“AI, IoT, and Cloud form the Key Triad That Delivers Actionable Insights”, Says Deepesh Aggarwal

Venture capitalists come with one intention i.e., to invest in potential businesses and reap profits. This is only one side of the coin. One other major objective lies in being able to influence its direction through mentorship and allowing its portfolio companies to extract value from the time and resources allotted. Silverneedle Ventures, a Venture Capital firm has recently launched a 100 crore fund to make investments in 30 startups in the coming 18 months. Analytics Insight has engaged in an exclusive interview with Deepesh Aggarwal, Co-Founder & Partner at Silverneedle Ventures.

1.With what mission and objectives, the fund was set up? In short, tell us about your journey since the inception of the fund.

The fund has the following broad objectives:

1. Select the right startups and ensure their growth
2. Ensure handsome returns for the investors, while getting the interested ones to be part of the portfolio growth management

            The fund has been formed because of the success of Xseedpartners, wherein we are at 7X multiple – 150% returned to investors & the rest unrealized. We are confident of the processes we have created to ensure not only do we pick winners but also propel their growth. The journey has been overwhelming since the inception of the fund – we already are 40% subscribed within 3+ months of the fund. 35% of this money is from the west, which is a strategic move for the value addition, investors from the west can bring to the table. Furthermore, we have invested in 2 startups – Knorrish, a content monetization platform & Samaaro, a virtual event management platform. We have a strong deal flow and are looking to close another couple of startups in the next 2-3 weeks. We are fortunate to have the backing of some good family offices in India and are also in late-stage discussions with institutional investors.

2.Kindly brief us about your role at Silverneedle Ventures and your journey as VC.

Silverneedle Ventures Fund is co-founded by Ajay Jain & Deepesh Agarwal, it's an extension of the success of Xseedpartners.

Ajay Jain: Ajay Jain has about 20+ years of experience in both corporate and start-ups. He has an MBA from the Indian School of Business (ISB) and a Master of Science degree from the University of Arizona (USA). He has a keen interest in the start-up space – playing the role of mentor, coach & angel investor for start-ups for 8 years now. He is the founding partner of Xseed Consulting & IIITH Seed Fund, investment, and advisory firms for start-ups. He was the Vice President, Incubation & Scaling at T-hub, India's largest and fastest-growing innovation center. He successfully established his own startup in the education space – Gray Matters India.  He has advised hundreds of startups & specifically mentors around 10 of them at any given point in time. Prior to doing his MBA, he worked in the semiconductor industry in areas of product development and quality control at companies such as Intel & AMD.

Deepesh: Spent 15+ years in the corporate world in mostly new-age technology roles while also preferring a more hands-on approach, which allowed me to look at the evolution of new technology products and the nuisance around the entire ecosystem and experience the importance of organizational dynamics.  During my stint at a financial services company in leading innovations, I was exposed to a number of new-age tech startups that we partnered with to offer solutions to our clients.  Some global startups we interacted with are today multi-billion dollar companies in RPA, AI, chatbots, and blockchain. Coming from a business family I kind of unknowingly had the knack to pick the optimal opportunity and was of the opinion that the company should not just partner but invest in these companies as they would outrun us in terms of revenue in a few years. Well, it came true, and also, I found my calling.  Also at that time, Ajay (a close friend for 15 years) was at Thub, and had an opportunity to participate and see the evolving startup ecosystem. Ajay was part of the founding team at Thub. This led to the start of Xseed partners, where we invested in ~30 companies and selected high-conviction bets that went on to become 50+M$ startups. Silverneedle is a natural progression to carry forward our success and apply the learnings/unlearnings at a larger scale in a familiar space. At SNV I look from a sourcing, and fitment point of view to deal with closure and subsequently engage with founders on a continuous basis along with SNV's extended team to help them grow right or build sustainable startups and keep evaluating performance as an investment.

3.What is your biggest USP that differentiates the fund from competitors?

Silverneedle Team's extensive startup-focused experience, key learning from the success of Xseedpartners, and its global SME Investor base will be our USP. Entrepreneurs look at opportunities, founders, and evaluation very differently and we have 3 successful startup entrepreneurs in the core team. Allowing us to pick the right sectors and startups in those sectors to focus on. From the time of Xseedpartners, we have been a founder-centric mentor-driven setup. We cover most of the key areas like sales, strategy, growth, global expansion, technology, product, HR & legal competency within the SNV team and extended LP network, allowing our portfolio companies to leverage dedicated time. Also, this allows us to screen and shortlist startups with a very diverse perspective of Investment Committee members, selected based on the nature of the Startup. This also enables us to attract both investors and startups, 2 key aspects for a VC firm. Also, the experience in multiple exits will help the performance and timing of returns for investors. With a 6-member core team network, the effect is quite huge in attracting startups and relationships in the ecosystem. The team is spread out in Hyderabad, Bangalore, Mumbai & Bay Area.

4.How do you see the fund and the industry in the future ahead?

We see the fund adapting to the industry in the future and making about 25-30 investments in 2023/24 based on how we see the situation evolve. Industry at large works as per economic cycles and we do see some pain in the near term globally. Technology will remain at the heart of all upcoming changes in Industry, irrespective of sector, giving us a good opportunity to make the right investments on behalf of our investors in 2023/24

5.How is the Big Data/AI/Robotics industry changing? What are some of the key technology transformations in this space?

I would like to think of these 3 new-age emerging tech areas as more of a composite – Data Science & Autonomous space, having a lot of cross-links and pollination both in technology and business-case angles. These technologies today are more what I'd like to call horizontal tech, which aids in a multitude of vertical industry paradigms. Also, these are the spaces where disproportional investment and research is taking place, hence it's of key interest to us to participate in some of these areas. The spaces that are being powered by these techs are – manufacturing & machine intelligence, robotic automation (both hardware & software), autonomous intelligence in – logistics, warehousing, manufacturing, pharma, aviation etc.

6.Which industry verticals are you currently focusing on? And what is your go-to-market strategy for the same?

Our focus area for the fund lies in Technology Startups, particularly in the area of SaaS, Deep Tech, Technology Enablers, Consumer / D2C, Gaming & Sustainability. In a fast-moving startup space, we at Silverneedle keep evolving our view based on changes in the dynamics of sub-segments. As we are a sector-agnostic fund it allows us to study focus areas from multiple sectoral perspectives and spot opportunities. For example, being a creator's economy is uniquely positioned and we have recently made an investment which in its own way is a SaaS + Technology Enabler play.

7.How are disruptive technologies like Artificial Intelligence/IoT/Big Data/Cyber Security impacting today's innovation and how has the role of a leader changed over the years?

The future of IoT/ Artificial Intelligence/ML/Cloud Computing in India

India is at a very interesting time slice, where it's not only producing tech talent, product, and solution for the global market, but also vividly using it for its own consumption, differentiation, and creating a competitive edge in the global marketplace. AI/IoT & Cloud together form the key triad which allows the creation of a combination of sensing layer, intelligence, and ability to deliver actionable insights through private, public, or multi-cloud capability. The future for this tech adoption in India is very solid and we expect higher adoption even from entities lower on the pyramid structure, especially the mid-market and SME layers.

8.If robots completely replace the need for manual processing, what will happen to the future of the workforce?

Ok, this is an interesting one, the fund has no view on it. It's more of a personal view. Hope we are not talking Robots to the point we replace CEOs with AI CEO bots, should be a re-run of the matrix movie then, with no Neo.  But seriously even in ancient times people needed to be kept busy and entertained. War, Sports, and Art; leaving the first one we are well covered in investing in gaming and tech enabler startups that will help automation, hybrid approach. Cheeky but yeah VCs are a practical lot.  What I have realized is that the nature of Jobs is changing, demand is actually going up with automation and Robots as new avenues open up. No one has seen the future and how far it goes as long as capitalistic tech investments exist. In the 1980s and 90s when computers were introduced in India a lot of Govt, political, social and unions opposed it as it was claimed to cause huge job loss and result in unemployment, and we are in 2022 discussing AI Robots taking over.