Founders and investors both need to have a problem-solving attitude, says Adith Podhar of Gemba Capital
In this episode of 100X Entrepreneur podcast, Adith Podhar, the Founder of Gemba Capital, shares his experiences as an early-stage investor, and how his learning curve has evolved.
Adith Podhar comes from a typical Marwari business family from Mumbai. Naturally, his family always had discussions around the business as he grew up, extending even to the dining table. But owing to the struggles his father had seen in his life, he wanted Adith to become a proper salaried man.
After finishing his MBA in 2005, he worked with ICICI Bank as a Product Manager in the international private banking team, helping some private equity funds raise capital through the bank's network. Later, he took the entrepreneurial hat by starting a food brand named Crepeteria.
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After serving as the Vice President for Cipher-Plexus Capital Advisors, he moved to Motilal Oswal Private Equity as its Vice President and worked there between 2013 and 2017.
In June 2017, he finally decided to start his journey as an early-stage investor and started Gemba Capital. Some of his portfolio companies include myHQ, ClearDekho, SureClaim, ShopKirana, Upekkha, Kaarva, SleepyCat, and HoiFoods, among others.
Siddhartha Ahluwalia, Head of Community at Prime Venture Partners, caught up with Adith Podhar on this episode of 100x Entrepreneur podcast, a series featuring founders, venture capitalists, and angel investors.
Tune in to listen to Adith in this conversation with Siddhartha:
Investment thesis at Gemba
When Gemba Capital started, it focussed on four to five sectors like agritech, healthtech, edtech, fintech, and consumer-tech, where it anticipated a lot of action to happen. Adith says these are the areas he truly believed in.
Over the last few months, the firm developed its investment thesis, which he says is two-fold.
"One is that we are very keen on the domestic consumption story, and it is something we would want to see the deal flow in. Let’s say by 2020-35, we’re expecting 200 million households in India to be earning between Rs 1.5 lakh to 10 lakh per annum. It’s a huge number. Even if you take two or three people per household, it’s almost 500-600 million people. So, a lot of the core problems which are still not solved in Tier-II and III cities, those will get solved," he adds.
He urges that startups should take the lead in that segment and wherever the infrastructure is present – fintech, content, or distribution, among others. The second area Gemba Capital wants to focus on is SaaS. Adith is a big believer in the potential of Indian companies building world-class products and shipping them globally.
An investor's mistakes and success attribution
Adith recommends that investors should step fully away from any kind of biases and not make up their minds too early.
Speaking on the mistakes he made, Adith says,
“Sometimes as an angel investor, you write off too early, or you approve too early. That’s a mistake. Because on the face of it, sometimes it might not come across. But underlying it is a strong thesis that is building up. So, that’s one mistake I have done. A lot of quick rejection sometimes, but also quick approvals as well."
As for the key attributes, one should have while investing, Adith credits the hunger for knowledge and a peculiar curiosity which should always stay with the investors. If it does not exist, he says, they could tend to miss out on a lot of things that happen around them.
He adds, "Let’s say co-living is a thesis, which we kind of were positive about because we observed it closely, and wanted to take a bet on it. We also invested in a company called StayAbode. Similarly, why not senior living? Seniors have an issue. They don’t have like-minded people. They want friends. Probably, the children are working in some other city and they don’t want to move. Can it be a business? Can you give a high RoI business there? What are the challenges there?"
Adith says that a constant thinking and evaluation approach to see where the problems are, and whether they are solved or not, is something that is limited to the founder, but also investors. Only then, he says, both sides of the spectrum join together to be in the same place of success.
(Edited by Suman Singh)