Utsav Somani: Alright, listeners. It's October 2. It's a national holiday. So if you're tuning in live, thank you so much. I have a new guest cohost today, Sharvil, joining us. Sharvil, welcome to TON as a guest cohost.

Sharvil Malik: Thank you so much,. It's a pleasure being here.

Utsav Somani: Do you wanna take thirty minutes and tell people what you do and, about your podcast that you used to host?

Sharvil Malik: Sure, man. So the last four years, I've spent a lot of time building zero to one at the intersection of AI and blockchain. Right? And, also took some time out to build, a media... A new media form. That's what everyone calls it these days. Right? Interviewing industry media.... Seconds, you've used all the buzz words. Like, AI, I'm in the media now. Exactly. Right. It's it's the frontier tech. Right? So just been, like, now and now sort of, like, seeing a similar shift happening in India where there are a lot of great stories to tell great companies that are being building out. And I think it falls upon us that we that we sort of, like, take this bandwagon upon us and help these companies amplify their work for... To the global world. Right? And I love what you've been doing at TON as well. Great to be here, man.

Utsav Somani: Thank you so much for giving us the time, and let's welcome our first guest, Rishi from Offgrid. Rishi, welcome to TON.

Rishi Srivastava (Offgrid Energy Labs): Thank you for having me, and as Sharvil said, really excited.

Utsav Somani: I think, I'm gonna start off with two questions. We were jamming about this a little while back, but tell us a story about, I mean, what the company does, but also the shirt. Like, I mean, it's extremely funky for a second October national holiday. So tell us a story.

Rishi Srivastava (Offgrid Energy Labs): It's it's a reflection of the mood today, and I'm I'm quite... I'm I'm a very high energy person, and, you know, I'm I'm I'm high energy and in a very nice, bright mood this morning... You know, this afternoon. So, I'm just looking forward to this broadcast. But, you know, as I was telling you, this is also a challenge to ensure that I still fit in the shirt, which is about, you know, twelve years old. So, yeah, I mean, that's that's the real story, behind this.

Utsav Somani: Awesome. Let me

Rishi Srivastava (Offgrid Energy Labs): let me tell you a little bit about the company. So, Offgrid Energy Labs got set up. You know, it was serendipity. I, you know, I had a corporate life before I started, I became a founder, and I happened to be at IIT Kanpur for a talk on innovation in twenty seventeen October. After the talk, what the professor said, hey. You know, I got these two PhDs who've, you know, got some crazy ideas on energy storage, and I've been a software technology guy. And I'm like, okay. I'm here in Kanpur at the campus. I'd love to go meet them. And, I met up with them, and that's where I met the cofounders, Brindan and Tejas. And they had this fabulous vision, which I knew very little about at the time, on energy storage. In 2017, they forecasted that there will come a time when, you know, there will be several chemistries that'll be required. And, you know, we've there and then decided that, you know, we wanna set up, energy storage, deep tech IP company, and, we founded the company in January 2018, actually. So that's that's that's the quick story. What we've done, till date is we've, you know, basically been in research. We've we've got a lot of IP around the world, about 75 plus IPs. We inaugurated our first, manufacturing facility outside of London in July, which is where Tejas and Brindan are now based. And, you know, I spent, me and my fourth cofounder, Ankur, spent a time here in India and, between India and London actually. So, you know, we're we're building for long duration entry storage, six to sixteen hours. But I won't bore you too much tech, technical details on that.

Sharvil Malik: But do... I would love some more technical details, honestly. Right? So we've we've all seen, like, lithium batteries been, like, ruling the battery space for a long time. Right? And for, like, for good reason. Right? Like, they have their own positives, when compared with zinc-bromine. Right? What are these particular reasons, and how has ZincGEL actually, like, solved these problems?

Rishi Srivastava (Offgrid Energy Labs): Great question, Sharvil. So, you know, a little bit of context. Right? Just before I get on to the lithium thing. You know, in hundred and forty years since the electron got invented, one quest that every generation has had was to generate more energy, at the cheapest possible cost. And it started with fire, then went on to, you know, coal and then gas and oil and, you know, now, coming back to, you know, solar and renewable energy. Right? We live today in, you know, in 2025, the lowest cost of energy generation is actually renewable, and in the world. And, actually, 2025 was the first year where renewable energy, actually exceeded, you know, conventional energy, generation around the world, including in India for that matter. So coming to lithium, lithium's actually a... You know, it's a great technology. It's, basically, it's also... You know, in the last forty years, the development of lithium is such that, you know, prices are down, like, 93% since 2010. So that's the level of development that's happened. But one of the things that engineers are, you know, or people are really beginning to realize is that, you know, lithium is, is great for, you know, vehicles and consumer electronics where weight and range and mobility is an, is a requirement. But when it comes to the grid, when it comes to renewable energy, when it comes to data centers, you know, the more important things are safety, long life, twenty plus years, of life, daily charge discharge where you can, you know, discharge the batteries to, you know, from 100 to zero or 100 to 99%, and, of course, you know, the, the being able to, source the materials because lithium utilizes a lot of, you know, fine, materials which aren't as abundantly available. So once those four vectors started to take shape and as renewable energy started to grow, India is now the world's third largest renewable energy source. Right? I mean, we generate a lot of energy, through sun and wind now. And, you know, the only thing missing there is, basically storage, and that's the that's the niche that zinc-bromine with an aqueous electrolyte, you know, that's that's the product that we've launched, if it, you know, defeats well.

Utsav Somani: Alright. This topic is super, super technical for me, but I'm gonna ask you a very basic question. So how do you measure, like, say, the efficiency of a battery? Like, the duration it can sort, store energy for and the cost per storage... I mean, per... Like, I mean, explain the unit economics of the thing because somebody... If you're pitching this to a customer, like, say... I mean, Tesla is probably buying your batteries in the future. So they will compare it with lithium ion. So how do they compare it?

Rishi Srivastava (Offgrid Energy Labs): Yeah. That's a great... Let me try and give you an answer, also, which is which is, you know, which is more with an example. So, you know, if you... So the laws of physics are where, you know, the sun shines, for a certain number of hours in the day, but it does... You know, and the energy requirement peaks once the sun sets. So if you ask me, energy storage is all about time, actually. The only thing storage does is it manages time for energy so that you can store it when it's available and then use it later. And, one of the things, you know, with renewable energy is that, you know, it needs long because, you know, the sun is out for twelve, fourteen, fifteen, sixteen hours. Right? Typically, all the wind may or may not go for that long. That's called long duration energy storage. And, lithium is great for two to four hours. So the cost of lithium batteries, you know, are most efficient when you when you store for two to four hours. It means, you know, shifting from the afternoon to the evening. But if you have to shift from the evening to the next morning, that's called long duration energy storage, which is the six to sixteen hour. And in that in that area, there really is no global player at the moment. The reason being that the, the economics of doing that with existing chemistries, was challenging because it's very expensive. So, what we've done is we've actually innovated in that area, and we brought the pricing to be, you know, the levelized cost of energy storage, which is the per unit price of storing energy. We brought that down by up to 20%, versus the best source today. And that... How did we achieve that is just one thing. We basically, have come up with new materials, very, very commonly available materials. So we use four things in our batteries. We use carbon, available actively everywhere in the world. We use zinc, which is again nine... 900 times more than lithium. We use, bromine, which is a natural resource abundantly available around the world. It's available in India. It's available in China, in Europe, in the United States, even in the Middle East. And we use polymers, which are standard polymers. So most of our innovations are actually in that area, and, you know, that's what's really helped us, bring in a product like ZincGel, which, addresses the six to sixteen hour, which frankly is not... Is unaddressed as a market. If you if you go and do a quick search on, you know, who's the leader in six to sixteen hours, you won't really find any names because that market hasn't been addressed as yet, and it's growing very, very rapidly. So I don't know if that answered your question itself, but that's the example that I would say. So two to four hours lithium works great. Well, beyond four hours, you need some of the technology, and, you know, we are one of them.

Sharvil Malik: You mentioned that you've been innovating on the battery front and the storage front. Right? And it's it's taken, like, six long years and a lot of, like, patience when it comes to innovating anything. Right? It's almost, like, six years for your Series A. How do you how do you keep a cap table and a team, like, motivated to just, like, keep hammering towards the same mission for those six long years?

Rishi Srivastava (Offgrid Energy Labs): Great question. You know, we don't see this. The four cofounders and every employee in the company, we see this as a mission. And I remember that day in 2017 when Brindan Tejas and I sat down, and he said, you know, we're gonna set up, energy storage company. And as I said, you know, I actually took tuitions from them. I stayed back at IIT. The professor gave us his office, and they actually taught me with chemistry from grade eight... Grade 10 onwards because I had left, chemistry after that. And we decided that, you know, this is, we want to build sustainable energy storage that's gonna transform, you know, the lives of people. And all the talent that we've attracted in the company, and, you know, we have more PhDs. I'm I'm the only non PhD in the company. You know, these are all people who are on a passion to, you know, to bring something transformative. So our innovation, you know, it's... For example, we launched the world's first, dry electrode. Now I know that's a technical term, but, the only company that's tried it is Tesla. They bought Maxwell back in the day to come up with dry electrodes, and, they were unable to do it. Of course, because in lithium, dry electrodes are more difficult. But we launched the first dry electrode line, in the UK on July 7. So we've been working on some real cool stuff. Our electrolyte is actually aqueous. Bromine doesn't work with water. We've been able to make... It's almost like mixing oil with water. So we've been able to achieve that. That's one of our innovations. So I think it's fun innovation, a very large market, and the fact that, you know, we see this, this technology transforming from a sustainability point of view as well because, you know, renewables... Renewable energy is the cleanest energy. It's the cheapest energy. The problem today is not generation. The problem is storage, and, you know, we play right in the middle of that.

Utsav Somani: Fascinating. And you've done pilots. You have patents for this. And why Hampshire, as the first, manufacturing hub for you? Yeah. The patents, pilots, talk to us a little bit about those as well.

Rishi Srivastava (Offgrid Energy Labs): Sure. So, you know, in the in the last six years, so we started, we started as a, you know, out of IIT Kanpur, you know, various response on a sum of money, did some research, looked at different chemistries. Then we moved on to, you know, zinc-bromine. We zeroed in on it, and, we did our first set of pilots with Shell. Shell Ventures is an early investor in the company and, you know, a lot of gratitude to them and their people around the world who, you know, really have not validated our technology. And then, of course, we raised our Series A and set up our first manufacturing facility at Hook in Hampshire outside London. Why in London? Two reasons. One, you know, UK has one of the largest curtailment opportunities. So it's it's a it's a very large wind power, especially northern, you know, UK or Scotland. And, you know, they spend a lot. They spend a lot. They spend billions of pounds every year in actually curtailing that, because they don't have storage. And, and it makes the grid, you know, it kind of impacts the grid as well. So we found that a very interesting, challenge to solve for. The second thing was that we do believe we have the world's best, zinc-bromine chemistry. We want the world's best talent to work on precision, manufacturing. So batteries, you have two things. Right? Like pharma, it's it's all about, precision manufacturing as well as, you know, purity. So we talk of purity in very high level. So any contamination is absolute anathema for storage. And, there is a good ecosystem for that in the UK. So that's the reason. It's it's it's a demo plant. We are gonna set up, you know, a gigawatt facility here in India as well, as well as, in the UK and some other parts of the world. So that's the conversation we are on at the moment.

Utsav Somani: Interesting. I assume that you set up in UK or Hampshire because of supply chain for, sync, but I believe your first reason is that you want talent and then, of course, be closer to your customers.

Rishi Srivastava (Offgrid Energy Labs): Yes. And by the way, all the materials we use is also locally available in the UK, which is, you know, in the current geopolitics of the world, so that's actually a huge, tailwind for us because nobody wants to be reliant. Everybody wants, you know, energy sovereignty. And, you know, that's one of the things we're able to deliver because, for example, the plant in India will source everything locally as well. It's the same with the plant in the Middle East. It's the same with the plant in Japan. So, you know, that was one of our building principles that, we wanna democratize the materials, that get utilized so that there is really no concentration risk, whatsoever. Because energy is a very, very, you know, critical, you know, is a critical area for every country in the world.

Sharvil Malik: Just double clicking on your UK operational plans. Right? Like, so your plan spreads manufacturing across dozens of SMEs instead of just, like, one giga factory. So is that, like, a capital strategic decision? Is that, like, quality control risk? You don't wanna put all your eggs in one basket? Like, walk us through that, man.

Rishi Srivastava (Offgrid Energy Labs): You've done a great, amount of research, I must say. Great. You know, it's a very good question. So, you know, one of the things we realized when we moved to the UK, you know, last year, the team, you know, the two, Brindan and they just moved there. We realized that there's only an existing infrastructure in the country that's only utilized. For example, there are injection molding machines.

Utsav Somani: There's a, you know,

Rishi Srivastava (Offgrid Energy Labs): on up north, there are there are some manufacturing clusters in the UK as well as on the tea side. You know, the... There's a pharma cluster just like their clusters here in India. And, you know, our technology, is, you know, is quite is quite similar. It's from a manufacturing standpoint to that. So we realized that, you know what, it makes a lot of... It's not really capital because, by the way, our capital, per gigawatt is just $25,000,000, which is one-fifth of that of lithium. So we have... We've got a lot of innovation in that too. But we felt, why not utilize the existing, ecosystem? You know, it's, you know, having worked, in an ecosystem business before I got into become an entrepreneur, one of the things I realized is for every dollar of revenue you generate, if your partners generate 7 to $10, it makes absolutely, you know, sense. And so that's one of the parts that we decided that we will evaluate for sure. And, you know, I must say that, that ecosystem exists in the UK. It also exists here, in India. You know, there's there's a lot of, you know, there is there is a lot of ability, in, for setting up. So we will still set up a gigawatt facility, but we will, farm out some of the work to existing infrastructure, not necessarily a capital decision, Sharvil. It's more to do with, you know, who can do what best. You know? And we do very well as electrochemistry, and we're gonna leave some of the some of the, you know, manufacturing pieces to people who have been doing it for years.

Utsav Somani: I'm gonna sidetrack a little bit because you mentioned gigawatt. Are your factories, getting a cool name as well, like the Gigafactory?

Rishi Srivastava (Offgrid Energy Labs): Well, I would say... So, you know, the minimum, standard size, is a giga gigawatt for a for a for a for a factory. So you call them gigafactories. And, you know, for ZincGel, our product, we have... This will be the very first, so we're looking to set up, you know... So our ambition is 10 gigawatt-hours in the next, five years, which is a very, very ambitious target. And how we'll achieve that is we will own and operate, between one to two of those plants. The rest of them are all gonna be in partnership. And that's the other difference that, you know, you see with off grid. We're not at all, you know, we were very keen to partner with folks in the industry, in the ecosystem. For example, there are enough manufacturers in the world who can manufacture batteries. And our battery manufacturing is very simple. We have lots of, as I said, lots of IP there. And we are more than happy to license that. So we are in conversation to do, stuff like that, which will help us scale much quicker, across the globe.

Utsav Somani: I have one final closing question. For you, there's something on our YouTube chat. Himanshu is asking, with the explosion of AI and data centers for it, do you see an exponential need for long term storage batteries like these?

Rishi Srivastava (Offgrid Energy Labs): Absolutely. The reason being that if you look at, and, you know, everybody's aware. Right? Right? All over the world, there is, there is not actually some parts of the world like in The US. Even in Europe, you're seeing data centers are being looked at, with a lot of, suspicion purely because, you know, the amount of power a data center requires is Power and water.

Utsav Somani: Everyone's talking about it. Water

Rishi Srivastava (Offgrid Energy Labs): is And chips. The chips piece is, of course, getting solved. You're absolutely right. There are, though, there are air cooled, data centers also coming up now because I think water is a is a real issue. But, you know, power is a is a big issue. And, the only mechanism to run data centers on a 24/7 cycle is to basically be able to do long duration storage. So our... You know, we've been in conversation with a bunch of companies around the world on this. We actually will have a pilot with the data center announced, shortly, where, you know, we believe that we will we will use the renewable energy for, seven, eight hours a day and then discharge over the next sixteen hours, to be able to run the data center, efficiently. And that adds a lot more to, you know, the existing power sources. But there really isn't enough power in the world for all the data centers that are getting announced, including in India, actually.

Utsav Somani: Fascinating. Sharvil, you wanna ask one final one?

Sharvil Malik: Yes. One last question. Right? Like, because we're talking about so much about, like, the needs of power. Right? So Archean owns about 18%, and if they're also selling bromine that your battery is running on. Right? So how do you keep your strategic investors from becoming your single point of failure? Right? Because if that goes down, like, how do we how do we, meet all the needs that everyone is having right now?

Rishi Srivastava (Offgrid Energy Labs): So, you know, RKM, it's, bromine, fields are large enough for several gigawatt-hours of factories that we can set up. And bromine is available elsewhere in the world as well. But RKM is a very key, you know, is a very key partner for us as well, because, you know, that's, you know, that's that's one of the inputs there. So there's no shortage of rogue in charge. If that was that was, you know, one of the one of the objectives of the question. The other thing, of course, is our relationship with them as an investor is as a strategic and, because they have additions, of, you know, evaluated added products, downstream products from bromine. And, you know, our chemistry utilizes bromine as well. So it's it's it's actually a very, very, symbiotic, and a good relationship for us. And I don't see any shortage on supplies there because there is... You know, bromine gets generated every year when the... It rains. So it's a it's a it's a natural phenomenon. It's it's, if it rains, and, you know, bromine just comes... It's it's it's in touch, actually. Archean's feeds are in touch. So there is really no worry of that for us.

Sharvil Malik: Amazing, man. Finally, at least there's one supply chain that's not getting, like, hit.

Utsav Somani: Yep. Fingers crossed. Fingers crossed, man. Like, don't think so. Don't shit.

Sharvil Malik: I take it back.

Utsav Somani: Rishi, thank you so much. Have a safe trip ahead, and thank you so much for coming on our show.

Rishi Srivastava (Offgrid Energy Labs): Thank you, Itzhaf. Thank you, sir. I will really do it. I appreciate it. Alright.

Utsav Somani: Cheers. Alright, listeners. We're moving on to our next segment. We've got Ananth and Ranjithh from DPDzero joining us. Guys, welcome to the show.

Ananth Shroff (DPDzero): Good to know.

Utsav Somani: What's happening? Is Ananth, here? Yes. We see Ananth now. What's up, guys?

Ananth Shroff (DPDzero): Hey. What's up? Thank you

Utsav Somani: so much for dialing on October 2. I know it's a, I mean, national holiday, but I'm guessing, like... I mean, from the background, you're in office.

Ananth Shroff (DPDzero): Yeah. Yeah. We both, are in office, and we thought of joining together, but then we understand that we have to be focused individually and

Sharvil Malik: Shut up. Let's do it.

Utsav Somani: In different rooms. Shut up. Let's spend the next twenty minutes learning about your business and industry. So tell us, for our listeners, what is DPDzero?

Ananth Shroff (DPDzero): DPDzero is a full stack AI collections platform. And, what we solve for is how do we get all the loans back, that are being disbursed. Right? So India... If you look at India, India's credit penetration is the poorest in the country. Right? We need the credit penetration to grow. We need, more access to credit and for which the lending institutions in the country have to focus on acquiring more customers. Right? And, for which they need to make sure that, they don't lose money. Right? So that's where collections is very important, and that's what we're building, the collections infrastructure for India, where any lending institution can simply plug in and they push their loans onto our platform. And we make sure that all those loans are collected ethically, efficiently, and with compliance. Right? So that's, like, broadly what DPDzero does.

Sharvil Malik: So, help me understand the flow here. Right? Hi, Anant. Hi, Ranjithh. So we've all, like, interacted with so many AI agents, whether it's customer bots or, like, whatever. Right? So many voice agents out there in this space. And I often get, like, super impatient. I'm like, you know what? Just connect me just connect me to the human in the loop. Right? How do you guys solve a problem as, as important as money? Right? Like, how are people responding to talking with an AI agent and just like, yeah. Sure. I'll return you. Right? There are there are friends in my circle who wouldn't even, like, return money when, like, I'm pinging them 100 times. So how are you doing this with AI workflows, man?

Ananth Shroff (DPDzero): Ranjithh, you wanna take that? Or...

Ranjith BR (DPDzero): Yeah. Yeah. So... I mean, it's, it's not easy. Right? Like, let's just be, very straightforward. It's not easy. And, but what's real is, there are lots of different types of borrowers. Right? There are people who don't want to talk to a human being also. Right? And, they're just happy to just respond on a WhatsApp message and say that I will make a payment on x day. And then there are people who have some difficult circumstances, and, they don't want to typically, you know, get away from making that payment. They want to inform that, okay. This is my problem, and this is why I'm not able to pay, and I need this much time. Right? And, that... That's why I say, you know, borrowers are on a spectrum from people who don't want to engage at all to people who are really, who are really supportive, when they have become delinquent. So there are different kinds of people and different kinds of, communication tools work on different kinds of people. Right? And, yeah. On a large, scale, we have seen that, AI agents and, human beings have almost equally good results when it comes to conversion rates. So, I mean, it does work.

Utsav Somani: But there was this stated goal that I read of yours where you wanna take AI to 50%. Like, I believe right now it's between 10 to 20%, in terms of doing these collections for you. Right. How do you get to 50%, and what has to, be true for that to happen?

Ranjith BR (DPDzero): Okay. To become, fully 50%, there are, like, two things AI needs to be very good at. Right? The main thing is understanding the language, that different Indian speak. For example, I sent some calls, and I can't understand what the borrower is trying to say. Right? And, these AI agents, are finally, an engine that take... Listens to speech, understands it, processes it, and speaks something back. So for it to become 50%, the main thing that needs to happen according to me is, for the speech-to-text technology to become really, really good, for, various kinds of dialects and the various speech styles that people in India have. So that would be the major thing. Beyond this, I think the technology is there, today. Right? Because what we are able to do is, you know, have architectures like speaker-thinker. That's an architecture that we have. There's an agent who's speaking and then there's an agent who's thinking in the background. And, the two are able to coordinate and, you know, do a really good job and give almost human-like natural speech. But I think the biggest challenge remains being able to understand all kinds of people and how they speak.

Sharvil Malik: Just double clicking on your product here. Right? Like, I think you've... You guys have done a phenomenal job in basketing, the borrowers in different personas. Right? Like, I think supportive, bargaining, intentional, and escapist. Right? I love the terminology. So dramatic. Right? But I think in a in an issue like money lending, this is required. Just walk us through that. How do you do this? Like, what does your system actually look for? What are these different things? And then how do you basket this? And once you basket it into a persona, does your approach change, after that?

Ranjith BR (DPDzero): Yeah. Yeah. For sure. So, it's a lot of heuristics that we employ. Every conversation that, we have with the borrower, we... I mean, if it's a text kind of channel like WhatsApp, it's already in transcript. But, if it's not a text, you know, channel like voice, we transcribe pretty much everything. And, then there is a lot of tagging that happens, sometimes manually, sometimes automatically, of the borrower. And all of this goes through our internal risk models, which creates various kinds of scores for the four attributes you actually came up with. And the way then we tag a borrower is based on how these different probabilities are estimated to be. And once we have this in place, we have a communication engine, which is, you know, like, it's a multichannel communication engine. And depending on the kinds of scores that borrowers have, they're engaged in different, intensities, I would say. Right? So for example, somebody who's an escapist and we know that their address, is this, we would send, like, a field agent. Whereas somebody who we know is very supportive and just requires few more nudges to make the payment, we'll stick to low cost, and low, you know, like, low bothering kind of channels like WhatsApp and SMS. So that's essentially what happens. So there's a communication engine, then there's a decisioning layer, and then there is an execution layer.

Ananth Shroff (DPDzero): Like, you know, just to add on to what Ranjithh is saying. Right? If you look at the current landscape today, right, every borrower is treated the same way. Right? Because the intelligence is absent, in the industry as a whole. Right? And everyone is trying to ensure that the losses reduce. Right? So they end up using this approach called as spray and pray. Right? So while there is a lot of segmentation that the industry speaks about, finally, what happens is that every borrower is sent a WhatsApp message. Every borrower is, done an AI call. Every borrower is then sent to a BPO for calling, and then mostly about 60% is also visited on the ground. Right? And, hence, the cost of collections is also significantly high while you're also ending up hurting the customer experience. Right?

Sharvil Malik: Mhmm.

Ananth Shroff (DPDzero): If you think about it, right, if the, if the credit has to compound, your customers... Your repeat rates have to be super high. And when will the repeat rates be high? When the experience is extremely good. Right? So that's the exact thing that we're solving for by using the persona identification that Ranjithh spoke about. Right? And the omnichannel that we have, that we don't rely upon one channel only, like your AI question in the past. Right? What if the borrower does not pick up the call? Right? Like, AI doesn't work in that case. Right? And then we use the next channel. Right? So can we show up at the door? Right? Then there are, the intentional default....

Utsav Somani: Agent takes over. Yeah.

Ananth Shroff (DPDzero): The intentional defaulters are the ones who are like, I will not pay you. You can do whatever you want. Right? And that's where we bring in our legal capability because that's the only last resort that we're left with. Right? But if all of these plethora of, channels are available to ensure that every rupee is coming back into the system, right, by following guidelines and compliance, of course.

Utsav Somani: What are the malpractices in this collection industry? Because, I mean, DPDzero started off with a personal story of yours in 2019 where a credit card payment was due and you didn't pay. So what are the malpractices that you wanna highlight? Maybe mention us. Mean, mention two, three examples that are prevalent in the industry, which you're trying to, like, make ensured, doesn't happen at DPDzero.

Ananth Shroff (DPDzero): I mean, it's only about malpractices today. Right? So, I mean, the most shocking fact, right, when we started DPDzero, we walked into a bunch of these collection agencies. Even in India today, the collections is being run by these 50,000 old collection agencies that are spread across the country. Right? And these are, small shops, offices, right, that employ 30 to 50 people in size, and, they have no, boundaries, at all. Right? They are like, just get the money back. You employ whatever tactics. And the problem is because there is no playbook as such on how to collect. Right? There is no science behind how to collect with these guys. They end up, you know, employing this one single playbook, which is abuse, harass, and repeat. Right? Like, that's the only playbook that they have. You will find all kinds of abuses that I... You know, I cannot even say it on the call. Right? But that is what they, rely on because that's the only way to pressurize a customer, in paying back. Right?

Utsav Somani: And we keep reading these horror stories where people have even committed suicide, because of these, things.

Ananth Shroff (DPDzero): You need to understand when a customer has no cash flow. Right? There are other options that you can offer. Right? So, if they're an employee. Right? So they have a Right? You can dip into your in order to get rid of your liability, right, than, like, going through, the great crunch and the bureau scores going down, etcetera. Right? So we look at all the options. We provide all the options. And if they're not able to cater to it, right, you have to give them time. Right? There's no other way. And when you give them time, you need to ensure that you follow-up. Right? And, that's where the data, the processes, the technology, all of that comes into play that you're able to follow-up with 20 or black customers that we're able to work with today at scale, by being precise. That's the real key of this answer. Right? So you need to be, you need to follow-up. You need to understand the borrower and propose the right kind of solutions.

Sharvil Malik: While we're on the topic of malpractices, right, like, RBI recently rolled out a mandate where the incentive design or the incentive structures of the collector agents shouldn't be such in a way that they have to resort to these tactics. Right? How are you thinking about, like, your internal incentive mechanisms at DPDzero so that you're also ethical while you're getting the money?

Ananth Shroff (DPDzero): See, if you go back to 2022 and read all the posts that I have written about. Right? We were the first ones to speak about very openly, in the public about the practices that are happening today in the country. Right? So, I'm very happy that RBI has now come out with a lot of guidelines, that is going to force the industry, to moving towards compliance. Right? So I think that's the... That's a big part that I really love. Because now I feel that we have a common playing ground. Right? Because so far, we didn't have that. From day zero, collecting with compliance was the practice. Right? But then when you're pegged against or benchmark against the players who have no guardrails, right, you'll end up losing inevitably. Right? But now, I think, all our hard work for the last four years is going to, pay off. Right? So a bunch of things that we do for, compliance. Right? So while we have a lot of agents as well, the human collection agents, we call them as advisers, firstly. Right? Because what we feel is, you need to advise the customer. It is counseling, end of the day, right, for the ones who are not able to pay. Right? How do you train them? Right? So we have built our own, software for these, advisers where there is AI that's coaching them in real time. Right? On how do you tackle certain borrowers. Right? Because you don't know end of the day, and you need to be taught on how do you have to tackle. If you're not taught, then you will, you know, go back to the kind of things that you can do to work. Right? The pressurizing tactics. So that's where we continuously coach these advisers on a daily basis. Right? And secondly, there is always a human. Right? When there is a human, problems might happen. Right? But how can you find out or identify these problems as early as possible? Right? So we've built in our own AI compliance officer that is sort of listening to every single conversation that is happening across, two thousand hours of calling, data that we generate on a daily basis. Right? To find out, right, how each and every borrowers could be improved, how each and every advisers can be better trained, and if there are any, noncompliance that's happening that's alerted to us in real time so that we can take proactive measures. Right? Those are the systems that we built three years ago. Right? And I think now it's going to be a very important, play a very important role in scaling up further.

Utsav Somani: Even the company name is very telling. So DPD means d... Days past due. Right?...

Ananth Shroff (DPDzero): And zero.

Utsav Somani: So from a, yeah, and zero, of course. So as a lender, how do they look at... I mean, suppose they give you a 100 crores and it's day one, it's day 30, it's day 90. How does that behavior change when working with the defaulters?

Ananth Shroff (DPDzero): It changes a lot. Right? So how the lenders sort of look at DPDzero is a plug-and-play infrastructure, right, that we wanna disperse faster. And everyone has a projection on how much are they going to disperse in the next quarter, in the next quarter. Right? So that's how they work with us. They give us a heads up. Look. This is how the volumes are going to be, in the next couple of months or six months down the line. Right? So, make sure the infrastructure is ready to support. Right? That's the only thing that they do. They don't do anything after that. Right? The data is moving into DPDzero, our platform, and we ensure that the collection efficiency rates are on par to the SLA that we have signed up with them. We sign an SLA that this is the collections efficiency that we are going to deliver. Right?

Utsav Somani: And the collection efficiency, you mean that... Suppose somebody gives you a 100 crore book to recover or a 100 crore loan, you will get to at least 50% of that. Is that what collection efficiency means? So...

Ananth Shroff (DPDzero): But it's......

Utsav Somani: Three to 5% of that as revenue.

Ananth Shroff (DPDzero): Yeah. Yeah. Yeah. Yeah. Very, very simple. Right? So, let's take an example. Let's say there's a 100 crores and, we call this as bucket x, which is, 1–30 DPD, right, which means the borrower has failed to honor the due date. Right? Now he becomes a DPD one. Right? Say there's a 100 crore there. Right? We sign an SLA that we are going to collect 90%. Right? So we ensure that 90 crores come back, and there's a fixed fee for that. Right? So we charge a percentage. We are in a revenue sharing business. Right? We share revenue with them, because we're an infrastructure partner for them. Right? So one to 30 basically means the borrower has one EMI outstanding. Right? 30–60, now the borrower has two EMIs outstanding. Right? 60–90 is three EMIs outstanding. Right? So that's how the behavior changes. In the one to 30, it's about ensuring, the borrower repays that one EMI. But when it moves to 60–90, which is... We call as bucket three, right, we need to plan the... We need to work with the borrower to plan their cash flows. Right? You get the one EMI first and then plan for the second one and then the third one so that we normalize these borrowers. That's the, you know, term in the industry that's called as normalization, which means all the borrowers are now, you know, good customers or healthy portfolios. Right? So that's that's how the behavior changes. And then there's NPA. NPA means the bank has already declared that it's a non-performing asset. Right? So where we, try to settle as much as possible to ensure the loss rates reduce further. Right? So that's how we work on different use cases.

Sharvil Malik: You're just double clicking on this customer behavior. Right? So right now when I look around me, right, like, I'm sure you guys are see... Also seeing a similar pattern where people try to opt in for as many credit cards as possible, whether it's for perks, whether it's for point farming, whatever you wanna call it. Right? In a in a in a... In India right now, what is the real credit risk according to you? Right? Is it, that one customer who has just one source of income but, like, eight different credit cards? Or is it that new Gen Z, like, 21, 22 year old guy who's just entering the workforce with... Like, who's new to credit? Right? Where do you see this cut out?

Ananth Shroff (DPDzero): I feel both. Right? So both are happening at the same time. Right? At one side, you can see the... The... It is

Utsav Somani: the new iPhone that I bought on, like, those no-cost EMI is, for my whole family don't work out.

Ananth Shroff (DPDzero): No. If you see that, on one side, you see a lot of fintech lending institutions, right, onboarding these NTC customers, right, new-to-credit customers. Because the bank does not wanna service new-to-credit customer at all. Right? The bank thinks about servicing Ananth even today. Right? Think about that. Right? That's the kind of risk profile that the bank deals with. So on one side, we see a lot of NTC customers, entering the credit ecosystem, but there is a challenge that we see there. Right? And what is the challenge? The challenge is the awareness of credit. Right? That is the challenge. Right? With millennial customers, right, you know, the ones between 30 to 40. Right? We see a lot more, awareness on usage of credit, right, and the importance of repaying back versus an NTC customer today, right, where they think it's, you know, it's like some coins that you downloaded from an app. Right? That's the kind of mentality that people have. You know? I installed an app. I got money, and, oh, I'll just uninstall the app. Right? Like, nothing changes for me. No one knows where I stay.

Sharvil Malik: Out of sight, out of mind.

Ananth Shroff (DPDzero): Out of sight is out of mind. Right? So that's the behavior that we see from the NDC, right, which... Where we just, you know, focus on educating them. Right? And that's how we convert them. Right? Because they lack awareness. They lack education on how to use credit. Right? On the other side, while you mentioned this, right, the number of credit cards per individual is increasing, is skyrocketing. Right? So, we were just talking to a borrower very recently in very interesting use case. He has one credit card for movies, one credit card for fuel, one credit card for just, ecommerce shopping, and, one credit card for his personal spends. Right?

Utsav Somani: He has a Imagine the mental bandwidth required to track all of this stuff. It baffles me, man. Like, wow. I can barely keep up with, like, UPI apps on my phone. Like, I have two.

Sharvil Malik: Exactly. I read this I read this tweet somewhere which... Where the guy said that if you're tracking seven different credit card points, then you're doing something wrong in your life.

Utsav Somani: If you're tracking more than two, man, like, I think, you honestly need to get a... I mean, life, I think. Shouldn't be that much

Ananth Shroff (DPDzero): Right. But they are getting eight credit cards. That is also shocking. Right? Someone has to see that this guy has eight credit cards.

Utsav Somani: So maybe another interesting tidbit to this. Suppose people have 100 credit cards. Like, I'll give you a sample size of 100 credit cards. How many of them pay on time in India, and how many of them actually revolve their credit?

Ananth Shroff (DPDzero): See, a lot of, again, it's about persona. Right? There are these personas who are......

Utsav Somani: Sample size of 100. Like, we pick random.

Ananth Shroff (DPDzero): About 60% pay?

Utsav Somani: 60% pay on time and 40% rotated. And how many of them pay within the next... I mean, DPD thirty day or DPD one? If you look

Ananth Shroff (DPDzero): at if you look at the credit cards today, right, so it's holding around 2.4% NPA. Right? So finally, about out of every 100 people, two people are not paying even after ninety days. Right? That's the general trend. A lot of people use it for working capital as well. Right? So they also rotate credit. Right? They use one credit card to pay the other credit card. That is also a very common use case. And they all use money to, pump it in the stock market, right, which is another big problem that we see. Right? A lot of borrowers, between 25 to 35, cohort. Right? Most probably, the delinquency is going to be because the stock market came down. Right? They've borrowed money, forty five to sixty day loan, right, thinking that they're gonna make x y z return, on that stock, but it doesn't go as per the plan. Right? Those are a lot of borrowers as well. Right? And they're borrowing three times their monthly income, four times their monthly income, and pour it into stock market. Right? I feel the younger, borrower generation, right, is lot more risk taking. Right? In that case, I would still, like, shit my pants if, you know, I have to borrow five times my monthly income and then, you know, put it on a high risk, situation. Right? I wouldn't do that, but a lot of people are doing that, right now. That is also another problem that we see.

Utsav Somani: Sharvil, any final question, one from you?

Sharvil Malik: I think I think I'm loving what you guys are doing here, like, building at... On the intersection of ethical money. Right? And I think that's a great space, especially coming from your personal story, man. I think founders who end up building and solving for their personal problems tend to win long term. So all the best, guys.

Ananth Shroff (DPDzero): Yeah. Thank you so much. Thank you so much....

Utsav Somani: So much, for dialing in, guys. Have a wonderful weekend.

Ananth Shroff (DPDzero): Yeah. Take care. Bye.

Ranjith BR (DPDzero): Thank you.

Utsav Somani: Bye. Alright, Sharvil. We gotta cover two news topics. But before that, how was it, man? How was it, your first experience of interviewing two awesome companies and founders?

Sharvil Malik: Dude, this has been beautiful. I'm I'm all... I'm sad that it's already over, dude. Like, the time went quick by it. Right? Like, when you're having fun, you don't realize how time is flowing.

Utsav Somani: Should we do a five founder, six founder, six company special, like...

Sharvil Malik: I would love that. I love that....

Utsav Somani: Like, TVP and, like, scroll through.

Sharvil Malik: Let's do it. Let's do it. I think TVP and ETN, MTS, all of these people have great competition coming up their way.

Utsav Somani: Alright. Let's do it. So Moneyview, talking about loans and stuff, this is one company that, popped up, on the stock markets last week. 60% pop. So, of course, their investors made a lot of money. Ribbit Capital is there, of course, anywhere there's a fintech IPO that's... Do you know of Ribbit?

Sharvil Malik: I have. I have heard of them. Yes.

Utsav Somani: Yeah. Yeah. So, basically, I mean, Ribbit is, of course, a big, winner there. Axel gets approximately 10%, 10 x, and, Ribbit is making 20 x on the current share price. So 60% pop over 1,000,000,000 in valuation, 9,000 plus growth. So I think that's a good win for investors. Liquidity is finally happening now in the ecosystem. Yeah. This is something you flagged to me. I mean, this is what, I mean, investors from the same Khosla Ventures, this proper, like, definition of v love, basically.

Sharvil Malik: Yeah. Yeah. This is this is what's kept me up for the last two nights as well. Like, as the story was breaking, I was like, alright. I should probably go back to sleep on time, but, no, Twitter never lets you take a day off. Right? And this is where it gets interesting. So, the CEO at factory... Oh, my bad. The CEO at factory, Martin Greenberg. Right? He came out bashing, one of one of, their team members who was a board adviser, not a team member, board adviser, Chris. Right? And they said that, Chris, while attending board meetings, was also talking to Cognition. So Cognition and Factory are two of these AI giants who are also competitors. And the interesting part is that they both have a common investor. Silicon Valley legend. Right? Vinod Khosla. Right? And then he came out attacking factory CEO saying that you're a liar. You're a second tier struggling competitor. Right? Like, really harsh words going on. Like, one of the

Utsav Somani: main takeaways portfolio company of theirs. Dude, like, in India, no investor has the guts to do that. Like, I mean, it's impossible. I mean, I cannot imagine, like, anyone bashing their own portfolio company.

Sharvil Malik: Right. 100%, man. And it's like, it... That's why it's so good to see when other investors like Keith from CoSLA as well and Sean from Sequoia. They came out in support of, Factory and their Portco. Right? And Sean's literally been tweeting, I would love to go on a war with you guys. Right? And Keith and Sean both have been saying that, oh, Vinod is not up to date with the facts. So I don't know. Where do you stand on this? Like, you're a billionaire. You have a fund who's deploying money everywhere. Like, do you lose track of your investments? I don't know.

Utsav Somani: And now you have an NFL team also.

Sharvil Malik: That's right.

Utsav Somani: Right. I mean, so I think the funny thing is that Chris, of course, Salesforce, first sales ad, like, I mean, he's a legend. Like, for somebody like him to actually sit in a board meeting while chatting with Cognition and then two hours later, actually announce that they're becoming the revenue head for that company. Dude, that is wrong. Like, I mean, that is wrong. No matter what, these people or investors on Twitter are debating about, but that is seriously wrong. So I don't know full facts, but whatever little I could read in the next, I mean, in the past fifteen minutes before the show, I could, assume that what Chris did, is wrong. So I think, yeah. But, I mean, crazy that this happened. I think the behavior of all parties involved, especially the same fund into competing companies, that's becoming very common now, by the way. Like, Like, people are hedging their bets. Like, I mean, it's not uncommon for a 16 these coyote to have same portfolio companies, in same sector as well. So they're always hedging now because the outcomes are becoming larger and larger, and suddenly markets are starting to look like either duopolies or monopoly, winner takes it all. So you'll see many interesting dynamics play out as these large platform funds become, like, I mean, crazy giants in, investing in...

Sharvil Malik: It's it's like the state of venture capital in AI is so interesting right now where, everyone's taking sort of, like, a sector specific bet. Right? They're not betting just a one player or a one player. Right? Because... Yeah. Because we don't know who that player is gonna be. Right? And the other part is so interesting now. We have global world leaders and venture capitalists both who are threatening for a nuclear weapon. Right? Like Sean literally tweeted, hey, Cognition. We have proof against you. This could literally be like a nuclear weapon to end you guys. Right? I'm like, wow. What is this happening on the timeline? But I'm here for it. So I think there are two main key takeaways from this. If you're a founder, do not crash on the timeline. No matter what happens, right, take it up on your personal Slack or your email. And the second key takeaway is never quote-tweet to a crash out with another crash out. That's a double crash out. Right? So just not let take your... Not take your emotions get the better for you.

Utsav Somani: Alright. Right. Thank you so much for those key takeaways and summarizing it for us, Sharvil. Good to have you as a guest cohost on TON stream 146. That's it from us. We'll see you on Monday at 04:00. Have a wonderful long weekend, everyone. Thanks for tuning in. Bye.