Full Transcript

Dhruv Sharma: Hey there listeners, it's great to have you back. As you might see today, Utsav is away, so I'm flying solo. We don't have much to cover in terms of news and our first guest is here already. I'm going to welcome him right now. Ashish, welcome to the show. It's great to have you.

Ashish Kumar, co-founder - Fundamentum Partnership: Thank you, Dhruv. This is a privilege to be here. I have watched a few of your shows, the last couple of episodes and all. I think I'm pretty excited to be here.

Dhruv Sharma: Thank you so much for tuning in, Ashish. Look, most people in our world seem to have a sense of what Fundamentum is all about. But let me start by asking you when you're flying on a plane and the person on the seat right next to you, if they're curious to know what you do for work, how do you explain it to them?

Ashish Kumar, co-founder - Fundamentum Partnership: Oh, this is a very funny way to do that. Like fund businesses. I read this some time back, right? We are, you know, when mildly rich people, you know, take capital from really rich people to give capital to companies which are starting and become rich over a period of time. That's what really the fund business is about. But jokes aside, you know, we are a venture fund where we would like to invest into companies at what we call a series B, which is typically early growth stage, right? So when the companies have gotten their initial product market fit, they have a product which we think that has a demand in the market. And now they need capital to scale up that business. And the scaling up typically happens through in terms of scaling up their organization and scaling up their demand across geographies, depending on what the product is about.

Dhruv Sharma: Ashish, very often people use phrases like, you know, value of death and so on and so forth for this, for this stage, right? Series B, in other words, it's it's one of it's considered one of the hardest stages for founders to raise. So why do you think and from your conversations with founders, why do you think that is the case? And conversely, from your perspective, what makes it challenging to underwrite companies at this stage?

Ashish Kumar, co-founder - Fundamentum Partnership: No, I think it's a great question, Dhruv. So I would say two reasons why it is considered, you know, value of death or kind of hard to kind of hard to raise. Number one, and is that there is a missing middle in the fund business as well. So if you will find that there are multiple funds, maybe, you know, by last count, around 300 odd funds, early stage funds in the country, and then there are later stage funds in the country, which may not necessarily be started in the country, but they are the ones which are kind of global funds who will kind of fly in and fly out. Right. When you do a series B or a stage investment, it is very you'll not find too many funds here. Right. You know, like you will probably find in India at this point of time, four, five, six, depending on what industry are you looking at. So that number one, that number is purely numbers that makes it a lot more harder. Second is that I think our venture entire ecosystem is perhaps maybe 15, 18 years old, Dhruv. Right. And in true sense, maybe 10, 11 years old. Right. And we have taken a great part of the last decade to perfect the entire product market for journey. Right. So you are a founder, you will start that business, you are going to get to a product market fit. Right. Scaling up is still kind of early. Right. And we are creating a lot more templates for it. We have templates for now, let's say, NBFCs, we have templates for now, let's say consumer brands, but let's say consumer internet or some of those interesting B2B companies may not necessarily have a template which could be copied. And that's where it kind of makes it a lot more harder because you don't have any example that you could be greatly inspired from and kind of copy their operating model. You have to really devise your own. And that makes it a little more difficult.

Dhruv Sharma: Understood. Ashish, you've invested in so many companies, you're on so many boards. Let's let's unpack this concept of PMF and not in the Y Combinator sense, but really what it means in India. Feel free to use an example from the portfolio or anything that comes to mind. At Series B, what does PMF start to look like?

Ashish Kumar, co-founder - Fundamentum Partnership: Yeah, so see, I think I'll maybe take instead of taking an example of a company, I'll take an example of a space. Right. So there are consumer spaces or consumer internet platform spaces where we the markets kind of exhibit, let's say, oligopolistic behavior. Right. And you'll typically find two, three, four companies which are going to really make a large outcome. And the other 30, 40, 50 companies that may start, they may not create enough value over a period of time. Right. And when you do that, the way to understand PMF is twofold. One is that is your value proposition truly significantly differentiated from the other options that are available? Right. And it will usually reflect in NPS or the customer satisfaction scores. If your customer satisfaction score is a few percentage point here and there as compared to the second one or the third one, you probably have not really created enough differentiation from that perspective. The second thing, which is a result of this, is that is your market share increasing or decreasing or remaining same vis-a-vis the entire market at that point of time? Right. And as long as it is happening, even if economics may not fully have played out. Right. We think that there is a reasonable chance that the company has a product market for it. Right. And PMF is never a solid line really through. Right. I think we all are going to build businesses. It is a little blurry. Right. And as venture investors, we have to take that call and understand that, you know, as long as those two things are met, there's a good 90 percent chance that the PMF is there. Right. And the economics will be able, people will figure out economics over a period of time.

Dhruv Sharma: Are many of the companies that present you and then you evaluate, are they already profitable at that point?

Ashish Kumar, co-founder - Fundamentum Partnership: Most companies will not be profitable. Right. So we invest in companies where the companies are also using frontier technology in a meaningful way through. Right. So and as we have seen technology, every time newer technologies creates a higher polarity in value creation. So which means that, you know, a company which becomes large will become larger and a company which becomes, let's say, smaller and smaller in our world will be anything anybody doing, let's say, a couple of hundred million dollar value is also smaller from a venture parlance. Right. They will necessarily become even smaller relatively. Right. So which means that when you have to invest into these companies, you have to figure out truly where is the use of technology and is this technology going to be useful to create a significantly larger value? Right. So if you look at, let's say, five years, seven years, maybe anywhere two billion to five billion is a great outcome for many of the funds and many of the businesses. We have some examples of ten billion dollar plus outcomes as well, but there are really far and few. Right. But we did see that there are a bunch of companies in the two to five billion dollar range. I would argue that next five years, eight years, you will find fewer companies in two to five billion dollar range and you'll find more companies in the ten, ten billion dollar plus range. And that's the nature of the technology that that is there. And that is what is going to be fairly important in in the current India.

Dhruv Sharma: And can we double click on why you say that?

Ashish Kumar, co-founder - Fundamentum Partnership: Yeah. So if you look at, let's say, maybe eight, nine years back through. Right. So digitization was the frontier tech. Right. Effectively, there were a business that would exist in the offline world. It's a very interesting word offline, given that your network is also called the offline. Right. So in the offline world and then digital technologies were created to create a new channel on and and and that there was equity money available to create a business out of it. So horizontal commerce, vertical commerce were great examples of that. Right. We have seen Flipkart and we have seen Ola's of the world and they created some value. Right. Which is, you know, like Flipkart is, of course, beyond 20, you know, but Ola is probably smaller than that. And there are a bunch of companies in two to ten billion dollar range. Now, when you look at, let's say the second wave is around four or five years back, which is what I call as digital companies. Right. So these are the companies which have created offerings which could not have been created, you know, let's say eight years, 10 years back or so. Right. A perfect example could be content companies where investors in this company called Cuckoo FM. Right. Now, such a company could not have been created nine years, 10 years back or so. That could only be. And as a result, if you notice and given that these are fully digital businesses, they scale much, much faster. Right. So Cuckoo has been able to get to a particular revenue or a value or a gross margin in a much shorter period of time as any company actually prior to that. Right. So in a three year time period, they have been at more than 200 odd million dollar revenue at 80, 90 percent gross margin businesses. Right. So that's and it is not the only company. There is Pocket FM and there are a bunch of other companies which have also kind of gotten there. And which means that in the same amount of time that Flipkart created probably 20 billion. Right. You will see that some of these companies will likely create even higher value. And now which kind of brings me to the third way, which is the current AI or the deep tech AI brings revenue velocity and deep tech brings, you know, like barrier to entry. So when you kind of look at these companies, you will probably see that in a 10 year time period, I will not be surprised that if you see maybe 10 companies, you know, creating value between 10 to 20 billion. And we have not seen spaces like that. It's just the nature of the business that and the technology that kind of exists there today.

Dhruv Sharma: And I mean, in the context of some of these numbers that you just mentioned, Ashish, what do you think it takes to generate outperformance from a venture return standpoint, specifically at your stage?

Ashish Kumar, co-founder - Fundamentum Partnership: In terms of the multiples?

Ashish Kumar, co-founder - Fundamentum Partnership: See, like I mentioned, I think I believe that power law, if you are investing in venture, you have to truly believe in the power laws of returns. Right. Which means that the best company that we invest in, even at the series B, right, should generate a return of 10x or more. Right. And while what we think is that the risk is lower, which means that you could underwrite an investment, which will also create a quote unquote safer 3x. As an example, I could invest in a consumer brand today or an NBFC, which could create a lot more safer 3x. But that's not what my investors are giving you money for through. Right. I think my investors are giving me money for creating a higher value, irrespective of the stage that I come in. As long as I'm picking up the right space and those spaces using technology in a very meaningful way, I should be able to underwrite kind of 10x. And we have seen that in our portfolio. Right. When I look at our own portfolio, around 20% of the portfolio, all those companies will create more than 10x returns.

Dhruv Sharma: Yeah. Very interesting. And you say risk, and I immediately want to ask you, if we take a step back, Ashish, do you think as a community, as India Venture, do you think our risk tolerance is growing or is it maybe shrinking?

Ashish Kumar, co-founder - Fundamentum Partnership: I think it is happening both. Right. So if you look at, you know, if you're using frontier technology in a meaningful way, people are aspiring for higher and higher outcomes. And there the risk is even even higher. Right. Because like I was mentioning, you know, maybe when you are doing digitization, you could take up commerce in any category and create maybe five companies in that space. Right. You know, there could be five companies doing, let's say, groceries. But when you look at, let's say, the new AI, I don't think you will have five companies. You will probably have two companies in that space because every company will take a larger market share, which means that these companies are inherently riskier for anybody investing into it or starting this up. Right. So but we are seeing a lot more action, both from funds which are, you know, domiciled in India and funds which are kind of outside India. So I do think the risk taking both capability has increased. And a lot of this is honestly also happening from a younger breed of entrepreneurs. That's number one. And even the repeat set of entrepreneurs who have kind of seen the story, they also want to create a large company legacy out of it. So that's one. But at the same time, I think now, you know, what we have also starting to see that the number of opportunities to create, let's say, consumer brands, number of opportunities to create, let's say, an NBFC, number of opportunities to create a little bit more offline for heavy companies as well. They are also increasing. Right. And and given that traditional businesses are finding it harder and harder to kind of start and scale and so on and so forth, you will see some companies like that as well. They may not necessarily be the best venture bet, but they may be a great candidate at one point of time for the private equity industry or even for a lot of family offices in India who are who are meaningfully relevant at this point of time.

Dhruv Sharma: Yeah. Very interesting. And if we again bring the attention back to fundamentum for just a moment, is there maybe does your capital base allow you to be a lot more patient than your peers? Is that a fair assumption?

Ashish Kumar, co-founder - Fundamentum Partnership: So it does. I think in venture, patience may not necessarily be the best virtue, especially with the way that technology is kind of evolving. See, I think what the younger generation does bring in, right, is a significant higher ambition. And the ambition, if your ambition is to, let's say, create a hundred billion dollar company, America is creating a trillion dollar companies in a 10 year time period. Why should we as India not even aspire to get to a hundred billion dollar company? So I think as an investor, I tell people that, hey, you know, it is all great thing to think about patience and all. But I think we both should be impatient. Of course, you have to be structurally right. You know, impatience does not mean that you do things which does not make sense at all. Right. Any step that you have to do will have an element of risk and element of reward. You have to kind of weigh it nicely, but you have to aspire for a greater and greater outcome. If you are aspiring for a hundred billion dollar outcome, it will not happen in that you will be a five hundred million dollar company till eight years and then you will become a hundred billion dollar company in the 10th year. It will not happen. So you will have to pace your businesses accordingly.

Dhruv Sharma: Yeah, you're so right. I mean, in the U.S., companies go from zero to a trillion dollars in 10 years and then keep rapidly compounding.

Ashish Kumar, co-founder - Fundamentum Partnership: And that also happens, Dhruv, because, you know, I think even though we see the company is starting on the 0th year, but in reality, a lot of work has happened in the research labs or somewhere in people's mind five years prior to that as well. Like if you look at OpenAI even right before, even before OpenAI came in 2016, precisely. Right. And and I think if you look at what Indian government has started to do with the RDI and entirely pushing people into a lot more research, right, I think we will start to see many of those activities happening. Venture money may not necessarily be most conducive for and I know it is a little more difficult statement to make for for necessarily the patient's capital. Right. I think what we need to do that, we need to have alternate sources of capital to to to to kind of jumpstart this. And we have started to see that happening, Dhruv.

Dhruv Sharma: Yeah. I mean, it's interesting you bring up RDI, I do have a related question, Ashish, which is given this sudden surge in attention towards deep tech and, you know, hard science and engineering, there are obviously real reasons why that surge in attention has taken place. One, maybe talk about that from your perspective. But I also want to get your perspective on, you know, if if this is simply helpful or if there is ways in which the surge in attention could also prove to be, you know, somewhat unhelpful over the long term.

Ashish Kumar, co-founder - Fundamentum Partnership: I think any attention to startup industry is always nice, you know, over a longer period of time. You know, if your question is that, will there be wastage? The answer is yes. But the question is that so we, you know, in the startup or the fund investment industry, we have to be an optimist. Right. We do not worry. We should not worry as much about the losses we have to worry about or we have to be you have to be mindful of the growth and the progress and the value creation. Right. And it is OK if two companies or five companies or 10 companies create a larger value because the company which will create very large value has multiple more advantages. One is that they kind of become almost sort of an infrastructure for the country. Right. And other businesses to kind of kind of build on top of the second is that it also creates a very large pool of talent, understanding the new age of building businesses that who could come out and then start their own businesses, you know, in this in the similar kind of capacity in the similar domain and so on and so forth. Right. So, yes. So I think and I think the RDI that if you talk specifically about RDI, I think it has been reasonably well thought out. Right. I mean, and it is not the money is not only going to companies for their own fundamental innovation brought the bottoms up. You know, there is money available for them to also, let's say, buy certain of the products which could be in the markets outside India to jumpstart this process. And then people can learn from that. It is also coming to fund managers and it is also going to research, you know, like accelerators and institutions and so on and so forth. So I think it has taken some time, but it is in the right process. You know, like as we have seen in usually most government funded programs, I think the execution has to be right. I don't think on the spectrum any of these will be 100 percent correct, like it is true for probably anything else. But I am a lot more positive about the impact of this.

Dhruv Sharma: Anashish, talk to us a little bit about why it's important for us to also now, you know, pretty much on quote unquote war footing, build like indigenous capabilities in certain sectors that are strategic to us, semiconductors and so on.

Ashish Kumar, co-founder - Fundamentum Partnership: So, you know, absolutely right. I think we see the the I don't think anybody who has in active either for building mode, whether building mode, investing mode have seen the world as volatile as what we see today. Right. And which means that and when the world is volatile, very volatile, you have to have number one, you have to be powerful and number number two, you have to have supply side leverage. India traditionally has only because of the number of people that we have, we have built demand side leverage. We have not truly built supply side leverage. The last time we built supply side leverage was probably on the IT services and we had a good run there. But the world has moved. Right. And so we do for us to build that supply side leverage. We need to be doing a lot of the stuff that you talked about, whether it is semiconductors, whether it is energy, whether it is computation in form of quantum and so on, so forth. Right. So I am absolutely in the camp of us doing a lot of these innovations. We are just we are one point four billion people. We don't have to pick and choose that. We will only do this. I think there are enough of us that all of us could basically could could choose different items. But if I were to think about, let's say, where should we as India have a little more right to win? It may not be in the horizontal technologies which the world has created, especially, let's say, US and some parts of Europe and China and Israel and so on, so forth. But there are enough, you know, like foundational work that one could do a layer on top of that, which is, let's say, when you talk about LLMs, can you do an SLMs as an example? Similarly, when you're when the world is creating GPUs, we could create an application specific ICs, right? Essex, right? So we could do such stuff on the edge, right, which will require a combination of use cases, data and then technology. Right. So that is how we start. That is how we not only we deliver something which is useful for a country like us, we also build our entire muscle around creating these foundational technologies.

Dhruv Sharma: You know, I'm sure you get this question a lot, but through you, we also want to know what's in Mr. Nilkani's mind when it comes to especially things like this, right? I know he's talking about diffusion a lot. Talk to us a little more about what his vision is when he speaks of diffusion.

Ashish Kumar, co-founder - Fundamentum Partnership: Yeah, no, I think he's been pretty vocal about what he thinks like should be done, right? And it's very similar to what I kind of talked about, right? And I've learned quite a bit from his thinking as well, right? So he does think that I think while the country has to create fundamental foundational stuff, right? And that need not necessarily be at the bottom of the stack that the US or the China could be doing, because typically that has a longer gestation cycle that maybe our industry, our country cannot afford at this point of time, right? But that's one thing that the second thing that Nandan does talk about quite a bit is how can we get more and more entrepreneurs in the ecosystem, right? So if you look at the entire digital public stack, the infrastructure was supposed to be kind of, you could have the infrastructure owned by a government or government like bodies, and then you could multiple more companies could create applications on top of that. So yeah, so a lot more inclusivity is how Nandan's mind operate the way I understand it.

Dhruv Sharma: Thank you for sharing. And Ashish, now we're in, you know, we're in early 2026. In fact, almost one quarter through. So we've had like a three month period to reflect on the 2025 IPO cycle. I'd love to hear what your reflections are in terms of what happened over that, over the last day.

Ashish Kumar, co-founder - Fundamentum Partnership: We live in a very blessed country, Dhruv, is what I can tell you, right? I think when the world last two, three years, if you look at it, Indian IPO story is one that has, you know, moved our entire startup ecosystem quite ahead, right? I think there was one problem that we had as a country had not solved for the last 10, 12, which was the exit problem, right? And we were, so that I think we have been able to do, right? Are we a very expensive IPO market? The answer is yes, but I don't think it is true for only technology. I think it is true for India as a whole, just because as a country, we have been growing faster than most other countries in the world, right? The onus is now on us, Dhruv, to continue doing that, right? And I think, you know, if you look at last, maybe 20, 30 years, many of the value creation that we have done is, you know, fundamental stuff in certain areas, but a lot more trading is what we have also, is the reason why we have become better at. Now in a world which is where globalization is probably not as rapid if at all, right?

Dhruv Sharma: It's de-globalization, if anything, but countries must industrialize. Yes.

Ashish Kumar, co-founder - Fundamentum Partnership: Right. So I think the focus has to be a little bit more on manufacturing. The focus has to be a lot more building supply side leverage, and that is what we need to do. And those are the companies, my sense is that will have a even better IPO. So I am kind of a lot more bullish on many of the, you know, companies that we now know as deep tech companies, they will go IPO in the next five to seven years. And that cycle will likely be longer than the cycle that we have seen in the last two years, maybe.

Dhruv Sharma: On that note, Ashish, thank you so much for coming and sharing your perspective on a wide ranging set of things. We'd love to have you back at some point. Thank you. Thank you for coming and thank you for your time.

Ashish Kumar, co-founder - Fundamentum Partnership: Thank you so much, Dhruv. Thank you. Take care.

Dhruv Sharma: All right, listeners, that was Ashish of Fundamentum. And our next guest is Anish Sheth, who is also with us already. I think he's going to come up on the screen just about now.

Aneesh Sheth (Dr. Sheth's Skincare): Hi, Anish. Hi. Hi.

Dhruv Sharma: How are you? I'm very well. How are you? Good, good. Great. So we're streaming live, Anish, as you know, this is a live show. And so you're actually our last guest for the week on Friday. So we're in between people and whatever their plans might be for Friday evening. But I think just to get things started, Anish, I think you're perhaps the best person to give us like a 101 on the evolution of India's, you know, beauty and personal care market, given that, you know, you've had like a front row seat pretty much for three generations as part of your family's business. So let's start there.

Aneesh Sheth (Dr. Sheth's Skincare): Yeah, I mean, I think like when my grandfather started, dermatology was just, you know, something that people went for skin infections and possibly STDs at that time, because dermatologists and venerologists are under the same bucket. My mom started the field of cosmetic dermatology, which at the time, you know, a lot of people kind of laughed at her and told her that, you know, she was wasting a medical seat by being a beautician. And of course, tables turned as, you know, innovation came in like laser hair reduction and, you know, pigmentation lasers, Botox, fillers, etc. And I'd like to think that I had a first row seat in developing, you know, a skincare brand at the time of the internet exploding in India or e-commerce, so to speak, exploding in India. So yeah, it's very three different, you know, angles to probably a continuing story.

Dhruv Sharma: I mean, this gives me an interesting idea. Anush, as a thought exercise, if you were to flip the legacy, right, let's say if you were the first generation of shades and building the business right now with what we know, where would you start? And what would you want to leave, you know, to the next generation and thereafter?

Aneesh Sheth (Dr. Sheth's Skincare): I think that there's a lot of room for innovation just because Indian skin, Indian hair, you know, generally, we haven't studied it so well. So I think starting with that first and innovating for, you know, India versus taking what is developed in the US, UK, and then in India and adapting it for India or, you know, lately Korea and then adapting it for India would be a good way to do it. I think from a business point of view, because I think that in the next few years, India is going to have a lot of disposable income and everybody is, whether we like to accept it or not, judged on the way they look. So, you know, I think that's probably the way that I would handle it. Be a little less academic than my parents and my grandparents were, so to speak.

Dhruv Sharma: And also, you know, we talked to founders across consumer categories in the show. And the one thing we've learned by now is that Indian consumers are so much more labor literate than they were even five years ago. And so, but, you know, the flip side of that is a lot of new and up and coming brands are making claims that maybe don't hold good in your space. How big is that false claim problem? What can one do about it?

Aneesh Sheth (Dr. Sheth's Skincare): So I think that consumers think they are labor literate, just the same way that consumers think they are doctors based on ChatGPT and Google. It's like seeing a recipe list and saying that I know what this product is going to taste like. And that doesn't necessarily stand true on one hand. And on the other hand, I definitely don't blame the skepticism for the consumers. And when it comes to the brand's point of view, because I think brands understand words that are buzzwords and that consumers respond to and sort of frame their claims accordingly, you know, versus actually probably sharing the data. But I think that that change that's going to change like brands, you know, the consumers demand that the brands be transparent now. So, you know, I kid you not.

Dhruv Sharma: I've seen the terms paraben free and sulfate free on a food label. I would think some people have just taken it so far. But, Anish, I think like just coming back to, you know, the Dr. Shade story, you had the opportunity not just to see the business, you know, get built from the ground up. You also operated it and then finally founded a new home in HONASA. Talk to us about that experience. What was it like from, you know, having seen the business being built with a lot of love and run independently to then moving into a house of brands? What was that entire journey like?

Aneesh Sheth (Dr. Sheth's Skincare): I always tell people that I had a profitable MBA. So I have a technical background and, you know, we come from a very, very overeducated family. So I think really understanding things from a medical point of view and developing with that goal in mind versus understanding and selling to someone with a very commercial goal in mind sort of taught me a lot. And I think, you know, understanding what the product market fit is, what the consumer is, who my consumer was and who their consumer is, the entire journey, distribution, everything. I think it was just a fantastic journey. I like I have no regrets about it.

Dhruv Sharma: And what are you doing with your time now?

Aneesh Sheth (Dr. Sheth's Skincare): So I've come back to my legacy business. My mom used to be a cosmetic dermatologist, and we thought that when she passed away, the clinics would crash with her. But fortunately, her team was amazing. And the clinics, my husband and the medical director, who was one of her proteges, you know, gave the clinics a new lease on life. And I've just joined them recently to help with growth and scale the business. Plus, I angel invest a fair amount and mentor and advise, you know, upcoming zero to one consumer brands.

Dhruv Sharma: And so outside of outside of products, which is what we spoke about for the first few minutes, what's happening inside of clinics? What's new? What are the opportunities? And also, I don't know, maybe are there some appliances or I've seen something that looks like this. I don't know. It's like a red mask that people put on their face. What is what is happening all around us?

Aneesh Sheth (Dr. Sheth's Skincare): So there's a lot happening, actually. I think like there is probably more innovation that's happening, you know, in the clinic and probably innovation where you can see the results which give you tangible results versus, you know, products which are generally slower, longer term, more maintenance. And, you know, we see things like lasers, injectables. There's this whole new category of injectables called skin boosters, which aren't really fillers. They're not Botox, but they help the skin, you know, sort of regenerate collagen. They help like fix barrier deformities, which is also the reason we get a lot of pigmentation. We get a lot of different things. And just watching, you know, everything in action, you know, front and center is extremely exciting.

Dhruv Sharma: And yeah, how large is that market? I'm sorry. Yes, the red mask first.

Aneesh Sheth (Dr. Sheth's Skincare): Yeah, the red mask is it's definitely a thing. It's like there's a lot of studies to show that it does do well. But there's also a lot of as with the MediSpa industry, a lot of sketchy devices out there. So just make sure whoever's getting one gets one that's validated, you know, right.

Dhruv Sharma: And now remember, I've seen it on Brian Johnson, the longevity.

Aneesh Sheth (Dr. Sheth's Skincare): Yeah, I have opinions about the word longevity, but we can talk about that another time.

Dhruv Sharma: I'm sure you do. Yes, I mean, we'll keep that. We'll keep that for a little bit later. No, but the clinical opportunity is interesting. I'm not even sure if it's called that, but it sounds very interesting. So in terms of like, if you could, if you have some numbers at the top of your mind, give us a sense of how big the opportunity is right now or the penetration rate is. What's it looking like outside of these large metropolitan areas? And where can we go from here?

Aneesh Sheth (Dr. Sheth's Skincare): That's a good question. And unfortunately, I don't have the answer to that. I've sort of been, you know, working operationally to try and figure out and understand the business at a very granular level right now. So I haven't really done any sort of deck building or market analysis. But I do know that almost every VC is looking at the space. Just from the point of view of the way that it's exploded in the US, the UK, Korea, Thailand, China, it's a necessary transition where people, as they get wealthier, realize that it's more value for money for a consumer to go to a skin clinic and get a treatment. You know, like when I was a doctor, we did a lot of consumer work and we would talk to consumers who were spending 10, 20,000 rupees a month on like various kinds of beauty products, you know. And if you go into a skin clinic and get a laser once a month, that's about 5,000 rupees, with maybe give or take, you know, that's your basic hygiene kind of like medical device process. You know, peels, of course, are cheaper.

Dhruv Sharma: So it's a lot more accessible than most people might think.

Aneesh Sheth (Dr. Sheth's Skincare): Oh, yeah, for sure. For sure. Yeah. You know, like people get intimidated because when you do get into injectable territory, like fillers and stuff, they do tend to be expensive. But there are like regular, like we have people who come, you know, every two weeks just for their you know, it's almost like a more efficient facial because you're using science to back it up. I mean, and the result is much more evident than, you know, if you were doing a face pack at home or like going to a beauty salon where you don't really know what's going on. So it's just a necessity. I think like given historically and globally how this industry has evolved, it's going to happen. And we're on the precipice of it exploded. I mean, you have skin clinics, like even in tier two, tier three towns like I was in Bhubaneswar, you know, because my dad wanted to go see the temple at Puri. And almost like every neighborhood had a skin clinic with like a doctor, you know, doing process procedures.

Dhruv Sharma: So it's very accessible. That is so cool. And I mean, the spectrum is also it baffles one, right? Because I mean, on one end of the spectrum, you have what your grandmom used to tell you to go by. And then you have, you know, then you have, you know, clinical procedures that are available to you and everything in between. How is that? Yes. So, I mean, the one thing that we haven't discussed so far is, I don't know, the the the organic and Ayurvedic category, I guess, you know, Forest Essentials was in the news recently about a potential financial acquisition. So tell us, you know, from from your vantage point, how that industry is shaped and and what are the opportunities of that as well?

Aneesh Sheth (Dr. Sheth's Skincare): So I think that India is the kind of market where I mean, not just India, but the world, it's almost as though it's I would if I was comparing it to fashion for everyone who wears a T-shirt, you will also have someone who wears, you know, a formal shirt, you know, and so I think markets can always coexist. Obviously, I'm a scientist and tend to lean in favor of things that have been tried, tested to give results versus, you know, natural products. But the industry, the beauty industry is the consumer retail industry has always moved in waves where we've seen like natural products take off. And then, you know, after that, you'd have like science based products and again, a wave of natural products and again, a wave of science based products. So there's no shortage of opportunities in any space, I think, as long as you find the right customer and you're offering a product that they perceive to be valuable.

Dhruv Sharma: Yeah. Another thing I would get your reaction on is so for the longest time we heard, quote unquote, formulated for Indian skin. And now there's, you know, with with Cape Beauty and J Beauty trying to enter the market, suddenly people with Indian skin want to pander to something that was never formulated for them in the first place. Help us make sense of that.

Aneesh Sheth (Dr. Sheth's Skincare): I think any consumer goods is in part like discovering your identity and embracing it and in part being like striving for something that's aspirational, right? Like, and I think that the Korean beauty market justifiably so has been, you know, pegged as extremely aspirational, you know, kind of like how Japanese do whiskey, right? I mean, a Japanese whiskey comes with a certain caliber and lives up to it. So similarly, it's almost as though like, you know, my Gucci, Prada, Louis Vuitton and my beauty of chosen sunscreen. It's like, you know, like kind of aspirational. They do work well, very well, fundamentally for, you know, most skin types. But, you know, being formulated for Indian skin, unfortunately, we do live in a world where AQI is an issue and water is hard and things like that. So, you know, like I said, skincare is it's like spices, right? Like, you have everyone finds the ones they like the balance that they like. And I think as long as someone finds that it's great. But Koreans do a lot of research. And there's a lot of patents being like churned out there that I think have a lot of relevance, particularly, you know, even for skin of color.

Dhruv Sharma: Right. Or, like you said, very early on in our conversation, maybe there are some things for us to learn from them, but then really adapt them to our skin types and our environmental conditions. Speaking of like, what are some things everyone should be doing given, you know, what's in the environment, but things that are not that hard for people to do?

Aneesh Sheth (Dr. Sheth's Skincare): I think like everybody has heard this and it's a cliche, but wear sunscreen. I think that's like your basic rule of thumb. Make sure you're using a good cleanser. Like I know there's a lot of people on Instagram and even doctors in the West who say, oh, you don't need to wash your face like multiple times a day or like, you know, you can shower once every two days. And I think that's fine if you're living in, you know, a farm in Iowa where you're not exposed to like dust and pollution, but always remember that we do live in India and therefore we need more cleansing than other people do. And use a good barrier cream at night because everyone in India has barrier deformities, which essentially means that you get eczema, patchy skin, etc. In layman terms, that's a good night cream.

Dhruv Sharma: Wonderful. Ananish, one more thing, which is unrelated to anything we've discussed so far, but my guess is when you look at the back of your product and you see all of these things, formulations as they're called, I'm guessing, does anyone, who owns the IP on the formulations?

Aneesh Sheth (Dr. Sheth's Skincare): Depends on who's, at times the brand does and at times the contract manufacturer does. So it depends on how it's conducted. There's various models in which, you know, you wouldn't have a third party formulator who formulated for a brand and then get it manufactured at a, you know, manufacturing facility. You know, so in theory, the brand owns it, but in practice, you know, it's like trying to say who owns the recipe to butter chicken, you know, and I know there's a debate going on about that. So probably that was not the best example. Is it? It's Deryaganj or no, I don't know. Yeah, I was gonna say that's probably not the best example. But yeah, but my point is like, you know, who owns the, like, unless it's a patented ingredient, which is different, not a trade bar patented ingredient.

Dhruv Sharma: Yeah. And what's the what's the most underrated and the most overrated thing happening in the segment right now?

Aneesh Sheth (Dr. Sheth's Skincare): Um, there's so much stuff that's underrated and overrated. I mean, overrated, like onion oil in your hair. Like, there's people who say that, like, that's gonna leave you with a lot of friends, though.

Dhruv Sharma: I mean, if you don't wash it off.

Aneesh Sheth (Dr. Sheth's Skincare): I mean, you have to prioritize, right? Do you want friends? Or do you want? I mean, really, there's no better hair. There's no dilemma there. But you know, I think underrated I again, I'm coming back to skin boosters just for Indian skin, because like, they really do wonders for the barrier. So wonderful.

Dhruv Sharma: Anisha, I guess that is that is the end of our show for today. Thank you so much for, you know, for hopping in for this week chat. I'd love to have one in person as well. You know, also is not here today. So I'm doing this solo and I'm clearly out of depth in this segment. And so but for what it's worth, it's been fun chatting with you. And thank you so much for sharing so much about your industry and all the best.

Aneesh Sheth (Dr. Sheth's Skincare): Thanks a lot. All right. Thanks for having me. Thank you. Our pleasure.

Dhruv Sharma: Bye. All right, listeners, that brings us to the end of the Friday stream. We'd have we virtually have no news to break down for you today. But we we might in our next episode. In fact, we will in our next episode. I have a lingering feeling we're not going to be streaming on Monday, but we will keep you posted on our channels. Have a great rest of your Friday and the weekend. Cheers.