Full Transcript

Dhruv Sharma: Hi there, it's Friday, February 6th. The Offline Network is streaming live. Google, or Alphabet rather, just dropped their numbers and it looks like they've had a red hot quarter. Utsav, did you look at it?

Utsav Somani: Yeah, they beat all expectations. I mean, Alphabet crossed 400 billion in annual revenue for the first time. It announced, I think the headline number was 175 to 185 billion in guidance for APEC spent for 2026. It's almost double of what they spent in 2025. 91 billion. And the Q4 numbers are, of course, like all the business lines are growing heavily, including cloud and their...

Dhruv Sharma: People thought AI is going to impact search. Search revenue is growing, cloud revenue is growing. Someone wanted them to come out and dance, now they're dancing.

Utsav Somani: YouTube makes 60 billion a year, which is more than Netflix. So it's insane. And there was I think a chart which went viral I think on Twitter where they said that YouTube is the highest used social media platform across all age groups, beating even the young ones. So I think it's fascinating what they've built in this company known as Alphabet.

Dhruv Sharma: But apparently the street is getting a little freaked out by these numbers, the CapEx spend across Alphabet and the other hyperscalers.

Utsav Somani: Yeah, so Meta spending 115 to 135 billion. Everything is above the estimates here. And Google is 175 to 185. Amazon aiming for 200 billion. So that seems like they're playing catch up, but 500 billion is what they're spending in AI infrastructure. That's more than the GDP of countries like Poland, Belgium or Thailand. And what are they buying with this?

Dhruv Sharma: One company's spending is another company's earning, so maybe we should look into that. Look, I mean, they're buying compute hardware, they're buying cooling systems, they're buying networking equipment, all sorts of things. Now they're saying that some of them are even thinking of putting power plants right next to their data centers, because at least on Earth, and I know you and Karshesh knew how to chat about orbital data centers, but at least for terrestrial, like on Earth data centers, power sometimes ends up being the limiting factor. And in the US especially, there are places where you have to wait like 7-8 years in some states to just get, like if you need like an on-grid source of power, it's taking that long for you to get just approval. So no one has that kind of time, given the pace of this AI race, shall we say. That's what some people call it.

Utsav Somani: Talking about Elon Musk, I think I read a tweet as well which said that why the SpaceX and X merger is happening. They broke down some numbers, but basically, I mean, these are rough numbers but just to give you a sense on what one motivation might be, just for Elon Musk to play catch-up with all of these hyperscalers, what I think he might be doing is packaging X, which is X AI, into the whole SpaceX group, just so that SpaceX, what generates free cash flow from their launches and from the Starlink, around approximately 10-11 billion. And X is burning through approximately 9.5 billion a year. So he's raised 20 recently, but he'll need a lot more firepower to match up to some of these CapEx numbers that we just mentioned. So it might be a way for him to hit the public markets with a stronger balance sheet and then eventually get into the same race. But where do you think this all goes?

Dhruv Sharma: For all of this publicly, by the way, he was speaking with one of the Collison brothers, the Stripe founders in Dwarkesh about 12-14 hours ago, and he was addressing some of this stuff. He's calling SpaceX a hyper hyperscaler, because once you start building data centers in space, someone's going to have to carry all of that freight. I think I remember reading somewhere that something like 10,000 tons moved from Earth to space will bring about a terawatt of power capacity online. But that will also take corners. How many Starship launches each of which costs $100 million? So we're looking at something the planet has never really seen before.

Utsav Somani: But there's something that benefits India as well. So because of the Trump-H1B issue, which increased the cost of applications, Google is looking to expand their India headcount. They want to double it from 14,000 currently. They're looking at big spaces in Hyderabad and Bangalore as well. So I think it benefits India as well, some of this money.

Utsav Somani: Gemini, just because of being integrated in the whole Google ecosystem, they have 750 million monthly actives and they've become the preferred partner for Apple as well. So Apple is trying to diversify away from their partnership, which they announced last year with OpenAI.

Dhruv Sharma: I can't wait for the day we finally get to use Siri for something. Kavito.

Utsav Somani: Why? Why would Apple lose out on some of this? They've had some personnel changes as well. I don't know how much of this will be rectified. It's too late to play catch-up or do you think they can still play catch-up?

Dhruv Sharma: I don't know if this is the game they want to play. I mean, make no mistake, they still dominate the pieces of hardware that they produce. And who knows, again, maybe this is an anti-AI trade. There was massive sell-offs in the US markets after Anthropic put out some reports and so on and so forth. And the Apple stock, if anything, went up by 7.5%. Have you looked into Waymo, their self-driving unit? Google? Google and Waymo have some affiliation, don't they?

Utsav Somani: I think it's some investment connection. I've honestly not read into too much of this, but Waymo does get a mention in the Robotaxi segment of Google's balance sheet. Alright, so what's happening in India? New start-up definition.

Dhruv Sharma: Oh yes, there's a new definition?

Utsav Somani: Definition of start-ups.

Dhruv Sharma: There's a carve-out, I believe, for deep-tech companies.

Utsav Somani: They've finally recognized it. So anything, basically a deep-tech start-up category is created where they give it a 20-year recognition versus 10-year recognition for a regular start-up if you're registered with DPIT. There's a 300 crore cap turnover and what this buys you is some relaxations in the income tax rules. So it's good because some of these companies have high energy spending and commercialization of their IP takes a long time. So I think they're just extending the runway for them by giving them a tax holiday for a while.

Dhruv Sharma: There was one question I saw somewhere in a group chat where people were like, okay, what does this new definition get you? And as you said, it gets you some tax incentives and I think also additional capital sources open up to you with this change in definition. The AIF route, for instance, becomes a new possibility.

Utsav Somani: Yeah. And what about, I mean, you've seen the Claude ads?

Dhruv Sharma: Oh yeah. It's Super Bowl Sunday. Yeah. What was the ad?

Utsav Somani: Man, they're making fun of opening AIF pretty openly. The ads were, I think, tastefully done, but I think, of course, taken in bad taste by Sam Altman. Tastefully done in the sense they were pretty culturally relevant and done very artistically. I'm sure they spent a bomb on this. They created these four ads, which they're going to run during the Super Bowl, where, I mean, a person is sort of acting like Chad GPD in the sense that communication style and the language that they use and the other persons, I mean, they start giving out an ad in the middle. So Claude is basically poking fun at open AI because they said that, announced that they'll do ads.

Dhruv Sharma: Let me ask you a question. If at this point I gave you output from three LLMs, would you be able to tell who's doing the talking?

Utsav Somani: I think we might. It depends if the answer is long enough, we might be able to because Chad GPD just leans into supporting you and saying that, Oh, awesome. This is an amazing idea. Why don't we go along with this? But we have three things that we can improve.

Dhruv Sharma: Grok is like a backbencher.

Utsav Somani: Grok is like a backbencher. Claude, I'm still getting around to using it. I mean, I've used more of the opening AI. I've used more of the co-work play that they have. So that I think was pretty exciting. Like, I mean, gets to control your desktop and stuff.

Dhruv Sharma: Claude is more like strokes of genius, geniuses and yeah.

Utsav Somani: But we finally have our first guest with us. Let's welcome Vivek to the show. Vivek, good to have you here.

Vivek Sinha - Founder & CEO, Emversity: Thank you for having me on the show. I have been listening to the past few episodes and very excited to be here.

Utsav Somani: No, no. Thank you so much for giving us your time. I know you're busy building. So why don't you explain to our listeners what you're building at Ember City?

Vivek Sinha - Founder & CEO, Emversity: So we are a skill development training and recruitment company. We focused on grey collar jobs in core infrastructure areas. So this company was built with the belief that over the next two or three decades, there will be massive capacity expansion in some nation building sectors such as healthcare, hospitality, data centers, construction. And these sectors are run by skilled workforce. And while technology automation will only make them productive, but any amount of technology or automation can't replace them. So AI proof jobs and employers are struggling to find skilled workforce for these sectors, which sounds very counterintuitive because one thing that we have in abundance in our country is people, right? But unfortunately, projects are getting stalled. Capacity expansion is getting stalled because they don't have people to run it. And on the other hand, the feeder which is supposed to, let's say, supply the skilled workforce to these industries are universities and colleges, which are producing about 3 crore degree holder and diploma holder every year. And 70 to 80 percent as per estimates of the Ministry of Education, graduates are unemployable. So we thought that we'll act as a bridge between the higher education ecosystem and the employers. And we'll help these universities and colleges who already have the academic depth, but they lack industry relevance. So we'll help them in building these bridges and making their candidates more employable by working very closely with the industry. So that's in short what we do. Right now we are creating talent for healthcare and hospitality. We are present across 23 states in the country now with physical presence in over 60 campuses. Last year, we trained about 5000 students. That probably makes us the country's largest skill development platform, if I'm not wrong.

Dhruv Sharma: Amazing. Do you have your own curriculum? Do you run the pedagogy? Do you have teachers?

Vivek Sinha - Founder & CEO, Emversity: Yeah. So there are two models on which we run. We have our own company-owned, companyoperated center from which we run short-term six to nine-month diploma programs. That's built in partnership with an anchor employer in the industry. So to give you an example, our anchor employer, which has co-created, co-scripted, co-delivers curriculum and hospitality is Taj Hotels. So that's our own skill center model. The curriculum is entirely done by us, of course, in partnership with an anchor employer. When we go to university, then the curriculum is actually a mix of what the UGC, which means the regulator or what the universities wants to deliver to meet the degree requirement. What we do instead is we embed industry-relevant modules within that degree. So think of a, let's say if there are 100 credit courses in a regular BSc degree, 30 or 40 of those theoretical courses will be replaced by industry-aligned modules. And so that's how we operate. But curriculum is entirely by us. Trainer, hiring, training, deployment is by us. Infrastructure upgradation is by us. For example, in order to teach a nurse on how to perform a life-saving procedure. The way it is being taught right now in colleges and nursing schools is writing down the steps on a blackboard. That's not how it should be taught. It should actually be taught on a humansize, high-fidelity simulator. But most colleges and universities don't have the capacity to invest in infrastructure upgradation because, for example, a typical nursing setup costs anywhere between 1 to 1.2 crore. Most colleges don't invest that kind of money. So that's where we come into play. We upgrade the infrastructure ourselves and then we charge these universities and colleges a monthly or annual fee over 5 to 6 years. These are long-term contracts. And finally of course, they don't have the capability to interact with employers and understand what their skill requirements are. So that's where we come in picture.

Utsav Somani: And are there any job guarantees at the end of the course?

Vivek Sinha - Founder & CEO, Emversity: Yeah, we don't do guarantee stuff. I mean while for every candidate that we had in the academic year 2025, we had three offers. So the demand is much higher compared to the supply in the marketplace, if you think of it. So think of this whole skilled workforce as a talent marketplace. The demand far outweighs the supply. So we don't have to give guarantees. You have to do that when you go to, let's say, segments like data sciences, technology or management. Because everyone is pitching the Fang job story, but there are only so many Fang jobs. Or everyone is pitching a 40 lakh, 50 lakh post MBA job story, but in reality there are only so many number of jobs. We don't do that. In the marketplace where we operate, there is no dearth of jobs. So I don't have to guarantee anything to the candidate to get them excited about what we're doing.

Utsav Somani: And you mentioned names like Taj and Apollo and healthcare and hospitality. Many of them have their own in-house training institutes as well, right? I believe the Taj and the Apollo ones are quite well known.

Vivek Sinha - Founder & CEO, Emversity: To give you a perspective, their in-house talent strategies are not even able to cater 5% of their demand. So think of, if you are a hospital operator, Manifal, for example, has more than 12,000 beds and they have more than 50 hospitals. Now these 50 hospitals are disbursed across 28 states in the country. And Manifal or Narayana for example has 3 nursing colleges. And they have 40 hospitals. And in this industry, geographical mobility doesn't happen. So somebody who is trained to be a technician in Hyderabad is not going to go and work in Bihar. So how do you solve for it? If you ask any employer having their own hotel school or having their own hospitality school is not what they want to do. They are forced to do it. Yeah.

Utsav Somani: And when did you start this business? And you completed one batch and the numbers look pretty promising, right?

Vivek Sinha - Founder & CEO, Emversity: We are less than 2 years old. We started our operations in April 2024. So we'll be completing 2 years in a month's time.

Utsav Somani: And in terms of outcomes, you are extremely happy and positive from the industry?

Vivek Sinha - Founder & CEO, Emversity: So far, yes. Like I said, we had more number of job offers and less candidates who we can actually place. we have to now actually as a platform solve it at scale.

Dhruv Sharma: And Vivek, is the entire focus on skilling people so that they can have first time entry level jobs? Or are you also starting to think from here on about reskilling and upskilling as well?

Vivek Sinha - Founder & CEO, Emversity: Business-wise, that doesn't make sense. I mean, it's impossible in India to make money on upskilling. I mean, that's not a viable model. That's not a scalable model. It's a model where very thin margins, there are no real modes. I mean, every organization has an in-house L&D team etc. We don't want the corporate business. We want to remain a B2C business.

Dhruv Sharma: L&D teams can't keep pace. That capacity can't keep pace with the demand that they have. Is that because the businesses are growing too fast or is that because even attrition is a real risk in some of these businesses?

Vivek Sinha - Founder & CEO, Emversity: So Dhruv, you're right. There's a real need on the upskilling side as well. But see, the question comes, who pays? So think of again, think of this as a talent marketplace. Do you monetize the supply side of the marketplace or do you monetize the demand side? Demand side is the employer, supply side is the candidate. Now monetizing demand is incredibly hard in this market. There's a company called Teamlease. You must be aware of it. Their annual revenue is 10,000 crore. And can you take a guess what is the multiple that they trade on? 0.25 times of their revenue. Because their margin is 1.5%. Which basically whenever you go to an employer and ask for any recruitment fee, L&D fee, training fee, upskilling fee, it's a very thankless job. Employers will tell you that they face a lot of issues. But when it comes to paying you from their budget, what is the L&D budget of let's say any employer that you can think of? It's nothing. So, on the other hand if you look at the higher education side, the annual fee collected by higher education institutions, schools and colleges last year was $70 billion. So we have taken a conscious choice that I want to play in that revenue pool of training and education rather than playing in the revenue pool of recruitment, L&D, etc. So yes, there's a market and there have been great companies built in the US and other geographies where employers want to invest in L&D. I think India is a decade away from that kind of a place.

Utsav Somani: And tell us about the 30 million raise, the headline number, but what is the money being used for?

Vivek Sinha - Founder & CEO, Emversity: Honestly, we went to the market with an ask of $18-20 million. So I have an answer for what will I use $20 million for. I don't know about the remaining 10 million. We'll figure out. We'll find good use of that capital. So yeah, 2-3 things. A is, of course, we have a presence as we speak today. We have a presence across 45 campuses. We want to take it to 100-120 in the next 2-3 years. So that's linear growth. Second, apart from hospitality and healthcare, we also want to add data centers, EPC and manufacturing. These are the three industries that we are very kicked about. We already have started discussions with some top anchor employers. So let's make initial days, content creation, etc. Take some investments.

Utsav Somani: Is anchor a must before you consider category or vertical?

Vivek Sinha - Founder & CEO, Emversity: When I launch, so let's say I create capacity for 1-2000-5000 students, I first bring an employer who underwrites at least 30-40% of the jobs in that segment. It just makes my life easier. Two things, 30-40% of my demand is committed and second, Dhruv made a point about curriculum. It also ensures that my curriculum is gold standard. For example, hospitality, if my curriculum is good enough for Taj, it's good enough for anyone else in the world. And if the candidate comes out with a Taj stamp or a Taj approval, I don't have to worry about placing that candidate elsewhere. So second is of course adding more vertical and third is till now we were only matchmaking. India supply with India demand. We want to now work on the talent mobility front. So there's a huge dearth of say for example healthcare professionals in Germany and the European nations, their average age is 40+. Society like Germany and Japan, they are breaking because there are no healthcare workers, no caregivers and they don't have the demographic dividend advantage that we have. So that's a very exciting market we want to work on. Indian hospitality is actually the gold standard for Middle East, South East Asia. So we want to work on opening those corridors as well. So basically three levels of growth. One is pure linear, more number of campuses. Second is more number of vertical and third is matching India supply with international demand.

Dhruv Sharma: Amazing. We have time I guess for one final question with you. You did, last month you wrote some reflections from two years of building this company and you made a, you wrote something about just the pace of building this company being very different from Unacademy. Do you want to talk about that for a bit?

Vivek Sinha - Founder & CEO, Emversity: Yeah. I think at different stages of your life you measure success in different ways. I have been a founder before and my first venture was 10 years ago.

Vivek Sinha - Founder & CEO, Emversity: Founder also need near term validation. Now what is that near term validation? When I started the first time that validation used to be validation from investors. I mean somebody coming and putting in money at a higher valuation. That used to give me a kick. And then it becomes so addictive that you keep on chasing or solving for that every six months. And hence you chase models where you see tremendous growth. When I was planning to build this and of course I was planning to build this after Unacademy, a company where we in total raised about 8000 crore. That was a tech play and it was you know crazy growth. I made a conscious choice that given the understanding that I built over my last 14-15 years in consumer internet about the Indian market. I realized that pure technology plays while they have crazy growth but specially in my kind of a segment those businesses are also vulnerable. I mean they might become very large very soon but they are also vulnerable and being large but vulnerable is a shitty combination. So I also wanted to build a very defensible business this time and hence I chose this idea where the pain point is not going to get solved over the next 30 years. Just to give an example we are going to build more hospitals in the next 12 years compared to what we built in the last 80 years and try replacing a nurse with AI. So these were kind of a more fundamental and macro bets that we took at the center and the second then the second design choice was embracing that we are not going to be a pure online company. I mean I could have done the nonsense of saying that I'll train nurses online or through AI or this or that and would have yeah looked fancy but we realized that real outcomes or meaningful outcomes can only be delivered once I go the hard way. I mean my end to stakeholders are employers and candidates the hard way to build about this business was to have a physical infrastructure as well apart from the digital infrastructure. So we realized it doesn't matter how we are going to be perceived. Let's do it the right way. It means that we'll probably go grow a bit slowly than a pure consumer platform so to say or a pure tech platform but we ended up building a business which is highly defensible which is meaningful for my stakeholders which won't vanish or evaporate overnight and which also generate cash. So of the 40 centers that we have right now 26 are more than a year old and those centers actually generated cash for me this year and no accounting jugglery. I mean including all the cost all allocations they are actually generating cash. So yeah that was what I reflected upon.

Utsav Somani: I want to get one final gem out of you Vivek. In terms of future edtech or education company founders who are listening into this show. How did you go about identifying this white space? Like what was the process like or was it just serendipity?

Vivek Sinha - Founder & CEO, Emversity: It was both. So after the last wave of COVID of course all edtech companies struggled to grow back to the revenue that we once commanded during the peak of COVID and my primary learning in that period was that the businesses of schools and colleges did not shrink. Only the supplementary education business shrinked. So say for example Baiju did not build inside schools. They built in K12 but they built outside schools which is supplementary. So what happens is that if the day your kid stops using that Baiju tablet you won't renew it. But if your kid is not doing well in school you won't pull out the kid out of school.

Utsav Somani: So like discretionary spending but in education. Exactly.

Vivek Sinha - Founder & CEO, Emversity: Similarly in education yeah no matter how much we say that MBA is dead or colleges are dead I mean that's not the reality. I mean so we saw that our revenue got shrinked the moment offline came back but even COVID did not impact the revenue of I would say let's say mandatory product. So the way I used to define it school and colleges are regulatory product everything else is daycare. So my one advice to edtech founders would be don't build a daycare product. That's not a defensible business. The second thing was serendipity of course. We used to do run the largest government test prep vertical in an academy. And there was this exam called railway group RRB exam. So my team came and said hey Vivek 3 crore people are going to write this exam. And so I inquired what is this exam about. I found out that it is for you know blue-collar jobs in railway and that too not full-time probably somewhere contractual. And MBA graduates and PhDs and you know graduates were applying whereas the eligibility was only 8th standard pass out. Then I came across a similar article where Haryana government had posted a sweeper job opening and graduates and PhDs were applying. And I checked at first I thought that these people must have done through their 20 years of education from government colleges which is basically a free. I found out that even people who went to private institutions spent 2 decades in their education earned a MBA or a doctorate were applying for these jobs. So that was a very striking realization. I mean this is something that of course I had read in BCG reports and industry report that experts and 90% people are unemployable etc. But when I first realized the level of problem in this country that's where I thought that is not something that is going to get solved over the next 10-30 years. It would require infrastructure investment. It would also require working in an institutional framework. So there was also a founder market fit. A 22 year old guy would find it very difficult to build a business like that because I have to interact with regulators I have to interact with Taj hotels. I have to interact with university chairmen and vice chancellors etc. So we also thought that we also had a founding team mode for this kind of a business. Grey hair as you said.

Utsav Somani: That breaks it down. Thanks so much Vivek. All the best as you hit future milestones. Thanks for coming on the show.

Vivek Sinha - Founder & CEO, Emversity: Thanks Roh. Pleasure to be on the show.

Utsav Somani: Alright listeners, that was a quick snapshot into the world of edtech and a second time founder. Let's welcome our next guest and the final one for this week, Mark. Mark, welcome to the show.

Mark Kahn - Managing partner, Omnivore: Hey Mark. Very nice to be here guys.

Utsav Somani: Loving the background. I think that gives us a sense of what industry you're operating in. But for our listeners who are hearing about you and Omnivore for the first time, can you break it down?

Mark Kahn - Managing partner, Omnivore: Sure. Omnivore is a VC fund based in India. We've been operating since 2011. We focus on four major themes. Agriculture, food, climate and Bharat. And so we are, we like to say we're a VC that looks at about 40% of India's economy. And we look for entrepreneurs that want to change that world.

Utsav Somani: And what was your motivation to do agriculture before agritech and all of these industries, even climate tech, before they actually became cool? I mean, talk of the town in terms of the VC ecosystem.

Mark Kahn - Managing partner, Omnivore: Well, I've never been cool so I think that helped. I moved to India originally 18 years ago this month, last month, sorry. Working for Godrej, for Godrej Agrivet. So my background came from the agricultural industry. I'd worked at Syngenta before, never imagined I was going to be a VC, wanted to run big ag companies and transform the lives of farmers and sort of became a VC by accident. We started a corporate venture fund while I was at Godrej Agrivet called Omnivore. And that's what I've been sort of doing ever since. But once upon a time at Syngenta, I was selling seed and agrochemicals at Godrej, I was selling Pashu Ahar in North India. I came as an operator into this space.

Dhruv Sharma: Mark, I believe you have a perspective on why India shouldn't have industrialized at the cost of shrinking its agrarian economy. Is that a fair assumption?

Mark Kahn - Managing partner, Omnivore: I think I have a perspective that agriculture and agricultural industry, what we call agribusiness, needs to be central to the future of the Indian economy, that if we are to employ the number of people that we need to employ, if we're to create widespread prosperity instead of just five or six cities that are doing well, and that too only for the richest people in them, we have to elevate India's role as the breadbasket, or for that matter, the fruit basket of the world. And there are examples of this. If we look at Brazil, Brazil is a fairly modern, fast-growing economy where agriculture remains a huge pillar of that economy. Agriculture is a pillar of the Indian economy and represents about 20% of GDP. It's actually much more if you take everything that's linked to it, the logistics and the banking, the food processing, the textile industries without cotton wouldn't exist. But my belief is that India needs to look at modernizing its agriculture and building great agribusinesses and understanding that it's always going to be part of the Indian economy and it can be made a much faster growing and productive engine of the Indian economy. And I think our vision at Omnivore is that in 10 or 20 years, India is a smallholder version of Brazil. We are already exporting $60 billion of agricultural produce globally. That could be $100 billion, $150 billion. And it just takes unlocking the potential of this sector to realize that and transform the lives of 100 million by 10 crore farmers and their families.

Utsav Somani: And you spent over a decade in the agri-tech industry. What are some of the things that people get wrong when they're trying to build for the agriculture economy of India? Sure. So many things.

Mark Kahn - Managing partner, Omnivore: I would probably start with not really understanding how diverse it is. There is this notion of abject, ubiquitous poverty. This kind of Garibi Kisan that everyone sort of assumes is everything. And that's simply not true. There are many, many, many poor farmers in India. There are also middle-class farmers. There are also wealthier farmers. If you have a couple of bighas of unirrigated dal cultivation, you're probably poor as hell. If you have five hectares of bananas, you're quite comfortable. If you have 20 hectares of bananas, man, I take that life. You know, there is incredible diversity to agriculture, both in terms of land holdings, in terms of what is being cropped, in terms of irrigated versus unirrigated. And so I think a lot of people fail to understand that diversity and fail to see the profit pools that exist in Indian agriculture. Yes, rice and wheat, not a great profit pool. You basically are engaged in a sarkari cultivation scheme of supplying the Food Corporation of India. But if you're growing horticulture, especially fruits, if you're engaged in dairy, in poultry, in aquaculture, in sericulture, these are value chains that have profit pools and there are opportunities to drive profits in those spaces. And so I think that's probably the first thing, but that's also very much linked to how we invest in Omnivore. One of the things we learned in our first few years was if a founder isn't, you know, if a founder comes to us and we find out their background, and their background is like, you know, I grew up in Indranagar, or I grew up in Malabar Hill, right, or for that matter, in a city in general, we are much more skeptical. What we see in our best founders is, yes, they went to the IITs, the NITs, the IIMs, right, BITS Pilani, but they're mostly small town kids. They're mostly village kids. They grew up in the district headquarters. Their connection to rural India is much more direct. And I think the city kids struggle with it a bit more. That would be a big one. Those would be two big ones. And then we have sort of a lot of general lessons. I think one of the things that people fail to understand sometimes is that when something seems illogical in the agricultural economy, there's probably, but it's persisted for decades. There's probably a pretty good structural reason for it. Right? So you have this wave of entrepreneurs, starting with NinjaCart in like 2017, that was like, we are going to buy subsea from farmers and bring it into cities and make money. And not a goddamn one was able to do that. There is a reason, structurally, why we have a system of, you know, of middlemen, especially in perishables. Right? That if you corporatize, and I learned this a long time ago, when I interned for ITC, which itself is a fun story, and did a project for them back in 2005, it was taking e-chopal and bringing it to subsea. Chopal fresh. It also didn't work. Right? Every corporate that's tried to do this has failed. And so it wasn't necessarily a surprise that hyper-funded startups like NinjaCart, not dead yet, and Wacool, very dead, you know, that they weren't able to do this. There are structural reasons why risk and losses, inventory, you know, are done the way they are done. And it's not always totally illogical.

Utsav Somani: You mentioned some names and your time at ITC as well, before Dhruv jumps into I think he was just jumping to ask you a question as well. Can you tell me two stories, two rural incidents where you've been to different parts of India, and what have you learnt as an investor from them? You mentioned company names. Just some anecdotes, because you seem like a person who has stories to tell.

Mark Kahn - Managing partner, Omnivore: I have lore, as people like to say. So I think one of my favourite lore stories is from about 2009, and I was north of Samastipur in Uttar Pradesh, in a village. And at the time, at Godrej, we were trying to launch these kind of innovative cattle feed products. And a basically like a very short, small, wiry farmer came up to me in a nice chaste Hindi that I now probably can't remember exactly, asked me where he could get a Dutch cow. And I said, why do you want a Dutch cow? Why do you want a cow from the Netherlands? And basically, he informed me, well, they give 30 litres a day of milk. And he'd read about it in a web cafe. And so if I could just find him some Dutch cows, his life would be sorted. And so that for me was an incredible realisation about the aspirations of rural India. Like these litres a day, like that dream of if I can just have the right tools, then I'll be able to change my life. I think that was a pretty cool moment for me. It was also one of those things like this is man, this is not mobile internet. This guy was learning about this sitting in a web cafe in Western UP. The idea that in 2009 that someone, and this man was not young, he must have been in his 40s or 50s, that that ambition was there. I think that was tremendously surprising. I think another time was I was in, in this case, Haryana. And I was, I want to say around Hisar. And I met a poultry farmer who had returned from the UK, right, who had made his money as a cabbie in the United Kingdom and had come back and was doing broiler farming. And I was like, please explain this to me. Like you've given up a nice life in London. And he said, my cost structure here is nil. Everything is profit. Agriculture isn't taxed. I get to be near my family. I get to be in nature, right. And for, you know, farming is for many people torture. It's dread, you know, it's drudgery. It's very hard. It's very high risk. But it was kind of a reminder that why people love the industry as well, right. And this guy was minting money, growing broilers, right, which was basically meat birds that he was then selling into, you know, I mean, in Haryana, probably Childless Chicken, if you guys know that place, the chain of North Indian chicken joints that have been around forever. So, yeah, I think that's, that would be some kind of early lore that's useful. Thank you. You know, and it's more true today.

Dhruv Sharma: Yeah, Mark, the question I was going to ask you is, you know, as cultivable land sort of shrinks, because it's certainly not growing, and we obviously need to hold with, I mean, we still need to maintain food security and export ambitions keep growing. What role did modernization come to play? And what spaces are you already tracking for people to come build companies and therefore for you to invest?

Mark Kahn - Managing partner, Omnivore: Well, I mean, the thing that's shrinking cultivable land is basically urbanization, right? But at the same time, right, on average, Indian yields are anywhere from 20 to 50 percent below, forget about, you know, the biological potential, you know, below Asian averages, below global averages. So I don't think we need to worry that much about losing land, right? I think that urbanization is a very desirable thing. I think there is huge upside potential in almost every crop. We could triple our soybean yields, right, if we had the right technology. And so, yeah, I don't worry about that. I worry that we're not taking the steps to unleash the technology, right, the regulatory potential, right, to ensure that food security is preserved not by perpetually keeping people in smallholder farming, but by allowing people to move on to jobs where they perhaps, you know, want to be or can make more money, right, and then allowing the people that stay in farming to scale up and become more profitable. Like, if you take, okay, more lore, right, and this isn't new, but this was back in, like, 2012 or 13. I was at, I was in Andhra, and there was an opening of a new retail store that part of, you know, part of the Monogapas kind of, like, rural retail chain that they run under Coromandel. It was a group of about 100 farmers, and a few of us from the agribusiness industry were there, and someone decided to take a poll, and these are Andhra farmers. These are relatively wealthy, horticultural farmers, or if they're growing rice, they're growing it zamindari-style, large, you know, very large holdings. We said, what percentage of you want your kids to stay in ag? I figured out 50 farmers, you know, 100 farmers, maybe one or two. Right, people are pushing their children out of this space, right, even the ones that are large landowners. So I think we have to kind of prepare for a world where fewer people manage more land and hopefully do so more profitably. And if you ask kind of what we're excited by, I think in general, we're excited by the profit pools. We're excited by dairy. We're excited by aquaculture. We're excited, you know, we're excited by horticulture. We're excited by sericulture. But I also think we're excited fundamentally by the transformation that happens after production agriculture. We've taken significant bets right in food processing, right, platforms like AgriZ. We've taken bets in the input side of the equation. You know, we're one of the largest investors in Simplify, right, which is a CDMO for specialty chemicals, where agrochemicals is a huge part of what they do. You know, we backed some of the largest warehousing platforms in the country, like Aria, and we've done quite a bit in deep tech. We were, you know, we led the pre-series AF Pixel, right, because we saw the potential for agriculture in having an Indian constellation of hyperspectral satellites. So there are certainly parts of the agricultural economy that we're more bullish on, and I think in general we're more bullish post-harvest than we are pre, even though we make investments in both. But you know, the scope of where we invest is much broader than people realize. When we started out, we were very much an agri-CBC, and these days, you know, we recently co-led Prashant Tithi's NBFC Optimo with Bloom a few years back, because we see the potential of land record digitization to do micro-lap. So, you know, very passionate about ag, but it's also useful to remember Omnivore invests in 40% of India's GDP, and we don't just do one farmer platform after another.

Dhruv Sharma: True, Omnivore in that sense, it's not just agri, it's agri and emerging tech. And emerging tech.

Utsav Somani: We've had some of those founders on the show as well, of AF Pixel and Ariya Iji, both the founders were there as well. We had a good chat with them. And, I mean, our previous guest, Vivek, he was mentioning that how after his time at Unacademy, he wanted to solve things the harder way, which is like going down to the grassroots and actually just learning about what the industry truly needs. And sometimes that's, you can't learn that sitting behind a laptop, right? And you must be seeing so many pitches pitching you need new technology, where, and you've mentioned that the fancy IIT degrees and IM degrees can only get you so far, but you truly need to have lived or experienced a problem in some situation. What are the technologies that you're skeptical of? AI, IoT, all of this kind of stuff, the buzzwords.

Mark Kahn - Managing partner, Omnivore: We've always been very skeptical of vertical ag, right? Vertical ag is, first of all, it's failed everywhere in the world, which is very different from greenhouses. Greenhouses at CEA, controlled environment agriculture, we're big fans of. There are great companies in India like NutraFresh that use CEA to create success. But vertical ag, LEDs and urban farming is something that we've always thought was a terrible idea and made literally no sense in a country with as much land and as much sunlight and as much warmth as India. We've always been skeptics of alternative protein, and for a long time people thought we were fools, and now they think we're geniuses. I think for us it was just, it was always about social context, right? I have many non-veg friends, I have many veg friends, and I could never see people that are passionate vegetarians, true being like, cool, let me eat this thing that tastes like a hamburger. Eating habits in India are very sociocultural. They're not just the ethical vegetarianism of the West. If you haven't grown up with those tastes, you're never going to like them. We were always bullish on that. IoT, we've seen great success with IoT. We backed at a time where people thought it was insane an aquaculture IoT company based out of Vijayawada, I think I was the first VC in India to ever write a check in Vijayawada, that turned into a $50 million exit of a company called Aruvaka that made aquaculture IoT. We like IoT. We love robotics. Nico Robotics in our portfolio has been absolutely crushing it, not just in India, but in California. You should have Jai Sim on if you haven't already. Big believers in satellites. I think we've done some embedded AI bets, but we haven't taken a pure AI bet, though we're evaluating some companies right now that are working on AI solutions for climate and for ag. I think we'll wind up doing something in that space, we just haven't quite.

Dhruv Sharma: Mark, I wonder if you can tell us about some institutions that you really admire that promote innovation in agriculture and the agricultural trade.

Mark Kahn - Managing partner, Omnivore: Sure. I mean, look, there are obviously some great agricultural universities in India. TNAU, the Tamil Nadu Agricultural University, is world-class. IRI in Delhi, which is probably the preeminent agricultural postgraduate university in the country. I would say GB Punt, we've backed a lot of GB Punt alumni like Madhur from Varaha. Those would be a few. I think the ICAR, which is the research institution of the country that has many, many branches, there are some incredible institutes within the ICAR. I would also point to, we're one of the earliest life science investors in the country, and we have so much love for Tasliman Company at SECAMP in Bangalore. Many, many of our portfolio companies are based at SECAMP, like Loopworm, for example. So yeah, there's obviously a lot of stuff that isn't as useful, agriculture being a space that probably has a bit too much government, but there are some real gems out there.

Utsav Somani: Talking about Varaha, they've also raised it out. Let's talk a little bit about your fund investing. What are the fund sizes? What fund number are you on? How much have you raised? What's the market cap of the companies that you've backed? You've had an IPO as well, Captain Fresh, Arirati.

Mark Kahn - Managing partner, Omnivore: That is not mine, and that did not IPO, so I'll correct you on both of those points. It's filed and pulled. Okay. It's filed and walked it back, but we wish them the best of luck. So we started out kind of as a CVC, so you can kind of call that Fund 1. Fund 2 was 675 crore. That was Vintage 2019. And then the most recent fund is actually 1,800 crore, which reflects a bit of a change in strategy, which is we're no longer really a seed check writer, and I think a lot of people don't know that. In general, we've been focusing on the Series A for the last few years, and you see that when we're investing. We've done a bit of seed, but I would say that on average we are writing checks of 3 to 7 or even 8 million dollars leading Series A rounds like we led with Simplify. And that's the role that we're playing. We came to the conclusion in 2022 that even as markets repriced, that the real gap in our space in India was at the Series A and in select Series Bs, and that we would play that role rather than I think relatively speaking the seed stage is over capitalized in India, or maybe it's adequately capitalized, but certainly the Series A and beyond is under capitalized, and so we decided to make the jump from seed to focusing on the Series A and have been operating that way 2023 onwards.

Utsav Somani: Who have been good follow-on investors for you and the companies that you backed?

Mark Kahn - Managing partner, Omnivore: We love working with Excel. That's been tremendous. We love Temasek and Sofina, and have had very good experiences with them. They have plenty of folks, but I would say those are a few that come to mind.

Utsav Somani: All right, Dhruv. Anything to close us out with?

Dhruv Sharma: Mark, I mean, maybe two things. One, you said Neco Robotics. We'd love to have more recommendations from you of founders that we should have on. And two, for any aspiring agri-tech investor, what would you advise them?

Mark Kahn - Managing partner, Omnivore: I would highly recommend you speak to Jai Simha. It's just such a great Indian deep-tech story. Forget about an agri-story. You've got a Carnegie Mellon alum who works on Wall Street as a quant, moves back to India, starts building robots, struggles for years, and now is just crushing it, not just in India, but in the United States. So I definitely think you should have Jai on your show. What advice? I guess the advice that I would say is it really depends on what playbook you're playing. At Omnivore, we generally believe there's sort of four playbooks of building in our space. So one is what we call digital value chains. That's the day hots of the world or outside of our portfolio, Captain Fresh. Those are basically how do you make a marketplace, a platform work? How do you make the unit economics work? How do you build supply and demand? And how do you make sure that you don't get destroyed in the cash conversion cycle? So that's one set. Then the second set is emerging technologies. That's deep-tech, material science, life sciences. And there, I think the biggest lesson for an Indian startup is by all means build in India, but sell globally. Do not only sell in India. You can use India to reach that creamy layer of the market. But then if you really want to validate your tech and you really want to be valued the right way, you should sell as globally as possible. That's what we did at Aruvaka that we exited out of. Their best market for sales in the world was Ecuador, which surprised me. Like make it in Vijayawada, sell it in Ecuador, make a bunch of money. So emerging technologies, we think the critical lesson is really about selling abroad. We also do quite a bit of farm-to-consumer brands. We were first chatting to Farmly, which is doing incredibly well in the dry fruits and makhana space. You should chat with those guys. We've more recently been backing Sid's Farm, which is in Andhra, which in Hyderabad and Bangalore, and I guess coming into Pune soon, doing incredibly well in premium dairy. And so the playbook for any of that, that's much more of the disruptive FMCG brand playbook, but we think that getting that back end of rural sourcing right is really and controlling your destiny with manufacturing is very, very critical. Whenever I see too many DC startups that just believe they can outsource this stuff forever, and I think that's a very fundamental mistake. And then finally, we do inclusive and rural fintech, where Arya is perhaps one of the best examples, Optimo more recently. And of course, there's the fintech game is very, very different, but we are big believers in get that NBFC license from as early as possible. The days of sort of lean fintech are over, and lending money in India is a profitable business. It has been for 3,000 years. And so it's very, very important that you do that in a good regulated way from the get go, rather than fucking around at the edges and getting slapped by the RBI at some point.

Utsav Somani: There's some new NBFC rules. I think we just got announced today that if you're doing a vehicle which is less than 1,000 crores but not exposing it to the public, then you don't need to register as an NBFC, even if your activity, financial activity is over 50%. I was not aware of that. I'm going to go look that up right now. Awesome. You've given us something to look forward to. All the awesome names that you've mentioned on the show will definitely hit them up right now. Thank you so much, Mark. Have a wonderful weekend and appreciate you giving us the time today.

Mark Kahn - Managing partner, Omnivore: Have a great weekend, guys. Thanks for having me here. See you. Bye.

Utsav Somani: All right, listeners. Today we've had two awesome guests and we'll see you on Monday. Not early, but bright in the evening. See you. Bye-bye.