The Exchanges

Q So bringing on to my next area where, you know, does perplexity make IVP more bullish on, on the India-US corridor?

A Absolutely. Yeah. Now, to be fair, like, it's not that we were not bullish before. As I, as I remind people, like, we were investors in Jyothi's company, AppDynamics. Jyothi started two companies afterwards, Harness and Traceable. You know, for me, he's an iconic Indian entrepreneur, you know, humble roots, went to IIT, came out here, and has been Probably in some ways almost like the Andy Bechtelschein or Steve Jobs equivalent in, like, infrastructure software and what he's done with three companies in the last decade. Uh, the Rubrik team I'm really proud to work with. Glean, of course, Arvind Jain came from Rubrik. Glean's been an amazing success story in the enterprise. But, um, I think what's cool now is that a founder who was born in Chennai can come to Silicon Valley and build something to compete with the biggest of the bigs, right? And I think that part of consumer markets or healthcare markets with Shiv Rao being Indian born founders or Indian educated founders is also why I'm so bullish. And I think what, what gives me pride is that fundamentally they understand the greatness of the United States. The United States gives you an ecosystem that's hard to replicate anywhere else. Where we're sitting right here, people have tried for decades to completely recreate Silicon Valley, you know, in different parts of the world. There's a magic about this place. Every time you f…

AI assessment note: “Absolutely. Yeah. Now, to be fair, like, it's not that we were not bullish”

Q Wow. And right now, do you believe the current public markets are overvalued in the US?

A I do not, no. I think, you know, look, It depends on which lens you look at it. So on one hand, there's a lot of excitement for the S&P seven versus, you know, but if you look at the S&P 500, or you look at just the indices, I mean, they have outperformed ever since I came back to IVP for business school from 20 10 to 20 25. Every 18 months, there's a long article about how the S&P 500 is at its absolute max, right? And the reality is, The growth engines of the top companies of S&P 500 carry the markets around the world, and if you look at NVIDIA as an example of this, you know, there's one argument that's saying if you look at the PE ratio, NVIDIA is very expensive, right, and it's, you know, potentially overvalued, and there's, you know, TAM constraints, but if you look at where AI is going, you think about where CUDA can be. You think about what Jensen as a founder is continuing to innovate and do at NVIDIA, I think you have an upside case which is materially larger than what you would get in most safe investments, so I actually think that most of these companies, Google, Microsoft, you know, Nvidia, if you, I would actually wager that if you looked at it five years from now, they'd be significantly higher than they are today, because we're still in the early days of AI, and AI is transformative, so there are parts of their business that will be not as robust, but they're al…

AI assessment note: “I do not, no. I think, you know, look, It depends on which lens”

Q the past. Because collaboration has completely taken on to the next level. Indian entrepreneur doesn't need to be in US to sell to US companies. Uh, so many Indian companies, especially in SaaS and enterprise space, becoming billion dollar entities in US. Today, as of today, there are eight Indian SaaS companies, which are unicorns. This includes the likes of Freshworks, Brua, Isartis. Um, what, what's your take on that?

A Well, I think it's great. It's a great start. I think, um, we need to be careful though. So in our firm, we focus much more on company fundamentals. So A unicorn to me is a billion dollar valuation. The thing we look for much more is a hundred million dollar AR business or a billion dollar AR business. So I think Ideally, some of these companies are on that path, um, if, if not there already. Um, I think that's very important. I do think that, um, we started the conversation touching on H-B visas. In some sense, the greatest headwind to the United States is faulty immigration policy that is leading the best and brightest who aspired in my parents' generation to come to the United States, not only study here, but live here, set their families up here, build their careers here, To second guess that. That's been happening for a few years now, but that's only going to accelerate if the number of H-MB visas is, is truncated as we saw a few days ago with the Trump administration. So, um, I think in some sense there's a structural advantage now that Indian entrepreneurs have, which is Um, you can stay in India, and there's a robust startup ecosystem there, uh, that's forming and growing. Uh, capital is also much, uh, much less siloed, saying that I physically have an office in Sandhill Road. I only do deals in Sandhill Road. IVP has, um, you know, made our first investment, which we'r…

AI assessment note: “Well, I think it's great. It's a great start. I think, um, we need to be careful though.”

Q I would say in a hundred years. Not only we are facing a global pandemic throughout the world, uh, US has events which has never seen a couple of days back. Immigration got banned by President Trump. India has its own set of challenges, you know, dealing with COVID and China. What, what's your learning during the last three, four months? You know, you, you got a time to introspect.

A Yeah, it's a great question. Um, there, I grew up, and as an Indian American, you know, going to Chinmaye Mission here in the Bay Area, and I remember a quote when I was a teenager from one of the resident Swamiji's who said, disappointment comes to those who make appointments with the future, and I think there's been No greater evidence of that in the last six months. The reality is none of us, all of us are well informed and, um, pretty up to speed on what's going on globally. And yet I don't think anybody would have predicted in December, 31st, less than six months ago, a global pandemic, economic volatility, obviously a huge amount of unrest on the civil rights race side in the United States, um, potentially a war between India and China. Um, uh, and then a whole plethora of other micro events that, you know, whether it's, uh, small things happening to companies or the Fed in the United States pumping in two trillion dollars at record speed, all of this is unprecedented. So I, I think when you, you and I were joking before the show, if any one of these events happened in one year, it'd be the most significant event of that year. We've had four or five of these events happen in the first half of 2020. So we are really in Historic times. I think there's been a number of lessons that, um, I've drawn from this experience. The first is, you know, a great way to understand the fu…

AI assessment note: “I think there's been a number of lessons that, um, I've drawn from this experience.”

Q How big was the company when you met him?

A Uh, I believe the company was about 20 employees. They had just launched early versions of the Perplexity product. It was still in beta, and it was still pretty small, but, you know, I was surprised to see, you know, how thoughtful he had been about where he spends money. He was spending money on a great talent, but he was not wasting money on silly things like ten-year leases on, on buildings before he had product market fit, and what really impressed me about Arvind was how much of a student he had been about Google. He had understood Google. He had read the books. He understood the strengths. He had deep respect for what they had built. He also saw the vulnerability based on just the innovator's dilemma. Seeing what he's done recently, especially if you look at the launch of Comet, right, which is the new browser that they've launched, you see now not only a great answer engine for knowledge, you see also the agentic browser, which is going to actually create huge productivity gains. I mean, I encourage everybody, actually, I know in India, they've made an announcement on Airtel, like they're going to be preloaded on a lot of the Airtel subscribers, uh, phones, You know, India, if you think about a lot of what you can do now with it is the simple things of buying food, delivering it, researching a vacation, thinking about applications to colleges, you know, tuition forms, li…

AI assessment note: “I believe the company was about 20 employees.”

Q the sectors in which you invest heavily are enterprise, infrastructure, and security. For example, companies like Amplitude, Rubrik, Datadog, CrowdStrike, Expanse. The other sectors are Future of Work, in which you have Slack, Umu, Thrive Global, and social platforms like Twitter, Snap, and Discord. Why, why these sectors? And if you can dive deep into some of them, What made you particularly invest in these companies at the growth stage?

A Sure. So part of how we manage the firm at IVP where I'm a general partner is, um, we look at every investment as a firm investment. We don't look at them as this is a, you know, so mesh deal or this individual GP's deal. So You know, we share credit and we, we take accountability and blame when things go really well across the portfolio or they go poorly. And I think that's an important tenant. We're celebrating our 40th year as a, as a firm. And I think that is one of the key reasons this firm has continued to succeed and thrive. And also has seen generational transition is we don't have a siloed view of sort of an individual versus the group itself. Um, So I'd say on the enterprise side, part of the heritage of IVP was always, ah, to invest in great technologies that were looking to, um, solve Issues that were within the corporate sector. Seagate was one of our all-time great investments. If you look at IVPs, what got us on the map in the eighties, it was really the growth of the storage industry. At that time, we think of storage today very differently. We think of cloud storage, but at that time it was really, um, tape, right? And, and which then transitioned to disk. So, uh, Seagate was one of those early pioneers in that. The semiconductor industry, the integrated circuit boom that occurred in the eighties. Intel of course is the most famous success story, but Um, we wer…

AI assessment note: “part of the heritage of IVP was always, ah, to invest in great technologies”