 So, welcome everyone and to the Tech Innovation Summit and I'm so very glad to sharing the stage here today virtually of course with Mr. Sudeer Sethi who is the founder and chairman of Chirate Ventures India as one of the foremost investors of the country. Mr. Sethi has of course led Chirate Ventures and it's a leading VC firm which is advising about 900 million dollars already put and has been advising startups right from AgriTech to ConsumerTech to Agtech and so many other areas of tech itself during the last few years. You know I was having a very interesting conversation with Mr. Sethi right now and he told me that today the purpose of a fund is not just to make an investment but to make an impact in the society. And to make this impact it is important that we look at society as a whole and given the theme of this conversation today for the next 15-20 minutes on the future of society, I would first like if Mr. Sethi once thanks, thank you for joining us here today. You know you made such a valid point about the purpose that is very important which is just beyond investing for a fund or for any business for that matter. You know if you can give us a sense of what is or how is it that you're looking to make these investments the last few years while taking into account what will be the impact of these investments on the society. Ritu, thank you very much for inviting me. It's really a pleasure and I hope you and whoever is on the call here is safe and sound. You know it's a very interesting question. We started off investing in 98 but Charate started off as earlier IDG and not Charate in 2006. And I think around four, five years back, a number of our LPs, a number of our investors came back and said, hey you know what, you're investing all these companies and so tell me what's happening there. One of the investors asked us that in your logistics company is the truck driver working, you know, more than eight hours a day. I must admit we never thought of that five years ago. So the other question was, okay, if farmer, if you funded Agritech company, then has farmer income increased? Then we went to the whole space of education and there were questions from that. We went to logistics, we went to environment, we went to FinTech. FinTech was a very interesting example. That how many people have actually in the SME business lent, you know, how many have got the debt? Have you been able to reduce the cost of that? Have you been able to reduce NPAs? Now that set us challenging. That was like, okay, we never did this. It's about, I would say, two and a half years back, based on these inputs from our investors, we found that it was important to start measuring first. It was important and we changed our position. So positioning from financial investor, right, in the market, delivering outside financial returns to our investors, we slowly changed our position to the following. The first was that we are here for a purpose. And by the way, there is no, there's no, let's say, pull between delivering outside financial returns to our investors, supporting the ecosystem, and also measuring impact. This is important. Why? Because, and that was really brought out during the pandemic. And when I said during, I mean the last 18 months, because the stress around us became more stark. Sure. I mean, for instance, in education, because everybody was focusing online, the number of people who stopped going to school shut up. It's not by a few million, it's by hundreds of million. Children were sitting at home. So how does technology solve that? So our position became, we invest in businesses, entrepreneurs, who are solving real businesses, problems in business or in society, which have not been solved before, but can only be solved by using technology. Okay, and I can give you some examples of that. Absolutely. Second, can they be built to scale? Because India offers scale. And third, what is the deliverable? Deliverable is outside financial returns, which means revenue, PNL, et cetera, et cetera. But it's also, when we do AgriTech, is the farmer income increasing? When we do lending in one of our companies, what's the scale of lending? Well, Vina Network has delivered last year, two and a half billion dollars worth of lending to 70,000 SMEs in the country with an NP of zero. Right? Crop in is, and these are recent recently, last five years. Crop in is delivering their monitoring 13 million acres of land, where through satellite imagery, where they are giving input to the farmer on soil management, disease management, crop management, water management, and that is leading to income of the farmers going up between 8 to 12%. So we are on an impact fund by the way, but we started measuring. In fact, we just released our second impact report, which gives you all this. And if you give me a minute, I will share with you literally the end result where we are right now. And not when say end result means today's results, right? So today as a VC fund, are we giving outside financial returns? The answer is yes. Two, what is the impact our portfolio has created? At a high level, we have now invested in 100 companies, but we are active at about 60. The revenue is about 1.2 billion, market cap is about 14 billion, and we are about 0.5% of India's GDP. That is enormous. Now we are going to ourselves to say, if we have to have impact, we have to be a significant player, we have to do more investments, we have to deploy more capital, we have to raise more capital. But we also have to be a significant part of India's GDP. We as a VC must have companies growing faster than India's GDP, right? Today we have reached our portfolio reaches 58 million consumers, okay? 37% of them, 22 million are female, which is very important. At any point of time, 30 million are active. Our companies have reached 325,000 businesses either in the supply chain or the distribution chain. Our companies in the recent, that is only a few select companies in fund 3 and fund 4, have created 30,000 direct jobs. 24% are female. 33% are in tier 2 and 3 smaller towns. 10,000 people have been re-skilled and upskilled. Okay, this is, so we as a VC are saying there is profit and there is purpose. Both go hand in hand, there are two sides of the coin and we are operating in the center of significant financial returns to our investors, technology, because that's the only way to do it for us. Sure. Solving significant business challenges for the consumer or for the businesses, using technology, early stage investing and delivering impact. So for us, that's the biggest impact. Yeah, sorry, go ahead. No, no, so I was saying so that's a massive impact indeed. I mean, you know, as a fund, you know, you're not just thinking of putting in money and taking out money or taking thinking exits but you're really thinking on what or how the society has been benefited from these investments and largely how it how the common man would eventually get impacted because this investment was made at some point of time in a startup. And I think that's that's really what our team is really all about that you know how today with the tech enablement the society is getting impacted. So, you know, of course it's been a very rewarding time for the startup ecosystem we've got about 60 unicorns already in 2021 despite the pandemic, having its own set of wars that it's put on us. But you know, and today if I was a startup. And if I were to ask you this that you know how should I plan my funding that is coming to me today it's not. It's not as if you know I'm going out and looking for funding here and there the funding is happening in the ecosystem and happening quite a bit. So as a startup how should I plan myself to get funding that is works for the investor and works for me should I go for an Indian fund should I go for an international fund. Today I also have options as a startup for going into m&a. How can I know that I it's not too early for me to go into that phase phase because you know obviously there are offers that are coming to me. And is IPO the way forward for me as a startup so you know, I know I've collected a lot of things together but as a startup I'm sure you know you need to weigh all these things in order to achieve them. So I think it's important to understand that all these are elements in the life of a company and not at first point, you're starting up a new new technology startup or a company here to look for capital, and initially people start with their own capital, or from friends and family. And then later on they get angels coming in, which is a known fact angel angel ecosystems very very strong India, it is unbelievable strong. So I think that's, there are groups like the triangle group. There is, let's venture the number of other people. Okay, in each city where this is, you know, the Indian angel network the Mumbai angel network you name it. And there are so many accelerators in the country, right, whether it is done by corporates or it is done by, you know, venture accelerators, about 400 of them actually. So it's important to study that market and see how you know let's, let's just go to the right because everybody has a team. Everybody has what they want to do. So I think that seed stage funding, there is no shortage in the country, let me be very clear. And the moment you go into that you will discover it's like matchmaking, right. Where do I do what do I do, and that can be done by research. And then you talk to a few people and most of the seed funding companies do get, when I say most I mean, maybe 50% or 30% do get funded at that level in the country. So I'm reserving my comments with the second part is when you grow early stage investing comes in that's where institutions come in. And that's where there are early stage funds. There is us, charity venture, there is all the other funds in the country, whether you name it like blue or, you know, cake capital, or even people like you know, they have their own early stage programs. They have everybody has, we have a certain, let's say communicated parameter, it's on our website say hey, let's go and study them and connect with the right people to raise, to raise early stage funding, which could be $12 million. And then you raise, it's a marathon race, you know, it's like a really racing keep on raising more capital as you move forward. And let me, let me be clear, there is enormous amount of capital in the country. Whether it is an Indian fund or international fund, it really doesn't matter, right, you have to find the match, people who believe in you, and people who can believe in your idea and your execution, you will find somebody, right. If you don't, then think why. Right, it is, I mean we see this year we've seen 3000 new companies, but we fund only around 12 to 15 a year. It doesn't mean the others are bad, it just means that we found our sort of, you know, match in terms of what we think we should be funding, and similarly the others do the same thing. So I think that's the process, you know, M&A and all is much later, I mean, M&A happens a great company, somebody wants to buy you because there's, you know, you can decide whether I want to run this company or I want to go and start a new company. M&A also happens when the company is not able to raise capital, the burn is very high, you really want to get out of this and say, okay, let me start something else. So I think there are many reasons there, IPO is much later, I think, you know, that's, it doesn't happen when IPO used to be very infecisive in public, IPO was a, there was no risk capital in the country and IPO was a method to raise capital in the early days, not never, IPO is much, much later. So don't even think about IPO. Sure. No, this is very helpful because obviously, you know, when you look at the options you don't need to be confused because eventually as a founder you have to be running a startup and not just thinking about, you know, going in different places just looking for capital. And that's very well put. You know, I see that your portfolio has a lot of agritic companies, companies like crop and who doing some great work. And you know, health in any country has become now one of the biggest challenges for the government for its citizens. And I think some of the primarily the problems of health start from agriculture, it's about what we consume the food that we are eating. And that sometimes leads to in the long run diseases and, you know, not such good health for us. So how do you feel as a society this needs to change the food we consume the daily that we are consuming how can it become healthier how can we go back to our roots of consuming organic and producing it in large volumes, because eventually it's not just about eating or producing more food it's about eating the right food. We don't want to make our population sick, even if we when we want to feed them. So how do you think as a society that can get connected. I don't think we've thought about that. I think where we are right now in. Let me take health first and then I'll take every case in health. The way we look at it is, there are five layers to for us to invest in health. The first one is prevention. Second one is the whole space of diagnostics. Third one is therapy. And the fourth one is rehab and the fifth one is medicine. There are five stages. And I'm not including pharma and all that that's, you know, as such, the moment you take, you look at the broader health sector today, every investment or the bulk of the investment is going into a little bit of diagnostic and therapy, a little in rehab. In fact, almost nil in prevention. Right. It is a well known fact. I mean, when you say therapy, it means opening hospitals and clinics but see that is important. But India has today 1.3 billion people. 1.3 billion people how many hospitals and clinics will you need and how many years you have not done it in the last 50 years. So you have to use technology to get that done. I mean, please understand, during the K during the pandemic period in the last 18 months, digital conversations between doctors and patients was available, but it was not adopted. And suddenly on the 22nd March of 2021, 2020, right. The clock became different. And I know my GP within a week or two weeks was accepting 20 calls a day on WhatsApp. Now that became a big thing. Now today, one of our companies is doing I think 60 to 100,000 calls per month, the health space. Why did this happen because the environment changed around you. Okay. So, effectively, in the health space, we are looking at prevention as a very large space, because if you catch cancer before it sets, there are many ways to do that. Right, technology can help you catch cancer, and you 80% chance it will recover. But if you catch cancer in stage three, it's very tough. Whereas today, the focus is nobody catches cancer at prevention stage, or even at early diagnostic stage. If you look at, and I'm familiar with the hearing devices space, our family, family foundation does that. If you look at the hearing abilities in the country hearing disability, of course, I think five or 6% in the country. Right, right. Now, the right now, the moment you go to any specialist, he says, hmm, if some people require some children required therapy otherwise here's a hearing device. And by the way, if somebody can afford it and, you know, go for cochlear implants, but nobody talks about prevention, nobody talks about screening of children in hospitals, you know, within a week to weeks of their being born. Right. How do you build a company to screen babies in the first couple of weeks to find out where there's a hearing disability. And how do you monetize that. Right. That is to me, a very large opportunity today. Okay. And I can take many, many examples in the healthcare sector. So I think health is very large India, India, 1 billion people in India do not have access to efficient healthcare. Let's be very clear. And I think you've got to accept this problem and then go attack. Right. Government is doing it in a different way. You know, it's a good way because that reaches out to the, you know, I've seen videos of vaccinations being delivered by doctors and nurses walking. You know, almost five to six hours to reach a village with four people. Right. So, government has his own way, which is, which is required. I think investors like us can do very, very different things and write on that infrastructure because the government infrastructure is pretty good by the way. Coming to Agri. So the way we look at Agri is not what people should eat. We have not reached there yet. The way we look at Agri is very simplistic manner that the average income, average acreage I believe is two to three acres per farmer. And in fact, the Prime Minister also mentioned in the speech that the average acreage per farmer is very small in India. Typically, my limited knowledge in that is that each farmer per acre earns about 40, 50,000 rupees per year. It means if a person has two acres of land, which is a large population of farmers, they will earn one lakh rupees. Right. And they have to support a family of six, by the way. How do you expect a family of six to run on that? It's like a perpetual cycle in poverty. How do you expect the youngsters to, that's why youngsters are coming into the cities. Right. So if you have to do that, you have to, and why do they do this? You can't change the acreage. Right. It will go down in the future. So you have to give them technology by which they can increase their productivity. They can increase their losses, sorry, decrease their losses, which is what people like crop and do. Right. Or in our portfolio, we have agro-straft. But then once you produce your Rabi and Karif crop, let's say in grains, the loss on storage is enormous. So we invested in a company called Ergos, which has got over 160 micro warehouses on a technology platform in Bihar and they're expanding. And they give, on the layer one, they give very healthy, very good storage facilities. They give rental, or that on rental. Farmer doesn't have to sell on day one after every crop because that's been, he has to sell at a lesser price, they can sell when they want to. And then on top of that, there are other financial models like insurances available, debt can be made available, et cetera, et cetera. So I think in the agri sector, the investor like us has to choose what to do and go and invest in companies and solve the problem, whether it is in crop productivity, income regeneration, lending to farmers, this input being managed, agro-star supplies inputs. It's like an e-commerce performance also, right? You have to manage that and Ergos goes and solves the challenges of storage, which is a massive, I mean you can't be losing 10-20% of your storage in the country. Absolutely. So we've solved it different way. As far as food habits are concerned, I can tell you one thing, food habits are changing very fast. Sure. Consumers will demand, I don't think we need a national policy on that. I mean that's the worst thing you can do, right? Consumers will decide what they do and I think analytics will tell us where the trending is. And today we have technology-enabled food companies who do use and meet the demand of the consumer by backward integrating with the farmer, which means the entrepreneur has to go back to the farmer and say, you know what, I think I need more protein, so produce dal and not meat. Yeah. So those things will happen as let's say rapid evolution on the business side rather than policies here. So you mean that there needs to be flexibility in what the farmer is producing depending upon what the market need is? Absolutely. I think convincing farmers to produce what the market needs is a very big thing. It cannot be done by policy. It has to be done commercially. And that's where people like us come in. When we fund companies and entrepreneurs who would go and do this, by the way, it's a massive thing. You know, Urgas can go and tell a farmer, you know what I think green is going to be a problem. Why don't you switch to certain other cash crops? It may take the farmer three years to do this, but he'll listen. So we've in fact just got a question from one of our listeners who says that what kind of agri-tech start-ups are you looking to invest in in the coming year? We are looking at agri-tech solving challenges in the whole supply chain of agri-tech, inputs to farmers, solving the whole issue of productivity of crops. Okay, water management, big issue in farmers. How do you do this while the average acreage is two acres? We are looking at automation coming out of the farm level in a subscription model. We look at storage again and again because that's a massive mass. I think if I give ourselves maybe a few years from now, we will certainly look at value-add. India does not have significant value-add on crops coming out of the farms. We can sell tomatoes, but selling tomato puri is very, very important because there's a value-add of 40-50%. You get that back to the farm using technology by the way. So I think if you look at the consumption of goods in the country and the value-add which is there on produce coming out of the land, there is huge opportunities in the ecosystem which goes up to the consumer to add value and produce goods in that space. I think we will probably move towards that area in the future. Sure. So while we're talking about technology, one of the areas of concern that has particularly become more rapid in 2021 is the tech talent piece. It's hard for companies to find good tech talent in order to digitize. Now, we're moving a step forward as a country where we are digitizing every small SME or a corporate. We're all looking at the talent that will help them to digitize in the right way. But at the same time, there is already a tech talent crunch that is beginning to sort of show its face. Now, how can we as a country ensure that we resolve this as a short-term problem wherein there is availability of tech talent for companies who want it, and at the long-term make a sustainable change towards it, wherein if we are looking at good tech talent to be there, they should be available in the right affordable range for every business to be able to gather them. No simple answer. In fact, NASCARM Executive Committee has actually, I don't know if you've seen them, many of us have gone and said it's a project and we need to take our own notes of making sure reskilling and upskilling takes place. There is a big challenge in recruitment, lack of people in this space. India is facing a normal shortage. Now, there's no answer but I can share with you at least some thoughts. I think we need to understand to my mind that this is going to be getting worse. Just look at the services companies. They will hire millions of people in this space and if they can't hire people in India, they'll go outside the country. Because they will run their company and that's the right thing to do because these are global companies. So if you look at the manner in which actually the software companies solved this problem many years ago and still do that, is they take entry level people and not even going to go into education system should be better. That's a long term thing and that people like us don't have any control. But new interest coming out, most software companies have enormous programs to skill them for employment in their own companies. I think that is a need for scaled startup to start with. In fact, NASCOM has a program has a website called FutureSchool. They've trained hundreds of thousands of people there. I'm encouraging startups to go and sign up there and say, hey, there is training available. So startups need to go and invest in people. Maybe series B onwards and series C onwards because that's when they can afford it to colleges and say, I'm going to take 10 people are going to take 100 people and training for six months. This is no choice. Right. And India has enough unskilled technology people by the way. Right. That's number one. I think number two is we need to think of offshoring. It is small city sharing. If the headquarters in Bangalore. What happened during the last 18 months, people went to their own small towns. Right. One of our companies is in the rental business called NIST way. He told me that a bulk of the IT service, one of the cities where IT services people moved from Bangalore was in Dor. Business has to follow skills. Correct. The old method of saying come to Bangalore is gone. I mean, my people are now in seven cities. I'm telling them stay where you are and we'll build structures in such a way that we are a digital form. So the moment you do this, you go and say, okay, I'm going to open a center in Indore. There are some people who want to quota. There are some people who want to syllogary. It is time for some of the large software services companies and the large technology companies to start quote unquote offshoring within India. Right. And not just get into I must get into the top 10 cities, because that's not where the population is. I think that you will get more people from these colleges, more people staying their own small places, because they want to stay with family, and they will join your firm and by the cost structure there are much much different, much more different than bringing people to Bangalore. So it's a very, very important thing we do this. So, rescaling, taking the top, I would say 50 to 100 cities in the country and making sure that infrastructure is set up there by scaled startups, and scale software services companies, and then hiring the right people from college more and more in India, and upscaling them, and then your next year keep upscaling. Okay, it's a really race in the country. And I think if the faster we do that, the better it is. So, sir, we've got another question on this that do you feel that there is an ed tech opportunity in the talent crunch for tech? Look, I think the tech opportunity is always there, it will increase now there's no question for the talent crunch because but it does not go into the, I don't know, millions of people who are coming out as engineers, and commerce people, and, you know, people in the area of physics, chemistry, right, the question is how do you take them. I think they're the model has to be slightly different because those people today are ed tech companies don't focus there, right. Ed tech companies focus on, okay, I have the money to pay one lakh rupees to get educated, I'll pay that those people don't have the money to pay. And there has to be a model by which a paid program comes, or a, or an employee guarantee program comes through startup, by the way, because startups can fund this, there's no question, if the right monetization is there. But the real real, let's say holy grail is lacks and lacks of people coming out of colleges in how to train them and technology. That is not there right now. I think in fact, software services companies are the best people are doing this right now, right. Yeah, they will scale it up because they need it. But this world where startups are there to a massive scale all the unicorns should be doing this, let's put this way. Every single unicorn should adopt, you know, the next 100 people they want to hire from colleges. I think that's that's certainly a good point you've made. So we've actually overshot the time but I'm taking a couple of quick questions that are coming in. So somebody is asking, do you think there is a future for rural mobility in the startup world? What do you think is the future of it? Not to show what rural mobility means. I think they're talking about EV in rural areas, but that's just about what the question says. So if it is the question on EV, I think EV in two-wheelers is a bigger opportunity and it's going to grow very fast in the country. The EV in four-wheelers is a longer opportunity. I think it will be slow for the simple reason that we need a bigger platform and larger investments. But EVs in two-wheelers, I think if they're priced at around 60 to 70,000 is the opportunity. In two-wheelers, anything about around one lakh is not a big opportunity because then it doesn't go down to the volume level. And those, they have to be making money at a per-product unit level. I can understand, PVC is funding for the first two, three, four years. After that, they have to make money without incentives. But right now, the good news is that many companies are coming up. So EVs, Ola, I think is about a lakh on two-wheelers. And I do believe it's not just going to be motorcycle. I think the world is going to back to scooters now. That's true. And cycles, hopefully. Yeah. But I think ride-sharing is a challenging area to my mind. So if that's the question, then this is my answer. Yeah, that was what the question was.