Jun 21, 2021 · 47m · neon-show
Backing the best D2C companies with Debt & Equity Funding | Ashvin Chadha, Anicut Capital
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In this podcast episode, Ashvin Chadha, co-founder of Anicut Capital, unpacks his firm's hybrid model combining private credit and venture equity to support Indian startups. He shares key insights on disciplined portfolio construction, patient 10-to-15-year compounding, and empathetic founder support across leading consumer and D2C brands.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Siddhartha as informed peer 4.2 Guest teaching 3.9 Guest disagreement 0.5 Siddhartha pushing back 0.2
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 8:21 Ashvin counters short-term valuation hype with portfolio discipline
Ashvin directly tempers Siddharth's enthusiasm about sudden unicorn valuation surges, emphasizing that heated market spikes can reverse just as fast.
Hardest push from Siddhartha ▶ 25:26 Siddharth challenges the macro bull market narrativeSiddharth directly presses Ashvin on whether the broader Indian startup bull market is nearing its peak or has multi-year runway remaining.
Biggest teaching moment ▶ 10:55 Ashvin explains why premature secondaries destroy long-term compoundingAshvin uses early institutional exits in Nykaa to demonstrate how selling after a 3x return sacrifices the massive 30x compounding unlocked by holding for a decade.
Siddhartha holds their own ▶ 45:07 Siddharth highlights his personal sourcing and backing of Neeman'sSiddharth demonstrates his active dealmaking role by walking through his initial discovery, podcaster sponsorship, and connection of Neeman's to Anicut.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Ashvin Chadha's Career Background and Origins of Anicut | 3 | 2 | 0 | 0 | Siddharth introduces Ashvin and asks standard biographical questions about his journey from Delhi to New York and back to India. Ashvin gives a straightforward recounting of his career across Morgan Stanley, General Atlantic, IEP, and founding Anicut. | |
| The Origin of Anicut's Private Credit Business | 3 | 4 | 0 | 0 | Ashvin narrates how Anicut entered private credit opportunistically via cash flow lending to a US subsidiary. Siddharth listens attentively as Ashvin outlines the lack of collateral among first-generation Indian founders. | |
| ShareChat Investment and Portfolio Diversification Strategy | 6 | 4 | 2 | 1 | Siddharth brings sharp context regarding ShareChat's valuation trajectory around the TikTok ban. Ashvin validates the host's points but tempers the excitement by cautioning that extreme markups are outliers and emphasizing disciplined portfolio construction. | |
| Debt vs. Equity Exit Horizons and Value Compounding | 4 | 6 | 1 | 0 | Ashvin delivers a clear masterclass on the operational mechanics of bridge debt versus the patience required for equity compounding. He uses Nykaa's secondary exits as a case study to show why selling too early forfeits massive upside. | |
| Portfolio Resilience and the Flintobox Pandemic Pivot | 5 | 4 | 0 | 0 | Siddharth asks about mental models when underwriting debt versus equity. Ashvin elaborates on underwriting late-stage profitable balance sheets for credit versus partnering with founders for seed equity, citing Flintobox and Earth Rhythm. | |
| Managing Debt Risk and Pandemic Restructuring | 4 | 4 | 1 | 0 | Siddharth asks about investments that failed, prompting Ashvin to describe severe pandemic disruptions in restaurant portfolio companies. Ashvin highlights their restructuring philosophy to preserve capital rather than rushing into NCLT or litigation. | |
| Supporting Founders Through Early-Stage Equity Failures | 4 | 5 | 0 | 0 | Ashvin candidly breaks down the 40 percent mortality rate of seed investing and the emotional toll on founders during payroll crises. He explains why Anicut supports repeat founders even after prior failures and contrasts institutional debt hurdle rates with venture IRRs. | |
| Macro Outlook: The Golden Age of Indian Startups | 5 | 4 | 2 | 2 | Siddharth challenges Ashvin on whether the 2021 bull run is near its end. Ashvin admits the macro cycle might be stretched but reframes the issue around strong unit economics surviving any cycle, likening India's startup growth to the US in the 1990s. | |
| Backing Bira 91 and the Potential for 1000x Returns | 5 | 5 | 1 | 0 | Ashvin shares the origin story of investing in Bira 91 and Ankur Jain's early distribution hurdles. When Siddharth points out the 100x return, Ashvin boldly predicts that the Indian ecosystem will soon see 1000x venture returns becoming the new benchmark. | |
| Scaling Wingreens Farms and the Raw Pressery Acquisition | 3 | 3 | 0 | 0 | Ashvin recounts how Wingreens Farms grew from a village women's collective to acquiring Raw Pressery. He explains Anicut's dual presence on cap tables through combined equity backing and debt acquisition financing. | |
| Financial Services Portfolio and Unconventional Founder Support | 4 | 4 | 0 | 0 | Ashvin reviews Anicut's financial services portfolio companies that weathered GST, IL&FS, and pandemic shocks. He reveals unconventional founder support tactics, such as providing payroll bridge checks before legal paperwork is closed. | |
| Sugar Cosmetics: A Masterclass in Entrepreneurial Grit | 3 | 3 | 0 | 0 | Ashvin highlights Sugar Cosmetics' grit after facing over 50 venture rejections during their FabBag days. He commends Vineeta Singh and Kaushik Mukherjee for building one of India's leading D2C beauty brands. | |
| Co-Investing in Neeman's Sustainable Footwear | 6 | 2 | 0 | 0 | Siddharth and Ashvin bonding over their shared investment in Neeman's Shoes. Siddharth demonstrates domain involvement by detailing his initial meeting with founder Taran and introducing him to Anicut. |
Statements from this episode (31)
Anicut Capital Manages 1,000 Crores Across Two Credit Funds
“We manage about a thousand crores of capital across two credit funds.”
Anicut Angel AIF Closed Over 30 Transactions in 18 Months
“More recently, about a year and a half ago, we launched our first Angel AIF. So there we've been particularly active over the last 18 months. We've done north of 30 transactions there.”
Anicut Puts 10% to 20% Own Capital in Syndicate Deals
“We actually put 10 to 20% of our own capital in every deal. So it's somewhere between a fund and a pure syndicate model.”
Chadha: Bank collateral requirements exclude first-generation founders, enabling private debt
“Banks are very limited in what they do and whatever they want to do, they want collateral. First generation founders don't have that flexibility of offering a, you know, large house or legacy property, et cetera.”
Chadha: Anicut funded its first 30 debt deals off balance sheet
“The first 30 deals we did from our own balance sheet.”
Chadha: Anicut invested in ShareChat via insider bridge round
“There was an opportunity that they had in an internal bridge round that only insiders were doing and we were able to get some allocation there. So that's about a year ago or just about.”
Chadha: Anicut has not sold any shares in ShareChat
“No, no, we have not sold any shares that I think it's too early for us in the journey, but of course it's one of those where, you know, the valuation has gone up significantly since we invested”
Chadha: Building Indian brands takes 10 to 15 years for compounding
“So I, in my view, it takes 1015 years to build brands in India. And if you don't stay the course, right, your compounding doesn't happen.”
Chadha: Early Nykaa exiters missed out on 10x returns
“And they made good money. Maybe, you know, they made three X, four X, but had they stayed for another two years, three years, you know, they would have made a 10 X from them.”
Chadha: Wingreens Farms Acquired Raw Pressery and Is Performing Well
“Win Green Farms again, very early you know great company just did an acquisition of Raw Pressery that company is doing really, really well.”
Chadha: Flintobox Sales Dropped to Zero in Q1 2020 Lockdown
“That business effectively went to zero for the first quarter of last year, April, May, June. We had zero sales because logistics were closed. Warehouses were closed.”
Chadha: Flintobox's 2021 Cashflow Will Multiply Its 2020 Revenue Post-Pivot
“So they pivoted and that company over the last you know, I can say that in the last three months, the cashflow that they're generating is probably going to be more than not three months, but let's say this year, the cashflow that they generate will be more tha…”
Chadha: Anicut Holds Equity Investments Long-Term Until IPO or Acquisition
“We are very long term in nature on the equity bets that we take. So we are very happy to stay the course and eventually exit when, you know, the company is going for an IPO or the founder is ready to sell the business. So on the equity side, we take a very, ve…”
Chadha: Anicut raised 1,000 crores in debt capital without distributors
“And interestingly, Siddharth, we've raised all that thousand crores without a single distributor.”
Chadha: Earth Rhythm reached 1 to 1.5 crore monthly revenue before Anicut's check
“And, you know, all of a sudden she was you know one and a half crore a month direct to consumer brand.”
Anicut Led a $3M Down Round to Rescue a Restaurant Portfolio Company
“We sort of led a three million dollar round An equity round for them, which was done at a much lower valuation, but you know, that seemed fair at that time, right? So we needed that capital to restart operations.”
Chadha: Restructuring Debt with Honest Founders Preserves Capital 99% of Time
“Our view is we, on the debt side, if we can avoid litigation, NCLT, bankruptcy, et cetera to do settlements as much as we can, to do restructuring if required, give people, founders more time. If they're good founders, if you haven't funded a fraud you will ge…”
Anicut has backed founders from previously failed portfolio ventures
“We've actually backed founders who we had backed in the past and did not have a successful journey.”
Chadha: Anicut debt funds delivered 13% to 13.5% net IRR over five years
“Whereas on the debt business, we have delivered something like net of fees for the last five almost five years 1718 quarters. We've delivered about 13, 13 and a half percent net of fees in our funds.”
Chadha: Early-stage equity must target 25-30% IRRs since only 2 in 10 work
“Whereas in early stage, you know, if you are underwriting to 12, 14%, you're gone because only two of 10 will work, right? So we have to go for the 25, 30% IRRs on the early stage equity side.”
Chadha predicts Bira 91 will IPO in India within 5-7 years
“I think that for instance, for me is again, a story for the next five years, seven years I am sure we will see Bira being listed on the Indian markets.”
Chadha predicts 1,000x returns will become common in Indian venture investing
“We're gonna see you know, not just in our portfolio, but in general, we're gonna see a thousand X becoming what 10 X and hundred X were in their timeframe. Very soon. So you're gonna see Those kinds of returns are being generated. There's already a few compani…”
Chadha: Anicut Backed Wingreens with Both Equity and Debt for Raw Pressery
“So we are early investors in the company on the equity side. And we give them money to get money to finance the acquisition of wrong. So, so we are both on the both sides of the cap table, equity and debt.”
Chadha: Wingreens May Reach 500 Crore Revenue in a Couple of Years
“When we first saw it was a three crore a year business. This year they're already on track to be a two 50 crore a year business, and maybe in a couple of years will be a 500 crore a year business.”
Chadha: Aptus and Five Star Business Finance Will IPO This Year
“Two of our financial services companies are IPO this year. They are Apters and Five Star.”
Chadha: Aptus and Five Star Generate 300–400 Crores in Annual Profits
“Those companies generate north of To 5300 crores, 400 crores of profits every year. So very, very large companies, which will, you know, be valued at, who knows few billion dollars.”
Chadha: Lendingkart Is Profitable and Will IPO in 2–3 Years
“Lending cart is from initially, you know, losing a lot of money because for running for growth is, you know, tremendously profitable now. So then I think that I, I'm very confident I'll see, we'll see an IPO in the next two, three years as well.”
Chadha gave written-off personal loans to founders to make payroll
“Personally, for instance, when founders are really struggling unable to make payroll or things like that, you know we've given them a short term loan that effectively we had written off, right?”
Anicut was the first lender to Sugar Cosmetics before A91 round
“Vinita and Kaushik of Sugar. We invested, we were the first lender to them from the Annika debt fund. And this was before the a-ninety-one round.”