The 10.8X Playbook: Scaling with Speed w/ Prasad Vanga, Anthill Ventures

SCS (Intro): 

India is on the move, now the world's fifth largest economy, set to hit $5 trillion in GDP by 2027, with over 900 million people under the age of 35. It's a powerhouse of innovation and entrepreneurship, and of course, a market that cannot be ignored. And yet, all the startup ecosystem has seen record breaking investments ₹136 billion in the last five years.

There remains a glaring gap I care about despite outperforming on capital efficiency and returns. Women-led startups still receive less than 10% of total venture capital funding. This is why my firm, Beyond The Billion, launched in India late last year to catalyze capital at scale for women founded companies and shift the paradigm for the next generation of wealth creation.

Which brings me to my conversation today, right in the heart of India. Few understand scaling better than my guest today – Prasad Vanga founded Anthill Ventures in 2015 with a bold vision, investing in an accelerating early stage. Startups at speed with 40 plus investments including Travelio, Doctor C and Rooter and multiple programs. 

Anthill is redefining growth in India's media, health tech and urban tech sectors. Now, as Beyond the Billion’s newest consortium member, I'm excited to introduce Prasad Vanga.

SCS: 

Prasad, Prasad. The last time I saw you, we were in beautiful Sweden. 

Prasad Vanga: 

Yes. 

SCS: 

On a boat actually, right? Always in beautiful places because we're chasing the puck here in venture. 

Prasad Vanga: 

Yeah. 

SCS: 

Tell me more about Anthill, your story, and why we're here in Bangalore, actually.

Prasad Vanga: 

Firstly, thank you so much for giving me an opportunity to be part of this forum. It gives me great pleasure to be one of the few men to be part of a forum like this, which is doing so much for women. Especially the women founders and the women investors need this, in today’s time. Anthill was a baby born out of pure passion for entrepreneurship.

My past life was with corporates. I was with G Capital and Genpact. We took it public in New York. We got a single ticker, single G and it really scaled up rapidly. It was a large startup because initially we were only servicing G companies and then later we would service every company in the world.

With speed, over a period of five years, we went from 20,000 people to 75,000 people. We went to countries that we've never been before. We went to places like Dalia. We went to Manila, we went to Tokyo, we went to Mexico, we went to everywhere we set up these centers. 

I learned a lot about culture. I learned a lot about the threads of change management. That are very important for companies to understand, and founders to understand, right? So we said, okay, what can we bring to the startup ecosystem that we've learned from the large companies? And we felt it's about scalability and speed.

Anthill was formed with that vision of putting these two words together, which is scale with speed. And to scale with speed, you just don't need capital. You need to get your product right. You need to get your marketing strategy right. And you need to get, most importantly, the distribution, the sales distribution right.

So these were things that we started offering to early stage entrepreneurs, in addition to capital. And that differentiated Anthill from the remaining. But also, we are an ecosystem player. Because we can't do this alone. We need corporates, we need the government. We need great unicorn founders that can give back to the startup world, right?

And we need investors who will understand this. So Anthill was born with that, uh, premises and that's why it's called Anthill because Anthill itself is so important for the geographical ecosystem to survive. 

SCS: 

Absolutely. So I want to pick on a couple of threats here. One is your lens as a founder of building a significant company at that scale, to then inform this journey as a venture investor. What are you taking from your time as a founder that informs what you're doing right now as an investor? 

Prasad Vanga: 

I think to be part of an executive team, and to think with your feet on the ground, but at least to be adaptable all the time, is a very important quality.

I feel companies that will be successful in today's market are the ones that will respond to change really fast. And that's why sometimes I see this huge difference between large corporates and startups, is that the large corporates do not have the adaptability in the organization to respond with speed.

And startups can change overnight. We've got so many examples in our portfolio, which started as a pivot became like the main business of the company. We have a company called Rooter Sports, which was basically into fan engagement on regular sports. And they said, why don't we just pivot on e-sports because that was not working so well.

They just did that and then it kind of streamed really well. And, you know, it became one of the largest players in India today, on e-sports. So similarly, I think the journey of a founder and investor, if you can combine them together, I think you can make better decisions in selecting the right founders.

I see a lot of corporate venture capital failed for this reason, because everything needs to be aligned to corporate objectives, right? And sometimes the deficient point is not about the founder scaling up. The deficient point is, can I make this in house, or can I just acquire this company? At that decision point, venture capital fits.

SCS: 

And it's interesting that you brought up corporate, because I was just mentioning, we had Intel Capital and Nick Washburn, the senior MD there, speak about how they built independently of the corporates, where, you know, their very job is to take risks. 

And that's the only way that Intel Capital, I mean, they've, you know, invested in Red Hat, VMware, long ago. and that's why they've succeeded and continue to succeed. 

So, Anthill Ventures, you know, what really excited me when you reached out I thought was great because your story is so unique in that you're actually early on from day one building as an ecosystem player. And in fact, you get contracted by corporates as well. 

Can you tell us a little bit about the structure here that you're thinking of and your vision for Anthill? 

Prasad Vanga: 

We have a simple framework. Source, invest, scale, syndicate. And it harvests the same ecosystem. So what we decided is, speed is there with the early stage companies. Scale is there with the large corporates. And we need to find a platform to bridge both of these together. 

So we started going to corporates and asking them, what are your big challenges? For example, how do we increase our coca production, or how do we find alternatives to plant based sugar?

Similarly, we had other large corporates say, can we focus on food innovation? Can we focus on sustainability and climate change? So we got closer to the corporates that allowed the startup ecosystem to get distribution to the customers. So the startups loved that and they applied for these programs. And then we pick and choose the ones that we want to invest in. So we get to also see a lot of deal flow around. 

We do not have domain knowledge in any vertical. The domain knowledge comes from our partners. For example, there was a small company from Nagpur in India, and they came up with a kit that can do a swab test, and find out within five minutes whether you have oral cancer.

And how can I evaluate that? Because I have a partner like HCG hospital, which is into oncology, they did a clinical validation over a period and it became 98 percent accurate. And now it's going to launch in November. We've really excited about it because it's also going to save many lives in India, which are chewing tobacco and things like that.

So this allows… It's a very interesting mix of how you leverage corporate strengths for startup scalability. 

SCS: 

Yeah, and did you start with working with corporates first, and then the fund, like, you know, of course we have an audience, a sophisticated audience of GPs, right, as they're thinking of building their platform.

We talk about platform strategy a lot. I mean, Sequoias, the Scouts, they've thought about this long ago, but you've done it in a different way. Which came first? What were your lessons learned, if a GP is listening, don't do it this way. What are your warnings here? 

Prasad Vanga: 

Because I came from an operating background, I didn't come from the VC world or the B world, so I didn't have any money management capabilities. But I know how businesses are run and how businesses can scale

For me it was easier to get into this world and understand whether a startup has scalability. And whether I can bring speed to it by bringing a large coporate. So what came first? First, we went to the corporates and asked them their challenges.

What do they want to look for? Where are they investing? Right? And then we started going and sourcing the startups. And then we grew on that at the same time.

SCS: 

Right. So very much a venture builder approach. And then you had a plug on of, you needed the capital to move quickly and close some deals.

Prasad Vanga: 

Absolutely. Whenever we created a challenge, for example, the corporate thought this was a problem, but there was a startup founder, somewhere down there, who would actually think that's not a problem at all. And then they would, they would basically say, oh, that industry is not going to die.

So the disconnect is just amazing. And corporates need to, I think, learn more and more from this ecosystem that what they think is a problem. That they have to spend billions of dollars to solve, is actually probably wasted money. 

SCS: 

Is there an example? I mean, this is interesting. Like, that's local to India, perhaps? 

Prasad Vanga: 

For example, content in India today, like movie content. It's sold only three or four different ways. There's language rights, regional rights, you know, things like that. But if these rights can be sliced and diced by blockchain and can be sold and managed independently, you can actually monetize one piece of content in many different ways.

Which the West has actually done quite well, right? But India, Indian movie industry is one of the biggest in the world. That we're able to solve for when a founder came up, came back and said this is a problem, you know, which can be viewed differently, right?

SCS: 

And talking about sourcing, of course, what we connected on was the fact that your portfolio is very heavily represented by women. Tell us a little bit about how you actually screened to create this successful portfolio. 

Prasad Vanga: 

Honestly, initially when we started, we didn't even have that filter. We said, okay, we'll listen to ideas and find the ones that we like. It just happened. That a lot of the companies that we funded either were like a brother and sister, husband, wife or a women founder, completely sold women founder. 

So that's, this is the early stage ones that we did and it's, we ended up almost being like, what, 30% of a portfolio being women founder. And we have 90 companies in the portfolio. And then we said, oh wow, this is interesting. And then we had a woman, LP who came on board. And she said, listen, I want to see this to be an equal opportunity. Is there a way that we can encourage more women founders to apply for your programs?

So we created a specific program called Athena, for women founders. And a lot of companies apply for that in urban lifestyle and urban tech. And then we picked a few that we liked and then we helped them grow and we brought the percentage up to 45%. So 45 percent of our portfolio is women.

Interestingly, over the last seven years, we only lost 2 percent of women-led startups. So what we saw is that women not only ask the question, “why?”, which men don't ask most of that. Men just rush into it.

And this is a very interesting angle we saw. The second angle that we saw is that women stick on for much longer when they pick up something they think a lot about why they're picking it up. And when they do it, they want to stick on to it. 

SCS: 

Because the why is strong. 

Prasad Vanga: 

The why is strong.

And these two actually, I think, led more companies to stay in our portfolio. And yesterday we found that one of our star women founders, Aastha, who runs this company called The New Shop, which basically is like a 24/7 shop. Last week they announced that they are acquiring all the 24/7 outlets abroad through Philips.

And today they announced another big deal. So she is like a superstar in the portfolio. She's an inspiration to many and many women entrepreneurs, or women or housewives in different cities are actually going and franchising The New Shop. 

SCS: 

Interesting. You saw the opportunity of investing in women, and of course it was driven by your LP, right? Which is why at Beyond The Billion we focus, you were at the round table on family offices.

We actually connected because of the Family Office Alliance because we know, when the LP says diversity should be a condition of my capital, things change. 

Are you seeing this wave in India with women stepping up or is it not enough SLPs? Tell us a little bit about the landscape here you're seeing. 

Prasad Vanga: 

I think one of the important things is that whenever we bring on board a strong woman founder or a strong woman investor, they're always out there to support.

But there, it should involve men who are supportive, who can take that decision point saying that, listen, I'm going to back women founders and give them the ecosystem for them to survive.

I think financial independence in this country is, for women, the single most important thing that I can provide. I always want everybody, every woman to be financially independent so she can make her own decisions. And this is a great way, venture is a great way to do that.

SCS: 

Yeah, to build wealth. 

As we were looking at the family offices, I believe, it is last year based on the Forbes richest list that the richest has surpassed a trillion dollars. We have more billionaires than ever before here. And a lot of the wealth, especially Bangalore, this is tech town, right?

The Silicon Valley of India is built on entrepreneurship and innovation. So, are we seeing, I mean when you think about even your cap table for Anthill as a fund, is this predominantly corporate money, family office money, what's the landscape for India? 

Prasad Vanga: 

Yeah, 80 percent of our capital is family offices, 20 percent is corporate.

SCS: 

Is this reflective, you think, across with your colleagues? 

Prasad Vanga: 

Depending. Yeah, but, I just say, as India is new to the family office concept, there is a lot of opportunity, right? So folks who've been traditionally doing businesses never thought about even thinking about a family deed, right? It's not, they're not saying, oh shit, after I'm gone, how are my kids going to manage my wealth, right?

Or how is wealth being distributed? So now families are really waking up to the problem. They're learning from European family offices, American family offices, even Asian family offices, which have been like Hong Kong, for a long time, right? Indian families are controlling everything with one person on the top. But now it's going in, and then they're also allocating capital to private. 

SCS: 

Some people say that the funding winter may be coming to an end and we're looking forward with excitement.

But of course, after a lot of mishaps, right? There were fraud issues. There were real crazy valuations for nothing, worth at all costs. What do we need to know if we're looking to invest in India? 

Prasad Vanga: 

Sure. See, firstly, Indian venture, it's just the last 15 years right? I feel from a very immature venture ecosystem, we become mature. We understand and pick the deals and the entrepreneurs that can scale quickly. 

Obviously it's a land of more than a billion. You will find frauds here and there. As a percentage, if I look at the amount of fraud that is done, then you can actually compare it to the world and then say, no, based on the population, this is quite less.

But at the same time, the capital is coming in, into a lot of funds. Today you see a lot of funds say, oh, we're bringing in a billion dollars and things like that. India has the largest young population in the world, we're getting close to almost between 700 to 900 million youngsters, who are spending a lot of time on the internet, who are buying, who want experiences, who are more conscious of the planet, right?

So there's opportunity is immense from a consumption standpoint, domestic consumption standpoint. So venture, for that matter, is going to just grow. It was because of many reasons. One is that people said, oh my god, like I've invested so many startups, I'm not getting an exit out.

Because they didn't understand the ecosystem. They also need to understand that in venture you have to stay longer. They can't get over this, that the funds are 7 years to 10 years long. Whereas public markets are performing super well. So, obviously the financial decision for money is going to go where can I make more money? If it's a financial investor. 

But if it's a strategic investor, who wants to also rethink about strategy of the company and the impact that it is giving, then venture is a great way to do that. 

SCS: 

And of course you talk about the seven years being too short, but in seven years of you building, you've returned, what was it, more than 10x? 

Prasad Vanga: 

10.8. 

SCS: 

10.8. So this is multiples, DPI? 

Prasad Vanga: 

Yeah, this is just a multiple. We've exited out of nine companies. And their exit values are about 2.54x.

SCS:  

Wow. 

Prasad Vanga: 

Yeah, but overall portfolio is up by 10.8. 

SCS: 

That's amazing. So tell us about what you're seeing here. I mean, of course, you know, in a venture portfolio, you've got your winners, you've got your losers. But what is the exit landscape as we're thinking about liquidity?

The crunch for fundraising is also because, as you said, LP's put in the first round, maybe this is their first time, and they're like, well, I haven't got my money back. Why should I invest in more funds? 

Prasad Vanga: 

I think the strategy now is to understand where the exits are coming from, right? If you're an early stage investor like us, then your exits are usually Series C and Series D. If you're a late stage investor, your exits are probably IPO or PE, or M&A, right?

Indian M&A has not gone to that level like the US. People don't pay a high value. They try and see if they can do it in house. That's why the M&A landscape is still highly dependent on global companies coming and acquiring Indian companies. You've not seen many Indian companies acquiring or paying a huge price for another Indian company.

So that is the gap that they have, we have from M&A standpoint. But SME market and the IPO market is becoming very, very strong. There is a hope on the IPO market? People are investing a lot, so that's slowly becoming interesting as well.

So exits are just two kinds now in my view, is secondary exits for early stage investors, And IPO for the bigger funds at this point. 

SCS: 

So what’s your AUM right now?

Prasad Vanga: 

$120 million. 

SCS: 

$120 million. Looking ahead as we wrap up here, five years later, we're having the same conversation in beautiful Sheraton in Bangalore. Where do you see Anthill going? 

Prasad Vanga: 

Wow. So we're headquartered in Singapore. We work with the Singapore government very closely. For the last seven years, we've been bringing Singapore tech into Indian markets. Now, Singapore wants us to also look at consumer. 

So consumer lifestyle brands that have grown in Singapore, we want to bring them into Indian markets as well. And also Indian IP companies, that have better protection, to Singapore to scale in the Southeast of Asia. So definitely, Singapore will strengthen for the Southeast Asian market. 

In the Nordics, we have a lot of interest because the Nordics have some amazing technologies on climate tech, on deep tech, which have a huge potential in Indian operations, Indian market, right? So we've been trying to bridge that gap and that's why you see me traveling quite a bit to Finland, Sweden.

It's because we're trying to find the right fit, family offices in both sides, to interact with each other and bring some of those over here. 

SCS: 

That's excellent. We've covered a lot of ground in a short amount of time. Well, I won't let you go yet. Are you ready for Billion Dollar Questions, Prasad?

Alright. Biggest career mistake. 

Prasad Vanga: 

Oh, wow. This is difficult. 

Switching from technology to go back to my family business. I love the whole Alcovev business, but I love technology much more. so I tried to do that with my dad for a while and then decided, no, I'd rather be an investor in Alcobef versus actually operating it.

And now we've invested in four Alcobef companies.

SCS: 

Was dad happy with this decision? 

Prasad Vanga: 

Yeah, dad, definitely. Because he wanted to control. 

SCS: 

Haha, get him out. 

Alright. Fill in the blank. Success is. 

Prasad Vanga: 

Success to me is satisfaction for my soul. 

SCS: 

Satisfaction for my soul. I love that. Alright, failure is?

Prasad Vanga: 

Failure is not being able to get what you're manifesting and digressing into other paths.

SCS: 

And to bring us home here. I want my legacy to be?

Prasad Vanga: 

To have purpose. Anthill, or anything that I leave behind should have a purpose and inten, to impact people's lives in a better way. 

SCS: 

Well, Prasad, for being a purposeful investor, which is our theme of the work that we do, and my purpose, to encourage more purposeful investing, Thank you so much for your time, for joining me in Bangalore.

Keep making billion dollar moves, my friend.