Global temperatures are reaching unprecedented highs. Our natural systems must contend with novel conditions that change more quickly than their pace of adaptation — but the reality is that they’re not keeping up. Global food supplies are in decline as droughts and floods impact agricultural output. Productivity of even our staple crops is under threat as low lying latitudes face the brunt of the effects of climate change. At the same time, there are pressures on yields to feed growing populations and deliver nutritional health while catering to consumer preferences. Our natural systems need a boost.

One of the tools that can aid climate adaptation and improve agricultural productivity is next generation seeds. Computational advances along with falling costs of genetic sequencing are playing a big role in seed research and production.

The $60 billion dollar seed market is ripe for disruption with precision breeding tools. Molecular breeding is expected to reach $15 billion dollars in the next 5 years. Today, most seed breeders follow a manual R&D process for the identification of novel seed varieties. The breeding systems are based on phenotypes (physically observable characteristics) which requires a long-winded process that can take 10–15 years from concept to commercialization. The introduction of gene editing tools such as CRISPR and CAS alongside advances in computing are changing how we identify new seeds and the time and cost to take them to market.

This is why we’re excited about Piatrika Biosystems.

Piatrika is a bioinformatics platform going a step deeper to assist seed manufacturers in the discovery, development and deployment of advanced seed varieties. The company runs computational biology algorithms on crop genotypes (genetic characteristics) and phenotypes to determine the hybridization of traits. Piatrika accelerates the seed discovery process by rapidly identifying desirable traits including those that can improve yield, boost resistance to disease and weather changing temperatures.

The company expects to reduce the overall product delivery timeline by 50% while simultaneously reducing costs by about the same. On top of available data sets, Piatrika will collate local data through sensors and weather information, enabling them to work in various micro-climates. For places like India, with an array of climatic zones, this type of localized data and delivery is essential. In the face of climate change, innovations like Piatrika’s are becoming necessary globally.

When we met Vasu and Phani, we were immediately impressed by the depth of their domain knowledge and commitment to challenging business as usual. Vasu comes with two decades of deep domain expertise in plant genomics and bioinformatics having worked at the European Bioinformatics Institute and KisanHub. Phani, on the other hand, comes with experience in managing the commercial front-end of delivering technology solutions. Together, they make a formidable team.

We look forward to working with Piatrika Biosystems to build tools for next generation seeds.

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Why we Invested in Piatrika was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Take your pick of supply chains across India, and you’ll find similar challenges: fragmentation, informal networks with multiple layers of middlemen, poor price discovery, substandard quality assurance and inefficient logistics. When we dug into the agri-processing industry, expected to be valued at half a trillion by 2025, we found that the system was complex at best and a mess at worst.

Agri-processors exist along the spectrum of both food and non-food supply chains to refine raw materials such as pulses, oil seeds, and fibers into consumable products. This process is far from linear. There are currently over 2.5 million agri-processing units, many of whom are not registered. Depending on their size, capabilities and market linkages, they engage in both buy and sell transactions. Most of this happens, well, let’s say — informally.

Traders we spoke with revealed just how little information is available while doing transactions. For example, typically when a buyer agrees to a deal, they send their associates to physically inspect a seller’s warehouse to examine the goods. The seller then dispatches a loaded truck, again with trusted associates, to deliver the goods and collect the cash. Each party relying on the other’s word and drawing on resources at a moment’s notice.

The information gap impedes more than trust and logistics though, it also undermines a fundamental need for any growing business — access to working capital. Without the relevant industry data, agri-processors pursue informal financing options which come with low caps and high costs. Ultimately, the end customer is saddled with a higher price that doesn’t correlate with quality.

There are, and have been, critical problems in the agri-processing market for a long time. Inertia has sustained business as usual.

But now, at the tailwind of e-commerce penetration, supply chains are transforming. Technology-led platforms have disrupted the industry downstream. Emerging consumer preferences, amplified by the ease of access provided by these platforms, is generating higher demand for agri-processors midstream. With greater availability of consumption data, access to digital tools and increased linkages to distributors, agri-processors feel the need for change.

Agrizy is fulfilling this need. Agrizy is building a tech platform to provide end-to-end fulfillment for agri-processors. By enabling transactions through their platform, Agrizy will be able to optimize order processing, provide demand and supply predictions, optimize logistics for fulfillment and enable access to finance.

We met co-founders Vicky and Saket at India Pitch Fest — our signature startup pitch competition. We found them to be passionate about unlocking this massive opportunity. Both founders hail from agri-processing family backgrounds, giving them rich networks and insights into the market. They also come with a strong mix of experiences across operations, finance, and logistics from Blackbuck, Bizongo and Zoomcar. We believe that the founding team is well positioned to crack this opportunity.

At Ankur, we are always excited about teams creating systemic change in large untapped markets. We look forward to working with the Agrizy team to digitalize the agri-processing value chain.

Why we invested in Agrizy was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’ve well understood the need to achieve net zero emissions to avert the negative effects of climate change — the question is how quickly we can get there. While structural impediments keep us from diverting from fossil fuels entirely, we will see a rapid uptake of renewables in the decade to come. India itself has committed to meeting 50% of its electricity requirements from renewable energy sources by 2030 and reaching net zero by 2070.

But is it fast enough? The Intergovernmental Panel on Climate Change (IPCC) insists that we must reach net zero — a balance between the amount of greenhouse gas produced and the amount removed from the atmosphere — by 2050 to meaningfully curb rising global temperatures. To get there, we need unprecedented technological transformation while balancing the need to provide everyone access to clean, affordable and reliable energy.

Clean, renewable energy has the potential to meet our global energy needs which stands somewhere close to 23000 kWh per capita, that’s equivalent to burning more than 2300 liters of petrol. The cost of installing renewables has dropped — to the point that solar is now cheaper than coal — but there remains inertia in following through with pre-existing fossil fuel infrastructure. Structural changes to diversify the global energy mix are slowly but surely progressing, but there are still inherent supply-demand challenges with renewable energy production and use. On the supply side, production capacity varies depending on various factors including the instrument, time, and location. On the other hand, while renewables have connoted limitless production capability, outputs may not balance consumption needs — again depending on time, location, and use. Hence, the fundamental issue here is reliability. Can we rely on renewables to power economic growth while counteracting carbon emissions?

If we are to overcome the twin challenges of climate change and energy for all, we need to innovate capabilities and efficiencies in energy management. This is where we see the case for investing in energy storage technologies.

What are energy storage technologies?

Energy storage technologies are vehicles to save electricity for later use. They can be classified based on their form and mechanism: electrochemical storage as in batteries, electrical storage as in supercapacitors (SCs), magnetic storage as in superconducting magnetic energy storage (SMES), kinetic storage as in pump hydro, and chemical storage as in hydrogen.

The application of each technology is driven primarily by power density and discharge duration. Power density refers to the net energy transferred by the system within a given period while discharge duration refers to the total time required for the system to release its stored energy.

Technologies with high power densities and moderate discharge durations lasting a few hours to a few days are generally used to store renewable energy for grid application. These include pumped hydro and compressed air energy storage systems. Technologies with moderate to high-power densities and low discharge durations lasting only a few minutes are used to manage variability in energy production such as voltage and frequency regulations. These include lead acid batteries, lithium-ion batteries, nickel-cadmium batteries, redox flow batteries, flywheels, and supercapacitors. Some battery systems which have lower power densities and moderate discharge durations are used in behind the meter applications such as home solar systems, EV charging systems, and data centers. The technologies and their applications are visualized in the graph below.

Among the various energy storage technologies, electrochemical systems or batteries span the widest spectrum of power outputs from 1 kW to more than 100 MW. This makes them suitable for a multitude of applications ranging from mobile electric vehicles to stationary storage of renewable energy. For mobility, moderate to high power densities with discharge rates of a few hours can be used. In contrast, similar power densities with much lower discharge rates ranging from a few seconds to a minute can be used for stationary operational applications.

Boom in demand for stationary batteries

The rise of EV adoption has boosted the demand for mobile batteries. Given the application’s proximity to consumers and ensuing short product feedback cycle, innovation has flourished in the mobility space. Stationary storage has been less sexy. Mature mechanical systems such as pumped hydro are mostly amenable to project financing. However, recent improvements in battery energy outputs, life cycles and the decrease in production costs are making stationary storage more attractive for innovation hungry capital. In fact, demand for stationary solutions is expected to grow 125 times by 2040 — outpacing advanced batteries for mobility.

The stationary battery market is seeing capital injected by both the public and private sectors. In 2020, total investment into the stationary battery market was $5.5 billion, up more than 40% from the previous year. Of this, 60% of the investments went into grid scale batteries, while behind-the-meter systems claimed the remaining portion.

Lithium, the most sought-after material component in mobile batteries, is equally popular in stationary given the maturity of the technology. However, they are not necessarily the best fit for stationary application, especially on the grid. While capital has flown predominantly into lithium-ion, we’re starting to see a shift in VC funding towards new materials. Globally, companies such as Form Energy (iron-air batteries), Natron (sodium-ion batteries), and Highview Power (cool-air batteries) have raised large sums from the likes of Energy Impact Partners, Temasek, The Engine, Sumitomo Heavy Industries, Breakthrough Energy Ventures, and Evok Innovations. As investments grow, the challenge for these new technologies will lie in overcoming supply chain constraints, managing recyclability, and scaling devices in response to adoption trends.

Zooming into India, the public sector is playing a big part in building out the battery market. The government has allocated over $2.46 billion in incentives to support the development of advanced chemistry batteries over the next 5 years. The incentives aim to boost manufacturing capabilities with a target of producing 50 GWh Advance Chemistry Cells (ACC) such as lithium-ion batteries and 5 GWh of upcoming niche ACC such as hydrogen fuel cells.

Private investments are beginning to crowd in. Large incumbent energy companies are making their bets. In mid-2021, Tata Power announced plans to set up a 50 MWh battery manufacturing plant. Reliance Industries also established a new subsidiary to build 100 GW of renewable energy capacity. Under Reliance New Energy Solar Ltd, the company acquired Faradion, known for successfully commercializing their sodium-ion battery technology. While large energy players are financing the scale-up of technologies, private venture capitals are slowly catching the wind. VCs such as Ankur Capital, Petronas Ventures, Exfinity Venture Partners have started investing in early-stage startups working on advanced battery technologies.

Below we highlight a handful of recent investments into battery technology startups in India.

Underlying the growth of stationary

There are four favorable conditions pushing investments into stationary battery technologies.

1) Policy reforms key in on storage: At the onset of the energy transition, the focus of government policy was very much on promoting renewables. As we increasingly integrate renewables into the mix, the discussion has shifted towards streamlining the system. Around the world, policies have been oriented to energy storage more specifically. In the US, the Federal Energy Regulatory Commission (FERC) 841 has made storage an important part of the energy market. The European Union has also included energy storage as part of the clean energy for all European Package. Similarly, in India, domestic manufacturing of energy storage devices is being promoted through Preferential Market Access.

2) Boost in renewable energy generation capacity: The deployment and hence capacity of solar PV and wind generation has increased dramatically — up 50% and 90% respectively in 2020. Overall, the production capacity of renewables grew by over 45% from 2019 to 2020, adding 280GW into global supply. The increased capacity in tandem with the aforementioned management challenges is critical in driving battery development and adoption.

Per data from IBEF, India has 101.53 GW of renewable energy capacity with a target of 450 GW by 2030. The country has already seen investments of more than $42 billion in the renewable energy sector since 2014 and ranked 3rd in the world for energy investments in 2020.

4) Decrease in costs as economies of scale kick in: The cost of developing batteries has been on a downward curve over the last 10 years, driven primarily by the rise in demand for EVs. The average price of lithium batteries has plunged from $1191/kWh in 2010 to around $137/kWh in 2020. This is expected to go down another 50–60% by 2030 as EVs shift from a novelty to the norm. Other materials will similarly evolve to meet demands for stationary application.

Capital cost of energies is decreasing and over the next decade, electrochemical batteries such as lithium-ion, lithium-metal, zinc flow batteries will become cheaper than energy stored in natural gas well as other existing technologies.

4) Rise in patent applications: The number of patent applications for energy storage technologies crossed more than 7000 in 2018, up 500% since 2008. The combined total for patents in other technologies grew only 50% in the same time period. Of the mentioned 7000 patents, around 88% were related to inventions in electrochemical battery technology. While lithium-ion has been the darling of R&D which subsequently brought down its manufacturing costs, increasing interest in other materials are anticipated to have a similar impact on the economics.

These innovations have coincided with a drastic decrease in the cost of lithium-ion batteries, highlighting the importance of these extensive research activities in commercializing advance battery technologies.

The path ahead

While it appears an opportune time to invest in batteries, it’s important to keep in mind that it’s a challenging market to nail.

In this market, there is no one size fits all nor winner takes all. There is a wide range of energy storage technologies and they come with their own strengths and weaknesses. At the end of the day, deep tech is what it is because of challenges in commercialization. To succeed, there’s more to it than injecting capital. Many aspirants have called it quits. Below we outline a few case studies to learn from their failures.

Scaling up battery technologies is capital intensive and comes with risks in raw material procurement, technology transfer, and capacity utilization among others. Companies currently inching towards commercialization will need to find solutions for these to become a success. Long feedback loops in deep tech mean that entrepreneurs and investors must be in it for the long haul with a clear line of sight.

All in all, the decade ahead promises to be an exciting one for energy storage technologies, especially batteries. Opportunities in the off grid and on grid storage of energy will require these technologies to become cost effective, improve their efficiencies, and increase their lifetime value. Both the public and private sectors have a role to play in the energy transition as we solve for both minimizing the effects of climate change while ensuring energy for all. Early-stage investments from private venture capitals will support the initial research, technology development and commercialization.

Energy Storage: The opportunities in the next decade was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

I have always shopped locally for things I need… a charger, my groceries, medicines, shoes… but that’s been slipping. Yes I am part of the 45% growth that India is seeing for online retail. The 70 million-odd Small and Medium Businesses (SMBs) that sell products and services across the country have been hit by a wave of digital-first distribution platforms that offer delivery at your doorstep. Can technology enable the SMBs to do the same, i.e., leverage their proximity to the customer to augment their edge?

While many SMBs conduct their business on the phone and WhatsApp, solutions to optimise their sales and operations remain limited. One of the things we have learned, especially when working with small businesses, is that they want a complete solution and not a single product, and so you see the phrase ‘full-stack” applied to address this. We were excited about the full-stack solution that Wasabi is using to build its business and bring in digital productivity tools for small businesses. Their offering is a single layer platform that will serve the needs of such businesses, from customer acquisition and maintenance, to payments and business management. To top it all, it’s on a tool that the business is already used to — WhatsApp!

The hallmark of a good product is simplicity, delivering a solution that is actually far from easy. In Wasabi we saw a simple product that addressed complex workflows. Most SMB’s have many different sources of customers all of who are given very individualized attention and this holds true on their supplier base as well. Using a tool that has already gained traction and building on top of it to offer solutions to businesses made complete sense; take out the friction and build a world-class product. No new apps and no new skills to learn, just simplification and a single tool to drive business growth.

Reimagining how SMBs do business is an ambitious vision, but we believe that Pradeep and Nikhil have the requisite experience and complement each other well to realise this. Pradeep has many stints in consumer-facing businesses, digital commerce and payments; Ola, Flipkart and PhonePe where he assumed multiple roles, from launching new verticals to strategy. At PhonePe, SMBs was the beat, and Pradeep acquired first-hand experience of the challenges and the strategies for conversion. Nikhil and Pradeep met at Flipkart, where Nikhil led various product build-outs. Nikhil also has set up several ventures before in content media and social shopping. The latter he sold to Glow Road before embarking on Wasabi.

At Ankur we are always stoked about solutions for large, underserved markets that overlap with impacting the next billion, and Wasabi fits nicely into that thesis. SMBs are the backbone of the Indian economy, generating 30% of India’s GDP and employing approximately 120 million people. It is about time that technology comes in to upgrade and expand the influence and reach of this sector.

I am thrilled to announce that Ankur, along with 021 and many individuals who have been mentors to Pradeep and Nikhil in the past, have come together to support Wasabi in their pre Series A round. I look forward to an incredible journey with an incredible team.

Why we invested in Wasabi was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

As a fund investing in transformative tech that marries profit with planet good, we are excited by the future of aquaculture.

Man has been farming aquatic organisms for thousands of years. Romans farmed oysters around 500 BCE, the Chinese practised freshwater aquaculture some 1000 years earlier, mussel farming was developed in the 13th century, and artificial breeding was discovered in Germany in the 18th century. However, aquaculture has never been more relevant, when over just the last 50 years, the world population has doubled, as has the average consumption of seafood. Not only is it relevant, it is also the most sustainable source of protein. Aquaculture is one of the fastest growing and most sustainable forms of food production today.

The fact that we have woken up to its importance is evidenced by the brave innovations emerging from all four stages of the aquaculture production chain, from hatcheries and feed mills, from farms to processors. Investors like Amy Novoratz who back founders in this space today, draw a sharp contrast to 10 years back, when LPs couldn’t imagine a fish farm, to now, when they see 3 good investments every week!

An example of disruption at the hatchery level is a company called eFishery from Indonesia, the world’s largest archipelagic nation. It began as an IoT startup solving for smart feeding and overtime, and then integrated deeply with fish and shrimp farmers to also offer access to feed, financing and markets. eFishery works with thousands of fragmented farmers across Indonesia, and acts like a very large co-operative sans being one!

India’s equally unorganised market offered an opportunity to Utham Gowda, who started Captain Fresh in 2019 to aggregate supply and demand for freshwater fish, which forms 95% of India’s total fish consumption.

We believe that the latent demand for fish in India is mammoth, and as people move up the GDP curve, their consumption of fish will also increase sharply. Solutions like Utham’s, who target supply and demand matching, at scale, at the source, enforce structured behaviours in the industry. For the next level of evolution, we look forward to certification and accountability standards being imposed by regulators and markets to drive change. These interventions will enable traceability and trust without incremental costs. Global landscapes have also played out similarly. That said, price sensitivity remains a constant across geographies and markets.

Since fish eat fish, feed is another vital piece of the aquaculture puzzle. There are multiple innovative and sustainable fish feed methods in the market today, with algae, bacterial and insect protein leading the way. String Bio has come up with one such (bacterial) solution, by leveraging microbiology and chemistry in a fermentation process. It significantly improves the FCR and therefore, ROI, to farmers. While they are based in India, their solution is modular and can be used to produce enormous quantities at source, anywhere. Despite having a world-class, sustainable product, String Bio and other innovators struggle with systemic industry issues, such as poor adoption of new technologies, fragmentation ( 90% of farmers are small holders), and a lack of transparency; stemming from these are financing and market linkage problems.

We believe that marketplaces can help redesign small farm agriculture pretty quickly. Also, consolidation is a simplistic but compelling answer to generate substantial outcomes. It will lead to faster collaboration between different players in the value chain, and facilitate the coming together of yield and ecosystem. Digitisation by the likes of Utham and eFishery are a great step in the right direction. When customers evolve, qualities such as traceability will be demanded of those that supply.

As a fund investing in transformative tech that marries profit with planet good, we are excited by the future of aquaculture. Tremendous potential exists for forward-thinking companies looking at disease prevention, data mining, feed and genetics for answers to complex problems. Changing water quality and rising temperatures make animals more susceptible to disease, and while we have made big strides in land-based agriculture, we are lagging behind here. Aquaculture is perhaps one of the only areas where the power of data is highly underutilised, and from feed to labour practices, opportunities abound. In the feed space, it’s not so much about innovations, but bringing them to market at the right price. Genetics is an unexplored territory in this realm, and if fish is the future source of proteins, the impact of introducing superior genes is game-changing!

Given that Nature is so sensitive, what’s even more promising is that we can all benefit from each other’s successes.

If you are passionate about sustainable fish farming, and are innovating for the aquaculture supply chain, please reach out to us at info@ankurcapital.com

Thanks for all the fish! was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Team Ankur

The Office ran for 9 seasons and showcased many nuanced and maybe exaggerated scenes that happen in workplaces around the world all the time. It left us with many sweet, sweet nuggets of wisdom, and these takeaways are specifically for founders building world-class companies.

On communication — verbal and non verbal cues:

Watch your words — Do you remember Kelly and how annoying she was at Dunder Mifflin? Being a customer service representative does require someone to be a chatterbox I suppose, so let’s give her that! In one scene, she tells Michael, “I talk a lot so I have learned to tune myself out.” Don’t ever be that founder! Talking less is better than talking more, and what you can say in 3 mins should not be said in 5 mins. This is particularly important when one is pitching or fund-raising — hyperbole does cause ear damage. However, when as a founder, you are trying to bond with a teammate or lend a sympathetic ear, share everything you got.

Not all meetings are useful — How many times did Michael call for meetings? And how many were productive? In today’s overdone Zoom meeting culture, founders really have to ask themselves if there are clear takeaways and action items from a meeting. If a 5 min call will douse the fire or give an update, go for it. Do you remember how bored Stanley looked in half his meetings? If there is even one person looking that bored, then something is not right.

Make them short and crisp, with clear takeaways from every meeting!

On building a kickass culture:

Collateral beauty — The final scene of Season 9’s Finale cuts to Pam Beesly’s drawing of the (Dunder Mifflin) office and she says, “There’s a lot of beauty in ordinary things. Isn’t that kind of the point?”

For busy founders, this implies taking out time daily to celebrate the most amazing thing that happened in the company that day. Make it a practise and applaud who did it. On big days, it could be as amazing as a huge contract that your sales guy won. On bigger, a $100m raise! But on most days, it will be the everyday, non-glamorous things — say an interview conducted well by your HR, or a contract sent on time, or a delivery made despite the traffic.

Do it for 5 mins daily, publicly or privately, and see where it takes you. Happy employees are your ticket in this startup world.

The best ideas can come from unexpected places — Who would have thought that Warehouse Foreman Daryl would be a source of great ideas? When Dunder Mifflin gets acquired by Sabre, she gets a great idea by spending time with Daryl. It’s then that he’s brought into the office for regular meetings and asked for his opinion. Talk to your customers — not the person who bought it but the person who uses it; speak with different functions at multiple levels on what they think. Everyone’s voice matters if you choose to make it count.

Your priorities are not their priorities — Perhaps a hard one to swallow and probably one of the nice things Michael taught us was this: When Dunder Mifflin is acquired by Sabre, their founder spends a lot of time at the branch. This compels Michael and his team to stay late. After a few such late nights, Michael takes one for the team and starts staying late alone. And lets his team off the hook. Unlike a founder, most people work to live, they don’t live to work.

Most of the people who join you have different priorities than yours, and everyone is entitled to their own path to joy. Even if it’s something as simple as Pretzel Day, or the free food that Michael organises for his office on many social events! Recognise and respect their priorities.

If you are innovating for the next billion and are waiting for Season 10 of The Office as eagerly as we are, please write in to us at info@ankurcapital.com.

What Can Smart Founders Learn from The Office? was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

According to a November 2020 report of the Indian Brand Equity Foundation (IBEF), nearly a third of India’s GDP is contributed by 63 million micro, small and medium enterprises (MSMEs) engaged in manufacturing or services. Unfortunately, only 1/6th of these of these MSMEs are able to access credit from formal providers; a 2018 report by IFC — Intellecap estimated this credit gap at a staggering USD 340bn. Innovations that enable easy access to credit and other relevant financial products can help unlock the growth potential of these enterprises, with a big impact on the broader economy.

Existing financing mechanisms are largely based on credit extended by wholesalers/ distributors down the chain or informal financiers; for MSME borrowers, these sources are often insufficient/ unreliable, lack transparency, and come at a higher cost due to the limited balance sheet strength of partners. Institutional lenders have historically limited exposure to this segment due to challenges in accessing, underwriting and monitoring/ servicing borrowers reliably, and in a cost-effective manner, given the lack of reliable data/ formal documentation, and low-ticket sizes. While a crop of new ‘digital’ lenders has tried to address the segment in recent years, the extent of adoption remains low for a variety of reasons.

Rupifi is building a new-age, digitally-embedded finance platform that enables MSMEs to have easy access to appropriate financial products. Their solution addresses the key levers for unlocking this market — product/UX, partnerships needed for a seamless digital journey, and a strong risk management engine. The company’s products, like buy-now-pay-later, and cash advance, provide flexible credit solutions to address MSMEs’ recurring working capital needs, in contrast to the one-off, term loans offered by most lenders. The company is initially targeting the growing base of MSMEs that engage with online platforms — whether as buyers on B2B platforms, or as suppliers on B2C platforms. Rupifi leverages valuable data on MSMEs’ orders, transactions, and payments on the anchor platform, to offer suitable credit products through lending partners. Anchor platforms see value in partnering with Rupifi, since availability of working capital credit for an MSME usually leads to a significant boost in their transaction volume on the platform, which lenders see value in getting access to new customers, while optimising for risk and operating cost.

While the huge market gap clearly indicates the potential to build a large business in the space over the longer term, we are excited about the short-to-medium term prospects as well for a couple of reasons. First, the Covid pandemic has led to a surge in digitisation of MSMEs; with a significant proportion of adopters seeing strong growth, rather than just preservation of business volumes, the value proposition for digitisation has become clear. Second, policy direction and ecosystem-level initiatives, including the licencing of account aggregators (AA) for seamless consent and data-sharing, and the roll-out of the Open Credit Enablement Network (OCEN) framework, can create a paradigm shift in the ability to access, underwrite, onboard, and service customers with smaller ticket sizes.

Rupifi’s founders, Anubhav Jain, Ankit Singh, and Jawaid Iqbal, bring in high levels of skill and experience around all the three pillars of growth — product, risk management and partnerships & scaling — to capture this attractive opportunity. The high engagement model that Rupifi is targeting can not only create a clear edge for underwriting MSME borrowers (given the inherent volatility in business flows and high variance in credit behaviour), but also provide data for deepening customer relationships, and building out a broader, embedded financial services platform. With e-commerce taking strong root across verticals and geographical segments, including those that have been relatively unorganised and informal (small business, agri value chains, services like education and healthcare), the universe of platforms that will seek to embed financial product offerings and partner with players like Rupifi looks set to rise dramatically!

Why we invested in Rupifi was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

The need for optimising logistics in India has existed for a long time. Inefficiencies abound in all forms and factors — vehicles not being utilised to their full capacity, lack of reliable live traffic data, addresses as vague as “Behind Cantt Gurudwara” and roads being dug up without prior notice. The landscape for optimisation across the range of first and last mile is huge; and it is great to see founders pushing boundaries in an age-old space.

Companies operating in the long-haul space are aggregating supply and demand through tech enabled solutions and offering fleet optimisation solutions. On the macro level, it is saving India millions of dollars in fuel and other resources. Examples are Delhivery and Blackbuck. However, the challenge for an early stage fund with a thesis to invest in transformative tech such as ours, is that most innovators in the current first-mile and long-haul space are not asset-light tech disruptors, but companies that need considerably more capital that demonstrate their value proposition. While these companies are solving for key problem areas such as express parcel transportation, freight, reverse logistics and warehousing, which form the backbone of a sound business, the technology moats are initially low and correlated strongly with the company’s ability to raise the capital required in large quantities early on. Barriers to entry are limited and mostly a function of cash at hand in the short term, and the captive network interacting with the company in the long term. An example is telematics hardware.

That said, the recent acquisition of Primaseller by Delhivery allows them to offer a (diluted) network optimisation solution of sorts to (omnichannel) SME retailers, and shows an evolution in the space, and their mindset. In the West, network optimisation, which takes a bird’s eye view of the entire supply chain from factory to store, has been around for a while, and the space is ruled by the likes of SAP, Oracle, Llama Software. The case for a holistic solution of this nature is reinforced all the more today in India, when you study the transformation in supply chains. Omnichannel is on the rise, product development life cycles have shortened, and enterprises are setting up dark stores within the city to meet customer expectations better and faster. We are excited to see startups entering this space to test the markets, and believe that network optimisation has good potential in the near future.

Our search for other green pastures in the logistics space led us to IP-driven route optimisation. It has attracted a lot of positive attention from founders and investors alike. A catalyst for the proliferation of startups in route optimisation was ecommerce companies and the need to provide customers round-the-clock delivery. While the initial uptick by startups was merely to track delivery boys and their smoke breaks, the need for tracking evolved and took on complex nuances, such as dynamic route planning, as their GMVs grew. With competition on the rise, ecommerce companies have to differentiate themselves on speed of delivery to meet customer expectations. This was one of the bedrocks of Flipkart’s success.

For such new-age companies, a host of smart algos served by the likes of Locus, Loginext and Fareye have the answers. They crunch what you need to send, to whom, where, and in what order, as complex mathematical problems. Their use cases lend themselves to retail, ecommerce and home service providers (example — Tata Sky, Dr Lal Path Labs, Urban Clap).

The best-in-class organisations have started adopting solutions from these startups in India. Retail behemoth Unilever has been working with startup partners to tackle the Travelling Salesman problem. DHL likes to use them for geocoding. Walmart India notes a delta in their delivery fleet’s efficiency when applying these algos.

The caveat here (for us), is that the Indian market size for these savvy solution providers is limited, as SMEs are less willing to pay a high price for the service, which limits you to a select corporate enterprise user base. This has led to a push for these startups to move abroad. SE Asia’s problem statements in terms of improper addresses and information dissonance lend themselves (almost) perfectly to these use cases. More mature markets, say the US and Europe, where geocoding and both competition (in on-demand delivery) are easy, are not the best fit use cases for these algos. What seems to be selling there are home service provider applications and efficiencies at the warehousing level. Although this market is super huge, it is being tackled well by the current set of startups. And now it’s a matter of them proving scalability.

To sum up, pain points in logistics are covered well at the last-mile level and long-haul space (in terms of aggregation). That still leaves us with plenty of lacunae to solve for if one goes deep into a sector. For instance, from an agri point of view, there is again complexity in loads and routes at the first mile. We think that solutions that address those areas have a large scope. Also, bulk transportation of perishable products is a big opportunity. Warehouses across industries can use smart solutions to enable LIFO/FIFO systemically. With dark stores coming up within cities for large retailers, perhaps a predictive, demand-integrated, supply chain offering could be in the works. There are problems of logistics across verticals and sectors aching to be solved by smart entrepreneurs.

If you are a disruptor and want to work with us or have an opinion about the views expressed, please write into info@ankurcapital.com. We would love to have you optimise our (investment) ride!

Route-Optimise My Ride! was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

Growth rates define success for technology startups. They are designed to grow fast since they fill an existing need and their customers are ready for them. One can choose from a variety of channels, tactics and methodologies to scale good and fast in today’s hyper connected world. Companies such as gmail (with their invite only), Airbnb (with their Craigslist integration), hotmail (with their signature feature) and Netflix which boasts around 150mm paying subscribers made only 1 or 2 moves that were out of box yet they hold them to posterity. Closer to home, companies such as Flipkart, Razorpay and Cult applied winning growth philosophies and metrics. It is one thing to have a growth idea and quite another to give it wings and make it fly. We were joined by Harshil Mathur and Ankit Nagori in conversation with Rema for the 12th edition of Ankur Capital Dialogues and got some great insights into their respective growth journeys.

What can everyone in the b2c space learn from Ankit Nagori from his journeys of captaining Flipkart and more recently, Cult -

1. Figure out pockets of growth and excel in them — Who will buy your product and become an evangelist? How can you get the first 50 customers to convince the first 5000 to join your bandwagon? Think extreme customer delight and let their euphoria be your ultimate north star metric. The 3 pillars of delight to customers are Selection, Price and Service/Delivery. You have to have the best selection in the categories they entered. The 2nd pillar — price — the metrics have to be very clearly defined — to be the top 10 percentile in terms of lowest prices on the net. On delivery and this is where Flipkart laid down the holy grail for all ecommerce companies, they pioneered deliveries within 48 hours.
2. Master one category before adding another one — Be damn good at one area before entering another. In dance parlance, you want to master the side split on the ground before doing it in the air like a butterfly. In b2c business parlance, founders should drive business in a category, become the best they can at it and then only think of adding other categories.
3. Tailwinds matter and how — Could ecommerce or foodtech have been a success had India not been ready to order online? While finding big problems is important, it is critical to check whether the appetite and infrastructure to support your next big idea exist. As a contemporary example — if India didn’t offer the cheapest data and smartphones in the world, how would innovating for farmers to take them on the cloud help? If schools and colleges had not been forced shut thanks to Covid 19, would edtech see the kind of adoption it is riding on today?
4. Don’t spend monies on digital marketing to get the first 90% of your customer base — With digital marketing becoming more expensive as the day goes by (cause that’s how bigtech earn their ever growing revenues), founders should never commit the mistake of acquiring customers online by paying for them. To cross the bridge for the last 10%, sure. Once you impose this restriction/rule upon yourself, you are forced to be creative and immersed in the process of selling firsthand, which is the crux of any good founder.
5. Spend adequate (>30%) of your time in the market you are building for — This although a no brainer, seems elusive to many, many founders building for the next billion. The next billion is not limited to your maid in Bombay or Bangalore, it includes the homemaker sitting in Chandigarh wanting to supplement her income, it includes the sweet shop in Bareilly that runs 14 franchises, it includes the proprietor of Kanpur’s oldest tannery. If you are building an app for the farmer, spend time with the farmer. Live days in his/her life. Figure out a problem you want to solve for him and deliver euphoria when you do.
6. Open an experiential store where possible — Wherever you can open a store for customers to come and touch and feel your product, do. Apple has mastered the art, most electronics stores do it. Indian startups such as Zivame and Ather are good examples. Human beings are tactile. Know this bit of psychology to roadkill your competitors.

What can b2b founders imbibe from Harshil Mathur who started Razorpay when the market was already thriving with fintech startups and odds were against him:

1. Define what you want to fix — When starting up, Harshil wanted to solve for SMEs and offer them the kinds of financial services that enterprises had access to. Enterprises are large accounts and bagging one means survival for a startup. However, Harshil saw that they were being serviced well by a suite of players so turned his focus on those who were underserved. Problem statements are the crux of the whole startup game — what pain point are you solving for? It can be iterated several times for it drives how you assess what you build.
2. Go deep with your target customer segment — Solve for your first set of customers before moving to any other customer segment. Go deep into the kind of problems your customers face — from not having enough money to pay upfront to needing a rollout yesterday; and meet (later surpass) their expectations on each and everyone of them.
3. Use lateral moves to acquire customers — Razorpay spent 0 monies to get its first set of customers. He reached out to potential customers who were other founders in the fraternity on whatsapp groups and through personal networks. Another very unique methodology that Harshil applied was its application of content. It educated its potential customers on success parameters. They held workshops on how to crack YCom or Techstars. Depending on your target audience, there are always tangent ways to acquire them and stay with them.
4. Everyone works the phone, yes, everyone! — Customer service rotation should be sacrosanct for everyone regardless of the department and designation. Working the phones helps customers cultivate empathy and learns to cultivate empathy for the customers’ problems.
5. Traditional marketing is passe — We encourage founders to make ‘word of mouth’ a barometer for customer satisfaction. Use it deliberately to extend and redefine LTV of existing customers to max in the first few years.
6. Expand your horizons — Think of your future markets and address them today. Harshil respected the potential that Tier 2 cities hold and beyond held and took them seriously from the get go. They held camps and sessions in cities far and wide to show what their product could do and to give a user interface experience in the real world. This was way before the next billion became a catchphrase!
7. Working with your dream organization is a process — For those in the b2b space, it’s important to remember that building a solution for a large company can take time. Harshil started meeting Flipkart 4 years back to understand what a large dynamic company needs in a fintech vendor, and only won them as an account last year! The harder the fight, the sweeter the win!

While there are many metrics that businesses can use to capture how much customers love your product, such as customer health score, expansion MRR, customer retention cost, churn rate and others, there is none better than the Net Promoter Score to measure their love. Amazon hovers between 7–7.5 usually and Apple’s ranges from 7–8 depending on the model they recently launched. If you are a founder innovating for the next billion and aim to build a company which has an NPS of 6.5 or higher, please reach out to us at info@ankurcapital.com

Roadkill your competition with these growth tips! was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Team Ankur

Being a founder and taking on the lofty challenge of changing our world requires one to awaken the Jedi within. Here are a few thoughts to help you realise your tremendous potential, from our friends in a galaxy far, far away…

1. “You know, that little droid is going to cause me a lot of trouble.” “…Oh, he excels at that, sir.“ — Luke Skywalker and C-3PO

Do you remember the first time Han Solo and Luke met? Not exactly on the best terms, right? That’s how working with people can be at times. Some will be slower than you, some too fast for their own good, some think in black and white and some come with their own 50 shades of grey. However, what keeps Han and Luke working together is their common vision and free-spiritedness; they are both cowboys at heart. Recognise the cowboy in another, nurture it even, and always know that as long as you share a lofty goal and some basic human (or droid) values, you can work with anyone!

2. “There IS still good in him.” — Luke Skywalker

Obi -Wan Kenobi tells Luke that his father once had the Force in him strongly, and that he wanted to train him to be a Jedi, but he was wrong. To which Luke says that even though his father might have been seduced by the Dark Side of the Force, there was still good in him and he could feel it.

Founders follow a rigorous hiring process and oftentimes, train them to deliver the best. More often than not, some people get left behind, not because they are lazy or incapable, but because of a host of other reasons. Such as trying to be existential at the same time as being a new parent and not getting enough zzzzs at night, or living far from the office and having to deal with a brutal commute (this obviously applies to the glorious days when we used to commute to work). Others can be psychological, such as being an introvert and finding it hard to speak in front of crowds, but not impacting their performance in the specific roles they have chosen. Even when someone is not performing up to mark, they deserve the opportunity to prove themselves again. Or be rotated to another role more befitting. Founders should ideally be good judges of human character, look for the gem within, and offer support when needed, rather than reject or fire outright.

3. “Fear is the path to the Dark Side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” — Yoda

The above is a succinct foreshadowing of Anakin’s eventual fall. He embodies fear, anger and hate when he picks Palpatine over the Jedi. Entrepreneurship is about risk-taking first, then anything else. And founders are supposed to rush in where angels fear to tread. Philosophically speaking, all of life and all our experiences can be viewed through that lens — fear is the flipside of faith. At the risk of sounding like Yoda, it must be killed when it rises or else It will shadow the light in us.

With the startup ecosystem becoming so robust, all a founder has to do is reach out to mentors, advisors, investors and other well wishers in the ecosystem who can be the Yoda to the Jedi in them!

4. “Do or do not, there is no try.” — Yoda

There are different interpretations of this one, and this is what I think Yoda meant. Luke was tired and defeated even though he was practising hard all day. When he is so in the thick of preparing for victory, he can’t see himself as being successful. It leads him to overthink and overanalyse, which most of us are guilty of, from time to time. But founders are supposed to be dashing warriors leading us into a new world where businesses meet the 3P criteria of Planet, People and Profitability. They can’t afford to second-guess themselves; trying to accomplish something in a hesitant mood is doomed to fail. It can also lead to rationalising failure, making it inevitable. So what Yoda is telling Luke is the Nike way — Just do it! Don’t overthink your game after readying for the battle. Go with confidence and the Force will guide you.

5. “Luminous beings are we, not this crude matter.” — Yoda

Personally this is my favourite and I interpret it to mean we are ethereal beings with unlimited power and must feed our souls to make our light shine brighter. For the Nikola Tesla lover in me and you, I also think it alludes to his statement to think of the universe in terms of energy, frequency and vibration, which essentially is the Holy Grail of everything in the world.

For the entrepreneur in you, please remember that Yoda delivers it to Luke when he is doubting his own gifts. When his fighter sinks into the mire of Dagobah and Luke fails to retrieve it, Yoda tells him not to be daunted by the ship’s size, to feel the Force around him, through him, with him, and encourages him to overlook the vastness of what he is against. To think in terms of light, spirit and energy, and not size. To take on bigger guys on their own turf and deliver a knockout if it comes to that to win. To have an intent so focused and clear that everything in the universe conspires to make it happen for you. To change the rules of the game by challenging the limits you have imposed on yourself.

Because remember, the Force is with you, always.

(If you are a movie buff and innovating for the next billion users, do reach out to us at info@ankurcapital.com!)

5 Lessons for Founders from a Galaxy Far, Far Away was originally published in Ankur Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.