Amit Mehta's (Asha Ventures) Path to Impactful Investing
I had the pleasure of interviewing Amit Mehta, a dynamic leader in the Indian venture capital scene who serves as the managing partner of Asha Ventures. Established with a focus on early-stage investments, Asha Ventures addresses critical societal challenges through sustainability, healthcare, and inclusion. Amit's journey, driven by his passion for impactful investments, has shaped Asha Ventures into a platform that supports scalable businesses with the potential to make a positive, lasting impact.
Check out the video of the conversation here or read on for insights.
🌟 Introduction to Amit Mehta and Asha Ventures
Amit Mehta is a trailblazer in the Indian venture capital landscape, serving as the managing partner at Asha Ventures. Founded with a mission to invest in early-stage companies, Asha Ventures focuses on three key themes: sustainability, healthcare, and inclusion. Amit's journey into this world has been shaped by a desire to make a meaningful impact through investment, supporting startups that not only aim for commercial success but also strive to address pressing societal challenges.
The Vision Behind Asha Ventures
Asha Ventures is more than just a venture capital fund; it’s a platform for change. Amit believes that the right investments can fuel innovation and foster sustainable growth in the sectors that matter most to society.
"We invest in scalable businesses that have the potential to create a positive societal impact."
🚀 The Journey Begins: From Investment Banking to Venture Capital
Amit's foray into the financial world began with a strong foundation in investment banking. However, his aspirations were always geared towards becoming an investor.
"I always loved learning about industries, the way companies operate, and listening to the stories of entrepreneurs."
This curiosity about the inner workings of businesses propelled him toward a career in venture capital, where he could engage more directly with innovative minds and transformative ideas.
A Pivotal Moment in Education
His journey took a significant turn during his MBA at IIM Ahmedabad. A course on equity research ignited his passion for understanding industries and business models.
"While making a research report, I really enjoyed the process of analyzing companies and understanding their structures."
This experience solidified his desire to transition from investment banking to venture capital, where he could leverage his analytical skills to support early-stage companies.
🔍 Early Career Experiences: Learning the Ropes
Amit's professional journey began at a financial services firm, where he spent two years as an analyst. His time there provided exposure to various sectors and companies in the public market. He reflects on this experience as critical for his development.
"It was a phenomenal stint that offered a steep learning curve and access to some of the best entrepreneurs."
However, as he progressed, Amit realized that the mutual fund business heavily relied on relative performance metrics, which didn't align with his interests. He sought a more dynamic environment where he could make impactful decisions.
🔄 The Shift to Private Equity
Transitioning to private equity marked a significant chapter in Amit's career. He initially worked at Motilal Oswal Private Equity Advisors, where he honed his investment analysis skills. Amit's experience in private equity allowed him to engage in more substantial investments.
"I learned the basics of analyzing companies and the importance of rigorous due diligence."
This foundational knowledge became instrumental in his future endeavors, particularly when he co-founded Asha Ventures.
📈 The Evolution of the Indian PE and VC Landscape
The Indian private equity and venture capital ecosystem has undergone significant changes.
"The Indian VC ecosystem is fairly old, with roots tracing back to the early nineties."
He highlights how the landscape evolved from institutional investments to the influx of domestic HNI money, which began to shape the funding environment.
Key Milestones in Indian PE and VC History
Early 90s: The inception of venture capital in India, primarily through institutional funds.
1999: The emergence of homegrown PE funds, such as Motilal Oswal, catering to Indian entrepreneurs.
2005-2010: A surge in domestic HNI investments, leading to a more diverse funding landscape.
2021: A notable increase in capital flow from domestic and international sources.
💡 Successful Exits and Lessons Learned
Amit has been involved in numerous successful exits throughout his career, which have provided valuable lessons. He recalls some of his most notable investments, including:
His first investment in Kogta Financial(India) Limited, which yielded over 10x returns.
Investing in Pickrr, leading to a lucrative exit to Shiprocket.
Taking Nazara Technologies public, showcasing the potential of tech investments.
These experiences have not only highlighted the importance of thorough analysis but also the need for strategic foresight in investment decisions.
📊 Understanding the Differences between VC and PE
Amit emphasizes the distinct characteristics that differentiate venture capital from private equity.
"VCs typically invest in early-stage companies with high uncertainty, while PEs focus on mature businesses with clear revenue traction."
This fundamental difference shapes their investment strategies, risk tolerance, and overall approach to portfolio management.
Investment Strategies
Venture Capital: Focuses on a larger number of investments to hedge against risk.
Private Equity: Concentrates on fewer, larger investments in established companies.
🧠 Investment Philosophy and Key Metrics
Amit's investment philosophy is rooted in a few key principles that guide his decisions at Asha Ventures. He emphasizes the importance of governance and the quality of the entrepreneurs he partners with.
Governance: A non-negotiable aspect that ensures alignment of interests.
Frugality: Entrepreneurs should demonstrate a frugal mindset, indicating sustainability.
Vision: Founders must possess a long-term vision beyond immediate gains.
These principles inform Amit's approach to evaluating potential investments, ensuring they align with Asha Ventures' broader mission of creating positive impact.
🌱 The Birth of Asha Ventures
Asha Ventures was founded in 2015 by Pramod Bhasin and Vikram Gandhi, two seasoned professionals with extensive backgrounds in finance and entrepreneurship. Pramod, the former CEO of Genpact, and Vikram, who served as Morgan Stanley India Head, envisioned a venture capital firm that would generate returns and create a positive impact on society.
Amit Mehta joined Asha Ventures later, aiming to scale their efforts and raise institutional capital.
"The founders wanted to invest in scalable businesses that could attract more commercial capital and create impact at scale."
This vision laid the groundwork for Asha Ventures' commitment to supporting businesses that prioritize sustainability, healthcare, and inclusion.
📊 Asha Ventures' Investment Strategy and Impact
Asha Ventures focuses on scalable businesses that address pressing issues in the community.
"If you want to change the impact the way the nation is, you have to invest in companies that can achieve scale and do good."
One notable investment is in Vastu Housing Finance, which provides affordable housing finance. Since their investment, Vastu Housing Finance has helped over 200,000 individuals secure homes, impacting nearly a million lives. Today, the company boasts an AUM of ₹10,000 crores.
Another example is Truemeds, an online pharmacy focused on generic drugs.
"In India, many families struggle with the cost of chronic medications. Truemeds aims to provide affordable alternatives without compromising quality."
This commitment to affordable healthcare has seen Truemeds grow from less than ₹1 crore in monthly revenue to nearly $5 million within a few years.
🌍 The Current Investment Environment and Challenges
The investment landscape has evolved significantly, especially post-pandemic. Amit notes the challenges in raising funds, particularly in a fluctuating market.
"While sentiment can change rapidly, our track record and commitment to impactful investing have helped us navigate these waters."
Despite these challenges, Asha Ventures has successfully raised a $100 million fund, largely from domestic LPs. Amit highlights the importance of relationships in this process.
"It's less about sales and more about finding like-minded investors who resonate with our mission."
As the investment environment continues to shift, Asha Ventures remains focused on identifying opportunities that align with its values and mission.
🔮 Future Opportunities: Sectors to Watch
Amit identifies several sectors ripe for investment, particularly in sustainability and healthcare.
"The move towards carbon neutrality opens up numerous opportunities for innovation and impact."
In healthcare, Amit sees potential in leveraging technology to improve access and affordability. He mentions the growing demand for AI applications in healthcare, particularly in diagnostics and patient management.
Additionally, the senior care sector is emerging as a significant opportunity.
"With an ageing population, there is a pressing need for innovative solutions in senior care, from assisted living to specialized healthcare services."
By focusing on these evolving sectors, Asha Ventures aims to continue driving impactful investments that contribute to societal well-being.
🛡️ The Role of Government Regulations in Investing
Government regulations play a crucial role in shaping investment strategies. Amit emphasizes the importance of being on the right side of regulatory developments.
"Regulations define the game's rules and can significantly influence business viability."
For instance, the regulatory push towards electric vehicles (EVs) has created substantial opportunities in that sector. Amit notes that government incentives have been pivotal in fostering growth, particularly in sustainability-focused startups.
As regulations evolve, Asha Ventures remains vigilant, ensuring that its investments align with both current and anticipated government policies.
💬 Advice for Aspiring Investors
Amit shares valuable insights for those looking to break into the investment field. He emphasizes the need for a genuine interest in understanding businesses and listening to entrepreneurs.
"Being a patient listener is crucial. You need to understand the vision of entrepreneurs to make informed decisions."
Additionally, he highlights the importance of analytical skills and the ability to make independent decisions without being swayed by market trends. Amit concludes with a reminder of the resilience required in investing.
"Even the best decisions will face challenges. You must have the ability to stick with your convictions."
🕰️ Reflections on Missed Opportunities
Amit has encountered numerous missed opportunities that serve as valuable lessons throughout his career.
"The best entrepreneurs often prove you wrong, and it's essential to remain open-minded."
Amit reflects on past decisions, such as passing on Atomberg, a company that has since thrived. He acknowledges that sometimes, the numbers don’t tell the whole story, and an entrepreneur’s potential can be underestimated.
These reflections highlight the importance of a holistic view when evaluating investment opportunities, balancing quantitative analysis with qualitative insights.
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