2024 Startup Rewind: AI, Fintech, and Quick Commerce | Prime Venture Partners Podcast - Prime Venture Partners Podcast

Episode Transcript
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Brij Bhushan (00:00):
I knew this was coming.

Sanjay Swamy (00:02):
Profitability, profitability, profitability.
India is still massively creditstar.

Amit Somani (00:11):
I would certainly say for our portfolio, this year
was quite a breakthrough.
Edtech and healthcare are goingto be a need even 500 years
from now.
Sas is dead.
Long live SAS.

Shripati Acharya (00:23):
The need for security is just going to
skyrocket Voice, vertical SaaSand democratization of AI.
There's going to be a bloodbath.

Okay, so time for some crystal ball gaming, and I
think next year we'll see a lotmore companies beyond the
10-minute apps.
There are a lot more mafiasgetting created, right.

You had more LP interest at Prime kind of this
year than perhaps the last.
You know 5, 7, 10 years, maybeeven combined right.

I'm saying the 17th coming off.

FinTech Namaste.

Welcome everyone to the Prime Venture Partners
year-end podcast.
We are here to share momentsthat gave us a lot of joy, some
grief and some moments thatactually turned our hair grey,
as you can see, for all four ofus.
So I'm Brij and I'm joined withmy partners in crime, Amit,
Shripati and Sanjay.

They're your partners at Prime, by the way.

Partners in Prime yes, actually, in Crime and
Prime both.
So what we will be doing todayis covering what happened in the
last year, have a fun, candid,no-holds-barred conversation and
hopefully, have a lot ofinsights along the way for our
viewers.
So we'll get started, and we'llstart with what happened last
year.
So I start with Sanjay.

(01:48):
You first right.
What is one standout momentfrom our portfolio that you'd
like to share with the audience?

Hi Brij, I think I'll step back a little bit
before I dive into the portfolio, if you don't mind.
Broadly, it was sort of aninteresting year where almost
nothing happened yet so muchhappened and in some ways I see
it as the maturing of the Indianstartup ecosystem and the
landscape itself, where you know, when we all started out, you

(02:27):
know 12, 14 years ago, in theearly days it was sort of a
really romanticizing.
Startups really had no clue howthey could solve problems, how
technology was going to shape up.
But a lot has happened over thelast 10, 12 years and this year
it felt really like there's acoming of age of the ecosystem.
One of the first things peoplewould ask us whether it was LPs

(02:48):
or even we would ask ourselves,where are exits going to show up
from?
And we broadly were building inan open loop sort of manner,
saying good things will happensomeday.
Let's figure it out.
But if you look at whathappened in 2023-24, the last

(03:08):
12-24 months, I think there's aclear sense that there is a
goalpost and if a company getsto this goalpost, you know it
will be able to list itself onthe Indian public markets and
broadly get, you know, between20 and 50 times its EBITDA of
the forward 12 months as itsvaluation.
So if a company gets to $50 to$70 million of revenue at the

(03:32):
low end and has a reasonableunit economics and profitability
, it could be a $700 million to$1 billion type of an IPO.
So in many ways that has beenestablished several times in the
past 18 months now and there isa sense of confidence in the
ecosystem that we know where weare headed and what we need to
do to get to a solid outcome.

(03:52):
So that I think, at a macrolevel, is one big thing that I
felt has been solidified in 24.
Coming to the portfolio, I guessthere are two levels.
One is the companies that aredoing very well, that have
broken out, that are now lookingat these goalposts and saying
we need to be there over thenext 12 months, 24 months.

(04:12):
So we've seen one group ofcompanies and we'll talk about
that in more detail as we goalong.
And then there are youngercompanies that you know are
entering our portfolio as we,since we invest at seed and we
have two, three really excitinginvestments.
So that, I think, was, you know, in some ways business as usual

(04:33):
, but there are new themes, newproducts, new technologies
coming in, and then the lastpart I would say is at a firm
level itself, at Prime,obviously you're coming on board
a couple of really excitingpromotions in the team and new
people coming up to speed, newLP relationships, as we've been
going out looking at our nextfund.
So I think broadly, if I lookat it from three areas here the

(04:56):
ecosystem, our existingportfolio, as well as at our
firm, a lot of exciting newprogress.

I think definitely this year has been remarkable,
as you were just saying that theIPO path is clear for all
startups that are creating, andI remember when I was at Nexus
10 years back, one of the bigquestions used to be how will
you generate returns for theinvestors?
What is the exit path?
And, as, andrew, you mentioned,we used to talk about that.
If we do the process right andif the market matures,

(05:24):
eventually it will show up.
I think 10-12 years now we areactually at that stage, amit.
Is there anything else that yousaw in the market broadly that
you will want to share with ourlisteners around the broad
themes, around what is changingin the market?

Yeah, maybe I think Sanjay covered a few things.
The quality of theentrepreneurs and the next
generation of entrepreneurs isactually very, very exciting to
see how that has evolved, and alot of it is not necessarily
second time founders, althoughthere are some of those ones as
well.
It's people that have worked atthese other companies, right,
you might have worked at aZomato or a Runner or a Make my
Trip or wherever, and Flipkartand so on, and you're now

(06:05):
starting up because you saw somevery exciting journey, right.
So I think that is very, veryheartening to see, right,
because in the ecosystem we arepretty young still, so the
quality of the entrepreneurialtalent definitely has gone up
quite significantly.
I would also say, on the VC VCside, a lot more capital in 2024

(06:25):
compared to, say, 23 andcertainly 2022, and a lot of
mushrooming of sort of micro VCsand stuff like that, right.
So I think that very, veryearly stage almost you know,
precede conception, say there'sa lot more sources of capital.

so those are a couple of interesting things
beyond what Sanjay covered thereare a lot more mafias getting
created, right the bullet ofPayPal mafia.
There are multiple companieswhere CXOs are exiting and
starting companies.
Shibari, what do you think?
What's your big takeaway fromthe year gone by?

It is the mainstreaming of AI.
So if you look at it, you knownow, in 2023, we used to see
articles in newspapers andexcitedly talk about that I've
gone ahead and put me a four-daytravel itinerary for Varanasi
and the fact that it could tellme where all to go.
Now, just last week, mydaughter was stuck in Amsterdam

(07:19):
because her connection gotmessed up and she said, look, I
need to figure out, you know howto get.
Are we going to pay forsomething?
The airline, what is thecompensation, et cetera?
So I said, okay, how are yougoing to figure that out?
She said, yeah, I've alreadygone ahead and got the thing
from ChatGPT and what to do andhow much I'm entitled for, et
cetera.
So it has become very secondnature from a consumer

(07:42):
standpoint to now startinteracting with AI and use it
as an enabler.
It's no more a talking point.
We don't come to the office andsay, hey, I did this.
Right, that's one.
And then the second one is onthe business side.
I feel that the enterprises aremoving, gingerly but surely,

(08:03):
from pilots to production.
We're beginning to see theinitial stages of that.
I think that it's going to be amuch slower process than
consumer, but we are beginningto see the initial stages of
that.
Of course we can have a lotmore conversation about on the
tech side how things aredramatically changed between
last year and this year, but Iwould say broadly mainstream of
AI would be the theme thatsticks in my head.

Actually, I want to double click on what you just
mentioned about what isactually happening on the tech
landscape using AI right?
So is there anything that stoodout from you in the last one
year about Indian startups inthe AI space?

Absolutely.
I would say that Indianstartups or entrepreneurs are as
up to speed and as at thecutting edge of using AI as any
other startup out there in thevalley or elsewhere.
So, beginning to seeentrepreneurs who are looking at
Indian use cases of AI, whereyou're solving a problem which

(09:00):
is specific to the Indian marketit doesn't mean it only is in
India, but the nature of it ismore specific, the way in which
you are going to solve yeah, youare going to solve, and what
that means is that the totalsurface area of things which you
can solve with technology isincreasing, because these were

(09:20):
things where technology was not,it was not possible for us to
do these kind of things Right.
But now, with AI and theflexibility that it provides, it
just opens up new vistas for usto address new problems, and
that's what we began seeing.

I think, srinivas, you talked about AI.
I think there were some otherhot themes in the last one year
and I'll come to you, sanjay,for one of the most hotly
debated.
Talked about spaces, quickcommerce.
What's your thought?
Is it a bubble, is it hype, oris it actually here to stay?

I think you're the expert on quick commerce, Rizal
he knew the source I'm going tomake you put you on the spot
here.
Oh, absolutely, I was preparedfor it, your thoughts and given
your experience.

No, I think, like with everything in retail
specifically, right.
Anytime there is a shift in howthings are delivered at the
speed or the price or selectionthere is obviously a need.
So I remember reading aboutJeff Bezos when I was starting
Magic Pin, and one of the thingshe said is build for things

(10:22):
that consumer will always want,instead of what is likely to
change.
And he had this example ofspeed of delivery.
Nobody's going to say I need itslower, right?
Similarly, nobody will say thatI need it expensive or that I
don't want as much options.
So I think with commerce hasproven it.
So if you deliver stuff thatused to take three days in 10

(10:42):
minutes, consumers will love it.
And so, while there is a lot ofjury out there in terms of
whether they will ever becomeprofitable like economics, are
they accounting for inventorycosts correctly or not the
consumer behavior has definitelyshifted, and when that shifts,
it forces every incumbent tochange the way they operate in
the market.
So no wonder Flipkart islaunching Flipkart Minute,

(11:03):
amazon is launching Amazon Days,reliance is thinking about it,
tata is thinking about it, andyou have Flipkart, you have
Zomato, zepto and Swiggy.
Anyways, right, aggressivelybuilding out, because that's
where the future is and if youcan imagine five years from now,
10,000 dark stores.
We are at about, I think, twoor two, two and a half thousand
At 10,000 dark stores.

(11:24):
The amount of retail that willbe happening to quick commerce
is mind-blowing and it is ahumongous market, so I'm
personally very excited about it.
I think there are multipleopportunities.

Actually one of the most interesting posts I saw
from the founder of Zepto saidwhen we started off three years
ago, you could buy a kg ofapples for 16 rupees, and today
you can get an Apple iPhone 16also delivered to you in 10
minutes.
10 minutes, yes.
And that tells you also therange right, because initially

(11:56):
it started off, as you know,groceries, daily consumption
things but it has quickly movedinto also the more expensive.
You know product lines and soon.
So it's not just serving thespeed need, it's just become the
way of doing commerce forpeople.

And Brij, if I may ask you to double click on this,
since you've talked about it alot at Prime, that it's the end
consumer facing thing is getthis to me in five minutes, 10
minutes, whatever.
But there is a enormous kind ofyou know, iceberg below the
water in terms of supply chain,in terms of logistics, in terms
of so, really, the innovationthat is happening is not just

(12:34):
the you know, I'll get this toyou in 10 minutes and you, of
course, want everything faster,so maybe you could talk a little
bit about you know what.
That is Sure.

So, as you mentioned, amit, this is just
the tip of the iceberg, right.
When I get something in 10minutes, there is a lot of
complexity behind actuallydelivering it in 10 minutes.
So this is a complete shift inhow supply chain use is working
on e-commerce or retail.
10 years back, when we investedin delivery when I was at Nexus
right, the thesis was that,because of e-commerce, the

(13:04):
traditional 3PL vendors will notbe able to change to the new
need of customers, and the newneed was that customers will
want things in 3 days instead of10 days and they'll want COD
instead of prepaid.
So suddenly you need a newsupply chain to meet to that
customer need, and I think asimilar thing is happening in
QuickCommerce, zepto, blinkit,need, and I think similar thing

(13:28):
is happening in quick commerce,zepto, uh, blanket, instamart
have all created their ownnetworks and like everything
else.
Right, you start with fullyintegrated solutions.
So I want to serve my customersquickly.
It will scale to having commonsolutions that other platforms
can also use.
So I clearly foresee a worldwhere there would be a common
enabled system of dark stores,of 3PLs right that other

(13:48):
platforms, including standalonebrands, will want to use so that
they can offer also a quickdelivery experience for their
customers.
So I clearly see that happeningand I think there will be a lot
of opportunities for startupsto come in and create businesses
that are catering to thiscommon infrastructure.

I have a point of view and perhaps a question
out there.
I feel that the number ofplayers in this, this is a
horizontal commerce platform,right.
So let's look at the number ofplayers here.
You have Instamart, you haveBlinkit, you have Zepto, tez and
Minutes, big Basket and, andBig Basket and Reliance and
Reliance coming up, right.

(14:27):
So we have seven, almost wehave seven, and they're all
well-funded, correct?
You know, everyone has raised alot of money.
Some of these other guys havetons of balance sheet money with
which to play, etc.
So I would think you know, if Iwould go out on a limb, that if
I would go out on a limb, thatit's going to be a bloodbath in

(14:47):
the market with respect tomargins, because I have already
myself personally gone ahead andordered from at least three of
these players actually four, andit is really about and the
reason that I shifted was notbecause I was wedded to one
particular thing.
It's just because I was lookingfor selection or something else
came up on the notification,and these are all well-known
brands.
It's just because I was lookingfor selection or something else
came up on the notification,and these are all well-known
brands.
It's not like you have trustwith one versus the other.

(15:07):
So how do you see that playingout in 2025?

I think if you go back 10 years Flipkart, Snapdeal
, ShopClues, Amazon and I forgotmore players and I mean there
is still bloodbath in thatmarket.
They are still not making money, but what happens is that you
create a new consumer behavior.
It allows a lot of supportinginfrastructure and services and

(15:32):
software companies to exist.
So that wave of e-commercecreated the delivery, a
Shiprocket right and aUnicommerce, and these are three
names that are coming top of mymind.
I mean this wave of QCommercecan also create another three
similar companies.
So there will be opportunities.
That I don't disagree with you.
There will be bloodbath andthat's why it requires deep

(15:53):
pocket and a lot of conviction,a lot of gumption, to actually
go out there and fight in thisspace, but it will be fun to
watch it from the sidelines.
Right, but back companies thatare actually servicing these
customers.
Yep.
So I'll talk about SaaS also.
I mean, actually, I wantedspecifically your views because
that's one space that has seen,at least from outside, a lot of

(16:14):
challenges.
Do you agree with that sentenceor do you think there's still a
lot of upside in the SaaSmarket?

Yeah, I think it's one of those you know adages,
right?
You know SaaS is dead.
Long live SaaS, right?
So software has been around forforever now and I think it'll
be around.
I think I wanted to add onepoint to what Shripati said
earlier about AI and themainstreaming of AI.
This is like any computerscience revolution you take
right From client-servercomputing to mobile internet, to

(16:44):
edge computing.
It's one of those.
Right, like everybody has to gofigure out what is your kind of
AI story, right?
And I think that isparticularly true for the SaaS
companies.
I think just going and enablingsome workflow or automation or
some business process is notgoing to be good enough, right,
that's very, very clear.
That's also what the publicmarkets are reflecting in terms

(17:05):
of valuations, in terms ofmultiples, et cetera.
That said, I think the need forhaving software to, you know,
solve customer problems, whetherit's support, whether it's
marketing, whether it iscustomer service, whether it is,
you know, whatever it remainslike you know there, for you
know it's going to remain for awhile to come, right?
So so I think the thing that wethink about at Prime is really

(17:28):
you know, how do these SaaScompanies get enabled with AI,
with automation, with the newbuzzword, agentic AI, et cetera,
to really help me solve mybusiness processes or solve my
consumer problems or solve mycustomer problems, right.
So, yeah, so I do think SaaSkind of circa 2020 or 2022, I
think is going to have a toughtime right If you're just

(17:50):
building software.
The second point related to whatShripati said earlier about AI.
A lot of our AI companies inparticular one comes to mind,
neo and others have done aphenomenal job of how they use
AI just to up-level themselves,irrespective of, necessarily,
what you're offering to theconsumer or the customer, right.
So, whether it is on marketingor it's on dev or dev tools or

(18:12):
automation or customer support,etc.
So I think there'll be a lot ofopportunities to help companies
adopt AI for themselves, evenif they don't necessarily bring
it out there, right.
So I think SaaS plus AI isgoing to be here to stay.

Got it, so you remain excited and bullish about
the SaaS plus AI combination.

That's right.
Maybe I can make a couple ofother points there, which is
that the size of the companyrequired to build a SaaS company
is going to come down.
Yeah, so, because I feel thatthe productivity of the what is
the most when you're starting aSaaS company, the zero to one
journey is the hard, is a veryhard journey.
Everyone says it's a hard, it'sa very hard journey.

(18:53):
For that you need to assemble aright team from a tech side and
you need to actually, after youhave got a PM, some semblance
of PMF you need to go and sellit.
You can go outside and sell itand have a motion for lead gen
qualification, sdr marketingqualified, dcs qualified, all
those kind of things.

(19:13):
I feel that AI is going to playa very big role in reducing the
headcount required to make thosethings happen and increase, and
does reduce, the time to market, reduce the time to market,
reduce the amount of moneyrequired and make it faster to
actually go to this initial ramp.
So we will see a lot morecompanies, in my opinion, with
three, four engineers slashbusiness people who are having,

(19:35):
in the first year, one to $2million ARR.
I think that's what we aregoing to start seeing in 2025 on
these SaaS companies.
I think that's what we aregoing to start seeing in 2025 on
these SaaS companies.
I think that's going to beexciting.
I'm not necessarilyextrapolating it to the 1 to 10
journey, because I think thatwhen you want to actually become
bigger, it's back to the future.
All the things which havemattered will continue to matter

(19:58):
Will continue to matter.
Yeah, you need to understandgo-to-market, you need to
understand unit economics, youneed to understand churn
retention, all of those things.

I wanted to add one very important note of
caution for entrepreneurs itselfright, Because a lot of times
the initial success is 1 to 2million that you're going to get
, Since every enterprise has gotsome sort of an AI budget it
might be coming out of that,versus saying I have decided
that I need to adopt AI in themainstream and I'm going to do a

(20:29):
pilot.
So if the pilot is successful,is the customer committed to
mainstreaming?
This or not is the mostimportant question to ask and,
frankly, the $1 to $2 millionare not as important as the fact
that you have customers who areplanning to mainstream the
solution after a successfulpilot.

And not just an experimental AI budget because I
want to checkmark that we aredoing AI.
No, absolutely.

Because for the customer, even the fact that it
doesn't work is also data,useful information, right.
So spending a million dollars,a half million dollars, to find
out that this is not for us ornot yet ready for us is itself
valuable, but for that startup,you know it might be, you know
it might kill the company.

So, sanjay, that's a good segue, because I want to
talk about a space that isclose to your heart and you've
been at it for decades in someways right FinTech.
Before the space started yes,before the space started FinTech
, it was not called FinTech, Ibelieve it would just be usually
called financial services orwhatever else.
Right?
But again, that's another spacethat people are sort of
doubting whether it is a spacethat has still something left,

(21:33):
or is it old-fashioned,traditional and that people were
building and no longer thereare opportunities for VCs to
invest in.
Do you have a different view ordo you agree with this?
What are your thoughts?

I think in India, over the foreseeable future,
fintech is going to be kind oflike the probably Lakshay Patra,
the gift that keeps on giving.
There is still infiniteopportunity here, right, if
anything, the regulator gettingmore actively involved.
And if you saw the initialspeech by the new RBI governor

(22:09):
as well, in terms of the role oftechnology and you know the
importance of fintechs, I thinkwhat has happened is in the
early days it was sort of likethe Wild West, right, you could
do whatever.
Nobody knew you existed, nobodycared about it.
You are still a a small piece,I think, with a lot of the focus
on bringing it into theregulatory umbrella in a more

(22:29):
formal manner.
The regulator has basicallysaid you know you are now a
first class citizen, right, you,sir you?
It comes with certainresponsibilities, it comes with
certain restrictions, because Ialso need to make sure that we
are protecting the consumer,protecting the small business.
But you are actually legit,right, and in order to be legit,

(22:49):
you know there are certainthings that need to be done.
You need to partner withregulated entities, ideally
become a regulated entity.
I think this whole space of youknow India is still massively
credit starved at all levels,right, you can think of.
We have several companies,whether it's a Finag or a Nabdan
or a Metafin or a Frio,operating in this space, and in

(23:12):
all of those spaces there isnever going to be a winner takes
all, and there can be severallarge companies, right.
Not to mention the opportunityfor the incumbents.
Some of the incumbents will dothings themselves and several
will partner with the fintechsin order to achieve their goals,
also knowing that these are notbusinesses that can be built
overnight.
So money is not a weapon, moneyis a tool in these businesses.

(23:35):
And also there is no concept ofa gray area in this business.
If it's not white, you'd assumeit's black and you can't do it
right.
So if you stay within the lanesit's now that the highways have
been built and the lanes aremarked you know it doesn't make
sense to drive on the shoulderto get a little faster.
You have to follow the rules.
But if you do, there are hugepots of gold here, right, huge

(23:58):
profit pools, and so we remaincontinually you, we remain
absolutely excited about thisspace.
There is a second category thathas emerged, and we have a
company called Knight Fintech,which is one of the companies.
Easytap also kind of started inthat space, which is tech
enabling the incumbents.
So, on the one hand, you havethe new financial services slash

(24:20):
fintech companies that are theservice providers.
They are the customer-facingbrandintech companies that are
the service providers.
They are the customer facingbrand.
They may be working at the backend or in partnership with the
larger regulated entities, butthere's going to be a huge
opportunity because theregulated, the large players,
are also going to enter thesespaces and they need to retool.
And so, whether it's theirlending infrastructure, whether

(24:42):
it's their you know, maybe notthe core banking infrastructure,
that might be too much of achange, but all of the you know
surrounding systems around there.
And if the first wave wasgetting these into, you know,
cloud-based, saas-basedsolutions, now whatever we are
seeing in enterprise with AI isgoing to play a huge role here

(25:03):
as well, because, at the end ofthe day, financial institutions
are large enterprises.
Right, there are regulatoryconstraints that may make the
adoption a little more.
I mean, there are ethicalissues of, you know, decisioning
on giving somebody, on creditworthiness and so on, that have
to be thought of, but all thescaffolding around customer
service and things like thathuge opportunities immediately,

(25:25):
right.
So we remain super interestedand excited about this space and
we'll continue to backconference.

It's almost a regulatory capture, increases
the cost of starting upcompanies and there'll be less
companies prying out things onthe edges, as you just mentioned
.
Do you think that's likely tohappen, or is it more clarifying
the new RBI stances that thisis what you need to do and this
is what you should not do, anddoes it not affect the pace of
innovation and the pace ofstartup creation?

(25:52):
Business?

So, look, I think you can look at the glass as
half full or half empty, rightIn all these situations.
Right, the fact that there arerules to follow is a
non-negotiable thing here, right?
So try to stay within the rulesand build what you can.

(26:16):
There are still largeopportunities and large problems
to solve.
I think that should be themotivation for entrepreneurs.

One thing which I've actually learned from
Sanjay in our internaldiscussions is that, as
entrepreneurs try to understandand really internalize what is
the spirit of the regulationrather than the letter of the
regulation, and that is animportant thing, what we have
seen the best fintechentrepreneurs do is they are
grasping that and building thebusiness around that.

(26:45):
So then what happens is thatthe incremental regulations
would typically come from RBI iswhen somebody has put an end
around it, and so then they haveto bring in a new regulation to
say hey, no, no, you cannotactually do those kind of things
.
It's like doing credit in acertain way where it is not
meant to be, et cetera.

On that note, let's switch some gears.
So, and now I want to talkabout the three of you
specifically from yourperspective of being vogue
members, but I'll start on thepositive notes and amit with you
what has been the one instancein the last one year where you
have seen in one of yourcompanies and that made you
think that this is why I do thisjob, this is why I love doing
this job.

Yeah, I would say across the portfolio.
I mean there are several.
Obviously, the biggest one thatcomes to mind is Dozee, which
is one of our portfoliocompanies, which is really about
saving lives and getting tothis notion of zero code blues,
so wherever they're deployed,you don't get any sort of
inadvertent code blues or deathsor whatever, right, I mean,

(27:48):
that is beyond anything elsethat you can imagine as being in
sort of venture capital.
I would also say there areother examples.
For example, a company of ourscalled Planet Spark, which is in
the ed tech space where you getyoung eight year old, nine year
old doing TEDx talks, right, Idon't think everybody here is

(28:10):
very well represented.
I don't think any of us havedone a TED or a TEDx talk yet,
or maybe somebody has, and thisis from somebody who started
with relatively very modest kindof communication skills from
tier two, tier three, india,right.
So Wheels Eye is another exampleof a company that is the
backbone of logistics in thecountry and people see it

(28:30):
everywhere.
And if you ever happen tomention that we're investors in
Wheels Eye, they're like whatyou guys are in Wheels Eye.
I didn't know that.
So I would really say theimpact that these companies are
making.
That would be one that acrossmoney I've just picked a few
examples, but across many thatreally makes you feel like this
is worth it.

Well, I had the Veerzai moment last week when I
met someone.
He said oh, you are an investorin Veerzai.
Everyone has sort ofexperienced that product right,
but it's incredible what theyhave done.

And Sanjay coming to you.
Actually, I was gonna askSripati maybe we can talk a
little bit about quizzes as AIand some of the really exciting
stuff that you've been seeingclosely.

Yeah, it is One of the things which quizzes
does is it enables teachers todo assessments.
That's how it started.
Now it has, of course, become amuch more core tool which
teachers use across the journey,and it is really gratifying to
see how the use of AI hasdramatically expanded the

(29:34):
utility by both teachers andstudents.
And one of the use cases whichTI AcQs has is called
accommodations, andaccommodations refers to how a
single question paper can bechanged for needs of students
who might have differing needs.
So, for example, there is astudent who has attention

(29:56):
deficit right, that studentprobably needs a little bit more
time, needs 15 extra minutes or20 extra minutes to do the
problem.
Or there might be a student whois at a slightly slower pace of
learning but will do equallywell if they are provided one

(30:17):
extra hint on how to actually dothe problem.
These are all calledaccommodations, and there are 20
, 30 different types ofaccommodations.
How do you do that in real timewith an assessment?
It's things which are just notpossible, and things like this
make the lives of students verydifficult.

(30:37):
It makes learning a verydifferent exercise, from being
completely overwhelmed toactually enjoying it, and for
teachers it gives a much greatersense of making a difference
right.
So these are the things whichcompanies do and having just the
privilege of being part ofthese companies, you actually
see this.

So, in keeping with a similar theme, right,
obviously, Dozie, we can talkfor an hour on some of the
exciting things that they'vebeen doing.
Another company which is a newaddition to our portfolio is a
company called Metafin.
It does rooftop solarinstallation and financing.
It's an NBFC for small SMEs inrural.

(31:18):
India, and think of a classicexample.
Here is an Atachakki in UttarPradesh for small SMEs in rural
India.
Right, and think of a classicexample.
Here is an atta chakki in UttarPradesh, where there's like a
little flour mill pretty muchattached to the house of the
family and it runs on diesel.
Right, if at all.
There is a grid there.
That grid brings lighting,probably at night, but there is

(31:41):
really no power to run the motorconsistently right and today,
you know metafin has about 2000installations where it goes
ahead and, you know, helpsreplace diesel, which is a high
pollutant, very expensive costskeep rising with a silent

(32:01):
rooftop solar.
It's really replacing diesel tosolar, right?
It's not like you're charging abattery with power which is
also generated with fossil fuel.
This is truly going green.
And not only that.
The cost of the EMI is prettymuch the cost of the diesel, or

(32:21):
even less, as diesel keeps goingup.
You only pay it for three tofour years and then you own this
thing.
You may pay an AMC after this.
So then they give you 25 yearsof power.
Your kids are not inhaling thatdiesel exhaust.
It's turned out that many ofthem have actually been able to
even lower the cost of theirproduct because they're getting

(32:45):
much better margins.
People are talking about howthis has enabled me to send my
children to college, how it hasenabled me to marry off my
daughters, or you know some ofthe small testimonials we've
started to get.
It's a very young company,right?
So, again, very, you know as,again, very, uh, you know, as
you say, you know what makes youfeel.
This is why I do this.

(33:06):
I think financial success instartups and in venture capital
are always an outcome.
Yes, that is sort of the metricon which we are going to be
measured.
And now you know, all of us canyou know, with above average
luck or with you know, withaverage luck, we'll do well.
But it really feels very goodwhen you see, at the end of you
know, with above average luck orwith you know, with average
luck will do well.
But it really feels very goodwhen you see, at the end of you

(33:27):
know, 10 years of putting in aneffort here, that a company that
is not just transformingpeople's lives and livelihoods
is the reason why you achieveyour financial success.
And we have really beenprivileged in several companies
in our portfolio where, yes, yes, it seems like it's a
convenience that it's solving orit's a core need that it's

(33:47):
solving, but it's really makingpeople's lives better oh,
absolutely.

I think that's true and and that's a great
place to also talk about morecompanies that we had invested
in the last one year.
Right, I mean, if you want toshare some of the other examples
that we've invested in sometidbits about what make made us
invest in those companies lastyear sure, uh.

So I'll take a couple of examples um, so, some
that are closed, some thataren't, so I'll keep it a little
, uh, cryptic.
Um, so, the intersection of aiwith various verticals, right,
one that you led or co-led, uh,which is basically ai on the
shop floor in a manufacturingsetup in fact I was going to
make that point earlierled,which is basically AI on the
shop floor in a manufacturingsetup.
In fact, I was going to makethat point earlier about AI,
which is that customers are notsaying show me more AI.

(34:29):
Maybe somebody CXO, cpo,somebody in the boardroom has to
put a slide, so the CEO and theboard is okay, but really
they're saying I have theseproblems, solve these problems,
right.
So I think that was a veryexciting company which is
basically saying how do you helpme improve my manufacturing
process, quality, quotient, youknow, leveraging whatever you
want to leverage, right, sothey're using original AI.

(34:50):
Another one is in the legal techspace, which is saying that, as
I invest a lot in legal tech,particularly in the IP domain
you know contracts, negotiations, ip assessments, et cetera Can
I make that process a lot moreeffective and efficient for the
IP attorney, for the inventor,for the interaction with patent
offices for reviewing portfolioassessment when I'm doing M&A

(35:13):
and so on.
That's another one, and thenperhaps maybe just one more
which is in the cross-borderspace, which is in the B2B space
.
Thanks to this big kind ofChina plus one wave over the
next seven years, we thinkexports are going to double or
triple from here on out.
Right, thanks to everybody allover the world, and certainly
out West, looking for a Chinaplus one strategy, right?

(35:36):
So this is a company calledLKME in the B2B chemical space,
but I think this could be aninteresting area for variety of
other verticals as well.
So these are a few examples ofthe kinds of companies that
we've looked at this year, orrather back this year.

Shripati, I'll ask you the counter of this or
opposite question of this, whichis what would you have liked to
see more of?

I would like to see more of in 2024.
Yes, I would have liked to see,actually from India, more
infrastructure AI companies.
I think there's an opportunityhere where a lot of spend is
going to happen, for obviousreasons, because this is a very
fundamental shift in computing.
Our data centers are going tobe rethought You're seeing the

(36:24):
success of NVIDIA, as in everysingle data center, server is
going to actually look different, because compute is basically
going to go to AI workloadsversus the traditional workloads
and so forth.
So I hope we see moreinfrastructure companies, and
infrastructure just doesn't meanactually doing LLMs.
I don't think that's a game thatwe necessarily need to play,

(36:44):
which is a very high-capx kindof game.
But one example of an areawhere infrastructure will be
required is, let's say, insecurity.
So let's look at it, becausewhat's going to happen is that
the essentially folks who aretrying to do the attack here now
have something as powerful asAI in their hands.
So you can expect severalthings to happen in that space,

(37:06):
which is that the attacks aregoing to become more frequent.
They're going to become morepowerful and more sophisticated
and once they actually enter asystem, the rate at which they
can export data is going to befaster.
It's not going to be weeks,it's going to be hours in which
they can do so.
All of these things now lead toa situation where the need for

(37:29):
security is just going toskyrocket, because every
enterprise is going to be very,very concerned and, in fact,
they would want to do thisbefore they put any AI inside
their enterprise right, theywould want to have, and fintech
is one such area where it isabsolutely paramount.
So I feel that there areopportunities here and I'm
really hoping that in 2025, westart seeing the innovative

(37:52):
stuff there.
And the thing to watch out foris that when we are looking at
infrastructure, we have to becompeting with the best that the
Valley has to offer.
We have to be competing at thatlevel.
I think we do have the talentabsolutely to do it and
hopefully, I'm excited aboutwhat's going on there.

On the same level of excitement.
I'd like to end this sectionspecifically by asking each one
of you individually to share oneanecdote of our portfolio
company that has truly shown inthe last year, and they've done
a remarkable job.
One anecdote each, and pleasegive us some more color on what
made that company stand out inthe last one.
Let's start with you, sanjay.

All right.
So I'm actually going to usethe same example across three
companies, which isprofitability, profitability,
profitability, right At scale,right.
So three or four companies sortof broke through to the other
side in a stable, configurable,consistent manner, and I think
that the first one, of course,has talked about it publicly is

(38:56):
MyGate Now actually seeingpretty strong momentum with the
combination of advertisingrevenue, saas revenue that is
starting to come back, as wellas some new innovative products.
They've launched the MyGatelocks and more to come in that
category.
I think there what has happenedis it's clearly the segment

(39:19):
leader, the category creator andthe category leader and slash
owner, I would say.
And I think real focus onbasics, right, what got us here,
what made us successful in thebeginning, and really being
laser focused on the customer,the customer requirements,

(39:40):
ensuring all the questionsaround data privacy and security
, in which we're always answered.
They're more well communicatedto people so they understand uh,
you know that their informationis safe and so on, um, and just
very clear communication, bothexternally as well as within the
organization.
And the path ahead as welllooks really exciting.

(40:03):
So we're super excited aboutwhere this company is and in a
similar vein, we had Frio in theconsumer lending space.
Again, you know it's a sizableheft now and really stayed laser
focused on profitable uniteconomics and I think that that
is a very large space.
There are several players there, but you know the opportunity

(40:24):
space is humongous.
There are several players there, but you know the opportunity
space is humongous.
Everybody has their ownapproach to the market and Frio
has really demonstratedextraordinary discipline in
everything around, you know,because the biggest thing that
can kill you here is CAC and, ofcourse, npas.
And you know, having like anengine where you can acquire

(40:44):
customers at a, you know, verylow cost, get the right
customers to come up the ladderand actually start borrowing
from you and making sure yourNPAs are in control and make
that sort of a repeatable enginethat can be scaled.
I think they've demonstratedthat level of maturity now in
the business.
And the third one Amit talkedabout is Planet Spark, again in

(41:06):
the education space.
I know everybody you know stillhas questions of you know is
EdTech a good opportunity or not.
I think they're kind of pastthat now.
I think people are starting torealize that.
You know, it was probably onevery, very large rotten apple
that they were drawing somelessons from, unfortunately, but
now I think there's a lot moreconfidence and ClientSpark again

(41:29):
.
You know the founders havetalked about this, shared that
video quite openly as well.
You know, doing 125 crores ofrevenue, profitable scaling.
We're super excited.
I think this is a theme and forus as a VC, when I see a
similar situation in anothercompany, while it's not ideal,
it doesn't scare us anymore.
Right, we are saying, okay,there is a path out of this and

(41:52):
it's going to take A, b and Cand it's going to be six to nine
months, maybe 12 months, butyou know we can tell with
conviction to the founders nowthat, hey, you know, let's put
the plan together and we areseeing another company that's
sort of in that phase, that iscoming out of it now.
So I think to me that has beenthe most reassuring.

What about you, amit, any, any of the companies
that have stood out?

Yeah, so I'll, I'll .
I'll pick a theme rather than acompany, although I'll mention a
company as well which is, Ithink, one of the modes modes we
have realized of companies thatgo from good to great or great

(42:34):
to awesome is ability to buildthe software which is not code,
which is the team right.
So investing in high qualityleadership team, grooming the
leadership team, being open toexecutive coaching, taking
executive coaching, etc.
So I would certainly say forour portfolio this year was
quite a breakthrough, at leaston the last element, that I
think there are at least uh,maybe six or seven have lost
track now maybe eight companieswhere the founders are seeking
kind of external counsel, help,right, and say, look, it doesn't

(42:55):
matter, you know even a gukeshneeds, you know coaching from
paddy upton or vishwanathananand or what have you right?
So I would say, um, you know,sir, and different, different,
you know strokes for differentfolks.
But, for example, wheelsa hasdone a lot of investing in the
leadership team, right.
A bunch of other founders havedone a lot around getting more
self-aware on you know what areperhaps their limiting or

(43:16):
empowering beliefs and how doyou kind of supercharge that.
So I would say investing inthat software was definitely one
of the highlights, for mepersonally.

That's a great sign of a maturing ecosystem.
Now we are thinking 10 yearshence.
Absolutely so, if you have to,then our team needs to be as
equipped as the quality of thecode or the quality of the GTN.

So I think that's a very important sign and in an
AI world, like Sripati said,you're going to have fewer
people right.
You have lesser engineers,lesser marketeers, lesser
whatever.
Now it becomes even moreimportant.
You know what your right brainis going to do, not just your.
You know left brain and how doyou kind of marry that and so on
and so forth.

Even Djokovic has Murray as a coach now.

Absolutely, absolutely.

Shilipati.
What about you?
What do you think?
I think that what Sanjeev andAmit said on my side in addition
to those two, I was reallyexcited to see a couple of
companies actually establishthemselves as leaders in spaces
where it is sort of difficult todo so.
One I'll come back to quizzeswhere edtech was essentially, or

(44:22):
is essentially, an area mostand number one candidate for
disruption by AI, like in 2023,it is the number one candidate
and one of the things which theteam set out to do is say that,
hey, this thing is coming, weare going to understand it, we
are going to really focus on itand our goal is to make this as
a thought leader in tech overthe next year.

(44:44):
And what I am glad to say isthat now teachers, when they're
talking about tech and AI,actually first mention quizzes.
So that requires a lot of work,it requires art building, it
requires understanding thetechnology, as well as spending
very prudently to make thathappen.
It's really satisfying to seethat and I feel that all
companies need to start thinkingin that way.

(45:05):
Right, when you're at theforefront of being disrupted,
you're actually how be a leaderin that way, like, in one sense,
you know, run to yourconfrontation and tackle it in a
way which is on your terms,versus having confrontation come
to you.
The second one I would say whichI'm really delighted about is a

(45:25):
company in our portfolio calledHitwaker, which is a gaming
company, as the name indicates,a cricket strategy game, and it
is an area where we haven't seenany leaders in India.
But I firmly believe that weare going to get a clash of
clans out of India.
There's absolutely no reason.
We have the data ubiquitous,lowest price mobile phones,

(45:47):
ubiquitous smartphones,ubiquitous young population,
like everything points towardscreating a leader in gaming and
I feel that you know it was abreakout year for HitWicket in
terms of their user growth,revenues, unit economics, all of
that.
So just excited about companiessort of breaking out in new

(46:09):
categories.

Okay, so time for some crystal ball gazing and
sneak peek, right.
So I'll start with you, Amit,on what's one trend or sector
that you're most excited aboutin 2021?
.

I'm assuming AI will be common to everyone, so I
won't do that.
So, the third coming of EdTech,third coming of EdTech, third
coming of EdTech, and I feellike you know, edtech and
healthcare are going to be inneed even 500 years from now.
Yeah, we've had two innings,you know some with somewhat you
know, checkered past, butobviously a lot of impact that

(46:48):
there is 100 million people thathave gone through a variety of.
I'm just talking about India,right, not talking about global,
right.
If you go into global, like,you know a lot more.
Just in India, which is such adire need, right, we have such a
lack of quality teachers,quality infrastructure, access,
inclusion that you talked aboutin a variety of themes.
So I think the need is there, Ithink the appetite to pay is

(47:11):
there, I think we need kind ofthe both the current and the
next gen of entrepreneurs to beable to serve it Leveraging tech
, leveraging AI, leveragingproduct, et cetera.
So I think that I'm going tostick my leg out and say the
third coming of EdTech.

Yeah, and I think there is now enough proof points
of demonstrably sustainablebusiness models in EdTech right,
Absolutely Like a couple ofyears back.

Absolutely and a lot more awareness, right?
No different than you know whenthe mobility revolution,
whether it's taxis or whetherit's e-commerce revolution.
So you know, quick commerce ismuch easier to pull off once
everybody knows that I can docommerce.
Right, I can do Flipkart,myntra, amazon.
So now I'm like, oh, of courseI can do this.
So now people are aware like,look, I can take a course online
and get better employed orup-leveled by skills or what

(47:56):
have you.

So yeah, what are you most excited about?

I would say voice, vertical SaaS and
democratization of AI toactually reach which makes tech
accessible to as many people aspossible.
So, just to pass that a littlebit, I feel that the opportunity
set in vertical AI, where youare actually solving a problem

(48:22):
like earlier Amit mentioned inmanufacturing a deal which you
co-led problem like earlier amitmentioned in manufacturing a
deal which you call it where youare not only just solving the
problem for that manufacturingcustomer, but you are slow
integrated with their workflows,their core needs, their
business problems and providinga compelling roi right, those
will be the themes, uh, which wefeel we'll see more of.

(48:42):
I'm really excited and what isgoing to enable that is the
ubiquity of voice, because now,with the tech is being that
advanced, I feel that voice willbecome mainstream and our
ability to interact withsoftware and technology over
voice, which is a natural voicefor us, will be a very powerful
strength.

(49:02):
It's going to ultimately maketech and software accessible to
more and more people.
You don't need to understandgraphical user interfaces, you
don't need to understand Englishto actually do this, and that's
really exciting.

That's truly democratization of computing.
Eventually, everyone will haveaccess to it in the natural
interface, the most naturalinterface.
One can think of Got it.
What about you?

Brij.
Before you ask me.

I'm actually going to ask you a different question
, not about the future.
Can I ask you that first?
Then I'll come to what I havesure so I want to ask you to
give us a sneak peek of what hascountry 25 in store from Prime
and Zubatna's perspective so, asAmit said, third coming of
EdTech, I'm saying the 17thcoming of FinTech.

That's going to be there for sure.
I think one idea that we havealluded to in the context of
Dozee perhaps is I think thiswhole IoT with AI is going to be
extraordinarily exciting aswell.
So I'm looking to certainly seepotentially even working with
some young entrepreneurs andincubating some new concepts,

(50:11):
you know, just to see how farthat could take us as well.
And yeah, I think those arebroadly the areas that we'd be
looking to do more stuff in.
A lot of the stuff is businessas usual, but I think a lot of
the stuff is where theexcitement is going to be, and
you know we have.
I couldn't be more excitedabout the opportunity ahead.

Absolutely.
So I will spend a couple ofminutes and talk about what I
foresee.
So I think, amit and Sripatiand you have already talked
about it, but I'll justsummarize in how I am thinking
about 2045.
So there are two things thatI'm extremely excited about.
One of them is AI, especiallyintegrated AI, created to solve
the problem Not a platform, buta problem solution that

(50:56):
customers can use and seeimmediately.
And second is I've always beenbullish on retail, so I just see
that with quick commerceenablement and just the fact
that now millions of Indianconsumers can truly experience
what fast, high-quality commercemeans.
So I remain excited about thatspace as well, and I think next
year we'll see a lot morecompanies beyond the 10-minute

(51:19):
apps come out and create value.
So I have finished my cup ofcoffee, but I would love to I
have to say one more thing.

I'm going to take a vote here.
Last year I was in that seat.
This year you're in this seat.
I propose that you keep thatrole for the next several years.
You did a bang of job of it.
Any objections, amit?
And Shiv.

Not at all, not at all.
I think that.

Then I will use that veto and ask you one more
portion before I close.
Okay, so?

but I do want to comment on something, right?
This is probably the first timewe have not talked about
payments, right?
Upi has just become so takenfor granted.
It is ridiculous that, you know, we just don't think about it
anymore as a even anaccomplishment, because it has
just become.
You know, it's like breathingright now.

(52:07):
Right, it's so mainstream, Infact, breathing is probably not
as taken for grantedunfortunately it is, but it's
really amazing to see theinfrastructure that we have in
India, the DPI, which is theenvy of the whole world, but it
stays at the foundation ofseveral of the things that we
have done and it's really theenabler, so really happy to see

(52:30):
how that has just becomemainstream across the board
actually I was about to ask thatonly, not payments, but broadly
, what has remained the same andwhat do you think will remain
the same next year.

So on his payments , I guess it's so ubiquitous
that it will remain what it is,but tripati amit, anything else
that you see, that is notchanging and should not change.

I'm going to go on a little tangent and come back
because I wanted to say thisyeah, perhaps closing remarks,
right, I think just the maturityand the quality of the
entrepreneurs which I mentionedearlier, both the next gen and
this, and the level of LPinterest for India We've had
more LP interest at prime kindof this year than perhaps the
last, you know, five, seven, 10years, maybe even combined,

(53:12):
right, so I think we're veryhigh quality investors backing
India and a lot and very kind ofprivileged position, like we
said earlier, to be working withhigh quality entrepreneurs who
are really trying to kind ofchange the world, make a dent in
the universe and so on.
Right, I think, in terms of whatremains unchanged, I think
consumer appetite remainsunchanged, in fact only

(53:34):
increasing right, like in apositive way, right, so and
that's a name, I don't know ifyou call it unchanged or not I
think the demographic dividendremains unchanged, right, only
growing.
So we'll be the country withthe highest sort of working
population for years, decades tocome, right Till 2047 when the
country turns 100 in terms ofindependent India.
So, yeah, I think, the bettingon the talent and the people and

(53:58):
the consumption justdomestically which will, I think
, keep us more insulated fromthe vagaries of the sort of
geopolitical world.

Absolutely Anything from you, Shibu.
Any closing remarks.

I'll say that, in one sense, the more things
change, the more things remainthe same.
And the focus on creating acompany requires all these nuts
and bolts things, which is, youknow, building an org, having
belief in a problem that you'retrying to solve and actually
having the resistance, the gritand the persistence to go ahead

(54:31):
and build that company.
And in the talk of all this AIand everything else, you might
forget that because thetechnology you can fall in love
with it, but if you're notsolving a real pain point which
you're passionate about solving,it's not going to work.
So I feel that the opportunityset is dramatically increased.
That is really, really exciting, because now technology can

(54:53):
reach more people morecost-effectively, in a more
compelling fashion, and we havethat opportunity to do that in
India today.

Well, so that is it for our year-end podcast.
Thank you, sanjay Shibati andAmit, for sharing your thoughts,
and thank you, listeners, forbeing part of the show, and
we'll see you in the new year,with our first episode coming up
in January, and so the power toyou on the other side of the
new year thank you for listeningto this episode of the podcast.

Prime Venture Partner (55:29):
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