The Exchanges

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 But is that FOMO? Because you missed investing in the previous round and, uh, I think it's catching up.

A Um, no, I think so there, there are two ways to look at it. One is logo collection. We don't like in logo collection. We look at whether we, that company, which we missed out at two hundred million is still going to become a twenty billion company. And we thought that, yes, there were opportunities which we misread, uh, like, so I'm crypto. I give example or consumer brands. We said, okay, we were wrong. And how do we correct that wrong? Uh, Axel has, uh, investing dollars. So we can come into some of these companies later. Uh, I think a case in point is for example, aero writers. Uh, we met them at seed, we met them at series A, uh, and we, we just felt that the company might not be able to go beyond India, but the founders have created an amazing business where a large majority of revenue now comes from outside of India. So we came in, uh, the company, uh, we invested two hundred million dollars as the first check in from our side into the company in the late stage growth round. Um, so I think, and that's a great part of it. So it's like a validation that India startup market is growing. Uh, and I am very happy that as Axel, we can come in seed or come in late stage either, either side. So that's what we are trying to do. Yeah.

AI assessment note: “Um, no, I think so there, there are two ways to look at it.”

Q And are you seeing now Indian founders learn distribution as fast as their US counterparts or we are still lagging?

A Uh, I think in enterprise sales, we are still lagging. Um, I think, uh, so there too. Okay. So let's break it down. So SEO, SEM, Indian founders are better or at power the US, uh, Content marketing. I think we are slightly behind. People still don't know how to do it. Um, PLG motion. We need to significantly do better. Uh, people shy away from it. People don't build PLG first products. Uh, people build some product and then they try to do PLG. Like typically PLG versions come one to two years later after their original product, whereas in US it's flipped. They just get the product out first. So customer feedback is faster. Uh, Hiring US enterprise sales team is very uncomfortable for most founders in India. And I think truly so for two reasons. One, uh, people don't have enough money to hire a person in the US, which I think can be solved. Um, but two more importantly, there is another challenge and most founders don't want to go to the US in the beginning. And I think that I don't know why we keep telling our founders, you have to go closer to the customers. They should. Uh, so people think I, I build in India, Uh, but then they just go down the wrong path because of feedback, which they get from customers is there is a new pattern, which is the founder influencer pattern. When you land up in the US or forget us, like not even Indian, a US customer, US customer needs to know w…

AI assessment note: “I think in enterprise sales, we are still lagging.”

Q Yeah. And as an investor, does it ever you shared in your journey, right? Before that work happened, it was too much pressure that your peers. Uh, does it have pressure to invest along with legends like Shekhar because they have so many logos to their name?

A Oh man, a lot of stress. So you walk into the office and so, uh, you know, when I, uh, when I joined Accel, uh, I was like, okay, uh, I was completely new, uh, software engineer turned product manager, land up here, need to learn how VC works. Um, and that time we just had Flipkart. Um, and I didn't really know there was no term called unicorn at that time. Um, then, uh, as you mature a couple of years later, so we had fresh works, uh, charge. We, uh, you know, book my show. Um, uh, so one after the other, uh, company, uh, and, uh, like I used to sit with on this, a couple of years, senior to me, uh, and, and did a swiggy, uh, and did black book, uh, spinny, uh, I've been over the Durban company. So. At least in Axel, you know, almost every partner has a unicorn and some of them have like multiple unicorns, uh, and all of this has happened in a very short span of 14 years. So it's very daunting sometimes. And you look around and say, should I be even here? You know, you have this imposter syndrome sometimes, but the great part of Axel is you learn and we are very collaborative. So Shekhar will spend time with my companies and Shekhar will give me insights. So I learned from Shekhar. I learned from Shubruto. I learned from Abhinav. I learned from Anand. Uh, like some of my companies, I should really thank Anand, like couple of my companies, uh, I almost gave up. I said, this com…

AI assessment note: “Oh man, a lot of stress.”