VC Pranav Pai on learning from father Mohandas Pai’s experience and launching 3one4 Capital

In this episode of 100X Entrepreneur Podcast, Pranav Pai, Founding Partner at 3one4 Capital, talks about the lessons he and his brother, Siddharth, learnt from their father, TV Mohandas Pai, and new approaches to finding horizontal and uncommon investment ideas.
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Entrepreneur and venture capitalist Pranav Pai has always seen the Indian startup ecosystem from up close.

Growing up, he and his brother, Siddharth, watched their father, TV Mohandas Pai, build the foundations of the startup ecosystem as the former CFO and Board Member of IT giant Infosys. 

Pranav says the duo experienced “interesting dynamics” in their home, growing up.

“Our parents together are the most engaging combination of patience and ambition that we have ever seen. My mother is very energetic and ambitious. She helped us learn, read, write, and engaged us in curriculars very early.

“And, our father’s career path with companies like Infosys really laid the foundation for India’s startup ecosystem. That combination helped us be patient about how we set personal goals for ourselves, how we planned our educational journeys and career paths.

“Siddharth and I were able to have this conversation in our teens and we decided early on that we would work together and needed complementary skills for that,” Pranav says. 

With this in mind, Pranav completed his post-graduation in electrical and electronics engineering from Stanford University while Siddharth became a chartered accountant.

Talking about starting up, Pranav says in 2011, when graduating, they noticed the launch of digital companies such as Flipkart and understood that they would need to prepare and train themselves for a new India. He adds that their father’s insights and advice on the fact that companies in India would now be tech-driven helped them get started.

Pranav says he and his brother borrowed heavily from their father’s experience to understand early-stage investing when launching 3one4 Capital.

“You can’t just wake up one day and say you want to be a VC. So I think his [Mohandas Pai] generosity from his insights, I think that’s something that Siddhartha and I are very grateful for.”

Focus on future mainstream businesses

The Pai brothers launched Bengaluru-based early-stage venture capital firm 3one4 Capital in 2016 to support and fund businesses focused on using cutting-edge technologies to create, grow, or dominate large markets in India.

With a corpus of Rs 800 crore, the VC firm has invested across a range of companies including Licious, Betterplace, Open, Tonetag, Darwinbox, Faircent, Bugworks, and YourStory among others.

The founding partner says the duo started small with their first fund of Rs 100 crore. They had decided early on that they would not back mainstream businesses, but would focus on startups with the potential to become mainstream in the near future.

“We have taken very conscious decisions to stay out of mainstream investing. We cannot start investing in trends that are already mainstream today. We have to predict and invest in ideas that will be mainstream in a couple of years from now. That is the only way to pre-empt the trend and take valuable positions in early-stage assets that could become large down the road. So, companies such as Licious, Darwinbox, Yulu and many new ones are doing well and hopefully will turn out that way,” he says.

In the recent episode of 100X Entrepreneur Podcast, a series featuring founders, venture capitalists, and angel investors, Pranav spoke to Siddhartha Ahluwalia on how he and his brother learned from their father about investing in ideas for the future and built 3one4Capital.

Listen to the podcast here:

Time stamps from the conversation:

00:11 – Intro of Pranav and 3one4 Capital

01:50 – Influence of upbringing and early career choices

05:25 – Background and setting up of Aarin Capital by Mohandas Pai

08:17 – Learnings and practices at 3one4 Capital, inspired from Aarin Capital

17:25 – Balancing the venture fund performance and relationship with LPs

18:33 – Investing early on in uncommon ideas like Licious and Yulu

22:17 – Investing in horizontal businesses like Darwinbox

27:48 – Fund III – Lookout for new format for Indian digital citizens

29:12 – Changes in Fund III – More variance & verticals

35:42 – ‘Not enough Indian capital is available for Indian funds to raise.’

38:21 – Top 3 pieces of advice from TV Mohandas Pai

Edited by Teja Lele Desai

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