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'It’s a talent game, not a hardware game'

Most of the startup founders come from Flipkart, Myntra, Yahoo Google etc with first-hand experience in the new market, says Bhushan Patil

Nov 25, 2019 by Ruiyao Luo
'It’s a talent game, not a hardware game'

Eric Muhr/Unsplash

Bangalore-based Multiple Ventures have made over 30 early-stage investments in the last two years. The Venture Capital and Private Equity firm mainly focuses on three sectors namely fintech, edutech and retailtech.

So far, the company has confirmed USD 17 million in funds. Multiple ventures boasts of an unique ecosystem partnership model giving startups access to consumers, global technologies, regulatory license/compliances framework and a Launchpad.

The Passage spoke to Bhushan Patil, founder of Multiple Ventures, to get insights into the investment strategy of the company and the early stage opportunity in India.


The Passage: What opportunities did you see in early stage investment in India when you decided to start your own venture on the back of your stints with Alibaba and Paytm?

Bhushan Patil: Two things. First is the market potential and second is the talent pool. Now, India has large companies such as Paytm, Myntra and Flipkart. Back then, it was not the case - the market was not ready. The consumer acquisition cost was high.

In the last two years, with the entry of Reliance Jio and a lot of digital push on the government’s side, the number of smartphone users has shot up dramatically. The new startups have now access to more than 560 million smartphone users.

Secondly, most of the startup founders come from Flipkart, Myntra, Yahoo Google etc with first-hand experience in the new market.

I felt it's a good time to look at this model and start a company.

The Passage: Why would Chinese funds go for early stages in India, given the trend is to go for the safety net of late stage investments?

Bhushan Patil: Most of the Chinese funds that are looking at India such as GGV capital, Shunwei Capital, Xiaomi are known for late stage even in China. When I went to China, I have met with a bunch of investors. Early stage investors in China are looking at India, but they don't have an option to invest in India now for multiple reasons.

There are LPs or individuals in China who want to invest in India.

The second is family offices or corporate groups. India is a new market for them and they don't want to bet big on India. So they put small sums just to test the market. This is a sweet spot for us. We have met a lot of these people, especially in Shenzhen, Hangzhou and a few in Beijing, who are willing to experiment.

They do around USD 20 -30 million investments a year in China and don't mind putting USD 1-2 million in India.

Then there are funds that are mainly China-focused or China and Southeast Asia-focused. And for them, syndication model is a good MO. Let’s say, if they have earmarked USD 100 million for China and SEA, they can deploy 20% fund in India through a partner.

However, the opportunity comes with its own set of challenges. We have to find a legitimate way for the money to come to India.

It's quite natural for large funds from China to have a couple of people here. They can afford to keep aside USD 20-50 million for India and put a team behind it.

For smaller VCs, it’s an additional cost to manage both the business and the portfolio. A major pain point is the cost involved in running the operations in India.

Additionally, there's not enough knowledge flowing from India to China. So there’s a knowledge gap. The access to companies is another problem.

That’s why it isn’t easy for the early stage ventures from China to succeed here. We see a lot of people stay here for a year or two to make things work. Since they don't have access to companies, it becomes very hard. I used to connect people like this, but it is just impossible unless they have an ecosystem locally available here.

That's where we come in. We understand India and we were in China earlier.

What we bring to the table is not just the deal flow. We try to solve things holistically like how to make sure the money can flow back and forth, tax matters etc- we think of the whole system.

The Passage: What's the idea behind the name Multiple Ventures?

Bhushan Patil: When we identify the target company, we do not only give money to them. Since we come from an operations background, we know how to help the founders. We also help with the distribution and access to the ecosystem. Startups typically spend money on technology, marketing, personnel, and consumers. So our idea is to help build an ecosystem of partners and bring in consumers at a lesser acquisition cost.

The Passage: What are the opportunities you see in India’s fintech space?

Bhushan Patil: There are pockets of fintech today that are crowded. For example, lending. On the other hand, insurance penetration is less than 10%. There is a huge space both in terms of market opportunity and product creation. Look at the sharing economy, India has not even started.

If you take lending, lots of companies are willing to give money. But the level of sophistication in terms of credit building, underwriting models is not on the par with China or developed countries. The lending firms follow the typical model - take money either from investors or from the government and try to find a new customer for that. So the opportunity is huge.

Large players such as Paytm and Phone will bet big. But it’s not possible to cover all the use cases. For example, if you buy a TV from a physical shop, the transaction happens in a POS system. So maybe it will be an insurance product linked to the POS machine. You still have a completely different segment to tap.

All the use cases cannot be exploited by one big company. Rest assured, there will be more companies.

The Passage: Most of the big edtech startups - some of them listed in the US - in China still don't have a strong revenue model and are incurring huge losses. What’s your investment strategy when it comes to education startups in India?

Bhushan Patil: We are looking at platforms that are using edtech as a vertical. In India, the number of people who are studying in schools is much larger - 30% population is less than 30 years old. Whereas in China, because of the single child policy, the school going population is lesser compared to the 250 million people studying in schools in India. So the market size is huge.

Secondly, the dynamics is different in India.

However, the profitability still begs the question. We still need to acquire consumers faster. We look at education as different segments: basic education, which is academic; shadow education which helps you do well in the academics; and upskilling.

There's a huge opportunity in the first two.

The edtech market is not crowded now. The first mover advantage is key to achieving profitability.

The Passage: Indian startups are trying to learn from China. But Indian market is a whole different animal. How do you think the entrepreneurs can strike a balance between learning from China on the one hand and solving issues unique to India on the other?

Bhushan Patil: Two things can be leveraged. One is definitely the technology. I was told China has already built technology to account for 2 billion people.

Second thing we can leverage from is the mistakes China has made in the process of growing. When you scale from zero to one million consumers, you try different hacks to target consumers. These hacks could actually work in India. Some of these hacks, especially growth hack models from China are much better when it comes to social ecommerce, KOL economy, influencer economies etc.

The Passage: Chinese companies are not only investing, but also rolling out products such as Helo to take on local players such as Sharechat. Do you think that has resulted in a trust deficit when it comes to forging partnerships with Chinese firms as the competition looms large?

Bhushan Patil: Since China has understood the space, they have already built the company and technology. They will be aggressive to launch it in India any day. Five years down the line, we would have our own local talent and local companies here.

I do feel this is a talent game and not a hardware game.

Maybe five years from now, 60%-70% would be Indian companies, 30% would be from outside.

India is an open economy and doesn’t have a problem with Chinese companies setting up offices here. In India, the largest search engine is Google and the largest social network is Facebook.

Same goes for startups. You will have enough startups coming in in 5-10 years. I don't see much of a competition. Because looking at the policies, if someone wants to start a company in India, they need to have enough holding here. So it's not competition per se. You are creating a brand in the country, paying taxes and everything.

The Passage: In India, ecommerce giants including Amazon and Flipkart don’t have a huge market share on the payment front. And the payment giant such as Paytm doesn’t dominate ecommerce. Do you think India will have a company like Alibaba that dominates both ecommerce and payment?

Bhushan Patil: China had good 20 years for companies like Alibaba and Tencent to grow.

Alibaba first tried B2B ecommerce before B2C ecommerce and then got into payments.

They built things slowly, as and when needed, and each thing - Alipay, Taobao, Tmall - got five years to mature,

The problem with India today is, because of the leap frog model, we see what happened in China in 20 years happening in India in less than 10 years.

I think, because of lesser time to kind of scale in that ecosystem, instead of having 500-billion companies, India might have 10-20-billion dollar companies.

China is a civilized economy. And because of that, one company got five years to build this on top of their existing stack. Indian market has already different companies including Google, Facebook, Paytm, and for that reason more startups are going to a billion dollar to 10 billion dollars bracket.

Ruiyao Luo

Ruiyao Luo is a Beijing-based tech reporter. She focuses on emerging startups and tracks the trends in the startup industry in India and China. She can be reached at

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