Summary

The Offline Network Episode 28: Early Stage Funds & Surety Bonds (aired 2025-11-03). Guests: Aditya Tulsian, Abhishek Nag from AxiTrust / NH1 Design, 360 ONE Asset. Aditya: "So AxieTrust is actually building a technology infrastructure for business in India to access shorty bonds." Aditya: "OK, the second difference is, and that's where the key difference really lies, is bank guarantees, especially in India, they are all 100 percent collateralized." Topics: venture capital and funding, AI and LLMs, consumer brands and D2C, B2B/SaaS. The Offline Network is India's live show on startups, tech, and venture — streaming M/W/F at 4 PM IST on YouTube.

Full Transcript

Dhruv Sharma: Hello, and welcome to the Friday live stream of the offline network. We've had three IPOs this week. It's been a blockbuster hat trick kind of week from an IPO perspective for the startup ecosystem. What a week. What's up? Great to see you.

Utsav Somani: Crazy. VCs must be busy updating their big techs.

Dhruv Sharma: Yeah, sure they are.

Utsav Somani: How are you feeling?

Dhruv Sharma: Pretty good. I mean, we've had Lenskart. We've had Grow and earlier today it was Pinelabs, so I think there's a great sense of euphoria in the entire ecosystem. You're going to help mature people you look up to.

Utsav Somani: Absolutely. And Pinelabs raised 3,900 crores in their IPO, ended up 13% from the listing price. So I think good, good debut. And I think the gray market premium was just 2%, so it's still a listing that happened over expectations. And I think just a big win for Peak15 again. They own 70% of the company and Shailendra wrote a heartwarming note online as well because he's been with this journey since a long time. He actually joked with Amrish that I think he's been in Pinelabs longer than he's had kids. So he didn't have kids when he invested in Pinelabs, that first $1.2 million check. So crazy journey. Congrats to the team and the investors.

Dhruv Sharma: And just a reminder how long these journeys can last.

Utsav Somani: Yeah. I think it's 16 or 17 years. Insane.

Dhruv Sharma: And 98 as well, this company was incorporated in 98 with Lokveer as the founder.

Utsav Somani: Yeah. And now it's like everywhere. Basically, every swipe that you do at a physical outlet, I think it's pretty much everywhere. Dominant market share as well in that space. Talking about big numbers, Elliot Gill, I mean, he's driving the solar GP market single-handedly. He's upped his fund size according to the information to $3 billion. I mean, that is insane. That number is larger than what all Indian VCs have raised in the last year. So imagine the scale of investments that he's expecting will go into these AI companies that he funds. And he's pretty much an investor in all of the name brand companies in the US. So what a phenomenal track record as well.

Dhruv Sharma: And he has that book.

Utsav Somani: He has that book, high growth handbook on Stripe Press.

Dhruv Sharma: You want to spend like 30 seconds on who are solo GPs itself?

Utsav Somani: Solo GPs, I think that wave really started in 2020, when AngelList US democratized this infrastructure where you could raise, I mean, they abstracted away anything that you would do in terms of back office and what AngelList India also did in India, where you can not worry about all the legal, financial, just the headaches of running a fund. And they just allowed people to raise capital, deal with LPs and invest in companies. Two simple things that you had to do, and you can basically take away all the things that the administrative stuff that you had to deal with when running a fund. And most people rely on analysts. But what these solo GPs did was that they had such a big brand name that they were talking to find founders directly and sourcing deals directly. So all of that stuff also, they removed the middle layer as well, apart from just the administrative layer. So that truly gave them the power to be these one man show because you don't have to bundle yourself as a GP or a firm. And I mean, some of them have really done well. There was this guy, I'm forgetting his name. He got a $1 billion outcome from a solo GP check that he did for a company. His name starts with Z. Do you remember his name? Zeev or something?

Dhruv Sharma: I really can't.

Utsav Somani: I'll look up that article and add in the show notes. So solo GPs, I mean, different models have come up, but solo GPs are basically just a one man show, one man GP and none of the investment company staff and usually just single person making the decision. So it's good for founders as well.

Dhruv Sharma: One GP and who knows, maybe not too far in the future, backed by like 25 agents, like a 25 person, 25 agentic team.

Utsav Somani: Lockheed Groom is another famous one. He was roommates, I think, with Sam Altman. Lockheed Groom and Allard Gill, both are LPs of mine and a fund that I run. And I mean, Lockheed, I don't know how he responds within 30 minutes to every single email that I send. And he's, I mean, an enviable track record in India as well. He's done Zepto. He's done Vetec. He's done even healthcare. And of course, globally, his portfolio speaks for itself as well. So solo GPs are here to stay in different shapes or form and different sizes now as well. All right, what's happening in the world of public markets with Michael Burry, the big short guy, Michael Burry, have you seen the film? I have. I have. Margin College.

Dhruv Sharma: Who played Michael Burry in the film?

Utsav Somani: Christian Bale.

Dhruv Sharma: Christian Bale. All right. Yeah. Great performance.

Utsav Somani: I mean, he tweets with Christian Bale's photo as well, where Christian Bale's reactions and him lying on the floor and making sense of the market kind of reactions. It's pretty fun.

Dhruv Sharma: So whatever's happening right now, and who knows what's really happening? We only have what we're seeing on X to go by. But it started with a few cryptic tweets. And then someone picked up on a letter which is dated, if I'm not mistaken, 27th of October, where he, you know, the letter basically says that he's de-registering his firm. And ever since then, there's a lot of speculation as to why he may have done this. What is he seeing that others are not seeing, what do you think he might be seeing?

Utsav Somani: So I think the bone of contention is, don't hold me to the numbers of the years, but Nvidia basically, I think the chips typically last between 12 months to 36 months, one year to three years. And what Meta and all of these companies are doing is they're depreciating all of these assets over 10 years. So that big delta that's there for the 5, 7, 10 years in the middle, where you're depreciating these assets, but they're not productive assets anymore. So he thinks that there is a bubble because of that. He's bought put options and Palantir and other companies as well. And he just doesn't want to deal with the market, like he doesn't want to explain his traits to the market. And just with those 13 F filings in the US, they tend to come under scrutiny as well. So I think that's why he's just stepping away. His AUM was 155 million. And I think you mentioned that he wants to pivot away to a private holding sort of setup where he runs his own trades and family.

Dhruv Sharma: He could be right, but you know how long he's going to take to be right. He could be right five days from now, five years from now. Even a broken clock is correct twice a day, right, as this is so.

Utsav Somani: He's been wrong before. He tweeted in 2023 sell, sell and a full stop. So he's been wrong before, but I think, I mean, he's rational, makes sense, but I think markets can stay rational longer as the code goes. So let's see. Let's see. Cursors raised 2.3 billion at 29.3 billion. All name brands are there, Axel, A16z, Cotu, Thrive, Nvidia, Google, 1 billion in annual reckoning revenue. Have you, do you know engineers who played around with this in India?

Dhruv Sharma: Yeah, our engineers at Angelus India use it also. And I want to, I want to read out something from a blog that they put out, which is alternatives to cursor as well, before you get to the codes. I mean, there's, yes, there's GitHub copilot, which you can, you know, which integrates with your ID or development environment amongst the AI native alternatives. There's Replit, there's Windsurf, they have a new name now. There's a few open source tools like Tabby as well. So most engineers will have tried two or three of these, but in the end, they gravitate towards any, you know, just one favorite. Cursor seems, appears to be the leader, even among their peer set. And as you said, they have, they're doing well over a billion in annualized revenue. The quote by the way, this is from their seed deck, by the way, or seed memo, in the next few years, cursor should be in a place where it's impossible, should be a place where it's impossible to write bugs. An editor where you can whip up 2000 line PRs with just 50 lines of pseudocode. So that's an incredible promise to be living up to. And also they're claiming that their in-house models now generate more code than any other LLMs in the world, which reminds me, chatgpd has codex, of course, how can we forget? They've also upgraded their model just, I think yesterday from GP5 to 5.1. Yes. It's more compatible with codex.

Utsav Somani: Quick line about the person who, I mean, who got that famous message from Elon Musk. What did you get done this week, Parag? What has he done now at Parallel?

Dhruv Sharma: Yeah. Oh, yes. You know, he was, he was at Twitter 11 years and the tragedy of the whole Saag is, I mean, he was Twitter's CTO for the bulk of those years.

Utsav Somani: All he's remembered by is now that one single message. What did you get done this week?

Dhruv Sharma: From Elon, yes. But he has a company called Parallel and, you know, in fact, I'm actually learning a little more about this company only now. But from what it looks like, they've taken a contrarian bet. And that bet is, I mean, the majority bet is that once models train, do a sweep on the Internet and train on whatever information is available on the web, they're not going to come back to the web. It's almost like they will, they will move linearly in a straight line. And Parag's bet with Parallel AI is that no, even if the models don't, and even if the humans don't, AIs or agents right now, they will come back and, you know, browse the web almost in a recursive loop, loop just to be able to do tasks. And they've announced this large, I think it's their series A, right? This is $100 million at $740. At $740, crazy. They've announced this round just right now. But of course, they've been in business for a few months and they're seeing almost a million requests a day, requests that are priced anywhere from $0.50 to $10. And they've put out their evals on the website, I was just going through them. And it appears as though across everything that they do, they're able to deliver, you know, superior efficiency per unit of compute than any of their peers. And in fact, super interesting, OpenAI in one of their many blog posts, I think maybe a month ago had just spoken about this idea that you can have an agent running in the background doing something for you that could take five minutes or five hours or five days or who knows, even five years. So that would be a very interesting day.

Utsav Somani: Awesome. Without further ado, let's welcome our first guest. Aditya, welcome to the show. Thanks for joining us. I think you're on mute. The classic Zoom problem.

Aditya Tulsian (Co-founder & CEO, axiTrust): Can you guys hear me now?

Utsav Somani: Yes, we can.

Aditya Tulsian (Co-founder & CEO, axiTrust): Hey, what's up? How's it going?

Utsav Somani: All well. For our listeners who are hearing about AxieTrust for the first time, give us a two minute download.

Aditya Tulsian (Co-founder & CEO, axiTrust): Awesome. So AxieTrust is actually building a technology infrastructure for business in India to access shorty bonds. OK, and so on one side, you have the suppliers who provide the shorty bonds. On the middle, we have all the enablers. And on the other side are the demand where the businesses need to use it. OK, so that's what we're building. And of course, the next question would be, what is a shorty bond? Right. So, you know, the way to think about it is a shorty bond is a non-collateralized alternative to bank guarantees. Right. And the way to think about bank guarantees is it's like a trust product. OK, so when I and you want to do business, OK, let's say I'm selling something to you. Right. You want to sort of have that surety that whatever I'm selling to you is of high quality and will perform what it's going to perform. If not, you will get compensated. Or if I'm buying something from you, OK, you want to get assured that I will pay you on time. Right. So that's how the trust products are used globally. And in India, the most prevalent trust product is a bank guarantee. And shorty bond is a noncollateralized alternative to bank guarantees.

Utsav Somani: So that's benefits, pros and cons of each.

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah, so, you know, as I said, both bank guarantees and sureties are trust products. OK, so in a sense, they do exactly the same. OK, that's where the similarity ends and where it becomes different is the bank guarantee, as the name suggests, is issued by a bank and the shorty bond, on the other hand, is issued by insurance companies. OK, the second difference is, and that's where the key difference really lies, is bank guarantees, especially in India, they are all 100 percent collateralized. Now, either they are collateralized by a fixed deposit, OK, or they are collateralized based on the credit lines that the bank gives you. So one or the other, anyone who's buying a bank guarantee is blocking a collateral. OK, surety bond on the other side is a non-collateralized alternative. So the way you get a noncollateralized loan, OK, the insurers are going to underwrite you, assess your risk, everything else. And based on that, they will give you a surety bond. OK, but in this case, your working capital or your credit line is not blocked.

Dhruv Sharma: Adi, could you give us a real world use case where surety bonds come into play?

Aditya Tulsian (Co-founder & CEO, axiTrust): Oh yeah, the best and the most obvious use case globally are usually when you get into government contracts. OK, so let's example, you're building a bridge. Now, when you're building a bridge and you're working with in India, you're working with OK, and you bid for a tender. You before just to bid for the tender, you need to give a bid bond. OK, to prove that you are serious about it. OK, and second, when you win the tender, you have to give a performance bond. OK, that, as I said, in case if I don't perform my contract the way it should be, you can sort of get compensated with X amount. OK, and in India, the total coverage provided by these guarantees is almost 150 billion dollars as of today, which is almost 4.5 percent of the Indian GDP, which is one of the highest in the world. OK, now in the case of surety bonds, the same bank guarantees that are given is now provided by instead of the bank guarantees by surety bonds.

Dhruv Sharma: So now the same contractor doesn't have this insurance product can unlock one hundred and fifty billion dollars in working capital.

Aditya Tulsian (Co-founder & CEO, axiTrust): The way I see it, actually, I think the way to think about it is that 150 billion is restricted not by the demand, but by the ability of the banks to supply it. OK, the total demand in India, the way the investments are going is a trillion dollars. OK, so the way to think about it is the 150 is what the banks can do. And let's assume they continue doing it. And even that increases, let's say, even 300 billion. You still have a several billion dollar demand, which is unmet. OK, so that is how you can imagine the scale of what surety bonds can do in India.

Utsav Somani: And what are the other global trust products like this? Like, I mean, like a mature market like, say, UK or U.S. Do they still have bank guarantees? Do they rely more on surety bonds? Where are we learning about this product from?

Aditya Tulsian (Co-founder & CEO, axiTrust): Brilliant. So when you think about it is a country like the U.S., Canada, Korea. OK, 90 percent of all the guarantees given are surety bonds. OK, in fact, all these three countries did not. I mean, at least Canada and the U.S. did not have a concept of bank guarantees ever. It was always a surety bond. OK, developing markets like China, Mexico, South Africa, the surety bonds has seen a phenomenal growth in the last five to seven years. And now they're almost 50 percent of the all guarantee market. OK, in China, it was launched in 2017 or 2018. OK, and the European markets, which were more traditional markets and more bank guarantee markets, the rate of growth of surety is significantly outpacing that of a bank guarantee. OK, so it's a globally proven product. OK, and it's actually one of the most profitable products for the insurers. In India, it was only launched, I mean, allowed by the regulator in Jan.

Utsav Somani: And what is the acceptance like you mentioned? It's allowed very recently. So what kind of providers? Suppose I'm a small, medium business owner, like in different industries. What are the acceptance like? I mean, what tenders have started using it? I mean, there must be a lot of education because it's a new product. Right. And also on the supply side, but also on the demand side of things as well.

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah. So the way to think about this is I almost believe that surety bonds is a UPI moment for insurances. OK, the entire might of the government is behind it. OK, so the Ministry of Finance issued a very strict guidelines in June 24 that every government department that asks for a guarantee has to accept surety bonds. OK, so now more than 150 odd PSUs have started accepting surety bonds. OK, and PSUs like the NHAI, NTPC, IOCL, all of these big BMOs are now accepting surety bonds. Now, so on the demands and to imagine this, I don't know whether you know this platform called Government eMarketplace, GEM. OK, now GEM is one of India's largest B2B sort of procurement platform for the government. OK, they almost crossed seven and a half lakh crores worth of procurement last year. OK, and 50 percent of that is by MSMEs. Now, they are sort of making it mandated that the tenders listed on GEM have to accept surety bonds. OK, so from the acceptance side, the government is putting the entire might. Now, on the supply side, initially the first year it went through its own learning curve because this was such a new product. It is an unconditional product. So the insurers and the reinsurers are figuring it out. OK, but to think about the scale in April 24, the total amount of risk covered through surety bonds was all about 5000 crores. 18 months later, just recently in September 25, that 5000 crore risk coverage has gone to 60,000 crores of risk coverage. That's 12x growth in less than 18 months. OK, and now all the bigger insurers in the world are taking a look into India and saying, what can we do to enter this market?

Dhruv Sharma: Aditya and is Agzi Trust in all of this? Are you guys distributors? Are you aggregators? Are you the OEMs yourself?

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah, so the way we call ourselves is that we are creating the digital infrastructure for all of this. So at one end, we are integrating with all the suppliers, which is the insurers and potentially the reinsurers. And on the other end, we are integrating where the demand is, whether it's in GEM, whether it's in some of the beneficiaries and all other players who are required in order for the entire lifecycle to be managed. Right. So we want to kind of become the highway for the whole dissemination of short rebounds across the Indian economy.

Dhruv Sharma: And one natural question, Adi, is, God forbid, if the contractor goes insolvent, then who does the ultimate liability rest with? Because this is a non-collateralized product, so.

Aditya Tulsian (Co-founder & CEO, axiTrust): No, to think about this is, let's say you are NHAI, you've got a short rebound, the contractor hasn't fulfilled its obligation, you raise a demand to the insurer, the insurer pays you the whole money. OK, and now the insurer goes and collects that amount from the contractor. OK, so all of this is legally signed and agreed upon. And so if, let's say, on day zero, the insurer, sorry, the beneficiary invokes the bond, within 48 hours, the insurer has to make good of this money. OK, and then within, let's say, 24 to 48 hours, this money has to be collected on the contractor. So in the end, the real obligation lies with the contractor. What the insurer is doing is saying, on your behalf, I'm giving a note to the beneficiary. But in the end, the contractor has to pay the insurance.

Dhruv Sharma: How do the suppliers make money on this product, Adi?

Aditya Tulsian (Co-founder & CEO, axiTrust): You mean the manufacturers?

Dhruv Sharma: Yeah, the insurers.

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah, yeah. So the way to think about it is actually pretty simple, right? It's what the insurance company is all about, right? It wants to give out as many of these short rebounds as they can, hoping, OK, and based on their model, OK, that the total number of invocations that happen are much lower than the overall premium that they've been able to accumulate. OK, by giving these lakhs of bonds. OK, and the second is, of course, they have to have a very strong ability to collect money, OK, whenever the invocation happens. But one thing that that's very important to keep in mind is when they do, it's very critical for them to figure out the use cases, which are the use cases they will do. OK, and the ideal way to think about it is you take those use cases where there's a structural disincentive for people to depart. And therefore, what do you mean by that? So let's say you are a contractor, you're working with the government, right? And your BG or shorty bond gets invoked. OK, what's going to happen is you're going to get blacklisted. And therefore, for next two years, you will not be able to do business with the government. If 50 percent of your business is coming from the government, the last thing you will want is to get blacklisted. Right. So you will do everything possible in your ability to make sure that invocation never happens. You would be OK to default on a loan because that's the only thing that's going to happen is your symbol is going to impact it. But you do not want to stop your revenue flow. So there's a structural disincentive for the contractor to have its bank guarantee or shorty get invoked.

Utsav Somani: But if we were to compare it to, say, a regular insurance product, like what is the need for the insurer? Like what are the margins like for this new product?

Aditya Tulsian (Co-founder & CEO, axiTrust): The way to think more than the margin, the way to think about it is all insurance products basically think about the loss ratio. OK, and the loss ratio is basically how much of claims have I paid visibly the premium that I've collected. Right. And if you look at health insurance, the loss ratio is above 90 percent. OK, that means if I've collected 100 rupees in premium, 90 rupees goes into paying my claims. Right. And this is a very well run health insurance company. OK, we have that for a shorty bond globally, this percentage is 30 percent. OK, that means 70 percent underwriting profit. I'm not even talking about the treasury income. So overall, globally, and there's enough data even from the bank guarantee market that this is a very, very highly profitable business for the insurers.

Utsav Somani: And the scale of Axie Trust, how does it look right now, if you want to share?

Aditya Tulsian (Co-founder & CEO, axiTrust): Sure. I mean, we've now, I mean, we launched our first kind of POC in April 2025. OK, and now we've been able to process more than 1000 crores of shorty bonds to our platform. Wow.

Utsav Somani: And typically, like, suppose, I mean, the premium for a shorty bond, what does it depend on? Suppose I'm doing a tender where a 100 crore bank guarantee or a shorty bond is required. What is the premium for that annually?

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah. So usually, so of course, you know, like any other credit product depends on the risk that I'm underwriting. Right. But a safe range would be anywhere between one and a half percent to say about three and a half percent per annum. So that is the range. And now just compare that to what is the cost of capital for the small businesses. Right. Just if you're giving an FD, you know, that's anywhere out of 10 percent, even if you're a very well run company. Right. So there's enough potential for the businesses to improve their working capital.

Utsav Somani: All right, Dhruv, any final closing ones?

Dhruv Sharma: Yes, one for Adi. Earlier, you likened this to UPI, Adi. You also said you're building the infra. So everyone by now is clear on what the design principles for UPI were. What are your early thoughts on what the design principles for infra in this context are going to be?

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah. So let me give you a specific use case. You know, when you design, when you are applying for a tender, OK, sometimes you also have to give a bank guarantee or a shorty bond for three thousand rupees. Right. So the ability for a business to, you know, almost instantly get a three thousand rupees shorty bond and apply for the tender even at the last moment, OK, simply enables them to go out and do more and more business. Right. So in a way, if you think about it, what credit cards did for B2C transaction, OK, that once I swipe my card, you know, I may be a shitty customer, but you're going to get the money if you are a merchant. Right. Now imagine the same thing. I am a B2B merchant and you are a B2B merchant and we are transacting. I'm telling you, dude, I'm giving you a shorty bond. Right. Irrespective of whether I'm screwed up as a party or not, you're going to get your money. Right. So just imagine how you reimagine the entire B2B transaction space.

Dhruv Sharma: There are lots of bills of this proposition, I think, for every party involved. It's that is abundantly clear. Yeah.

Aditya Tulsian (Co-founder & CEO, axiTrust): So so we were we talked to the government quite often on this. And one of the insights that the folks in the Ministry of Finance told us was for every extra bidder that goes in a tender, the procurement company saves 0.5 percent. And this is a study from Harvard Business School. So if all we can do is we can enable more and more MSMEs to just participate in the bid, forget about winning it. OK, you significantly impact the GDP.

Utsav Somani: Amazing. Do you want to give a shout out to the design firm that you spend time at? NH1 Design.

Aditya Tulsian (Co-founder & CEO, axiTrust): Yeah. So NH1 is run by my better half, Neha. OK, so it's almost 13 years now. It's now one of India's leading design and branding firm. And I really had the unique sort of opportunity to see the company grow and more importantly, see the work. And the way I always look at it is every time I have a shitty day and I think, you know, why the fuck am I doing anything? Right. I just stand behind her desk and I see the work that she does and how they all think so differently from all of us who think we are God's gift to mankind. And it just energizes me. So just happy that I've been part of the journey of what she does at NH1.

Utsav Somani: All the best. Is she the one who did the designing for Axie Trust as well?

Aditya Tulsian (Co-founder & CEO, axiTrust): Branding? Not so far. She's very expensive.

Utsav Somani: Awesome, Adi. Thank you so much for joining us. Have a wonderful weekend.

Aditya Tulsian (Co-founder & CEO, axiTrust): Thank you so much, guys.

Utsav Somani: Great to have you. All right, folks. Now we're switching gears as well. Let's switch to the other side of the table and welcome Abhishek. Abhishek, welcome to the show.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Great to be here.

Utsav Somani: Thank you so much for giving us the time. Love what's on the wall at the back.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Oh, this is our boardroom and behind you, you see sort of different moments in 361's history, just written in micro type with a magnifying glass in front of it. It's been, I think, for this company, just an incredible journey over the last two decades.

Utsav Somani: Do you want to start off with that? Like, what does the firm do? I know you've done, I mean, Lightspeed before, but 361, I think, is a very unique institution as well. They're listed and they do wealth management. They do early stage private equity. So maybe just paint us a picture of what the firm does overall.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, absolutely. So, you know, the firm started about 17 years ago as India's first non-banking private wealth management firm. And the thesis there was fairly straightforward. You know, anything to do with wealth management was largely done within the domain of banks before this. But that had a few issues for, you know, people who needed wealth management services, which is that business never got focused because, you know, current accounts, saving accounts, lending, insurance were primary focus areas for banks. And the second is incentives didn't really align well for wealth management businesses, which were largely distribution businesses, right? And so that was the core thesis. And so, you know, today on that business, 17 years hence, we are on 361 Wealth, India's largest private wealth management firm. And then about a decade ago, we also started an asset management business. And there we have four verticals. We have listed equities, private equity, real assets, and private credit. In aggregate, across these four businesses, we manage about $12 billion. That's sort of the AUM. And then of these, you know, listed assets is about $5.5-$6 billion. Private equity is about $2.6 billion. And the rest is real assets and private credit. So what's effectively happened is over time, we have also become one of India's largest domestic private equity fund houses, right? So that's sort of, you know, where we are. What makes us unique on private equity is, you know, we are today India's only private equity fund house that works with founders all the way from idea to IPO, right? And so with venture capital, which is the newest business getting built under this umbrella, we do seed and CDZ. Right after that, we have venture growth. Then we have, you know, growth private equity, which is classic private equity done by industry vertical across consumer, healthcare, financial services, technology. And then right at the top, we have pre-IPO and secondaries, which is where the private equity business started. And so we love to call it the idea to IPO stack. And then the wealth business is the IPO to inheritance stack. So if you're a founder in India, you know, we are here to serve you all the way from idea to inheritance.

Dhruv Sharma: That's an incredibly strong proposition, Abhishek. And talk to us a little bit about the firm you're setting up now. This is the, is this the newest part of the mothership?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yes, it is. You know, so I joined about 20 months back to build and lead early stage venture capital, which is largely our seed and CDZ focus strategy. And look, there are a number of reasons why it makes sense, right? So at the firm, the reason it makes sense is because at the center of everything we do is the founder, right? And, you know, seed and CDZ are the tip of the spear when it comes to identifying with and working with the best founders in the country, right? So that's, I think, number one. Second is, I think our LP base on private equity and, you know, our LP base, a large part of it all also comes from sort of the wealth business, wanted exposure to venture capital in a sense. That's also, by the way, an indication of the maturity of the domestic LP base, the maturation of the domestic LP base in the country. And so those are the two reasons why it made sense. Why it made sense, you know, to do this now is, you know, I think what we're seeing is with the large number of venture-backed companies now going public, I think there's a growing realization. And also with all of the cycles we have gone through over the last few years in venture capital in India, whether it was the funding winter, you know, now everything that's going on with sort of the public markets boom. I think there's a growing realization that venture capital in India looks very different from venture capital in Silicon Valley, right? So the nature of companies, the time they take, the ways in which you work with them, their capital requirements are very different. And that requires a mix of, you know, local expertise and how to partner with these founders, not just through capital, but in all of the ways in which investors like us partner with founders. But also that requires expertise on the journey beyond just the first round, right? And so that's sort of what we felt were very natural rights to win for us in this business. And, you know, that's sort of why we set it up. And then beyond that, I think, you know, this message has also resonated really strongly with founders because through us, they get access to the universe of founders that we on private equity and the listed markets business. They get access to the university of promoters and clients on the wealth business. So they get access to the network. They get access to the expertise. So a series A company knows what a series B company needs to look like. What is the right time to raise? Who's the universe of investors for them? What sort of revenue they need to be at and so on and so forth. What does corporate governance need to look like? Do they hire a financial controller now or a CFO now? What does that candidate pool look like? All of that expertise resides here, you know, within one roof. And so I think that resonates tremendously with founders. And over the last year or so, we have sort of on the late stage private equity business taken on an average about one company public a quarter, right? And so founders value the expertise that we bring on that front as well. So I think, you know, it's a combination of why it makes sense for the business, why it made sense for the LP base and honestly timing, all of which coming together to really sort of create a need to create a venture capital business under this umbrella. And I'm super stoked at how well the journey has been over the last 20 months.

Utsav Somani: Amazing. And you've written about domestic capital as well and given your proximity with the asset management business and the wealth management business to these HNI clients in India. What is the general perception about venture as an ecosystem or asset class? Is that evolving slowly and steadily? Or what are the kind of conversations that you're having recently with LP?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, yeah. It's just such a diverse set of views and conversations, right? So I think, you know, about 20 months back, the prevailing view was, look, the Indian public markets are doing so well, you know, why does anyone need venture as an asset class in their portfolio? That was the number one sentiment I would hear. Then I think what happened is there was a correction in the public markets, also a bunch of venture backed startups going public, started going public. So people realize that, okay, you know what, there's value creation in venture capital. And it also acts as a good long term part of anyone's portfolio, right? So I think they realize that. A lot of people have had mixed experiences with venture capital in India, you know, on sort of just how long it takes to generate liquidity. But I think a lot of the more mature family offices and institution investors are also now beginning to see how the capital stack has gotten built out. So, you know, just contrast to five years back, today you have companies going public. But beyond that, you have secondaries funds, you have, you know, the late stage markets, you know, which provide liquidity to venture funds and GPs.

Dhruv Sharma: Can you talk to us a little bit about the secondaries business within the franchise, what structures, what products are they working on, just to help LPs get over the illiquidity part of private market investing?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, so we pioneered, you know, secondaries as a strategy in India. We launched India's first secondaries focused fund, closed it last year, a 5000 crore fund. And that fund essentially goes into the portfolios of different sort of funds, early stage funds, venture capital funds, which are coming up towards the end of life, identifies the best assets. And honestly, it's a very strong alignment of incentives for everyone, because, you know, those GPs need to show liquidity on the fund coming to their end of life. Those founders need a fresh cap table, because they don't want a fatigue cap table, which is going to sell right off to go public. And for us, you know, we have the opportunity to, in the process of providing liquidity, get some exceptional assets at very reasonable valuations. So I think we realized that, you know, early in 2024, and launched this strategy. And that was the first ever 5000 crore secondaries focused fund in the country. After that, I think today, we are at a place where that market is beginning to really do well. You have most of the large secondaries focused international institutions now also becoming active in India. And I think that's a very healthy development in the ecosystem in general. Globally, in the private markets, the secondaries market is larger than the primary market. But in India, it's not existed till about 2024. And it's healthy because it provides pathways for, you know, venture capital GPs to create liquidity on their funds, or founders to go in with absolutely fresh cap tables into their public markets. And there's value unlocked in just that, right? For investors, as well as, you know, other people on the cap table. So I think that's sort of what's been happening. And so that's just one part of what's made, you know, venture downstream, a healthier industry than, you know, what would have been the case just five years ago. But today beyond that, right? So there are acquirers of venture backed startups, you know, 10 years back, there was no Flipkart or Zomato or Swiggy acquiring venture backed startups or, you know, Razorpay. Today you have them, right? Then as the late stage market continues to attract domestic as well as global capital, there are pathways to liquidity there, right? So there are all of these paths that have opened up, you know, in contrast to just five years ago. And I think the savviest LPs have seen that, right? And so that's why I think there's renewed interest in venture, all of these things combined. And so the focus is now for the, you know, most mature LPs no longer whether venture should be a part of their portfolio. It's really about asking the question on how do they identify the best fund managers? And then within venture is that one fund is venture many different sub-asset classes within venture as a broad asset class, right? So they're asking the savvier questions. So in general, it feels like a very good time to be raising a domestic fund.

Utsav Somani: And do you think like the three IPOs that we've had just this week, and also in the previous few weeks, we've had Urban Company and many others that have gone to the public markets. Do you think that'll spike the LP interest from people who were on the edge?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): I think so. I think so, you know, but there's also a certain kind of LP that's, that's, you know, suitable for venture, right? So I think venture is always going to be a long tenure business, right? So I think it's not going to be a four, five or six year business. It's always going to be an eight, 10 or 12 year business. And honestly, not, that's not going to be right for every LP, right? And that's completely understandable.

Dhruv Sharma: Sorry, Abhishek, I said I have a related question. So, you know, family offices tend to have a very broad definition in there, right? Can you help us given your vantage point, help us sharpen that definition, throw some color, what are the different kinds of family offices that we have out there?

Utsav Somani: Maybe like, when does somebody become a family office?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): I think in all honesty, anybody can become a family office when the operational expenses of setting up a family office start to make sense, right?

Utsav Somani: So what's that minimum threshold that you require to be a family office in India?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): I think typically if you're what by classical definitions of what an ultra high net worth individual is, which is 25 to 30 crores, you start thinking like a family office because you start thinking of your financial assets as a portfolio, right? And portfolio where you have exposure to multiple asset classes, you know, and hedged against each other, hedged against the macro and so on. Now, even the idea of a family office is many different things, right? In many cases, you know, somebody may outsource their portfolio to a wealth management firm like us, and they may come in with sort of a policy statement and say, you know, my long term goal is X, and you know, the way we achieve X is allocations across all of these different asset classes. And here are sort of the broad guidelines, right? And so then a firm like ours will manage most of what follows from there on, right? So there's that to the other end where, you know, you have very large family offices, which are full fledged investment firms and will invest all the way from, once again, seed to the public markets, right? And they have fairly large teams. And all of us are familiar with some of the large names in that space, right? So you have the spectrum and some in the middle, you have single family offices, multifamily offices, who are sort of dedicated shops set up purely to serve either one single family or many different families, right? So you see the spectrum, honestly. And so, but, you know, what's common to all of them is that the needs of every family will differ, the needs of every LP will differ. And so some of them care primarily about wealth preservation. So a long-tenure product may not be the right product for them. Some of them care about sort of wealth appreciation, or at least a part of their portfolio there. And so a venture may make sense for them, right? So I think a lot depends on who the person is, who the family is at the end of it all. But I do want to say that's just one part of the story though, right? So I think there's also the domestic institutions story that's, you know, in early signs of really beginning to play up, you know, till sometime back, it was only CB. Today, there are many more. The government, it feels like every month announces a new fund of fund to back deep tech or research and development in defense and space. So a bunch of that is beginning to happen. And so there's that journey as well.

Dhruv Sharma: Might even be a sovereign wealth fund.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, there might be a sovereign wealth fund, there's talk of that as well. And so I think there's, you know, early and very positive movement on that front, you know, with IRDA and RBI setting clear guardrails on what part of an insurance company or a bank's balance sheet can be invested in alternative investment funds. And so there's that part of the journey that's begun as well, right? So, yeah.

Utsav Somani: Abhishek, we're almost running out of time, but a couple of questions. Let's zoom in back into your business as well. What are the investments that you've done? Anything that you can share publicly and sectors or teams that you're excited about?

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, so on early stage venture capital, we are sector agnostic. But, you know, the themes that we go really deep into, we are very thesis driven, high conviction, high ownership investors. So even by early stage VC standards, you'll see us building a portfolio of about 20 companies, which is fairly small for early stage venture capital. And, you know, fairly high ownership with the entry check. And the only way to do that is to pick teams, even while you're being sector agnostic. And those teams, honestly, are a combination of two things. Things that, you know, us as a team, and we are a team of six people across Bombay and Bangalore now, are really good at, have experience in, have really liked. And teams that we have very strong beliefs around being really strong mega trends for the next five to 10 years. So those four teams for us are domestic consumption, secure technologies, which is defense space and precision manufacturing, B2B technology for financial services, we call that financial services infrastructure, and then JIL and applications and services, which we call applied intelligence, right. So, you know, we have three announced investments so far, and three more term sheets signed. The three announced investments are in a gaming studio, are in a hot sauce company, and in a B2B financial services, technology company serving the AMC industry, the asset management industry. So those are the three and then three more coming in.

Utsav Somani: Hot sauce and JNI.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Yeah, yeah. And then, by the way, the other three that are coming are going to be in AI, defense and space tech, right. And so one of the other advantages of sort of picking these very teams is you get sort of the linear compounding businesses that you get in financial services, you get the hopefully somewhat some of the early liquidity businesses that you get in consumer, and then you also get sort of the long term alpha and multipliers that you get in defense, space tech, precision manufacturing, and so on, right. So from portfolio construction point of view, it works too. And by the way, our belief as a team is that you can invest in this manner, high conviction, thesis led, being very, very deep about, you know, what you're what you're doing, only if you are operator investors, you need to have built businesses from zero to one, and then being in investing. And if you look at our team, that's the nature of our team, right. And so and that's also hopefully what founders love about us when they interact with us.

Utsav Somani: I mean, the operator mindset, you spend time at Netflix, give us top three learnings from there that you share with the founders very widely.

Dhruv Sharma: Yeah, I think, you know, we give our listeners some recommendations, obviously, because the weekend is almost weekend is coming.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): I'm the worst to ask for Netflix recommendations anymore, because I barely get to watch any Netflix anymore. So unfortunately, no recommendations for the weekend. But I did watch the animated show based on the Mahabharata just last weekend. I really loved how it's come out. So, you know, would encourage folks to go watch that, whether you're interested in mythology or not felt like it was a well made show. And so that's one recommendation for you. But I think, you know, the thing about Netflix I really liked is it's a company that was born in the late 90s. But even today, it feels like a startup in how it competes, how it feels inside the company, how people work with each other. And there's just so many lessons in how it operates as that machine. But the biggest lesson is just around, you know, the Netflix culture, books being written about it, the Netflix culture memo is very seriously and widely distributed. What I can tell you is that all the things that you read about in that memo, they're true. They're practiced daily by leadership, through walk and talk and by every employee who stays there for a while. And so that to me, you know, lead home the point more than any other place that I've worked at on the importance of just thinking about your culture. And now very early on, if you're a seed or seize a startup, you cannot really crystallize it. It does not make sense to crystallize it. Culture is really how the early team behaves with each other, how the leadership and the founders, you know, behave every show up every day. But as you scale, as you go from seed to seize B, how you sort of crystallize some of those things, put them to life scale, some of those things are actually the number one long-term mode for any business, right? So that's like the number one thing I learned at Netflix.

Utsav Somani: And for me, I think the thing that stands out about Netflix is they've reinvented themselves. Like I would say three times over now, first was that DVD mail business, then the streaming business. And now I think they're a full-blown production house because streaming I think is getting commoditized. The quality of software varies, but now they're a full-blown production media company. So I think they've reinvented.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Trying to be an ads business as well, right? And so, and so in each of those pivots or not pivots, but evolutions in a sense, they were always the underdogs. They were the underdogs in the DVD business. They were the underdogs in the streaming business. They were underdogs in the production business. And for a company of that scale to be the underdog and always execute well, has to come down to culture.

Utsav Somani: Amazing. I think that's a good note to end this episode on. We'd love to have you back Abhishek. Have a wonderful, wonderful weekend. Thank you for your time today.

Abhishek Nag (Head of early stage VC, 360 ONE Asset): Thank you very much. We'd love to be back. Loved having you. Thank you. Have a great weekend. Bye.

Utsav Somani: Alright listeners, you're tuning out today with a Netflix recommendation from the man himself. I hope you have a wonderful weekend. Dhruv and I will see you on Monday at four o'clock. See you.