1Mby1M Virtual Accelerator Investor Forum: With Rahul Chandra, Managing Director at Arkam Ventures (Part 2)

Rahul Chandra: One of our companies is called Jar. There is a very big question about whether the segment of 400 million UPI users that Jar is targeting and investing for is just a dream. For them, investing needs significant capital saved in the bank. India is a credit-hungry market. Are people even thinking about saving?

We took that chance with Jar. Jar has built a product that allows you to download the app, open it, do a login, and come out in 45 seconds with even one Rupee saved. Jar married these two concepts which are lower than what is considered an investment. It’s in gold but it’s in digital gold. The transaction is super friction-free. It’s almost like me saving so smooth that people feel great about it. It, very quickly, becomes a habit.

These guys were at about 20,000 users when we went in. Currently, they have five million users. There is a big latent demand for high-quality, consumer-friendly products which can help you go down the path of savings and investment, which nobody had figured out earlier. It just looked like India was not ready for it.

This is an example of taking a product, putting the scalability aspects into that, and then creating a very simple interface for a new first-time user to experience something. Democratizing complex products for the masses in India is a theme that we are chasing.

Sramana Mitra: How big is your fund?

Rahul Chandra: We closed a $100 million funding in January.

Sramana Mitra: What stage are you focusing on?

Rahul Chandra: It’s a mix of pre-Series A and some Series B – somewhere in that. Our sweet spot is a $1 million to $3 million check. We are multi-round. We reserve 2x of our first check for follow-on investing. We usually come into companies that are post-product.

Sramana Mitra: The investment thesis that you started with was middle India consumers. Is that the investment thesis?

Rahul Chandra: Yes. We think that’s a very deep market. We are just scratching the surface. The five areas are FinTech, health tech, AgriFood, mobility, and education. I’m looking at a company that caters to children in households who want to learn to code. The other would be that employability in India is a massive challenge.

For education, our themes are affordable education and employability. We focus on middle India consumers, which is consumers with sub-25 lakhs ($33,000) household income. One of our first investments was Jettison which is doing rural financing just after the first COVID wave. There was a big question about whether it was going to get impacted. It was incredible that the loan quality was absolutely smooth.

What was a priority sector selection for us for middle India consumers became a very resilient sector during something as destructive as COVID. When you choose middle India, you are choosing, by default, sectors that are incredibly important for a large part of the population.

Sramana Mitra: What are you learning from a go-to-market strategy? These middle India consumers, are they reachable on Google? Are they reachable on Facebook?

Rahul Chandra: WhatsApp is a big channel. Also a lot of the short-format video apps. The sum total of the audience of the top three or four apps is what TikTok used to be before they left. That’s one big channel.

Sramana Mitra: This channel is converting?

Rahul Chandra: Yes. What used to be complete time bust activities are now creating millions of creators. Many of them are working on promoting certain products. Some of them are teaching. Obviously, there are some bad elements, but, by and large, there is a lot of productive use now where small entrepreneurs are benefiting.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Rahul Chandra, Managing Director at Arkam Ventures
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