The Exchanges

Q And, uh, can you talk about the exit ecosystem? Is M&A the preferred route?

A Yeah, so, I mean, Europe and also Switzerland is not very well known to do IPOs with startups. Pretty much all deals are either with buyout funds or private equity or M&A deals. Um, it's also because many of them, they don't, uh, get enough funding. They don't get the hundreds of millions of funding, but they get the tens of millions of funding, and then often an M&A deal is the better pass. Because if you don't get the hundreds of millions to go really global with your own Salesforce support and distribution network, then you rather join forces of, you know, a bigger player, which already has all of that built up. So I think a lot of the deals were basically formed such that they Create a new product. They get traction. Once they have double-digit million revenues, they basically look to be acquired. That's the classical class, yeah. Doing an IPO, it's possible. Few of them have done it. Onshoes did it, but they did it in, in New York, not in Switzerland, right?

AI assessment note: “Pretty much all deals are either with buyout funds or private equity or M&A deals.”

Q is the real per capita consumption is only growing three to 3.5%. So where is this gap? Like, why is the consumption not growing with the GDP, right? And Also want to understand from you when GDP of India grows by one percent. So this is for people watching the podcast. How does that actually translate into people's life? Does it lead to better jobs, higher income and affordable housing?

A So thank you Siddharth for having me again. I'm glad that the first one, even though it was long, You know, you had so many views. Uh, so that's shows how much curiosity there is amongst people to know what the reality is. So as we discussed in the earlier program, our GDP is not growing at the rate at which the government is saying, because that's the rate at which the organized sector is growing. That's not the rate at which the unorganized sector is growing. Uh, and as we had discussed, the unorganized sector has been hit hard because of demonetization, the structurally faulty GST, the NBFC crisis, and then the pandemic. So in fact, actually the unorganized sector is declining. So our rate of growth is not six, seven percent as the government would like us to believe, but since demonetization, the average may be two percent or one and a half percent or something thereabouts, huh? But because the data that we take is largely from the organized sector, so we keep getting this data thing. Now that explains a lot of things. Because you see, if unorganized sector was growing, then people's income at the lower run, they would be growing. And then that consumption demand would also be there. If they are declining, Then naturally they are the ones because unorganized sector, 94% of the total employment. So if their incomes are declining, then naturally consumption would be affected.…

AI assessment note: “if the income distribution is shifting in favor of the organized sector... consumption rise would be slow”

Q that, you know, Motwani Jadeja Foundation and you took a bet on Neon and me, and got us to Davos, and that unlocked a bunch of, you know, opportunities for us globally. So, so let's start, you know, by, by your journey and Raji's journey, right? How did you both come from India to the US? And how did, you know, you became the founding, uh, uh, stakeholders of Google?

A So Siddharth, basically we both came here like everybody else as students. We came on F-one visa except on different universities. I came to USC at first. Rajiv came to UC Berkeley. And Rajiv came from IIT Kanpur. I came from Ahmedabad from CEPT. And I was studying urban planning. Rajiv's PhD work was in, was in computer science. And we both actually met in UC Berkeley in grad school. Um, and we, you know, at some point got married in 1990. And Rajiv had an offer from Stanford at that point to be teaching computer science. He had already joined as a, you know, as an adjunct faculty at that point. And then he was on tenure track, got tenure. And, uh, uh, you know, we were, then we've been a Stanford family since 1989, actually. And right from there on, um, how did Google happen is a different story. I think Rajiv's work in fundamental computer science, in theoretical computer science, has led to many algorithms, actually. Uh, one of which turned out to be PageRank and AnchorText, and those two algorithms powered the search that ultimately became Google. Uh, it was also a paper before it became Google. And, uh, so Rajiv got founder shares in the company. Uh, and I think it was four or five people only that got founder shares apart from Larry and Sergey. And, um, uh, and of course we were thrilled to be on the ground floor of a company like Google, which, uh, not only changed the …

AI assessment note: “we both came here like everybody else as students. We came on F-one visa”

Q And can you describe a couple of more powerful stories? Because I'm really moved by the story of Munitiga, and I believe my listeners would also be having the same once they listen to this conversation.

A Well, you know, that, uh, nice t-shirt you are wearing, um, and this shirt that I am wearing, and suddenly the, you know, trousers we are wearing, chances are very high that, uh, they come from a tiny municipal town in India, in Tamil Nadu, called Tirupur. Now Tirupur is the Bangalore equivalent of the government export industry. A few years back, Tirupur actually is a municipal town, ok, not even a city. Uh, it produced almost like six billion dollars of government exports for India. It's, it's done by close to, um, uh, 600,000, uh, uh, workers. Half of them are from Tamil Nadu. And half of them are migrant workers from Bihar and Chhattisgarh and UP and Odisha. So out of that half, 50% come from Odisha. And 98% of government workers are women who are school dropouts. So when you wear an H&M product or a Tommy Hilfiger or you wear a pair of, you know, Dockers, uh, chances are an Odia girl has touched that before he has adorned you. Should you look at mannequins in Madrid and in Paris and in Barcelona and in New York and London, uh, the cloth, the, the, the dress draping the mannequin could be from Tirupur. Might have been touched Uh, with, with the hands of an ODIA worker. So where is the story going? The story where it is going is the average government, uh, worker, uh, who's a girl comes there because, uh, she needs to get married and the family can't afford it. Typically you…

AI assessment note: “The story where it is going is the average government, uh, worker”

Q You know, during this podcast, we'll discuss various life stories of you and the people related with you. So can you describe, you know, Mr. Naveen Patnaik as, because he was a CEO in his own right, a CEO of a state, right? Your experience, how did you knew him, your experience working with him and some of the transformations that he brought in the state of Odessa?

A So first of all, I didn't know him. You know, I knew of him. I had no past association and I had nothing to do with politics. Maintree started its global learning center in Bhuvaneswar. It was called Maintree Kalinga at one point in time. That was when the government of Bodhisar was quoting IT companies to come and set up campuses. So during the course of that, he came for the foundation stone laying, and then he came to inaugurate it. So it was very polite interaction during that time. Um, it didn't build any familiarity. Then what happened was, ah, I stepped down from Maintree, ah, on the first March, 2016, and on second April, I had a talk to Deliver, um, at the behest of the Odisha government. This is called Odisha Knowledge Forum, and, ah, they typically bring all the top bureaucrats together. And get somebody who's from the outside world to talk on, you know, eclectic set of subjects. Um, so it was a third edition of the Odisha Knowledge Hub, and on second April, I delivered that talk. Uh, prior to me, um, Raghuram Rajan was one of the speakers, and Nachiket Moore, I was the third in that series. Um, I didn't realize that when I was talking to the top bureaucrats, Uh, a feed was made available to the chief minister's room. Uh, he never sits in this because he wants his offices to have a free willing, uh, no innovations kind of interaction. So unknown to me, uh, he was lis…

AI assessment note: “So first of all, I didn't know him. You know, I knew of him.”

Q And today, how many customers would Unicommerce have?

A Uh, we have 7000 plus customers. Uh, we have a combination of enterprise, as well as small and medium businesses. Uh, we started by serving small and medium businesses, and then started to focus on enterprise businesses. In due course of time, we've realized, like today, enterprise businesses for Univare contribute 90% of our revenues. And by enterprises, I don't mean that these are large 5010 thousand crore businesses. These could be a seller sitting out of Surat or Indore. Enterprise is a function of their e-commerce volume, uh, and the product that they want to use. Today, a large brand, uh, uh, let's say a Lacoste or a Meena Bazaar are on our SMB plan, uh, but because their e-commerce volume today may be small, but, uh, a small seller, as I meant today, there have been so many great, very inspiring stories from small town at Adil Qadri, uh, then Family Care from Indore, uh, then we have XYXX from Ahmedabad. They have been very inspirational stories. And all of these are users of our enterprise plan because they have been able to build a large enterprise or a large e-commerce base for which they obviously need a credible offering to be able to manage their backend.

AI assessment note: “we have 7000 plus customers.”

Q So, uh, what attracted you to join these companies?

A Absolutely. Um, I think, um, different stages of my life, I think different things were more attractive. Um, starting off with Nvidia, I think what I was really attracted to was just the vision of the founder, vision of Jensen, and the reputation around Nvidia. Keep in mind that this happened Back in 2015. So this was well before Nvidia became what it is today. Um, back then, um, Nvidia was extremely prestigious in the semiconductor world, and it was starting to show a lot of, um, possibilities, both for AI workloads and for Bitcoin mining. But I think what attracted me was how futuristic the company was, the kind of stuff they were doing. And the vision of the founder. The second thing which attracted me was I, I knew a bunch of folk who were already working at NVIDIA. So the culture was something which was extremely attractive to me. NVIDIA is one of the few companies in the Bay, um, where the average employee tenure is probably closer to double digits than single digits, at least when I was working. Uh, primarily because of the loyalty which the leadership team And Jensen engenders, uh, in the entire workforce. So that's kind of what attracted me to NVIDIA. When I think about Meta, that was a bit later, and I, these, this opportunity came across where I would get to work on integrity, which was something which was fascinating for me, uh, because of everything which happened …

AI assessment note: “starting off with Nvidia, I think what I was really attracted to was”

Q it is founders or as emerging managers, they're all laying the foundation of the first innings, right? Or first or second innings at this point in time. If I really love what Kushal said. So we should ask the question of like, what is the YC equivalent based on today's market? And then how, like, you know, how it should shape up in that first principle thinking is, is needed.

A I have a thought process around what does, you know, equivalent of YC look like in India, and it requires a lot of capital. So first of all, it requires a bigger check than YC. So what I'm trying to replace is how Adit Palicha of Zepto should not apply to, to YC in the US, but to an Indian, uh, accelerator, right? So first is that accelerator should out-compete YC with money. First is that it gives up a mill check for hypothetically at 10 mill valuation. Then you need to do or a 500 get five at least, right? Then you need to do hundred those checks in a year because for a founder in an ecosystem, it means that if I go to a VC fund, they'll do four checks in a year. But if I apply to YC, my chances are higher because YC accept two 50 companies in a year, right? So at least it gets me started, but then you need to do 50 to hundred checks in a year. So let's say on, on lower case, if you're doing, uh, 500 K, 50 checks in a year, you are deploying twenty-five million in a year, right? Or on the higher end, if you want to really out-compete YC, you're deploying one million hundred checks a year. You need a hundred million. So a lot of capital is required. I think once somebody starts doing that and founders like Adit Come out of it. Then you will attract the quality of the mentors that YC have. Then I think Dipinder Goyal of the world will start giving those founders the time, right…

AI assessment note: “what does, you know, equivalent of YC look like in India, and it requires”

Q And what is the current composition by sector?

A So I think, uh, Financial services will be close to 30%, a little bit less than 30%. Education would be another 30%, including U.S. because we sell in U.S. uh, education. Then the healthcare would be about, you know, 10 to 15%. Um, and then remaining would be more, uh, more, you know, uh, large companies, enterprises, uh, you know, which is growing now, by the way, that segment of our business is actually really taking off now, um, where people are like in automotive and manufacturing, um, In building materials, right? I think people are liking our, our product and field sales and stuff like that. And I think that I believe is going to take off really well for us now.

AI assessment note: “Financial services will be close to 30%... Education would be another 30%”

Q But now, now coming to, you know, AI. So, so why do you think, uh, India hasn't produced like Europe or US level like companies in a short span of three, four years while other countries have caught up?

A Yeah, I think it's a multi-layered, uh, question. I think, um, if you, so I look at AI in three spectrums. So one is foundational layer. Second is middle layer, the middleware, and third is application layer. I think the foundational layer is just absent in India. Um, and I think that has to do with talent that has to do with capital, uh, availability and others. Uh, we just don't have enough deep pockets, um, To go after that. Um, but more so it is, I think nobody was focused. No investor was focused. No academics were as much focused on it. And it just so happens that we were not even present in those. Uh, so, but now we are, and I hope, uh, we will be able to get there. So there are some interesting companies which are building foundational models. Um, I mean, the right now, the most commonly known names, uh, like Sarvam and smallest AI and bunch of, Others, but there are a bunch of teams because of the government initiative of India mission. They are forming from ISCs and IITs. Uh, they don't even have names right now, uh, which have created those companies and we'll see if it evolves. Um, so, but it will take time. The foundational layer is not something which will happen in six months, seven months. I think it will take 18 months, but, uh, it has to happen. So that is one, um, on the middleware layer. I think we are starting to see companies. There are enough companies wh…

AI assessment note: “foundational layer is just absent in India. Um, and I think that has to do with talent”

Q Got any other companies in AI that you are excited about from your portfolio?

A We are co-investors in rapid claims. Uh, so rapid claims enables hospitals to do medical coding, uh, something and revenue collection management, uh, something which takes a hospital, like a file from a patient. It almost takes them almost a month sometimes to figure out what is the right payment they need to make, what, uh, Collect from the insurance provider and make to the patient and rapidly comes in and solves that problem in a couple of minutes. Uh, so we are very excited about it. Um, another company of ours is, uh, presentations.ai. Uh, I think they just found themselves in the perfect storm. Uh, so they are growing quite well. Um, so there are, I think, I mean, of the 27, I mean, there are so many of these, uh, I've invested in BPR hub. Uh, so they do. Um, uh, compliances management for manufacturing companies. It's another example of a vertical niche area where there's a lot of, uh, grant work required and they just, uh, shrink the period of getting compliances for a manufacturing unit from six months to like three weeks, uh, or like a couple of months. So, so those are examples. Yeah.

AI assessment note: “We are co-investors in rapid claims... another company of ours is, uh, presentations.ai.”

Q Then, then how should we say is the 66, fifty million India fund? Is it a seed fund, series A fund, series A fund?

A Well, we are trying to be everything. So the good part is Axel is not just Axel India. Axel is a family of five funds, and we are a global firm. Uh, in India, we are essentially investing out of three funds, not just one. So we have the six 50 India fund. We have, uh, Axel growth fund, which is 1.3 billion, which was also raised in January. And then we have a four billion dollar leaders fund or a late stage fund. Um, so all these vehicles are investing across, like, For example, erudite is two hundred million dollars, uh, came from our late stage fund. Um, uh, so we have the whole spectrum and, uh, yeah, I mean, so my job is actually quite interesting. I have to write a hundred K check also, and I can write a hundred million check also. Uh, so it's very interesting. Yeah.

AI assessment note: “Well, we are trying to be everything... so we have the whole spectrum”

Q And what prompted the decision to move back to Bay Area?

A Couple of things. Um, one was from a professional perspective, it turns out in the software investing, Um, practice that we'd started at Lightspeed in, you know, 2016, 17 had grown. Um, about a quarter of our Lightspeed India funds over the years have gone into software investments. We've got about a hundred total portfolio companies in the region, so about a quarter of that are software. And, uh, many of them had moved to the US, and many were threatening to move to the US. Um, and so, from a fund perspective, It made sense for us to have somebody there who'd had 10 years of runtime in India, new software, um, and could help these companies, uh, uh, bridge over to the US. And there's so many things that companies that need, we can talk about that. Um, and that trend line has strengthened since then. We can talk about that as well, but we are so closely integrated with Lightspeed globally. And Lightspeed started off in Menlo Park and San Francisco and has spread to Europe and Israel and, um, Southeast Asia and so on, um, and India, of course. And so it helped us on that front as well, because as a platform, Lightspeed can help these companies move there and plug into the Lightspeed platform globally, which is exec hiring, customer introductions, uh, partnerships, and obviously connecting with all of our Uh, partners there in the US and globally, as well as all our portfolio com…

AI assessment note: “from a fund perspective, It made sense for us to have somebody there”

Q And, and are you satisfied the way that India is playing the AI wave right now?

A Not yet. I'm not yet satisfied. Um, I think I posted about this about a year, a year or two ago when post two years ago when GPT, 3.5 came out. It was like every wave of sort of innovation out of the U S or China. There has been, I think, a, a legitimate excuse for founders in India to say, we didn't have access to whatever. So either they didn't have access to the cloud, or to smartphones, or to venture capital funding when that market was small in India, or to large consumer bases, um, or, you know, um, playbooks to scale, or mentors to advise. There's also, these were issues in the past, but today none of these are issues. There's enough capital, mentors, hyperscalers, you know, uh, playbooks, You know, second, third time founders to help you. It's all there. Right? But we're not seeing anywhere close to the amount of innovation or even applications companies built on innovative infrastructure out of India that we're seeing in the US and to some extent Europe and China as well. Um, It's been a bit of a lag effect that's in play here. Maybe two to three are lag. I don't know why, but it's not a hard, it's not a, a hundred percent case. There are lots of interesting companies and we've backed a bunch. We backed Sarvam, um, in the foundation model space. Uh, we seeded that company Pratyush and Vivek, um, I'm going to say 18 months ago. Uh, and then, um, I think Khosla and Uh, L…

AI assessment note: “Not yet. I'm not yet satisfied.”

Q Vijay told me exactly that, right? I'll, I'll not name the company, but said the, the, the founder went to jail for unnecessary reason and only Z-Forty-Seven was one to, to bail the founder out of jail.

A I mean, we were all there. Nobody ran away. My colleagues, Tarun and Rajinder visited him. He remembers that forever, forever. I was speaking to him six, eight weeks ago when his new round was going on and he still remembered that, right? Reputation matters. So I think why Super Ops, I'll give you an example. So Super Ops, Arvind started a company the first time called Zarget. He exited to, to Freshworks. Second time he came and told Tarun that, you know, you have a right of first refusal on my route, right? And I asked him why. He said, because Tarun was the only one who was giving me advice that was the right advice for me. Not just, you know, what, what I, you know, for himself and, and stuff like that So I think that really matters. So how do we win these? Uh, you know, for me, I think if you look at venture capital, if you look at most businesses, almost everything can be copied in no time. Reputation cannot. Reputation is a moat. Reputation compounds with time. And I think that's what's getting us.

AI assessment note: “I mean, we were all there. Nobody ran away. My colleagues, Tarun and Rajinder visited”

Q And you are spread across, you know, so many sectors also, B to B software, D to C, you have fintechs like Razorpay, stable money, B to B marketplaces, like Off Business, Captain Fresh. So how do you win across these many categories? It's not just one category.

A I think it goes back to what we discussed, which is we have operators who are experts in each of these sectors, right? So if, and so I personally, and now clearly as a firm, we, we don't believe in the generalist model. We are a specialist firm. So, and sometimes it's not easy because you know, these, all these sectors go through ebbs and flows, right? So, and I joke up to everybody here is tenured. So people also have seen this, but every year, some sector is hot and all the other sectors are formal about that sector. Everybody wants to work in that sector, whether they know anything about the sector or not is irrelevant, right? So Sudipto does B to B, he's doing advanced manufacturing, Pranay does SaaS and AI, Cash knows. A bunch about AI. CV is doing consumer. So, so on and so forth. We have, uh, financial services, you know, and we are all paired, uh, at various levels. We think of us ourselves as squads. We, and the idea is like a pod structure, right? But that pod is a sector pod, right? So that sector pod, I tell the sector leads that think of yourself as a CEO. You have to win the most deals in your sector. So therefore many of our podcasts you will see are actually around depth of content in that sector, right? So I think that's what gets us, um, into, into a bunch of these. And then of course, ultimately portfolio referenceability, right? People, people want to associ…

AI assessment note: “we have operators who are experts in each of these sectors, right?”

Q And how has your father's career, you know, shaped your decisions?

A It has not really shaped my decisions, uh, in important ways. Uh, he has been a role model for me, of course. Uh, but, uh, you know, he of course was in the IAS. He also wanted me to take the UPSC, but I chose, uh, to be in the private sector. Uh, he of course stayed in India. I went off to the US after IIT, and I was there for 25 years before I came back. Uh, so in that sense, I followed a very different career from his. Uh, but there is a very important way in which, you know, his, uh, life and the lives of, uh, other people in the family have had a very important influence on me, and that is in service to the nation. Uh, so my grandfather, my nanaji, Sri N.C. Srivastav ji, was an ICS officer. Uh, in fact, he's the one who built the Bhilai steel plant. Uh, other members of my family have been in the IES, the IPS, uh, income tax, et cetera. So many, many members of my family have actually devoted themselves, dedicated themselves to the country, as has my father. So watching all of these people, watching that generation really help build up India. As I said, my grandfather built the Bilhai steel plant with help from the Russians. You are very inspired to serve the country as well. So in that sense, you know, my father's life and his, uh, his political career Uh, has had a very significant influence in me because it's been an inspiration, uh, that there is a point in your life w…

AI assessment note: “It has not really shaped my decisions, uh, in important ways.”

Q And it, it must have been a huge execution effort, right? Because you had seen it, worked in it closely, but, you know, fighting an election for the first time, and, uh, in your mind, I believe you hadn't prepared for it because you were on the ripe of your corporate career.

A I was working at Omidia Network when this whole, uh, situation started to develop, uh, and of course I left and, you know, got into the whole campaigning process and everything else, and then, Of course, the elections were in May, April, May of 2014. So yes, it was a very, uh, interesting, uh, and novel set of experiences for me, but not a complete, uh, sort of new thing in the sense that, of course, as I said, in my father's previous elections, I had been deeply involved and 2008 and nine, uh, I had really, really worked very, very hard तो सब कुछ जो आदमी चुनाव में करता है और्गनाइजेशन विवस्था का सब बंदोबस्त कारेकरताओं के साथ बैठा इवन पब्लिक स्पीचेज यह सब तो मैंने पहले किया ही हुआ था लेकिन हां

AI assessment note: “not a complete, uh, sort of new thing in the sense that”

Q And, and how are we planning to get that?

A Like, so there's good news for venture capitalists like you, uh, in that Siddharth, uh, we will need to mobilize this through four or five different sources for the private sector. Number one, venture capital has a very important role to play. And I have just written a book called India's green startups, uh, which of course are VC backed. Uh, and if we can scale up these green companies like a blue smart, a battery smart, a Kisan connect, Achyaps, fantastic companies, fantastic businesses. If they scale up, they will grow, they will decarbonize. Decarbonization, in fact, is Siddharth, their business model. So if we back them with venture capital and we enable them to scale, they will automatically start decarbonizing and accelerating our green future. So that's a wonderful way of doing it through venture capital. Second source is private equity. And again, in private equity, when you take somebody like, ah, Blue Smart that's growing, they almost have 9000 electric vehicles right now. When they start to scale up, we need private equity to come in and support them. Venture capital is in the startup phase, but when you get to the growth phase, that's when we need lots and lots of private equity as well. Third source has to be infrastructure investments. We need very significant infrastructure investments. We've got to build out renewables. 500 gigawatt of renewables is what the Ho…

AI assessment note: “we will need to mobilize this through four or five different sources”

Q Uh, and you had quit your job at Unbox?

A No, I was still there. I was still at Unbox. We just, we, I was just bouncing off ideas with them. Um, and, uh, we stumbled upon, um, building something, uh, for actually sales team, right? Because we, I had seen Gong and, um, there was this another company, uh, Again, you never remember your number two, right? So, uh, Gong was a product that we were using. Uh, and my thought process was, Hey, there's so much of data being mined. Why don't we use the data today to mine insights? Um, and then we were looking at Gong as a potential competitor to anchor on. And then I was thinking, Hey, uh, with sales teams, yes, you can provide them insights, but usually after the first 90 days, right? The kind of people you hire in sales team, Are a lot more, uh, I would say evolved, uh, users. Uh, I think over 90 days or one 80 days, they might not use your product as much. But then I looked into another market, which is contact centers, uh, where I spent some time before Unbox in the Philippines, after Practo took us over, I actually launched Practo in the Philippines. And I'd seen this one place which had over a million people working for this one industry called contact center. I'm like, hey, that industry has so much of attrition that people leave their job in six months. Maybe a product like this where you draw insights and give them some value from that data might be very helpful for that…

AI assessment note: “No, I was still there. I was still at Unbox.”

Q And assume demo day was like March or April, 2018?

A March, 2018. Three weeks before demo day, we got an inbound from, um, Lightspeed and then Sequoia and then Nexus. Um, and then we started spending time with investors and that point in time, Jishnu and Ram, um, uh, were from Nexus. Um, and I think we were just blown away with Ram's humility and Jishnu's, uh, overall knowledge of this industry. Um, and then I think they gave us some really strong, helpful advice and met Naren, who's unfortunately no longer there. Again, everybody in Nexus, we were just blown away by their humility. Um, and they were one of those companies who really wanted to be part of the Observe story. Um, and then yeah, before demo day, we actually raised, at that time, outside Justin Khan's big round, because it was, we raised the largest seed round out of YC. An eight million seed round, uh, was the largest seed round.

AI assessment note: “March, 2018. Three weeks before demo day”

Q And what's been the difference in the journey?

A Difference has been pure momentum. I think, uh, because in observe, we still had legacy players. Who are there and you built a AI first product. You still had to go and compete against them. So the momentum, um, yes, we went from zero to two and two to six, seven million in the first 24 months. In Sanus, we went from zero to 20 to twenty three million in 18 months. I think that's been a strong difference because here we are not competing with anybody. It's completely greenfield. So it took more time to build a Sanus product than an Observe product. Uh, I think that, that momentum, that market momentum has been pretty different, uh, between, uh, uh, Observe and Sanus. Um, uh, and then Observe was very strong founder-led outbound sales motion. Sanus has been very strong inbound and channel-led sales solution, apart from the founder being involved in selling. Uh, that's been a little bit of a difference. Um, uh, the third thing has been After building Observe, I always thought building Sanus will be a lot more easier. Like, it always finds a way to surprise you. Building true blue enterprise products is a lot harder than a lot, than what most people think. And even though you've been successful, when you go out as a founder of a new company, the journey is pretty similar, right? I had never expected that I'll do cold outreach. Um, and explaining to people whom I was after observe,…

AI assessment note: “Difference has been pure momentum.”

Q And, and then even you were mentioning during the raise of second fund COVID happened. What, what are the stories from that fundraise?

A So, uh, we are always, uh, we have the gift of perfect timing, Siddharth. Our first fund we tried to raise when nobody was investing in India. Our second fund we planned to launch in April of 2020. March, we were all sitting at home. We had finished building the portfolio, and I remember having the call with one of our largest LPs. That was a call in which I was supposed to ask them, hey, we are starting our new fundraise. Are you guys in? I have the call and the LP on the other side started talking about how they want to delay even the drawdowns of the current fund. I didn't even have the courage to ask him the question about the next fund because they wanted to slow down and look at what, uh, you know, where else their capital needed to go. Um, so we had to delay the fundraise, uh, by a few months. Um, at that point, it was not clear how long we would have to delay it for. We also were not sure how much capital our existing portfolio would require, how much support the portfolio will need to tide over this COVID period, because there were companies, particularly in the consumer space where demand had gone from doing really well to absolute zero. And so they needed capital to tide over that period. So we took a decision at that point to do small secondaries in two of our companies so that we have the capital to help our portfolio if needed. Uh, now it turned out that by the fa…

AI assessment note: “Our second fund we planned to launch in April of 2020. March, we were all sitting at home.”

Q And, and what has been, you know, in your opinion, uh, Stellar's strategy Which, which attracted the best of global LPs in 24?

A I think there are certain, uh, there are three or four key pillars to our strategy, uh, Siddharth. I think the first one is focus. Uh, we have seen probably because the India opportunity in the past was not large enough, uh, funds often defocus from their core strategy. So India only funds will start investing in other parts of the world. Um, uh, early stage funds will start doing mid stage and late stage, uh, tech only funds will start doing retail and, uh, hospitality and, Uh, manufacturing. Uh, we took that call relatively early on that we will, uh, we will be tech only, India only, and early stage only. And for the past eight plus years, we have followed that strategy. Um, and, uh, there have been temptations. There have been fantastic opportunities. Back in 2018, we were offered a CDC opportunity that looked Phenomenal. And, but our thinking was that either we do it as a new strategy, uh, either we build a portfolio of such late stage companies. We can't have a one-off late stage investment in our portfolio because it increases the risk. Um, it makes fundraising harder. Uh, and of course that is not our area of expertise either. So we have said no to those kinds of opportunities. Uh, I think focus counts for a lot. Um, the other aspect for us is, uh, uh, discipline of portfolio construction. Um, uh, as I mentioned, we do proactive portfolio construction at a portfolio leve…

AI assessment note: “there are three or four key pillars to our strategy, uh, Siddharth. I think the first one is focus.”

Q Uh, fabrication is a short form for FAB, right?

A Wafer fabrication. Yes. So wafer is, you know, your, your, you start with the silicon base, right? Uh, we call it like a pizza, right? It's either as eight inch or 12 inch pizza, right? And then you build structures on top of it. You basically build a lot of transistors on top of it connected with metal layers, right? Uh, and the more you, uh, you know, like a, uh, like a Nvidia chip goes through, you know, huge amount of processing, right? Um, they, they keep building, building on top of it, you know, 203 hundred steps that you have to go through, one wafer will have to go through before they come out. Um, and, uh, and that's why, you know, it's very expensive as well, right? Uh, both because the equipment that you need for, for Nvidia kind of a chip is, is very, very expensive.

AI assessment note: “Wafer fabrication. Yes.”

Q I was asking, when was the first car out in the market?

A So, so, 1998 was when the Tata Indica was launched. It was driven out proudly by Mr. Ratan Tata from the Pune plant. Uh, it was launched in the market. Initially, it had some quality issues with it. Uh, even now, you know, people squirm when they are reminded about those quality issues, but those quality issues were fixed very quickly. Mr. Tata and his team visited distributors, visited the markets, understood what the issues were. Over the next year, those issues were fixed, and eventually the Tata Indica was relaunched as Tata Indica V-II. It went on to become the fastest selling car on the face of India in the early 2000. There are about 3000 discrete parts which go into a car. And when the Tata Indica was launched, 97% of these parts were created indigenously. So imagine the ancillary industry that it gave rise to. Imagine the engineering excellence which the actual making of a car in India brought. Um, and, uh, you know, people have later asked Mr. Rutten Tata, What gave you the courage to make India's first car, the Tata Indica? And Ratan Tata has said that his courage came from his trust in the young engineers of Telco, Tata Motors. And he has also said that he wanted to do something which would be inspiring for young India, which would show young India that it's often possible to do the impossible. Ratan Tata has actually said, you know, history may say it succeeded or …

AI assessment note: “1998 was when the Tata Indica was launched.”

Q And you were presenting the business projections, business plan, and they stopped you midway and asked, how are we doing on culture?

A Totally. Totally. And I'd never been asked that question in that order. Any other organization that I've been with, the first thing that they always wanted to know was about business metrics. This was the first time. This was Grady Burnett who was visiting. Of course, they're so excited. We want to show him the business metrics of the impact that we were making on global operations, and we did a bunch of prep on that, and that's what I started with. And indeed, he paused me and he said, I think they're getting ahead of ourselves. I would like to know, how are you building the right pipeline for people? What are you doing to build the right culture? And then, of course, business results will come. It was an aha moment for me. And I decided that I'm going to really spend time understanding the Facebook culture. Uh, and in Facebook, it was all about being anchored on its values. You know, be bold, move fast, build social value, um, focus on impact. So these were some of the elements of the, uh, of the culture that I spent a lot of time on. Sid, that led us to lots of work streams, if you may, to make that real. One, we used to have discussions about what does it mean. Let's take be open as an example. You ask five people what be open means to you, you'll get 10 different answers. It could be about be open with information. It could be about be open in how we are having conversatio…

AI assessment note: “This was Grady Burnett who was visiting... paused me and he said”

Q an amazing story. And during this period of 15 years, what kept you so patient, uh, about the business? Because you were a Stanford, uh, graduate school business, you know, MBA, and you were seeing all the people around you Uh, maybe doing a lot of stuff in Silicon Valley. The entire Silicon Valley was actually happening maybe in front of your eyes, right? Uber, Google, Facebook, uh, now Meta.

A You know, It's a good question. I'm not sure I, first of all, I'm not a very comparative person. Um, secondly, a lot of people just, you know, going from Stanford Business School, especially back in my year, yes, a few of them went on to start businesses, but a lot of people got jobs at companies, and I just knew that wasn't for me. Working at a company just didn't feel like me. It, it, you know, whatever is wrong with my personality makes me unemployable. So Um, it didn't, it didn't work for me. So I wasn't very jealous of friends who had jobs at, you know, big tech companies. That was, that didn't feel that way. Um, I, I'm not jealous in general. Um, that said, Silicon Valley is alluring. And in Nine, I think, I started to get a little bit like, ah, ah, maybe this is my chance to build a bigger business. Chess is going to be small, and we started a business called exercise.com, and it was all about fitness. But after about two, two and a half years, that business, um, it, it, it failed. I couldn't stand it. I hated it because, um, it wasn't a product I believed in. Uh, the fitness space can be very challenging because it's a lot of promises and, you know, people, people like playing chess, but they don't like exercising. Um, so, but what's funny is that through doing that, I was before starting that business, I was not an exercising person. But in doing that business, I becam…

AI assessment note: “first of all, I'm not a very comparative person.”

Q So, so is, is that the trait that you were looking for in the people that you work, like extremely high processing power?

A No, actually, no. Uh, I think that that is somewhat commoditized. A lot of people have that. Um, and a lot of people you end up interviewing who coming out of the top business schools or IOTs or whatever, Processing power intelligence is something you can take for granted. Um, I personally look for intellectual curiosity. So I'm more impressed with someone who is, is, uh, uh, might be an accomplished coder, but is equally interested in Bob Dylan and Shakespeare. I just pick randomly two of my favorites, but, uh, but I over index on that intellectual curiosity. And by the way, I mean, I've had this discussion with a number of My colleagues in senior roles, and they would agree with that because, and particularly when you're dealing with the world of technology, which hopefully you will relate to things change so fast that, uh, that if you have the ability to be many malleable can think on kind of different levels. That's a, that's just an extraordinarily useful characteristic.

AI assessment note: “No, actually, no. Uh, I think that that is somewhat commoditized.”

Q And you met your wife there in Oxford?

A No, no, no. My wife I met later. She had a very similar background. She sort of, um, did well in education and got a scholarship to go to MIT. And I, uh, instead of coming back after Oxford, I was recruited into the World Bank, which had just started expanding because, you know, in the early sixties, I mean, development and how to help developing countries became a big issue. And the World Bank was a major instrument for flow of development funds. So they were expanding the office and they recruited a lot of young people. I thought I'd do that for three years, gain some experience, come back. But it was a lot of fun. Then I met my wife there. She was working for the IMF. We got married. Then we had decided to have children. So my eldest son was about to be born, and she also wanted to finish her PhD because she left her PhD before completing it to join the IMF, thinking she would go back. So that delayed our return. But you know, by the time my eldest son was actually born and was one year old, uh, we decided that it's time to come back. There was a vacancy in the Ministry of Finance. Dr. Manmohan Singh, who used to come to Washington quite often, you know, in connection with the World Bank annual meetings, I had got to know him, uh, and, uh, we were, we would always ask him, what are the possibilities of coming back? And he said, look, We are advertising this position for an e…

AI assessment note: “No, no, no. My wife I met later.”