1Mby1M Virtual Accelerator Investor Forum: With Eric Benhamou, Founder and General Partner at Benhamou Global Ventures 2021 (Part 5)

Eric Benhamou: Up until recently, waste management was done the same way as 30 years ago. You have big trucks collecting garbage from houses and office buildings to take them to recycling facilities. It would be dumped on a treadmill-like structure and you have people sorting out the waste. They send the recyclable waste to be sold as recycled material.

This is begging for disruption. It is a robotics, machine division, control, and analytics problem. Every neighborhood has a waste profile and this waste profile can be used to train AI to recognize objects. Robots can pick these objects efficiently while removing the safety risk from human beings. They can be recycled in ways that produce higher quality materials.

This is an example of a complete solution taking advantage of AI. This results in a much-improved workflow. It hits all the aspects of enterprise full pointer companies. Not only that, it produces unbeatable cash on cash returns. You can deploy this in one recycling center without having to get clearance from the Chief Technology Officer of the entire company. This has a lot of the attributes that we look for in an enterprise. 

Sramana Mitra: This is something that you have invested in already?

Eric Benhamou: Yes, we have invested in a company in this space. There have been a few big investments made by other firms there because space is just begging for disruptive solutions. 

Sramana Mitra: There is one other trend that I want to talk about with you. We picked this up a while ago. This trend has built up more especially during COVID. People are starting side businesses and coming into full-time entrepreneurship later in the cycle. I don’t know if you have seen this in your deal flow but we certainly have seen this in our community a lot. 

Eric Benhamou: We have not seen this as much. Sometimes we are a bit mistrustful of these businesses because if a small business has lived on a small scale for a long time, then we have some doubts about the entrepreneur’s drive to build an impactful business.

We have a mandate from our investors. We need to generate venture returns and you cannot generate venture returns without scale. For example, a business that is operating at a $1 million revenue range for five years now claims that they want to grow 100% a year. It’s possible and we love this but we are going to scrutinize this very closely because it’s not just a question of opportunity; it’s a question of desire and drive. 

Sramana Mitra: I don’t think that is the profile of the companies that I am talking about. For example in an enterprise, getting meetings with people to validate your idea already takes several months. That validation phase of getting the right meetings and talking to the right people to get validation on your idea to even scope out the product takes time.

I would say that it is a 9 to 18-month process. During that period, there is a tremendous amount of risk in quitting your job and cutting off your source of income for most people. People are coming to realize that. Especially in enterprise, this is an important trend to note. You can fund your seed stage with your paycheck and get validation before you quit your job. 

Eric Benhamou: You are right. These profiles exist and we love them. What I was reacting to was people who have had a lifestyle business for many years who now pretend to be entrepreneurs because it is fashionable. We need to separate these two flows.

It happens very often that an entrepreneur has a great idea, but it takes more than a year to get any kind of seed capital to put the idea into a prototype form. We don’t have the resources to scout for these entrepreneurs because there are only so many people in our firm.

We try to operate one or two levels downstream from there but we have made an effort to care for these entrepreneurs in India through our incubator Arka. Our incubator has identified close to 30 companies in the last three years. We are expecting many more in the next three years. We are trying to catch them one level earlier. We can then pick them up at BGV and hopefully lead a Series A round.

Sramana Mitra: Thank you for your time.

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Eric Benhamou, Founder and General Partner at Benhamou Global Ventures 2021
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