The Exchanges

Q So why, why did you started investing in startups?

A So I think, um, A, I had, so after actually I left Global Logic, I worked briefly with venture funds. So I worked with Sequoia, India, because I've had a great relationship as an EIR, uh, for a little bit. Then I worked with Avishkar, which is an impact investment fund. So I'd met Vineet, uh, who runs Avishkar in Bombay at an event, and I was totally, I fell in love with the whole mission of impact investment. So I spent a bunch of time there. So I think that exposed me to investments. My stints at both Sequoia and Avishkar exposed me to investments. I had liquidity, so I had money to invest, and I think the market was, you, you had started hearing about all these things, right? I mean, Flipkart was born in eight, nine, uh, and, you know, snap deals were already there, so there's a bunch of things happening, you know, these murmurs were going around, India consumer story, and this is the whole reason I left Globalogic, because I wanted to partake in the India story. Um, you know, we were, uh, basically a global outsourcing company, and I felt I'm missing out on all the excitement. Um, so I think that's, this was my sort of small way To, um, you know, at least get started on it. Uh, and I think my first investment was this company called Cygnus Medicare, which is a chain of hospitals. Somebody I knew, you know, somebody had worked for me in Global Logic, and, you know, so it hap…

AI assessment note: “I had the motive. I had the opportunity. I had the money.”

Q So, uh, at a point in time between, let's say, 2001 to 2008, you are being able to run both the companies. How was it like for you?

A Yeah, not, not all the way. Only until 2003 till Lokvir came, I was like the CEO of Pine Labs. After that, I was only a board member, so I wasn't really running it. Um, so I ran both only for two years, uh, and both were relatively small at that time. So it wasn't, it wasn't that hard. Uh, after that, I was fully into global logic pretty much. After Lowquid came in, uh, and I was fully hundred percent dedicated to that. So I think it's very hard to run two companies. I think, I don't know how Elon Musk and some of these other people do it these days, uh, or, um, or, you know, the Twitter guy, uh, I don't know how they do it, uh, these days, but, uh, I, I don't think, I think it's really difficult.

AI assessment note: “I ran both only for two years... So it wasn't that hard.”

Q So Raju, let's come to a more personal side of you. What's your daily routine like?

A What's my daily routine like? Um, so I have a lot of travel generally because of sort of, uh, I have this U S India kind of thing. And then, um, you know, then there's domestic travel between Delhi and Bangalore and stuff like that. Um, but when I'm in Delhi, uh, normally, uh, you know, I, I, I, over years I've become like an early light riser versus a late sleeper. Um, so if I have a lot of work to do, I would get up even earlier. Um, at four 35, you know, if I have nothing to catch up on, then I would normally get up six, six 30, um, you know, get stuff done. I mean, nothing specific. I normally, my family in the US, I would talk to them usually in the morning, uh, you know, on FaceTime and WhatsApp and this and that. Uh, and I would head out to office by nine or so. Uh, I take the Metro to WeWork, which is where our office is in Gurgaon. Uh, so I'm usually there by 10 and sort of regular 10 to five type of thing. Uh, would get back by five or six, try to get a walk. Um, I'm near Lodi Garden, so I like to do, uh, if I can, you know, on most days, if the weather permitting, uh, I would go for a walk. I would like to do sort of walking meetings a lot. So a lot of entrepreneurs, let's say if they're in Delhi, I would call them for a walking meeting, uh, just utilize that hour and it's good, a pleasant experience walking through, walking, walking through Lodi. So I think those ar…

AI assessment note: “I would head out to office by nine or so. Uh, I take the Metro”

Q What was the role in markets in those companies that shut down? What are your learnings from them?

A Right. See, I think market certainly is a big one. I think what I feel is that, um, out of the three things, market, team and traction, market is something that you just can't fight with at all, right? I think teams you can still work with, you can fix them, you can hire more people, uh, you can chip and chop and things like that. Though it's hard, but it's still doable, right? Attraction, obviously you build, you can pivot, you can do this, but market is very, very hard to fight. So I think if you find yourself in a, in a market which is, um, let's say small, not that big, or just really hard to penetrate, or not growing that fast, uh, or, or super competitive, uh, or just timing wise wrong, you know, uh, so I think that is just very hard. I think I would say that is the number one reason where sort of, uh, things don't work out. Um, like I, you know, if you talk to some of the sort of Top tier beta investors have been doing it for 3040 years. Many of them will tell you that the number one predictor of success for investment has been timing. Um, so, uh, many opportunities which do not make sense today may make sense five years from now. Uh, many of them which made sense 10 years back don't make any more sense, right? So I think getting the timing right of why sort of this makes sense to do today is I think a very difficult part from an investment perspective and it's often, yo…

AI assessment note: “out of the three things, market, team and traction, market is something that you just can't fight”

Q What have been some of the low moments in your life, if you'd like to share some, and how did you bounce back from them?

A Yeah, I think, um, I can think of two, I would say. So one was, I think, nine, 11 back into turn one way back. So this is the time we had sort of, uh, global logic had started, uh, and we were still in the first year. Uh, and it was kind of a critical year for us. We had raised some funding as well. Uh, but we were struggling. We hadn't found product market fit and all that. So we had three, four months of capital left and we were trying to raise money, survive this and that. And nine, 11 happened. And we were actually, I remember I was in D.C. Uh, pretty close to, uh, Pentagon where one of the, one of the sort of planes had fallen. Uh, so that was like just symbolically like a pretty low thing. I mean, it was, chances are that you would have gotten completely out of business after that, because even if you had a little chance of making the work that completely went away, um, but some hard work, you know, after that, so that was pretty low. I remember, and then I remember coming back and we had to lay off half the people and sort of cut salaries and all that. I'd never done that before that. So that was a hard thing to do. And I think, um, I think for me, what I've seen over the years is that I tend to sort of let the process take over versus thinking too much of the outcome. So I get into more action mode. This is what needs to be done. And so don't think about sort of what wi…

AI assessment note: “I tend to sort of let the process take over versus thinking too much”

Q So what's your process of investing in startups, evaluating startups at this stage in Leo Capital? And how does deal flow work for you? What's your ticket size?

A So, um, deal flow, actually there's a lot of entrepreneurial activity in India. So, uh, you know, we were just compiling our quarterly report and I can tell you that last quarter we received 472 new investment pitches. Um, you know, and they come from all over the place. They come obviously from some of these angel networks. They come from, uh, founder referrals from all the companies that we've invested in. Uh, they just come cold on LinkedIn, on our website. Um, you know, sometimes larger funds, uh, send us stuff, things that are too small for them, you know. So I think when you put it all together, it's a, it's a really, really material deal flow. Um, now a lot of it is kind of easy to reject. You know, a lot of it is sort of Poorly articulated too early in spaces that we generally don't invest in and all that. So I think on the email itself, we can reject, I would say, 70%, 75%. But still, I would say every week we are meeting six to eight new companies for the first time. Um, like I'm meeting three today, for example, right? Uh, and, uh, and I think that process then leads to sort of with the companies that you get interested in, second meeting, third meetings, fourth meetings. Uh, and generally sort of you spend more time with the companies that you like and results in investment over a four to six week period. So I think that's what sort of, uh, uh, the standard processe…

AI assessment note: “last quarter we received 472 new investment pitches”

Q Wow, that's almost zen-like. How do you achieve that? Like, there's a meditation process behind it?

A It's just, I don't think I'm there yet, but I think it's just aspirational, so it's a, it's a purpose, uh, you know, I, I don't think it's fully, uh, fulfilled, uh, so far. I think there are plenty of other people out there. Who are much more accomplished at that. Uh, but I, I do think at some level that that is what life is about. So I, I don't have any special techniques. I don't, I don't really meditate in that sense. Uh, but I, I, it is important to me that when I'm somewhere, I'm fully there. Like in meetings, if I'm there, I want to be fully there. If I'm in conversation with you, I want to be fully here, uh, and sort of just block out everything else at that point.

AI assessment note: “I don't have any special techniques. I don't, I don't really meditate”

Q So you mentioned about your strengths. So what, what are your strengths?

A Yeah, I think, uh, both strengths and weaknesses, I would say, so I'm sort of, I think because I'm so aspired to be so in the moment, I'm, I think I'm sort of generally what I've found over the years is that I'm a good sort of tactical thinker, you know, so I, given three options, I'm able to sort of quickly latch on to what to do now, move forward, sort of bury the past, keep going. Um, you know, like that sort of who moved my cheese more like sniffer, You know, who can sort of sniff and quickly scamper through and sort of course correct things like that. I think that's my style of working more bottom up. Uh, and I think I'm generally being okay with that. Sort of, I'm able to quickly correct mistakes, uh, and sort of navigate my way through complex problems kind of step by step. Um, I think on the same side, I'm, I don't think of myself as a big strategic thinker. I'm not, I don't think of things that way that how will the market evolve? In five years or 10 years, and sort of where, uh, like the strategic, I've met some people who are really good strategically, right? They're able to envision all the sort of Porter's five forces and sort of, uh, you know, the sort of theory behind markets, uh, and internalize it much more. Uh, I, I, I'm sort of learning to do that a little bit, but I'm not naturally good at it, I would say. So I'm more, I think my whole being is more bottom u…

AI assessment note: “I'm a good sort of tactical thinker, you know, so I, given three options”

Q As an angel investor in the last 10 years, what markets or startups have been a big win for you?

A So, um, uh, more like last, I would say seven, eight years, I actively started investing in 1011, and all that. So I invested actively for five, six years, I would say. Uh, so I think, uh, some of the bigger wins for me, uh, when I look at them today, um, I have Misho from my angel portfolio, uh, I have Shuttle, Um, you know, from my angel period, which I'm still in. Uh, I did sort of health card, one MG, which I sold. Um, I did Cygnus. So I think generally health tech, I did quick well, which was bought by a practical, you know, good exit for all us investors. So I think generally health tech, uh, worked out for us. I don't think there was any real strategy behind it. I think, uh, it just happened. Um, uh, you know, sort of, um, Cygnus, quick well, I did health ashore. Which has done very well. So I think, I think the health tech kind of worked out for us. Uh, and, um, I think some of this newer internet plays that we did in 1415, uh, many of them didn't work out, but the ones that did work out like Shuttle and Michaud, uh, ended up very big. So I would say those are the two, uh, that have generally, I would say worked out. Uh, but out of the 28 that I did, I think there's obviously a lot of them that didn't work out at all. They were like probably at least 10 companies which completely shut down. Uh, and offered zero return completely.

AI assessment note: “some of the bigger wins for me... I have Misho... I have Shuttle”

Q So let's talk about one or two journeys, like Misho and Shuttle. What, what were those things which you found in these founders which you invested in, and what were the earliest struggles in the product market fit?

A So I think, um, Shuttle, let me speak about Shuttle. I've been sort of a little bit more there in Delhi, so I'm sort of a little bit more closely involved, even though, um, you know, also with Misho. But Shuttle, for example, uh, when we invested, so we, I was the first check back in 2015, and, um, I thought that the team was a very strong product-centric team. Um, you know, so I think they, I really felt that they understood how internet products, the team was ex-Jabong and this and that. And, uh, I thought they were a very strong product team, uh, which is something I like in early stages of, let's say, if you're building a product business of that nature. Um, and I felt like they do things in the proper way. They wouldn't hustle, right? They wouldn't take shortcuts, uh, you know, they would sort of do it the proper way in a tech-centric way when they encounter a problem. Uh, so that's what I liked about them at the time of investing, and it was a large space, right, which is out of the commute problem. So when they started, they, they have actually pivoted a little bit. There are a few things they've tried, and some of them have worked, some of them have not worked, right? They've tried things like intercity, uh, buses at some point of time, which kind of worked, but it was not that exciting, you know, because I think intercity, uh, use case is not that frequent use case. Yo…

AI assessment note: “I thought that the team was a very strong product-centric team”

Q Who are your ideal co-investors, Rajul, which if you get a good deal, you would forward them first to?

A So I think, um, honestly, I think the Indian, uh, venture ecosystem is relatively small. So there are six, seven seed investors, uh, institutional, um, you know, who are all, I actually, I find them, all of them pretty good. Um, so, you know, I have dealt with many of them. We have, um, Urias with us in Beto. We have Bloom with us, uh, in Beto, you know, and from Angel portfolio, we have several investors in different companies and all that. And in general, I would say the general quality of fund managers is, is pretty good. And they're all sort of good, sincere, hardworking people. And, uh, I'm happy to sort of have any of them work with us in any of the deals. They all bring their own unique perspective and value to the deal. So it's, it's hard to pick one in that sense. Um, but I think some investors like certain things more, something like over a period of time, I've discovered that let's say prime, which is based out of Bangalore, great guys again. Like certain kinds of companies. They like to go a little bit deeper. You know, they like them at a certain stage. So if I have companies like that, I would work with them, uh, versus let's say Bloom likes certain kinds of companies, right? Or sort of Rise likes certain kinds of companies. You know, so I think as we get familiar with them, you know, we get to know that and what kind of opportunities we can sort of be most likely…

AI assessment note: “So if I have companies like that, I would work with them”

Q So what, what are the books you're reading right now, and what books you think have shaped your life in a better form?

A So I have to say I've sort of, I'm reading much lesser than I, uh, than I used to. I think I, uh, I think in my early years I used to read much more. I'm reading less and less over a period of time, which probably is a bad thing. Uh, but I'm reading a lot more sort of internet, newsy kind of stuff, blog kind of stuff, bite-sized stuff versus, versus books these days. Um, and because I tend to be sort of bottom up, I usually tend to read in context. So let's say I'm looking at a fintech company, Then I would sort of certainly, you know, look at a lot of fintech stuff, right? Or a book, let's say, which is around that and all that versus sort of on my own sort of reading stuff, uh, and all that. But, uh, over the years, I mean, Plenty of books, plenty of books. I think I, in older days, one of my favorite books used to be good to great, uh, by Jim Collins, which is like, basically talks about how all you need is discipline to bring a, build a lasting company. I love that book. And I still think for a company that teaches a certain stage, it's a, it's an awesome book. Um, you know, I, even on the philosophy side, I, I used to love in Rand back, back in the day. Um, you know, just recently, I read this Michael Singer's book, uh, Laveline from Edureka had recommended to me, um, you know, which is more about sort of just, um, living in the present and things like that, which I really…

AI assessment note: “one of my favorite books used to be good to great, uh, by Jim Collins”

Q So if an entrepreneur wants you to get excited about his startup, how he should reach you and what are the parameters that, you know, he should speak about or mention about that he should catch your attention?

A Yeah, I think, um, like for example, I said many, many entrepreneurs approach us. I, I would love if entrepreneurs took a little bit of time just going through our website. I would say I see still a vast majority of entrepreneurs don't take even five minutes to go through sort of what we've done, maybe our existing portfolio, uh, on our website, there's some frequently asked questions. You know, if somebody spent five minutes, uh, and sort of referred to that and just follow those guidelines, that always wins me over, that shows me some depth and sincerity. Uh, many of them are just very, very, so they don't even take that time. They're just spraying, you know, to sort of whatever email they can find, uh, and they're doing a disservice to themselves because, you know, they can be far more personal and they can sort of look at what we are. I think the only way you can really judge an investor in my view is to look at their portfolio. I think everything else is just talk, right? I mean, I can sort of talk endlessly, but you have to look where I put money in and that's what sort of defines me more than anything else. Um, so I think, um, So I think just sincerity through towards sort of, uh, you know, applying more sincerely, spending a little bit time on sort of the publicly available information wins me over just to read their sort of presentation thoroughly. If you have invested…

AI assessment note: “if entrepreneurs took a little bit of time just going through our website”

Q Rajul, you had two entrepreneurial stints where you were very deeply involved. What was the reason behind the two great success startups, which are both billion dollar entities now? What were the founding DNAs of these companies, which are market leaders even 1520 years after you started them?

A Look, I think, um, I do think when you look at any such success, uh, including these companies, um, there is definitely an element of topicality sort of in the time that they happen, uh, and a lot of different things come together to make a, to make a big company, I think. And, you know, because I've seen both of these companies, there were several points of the journey where it could have gone totally a different way. Like I remember there was a year where Pine Labs could totally shut down. Um, there was a year where global logic could totally shut down, you know, but somehow survived and sort of we, we built on that. So I, I do think you have to always keep in mind the sort of the topicality, the times, like, like for example, you know, like, um, you can't really build a new, I think it's hard to build like a new Infosys or TCS today. You know, there was a time through the eighties, early nineties where the topicality environment allowed you and sort of they capitalized on that, executed well. So I think there's one, one of that, I think. But I think more pertaining to your question, I also think it's kind of really hard to figure out a formula. Let's say that, you know, if we do, it's not a deterministic problem. Uh, and now that I'm an investor, I see so many companies. If I had the formula, I would give it to them, right? Or I would give it to you that, okay, do these thre…

AI assessment note: “there is definitely an element of topicality sort of in the time that they happen”

Q So, uh, personally working with Rajul, Since he was a lead investor in BabyGoGo, Rajul had a lot of focus on retention metrics and product. Why is the reason for that, Rajul?

A Yeah, so I think the specific nature of BabyGoGo or all of these apps, uh, like Shiro's and sort of now, uh, you know, all the new apps, ShareChats of the World and sort of, uh, Daily Hands of the World and all that, right? I think I believe that sort of the acquisition problem or how do you get, how do you get more users to get into your app is kind of a solvable problem through money, right? So I think you raise VC funding, you advertise, you deal offers, this and that. So I think that, that is kind of a more of a money problem over a period of time when you look at scale. The more money you have, you can acquire more users. Of course you can hack it, you can do growth hacks and this and that, but still, you know, it's predominantly a money problem, I feel.

AI assessment note: “acquisition problem or how do you get... users... is kind of a solvable problem through money”

Q Raju, you have seen Indian market evolve like no one else. You were very early in the market when the Indian ecosystem was getting built. What difference do you see in the number of startups and in the capital available when you started investing and right now?

A Yeah, I think, uh, certainly if you draw a graph, I'm sure it's growing every year, you know, by certain percentages, I'm sure those numbers are available. Um, I, so, so definitely a lot more maturity. Uh, I think a lot more interest, lot money, more entrepreneurs, lot money, more investors, a lot, many more LPs, some exits happening. Right. So I think overall, I think the ecosystem for sure. I would say is in this third version. So I think the first version I would say is probably the eight to 13, uh, kind of thing where sort of these early internet things. I mean, there was a version even before that, which is like the late nineties to early 2000, which was kind of internet one dot o and people even at that time felt that the internet is here. And you know, a lot of things like Knockree and all kinds of companies were built at that time. Uh, but they all realized they were early, you know, like the five, ten million internet users at that time. Right. Then the second coming was like this eight to 13 and a lot of investments happened. Um, you know, again, a little bit early when Flipkarts and all these companies started, travel companies, right, started in six, seven, and sort of started becoming big, uh, in the late 2000. I think the third was this 14, 15 onwards, right, which is sort of, um, uh, as sort of people are expecting Gio to come in, it came and sort of now it's blo…

AI assessment note: “definitely a lot more maturity. Uh, I think a lot more interest, lot money, more entrepreneurs”