1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital (Part 5)

Sramana Mitra: What we also see in the Bootstrapping to Exit mode of company building is a lot of acquisition hires. We have sold companies in our portfolio in that mode. These are typically companies with a little bit of angel financing that go straight for an exit. We pulled a company to Qualys, for example, in this mode.

That is all about talent. Whether they are going to stick with the same product strategy or not, what they are looking for is the team. That happens a lot in the business. 

Sumant Mandal: Think about it this way. We have a company in our portfolio that is 250 people in size today. In the first half of this year, they plan to go from 250 to 550. They have to hire 200 people in six months. The only way that you can do that is to compromise on quality because you cannot fill that many people through the system so quickly.

Let’s say that you hired 30 good engineers. They are working on similar technology and they understand the area that you are in. They can be integrated quickly and that makes sense. 

Sramana Mitra: That’s right. What are you seeing in the trends? Of course, remote work and collaboration is a big trend. Is there anything else that stands out?

Sumant Mandal: I think most people will understand it. The whole idea of the supply chain in any industry has been challenged over the last 18 to 24 months. It was challenged first by the whole US-China discord. With the pandemic, even the last mile has been affected. How a consumer products company would think about its inventory or think about keeping a shelf filled with its goods in the store has changed to, “How do I get my product to the customer’s home?”

If you think about logistics, you think about warehousing, supply chain, and transportation. That entire supply chain has been disrupted dramatically all the way from manufacturing to delivery. This is a big area of technical innovation and disruption. The second part of that is payments. If you think about how people used to pay and how they are paying for things today, it is dramatically different.

I just did a panel on the global payment ecosystem. I had a close good friend who is the Vice Chairman for Visa. If you think about it from their perspective, they have seen the debt part of their business go through the roof. Even people walking to a store would prefer to pay with their phone than something that they have to physically touch. Cash payments worldwide are down 10%. That has been a great shift. This is the reason why these companies are trading at such high multiples.

The other big change we see is around the footprint of cybersecurity. If you are working from home, you are no longer inside the perimeter of an enterprise. The whole framework around cybersecurity is changing. In the next couple of years, the advent of 5G and the availability of a low latency high bandwidth network will allow for a lot of devices to be connected to the internet. This is the promise of the IoT world, but it hasn’t been fulfilled quite yet.

We had the CEO of Qualcomm at a summit a couple of weeks ago and when you hear him talk about what 5G could mean, it opens up a lot of potential opportunities but also a lot of potential threats. Those opportunities always exist. I have been following Quantum Compute for a very long time. I think there is a ton of opportunity in Quantum. It is far from being commercialized. As someone interested in science, it is very interesting. It defeats the laws of physics. 

This segment is part 5 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sumant Mandal, Co-Founder and Managing Partner at March Capital
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