Episode 186 / August 29, 2022

The Framework to build Category Creators for Consumer Market in India ft Bala Srinivasa, Managing Director, Arkam Ventures

42 min

Episode 186 / August 29, 2022

The Framework to build Category Creators for Consumer Market in India ft Bala Srinivasa, Managing Director, Arkam Ventures

42 min
Listen on


Today being an entrepreneur and starting with a new idea, you can take either of the two approaches –

  1. You can build on top of an existing category in the market and bring your unique offerings
  2. You can take the riskier bet and create an entire category.


In India, companies like Flipkart, Oyo, Ola etc. are the ‘Regional’ first movers. Although their concept was inspired from the global companies, however, being the first mover in the Indian subcontinent region gave them an advantage.


In today’s episode we have Bala Srinivasa, Managing Director, Arkam Ventures, who has a great focus on identifying and investing in such Category Creators for Middle India.


Prior to Arkam, Bala, was part of the founding team at Vistaar, which in simple words helps companies like Cisco, Dell, GE, Ford, and Hitachi to make better, faster, and more profitable business decisions.


Post that he became one of the founding members of Amba research, which was acquired for $100 Mn by Moody’s.


After Amba, he was also with Kalaari Capital for over 3 years, post which he co-founded Arkam Ventures, a Venture Capital firm with a focus on “Category Creators for Middle India” and “Enablers for the Global”.


In today’s episode, we talk with Bala about key ingredients of building a Category Creator, Solving for the pricing problem in SaaS startups, taking SaaS to the mass audience in Tier-3 cities and towns and much more.


Notes –

02:01 – Intro

04:05 – Essential ingredients to build a $10 Mn ARR company

06:29 – Why focus on category creators for Middle India?

18:38 – Zoho Sponsored – Prashant Ganti on Where do founders struggle with Payroll and how can they fix it?

20:08 – Evolving from a single problem statement to a platform with multiple offerings

22:23 – Razorpay’s gameplan for trust building for Small town customers

24:06 – His thesis around investing in enablers like Signzy and Spotdraft

30:26 – His thoughts on India-focused SaaS with regards to pricing

33:24 – Themes and Thesis which didn’t worked out

38:42 – What gave him an edge into the middle India consumer?


Read the full transcript here:

Bala 0:00

I was talking to Harshil at razorpay last year, and one of the things that Harshil said that really stuck in my mind, which is he said, India is one of the few countries where the same company that sells table salt also makes cars and also actually exports software. Okay, obviously talking about Tata. But there is a very important lesson there. The vast majority of India has a small wallet, you can lead with a particular product. But then you need to have a product platform where you’re leveraging that retention and that LoCat to go in and sell multiple products. You can have an internal debate whether you want to be for example, a crazy B today, sales insurance, they actually sell CASA accounts, they sell credit score, they sell a bunch of things, but they could also if they wanted to go outside, shall I say go outside financial services, which is what that has done. But what we mean by product platform is does the founding team, as part of their growth strategy, understand this? And do they have a game plan as to once we get to this level of stability, this is how we’re going to maximize our footprint, without which at least we don’t believe you can be a large category.

Nansi 1:25

Hi, everyone. Before we begin, I would like to share that this podcast 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 defining tech startups in FinTech, SAS, healthcare and education, such as Mygate, Quizizz, PlanetSpark, Bolt and Glip. To know more about Prime, visit

Siddhartha 1:56

Hi, this is Siddhartha Ahluwalia Welcome to 100x Entrepreneur Podcast. Today I have with me Bala Srinivasa, founder and managing director of Arkam ventures. Bala has a very rich history as an entrepreneur and a VC Bala started as one of the founding members of Amba Research that got acquired for more than 100 million by Moody’s Bala was also part of founding team at one more organization where he led the entire journey from the start right to a completion the name of the company is Vistaar, it was a pricing analytics for enterprises. And it’s very interesting Bala, a BITS Pilani graduate, started his journey in the US as an equity research analyst. Then he wanted to become an operator jumped into Vistaar as the number three guy and then when the Amba team, the Amba founders, were looking for professional management to scale their company. They got Bala as a managing director and Bala took Amba from 8 million in ARR to 45 million ARR when it was acquired by Moody’s. Today Amba as a part of Moody’s is a two 30 million ARR company.

Bala after the conclusion of acquisition moved as a VC with Kalaari. And then after spending some time at Kalaari and doing some fantastic first checks in companies like Upstox, Jumbo tail were category creators in their own market started to explore a VC himself and then he started Arkam Venture Partners along with Rahul Chandra and it’s been a phenomenal run for Bala and Rahul, starting Arkam. They have made fantastic 13 to 14 investments in the two categories they believe in. One is the category creators for middle India. And the second is enablers for the global. Welcome Bala to the 100x Entrepreneur podcast.

Bala 4:02

Thank you Siddhartha, very happy to be here.

Siddhartha 4:05

So let’s dive deep into your experiences building global SaaS companies. What are the few things that you have learned, which you still find are the necessary ingredients to build a 10 million ARR Sass company?

Bala 4:25

So Siddhartha India right now is in an amazing place in terms of very, very high quality entrepreneurs in the SaaS space and people are coming off very strong organizations, whether it’s FreshWorks, whether it’s Chargebee, whether it is Zoho, etc. So the talent is certainly there. And the vast majority of Indian companies that we see that seem to be on a path to scale, are the ones that clearly have a good product. So the product becomes stable. stakes, otherwise you can’t really compete. But the key determinant for people to hit the traditional ARR benchmarks, if you will which is if you get to 1 million, you can grow 3x, for a couple of years, and then at least grow to x from there, which is a 1-3-9-20 kind of trajectory has always been your GTM motion.

And especially Indian SaaS companies going global. Where we have seen the ones get off the block very quickly, once they get product market fit, are the ones that have in the DNA in the founding team. It either it’s a combination of co-founders, or they’ve been able to assemble the right GTM team, were very quickly they’re able to establish a football in the largest market, which is the US, but more importantly, build very consistent, smooth GTM motions from India while having some feet on the street in the US. So I think that turns out to be a critical determinant of success. Obviously, there are a lot of other factors, including how you design your product, how you land and expand and how you grow, etc. But overall, GPM seems to be the crucial ingredient to getting to scale and the 10 million ARR range.

Siddhartha 6:29

Let’s dive second into the first team that Arkam focuses on that is the category creator for middle India. Why this team, you want to focus on why not bharat? And in your opinion, what are the six essential ingredients for a company to build out a very large company in this theme?

Bala 6:53

Yeah, so when we started our company, the whole idea for Raul and I was to increase in 2018. Seeing a lot for the second time. Third time founders are even new founders, who were kind of done with building products for, for really the top portion of the pyramid in India. Okay. So while there’s a lot of talk about Bharath, versus Metro India, we learned more and more that they were a lot of founders who are solving fundamental problems with products and challenges. And I’ll give you examples, that from day one, or within a couple of years, could have 3040 50 million users. And these ended up with our investments in companies like KrazyBee, which is probably India’s single largest digital lender today. Companies like small cases, and Jar, they’ve also invested in jumbo tails, they’ve invested in people like smart staff, which is in blue collar, skilling. And these are companies we call category creators, where they are taking a new digital solution that was previously not available for that given category.

So investing in these companies, what we found was, there are about five or six key parameters that these founders and these companies have managed to solve that give that kind of turbo charge to their product and creates a lot of very deep moats for them. So I’ll try to give you an example of each of these from our companies. And we can double click wherever you want to, right. So if you take friction to adoption, so what we have found is, a lot of these areas there are, it’s not that what our companies are doing is dramatically new in terms of the actual activity, But what these companies have managed to do is solve for two, three of the six areas that in a way that really makes their product take off. So to list the six areas, I’ll come back to them one by one. One is can you reduce the friction to adoption of your product? The second is, is your product a small ticket high frequency and we come back and explain why that’s important, because that is how middle India operates.

And when we say middle India, we’re really talking about consumers who are in the three lakh to 20 lakh per year annual income range. And within that, there is a division. People between three lakhs and 28 lakhs tend to be more on the blue collar side, 8 lakhs 20 lakhs can be more skilled but lower end white collar . So first was low friction adoption. The second was a high frequency small ticket. The third is how you spend, what we call daily, weekly versus monthly annually, the way you spend your money there and the way you earn, it tends to be daily, weekly, not monthly.

The fourth was around trust, if you’re going to have a product that scales in middle India, with people who are just beginning to understand how digital apps work, you need to definitely build a lot of trust into that. And we’ve talked about the last couple of things, not the least of which being how you kind of need to build a multi product platform. So these are some of the key ingredients that we felt were really important.

Now, just to give you a sense for how some of this, some of this actually works. If you take a company, like Jar, which is one of our investment, I mean, jobs today got three 4 million users, the company is less than a year and a half old, small ticket savings per se is not new and the name jar itself tells you that anywhere you go in India, whether it’s male or female, people put away a little money for their son’s education, they put away a little money for their daughter’s wedding, they put away a little money for something else. And there have been savings apps before. But what attracted us to Jar was they solved one of the key ingredients of people just getting the app and using it, which was using digital gold. Up to 50,000 rupees digital gold doesn’t require KYC. This may seem like a very small thing. But if you had to make a saving where you essentially came in and said, Okay, take out your Aadhar card, give me your bank income statement, etc. get your KYC done, as saving is not a natural habit, the friction just increases.

In Jar’s case, when we saw the original demo we were blown away by how quickly you could be up and running on this app. And that itself, then the rest of it checks out the team is very good at building products, the team is very good at marketing, etc. So that is the example of one and someone like a KrazyBee, for example, when we first saw KrazyBee, they were doing a few 1000 loans a month. Today KrazyBee does over a million loans a month. But the key to KrazyBee success has been their understanding that going back to my original point about cash flow being a real problem by all the banks and everybody, you could go in and borrow for a lock or for 50,000, which again, was a very complicated process. The average middle Indian has a cash flow problem where in a given month you’re paying your kid’s school fee, suddenly you don’t have money to do other things, you need a 10,000 rupee loan 20,000 rupee loan.

And built on the back of UPI on the back of Aadhaar on the back of eKYC. KrazyBee was able to build a very beautiful process flow where money was in someone’s bank account in 15 minutes. So again, small tickets are high frequency. And what that means is because people have this cash flow problem very often, KrazyBee has a 70% repeat rate, and they have people who come back to them two, three times a year. And this completely changes your business model versus a traditional NBFC or however you are and it’s actually a profitable model because it is profitable at a net margin level not even, cm one cm two, etc. And they’ve clearly scale very, very nicely.

So, in all of these six themes,we don’t go in with a checkbox saying hey, there’s the company checking on six but we’re really looking for the founders insight into why something does not work today in this category and what are you doing differently that will allow you to make it. The third thing for example is that all 90% of middle India incomes are the 500 million people between three lakhs and 20 lakhs a year 90% of their income goes into only five categories. If you look at their wallet, you will find that they are, in some way shape or form, in financial services, usually trying to borrow money.

They are spending a fair amount of money on health care, even if they don’t want to, they are spending money and commuting which is logistics going to work and coming back from work is spending money on education. And essentially overall in these five or six categories 90% of the money goes and entertainment a little bit here or there. So when you look at the way they operate with digital apps, while you have this insight that is not enough, one of the things we learned when we were doing smart stuff, which is smart stuff, is a company that helps manufacturing enterprises hire blue collar workers. It’s very different from Apna Apna as a job board, smart staff is most of the smart staff workers and users are outside your big city right outside Bangalore, you go to to code, there is an industrial layout in an area, there are literally 1000s and 1000s of manufacturing workers, textile workers, etc.

What is changing in India, the insight we got from the founders was just like you and I wake up every morning, look at our phone. Today, I got up in the morning. I have two o’clock with Siddharth. With 70% of manufacturing workers having a smartphone, there is an opportunity to go in and make yourself part of their fabric of how they operate right. Now, at this level, everybody can have a thesis, the question is how do you make it work. And the insight that the smart stuff founders had was essentially the fact that if we want to have a lot of adoption on a platform, today, more than 50,000 workers are on the smart stuff platform. If we want to have a lot of adoption on this platform, we have to solve some fundamental issues. And those fundamental issues are around worker attrition, so over 30-35% of workers turnover every month, which is what causes the problem for enterprises.

So in the SmartStuff case, they found that one of the big reasons they have turnover is that workers are not confident in getting paid at the end of the month by the contractor, contractor siphons off their PF, they provided an app where the worker can come to the app every day, understand exactly what the PF is. And they’ve also worked with the enterprise to pay the worker every two weeks. So middle India thinks in terms of daily wages and weekly wages, not in terms of annual paychecks or monthly paychecks or annual annual bonuses the way we do. So these are the types of insights that allow you to build a product that is much more stickier, and has lower leakage, etc.

The other issue, I’ll give you an example. And the last one, and I’ll stop to doubt if you had any questions on this is, low cap to LTV. This again, sounds very obvious, but what we look for is it is not low CAC, as in just LOW. It is an order of magnitude lower than someone like a KrazyBee can acquire a customer for 300 rupees.A bank today for a credit card customer it cost them 7000 rupees. So it’s not even in the ballpark, we are talking about a completely different level of acquisition. So when you combine this very low CAC, with high retention, you suddenly have a business model that begins to work in servicing the middle India consumer. And historically, that’s been the problem. The problem with middle India is it is a very diversified set of consumers in small towns. And if you’re going to put up brick and mortar, you’re going to have heavy logistics going in and out. You’re going to do feet on the street, you can’t make money. But if you’re going to go digital to make money, you need to understand the psyche of the consumer and build certain flows that allow you the stickiness and the retention and all of a sudden it’s a great business. So just some examples to give you a sense of that.

Siddhartha 18:37

Dear listeners. Before we dive further into the podcast, I would like to welcome Prashant Kunti, Head of Product Management at Zoho payroll and Zoho book, Prashant, what makes Zoho payroll different from its competitors?

Prashant 18:52

Thanks Siddhartha. First up, payroll, from the ground up, has been designed so that it can address the payroll complexities as well as larger enterprises. So once you have signed up, started using Zoho payroll, you’re never going to outgrow it. Secondly, it’s very easy for you to onboard your employees, your payroll department can easily get the hang of Zoho payroll, very easy. There’s no complexity. We have abstracted all the complexity, we take it all. Everything is handled under the hood. Thirdly, Zoho payroll plays very nicely with the Zoho ecosystem. So once you have signed up and started using Zoho payroll, and once you have expanded your Zoho footprint, you’ll see the benefits of integration and data movement, thereby improving decision making across your organization. And finally, Zoho payroll is not just a product, it’s going to be a platform as well.

Siddhartha 19:58

Thank you Prashant. Dear listeners, you will find more about Zoho payroll in the show notes. Now, let’s further continue with the podcast.

So just iterating over those points again. So what you require for a middle India category creator, serving the income of a three lakhs annual toward 20 lakhs annual on the highest end, you need a low friction product, you need low ticket, very high frequency product which can almost be used on a daily basis, you need a low cost of customer acquisition and a very high retention, where a customer can continue to use the product on a daily or a weekly basis for years and years. You need a very high level of trust. And the last is you want to evolve from a single problem set to a platform with multiple products.

Bala 20:52

I was talking to Harshil at Razorpay last year, and one of the things that Harshil said that really stuck in my mind, which is he said, India is one of the few countries where the same company that sells table salt also makes cars and also actually exports software. Okay, obviously talking about Tata. But there is a very important lesson there. The vast majority of India has a small wallet, you can lead with a particular product. But then you need to have a product platform where you’re leveraging that retention and that LoCat to go in and sell multiple products. You can have an internal debate whether you want to be for example, a KrazyBee today, sales insurance, they actually sell CASA accounts, they sell credit score, they sell a bunch of things, but they could also if they wanted to go outside, shall I say go outside financial services, which is what that has done. But what we mean by product platform is does the founding team, as part of their growth strategy, understand this. And do they have a game plan as to once we get to this level of stability, this is how we’re going to maximize our footprint, without which at least we don’t believe you can be a large category.

Siddhartha 22:23

Got it. And Razorpay has clearly demonstrated that With now various products of Razorpay now towards the standard default for payment. In India, When anybody thinks of payment, nobody can escape a Razorpay at least.

Bala 22:39

Correct. And speaking of Razorpay, even Razorpay since one of the points we didn’t fully touch upon was the issue of trust. If you look at Razorpay, one of the things they did really well, in the initial days the bulk of their revenue was coming from larger enterprises. But if you talk to Harshil, he will always say our game plan was always to go after small businesses, but they were clever enough to know small businesses wouldn’t pay the bill early on for you to grow. But they invested a lot of money in going to small towns with digital content and events. He would go to a small town where a Razorpay customer would stand up and talk about how they’re using Razorpay. But the onboarding was completely digital, if anybody else was saying, Hey, I also want to use razor pay, they would just point him to a link and say, Hey, go click here, then the engineering challenge was how do you take somebody who’s clicked on a link in a small town through the engineering journey and a product journey of downloading the app and using it.

So digital content for millennial users in middle India, is a great way to build trust, and the content has to be given for free. And these millennial users because they watch YouTube, they watch everything, learn to trust your brand, if you put out trustworthy content. And then you build your product GTM from that.

Siddhartha 24:08

So this is the part where we cover the enablers. Now we enter into enablers we have covered the part for the category creators, what is required for a category creation truly to happen in the Indian context. Now, switching over to enablers. What are some of your investments in the enabler side and how did you decide to make those? What are the parameters that you were looking for?

Bala 24:32

Yeah, so some of our investments are companies like Signzy is an investment that I’m very familiar with. We had seed funded them at Kalaari. Then we invested in them at Arkam as well. SpotDraft is a company that we’ve invested in, we’ve invested in customer go. Rahul, my partner in the past has done more engagements, which has done very, very well So on and so forth. So if you were to just take a company like SpotDraft. And look in this entire conversation, we all know, the universe we operate in. All the discussion we’re having is more around the point of investment and how we feel about them today. But clearly all these companies have their own challenges of scale and some things are going to work, some things are not going to work. But our approach with a b2b SaaS company.

First of all, we try to understand where the real critical mass is for the first couple of years of this company? Okay, so for example, a Signzy is very different from a squad draft. Okay, Signzy came in saying, We think there’s a massive Small Business onboarding problem for banks. This was in 2017. If somebody told you a company could be 10 plus million ARR, and said that you were asking about scale earlier, in India, just servicing Indian financial institutions, you will really scratch your head because there were no proof points at that point in time. But in Signzy’s case, they checked one box that we see as crucial if you’re going to be a SaaS company out of India, for India, and outside India, which is the value prop is crystal clear.

In Signzy’s case, a bank could onboard in three days what would take them three weeks, and they could cut their cost of onboarding by 70%. So no ifs, ands, or buts. And as a result, they’ve been very, very successful in the Indian financial landscape in terms of getting to 10 plus million ARR over three years, because the product has significant value, one and two, what works in their favor, which is great news for b2b SaaS companies looking at India, even India alone is b2b SaaS for medium to large enterprises in India, I think the time has come, companies are willing to spend, they are willing to spend one to two crores a month in terms of SaaS subscription, as long as the value is there. Someone like a spot draft was very different.

In SpotDraft’s case, here you have a company that is claiming to want to go head to head with a very well funded competitor out of the US that is not of 700 million in valuation when we invested in SportDraft. But the main boxes they checked for us and this is what we kind of follow and approach with us as companies is when we started out the conversations that you asked about GTM, etc. For us, it was hey, what is your GTM motion to win out of India as a global horizontal SaaS product because we bought into the fact that the product is world class. We bought into the fact that it was very elegant. Customers love the product in terms of retention, very low churn, etc. The real question was, can this product be successfully sold from India into environments like the US? Or are you going to spend two or three years learning how to sell in the US?

So the first checkpoint for us was simply to see what is the direction trend line of your inbound from the US which was very, very healthy for SpotDraft. But we actually ended up introducing all our SaaS companies to a bunch of new prospects, just to understand their GTM motion out of India, again, not to harp on GTM. But obviously, there are a lot of other considerations regarding founders regarding products, architecture, so on and so forth. But GTM happens to be one of the crucial elements. In SpotDraft’s case, we introduced them to three, four customers, and we got to see for ourselves that the sales cycles were two to three weeks, the implementation cycles were two to three weeks, a couple of these customers, these prospects became customers, we got feedback from them. And most importantly, in our reference calls with other prospects, we got to see that they were beating the number one competitor six or seven times out of 10.

And lastly, the founder mix is such that these guys were already proving their ability to understand what it takes to sell in the US in the way they hired and the way they put together account management teams, and the way they were able to demonstrate land and expand. And you just need some examples. The company was some 1 million ARR and they were doing it but for 20-25k ACV company that’s a meaningful number of customers where you can you can kind of draw conclusions, but in a nutshell, for us in addition to the product and the founding team and how you’re building, understanding your GTM motion, which is the load carried by inside sales, the load carried by feet on the street people, and how well you were able to convert your top of the funnel into the middle of the funnel and to close leads early on is a pretty good signal, especially for small ticket mid market SaaS companies.

Siddhartha 30:27

And while talking about enterprise SaaS. What do you think of India focused Saas? Where is it working, not working, a customer’s ability to pay, is that also changing with time?

Bala 30:44

Yeah, I think in a nutshell, I would say, we have seen several companies. In fact, we are in the process of investing in a company that I won’t name, but this is a very young company that is in the industrial training area, they are able to go to large companies in India, which is some of the largest BSE listed companies, where they are able to get them to start out at 40k USD ACV, and expand to 100k, 150k ACV within year one and even sign multi year contracts. My broader point is large enterprises in India are increasingly understanding the value of technology and digitization.

And if you are able to show them true value, such as this company where you’re able to reduce costs and increase revenue, I think now is your time under the sun compared to even five years ago, the part where we have more hesitation and India is going after the India mid market. And what I mean by mid market is true mid market, small businesses in India, who have all the original problems we discussed, they have a cash flow problem, they have a revenue and across problem. And we have not found too many SaaS companies in India at a successful healthy pace in terms of variation of Saas companies to crack the Indian small market with the SaaS model. And the reason for that is very much the fact that you can acquire a lot of customers. We have seen companies with 50-60,000 customers, but the propensity to get the customer to pay is very, very low.

And as a result, you then pivot into Hey, I’ve got all this customer data, I’m now going to get, for example, into FinTech lending, which seems to be a very popular place for everybody to end up. So we feel if you’re, if you want to be a true SaaS company, true SaaS model in India, and you can show the value, there is a lot of picking at the larger company, enterprise level company. But if you’re going to be in mid market SaaS, we feel you ought to be part of the transaction, you can have a SaaS delivery model, but if you can show value as part of every transaction on revenue and cost and price accordingly, we have seen more successful companies in those areas.

Siddhartha 33:24

In your experience at Arkam, what are the things that you believed were true and you invested in without naming the companies, but it didn’t prove out over a period of time? What are the learnings there?

Bala 33:39

See, I think Arkam I would say it’s too early for us to comment, but I try to comment on it in general over the years. What we have kind of invested in. Because this is the third year of Arkam, they’ve been very fortunate with a good portfolio. Overall, I think what hasn’t worked out which honestly led to our current thesis is building products that initially target a certain customer segment. And then for the sake of scale, you have to pivot into a new customer segment. All these six points are made about the middle India framework. None of them actually apply to customers living in the metro cities who are making above a certain income level. For example, you will never borrow from a crazy person, you’re very unlikely to invest in a Jar, you will never use smart stuff. You are very unlikely to actually have a business that uses a Jumbo tail.

So what we have learnt is that India has multiple consumer segments. Many consumer segments are very large, but you need to build a product from scratch for that. That’s point One. The second thing that we’ve learned is that founder market fit is as important as product market fit. To go after, even if it is a b2b SaaS company, we meet b2b SaaS companies that are very strong engineering leads from successful b2b SaaS companies from India, for example, this is really no particular example. But I’m giving you one for the sake of it. Let’s say that the head of engineering and the head of product for a 50 million or 30 million ARR, SaaS companies from India get together and they’re trying to build a product. We love that we think that’s terrific. But we also find that there is often a long gestation period and cracking the GTM motion. And some of these teams have absorbed it, understood it, they quickly put people around them, or they themselves figure it out, but many others still underestimate it because what worked in the past company worked as a platform, and you’re not necessarily equipped to do so.

So I think founder market fit is a pretty important aspect for us in terms of what we think works. And lastly, we think not all markets are created equal. In b2b SaaS, we see lots of companies where we scratch our heads wondering whether it is a treacher? Or can it really become a product platform? Or Can this really become a 100 million ARR company, where you can get very excited about a nice product, initial traction. But if you don’t believe or can’t visualize, visualize the end state market, which many great founders are able to even create. Because they could go into adjacencies, etc, over time. But on average, I think many of the categories coming out of India, because now there is such a plethora, not all categories are created equal. So we have a pretty watchful eye on that based on some past lessons.

Siddhartha 37:14

And you don’t invest in content led businesses for the mass India, like a tik tok for India, or you think the board has passed for that?

Bala 37:25

Sorry, say that, again?

Siddhartha 37:28

I’m saying that you have a clear no against, for example, content led businesses, for example, a tik tok for India, somebody’s building for that.

Bala 37:38

So I’ll clarify that that’s not true at all, because we would invest in that, because if you’re going to be a successful mass market company in India, 90% of your customers will come from metal India. So we will be very interested, all these players, like we find Kuku FM to be a very interesting company, like a local to be a very interesting company, companies like that we will be very, very interested in what we are less likely to invest in is for example, if you said, Hey, I’m building a very high end fashion brand, just for the top 10 million in India. Because the price points are such that, it is something that we think we can be very profitable, we can be a very large company, we are unlikely less likely to do something like that.

Siddhartha 38:33

Your experience has mostly been on the enterprise side in your career before you became a VC?

Bala 38:39


Siddhartha 38:41

So what gave you an edge into the middle India consumer?

Bala 38:47

So a lot of it was, the work we started doing, both Rahul and I. One of the first areas people digitize in India happens to be financial services, because one of the first things people use their mobile phone, apart from watching videos, is to make a payment. And one of the first transactions you’ll ever make is actually to book a ticket. This is all there’s a lot of data around this. So those are the low hanging fruit. For us, at least for me, specifically, I think two companies really drove a lot of this for me, I think, investing in a jumbo tail in 2016. At a time when 4g was just coming and working. And walking the streets going to the APMC yard and really understanding how middle India consumers think or how a small businessman operates, really began to check the boxes saying it’s a completely different segment that has its own needs.

And the more we can understand this, the better off we are, like for example Jumbo tails in the early days would actually allow people to help people get a SIM card so that they could use the app. Okay, but they knew 4g was coming. Today Jumbo Tail is in 50 cities, they have 50,000 200,000 Kirana stores on their platform. And they’ve done a lot. Similarly, the original investment and Upstox. At that point in time, there were only 8 million Demat accounts in India, conventional wisdom would have been, hey, India is never really going to be a very large standalone trading opportunity, or individual investors would never invest in it. But if you actually went and looked at the consumers for a ShareKhan, and you looked at the consumers who are I mean, Zerodha is a great comparison.

Vast majority of them are not people like you and me, the vast majority of them are people who actually want to invest in the stock market and simply didn’t have better digital means of doing it. So upstox was very much against the grain kind of bet at that point in time. But what really helped with someone like an Upstox is just having been in a brokerage firm before. And having seen that trend, for example, in the US or the Scottrade. And with Charles Schwab, where you knew the eventual small ticket retail consumer would get on platforms like this. And clearly there’s been serendipity for Upstox in terms of eKYC in terms of digitization, overall smartphones in terms of COVID. Today, I think they’re onboarding almost a million consumers a month, etc. But for us, a lot of it has come from working on the ground. And the same thing for my partner, travel. He started out with Shubham and Spandana and he’s done a lot of work that kind of led him to the jars and the small cases just like it led me to someone like a KrazyBee.

Siddhartha 41:53

Got it. Thank you so much, Bala. It’s been a pleasure in sharing, understanding your learning frameworks, your investment frameworks.

Bala 42:05

Sounds good. Thank you for having me and appreciate it.

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