1Mby1M Virtual Accelerator Investor Forum: With Mohit Gulati of ITI Growth Ventures (Part 2)

Sramana Mitra: Yes. Let’s double click on that. Talk about the B2B industry sector. What in B2B is your interest area? There is the  global facing B2B SaaS and then there’s the Indian-facing B2B SaaS. There is mid-market B2B. Where, in all those permutations and combinations, is your sweet spot? What is your preference?

Mohit Gulati: One of the sweetest spots that we have looked at is global B2B SaaS. In SaaS, most traditional Indian companies would not pay for a new age tech solution. They’d believe in building it in-house rather than paying a young entrepreneur who is developing something.

Pure play B2B SaaS is definitely more promising. India, as a country, could possibly be one of the early adopters and the largest beneficiaries of the Blockchain technology. I’m not talking about just crypto tokens. I’m talking about opening up Blockchain across a multitude of sectors. Most of the record-keeping within India is actually still on pen and paper. Imagine how Blockchain can change that. We take a simple example of land records.

If you own property in India, you would have your name buried in some file, deep inside one of the government buildings. If Blockchain is adopted by the government, you’re actually looking at transacting and land moving from one hand to the other just like a list of marketing. That is, in my opinion, a game changer. Imagine real estate being as liquid as the stock market and as liquid as the normal stock.

Sramana Mitra: I think the issue that you’re dealing in India-facing Indian market is, even if it is B2B Indian-facing ventures is, as you said, the adoption. It’s such a long cycle. We’ve had company after company that got stuck in that adoption cycle and it’s a high cost of scale, high length of closing a deal, high-touch requirement from selling but with low payoff.

That’s been a very difficult area for  companies that want to get funded. They face a slow adoption and revenue growth curve that doesn’t lend itself to the venture model. By large, our guidance B2B SaaS companies has been to go for global.

When it comes to companies that have aspirations of raising funding, if you’re bootstrapping you can afford a slower sales cycle. For some entrepreneurs, that may be the right strategy. But if you are looking to fund companies, we have kind of come to the conclusion that you kind of need to go global B2B.

Mohit Gulati: I think we resonate each other’s thoughts.

Sramana Mitra: Yes, I agree with that now. Talk a bit more about the industry sector. You seem to be in your new incarnation of the fund. You have a limited partner pharma. So does that have implications on what you want to invest in? Is healthcare pharma a big category that you are looking into?

Mohit Gulati: We are very dominant on the healthcare space because we’re instrumental in changing one of the largest healthcare policies in India. This is the 1940 Drug and Cosmetic Act, which basically says that e-pharmacy in India is a gray area. It’s not legal but it’s not illegal either.

We spoke to the honorable Health Minister and drafted a full-blown 98-page document that talks about the implications of regulating this space and the implications of opening it up for all the pharmacies. What the government is today talking about, both from the PMO side as well as the health ministry side, is that they want to make drugs affordable for common Indians.

I’ll just give you a small example. A paracetamol tablet will cost a dollar when you’re buying it in India from a retail store. The actual cost of manufacturing that same pill is sub-20 cents or sub-10 cents. There are eight different layers of people who actually distribute and deal with that one medicine for you to finally buy it for a dollar. So our proposition to the health ministry was simple.

If you let a pharma company give out its goods directly to an e-pharmacist, we can essentially bring that paracetamol to the doorstep of people for some cents. It could be 30 or 40 cents. Healthcare is a massive focus, but there is no dictate or mandate given to me from my LPs. They are purely equity investors.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mohit Gulati of ITI Growth Ventures
1 2 3 4 5 6 7