Oct 3, 2019 · 46m · neon-show
100x Entrepreneur | Episode 19 | Kunal Khattar, Founder and Managing Partner of AdvantEdge Founders
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Kunal Khattar, Founder and Managing Partner of AdvantEdge Founders, discusses his specialized venture fund's thesis on Indian mobility, the operational superiority of asset-light business models, and his operator-first approach to building sustainable 'Indicorns.'
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 1.9 Guest teaching 3.8 Guest disagreement 1.3 Siddhartha pushing back 1.0
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:54 Guest rejects host classification of portfolio companies
When the host asserts that Shuttl is an asset-heavy business, the guest immediately and firmly rejects the premise by breaking down its marketplace structure.
Hardest push from Siddhartha ▶ 15:48 Host challenges guest's asset-light investment thesisThe host actively challenges the guest's preference for asset-light businesses by naming Shuttl as an example of an asset-heavy bet in the portfolio.
Biggest teaching moment ▶ 15:54 Guest educates host on transit marketplace economicsThe guest explains how Shuttl avoids fixed maintenance and capital depreciation costs by contracting private operators on hourly and per-kilometer bases.
Siddhartha holds their own ▶ 3:40 Host connects US IPO performance to Indian mobility viabilityThe host demonstrates domain awareness by citing the underwhelming public debuts of Uber and Lyft in the US to probe the long-term unit economics of Indian ride-sharing.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Automotive Heritage and Lessons from Carnation Auto | 3 | 5 | 2 | 1 | The host asks informed questions citing the post-IPO market struggles of Uber and Lyft. The guest reframes this conventional pessimism by breaking down early tech IPO valuation dynamics and explaining why mobility requires deep offline execution in India. | |
| Backing Shuttl and Refining the Mass Transit Thesis | 2 | 4 | 1 | 1 | The host queries Shuttl's seed origins and ticket sizing. The guest provides detailed insight into how Shuttl pivoted from intercity shared vans to point-to-point intra-city transit to capture an unserved price gap. | |
| Case Studies in Scaling: The Journeys of Rapido and Chalo | 2 | 4 | 1 | 1 | The host asks about early growth in Rapido and Chalo. The guest explains how regulatory constraints forced Rapido to pivot from bike taxis to bike sharing and details Chalo's tech stack for municipal fleets. | |
| Expanding Fund 2 Horizons: EVs, Digital Auto, and Logistics | 4 | 6 | 3 | 4 | The host pushes back against the guest's praise of asset-light models by asserting that portfolio companies like Shuttl are asset-heavy. The guest corrects the host by detailing Shuttl's asset-light marketplace mechanics and unit economics. | |
| Opportunistic Exits and the Math of Returning Fund Capital | 2 | 3 | 1 | 1 | The host asks about early fund exits and GP/LP composition. The guest explains his fund math of returning capital early through Indicon-sized valuations rather than waiting for unicorn outcomes. | |
| Evaluating Anti-Portfolio Bets and Deliberate Omissions | 2 | 3 | 2 | 1 | The host asks about anti-portfolio companies that scaled. The guest defends passing on Drivezy and Vogo, arguing that asset-heavy fleet models face steep depreciation and maintenance issues after several years. | |
| Syndication Partners, Co-Investors, and Super Angel Alliances | 2 | 5 | 1 | 1 | The host asks about co-investors and portfolio write-off learnings. The guest outlines a clear operational framework matching founder age and stamina to grueling last-mile businesses versus digital products. | |
| Daily Routines and Fund Management Time Allocation | 1 | 2 | 0 | 0 | The host inquires about daily routine and time allocation. The guest breaks down how early-stage fund life cycles shift GP time between fundraising and deal sourcing. | |
| Proprietary Sourcing and Auto-Tech Alumni Networks | 1 | 3 | 0 | 0 | The host asks how deal flow works for a sector-focused fund. The guest explains proprietary deal sourcing originating from relationships with executive alumni of leading Indian auto portals. | |
| Unforgiving Realities and PMF Timelines in Indian Markets | 1 | 4 | 1 | 0 | The host asks about unseen hardships. The guest details the steep learning curve of returning from the US to India, highlighting first-mover disadvantages and unavoidable multi-year product-market fit cycles. | |
| Embracing Failed Founders and the Zero-to-One Mindset | 2 | 4 | 2 | 2 | The host prompts about managing founder failures and makes a lighthearted remark about parenting patience. The guest presents a contrarian view on actively backing failed founders over first-timers. | |
| Founder Wisdom, Marathon Mindsets, and Prioritization | 1 | 3 | 1 | 0 | The host asks for core founder advice and daily success habits. The guest emphasizes customer centricity over competitor watching and viewing startup journeys as marathons composed of individual dashes. |
Statements from this episode (28)
Khattar: AdvantEdge aims to build 10 to 15 1,000-crore 'Indicorn' companies
“I think today if you ask me what's my purpose in life, it's to basically, I started this fund to create successful Indicons. Which is our definition of thousand crore companies as opposed to unicorns, which are a thousand million companies. Ultimately it's, if…”
Khattar: 300 Million Commutes Take Place Daily in India
“In India, you know, three hundred million commutes happen every day.”
Khattar: Mobility Startups Require Local Knowledge Over Overseas Entrants
“Mobility by the very nature of the space requires a lot of offline, last mile execution, ah, expertise, ah, where you have to have people with local knowledge who can definitely create competitive advantages to companies who come from overseas.”
Khattar: Shuttl pivoted from intercity shared Innovas to intracity point-to-point transit
“Initially, of course, Shuttle was trying to, thinking of running intercity micro buses, which are Innova's in a shared
Way.
And I think we did a little bit of brainstorming and discussion.
We realized that the larger opportunity might be Intracity, which we di…”
Khattar: Indian transit had an unaddressed market gap at 75-100 rupees
“Private mobility or when you're commuting to work in your own four-wheeler used to cost about three to 400 rupees a day, back and forth.
Uber or Nola at that time, in spite of being highly subsidized, would also cost somewhere around that price point.
And pub…”
Khattar: AdvantEdge wrote its largest investment check into Rapido
“I think the biggest in check that we wrote was in, in in Rapido.”
Khattar: AdvantEdge convinced Hero Group's Pawan Munjal to invest in Rapido
“We also were able to convince Mr. Pawan Munjal to put in a personal check.”
Khattar: AdvantEdge led Rapido's investment at $2M-$2.5M valuation
“Rapido, as I already mentioned, we were the lead investor. We came in at, you know, two, two and a half million valuation.”
Khattar: Rapido operates in 35-36 cities, hitting 150K rides on peak days
“That is what allowed us to now ultimately roll out Rapido across almost 35 35, 36 cities. On a good day we could even do 150,000 rides.”
Khattar: Four-Wheeler Form Factor Is Wrong for Indian Shared Mobility
“The four-wheeler form factor is not the right product for a country like India, which is why we focused on shared mobility applications and solutions using two-wheelers, three-wheelers, and, ah, buses.”
Khattar: Digital Auto E-Commerce in India Lacks Clear Winners
“We're also looking at opportunities in digital auto, and that's an exciting area for us because we feel that you know, the e-commerce model in auto is still not have been invested in. We don't have clear winners there.”
Khattar: AdvantEdge grew asset-light startups 50 to 100x, unlike asset-heavy investments
“What we realized was that asset light businesses where the focus is predominantly on just building technology and you know, managing customers were businesses, which where we were able to build
And grow businesses 50 to a hundred X from the time we invested in…”
Khattar: Asset-light models in India are superior to physical infrastructure businesses
“If you have physical products or physical assets on the streets, a predominant, a majority of management bandwidth is, goes towards managing those physical assets, and whatever time is less from managing assets is when you're actually managing businesses, and …”
Khattar: AdvantEdge targets $150M exits rather than waiting for unicorn status
“Being an early stage investor, we're coming in at, you know, sub million to two million dollar valuation. So we really don't want to be as part of the journey to build these companies into billion dollar companies. We are more than happy to exit at the one fif…”
Khattar: AdvantEdge Fund 1 expects to return 2-3X within five years
“So we are hopeful that we should be able to take a couple of, ah, more exits in the next 12 to 18 months, ah, to be able to return almost two to three X of the fund within the, within a five year horizon itself.”
AdvantEdge Founders only hires former entrepreneurs, not career investors
“So the advantage we only hire People who run businesses and I have entrepreneurial experience. Till now we've not hired anybody who's been a career investor itself”
Khattar: AdvantEdge passed on IndiaLends and EarlySalary over small check sizes
“Two of the ones that we missed was, ah, India Lens and Early Salary. Ah, both of them were raising larger sums of capital. We had shown interest. We did take the process down to a conclusion level, but we realized that the check size that we were putting in ov…”
Khattar: AdvantEdge passed on Drivezy and Vogo to avoid asset-heavy models
“On the mobility side, we have we looked at and passed on both DriveZ and Vogo, and the reason for that was our inherent hesitation to invest in businesses that have asset heavy or manage physical assets across their network.”
Khattar: Asset-heavy models hit maintenance and depreciation spikes after 3–4 years
“Asset heavy businesses take about a three to four year cycle for those assets to start depreciating and you know, cost of maintenance start going up.”
Khattar: AdvantEdge Fund 2 writes $150k to $500k initial seed checks
“So one is what we refer to as seed investing, where we will cut checks from everywhere from about you know, 150 K to about 500 K would be the first check size, and we would continue to prorate on at least two to three rounds in each of those deals capping out …”
Khattar: AdvantEdge co-invests frequently with Sachin Bhatia and Rajan Anandan
“We've done a number of deals with the with Sachin Bhatia, the ex-founder of Make My Trip, current founder of Bulbul. We've done a number of deals with Rajan Anandan in his angel hat. He shares a number of good quality deal flow with us.”
Khattar: Operations-heavy tech startups need younger founders
“And what we've seen is that if you're doing business, you're executing businesses which are all still tech-enabled, but require, ah, a lot of last mile execution, may not be physical infrastructure, but you're still trying to acquire a supply side or demand si…”
Khattar: Pure digital businesses require experienced founders
“On the other end of the spectrum, they're pure digital businesses. Think social media. Think digital content, et cetera. Where you can basically just implement technology and the use of online digital to be able to execute and acquire customers across the coun…”
Khattar: Indian Startups Often Face a First-Mover Disadvantage
“There's a first mover disadvantage in many cases when you're trying to build companies in India.”
Khattar: Reaching PMF Takes 2-3 Years Regardless of Funding
“No matter how much you're funded and how many people you have, it is going to take two to three years to get the right product market fit. So you can't really speed that up”
Khattar: AdvantEdge Never Invests on Projections; 90% of Portfolio Misses Targets
“We've never made an investment based on projections, and I think nine out of 10 times nine out of 10 of our portfolio companies have not, never really hit the targets and numbers that they sought out to achieve.”