Page 71 - Forbes - India (January 2020)

anand rajaraman

(AI) working together to make better India started happening for us around way round. We fixate on specific
decisions and not in isolation. You 2017-18. Jio had launched. We didn’t companies as opposed to themes.
train the AI on some data, but it is consciously say we wanted to be in We are not thesis-driven at all.
completely blind to what else is going India. As a fund, our algorithms pulled
on in the world. Humans are good us here. They were showing a lot Q What are the lessons learnt
at broad vision. It’s a combination. of companies in different segments from investing in India?
with good adoptions. Companies in In India, things always take longer
Q While everybody talks about the short video space. A lot of growth than you think. The regulations
data being the new oil, do all in fintech and vernacular languages. change, so companies have to
companies know how to do Rural ecommerce is another adapt to those things, which
something meaningful with the interesting idea. With Jio, it looks doesn’t happen as often in the
data they are sitting on? like the market can be much bigger. US. Sometimes, the regulatory
This whole data thing started way In terms of sector and spaces, changes create opportunities.
back in the 1990s. There was no serving the second and third tier That’s an interesting learning that
World Wide Web, but companies cities, serving the non-English user whenever there is some kind of a
were using their own data to make base, both in terms of entertainment change, that can be an opportunity
better decisions. At the point, data and communication, commerce, for an interesting company.
was internal and private. The second interest us. Fintech is going
phase happened when World Wide through some issues, but we are Q How comfortable are you
Web came around and there was so keeping a close watch. Health care with the valuations here?
much more public data available. as well. We are looking at B2B I don’t take private market valuations
That unleashed a wave of innovation. seriously because it is one investor’s
Companies were built on publicly belief of what the company is and
available data and the biggest success “India as a market not that of the overall market. It may
story is Google. The third era was can possibly or may not reflect any underlying
when social media came out and then support one or strength in the business. Massively 71
we had social data, which is kind of funded companies with big valuations
neither public nor private data. probably two do fail as well. In the first wave
The new set of data that companies big ecommerce of ecommerce, many companies
are trying to get are through trained companies. The raised lots of capital and they didn’t
machine learning models. end up going anywhere. Private
There is an interesting dynamic market is just not market valuations should be taken
called network effects, which big enough.” with a pinch of salt. Only when a
create lock-ins that make it hard for company goes public, you know
competitors to enter. When you are if the valuation is real or not.
an early entrant, you might put out
a very ordinary product. But since Q Are investors more inclined
you are the first product, people start software as a service for Indian to back business model
using it and when they do, you gather companies with a global market. innovations while others get
usage data and you can use that to sidelined as science projects?
build better models and improve the Q Data may guide you to sectors There are companies with good
product. This is a network effect and where a lot of companies are technology that have been built. It
when this starts rolling, it becomes coming up or money is going is right to say that technology alone
very hard for a new entrant to come in? How do you make sure that is not enough. In the early stages, I
into the market because they don’t you don’t enter a bubble? won’t know the size of the market,
have this usage data to make their We are focussed on specific which is okay. We want a technology
products as good. That is what companies and their numbers and to be innovative and the adoption
exactly happened in case of search. execution, as opposed to the overall has to solve a real customer pain
The market leaders who have this ecosystem. For us, the themes come point and cause disruption in the
network effect going have an edge. bottom up. We look at the companies, market. Clearly, there are going to
get excited by them and then we see be science projects and there are
Q You were late in entering if the company is part of a theme going to be some that will solve
India. Why, and what interesting or whatever. Many investors are interesting pain points and those
opportunities did you spot here? thesis-driven. We are the other are the ones that we will back.

january 31, 2020 • foRbes IndIA