Fund thesis: AI is the X-factor 

It is a $50-million fund, which will be fully deployed by next year. At a time when activity has been pretty slow in the ecosystem, for us it’s been super-active actually; we’ve been doing a lot. The focus is on companies that are powered or made possible by the developments in AI over the past year. We want to be the first investor in the company, so we’ll come in as early as friends and family rounds or seed rounds, and our cheque sizes have quite a range. The smallest we’ve done is $250,000, and the largest is about $1.5 million.

We wanted to embrace the structural forces. That’s why our thesis so far has been about investing in companies that enable trusted intermediaries to provide a human interface to customers. Meesho, Sim Sim, Orange Health Labs, and LEAD School are some of the investments exemplifying this thesis. Now, what’s changed is the development of AI and how it applies to the thesis. Broadly, our thesis is that in an economy of intermediaries — traders, brokers, and middlemen — we invest in leveraging intermediaries to add trust and credibility, and layer in AI to narrow the scope of work for intermediaries.

I think of AI more as something that’s going to be across sectors, and we are seeing a lot of applications. Even ed-tech is quite an exciting sector, as a lot of what AI enables will be in ed-tech use cases. Services as a sector is also interesting, if you can start to build AI-enabled systems that can augment or replace a lot of the services work, which is going to be interesting, because it’s going to be narrower and more use-case specific. I think what I’m most interested in is the power of multi-agent workflows using AI. 

In 2022, many large VCs invested in pre-seed, seed companies, and gave the best valuations; they invested $8-15 million in seed. The problem now is when those founders come back to us... they’ve raised money from one of the six big firms in their last round. If those guys are not reinvesting or taking them seriously, then why would I? So, founders need to understand that there’s a huge trade-off in taking capital from a firm that specialises in Series A and Series B. If you take money from a Series A firm at the seed stage, and they’re not the ones thumping the table at your Series A, then you’re in trouble. I think that’s something that seed-stage founders should never do.