Insight
Reddy: India backs me-too copycats instead of novel behavior creation
“And it's because of new behavior creation that incredibly long, large long-term value gets created in the world. And India is almost the antithesis of it. All the large-term value you're trying to create is in Me Too's. Right? By pumping more money and trying …”
What-if
Reddy: Early Indian startups wouldn't exist without Tiger Global's Lee Fixel
“Because, you know, if, when Lee used to cut them from tiger, He's literally the only person in the world. If you think about it, you can say no, no, if Lee didn't, somebody else would have. I say bullshit. I say basically if Lee didn't, it wouldn't have happen…”
Insight
Reddy: Indian VC funds must target 5x returns to offset slower exits
“We don't want to be shooting for less than five X funds. In India, things take time, so I have to adjust for a time factor that things will take two years more, so that hits your IRR. We're measured by IRR. And so, don't want to take an easy way out and say, t…”
Insight
Reddy: Consensus themes are dangerous for seed funds seeking Series A
“So the more common themes that get picked are dangerous in some sense for a small player like us, because then you're always under headwinds, because there's a bigger guy who says, you know, I've already made a bet in the space or adjacent space. I won't fund …”
Insight
Reddy: Indian VCs will make the most money backing edge cases, not copycats
“Those risky bets are the ones which are going to make the most money. Like my LPs tell me, historically, you were shying away from that. It's probably true. It was basically, you didn't know what's going to work, what's going to take off, so you're hedging, ma…”
Prediction Held up
Reddy: India will produce a dozen billion-dollar B2B companies by 2025
“I think we'll have a dozen of them by 20, 25.”
Insight
Reddy: Venture firms cannot build enduring institutions with $20M-$30M funds
“You can't build a team. You can't build an institution with twenty million dollar funds, thirty million dollar funds. It's tough. It's a lifestyle business as we tell other people who come and pitch to us. You can make it a lifestyle business, but you can't in…”
Prediction Held up
Reddy: Blume Ventures aims to reach $500M AUM by 2024
“By the fifth fund, which is maybe five years away and that's how far we've thought. So I don't know about 10 years, but five years is what we've thought. I want to be able to have five hundred million under management. That's when, that's 20, 24, right?”
Insight
Reddy: Startups must build for IPO rather than rely on M&A
“You bloody well built to a proper IPO-able business, or don't bother is my take. Even the US market is saying that, and they've been doing it for 60 years. There's no hacks to that, right? Eventually, if you want a great cash exit, that's how it will happen is…”
Disclosure
Reddy: Purplle is Blume's only surviving vertical commerce bet
“The other thing I would argue where we failed quite a bit was trying to do vertical product commerce. Got onto the cycle too late. That entire commerce engine works as a herd mentality. Either everybody's making bets or nobody's making bets. And then you would…”
Prediction Not checkable as stated
Reddy: VC herd mentality will not disappear due to follow-on dynamics
“So, I don't think the herd mentality is going away, right? Because effectively, It's led by how you think the next check writer is going to think. Right? And which automatically means by then the herd mentality is forming.”
Insight
Reddy: Founders cannot build large businesses without storytelling capacity
“But I think to say that you can actually build a very large business without a capacity to storytell is fooling yourself. It has nothing to do with VCs. How do you sell? How do you sell to your customers? How do you sell to your employees?”
Disclosure
Reddy: Blume opposes secondary exits before companies hit $1B valuation
“Philosophically, I don't believe in it. So until a company kind of reaches a billion dollars in valuation, and then I've lost track of why the hell they're raising more money or why they're mindlessly raising more money.”
Disclosure
Reddy: I saw no carried interest or extra savings for eight years
“I still don't have, I've not seen a rupee of carry. I've not had extra savings for like eight years.”
Disclosure
Reddy: Blume Sets KRA to Bring Exited Founders Back as LPs
“The KRA is that if you can't get your exited founders back as LPs, then we've screwed up somewhere.”
Insight
Karthik Reddy: Startups need institutional seed funds to bridge angel rounds to Series A
“And then I saw that there was a huge gap between the large series-ish funds, which were all above a hundred million, and the angels. And so we said that there's a huge gap here. It can't be that every company miraculously takes a few angel checks and becomes a…”
Disclosure
Reddy: Blume made no pre-2018 hires without months of familiarity
“So no hire pre 2018 was made without six to nine months of familiarity. There was never a JD. There was never a interview per se, but it was like multiple, a series of interviews, series of meetings, and I think we could have put a better framework, but in ret…”
Insight
Reddy: Software companies need $75M–$125M ARR to become billion-dollar businesses
“So the rule of thumb just as a, for your listeners in my book is if you can build a 75 to hundred and twenty-five million dollar ARR company, you can be a billion dollar business. If you built it with healthy margins, which in most software-oriented stuff you …”
Insight
Reddy: Niche market startups must exit at 2x-3x or risk failure
“There's market conditions. So the crowd space gets super crowded and then the number of check writers disappear. There is niche markets, which we are guilty of funding in the first fund. Nobody seems to care about it after us. So then you're at two, three X, i…”
Assertion Partly supported
Reddy: All four Blume B2B exits sold for $30M to $40M+
“The others were all very promising businesses to a global buyer who either wanted India or emerging market access or wanted access to the product portfolio to take global and thought this little Indian company out of a Bloom portfolio was best in class, right,…”
Assertion Not checkable as stated
Reddy: Mettl returned as many dollars as TaxiForSure due to ownership
“So amongst the hits we've had, metal has actually, surprisingly, delivered the most dollars, as much as taxi for sure, because though the size was much smaller, my stake was much larger. So fund one is a very funny fund. We had three percent in one and 10% in …”
Insight
Reddy: Indian strategic acquisitions almost always force early VC exits
“When a strategic comes and buys, in India, not too many people are saying, hey, old trusted investor, you can also stay on for the party. They're saying, you get out. I'll figure it out with the founders. Right? So they clean out the cap table. You take what y…”
Insight
Reddy: VC effort skews heavily toward struggling founders rather than winners
“The guys who need you the most are the ones who are lagging behind for whatever reason, right? Either they're selling a tough sell or they're not able to raise money. So how's, you're not actually even the mean or the average of all of these. You're actually s…”
Disclosure
Reddy: Why Blume Ventures passed on investing in OYO's early round
“In the case of OYO, we had something remotely competing when Ritesh met us first as O'Revel even before the Thiel Fellowship. He was saying, I do like an Airbnb for India, right? And he said, yeah, but we have like a vacation rental place in our portfolio. How…”
