Full Transcript

Dhruv Sharma: It's also our 50th episode at The Offline Network. Hey there listeners, it's Wednesday, January 28th and we're streaming our 51st episode live. Hey Utsav. What's happening? Apparently, they've launched a card which is called the Bharat Yatra card.

Utsav Somani: Yeah, available.

Dhruv Sharma: Which is the one card to rule them all.

Utsav Somani: Yeah. Yeah, multi-modal. So I think it should be exciting. I haven't looked into it, but something that should be a convenient factor for a lot of people. One interesting tidbit as well, Google bought DeepMind yesterday, 12 years ago, January 27th. How far we've come.

Dhruv Sharma: Yeah, yeah, yeah.

Utsav Somani: I mean, I don't know if you saw that Anthropic CEO's blog post. He writes these extremely long blog posts where he makes a point about the future of AI, in positive and negative. And I think it's a phenomenal piece as well. Have you had a chance to read it?

Dhruv Sharma: I have, yes. I also really liked a question that Vlad Denev, the Robinhood founder and CEO has asked, you know, the Anthropic CEO, which is like, you know, what you're saying is important. But what's also important is that we address the economic disparity this is going to cause because Anthropic's next private round is going to happen at like 350 billion. And Vlad's view is that these companies aren't going public till they are maybe worth over a trillion. And so where do retail investors get exposure to these companies that are going to concentrate incredible amounts of wealth?

Utsav Somani: But do you think retail investors should have access to these companies? A more philosophical question at this point, when the risk is extremely, extremely high?

Dhruv Sharma: Yeah, good question. No easy answer. Maybe, you know, again, there's that question of how early is too early. If you're not early enough, you lose out on a lot of value creation, but also there's that risk. And which is why they're trying to tokenize the assets now. And, you know, once the company is derisked beyond a point, at least there's no mortality risk left anymore. You can seek exposure.

Utsav Somani: Yeah, I mean, 20 billion round, which is always a threat. So I think interesting to see. But closer to home, Shadowfax listed on the stock markets today. It's now the second largest player in the logistics space, B2B2C model.

Dhruv Sharma: Well, the IPO of Windows is open again.

Utsav Somani: Yeah. Class of 2026. Class of 2026. The stock is, I mean, of course, at a hit today, 9% down, just because I think market is realizing that 50% of the revenue is concentrated in Misho. And I think you mentioned that 75% comes from the top five clients of theirs.

Dhruv Sharma: Top five, yes. So B2B2C model and therefore Misho and Myntra and RGO. I would imagine like all of these people in the fashion and commerce space.

Utsav Somani: But I think what's phenomenal is that the ESOP pool, which was worth 250 crores in 2024, is now closer to 900 crores and 3.5x growth in just the two years. So I think it's phenomenal outcome for the employees. And many of them will again become investors and some of them will become founders. So all in all, I think the flywheel keeps on churning in our country, which is, I think, great to see.

Dhruv Sharma: This is good virtuous cycle to have. You know, one very interesting thing these guys worked on along the way was address intelligence. So, I mean, if you've looked at e-commerce packages in India, some of them have the most enduring but comical addresses. People will say, you know, behind the pink temple or blue building, second floor. And it's really hard for anybody to be able to tell what that means. And these guys have built a system that is able to do that. You know, if somebody writes house number 202 and somebody writes second floor, house number two, it can tell the difference. And also, you know, pin codes are not enough to go by. And so they've, in a sense, created this entire an overlay of like, you know, hexagonal grids over India's map. Created a very complex mapping system, which they've also promised to open source at some point, which will be very, very helpful.

Utsav Somani: There was a company called Zipper back in the day, which was trying to do this at scale. I mean, you need zip codes for every particular house so that when you enter that exact zip code or that alphanumeric code, you literally land up to that place. I think it's needed because the RTO returns or return to origin orders or the reverse logistics cost for many of these logistic players. It's open source and I think anyone can contribute to this, improving the logistics.

Dhruv Sharma: And if you make like 10 deliveries to the same address, you can keep reducing the marginal error after every delivery.

Utsav Somani: But Kunal and Rohit's Titan Capital is sitting on a 158x return. They invested. Mama Earth, Urban Company, Shadowfax, IPO Hattrick. I mean, they have like five unicorns in their portfolio. And like, I mean, it's just insane what they've done. They've done 125 rounds, leading 60 rounds. And I think, I mean, the unicorn hit rate is insane. Like, I mean, 70 lakhs invested, 8 crore valuation in 2015. That stake should be worth over 100 crores today at the IPO. So congrats to them.

Dhruv Sharma: And also I think because they were mostly investing personal capital at that stage and they don't have, they're not constrained by a fund, you know, lifecycle or anything. They also hold pretty much in perpetuity, let these assets compound.

Utsav Somani: Yeah, so that's why they're not selling as well. All right, let's welcome our first guest, Abhimanyu. Welcome to the show.

Abhimanyu Rathi - Founder & CEO, RenewCred: Thanks so much. Thank you for having me here.

Utsav Somani: Can you explain to our listeners what your business does?

Abhimanyu Rathi - Founder & CEO, RenewCred: Sure. So we are Robin Hoods of climate change. We take money from the rich polluters and end up investing that into projects that are doing good for the planet. But technically we are a standard and registry. We certify, verify and issue carbon credits.

Utsav Somani: Okay. And what are carbon credits? People who are hearing about, we've had the founder of All Carbon on our show as well. He explained it in his words. But just as a quick recap, what are carbon credits?

Abhimanyu Rathi - Founder & CEO, RenewCred: Carbon credits are actually a quasi-financial tool. One ton of CO2 either avoided or removed by a particular project is equal to one carbon credit. So if you're driving an EV vehicle and your vehicle removes one ton of CO2 or reduces, or you're doing something like a biochar and one ton of CO2 is sequestered by the biochar, that's equivalent to one carbon credit.

Utsav Somani: And is there any laws and regulations around this in India where we've seen many climate companies come around? Like I think even the Reliance family with Navantara is getting into carbon credits. And there was chatter about a carbon credit exchange coming up in India as well.

Abhimanyu Rathi - Founder & CEO, RenewCred: Yeah. So formally there are three ways to save the world. One is put a carbon tax. The other is you exchange emissions. There's no real project happening. In these two cases, this is where the government is involved. It is called a compliance market. The third way is you actually do projects which generate carbon credits. It's called a voluntary carbon market where there is limited government intervention. What the Indian government is coming up with is a compliance market carbon trading program. This should happen anytime now.

Dhruv Sharma: Could you explain what the difference between those two regimes is, Abhimanyu? Compliance and voluntary?

Abhimanyu Rathi - Founder & CEO, RenewCred: Like I said, in a compliance market, there is no real project that happens. Either the government will put a cap. So suppose government says you and me are industries and we can't emit more than 10 tons of CO2. And you do 11 and I do 9. You can come to me and say, please issue me a carbon certificate for this one ton extra in your quota. So we're exchanging or trading emissions. This is called an emission trading scheme. The other way to do it is, like I said, put a tax. But Sweden does it today. If you emit beyond the number, you pay a tax. But if trading is more incentivized because it allows for innovation, it allows for scalability. But no projects. So this is a compliance market. In a voluntary market, real projects happen. We generate real credits, which are certified and verified by standards and registry. So there are gold standard. And now RenewCred, the work that we are doing, the first ones to do it in India, we have standards and registries. So a project will come to us, issue the credit, and this credit is bought by buyers of credits.

Dhruv Sharma: Does that mean you ordered them from an emission standpoint before you issue credits?

Abhimanyu Rathi - Founder & CEO, RenewCred: That's very true. So we look into the entire lifecycle of the project. We verify the claims made by the project. We see if the project was not happening, then what else was happening? And for that delta, we issue the credits. And buyers buy for two reasons, either because of regulatory requirements or because of altruistic reasons. For example, Microsoft, they say we want to just reduce our current emissions. We'll go back in the history and reduce all the emissions we have done so far. So that's how a voluntary carbon market works.

Dhruv Sharma: And as a registry, are you any different from a depository? I'm just trying to draw an analogy here because credits, shares, is there any analogy there, any equivalence?

Abhimanyu Rathi - Founder & CEO, RenewCred: Yeah. So that's a good comparison. The only problem or the only difference between a share market and a carbon credit market is a carbon credit retires. So when a company or an entity or an individual also for that matter reduces their emissions via carbon credit, they will come to a registry and say, please retire this against our needs. Whereas a share doesn't retire in perpetuity.

Dhruv Sharma: So that's the difference. You can redeem it. But yes, but I get what you're saying.

Utsav Somani: Identified five failures in the carbon markets, right? You mentioned that in your comms as well. Lack of trust, opaque data, slow verification, high costs, and fragmented accountability. Can you break it down for us? Maybe some examples?

Abhimanyu Rathi - Founder & CEO, RenewCred: Yeah. The number one problem is it's an organized market, but the verifiers tend to be super corrupt. They sanction projects that were not even really there in the first place. The famous example is there was a big agroforestry project saving the forest project in Zimbabwe. And when a newspaper did an audit on it, figured out 90% of the project was just on paper. Entire project was fake because there is no automation, no digital verification happening. The second problem is in the current environment, the suppliers of carbon credits, people who are doing good for the planet end up paying a fee to get the carbon credit. And this fee is not less. It is anywhere between 10 lakhs to 1 crore in INR terms. Now, starters and SMEs don't have that much capital. The third problem is there are two kinds of projects, nature-based and non-nature-based. The problem with nature-based projects is suppose I set up a forest of 100 trees. I don't know the quality of soil. I don't know the quality of seed. I don't know the atmosphere. I'm just guessing how much carbon it would have saved. And the fourth problem is nobody knows what a carbon market is, who to go, who to consult, what price point are credits issuing. So, these are four problems that we as a company Renew Credit is solving for. Also, India, 400 million credits are issued. India issues close to about 17% of those credits annually. Yet, this is not really talked about in India. It's just happening in the last year or so. So, we are a big supplier of carbon credits. And it's a fantastic means of sustainable finance also. Those projects get money to survive.

Utsav Somani: Arbitrage, why is India supplying 17% of this? Like, is it just because of landmass, just because of our natural resources, or is there some price arbitrage at play here?

Abhimanyu Rathi - Founder & CEO, RenewCred: Both the things. Landmass, for sure. The local ground-level capacity building in India is quite drastic. These are NGOs that end up being project developers that set up forests, that set up biochar. And second, obviously, is a drastic price arbitrage. The key fix of setting up these systems is far more lower in India compared to, say, European Union or America. So, both the things come at play.

Dhruv Sharma: And what's the difference between carbon and green credits, Abhimanyu?

Abhimanyu Rathi - Founder & CEO, RenewCred: So, carbon credits is all about emissions. It's a globally accepted trade. There's some structure to it. This has been around since Kyoto Protocol in 1997. This has been around for 27 years now. Green credits is something that just the government of India came up with about a couple of years ago. They wanted to incentivize more kinds of products. So, water, doing simple things like setting up a small forest in your home, etc. Those are green credits. Green credits can't yet be monetized. Carbon credits can be monetized.

Dhruv Sharma: And as a developing country that is yet to industrialize, how do we prevent the developed economies from penalizing us for something they once did?

Abhimanyu Rathi - Founder & CEO, RenewCred: So, instead of, I have a different take at it. I say, instead of penalizing them, let's get the money invested into green projects in India. And that, again, can happen through carbon credits. So, today, credits are not consumed in India. They are broadly consumed in the EU, 55%, and then America. So, like I said, it's a mean of sustainable finance to get the money back in India.

Utsav Somani: And as a final question, Abhimanyu, you recently raised just over 4 crores. Tell us about the round and what does the future look like for you in 2013?

Abhimanyu Rathi - Founder & CEO, RenewCred: Yeah. So, this round was broadly to create those algorithms and methodologies that will issue the credit. And obviously, our technology also. The idea is to do about 30 projects this year, which would give us a supply of about 2,50,000 credits. It will also make us a bit more positive in about 15 months from now. So, any other future round will be for the growth of the company rather than survival. And we will be rolling out one methodology or algorithm every couple of months. So, reaching that stage where we are catering to not just India, but all the projects coming out of Global South. We just registered a project in UK, another in Nigeria. So, becoming a global player for carbon credits is the idea.

Utsav Somani: That's amazing. As you hit many of these milestones in your future, please come back on the show and talk to us about them. Thank you.

Abhimanyu Rathi - Founder & CEO, RenewCred: Would love to. Thank you. Thanks so much. Thanks for having me.

Utsav Somani: All right, listeners, we'll shift to our next guest now. Anurag, welcome to the show.

Anurag Sheth - Co-founder, For Real: Hi. Hi. Thank you so much. Thanks, Guru, for having me. Lovely to be here.

Utsav Somani: I love the name of the company, For Real. What does it do?

Anurag Sheth - Co-founder, For Real: Yeah. So, we're essentially building the new age factory outlet equivalent for the online commerce space in the country, right? This is predominantly to help brands liquidate their aged inventory in a manner that doesn't cannibalize their brand equity, as it does today. So, that's essentially what we're building. Bringing branded value commerce to the forefront.

Utsav Somani: What kind of brands? Are they just fashion brands or can they be like any kind of apparel or different kinds of shoes or like what kind of brands are you working with currently?

Anurag Sheth - Co-founder, For Real: Yeah, so we're essentially pre-launched right now, but the idea is that we'll be going live super soon with the lowest hanging fruit first, which is the fashion and apparel category. The idea is then to extend it to horizontal categories in non-apparel spaces as well, including home, beauty personal care, lifestyle accessories, electronics as well, because pretty much any industry that we pick up, it also has problems of dead stock slash non-moving inventory purtailing across. So, yeah, the idea is to become that horizontal player, but again, with an initial wedge with fashion leading the space.

Utsav Somani: What were the alternatives before your platform? Like, what are the alternatives now? On NH8, we see these factory outlets on the left. Many of them have shut down, I think, because of some compliance issues, but what were the alternatives before?

Anurag Sheth - Co-founder, For Real: Yeah, so liquidation today happens predominantly through two methods. One is the online discounting that we see that pretty much anything, any destination that we look up to, either it being brand.coms or larger marketplaces, have some sort of sale periods running across the year, right? That is one destination slash platform that brands utilize to liquidate some of this inventory. Once that is also not delivered, the ideal amount of throughput for those brands, eventually this inventory ends up in the offline lot or the bulk buy ecosystem, which essentially is the unorganized GQL and for the general trade ecosystem that exists out there. There are retailers who will pick up your inventory on a cash and carry basis, but brands end up realizing very low values for their inventory, right? Somewhere in the ballpark of five to 10% of usual selling is what brands end up realizing. And this is at month eight, month 12, times month 24 of inventory holding. So a lot of cash flow lost and a lot of value also lost in the meantime.

Dhruv Sharma: Can you help us quantify that maybe with an example? Like how much of your working capital could you reclaim by working with Forreal?

Anurag Sheth - Co-founder, For Real: Yeah, absolutely. So that's a great question because even a lot of brand partners that we speak to, unfortunately are not able to quantify this. So what we've seen across the board, particularly with fashion, that there's a 22.5% top line unlock that remains jammed in this particular debt stock on a rolling basis. Again, this is at a yearly level and at about a bottom line level, I think this apportions to anywhere between a two and a half to three and a half percent, including the added bottom line from the new collection launches that brands would then, as a function of unlocking timely cash flow and also from lower inventory holding and operational costs as a function of again, holding lesser inventory by virtue of liquidating it timely. So that's the level of delta that we're looking at stock for brands on a yearly rolling basis.

Dhruv Sharma: And the people who come by... Sorry. The people who come by, are you only gonna make like a value proposition to them or are you also gonna appeal to them on things like responsible consumerism and so forth?

Anurag Sheth - Co-founder, For Real: Yeah. So I don't think India is there yet as far as consumerism in terms of their responsibility as consumerism and sustainability per se. But I think what appeals to the Indian consumer psyche is value shopping and branded value shopping per se in this particular case, which is pretty much the biggest call out that we see in the country, right? Pretty much all top of funnel across the board for dot coms as well as marketplaces is led by discounting. What we're essentially doing Utsav and Dhruv is introducing more context to this discounting, right? For the past 15 years, consumers haven't been told as to why a certain product is being made available at the 60-70% discount. Suddenly now we're bringing transparency to that ecosystem saying that this is yes, last season merchandise might not get the latest and the greatest out there, but whatever you're getting is of the highest quality and is being made available at the best value possible because it is sourced directly from the brands.

Utsav Somani: Will you be working with D2C brands as well or does value proposition appears more feasible for brands with like extremely large inventory or dead inventory?

Anurag Sheth - Co-founder, For Real: This is actually valid for both use cases Utsav because no matter which brand partner that we speak to today, right? Pretty much everybody has debt stock and the liquidation issues thereof pertaining. Even so particularly worse for the online first D2C brands because they actually don't have the offline ecosystem that we discussed open to them because their merchandise does not get a lot of salience in the markets that it is usually liquidated in. So very high propensity towards a D2C ecosystem because their entire brand is built online and they're forced to deep discount on their primary channels of sale as opposed to having a separate channel that speaks to value consumers and protects their brand equity at the same time. Though the larger nationalized labels they have their own supply chains set up including factory outlets like Utsav you mentioned. They've in fact moved towards the Gitorney side of the metro rail in Delhi. There's an entire market very close to the Bangalore airport as well and pretty much every city out there has its own equivalent of that. But that also doesn't ensure that 100% of merchandise for those brands also ends up seeing the day of light light of day rather for inventory like this. So yes, the magnitudes of the problem statement are different for both of these brands but it still pertains across the board.

Utsav Somani: Interesting. So, I mean, you've spoken to us about I mean, I'm guessing the pitch to all of these brands I think is very, very clear. But what are your go-to market plans? What does the new fundraise do for you?

Anurag Sheth - Co-founder, For Real: Yeah, so the new fundraise essentially with Titan Capital coming in that has actually given us a lot of ammo to one, build out the platform the technology platform that we're you know, essentially in the rollout phase of and then on the consumer side this is to drive the early consumer adoption as well as test out consumer love for a proposition like this as to how effectively can we cut the clutter in terms of bringing the factory outlet narrative front and center to the end consumer because unfortunately we're in a space where this part of commerce hasn't kept pace in the past 20 years pretty much everything that we see is all is a premium for a convenience, right? The value shopping space particularly with respect to branded goods hasn't kept pace. So that's what we're doing.

Dhruv Sharma: Do you have a sharp, vivid definition or description of your ICP? Or is it more broad? Because you're still in this company.

Anurag Sheth - Co-founder, For Real: We're focusing predominantly towards the tier one audience who's aspirational but doesn't have the pocket capacity to partake in these branded purchases on a regular basis. So these are folks that usually would reserve branded purchases for end of season sale periods more than anything else. So this is an access unlock story for them, right? So we're bringing similar merchandise being made available all year long. Doesn't go to say that we'll have brands with us all year long the same brand all year long but the consumer every time they walk into 4Real they'll find something that works for them at the value that works for them.

Utsav Somani: And Dhruv was mentioning, I think these I mean these European outlet villages and the malls that you have just outside the city maybe a one hour, two hour drive. So we're trying to build the online version of that for India. Precisely, precisely.

Anurag Sheth - Co-founder, For Real: And in Europe, outlet villages are a thing. In the US, there are multiple players. There's TJ Maxx. There's Nordstrom Rack which have done phenomenally well in this space and have actually just captured value branded shopping as a space and owned it for more than 50 years now.

Utsav Somani: What did you learn from them? Like these global players that you mentioned?

Anurag Sheth - Co-founder, For Real: Yeah, so I think the name of the game in this itself is capital allocation in a manner where you don't burn through a lot from a customer acquisition point of view and how do you build a sustainable business because this inherently is a very low ASP and a low margin business. So your supply chains have to be set up in a manner where there is money to be made for the brand partners who are liquidating and for us who are enabling this practice for them as well.

Utsav Somani: You will be taking inventory risk also, right?

Anurag Sheth - Co-founder, For Real: No, not in our case. We won't be taking inventory risk. The idea is to do this in a manner which is inventory light because again just to add a little more nuance to the discussion, right? This is inventory that is typically already aged 12 months. Let's say I block let's say 10,000 products for a set brand and I only see 80% throughput. Suddenly that inventory becomes 14 months old which is a very bad place to be, right? It gets worse for the brand and it is even more a larger problem for brands to solve suddenly because then they have the longer tail of long tail which remains which becomes increasingly notorious to sell through. So brands should have that flexibility to see throughput for this inventory on other channels parallelly as well. The idea is to become that de facto partner but again it will be a function of time as to when we get there.

Utsav Somani: And what do you do about returns in this business? So again, so... No returns?

Anurag Sheth - Co-founder, For Real: Absolutely. So a bunch of our products are going to be marked as non-returnable by adding that extra value being passed on to the end consumer and this we've seen play out beautifully well not just on value shopping platforms such as Amisho but also on the larger marketplaces like Myntra where consumers are okay to take that additional pain of not being able to return a product in exchange for an added value that is being passed on. And again, one of those other pain points that we're solving both for the brands as well as the consumers is bringing transparency to this entire practice. We're not in the business of overshadowing and providing user delight just at the cost of the business itself. The idea is to set expectations straight with the end consumers from the get-go that you won't get 7-day return windows you won't get 14-day return windows a bunch of these products might also be non-returnable but what we absolutely guarantee is that you won't get this price elsewhere on the internet that's for sure.

Utsav Somani: And congrats on getting Titan Capital we were highlighting their wins so how was that as a final question like how was your interaction with them what was the pitch and who did you get connected with there?

Anurag Sheth - Co-founder, For Real: Yeah, I think Chirag was the individual who led the entire charter for us at Titan Capital fabulous individual true believer in the space that we were chasing from legit day one and very interesting conversations that we ended up having with both Kunal as well as Rohit and given their backgrounds of having built Snapdeal to the place where it is today they really understand the consumer pulse in the country from a value shopping POV and they had a thesis they really understood that this is a problem statement that they've been seeing and this is Kunal's words we're waiting that we've been seeing this problem for the past 18 years we were waiting for somebody to actually come forth and solve this in an organized manner

Utsav Somani: I think a lot of their commerce is value commerce as well

Anurag Sheth - Co-founder, For Real: precisely so they understand that consumer behavior more than anything else and one of those rare conversations that I had during that time speaking to a bunch of VCs where I actually did not have to create a lot of context around the problem statement they knew the category they knew the problem they in fact had suggestions and ideas of how we could execute this better and that's why we were lucky enough to actually close out the fundraise process within four days of starting it in fact and that's the level of conviction that they came to the table with in terms of the problem statement of course we're super lucky to have them on the team backing us

Utsav Somani: Awesome Anurag All the best as you launch and me and Dhruv will definitely log in and check out so drop us a link when you're good to go

Anurag Sheth - Co-founder, For Real: I'll do, I'll do Thank you so much Thanks, thanks Thanks Dhruv

Utsav Somani: All the best All right listeners our final guest for the show today let's welcome Shiv Shiv, welcome to the show Hi guys, how are you?

Shiv Sharma - Former president, Stocktwits: Good to see you Hi Dhruv, good to meet you Very nice to meet you For the kids at the back? They're going to be coming in if they come in I can't stop them so they've been told to be on good behavior but you know, you know how it is it's a not yet I think your, I think your child is still too young for you to understand this age All right

Dhruv Sharma: So we're going to ask you some I was just going to say if they do end up coming they'll be the first kids in D.U.N.

Utsav Somani: Yeah All right, so let's have a fun chat You're in between chapters now but before we move on to what's next for you why don't you explain to our listeners what StockTwits was doing

Shiv Sharma - Former president, Stocktwits: Yeah, look so my background is basically in investing, right so I did the usual banking invested banking and private equity in New York and then INSEAD and Cisco's VC team in the Bay Area Then we're invested in but but then in WhatFix actually who's now a very large organization and has scaled very nicely And then I joined StockTwits through my good friend Howard Linzen who's a he's the first investor in Robinhood first investor in eToro early in D.U.N. even in India and he's the founder of StockTwits as well where he did a deal with Jack Dorsey to create the finance version of Twitter and and so he invented the cash tag a long time ago and he was the first person to really make the democratization of investing really a popular real thing right a real trend and so I worked as first the India head and international head first and then I moved to put in the president and C.O.O. and a chief strategy officer as well in the last two years so yeah that's a brief background there Utsav

Utsav Somani: What a transition we can probably dive deeper into some of these title changes as well what was that like?

Shiv Sharma - Former president, Stocktwits: Yeah look so this is my first real operating role right and so I got to understand what it's like to scale businesses and you know this is basically a media business per se so I built a social media franchise with my team from scratch I did large deals with publishers and brokerage firms and things like that right so I think it was a really good hands-on operating experience at the more V.P. international level and then I also did a large deal with Times Group and Times Bridge which unfortunately didn't pan out because of external situations that are not tied to StockTwits and so that would have been a massive thing for StockTwits where it would have been a part of Economic Times and a massive franchise very quickly overnight they were going to come in our Series B which FTX led because GameStop happened on StockTwits during those days as well and FTX led our Series B and wanted to acquire StockTwits and they wanted to you know be a part of the journey and have a very social training experience as part of StockTwits and so that was the India journey and then moving over to a global role you know I worked U.S. hours sitting in Singapore running a New York based franchise and you know from Singapore was a huge time zone challenge but it was fun you know we kind of divested the brokerage business and went all in to scale what I call a media tech platform and that's where you know you have the hack of a publisher get the ARPU of a subscription product but then eventually a brokerage transaction firm as well and so that's when I left I think you know and now they want to go in a bit different direction around video and TikTok of finance and things like that right and so it was a good time to leave as well and so yeah it was a fun five years where I learned a ton and now I'm extremely deep in the retail investing landscape so it's a it's a good spot to be

Dhruv Sharma: earlier on did you have like a brokerage business in at StockTwits

Shiv Sharma - Former president, Stocktwits: as well many many times so our series so so Howard is a first check in Robinhood so he got Vlad to integrate to then have us have Robinhood be available via StockTwits so Robinhood their first you know several you know probably a hundred thousand or so users came from the StockTwits community so every VC firm said hey why are you getting marketing dollars you know you should have your own brokerage so StockTwits raised a series a back in I think 2015 2016 with a thesis of building a brokerage and this new app was like I call TikTok or Instagram stories meets Robinhood but it was way too early number one and two every brokerage went zero commission in the US right after that so then they got kind of pushed away and kind of shelved and then again what happened is that we raised a series B after GameStop and FTX so we had the same license except we rebuilt brokerage inside the product itself and then because of various reasons and strategy changes and all that after you know SPF kind of is no longer in the ecosystem anymore as we all know all those changes happened you know the math to build a brokerage and the fixed cost P&L wise is very different right and you know it's just a very big challenge from a regulation perspective team bandwidth perspective and things like that so now it's a pure media tech business I would say which is I think which is a great spot to be in

Dhruv Sharma: it's interesting you bring up Vlad because he likes to talk about like this trillion dollar I mean this intergenerational wealth transfer that amount of trillions of dollars in the US outside in the world too and how he's now reorienting the Robinhood business to you know be in position to take advantage of that do you is that and you said you like you know tracking the retail investing space is that something you think about as well like super long term

Shiv Sharma - Former president, Stocktwits: I'm not as fortunate as Vlad where I don't have a business that's already won the active trader and that's like the key is that what he's doing he's changing his mindset from the active trader to now the you know the more passive AUM transfer that's going to happen over time so he's been making acquisitions as well that also strengthens him with the you know the purpose and the futures for crypto but as well as for the long-term AUM game with wealth management and all those things right so he's playing a completely different game all together but in this industry kind of where I'm the most passionate and where I think is the most fun and what I think is the most opportunity is around the active trader because you know there was this thesis that retail was dumb and all and you know it's not untrue but it's a super nuanced question right I can know it's if you're very passive and very long term right but I'm very active and I've learned through the stock community and being that ecosystem from the Cisco days people in retail do very well right and so I'm in discords with people now with normal people with normal desk jobs who have made millions of dollars in this latest technology that's a

Utsav Somani: very small percentage right so we put out this number in India it's not a lot like I mean F&O is a place where you go and lose money basically in India so

Shiv Sharma - Former president, Stocktwits: yes right in fact I actually did a big campaign with sharecon to help amplify that point in fact right when that whole campaign came out the new one says that that is also like very you know that's also India number one so I think India is not as far along in its retail education journey as the US but for India I think it's just a law of large numbers there are people who are getting it right and what's going to happen is that as people learn as they go through cycles you will see the same trend happen as what happened in America now different products different strategies but basically you know for example the best example right if you're very bullish in HDFC or reliance you can buy long-term call options instead of buying the stock people do that right and your returns will be a huge multiple of if you just bought the stock right and so that's the simplest example that I give that I've seen people really crush right as long as you're in a general uptrend right you know the risk is really not that crazy what is crazy is the random punters who buy weekly call options and things like that that's where you will see like incredible losses and those things and I think that's what drove a lot of the volumes in India which led to the recent ban and the loss of but then also the ban by SEBI where now it's much harder to trade F&O and all those things right

Shiv Sharma - Former president, Stocktwits: more money more contracts to buy and all those things and so they've done a great job of being very active and kind of forward looking how they think about regulation for India.

Utsav Somani: We've seen the Game Stop movie or the documentary I think that came out on Netflix but tell us your version of it how was so there's four of them that I've seen I think one or two mentioned StockTwits and unfortunately three do not.

Shiv Sharma - Former president, Stocktwits: Our PR game in those days was different after I came in we hired a PR firm so things were different back then so how it happened is that Roaring Kitties has a StockTwits account he was very active and it started to blow up it would show up on the top trending bar Andrew Ross Orkin about two months ago organically no PR attention after commercial break said Open Door is the top trending stock on StockTwits GameStop was there for two months before going over to Reddit and Wall Street Bets Wall Street Bets shouldn't exist if StockTwits nailed social and community people would have stayed on StockTwits and owned that full experience and so that's what happened and from there it was a party and the whole world followed the trend but from my experience we saw the users I've never seen growth like this. The whole company stopped what they were working on and it was totally up to make sure the website stayed up and we could absorb the traffic and the scaling worked and it was a completely different situation. The first was a massive spike in global adoption and retail and that obviously tanked but it didn't tank as much as the starting point. So we're at a way higher spot than before. But we're still not at the peak of game stock back in those days. That was a whole different game altogether. How did that story end though, Shiv, GameStop? I think we all know how it ended. The funniest thing now is it's now back in vogue, GameStop, in the micro communities on Fintwit and StockTwits and all of that. After years of going down, it stopped going down and stocks have to stop going down before they start going up again. From a technical chart perspective, the news headlines are not turning positive for GameStop. I wouldn't be surprised to see a micro-squeeze in the next two or three months if the global bull market continues here, especially in the US.

Utsav Somani: Tell us your views on crypto. You did CryptoTwits as well, right?

Shiv Sharma - Former president, Stocktwits: We launched CryptoTwits last year.

Dhruv Sharma: After crypto, we'd love to hear your thoughts on prediction markets as well.

Shiv Sharma - Former president, Stocktwits: For crypto, look, I think...

Utsav Somani: We're going into deep gambling territory now.

Shiv Sharma - Former president, Stocktwits: Oh, I love it. My next gig I'm probably going to do is exactly... I believe the world is getting more degenerate in a good way, not less. It will never get back to being more conservative.

Utsav Somani: Don't tell me you're setting up a prediction market desk in Singapore and...

Shiv Sharma - Former president, Stocktwits: No, but you're not too far off.

Utsav Somani: Crypto first and then we step into prediction market territory.

Shiv Sharma - Former president, Stocktwits: I think everyone knows that the current regulation in the U.S., the current government in the U.S. is very pro crypto. I think that's been a massive tailwind to finally getting institutional adoption. The ETF launches in the U.S. have been a massive tailwind. Now, the mindset is that if you're a private... Even Bank of America, by the way, who has a very large distribution network and wealth management across the country, similar to access in India. They're telling clients you should have call it five-ish percent exposure. Say what you want. It is here. I was just at the breakpoint conference in Abu Dhabi a few months ago. The usage, the community, the developer ecosystem is all freaking real and it's happening and it's probably here to stay. The challenge that I see is that token economics are not the same as buying a stock. That's why you've seen proxies to people who... Like proxies to crypto in the public markets. Not MSTR in those guys. That's a whole different concept. Not the DATs. I'm talking about Bitcoin miners and people who are exposed to crypto but who have their equity listed in equity markets. I've seen those stocks perform better than crypto projects who may have amazing fundamentals. That to me is very irritating. That's a challenge I see in the space that has to get resolved at some point. Prediction markets. I did a massive deal with Polymarket in the Q3 or Q4 of last year. Their stock was the official prediction market provider for the year. I know both teams extremely well. They're both very different. They're both very different. Different strategies and different ways of thinking about the world. They're both very talented and aggressive and determined to make sure this is a real asset class. There's two schools of thought. I think we should debate. I won't share my take. One school of thought is this is basically a pure form of gambling. You're effectively gambling and you've moved the dream 11 draft kings model into live events and weather and politics and sports and finance and stocks. The other school of thought is this is a real science. While I'm so deep in this industry, I can see both sides, but I think for most people I'm leaning towards a former. That doesn't mean it's bad. I think as you mentioned before, gambling is here to stay. It's coming in different forms and shapes. Odds are changing. If you have certain insights and research or whatever, I think is it really gambling? Is it really taking calculated bets? I think the gray area to this is the main point. I think everyone should get used to it. I think what's really cool in this is the data impact that comes from it. Both platforms have massive partnerships with mainstream media and people use prediction markets to see election results. It's insane.

Utsav Somani: crazy. There's one account linked to all of these Trump announcements. Insider trading must be happening. It happens in all markets, including private markets.

Shiv Sharma - Former president, Stocktwits: If you look at equity markets, if I were to show you a bunch of acquisitions that would have happened recently, you can see it on the charts of people who had some sort of clue. It's insane. Tracking all of this has become extremely hard with the complexity of ways to hide it. For prediction markets, I just saw a headline recently which stated that I think they tried to track insider trading, but again, you're only as good as your algo and the processes are brand new. Both of these companies are very small companies by the way. They're very lean teams. They're not massive. They don't have 500 people compliance departments yet. Right now, it's a hardy free-for-all in the U.S. given regulation. I think all of those things you're saying are probably be phase two once you've hit more critical mass and adoption than even more mainstream usage.

Utsav Somani: I think that was a big one. He was rated a year before that, so pretty insane what this guy could do. I saw a Twitter project online where somebody basically had an instance of Claude de it ended up with $3,000 in two days. World of AI. Does it give you an advantage?

Shiv Sharma - Former president, Stocktwits: 100%. In fact, I'm working with a startup now doing that in India. That's literally where this industry goes. 100%. I think why it's so useful, by the way, is it takes out the human emotion from your process. If you quantify, I only buy stocks in up trends with positive relative strength in sectors that have momentum, you're going to make money. If you have a stop loss of 7%, it's really hard to not make money here. Right now, if you would have used algo or AI, if you see the moves, they've gone up 100% in the last three months. Silver, for example, is going vertical. All that is real. If you were to buy options, I'm surprised not even more than that return. I think to be clear, I've seen various market cycles and equity markets and we are in a bull market. This party will end. The fear that everyone has in this industry is that it ends for a long period of time. We've historically seen periods of the market where there's no action, no entertainment. We're not talking about it here. In these markets where it goes sideways for 10 years, people get bored. That is a concern at some point and I think that's what this industry is really scared of. In that environment, very few algos will consistently outperform as well. Long-term bull market, people have to optimize returns in the best way they know how. When the party ends, we'll know based on technical patterns and that's where you have to change your strategy and be less aggressive.

Utsav Somani: A topic we've been discussing, precious metals as our closing question. Gold, should we buy copper? Might be 70% short and there's no replacement for it.

Shiv Sharma - Former president, Stocktwits: I can't tell you how many calls I've gotten on this topic in the past three weeks. I am not long. I feel like I missed the trade and I'm probably wrong. I think they go higher in the intermediate term. The reason I think that is not just based on random thoughts. I think that because if you look at the call option activity happening from people that matter who are putting large amounts of money in play, they're taking extremely bullish bets for the June strike and the fall strike and Q3 March strike even. If you follow big money, which I truly believe in, I think that's historically worked, it is still very bullish. They can change on a dime. The main catalyst for all of this is beyond the, you know, it's not like a stock because there's a commodity element to it. There's all these use cases of people who need to lock in prices. There's my son. In this batman towel. Sorry. Can you please take him? Sorry. Sorry, guys. sorry.

Utsav Somani: That's a very nice chair.

Shiv Sharma - Former president, Stocktwits: Thank you. basically, I think generally I think trend is higher. I guess one of the largest catalysts is hoarding by Chinese. And I think, you know, what stops that? Is there any change in that? Is the pace of that buying interest going to slow down? There's all these complexities there. I'm actually very long copper as well. I missed the silver trade. The gold trade. I think the others play catch up. I think that's where the cycle goes.

Utsav Somani: So much to uncover in this topic. Currency debasement. Everyone is making his own commentary since a while. Shiv, thank you so much for coming on the show.

Shiv Sharma - Former president, Stocktwits: Thank you for having me.

Utsav Somani: All right, listeners, that's it from us today. We'll see you on Friday. Thank you so much for joining us. Bye-bye.