1Mby1M Virtual Accelerator Investor Forum: With Ritesh Agarwal of CerraCap Ventures (Part 3)

Sramana Mitra: Switching gears a bit, tell us a bit of a few companies you’ve invested in. Maybe start with the two that are turning into unicorns. Tell us where you encountered them and how you encountered them. What state were they in? What did you see in those companies that told you that this is going to go?

I’m trying to get at your thought process in thinking through investment opportunities. 

Ritesh Agarwal: I’ll take a step back. If you go and look at our website and the Board Members, these are all industry leaders. They are the guys who are at the top of their domains. All these guys have been with us for the past seven years. The deal flow mostly comes through their channels.

Second is regarding the two companies that are on the way to becoming unicorns. Viome is in healthcare. The second is Deep Instinct. It’s in cyber security. I’ll go with Deep Instinct first. Deep Instinct came out of Israel.

It doesn’t matter where the company is formed. What matters is how we can get them to the US. The company that we’re investing in has to have a US presence. Ultimately, they have to move to the US. We have companies from UK, Israel, Singapore, US, and Mexico.

At that time, Deep Instinct was just coming out with the concept that all the computers running in the world are not fixing unknown malwares. As an analogy, COVID came in out of nowhere. Nobody had any idea. I don’t think there’s any other company that can predict that this is malware in making. Initial valuation was $5 million. They got an OEM signed with HP. All HP computers will be pre-loaded with Deep Instinct software. 

Sramana Mitra: Was the HP deal already in place when you invested?

Ritesh Agarwal: They were starting to build the product. They had a prototype. They ran it on a computer and we loved it. We took them to Walmart. They did a 60-day study on them. They predicted on what date they will be hit by a virus and what kind of virus.

That’s how their journey started. Five people in the room started the company back in Israel. Now they have a very strong US presence. They have got almost 30 clients. They have very good revenue. The question is what is the next step. Is it going to be an IPO or acquisition?

The second one is Viome. The CEO is a good friend of ours. He was with Microsoft and got connected with us back in 2004 to 2005. He has done multiple companies. He came up with this idea that your gut is where your microbiomes are. These microbiomes have a lot of information that nobody is looking into.

We invested at a $5 million valuation. Their revenues are $17 million. There are a lot of known celebrity investors. They take a stool test and analyze your gut. They tell you what kind of microbiomes you have. Based on that, they give you recommendations on what you should be eating.

They have become the largest data pool or microbiome in the world. It’s comparable to 23andme. They have signed a deal with GlaxoSmithKline to build a vaccine using the microbiome data.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ritesh Agarwal of CerraCap Ventures
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