Summary

The Offline Network Episode 11: Factory OS & Consumer Brands (aired 2025-09-24). Guests: Neal Thakker, Neel Gogia from Magma, IPLIX Media / Layers.shop. Neal: "And I think part of the story is economies of scale, just by virtue of the fact that we've built like enough muscle to sustain that." Neal: "We've built like a suit of tech solutions and, you know, we're also launching an ERP soon, where we provide all of that in one interface." Topics: venture capital and funding, AI and LLMs, B2B/SaaS, space tech. The Offline Network is India's live show on startups, tech, and venture — streaming M/W/F at 4 PM IST on YouTube.

Full Transcript

Utsav Somani: All right folks, so we'll switch directly to the guest segments now. We've got two Neels today. The first one is here with us and he's redefining how supply chains work. Traditional industries like factories and all the hardcore stuff that happens on factory floors is optimized. But before I try to explain anything that I might say very wrongly about his business, let's welcome Neel and give him two minutes to explain what he does at Magma. Neel, welcome.

Neal Thakker (Magma): Thanks so much, thanks for having me on. So Magma is an end-to-end industrial solutions provider. We sell factories and we provide them with a wide range of critical manufacturing solutions ranging from their pre-production requirements to post-production requirement. So we have solutions across specialty raw materials, biomaterials, waste management. So right from factories' critical production requirements to their boiler requirements, to their waste liquidation, we're part of the entire stack. We currently sell 350 factories across ceramics, chemicals, packaging, polymer, plastics, and yeah, right from their input to output requirements, we're part of the entire stack.

Utsav Somani: And solutions, what do you mean by solutions? Just so that I can go one level deeper and for our audience to also enjoy the chat.

Neal Thakker (Magma): Yeah, these are essentially procurement solution. So think of us as like a supplier for factories. So say you're a factory, you require customized made-to-batch solutions products for your production requirements. Magma is your integrated supply partner. So for the factories, we're the suppliers, whether it's them requiring biomass for their boilers or energy for their boilers, whether it's us collecting their waste. So essentially physical solutions is what we mean by that.

Dhruv Sharma: And you mentioned a few different categories, Neil, is one bigger than the others, at least at this time?

Neal Thakker (Magma): Yeah, in 2022, we started serving ceramic factories and then we grew on to serving allied industries. We first started serving like specialty raw material requirements for a ceramic industry, then moved on to green energy business, where we started serving boiler requirements for a lot of factories. And that allowed us to expand into other categories like packaging, paper, polymers, chemicals. And when you're building for the factory stack, their critical requirements tend to change. However, in principle, the fundamentals are similar, right? So that's how we've been able to evolve over the course of time.

Dhruv Sharma: Seems like it sounds like a very large business with lots of moving parts. Maybe you pick just supplying raw materials for a few minutes. And so what is the work that you do? Do you identify supply? Do you negotiate price? Do you partake in logistics? Give us a sense of all of that.

Utsav Somani: I think what Dhruv is trying to get at is what's happening right now and why is Magma better, basically?

Neal Thakker (Magma): Yeah, absolutely. So, you know, Magma is a managed marketplace, right? So think of us as like a supplier for factories. If you're a factory, you require raw materials, which are made to batch for your production requirements. And if I were to give an example, say you're a factory, you want raw materials that improve the stain, scratch, water, moisture resistance for your product. You come to someone like Magma, where we give you exactly what you need as per your production batch, as per your melting point, as per your heating index, without you having to go to 20 different people, procure 20 different SQs, have minimum order quantities for those SQs, block working capital. Whereas at Magma, without any MOQs, you're getting exactly what you want at the right position. And that's one of the many things we offer to factories.

Utsav Somani: Have you been compared to OYO for factories?

Neal Thakker (Magma): Yeah. Yeah.

Utsav Somani: That's something that people have given to you.

Neal Thakker (Magma): Yeah. Yeah. OYO for factories has been something which has been synonymous with us for quite a period of time, actually, because, you know, when you look at OYO, how they started selling hotels and then kind of cross-sell and upsell like a lot of things, we did the same thing, right? Like raw material business was the first thing we started, and then we kind of grew on to other offerings.

Dhruv Sharma: And as the business is scaling, Neil, how are economies of scale kicking in?

Neal Thakker (Magma): Yeah, absolutely. This is, you know, when you look at B2B through supply chain, procurement, manufacturing, these things don't change overnight. They need to run on a routine basis. So one thing that we always look back is the moment you start serving, say 100 factories instead of 10 factories, or as you grow on, your wallet share improves, your procurement power improves. And that translates into, of course, better margins, better working capital. In our business, rotation is like a key part of the story as well, right? Because you're dealing with a lot of capital, right? A lot of receivables. So, you know, when we started to now, we've almost, I guess, tripled our margins. And I think part of the story is economies of scale, just by virtue of the fact that we've built like enough muscle to sustain that.

Utsav Somani: And I mean, so where does tech come in? Like, I mean, different kinds of tech, apart from just software might be used, right? IOT is, I mean, capturing all of this at scale, I think you must be generating and managing a lot of data as well, right?

Neal Thakker (Magma): Yeah. You know, when you look at manufacturing, right? It's really about visibility and predictability in an ecosystem that has historically run on opacity. You know, it's more like a pen and paper industry. And when you look at tech, I always say that tech is an enabler for magma. We've built like a suit of tech solutions and, you know, we're also launching an ERP soon, where we provide all of that in one interface. But if I were to give you like an example, you know, an average truck has 12 documents you're carrying, right? Right from your lorry receipt to empty slip to purchase invoice, sales invoice, purchase orders, like GRM. There's so many things going on. And imagine you're doing say 40 trucks a day. So tech really builds that visibility for you. And also from a customer point of view, tracking maintenance, a lot of these things, these are high value cargo and average order value is about 10 lakh rupees, right? So factories want that comfort when they're putting in so much capital on the line. And we do see like our tech solutions to be an enabler to the wider scheme of things.

Dhruv Sharma: Anil, you mentioned a marketplace and most marketplaces tend to have network effects. What do network effects mean in the context of your business? Do you oftentimes find, you know, surplus capacity somewhere and, you know, existing demand elsewhere and just have matched the two?

Neal Thakker (Magma): Yeah, absolutely. You know, network effects was actually one of the first GTM for Magma, right? When we started Magma, it's going to sound philosophical when I say this, but one ethos we had was tapping into existing capacity utilization for a factory, similar to like tapping into existing potential is often always the best place to start, right? And that's what we did. We started identifying industrial hubs, geographies, where there was a very small subset of customer base and we started taking critical wallet share there. So if there's like a SEZ zone with say 70 factories, Magma would go and sell like 30 factories out of those. And I would, I would like to call it like the queen bee strategy where we would eventually onboard the queen bees that would get in the other bees. And I think, I think that's been in an industry like when we say B2B, I often say it's belly to belly. So those things really helped us get our validation when it comes to onboarding new customers.

Utsav Somani: And do you help them in demand generation as well? Because a lot of these factories might need matching on the other side as well. You've created supply. Do you help them with demand generation as well or sourcing leads for their business?

Neal Thakker (Magma): Indirectly? Yes. Not directly because our fundamental goal is improving capacity utilization for a factory by our suite of solutions. Our simple pitch to them is that, Hey, without doing anything, we are going to come in and help you improve your IRR and your capacity utilization. Right. And if you think about that, what that means is a factory manufacturing something at a hundred and 120 is now manufacturing at 95 and selling at 125. So in hindsight, it turns into a magma powered factory that has the ability to solve large enterprises, quality customers, global buyers, and perhaps a better operational efficiency than the previously operated.

Utsav Somani: Give us maybe two examples for our listeners to better understand. And if they're running factories as well, they might come to you also, but give us a sneak peek into two live examples. You might skip out the names as well, but different industries on what was the impact pre magma post magma.

Neal Thakker (Magma): Yeah, of course. So, you know, without going into, into like, with the names and specifics, I'll give an example of a chemical manufacturer, right. That we started serving back in 2023 and they required pre-made specialty chemical raw materials, which were part of our SKU list. And we have on our backend supply basis where we offer that manufacturing as a service to customers. We saw about 17 to 18% reduction in their costs in terms of the fact that, you know, they didn't have to deal with multiple suppliers. They didn't have to do the processing themselves. Magma became like the one click partner to optimize the procurement for specialty batches. And what that translates into is less capital in the value chain. You know, you previously were spending like a hundred rupees, say to get like 20 units of output. Now you're just spending 20 to get 20 units of output. So the remaining 80 is better operationally utilized. So I think, I think we start with that. And then as we gradually move on to our other offerings, say when we talk about energy, we reduce their energy consumption costs. So through our green energy business, we supply their day-to-day energy requirements. And of course, not just the cost savings, but the fact that they're able to get everything in one place. And when you, when you broadly look at it from an ecosystem point of view, we also have a waste management arm that unlocks new revenue stream for them. So for a factory that's buying our raw materials in the same truck, they're dumping in the waste.

Utsav Somani: Seriously doing the full stack thing.

Neal Thakker (Magma): Yeah. Like, like say you're a factory and you have to pay like, say one lakh to me in the same truck, I'm dumping 40,000 rupees of waste. So net, net, you know, you're unlocking hidden opportunities for factories while focusing on the core and criticalities, which makes them really enjoy working with us.

Utsav Somani: Got it. And in terms of, I mean, these things that you've done, what is the number look like in terms of your annualized revenue? I know a press release, which said 300. Have you crossed that mark?

Neal Thakker (Magma): Yeah. Yeah. We crossed the 300 crore, like, you know, ERR mark. And as of this year, this financial year, we're already sitting on a 500 crore order book. So one question, so we always ask ourselves is what does the factory need and what are we going to do to solve it? Right. And it's really about giving them what they need day to day and focusing on the essentials and how we've been able to achieve this without like, you know, any leakages on supply side is really building a good backward integration model. And what I mean when I say that is we have three models. One is our supply side, where we call it company owned, company operated, which is our COCO model. So basically it's the factory we set up ourselves for our supply side. Another is a company owned dealer operated model.

Utsav Somani: Does that involve CapEx as well for you? Or that's typically done by?

Neal Thakker (Magma): Yeah, it does involve CapEx. So we've kept a certain threshold of CapEx that we don't cross, but COCO like company owned, company operated model is very asset light that way. You're just spending like 50 lakh to 1 crore on CapEx, but it allows you to control the value chain. And, when you're making like 30, 40% margins, the IRRs tend to pan out into the asset light story. The second model is company owned, dealer operated, where it's our machines, but it's run by someone. And third is dealer owned, dealer operated, which is basically contract manufacturing. So we've built our supply side quite creative, and that's really allowed us to serve customers consistently. And that's where really this order book and predictability of revenue is coming in, where factories are saying that if I'm procuring 4 crores of things every month, out of which if Magma is taking a good 30, 40% wallet share, you replicate that playbook with just 3000 factories in Gujarat, 2000 factories in Rajasthan, Maharashtra. We're looking at like a billion dollar order book just in the span of next three years, if we continue executing along this space.

Dhruv Sharma: Interesting. Dhruv? Neil, at T1, we typically shy away from origin stories, but over here, we're going to make an exception. By the way, listeners, Neil is astonishingly young for a business that is, that requires this level of execution discipline.

Utsav Somani: So we want to know how... Yeah, both the Niels today are young and titans of their respective industries.

Dhruv Sharma: Both Niels today are very, very young. And we'll talk to the other Niels in just a moment. But Neil, how did you get into this? Of all the things you could have done, why this?

Neal Thakker (Magma): Yeah, look, I guess it's chip on the shoulder. I often always think your journey starts with chips on your shoulder. For me, it started at 16. When I went to China, I had a chance to visit factories with humongous capacity, all running at over 90% capacity utilization, which is astonishing because in India, average capacity utilization is 55%. And I just said very naively to myself that I wish I could own such factories one day, you know. But I came from a background where, you know, you can't really spend like 300, 400 crores in setting up plants, right? And intuitively, my career choices really always revolved around factories. So I started my career working at this company called AGL India, which is India's largest building material manufacturer. So I was working out of their plant in Himmatnagar, Gujarat. And when I went to the US to do my economics, I started working at this company called MS International, which is again, one of the world's largest building material company. Coincidentally, where I landed on the back, back inside for a factory was, when I was in the US, I was the only Gujarati at the company I was working for. And at that time, due to China plus one, a lot of our procurement was shifting to Gujarat and India in general, right? So that got me into like a lot of customer base networks. And yeah, that's my story.

Dhruv Sharma: As a final closing, I was just going to tell Neil, so chips on the shoulder. Josh Wolfe of Lux Capital has this saying where he says chips on the shoulder, put chips in the pockets. So with that, all the best to Neil. So you were saying?

Utsav Somani: Yeah, as a final closing one, I mean, looking like 10 years down the line, what does the future of Magma look like? I mean, and I mean, I'm guessing you have investor conversations, do they ever question that you're doing too much too soon? Because a lot of the VC knowledge that's been thrown around is always about focus, focus, focus. How do you answer that question? And what does 20, I mean, 10 years down the line look like for you?

Neal Thakker (Magma): I'm glad you asked that, right? And I'm going to hint back at my previous answer where I say that at Magma, we focus on what keeps the factory up at night, the essentials they need to run the show. And when you look at our solutions, one way we look at things is these are not separate businesses, but deeply interconnected needs, each reinforcing the other one. So when you're building solutions across the entire cycle, what you're doing is justice to a guy, entity that spend their life savings in something which they're struggling with. And when your ethos is as real as it gets across the entire life cycle, when I look at 20, 30, say 10, like even five years down the line, Magma is truly building for Bharat, that manufacturing dream. A lot has been talked about China plus one shift of manufacturing make in India. It's definitely real, but currently not magical. Factories do need to realize, factories are definitely realizing supply chain inconsistencies. But I feel like the tailwinds are real for those who want to execution problem, not just for the narrative. Manufacturing, like I said, is very raw, real. And if you're young, you want to roll up your sleeves and go on the ground. I think it's the best time to be building for Indian manufacturing right now.

Utsav Somani: Awesome. Wishing you all the best team. Thank you so much. Thank you so much for tuning in. And hopefully we'll have you back on the show again soon.

Neal Thakker (Magma): Appreciate you guys having me on. Thank you.

Utsav Somani: All right. So switching from one needle to another, we've got our next Titan of the industry who's capturing a very different kind of industry and he's educated all of us. He's given us advice while we started the show as well. And he's been a good supporter as well. And also a gym buddy who I look up to. Let's welcome Neil Govia of iFix and Layers. Neil, welcome.

Dhruv Sharma: Thanks, Utsav. Thanks, Dhruv.

Utsav Somani: I want to ask Neil, influencer marketing versus content creation, what does it mean? Do they differ or are they the same?

Dhruv Sharma: Influencer marketing is different because you are running the show behind the camera. You help creators get money. You help brands spend their money the right way. Whereas content creation is something which completely changes the dynamics. Now you are running your own show. You are concerned about engagement. You are concerned about subscribers, views. The motive. So influencer marketing is like you are trying to connect brands with creators and trying to make sure that both of them are happy.

Utsav Somani: And what does, I mean, so for our listeners tuning in, Neil runs iFix Media, which is one of the largest influencer management agency in the country. And he manages many big names like TechBurner and others as well. So Neil, what's the scale of iFix now?

Dhruv Sharma: Currently, we are at an ARR of 140 crores. So we are a young team doing this since last six years. We manage around 170 creators right now, help more than 40 plus brands every month. And this is what I know. This is what I've been doing since day one. So I love what I do. This is what you do extremely well. Neil, how do you scout for new creators? This is a really good question because since we are in a business of content, so we like effortlessly, we consume lots of content every day because of which we know what is culturally trending. And if I watch 100 reels, I can tell you easily that these 10 creators are really good, even if they have 1000 views and rest of the 80 creators who might have a million views, they are not so iFix friendly because you need to spot the trendsetters earlier. Our criteria is someone who is slightly unique, caters, does not ignore Tier 1 audience because that is where the money comes from. If someone reaches out to Tier 1, Tier 2, Tier 3 at the same time, say someone like Sameera, everyone can consume his content, it's golden. So these are Tier A creators for us. Tier B can be someone who only reaches out to Tier 1, but is not so relatable for Tier 2 and 3. And third, there needs to be a story. A lot of influencers do not create content with their voice. They are just doing random trending audio. So we usually avoid them because there is no personality in that case. We need more personality, personal connection so that whenever we review a content, we see if this person will do a meetup, how many people will show up. If we feel more than 100 people will show up, we'll onboard them. But if we feel no, they are following them for different reasons, maybe personal connect is not there, it's mostly trend-based, then we try to avoid.

Utsav Somani: And do certain categories of influencers or content creators work better than others or make more than others?

Dhruv Sharma: Yeah, a few categories are universal like tech, because tech brands need credibility and credibility, like their narrative is dependent on creators. Similarly, automobile, whenever someone, a new car comes in, there are lots of reviews out there because consumers want to see them. Uh, most of the money goes into tech and fashion. Uh, fashion, beauty is sort of one category because a lot of makeup brands, Nike, Tita, these sort of brands, they want to make sure whenever there is a new launch, you know, there is a creator activation. They don't only use creators only for content, they use them for events as well. If they're hosting an event, now the 60% of the guest list would be just creators and they get free coverage. So these are the most hot categories. And entertainment being a universal one for brand awareness or ads, like you want something to spread across the country, you use entertainment as a medium where the overall goal is just awareness. No, you know, not consideration or conversion. Neel, two questions for you. I'm actually opposite ends of the spectrum. So, you know, by the way, one thing that's common between your industry and the venture industry is that even in the venture industry, VC is always talking about meeting founders earlier so that they can build relationships with them earlier. So in the context of your industry, how early is too early? And so that was part one. And part two is, I mean, on the other end of the spectrum, I would imagine it's kind of like pro athletes, right? Like you're an acknowledged, celebrated athlete and maybe agents would want to, you know, represent you and things get competitive. So how do you play that side out as well? So for maybe an agency like us or maybe the top four agencies of the country, if an influencer is somewhere between 25 to 30,000 followers, that's a good point for us to start considering them and, you know, onboard them. If someone is around 10,000, 15,000 followers, it's too early. We might want to wait. And at the other end of the spectrum, if we are managing influencers over 5 million followers or 10 million followers, the product which they need is different because then they are not looking at, they're competing with, you know, everyone wants to onboard them. They literally get pitching calls every day. Every agency wants to pitch them every day. So then we obviously need to make sure that where does our product stand? It's not only the timing. In venture industry, if you invest once, you have your equity, there are until and as you decide to exit. Here our creator gave us a 30 day notice whenever they want because they need flexibility. So there's a lot of time to take an influencer from 50k to 10 million. The moment he reaches 10 million, he says, okay, I got to go and he joins another agency starting from 10 million. So we need to make sure that our product is ever evolving. There are eight different teams which we give to every creator. With different tiers, the team keeps changing so that we make sure that our retention is the highest. And that's a fact which we measure on an yearly basis how are we able to retain different tiers of creators.

Utsav Somani: And do people compete on fees? Like, I mean, you mentioned the offering and the product that you have to do. And I'm guessing managing influencers is also like managing us, I mean, running a sports team, I mean, a sports talent agency. And how do you retain them? Like, what's the secret sauce? Like apart from just giving them acceptable turnaround times and other things?

Dhruv Sharma: Usually, top agencies do not really mess up a lot that there are too many leakages, especially with their top talents. The recipe is the same across agencies that first is the relationship, second is the intent. The influencer needs to feel that they are important for you. The moment they feel you are too busy for them, that's when their insecurity triggers and they open up to other agencies. Price is not a big deal because it's anyway a 10 to 15% margin business for A-plus creators. For smaller ones, we can go up to 20, 25. So fees is not something which bothers a lot rather than who is able to plan their future events better and trying to tell them that why they can fail next year and how we are able to create a game plan basis on that. Because the toughest part for being a creator is to stay relevant for years. They're like, I'm doing this since last six years. I see creators becoming irrelevant within two years, three years. They don't know what to do then. Do they go for a job? And the fact that they used to make 10 lakhs a month suddenly reduces to two lakhs a month. At a young age, it's hard to absorb that, they're no longer relevant. So if a creator feels that their agency is looking out after them, they know what's the competitive landscape within creators and they're trying to secure their future via relevant events, relevant activities, which they can do as a creator. They feel happy and they value the partnership and the loyalty rather than, because it's tough for them to switch partners and then establish trust from scratch. Trust, it's a trust deficit economy in general. So wherever they find trust, they like to stick to them. Anil, as you're building out the iPlex organization, do you think you're better at one platform versus the other? Say you're just better at YouTube and if you're equally good at all, then how have you built those capabilities out? So we are good in platforms where the money is flowing. So in the first year, the money was flowing on YouTube first because the Instagram reels were not there. So I used to ace YouTube. I knew every creator where the money is going because I need to pitch that to brands. Now the dynamics have changed. It's 70, 75% Instagram, 20% YouTube, 5% rest of platforms. So the entire team goes inside out of Instagram and YouTube. We think the market for LinkedIn, Snapchat, Twitter is too small. So we usually don't care about that. So it's primarily Instagram and YouTube. And how do you stay ahead of the platforms? How do you stay ahead of the platform companies of YouTube and of Instagram, the algorithm and any tweaks they make to it and where the money is going? So we don't have to, like we work with these platforms. We're not trying to, hitting the algorithm is creator's job, not my job. The moment we sign, we don't want that. They're dependent on us for making them relevant. They need to have some talent. They need to have some raw talent. If that exists, then we create an ecosystem around them that pushes them and makes their life convenient. So creators are really good at this because these are trendsetters and algorithm gets decided by trendsetters. So it's not as tough as it looks like from the outside.

Utsav Somani: All right. So we've learned about influencer marketing and management. Neel, you've entered a new crowded space. I mean, new for you, but a crowded space. You're making smartwatches now with TechBurner called Layers. And the watch is called Anark. But give us a lowdown. What made you decide that you want to enter this space? Like why that category? Why that product? And why now?

Dhruv Sharma: Especially if you look at all the Indian wearable brands, even in smartphone brands, most of these brands were able to get, create a lot of impact at entry-level price points. And at entrylevel price point, you're not building a lasting cause. Then a Chinese competitor can come in, can take you with their pricing because of the economies of scale and the longevity is not there. Why smartwatches? Because we started with smartwatches because we want to build a new age wearable brand for the Gen Z and millennial. We felt that the brands which are out there and the sort of products which consumers are offering, but consumers are getting, they are not reliable. Every watch literally looks the same. And when we did speak to TechBurner superfans, we realized that no one, they buy the product once, but the experience is not nice enough that there are enough repeats. They wait that they save up to 10,000 rupees so that they can buy a Samsung watch. And that's when we realized that if the market is so huge between 1,000 rupees to 3,000, 4,000 rupees, why not we create a stylish yet reliable brand specifically for Gen Z millennials? Our strength being that we know the consumers in the community really well. We already have an initial base of some followers of Shlok which we can use who are willing to help us in this journey. So that's why smartwatches and that's what we are trying to do with Anark. Neel, I would imagine, so when people launch a new product, launch a new business, but nobody really knows them, they don't have, I mean, they just have one thing to focus on. There's not too much attention, not too many external pressures. I would imagine for someone who's already fairly well known, like your partner Inles, well, you have a lot of distribution, which can be helpful, but you also have a lot of attention. How does that dynamic really affect you when you're on the drawing board, really? The only thing now I realize, now I can tell you because the product is already launched. The only thing different if you're working with a famous personality is that you need to ace your strategy on day one. If there would have been no Shlok today, I would have silently launched the brand. Few thousands of meta spends, got feedback early on within day and by day 60, I would have changed my strategy and I would have done a proper launch. But since your leverage is marketing, so you need to launch with a bang. But if you launch with a bang, the chances that you fail needs to reduce because if you fail, then that sort of attention can go against you as well. And we learned this with the first launch as well, that how to balance out marketing with the right product strategy that if you're doing too much of marketing and you can't say that, I will try and do better next time because if it would have been a new brand, only thousand people I would have known the story. In this case, millions of people will know your story on day one.

Utsav Somani: Yeah, a double-edged sword. But in India, influencer-led brands or unlike the US where like Kardashians have, I mean, all the Kardashians have separately their own billion dollar businesses in different verticals. India may influencer-led brands have not really made a mark to that extent, right?

Dhruv Sharma: Not until last year, but this year, a lot of brands have at least crossed a 100 crore ARR mark. Beast Light being one of them, they are doing pretty well. They launched last April and it's their 15th month and they've already crossed that mark. Kusha is doing well. Parul Gulati is doing well with Niche Hair. It's a very niche category, but I guess they are also at the right path. I think influencers also need- Super You, our favorite.

Dhruv Sharma: Yeah, Super You. Super You, I don't say that as an influencer. In that way, even KMU is doing well, though it's Naica Bank, but still a good start. So yeah, I feel that now maybe we can relook into this after two years because this year we have seen lots of brands in promising categories. Before that, I feel in the end, at least in the creator economy, they were not lots of brands with the right partners out there. This year looks good. You know, guys, it's been a while since I read this, so I hope I'm not getting this wrong and we can always check. So K-pop, right? Korean pop, which is almost like it's a Korean export. It's very much a part of their soft power. Apparently the state thinks of it as something to be spending time on. And just like, you know, the Chinese train Olympians, future Olympians, right from age six onwards. In Korea, they actually have creator academies where they spot talent as early as six and eight. By the way, we had some gaming entrepreneurs on the show earlier this month, and they told us there are academies for gamers. Are they creator academies? Is that something you would do at some point? We need to start thinking of giving back. There are creator courses which a lot of these creators are building. We did try a creator academy last year, where we onboarded roughly around 600 creators. But we realized that these creators, one, for us to sustain this in the long run, either we'll have to take some fees from them so that we can truly create impact. And we realized that these are people who are too early in their journey. And we did not ask them any money. We told them that we'll give you the ecosystem and the information. Whenever you go big, you stay with iFlix. But let's mention something super important, raw talent, which is the biggest ingredient you need here. But when we tried it, we did not feel that it was sustainable for us to do it at scale. My goal was that we do with these thousand creators per year. But for us to make sure creator is consistent and not taking this for granted, because there is no transaction involved, we realized that a lot of them say, we're too busy now, exams are coming and whatnot. So we felt that a lot of leakages are happening because of that, and we are not able to do that well. So, but the good part is that if someone has talent, they can reach up to 20, 30,000 followers easily. You just need to do viral videos and you go there. And that's when you are anyway getting attention from agencies like iFlix. So our entry threshold is anyway not too high that you need to spend years reaching a million followers. 20, 20k is like four, five videos. You're just five videos away. So you show your talent with wire. If you have talent, you show it and algorithm pushes you. But that's when you can get signed via agencies like iFlix.

Utsav Somani: When are you signing the offline network?

Dhruv Sharma: I thought we are already together.

Utsav Somani: No, no, thank you. And what's next for iFlix before we let you go?

Dhruv Sharma: We are currently spending a lot of time on virtual influencers.

Utsav Somani: AI influencing is becoming big, right? These, I mean, pages run entirely with AI generated influencers.

Dhruv Sharma: Yeah, and plus now this year it can be executed because of the tech involvement over the last few months.

Utsav Somani: How do you sign in this case?

Dhruv Sharma: Then we own that IP. So we create these avatars. We will have to hire story writers who create their storyboard. We own that IP. In this case, our gross margin from 15% turns to 80, 85%. Since we already have a supply chain from brands, we know what they would be consuming. So currently we'll be starting with two or three influencers in different categories and do a trial run. There are already good examples based out of Europe. They have one company has created 20, 30 influencers and they are sending them to brands for shoots, ambassador for brands. And eventually every brand works with them out of FOMO as well. Like let's have 20% of virtual influencers in the campaign. So currently that's what we are working on. Let's see how it goes.

Utsav Somani: And I mean, doubling down because you opened up a can of worms, AI generated content. How do you deal with, between your creators creating content using AI versus natural content?

Dhruv Sharma: Are creators creating content?

Utsav Somani: Is there a dilemma that's going to open up in the future where you see creators getting lazy and start using AI more often?

Dhruv Sharma: We anyway do. A lot of creators like Varun Maya, Web of Sicinty, they're creating content with AI. They've created their AI. But I feel in the end is consumers are getting value. It's completely fine. Consumers are not watching them because they're putting effort. They're watching them for value or entertainment. If that emotion remains consistent, whatever makes that happen should be acceptable.

Utsav Somani: Awesome. Perfect, Neil. Thank you so much for tuning in. Hope to have you back soon and all the best for Layers and whatever you launch next.

Dhruv Sharma: Thank you so much guys for having me. Take care.

Utsav Somani: Yes. All right, folks. So we missed out on some of the new segment in the beginning. And I think we quickly want to run them down Dhruv, can we get started with that?

Dhruv Sharma: Yes. We had lots of news to cover, but I suppose we still have time to go over a few things at least. Do we want to start with Vibe Coding maybe?

Utsav Somani: Vibe Coding. That's the most interesting one. A company in Surat has raised 15 million from Salesforce and Axel called Rocket. And Vibe Coding is, I mean, a very interesting term that I think Dhruv can unpack for us. What does Vibe Coding really mean?

Dhruv Sharma: Andrej Karpathy, who's like a rock star amongst developers, was the first to use this term. He used it very loosely for side projects he was doing. I think sometime in Feb, the term really caught on. Many people mistakenly think it's the same as AI-assisted programming, which a lot of professional developers will use also. Yeah. But look, I think when I talk to developer friends, they think this sort of thing is best. It's best for side quests and hobby projects, not really for production code. What I typically hear is, security vulnerabilities, for instance. So if you're taking someone through your code base on a screen share, if there are fields that you can't expose, then you definitely don't want to be feeding that into an LLM. And then there are other things as well. It's not maintainable and so on. But it's great to see.

Utsav Somani: Yeah. I mean, an Indian company, right? And numbers are good. Three months, 4.5 million ARR. They have another one in India called emergent.sh, which I think is at 10 million ARR. Then the global counterparts, Replit and Lovable, the two more bigger names in the space. They're both over 200 million ARR. So, I mean, fascinating space. I don't know how much of this is sticky, but it's at least worth noting that all of these tools will probably make the computer engineering degree a lot less worth than what they are today, so to say. But UltraHuman turns profitable. A company that I love and of course have supported as well in the early days. You're wearing it, aren't you? I'm wearing it. Show us. That's the UltraHuman ring. They've launched UltraHuman Home as well to diversify away from the ring business. The ring business is 91% of their revenue, which is 565 crores. And they've hit a profit of 73 crores. One of the very rare companies in India to go global, be profitable. Hardware companies are that. Hardware companies are that. And they've got customer love as well globally and their bigger counterpart, Aura, based out of Sweden, I think, has raised a second round in less than a year and jumped to a $10 billion valuation, almost close to $11 billion, actually. Almost hitting $1 billion in annualized sales. Crazy how this has evolved. Just a small piece of hardware on your body. Indian market is less than $100 million, so much smaller.

Dhruv Sharma: What's the most unique form factor you've come across amongst all of these wearable companies? The patch was pretty cool. The patch was pretty cool, but it was, I mean, different purpose, right?

Utsav Somani: I mean, you have glucose, real-time glucose sensing on the body. So diabetics still use it. But for me, I think I was not learning much after two weeks. Like I know when I've had a pizza, I'm going to have a bad glucose spike. And when I've had a protein shake, it's going to be okay. So I think... So what do we have right now? We have glasses. We have rings. We've got glasses. We have watches. Measure anything. Now the new AirPods are measuring your heart rate as well. Honestly, you're going to be a quantified self pretty soon. What Brian Johnson wants. Yeah. But interesting form factor. Better than wearing a watch or whoop to sleep. It's just uncomfortable. But I think the data capabilities of those devices might be slightly higher. But continuous innovation required, right? You can't just stop at a ring. Like I think we have to figure out what new data can they collect. And only so many sensors can be miniaturized that quickly. But still a lot more to go in terms of penetrating the global markets. We've covered this before. So Swiggy was an investor in Rapido. They've taken an exit at 2.5x multiple. They invested 950 crores and have gotten 2400 crores out of that. And why do you think this happened?

Dhruv Sharma: Oh, well, you told us in one of the previous episodes that Swiggy made this investment when they didn't have competing businesses. Well, now they do. And so maybe it's a sign of the space starting to first heat up, then consolidate a little. But we've covered Rapido before. It's definitely been a very interesting trajectory.

Utsav Somani: Solid. I mean, to get a mention from the over CEO on their Nikhil Gupta podcast, I think was memorable. And also, I think, worthy mention on many of the places that they've received. Nothing. That's the name of the company that we're going to talk about. 200 million and 1.3 billion. I mean, these 100 million numbers are fairly common. We'll jump to the next big number very soon in our next headline. But Nothing is a company that's probably the only independent phone company in the last decade that's made a mark. And they've made it via their unique hardware, their unique software. And now they're playing that whole Apple style play where they're going to This is the Kalpeh company. Yeah, he keeps coming to India too. And he, I mean, India is one of the biggest markets as well. They've got these unique headphones where you can see through stuff. Even their phones have lights at the back. So unique. They've done catchy stuff. Kalpeh was the founder of OnePlus. So very interesting for him to fight the same industry twice. They've done one billion in lifetime sales. Brutal industry. Brutal, brutal industry. Margins are wafer thin. And especially combining hardware plus software. I don't think even Samsung has done that properly with, I mean, they use Android also. And Apple, of course, has been the longstanding giant in this space. The final one, circular economy. How the world goes around. NVIDIA and OpenAI. 100 billion invested by NVIDIA in OpenAI. 100 billion was just for reference, the fund size of Masayoshi Son's Vision Fund. The first fund was, I think, 93 billion. And I think touched and closed 100 billion. But imagine just one single company investing 100 billion in another. What's the story behind the headlines?

Dhruv Sharma: There could be two. One could be something we've again touched once before, which is turning your balance sheet into an income statement. The other thing could be, you know, if we were to, if I were to sell you water and you were to sell me ice cubes, and if you were to keep going back and forth, back and forth, still circular value creation takes place.

Utsav Somani: And Sam Workman recently, yeah, Sam Workman recently posted Abundant Intelligence. This article where he says that 10 gigawatts of compute can possibly get you on the path to cure cancer as well. And he wants to get to a state where a gigawatt per week is the capacity that he's deploying. So he'll need the 100 billion. And I'm guessing most of it flows back to Nvidia as well. And that's how the world goes around.

Dhruv Sharma: Yeah, I'm yet to read the essay. But, you know, I think all of us should maybe later today. But I did catch a glimpse of, you know, the presser that they had, Sam, Greg Brockman, Jensen Huang with, you know, someone from the media. And Greg had a very interesting point, which is like, he totally thinks every human being is going to need one GPU soon. So we need something like eight or 10 billion GPUs. And so what is the $100 billion between 10 billion friends who each need a GPU?

Utsav Somani: And Elon Musk, I think, remotely mentioned that the concept of money, I think in the future, when we're all living with super productivity, all of this is hard to imagine right now. But maybe like, I don't know, 300 years down the line when we are AI making a food efficiently or your energy is free and all of these things, concept of money might even go away. I don't know how much truth there is. But fascinating. Any closing thoughts?

Dhruv Sharma: Yes, I do have one closing thoughts. We're talking about nothing and you know, the Apple iPhones came out. I saw a video, I think a couple of days ago where someone showed MKPhD. In fact, let's try this if we can, if you have a minute, can you bring your iPhone out? If it's, is it handy? Go to, just go to the alarms and try and set a new alarm and go to, you know, where you have the hours. Yeah, and you know, typically you scroll and there's a circle, right?

Dhruv Sharma: Just scroll really quickly. Yes, scroll really quickly. Hours, just scroll, scroll, scroll, scroll. It won't take more than 15 seconds.

Utsav Somani: It's bouncing between AM and PM.

Dhruv Sharma: Yeah, let it keep doing that. Let it keep doing that. Until when? Until you know when. Just keep going. It's not going to take that long. I think it's just bouncing between the two. I don't know, keep going, keep going.

Utsav Somani: What happens? Like, I mean, there's...

Dhruv Sharma: So it hits, it hits four at the end. So this is not a circle, it's a line. And so MKPhD's response is, man, they've held this together through duct tape and they say artificial superintelligence is coming. So there's two ways to look at everything.

Utsav Somani: Yeah. All right, with that, let's end this awesome show. Thank you so much for tuning in. I hope you guys had fun tuning in and learning from both Anil's different industries. And hopefully we'll bring you more such awesome guests as you tune in on Friday at 4 p.m. Thank you. Cheers, everyone.