1Mby1M Virtual Accelerator Investor Forum: With Anirudh Damani, Managing Partner at Artha Venture Fund (Part 2)

Sramana Mitra: Is your portfolio all India-born companies?

Anirudh Damani: Out of the 27 we’ve done from the fund, 26 are domiciled in India. One is domiciled in the US but it’s primarily an Indian business selling to the world. In terms of sales, 25% of our portfolio sales happen outside the country, but most of the companies are based in India.

Sramana Mitra: I assume the B2B SaaS strategy is global SaaS companies.

Anirudh Damani: Absolutely. 25% of the sales are dominated by companies that are B2B SaaS selling to the world. What’s been interesting is also the direct-to-consumer front. We’ve had a couple of brands that are now getting orders from the US and Europe. One of our EdTech platforms is called HobSpace.

It’s probably the world’s number one platform for learning chess online for children. 80% of their sales is from overseas. It’s one-to-one coaching. We’re seeing some early traction in those kinds of plays. It’s fairly interesting. Probably 80% of our global sales in the portfolio are coming from the B2B SaaS platforms.

Sramana Mitra: Let’s do a few case studies of companies you have invested in. As you’re talking about them, talk about how you encountered them and at what stage. What was it about them that convinced you to write that first check?

I want to start with your pre-Artha days when you were doing pure angel investments. What kind of companies were you investing in? What was that early experience like? The reason I want to go there is, with your commentary, I want to trace the journey of the Indian venture capital world as well.

Anirudh Damani: I went to college to study Computer Science. After my first two semesters, I realized I wasn’t built to write code. I’m in no way a techie. Most of the businesses I have invested in are tech-enabled startups.

One thing I’ve always believed is since I don’t understand the technology side, I always seek from the founder their brilliance in taking a very complex concept and making it very easy for me to understand. If a founder cannot explain their business to me within five minutes, usually that founder doesn’t understand the business himself. That’s why it’s very important for me what the actual business you’re in is. Many people think it’s a food business, but it’s actually a real estate business.

A very good example is OYO Rooms. I was a first-round investor in that company. Ritesh was 18 years old and had dropped out of college. Back in 2012, dropping out of college in India was a big taboo. Parents were not okay with that. Things have changed.

There’s this platform called Airbnb that’s going extremely well in India and overseas. But what’s happening is that when you’re somebody who frequently travels for work and wants a standardized experience across India, it’s a very difficult experience to find. For a 2-star hotel, that experience is broken. What constitutes a 2-star property in Bombay would be very different from a 2-star property in Delhi.

He was very successful in doing that and found a bigger niche to go after the 2-star hotel space and start standardizing independently-run hotels by branding them as OYO Rooms by coming up with a very simple thesis saying, “I’m going to provide you with a clean room, clean breakfast, and free WiFi. Everything is a plus.” You realize the value of experience.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Anirudh Damani, Managing Partner at Artha Venture Fund
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