Eight years ago, two women formed a team and decided they would invest in India’s startups. One was Rema Subramanian, a finance professional with three decades of experience; the other was Ritu Verma, a physicist who previously worked for multinational firms. At the time, internet usage and smartphone adoption was becoming more common in the country, and global VCs were beginning to cut checks for the nascent local startup ecosystem—particularly for e-commerce companies.
Instead of following suit, Subramanian and Verma realized there was “white space” in areas like agritech and health tech that presented promising opportunities. In 2014, they founded early-stage VC firm Ankur Capital with an INR 500 million fund (roughly equivalent to USD 7.9 million at the time) to primarily invest in startups building deep tech solutions in these segments. KrASIA spoke with co-founders and managing partners of Ankur about their journey.
KrASIA (Kr): The sectors you started focusing on in 2014—agritech and health tech—have become crowded in the last few years. How has your investment thesis evolved?
Ritu Verma (RV): More investors are looking at these areas now than in 2014. The realization for us is that these are large markets and there’s a long way to go. Having spent time in these markets, we understand what can and cannot work.
Over the years, we’ve realized India is a great sandbox. A lot of technologies that get developed here have global applicability. Many companies in our portfolio have tapped overseas markets. For example, CropIn digitizes farms and does high-level analytics using satellite data to make predictions. It is present in 60 countries across Asia and Africa. Another company is Skillveri, which uses virtual reality to train industrial workers.
Kr: What are some of the other interesting companies that you have backed?
RV: We have invested in StringBio, an alternative protein company that uses waste gas (methane) to make proteins for animals and humans. It is backed by a French billion-dollar biotech VC. We also backed Niramai, a breast cancer detection company, which is backed by Japanese investors.
Kr: Indian deep tech startups often find it difficult to raise follow-on rounds. Moreover, the sectors you focus on weren’t mainstream in 2014. How did your portfolio companies tackle this?
RV: There wasn’t a tsunami of funding coming to these sectors. Fundraising took longer than it did for startups in hot sectors like e-commerce. We focused on the pain points the company was solving and getting the right customers on board. The fundamentals of our companies were very sound, so they could withstand delayed funding.
Kr: As women in the male-dominated Indian VC industry, what challenges have you overcome?
Rema Subramanian (RS): We were first-time fund managers looking at completely new spaces, where few funds were investing, and we were women. Our fundraising journey was not easy for the first fund. But how much each one of these factors contributed to making things challenging would be difficult to say.
RV: We were very thick-skinned, and we still are, because that’s the only way.
Kr: Since 2014, you have backed 20 companies—fewer than other early-stage VCs. Was that deliberate?
RS: As a philosophy, we do not spray and pray. There are many early-stage funds that make a large number of bets and hope some of them work. We work with each of our entrepreneurs to ensure they succeed. Initially, we invested in one or two companies annually, but since June 2020, we have backed ten companies. Because our second fund is also much larger—INR 3.5 billion (USD 47.8 million)—our pace has increased.
Kr: Have you identified any interesting trends in India’s healthcare space?
RS: Until last year, e-consultation hadn’t picked up. There was no trust [in telehealth providers], but we see consumers changing their behaviors now. As more of healthcare becomes digitized, we will see deep tech companies utilize digitized records of patients’ medical data to diagnose and cure diseases faster, develop drugs faster, and come up with customized drugs and treatment plans.