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Khattar: AdvantEdge Never Invests on Projections; 90% of Portfolio Misses Targets
“We've never made an investment based on projections, and I think nine out of 10 times nine out of 10 of our portfolio companies have not, never really hit the targets and numbers that they sought out to achieve.”
Khattar: Four-Wheeler Form Factor Is Wrong for Indian Shared Mobility
“The four-wheeler form factor is not the right product for a country like India, which is why we focused on shared mobility applications and solutions using two-wheelers, three-wheelers, and, ah, buses.”
Khattar: Asset-light models in India are superior to physical infrastructure businesses
“If you have physical products or physical assets on the streets, a predominant, a majority of management bandwidth is, goes towards managing those physical assets, and whatever time is less from managing assets is when you're actually managing businesses, and …”
Khattar: AdvantEdge targets $150M exits rather than waiting for unicorn status
“Being an early stage investor, we're coming in at, you know, sub million to two million dollar valuation. So we really don't want to be as part of the journey to build these companies into billion dollar companies. We are more than happy to exit at the one fif…”
Khattar: Operations-heavy tech startups need younger founders
“And what we've seen is that if you're doing business, you're executing businesses which are all still tech-enabled, but require, ah, a lot of last mile execution, may not be physical infrastructure, but you're still trying to acquire a supply side or demand si…”
Khattar: Indian Startups Often Face a First-Mover Disadvantage
“There's a first mover disadvantage in many cases when you're trying to build companies in India.”
Khattar: Reaching PMF Takes 2-3 Years Regardless of Funding
“No matter how much you're funded and how many people you have, it is going to take two to three years to get the right product market fit. So you can't really speed that up”
Khattar: 30% to 40% of AdvantEdge's Portfolio Are 'Failed Founders'
“I would say almost 30% of our 30 to 40% of our portfolio company consists of failed founders.”
Khattar: AdvantEdge aims to build 10 to 15 1,000-crore 'Indicorn' companies
“I think today if you ask me what's my purpose in life, it's to basically, I started this fund to create successful Indicons. Which is our definition of thousand crore companies as opposed to unicorns, which are a thousand million companies. Ultimately it's, if…”
Khattar: Mobility Startups Require Local Knowledge Over Overseas Entrants
“Mobility by the very nature of the space requires a lot of offline, last mile execution, ah, expertise, ah, where you have to have people with local knowledge who can definitely create competitive advantages to companies who come from overseas.”
Khattar: Digital Auto E-Commerce in India Lacks Clear Winners
“We're also looking at opportunities in digital auto, and that's an exciting area for us because we feel that you know, the e-commerce model in auto is still not have been invested in. We don't have clear winners there.”
Khattar: AdvantEdge grew asset-light startups 50 to 100x, unlike asset-heavy investments
“What we realized was that asset light businesses where the focus is predominantly on just building technology and you know, managing customers were businesses, which where we were able to build
And grow businesses 50 to a hundred X from the time we invested in…”
Khattar: AdvantEdge Fund 1 expects to return 2-3X within five years
“So we are hopeful that we should be able to take a couple of, ah, more exits in the next 12 to 18 months, ah, to be able to return almost two to three X of the fund within the, within a five year horizon itself.”
AdvantEdge Founders only hires former entrepreneurs, not career investors
“So the advantage we only hire People who run businesses and I have entrepreneurial experience. Till now we've not hired anybody who's been a career investor itself”
Khattar: AdvantEdge passed on Drivezy and Vogo to avoid asset-heavy models
“On the mobility side, we have we looked at and passed on both DriveZ and Vogo, and the reason for that was our inherent hesitation to invest in businesses that have asset heavy or manage physical assets across their network.”
Khattar: Asset-heavy models hit maintenance and depreciation spikes after 3–4 years
“Asset heavy businesses take about a three to four year cycle for those assets to start depreciating and you know, cost of maintenance start going up.”
Khattar: Pure digital businesses require experienced founders
“On the other end of the spectrum, they're pure digital businesses. Think social media. Think digital content, et cetera. Where you can basically just implement technology and the use of online digital to be able to execute and acquire customers across the coun…”
Khattar: 300 Million Commutes Take Place Daily in India
“In India, you know, three hundred million commutes happen every day.”
Khattar: Shuttl pivoted from intercity shared Innovas to intracity point-to-point transit
“Initially, of course, Shuttle was trying to, thinking of running intercity micro buses, which are Innova's in a shared
Way.
And I think we did a little bit of brainstorming and discussion.
We realized that the larger opportunity might be Intracity, which we di…”
Khattar: Indian transit had an unaddressed market gap at 75-100 rupees
“Private mobility or when you're commuting to work in your own four-wheeler used to cost about three to 400 rupees a day, back and forth.
Uber or Nola at that time, in spite of being highly subsidized, would also cost somewhere around that price point.
And pub…”
Khattar: AdvantEdge convinced Hero Group's Pawan Munjal to invest in Rapido
“We also were able to convince Mr. Pawan Munjal to put in a personal check.”
Khattar: AdvantEdge led Rapido's investment at $2M-$2.5M valuation
“Rapido, as I already mentioned, we were the lead investor. We came in at, you know, two, two and a half million valuation.”
Khattar: Rapido operates in 35-36 cities, hitting 150K rides on peak days
“That is what allowed us to now ultimately roll out Rapido across almost 35 35, 36 cities. On a good day we could even do 150,000 rides.”
Khattar: AdvantEdge passed on IndiaLends and EarlySalary over small check sizes
“Two of the ones that we missed was, ah, India Lens and Early Salary. Ah, both of them were raising larger sums of capital. We had shown interest. We did take the process down to a conclusion level, but we realized that the check size that we were putting in ov…”
Khattar: AdvantEdge Fund 2 writes $150k to $500k initial seed checks
“So one is what we refer to as seed investing, where we will cut checks from everywhere from about you know, 150 K to about 500 K would be the first check size, and we would continue to prorate on at least two to three rounds in each of those deals capping out …”
Khattar: AdvantEdge wrote its largest investment check into Rapido
“I think the biggest in check that we wrote was in, in in Rapido.”
Khattar: AdvantEdge co-invests frequently with Sachin Bhatia and Rajan Anandan
“We've done a number of deals with the with Sachin Bhatia, the ex-founder of Make My Trip, current founder of Bulbul. We've done a number of deals with Rajan Anandan in his angel hat. He shares a number of good quality deal flow with us.”