1Mby1M Virtual Accelerator Investor Forum: With Utsav Somani of AngelList India (Part 4)

Sramana Mitra: What else is interesting in your structure that is worth discussing that I have not discussed with you yet?

Utsav Somani: I think you’ve pretty much covered everything. There are some really good companies coming out of India.

Sramana Mitra: Can you talk about them?

Utsav Somani: It’s too early to be disclosing some names. I can talk about the first one which is a middleware company that’s doing Blockchain-based API for companies to quickly deploy Blockchain government systems in

their organization. It has nothing to do with crypto currency but actually deals with the real Blockchain technology.

Sramana Mitra: There’s a lot of Blockchain startups coming out right now. You said you’re seeing a lot of FinTech in your deal flow. What is the regulatory environment in India? What are the signals that you’re picking up from the regulatory environment?

Utsav Somani: FinTech is one of the spaces which has caught the most attention. It’s also got government intervention with the government launching their own National Payment Corporation. When WhatsApp launched their own peer-to-peer payment system, it created some buzz.

Payment is a super hot market in India. Numbers are not that favorable when it comes to credit cards. Out of the population of over one billion, there are only 20 million unique credit cards. We are going to skip the credit card generation and go to the space where people are transacting more in a peer-to-peer fashion. Some of the large companies are demonstrating that.

Sramana Mitra: Besides payment in the early stage FinTech startups, what other types of applications are you seeing? What other types of use cases are people going for? I know lending is one of them.

Utsav Somani: Lending is one of them. We’ve done one company which is doing the other side of the equation – collections. We’ve done a new banking system. It’s funded by one of the largest banks in the country. They’re trying to help entrepreneurs and small to medium-sized businesses. 95% of businesses in India are SMEs. They’re trying to solve problems for that.

GST is a goods and service tax reform, which is trying to create a unified tax system in the country. It has created a lot of teething problems. We’ve seen some solutions for that. Clear Tax is doing really well. It was a Y Combinator-funded company. The first wave of companies was definitely trying to copy what happened in the US. Currently, they’re trying to solve Indian problems.

Sramana Mitra: I started covering startups in India back in 2005. At that time, there was hardly any product startup. We took it upon ourselves to promote product startups. That started happening around the end of the decade and the beginning of this decade. That’s where the Freshdesks and all that came from.

There was a lot of concept arbitrage in the beginning. Now there are more original ideas. I was encouraged to see a consumer brand company in your deal flow because I think there is a real opportunity for building consumer brands using all the different things that have happened. Not just India-facing consumer brands but there are also opportunities for doing global-facing consumer brands.

Utsav Somani: True. One of the largest global B2C companies to come out of India is Zomato. India is a very aspirational market. People like to spend to show off. There is this level of aspiration spending which lots of brands are trying to go for. That’s a very interesting CPG segment to go after.

Sramana Mitra: That is true about all societies, especially societies that are coming of age. There is a desire to show off.

Utsav Somani: There’s also desire for quality.

Sramana Mitra: That’s different. Luxury brands do very well in China because of the desire to show off. We’ve covered quite a bit of ground. Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Utsav Somani of AngelList India
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