Deep-Tech Startups Building Globally Innovative
In an interview with BW Businessworld, Shyam Menon is Partner and Co-Founder of Bharat Innovation Fund and Chief Growth Officer at CIIE.CO. highlights his thoughts on deep-tech startups in India, entrepreneurial ecosystem, global-bound ventures, Indian startup ecosystem, and more. Excerpts:
Q1) What was the thought behind the launch of the Bharat Innovation Fund?
We envisioned and created the Bharat Fund platform as an early-stage focussed commercial private venture-investing platform to invest in game-changing technology-led solutions from and for India - across emerging themes like deep-tech, inclusion-tech and climate-change, among others.
The first theme that we wanted to catalyze was deep-tech from India - and launched our first fund i.e. Bharat Innovation Fund. We believe, just like the 2000s saw the growth of IT/software-service driven ventures and the 2010s saw the growth of consumer internet-led solutions, the 2020s will see India produce deep-tech, IP-led and product-focused startups. India’s talent, data and cost advantage makes it uniquely poised to become the global cradle of deep-tech innovations - leveraging themes like AI/ML, robotics, biotech, among others.
Bharat Innovation Fund invests in pre-Series-A and Series-A stages with the goal of building these globally-relevant companies of consequence from India. Our second fund, Bharat Inclusion Seedfund, complements the Bharat Innovation Fund, by backing seed and pre-Series-A startups leveraging digitization to solve problems of India’s masses.
Q2) How do you help entrepreneurs?
The Bharat team presently manages $100 mn across multiple investment vehicles and is closely affiliated with and complements the seed-stage incubation and acceleration work carried out by CIIE.CO.
Bharat Innovation Fund provides scale-up support and equity funding of upto $3-4mn in our first check to select deep-tech startups emerging from the incubation work at CIIE.CO, as well as from across the Indian entrepreneurial ecosystem. We believe in supporting these ventures very early in their life-cycle and continuing our support to them across rounds. For example, we led the pre-Series-A round of emotion-intelligence startup Entropik in 2018 with a sub $1 mn check - and doubled-down during FalconEdge-led $8mn Series-A round. In industrial-automation focussed Detect Technologies, CIIE.CO incubated and backed the venture with a seed-check, before Bharat Innovation Fund supported it further in its Series-A round. Bharat Innovation Fund and CIIE.CO are hence uniquely positioned on the capital requirements for deep-tech startups - starting from a small check size of INR 1 crore to INR 25 crores check size, and subsequent follow-ons to deep-tech entrepreneurs at early-stages.
We believe it takes more than capital to support these fledgling global-bound ventures. We leverage our people, capital, vast networks and deep domain expertise to help build these transformative companies. Our Partners as well as our hand-picked investors provide strong global networks, know-how and expertise to our entrepreneurs as they explore capturing new markets.
Q3) Which are the sectors of focus at Bharat Innovation Fund and why?
We look for deep-tech startups building globally innovative IP-based technology from India. We are a sector-agnostic investor - and willing to back ventures disrupting traditional sectors and creating new ones. Our investments so far have been in areas like emotion AI, immuno-oncology, Augmented Reality (AR), Natural Language Generation (NLG), AI in cybersecurity, computer vision, etc. While the majority of our investments have been B2B in nature, in sectors like healthcare and education we are open to backing entrepreneurs creating game-changing solutions for consumers.
We are actively looking for disruptive entrepreneurs in the healthcare space solving large unsolved problems through the use of data and AI, especially in the post-Covid era.
Q4) How important is it to be a tech-based business, especially in India?
Covid has emphasized the need and opportunity for every business to be a tech-enabled business. Even as a traditional business, today you need extensive use of technology to design your offering, to get customer feedback, and distribute it effortlessly and at low cost to your end customers. While use of technology is fast becoming the de facto way of business, adding deep-tech elements like AI/ML, industrial automation or robotics allows the business to build a sustainable competitive edge by leveraging data, low-cost manufacturing, among others.
Q5) What process does the Bharat Innovation Fund follow for Investments?
To begin with, we like to align ourselves with the entrepreneurs’ vision and capabilities to solve large unsolved problems, disrupt existing markets and create new ones. We believe markets and teams are the single biggest determinants of success - and we therefore prioritize our analysis of the same. Given the deep-tech focus, we dig deep into the technology’s uniqueness, defensible moats and how easy or difficult to replicate - and its ability to serve the end customer at a much lower cost or more efficiently or do something that was completely unimaginable thus far. We believe we have to play an active role in helping these ventures become companies of consequence, and our ability to enable this journey also plays an active role in our decision-making.
Q6) India is a startup hub, how difficult is it for investors to choose the right venture to invest in?
There is no shortage of opportunities in the Indian startup ecosystem and we should all be immensely proud of the incredible job being done by the local entrepreneurs. However choosing a potential investment is never easy, we believe in sticking to our investment thesis, doing the rigorous groundwork and taking decisions while not getting swayed by the most recent trends in the ecosystem.
Q7) Being an early-stage investor what are your expectations from startups?
We believe India with its transformational entrepreneurs are producing globally competitive and disruptive solutions for global challenges. These ventures can be game-changers not only in the Indian context - but also emerge as dominant leaders globally.
We expect the startup founders and teams to be passionate and do their best - always focus on tech differentiation and customer-centricity. They need to understand the long term nature of the startup journey, be willing to listen and learn from market feedback and incorporate learnings into their evolving product/solution iterations.
Q8) Could you Briefly introduce the partners of Bharat Innovation Fund?
Bharat Fund has 5 partners that bring complementary skill sets of incubation/acceleration, building massively scalable tech products, deep-tech investing, and operating experience, across multiple sectors and geographies.
Kunal brings significant early-stage investing experience to Bharat Innovation Fund, having co-founded Infuse Ventures (India's first sustainability and cleantech-focused0 (VC) and CIIE.CO. He also co-founded Sarvajal and has had prior stints at Citibank and American Express. The IIT Madras and IIM Ahmedabad educated Kunal serves on the Government of India’s National Startup Advisory Council.
Shyam brings significant global tech-landscape understanding and networks having worked at London-based Conduit Ventures, Singapore-based Nadathur Holdings, World Bank and Lawrence Berkeley National Laboratory in the US. He was a materials researcher at two hydrogen fuel cell startups in the US. Prior to Bharat Innovation Fund, he co-founded Infuse Ventures with Kunal.
Somshubro Pal Choudhury
Som brings strong corporate networks and scale-up expertise to Bharat Innovation Fund. Previously, IIT Kharagpur and Wharton-alum Som was the Managing Director of Analog Devices India, a global semiconductor company headquartered in Boston and spent two decades in Silicon Valley in various senior management roles in tech businesses including Netgear and Cadence Engineering.
Ashwin is one of the most experienced deep-tech investor in India having co-founded, run and exited the India Innovation Fund, an early-stage deep-tech venture capital fund, promoted by
NASSCOM in 2010. He brings strong engineering and business experience from his time at Maersk and Wipro.
Sanjay brings strong technology, product management and engineering experience to Bharat Innovation Fund. Prior to joining Bharat Innovation Fund, Sanjay was Chief Product Manager at Aadhaar. Previously, Sanjay was a product head at Google India, engineer at Sun Microsystems and co-founder of Novopay. The IIT Mumbai and UCLA-educated Sanjay, is also a volunteer with iSPIRT and has played an active role in the creation of the India Stack, Open API, and Cashless teams.
Q9) What is the role of IIM Ahmedabad and CIIE.CO in the establishment of Bharat Innovation Fund?
Bharat Fund is a part of The Innovation Continuum at CIIE.CO - which includes other complementary support like incubation, acceleration, seed-investing and research. Through this suite of support, CIIE.CO provides a one-stop solution for early-stage ventures - with Bharat Innovation Fund being the deep-tech scale-up capital vehicle of this continuum. Headquartered at IIM Ahmedabad, CIIE.CO and all initiatives within The Innovation Continuum, leverages strong training support, networks, business know-how and governance oversight of IIM Ahmedabad and its faculty to support entrepreneurs in India.
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