s going to be human augmentation within that BPO, and it’s just going to be a different kind of services industry. There is a services industry that should do very well.

Piyush Kharbanda: You’ll price on outcomes rather than on people or bodies. I think that is a large enough disruption to the BPO business model that many new players will emerge. Just the business model disruption will cause a lot of opportunity for investors.

Sramana Mitra: Yes. Now, based on your portfolio and your colleagues in India portfolio, what are some of the best investments that have happened with this thesis?

Piyush Kharbanda: Oh, but they’re all in our portfolio! No, I’m kidding. I do think that the writing is still super early, and we are excited about our AI portfolio. I’m going to stop. I’m not going to talk much about the market in general where we’ve not invested. There are some interesting companies out there.

We think that the revenue traction that some of our portfolio is getting, and we have a few portfolio companies in the AI-led business process re-engineering, SaaS, et cetera space, which are doing quite well and growing faster than anticipated.

So, we are quite excited about all of our companies because the revenue tracking opportunity right now if you’re AI led is unlike the SaaS ecosystem in 2001 as well.

Sramana Mitra: But the market is much more ready to buy software right now, and there is real hunger in the enterprises for AI insertion.

Piyush Kharbanda: Absolutely. It works even in the midmarket. Even in boring old vertical applications in the midmarket, there’s an appetite to buy high quality. So, we are excited.

We have a company called Certa where we did a series B in later 2024. They are finding significant traction. They only sell to large enterprises and they’re finding significant traction as they’ve retooled their entire application on the back of AI.

Sramana Mitra: What is the product?

Piyush Kharbanda: They do what is called third party risk management or TPRM, which is a category in itself. But with the help of AI, what they do is they help large enterprises onboard, manage, and work with vendors across use cases. So, they’ll work with a Boeing or a Pepsi or a Walmart and help them onboard and manage all their vendors across the world.

Sramana Mitra: I see.

Piyush Kharbanda: This sort of becomes a system of record and a system of management for all these vendors.

This segment is part 6 in the series : 1Mby1M AI Investor Forum: Piyush Kharbanda, General Partner at Vertex Ventures
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