There is almost no chance an individual can repeatedly meet a great founder in India starting a company before the large venture capital firms in India do, and the reason is quite simple - our ecosystem is quite shallow. There is a term called “deal coverage” (or “coverage” for short) that the large firms obsess over in India. It is defined as what percentage of companies who are raising capital of a particular stage (i.e Seed, Series A, Growth) does a venture capital firm meet. In India, top venture capital firms have a coverage of 90%+ for seed rounds. This means every top firm in the country virtually meets every company that raises capital and they are able to do so because every year there’s only ~1,300 companies who raise a venture capital early-stage round. [Tracxn]

If a firm has 10 investment professionals, each individual only needs to meet 130 companies in a year to have total coverage of the ecosystem. Most investors end up meeting far more companies in a year, including many companies who don’t end up raising at all. Thus with a ratio of meeting 33% of companies who end up raising a seed round, an investor still only needs to meet 400 founders a year - which nets out to meeting slightly over a founder a day.

However this is not possible in the US, where there are ~10,500 early-stage rounds every year requiring the same team of investors to meet 8x the number of founders for the same coverage. [NVCA] And it does reflect in the numbers too — the top venture capital firms only have a 50-60% coverage at the seed stage. And this is further exacerbated by the fact that most venture capital firms (with the exception of Andreessen Horowitz) have smaller investment teams than Indian firms making high coverage an irrelevant statistic. This gap allows new venture firms to emerge in the US while in India that path doesn’t exist. Firms can still differentiate by picking which companies to back (to be covered in a future post), but the access edge that powers new firms in America is structurally unavailable here.

This is further reflected in the data behind which venture capital firms in the country lead rounds into outcome-creating companies. While 11 American venture capital firms led the Series A of 50% companies now worth $5B+, only 7 Indian venture capital firms led the Series A of 60% companies now worth $1B+. Similarly while 75% of all venture dollars are raised by just 30 American venture capital firms, 70% of all venture dollars are raised by just 16 Indian venture capital firms. This shows that the Indian ecosystem has a stronger concentration of capital amongst a few relevant venture capital firms

We have seen the list of important or relevant venture capital firms change over the course of the ecosystem in America. While Sequoia has been a mainstay in the industry since the 1970s NEA & KPCB have certainly lost some of it’s shine, and Andreessen Horowitz & Founders Fund have emerged as very important firms in the last two decades. However, we haven’t quite seen this change, yet, in India (albeit that the Indian ecosystem being about ~20 years old where the American ecosystem has existed for over 50 years).

In India the 7 most important historical venture capital firms have been Peak XV Partners, Accel India, Nexus Venture Partners, Z47, Elevation Capital, Lightspeed India and Tiger Global. These 7 collectively led the Series A rounds for 6 of India’s first 10 unicorns and also led the Series A rounds for 8 of India’s last 10 unicorns — showing their staying power. This is definitely a lagging indicator of who the relevant venture capital firms are at any point of time since it does take at least 5 to 7 years between raising a Series A round to becoming a unicorn.

The composition of the list of these top firms might change over the next decade but it currently seems unlikely that the size of this list will expand meaningfully. Tiger Global has been losing relevance in India, General Catalyst has entered India very strongly in 2024 and homegrown firms like Stellaris or Blume might graduate from single-stage firms to multi-stage firms. Meanwhile, old venture mainstays have split or splintered into new institution i.e the death of Helion Venture Partners gave rise to Fireside, Arkam, Stellaris and Fundamentum; while firms like WestBridge, A91 Partners and a couple of upcoming firms have come out of Peak XV Partners’ ex-Managing Directors.

After I published my last musings on venture capital in India, Utsav Somani (CEO @ Offline) asked me - “what would it take for someone to compete with the top firms in India” and the answer is a new firm that competes with the top firms head-on by having a similar fund-size and high coverage. Since there are only a finite number of early-stage investments each year that are truly important, new firms coming in to compete on those deals is the only way to displace the existing firms.

Are you Diwan-i-aam or Diwan-i-khas? That was Anmol’s shorthand for the two summits happening simultaneously. The public court at Bharat Mandapam, buzzing with hundreds of thousands of curious Indians. The select court, scattered across closed-door sessions and side events around the city. I spent the week shuttling between the two and stuck in traffic for what felt like the remainder. The energy was unmistakable. So were the concerns that people were more open to voicing in private than public.

I. The Energy

The first thing that hit me entering Bharat Mandapam was the sheer number of people. On the opening day, something like 250,000 showed up. Over the course of the week, attendance reportedly crossed 5 lakh. Bharat Mandapam felt, at times, like a family picnic. Young couples walking hand in hand past expo stalls, students crowding around demos, a palpable, genuine curiosity about this technology that is going to reshape their lives. Multiple global AI leaders — Dario Amodei, Demis Hassabis, Sam Altman — commented on the positivity and enthusiasm they encountered, which stands in notable contrast to the anxious, even hostile reception AI often gets in parts of the West.1

There has been criticism of this open for all approach. Too many people, too much of a mela, too exhibitionist. I think the critics are wrong, and broadly agree with Subbarao Kambhapati’s tweet below. We are a very young country with a massive working-age population, and AI is going to have a profound impact on our jobs, our services, our governance. Opening the summit up to this many people matters. It is, in fact, a meaningful departure from how India has historically engaged with technology. Whether it was Nehru’s philosophy of the state as gatekeeper of which technologies citizens should access (”appropriate technologies”) or George Fernandes leading protests against IBM in the 1970s, India has not always treated technological curiosity as something to be encouraged at scale.

Think back to the Startup India summit in 2016. That too was dismissed as a PR exercise. Be that as it may, it had a genuinely catalytic effect on how Indians perceive entrepreneurship, helping make it a more acceptable choice in a deeply risk-averse society. If this summit does even a fraction of that for how people engage with AI, that is a net positive.

The most thrilling thing at the summit, for me, was Sarvam AI. They launched their Sarvam-3 series of open-source models trained for 22 Indic languages, at 30B and 105B parameter sizes, using a mixture-of-experts architecture alongside a full stack of use cases spanning speech-to-text, text-to-speech, translation, and reasoning.2 The demos were genuinely impressive, and the energy at the launch and their booth was electric. There were also new sovereign models from Gnani.ai and BharatGen.3 For the first time, it felt like India had something concrete to point to in terms of actual models, actual products, actual capability.

Then there were the investment numbers. Over $200 billion in pledges over the course of the week.4 These are big numbers that are responding to a genuine and massive need. India currently hosts only about 3% of global data center capacity while generating nearly 20% of the world’s data. It’s a staggering mismatch between where data is produced and where it is processed. Current installed capacity sits at roughly 1.5 GW. The Economic Survey 2025-26 projects a need to reach 8 GW by 2030, more than a fivefold increase. Industry projections suggest a supply shortfall exceeding 1,500 MW by 2033 even with the current pipeline. India’s Petabyte-per-MW ratio stands at 13.2, compared to China’s 4.5. This means that each unit of Indian data center capacity is servicing nearly three times the data load. And this is before the explosion in AI workloads, which are far more compute-intensive than traditional cloud. As Cisco’s Jeetu Patel put it at the summit: infrastructure is oxygen for AI, and India is gasping.5

And perhaps most significantly, India used the summit to make a genuinely important geopolitical argument. This was the first major global AI summit hosted by a Global South nation, and India positioned it as a continuation of the agenda it set at the G20: the idea that AI cannot remain a conversation that positions the Global South as passive consumers. The New Delhi Frontier AI Commitments that emerged from the summit are voluntary and non-binding, but the framing itself is a contribution.

While India also signed the US-led Pax Silica declaration, joining a coalition to secure semiconductor and critical mineral supply chains.6 The signing was not really the main story. The US push to build on the American tech stack drew more attention. White House AI adviser Sriram Krishnan told summit attendees that ‘we want the American AI stack to be the bedrock that everyone builds on’.7 It was a line that drew enough backlash online and bristled enough feathers behind closed doors to make clear that the US-India relationship, while functional, remains bruised. India will do business, but guardedly.

So far, so good. The energy was real, the need is real, the ambition is real. Now for the harder questions.

II. The Gap

Start with those $200 billion in pledges. As the substack author Kakashii pointed out in a sharp note about Yotta specifically,8this is a company that made very similar announcements in 2024 and even attempted to go public via SPAC on the back of those claims. The broader pattern of conglomerates making eye-popping investment pledges only for the actual capital deployed to look quite different years later, is well-established enough to warrant a default posture of healthy skepticism. This is not just an Indian phenomenon.9 Many of the India summit pledges were actually reiterations of previous announcements. Microsoft’s $17.5 billion was first announced in early 2025; Google’s $15 billion is cumulative across prior commitments. How much of the $200 billion is genuinely new versus repackaged capex already in existing plans? How much is contingent on government subsidies, tax holidays, and land allocations that may or may not come through? How much will actually be deployed on the timelines announced? India desperately needs this infrastructure, that much is clear. The question is whether we’ll get it, and the track record suggests caution.

Then there’s Sarvam. The demos were impressive, but impressive demos and commercial adoption are different things. Sarvam’s 105B model is impressive as a research artifact, but the 30B is likely to see more production use, and the real test is cost-per-token at inference, not headline parameter count. How many enterprises will actually adopt Sarvam when the frontier labs offer better performance on most benchmarks? Even in voice specifically, which is where Sarvam’s pitch is strongest (India is undeniably a voice-first market) Sarvam is playing catch-up with ElevenLabs. ElevenLabs already does several multiples of Sarvam’s revenue in India alone, and is doubling down on price competitiveness. Anecdotally, portfolio companies we work with speak very highly of ElevenLabs vis-à-vis Sarvam on voice quality.

Sarvam and others have leaned into the geopolitics: sovereign AI, the imperative of not being dependent on foreign models, the IndiaAI Mission funding they’ve received. I understand the strategic argument and take it seriously. But for most commercial organizations, the imperative is still to use the best model, not the most sovereign model. If Sarvam is to succeed, it has to compete at global benchmark levels, not just on a sovereignty pitch.

There was also a lot of talk during the summit about how frontier labs are “using Indian data” with the implication that this is somehow extractive. I think this framing deserves pushback. These labs aren’t accessing proprietary data; they’re training on what’s publicly available on the internet. Unless India plans to go down the Chinese route of a closed data ecosystem, the fact that we produce a lot of data doesn’t confer a particular competitive advantage. That data is accessible to everyone. Yes, high-quality Indic language data is genuinely scarce on the open web, which is exactly why Sarvam’s work has real value. But scarcity of training data is a moat only if the models trained on it are genuinely better for Indian use cases. That’s a commercial question.

The most viral moment of the summit, the Galgotias University robot dog, was funny, but it was also the single most revealing thing that happened all week. A professor of communications told state broadcaster DD News that a robotic dog named “Orion” had been “developed by the Centre of Excellence at Galgotias University.” Social media identified it within hours as a Unitree Go2, a commercially available Chinese product retailing for about $1,600. The university was ordered to vacate its stall.

It would be easy to dismiss this as one embarrassing incident. I think it’s symptomatic of a deep problem in India’s innovation ecosystem: the chasm between our stated ambitions and our actual research capacity. India’s universities — notable exceptions aside — are not producing cutting-edge R&D in AI or robotics. The private university system, which has expanded enormously, too often prioritizes enrollment over research output. We have a culture that rewards the appearance of innovation more than the painstaking, unglamorous work of actually building things from scratch. If India’s sovereign AI ambitions are to be real, they need institutions that can produce genuine research, not institutions that rebrand commercially available Chinese hardware as indigenous innovation.

Which brings me to the quality of the Diwani-e-Aam itself, because the main stage was a missed opportunity to do something about exactly this problem. The closed-door sessions I attended were solid. You need some privacy for that kind of honesty. But the main stage at Bharat Mandapam had largely become a gabfest. Too many panels, too many speakers, too many sessions that were variations on the same theme: governance frameworks, responsible AI, consultant-speak (I say this as a consultant who ran a panel myself!) A punishing signal-to-noise ratio. The summit website offered no filtering by theme, no way to distinguish technical sessions from panel discussions, and coupled with side events across the city and the traffic, it was nearly impossible to navigate.

Given that the Mandapam was opened up to hundreds of thousands of people, including many trying to understand what AI actually is, I’d have loved to see an agenda built around that ambition. How does AI work? How does voice AI work? What is a large language model? Technical primers that demystify the technology for a curious public, alongside substantive debates about where the frontier is moving and what that means for India. Instead, we got an agenda that felt more designed for LinkedIn posts than for learning.

There were bright spots. Sarah Hooker’s keynote covering topics like the death of scaling, data space optimization and model steering was excellent. Yann LeCun lambasting LLMs was a reminder that the AI we work with today is just one manifestation of the technology and possibly not the most important one. Some of the research frontier sessions were terrific. And these are precisely the kinds of sessions that should have been front and center. When someone like Hooker walks an audience through what problems frontier AI labs are grappling with that does something no governance panel can: it opens up the imagination. For the school and university students who were at the Mandapam in huge numbers, those are the sessions that plant the seed. That help a twenty-year-old in Lucknow or Coimbatore see not just what AI is, but where the white spaces are, what’s worth building, where India might genuinely leapfrog rather than imitate.

III. The Execution Test

All of the gaps above point to the same underlying problem. And that problem was, ironically, on fullest display in the most mundane aspect of the summit: getting around the Mandapam and Delhi.

The initial chaos on Day 1 was acknowledged by Minister Ashwini Vaishnaw himself, and to be fair, entry improved significantly on Days 2 and 3, but that was the lowest common denominator of what should be expected. Basic signage to exits were absent or contradictory. One evening I left through a gate and walked to Supreme Court metro station; the next day, that gate was closed with no notice. Volunteers couldn’t tell you which exits were operational.

And then there was Delhi itself. I have never experienced traffic chaos at this level, and this is the capital city that has hosted heads of state and major international conferences before, including the recent G20. The irony was not lost on anyone that the city was hosting an AI summit while failing to use even basic technology for traffic management. We talk endlessly about AI improving governance and solving age-old problems. Dynamic traffic routing, real-time information dissemination, VIP movement optimization that doesn’t paralyze a city of 20 million: none of this is technologically difficult. It is lack of state capacity, governance failure, and a disregard of the citizenry. All factors that have repeatedly thwarted our ambition.

There is one more execution risk worth flagging, because it is classically Indian. There is a strand of commentary gaining traction in our public discourse that imports environmental concerns about AI wholesale from Western debates about data centers guzzling power, the carbon cost of training models and applies them to India without any adjustment for context. This fits a pattern that Shruti Rajagopalan has written about compellingly: “premature imitation,” the tendency of Indian elites to import policy positions from developed countries before those positions are appropriate to India’s stage of development.10 The environmental arguments about AI’s resource consumption have real weight in a country debating whether to build its 500th data center in Virginia. They have no business being used as an argument against building foundational digital infrastructure in a country where 1.4 billion people are served by 3% of global data center capacity. India needs more clean energy and more data centers, simultaneously.11 Devesh Kapur has argued, we have a long history of being precocious in our political battles12, and the AI-environment discourse risks becoming another instance of this. One that could, if it gains policy traction, actively impede the infrastructure buildout India desperately needs.

Closing the Distance

The India AI Impact Summit was, in the end, a remarkably faithful microcosm of India itself. Extraordinary energy and genuine ambition, coexisting with deep execution gaps, both on full display at the same venue in the same week. A young, curious population eager to engage with the future, navigating an institutional apparatus that too often lets them down. Huge investment commitments serving a genuine need. A geopolitical positioning that the world actually needs. All shadowed by a track record that counsels patience.

Whether the ambition that filled Bharat Mandapam can be matched by the institutional capacity, the research depth, the governance quality, and the honest self-assessment needed to turn that ambition into something durable is the question India faces.

Our latest is a guest post co-authored by Anmol and Anshul on the rise of a new founder archetype in India and their outsized impact on the Indian ecosystem.

Anshul Bhide is an active angel investor in startups along the US-India corridor, especially in AI and dev tools. He is also President at Calsoft and was previously India Head for Replit. You can learn more at www.anshulbhide.com

What is a Barbie?

In the Indian startup ecosystem, you constantly hear about how IITs and BITS produce some incredible founders. Abhishek Goyal, founder of Tracxn, said that his entire sourcing strategy during his time at Accel was going through each IIT Delhi batch - something he adopted after sourcing the Flipkart investment for the firm.

But there is a large cohort of founders in the ecosystem that doesn’t get as much airtime and that has a higher incidence rate of unicorn creation than any single IIT. These are what we call BARBIE founders - founders who did their Bachelors Abroad and Returned to Build in the Indian Ecosystem (the credit for coining this term goes to Sajith Pai, a Partner at Blume Ventures).

From Peyush Bansal (Lenskart x McGill University) to Aadit Palicha (Zepto x Stanford University), we’ve seen hundreds of these founders move back to India to build audacious, ambitious and enduring businesses in the country.

3.7%1 of Barbie founders have gone on to build unicorns, a statistic that is noticeably higher than the original IITs with 2.7% (IIT Delhi), 2.0% (IIT Bombay), 2.1% (IIT Kanpur) and 1.6% (IIT Madras)2. This cohort of roughly 300 founders creates a disproportionate amount of value in the ecosystem. The numbers speak for themselves - Barbie founders have started 11.5% of all active unicorns in the country.3

In 2024, there were 70,000 Indian students studying for undergraduate degrees in the US and UK, compared to 20,000 students a decade ago. This is a tiny minority of the overall Indian undergrad population of 33M students but this number has been growing fast. With rising income levels in India and a myriad of problems with the Indian college experience, more students are looking abroad earlier in their educational life.

Akshay, founder of Leverage - a global study abroad platform - adds, “As India’s middle class earns more and has become more aspirational, we are seeing more parents put their children through schools with alternative education boards like IB and GCSE. These students are geared towards studying abroad as they aren’t fit for applying to most universities in the country. Broadly when you also look at the curriculum abroad for undergraduate degrees, it is far superior to what is being offered in India and why we are also seeing continued tailwinds for the sector.”

Much has been written about brain drain and reverse brain drain, but there is no reliable data showing which way the trend is moving. Anecdotally, return rates among Indian undergraduates appear to be at par with, or slightly higher than, earlier cohorts, likely influenced by recent geopolitical concerns.

What do Barbies build?

Barbies overwhelmingly build companies targeted towards consumers rather than enterprises - be it brands (e.g. The Pant Project), marketplaces (e.g. Zepto), gaming (e.g. Dream11), fintech (e.g. Upstox) or a multitude of other consumer internet businesses (e.g. Shaadi.com). The majority of Barbie founders have studied in the US (78%) which seems fitting given how America values and instills entrepreneurship.

The path of the average Barbie founder is to spend 3 to 4 years studying for their undergraduate degree, work in the country for a couple of years in tech, consulting, or banking before eventually moving back to India. A lot of these founders start up soon after moving back, but a fair number of them also spend some time working in the ecosystem or their family businesses before venturing out on their own.

We tracked the undergraduate alma maters of Barbie founders. Penn ranks first, followed by Stanford, Michigan, and USC. Penn’s lead is unsurprising given Wharton’s presence and its role as an early cradle of US D2C, producing companies like Warby Parker, Bonobos, and Harry’s. In India, the Penn diaspora has gone on to build brands such as Knya, Taali Foods, and The Pant Project.

Abhijeet Kaji, founder of Knya, observes, “What my time at Penn and Stanford really changed was my relationship with time and ambition. I saw founders and operators who were not in a hurry to “win” a year, but very intentional about building something that would matter in ten or twenty years. That long-term orientation changes the kinds of decisions you make … and how much you are willing to invest before the outcomes are visible.”

Importantly, Kaji is clear that the value from Penn and Stanford was not purely transactional. “It didn’t directly help us hire people in India, scale manufacturing, or open stores. Where it helped was in shaping how I evaluate problems and opportunities. Being around people building globally relevant companies expands your internal benchmark of what ‘good’ looks like. You stop optimizing for incremental improvement and start thinking in larger arcs.”

The most popular sector that Barbies start up in is in the consumer brand space. This sector alone accounts for 37% of all Barbie founded companies. Founders who are building for enterprises tend to just stay back in the US as it is the largest B2B market worldwide.

As Sandeep Singhal, founder of Nexus Venture Partners, puts it,

“US returnees are more likely to focus on consumer/fintech, where they have interacted with offerings while in the US. The US undergrads who have worked in tech/science in university labs or internships, or even post-graduation in companies, tend to stay on in the US rather than come back to build in India.”

There are two key reasons for why Barbies start consumer brands: Firstly, this cohort of founders tends to develop better taste due to global exposure. These founders go to colleges in the US and UK that happen to be a melting pot for cultures. New consumer trends naturally emerge from these cultural hotspots and Barbies are then able to bring this novel flavor of products with a local twist back to India.

There is also a greater focus and appreciation on design language in many of these brands—evident in how founders often come from fashion, design, or creative backgrounds—enabling them to build brands that feel globally fluent but are distinctively India-first.

Secondly, this cohort of founders tends to belong to family businesses catering to the same or adjacent sector. Trying to build a new consumer brand is hard in India because of the lower barriers of entry of starting one leading to intense competition. These founders have an unfair advantage in building these businesses by leveraging their families’ businesses on either the supply (e.g. a textiles manufacturing family business for a D2C brand) or demand side (e.g. a family-owned retail chain or distributor that becomes the first large buyer).

Vanshika Kaji, founder of Knya and someone who is a fourth generation entrepreneur in textiles, adds,

“A family background in textiles, didn’t just give me familiarity - it gave me intuition for product and a very practical sense of how things get made. At Knya, that mattered. We could build proprietary blends early, iterate faster with mills, reduce sampling errors, and insist on the finishes we wanted to get both performance and touch right…The family business didn’t dictate what I would build, but it absolutely compressed the learning curve. It demystified manufacturing and gave us the confidence to be product-first from day one, instead of outsourcing the difficult decisions.”

Barbies’ unfair advantages

Let’s also address the elephant in the room - privilege. An undergraduate degree in the US or UK can cost up to Rs. 2.5 Cr for a 4-year program, so it is only affluent families who can afford to send their children abroad. And with affluent families (and family businesses in many cases), these founders have a safety net that often influences their decision to come back and take the risk of starting a business.

Because of the inherent privilege Barbie founders come from, they end up being bolder in the companies they build and often end up creating new markets.

Pratham Mittal, founder of Tetr and Masters’ Union, whose parents founded Lovely Professional University (LPU), expands on the role of family businesses in inspiring audacious new ventures:

“Lovely Professional University (LPU) showed me scale without elitism. It showed me what happens when you don’t over-romanticize scarcity. Massive execution, relentless expansion, systems that work at volume. That stays with you. Family businesses create a similar mental model. When you grow up seeing capital recycled, risk managed over decades, and failure treated as feedback rather than catastrophe, your risk calculus changes. You don’t confuse boldness with recklessness, but you also don’t confuse safety with stagnation.”

In addition, a lot of these businesses could only be created by founders who spent time outside the country and ecosystem because they have new ways of thinking about how to challenge the status quo and existing biases.

Harsh Jain (Dream11 x UPenn) single-handedly created a fantasy sports ecosystem in the country by having faith that the market would eventually be ready for such a product. Aadit Palicha and Kaivalya Vohra (Zepto x Stanford) showed consumers that you can build an ecommerce marketplace from scratch and deliver products to millions of customers within 10 minutes. Anjali Sardana (Pronto x Georgetown) is transforming home services by organizing a fragmented workforce with professional standards and dignity to deliver a level of reliability and consumer delight previously unseen in the country.

Anjali Sardana, founder of Pronto, articulates this dynamic clearly:

“An industry that hasn’t been cracked before requires new solutions. Founders who have been a part of the ecosystem tend to fall back on priors or their biases while attempting to solve problems. But not being part of the system helps you tackle challenges using first principles thinking. It allows you to design solutions that may seem counter-intuitive to the rest of the ecosystem but ultimately work better.“

For Anjali, this advantage was directly shaped by her time at Georgetown, where the liberal arts college experience exposed her to diverse perspectives that forced her to constantly challenge her assumptions—an approach she credits as essential to building Pronto.

Barbie founders also excel at fundraising. This is a result of having access to unique networks and a liberal arts undergrad background embedded in curriculums abroad. For example, Penn undergrads have access to Penn alumni that dominate both the founder ecosystem and the investor ecosystem. Colleges abroad encourage a healthy dose of interdisciplinary liberal arts classes with all the critical reading and writing training that goes with it. As a result, Barbies are able to articulate their startup vision with clarity. As a founder, you are selling to everyone - early employees, investors, and clients. In the early days of a startup when you have nothing but a story, the most creative storytellers are the ones that succeed.

However, it isn’t all rosy for these founders. They have no access to the IIT / BITS networks that are omnipresent in the Indian startup ecosystem. And coming from predominantly English-speaking privileged backgrounds sometimes works against them as they might have real blind spots about how the long tail of India lives and consumes. This is why you might not see a Kuku FM or Meesho being founded by a Barbie founder. Finally, some investors are biased against this cohort of founders, viewing them as less hungry because they come from privilege - which can be a fair argument.

Do VCs back Barbies?

In most multi-stage venture firms and sector agnostic firms, only 3-5% of the founders are Barbies. They aren’t able to back as many Barbie founders for a couple of different reasons - 1) there aren’t a huge number of Barbie founders so while a firm might be able to back a couple Barbie founders every year at most, they might end up investing in 10 to 20 companies a year; 2) a lot of multi-stage venture firms do not invest in consumer brands as the outcome sizes are too small to return their funds and thus a majority of Barbies couldn’t raise capital from them in the first place.

At Untitled Ventures, we love backing Barbie founders because 1) both of us (Anmol and Vedica) also studied outside India and naturally we know and relate with a lot of these founders. We’ve invested in Hena Mehta’s company Basis (Vedica’s classmate from Wharton) and Zefaan Kanwar’s company XTCY (Anmol’s classmate from high school); 2) we love investing in consumer businesses and brands that have taste and we think Barbie founders best exemplify that. We back the most Barbie founders in India at 25% of our portfolio - 6x the rate of the average venture capital firm.

The future of Barbies

Indians were able to study and immigrate abroad over the last 30 years during the heyday of the global economy and globalization. While there are increasing headwinds for global immigration, countries are still eager for international students and Indian students are yearning to study abroad. But the political environment in these countries discourages them from staying on after they graduate.

There has never been a brighter time to build in India. The last decade has produced battle-hardened product & engineering talent that has seen large systems operating at scale at companies like Zomato and Flipkart. India’s annual GDP growth is the highest amongst the large economies, growing at 6% to 7%. Finally, there is a surplus of VC funding available to back bold founders.

As a result of all this, Barbies are more likely than ever to move back to India and build. Combined with an increasing number of Indians choosing to study abroad in the first place, we anticipate the number and significance of Barbie founders will increase significantly in the coming years!

As a final callout, Anmol also co-hosts a monthly dinner series across Delhi, Bombay and Bengaluru for founders, investors and operators in the Indian ecosystem who have moved back to India from the US. Check out and join 1291 club if you’d like to attend a future dinner - there are upcoming dinners in Bengaluru (Jan) and Bombay (Feb)!

join the club

Appendix

Thanks to the countless people that we spoke to while writing this - we really appreciate your time and thoughts. If you’d like to see the full non-exhaustive list of Barbie founders that we are tracking check it out here. If you think that there’s someone missing from the list, you can request to add here.

There was a moment, roughly a decade ago, when India’s digital future seemed inevitable. At the heart of this vision was Aadhaar, perhaps the most ambitious civilian technological project ever attempted. To give a billion-plus people a secure, verifiable digital identity was a staggering feat of engineering and logistics. It was a bold answer to a fundamental question: in a vast and diverse country, how does the state reliably know its people? Aadhaar became the bedrock of the “India Stack,” a set of open APIs and digital public goods that aimed to unlock a new era of innovation and inclusion [1]. Hailed from Silicon Valley to Singapore, the promise was a frictionless, transparent, and efficient interface between the citizen and the state. We were, it appeared, ahead of the curve.

From its very onset, however, this ambitious push ran into profound philosophical debates about its use and implementation. Civil liberties activists raised legitimate alarms about privacy and the potential for a surveillance state, and legal scholars questioned Aadhaar’s constitutional validity. For years, while other nations silently built their digital futures, prioritizing delivery over debate, India’s progress was stalled by this high-stakes democratic reckoning: the imperative of efficiency versus the sanctity of privacy.

Today, that initial vision seems to have died a death by a thousand cuts. The regulatory state has fought back, and even Aadhaar itself, the very foundation of this digital dream, is being degraded. We are now left with a patchwork of half-baked portals, a citizenry frustrated by the illusion of digitization, and a corporate sector mired in digital quicksand. India, once a pioneer, is now being lapped by nations from the Netherlands to even Saudi Arabia.

The Shining Promise and The Patchwork Reality

To understand the scale of the failure, one must first acknowledge the breathtaking success of specific parts of the GovTech vision, particularly at the central level. The India Stack, especially the Unified Payments Interface (UPI), has been a revolutionary force. By creating a public digital payments infrastructure, it democratized finance in an unprecedented way. Coupled with Aadhaar-based e-KYC, it enabled the opening of over 56 crore (560 million) bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY), bringing a vast informal economy into the formal financial fold [2].The statistics are staggering. In December 2025, UPI recorded over 21.6 billion transactions [3].

Another resounding success is FASTag, which has achieved a penetration rate of approximately 98% with over 80 million users, revolutionizing electronic toll collection on national highways [4]. These systems work because they are transactional, federally driven, and solve a single, clear problem with a well-defined API-based architecture.

However, the picture becomes more complex with initiatives like DigiYatra. Designed to offer a seamless, paperless travel experience at airports using facial recognition, it represents a more ambitious, process-oriented goal. While promising, its rollout has been a mixed bag, facing challenges in adoption, inconsistent implementation across airports, and occasional technical glitches that erode user trust [5].

Beyond these high-profile projects, the broader dream of a paperless, efficient state remains largely unrealized. DigiLocker, despite issuing over 5.6 billion documents, has a user base that pales in comparison to UPI’s reach [6]. Ambitious projects to digitize land and health records are fragmented and stalled, likely caught in the quagmire of state-level bureaucracy.

The Federal-State Disconnect: A Case Study

The starkest evidence of this disconnect is not in macro-data, but in the micro-experiences of citizens. My own recent ordeal to obtain a housing NOC from the Mapusa Town Planning office in Goa is a perfect allegory for India’s GovTech tragedy. The process begins digitally, as it should. But this was merely an illusion. The digital submission was not a ticket to efficiency, but a digital postbox. To ensure the file was even viewed, a physical trip to the office was mandatory.

What I found there was a scene straight out of the pre-Aadhaar era: touts and developers clutching thick folders, clustered around officials’ desks, their conversations a low hum of negotiation. The system was not running on code, but on clout. This experience reveals the core of the problem: a deep gap in India’s ability to execute consistently across different levels of government. State governments, in particular, often lack the capacity and will to push for transparency and sophistication in citizen services. While the Centre has built sophisticated digital highways like the India Stack, the last mile - the actual point of interaction for most citizens - is a broken road controlled by state and municipal bodies. It is at this level, where the machinery of government directly touches daily life, that the digital dream truly falls apart.

This is the reality for millions. As Peter Thiel has noted, “Bureaucratic hierarchies move slowly, and entrenched interests shy away from risk” [7]. The digitization of a form without the re-engineering of the underlying state-level process doesn’t reduce corruption; it just creates a digital facade for the same old inefficiencies.

The International Contrast: A Glimpse of What Could Have Been

Over the last few years, I have worked in countries like the Netherlands, the UAE, and Saudi Arabia, and these are all benchmarks we are now failing to meet. This was not the future we had envisaged a decade ago. Consider a few examples of global digitization:

• Estonia: A global leader. An Estonian can start a company online in 15 minutes and file taxes in under five [8]. Their X-Road system ensures secure data exchange across all public and private sectors [9].

• The Netherlands: The DigiD system provides a single, secure digital identity for residents to interact with all government agencies, simplifying everything from taxes to healthcare [10].

• Saudi Arabia and the UAE: These nations have used a top-down mandate to achieve stunning digital transformation. In the UAE, over 90% of federal government services are online [11], and Saudi Arabia’s Absher platform allows citizens to manage a vast array of services from a single dashboard [12].

India, with its world-class tech talent, should be in this league. That we are not is a failure of governance and imagination.

Back to the Drawing Board

Fixing this requires a revised approach. If you are building in this space and rethinking how citizens interact with the state we at Untitled Ventures would love to chat. We believe the future of GovTech will only be promising if it is citizen-centric, built around life events rather than government silos, prioritizes UX/UI, and embraces open APIs. The promise of GovTech was about more than convenience: it was about redefining citizenship, fostering trust, and unleashing economic potential. The vision was not wrong, but its execution has been incomplete. Finishing the job is the real test of our digital ambition.

References

[1] India Stack. (n.d.). India Stack. Retrieved from https://indiastack.org/

[2] Ministry of Finance, Government of India. (2025, August 27). 11 Years of PM Jan Dhan Yojana: Banking the Unbanked. Press Information Bureau. Retrieved from https://pib.gov.in/PressNoteDetails.aspx?NoteId=155102&ModuleId=3&reg=3&lang=2

[3] The Economic Times. (2026, January 5). UPI hits record 21.6 billion transactions in December. Retrieved from https://bfsi.economictimes.indiatimes.com/articles/upi-sets-record-with-216-billion-transactions-in-december-2025/126284623

[4] Press Information Bureau. (2025, November 11). Press Note Details. Retrieved from https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155978&ModuleId=3&reg=3&lang=1

[5] Business World. (2025, November 7). Digi Yatra CEO Says AI Boosting Convenience, Adoption Still Lagging. Retrieved from https://www.businessworld.in/article/digi-yatra-ceo-says-ai-boosting-convenience-adoption-still-lagging-578762

[6] DigiLocker. (2023, March 16). 15 Crore and Counting: DigiLocker Leads the Charge in India’s Digital Revolution. DigiLocker Blog. Retrieved from https://blog.digilocker.gov.in/15-crore-and-counting-digilocker-leads-the-charge-in-indias-digital-revolution/

[7] Goodreads. (n.d.). Peter Thiel Quotes. Retrieved from https://www.goodreads.com/quotes/7510122-bureaucratic-hierarchies-move-slowly-and-entrenched-interests-shy-away-from

[8] e-Estonia. (n.d.). e-Business Register. Retrieved from https://e-estonia.com/solutions/ease_of_doing_business/e-business-register/

[9] e-Estonia. (n.d.). X-Road. Retrieved from https://e-estonia.com/solutions/interoperability-services/x-road/

[10] Digital Government Netherlands. (2025, May 23). DigiD. Retrieved from https://www.nldigitalgovernment.nl/overview/identity/digid/

[11] The Official Portal of the UAE Government. (2025, November 27). Bridging digital divide. Retrieved from https://u.ae/en/about-the-uae/digital-uae/digital-inclusion/bridging-digital-divide [12] Absher. (n.d.). Absher Portal. Retrieved from https://www.absher.sa/wps/portal/individuals/Home/homepublic/!ut/p/z1/04_Sj9CPykssy0xPLMnMz0vMAfIjo8zi3Q0NHT2M3A183N2DjAwCnR0Njc0dnQwtDE31w8EKDDxNTDwMTYy83Q3MjAwcw4IsTFw9TQ3dzUz0o0DSOICjAVQ_HgsI6o_CosTRwCnIyMnYwMDd3wirAhQzghOL9AtyQyMMskwUAaQuPfE!/dz/d5/L0lHSkovd0RNQUZrQUVnQSEhLzROVkUvZW4!/

[13] Tracxn. (2025, October 14). Top startups in GovTech in India. Retrieved from https://tracxn.com/d/explore/govtech-startups-in-india/__VRusmj0QMvz_sqACkHTKWOSf1Rj8xGjIpShA6JZr2gs/companies

Wishing you and your loved ones a joyful, safe, and luminous Diwali! May this festival of lights bring you clarity, courage, and inspiration.

To mark the occasion, we’re featuring a sharp and timely guest post by Arun Sukumar on the rise of Zoho, the battle over protocol interoperability, and what it means for India’s digital sovereignty. Drawing a through-line from Microsoft’s anti-OSS strategy in the 1990s to today’s Big Tech dominance, Arun argues that supporting Indian tech champions like Zoho makes strategic sense, but must come with demands for openness, interoperability, and real cybersecurity.

We’re also always open to strong, original voices writing on tech in India. If you’ve got a compelling POV, don’t hesitate to pitch us.

Take care and enjoy the festivities!

In October 1998, computing circles in the United States were abuzz with chatter about a series of leaked memoranda from Microsoft. The memos, titled the “Halloween Documents”, reflected the company’s unease with the rise and popularity of open-source software (OSS). The first and most popular Halloween Document, written by a 23-year-old Indian American engineer named Vinod Vallopilil, acknowledged the long-term competition that OSS presented to Microsoft’s proprietary software. Open-source browsers like Mozilla were already “close to parity” with Microsoft’s Internet Explorer, wrote Vallopilil. The young developer’s prescription to the problem had little to do with improved products from Microsoft: the company instead had to “change the rules of the game”. First, Microsoft had to “de-commoditize protocols” that allowed for open-source projects to quickly integrate into web applications. In other words, Internet protocols, such as the ones that were developed by standards bodies like the Internet Engineering Task Force (IETF) should not be readily accessible as simple commodities would be in a market. They had to be transformed into closed protocols to deny “OSS projects entry into the market”. Second, Microsoft had to get into “network and server infrastructure” to capture the downstream market. It was not enough to build internet-facing applications, but also to create storage solutions and programming interfaces that lock in internet users to Microsoft products. It would not be until several years later when another engineer of Indian origin, Amitabh Srivastava, would help realize this vision by developing Microsoft’s cloud computing capability – called Azure. Today, Azure is at the core of Microsoft’s business, and has transformed the company from yet another software vendor to an internet behemoth.

The Halloween Documents are a great illustration of the truth that the Internet’s transformation to what it is today did not happen by chance. The Internet is no longer a genuinely open “network of networks” whose standards and protocols are developed by civic-minded engineers or amateur hobbyists. It has centralized to a significant degree, and Big Tech companies have a major role in the development or management of key Internet infrastructure, protocols, and applications. When the Microsoft memos leaked in 1998, the OSS community was worried that big companies would “crush IETF” and other standards bodies. That hasn’t happened. Big Tech has simply found ways to influence the development of internet protocols, and “de-commoditize” them by building their operation around their proprietary products which dominate user-centric activity like browsing, messaging, and cloud computing.

It is this de-commoditizing impulse of big Internet companies that Zoho and its co-founder Sridhar Vembu has targeted in recent weeks. Vembu has called for the Indian government to force Big Tech to make their protocols open and interoperable in the country – hardly a controversial demand, given that regulators in the European Union have been trying to achieve exactly the same objective for the better part of the last decade. The difference this time around is that the demand comes from someone who runs a billion-dollar company, is considered close to the ruling dispensation, and whose products, most importantly, compete with Microsoft, Salesforce and Google. But that is no reason to dismiss the validity of his arguments: if anything, there are sound business and strategic reasons to implement Vembu’s pitch.

First, it may be necessary to unpack all that has been happening around Zoho recently. In a matter of days, Zoho’s messaging app Arattai has become one of the most downloaded apps in India. Leading government functionaries, including members of the union cabinet, have purportedly switched to Zoho Mail for official use. On October 13, The Hindu reported that lakhs of central government employees’ email services have migrated to Zoho, and that they are being encouraged to use Zoho Office Suite (in lieu of Microsoft Office). All these developments have come on the back of a concerted and visible effort from the Indian to push for the adoption of home-grown technology products. That the Indian government is rooting for Zoho is not particularly surprising. We have entered an era of industrial policy, and governments from Washington D.C. to Seoul have begun to pick winners and national champions in key markets. Extraordinary times have prompted extraordinary promotion by states of certain companies.

It is also not the case that the major technology companies of our time have thrived on technical brilliance alone. US government contracts were critical to the early success of Microsoft. When Microsoft agreed to develop an operating system for IBM computers in the eighties, Bill Gates’ team famously had neither exposure to the OS market nor any expertise developing such software. So, Microsoft simply hired Tim Paterson, the developer who would go on to create MS-DOS. Microsoft rode on the back of IBM’s government relationships, snagging in the process the biggest and most deep-pocketed client in the world for its OS and Word Processors. As Microsoft made inroads into Europe in the nineties, it was the bundling together of Microsoft Office and MS Windows/ DOS that prompted the European Commission to award the company its public contracts. The EC, according to an investigation by Computer Weekly, skipped public consultations and chose Microsoft by invoking a little-used clause meant for the acquisition of “technical products that […] could only be delivered by a particular supplier”. Google’s misuse of licensing agreements to bundle and prominently highlight its proprietary services in any mobile that relied on the Android OS has been investigated and fined by Europe and other jurisdictions. In September 2025, Amazon paid billions of dollars to the US Federal Trade Commission to settle a lawsuit that alleged the company had tricked Amazon Prime users not only into renewing their subscriptions but also made it difficult for them to cancel subsequently. Amazon, the FTC alleged, had extensively deployed “dark patterns”, i.e., deceptive user interfaces that made it difficult for Amazon users to even buy products without a Prime subscription. Suffice to say, the modern digital economy is not exactly characterized by fair competition. Government support of Zoho is no different from the regulatory shield and diplomatic cover that US and Chinese technology companies have enjoyed for long from their parent states.

Still, the government and Vembu could make a better case for public adoption of Zoho than an appeal to nationalism. Even as Zoho’s popularity has soared, users have flagged concerns regarding Arattai’s encryption. Although Vembu says only “secret rebels” need to worry about surveillance on Arattai, Zoho has done well to announce a roll-out of end-to-end encryption for the platform from next month. Privacy and patriotism are not mutually exclusive – if users perceive their digital platforms to be insecure, they will vote with their feet. An official meanwhile has said the switch to Zoho for government employees was prompted by security concerns around OSS. There is some truth to this concern – given especially the pervasive capture of the OSS supply chain by Chinese actors – but to taint all open-source products as compromised is counterproductive to the country’s own aspirations to be a software powerhouse. Most major proprietary software today run on OSS tools. Microsoft, which decried the rise of OSS in the nineties, ended up buying GitHub, the world’s biggest open-source repository in 2018. If security was such an overwhelming concern, what explains the Indian Defence ministry’s own reliance on OSS for its indigenous operating system Maya?

Ultimately, the government should lay the groundwork for a digital economy that gives Zoho and other Indian companies a fighting chance to compete with Big Tech. Protocol interoperability, which Vembu has sought, is a necessary first step. Indian users on Whatsapp must be able to make digital payments through whatever services they prefer, rather than being forced into an in-house payments system. They should be able to effortlessly migrate from Amazon Web Services to Zoho and vice-versa without any concern for data integrity in the process. They should also be able to message anyone from any platform, without having to open multiple apps in the process. Interoperability, however, should be between like platforms that offer comparable cybersecurity. It is neither in the government’s interest or Zoho to seek to replace existing digital services in the name of nationalist appeal unless security and scale concerns are fully addressed.

Strategically too, an “open protocols” economy will benefit India, making migration of data and review of algorithms by Indian entities easier in exceptional cases of national security. Instead of banning TikTok in 2020, the government could have considered a sale and migration of the company’s India operations to an Indian entity with the resources to manage the platform’s data. Zoho, in this scheme of things, is also a valuable strategic asset because it operates in the arena of cloud computing, and can arguably scale up to meet such contingencies. It is for the same reason that the Trump administration has chosen Larry Ellison’s Oracle to manage TikTok US’ data and algorithms after the Chinese social media giant finalizes the sale of its US operations to an investor consortium.

The bottom-line is that there are good reasons for the Indian government to back Zoho. Facilitating its entry and those of Indian entrants into new segments of the digital economy requires policy action on open protocols. If it does go down that path, it is also New Delhi’s responsibility to hold Zoho’s feet to the fire on data protection and cybersecurity.

Arun Sukumar is an assistant professor of international relations at Ashoka University, and the author of “Midnight’s Machines”. His work explores the intersections of technology, policy, and global affairs.

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There are only a handful of multi-stage venture capital firms in India leading Series A+ rounds in the country - something that hasn’t changed in the last decade. If a founder truly wants to build a massive company ($1B+) they have no option but to raise from one of these firms early in their company lifecycle. Multi-stage firms are often helpful in supporting these companies who have to raise several rounds of capital between their inception and an eventual IPO. So “how important are these multi-stage venture firms in this country?” and “who are they?”

The answer was, unsurprisingly, very important. Just 7 firms led the Series A of ~60% of startups that are worth $1B+ today. The list of firms is just as predictable - Accel, Peak XV Partners, Tiger Global Management, Elevation Capital, Z47 (fka Matrix Partners India), Lightspeed India Partners and Nexus Venture Partners.

The list of venture firms who have led early-stage (Seed, Series A) rounds in multiple unicorns also doesn’t run too deep either - only 16 venture firms. Moreover only 19% (18) of unicorns haven’t raised an early-stage round led by these 16 firms and only 12% (11) of these unicorns haven’t raised ANY round of capital led by these firms. The firms that are important might change over the years (i.e Tiger’s fall in importance, Stellaris & General Catalyst’s rise in importance) but it does seem that only a handful of venture firms will back most companies that actually matter. One can build a unicorn without raising from one of the PANZEL (Peak Accel Nexus Z47 Elevation Lightspeed) firms but the odds will certainly be stacked against you. (side-note: h/t to Sajith Pai for coining the term PANZEL to describe these firms).

There are a multitude of reasons for this phenomenon, and some of it traces back to only a handful of firms existing at the inception of India’s venture capital ecosystem. Many of the unicorn companies who were originally founded in the late 2000s and early 2010s raised Series A capital from these firms because they were one of the few sources of intuitional risk capital. As the years have gone on, these firms have invested in successful companies which makes the next generation of companies & founders want to work with them. You see this in practice with how many second-time founders raise capital from the firm that back their first company. Bhavish raising from Tiger Global and Z47 for Ola Electric and Krutrim respectively after they were early investors in Ola, or Mukesh Bansal raising from Accel for Cult after they lead the seed round in Myntra. In venture capital, success begets success, and emerging firms must identify what their right to win is to to earn their importance in the ecosystem.

Now coming to the firms that are the best at finding & backing these unicorns. Accel is first having led the most number of Seed and Series A rounds in companies who are unicorns - 19% (18) of them and these include both consumer companies like Flipkart and Swiggy as well as enterprise software companies like Freshworks and Chargebee. Peak XV Partners is second with 15% (14), followed by Tiger Global & Elevation Capital at 8.6% (8) and Z47 & Lightspeed India Partners at 7.5% (6).

A partner at a global growth firm in the US once asked me - “which individual investors in India would be considered world class even in America?”. This was an individual who had invested in growth-stage companies in the country and was very familiar with the landscape and the people, and I was not familiar with most of the partners personally so never had a great answer for them. Now I can at least attempt to answer that question by seeing what individuals led the Series A for Indian companies worth $5B+ or more (to compare to this list).

And it turns out that there is only a single individual who has led multiple Series A rounds into multiple of these companies and he technically isn’t even a full-time investor. Sanjeev Bikhchandani who is the founder of Info Edge where he led the Series A rounds in both Zomato and PolicyBazaar.

Compared to Cole’s list of 97 investors in the US who’ve invested in a $5B+ company, we have 12 in India; but compared to the 22 investors in the US who’ve invested in multiple $5B+ company - we only have one.

Here’s the Google Sheets with all the companies.

Disclaimer: I’ve used Tracxn for all the information for the funding rounds and lead investors. Thanks to Tracxn for giving me a journalist pass to research and write this post. Please DM me on X/anmolm_ if I’ve missed any companies or have any information incorrect.

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Over the last decade, the Indian and broader American venture ecosystems have often moved in lockstep. Growth in venture in India in the last decade largely mirrors the west with the cloud and mobile eras largely looking similar in both counties. In the latter parts of the 2010s, building enterprise software companies had largely become commoditized resulting in these companies being able to be built from anywhere i.e India. As a result of this, Indian firms started underwriting companies being able to exit in America as American companies and started increasing their fund sizes that start to look more similar to their American counterparts.

This combined with the fact that the new company formation in the country has grown significantly slower than capital availability has resulted in much larger round sizes and valuations almost mirroring America as well. This all changed in the aftermath of the pandemic - the AI wave has taken off massively in America with India lagging behind severely. Thus, there has been an impact on the outcomes that capital allocators in each market are underwriting (i.e what is the terminal value of these companies) and their ability to deploy that capital (i.e how much can we invest in these companies).

With Anthropic raising at a $183B valuation and OpenAI being marked at $500B, the venture game in America has changed dramatically. We are now seeing a cohort of private companies being valued at $100B to $500B and this becoming the new benchmark that investors investing in private technology companies are chasing. In America, companies can seemingly also choose to stay private for much much longer with there being enough capital to provide liquidity to early investors and employees. But as a result, venture capital firms (or firms investing in private companies) have and are also rapidly scaling up their fund sizes to be able to deploy billions in individual companies - Thrive’s exposure to OpenAI alone is in the billions, and when Lightspeed led a $3.5B round into Anthropic earlier this year, I can only assume they deployed a billion dollars or more into that company.

On the other hand, in India we’ve seen many firms retreat to investing in more traditional businesses (banks, NBFCs, CPG companies, QSR chains, offline healthcare) with there not being enough private technology AI companies being present who can absorb the large funds that Indian firms have raised. In 2025 alone there have been 24 companies in the US who have raised a $100M round, while India still does not have a single AI company that can absorb even $50M in a round.

Hence the conversation around venture in the US has become - “How do we find and back the next $100B to $500B company”, while the question in the Indian domestic market still remains - “How do we find and back the next $1B to $5B company”. The benchmark for a successful exit in America is now polls apart from a successful exit in India, however the fund-sizes of American and Indian firms still have worked in lock-step which is where this dislocation of venture is happening. It becomes very hard to impossible to return a multiple on a $1B fund if the top outcomes in your portfolio are only worth $1B to $5B - even if a firm owns 20% of a $5B company that’s a 1x return on their fund. Finding multiple of these companies in a portfolio becomes very challenging, especially in a market like in India where there are still very few meaningful IPOs and M&A outcomes. It would not be feasible to assume an early-stage firm with a portfolio of 30 companies over 3 years would eventually have 5 $1B+ IPOs.

Therefore the multi-stage platform firms in India have two options: 1) drastically reduce their fund sizes to an amount where they can reasonably return a multiple investing in the Indian market alone; 2) go truly global and try to compete with the best in the west for the $100B outcomes. Drastically reducing one’s fund size or future fund size is not a very appealing prospect to most firms, primarily because it would mean reducing their management fees drastically. A venture firm organization runs its payroll and operations basis its’ management fees (typically 2% of the fund size annually) but if that were to be halved they would likely have to make major changes across the organization primarily impacting their personnel.

Hence trying to “crack it” in America has become the option many firms like Peak XV, Elevation Capital and Z47 have chosen. An interesting call-out here is that while these firms and their fund sizes might be outsized for the Indian market they would be considered mid-sized firms in this market, which only makes competing for the best companies even harder. It however isn’t impossible - Nexus Venture Partners has been focused on Indian & cross-border investments from its inception in 2006, partnering with technical founders leading early rounds for companies like bolt.new, fingerprintJS and firecrawl (all companies with no Indian connection). It is yet to be seen how the other Indian firms stand out and compete in the US long-term, though they all seem to have a fairly predictable entry-point - attending YC’s Demo Day and backing companies they meet there.

I am slightly concerned about Indian firms’ ability to be competitive for top AI companies in the US when top AI companies from India are picking American firms over Indian firms for capital. Composio recently raised $25M in a Series A round led by Lightspeed US (I have anecdotally heard how Indian firms gave better offers to the team who still chose an American firm), and GigaML has raised a previously undisclosed $40M Series A round led by Redpoint (there are a couple more but I’m not in a position to announce these rounds). Results, too, won’t appear quickly so I just hope these firms are thinking about venture in America from a lens where they can truly be competitive - either by bring on new local talent on the team or creating a niche for themselves where they can excel.

I am also yet to see a large firm who wants to be contrarian in this era and choose to not fund any companies building outside of India. There might be some fund-size restrictions but there does seem the possibility of building a top-tier institution only focused on domestic company creation backing companies from early-stage to IPO.

Different sides of the argument aside, there is no denying that as Indians become more affluent, and are exposed - through travel, being preternaturally online, etc. - to ways of life outside India, there is a higher baseline expectation for what life in India should be. This isn’t a political post, but the parallel with Indian consumers is an interesting and important one here.

We believe this frustration doesn’t stop at governance—it finds a parallel in the Indian consumer market: Indian consumers are also underserved by homegrown brands. At its core, the frustration of taxpayers stems from the feeling of inequity: they pay their dues but don’t receive adequate value in return. Indian consumers, too, experience a similar disconnect when it comes to their interactions with Indian brands. Despite being among the largest consumer markets in the world, Indian consumers are often left with lackluster choices that fail to meet global standards of quality, innovation, or customer service. This failure is true of both international and domestic brands.

International brands have often treated India as a market that doesn’t deserve their best efforts. Many global brands introduce substandard products in India. for example:

• Both Indian and global brands will often use palm oil and more sugar in their Indian variants because these can often be cheaper to produce

• A report by the Access to Nutrition Index (ATNI) in 2024 showed that “brands including Nestle, PepsiCo, and Unilever, in India and other low-income countries were assessed as part of a global index and found to be less healthy than those in high-income countries

• Diapers and sanitary pads in India are generally substandard, with brands pushing back against more stringent QC requirements

India is still regularly used as a dumping ground for older product models. While other markets get the latest and greatest, Indians are left with yesterday’s technology and design. And clearly, it’s not like domestic brands have been much better. Many homegrown companies have settled for mediocrity, leaving consumers with products that are neither cutting-edge nor aspirational.

The arguments that Indian consumers are price-sensitive and value conscious are of course true. In particular, the K-shaped recovery we are seeing in the economy post-Covid has undoubtedly put a stress on a very large number of households in the country, and made value for money critical. It is also probably true that Indian consumers are not that educated or discerning about product quality (though this we would argue is changing).

As we / others who track the Indian economy have noted, the affluent section of the consumer economy has proved to be fairly robust, while mass consumer brands have struggled.

This has been a secular trend across product categories. Unsurprisingly, this has meant that brands are increasingly chasing the rupee spend of the 1% in India. What the ramifications are therefore on the cost-quality calculations for the large mass of consumers products remains to be seen.

Much of the commentary about this poor performance of mass brands has revolved around the sluggishness of middle class demand. This is of course true, but we believe this has completely missed the consideration around consumer wants. Indian consumers will demand more bang for their buck across price points. Our concern is that by undermining their offering to customers, consumer brands might end up in a vicious cycle of alienating the very customers they are trying to serve.

We would love to see better-for-you brands at mass-price points emerge for India. We believe there is a need and market from them.

As people prepare to fly to Ahmedabad and Mumbai for Coldplay’s concerts—or scramble to sell their tickets—it’s amazing to see how much the live music and events scene in India has evolved. From the underground EDM festivals of the 2000s and the chaos of Metallica’s infamous show in the early 2010s to the sold-out India-wide tours of artists like Diljit Dosanjh and Coldplay, it’s clear that India is eager for big experiences. This trend isn’t unique to India; with the “revenge offline economy,” easier access to credit, and rising incomes (at least for the affluent), it was only a matter of time.

As America moved into the post financial crisis era of 2008, along came millennials and their love for experiences. Some of this shift can certainly be attributed with the trauma of watching their / their families’ live savings being evaporated overnight and the associated fear of financial instability. Americans started valuing products that offered emotional value over mere material possessions.

Americans shifted from seeking basic commodities to goods, then to services, and ultimately to experiences. As incomes and wealth grew, households began craving more premium and unique offerings. This trend led companies to go beyond simply selling products or services, transforming the act of purchasing or using them into an immersive, memorable experience.

India’s premium economy is also facing similar tailwinds as the US did where the top 1% has seen their wealth and income grow tremendously over the last decade and led to people craving more. Two factors have amplified this trend: the fact that the country was essentially locked up for 2 years; and that Indians are lonelier than ever. Indians today seek connection and shared experiences, prioritizing going out, meeting others, and engaging in activities over simply purchasing goods and services.

Traveling & attending concerts has now become the national pastime (amongst affluent gen zers). 2024 / 2025 has seen the concerts ecosystem boom in India with several major Indian and Global artists holding nationwide tours - namely Diljit, Karan Aujla, Dua Lipa and Coldplay. That said, there’s still a lot of work to be done to improve the facilities and infrastructure for these events. Diljit went so far as to say that he wouldn’t perform another show in Chandigarh until they have better infrastructure to support live events

In their 1998 piece on the Experience Economy, Pine and Gilmore talked about 4 realms of an experience - entertainment, educational, esthetic and escapist across two different dimensions (active vs passive participation & absorption vs immersion) and how we might use them to design experiences.

India’s growing appetite for the experience economy opens up opportunities for businesses tailored to this demand. Traditionally, Indian experiences have leaned toward entertainment-driven activities like watching movies or attending concerts, where participation is largely passive. However, there’s potential for companies to explore experiences in educational and escapist realms—areas that are still relatively untapped in India but could appeal to the affluent class and resonate with Gen Z’s evolving preferences.

In the West, the experience economy has led to the birth of companies like Airbnb, which enables global travel and curated experiences; Topgolf, which combines golf with interactive games and socializing; and SoulCycle or Barry’s Bootcamp, offering pay-per-class fitness sessions. Similarly, concepts like Dave & Buster’s—which now has its first Indian outlet in Bangalore—bring arcade gaming and bowling into social settings. There’s also a wide range of creative and recreational experiences, from painting and pottery to mini-golf, go-karting, paintball, and newer fitness trends like pickleball, run clubs, and climbing. These models showcase the potential for innovative, experience-focused businesses in India, catering to a generation eager for more active and engaging pursuits.

In India, the live concert market is projected to surpass ₹1,000 crore this year, with the potential for annual private spending on concerts to reach ₹6,000–8,000 crore if infrastructure improves and audiences continue to invest in such events. Possibly fueling this, Zomato acquired Insider from Paytm last year for ₹2,048 Cr to build out District - its live events and movie booking product. The full impact from the acquisition and investments in District are yet to be seen but already Zomato’s going out business is its fastest growing vertical (albeit on a much smaller base).

The other large “experiences economy” that has picked up post the pandemic and continues to grow is travel. According to a report by McKinsey, first-time travelers (largely younger folks) are a fast growing pool and popular destinations include Vietnam, Thailand and the UAE. Spending by Indians overseas saw its peak in FY24 at $31.7 billion with over 50% of the amount spent on travel ($17 billion), a 25% increase from the previous year. Even within travel, consumers are now spending more on experiences while they travel as opposed to just flights + accommodation, as evident from where travel booking agencies have seen their revenue sources change.

Moreover while a large part of the travel spend, especially international, cannot be tapped into by startups there are several more experiential segments which are underserved in India and are interesting areas to expand in - religious travel and amusement parks. Religious travel in India is expected to grow at a CAGR of 16.3% over the next decade and is likely to reach $4.6B in size by 2033 [Report]. The consecration of the Ram Mandir in Ayodhya was a catalyzing moment, but a lot of this has also been driven by the investments in infrastructure (railways, roadways and airports) being made by the government. Amusement parks, on the other hand, have never been as culturally or economically important in the country and largely don’t leave families or kids with memorable experiences like Disneyland or Universal Studios might. But given the rise in consumption and spending amongst the affluent Gen Z consumers and with Millennials becoming parents in the 2020s, there might be opportunities for amusement parks built around domestic or international IPs to open in major Indian cities.

More on the participatory front and on a much smaller scale, we’ve started to see pickleball pick up in the metros as a popular recreational activity - with over 50,000 people having played a game; as well as run clubs becoming popular in cities like Delhi (Bhag Club with several hundred people running together every week), and hundreds of folks coming together to parks to read together in book clubs like Delhi (@delhireads) and Bangalore (@cubbonreads).

Ultimately any experience in India, with active or passive participation, that is fun and instagrammable will appeal to young affluent consumers. People want to go out, be social and have fun; but they also want to signal to their peers that they are doing these activities. A couple of different types of “instagrammable” experiences that really drove young folks out in the West were “made-for-instagram” museums and immersive art experiences - that has also made way in India.

I’m not sure if any of these activities will be large enough to create venture-fundable outcomes in the country or if any of these activities will also persist beyond a couple years in the country, but I predict there’s going to be a big resurgence of IRL things to do and activities in the coming decade and its an exciting time to be a young affluent urban consumer. Kids just want to be young, dumb and have fun so we should build more to enable them.

If you are working on things around the loneliness epidemic or the experience economy, we’d love to learn and chat!

This week, we’re diving into a topic that feels both urgent and ripe for discussion: health and obesity in India. It’s a complex issue, deeply tied to cultural shifts, economic factors, and the growing influence of global food trends. We’ll unpack how these forces are shaping India’s relationship with food, health, and fitness—and where we see opportunities for innovation and change. We hope to share similar short snippets on an on-going basis this year.

If you are a child of the ‘90s and grew up in India in the early post-liberalization years, perhaps some of your memories of those years will be centered around watching the glut of cable TV and American culture being beamed directly into your living rooms in those years of true American hegemony. It was a window into a world of plenty—plenty of food, and all kinds of food, for one.

As India opened up—including to McDonald’s and Pizza Hut—there was (as there always is) a debate about what this would mean for our eating habits and whether the country would go down the road of forming a taste for the kind of food that had made America, basically, an obese country. It seemed hard to fathom at the time that this could happen. Our food was not dominated by highly processed items high in fat, salts, and sugar. But more critically, we were a poor country (we still are of course, but the overlay was more widespread then), with a reality and deep memory of scarcity, if not famine. The idea that being able to afford eating out or eating junk as anything more than an indulgence seemed far-fetched. It was hard to imagine that a country of malnourishment, where people were mostly thin, would ever become a country where people were mostly fat.

And yet, here we are. Travel to India today and it’s hard not to notice that, on the whole, we are now a fat country! Data from the past decade shows that India’s obesity rate has almost tripled, with more than 100 million people classified as obese. An estimated 14.4 million Indian children are now obese, owing to sedentary lifestyles, poor diets, and increasing consumption of processed foods.

The culprits are familiar: fast food chains, American-style malls, and advertising strategies targeting young minds. The rise of ultra-processed foods—laden with sugars, salts, and unhealthy fats—has infiltrated diets across socio-economic classes. The “thrifty gene,” advantageous in times of scarcity, is now a liability, making South Asians genetically predisposed to obesity and related health issues like diabetes, hypertension, and cardiovascular disease.

This trend is not just one that driven by consumers. The food and beverage industry is facing strong regulatory scrutiny and greater public health awareness. This has hampered their ability to sell indiscriminately to Western markets, and in a search for growth and profitability countries like India are attractive. Populous, still under penetrated and poorly regulated — it’s a free for all. It’s not an exaggeration to say that this trajectory is an economic and social disaster waiting to unfold fully. The healthcare costs that such an unhealthy population are going to be tremendously high.

But while the parallels with the U.S. are stark, we believe they also point to the potential for change—and opportunity. America, after hitting peak obesity, has seen a growing health-conscious movement, driven by fitness regimens, calorie-counting, and better nutritional awareness. This wave has spawned multi-billion-dollar industries ranging from organic food and fitness apps to health-tech solutions. Say what you will about Robert Kennedy’s anti-vaccine stand, but the MAHA movement is politically important and has been an issue that has resonated with many voters, particularly affluent moms who are worried about the ingredients that are in the foods their kids eat.

We believe a greater awareness of health and ingredients on the part of consumers is a natural trajectory for the Indian consumers, especially those who are urban and affluent. The shift will likely start with the top 1%—those with the purchasing power and awareness to invest in health. We are already seeing this in the popularity of influencers like Food Pharmer, new-age brand catering to a more health conscious population (Epigamia, etc.) and older brands trying to catch-up (Amul).

In line with this thinking we believe there is a huge opportunity for companies building to capitalize on these tailwinds across a variety of areas. Just some example categories include:

1. Health-focused consumer brands: E.g., Organic and locally-sourced snacks, low sugar beverages and condiments, plant-based foods

2. Fitness and Lifestyle: E.g., Premium gym chains, fitness studios and services

3. Preventative Healthcare: Apps and wearables focusing on fitness, nutrition, and monitoring chronic conditions like diabetes.

In each of these areas, we already see exciting companies that are building for identified pain points and un/underserved needs. We are excited to see how this space will develop. If you are working on these problem spaces and themes, we’d love to learn and chat!!

Reach Out

I should start off by saying I was among the incredibly lucky few in the US who had a job that gave me excellent healthcare and maternity benefits. And even then the last year has been a roller-coaster both personally and professionally. I could write reams about the challenges of being a parent, but for this post I’ll focus on the professional front. Managing a small baby and a pretty demanding day job is hard. It’s very hard. For all the talk about equality there’s no getting around the fact that childcare is much harder on women than men. And its not made easier by the fact that we have been living through an era of “leaning in”, where obviously having a baby should not mean you are any less of a girlboss. All in all, its a lot of pressure.

A couple of months after I came back from maternity leave, a female Partner at my firm asked me how I was adjusting. Struggling through it, I told her. She nodded, and said I just kind of had to struggle through it for a couple of years. It gets better. But also she said, you have to adjust to working at a different tempo and pace. It’s blindingly obvious but this adjustment has not been easy. I can no longer just power through with sheer stamina and long hours during a tough work situation — all nighters are really not feasible. Between more managerial responsibility and baby duties at home, I find myself dealing with fragmentation in the extreme. In all honesty, this is something I am still getting used to. There’s obviously a bit of mourning for my old work self. Figuring out what my new normal or new optimal is is still work in progress. Should I continue to work late into the night or try and become more of a morning person? How much in terms of additional commitments can I handle realistically without cracking and then coming across as flaky. It’s all been very much trial and error.

In all of this, the most important thing for me to think about has been setting boundaries. Leaning in is overrated and exhausting beyond measure. I remember one day managing my baby’s nighttime routine while also dialed in on a conference call. It was miserable. She was cranky and I wasn’t a 100% present either for her or for the call. Even worse, no one would have missed me on the call. But I had felt the pressure to be seen. I am much firmer now and vocal about what my boundaries are and why. I have also realized that on the whole people are pretty understanding (and if they aren’t, you probably don’t want to work with them anyway), and very rarely is something so crucial that you can’t pick it up later. The other realization was that the onus is always on me to set my boundaries and also be vocal about why, since I can’t just assume other people should or will understand my personal situation.

This touches on another key thing I realized — supportive colleagues are key. And to be honest, here I don’t even think gender matters. I work in a pretty male-dominated work environment, but some of the best advice and support I have received has been from male colleagues who are new parents too. They have been open about sharing stories about challenges they face (while acknowledging its always tougher for mom), while also sharing tips, and in general providing solidarity. It makes such a huge difference. When I wrote at the beginning of this post that my outlook has changed a lot, it was no exaggeration. We as a society don’t talk openly about what it takes to raise a child. Its no surprise to me then that if you don’t have a child you are clueless about what people with young children are going through, and will also likely be incredibly bored by it - I was! So finding a group of people at work who are navigating similar issues does make a big difference.

And one final reflection. I wish we asked more men how fatherhood impacted their professional lives. It has become commonplace to get annoyed about women being asked how they manage it all, because we don’t ask men. I’d actually love for this question to be asked to men, because sometimes you do hear insightful things, and because sometimes it’s important to know just how involved / not they are in child raising. In my experience millennial and Gen-Z fathers are way more hands on, and asking this question also puts the onus on them to think more about the toll of child raising on their professional careers vis-vis their female partners’. It’s exactly why I feel long paternity leave is so important. We should not normalize women being the primary caregivers.

As a manager, I now also think a lot about how we can set up supportive team structures for parents (and non-parents) of both genders. I do think it is incredibly valuable for companies and managers to articulate vocally the ways in which they can support their employees through challenging years on the personal front, but few do that. There’s a lot of low hanging fruit here for most organizations to create fulfilling and supportive environments for their employees, and I wish we see more doing so in practical terms.

We’re back to covering everyone’s favorite investor in India, Tiger Global, and what the future might hold for the Indian ecosystem. Earlier last week, MoneyControl reported that January 2023 was the first time Tiger didn’t write a single investment in an Indian company. While Tiger and other global investors were writing checks every week during the heyday of the pandemic, that has come crashing down in the latter half of 2022 and as we move into 2023. This, for Tiger, is neither an India-only phenomenon as their global investment velocity has slowed down significantly nor is it something they haven’t done in India in the past. We wrote back in April 2021, when Tiger coined 4 new unicorns in India (CRED, Groww, ShareChat and GupShup):

“The thing about Tiger Global, though, is that the firm has been quite hot and cold with its investments in the country. Every cycle, it starts off being very aggressive and does a bunch of deals and investments for a couple of years and then goes dormant for a few years. The Indian market saw this when Tiger was very aggressive in 2014 and 2015 (according to Crunchbase, Tiger participated in 46 funding rounds), but then was fairly quiet in 2016, 2017 and 2018 having only participated in 12 funding rounds in those 3 years. The firm has certainly been active in 2019 and the early parts of 2020 but seems to have gotten even more aggressive in the last two quarters. Is it still yet to be seen how long Tiger truly will be active in the country given that historically India hasn't really generated a lot of returns for the firm.”

The Cat is Out of the Bag

Amidst these struggles, their longtime partner John Curtius left the firm late last year, and the firm recently is scaling down the target for their newest fund which they may have struggled to raise. The firm’s absence from India as a combination of all these factors doesn’t come as a surprise - as corrections in the public markets have left growth investors slowing down their investment pace, they have understandably pulled back from India and other emerging economies. Tiger has traditionally invested heavily in the SaaS and Fintech sectors, however, recent regulation from the RBI and the departure of John Curtius, who led a lot of their SaaS investments in India, have also contributed to their decreased activity in India.

In a rare public appearance on a panel hosted by Matrix Partners India, Scott Shleifer spoke about the firm’s history in India and their continued belief in the Indian markets and founders. Scott was quite frank and open about how returns in India have historically “sucked” for the firm, and this was the key quote from the entire panel:

“Our returns in India, our IRR, is something like 20% gross since inception. That compares to mid-30s in the U.S. on the private side, and low-50s in China. But that’s the past.”

Paraphrasing Scott, I have heard for the last 10 years from Indian investors that returns have historically not been great in the subcontinent but that it’ll get better and improve. And every couple of years I ask them when? The pandemic fueled free-money era is not returning and it raises a key question about Indian companies being able to go public in future. Growth rounds in the country have stagnated, and while things haven’t impacted the early stages as much the ecosystem risks another couple of years where Series B/C+ rounds become hard to come by and a lot of companies (great and bad) die out. This is similar to the capital influx in 2015 and capital flight in 2016, which was partially attributed to Tiger, as acknowledged by Scott.

The bet on India and Indian companies has been a bet on India’s macro-economic outlook with a massive population that is coming online in an ever increasing rate. The number of India’s internet users looked vastly different in 2010 when Tiger first wrote an $8M check into Flipkart. But even with >600M internet users in the country, Tiger and other global investors have fared better in other markets. Investors in India often mention the need for patience with companies as they take longer to become profitable, go public, and deliver returns. But venture firms investing in India have to eventually show that their investments in the country result in actual cash returns rather than just other investors marking up their investments. A couple years ago, Karthik Reddy (Managing Partner at Blume Ventures) penned this 3-part piece on the need for Indian companies to list publicly, and he makes a great point why Indian companies and firms need public exits- "no legendary Fund Vintage cycle is created without enough quality IPOs". And after more than a decade, the question remains whether global investors will lose patience with the Indian market or if companies will prove them wrong and deliver great outcomes.

Other stories we have been following

Startups were noticeably absent from this year’s union budget as the dreaded angel tax is returning which might lead to foreign investors finding it harder to invest in Indian companies or drive Indian founders from choosing to incorporate their companies elsewhere.

The latest on Adani and Hindenburg: After becoming the richest man in Asia, a report by the research firm and short seller Hindenburg has sent the shares Adani Group spiraling downwards.

Over the last few weeks we have been thinking a lot about the layoffs in tech. It’s been a brutal year for tech companies. Of course, given the center of gravity for tech is the US, the cuts have largely been centered there. According to Crunchbase, ~58K tech jobs have been cut just this year. And January isn’t even over! Add this to ~140K tech job losses last year and you start getting a sense for just how brutal that layoffs have been. At this point its hard to think of a single big tech company that hasn’t cut jobs. Except for Apple, of course, which was even-handed in its recruitment even during the peak of the pandemic (this is a good article on why Apple has avoided this fate). I have seen this particular chart on Twitter a few times now to highlight (1) just how much tech companies hired during the pandemic (2) how the job cuts were a drop in the bucket given this hiring spree, and that none of these companies have really gone back to pre-pandemic headcount levels.

Ben Thompson had a nice article a couple of days ago, digging a bit deeper into this hiring spree. He laid out another chart, showing YoY change in headcount:

The popular narrative right now about these layoffs is that tech companies dramatically over-hired during the pandemic, but while that seems to have happened with Amazon — and for arguably very good reasons given the way that e-commerce shot up during lockdowns in particular — the reality is that the rest of the tech companies largely increased at the same rate they always had. Sure, the number of employees they added was large, but that was a function of keeping the same hiring rate off of an ever increasing base.

Thompson argues that in his view these layoffs are quite opportunistic, since they keep employee count in line with what would be needed to accomplish the companies’ strategic priorities while giving investors a sense that these companies are reining in costs and adjusting to a new economic climate. I think there’s also obviously a bit of a domino effect going on here — no one wants to be left out when the general state of mind across the industry is that of cleaning house. The thing with cuts though is always what is enough, and I think we will need to wait and see if there is another deeper cull. Hopefully not, but let’s see where the economy goes.

Indian tech companies have gone through their own version of headcount cuts. Again this is not surprising given so many are venture-backed, and now have to focus on increasing runway and profitability. And I think in India, these cuts were probably more needed as well. Indian companies have also historically over hired compared to companies in the US. Hyper-funding and growth expectations meant that this proceeded to get significantly worse in 2021 and 2022. There is still a cost arbitrage of building companies in India vs the US, but that slowly disappears given how these startups ended up hiring. Companies hoped they could blitz-scale and the party would never stop but as venture dollars dry up in the latter stages, growth stage companies have hit a reality check. Across 2022 and 2023, 20,000 employees have been laid off across companies large and small and it seems likely that more are to come. If there’s one key takeaway from this downturn, it’s probably the fact that Indian startups need to be more cognizant with hiring and not hire ahead of their growth given the price these companies need to pay if things go south. Only time will tell how companies and founders apply their learnings into the next boom and bust cycle, but I think it’s pretty clear that there's no reason a seed stage SaaS or technology company needs over 50 employees to reach PMF.

Other stories we have been following

Sharechat is apparently going through a leadership crisis: Even as the social media company went through a headcount reduction, its CTO and COO were MIA. Apparently the company’s top and middle management have hollowed out, with implications for the company’s growth and revenue trajectory

Walmart is doubling down on India: Even as Amazon is streamlining its operations in the country, Walmart is pumping cash in to its big bets PhonePe and Flipkart. The company is looking to buy back ~$1.5B of Flipkart shares from Tiger Global and Accel.

It’s been a wild week for the Indian ecosystem. The biggest news this week has unsurprisingly been GoMechanic. The story: “GoMechanic founder Amit Bhasin has admitted to financial reporting errors at the Sequoia-backed car repair startup and stated that the cash-strapped company will lay off roughly 70% of its workforce while also having its accounts audited by a third party.” When I read Bhasin’s LinkedIn post, I had to wonder what exactly happed. The mea culpa obviously didn’t spell it out in simple English, but it does seem likely that the books were cooked. And that indeed was the case.

According to reports, things came to the fore because GoMechanic was in talks to raise $75-80 million in a funding round led by SoftBank and Malaysian sovereign fund Khazanah Nasional. However, the due diligence process raised a bunch of red flags. Money Control reported “GoMechanic had reported overinflated numbers and fictitious garages. Some of its favored partner garages were found to be making disproportionately more money during due diligence,” The startup's investors in a joint statement said, "The investors of GoMechanic were recently made aware by the company’s founders of the serious inaccuracies in the company’s financial reporting. We are deeply distressed by the fact that the founders knowingly misstated facts, including but not limited to the inflation of revenue, which the founders have acknowledged. All of this was kept from the investors."

It’s obviously not a great look for Sequoia, one of the company’s investors, that it seems to have a perennial problem with start-ups that play fast and loose with their numbers. But the bigger question for me is how does this keep happening, and how is this ok? I remember when I first moved to the US and was involved in conversations about funding, diligence etc. I was surprised at how easily investors what take founders’ words at face value. And I had to remind myself that I was coming from what is essentially a low trust society to one that is high trust. There isn’t a mindset that people are out to defraud you, and things largely work on trust.

Perhaps its unsurprising then that Venture Capital, which in its origin is American, has largely worked on trust, and that many venture investors have historically trusted what the entrepreneurs they have invested in tell them. Venture capital is no longer new in India, and like all businesses, there is a need to adjust to local contexts. Should there be more thorough due diligence? Of course. The fact that it was Softbank of all investors whose diligence process unearthed this, and who decided to walk away perhaps points to the go-go days of easy investing being well and truly over. But there’s an even greater onus on founders running a clean business, and not cheating and lying. It’s really that basic. Or it should be. I have written on a number of occasions about anything related to business and profit still being considered suspect in India. The businessmen are always out to get the consumers, many believe. This deep seated suspicion is so rooted in our psyche, and built upon some 250+ years of foreign rule that it should not be surprising. What is upsetting is when these notions get reinforced, especially by the start-up ecosystem that is supposed to be doing differently. I think we can only hope that investors become more diligent, and that boards actually probe more, and we have fewer GoMechanic like cases going forward.

Other stories we have been following

PhonePe is now a decacorn: India’s top payments app, which formally separated from Flipkart last year, has raised money from General Atlantic and is now valued at $12B. The company said it will deploy the new funds to make significant investments in infrastructure, including in the development of data centers and build more financial services. The company also plans to invest in new businesses, including Insurance, wealth management, and lending. Now that PhonePe is untethered from Flipkart, its going the full financial services business route, and can clearly become a big player in the space. It will be an interesting story to watch unfold

Even more layoffs are expected in Q1 2023: As if the news about layoffs over the last few months hasn’t been depressing enough, we should be gearing up for more cuts according to ET. This is of course not an India specific phenomena, like elsewhere many venture funded start-ups have to tighten their belts to prolong their runway, and the fact that everyone hired like crazy during Covid is now impacting employees. Of course, this is not a private company issue either. Big Tech — famous for its cushy jobs — has been tightening its belt and laying off people too to meet shareholder expectations. This is a good post and good view on how much the situation has changed in just the past one year.

What we are reading

I can’t speak for Anmol, but I’ve been engrossed in Prince Harry’s Spare which I finished earlier this week. Yes, I am one of the many millions of people who have made this the biggest blockbuster in publishing history. The book is … good!! J. R. Moehringer is an extraordinary writer and the book is actually full of pathos and very thoughtful. Of course there’s drama and gossip, and the Royals make the Roy family look half sane in comparison. Definitely recommend.

First off, happy new year! Here’s wishing you, and your loved ones a healthy and happy 2023. In all honesty, after the roller coaster ride of last year, we all probably need it.

2022 quite the year for both of us personally, with new jobs, moving cities and continents, and new family additions. So, it was perhaps not a surprise that keeping up with the newsletter became a bit too much to take on. Which is not to say, we weren’t engaging with the ecosystem — as investors in early stage start-ups we remain committed to India, even if we haven’t regularly chronicled it. This year though we are committed to getting things going again on the newsletter front, and rebuilding our habit of writing, with new posts weekly every Wednesday/Thursday.

A look back at 2022, a look ahead to 2023

To start off this year, we wanted to actually look back on 2022, before looking ahead. Yesterday, reading an FT article about the saga that Tesla has been over the last year, got us thinking about what an apt symbol of the last year the company is. The last week of the year was brutal for the iconic company, taking it to its lowest point in two years. Tesla was worth $1.2T at the beginning of the year. It’s market cap now is ~$350B. While not all tech companies have had as precipitous a drop, anything tech has been battered this year. And the winds changed so quickly early on in the year too. As inflation remained persistent, and interest rates went up, tech stocks suddenly looked very, very overinflated. Free money is no longer a thing, and growth at all costs has gone out of the window. The idea that people were buying NFTs of Bored Apes seems like it happened in another time, but it really wasn’t so long ago!

Of course, the impact of the shift in the public markets also began impacting private markets. And like everything, what was happening in the US also impacted the funding market in India. In short, it was a tough year for Indian start-ups and founders. In 2022, India added just 22 unicorns to its tally, down 51 per cent from the 46 it had added in 2021. To highlight how tough things got in the second half of the year: of the 22, just four unicorns were added in the second half of the year. VC investments fell by 35 per cent drop to $24.7 billion last year, as did the total number of deals.

We have seen the knock-on effects of this slow down even at the very early stage. Except for a couple of months post-August, the market has felt exceptionally slow across the board. Looking forward to this year, we have had multiple conversations with folks based in the US who are concerned about Q1/Q2 and it sounds like the venture ecosystem will be quite sluggish. We are assuming it will be similar for India. A lot of funding in India depends on how capital is deployed in the US, and what additional investments funds then have the capacity to make. So it will be crucial to continue monitoring the US economy from our perspective, as it is a leading indicator of how the ecosystem in India evolves as well. That of course isn’t to say that there won’t be activity in the market. If anything its a great time for some of the bigger conglomerates to snap up smaller, more agile, tech-focused companies, and we expect to see more M&A in the coming year.

Stories we have been following

Mamaearth’s upcoming IPO: Mamaearth’s parent company, Hosana Consumer, filed its draft red herring prospectus with market regulator SEBI in the last week of December. Hosana has an interesting portfolio of personal care and beauty brands, and has been a first mover in the D2C space. The company actually became a unicorn in 2022 after raising $52 million in its Series F funding round led by its early backer Sequoia. We think this IPO will be interesting since we think it will be one of the few IPOs we are likely to see of a venture backed start-up for a while, given the broader economic climate. And it will be interesting to see where the company’s valuation settles. Already there’s been a bit of a brouhaha about how overvalued the company is (even though no valuation has been mentioned in public). Given the underperformance of many of the sexy venture-backed / new age companies that have IPOd in the past 1 - 1.5 years, will there be appetite for a loft valuation here? To be seen. In the meantime, the Hosana DRHP is a good read for some insights into consumer trends and the growth of the beauty and personal care products space in India.

Kreditbee raises funds: It’s generally been a tough time for fintechs in India, both with the RBI consistently throwing curveballs to those operating in the space, and because an uncertain macro climate is always challenging for the sector. Not so for Kreditbee, which raised ~$200M in Series D funding at a valuation of ~$700M. Kreditbee targets the new to credit customer segment, offering instant micro loans starting as low as $12. By all accounts this is a tough segment to play in, so it speaks to the investors’ conviction in the company that the round went through even in this funding environment.

Newsletters we’ve been reading

• by Pranav Marie (we loved his latest on Hip-Hop in Delhi)

• by Sar Haribhakti

• by Dharmesh Ba

• This Week in Fintech (Asia & India) by Osborne Saldanha

Vedica: To get started, let me start from the very beginning - how did the idea of Loop come about?

Mayank: I, and actually the other co-founders as well, Amrit, Ryan and Shami all kind of arrived at the idea because of personal interests in healthcare and our desire to make healthcare better. We all have had experiences with our family members in the past that have been full of friction in terms of navigating the healthcare system. A lot of that friction and discontent with healthcare was caused by the quality of healthcare that we received personally or that family members have received.

My dad had a heart attack when I was at university and as the only son I traveled back to India and had to navigate the whole thing myself. I saw how broken the whole experience was. This could have been totally prevented with really good primary care. He was prescribed a surgery that we later found out he didn't need. At the time, I didn't know what a second opinion was. We were just taking the doctor's advice and going through it. It took him a long time to recover from surgery and there was no real support. And so they basically charged as much as they could. The whole experience made me really try to figure out why things were so bad. I ended up realizing that doctors and hospitals make more money the sicker someone is. In this kind of fee for service model that is based on volume of care doctors have revenue targets based on how many MRIs they prescribe, how many surgeries they prescribe and the blood tests that they do. That's really messed up because that is not really aligned with what patients want. You would want the doctors and hospital to be aligned to better outcomes. So that got me thinking - what is the best configuration so that the doctors and care providers are on the same side of the patient? That's where the obsession with managed care or value-based care started.

Amrit: The interesting thing here is that there is one kind of organization in the market that does want you to stay healthy. And that is your health insurance company. That's typically not a lens that most people take to their health insurance plans. If you go to a company and you ask if they have a group insurance plan, most people will say, yeah, I think the company has bought insurance for me. If you ask them who their insurance provider is, they have no idea. Because it's not something you want to think about until the day you use it. Insurance in general, in the market has largely been a push product and it's quite nascent in India. But fundamentally we see it as an important tool for financial protection. So if you bring these two things together - if you take the insurer model and allow them to provide care for the people they insure you're creating a system that's now incentivized to deliver great preventative and primary care. And that's essentially what we are - the first integrated payer provider in the country.

If you look at how Loop operates right now, we have a B2B sales motion, we sell health benefits to companies, we have bundled both insurance and care and got a lot of competency around providing really great care to people. We built an in-house medical team with ~35 doctors to care for the ~1.5 lakh lives we have insured. That's how we arrived at this model and why we care about the unique combination of these two things.

Vedica: The Loop co-founders met in the US - what was it about the Indian market that you felt was attractive or what was the gap you saw there that made you kind of want to attack that opportunity?

Amrit: I guess I'll say two things. One is a bit more emotional - it's that we all had family members and roots here. So we felt that connection. And having experienced really crappy healthcare in many ways, ourselves knew that there was a lot to improve on. But the second thing is that the opportunity in the market was a lot bigger compared to the US. The difference in the quality of care was massive. In the US actually a lot of people do receive high-quality care. It's expensive, but they have access to telemedicine and they have access to a great GP. A lot of folks in India, don’t. If you look at the number of GPs in India that are active, there's 1.3 million registered GPs in India, but only 20% of them practice allopathic care. So, the delta and care we could bring was much higher in India. In addition, in the US regulations prevent you from moving quickly in healthcare. You need state-by-state licenses to practice, you need to follow HIPAA rules etc. At a seed round, as a healthcare founder in the US you're going to spend a third of your seed round on a legal team. And so for us to be able to move quickly and to build the things that we imagined would be an amazing customer experience, we felt that India was really the best market to do that.

Vedica: You're obviously going at it from a B2B perspective. Say, if I’m a company and am looking to provide some kind of group health insurance for my employees, what does that interaction with Loop look like for me? Why would I, or why should I choose Loop over other providers out there when it comes to health insurance?

Mayank: It's the HR of companies that buy insurance. And the biggest companies have been buying insurance from legacy brokers, like Marsh, Aon Global, etc. An average company spends 50 lakh rupees on health insurance. It's one of the biggest expenses that they have as a company and often they look at it at the end of the year, they see 5%, 6% of their employees use this benefit. And 95% of the employees don't even know the name of the insurance company. So it can really feel like they're not getting value for their money.

And even the experience that employees have is often just awful. You really don't have a great digital experience for claims and so on and so forth. So when Loop comes in, the real value we provide is that you buy health benefits, health insurance from us, and you get free unlimited in healthcare on top. Often 95% of employees don't need to go to the hospital, but they do need primary care doctors, especially now during COVID. We provide free unlimited primary healthcare that allows you to text your doctors and the get responses 24x7. And you can consult with the top 10 specialties as many times as you want throughout the year. That really helps HR provide a health benefit that is actually useful to employees. Usually doctor consults and OPD are not covered under plans, but we ended up covering them. And so by the end of the year, 40 - 50% of the company starts finding value in the health insurance. It's an experience that completely changes how employees are interacting with care system. That's all core reasons that HR folks switch from older brokers to Loop, because they just see that this is obviously more useful and can really help employees.

Vedica: Can you speak more about how being an integrated health care provider works both from the doctor and insurance angles?

Mayank: I can quickly chat about the doctor's side - there’s a lot of talk about the dearth of doctors in India, which is a bit of a false statistic in the sense that if you take the population of the country and how many doctors we have, it does look like that. But if you look at where doctors are aggregated its mostly in major cities. So, doctors often don't have that much utilization unless they are a super specialist. Most primary care, even secondary care providers are not nearly at capacity. What we basically did is hire doctors - we give them a better salary, that's more consistent than running their practice. They work from home and they can consult virtually. And they also get 20 minutes per patient, not three minutes that they're used to practicing because we have a different kind of payment model. That really attracts the best kind of doctors to come and work with us on the primary care level. And if someone needs to go to an endocrinologist or a cardiologist, depending on the city they're in, we refer them out to those specialists.

Amrit: On the insurance side - we work with insurers to get quotes. I don't know if you know how the broking process works, but essentially we have to float an RFQ out from a company to insurers and then insurers decide if they want to take on the risk. And the way they do that today is that they look at every company we send them. They usually look at two or three factors - the number of people in the pool, average age and then they look at the split of gender, male, female. That's all they use to underwrite today, which is remarkably primitive from an underwriting standpoint. There's nothing preventing them from underwriting on more information - they actually just don't have more data to underwrite on. And so you can imagine the room for error there. If they don't know exactly how many, let's say diabetics are there in a population, it's very, very hard for them to underwrite the risk properly. What we're doing today is working with the insurance companies to show them that we can actually keep people healthy or use our preventative care to reduce claims. And not just keep people healthy, when they do get sick, make sure they get sent to the right hospital. So we do the routing part really, really well. And prove that these things can actually lower claims and create better outcomes and more profitable products for the insurance company. So that's step one in creating value.

The second thing is over time collecting the healthcare data so that we can start to underwrite these ourselves. And so there are certain populations or certain kinds of insurance products we would want to spin up. For example, top-ups. We discussed how HR decides which benefits to pick for the company. And for some people it's enough coverage, but for others its not. For example, if I want to be able to add on more and more coverage and be able to do that in a really simple way, it’s not easy today. So we have designed top-up plans to be able to give people the coverage they want. It's effectively like a slider scale.

We can create these new kinds of products because we have access to healthcare data, and we're pretty informed as to where there's risk that's worth taking and not worth taking. So we can selectively, over time, pick up and add these more customized, personalized insurance products that we can bundle in with the group health insurance plan. And maybe one day we can also provide the group health insurance plan. So that's where we're headed in the long run.

Vedica: And what’s the immediate plan for 2022?

Mayank: We want to grow our customer base four or five X this year. We have seen a lot of product success in our primary care product, where people keep coming back to get care for themselves and their family members. One third of the consults are for the employees. One third are for their kids and one-third for their parents. And so we're seeing this affinity towards our primary care, experience and doctors. We want to double down on that and basically see how we can bring it even closer to our members. Building offline networks to make sure that there's continuity of care, building a better diagnostics experience around primary care, etc.

Apart from this, we're also launching some disease-specific products. If you have diabetes, if you have hypertension, how can our doctors continue to help you across the year and not just through consults? Ideally we can help you in type two diabetes or can help you control your blood pressure and so on and so forth.

Vedica: How would you say you are differentiated from even other startups who are tackling the space, and tackling the health insurance market in India?

Amrit: The first thing that's important to say is that this market doesn't seem like a winner take all market by any means. There are some markets where there's clear first mover advantage - it's winner take all - but in healthcare and insurance too, we tend to see oligopolies form. I would say for the folks that are in this space, who are also starting up, a lot of their approach seems to be very insurance first. It seems to be about taking insurance broking online. Policy Bazaar has been in the market for a decade, but they were never able to really crack the enterprise sales motion. The purchasing behavior is so different for an HR making decisions on health benefits than someone buying retail online. And so the incumbents like insurance brokers were fine. Fundamentally what we're doing is building a healthcare system and that's something different. We will only take customers in the three metros because we know we have to build so much more for these folks since we see them as patients. We know that to deliver great care experiences you need things like strong relationships with certain health systems and hospitals, with tertiary care providers, with diagnostic providers, with medicine providers. And so there are these very local competitive dynamics that get built up over time.

What we have done is we have mapped the entire customer journey in healthcare. And we said, okay, the moment you feel sick you'll probably want to be able to text or call a doctor. And so that's the first thing we built. And then as you get more sick, let's say, you end up going to labs and seeing specialists, and then maybe at the end of your healthcare journey, ending up at the hospital and using insurance. And so we provide that insurance as well and help you get to the right hospital and use the right insurance card for the right treatment. We have virtual care at the very beginning and we have insurance for when things get really bad. And now we're building products and services that fill out things that you would need along the way. That's very, very different. We hope that what that looks like is, if you're in Bangalore or Mumbai and you get insured on a Loop plan, you have access to free unlimited primary care, but that also means you can walk into a Loop clinic and get free care, and you can get discounts with our lab partners and you can get medicines delivered to your home through one of our tie-ups and, and that's discounted too. In addition, you have really high quality specialists you can go and see. Your Loop doctor is checking in on you proactively because they know what your condition is. They have a plan to help you manage that condition and they can proactively recommend when you go to see a certain kind of doctor when, whether or not you're following a prescription or a diet, a plan for a lifestyle change.

Vedica: How do the big hospital networks fit into the landscape given what you are trying to do. Do you see yourselves competing with them further down the road or partnering with them? How does that relationship work currently and how do you see that evolving?

Amrit: What is really interesting is quality varies across even the reputed brands. People don’t really know who to trust in any market. Because we see all the claims, we get to see the cost per procedure, and we get to see readmissions over the year. So we get a sense for where there's high quality care and low quality care. It's really, really important that we pick the right hospital partners, because it allows us to direct people to the right care. One in three people before they claim will ask their Loop medical advisor or a doctor about where they should go. And we're fortunate enough to know what's in their policy, and so we know exactly where we can send them and where they're going to get the best care. That relationship is incredibly important and will only get stronger. So we do see hospitals as a partner.

On competing with hospitals — we joke about the thesis here being that if we're going to build everything from the moment you feel sick, that first symptom to when you use your insurance Loop may find itself building a hospital. It would be strategically aligned, but very, very difficult to do. So for the next decade or for a long time, it's probably going to be a really, really great relationship we build with healthcare systems and hospitals. And we'll really want to invest in choosing the best providers to be in our own network.

We know that insurers have created their own hospital networks - there are hospitals that are in network and out of network. We're building our own network on top of that, with the data we have access to that no one else has or uses effectively to really curate the list of the top five or top ten providers in any city. We have seen that when we recommend a provider, people are willing to travel an extra kilometer or an extra two kilometers down the road to go to the right provider, as opposed to just going to the closest one for a lot of their treatment.

Vedica: Finally, what are some of the more interesting healthcare trends that you are seeing right now?

Amrit: The willingness to start the care journey online. People in India are not afraid to use apps and the kind of behavior we have seen around payments is going to happen in healthcare over time. We have already seen it start - the willingness to start your care journey on your mobile phone and rely on a doctor over WhatsApp etc.

Mayank: On the employer side, employers are more and more mindful now of providing benefits to their employees than they were before. If an employer wants to succeed in their industry, they need the best talent or to get the best talent they have to one up each other on the benefits they offer. So, it's a great time to be building in the corporate benefits spaces.

Vedica and I are excited to announce the launch of our firm, Untitled Ventures. Untitled Ventures is an early stage fund for the Indian subcontinent and will invest $25k - $50k in companies where we (and our newsletter community) can help companies. If you’ve been following us for a while and have seen our syndicate in the past, this has been a natural progression for us. We love backing founders and helping them tell their stories and are excited to grow as investors with the firm alongside them.

Our mission still stays the same:

We believe start-ups have only begun to scratch the surface of their potential contribution to the Indian economy -- a story that is still playing out and is, as yet, untitled.

We are excited to play a small role in this story.

As we have talked about in the past, the early stage ecosystem in India has evolved significantly. It sis now a lot more collaborative with the proliferation of party rounds and emergence of products like RUVs. Founders love raising from other founders and operators, who can actually help out in specific ways, as opposed to the popular VC meme.

We are super grateful to all our subscribers and Syndicate LPs for supporting us over the years and have reserved some LP slots for the community. Being a 506(c) fund means we can talk about the fund in public and raise from the community. Unfortunately, you will need to be be an accredited investor to participate.

We are well aware of the lack of venture capital that goes to female founders in India, as well as the lack of female angels, GPs and LPs and are thus removing our minimum investment for people who identify as women (thanks to Radhika for the idea). Currently only ~16% of our LPs are women and we’d like to improve that. Priority will also be given to long-time readers of the newsletter and people who have backed our syndicate deals in the past. If you’re interested in investing in Untitled, please fill out this form.

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We’d be remiss not to thank all the people who have supported us through our evolution — our readers first and foremost, our LPs for backing us, and the founders we've worked with in the past.

If you’re building a company, raising or even thinking through an idea we would love to chat with you!

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Anmol & Vedica

When I wrote about Reliance, there was a lot of interest in the article and the history of the company. The historian in me has always been aware that business history in India is very poorly documented and given that we’ve been writing about start-ups and the tech sector in India, I thought it would be interesting to explore its origins.

The good people at fiftytwodotin, who by far and away produce the best long-form stories on India asked me to do so, using the lens of the original poster child of the tech sector — Infosys. In writing this article, Source Code, I was lucky to have access to Infosys’ founding team and NRN Murthy himself, who was incredibly generous with his time. It felt very much like documenting a little documented chapter of Indian history.

Source Code

Liberalisation became the impetus that made India the world’s software capital. This is what it looked like to the men who built its most successful company, Infosys.

One January afternoon in 1990, a few years after they’d relocated the headquarters of their small software company from Pune to Bangalore’s Jayanagar, four men sat down to lunch at an inexpensive neighbourhood restaurant called Shalini. N.S. Raghavan, K. Dinesh, Nandan Nilekani and Narayana Murthy were four out of the seven founders of Infosys.

They had spent the morning debating a momentous decision. A well-known conglomerate had offered to buy out the founders’ shares for $1 million dollars (then around ₹2 crore). Just a year earlier, the company had been on the brink of collapse. Its joint venture with an American firm called Kurt Salmon Associates had fallen apart. They had regained their footing only slowly. All the more reason that the offer was not to be scoffed at.

Infosys had been founded nine years earlier, to provide outsourced software development services to companies in the US and Europe. It was a decade in which the rise of microcomputers had decoupled hardware and software completely, and it had transformed the computing industry. Gone were the days of expensive mainframe systems that required entire rooms to store and a battery of specialists to operate. Now, firms could buy cheap hardware, and develop their own software applications to run on the machines. Infosys’ business proposition was that it could help its foreign clients develop software at a fraction of the cost, deploying equally skilled but cheaper talent available in India.

The four men sitting down to lunch at Shalini had been through the wringer together. Neither the time nor the place made it easy to set up and run a technology business. The company began life with an initial capital of ₹10,000 (roughly $1,000 at the time) borrowed from friends and family. From that start, by all objective measures, the company had come far. Most of the founders were comfortable with the idea of selling, but Murthy, nearly a decade older than the others, wanted to hang on.

“We had lived a life of austerity and become masters of our habits rather than slaves of our greed,” Murthy said, 40 years later, over a Zoom call with me this summer. “We owed it to our families, youngsters in the company, the industry, society and finally, to ourselves to run this marathon to its entirety.” Within an hour, he had convinced the others about turning down the juicy offer.

With the benefit of hindsight, it was the right decision. Infosys is one of India’s most valuable companies with a current market capitalisation of nearly $100 billion. Its success is representative of, and sometimes synonymous with, the overall trajectory of India’s Information Technology (IT) sector. In 1990, at the time of that fateful lunch in Shalini, the size of the country’s entire IT industry was $100 million. By 1996, it was $1 billion.

The industry’s exponential growth was hardly ever a foregone conclusion. “In the 1980s, India was a loser country, we were bottom of the pile,” Saurabh Srivastava, one of the co-founders of the National Association of Software and Service Companies (NASSCOM), told me. “We had a 2 percent Hindu rate of growth”––the term commonly used to describe India’s slow economic progress between the 1950s and 1980s. “We exported junk. We had no voice. At that time, to export something that was intellectual and considered top of the heap in the West from India was an attractive and challenging proposition.”

It’s now widely acknowledged that the fortuitous turn India’s economy took 30 years ago changed the game for information technology. In 1991, faced with a balance of payments crisis, the government of P.V. Narasimha Rao took a series of measures to liberalise the economy. The reforms marked India’s re-assimilation into the global economy for the first time since the 1960s.

“In the 1980s, India was a loser country, we were bottom of the pile. We exported junk. We had no voice.” — Saurabh Srivastava

But slow changes on this front were already underfoot in the latter half of the 1980s. They were less dramatic, perhaps, but vital to set the scene for the Big Bang of July 1991. Changing foreign policy equations, forward-thinking bureaucrats, a visit by a legendary corporate leader—all these nudged India and its IT sector on a path to success that might otherwise have looked very different, if it existed at all.

There’s now some academic agreement that India first began moving away from its socialist posture in the 1980s through these relatively quiet changes. The story of Infosys, and its founders, is a part of the story of India’s move to a more capitalist path of growth, or at least one less hostile to business. From this lens, the Infosys story is one of economic philosophy and realpolitik as much as it is a narrative of entrepreneurial bootstrapping and triumph. Now, it is clear that Infosys’ journey is entwined with the story of an India that first slowly, then all at once, changed.

Independent India, which wanted to build itself a planned economy and an industrial base, was an early, and perhaps unlikely, adopter of computers. Influential institution-builders such as P.C. Mahalanobis and Homi Bhabha pioneered India’s use of modern computers. IBM established a presence in India as early as 1951, and became the dominant player in the market, catering to customers ranging from research institutions and oil companies to public utilities and airlines. Its big competitor was the British company International Computers Limited (ICL).

At independence, the country’s educational institutions had capacity for only 2500 engineers, largely trained to work on civil construction. The Indian Institutes of Technology were conceived because India needed universities that could produce a diverse, well-trained technical workforce that could be employed by both the government and the private sector.

They began to fulfil their purpose quickly. A consortium of nine US universities helped set up the IIT at Kanpur. The equipment package included a high-speed IBM 1620 computer. It was installed in 1963, and it was here that a whole generation of India’s software writers learned their skills on commercial machines. One of these Indians was Nagavara Ramarao Narayana Murthy. Born in the small town of Sidlaghatta, Karnataka, he got his engineering degree at the University of Mysore. He wanted to become an electrical engineer. But after he started his master’s degree at IIT-Kanpur, he got hooked to computing.

After graduation, unlike many of his peers who took their first step into high-flying corporate careers, Murthy chose an unusual path. The Indian Institute of Management at Ahmedabad was setting up a new computer centre at the time, under Professor J.G. Krishnayya, an MIT alumnus. He had decided to import an HP 2100A time sharing system (TSS). This made IIM-A the first place to install a TSS in India, and only the third business school in the world, after Stanford and Harvard, to do so. It was here that Murthy decided to work as Chief Systems Programmer. “It was about the kind of work I could do at IIM-A—producing computer-aided instruction software for teaching accounting, production methods, inventory management, and even management games to bright young students,” Murthy told me.

Murthy’s stint in Ahmedabad opened up new opportunities. In the early 1970s, he received a job offer from a software company in Paris. “The opportunity of being a part of an 18-member team that built an operating system that would be used in a highly developed country like France was tempting,” Murthy said. “Living in Paris, the liveliest city in the world, was tempting. **The salary was very good. I was young!” He picked the Paris job over a PhD.

The whole experience turned out to be transformative. “I had not taken a flight till I went to France. I took a Syrian Airways Bombay-London-Paris flight that cost ₹800,” Murthy told me. “When I got out of the plane at Heathrow to get into the airport, it took me some time to understand that the glass door had photoelectric sensors to open and close automatically.”

Europe provided Murthy a broad exposure to the world and its ways of doing business and politics. “The country was so clean. The city was beautiful. There was so much prosperity,” Murthy remembered. Until that point, he considered himself a leftist, schooled in the Nehruvian vision of nation-building, with its grand state-sponsored infrastructure projects. “From 1961, I started getting a national scholarship for education. At IIT, every department had two or three professors from the US. They were liberals and had high admiration for Nehru and his policies.”

Paris provided an intellectual environment to challenge that world view. Murthy began listening to and joining in the ideological debates at the Sorbonne and cafés on the Left Bank. By the time he left Paris, he had picked his side. Now, he felt that India could only become prosperous through high-value job creation––and it was the role of entrepreneurs in the private sector, not the government, to spearhead it. This realisation and the desire to “conduct an experiment in entrepreneurship” brought him back to India in 1976.

The first experiment was a company called Softronics, which Murthy set up in 1976. But the timing wasn’t quite right: fear-mongering about computers taking away jobs was at its peak. Within a few months, the Janata government would boot IBM out of the country. Additionally, computer adoption in the country was nascent at best: Softronics just didn’t have enough clients to sell to. Within a year of its launch, Murthy had to shut shop.

At the same time, however, things were very different in the United States. Access to business technology was rapidly democratising, helped by the launch of affordable super minicomputers by companies like DEC and Data General. There was a sliver of opportunity for Indian businesses to be a part of this story, and it lay in a government rule that allowed computer import as long as the importer committed to exporting 200 percent of the value of the machine. It was far from ideal, but a bunch of companies leveraged this rule to become pioneers of the industry: Tata Computer Systems (now Tata Consultancy Services), Hinditron––and Patni Computer Systems.

Though now a somewhat forgotten name, Patni, founded by a graduate of the University of Roorkee (now IIT Roorkee) and MIT named Narendra Patni, played a key role in both India’s IT history and the Infosys story. At the time, a number of US-based companies were creating the kind of electronic tools that we now take for granted. Legal Exchange Information Services (Lexis), for instance, was building an electronic database for court judgements and legislations.

It was cheap to outsource the data entry. Typists in India input the text into paper-tape punching machines, which were then shipped to the US to be uploaded into a computer. As the work scaled, Patni was convinced that it would be more efficient and profitable to directly typeset the information on computers in India.

In 1976, he reached an agreement with microcomputer manufacturer Data General. Not only did he buy their machines; Patni also became Data General’s distributor in India; and, to fulfill the 200 percent export rule, the company would also undertake to write software for DG.

To build out its operations in India, Patni hired Narayana Murthy. Murthy had just burnt his hands with Softronics, and Patni offered a strategic opportunity. He had already identified software as an area to play in, but needed to better understand the international market. “I realised that the export market was viable since there was going to be a huge explosion in demand for computer software in the US,” Murthy told Professor Joe Fuller of the Harvard Business School in 2019. “There was engineering talent available in India looking for jobs, and India had a huge shortage of hard currency.”

At Patni, Murthy took on responsibilities over and above writing software. He also sold Data General computer units to Indian customers and oversaw the operations of Softronics’ data centre. As his responsibilities increased, he built out a team of programmers to support him. The core team he hired included Nandan Nilekani, an electrical engineer from IIT-Bombay; S. Gopalakrishnan, an MTech in computer science from IIT-Madras; S.D. Shibulal, an MSc in physics from the University of Kerala; K. Dinesh, a postgraduate in mathematics from Bangalore University; N.S. Raghavan, an engineer from Andhra University, and Ashok Arora, also from IIT-Bombay.

In 1979, Patni signed one of the largest software outsourcing deals in India at that point: a $500,000 contract with the software vendor Data Basics Corporation to develop a Comprehensive Apparel Manufacturer’s Package (CAMP). That deal marked the beginning of the outsourcing industry as we came to know it. Instead of developing dedicated software for minicomputer firms, Indian firms began working with vendors who would then sell customised software to end-user clients. The Data Basics deal vastly improved India’s visibility amongst US software vendors: they now knew about the calibre of engineering talent on the other side of the globe.

The success of the deal also made Patni’s software developers more confident and audacious. In 1981, Murthy and his team quit Patni to start their own company. That company was Infosys.

This new company was neither a spin-off or an arm of an established family conglomerate, like TCS or Wipro; nor a company founded by Indians based in the US, like Patni. In the 1980s, entrepreneurship would have been a risky choice for these engineers. They had elite degrees but they were not from business families. Running an ambitious business in India meant having to grapple with bureaucratic red tape and legislative roadblocks.

“At that time,” Murthy told me, “it took years to get a telephone connection. The banks did not understand software. They wanted a collateral that they could touch and feel, for their loans. Importing a computer required 20 to 30 visits to New Delhi.”

To set up a business that relied heavily on clients based abroad presented a unique challenge. “We were just emerging from the limit of $8 a day when you went abroad,” Srivastava of NASSCOM said. “Foreign exchange just didn’t exist—the country probably had a few months’ foreign exchange at any given time.” Every single trip abroad required approval from the Reserve Bank of India.

Infosys kicked off its business by poaching Patni’s most important client: Data Basics. The small catch was that it didn’t have the money to buy and import a computer to work on. This was why Infosys adopted what would become the initial model for Indian software exports: its engineers went to work “on site” in the US. “Body shopping became a derogatory term,” said Srivastava, “but at the time it was the only thing software exporters could do. We would tell the customer: here is a CV, please interview this person on the phone, we’ll pay for their airfare and Indian salary and you pick up all the local expenses.”

In those days, Srivastava recounted, the Indian salary was about ₹2000-3000 per month. The real cost was living expenses in the US: $1000 or so. Instead of billing the client after a month or two, Indian companies would ask for an advance in lieu of a discount on the service cost. “And that’s how we basically got clients to finance our business,” Srivastava said.

“The banks did not understand software. They wanted a collateral that they could touch and feel.” — N.R. Narayana Murthy

Infosys signed a six-year contract with Data Basics to customise, install and support CAMP for a variety of apparel and shoe manufacturers across US, Europe and Japan. The scale and span of the work “became our passport to the US market in other domains,” said Murthy. The company also struck a partnership with Kurt Salmon Associates, a consulting firm in Atlanta, and signed on a few more customers like Digital Equipment Corporation and Reebok France. In 1987, it set up a pair of US offices—one on each coast—to take a more active role in pursuing clients.

Then, in 1989, Jack Welch, the celebrated CEO of General Electric, visited India. He came to pitch GE’s aircraft engines but found himself receiving a pitch to outsource his company’s software development to India. The proposers were Sam Pitroda and Jairam Ramesh, Prime Minister Rajiv Gandhi’s technology advisers.

“Welch’s trip was a seminal moment for Indian IT,” Nilekani explained. “He was one of the first American CEOs to realise the potential of Indian brainpower.” GE became a big driver of Infosys’ growth between 1989 and 1994. It was a learning experience: working with a company at the top of its game also made Infosys think strategically.

Infosys and India’s IT industry were coming of age, it turned out, as broader shifts were shaping India. The country’s economic trajectory may have touched a high watermark in 1991, but there were several policy changes in the 1980s that led up to this big shift. The change was led by a chastened Indira Gandhi, who returned to power in 1980. As always in India, it was politics that dictated the economics.

The political scientist Atul Kohli has observed that “the two packages of secularism and socialism and Hindu chauvinism and pro-business have tended to offer two alternative legitimacy formulae for mobilising political support.” In a bid to counter the Janata Party threat, Gandhi abandoned the first formula for the second.

Winds of change were blowing in foreign policy too. In the 1970s, India’s tilt towards the Soviet Union had appeared more pronounced in the context of Gandhi’s frosty relationship with President Nixon of the US. The US’ decision to side with Pakistan during the 1971 war hadn’t helped. But the 1980s were different. The Soviets had invaded Afghanistan, and the Americans’ relationship with Pakistan had cooled off. Additionally, Gandhi got on famously with President Reagan. There was a marked change in the tenor of the relationship between the two countries, especially when it came to matters of technology.

After her assassination in 1984, her successor and son Rajiv took over the mantle of pushing the technology mandate. Already, under his watch, colour televisions and computerised ticketing had been introduced at the 1982 Asian Games. When he became prime minister, computers were installed in government offices. “A lot of civil servants didn’t want to go through the hassle of learning how to code and operate a computer, but as a symbol, the computer was suddenly on everyone’s desk,” K. Roy Paul told me. Roy Paul is a former IAS officer who was Joint Secretary in the Department of Electronics in the late 1980s.

It is common to attribute the IT sector’s success to the fact that it largely stayed under the radar and out of the notice of bureaucrats. But that is not the whole truth. “When people say the government had no role in the rise of the IT sector, that is not quite right,” Srivastava said. “We had some excellent officers who saw the sector’s potential and gave us support, taking personal risks and going out of their comfort zone.”

There’s one bureaucrat whose name comes up repeatedly in discussions: Nagarajan Vittal, a Gujarat cadre IAS officer who was Secretary at the Department of Electronics. Along with a team of advisors, he worked from the inside to shake up the status quo. “In our industry, he is a legend,” Srivastava said. Murthy told me that he hadn’t “come across another industry-friendly bureaucrat like him.”

“When I was told by the Cabinet Secretary to take charge of the DoE, he mentioned that Arun Nehru thought software was a sunrise sector for the Indian economy,” Vittal, now 83, told me when I spoke with him––referring to Rajiv Gandhi’s close advisor and former home minister. It was enough of a signal for the technocratic Vittal.

By the late 1980s, IT services firms were looking to move from body shopping to a remote delivery model, to reduce costs and time lags. But advanced telecommunication networks were prohibitively expensive and logistically complicated. Access to high-speed bandwidth required setting up an earth station, something almost no Indian company could afford.

“At that time, VSNL controlled satellite links and they’d ask why do you need so much capacity and act all high and mighty,” explained T.V. Mohandas Pai, former CFO of Infosys. “The procedure basically was that you would apply for bandwidth, and VSNL would say we can’t tell you the price or when you’ll get it,” Srivastava said. “What customer would give us an order based on this?”

It took an American company to show the way. In 1985, Texas Instruments set up a dedicated satellite link to connect its Bangalore software development centre to offices in the US and the UK. “A guy called Mohan Rao at Texas Instruments took a real leap of faith, and pushed to set up India’s first Earth Station,” Nilekani has said. “It was in a building called Sona Towers on Millers Road. They had engineers sitting in Bangalore connected to their centres in Dallas and Houston, and doing software over the satellite.”

Texas Instruments had provided a model for the industry. Under Vittal, the DOE pushed the idea of state-operated Software Technology Parks, which would operate as autonomous bodies under the ministry’s ambit. To solve the issue of bandwidth, the DOE agreed to aggregate demand on behalf of industry and pay VSNL an advance fee to provide high-speed data links at the parks through satellite earth stations.

This was also the time that the industry was lobbying for financial incentives, including tax breaks. Vittal pressed his colleagues for these concessions. At a meeting in August 1990, finance secretary Bimal Jalan asked for a commitment that the industry would hit $400 million in exports by the next year—a nearly fourfold increase. Vittal assured him that it would. “I was stunned. I got out of that meeting and asked him what he had done,” Roy Paul told me.

When Vittal relayed the news to NASSCOM, its members were similarly shocked. “But I reminded them of the story of Akbar, Birbal and the flying horse,” Vittal said. “Akbar was angry with Birbal. He told Birbal he’d get to keep his head only if could find a flying horse. Birbal agreed. His reasoning was that who knew what would happen the next day—the Emperor might forget his ask, or he might indeed find a flying horse. My view was similar. The industry wanted certain things, and we got it for them.”

Now, companies based in the parks could import computers licence-free and duty-free. Profits on software exports would be tax exempt. The liberalisation of the software sector had begun.

Then, the 1991 reforms took the industry to a different level. Current account convertibility eased foreign operations—it was now far less complicated to travel abroad and open up international offices. Capital market reforms went a long way to help companies raise equity from public markets: before 1991, the office of the Controller of Capital Issues used to fix initial IPO prices.

“This was an officer who determined at what price we would list on the stock market,” Murthy explained to an interviewer from Yale University in 2006. “This officer had no idea of capital markets. And he would rarely allow you to list your stock at anything better than your par value.”

After the rules changed, in June 1993, Infosys became the second software company to go public. Murthy told me he was initially disappointed by the response to the listing. “Most investors had not heard of software,” he said. “The banks, too, did not understand software.” The shares were a hard sell even within the ‘friends and family’ quota. “Most of the upper-middle-class friends and relatives I went to sell to were sceptical. They asked umpteen questions and even guarantees of return,” Murthy said. “In the end, none of them invested.”

Despite the scepticism of Indian retail investors, the issue allowed Infosys to raise nearly $4.4 million. This was largely thanks to yet another liberalisation reform: the arrival of foreign investors. Morgan Stanley Asset Management, one of the first reputed financial institutions to heavily engage with the Indian market, was an early and enthusiastic backer of Infosys. “They had seen tech in the US, and they drove a lot of the Infosys story in the early years,” Nilekani said.

It was good timing, as changes in the US were once again playing their part in Infosys’ trajectory. In 1990, President George H.W. Bush signed the Immigration Act, which launched the H-1B visa programme. The H1-B was intended to help American firms deal with labour shortages in rapidly growing fields that demand specialised skills: research, engineering, computer programming.

The US economy was also in a period of high-growth after the relative sluggishness of the 1970s and 1980s. The gains were driven by massive technology investments by US businesses, which had greatly improved productivity. Infosys’ market was booming, and that reflected in its share price. A large part of the money Infosys raised in its IPO went towards setting up training facilities on a 335-acre training campus in Mysore.

For years after liberalisation, India did not produce nearly enough computer science graduates. To get around the problem, Infosys worked directly with engineering colleges and pioneered “learnability tests” for engineers from streams other than computer science and electrical. Those selected were put through a rigorous 32-week residential training program.

In this period, Infosys doubled down on scaling operations. One of the things it famously did was offering an Employee Stock Option Programme (ESOP). “We offered ESOPs, good salaries, good amenities and good opportunities,” Pai said. “There are all these stories about how drivers at Infosys became lakhpatis because of the value of their shares. This was all true.”

An IT sector job at a company like Infosys became the aspiration for young Indians looking to enter the workforce. Liberalisation meant that a number of private engineering colleges were mushrooming around the country. “Governments were quite liberal, especially in the southern states, to open up a lot of engineering colleges, so engineering capacity in the country went up dramatically after 1990,” Nilekani has noted.

In the run-up to the millennium, Infosys hit the jackpot. To save storage space and cut down on costs, many computer programs abbreviated four-digit year data as two-digits. In the late 1990s, there was genuine concern that the programs would be unable to recognise the “00” and differentiate between 2000 and 1900. There were wild rumours about the havoc to be unleashed at the stroke of midnight on 31 December 1999. Corporations turned to India and its cost-effective software programmers to fix the Y2K bug. Twenty two percent of Infosys’ 1998 revenue came from Y2K contracts.

The problem was important enough to raise the profile of the Indian IT sector, and Infosys capitalised on this by listing on the Nasdaq in March 1999. Infosys had started the decade with a top-line of $100 million. In 2004, Wired magazine ran a cover image of a woman with computer code written in henna on her hands. The strap said: “Tech jobs are fleeing to India faster than ever. You got a problem with that?”

2004 was also the year in which, with the impact of Y2K settled, the company’s revenue grew to $1 billion. In another couple of years, it doubled to $2 billion. Infosys, like a certain section of Indian society, seemed to have won the sweepstakes of globalisation.

A well-known chronicler of that buoyant era was the commentator Thomas Friedman whose 2005 book The World Is Flat gained enormous currency in corporate India. The book gave pride of place to Bangalore and Infosys. It was Nilekani, then CEO of Infosys, who had given Friedman the visual of a flat world. “Tom, the playing field is being levelled,” Nilekani had said.

Infosys’ history, set against the broader international backdrop, is particularly interesting to revisit now. There were concerns about jobs being outsourced to India in the mid-2000s, but we hardly hear that anymore.

The launch of the iPhone in 2007, Android in 2008, and the shift to cloud have definitively transformed the technology and business landscape. Outsourcing decisions are now more complicated and not simply left to the IT department. Enterprises have chosen to set up their own subsidiaries in India to tap into the large technical talent pool.

Politically, too, the era of Friedman’s Flat World is obsolete. The 2008 recession changed the mood around jobs in the United States. Blue collar jobs lost to China became more concerning than the white collar jobs that were being lost to Bangalore. American politicians began to speak the language of manufacturing again, to appease rust belt workers who had been excluded from the economic conversation.

In our interview, Nilekani acknowledged the pushback against globalisation. “Still, our industry has come out more unscathed than most, because India is not in the firing line the way China is,” he said. To adapt to changing global dynamics, Infosys has focused on building deeper talent pools in the countries in which it operates.

“Infosys is now playing a big role in job creation in the US. We have set up training centres in places like Indianapolis, which is something even American companies don’t do today,” Nilekani, who has been non-executive chairman of Infosys since 2017, said. “We’ve made Infosys visa-proof in some senses, with more visa-independent employees—so Americans and Green Card holders—than employees on visas for the last two years.”

“Our industry has come out more unscathed than most, because India is not in the firing line the way China is.” — Nandan Nilekani

But this shifting model has had domestic repercussions. For a long time, for many Indian engineers, a job at Infosys meant access to an upper middle-class existence, enticing opportunities to work abroad and ultimately a path to a Green Card in the US. These avenues have narrowed significantly.

A glut in engineering graduates has meant that entry-level salaries in the Indian IT sector have stagnated. In 2005, trainee engineers at Infosys earned an annual salary of around ₹2.8 lakh. Today, more than 15 years later, the figure is around ₹3.5 lakh. The arrival and relevance of Big Tech companies like Google and Amazon has also shifted perception. For many millennial engineers, Infosys is a hark back to the Old Way—an assembly line of vanilla engineers churning out routine code. More recently, ‘rockstar coders’ are increasingly attracted by the VC-funded riches of the made-in-India unicorns.

But India is also a country where jobs are few, with unemployment hovering at nearly 7 percent. The IT sector is one of the few that can continue to absorb some of the millions of engineers graduating every year. (Even so, data from the All India Council for Technical Education for 2019-2020 suggests that almost 36% of engineering graduates in the country failed to find placements.)

Unless faced with a real crisis, the IT services firms might have little incentive to fundamentally shift their approach. Revenue per employee has remained fairly stagnant over the last decade, but the sector has continued to thrive not just because of low wages, but also because the rupee has devalued nearly 70 percent against the dollar during this period.

Even as the landscape of technology evolves rapidly, some observers believe the old IT houses will continue to have a role to play. “The fact of the matter is that the work companies like Infosys, TCS, and Wipro do is not going to become irrelevant,” said Prakash Chellam, industry-watcher and former Infosys executive. “The more tech overhead any company has, the more resources they need to maintain that, especially over time. This is true even for big tech companies.”

The men who went to lunch at Shalini and decided not to sell their little firm inspired a generation of professionals to make the leap to entrepreneurship. The company created real value for its stakeholders, and it did so while championing the profile of the nation’s IT industry on the world stage. In no small part, India’s strength in STEM education is because of the opportunities India’s IT sector, and companies like Infosys, created. Today’s young engineers stand on their shoulders: the unicorns owe something, after all, to a group of upstarts who wrote software for the world when their country was still known as the land of snake charmers.

Acknowledgements:

First, I am grateful to N.R. Narayana Murthy for speaking with me at length about Infosys, and his own life story, the two being so deeply entwined. This article would not have been possible without his generosity. I owe thanks to Nandan Nilekani, who not only introduced me to Mr. Murthy but also spared time to speak to me. Mohandas Pai, Nagarajan Vittal, K. Roy Paul, and Prakash Chellam were gracious with providing their perspectives—all this helped me piece together the story. Manish Sabharwal read an early draft of this story and I am thankful for the feedback that he provided.

Over the years, I have had many conversations with Saurabh Srivastava about his entrepreneurial journey, and the beginnings of India’s IT services sector. The chats made me wish that those stories were better chronicled. I am grateful that he was willing to speak with me at length for this article, and contextualise and bring to life many of the events that shaped the industry in its nascent years.

I would not have attempted to write about Infosys had it not been for Arun Mohan Sukumar’s initial suggestion. I am thankful to him for always nudging me to keep writing, for talking through my ideas, for reading my drafts, and for providing feedback.

2022 will be the year crypto goes mainstream in India and gains a significant adoption - from the dApps being built, from venture dollars in the ecosystem, and most importantly from the population getting exposure to the asset class. Currently the biggest hindrance to adoption is two-fold: education about the asset class as well as infrastructural barriers. If you’ve tried any of the major Indian exchanges (CoinDCX, CoinSwitch, WazirX, ...) you’ll know their bridge to the fiat system (transfer fiat to buy crypto or vice-versa) is very fragile and one direction is broken almost every day.

The key to scaling to 100M crypto users in India will be reliable and easy-to-use onramps. If we can make buying crypto as easy as sending a UPI transaction in India, crypto will take off. The other important factor here are: a) educating users about the risks involved with the asset class; and b) introducing ways for them to get exposure to crypto with a lower risk threshold. This can be done by only letting users invest a small amount of their portfolio into crypto or by letting users buy or invest in assets that aren’t as volatile i.e stablecoins1.

Following up from the Crypto roundup from the last post, I wanted to do a deeper dive on another company I’m very bullish on in the Indian ecosystem (Disclaimer: I’m a tiny investor as well).

The company is called Flint, and I think they will be one of the first companies in India to really push crypto adoption to a higher level. The company was started by Anshu & Akshit, both from BITS Pilani where they met and later working together at CRED (Anshu was also the PM behind CRED’s new popular offering- Mint). They’ve been exploring the ecosystem since the crypto winter of 2017/2018 and finally decided to build Flint to offer a great consumer experience for people new to the asset given that the ecosystem has both matured and is becoming scalable for mass usage. The company’s current core offering provides users up to 13% annual interest on their invested capital.

The way Flint’s first product will work is quite simple:

1. Users go through a KYC process on their devices like other investing applications

2. Users deposit INR through a UPI transaction (or via other payment methods) that gets converted to stablecoins (USDT) and custodied by Flint

3. Flint then lends these stablecoins to borrowers and users earn a 13% interest on their deposited USD

I think it’s important to point out here that Flint is making a core UX decision to custody its users stablecoins to begin with. There will be critics who say that this goes against the ethos of “your money your keys” in crypto, but on the flip side the current experience of non-custodial wallets is not very user friendly for folks new to crypto. For my friends who I’ve onboarded to crypto, I have spent 30 - 60 minutes explaining them each step of the process and this is not very scalable until we have better and safe education resources. Even in the United States, applications like Robinhood and Cash App are popular products where a lot of Americans first got introduced to Bitcoin or cryptocurrencies. In Q1 2021, there were 9.5M users on Robinhood who traded cryptocurrencies and 1M users bought Bitcoin in January 2021 on Cash App, which shows the importance of platforms that make it easier for users to participate and invest in cryptocurrencies but custody the asset themselves in the short-term. I would imagine as the Flint platform grows and it teaches its users about the ecosystem, it would let its users move their funds to non-custodial wallets i.e MetaMask or Rainbow (or even build their own wallet, who knows?)

I don’t want to give too much away about what Flint will build in the future, but one of the next steps would be to give users the ability to invest in assets with a higher return potential but higher risk associated with it, a couple possible investment products could be: Coin Baskets (a curated basket of different cryptocurrencies that users can invest in) and Decentralized Finance products that the company’s research arm would recommend to users. Once Flint gains a level of adoption, the number of products it can build and offer to users will expand based on a user’s experience, risk-tolerance and even interest (Flint NFT Marketplace wen?). The product is currently still in its early access phase, but Flint has offered to give 10 Keeping Up With India users access to the product, so sign up for a chance to try out the product before everyone else:

Get Early Access

And like millions others, 2021 was probably the first year where I started consuming information about crypto more actively. Hence, we thought we’d round off 2021 and start off 2022 by asking people who’ve been building and investing in India what projects from the ecosystem they’re excited about:

Anmol Maini - FanCraze

“2021 was the year NFTs went mainstream globally with over $20B in trading volumes. And while we have seen more adoption in western countries, it hasn’t been the same in India yet. A large part of that has been because crypto on-ramps in the country aren’t great so getting your ETH or SOL to a non-custodial wallet like Rainbow or Phantom often requires several steps which aren’t intuitive to first-time users. I’m very excited for FanCraze’s upcoming launch this year because they are bringing one of India’s largest source of entertainment on-chain: Cricket. The company also has an official license with the ICC (International Cricket Council) and are building on top of the Flow blockchain (the underlying chain that NBA Top Shot is also built on). If FanCraze is able to crack the on-ramp experience and make funding your wallet or buying NFTs as easy as doing a UPI transaction, I think they will do large volumes in India. India is a country obsessed with cricket so both moments of iconic cricket matches and moments of popular cricketers that the company is partnering with will be wildly popular.”

Madhavan Malolan (CEO @ Questbook) - Mesh Finance

"They're particularly interesting because they are a company that has decided to never hire anyone. All the work is done by the community. They do community calls to even figure out what exactly they'll build. They are building tooling for defi including a dex in zk roll-ups. Very cutting edge tech, very idealistic decentralisation principles. They're going to be huge and no one knows it yet”

Manish Singh (TechCrunch) - Questbook

“Even as web3 has made inroads among consumers, investors and speculators in recent years, the developer base that is building web3 projects remains very tiny. Questbook is attempting to fix this gap. It helps web2 developers transition to web3 and contribute to open source web3 projects.”

Nameet Potnis (Founder @ Drumworks) - IndiGG

“For 2022, I am most excited about Indigg. Across the world, Play to Earn games have made a strong impact in 2021, and I see that expanding to India now. Indigg is the perfect partnership between Polygon and YGG to foster this nascent ecosystem here in India.”

Pratik Poddar (Investor @ Nexus Venture Partners)- Biconomy

“Biconomy offers plug and play SDKs and APIs  which help offer user friendly experience on decentralised applications by removing multiple friction points (flipping the gas fee to be paid by the app instead of the user, or allowing user to pay gas fee in ERC20 tokens, or enabling cross chain transfers). This reduces user churn and significantly enhances engagement. Biconomy’s middleware is blockchain agnostic. Its is a pick-and-shovel business, which enables developers to create user-friendly decentralised applications, just by integrating a few lines of code. This removal of friction on both sides (user and developer) makes DApps accessible to masses and expands the market manifold. They have a strong community - BICO token listed earlier this month and are trading at a solid market cap of $250M. They have partnered with 35 decentralised applications till date (across NFTs, gaming and Defi). Discord channel has 110k+ members and ~60k twitter followers. Most importantly - exceptional team - Aniket, Ahmed and Sachin are crypto native and have solid background in web.

We at Nexus, having had deep experience in developer tools, open source companies and infrastructure companies like Postman, Hasura, H2O, Minio, Gluster, etc, are very excited about deep tech infra / dev tool in web3, and see Biconomy as poster child for such a company being created out of India.

Rahul Sanghi (Cofounder @ Tigerfeathers) - Invact Metaversity

“This might be a left field choice, but I’ve been really impressed with the work Tanay Pratap, Manish Maheshwari and the founding team at Invact Metaversity have done so far to build ‘the future of business education’. I’m of the belief that more and more of our social experiences online will start to resemble the environments and user experience of popular games like Fortnite, Roblox and Minecraft. This will be no different for education, which is delivered best as a social activity, where the richness of a persistent 3D interface helps to enhance the learning experience and bring it as close as possible to the real thing. I’m bullish on the potential of Web3 to decentralise identity management and credentialing for the average Internet user - you should be able to manage your own identity and take it with you across the internet. And you should be able to ‘store’ your credentials as a form of tokenised inventory (NFTs) which can be easily used as a cryptographic proof-of-accomplishment for any person or institution that wants to assess your qualifications. Higher education is one of the last bastions of centralised identity management and accreditation. From the outside looking in, Invact Metaversity has a real chance to make an impact in this space. Its early days, but all the noises from the team suggest that they are on the right path.”

Romit Mehra (Investor @ Lightspeed India) - IndiGG

“My project - Indigg. 300M gamers in India, thriving secondary market for in game goods. When this combines with contours of web3 gaming (clear ownership trails, unlocking a clean secondary market, chance to earn), it can explode. A high quality guild will catalyze this. Given the experience and the chops, my bet is that it would be IndiGG.”

Tushar Behl (Investor @ Alpha Wave Global) - Coinshift

“I am really excited to see how Coinshift plays out - If 2021 was the year of NFTs, 2022 will be the year of DAOs - and Coinshift's treasury management and payouts infrastructure is a critical tool to enable DAO success and mass coordination. Most DAO assets today are held in native tokens - a high risk proposition, especially as we approach the early stages of a crypto winter. As Coinshift builds out its comprehensive product suite, it has the potential to become one of the most meaningful infrastructure companies in this space, stewarded by a mission driven founder.”

Vedica Kant - WazirX NFT marketplace

I’ve been following the NFT space and while folks might think NFTs are so 2021, we haven’t actually seen NFTs go mainstream in India. How and if this changes will be worth keeping an eye out on I think. As Anmol has already noted there are some structural challenges to NFTs taking off in India. The one player that meaningfully tried to overcome those and build a South Asian NFT marketplace has been WazirX.

The Binance-backed company has built a South-Asian centric NFT marketplace with a robust community for creators and collectors to easily share, trade NFTs, which can be bought using WRX tokens.

I’m keen to see how Wazirx’s NFT marketplace develops, but more importantly also see what other marketplaces develop and come up!

This is definitely an exciting time in web3 and I am excited to see all the projects to come out of India. I’ve especially been impressed by all the young builders in the space, which is why I helped launch the Jugaad Grant- we’re giving 3 grants to Indian Gen Z builders to help them build a web3 project. If you’ve been ideating about something or working on a project, please apply! I also wanted to give a shoutout to a couple of builders who have just gotten started on their projects- Kunal has been doing a fantastic job building Solana projects, namely wagmi.bio and the team of Anoushk, Daksh and xyz building Metapass are one to look out for in the coming year.

We’d also love to hear from you about your favorite web3 project from India and why you’re excited about them so feel free to leave a comment, tweet at us or DM us! And if you’re someone building a company in the space and think we could help out, we’d love to chat at anmol.maini@gmail.com and vedicakant@gmail.com