With so many Indian startups achieving unicorn status in 2021, the situation begs an answer to the question:

# Is this growth sustainable or are we in a bubble?

# What does this mean for foreign and Indian investors?

#What does this mean for the next decade of VC and Startups?

To understand this better, in today’s episode, we’ve brought Anjali Bansal, founder of Avaana Capital, that invests in innovation-led start-ups creating sustainability and impact at scale while delivering outsized returns. Previously, Anjali has been Global Partner and MD with TPG Growth PE and a strategy consultant with McKinsey and Co. in New York.

She’s also the former non-executive Chairperson of Dena Bank, where she successfully led the resolution of the stressed bank. She has invested in and regularly mentors various successful start-ups including Delhivery, Nykaa, Alpha Vector, Lenskart, Urban Company, Darwinbox, Coverfox and FarMart.

She is closely associated with NITI Aayog’s Women Entrepreneurship Platform and Digital Solutions and is on the Expert Advisory Committee for the Start Up India Seed Fund Scheme.

She has been appointed as President, Bombay Chamber of Commerce and Industry, and serves as an independent director on several leading boards including Tata Power, Kotak AMC, and Piramal Enterprises.

During the episode, Anjali talks about the volatility in the Indian startup ecosystem, the opportunities for entrepreneurs and investors; she also shares learnings from her portfolio and much more.

Notes – 

00:40 – Intro and background

02:55 – Working at ISRO and early career

04:59 – Ideology behind Avaana Capital

08:22 – Is the Indian startup ecosystem in a bubble?

17:21 – Common patterns and learnings from the winners

20:50 – Mistake: Investing in the idea and not the team

22:44 – Ability to move quickly as a fund

34:49 – Learnings from early-career at Mckinsey

36:29 – Potential in Indian startups

41:01 – What all she prefers to read on a daily basis

Find the transcript here:

Siddhartha Ahluwalia  00:00

Hi, This is Siddhartha Ahluwalia, welcome to the 100x Entrepreneur podcast. Today, I have with me Anjali Bansal. Anjali is the founder of Avaana Capital which invests and provides scaling support to innovative startups for catalyzing impact at scale while delivering commercial returns, Anjali has invested and mentored various successful startups including Delhivery, Urban Company, Darwinbox, Lenskart, and now, the recently IPO Nykaa. She’s closely associated with Niti Aayog Women Entrepreneurship platform digital solutions, and mentor to Atal innovation mission. Anjali is a non-former, non-executive chairperson of Dena bank, and appointed by the government of India, Anjali has also been one of the most powerful women in business in India by business today, in 2013, Fortune India Magazine, and in 2011, India Today. Anjali, welcome to the podcast.

Anjali Bansal  01:00

Thank you very much. It’s a real pleasure to be here.

Siddhartha Ahluwalia  01:04

Anjali, I’ve known you for a while now. You and Sandeep have been great supporters of the 100x Entrepreneur Fund. It’s been a pleasure knowing you and you know, you supporting such a young fund, and you and Sandeep, both have mentored so many successful entrepreneurs who are at budding stages many years ago. So when was your first tryst with the startup ecosystem of India?

Anjali Bansal  01:33

I think probably about 20-21 years ago when we moved back to India. We were in New York, I was still with McKinsey. And we moved back and we saw the absolute sort of entrepreneurial energy in India. That was probably the first brush, the days of Make my Trip, and so on. But I can tell you that what we are seeing today, the energy, the quality of entrepreneurial talent, and just the velocity of innovation and startups, is absolutely heady. I think the best decade is ahead of us, not behind us.

Siddhartha Ahluwalia  02:06

Now I would like to go back in time and would want to know how your journey started. Right? You worked as an engineer in Isro, to being a consultant at McKinsey then being chairman of a very large bank. And now a VC.

Anjali Bansal  02:23

It’s been an interesting journey, lots of learning, lots of new experiences. I did my project internship at ISRO, I grew up in a generation that was fascinated by Isaac Asimov and Carl Sagan, and space and Star Trek. So I thought I would actually go work at ISRO, and potentially at some point, go work at NASA and so on. But I think spending a year in a lab helped me realise, I think this is very important for entrepreneurs as well. It helped me realise what I like doing, but what my strengths are. And that led me to then pursue a degree in international policy and business from Columbia, and then joined McKinsey in New York as a strategy consultant focusing on financial services. So from there, I actually got involved with banking innovation, particularly as it relates to micro finance. I moved back to India in 2000, continued to work with McKinsey, ended up sort of chairing the board of women’s world banking, advising seva bank, getting very involved with micro finance, not just as a development tool, but also as a mainstreaming activity for an entirely new borrower segment. And some of the earliest companies at that time that we sort of supported through lending, whether it is a Bandhan bank, today are very successful large scale enterprises. So from there onwards to my first entrepreneurial opportunities, setting up Spencer’s towards India Business, building that, it has ended up being very successful fortunately. And then moving on, was a partner at TPG growth, looking after some part of the Asia, Middle East, North Africa, Southeast Asia business, then, I was tapped by the government to chair a highly stressed public sector bank called Dena Bank, which was under PCA by the Reserve Bank. So leading to the resolution, the first-ever three way merger of three big public sector banks Bank of Baroda, Vijaya, and Dena and then setting up Avana. So during the journey, I have been very involved with both private equity early-stage investing, a lot of entrepreneurs, supporting them as a mentor as an investor. And then I think Avana in some ways is the culmination of all of that and bringing together what is happening in the tech and innovation ecosystems, with what’s happening in policy, in large companies, I served on a number of large company boards in the past and I continue to do so and saying how can we actually solve some very large scale problems for India and then eventually the world as well. So that is the purpose of Avaana. We focus specifically on sustainability-related issues but always with a view that to have impact, you need companies to be commercially sustainable, scalable, and very, very successful.

Siddhartha Ahluwalia  05:12

And when was your first investment, if you go back in time, in which startup, if you can recall, either in personal capacity or through an institution?

Anjali Bansal  05:22

Probably the very first would have been Make my Trip way back in 2001. And then for a long period of time, did not do as much in the startup space, came back with one of my earliest investments would have been NYKAA, in a personal capacity, other than TPG, of course, and TPG have been involved with Lenskart, and a number of other successful both in India and overseas investments. But Nykaa, in some ways, has been such an inspiring journey, having known Falguni for a long time, and seeing a very, very successful woman at the top of her career, to give up what she’s done in her entire career, she was a top banker, and go into a completely new field was so inspiring. And I’m just privileged to have had the opportunity to be a part of the journey.

Siddhartha Ahluwalia  06:10

And if you remember, you were the first cheque in the company in 2014-2015, kind of timeframe, or much before?

Anjali Bansal  06:20

A bit later. But I’ve been first cheque in a company called alpha vector, which makes bicycles. And we’ve done first cheques in several companies, and more recently, as you know, in several very small micro VC funds, because in my view, when we really believe in this, the entrepreneurial energy in India is so abundant. We are full of young people with great ideas, great talent, and we have the technology. So let many more flowers bloom, happy to support and actually participate. And I think with all of these, I feel I gain more and not just from a returns point of view, but from a learning and energy point of view.

Siddhartha Ahluwalia  07:04

So at the same time, you’re nurturing the garden, as well, nurturing several gardeners as well, if I can say.

Anjali Bansal  07:13

Absolutely, and we need both right?

Siddhartha Ahluwalia  07:17

And you have observed the last two decades very closely, right? Some say 2021, the $25 billion of funding, which has come and 35 new unicorns created in one year is a bubble, or what was your take on that? Because very few people have seen India shaped the startup ecosystem in the last two decades. 2020 You know, we had only a couple of public companies like, make my trip and Naukri. And today, every day we see a startup going public, and that’s phenomenal. But is it a bubble? Or is it going to continue the momentum which we are seeing today?

Anjali Bansal  08:04

So, I wouldn’t say that it is a bubble or not a bubble? I think there are always cycles, we are probably seeing we are towards the top of an up cycle. Will there be some volatility? Absolutely. At the same time, the momentum will absolutely continue. So volatility may create some uncertainty in the short term, whether it is short term, medium term, I don’t have a crystal ball, I wish I did. But despite the volatility, I think the momentum is here to stay for all the reasons I’ve mentioned before. I think secularly we are sitting on the convergence of some very powerful trends. One, as I mentioned earlier, is the incredible quality or the positive quality of entrepreneurial talent, the kind of young people we see who are taking risk and absolutely fearless in experimenting and trying new things and not looking for a job. So that combined with the availability of capital, plus technology, I think India is very uniquely positioned because not just from an industry point of view, but also from a policy regime. We are unique in the world in the sense of having large public digital infrastructure and population scale. So we have 1.3 billion people with a biometric unique ID. So they are identifiable, they’re discoverable, they are serviceable as consumers of anything, whether it is product or financial services, one to having a system like UPI, which makes absolutely seamless, ubiquitous digital payments, and thus, again creates formalisation and the and the forces that drive formalisation and digitization for all segments of the economy. And as you know, in the last several years, we have seen the emergence of several new business models just riding on the UPI rails, and hence new unicorns as well. And similarly, even today, there is work going on to create a unique health Id like we have a unique aadhar id, a unique health ID making a seamless set of rails. opened network for digital commerce, which is the UPI for E-commerce. So I think momentum is here to stay. I’m very excited about what is coming ahead. And lots of opportunity both for entrepreneurs as well as for investors.

Siddhartha Ahluwalia  10:14

Now coming on to your journey of Avaana capital, how did you decide, right? Because you could have continued as a senior partner with a firm like TPG, or even joined an early stage fund, but creating your own fund? What was the thought process, the risks which you evaluated behind it? And what if you have to split your investments into various sectors, slice and dice them? What would they be?

Anjali Bansal  10:43

So, why start versus join? I think I actually really believe in the power of collaborative efforts. And so Avaana also happens somewhat organically with a few of us who have long years of experience both in operations, operating companies, building businesses, investing, and coming together with a thought process, as I mentioned earlier that how do you combine what is happening in the tech innovation space, with capital, and with all our expertise and networks to help them scale faster and better, is how Avana got created. The sectors that we like, and we invest quite actively in span both financial services so FinTech and financial inclusion, particularly both lending insurance and insurtech, and more recently, embedded finance, food systems, food and agri so we look a lot at both d2c brands as well as agri tech, mobility and supply chain. And again, thinking about where the inefficiencies are right. So technology and innovation and disruption are two sides of the same coin. So there is such low hanging fruit in India, Just in process efficiencies for enterprises, as well as for b2c type businesses. So we like mobility and supply chain space. We also like market linkages, and health and wellness to some extent, and ultimately digital tools. Very excited about what is happening in the digital enablement of various business ecosystems.

Siddhartha Ahluwalia  12:10

And as an investor in various funds, what are some of the themes that you observe the new funds coming up with? Right? Would you prefer, right, a fund manager with an entrepreneurial experience or with an experience of let’s say, B-School? McKinsey, right, what are the different types of them, strengths versus weakness, if you would have to ever think?

Anjali Bansal  12:40

So think when one is investing behind an entrepreneur or a new fund manager, one applies a similar lens. Are they doing it for the right reasons? What problem are they looking to solve? So is there a unique proposition? How well positioned are they? Do they have the skills to deliver against that unique proposition? And particularly with the newer micro VCs, like 100x, we are excited that folks like you are taking the risk. And rather than joining another fund, you’re creating a platform of your own with a unique thought process. And you know, you’re out there hustling, competing, and creating an institution. So much like we evaluate entrepreneurs, we also think about fund managers in the same way. Ideally, in a fund, I like to see a combination of skill sets and complementarity in the team. So having three people who are exactly the same, yes, that makes for a more comfortable team, but potentially less creative thought process. So if you have somebody who’s been an entrepreneur, somebody who’s been potentially a consultant, but obviously also has had some investment experience in the past is ideal.

Siddhartha Ahluwalia  13:54

And in your experience, across the last two decades, how have these, you know funds except capital, have built the startup ecosystem of India because today Indian funds are competing with the best of global funds, right in the global funds, like Tiger take one week to do the entire process with a breathtaking speed and the fund managers haven’t been used to such speed.

Anjali Bansal  14:23

I think no fund managers are used to such speed. So the age of the fast moving, not even growth funds, but really hedge funds that are now competing in late stage tech is not unique to India, it’s also in the US. So when I say God bless them, they bring in a lot of capital, they bring in a lot of velocity. It is really changing the funding landscape, and the dynamics of the funding landscape. So the traditional VCs have all had to shift their processes and the way the game is played a little bit. And in India, One of the things that you have to continuously as an entrepreneurial fund manager look for our unique niches. And ultimately, it’s not about capital. So that once you’d asked me, you know, what should an entrepreneur look for or a founder look for. So large cheques can be written, there’s plenty of capital available. But at the early stages, it is important to pick investors who you think will be value adding beyond capital. So craft the captable carefully of funds that can bring large cheques and continue to support through various rounds. But also funds who are value adding in a different way. They understand the ecosystem, they can help with business building, they can help you network. And sort of very founder friendly fund managers as well. So I think it’s important to craft the right captable.

Siddhartha Ahluwalia  15:53

And today, I think, only in 2021, we have seen entrepreneurs rejecting fund managers actively, like daily or here, you know, a story where a fund manager got rejected on a captable.

Anjali Bansal  16:13

I would say tables are turned right. Whichever way the power dynamic flows, it’s so important to be respectful of the other person, if you’re a fund manager, be respectful of the founder, because I think it’s one of the bravest things to do is to become an entrepreneur. So we have a lot of respect for entrepreneurs. So whether they sometimes know, we don’t like the business model, sometimes we don’t like the team, or it doesn’t fit our thesis, I would like to think that we are in no position to reject anybody. It may just not fit. But I’m sure they will be the right fit investor and funder for a founder. And similarly, the right fit founder for a fund manager.

Siddhartha Ahluwalia  16:59

If you have to, you know, think through your investments, and today, which are some of the large winners, for example, Nykaa, Darwinbox, and others, even Bombay shaving company, and the upcoming winners like Animall and one of the largest one being Urban Company, what are the common patterns that you have seen across these various entrepreneurs? Because you are also, you know, changing your thesis, I would not say on a daily basis, but changing your pattern, right? You can’t invest based on what you saw yesterday. But what are your learnings across these themes?

Anjali Bansal  17:37

I think you’ve mentioned something interesting, which is the importance of being agile, both as a fund manager as well as a founder. And more recently, I will add to this list, right? So companies like FarMart. FarMart is building the largest micro Saas platform for rural retail and, farmers. And within six months, they’ve got a million farmers using very little capital, NYKAA has been built using very little capital. So what one of the things I find in some of the best founders is tremendous learning agility. So they’re constantly learning, they’re constantly taking cues from their environment, and able to Agile shift. But do it in a thoughtful way. So they are not just randomly pivoting all the time, but they’re actually using data and analysing very rapidly, and it may not be quantitative data. So one is learning agility. The second is the humility. So on the one hand, of course, founders always need to have confidence, founders and fund managers, but also have the humility to say I don’t know everything. And I’m going to learn. So in order to learn, you need to have the humility to want to learn to acknowledge mistakes, and quickly move forward. And just incredible focus. So they’re very focused. I think the hard work, the tenacity, the perseverance, all of that is a hygiene. But they’re very focused. And they’re excellent at attracting talent and building great teams.

Siddhartha Ahluwalia  19:06

And because as an investor, you also have to constantly evaluate the markets in which you are investing to see if the timing is right. And is the market large enough for a large outcome to be created? How are you yourself learning on various markets, because they are also changing very dynamically.

Anjali Bansal  19:28

So learning happens through a lot of reading. And, frankly, a lot of learning happens by just talking to founders, to entrepreneurs, to policymakers, large companies, and other fellow investors to see what trends people are seeing. So learning is not a structured exercise of reading three books a week, but it is having many, many conversations and picking up something from every conversation. That then goes into some complex algorithm of pattern recognition.

Siddhartha Ahluwalia  20:04

And if you have to think back, right, what are some of the mistakes which you did, which you have caused to be corrected over a period of time as a fund manager? And what is your own learning on how you change?

Anjali Bansal  20:19

So I think one of the things I do and perhaps many other fund managers also do, I get excited by the idea. And if I can see that this is a large problem that needs solving. And I get very excited by the idea. One mistake I haven’t made too often, but has happened is to invest in the idea and not the team. Because it’s not, there are many ideas. It’s all actually ultimately it’s about execution, India, particularly India is about execution. And we cannot be wishful in our thinking that this team will solve my vision. It has to be their dream and their vision. And ultimately, their execution capability.

Siddhartha Ahluwalia  21:12

One trend, which I am personally observing is, the time to respond for funds has become extremely short. Sometimes even you have to make a decision in one call these days, because rounds are getting built up so fast, which is good for the entrepreneur. But all the things that you talked about, you know, the entrepreneurial traits, the market traits, right? How are you able to shift from making decisions over a few months to now making within over a few days.

Anjali Bansal  21:42

So at an early stage, I’m not sure we ever had a few months, it’s just that it has gone from being a few weeks now to a few days. As a growth stage investor at TPG, and a late stage private equity investor, you know, we always took more time, because the values were higher, you had a lot more data to process. But at the early stage, given the kind of innovative business models, there is very little data. So really are taking a bet on the entrepreneur. So what we tend to do is, as I mentioned, you know, we have sectors of interest, we are constantly learning, we are constantly watching trends there. And we are constantly meeting teams in that space. So we develop a thesis about what will work in our view, and it’s not like we are not wrong, they are sometimes wrong as well. And then when we find a team that we like that is solving the problem in a space where we think there’s a large opportunity, then we move very quickly. So we do have the ability to move very quickly. Largely because of course, that’s one of the advantages of being an India centred India located fund is our processes are agile. So we don’t have to go through a lot of cycles and take investment committees elsewhere.

Siddhartha Ahluwalia  23:00

But is that short span of time enough if you have to deploy $2 million in the early stage, to evaluate and differentiate between just a good storyteller versus a good executioner?

Anjali Bansal  23:14

We do a lot of referencing, so diligence is done very, very quickly, but it is done very thoroughly. And like I said, it’s not like you never make mistakes, we do. But our ability to build a thesis, and due diligence on a model and an entrepreneur, I think is, we are quite well positioned to do that, given our networks in industry, and particularly on the large corporate side, where you actually see some of these patterns that fitting into as well as the policy side you get a sense of where is the market going, you are able to what we are able to reach into places where the founder may have worked with, worked at before people they have worked with, and get a sense of the quality of the individual. And then the last bit is always a leap of faith.

Siddhartha Ahluwalia  24:07

And is there a humongous competition between funds right now, as you observe, you know, between to invest in the best possible companies? And then how do these funds you have pointed out earlier that you would have to build your niche. But how do these funds then, is the fastest single fast or, as the entrepreneur has been able to choose between, let’s say, x versus y when they’re both getting the same amount of cheque.

Anjali Bansal  24:37

I find entrepreneurs and the best entrepreneurs are actually fairly discerning. And they have the tough negotiations and bring whoever they want onto the cap table. So we’ve been in several situations where because the founder has wanted Avaana to be there or to work with us they have actually worked actively to include us in the cap table. And we may not be the largest cheque, but that’s okay. That said, I always think that it is important to the mentioned earlier to balance the cap table to have funds that can. And it’s perfectly okay by the way, in my view for a founder to say this is somebody else is giving me a 2x valuation. So I’d rather work with that fund. So if you know there’s another fund that has more conviction and more capital then so be it. But yes, it is competitive for funds to compete with each other. In the early stage I think a lot more funds collaborate, we are active co-investors, we have long relationships with many of the other funds. So we are very happy to be co-investors and, and work in a very collaborative way.

Siddhartha Ahluwalia  25:46

Now coming to one of my favourite topics, which is, you know, SAAS which is built in India, for global you are invested in one of the companies Darwinbox one of my favourite companies, right? They expanded from India to Southeast Asia, and now our $20 million ARR Company. Do you see such kind of fast turnarounds in SAAS because earlier, it used to take 10 years for a company, like Freshworks is one of the very unique companies, which lead 3 million ARR in 10 years, but not the top 20 SAAS companies are growing at that speed. So do you see the Darwinboxes of today becoming bigger than freshworks? In the years to come? And would there be many more?

Anjali Bansal  26:32

I would like to think that there will be many more Darwinboxes. But that said, I think Rohit Jayant and Chaitanya are a very special team. They are a very well, Aligned team. I mentioned complementarity, there’s tremendous complementarity across the three of them in their skill sets and how they work, they have also been able to attract kind of the right capital, they have used their initial earlier networks as well as insight to build a really strong product, very differentiated unique product, and then be able to take it to market in the right way. They have sort of been strategic about assembling a band of angels who are supportive influencers in various markets, whether it was India or Southeast Asia. And so yeah, I think that the speed has increased of go to market as well as scaling up, if anything COVID has actually helped. Because what required enterprise sales, earlier required you to be there in person and meet people and because of COVID, all sales have happened remotely and virtually. So I think it has actually helped to accelerate the growth of enterprises. And large companies as well, by the way, I sit on the board of Siemens and some of our processes that you could never have imagined that sales and service could be done remotely. And somehow everyone’s figured out how to sell switchgear remotely.

Siddhartha Ahluwalia  27:57

And these enterprises, you know, you are part of so many boards, and you have served a bank, are they taking fast decisions? Like I said earlier? We know it’s a joke among SaaS entrepreneurs that it may take up to a year to close an enterprise deal in many cases. Are they now agile enough to take decisions within a quarter?

Anjali Bansal  28:25

So $100,000 ACV, I think enterprises are far more willing now to experiment and pilot. But the sales cycle is still a longer sales cycle than selling to another digital startup. So for a delivery to sell to an E commerce company would probably take less time. And it’s you’re talking to people like yourself, that is if you’re selling into an enterprise, then they are typically older, less digital, and so on. But interestingly, that has also changed. enterprises have increasingly more appetite. They recognise that they will not have all the solutions in house or your traditional enterprise tech providers may not have the solution. So they’re quite willing to experiment. And also partner with startups, a number of large companies have created their own little incubator and lab systems. And folks like me, we encourage them to do that. To give it a shot, but at the same time, if it’s a mission critical application, then obviously they will be a lot more thoughtful and do a lot more diligence. And yes, it could take up to a year before they do a full deployment.

Siddhartha Ahluwalia  29:30

And that brings me to the question of you know what Avaana ‘s position into investing in SAAS because I see Darwinbox as a part of your portfolio, FarMart, being part of your portfolio, but are you going more into SAAS or is it will it be a small portion of your entire portfolio?

Anjali Bansal  29:51

So, SAAS is not a focus for Avana. it’s more agency to achieve a certain outcome. So, FarMart is more the centre of point for what Avana does, where we are using technology and SAAS models to solve a very specific supply chain issue and a market access issue. So I think those are the kinds of things that we will do a lot more. We are also investors in a company called InteloLabs. Intelo was started with computer vision for quality as a saying of fresh produce for horticulture. And today they are the largest digital trading platform for fresh produce fruits and vegetables. So we are not active enterprise SAAS investors, but we do understand and given the opportunity where we see it fitting into our thesis, we will look at it

Siddhartha Ahluwalia  30:49

and currently how large is Avaana fund today. And you have two vehicles, is it part of the same one the Awana seed and Awana growth or are they different?

Anjali Bansal  31:00

They are different pools, we invest from different pools. We are now building the next fund which will be a sustainability focused fund, where we are considering having a smaller pool within the Fund for experimentation with very early seed.

Siddhartha Ahluwalia  31:18

And I believe the current fund would be roughly between $50 to $80 million.

Anjali Bansal  31:27

I would not comment on that.

Siddhartha Ahluwalia  31:31

And digital acceleration UPI has been, you earlier mentioned right, one of the factors on digital acceleration, what are the other trends which you see facilitating?

Anjali Bansal  31:56

so I see embedded finance, our company CoverFox, which has very sharply and very agile highly evolved into doing embedded Insuretech. So, really developing the pipes to facilitate seamless, deep integration with partners to do on the spot underwriting and issuance of insurance. So, embedded InsurTech, for example, is one of the things that is now getting linked with UPI supports payments, it also supports and both large companies as well as startups. You know, we are now seeing a lot of development of API companies like companies that create the API’s, you have a setu, you have a postman that are facilitating some of the seamless transitions and transactions.

Siddhartha Ahluwalia  32:43

And on something on the personal front. So, Sandeep and you are both one of the best fund managers in India. Right. So you and Sandeep consult each other on making investments are the kind of trends that you are seeing. How’s the equation at the dinner table in your home?

Anjali Bansal  33:04

We’ve always maintained very strong Chinese walls, because otherwise we couldn’t have had any sort of healthy professional lives in addition to a healthy personal life. We will never talk about competitive market intel. And yes, we will talk about trends from time to time. And it’s like you would talk to anybody else. But keeping oour Chinese balls very clear. But now, of course, Sandeep will be an advisor to Avaana on sustainability given that’s also his passion area on a going forward basis.

Siddhartha Ahluwalia  33:43

but how have you both helped each other grow both as entrepreneurs and, you know, fund managers over the course of you know, large, your own both journeys?

Anjali Bansal  33:55

So I think always being supportive, we recognise what we do, so work is not work, work is enjoyable. It’s part of one’s purpose. So, for both of us, why we work is an important question, right? So the purpose behind the work we do is very important, and so have been, I think both of us have been very, very supportive of each other’s entrepreneurial choices at different points in the career journey, and believing in the other person and encouraging them to take the risk, take the leap. And then being there to support in any way.

Siddhartha Ahluwalia  34:37

Anjali, your time at McKinsey, right. How has that shaped you if you can share like two three frameworks that have helped you develop as a professional? Right, and what you could share with others who could, you know, look at developing themselves from your own learnings, what you observed at McKinsey.

Anjali Bansal  34:57

I’m very grateful to the firm because it has really shaped me. My early years as a business professional was spent at McKinsey, and a lot of that was in New York, and then some here in India as well. But I would say three things, it’s probably a unique place where you develop strong friendships inside the firm. So it’s not competitive internally. Actually, quite to the contrary of the popular perception, some of my closest friends are the people I started mckinsey career with. And we’ve all had different career journeys, but still very close to the whole alumni network, in fact, you get closer after you leave the firm. So learning how to work with people is a very important thing. The second thing at McKinsey is putting the purpose first. So it’s always about the client first, firm second, self last. So that it’s almost kind of defining your purpose in a way that is other than yourself. And personal gain is a useful thing to have, it’s quite liberating, it takes the pressure off you because you’re working for a larger cause than your own benefit. Third, is just the ability to go into any situation and be able to break it down into a structured problem solving approach. So breaking down something that is very complex, and disaggregating it into smaller, solvable components, is a great skill set to have. And these are some of the tools that you develop just naturally, while you are in the form. And in most consulting firms, you have that kind of training, communication and confidence and being able to walk into any boardroom at any age, and be able to present so it’s, you know, you can be a young associate, 26 year old associate and be presenting to a chairman of a large company, deciding some of those important skills and toolkits to pick up.

Siddhartha Ahluwalia  36:56

And moving on to, you know, we are towards the end of 2021. It has been the best year for the Indian startup ecosystem. doubters and naysayers earlier said that right? There won’t be another Flipkart like exit. But we’ve seen the first year so many companies going public, right? So 2022, you see more capital coming into the Indian startup ecosystem. And if you have some thesis on how it’s going to be different from 2021.

Anjali Bansal  37:30

2022 will continue the momentum. We have several very high quality companies that have grown well and scaled well in the last few years that will hit the public markets. So every time there is a successful listing of quote, unquote, startup and the reason I’m saying quote, unquote startup is that some of our startups are bigger than 100 year old companies, right? So yeah, but every time there’s a successful listing, it actually is a great boost and proof of concept to support entrepreneurship. And you know, India is actually a country of entrepreneurs. All our large companies, or rather, most of our large companies are promoter led. They’ve also all been entrepreneurs. So before there were funds in India, the portfolio investors were actually large companies, so whenever their next generation grew up, they said here, take a pot of money and go build something new. So I think entrepreneurship is very deeply ingrained in the Indian DNA. So 2022 We’ll continue to see the scaling up and the coming of age of many of our startups that have grown well in the last few years, it will create more confidence, there seems to be enough liquidity, there is tremendous global appetite for participation in India tech. And some of our the listings provide an opportunity to the largest foreign institutional investors to participate in India tech. What happens from a global macro economic trend around liquidity and capital pools and through geopolitical uncertainty and so on is beyond the control of the Indian startup ecosystem right. So, I am very optimistic about 2022

Siddhartha Ahluwalia  38:04

and on your own personal growth, right, you mentioned you talk to entrepreneurs, you talk to other VC funds and you keep on reading, what are the some of the things that you when you are alone you spend time on learning and what are the sources of those

Anjali Bansal  39:46

One is seldom alone to start with. Look at this from a discussion with you, Siddharth I will learn a few things. Like I mentioned, when one is alone, I read quite a bit and current events, commentaries by other global entrepreneurs, fund managers, policymakers, gives you a sense of really what is happening in the world, not just in the world of tech and investing, but in society, in politics. And how is that likely to translate into what society at large will look like in the years to come. And that’s really where opportunities set

Siddhartha Ahluwalia  40:35

any favourite couple of books or reports that you could share, you know, which are listeners can go back and refer to?

Anjali Bansal  40:45

So if people haven’t read Isaac Asimov, I would urge you to go back and read the novels he wrote. And you’ll be surprised how much of that is now coming true. But in addition to science fiction, I read a lot of what is published on some of the blogs, continue to read Wall Street Journal, I actually like to read a lot of what comes out in the ken, and the morning context, so it’s not any one particular journal or otherwise, thanks to Google, one has a very active feed.

Siddhartha Ahluwalia  41:25

Thank you so much, Anjali, it’s been fantastic to host you on the podcast. Thank you so much for sharing your experiences, learning, and your life journey with our listeners.

Anjali Bansal  41:36

And can I also say that you said, you know, Where do I learn from? I learned a lot from my children and their friends. And the children of my friends who are now all becoming young adults. This is a Gen Z generation, if you will. And the post millennial, the Gen Z’s and the post Gen z’s. I think the more time you spend with young people, the more energising and more learning there is in that

Siddhartha Ahluwalia  41:59

That’s correct, right. The trends like companies like snap, or even in India, if you’re closer to home, you see Fampay building, there are 23 years old, and already have like many millions of users transacting on, for example, kind of apps like Fampay,

Anjali Bansal  42:20

the story of DTC brands also, isn’t it? So DTC brands have grown through tier two, tier three India, as well as the Gen Z, who are much more discerning in what they want to use what they want to consume. And frankly, I think if given affordable alternatives, they are much more focused on doing the right thing for the planet. So sustainability is a big trend, both from a consumer side as well as an enterprise side as well. I think sustainability will be for the next 20 years what digitization was for the last 20

Siddhartha Ahluwalia  42:55

Thanks again, Anjali, it’s been absolutely an honour and a pleasure to host you on the podcast.

Anjali Bansal  43:00

Thank you. Thank you for the opportunity, and great to be together with you

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