1Mby1M Virtual Accelerator Investor Forum: With Ritesh Agarwal of CerraCap Ventures (Part 4)

Sramana Mitra: What is the go-to market strategy of the diagnostic product?

Ritesh Agarwal: They’re mostly in B2C. They’re selling the kit on Amazon or through their website. They want to go into more wellness sites – into B2B. That’s their next step.

Sramana Mitra: But the B2C model is scaling?

Ritesh Agarwal: Absolutely.

Sramana Mitra: I have a couple of questions in the context of what you said so far. One is on geography. You said you want the companies to be here in the US, but they can be coming from anywhere in the world. 

Ritesh Agarwal: That’s correct.

Sramana Mitra: What sized checks do you write?

Ritesh Agarwal: This is how we divide our fund. There are three categories. One is the growth capital. That’s the early investments we are making. We have done $250,000. But now we are going for half a million minimum and could go up to $1.5 million. Second is our prorata. We want to maintain prorata so we have an amount always ready. Third is the bailout fund. 

Sramana Mitra: If the first check is $250,000 to $500,000 and you have a company that already has a product in some other low-cost place, what is your appetite for handling the process of their coming to America?

Setting up shop in Silicon Valley or somewhere in America is a much more expensive process. Maybe they have managed to put together a team of six to eight people, built a product. But taking on US operations is an expensive affair. $250,000 to $500,000 is a small amount of money to take that on.

Ritesh Agarwal: Yes. I’ll give you an example of one company dathena. They started in Singapore. They just closed around $50 million in two and half years. They’re in the PIA [private internet access] space. We got them into the US around six months ago. We see what kind of clients they have and what kind of traction they have.

Sramana Mitra: Because we are global, we see a lot of companies that are doing good work in different geographies. They just have to put one foot before the other and have stuff done before they take on the expense of coming into the US.

Ritesh Agarwal: Absolutely. One check that we have is that you have to have a channel partner relationship with one of the large companies in the US.

Sramana Mitra: That’s a pretty high bar because it’s not easy to do those channel partnerships either. That gives us a good window into what you are doing. Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ritesh Agarwal of CerraCap Ventures
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