Blume Ventures has emerged the most active technology investor in India between 2012 and 2017, according to CB Insights. Disruption? Sanjay Nath has built up to this moment for a while now. Nath, Blume Ventures’ co-founder and managing partner, first honed his skills in the business when he helped his father build a company which eventually went on to attain the status of a unicorn.
Nath’s 15 years of work experience ran across a mix of strategy consulting, product marketing and entrepreneurial roles, mainly in the US and India. Blume Ventures evolved out of those brushes with innovation and entrepreneurship. “During the mid-1990s, I helped my father Dileep Nath while he co-founded Kanbay Software (Nasdaq IPO in 2004, acquired by Capgemini in 2006).”
Then Nath met Karthik Reddy, who would later become his co-founding partner at Blume. They first met as members of the Mumbai Angels (the pioneering angel investor network), where Sanjay had already made a start as an early stage angel with InMobi, a global mobile advertising and discovery platform.
“I eventually moved back from San Francisco to India in the fall of 2010. Karthik and I launched our flagship Blume Fund I of $20 million in 2011,” recalls Nath. “Our burning mission when we started Blume in 2011 was to target the white space of ‘angel capital’, but with an institutional face”.
To raise their first fund − a domestic, rupee-only fund – Sanjay and his team made more than 500 pitches. Among the investors they approached was a big high net worth individual (HNI) who had asked, “What if I don’t want to pay you the last tranche as an LP (limited partner) or I change my mind in the middle of the investment drawdown period?” Nath considers all experiences valuable and this one was particularly so.
Another amazing revelation was when a banker from the United States asked him, “So, you’re sitting in these coffee shops and hearing the newest ideas from 25-year-old startup founders – that’s your job?” Nath muses, “Today, given that we’re well into our 40s, one of the most incredible parts of Blume is we learn every day from a diverse base of entrepreneurs; some a good 15-20 years younger! It’s why we come to work every single day.”
Changing the industry
Nath firmly believes there’s still much to be done, but that Blume’s existence had filled the large funding void between angel investors and traditional Series A venture capitalists (VCs) that younger startups had often found hard to traverse. “Blume’s presence has been instrumental in bridging this funding gap from $250K to $1 million – making us one of the first ports of call for the first institutional cheque.”
“As founder-VCs ourselves, the ‘founder-first’ ethos has been driven deep into Blume’s fabric. While common in the (Silicon) Valley, in India the PE culture of majority owned investments is very different,” says Nath. “Some other VCs may also share this philosophy, but we’re proud that being founder-first has been a tenet of Blume from Day One”.