Anup worked with some top of the line consumer brands like – Yum! Restaurants International (Pizza Hut), Whirpool, and P&G among others for over 20 years of his career.

In 2015 he started his own family office through which he mentored and Angel Invested in several startups over the next 2 years. In 2017 he joined Orios Venture Partners, where he currently focuses on retail, finTech, healthTech, edTech and D2C brands.

Some popular startups in its portfolio – PharmEasy, Zostel, MoneyOnClick, CountryDelight, BeatO among others. In this podcast, Anup shares his experience of identifying top-quality founders and how their portfolio companies are combating with the lockdown due to Covid-19.

Notes –

00:42 – Working at Consumer Brands to joining Orios Venture Partners

05:11 – Thesis behind investing in Portfolio companies – Multiple pain points, Founders & Team with quality execution experience

08:06 – Investing in BeatO – Personal assistant for managing Diabetes

09:10 – Investing in MoneyOnClick – Personal loan for salaried professionals

09:52 – Investing in Gully Network Retail

11:58 – What are their portfolio companies doing to survive through Covid-19?

16:08 – Exploring new investments vs re-investment in existing portfolio companies

18:15 – Helping out Portfolio companies with – Extending runway & Optimising operations

19:25 – Is it a suitable situation to consider an M&A?

21:45 – PharmEasy being the crown-jewel of Orios Venture Partners

26:12 – Sectoral outlook for potential tailwinds during Covid-19

Read the full transcript here:

Siddhartha  0:00  

Hi, this is Siddhartha Ahluwalia, welcome to the 100x Entrepreneur podcast. Today we have with us Anup Jain, Managing Partner, Orios Venture Partners. Anup has 20 years of experience in building brands across various countries and categories. Anup, we would love to know about your journey from the days of Delhi University to landing at Orios Ventures and also what made you join the Orios team.

Anup  0:48  

Thank you very much, Siddhartha, for inviting me on this podcast. So, my professional journey indeed initially started off, you know, out of FMS batch of 96. I joined Procter and Gamble and worked through a startup Whirlpool, which was consumer durables, sales, marketing, e-commerce and then into retail with Yum! brands, the Pizzahut and followed by Bata, and experienced a multitude of different situations, contacts, countries and of course teams and learned quite a bit about the Indian consumer and even Australian and Asian consumers as part of my career. Now, after having spent so much time and I worked in a startup called Indya.com in its launch days back in the dot com boom days. In fact, I was in Bangalore, and the seeds of sort of entrepreneurial ambition had been sort of sown at that point of time, I always felt that there was some kind of calling I didn’t quite know when was the right time. And recently 2015-16 onwards, I started noticing major changes in the global and the Indian economy. Consumers were increasingly digitizing large parts of their lives, starting with the sort of, say the top, you know, upper-middle-class consumers, enterprises, we’re moving towards that, as well as in a much, much faster way. And when that happens, there is a lot of data that gets generated all the old paradigms of channels of distribution, customer marketing, research, customer service, all of that completely changes. And I sort of foresaw this coming through with a foster degree of adoption with mobile phones turning from feature phones into smartphones entry Level smartphones into, you know, sort of super processing smartphones with 8 GB of RAM, and 128 and 256 GB of storage, able to, you know, function at extremely high speeds, almost the same specs as your kind of laptop and all of that. So, I think recognizing that, that internet and online-based businesses are going to be growing. And there is going to be an opportunity in that. That’s where I started to do a little bit of angel investment on my own to understand as to what my strengths and weaknesses were. Over there, I chose some areas to invest in, it was largely based on references. I didn’t join any Angel networks to be absolutely sort of unbiased in that sense, and, and during the course of doing that, I met up with Rehan, who’s the Founder and Managing Partner at Orios Venture partners and started to work with Orios as a venture partner since late 2017. Then finally joining in the middle of 2018 as a full time managing partner, looking after all aspects of the Fund business, you know, and continuing to be based in Gurgaon here. Since then, it’s been an exciting journey. And we’ll talk about it I think, towards the subsequent sections of the podcast, but I felt like if I hadn’t made that step, I would have cheated myself sort of out of my connect with the entrepreneurial world, which I always felt that I said I had much earlier and I was just looking for the right time. And, and this was indeed the right time. As the many events that have led they’re all aware of have unfolded, with large creations of value over talented teams, working in different spaces. Creating new brands and businesses which have become parts of our lives that we cannot imagine our lives without. So, I want to be part of that which is going into the future.

Siddhartha  5:10  

Orios portfolio looks very diverse from Miss Malini to Country Delight, Zostel, Pharmeasy, Pretty Secrets, can you share the philosophy behind investing in some of these companies?

Anup  5:24  

So, Indeed at Orios, we are a diversified tech-based fund, we use a couple of principles for investing. One is these should be extremely large spaces where fragmentation asymmetry scope for therefore, organization from an unorganized environment consisting of multiple players and lack of you know, information pricing discovery, etc. There could be multiple pain points and these could result in large businesses doing that on the basis of tech or using technology as one of the key pillars, we look for, of course, the best founders in that sector. So that goes without saying, and that’s the number one criteria for us to choose a team over another team and make our investment. Otherwise, we simply wait in that particularly identified sector, for the right team to come about. And third, I think, it’s the quality of execution that we have either seen the team do in their past lives, they may be startup founders before they may have succeeded. They may have failed, it doesn’t matter. Or if they’ve already started working on their idea when they’ve come and met us, then what sort of execution have they had and the quality of it is obviously far more important than the quantity of it being early, so with their small scale small teams, small funds, what have they managed to achieve how well they have executed their ideas, and how nimble they have been, how sharp they have been, the thinking, the learnings, the strategy. So that is fairly impressive. Now, it goes without saying that in the investing business, the art of storytelling is extremely important. If you’re a great founder with all of the above ticks, but if you’re unable to communicate that, or you come unprepared in a conversation with an investor, then it does become difficult to judge the team. And therefore one might sense and like and rate everything else very highly, but it becomes difficult to be able to make a decision. So these are some of the criteria that we use to make investments

Siddhartha  7:59  

What are some investments you have led since joining Orios in 2018?

Anup  8:05  

So, my first investment was in BeatO, which is a full-stack diabetes management company. This was already invested by some angels, very leading angels, and two funds. It was a pre A round. The team consisting of Gautam and Yash is an excellent team, one of the leaders in that space completely, we saw a lot of space and a great team with some early execution that was extremely outstanding in their own way. And a lot of runway for growing further from there. So, we basically invested on that basis. The other investment that I led was in a completely different space, which was FinTech. So, MoneyOnClick, this is a team which is ex Lendingkart, Vishal and Himanshu based out of Bangalore digital sourcing and digital underwriting for salaried but underserved groups of customers and probably the best team in the business. Again co-invested by other funds, no angels this time but large space therefore, great team with like I was saying prior examples of excellent execution curtsy their Lendingkart experience. So, we in fact invested even before they had any product or started their business so it was completely at a pre-seed stage. Another such example is in another space which is quite different from the first two which is retail. So we know that grocery retail is one of the largest segments of Retail in the country, almost $500 billion, it has become extremely important particularly during the current context, as only essentials are allowed, and therefore, in a way it is also protected, and in fact gets positively impacted by COVID as well. So, the opportunity over there lay in organizing the unorganized Kirana stores using technology. And we identified again, a great team with past co-founding experience in the startup world, Ajay who is the founder of RentoMojo and his classmate, Pratik Gupta. And we again invested at a pre-seed stage. So through these examples, you can see the variety of investments that we have done. And these are  few of these examples. We’ve done more investments but I want to take maybe some of those examples in the subsequent part of the podcast through which, we have sort of use these principles that I spoke about earlier to make these investing decisions.

Siddhartha  11:10  

What was the name of the company in the retail space?

Anup  11:14  

That’s called Gully Network. So, in the retail space, we invested in this startup called Gully Network led by Ajay Nain and Prateek. Ajay is an ex Co-founder of RentoMojo as I explained, and we invested in the pre-seed stage. They already have 22 stores in Bangalore. I would say they’ve achieved product-market fit. Their aim is to organize the unorganized space of small format Kirana stores and make them function like small format modern trade stores using the power of technology throughout the operations of the retail store, right from supply to the front end.

Siddhartha  11:55  

Anup, we have seen crisis like the 2008 crash, the dotcom bubble This is the first time we are having a humanitarian crisis. All businesses are getting affected by this. A few changes are happening in the models in some businesses and some businesses are getting a completely 100% 180-degree pivot. Some businesses are trying to do layoffs and just survive through cutting costs. Startup founders are making super-tough calls, I think, in this decade, for the first time, what are your portfolio companies doing specifically to cope up with the COVID times?

Anup  12:39  

So, I think our companies are doing pretty much what I think all other companies are also doing. The first and foremost objective of any company during COVID is to simply survive this entire period. I would bucket our companies to come to two sorts of buckets. One is a bunch of companies that have been positively impacted by COVID. And there, I think there is nobody over there except the fact that if they were going to do some fundraising, then that has got delayed. So, they need to ensure that they have enough runway to be able to run their companies until the funding happens by keeping up with the pace of operations and the demand surge, so I gave on one such example, which is Gully Network, which obviously saw an increase in consumer demand in their retail stores, which they were managing. There is another bucket of companies which have been negatively impacted during this time. So one of the companies that I gave an example earlier in the podcast was MoneyOnClick, and this is a lending company. Now imagining that COVID despite being a health and a humanitarian crisis has deeply impacted the economy, and this naturally will bring economic hardship, irrespective of, you know, sectors for people, especially employees whom they lend too. So, what they especially started to do was stopped the dispersals immediately, and started let taking a very careful look at their existing portfolio of borrowers and stayed in touch with them to work out and figure out as to what was a risk on that portfolio for future repayments before you know starting to lend again, and I think they’ve been sort of success in doing that, across the board. In order to survive to preserve cash is absolutely necessary. So nearly all our companies the founders have taken salary cuts. They have also asked their teams to take cuts wherever necessary. Non-essential expenditure has been completely curbed. Everyone has gone back to all the lines of the cost that they have, whether it’s office rentals or anything else to completely optimize it, while trying to obviously preserve operations and keep the employees still motivated and to enable them also to work from home where you they are not been able to come to the office. So, some other companies have even taken calls of reducing their office space and moving 20 to 30% of their employees permanently on a work from home basis. So, there has been a slew of measures that most portfolio companies have taken in order to tide over this period in different ways.

Siddhartha  15:50  

You have been very active with misfits you have, I believe, three batches of misfits before COVID. So is the fourth batch happening in coming time? Are you focused right now on building the existing portfolio and reinvesting in them?

Anup  16:07  

So our third batch is running, and we keep selecting companies to take into the next batch, the third batch is full, but we are still investing from our current fund. And therefore looking at admitting new investees into the next cohort, which is cohort four. So, we keep meeting up with startups, startup founders to sense any opportunity over there for us to partner with them. And we will certainly keep looking out for them to join our cohort for but in terms of time allocation at this point of time, yes, we are working with our folio companies across the already established cohorts very closely. So almost 60% of my time is going into the current portfolio companies to help them through this crisis as also to help them with anything else that they might need.

Siddhartha  17:13  

And you believe that has the pace of investment slowed down or is still going on pre-COVID?

Anup  17:21  

So, the pace of investments has definitely slowed down overall, and it has slowed down definitely the early stage. We have also seen that the pace of investments, not just that but the pace of supply of let’s say, entrepreneurs have also slowed down. So the number of companies or startups which were getting formed the number of teams which were coming together to form new ventures and launch their products or services in the market that has also gone down and therefore we’re meeting fewer startups at this moment. So overall, yes, the investing community is seeing slowdown directly as an impact of COVID. And it’s across stages.

Siddhartha  18:15  

If you can share one or two areas where your portfolio companies are seeking your most help in current times? What would be those areas?

Anup  18:24  

So, I think it’d be fair to say that, look, most of the startup founders’ chief cause for worry is always runway and therefore cash. And that’s one of the biggest needs that they have. So, that is that remains one of the biggest sources of concern that they will seek our help on. The second one would be to also exchange some thoughts and ideas in terms of how they should vary their operational plans in order to stay relevant to consumers, as also to sometimes brainstorm as to the measures that they could take, which we might be knowing about, on how to go about, you know, preserving cash and cutting down on some costs and some strategies for doing that. So I think one is funds and the second one is on the operational side.

Siddhartha  19:23  

Are you also suggesting M&A to some of your portfolio companies if it’s a viable option at this moment?

Anup  19:29  

I think it’s a good point that you bring up. I think, it is not an idea which is off the table. If there is an M&A opportunity, we should definitely consider it if it creates value, and it increases runway as well as if it sounds, you know, synergistic. I think it could be a useful opportunity during this time.

Siddhartha  19:50  

And if you can share any of your portfolio companies which are exploring this option, or are in a reverse way acquiring companies who are looking for M&A?

Anup  19:59  

At this point time, I can’t really see any immediate opportunity that I can sort of share with you at this moment. But it may so happen in the future. And I think it is definitely something that we have discussed and kept our minds open to, and we hear them from the founders as well. And particularly in the cases of, let’s say, you know, it could happen both ways. You’re right. One is you could be approached by a larger player. On the other hand, you could be a larger player yourself, and you could approach others as well.

Siddhartha  20:31  

Globally, recently, the news of Facebook, acquiring Giphy for $400 million has been a relief that there’s some, you know, good signals also coming from the market.

Anup  20:43  

Yeah, look, Facebook invested in Reliance, you know, Jio platforms closer home. And that news has been pretty big in the Indian ecosystem as well as we all know. So Facebook is one of the tech-based global companies, which I’m sure has seen an uptick in its revenues and uptick in usage post-COVID. So, these are businesses that get positively impacted much like Netflix or Amazon, etc. Or even Google and they were sitting on cash, which they can deploy to now, you know, probably get access to better valuations. This is a great time for companies with cash in any sector to be targeting companies to invest in or to do some M&A activity at better valuations than before.

Siddhartha  21:40  

So, let’s talk about Pharmeasy. Pharmeasy has been the crown jewel of Orios’ portfolio companies. Can you share more details on when you came into the Pharmeasy, what was a special thing that you saw about the business model or about the founders?

Anup  22:02  

So, look, Rehan is the deal lead on this, but suffice it to say that Pharmeasy is bang on the thesis as far as you know, some of the principles that I highlighted basis which arises makes investments, which is it was a large organized market, you know, each of the players not holding more than 1%, lots of value loss in the entire chain because of information asymmetry. You know, consumers on one side, businesses like small hospitals, large hospitals on the other side on the b2b side, all of the chain right from pharma company down to the consumer was completely kind of broken and fragmented. So, if a platform came up, which provided the marketplace for consumers to discover the products and be able to get it delivered at their houses by uploading a prescription or getting to talk to a doctor and make a prescription and then order it, I think they created significant value by organizing this entire supply chain and passing on the largest share of it to the consumer, because the actual cost or the margins of the product, which is medicine was extremely high upwards of you know, 75,65,75%. And a large part of that value was being cornered by the unorganized players of distributors, and various middlemen. And this needed to be organized, and I think they did a fabulous job of that, giving value to the consumer, making the freshest product in the right products available basis a prescription and catered significant value both in the B2B and the B2C segments. As of last year, and they also merged with the Ascent. 

Siddhartha  24:00  

And what about companies in Co-working space, you have portfolio company Zostel which is in hostel space or I would say co-living for a short period of time-space, how are they impacted from this time and do you think they will be able to recover?

Anup  24:18  

So, Zostel is like an asset like a model of hostels, which are basically meant for the youth. It is no secret that there is no travel tourism leisure happening at this time. They come under the umbrella of hospitality overall. And that sector has been the most adversely impacted probably next to aviation I would imagine, or Yeah, or any such related businesses. So, I think, will consumers travel again, in groups will the youth want to take holidays and explore new places I don’t think human beings are gonna change. So that I think is going to remain now. What happens and how long does it take for us to come back on track for the entire sector to start? That is I think anybody’s guess. As you know, right now, it is completely up to the government to start opening up various areas of activity. I did see a newspaper clipping in one of the online news channels that the government is thinking of allowing states to operate domestic flights if they so agree with each other, and therefore domestic aviation could start. So, therefore, travel for business, travel for other occasions could actually start and once that starts to happen, I think you will see some sort of come back to normalcy and the sector can then pick up but my guess is that it’s at least a few months away, if not more. 

Siddhartha  26:10  

What are the sectors that specifically have got tailwind during COVID? And if you’re looking at them right now for investments, as you say, you know, you’re looking for the best founders in the sectors which Orios is focused on?

Anup  26:25  

Yeah, Orios’s thesis post-COVID is that online businesses, online to offline you know, these will dominate. The next wave of tech businesses that are going to see an uptick tailwinds will be there for these businesses. So I would cover gaming in this, I would cover all forms of online entertainment, education, health, and any business which is being you know, run on a Digital and online basis, pure offline businesses and in certain sectors which have been adversely impacted. I think they will continue to basically face challenges for at least a year. So anything to do with hospitality, retail chains of, you know, food and beverages, you know, entertainment, which is offline. I think those will continue to see challenges. Those in the essential sector, as I mentioned, Valley network, those in the electric vehicle sector, and those in contactless payments, those will continue to see and continue to see an uptick, we will see foster digital adoption by all sections of society. In fact India is likely to lead from on ownership of, you know, better mobile phones and data connectivity and adoption of digital for doing more and more transactions. The immediately as economic activity starts, I think consumers have realized that if this can happen, this can happen again. This is anywhere for the next one year not going away in a hurry, we have to learn to live with this risk, which means that we can’t go to crowded places we have to practice social distancing, we have to go for methods, which allow us to run our normal lives without doing it the way we used to. and India was always a market of you know, crowded spaces and you know, shopping was a form of entertainment. eating out is a form of entertainment. Right? And some of this is going to be transferred and shifted into doing a whole lot of these activities at home in less crowded spaces and possibly transferred online. So we are going to see changes and habits around the purchase of apparel, purchase of products right and going to see a lot of usage in certain verticals like education, health care, financial management of one’s, you know, portfolio of wealth or our finances and certainly see an uptick in entertainment and gaming post-COVID.

Siddhartha  29:26  

You have not invested in Edtech or SaaS businesses. Is there a reason behind that or is it just that you didn’t came across some of the best founders building in those categories.

Anup  29:43  

So I think the age of like SaaS business is built in India around the entire dollar rupee arbitrage between clients based here and clients based there. So the best way to basically run or spot a SaaS business for investment is if the clients are based overseas. And the cost or the tech team, which is supplying the service is based over here. We have tended to sort of staying away from SaaS businesses in the past because we couldn’t do due diligence on customers overseas. And therefore, we kind of stayed away from that because it was too early in that space. But today as we speak, I think the enterprises of all shapes and kinds have now woken up. They are ready to pay for technology for productivity. I think COVID has taught everyone that a client-server environment does not work, you need to be working off a cloud-based environment. So therefore you need to purchase cloud-based products, and SaaS products that help you to do accounting or marketing or do anything you know which so that your team stays productive, you cannot be working in a desktop kind of environment which is fixed to a certain office location. So, I think in the coming years, businesses of all types will be very amenable in India to pay a SaaS company subscription fee for using their product. And I think this is a big mindset change which is going to take place post COVID or may have already taken place. We know that most companies have moved on to zoom calls for example, right. And if you want to do longer zoom calls than the free call of 40 minutes you need to purchase it and therefore Zoom must be having an increase in business over here. Similarly, we’ve seen entertainment products, whether it’s your music, whether it is Netflix, whether it is other platforms, Hotstar, For example, these have all become subscription-based entertainment products, right. So, I think it is the Advent, both on the consumer and on the B2B side, there are going to be businesses where consumers in India suddenly post COVID more amenable to paying for a better experience on a subscription basis, and that now, therefore, becomes an attractive area for us as a fund to invest in rather than maybe 10 years ago. So, I think we will train our guns again, we will look for the best companies in the large spaces, solving pain points and having a value proposition over there for a large section of consumers and our businesses so, therefore, we will visible the new areas. On education, I think the education we are yet to see a multitude of businesses and Now there are many unicorns in, in education, and there are many models. So we will continue to look for the most impactful business model and the team which can capitalize on this. COVID has been a watershed moment for education in India. The government cannot build support or sponsor any infrastructure, which will promote online education. But the private sector is already stepping in. Parents, students, even located in the far corners of the country, can now log through their families’ mobile smartphones and can get access to education which is taking place which is similar to anyone sitting in a tier-one city can now consume. So the access to opportunities, access to quality education is going to get more and more equalized. And I think now is the time for us to invest in some of these companies. And therefore I invite EdTech founders to come in touch with Orios and talk to us. We’re very passionate about this space. And I’m personally delighted to talk to some of the talented startup founders who are working in this area,

Siddhartha  34:19  

If you can share before joining Orios, what are your personal angel investments like and how are they doing now?

Anup  34:27  

So, I did invest in agritech, I was a very small investor, this was into B2B hydroponic farming. So, the farm is coming up. I invested as an angel investor in Wittyfeed which is doing well. They face some challenges. But then after that, they’ve come back and through the COVID era, they’ve really gone from strength to strength. In fact, they’ve launched a dialect based entertainment platform which connects consumers to amateur artists, which is called Stage. So if you download the Stage app, you will see today how amateur artists are displaying their talent in the Haryanvi dialect for consumers from Haryana, or consumers whose dialect is Haryanvi. And they are opening up a new form of entertainment. So that is really going very well. One of the investments that I did in B2B networking, which is called LetzGain, so that unfortunately, has not done well. And I think, the tech product didn’t really take off. And that’s been a learning for me as part of my angel portfolio. So I think these are the sort of spaces that I did some personal investments. Now of course, I do all my investments through the fund.

Siddhartha  35:52  

Coming to the personal side of yours, Orios team calls you Chief Explorer. Tell us about your hobbies, interests, and things which keep you occupied beyond office time.

Anup  36:04  

Well, I think that space is shrinking, but look, I love to explore different spaces I love to explore different places in the world. So I’m always on the hunt for great food and cultures. I love music from different cultures, love entertainment from different cultures. So, you know, I sort of explore that whenever I go and travel in a city I just don’t see just the monuments or get some pictures next to some places of tourists interest and come back but I interact with locals. I taste the local food. I would love to also cook food so I cook food regularly even at home and during the COVID scenario when everybody is at home. I’ve been cooking some delicious meals at my home for my family. So I’ve been doing that and I have a great sort of interest in food. I also have a background in food retail. So that made me very close to food as well. And, yes, it’s a funny thing to say, but I love working with startups. And, here I am on a Saturday talking to you. And this would be a normal weekend and corporate life, and one would tend to switch off from work and say, Well, let me relax. But for me, this is relaxation. I love working for the startup ecosystem. I don’t see this as work this is something that I would love to do at any point in time. So, I feel completely excited about it. So, you know, this is my hobby, this is my work.

Siddhartha  37:36  

And you have been among the top CXOs in India and you were with Bata before that in the Yum foods, which is the parent company for Pizza Hut. What’s the reason behind your back to back success if you can ponder over and take us through that?

Anup  38:00  

I think I have nothing spectacular over there, I’ll put it very humbly. A lot of people have achieved much more than I have in the corporate world. And I humbly submit to their skills and strengths and a lot to learn from them. But I think one of the few things that I always felt that works for me, even today is being true to what you’re doing. Whatever I wanted to do, or whatever field I was involved in, whatever role I had, I think the first thing that one has to have is a true passion and be true to what you’re supposed to do. If one doesn’t like it, for some reason, or it turns out to be something different from what one must have expected, then one must sort of find the next part and make changes and move in that direction and not be untrue to the role or to the passion that is expected over there in that role and let somebody else do it instead of yourself. The second thing, I think there is no substitute for hard work. So, time and again, it has been seen that successful people, in general, are persevering. They are committed and they are self-driven. So, you don’t need to be monitored. And you don’t need to be told what to do you take an active interest and, monitor your own self and I think that brings about the best of a person on a job. So that is something that is truly two things that I felt that I brought to the table and that worked for me and

Siddhartha  39:58  

You are some of the people who have come outside from the venture world, most of the VCs and the VC partners like Rehan, they have a decade of experience in venture investing. So do you consider yourself an outsider to the VC world? Or how do you deal with it?

Anup  40:17  

So, Siddhartha, I think it’s a good question. I think it is only fair to say that look, I am not from the traditional investment space. And therefore, I don’t have 10 years of let’s say, investing experience, you know, behind me, but I do have good sort of now, four years of investing experience behind me with. Almost three of them being with Orios as well. So, yes, I am a definite newcomer, formally speaking into the investment space. Orios has Rehan, me, and then Rajeev with a third partner he joined us last year. He also comes from an operating background. And that’s the common thread that runs amongst all partners at Orios, we feel that this is a special sauce for us as different from other VC funds. We come with operating experience, and therefore, our mentoring is rooted in our own actual experiences. We have not risen from looking at Excel sheets, only to make investments and to be able to mentor founders, we are able to lean back on the mistakes and experiences that we have had while working in large spaces and large companies for large corporations and provide the depth of that experience to founders for solving their problems. So our suggestions look more realistic, our recommendations have more basis than it would otherwise be. And that’s a special sauce that we bring to our investing expense as well. We intuitively have a gut for large spaces and the problems that we have had. I mean, I have traveled the nook and corners of the country. I’ve been to tier three, four towns, I don’t know how many investors in the VC world today can claim to have climbed in a bus, or in a train or sitting outside in a taxi or another means of transport to actually feel the pulse of India. In a tier-three town or a tier four town, well, many talks about it, but I don’t think they’ve had that experience. Not all of them at least. But I’ve had the opportunity to have that from very close. So I think that makes us more grounded, that makes us more, I would say, intuitive and hopefully, we’re able to give more realistic bits of mentoring to our companies. 

Siddhartha  43:00 

One of the things which I foresee you know, being an entrepreneur, is that definitely entrepreneur more able to connect with you at the initial stages, series A Series B round. Because you have a deeper empathy for the entrepreneur, even if he’s making mistakes and not able to reach projections, what he promised. It might be okay for you.

Anup 43:25

Yeah, that’s right. I think the early-stage investing is a special science. And you know, later-stage investing is less risky, you have far more data. It is akin to private equity. There are a couple of established players some consolidation has happened one is bigger than the other. At an early stage, it is fairly risky. These ingredients are absent. Sometimes, as I explained earlier in the podcast, we make decisions on teams which are pre-product and pre-market operations. And therefore, these require a bit of a special sauce. And that’s where the operating profile of all the partners of Orios comes in handy. We’ve worked in startups. We have built startups. We’ve worked in large companies. So I think we’ve had that experience to be able to relate to the founders and to be able to relate to people in our startup environment. And investing has only happened to us as a result of having that experience and we would be incomplete without it.

Siddhartha  44:41

But do you feel, as your company moves at a more later stage, the growth stage investors especially those who come at series C and series D, try to push aside the early-stage investors? 

Anup 44:56

In the sense they are making some seed investment on their own?

Siddhartha 45:01

No, no, not in that sense like, for example, in a company of yours, which is series D and Series E, the growth stage people when they come with larger checks 50-100 million and when you are on the cap table, they tend to push aside the early-stage investors?

Anup 45:19

Look, investing implies that someone is going to get diluted, right if they don’t invest along on a pro-rata basis with their existing shareholding. So, seed funds are only designed to go through to about Series B stage, I would say and then leave it to the growth funds to take over and Orios has a select fund which basically invests in Series B plus stages of the winners from our past seed funds. So, therefore, that is a special instrument to help the founders and for us to stay invested in those companies having worked on them from Series B onwards. Yes, it is correct. With the passage of time one gets diluted. But it’s still in a relationship with the founders, which ultimately decides your interaction and also your returns as an investor from that company’s investment. Since you’ve been associated with a company at a very early stage when it was going through a lot more ups and downs, of a very risky nature and you believed in the team at a very early stage, even pre-market operations, etc. I think that the team naturally has some very high regard for early-stage investors. So I think, we’re not worried about the percentage shareholding It is natural that somebody who’s coming in at a larger check at a later stage will have some ambition of having a shareholding. And they will be setting the price and the valuation for that. And I think it is motivating to be having them on the cap table, which is why the founders would welcome them for the continued growth of the company and we as early-stage investors would take great satisfaction in the fact that, we have built a company which is now attracting larger investors.

Siddhartha 47:24

Thank you so much, A for sharing your time and your experience with us. It’s been wonderful to have you on the podcast.

Anup 47:31

Thank you so much, Siddhartha.

(This episode is brought to you by Prime Venture Partners, an early-stage VC fund led by Amit Somani, Shripati Acharya, and Sanjay Swami. Prime is often the first institutional investor in category-creating tech startups in FinTech, SaaS healthcare, and education such as Ezetap MyGate and mfine. To know more about Prime visit primevp.in)

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