Within my failed startup portfolios, if a founder comes up with a new idea, I would back them again, says investor Alok Mittal
In this episode of the 100X Entrepreneur Podcast, angel investor Alok Mittal, Co-founder and CEO of Indifi, talks about his journey as an entrepreneur and an investor, his schedule and work ethics, portfolio, and much more.
An engineer by profession, Alok Mittal has always enjoyed solving problems. Before starting up his entrepreneurial journey, he worked in the satellite communication field during the early days of his career.
Later, he quit his profession and started JobsAhead, a job listing platform that connects employers with job seekers in India and abroad, in 1999. Six years later, the startup was sold to Monster.com, which was expanding in the Indian market at that time.
After selling his first startup, he took a short break from entrepreneurship during which he founded the Indian Angel Network along with his friends.
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“While I was looking to set up my next business venture, Canaan Partners was looking to set up their India presence. So, it was an exciting time to join venture fund business, so I joined them to set up their India business,” says Alok. He ran the India business for nine years, and in 2015, he exited from Canaan to set up his next venture, Indifi, a B2B fintech startup.
Siddhartha Ahluwalia, Founder of 100x Entrepreneur Podcast and Co-founder of SHEROES, caught up with Alok Mittal in this episode of the podcast, a series that features venture capitalists and angel investors.
The 100x Entrepreneur Podcast is an endeavour to know their habits, mindsets, and viewpoints that can help entrepreneurs scale 100x.
Tune in to listen to Alok Mittal in conversation with Siddhartha:
Speaking about his daily routine, Alok says: “I wake up at 6 am, go for a run, and hit my desk at 8-8:15 in the morning – that’s a couple of hours before the crowd starts to come in. I wind up by 7-7:30 pm. I am an early sleeper and early riser. On Sundays, I like to teach kids, and I take up math classes. That’s my hobby, and I spend time with family on Sunday afternoon."
When asked about his purpose in life, Alok says: “I honestly haven’t thought about it. But what excites me on a day-to-day basis is problem solving. It could be any area. That is why I like being in startups."
Life after starting up
While Alok initially planned to start a healthcare company, he ended up starting a fintech company and disbursing loans. He says, “When I came out of Canaan, I had three business ideas - one was Indifi, which is about lending business to SMEs. The second idea was largely about chronic disease management, and I made an investment in it, and also committed another investment in the space recently. The third idea was about supplementary education. And soon, I landed up investing in a company in that space. So, there were three ideas at that time, out of which I have invested in two ideas, and the third idea was Indifi."
When asked about how Indifi is standing out in a sector which has 120 startups, out of which about 50 are funded, he says, “Yes, there are a lot of lending platforms currently. The way Indifi operates is we actually go to the root cause of why SMEs are under-funded in India. We thought the root problem is that this industry suffers from a 'one-size-fits-all' problem. The product and credit assessment criteria for SMEs are all the same regardless of what small business one is running. Different industries carry different risks and have different product needs. So, we are building Indifi around some of these industry verticals and that’s our unique model."
Today, the startup serves about 10,000 active customers. According to Alok, their goal is to serve 1,00,000 active customers in the next four to five years.
“Different players in the lending segment have chosen to address different kinds of customers. We are for micro and small customers, and provide access to unsecured loans for Rs 1 lakh to Rs 50 lakh. In our case, the average lending price is Rs 5 lakh,” he says.
“We go to the ecosystem that our customers are already using. So, if we want to go to restaurants, we will go and partner with Swiggy or Zomato. If we want to go to travel agents, we will go to Travel Boutique or TSI Yatra. And the good thing is that customers don’t have to leave the ecosystem to avail the credit. Second is the online medium, where the customers come to our site and end up applying to us," he says.
Journey from being an entrepreneur to an investor
“There is a marked difference between angel investing and VC investing. In a VC investment, you are managing other people’s money, whereas in angel investment you have more liberty because you are managing your own money,” says Alok.
Given the fact that he has spent four years in Indify, Alok reveals that he doesn’t have to work hard to source angel investing opportunities. “Most of my angel opportunities comes from within the network. I tend to look whether the idea is compelling, or the problem is real and exciting. The second is the quality of the entrepreneur. At the stage where I invest in, there is very little data available. So, it’s a high risk and hopefully high reward profile of investments.”
“Like it happens in all startup businesses, almost all of your returns are driven by top ten percent of your investments. So, my investments also followed the same trajectory,” says Alok.
One of his top portfolio investments was in Qikwell Technologies, a doctor appointment platform. The startup was later sold to Practo. His other investment was in a firm that built online poker products and got sold to a casino company in Goa. “I am also lucky to participate in an investment in Curofy that built a network of doctors and got acquired by Roundglass Partners. These are some of the startups that gave me good returns. But I am hoping that the biggest winners are still in my portfolio,” he says.
Alok’s other portfolio startups are LifCare, CueLearn, Letsventure, Adda52, BiteClub, Supafoods, Autoflik, and many others. When asked about whether he puts the “first cheque” or would like simultaneous investments, he says, “I would not like to be on the follow-on round. It’s just less fun to do that."
On being asked what markets did well for him when he was a VC, and what is doing well for him as an angel investor, he says, “During Canaan, internet services like Bharat Matrimony and Car Trade did well for us. Outsourced services were ok for us. Equitas also did well for us. As an angel investor, if I have to pick, I think healthcare has done well for me. As far as spaces that have not done well for me, I would say that some companies have not done well for me, rather than spaces that haven’t done well.”
Speaking about startup failures, Alok says, “Most startups fail because they had a wrong reading of the risks involved, and not because the entrepreneurs weren’t committed. Within my failed startup portfolios, if some founders come up with a new idea, I would back them again."
On his thoughts of becoming an entrepreneur again after being a VC, Alok says, “VCs don’t really solve problems. They back problem solvers. So, the only problem we are solving is how to pick the right entrepreneur. After having done that for 10 years, I felt like I wanted to be a problem solver again and sitting in front of customer."
(Edited by Megha Reddy)
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