The Exchanges

Q downturn as the current one. We don't know like how, how COVID 19 will turn out, but definitely the economic impacts we are, we are seeing it right here, right now. And looking back, uh, retrospectively, you have seen Y two K, you have seen the 2001 nine 11 crisis, like 2008 and currently 2020 COVID. In 2008, when the market was crashing, what, what made you back Naveen Tiwari?

A But I think, ah, the, the deep thinking, the passion, and the ability to convince initial stakeholders, ah, early employees, you look at the strength of the co-founders, right? I mean, Amit and Mohit, ah, and, ah, ah, you know, three IIT control guys, you know, one rookie guy who are all had seasoned experience under the belt to all come together, right? That gives you a show of confidence. And remember, I was a small check rider, you know, part of that round. So, ah, I think that vision and that Uh, the gumption and the, uh, the passion to go out and make a difference. I think we backed that as much as just the idea itself, because all of us know that ideas pivot, right? So, um, yeah, that, that was, uh, that was one of the first angel investments from, uh, from the Mumbai Angels. And this is, remember, I was still in San Francisco. I had, uh, I had not made a decision to move back as yet.

AI assessment note: “the deep thinking, the passion, and the ability to convince initial stakeholders”

Q And you specifically, you know, uh, from the beginning have focused a lot on B to B and SAS. You know, you shared briefly in the podcast till now that SaaS is going to be impacted. A lot of renegotiation is going to happen with the existing clients, but what are you thinking? What is 2022 1021 now going to look for SaaS companies?

A Yeah. You know, I will broaden SaaS to also include a broad enterprise, right? So I'll include SaaS in that. I will include enterprise software that I'll also include deep tech in that, right? Let's say non-consumer, right? Broadly. So I think on the, um, uh, the tough side, like I mentioned, uh, you know, till enterprises come back fully and open their wallets again, I think, uh, lending, lending runways and maintaining your existing accounts, uh, reducing churn is very important, right? No matter what you do, whether it is classic enterprise software, you're selling, uh, you know, a 100,000 dollar accounts or You know, 20 dollars a month SaaS. You've got to keep your existing customers, right? That's first and foremost very, very important. On the other hand, Siddharth, I actually think that this is going to be one of the most exciting and important sectors because if you look at, like I call the new world order with future of work and with, I won't say less human contact, but more selective human intervention and contact, right? We don't need humans for every task and with the more towards automation. I think the rise of autonomous systems, right, of technology is going to increase. Uh, uh, in one sense, you could say that gray orange robotics ahead of its time. You look at UiPath, you look at in the, in the U.S. also on the stock market, there's been a lot of success, a lot…

AI assessment note: “I actually think that this is going to be one of the most exciting”

Q And, and how is the impact across, you know, of the COVID-nineteen situation across the companies you shared, TAP, Chief and FRAP? Are there more gig workers available today or the companies are looking to outsource some of the, the fixed workforce gig workers?

A I think, I think, uh, uh, you know, on the supply side, which is the supply or the number of gig workers, I think will definitely go up. Uh, in terms of, you look, look at a state like Goa, for example, right, Siddharth? If you look at lots of the best designers and good design work, for example, is saying that I don't need to be in front of the corporation. I meet them, my clients, maybe once in two weeks or once a week. I can be anywhere. I know Goa, in fact, a lot of these people. Delivery, for example, I don't know if you know, but the CEO, Sahil of Delivery sits in Goa. He's moved to Goa. Can you imagine a unicorn company based, being based and operated out of Goa, right? Uh, the reason I mentioned that example is that, uh, the supply has increased. I think what has to come back is the demand side, right? How are corporations going to open their wallets again? Uh, is this discretionary, non-discretionary spending? I think right now the focus right across is on discretionary, right? Renegotiate your leases, uh, cut all your non-discretionary customers here to Amazon, AWS, right? look at it, you need the expensive office. So I think on the demand side, corporations and even startups will take a hard look, but there's no doubt I think on the supply side that the supply of gig workers will improve.

AI assessment note: “on the supply side, which is the supply or the number of gig workers, I think will definitely go up”

Q So that means that a few Monday IC meetings will be skipped, right?

A No, no, I'll tell you, IC meetings are for everything. IC meetings are even for, you know, when the company is in the next round, right? You have an IC for that also, right? So for example, ICs could be, you know, should this company merge with another company, right? Should we acquire another asset? You can, you have an IC for that also. I'm saying that, uh, earlier the investment decision was more a term sheet. Let's invest. I think now you're looking at multiple things that you're almost like operating like a business. Okay. You shut down one business. You put more resources in another. Should you merge? Uh, should you actually hire? You know, should you, uh, you, you get the gist, right? I think you're looking much more broadly and holistically.

AI assessment note: “No, no, I'll tell you, IC meetings are for everything.”

Q And how are your SaaS portfolio companies doing right now? Can you share impact across the various categories and spectrum in your portfolio?

A Yeah, no, that's a great question, Siddharth. You know, it's not one size fits all as you yourself are saying. So we've been trying to map it, you know, across different frameworks and different, like a different matrix. I think, uh, there will be some sectors that are just structurally hardly, uh, I mean, hard hit, right? Just because the structure, for example, and then there are going to be the other side, which are what we'll call lift sectors, right? So they're the, uh, you either hit by, you either have a tailwind that is lifting you or you have a headwind that is, you have to go into, right? So we'll start with the headwind side, which is the tougher side. So, uh, for example, let's say shared mobility, right? If the government shuts down, Uh, just bikes, uh, everything, right? Uh, down. That sector is a little affected, right? Right from Ola to Uber, correct? Like if you look at the US, I was talking to my peers and friends there. Interestingly, lots of Uber drivers have moved to Uber Eats, correct? Because those deliveries are more relevant. Everybody's working from home. Um, uh, so obviously even the U.S. Uber and Lyft have been hit. So shared mobility is kind of tough. Uh, SaaS is a double-edged sword. Uh, uh, uh, you know, enterprises will take some time to open their wallets again. Uh, for SaaS companies, it's very, very important to keep the existing customers clo…

AI assessment note: “SaaS is a double-edged sword. enterprises will take some time to open their wallets”

Q And from investment point of view, so is Bloom spending a still majority of the time, let's say, 30, 40% looking at new deals, or the focus is completely for the next one, two months on the existing portfolio?

A I think it's first most important to get your house in order, right, as VCs and even as startup CEOs. So, uh, do all your enough. What is the assessing the business impact, right? We talked about the tailwind and headwind factor. Are they adequately capitalized? You know, are they in denial or do they really know what's going to hit them? Also, what do you want to plan now is not just for three months, right? It has to go across the next. Uh, 12 months to 24 months to the next five years. So first is assessing their impact. So to answer your question, yes, most, a large percent of the focus will make sure that, you know, that your best companies are protected, that they have enough capital, and they are conserving cash and extending runway. That's number one. Now, number two to your side. See, we have already quite an active backlog, right? I mean, uh, from last year, you know, we built that brand. We have great companies approaching us. In one sense, it is an investor's market, right? As you can imagine. Uh, uh, you know, I don't think people are rushing. I don't think anybody is rushing in Pudeen. Have we stopped evaluating? No, of course not. Are we, uh, you know, are we, uh, you know, running to cut a, uh, to plan an IC for Monday? Of course not either. But I think there are good optionees. There will be a lot of good talent actually floating around. One of the things that …

AI assessment note: “a large percent of the focus will make sure that, you know, that your best companies are protected”

Q Yeah, Bloom founders or within the portfolio or even the Bloom team. What can be the best case scenario? Because we are all preparing for the worst case scenarios. We haven't discussed what can, what can be the best case scenarios coming out of twenty-twenty.

A You know, the, the best case scenario is, see, this is a very, this is a difficult question to answer because unlike all the crises before, prior, Siddhartha, uh, right from Y to Cain, uh, you know, nine-leven, the financial crisis, none of them involve the pandemic, right? SARS was very, uh, limited to China. Now the reason I mentioned that is that the concept of business is basically going in and talking to customers, right? Uh, yeah, now you're all limited mobility. So everybody's working on Zoom. Uh, and that's basically created a lot of inefficiencies in the whole supply chain, right? I mean, travel has come to a stencil. So if you look at the best case scenario, obviously it is that you have a quicker recovery, uh, you know, countries, countries stabilized, international flights start, goods can start moving again. Uh, we, let's say we are talking about the summer, right? June, July. Uh, obviously the worst case is this goes on to the, you know, the, uh, sell pockets of isolation go under the pocket, uh, to the end of the year. So I think it really depends which sector you're on, whether it's a headwind or a headwind. I mean, what will people do more like this thing? I mean, again, I think on the enterprise side, the movement to the cloud has already happened. It's already taking place, correct? Infrastructure, everything moving to the cloud, autonomous systems, future of…

AI assessment note: “best case scenario, obviously it is that you have a quicker recovery”