Rocketing Ahead: Unveiling India’s Cosmic Quest in the Space Tech Arena

Do you ever find yourself marveling at the uncanny resemblance between reality and the fantastical scenarios portrayed in science fiction? If so, prepare to be captivated, for the domain of space technology is currently witnessing a convergence of visionary concepts and tangible advancements that rival even the most imaginative cinematic portrayals!

Consider this: at present, our planet is encircled by over 4500 satellites, with an estimated projection of approximately 2800 additional satellites slated for launch each year in the foreseeable future. This equates to an average of about 8 satellites launched daily—an impressive testament to humanity’s surging presence in the vast expanse of space.

While stalwart pioneers such as the United States, Russia, and China have long held dominion over the realm of space exploration, India, under the astute guidance of the Indian Space Research Organization (ISRO), has emerged as a formidable contender. ISRO’s resounding success in launching missions to celestial bodies such as the Moon and Mars has firmly established India’s position as a significant player on the global stage.

In a strategic initiative aimed at fostering private sector participation in space endeavors, the Indian government has introduced the Indian National Space Promotion and Authorization Center (IN-SPACe). Serving as a facilitator and regulatory body, IN-SPACe endeavors to empower private entities through technology transfers, financial assistance, and access to testing infrastructure—an attempt to catalyze a vibrant ecosystem of space-related enterprises.

While missions like Chandrayaan and Mangalyaan have undoubtedly captured global attention with their lunar and Martian exploits, the ascent of private enterprises within the space technology landscape heralds a new era of innovation and opportunity.

Furthermore, with the Indian space industry poised to catapult from $8.4 billion to a staggering $44 billion by 2033, the trajectory of growth appears nothing short of astronomical. This exponential surge underscores the transformative potential inherent in space-related ventures.

Space Tech Industry – Addressing every link in the chain: 

The industry is delineated by IN-SPACe into key segments of: access to space, space for Earth, and space for space, as outlined below:

  • Access to Space:
    • This segment encompasses the development and deployment of systems necessary for reaching and operating in orbits beyond Earth.
    • It includes the construction of launch infrastructure, the design and manufacture of launch vehicles, as well as the production of associated hardware and software.
    • The overarching objective is to facilitate the transportation of payloads, satellites, and astronauts into space.
  • Space for Earth:
    • Within this segment, space assets and resources deployed in orbit are harnessed to enable a variety of applications and use cases on Earth.
    • Examples include earth observation, navigation systems (such as GPS), communication systems (satellite communication), and weather forecasting.
    • The focus is on leveraging space-based technologies to address terrestrial needs and challenges, thereby enhancing communication, navigation, and monitoring capabilities.
  • Space for Space:
    • This segment involves the development of systems and solutions aimed at enabling and sustaining operations in space itself.
    • It encompasses space exploration missions for research and development purposes, the provision of in-orbit services for satellites (such as maintenance and refueling), as well as activities related to space traffic management and debris mitigation.
    • The primary objective is to support ongoing exploration and utilization efforts in space, while also ensuring the safety and sustainability of activities conducted in orbit.

All these 3 segments have new age players emerging in the Indian ecosystem as mapped below (non-exhaustive):

As per the Decadal Vision unveiled by IN-SPACe in Jan ‘23, following is a view of the key growth segments within space technology:

The most prominent sectors within the space technology industry today in India are navigation and communication, both of which have become integral parts of our daily lives. Globally, companies like Starlink (a division of SpaceX), have already deployed over 6000 satellites in low Earth orbit, with projections indicating that this number could skyrocket to as many as 42000. These satellites provide internet connectivity from space to any location on Earth, a development that has profoundly transformed global communication dynamics.

Amongst the various new and emerging areas in the value chain, we foresee biggest value unlocks by private players in India happening in key areas of: 

  1. Earth Observation:

Earth Observation is projected to become an $8 billion market by 2033, offering significant opportunities for both domestic and international markets. Despite the Indian Space Research Organization (ISRO) launching its first remote sensing satellite in 1988 and currently operating a constellation of around 44 such satellites, their commercial applications have been limited due to constraints in coverage, data capture frequency, and use cases.

However, there is a burgeoning demand for satellite data across various sectors such as maritime surveillance, forestry, border security, insurance, oil and gas, agriculture, and mining. To address this demand, numerous startups have emerged in the Indian space ecosystem, providing customized data solutions tailored to specific industries.

While optical imagery has traditionally been the primary technology for Earth observation, it is limited to capturing images only in daylight and under clear weather conditions. To overcome these limitations, new technologies like Synthetic Aperture Radar (SAR) and Hyperspectral imagery are being developed. Indian startups like Pixxel (specializing in hyperspectral imagery), Piersight (focused on SAR), and Galaxeye (offering multispectral imagery) are at the forefront of developing prototypes and solutions using these advanced technologies.

Although the scientific principles behind these innovations are well-established, the key challenge lies in demonstrating the effectiveness of hardware and software in real-world scenarios. Currently, most players in the Indian space industry are in the process of showcasing their technology through test satellites and data processing. Over the next 3-4 years, these startups are expected to launch multiple satellites, forming constellations that cover key regions of interest for their clients.

The rapid advancement of these startups and their potential to revolutionize Earth observation through space technology applications is generating excitement within the industry. The ecosystem is waiting to witness the young entrepreneurs actually showcasing their technical prowess and unlocking real commercial opportunities.

  1. Satellite and components manufacturing:

Satellite and components manufacturing is poised to become a USD 4.6 billion market in India by 2033. With the escalating demand for satellites for earth observation, navigation, and communication, it is crucial to enhance the upstream value chain of components and manufacturing processes. Reflecting the broader trend of indigenization across industries, particularly in space technology where defense applications hold sway, the government is steadfast in retaining intellectual property, profit pools, and as much of the value chain as possible within the country.

Key subsystems in satellite manufacturing encompass antennas, power electronics, propulsion systems, thermal control systems, sensors, and data handling units. The challenge lies in seamlessly integrating these components to cater to specific use cases while fortifying the supply chain for each. Strategic decisions regarding whether to procure or build each component significantly impact the speed of satellite deployment downstream.

The commercial viability of satellite applications hinges on hardware optimization, driving global efforts towards miniaturization. Innovative approaches include optimized mechanical structures, such as origami-based satellites pioneered by NASA. These satellites are launched in a folded state to minimize volume, subsequently unfolding in space to reduce the size of the satellite bus and lower power and fuel requirements. Additionally, there is a surge in the development of innovative materials for components, capable of withstanding the rigors of launch and space while being lightweight.

In this thriving landscape, startups like Bellatrix and Dhruva Space are emerging as key players in supplying cutting-edge components. Dhruva Space’s announcement of a sprawling 2,80,000 sq.ft. full-stack manufacturing facility in Hyderabad in October 2023 underscores the sector’s growth trajectory. Moreover, a robust network of small and medium-sized manufacturing facilities, long-standing suppliers to ISRO and aerospace clients, is witnessing blossoming partnerships with new-age funded satellite startups. These collaborations underscore the industry’s potential for innovation and growth, positioning India as a key player in the global satellite manufacturing ecosystem.

  1. Launch segment:

The launch segment is anticipated to grow into a USD 3.5 billion market by 2033, comprising satellite launchers and the essential infrastructure for satellite deployment into space. Across the globe, nations, including India, are intensifying efforts to fortify their launch infrastructure in response to the escalating demand for satellite launches.

Presently, there exists a substantial waiting period for satellite launches, with bookings often necessitating advanced arrangements of 6-12 months. This delay stems from the practice of launch vehicles accommodating multiple satellites or payloads, mandating meticulous capacity utilization optimization for economic viability.

Key players in this sphere include prominent entities such as Agnikul and Skyroot, actively contributing to the advancement of launch capabilities. Moreover, there is a prevailing expectation that launch vehicles will undergo miniaturization over time, facilitating streamlined and more frequent launches. This anticipated trajectory is poised to enhance space accessibility and stimulate innovation within the satellite industry.

As these segments expand, we stand on the brink of witnessing a surge in proprietary technology developed by India, benefiting both domestic needs and the global community, thus creating genuine value for all stakeholders.

It’s an opportune moment for entrepreneurs to showcase boundless innovation and cultivate groundbreaking businesses that truly transcend the limits of our world.

The Anatomy of Seed Deals in India: Insights and Evolution

The Indian startup ecosystem has come of age in the last two decades. What started as an adaptation of US consumer internet businesses for India in late 2000s, soon grew into a lifeforce of its own with rapid rise in India focused playbooks, consolidation of India’s leadership in software, public-private partnership in scaling financial rails & products, a rally towards make-in-India, and most recently, a race to the space. India has certainly benefited from a multitude of factors, both geo-political and social, but at the core of its success lies the Cambrian explosion of talent and capital chasing innovation. It has been particularly pivotal for the 0 to 1 journey of an entrepreneur which has historically been the most perilous. 

In this article, we discuss the anatomy of seed deals in India in the last two years, compare it with the state of the union a decade ago and provide insights into the startup ecosystem.

[For the purpose of this article, we define seed deals as investment rounds in which start-ups raised a total capital of $0.5-5M. Such deals accounted for c40% of total fundraises of less than $5M in 2023.]

The gold rush has subsided, but the shovels remain aplenty

As expected, we saw significant correction in early stage investments in 2023, with seed deals reducing from a high of 288 investments in 2022 to 193 investments in 2023. The total value of investments declined from $488M in 2022 to $347M in 2023. This 33% decline in volume and 29% decline in investment value was largely driven by a raging interest rate cycle and the change of sentiment post the peak of liquidity in 2021.

However, even amidst the sharpest rate hikes in the last two decades, and a prolonged monetary tightening, coupled with geopolitical tensions across the globe, the deal activity remained strong when compared to the investment activity a decade ago. Compared to 146 seed investments raising a total of $187M in 2013, the early stage seed investments in 2023 stood at almost 2x in terms of capital deployed.

This underlines the fact that the Indian startup ecosystem has significantly expanded in the last decade across all the vectors of talent, breadth of innovation, and capital. A quick look at investors in seed deals show that when compared to 2013, the total number of lead investors have grown by c2.7x to 339 and the total number of participating investors have grown by c2.2x to 1230. A higher growth in investors that lead rounds vs. those that participate underscores significant expansion in smart capital chasing conviction across a broad range of end markets, thus deepening innovation in the country. 

Figure 1: Total seed investments in 2022-23 vs. 2013 

We also note that while the overall seed deal activity remained low in 2023 when compared to the year before, the market seems to have bottomed in the first quarter (JFM) of 2023 with a total of 37 deals during that period. The seed deal activity since then has recovered to over 50 seed deals/quarter; however it remains low compared to 90+ deals/quarter during the heydays of 2021 and early 2022. 

Figure 2: Seed investment volume bottomed in Q1 2023

As table stakes mature, the blinds increase

While investors may have re-calibrated their bar for pulling the trigger in the aftermath of the 2021 bubble, the ecosystem continues to have a lot of dry powder that was raised amidst the flood of liquidity in 2020-21. As a result, many seasoned investors as well as first time fund managers, particularly at the early stage, are sitting on a lot of cash eager to find promising investments. This, coupled with increasing confidence in India’s capability to create large outcomes,  has led to a significant increase in the size of seed investments over the last decade. 

Compared to c44 startups that raised more than $1.5M in their first early stage round in 2013, c92 startups raised rounds larger than $1.5M in 2023. The contribution of larger rounds in overall deal activity continued to increase over last year as well with c47% of total seed investments in 2023 being larger than $1.5M vs. c40% in 2022. 

In our view, the increase in round size in 2023 over 2022, in spite of a weakening investment environment, can largely be attributed to large pools of capital chasing fewer high quality startups. It also highlights risk aversion in some sense as it can be argued that a lesser number of smaller rounds imply a lesser number of high-risk experimental and/or optionality checks.

While round size continued to inch higher, the entry valuations corrected to a more sober level with more than 70% of startups in 2022-23 raising their seed rounds at less than $10M post money valuation. However, when compared to a decade ago, the seed stage valuations have clearly ballooned – in 2013, almost 85% of the startups raised capital at less than $10M post and almost 70% raised at less than $5M post money valuation. 

Figure 3: Seed valuations and round sizes in 2022-23 vs. 2013

Startups now come in all shapes and sizes

What was predominantly a consumption story a decade back, has now become a holistic narrative. Innovation has become a household phenomenon, and founders with all kinds of experience are now embracing this path. 

Compared to 2013, when more than 70% of the funded founders had more than 10 years of experience, both 2022 & 2023 cohorts were a lot more evenly distributed amongst founders of varying experience, with experienced founders (>10 years exp) contributing just under 40% to overall seed deals. On the other hand, the representation of young founders (<5 years exp) amongst early stage investments increased to c36% in 2023 vs. c31% in 2022. 

Figure 4: Change in founder mix in 2022-23 vs. 2013

As the number of entrepreneurs have almost exploded in the last decade, the canvas for innovation has also expanded significantly. We are not just a consumer internet phenomenon anymore and our startups are no longer a derivative of US business models. This has reflected in the diversity of the sectors which raised capital in 2022-23. While SaaS/AI and Consumer remained the largest sectors in terms of total deals, the contribution of other emergent sectors or frontier sectors also remained high. A significant number of deals happened in emerging markets like Space tech, Defence tech, Climate etc [bucketed under Others in the image below].  

As the first generation of technology startups have matured and as public private partnership has evolved into a symbiotic relationship, we now see experienced operators, with shorter learning curves & deep business insights, increasingly starting new companies. The depth of talent pool in SaaS and FinTech has improved significantly over the last decade as operators from both incumbents & India’s big-techs are increasingly starting new companies. B2B commerce is also gaining traction with the consolidation of manufacturing, formalisation of 25%+ MSMEs and digitally-native next generation of traditional business owners taking charge.

On the other hand, we have seen a declining interest and deal activity in more saturated or turbulent sectors like Consumer Internet, Edtech and Health. We expect some of these categories will likely be re-imagined with the use of AI where we are seeing early applications in areas like radiology, customised learning modules and webtoons, amongst others.

Figure 5: Break up of seed investments across sectors in 2022-23 vs. 2013

The roots of innovation starting to run deep and wide

In the previous decade, large tech companies in India produced the highest number of funded startups in the country. More than 100 funded startups came out of Flipkart alone. However, the concentration of talent pools have started to reduce and in 2022-23, no single company produced more than 2% of funded startups. The top 8 companies (mostly tech behemoths like Flipkart, Amazon, Microsoft, Google, Oyo, Uber, etc) contributed only 10% of seed funded startups, as the last employer of the founders before starting up.

However, when we look at lifetime experience of founders, the top 15 companies contributed over 35% of the total seed funded startups in 2022-23. Interestingly, these companies not only include new economy tech giants but also old economy incumbents like Reliance, ICICI, TCS, Amex, HSBC, etc. This implies that the innovation is no longer just driven by the outsiders with disruptive perspectives but also industry insiders with deep domain expertise. The right to win is shifting from ‘sheer force of will’ to ‘unique insights’.

Figure 6: Genesis of startups in 2022-23 as per last job experience vs lifetime experience 

Not just VCs, but Angels, Sharks & Dragons also seeding Unicorns

The make-up of risk capital has drastically changed in the last 5 years. What used to be a small friends & family round of a few ten thousand dollars to bootstrap product journey of a startup has now transformed into a professional seed / pre-seed round of several hundred thousand dollars. These new sets of investors, who typically invest much before VCs do, have many names – angels, sharks and dragons; but they have a similar characteristics: most of them provide what we call paying-it-forward capital – i.e. they are investing back into the ecosystem from which they earned their riches. 

The flush of global liquidity & maturing of the tech ecosystem in India in the last 5 years has led to many IPOs, share buybacks, secondary exits and M&A – all leading to wealth in the hands of individuals who want to give back to the ecosystem. This has led to a sharp increase in super angels as well as micro VC funds who not only provide high risk capital but also help founders with advice & expertise, thus improving initial chances of success. This has been particularly pivotal to the growth of the startup ecosystem in the last 5 years and the spread of innovation across all kinds of products & services.    

While there are more than 100 micro VCs in India today, top 20 micro VCs invested in more than 30% of all the seed investments that happened in 2022-23, making them one of the largest groups of investors. Similarly top 16 angels (out of 1,000s) invested in more than 20% of all the seed investments that happened in 2022-23. 15 out of these 16 angels are founders of successful startups who actively invest to pay it forward to the ecosystem. 

Figure 7: Top 20 micro VCs participated in 141 or c30% of seed investments in 2022-23 

Figure 8: Top 16 Angels participated in 103 or c20% of seed investments in 2022-23

It’s Day 1!

In traditional finance, people talk in terms of P&L, cashflow and balance sheet. A decade ago, while popular tech jargons like GMV, contribution margin, unit economics, retention, right to win, were common amongst a handful of VCs and tech entrepreneurs, they were not really mainstream in India by any stretch of imagination. 

10 years later, thanks to Shark Tank, these jargons have become household knowledge. Entrepreneurship has become mainstream in India. CNBC could never do what Shark Tank has done – it has captured the imagination of the working class, and brought business & economics into every Indian households’ dinner table conversations, weaving the DNA of entrepreneurship into the social fabric of our country.

India’s startup story might be two decades old, but it’s still Day 1 for the entrepreneurs of this country, and this day is brighter than ever! 

How to Scale Open Source Software

India’s developer community, currently the second largest globally, is projected to surpass the US by 2027. In 2023, 3.5 million Indian developers joined the GitHub community, bringing the total to 13.2 million. The widespread adoption of open-source technologies among the Indian developer community is notable, with 85% of the country’s internet running on open-source software (OSS). However, the community’s contributions to building such software remain limited. Companies like Postman, Hasura, AppSmith, and Signoz are trailblazers in open-source innovation, and the time is right for entrepreneurs to embrace this model. Despite the potential, a common challenge we have observed among Indian entrepreneurs building OSS products is scaling open-source communities. In this article, we are sharing our learnings from founder conversations that will help entrepreneurs build and scale OSS communities.

Mechanics of open source network effects

Today’s developer tool entrepreneurs recognize the value of cultivating open-source communities around their products. With this approach, they drive product adoption, gather user feedback, and improve their products. Consequently, a new product-led go-to-market strategy has emerged, characterized by the creation and growth of open-source networks. 

An open-source network is characterized by 3 contributors within the network

  1. The project creator is the entity that wants to kickstart an open-source network around a centralized vision. Usually, this is the startup that wants to increase the adoption of its products via an open-source community. The main role of the creator is to write the first lines of code, set an overarching vision for the project, and make efforts to get contributors and users onto the platform. Creators are usually a few in number.
  2. Contributors are developers who add to the codebase of the project and expand its scope and performance. The incentive for them to spend their time and contribute is rarely monetary. Usually, it is the belief in the creator’s vision, the willingness to learn and apply new technologies, and the drive to improve the project for self-usage that drives contributors to improve the codebase. 
  3. Users are individuals who utilize the open-source code in their products according to the scope defined by the creator, which can include both commercial and non-monetary applications. Users are essential in promoting the widespread adoption and application of the open-source project.

To understand the dynamics of an open-source network, let’s examine a minimal viable setup consisting of a creator, a contributor, and a user. These three roles must be mutually beneficial and provide incentives to sustain the network:

  • The creator sets the project vision and mission, which invites the contributor to add to the project codebase. A contributor enhances the codebase, making it more attractive for creators to invite additional contributors and users. 
  • Once the open-source code becomes usable, a user applies it to their products. In return, the contributor benefits from the growing community and the product feedback provided by a user, helping improve the codebase. 
  • A user may also contribute to the project’s reputation by writing reviews, making it easier for creators to attract more contributors and users. Creators might offer personalized support to users to further strengthen the network..

As an open-source network grows and attracts more contributors and users, its potential for success increases. A crucial turning point occurs when super-users join the platform, as they act as both contributors and users. Super-users contribute to the codebase, use it in their products, and improve it, ultimately enhancing the overall value of the open-source repository. Once a substantial number of super-users are involved, the creators can shift their focus from expanding the network to capturing monetary value, by providing personalized support to these superusers.

Strategies for scaling open source networks

We’ll now discuss what are the best practices followed in scaling and launching open source software. There are 4 critical steps involved in scaling an open source network, namely, launching an OSS project, building a community, scaling it, and finally monetizing the product.

Launching an OSS Project

Documentation + Open Source License + Base Code

There’s a lot of effort that has to be put in before you actually launch your open source project. The more prepared you are for the launch, the lower the barriers would be for building your open source community. 

At this step, there is only one entity, that is the creator of the project, within the network. It’s critical to define the project goals and the target audience, similar to what you would do when you build your pitch deck for a startup. This creator’s vision has to be documented as your first entry to the README file, which is the dedicated document for anyone who wants to learn about the project. While the vision is what the project has to look like in a span of several years, there always has to be a starting point, which in this case, would be a functional base code contributed by the creator, that solves for atleast one use case contributing to the overall vision. Given that the code is will be pushed into production, the README file has to be expanded to included the software’s installation instructions and usage examples. 

The creator now has to choose the open-source license and establish community guidelines for the project, to define how the community’s code can be altered, managed and utilized. There are several types of licenses which projects can choose from, depending how they want to use the source code in their projects (derivative code). Several open-source stalwarts, including Apache, Mozilla, and GNU, have launched different versions of these licenses. 

The last step involves choosing  a hosting platform for the code and the documentation, consisting of the README and other file. Github is the most popular hosting platform for open source projects. WIth all this, the creator would now be ready to launch their open-source project.

Building the community

While scaling network effects, starting it is often considered the most difficult step. Given the cold start problem of starting a network, there’s no right answer for how do you do so. Fortunately, for open-source networks, this allows you to be extremely creative in getting your first contributor and users. 

It’s important to create awareness about your project in advance of the official launch date. This involves having an effective and consistent content strategy: blog posts, tutorials, or video demonstrations showing the software’s capabilities and use cases. But just creating content is not enough. It must be directed toward’s the ‘ideal developer profile’ of the project -individuals who possess both interest in the project’s domain and the necessary technical skills to contribute.. E.g. For an open-source LLM for biological modeling, the ideal developer profile would be researchers within biotechnology labs at universities, skilled in bioinformatics. For example, if the project is an open-source Large Language Model (LLM) for biological modeling, the ideal developer profile might be university-based biotechnology researchers with expertise in bioinformatics. 

Open-source events serve as valuable platforms for connecting with skilled and experienced developers in the field. Given the global nature of open-source networks, attending these events can significantly contribute to finding initial collaborators for specific projects. Notable Asia-focused events include Open Source India (OSI), fossAsia, ReactIndia, Angular India, and PyCon India.

Once a suitable number of developers have joined the network, it’s crucial to open it up to end-users. Building a strong reputation on platforms such as ProductHunt, HackerNews, and Reddit can help attract the initial wave of users to the network. By engaging with these communities, you can effectively showcase your open-source project and drive user adoption.

The metric for success in this step becomes achieving the milestone of a 1000 stars on GitHub., which indicates that the community is flourishing with a strong feedback.

Scaling the Community

As the open-source network gains momentum, it’s essential to maintain balance and engagement among contributors and users to prevent potential collapse. Creators must establish clear practices and institutionalize processes to ensure consistency and project identity. Some key steps to achieve this:

  • Hire community managers: Managers will help bring together the growing community of contributors and users, facilitating effective communication and collaboration.
  • Evolve and refine documentation: As the network expands, the documentation should become even clearer, providing comprehensive guidelines for new developers.
  • Optimize creator-developer communication: Creators often use platforms like Slack or Discord to interact with contributors and community managers. These channels enable efficient communication and help resolve doubts quickly.
  • Provide ample resources for newcomers: A successful open-source network should offer enough resources for new developers to get started while maintaining a balanced interaction between creators and community members.

As the center of the network shifts from the creators to the contributors, it is important to create consistent incentive structures for developers. Typically, this involves establishing a mentorship program between experienced developers and new developers. There are certain formal programs like the Google Summer of Code, which empowers experienced developers within an open source community to mentor and share the project’s culture with the next generation of developers joining the community. Other modes of recognizing and appreciating high-performing contributors includes contributor badges, shoutouts on social media, or even leadership roles within the project.

By offering mentorship and recognition, creators can ensure a supportive environment that nurtures growth and attracts talented developers to the open-source network. This helps maintain the network’s long-term success and relevance within the development community.

Monetizing the OSS Project

There are several ways to explore monetization while staying true to the open-source spirit:

  1. Open Core Model involved offer a free, open-source core version. Additional functionalities can be added for a fee. This model applied to both business and consumer end users.
  2. Donations and Sponsorships set up on platforms like Patreon, Open Collective, or GitHub Sponsors help the creators accept donations from individuals and organizations who value your project.
  3. Paid Services such as professional training, consulting, or custom development work related to your software become a source of revenue for these projects. 
  4. Freemium Model provides a limited free version of your software with the option to upgrade to a paid version that removes limitations.

Understanding an open-source project’s monetization strategy involves considering three essential aspects:

  1. Community’s needs and expectations to ensure that the approach doesn’t introduce barriers that may distance the contributors core users. 
  2. Project’s maturity to ensure that its foundation, community engagement, and demonstrated value are at their maximum
  3. Long-term sustainability for development, maintenance, and user support.


Building and scaling open-source networks is a journey that requires strategic planning, dedication, and continuous engagement with your community. By understanding the roles of creators, contributors, and users, you can foster a collaborative environment that enables growth and innovation. To ensure sustained success, create clear practices, incentivize developers, and tailor your monetization strategy to your project’s needs. By leveraging the power of open-source networks and communities, developers can now establish a bottom-up, product led growth strategy for adoption of their products. At Venture Highway, we are big believers in open-source as a catalyst for innovation and global adoption. We look forward to meeting entrepreneurs building such products and utilzing the open-source growth motion to their full potential.

Catalyzing Climate Action: Building a Sustainable Future

A sustained 1.5°C temperature increase from pre-industrial levels, staggering economic losses worth $300B+ in 2021, larger than the GDP of ~80% countries like New Zealand, Portugal, Qatar etc. and the increasing frequency and severity of climate disasters, costing over $1B, underscore the urgent need for proactive measures to mitigate climate risks.

Analysis by the ILO suggests that continued global warming leading to heat stress could result in losses of 2%+ of total working time by 2030, the equivalent of 80 million full-time jobs.

Regulators worldwide are pushing for greater transparency and accountability in environmental reporting, with a focus on carbon accounting and the growing demand for carbon credits to offset environmental impact. Organizations globally are incorporating climate risk as a core tenet of their enterprise risk management framework.

In a world grappling with the escalating impacts of climate change, ClimateTech startups present a promising avenue for driving innovation and sustainability.

As global warming trends continue to accelerate, ClimateTech startups are at the forefront of developing innovative solutions to address climate challenges, offering mitigation strategies, transition pathways, and sustainable technologies to combat climate change and build a more resilient future.

Amidst a competitive landscape, Indian startups have a unique opportunity to carve out a niche in the burgeoning ClimateTech sector. By leveraging local expertise, fostering innovation, and embracing sustainability principles, Indian startups can position themselves as key players in the global fight against climate change.

Through this thesis, we want to share our investment framework on the ClimateTech startups we wish to partner with and we humbly offer our limited perspective of what we believe are important elements to build ClimateTech “enterprises”.

If you are building in ClimateTech and want to brainstorm/fundraise, please reach out to us at

OTPless – Authenticating Digital Users

We invested in OTPless almost a year ago, backing their vision to enable the authentication of digital users. Fast forward 1 year, they have built a full stack authentication platform enabling businesses to seamlessly incorporate multiple authentication workflows in their existing mobile/web applications to authenticate their user’s digital identity (mobile or email). They have expanded beyond India to multiple countries. 

Let’s deep dive to understand the problem statement, solution, and the journey ahead.

Problem Statement

Imagine you’re a B2C gaming platform. You have a new user on your platform trying to sign up. While signing up, the new user faces an OTP challenge (say OTP does not arrive), the user will drop off due to a bad user experience, and you lose the opportunity to convert the lead to a customer. Imagine this happening to 20% of your users landing on your page. Now, that’s a lot!

And this is not limited to just gaming, every company offering Signup/Signin functionality needs to verify a user’s identity every time they log into their app or website. 

A user’s mobile number has become his / her digital identity on the internet in today’s world. Similar to how a person needs a passport (Physical identity) to travel to multiple countries, users need a digital identity (mobile number) to use specific mobile/web applications in the digital world. Also, similar to how immigration is the authentication layer for physical identity, OTP-based verification is the authentication layer for mobile number verification (digital identity)

Authentication of users is a “Must-have” step that companies cannot do away with. However, any friction at this point can lead to losing a lead who has landed on the site or downloaded the app and is present on the home screen. Hence the right balance of authentication and user experience needs to be ensured.

OTPs come with various challenges for businesses & users. These include:

  • Challenges for Business:
    • Broken Outbound SMS – The current SMS infrastructure cannot support rising SMS traffic. On an average, 40% of SMS fail. During peak hours, the success rates are even worse. OTPs are time sensitive and has to reliable.
    • Significant Development Efforts – Need a team to build and monitor consistently given the fast-paced developments in technology.
    • Less Secure – SMS OTPs are relatively easy to hack. Rs. 1,500 Cr lost in 2021 due to OTP Phishing frauds in India alone.
    • High cost of SMS – SMS cost of $120k vs. WhatsApp cost of $40k for 10M authentications.
    • Lower conversion – High friction on Login/Sign-up leads to users dropping off
  • Challenges for users:
    • Remembering multiple passwords: Multiple B2C applications have their unique password requirements.
    • Cumbersome password reset – Many steps in the reset process increases friction.
    • Time-bound sessions – Limited time to enter OTP and delayed receipt of OTPs by users.
    • Additional friction with 2FA – Almost all large platforms & banks require their users to validate their mobile number as an additional factor of authentication, adding an additional step in their onboarding or transaction journey.

While there are many companies like Google, Meta, Twitter, Okta that provide a suite of tools to enable businesses to authenticate their users, they are limited to email-based authorization. 

SMS-based OTPs were first used to authenticate mobile numbers in the 1980s, and since then, no significant shift has been made in this workflow. While efforts have been made to make the flow of OTPs smoother, no new alternative for authenticating mobile numbers has been developed.

OTPless is looking to disrupt this and reimagine the authentication of Mobile Numbers.

Solution & Value Proposition

OTPless started by building a simple ‘WhatsApp Sign-in API’, which could be integrated into a business’s mobile/web app flow as an alternative authentication modality to enable authentication of mobile numbers. It was an authentication protocol to authenticate a user using WhatsApp. 

Factoring in feedback from various customers & users, they have now expanded to become a full-stack identity and access management suite for businesses to provide multiple authentication methods to their end users like Sign in with Google, Facebook, Twitter, Slack, Github, Line, Viber etc. Moreover, the platform offers much-needed functionalities like user management and session management.

The platform is fully customizable, highly scalable and caters to businesses of all sizes, whether they have 10k monthly authentications or 10M. OTPless can be integrated in minutes with your Shopify store, WordPress Site, Android or iOS App. The SDKs/APIs are available for all platforms.

Merchant Onboarding Journey

User Sign-up / Login Flow on OTPless powered Application:

‘Login via WhatsApp’ ensures a seamless experience for end users through:

  • Smooth Sign-up / Login – Two-tap login for users via WhatsApp
  • Removes Re-Authentication – Once a user logs on to any OTPless-powered application once, for any future sign-up / login, the user shall be automatically authenticated without the need to go through the same steps unless the user changes the device.
  • Improved Security – End-to-end encryption of WhatsApp improves security.

OTPless has received a High Degree of Customer Love from its merchants & their users:

  • Across our conversations with Merchants and their end users, the product has been loved, whether it’s their simple onboarding or frictionless experience for their end users.
  • For Users – The product delivers a strong value proposition in terms of high user satisfaction.
  • For Businesses – Ease of integration and exhaustive developer-friendly documentation make integrating OTPless a minute’s job, saving time, effort and cost in development.

Large Market Opportunity

  • Authentication is a large TAM globally – There are 60 bn first-time sign-ups on mobile apps annually across the globe. Repeated logins are 3 – 4X of this. Assuming a cost of $0.01 per authentication (across modalities & geographies), TAM for just Sign-up / Login is $2.4Bn
  • Adjacent use cases provide an opportunity to expand the TAM – Besides Login / Sign-up use cases, multiple use cases are present, which have the potential to add significantly to the TAM like Checkout, payments, workforce authentication, etc.

High Pedigree Founding Team

Bhavik Koladiya
Exp: Ex-BharatPe Founder (7 Years)
Tanmay Sagar
Exp: Ex-BharatPe founding team, IIT-Delhi (6 Years)
Satyam Nathani
Exp: Ex-BharatPe founding team, IIT-Delhi (6 Years)

Bhavik is a proven founder who has demonstrated his execution ability, having built BharatPe from ground 0 along with his other co-founders. At BharatPe, he scaled the company to a 550+ member team, indicating his ability to drive innovation and attract / retain high talent. He also brings an extensive network of founders / banks / investors / regulators that he built during BharatPe.

Tanmay & Satyam were part of the founding team at BharatPe, where they worked on multiple 0 – 1 initiatives. Tanmay handles all things business, and Satyam handles all things Tech at OTPless.

Traction & Journey Ahead

Within the first year of inception, OTPless has authenticated over 15mn+ users across 4,000+ websites and apps in 15+ countries. With the rapid adoption of this innovative authentication method, OTPless is poised to grow and capture a significant market share in the global authentication industry.

The next phase of growth rests upon 3 key pillars – (i) Expansion to Indian enterprise customers, (ii) expansion to adjacent use cases like payments, and checkouts, and (iii) international expansion – acquiring international customers. 

Alternatives and Beyond – Fireside chat with Gripinvest

Fireside chat with Nikhil Aggarwal – Founder & CEO of Gripinvest. You can read more about their latest funding round here – ET, Financial Express, VC Circle.


Congratulations on your latest round of $10M. How are the spirits in the team & what are the top few milestones you are looking to achieve with this round?

Raising capital is always great motivation for the team as it provides external validation of the business model as well as visibility of resources and time to expand. It has been even more meaningful to be able to secure this capital in a weaker funding environment, with a healthy appreciation in valuation and participation of 6 venture capital firms. 

We are incredibly excited about the exclusive suite of investment products we offer, especially with 100% of our products being SEBI-regulated. We are now focused on driving growth in investment volumes led by higher awareness and delivering consistently great user experience. In the next 24 months, we aim to increase new investments enabled to 1,000 Cr annually and deliver at least 2 quarters of profitable operations. 

Let’s talk about the space itself a little more. Alternative investments are still relatively new in the Indian context. Grip is amongst the pioneers in the space. In your 3-year journey, how have you seen the ecosystem evolve across demand, supply, VCs & distribution partners?

On all accounts, we have seen massive growth in the sector. The fact that SEBI has created two new licenses (OBPP and MSM REIT) to bring such alternative investments under regulatory purview is a sign of both the large opportunity as well as the evolution of this industry. Speaking more specifically: 

  1. Demand: We estimate that digital alternative investment platforms collectively enabled over a billion dollars in investment last year. Since the introduction of the OBPP license (Online Bond Platform Providers) in Nov’22, SEBI has reported a 2x growth in retail investors in bonds. Across alternative investment platforms, we are seeing exponential growth in investment volumes 
  1. Supply: When we started our business, large companies would often refrain from using platforms like ours to raise capital as they feared adverse public perception. However, now we actively speak to CEOs and CFOs who want to leverage our platform to create public awareness for their companies and brands by offering investment opportunities. In the last 6 months, we have listed investment opportunities for
    • India’s second largest cash management company – a publicly listed corporate
    • leading NBFCs like Navi, Ugro, Incred, Vivriti
    • India’s largest cab fleet with a global blue-chip shareholder
    • late-stage start-ups including unicorns on their way to IPO

  1. Distribution partners: While smaller distribution partners have been aggressively distributing alternative investments, we have recently started seeing larger institutions open to partnership. This trend is being accelerated now on account of
    • regulatory clarity on several business models
    • rising demand for affluent customers of these platforms
    • a general view that diversification from equities may be advisable
    • likely peaking of the yield curve which makes fixed-income investing even more attractive      
  1. Venture Capital: Since most alternative investments being offered are fixed-income in nature, venture capital in the sector has also come from funds that deeply understand that market. Three of our equity investors – Anicut Capital, Stride Ventures, and Lighthouse Canton Nueva manage some of the largest debt funds in the country. The same is true for several other lead investors in other platforms – Kotak/ Strata, Zerodha/ Wint, Eight Roads (previously Fidelity)/ Wint. Venture Highway is a rare early-stage VC fund to have understood the opportunity in this industry as well as appreciated the attractive potential for servicing a rapidly growing affluent population. With regulations now in place, we expect VC interest in this sector to become more broad-based. At the same time, unregulated business models are unlikely to attract further capital. 

One of the biggest reservations in this space has been around TAM. To further elaborate, there is a section that doubts the potential of alternatives to ever become a mass product, and consequently a large VC outcome. Having interacted with the customers closely over the last 3 years, what’s your take on that? How do you see TAM for alternatives in India? 

The word ‘Alternatives’ is unfortunately a catch-all for everything other than gold, fixed deposits, and public equity. Should an AAA-rated fixed-income instrument, listed on the stock exchange and offered at INR 10,000 really be considered an alternative? Those are some of the products Grip offers. It is ‘Alternative’ because before this year it had never been offered to retail investors, but it is hardly exotic or risky, which is the general perception of alternative investments. 

In understanding TAM, it is important to first appreciate the value proposition of products Grip offers vs. the generally perceived proposition of alternative investments. Grip offers secured,  investment-grade rated, fixed-income options offering 10-16% IRRs. Retail investors today are seeking investment options between two extremes – safe FDs at 6% or the potential of 16% but volatile returns from the stock market. Grip is solving this gap in investment portfolios through its investment options. 

Secondly, TAM for investment products is inversely related to the minimum investment amount. The higher the required minimum investment, the smaller the TAM. SEBI has recognized the need for enabling retail participation in such regulated products and accordingly has reduced the minimum investment amount by 90% from INR 10 lakhs to INR 1 lakh. It has proposed a further 90% reduction to INR 10,000. Furthermore, products offered through a public process can be offered at even INR 1,000. This reduction in investment amount has dramatically increased TAM. 

The third factor in appreciating the large TAM this industry has is the changing demographic profile, driven by strong consistent economic growth. Multiple recent industry reports have identified that the ‘Affluent’ segment is likely to be the faster-growing segment. This is the core target market for our offerings.  

You started with lease financing, and since then, a suite of products has gone live on the platform. Tell us more about your product strategy – product mix over the next few years, ticket sizes, & the key customer segments you will look to cater to with these products

We realized very early that a single investment product is not what our customers want. Just as you don’t order the same cuisine on Swiggy or watch the same genre of content on Netflix, every investor is different and each investor wants to have the choice to build a diversified portfolio. This is also the first principle of investing and allows for healthier returns. 

Our product strategy hence evolved around offering investment choices across risk, return, and tenure. The chart below represents the breadth of options a user has today on Grip. 

Our addition of products over the last three years has been driven by our focus on completing this matrix of risk-return-tenure. The below table captures the products we offer and how they fit into the preferences of different investors 

Investment ProductInvestor Objective 
InvoiceX (Investing in a pool of invoices)Short tenure < 12 months 
LoanX (Investing in a pool of loans)Medium tenure (12-18 months); High returns
LeaseX (Lease financing) Long tenure (24-48 months); High returns 
BondX (Investing in a pool of bonds)Medium tenure (12-18 months); High credit rating 
Corporate bondsMedium tenure (12-18 months); High credit rating 

You have managed to consistently improve the take rates on the platform to a now-healthy number. Given the changes in the last year (structures included), are you confident to maintain/improve that? Do you think the margins will hold at scale and a large, profitable business can be built in this vertical?

Across products, whether soaps or investments, there are two types of business models in the world. Manufacturers and Distributors. Typically manufacturers have high margins because they build brand loyalty due to their differentiated products. With scale, these manufacturers are also able to reduce costs and have better supply chains. While distributors especially those who have limited product differentiation end up with tough competition and declining margins. Technology has made it possible for Manufacturers to also become Distributors and vice-versa, and those result in some of the strongest business models. Amazon-branded goods sold on Amazon are probably a great example and have the highest margin contribution. 

We see Grip as a manufacturer of unique fixed-income products and also the primary distributor. With scale, we have seen the ability to reduce our cost of ‘manufacturing’ resulting in improving margins. I am excited about our ability to further improve margins led by establishing a strong brand and larger scale.    

While alternatives may be fairly new, there are already a few scaled & upcoming wealth-tech platforms in India, both in B2B & B2B2C. And there are a couple in the alternatives space as well. How does Grip plan to stand out, capture mind/wallet share & build a brand? Do you plan to partner with some of these platforms?

We want to differentiate ourselves in terms of the investment options we offer and secondly in terms of the quality of user experience. On the former, we are clearly positioned as a high-yield platform offering 12-16% returns. At the same time, these returns are offered through products that have historically seen limited default rates and hence the risk-reward offered on Grip is unique. 80% of the investment options available on Grip are not available on any other platform. 

On the latter, we believe that most Indian investors do not have access to high-quality wealth managers. They hence prefer to invest DIY and need to be provided an easy but powerful investment experience. Everything from discovery to payments to portfolio management must be intuitive, seamless, and secure. We have invested ahead of our peers in establishing a strong prod-tech team that has been first to market in launching features to achieve this. Among these features, I am most excited about launching the 1st SIP for fixed-income products in the country.

While 95% of investments on Grip today are facilitated on our platform, we do recognize the power of working with other scaled-up wealth-tech and wealth management companies offering more comprehensive portfolio management solutions. We are already integrated with several of them and in discussion with others. Carrying forward our tech-first approach, we have built a proprietary API stack that powers such integrations in a scalable manner. 

Let’s also touch upon regulation, which has become the talk of the town in the fin-tech industry lately. We have seen the approach the regulators are taking – the most recent example being a sizeable investment platform that came into focus due to LLP structures. You have made regulatory compliance a top priority over the last 1.5 years – what led to that foresight & how do you plan to go about it in the future?

As founders, we are all aiming to build large, scalable businesses. It is important to realize that scale, especially in fintech, can only be achieved within the ambit of a regulatory framework. When it comes to investing money, the most important thing for the user is trust. Obtaining a SEBI license to offer investment options is the most critical way to establish that trust. 

From our experience, we have also realized that being regulated unlocks other significant tools and possibilities. In our case, it allowed us to integrate with the National Stock Exchange (NSE) to offer easier payment flows, engage credit rating agencies to provide an external credit rating to our investment instruments, use demat accounts etc. The cost of obtaining and maintaining the regulation pales in comparison to the business upsides. 

We have established a dedicated legal & compliance team and invested substantial tech effort in ensuring that we are fully compliant. At the same time, we actively engage with the regulator and concerned bodies to discuss aspects that would improve customer experience and safety. Grip is also a founding member of the Association of OBPP members and makes frequent representations to SEBI that would be in the collective interest of this industry. We have found the regulator to be open to constructive discussions in achieving the dual objectives of market growth and investor protection. 

As a founder, what’s your vision for Grip over the next 5-7 years? What are the key levers that will take you there?

Grip will be to alternative fixed-income what HDFC was to FDs and Zerodha to equities. That is our vision for the business. On the back of an established regulatory framework, an exciting suite of products, and an incredible team, our focus is to consistently deliver on our brand promise and customer experience. We are fortunate to be building in a macro environment for rapid growth in India and a micro set-up where users and businesses are challenging the 30-year status quo of having just two investment options. 

Code to Cognition: Overview & Trends in Artificial Intelligence

Artificial Intelligence stands at the precipice of a new era, poised to redefine our interaction with technology and catalyze an unprecedented wave of innovation and creative potential.

With the development of foundational models in AI, coupled with the abundance of data, entrepreneurs can now redefine and reshape product experiences across the entire technology spectrum.

India, with its dynamic startup ecosystem, cultural diversity, and extensive operational scale, positions Indian entrepreneurs to build AI solutions that resonate globally while also addressing the nuanced needs of the local market.

Our report provides a comprehensive exploration of AI’s core principles, the evolving landscape of AI products, its transformative potential across industries, and the pivotal themes that Indian entrepreneurs must navigate.

Creative Capital: Transforming Content into Currency

Creators have become central to online media and entertainment 200M+ content creators and brands spending USD 30B+ on creator marketing globally. 

Creators confront three significant challenges: producing content efficiently and generating sustainable income. 

In this article, we will focus on these three critical aspects: creation, distribution, and monetization. We also highlight the growing need for specialized third-party tools in each area.

In our exploration, we observe that distribution is well-managed by giants such as Meta’s suite of platforms, Twitter and LinkedIn. However, there are clear gaps in original content production and novel monetization strategies. Newsletters, in this context, emerge as a powerful solution. They address both distribution and monetization, proving invaluable to creators.

We also touch upon other essential tools in delivery and community management. Though not primary distribution channels, they play a vital role in increasing the value provided by other full-stack solutions, proving indispensable to creators in the grand scheme.

As we unpack these dynamics, we aim to spotlight the untapped potential for content creators looking to thrive in today’s digital renaissance.

As creators evolve, they embrace a multitude of roles

With the profession of a full-time creator becoming a sustainable income avenue, the workflow of a creator has become complex, with critical decisions taken that affect the output generated. These decisions can be divided into the following processes:

  1. Creating engaging content: Content is the primary product of a creator. Building the right content is the most important task a creator pursues that eventually affects the output performance. The key parameters that a creator has to consider while creating content include
    • Mode of content – text (short/long), images, audio, video (short-form/ long-form)
    • Core content of the output
    • Professional editing of the content
  1. Delivering content and building an audience: After content is created, the next step is posting the output and attracting an audience. The key parameters to consider in this step include
    • Platform of core audience – Meta, LinkedIn, Twitter, YouTube, Twitch, TikTok, etc.
    • Time of delivery – when is the core target of a post most active
    • Mode of delivery – email, newsletter, post, tweet
  1. Monetizing on output performance: Capitalizing on the buzz created by the post helps a creator build a steady source of income. Parameters to consider while making monetization decisions include
    • Medium of monetization – commerce, donations, premium content, courses, NFTs, community access
    • Modes of payment – payment gateways, cryptocurrencies and NFTs, etc.
  1. Output feedback and analytics: After an output content has served its purpose, it is important to analyze the performance and extract learnings for future posts. Parameters to consider while analyzing feedback from the audience include
    • Key metrics to be traced
    • Visualization of feedback data
    • Specific insights to be derived

Creators are adapting tools tailored to meet their diverse needs

Let’s look at the types of tools used across the four steps in the value chain.

Content Creation

Text and video are the two most popular kinds of content on the internet. There are different tools used to create both of these forms of content.

Textual Content

Types of tools used to create textual content 

Key insights 

  1. ChatGPT and corresponding derivatives like Jasper and enjoy the most popularity with informative and casual content such as LinkedIn posts, blogs, and articles, Instagram captions, etc.
  2. Twitter is the platform where specialized content is required. Given the constrained nature, making differentiated content is difficult but essential.
  3. Specialized tools are mostly unfunded. The reason for this has to be confirmed using the creator survey. Our hypothesis is that the payment propensity for text-based short-form content is not significant. 

Video Content

Types of tools used to create video content

Key Insights

  1. Highly advanced tools like RunwayML are a bit complicated for creators to use, given that the organization is research-focused. The high-quality output provided by Runway provides an opportunity to build a tool for creators that implement it.
  2. The AI for video development space provides significant value to various industries, and hence, there are several heavily funded players in this domain.
  3. Invideo and Pictory are the ones that specialize in YouTube video generation, which is primarily in the long form. Wisecut is useful for creating short-form videos. There is no one-size-fits-all solution in the market today.

Content Delivery and Community Management

Types of companies providing social media management to creators

Types of tools used for blogging, email marketing and newsletters

Key Insights

  1. Scheduling tools are a critical part of the tool stack of creators since the timing of a post and reshare is a sensitive parameter. There are funded companies created just on scheduling as a use case.
  2. Membership and community management acts as a natural extension and ACV expander for content creation tools or monetization tools. The standalone value extracted may not be significant.
  3. Newsletters and blogs have become a pivotal mode of communication between a creator/brand and its audience. There are several tools to choose from to create the right one-to-many interaction page.
  4. Key purpose of newsletters is to distribute premium content to high-intent content creators and followers and enable monetization on a captive audience.


Tools used for monetization and monetary management

Key Insights

  1. Creator commerce platforms have been successful in attracting and serving a large number of creators. Creators have control over the GMV and the products they promote.
  2. Other modes of payment have been ineffective in creating a steady source of income. Audiences would prefer paying for products and merchandise over crowdfunding and courses.
  3. Finance management tools for creators are gaining significant popularity, and startups in this space have recently raised early-stage funding. 

Feedback and Analytics

Most Creator CRM, Audience Management, and Analytics tools are extensions of the other three categories. These tools act as features that extend ACVs.

Opportunity for startups to build content production & monetization tools

In conclusion, while the creator economy is burgeoning, it’s clear that the most significant opportunities for growth and innovation lie in the realms of content production and monetization. 

Tools that enable creators to craft and distribute original, engaging content at a faster pace, as well as those that open up new revenue streams, are poised to define the future of this industry. Newsletters have emerged as a potent force, adept at addressing both distribution and monetization challenges, and are a testament to the potential of specialized tools in this space. 

Other tools that focus on delivery and community management may not be primary channels, but they are crucial in enhancing the value of comprehensive creator platforms. 

The path forward for creators is one of leveraging these tools to not only meet their fundamental needs but also to expand their creative and financial horizons in the ever-evolving digital ecosystem.

If you’re an entrepreneur building creator tools for content monetization and production, we’d love to hear from you. Reach out to Aviral or Parth.

Reflections: as we Venture through the VC Highway

Past Perfect, Present Continuous!

Venture Highway (VH) is 9 years old and we are young in an investing world, known for its excruciatingly long feedback loops. As the year draws to a close, I reflect on our journey against the backdrop of bull runs, Covid, bull runs again, global wars, bear runs – some important lessons and stories of personal growth!

When I joined VH in 2018, just after exiting my start-up, I felt like having moved straight from the factory floor to the corner office – why? Suddenly everyone was accepting my LinkedIn invite! Little did I realize then, the high mental agility and execution chops required to be an investor, especially when Venture Highway did and continues to operate like a Startup masquerading as a VC (This is our real tagline!)

The last 5 years have been ‘coming of age’ for VH, as we earnestly went about building the institution, trying to move the center of gravity from the “people behind it” to the Organization! 

The foundational question: Why should founders take our capital?

We are paranoid about this question, however, not for the most popular reason that one shouldn’t miss the next ‘AirBnB’ or ‘Google’! Large outcomes, after all, are an output metric, even if the most important one in Venture math. Our real focus has always been the ‘process’ – how we show up, how earnestly so, how soon, with respect & integrity. One example is our commitment to ‘high ROI for founders’ time’ (Yes we have an internal dashboard that measures #days from 1st engagement to saying “No” or “Yes”) 

One incident stands out in memory: We had to, with a heavy heart, bow out of an investment, and did so within 24 hours. In our 1st 3-hour marathon session with this highly experienced founder, we felt the chemistry and shared a deep empathy towards the problem statement. This depth of engagement also made us realise, unfortunately, that some slivers of the offering could compete with an existing portfolio, in the future. “I would have loved to have you guys on board, but a fast “No” is something I value even more”, he said. 

Sometimes our real wins have been great founder relationships, even if at the cost of a deal!

“How do you win deals against the popular names in your industry?”, is an oft-asked question by our LPs (Limited Partners). Our answer: “We don’t play the brand card, we play the ‘see our work’ card”. Some of our most cherished investments have been so organic that we failed to realize the line when we crossed over from being “brainstorming partners” to becoming an investor. However, this style comes with its costs, the most expensive being when, after the engagement, we still miss the opportunity to partner with these amazing founders. Yes, we feel absolutely gutted when it happens, fortunately very rarely so, but we would never change our ways – ‘GoodWill’ cannot be hunted after all, it has to be earned!

Part of acting like a startup requires us to reimagine the venture landscape ever so often at a foundational level. Nurturing and growing young talent for the startup ecosystem is one such foundational aspect, we are committed to contribute towards. In the last 3 years, we have had the privilege of working with 37 amazing Student Venture Partners (SVP), students from the country’s marquee institutions. These young girls and boys were part of our structured 8-week ‘all you need to know about startups’ SVP program. At the end of every season, our favourite question to these folks would be “Why consulting and not a startup?” Their recurring answer: “We did not know much about the startup ecosystem, until this program, but consulting is well understood and seniors can help us”. We aim to change this and help young talent discover the world of startups and starting-up early on: after all, two of our portfolio companies were started from dorm rooms!

What is a business, if not its people! One of our trademark questions to founder teams is “What collective skills & attributes solve for your individual blindspots?”. It applies to VCs as well – each of us a product of our biases, heavily weighted lessons from the last failed or successful investment, some of us more intuition-first while some analysis-first. When I look back at all our VH team interactions over the last many years, our diversity covers for our individual blindspots. One of my biggest lessons as a leader is that radical transparency starts with You and being comfortable showing your vulnerability to your team even if it is saying “I was wrong”. At VH, we have always celebrated owning our mistakes and being able to rely on each other’s intellectual and moral support. Safe spaces inside and in our Board rooms, in our view, are fundamental to authentic conversations. 

Specifically, as we look back at 2023, perhaps the most excitingly tumultuous year in the history of the world, the Venture ecosystem was also deeply impacted. As Ray Dalio says “the best lessons are learnt in painful situations” – the lesson being valuations, investments, and funding climate are and always will be the variables behind that single constant: that one idea/technology that would be the foundation of a sustainable enterprise, structurally strong and deeply impactful. Anchored with this 1st principle belief, VH has invested in 9 deals in 2023 across areas in fintech, AI, manufacturing tech, and SAAS to name a few. Rajit Mehta, MD of Max India, one of our panellists at our recent founder’s event, which brought leaders from bootstrapped, family businesses to exchange ideas with our funded startups, said “As a business, we think of survival and that we are here to stay, this drives many of our business decisions”. 



In a social media world that rewards black & white opinions, the reality of the nuance is often lost – painful corrections are part of evolution and only lead to stronger foundations.

If I were to summarize one big lesson in all these years, it is that:

As an investor, one needs to have loosely-held opinions and very tightly-held values

In this context, while one cannot necessarily model out the bull runs, pandemics, wars, and bear-runs etc. etc., what will always stay is the founders’ thirst to create, innovate and impact.  In this world of Creation, as VH learns and grows, we would continue striving to become the most ‘mindful and conscious’ partner to these visionaries. 

2024 here we come… 

ONDC: Build for Bharat

The ONDC: Build for Bharat Hackathon provided an immense opportunity to learn about recent developments in ONDC.

The network’s nascence did not deter 200+ builders and investors who came together to support their belief in ONDC’s potential as the UPI moment of e-commerce, to onboard the next 500M+ digital consumers into the folds of the digital economy. 

Industry veterans, builders and investors shared their roadmaps for incorporating or adapting to this new digital reality and areas where they see deep value creation in the coming years. 

Sharing below an overview of ONDC and key takeaways from the discussion.

ONDC is about Freedom. Freedom to Innovate, Freedom to Prove and Freedom to Fail, and Try Again

  • Thomas Koshy, CEO, ONDC

The Open Network for Digital Commerce (ONDC) connects buyers and sellers to facilitate digital commerce.

As a brand owner in the physical world, you decide your terms of trade, your campaigns and your advertisements, exercising complete control. When it comes to the digital world, however, you do not have the same freedom. You had to play by the rules set by somebody else. ONDC gives that ownership back to me: I get to decide my terms of trade in the digital world as I did in the physical world, with an ecosystem of partners, and specialists managing their nodes, enabling these transactions.

  • Owner of a Global Lifestyle Brand

That is the value of an open network of ONDC. It democratises access to e-commerce: handing back the reigns from platforms to sellers.


ONDC is an interoperable network based on the BeckN protocol. It unbundles digital commerce and makes it interoperable/platform-agnostic by bringing buyers and sellers on a single network making them globally accessible with ecosystem services ensuring a seamless transaction experience.

A simplified comparison:

A buyer can use any buyer app on the network to access products across suppliers. A purchase transaction is communicated from the buyer app, through technology rails on the network, to the seller app. The seller takes ownership of the transaction and picks a logistics provider from the network to deliver the goods, paying commissions to the seller and the buyer app for facilitating the transaction. 

Contrast this with traditional e-commerce. You can purchase goods only listed by a seller on a specific platform. The platform takes ownership of the transaction, hires logistic providers, delivers the goods to the consumer, collects money, and pays the seller after deducting its often unclear fees and commissions, withholding the buyer’s information.

Need for ONDC

With $70B+ in gross merchandise value (GMV) transacted by 50M+ households through online retail channels, we must ask ourselves: Why do we need ONDC?

ONDC solves two critical problems in digital commerce:

  • Access
  • Price


Forget Tier-2+ India, marketplaces are still unable to serve people in larger cities. I was not able to purchase a television for my relative living in <Indian Metro City>. Despite an order value of INR 64,000, a large e-commerce platform did not service that pincode. I had a similar experience while buying air purifiers.

We were wondering who would purchase electronics online through ONDC and were surprised to learn that a local provider had listed an air-conditioner with a discount offer which was purchased through our application with installation service also being provided.

  • Vijay Shekhar Sharma, Founder, PayTM

While e-commerce is growing fast, 25%+ Y-o-Y, the penetration is still 8% with a lot more to go. Major E-Commerce platforms today have solved for the 50M+ households who live in Metro/Tier-1+ regions but for the UPI moment to happen for E-Commerce, to reach 300M+ users, we need to provide greater access to Tier-2+ India.

ONDC’s value is not just in disrupting existing e-commerce markets/supply chains today, but in creating newer markets, providing local sellers in Tier-2+ regions with broader demand visibility.

These sellers will no longer struggle with managing multiple platforms’ listings with their own rules. Onboarding on one seller app will provide them access to a global demand network while expanding the option set for consumers, giving them more competitive choices.


The keyword for Shampoo has become more expensive than the cost (MRP) of the Shampoo itself

  • Aman Gupta, Founder, BoAt

With digital acquisition costs increasing, it has become more expensive to acquire customers, which, combined with the rising marketplace commissions, has made it uneconomical for certain categories of products to be sold online.

In ONDC, with marketplaces no longer exercising disproportionate control over the network, the value they could potentially capture decreases. Open access to the global supply and demand network increases competition, driving down commissions.

The use of horizontal service providers offsets these costs. The switch from a platform to a network provides fertile ground for creating an ancillary network of shared services across technology, logistics and dispute resolution, for instance in areas like catalogue management, RTO, vendor reputation management etc. 

Democratic access to transaction data is expected to allow horizontal network participants to operate on a lower cost base than a single entity. This is expected to reduce transaction costs in the network, providing better economics.

Solving For Trust

A critical question asked of ONDC is the development of consumer trust, ensuring goods/services get delivered per consumer specifications.

While there is no clear answer, a few technological interventions to build consumer trust and drive adoption were discussed:

  • Reputation Systems – Building a reputation ledger that tracks the past performance and reviews of sellers, buyers, logistics partners etc. Positive track records can be incentivized.
  • Standardized SLAs and Dispute Resolution – Common service level agreements around delivery timelines, product quality etc. with transparent dispute redressal processes help build trust.
  • Digital Credentialing – Technologies like blockchain can digitally credential and verify the identity, location, and licenses/certifications of sellers to assure their legitimacy.
  • Payment Guarantees – Solutions like escrow payments assure buyers that funds are only released to sellers after confirmation of delivery/acceptance.
  • Community Reviews – Aggregating user reviews and ratings on different entities helps buyers evaluate trustworthiness based on crowdsourced feedback.

Much like the early days of e-commerce in India, the expectation is that over time, the market will weed out poor network participants.

Governing the Network

Governance in ONDC is expected to be community-led, playing an enabling role rather than being overly controlling. Some key principles discussed:

  • Set baseline standards for reliability, transparency and consumer protection without being overly prescriptive. Allow flexibility for different contexts.
  • Oversee and facilitate collaboration between participants rather than directly managing operations. Let the ecosystem self-organize with light coordination.
  • Incentivize good behaviour through reputation/rewards systems.
  • Continuously crowdsource feedback and make governance principles emergent based on learnings.
  • Prioritize problem-solving over process compliance to quickly address issues as the network scales. Keep regulations relevant.
  • Be transparent in decision-making and give participants recourse/appeal rather than operating as a “black box”.

The goal of governance should be enabling open innovation, not controlling it. If done right, light-touch governance can help ONDC maximise its potential as a self-organising digital ecosystem.

The Future

There were 4 key takeaways on the future of ONDC:

  • Outstanding vs Outspending: Much like a third party in national elections, ONDC is expected to emerge as an additional e-commerce player, eventually occupying the primary spot. This will be driven by its ability to catalyse digital commerce for the 300M+ Bharat consumers who are not serviced by traditional commerce. The network strength could eventually overtake traditional e-commerce players by providing better services without heavy discounting to drive adoption, paving the way for sustainable business models.
  • Expansion of Supply: The lower commissions on the ONDC network could seed the online uptake of products/services that were previously unfit for digital commerce, due to lower margins. For instance, delivery in a 0.5km radius from your local Kirana may be possible even for smaller AOVs, driving higher sales of low-value items hitherto picked up only at the store/during checkout. A similar example but on the other end of the spectrum is the delivery of high-value furniture over shorter distances. 
  • Market Structure: There are expected to be fewer buyer apps with a much higher proliferation of supplier apps since consumer trust is more difficult to capture, and manage than businesses that prioritize business value creation. Existing businesses with a large, active consumer base like PayTM/Ola/MagicPin have built the guardrails and/or set up dedicated teams to enable commerce via ONDC.
  • Cross-Border Commerce: ONDC could be the fabric enabling cross-border digital commerce for Indian brands. Like UPI’s expansion to other countries, ONDC’s export-ready supplier network could eventually be picked up by buyer apps in other countries, expanding the demand for homegrown consumer brands in international markets akin to what Shein has done for fashion. 

Closing Remarks

With rising per capita income, consumers of Bharat will demand higher-quality products and services, and the convenience of digital commerce.

Despite open problem statements around cultivating trust, driving adoption and governing ecosystem behaviour, with 1 lakh+ daily orders, early green shoots are visible. 

We are excited to see founders build on this new fabric of commerce. If you are building on ONDC, please reach out to me here.