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Why India Has No Agritech Unicorns; And Why That's About to Change | Mark Kahn (Omnivore)
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Mark Kahn is the Managing Partner of Omnivore, India's pioneering agriculture and rural economy venture capital fund with over $325 million in assets under management. Since 2011, Omnivore has backed 50+ startups including DeHaat (India's near-unicorn agritech platform), Pixxel (space tech), Ecozen (climate hardware), and dozens of companies transforming India's 600 million rural population.
In this conversation with host Akshay Datt, Kahn unpacks his contrarian thesis on smallholder farming, explains why "B2B SaaS is fucked by AI," dissects the horseshoe politics blocking GM crops in India, and reveals why Trump's 50% tariffs and Modi's dairy farmers are on a collision course. From his operational years at Godrej Agrovet to building India's leading agritech VC, Mark offers a masterclass in sectoral investing, the realities of raising from DFIs, and why India's bioeconomy could hit $300 billion by 2030 - if entrepreneurs stop becoming software engineers and start doing actual biology.
What You'll Learn:
👉Why Mark Kahn believes India will never have a unicorn agritech company by traditional metrics, and why he's okay with that
👉How Omnivore's portfolio companies like DeHaat, Arya.ag, and Captain Fresh are approaching profitability and IPOs while others like WayCool imploded
👉The "Kirana shop analogy" - why Indian smallholder farmers are more productive than you think and will beat US industrial agriculture
👉Why both the Indian left and right agree on blocking GM crops (horseshoe theory), and how Indians have been eating GM food derivatives for 20 years without knowing it
👉Mark Kahn's provocative take on US-India trade negotiations: why dairy imports should be blocked but feed ingredients should be welcomed
👉The shocking reality that India's biotech sector has produced zero new billionaires in 20+ years, and what the $300 billion bioeconomy opportunity requires
CHAPTERS:
00:00 - Mark Kahn's Journey to Omnivore VC
01:18 - Why Agritech Over B2B SaaS
02:52 - India's Agritech Unicorn Problem Explained
06:37 - Bharat Economy Beyond Agriculture
09:49 - India's Agricultural Future Vision
13:27 - GM Crops Controversy and Yield Gaps
18:26 - The GM Foods Paradox
23:21 - Omnivore's Investment Thesis and Portfolio
30:35 - Fund Size and LP Strategy
31:45 - Origin Story of Omnivore
40:06 - Early Days at Omnivore
50:12 - Agriculture Protection and Trade Policy
52:25 - US-India Agricultural Trade War
57:52 - Why India's Farm Policy is Soviet
1:01:08 - The Farm Reforms That Failed
1:06:13 - AgriStack Digital Infrastructure
1:09:04 - Smallholder Farmers vs Industrial Agriculture
1:13:01 - Zero Percent Probability of Reform
1:14:13 - India Through an Immigrant's Eyes
1:20:31 - Advice for Founders Raising VC
1:26:56 - The Bioeconomy Opportunity
#MarkKahn #OmnivoreVC #AgritechIndia #VentureCapitalIndia #IndianAgriculture #AgritechUnicorn #DeHaat #RuralIndia #BharatEconomy #GMCrops #AgriculturePolicy #USIndiaTrade #TrumpTariffs #BiotechIndia #SpaceTech #Pixxel #Climatetech #ImpactInvesting #AgricultureVC #StartupFunding #IndiaVC #FarmersIndia #SmallholderFarming #AgricultureReform #FoodSecurity #SustainableAgriculture #AgriFintech #RuralFintech #DigitalAgriculture #AgriStack
Disclaimer: The views expressed are those of the speaker, not necessarily the channel
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Transcript
Emerging Agritech Unicorns in India
00:00:00
Speaker
How do you see the future of Indian agriculture? Why is this a big opportunity? Why not say B2B SaaS or AI? B2B SaaS is fucked by AI, but I think that we will see the first Indian unicorns in the agritech space minted in the next 12 months. India will leverage technology and leverage exports to increasingly feed a hungry world.
00:00:25
Speaker
Mark Khan is the managing partner of Omniwar, a $325 million dollars VC fund. Omniwar invests in ambitious startups like Pixel and Dehat, which are transforming rural India. Is it valid the objection to GM Foods? We have all been eating genetically modified foods for like three decades. It's not genetic modification now, it's it's genetic editing because we have tools that are scalpels, not
Startup Success: Importance of Team Formation
00:00:51
Speaker
sledgehammers. The first thing that I will always ask founders and where a lot of founders really, really fuck up is like, have you built the right team?
00:01:07
Speaker
Mark, welcome to the Founder Thesis podcast. Very very nice to be here, Akshay. yeah Thank you so much. I want to start by understanding what exactly is Omnivore. You run Omnivore, the venture fund. Help me understand what is Omnivore.
00:01:24
Speaker
Sure. ah So Omnivore is, as you correctly said, a venture fund. um We are a sectoral venture fund. So we are focused on um essentially a few themes related to to India.
00:01:42
Speaker
One big theme is is agriculture. Another is food. A third is climate. And a fourth is Bharat or rural.
00:01:54
Speaker
And so we basically invest in, you know I would say probably about 40% of you know the Indian economic opportunity. And we have built expertise in these four areas and have a team that comes from these sectors.
00:02:12
Speaker
And this is where we believe a huge opportunity lays ahead over the next over the next decade. Why is this a big opportunity?
Agriculture vs. B2B SaaS: India's Economic Pillars
00:02:23
Speaker
Why not say B2B SaaS or AI or at you know all of these companies?
00:02:29
Speaker
Well, B2B SaaS is fucked by AI. um So you answered your own question there. um Look, I've been working in this space for a long time, and Omnivore is not a new fund. We we date back to roughly 2011.
00:02:46
Speaker
um I've been working in in Indian agriculture since 2008, and I've seen a huge transformation over the last 17 years.
00:02:58
Speaker
But I continue to believe that effectively the other half of India will in the next decade or two outperform everyone's expectations as it begins to catch up with what we see now in urban India, as development spreads into the interior, as the rural sector modernizes, as agriculture is no longer a you know weak wicket,
00:03:34
Speaker
but instead um a very strong pillar of of the Indian economy.
Funding Trends: Current Equilibrium and Future Outlook
00:03:40
Speaker
I think that you know we are building for Bharat and that is actually an enormous opportunity for for founders, for investors, um eventually for the public markets. There's no unicorn in this space. The funding that this space attracts, I think, has gone down in the last year or so. So why are you so... Definitely not the last year. It's gone down since... ape So I would say starting in April of 22 was kind of the peak.
00:04:11
Speaker
And um though interestingly, Agri... One thing to be clear of is is is that we can't move goalposts. So... When I talk about what Omnivore does, again, agri-food, climate, product.
00:04:26
Speaker
Okay? So when you say funding has gone down, you're probably just referring to the agri-food side of it. And that certainly has has dropped, right? The peak year there was April 21 to March of 22.
00:04:40
Speaker
The next year was worse, right? Which was 22 to 23. 23 to was worse than that. twenty four to twenty five was actually up on 23 to 24.
00:04:52
Speaker
um So there was ah already a bounce back. And I anticipate just looking at the growth rounds that are happening in our portfolio and in some of our peers, that FY25, 26 is going to be up from there.
00:05:04
Speaker
So I think we're finding a new equilibrium in our sector of a couple hundred million dollars a year. um But to your question about unicorns, look, we've had a bunch of things that are are sort of close or hovering to that level. And it also define depends on how you define the space, right? So, you know, Dehat's valuation is almost at a billion dollars. Hopefully it will cross that this year.
00:05:30
Speaker
um You know, we there are other players, you know, we we certainly think of of Captain Fresh being in our space and they're trying to list for more than a billion dollars.
00:05:41
Speaker
um Obviously, there have been some pretty notable implosions, Waikul being probably the most prominent. um But I think that we will see the first you know Indian unicorns in in in the agritech space minted in the next 12 months.
00:05:59
Speaker
at How do you see the future of Indian agriculture? Before that, How is Bharat different from agriculture? Isn't the Bharat opportunity largely agriculture? What else is
Beyond Agriculture: India's Economic Potential
00:06:11
Speaker
there? If you think about um a farming family, okay, in India, um imagine a ah five-person family, mother, father, three kids, okay?
00:06:22
Speaker
Probably two of those people work in agriculture, or maybe two and a half, you could say. Right. So probably the dad works in agriculture. Not all of the kids will work in agriculture, maybe be one son and probably not full time.
00:06:37
Speaker
Okay. um Someone will have maybe a job in a city. um Someone might have something entrepreneurial, right? These days that, you know, you you could even say that the the daughter might be a drone dy at this point um or or working in a shop.
00:06:54
Speaker
or or you know one of the kids is working in a food processing facility. right So when you think about, let let me put it this way. when you When you think of Bharat, you think of farming. And when I think of Bharat, I think of food processing and textiles and factories and actually where the industrial belt of India is moving, right? And I think of of consumption plays and I think of fintech that's focused on people that have this kind of entrepreneurial stream of incomes.
00:07:25
Speaker
The Bharat opportunity is is enormous and it very much is India's future. Right. We can't really make our cities any bigger than they are. You can't get another 10 million people into Mumbai, I can assure you.
00:07:38
Speaker
Right. But as more of the second and third tier cities get built out, as you know, hopefully we are are finally in in sort of a manufacturing boom in India, long overdue, long delayed, long neglected.
00:07:56
Speaker
um you know I think that you will see a real meaningful transformation. By the way, this is not just some sort of fucking science fiction. right like If we go today to Velour or we go today to Krishnagiri, right going outside of Bangalore, right these places look radically different than they did 20 or 30 years ago.
00:08:19
Speaker
Um, you know, if if you think about the NCR, right, the way that Delhi has, it has, you know, the NCR has, has radically transformed. I remember the first time I ever saw Gurgao, right, there was, you know, there were still fields.
00:08:34
Speaker
Um, Those are all gone. and And so this blurring between urban and rural certainly happens. but But definitely the rural economy, the Bharat opportunity is is is growing um as as more and more businesses move further and further out.
00:08:52
Speaker
How do you see ah Indian agriculture, rural India growing? say a couple of decades down the line, will it be somewhat like how say
Vision for Indian Agriculture's Future
00:09:02
Speaker
the US is? or No, I don't think it'll be like the US. i So i I think it'll be its own thing.
00:09:09
Speaker
my My dream, my vision for Indian agriculture is that you know India becomes a smallholder version of Brazil. If you think about Brazil, if you think about agriculture in most Western nations, it is a, you know, 2% of the economy, 3% of the economy, right? In India, just production agriculture is about fifteen seventeen percent of the economy.
00:09:34
Speaker
I don't see agriculture right dropping far below 10%. um and And the thing is, there's a lot of other things that are linked to that agricultural production from a GDP perspective. There's a lot of food processing, there's there's textiles, there's you know all of you know all of the financing and logistics. And and you know I think it's a much larger part of the economy than that.
00:09:58
Speaker
but But when I say a smallholder version of Brazil, you know what I mean is I think many more people will stay on farm and in rural India um then than than then people might expect.
00:10:13
Speaker
And India will leverage technology and and leverage exports to increasingly feed a hungry world.
00:10:24
Speaker
That we will stay in agriculture for longer innings than people expect. And that agriculture will become increasingly profitable.
00:10:35
Speaker
increasingly modern, increasingly um productive, it will not you know it will not employ as many people as it does today. Today, you know the number of farmers, cultivators in India is a very contested number. right So if you take some government statistics, it's 130 million. right um A lot of other people believe that's probably overstated. It's more like 100 million.
00:10:59
Speaker
But other people who who look at things related to the PM Kisan program or Kisan credit cards or other things actually think, you know, full-time cultivators, we've got about 60 million in the country. It's still like the largest in the world.
00:11:13
Speaker
um I think that we will probably hover around that level, that those numbers will come down over time. But I think the amount of land that those cultivators manage will you know on a per farmer basis will grow as we bring you know liquidity and flexibility to land laws in India, which is already happening.
00:11:39
Speaker
And you will see an increasingly professionalized agricultural sector. But I also think you will see the professionalization of agricultural services. um You know, you will see, and and the drone sector is a great example of that.
00:11:54
Speaker
And you will see more and more food processing in India happening near the farm gate. And that will create a huge number of rural jobs that are that that are needed.
00:12:06
Speaker
And so i you know, my hope for this space, and and and I do think we are heading in the right direction, is that this becomes a dynamic part of a diversified rural Indian economy that that creates, you know, dignified jobs, that creates employment, that creates entrepreneurship.
Challenges in Tech Adoption in Agriculture
00:12:27
Speaker
What is the productivity gap in Indian agriculture versus, say, Western countries? Maybe in terms of... I mean, it's enormous in some things and not so bad in others.
00:12:38
Speaker
You know, i would say that, you know, in general... where you see really, really big gaps, there's usually a good reason. So like if we were to take soybeans, soybeans are you know about a ton per per hectare, and in the West, it's like three tons per hectare.
00:12:57
Speaker
And everyone's like, oh my God, how can this be so bad? And the answer is, um we don't allow any technology into the soybean sector because basically that would require genetically modified traits.
00:13:09
Speaker
And back in 2009, right, government of India at the time decided to throw all of these decisions to the states, which is to say to a you know group of of people that can't agree on anything.
00:13:25
Speaker
um And our process of of doing genetic approvals has been broken ever since, more or less. And so, you know, if you wanted to have world class soybean yields, you would need to have traits that allow you to have world class soybean yields.
00:13:42
Speaker
But we don't have that. um You know, and I've often said that that hating on, you know, genetic engineering is the only thing that the Indian left and the Indian right agree on.
00:13:54
Speaker
right You have one group of like lefty NGO-bribed Jholavallas who are like, nothing you know not none of this is okay. right um And then on the other side, you have these like hardcore nationalist types right that that are terrified of any science in in agriculture or anything foreign you know coming
Controversies Surrounding GM Foods
00:14:20
Speaker
into India. and so there's sort of this alignment between the left and the right. It's that like it's that like horseshoe theory of politics, like genetic engineering is is like right here in the horseshoe.
00:14:31
Speaker
so um Is it valid, the objection to GM Foods? do you Is it valid? i I do support notions of food sovereignty um and and food security.
00:14:49
Speaker
Like if you ask me, should you know should should we not care at all about multinational control of things? No, we absolutely should. Like despite being very, very, very, very pale, I am still nationalistic, okay? and i'm I'm a proud immigrant. um But think i think that If you look globally, okay, um we have all been food genetically modified foods for like three decades.
00:15:22
Speaker
Okay. And, you know, in India, you can say, no, no, no, but it's been so bad. Right. There's so much, you know, you can point to America and be like, there's so much obesity. And I'm like, oh, really India? Okay. Let's, let's have that discussion, shall we? Okay. um Like everything that you can say, right. I mean, to be clear, I do think we should be worried about what we eat and concerned about what we eat.
00:15:51
Speaker
But if you look you know over multiple decades right in in the places that have right that have genetically modified crops, right in in the US, in Canada, in Latin America, right it's ubiquitous in Brazil.
00:16:08
Speaker
right it's ubiquitous in argentina right all of these like you basically have that entire swath australia right i don't think these countries are somehow less healthy than india okay i don't think somehow they have worse you know medical results than india or more prevalence of other diseases than india and then the the flip side right is that india does have gm and and everyone you know and you could say no no no no no no but it's only in cotton Okay, bro, so what do you think we do with Kapas Kali?
00:16:44
Speaker
We feed it to cows. Kapas Kali is a product of cotton. Yeah, yeah. After you make cotton, you have cotton seeds. Those cotton seeds are then turned into oil and meal. The oil is consumed by human beings in India, and the meal is consumed by cattle in the form of cattle seed cakes.
00:17:05
Speaker
Okay, cotton seed cakes, excuse me. um So we've all been since 2002, 2000 in India consuming this stuff. So it's a little bit rich and more than a little stupid to object to the idea that we should bring this into other crops. And then the other really funny thing, okay, is in India also imports a shit ton of soy oil from Latin America. That's all GM.
00:17:35
Speaker
So it's just like... at some point, the the the hypocrisy is bizarre and self-limiting. And so you asked, this originally was a question about like yield gaps. The answer is like, they're not bad in everything, but they're they're pretty bad.
00:17:51
Speaker
ah I didn't understand the linkage between adopting GM and losing national food security. Oh, I mean, they're just sort of questions, you know, historically, In this horseshoe theory, let me put it this way. what but This company no longer exists anymore. But it used to be you couldn't go to a, yeah you know, you you you couldn't, what what was it? What's the place in Delhi? Jantar Mantar, right? With the protests? Okay. yeah Did I get that right? um It's been a minute since I've been there. Okay. um Right. And you would there was always like Monsanto, big death sign, like all of this stuff. Right. um
00:18:28
Speaker
And Monsanto doesn't exist anymore. It was acquired by Bayer, but um but But the point is that that there were always these questions about like, multinationals will take over our food system, right? Terminator seeds, right? Like all of these like buzzwords that mean literally, ga okay? um but But, you know, I am sympathetic to the idea that countries should be able to feed themselves, that they should, you know, that that you should not have a complete multinational control over over a food chain. The likelihood of that happening in India is literally zero.
00:19:03
Speaker
Um, you know, people are like, but, but, but we don't want GM wheat. And it's like, okay, moron, you do realize GM wheat doesn't exist. Like it literally doesn't exist in this world. There is no GM wheat. There's no country that grows GM wheat there. There's, you know, you have genetic modification in a couple of crops. You have it ah very heavily in corn, which is very easy to breed. You have it in, in soy, you have it in, in canola, which is rapeseed, mustard seed. Um,
00:19:29
Speaker
You know, it's' it's a narrow segment of crops that actually have it. And besides, this is like a very 30 year old argument, because everything has moved in the direction of really, really, really, you know, it's not genetic modification. Now it's it's genetic editing, because we have tools that are scalpels, not sledgehammers. right The original objection to a lot of GM back in the day was that you know you're taking ah you know a gene that is exogenous to a to a you know to a system and inserting it.
00:20:03
Speaker
but that's and But the direction that we're going to with things like CRISPR is literally the ability to turn right you know turn parts of the DNA on and off, injecting nothing exogenous into it, right and just effectively doing hyper-precise breeding um of you know ah of the genetic code.
00:20:24
Speaker
And so I think anyway, a lot of these arguments are are very, very dated and not particularly relevant anymore. So if I understand the implication correctly, you're saying that just like India doesn't have any social media companies, they're all from the West. So similarly, GM companies are likely to be all from the West. No, no, no, no, no. I mean, so let absolutely correct that.
00:20:47
Speaker
When India allowed for um GM cotton in 2002, They required the original, um and i I might get this wrong, but I don't think I will. They required that the technology be licensed widely to lots and lots of Indian companies. So you have lots of local versions of this. And in fact, in in recent years, you know going back to in 2009, it was BT Brinjal that was the thing, but that was that had been created locally.
00:21:19
Speaker
right we've had lot but even those local things have been blocked up. And there is not a single state which has ah kind of approved ah this. No, there are some states that are fine with it, but then you have these lefty states that aren't. And again, the horseshoe thing, right? You really have a situation where, you know, the hardcore right and the hardcore left will will always block this stuff, right? And it's unfortunate because you have like sort of normal moderate agricultural states that would love to have it. And then the other weird thing that's happened in the last 15 years is you have a lot of illegal genetic modification in India. right So you have a lot of, you know nobody acknowledges it, but everyone understands it's there, that there are certain traits that have been brought in kind of black market, and they're not sold by the multinationals. They're sold by like small local players ah that can get away with it.
00:22:14
Speaker
Okay. Interesting. Okay, so now I'm guessing that ah you as a fund would mostly be backing ah what you spoke of that you're seeing a lot of professionalization of services in the sector.
Investments in Rural Opportunities
00:22:28
Speaker
I'm assuming that would be your target as a fund or like what what what kind of companies or businesses do you back?
00:22:35
Speaker
So, I mean, radically different kinds of of of business models, right? So if I were to characterize like where we invest, um I would say four major kinds of business models. The first is what we call digital value chains, which are platforms and marketplaces and attempts to digitize and and modernize certain sectors. So like a great example here, would be Dehat, which is one of our best known. It's the largest farmer platform in India. Dehat manages effectively micro retailers that sell to farmers um and provide other services to farmers. and they're And they're basically the largest branded retailer for agricultural inputs in India. So that's a a good example. That's like professionalization of supply chain in a way.
00:23:25
Speaker
Professionalization of the input supply chain. Okay. Another great example is a company called Aria. Aria basically is professionalizing the storage and warehousing space by running the largest network of, you know, go-downs for agricultural commodities in India.
00:23:43
Speaker
but with embedded FinTech solutions. So if you're a small farmer, you can bring your grain at harvest to an Aria go down and they will store it for you, right? They charge you for it like a rent.
00:23:58
Speaker
So you don't have to sell when prices are low and they'll give you a loan for the grain that you've stored with them so that you can manage your household expenses and they'll help you sell the grain.
00:24:09
Speaker
So basically you make more money. so that's ah you know those those are both good examples of of digital value chains. And not all of them are farmer facing. We've backed a company um in the last two years that's doing really well called Simplify, S-C-I, like Science Simplify.
00:24:27
Speaker
um and um It's a company where where we wrote the series A, Excel and Bertelsmann led the series B. um It's basically a full stack marketplace and CDMO for the specialty chemical sector. What is CDMO? A CDMO is a contract development and manufacturing organization.
00:24:48
Speaker
um And Simplify basically works with small, small um chemical manufacturers, helping them to improve what they're making, access better products, access overseas markets, fill their capacities.
00:25:09
Speaker
um And so you know effectively helping all of these you know SME specialty chemical companies make more money. um so And we like the full stack CDMO space. but at the This is very much an abharat thesis. Or similarly, companies like AgriZ, which is a full stack CDMO for food processing companies.
00:25:31
Speaker
So those are digital value chains. um and And we've done a number of of companies there. Then the other thing um would be you know another major theme for us is inclusive fintech.
Omnivore and Rural-Focused Fintech Innovations
00:25:42
Speaker
So we look at a lot of rural focused fintech.
00:25:45
Speaker
um A great example there you know would be um Optimo, which is Prashant Pitti's new fintech that that he's been building um over the last over the last two years, which is focused on micro loan against property, um where you know effectively a purely digital loan um secured by by you know secured by property for rural msmss And you know he's obviously phenomenal entrepreneur. um And that business has been growing like crazy um and and is really, really exciting because it's also playing into this increasingly rich data environment around land records and property records and the ability to you know really drive um you know drive credit on the basis of having stronger and stronger information in that space.
00:26:40
Speaker
um A third theme for us is, i mean, effectively deep tech. We call that emerging technologies because it includes deep tech and life sciences and material sciences. um And we've done a lot there. We we we backed Pixel, right, which is you know India's most successful space tech company.
00:26:58
Speaker
um We've backed a company called Ecozen, which makes, ah it it is a company based outside of Pune, and they make climate smart hardware for farmers. They make the best pumping and irrigation, and solar powered pumping and irrigation and food processing systems in India.
00:27:17
Speaker
um Phenomenally successful, profitable company. um and And recently we've done things like, you know, Alt-M, which is two two guys who've come back to India from Tesla.
00:27:31
Speaker
ah One went to Berkeley, one went to MIT, both very, very smart. um and And they are building... um essentially a ah revolutionary company for sustainable materials. So they're converting agricultural waste into specialty chemicals and selling those specialty chemicals to, you know, for example, the cosmetics industry as a way of getting plastic out of cosmetics.
00:27:55
Speaker
And then finally, we've we've done some amount of sustainable brands. So we backed, we were the first check into Farmly, which is a you know great brand of nuts and dry fruit and makhana.
00:28:07
Speaker
um Recently raised a a growth round from El Caterton, LVMH. um and And for example, a recent check into into Sid's Farm, which is you know an organic milk company um that that largely operates in Hyderabad, but has entered Bangalore in the last two years.
00:28:26
Speaker
So gives you a sense of the different kinds of things that we do. it's It's not all farmer platforms all the time. It really is this mix of agriculture, food, climate, and Bharat.
00:28:38
Speaker
ah How is Pixel? ah I mean, they just launched a bunch more satellites. How how does it tie? Like they help in ah ah observability of farms? Agriculture is a major client group for them.
00:28:52
Speaker
um And there's a lot that you can do with hyperspectral satellites that you could never do with multispectral for the agricultural economy. And yeah, so it's, it's it's you know, that's that's not a recent investment for us. That's, you know, about five years back.
00:29:06
Speaker
Okay, okay, good.
From Seed Funding to Series A Growth
00:29:08
Speaker
And typically, what kind of tech sizes do you do? What series do you come in at? ah So typically, we it's evolved a bit. um You know, when we started out in our earliest days, ah we were very much... um you know super, super, super early, like even pre-seed.
00:29:27
Speaker
um I think by 2018, 19, when we raised our our first fund with with kind of over substantial fund with overseas capital, um we were largely a seed check writer, sometimes pre-series A.
00:29:43
Speaker
And these days, from our most recent fund, which we raised in 23 and 24, we're largely doing Series A's these days, sometimes pre-A and seed, um but mostly Series A's.
00:29:58
Speaker
And what's the size of your latest fund? Our latest fund is 1,800 crore. Take me through the history. You said the fund started 2011, I believe.
00:30:11
Speaker
So what's the origin story? So I moved. So I think people have heard the story million times. I moved to India in 2008.
00:30:20
Speaker
ah working for Godrej Agravat. I had gone to Harvard Business School with Nista Godrej. I had a history in India before that, um had had done an internship, had had come to India many, many, many times. but How is that like what attracted you to India?
00:30:36
Speaker
um I think basically I grew up in a heavily... um and NRI, ABCD environment. in in i'm from I'm from Houston, which is like a very Desi American city.
00:30:49
Speaker
And so I had this very early exposure to India going back to my like preteen years um because the immigrant population, i grew up right near it and went to school with lots and lots of Indian American kids. And so I had this very, very early exposure to India.
00:31:08
Speaker
you know in my college years, um backpacked in India and and traveled there and loved it. And then when I got to B school, I was pretty interested in in trying to to focus on emerging markets in my career and was very, very interested in Agri.
00:31:25
Speaker
and sort of put two and two together and saw this overlap. So people are like, how long have you been doing this? And I'm like, i don't know, in 2005, I was bringing like the head of the NC decks to Harvard Business School campus to speak. So like, I've been in this for a while.
00:31:40
Speaker
Like this has been two decades of obsession. um But i moved, um started moving in late started at like January of and spent about six years. Did you get paid at the same level as your peers? I assume ah in India, salary must be like a bit of a sacrifice. took a 50% pay cut to move. I was clear at i was earlier at Sinjana. And even that was like, they were they were at the edge of what they could get away with paying me. Like that was sort of the, I had student debt to service. So that was always an issue. Salaries are much, much higher now than they were back then.
00:32:23
Speaker
um so So, yeah, I had been at
Godrej AgriVet's Pan-Indian Operations
00:32:26
Speaker
Syngenta. I moved from, which is one of those big multinational seed and agrochemical companies. And I i moved and and joined ah to head up strategy and business development at Goldridge AgriVet. I spent about six years there. What does AgriVet do? So, AgriVet is... um It's funny, it's like a conglomerate within a conglomerate. So if you think about like Godrej, even if you just look at, right, the Adi and Nadir Godrej side of Godrej, as opposed to the, um you know, the the engineering side of Godrej, you know, in a conglomerate of FMCG,
00:33:01
Speaker
property, right chemicals, right agri was one of those verticals. And um now Goldridge is publicly traded. It wasn't at the time. At the time, it was just a subsidiary of Goldridge Industries.
00:33:15
Speaker
and um Even within Goddard Jagravet, it was a diverse series of businesses, right? So a very large animal feed business ah with about like 40, 45 feed mills, right? From Khanna in Punjab down to, you know, one or two in Tamil Nadu, right? um Westernmost, I think, would have been Sachin, which is outside of Surat.
00:33:43
Speaker
And easternmost might have been, um I guess it's changed now, but like we had depots at Siliguri and stuff. um And so really like a very pan-Indian footprint of feed mills selling poultry feed, aqua feed and cattle feed.
00:33:59
Speaker
then a um, a poultry business, which became Godrej Tyson, um, which is now fully owned by Godrej again, Tyson's out of it. Um, a dairy business, cream line, uh, an oil palm business, largely in Andhra Pradesh, um, an agrochemical business.
00:34:18
Speaker
Yeah. It was a lot of different pieces to it. And, um, it was It was a very interesting place to to sort of get a baptism by fire. ahless Was this a desk job or like like you said, strategy, business development? like like What was your role?
00:34:33
Speaker
it was um It was kind of both. um there There was very much a culture of touring, right? Like there was an expectation that you were out in the field. um And so my job was basically strategy for all these businesses, supporting m and a um the planning process, ah but also lots of kind of business development. Like, can we can we try this new technology?
00:34:58
Speaker
um Rebooting our R&D program was a big thing that I worked on. um You know, it was it was really, it was interesting.
Cultural Insights from Business Experiences in India
00:35:06
Speaker
um Quite a bit on on on kind of, quite a bit of work in the animal feed business on in terms of innovative products.
00:35:13
Speaker
But yeah, I was very much on the road most of the time. And you learned Hindi? How did you? Yeah, I'm pretty terrible with it. But um it's funny, i was better i was better when I was at AgriVet. And I think when i when I became a VC at all, it it it it got much worse because it's such an you know English medium kind of profession.
00:35:33
Speaker
um But yeah, i was I was having conversations in Hindi with Bashu Ahar dealers in Bihar. Like in Samastipur. So yeah, it was ah it was an interesting, it was a really weird job because I also lived in South Bombay.
00:35:50
Speaker
um And so like when I would come back, like my friends who were largely kind of, I would say kind of posh. sobo types right i didn't really hang out with expats there have never been many expats in india but when i went came back on weekends everyone was like you know at at the bar like regale us with stories of our own country please um i was a source of tremendous amusement um for people that worked at like morgan stanley or you know um
00:36:22
Speaker
Yeah, and and and so i like I remember sitting at like Woodside Inn in Kolaba, right, with someone being like, wait, where were you? And I was like, Putna? And he's like, no, no, say that again, and like calling friends over, right?
00:36:37
Speaker
yes So, yeah. um But it was it was a really... um I think it was a really formative experience for me. um i It gave me... yeah You know, sometimes you have these... um people that you meet in India and you say, where are you from? And they're like, well, this a tough question. Okay. Because usually they're UPSC kid. Like dad was in the IAS or the IFS or, you know, um you know, the IPS or, or they grew up in army camps or what have you. And they have this very, very like pan Indian perspective. Well, I'm the Gora version of that.
00:37:14
Speaker
Like, i i I have a very pan Indian perspective. Like if you ask, you know, when people are like, do you like Indian food? I'm like, what kind?
00:37:25
Speaker
Right? Like if you ask me, like my go-to is like South Indian non-veg. I love Carolite food. I love Mangalorean Catholic food. I love Bunt food, right? What you know what what you get in in that community.
00:37:41
Speaker
um I'm a huge fan of Bengali food. If you ask me, like, do I love Punjabi food? I'm sorry if it creates a fucking riot, but no, I don't. To be clear, Sarso and Kasag and Makiki Roti is awesome and everything else is downhill.
00:37:55
Speaker
okay okay so like um yeah you know i mean there are other things too but like i i got a very very i've spent a shit ton of time in shillong which makes no fucking sense except there was a reason for it i've i've you know spent time right in in very random parts of the country over the years um much more so back then than these days these days as like a vc i spend time in like Mumbai, Pune, Delhi, right? Bangalore, Hyderabad, Chennai, the cities is where you have startups.
00:38:27
Speaker
um but But back then, and especially even in the early days of Omnivore, where where you know we were the first- How did
Inspiration and Origins of Omnivore
00:38:34
Speaker
Omnivore come about? Like you were in this um strategy business development role. So I had the strategy business development thing. And so I was thinking a lot about R&D. And at the time, this is like the early teens, um there was this notion of like external innovation. Like people, everyone should do external innovation.
00:38:50
Speaker
It was like a whole corporate fetish at the time. And that could be academic tie-ups or what have you. But like the vanguard of external innovation was like launching a corporate venture fund. um because and And by the way, the the flip side of that was there were all of these kind of very small, innovative businesses that kept pitching me, um even in my corporate capacity, being like, you know well, if you guys are looking, if you guys are thinking about right doing M&A, maybe you should think about backing us. like Here's this small, innovative thing we're doing.
00:39:24
Speaker
And I just thought it was really interesting. And and and there's a bit of ah of a segue to some work I had done in my prior role at Syngenta. The last assignment I had at Syngenta was developing the business plan for what later became Syngenta Ventures, which is one of the oldest, most established um sort of corporate VCs in the agri-food industry.
00:39:44
Speaker
And so a couple years into being at Godrej, kind of pitched this and got some support and it took off. and And we wound up being the sort of first earliest catalytic investor in the space. Fascinating. Was it called Omnivore right from the beginning? It was called Omnivore right from the... The the genesis of Omnivore was... um a book from 2005 around the time that I was at at ah at business school called The Omnivore's Dilemma, which was written by Michael Pollan. Michael Pollan was a New York Times journalist.
00:40:17
Speaker
um And it was really a book about food policy and Essentially, like it was the first book that cracked the American consciousness with respect to what should we eat and where does it come from?
00:40:35
Speaker
These were debates that had happened a decade earlier in Europe. Right? So Europe in the late 90s had all these debates about like mad cow disease and frankenfood and all of this kind of stuff. While America was like happily chowing down on Big Macs, utterly fucking oblivious, did not care. Like America late 90s, like processed food is wonderful. Fast food is great. Like um it was it was around this time in the early that that um suddenly this debate kind of jumped the you know ah jumped over um the Atlantic Ocean and and and came to America. And the guy who really was probably the most important thinker about it at the time was Michael Pollan.
00:41:20
Speaker
And I was very, very inspired um by the book. I loved it. It was one of my favorite books that I read at the time. And so um when we were thinking about doing this this VC, this corporate VC thing, um I wrote Michael Pollan and and asked for his permission. And he was like, yeah, sure, kid, whatever. um and and And yeah, I mean, he doesn't own the word omnivore, but we wanted to be like, we are inspired by you.
00:41:44
Speaker
um But the joke these days, um since nobody, like very few people in India have heard of the book, we always say that that the joke is, um so there are two of us who started this, myself and ah and a guy named Janesh Shah. Janesh was earlier the CFO at Nexus Venture Partners before we we kind of started this together in 2011. And um The joke is that that Janesh, we're an omnivore because he's a herbivore and I'm a carnivore. He's like an Orthodox Gujarati Jain, right? and And I love steak tartare. So I'm a pretty hardcore non-veg person. So um that's that's what what more people tend to think.
00:42:30
Speaker
hu Okay, fascinating. How much ah have you raised till date? Like you said, the current fund, this is what, fund four, fund three? Which fund is this, the 1800 crore? This is sort of our second kind of fund that it is that is sort of truly independent, um right? we we had We had a thing with Goldridge. That was the first thing. But then independently, we've had we've had two. um A fund from from twenty that we raised where the first close was and a fund where the first was
00:43:03
Speaker
um The fund where the the first close was in 2018 was 675 crore. And the most recent fund is 1800 crore. And how much of this capital comes from Godrej?
00:43:16
Speaker
Godrej was just in the first thing, not in these two. we ah We kind of became fully independent in like 2016, 17, continue to be good friends. Mr. Goldridge served on the investment committee of the last fund.
00:43:29
Speaker
um but But yeah, we we we we fully kind of spun it out, became independent. Okay. Okay. So whom do
Funding Preferences: Domestic vs. Foreign
00:43:37
Speaker
you raise from? Like who are your LPs? Is it domestic? Our LPs are pretty public. Like we have a lot of development finance institutions um that that we've raised from. We've raised from a lot of corporates like like Cargill, Louis Dreyfus, Yara.
00:43:51
Speaker
um We've raised from fund to funds. We've raised from um some sovereigns. I would say about 90% of our capital is ah is foreign capital. We have some some domestic capital, SRI.
00:44:05
Speaker
But it's almost entirely foreign capital. ah Is that because there isn't appetite in India for... No, I mean, we have some domestic family. all We haven't really focused on raising locally.
00:44:19
Speaker
um that That hasn't been something that... that Easier to you know raise from outside. I would say it's just different. um you know We've seen over the years that that there's sometimes counterparty risk with family offices in India.
00:44:33
Speaker
um you know, where where someone is supposed to keep investing and they're like, yeah, I'm not gonna. Take me to court. Good luck. Right? and And we just don't, like, we've literally experienced that where someone was like, you know, nah, I, you know, market's down. i don't want to make my capital call. And it's just like, I'm sorry, what?
00:44:53
Speaker
um and And we haven't seen that really outside of India so much. So we think it's a little bit easier. How does it work when you're raising a fund? it Does everyone, so like you said, 1800 crore. So does that mean you have 1800 crore in the bank right now? God, no, no, no. You do capital. That's the point is you do capital calls.
00:45:13
Speaker
Right? How does it work? like um You send people, you you send people, let's say someone commits to a million dollars. But that million dollars is going to be drawn down over like five years, mostly over five years, and then with some management fee, it trails out towards the end. And so like you know every quarter for five years, except it's not every quarter, you might have a quarter with almost nothing. right But basically, people have to like make sure they have effectively provisioned for that um you know for that ah for that drawdown.
00:45:47
Speaker
And the challenge that we that we kind of saw like domestically was that sometimes we would be like, capital call, and they'd be like, nope. Right? okay Six months later, they still haven't set it in. it's just like, ah i I don't know what to do here.
00:46:02
Speaker
Right? and And technically, you can default ah people who do that. Right? It's against the rules. Like, you default on. But, you know, they'll they're like, yeah, I'll take you to court. It's like, Okay, cool. So we've just over the years sort of moved away from from wanting that kind of, I think other people like it.
00:46:20
Speaker
ah Other people prefer to raise domestically. we we We find that there is more appreciation for what we do outside um and including from family offices in Europe, family offices in the US, fund to funds, foundations.
00:46:35
Speaker
um So yeah, that's that's generally how we raise. how we raise How much of the money you raise is coming in for returns and how much is coming in for impact?
00:46:46
Speaker
I would say most of it. It's very funny. People have ah have sort of a misunderstanding about DFIs. DFIs are banks, okay? They are not they're they're much harder money than you think. There are impact investors that exist in this world. I think many DFIs care a lot about impact. They care much more about ESG. But that like the best ones, like, you know...
00:47:06
Speaker
If I think about someone like BII, BII is incredibly returns focused. Which country is BII from? The UK. It's the erstwhile CDC. they stopped I think they changed the name because of, well, you know people have other associations with CDC. so um But yeah, I mean, I think a lot of the DFIs are actually very, very returns focused. We have a couple of hardcore impact investors, um but...
00:47:30
Speaker
you know I don't think of the DFIs that way. And then we have a lot of corporate investors and you know pure family offices that are very, very returns focused. And in this asset class of venture investing, what is typically the return? I know in equity, they say long-term return is around 14%, 15%. I think we just try to benchmark ourselves with our venture capital peers. We're just trying to deliver the same seed series A stage VCs in India. We're aiming to kind of do around the same.
00:48:05
Speaker
and what does this mean yeah the What's your think think is kind of what i you know i think of that like i sorry i n r twenty is kind of what i what I think of as that.
00:48:17
Speaker
And how do you ah make wealth? We're doing better than that. I mean, we've we've historically done better than that. So I think we're tracking pretty well. As the founders of Omnivore, what is your, how do you earn? Like, how how do you make money?
00:48:32
Speaker
The same way every fucking VC in this country does. You get paid a salary from your management fee and you have carry in terms of fund performance. Which is the least interesting thing of all time. perfect um Yeah, it's a percentage of the, of the every fund almost every fund in India 2 in 20. There's 2% management fee. There's 20% carry.
00:48:51
Speaker
Everyone makes money the same way. Same as private equity. Okay. Okay. Got it. I want to come back a little more to agriculture and policy and you know the inspiration which you got from the omnivores dilemma. Yeah.
00:49:05
Speaker
You know, in India, do you think agriculture needs
Balancing Local Farmer Protection and International Trade
00:49:09
Speaker
protection? Because I believe a lot of our tariff-related disputes are because ah the government wants to protect agriculture as a sector. Do you think it needs that protection?
00:49:20
Speaker
I think we have... So I think a couple of things. Number one, we have a huge number of smallholders in India. If you think about it, if we take not the most conservative estimate, but the general estimate, about 100 million farmers, um you have about 600 million people living on farms with their families.
00:49:40
Speaker
I think that we have to be very, very... So so to answer your question, I do believe in protection um for the livelihoods of those people. I think it is very, very important.
00:49:54
Speaker
um But I also think about protection a little bit differently. um And let me sort of explain that two ways. So the first way is to say, i do not think one drop of American milk needs to come into India.
00:50:08
Speaker
Right. Like we don't need to do that. We have 80 million dairy farmers. We are the largest producer of milk in the world. American milk is is made with non-veg cattle, cattle that are fed like non-veg feed ingredients. And so I think there's a legitimate cultural reason why India doesn't want to import that kind of milk. And I think we have a huge number of livelihoods to protect. So cool. I'm a thousand percent. let's Let's not allow American dairy products into India.
00:50:38
Speaker
Blocking American feed ingredients from coming into India is fucking stupid. Okay. It is fucking dumb. Like there's no other way to describe it. Like if if if we want to if we want to make the Americans happy, if we want to like not be in this 50% clusterfuck that we're in right now, okay, like part of that is is figuring out the battle for what we can let in and what we can't.
00:51:06
Speaker
we should not let in milk. We should absolutely let in DDGS. DDGS is a byproduct of the corn ethanol process. DDGS is a type of animal feed.
00:51:18
Speaker
It's a type of animal feed. okay okay It's pure veg, right it's low cost. And if we import it, the Americans are happy and our farmers buy have a cheaper feed ingredient.
00:51:32
Speaker
right Like it's a, it's a, whi you could say, it and no no, no, but it's not good for this small group of farmers that like grows oil seeds kind of, but they all, it's like boss, like if we're gonna, if we're gonna cut a deal.
00:51:46
Speaker
Okay. And, and deals are about compromises, right? I would let in American soy meal. I would let in American DDGS. I would let in American bourbon, please God let in American bourbon. It's such an easy win. right like just just like i think we all want that um Right. Let it bring in American wine, California wine without such crazy high you know tariffs. Like there's a bunch of things that are very easy wins.
00:52:16
Speaker
Right. While protecting the things that are important. Right. We should not let we should we should drown in California wine, but not let in one drop of American milk. And so it's just about like, and I think part of the problem with, you know, with the with the negotiations and I can't, I'm not involved in them personally and and, you know, don't know the participants, but like you got to pick your battles. And sometimes the the challenge is that like the list of what what we can't budge on is so long that like, it's like, okay, where is the compromise? Yeah.
00:52:51
Speaker
Right. You know, because on one hand, like absolutely, there is a legitimate socio cultural religious reason to not let American milk in. But when you're like, no, no, we can't possibly let an American soy meal because it has GMOs. Dude, you're fucking importing right from Argentina edible oil that was made from GM soya.
00:53:15
Speaker
Like there's a limit to this. Like, like you know, like, I mean, oil is another great example, right? India's in importing like 70% of their edible oil.
00:53:27
Speaker
Right now, largely from Indonesia and Malaysia, palm oil, some amount from Eastern Europe, sunflower oil, and some amount from Latin America, soy oil. Import more American oil.
00:53:38
Speaker
Like, You know, like cut, do the things that are necessary to cut a deal so that we get these tariffs down to the point that they're not punishing the entire country. And and you you we need to protect our agriculture. We should not let in things that will hurt smallholder farmers.
00:53:55
Speaker
But we're going to have to let in some stuff. Right. and And so I would, you know, I would pick those battles very, very selectively. If we're already mostly importing something from somewhere else like edible oil, move some of that to America. If there's something that is insanely overprotected, like liquor and wine in India,
00:54:15
Speaker
Give the Americans a break so that they can, you know, i don't, i'm not sure Donald Trump cares as much about California wine, but definitely cares about Kentucky bourbon, right? That's a state that votes for him. And so like it's, it's broadly speaking, I think we should protect the livelihoods of our farmers.
00:54:35
Speaker
Part of that can be bringing in and feed ingredients that, that lower the cost of animal feed.
00:54:42
Speaker
What is the shape and form of protection?
Modernizing India's Agricultural Economic Practices
00:54:44
Speaker
I mean, I've read the headlines. headlines that say that ah there is too much protection on agriculture. But is it in the form of tariffs or is it in the form of- It's in the form of tariffs and non-tariff barriers. They're high tariffs.
00:54:56
Speaker
A non-tariff barrier is basically like saying like, you know, we will not allow things that are- milk that was non-veg. Okay? Milk that was fed things we don't like, right? Or we will not allow poultry that was raised in this way. Like those are non-tariff barriers.
00:55:16
Speaker
Basically, with trade, India finds ways to block everything. I mean, it's you get it, right? like there's It's kind of a game, um but it's also, and some of it's legitimate, right? But some of it is just basically creating a very, very protected ecosystem. And I think that is not a terrible thing because I think Indian app farmers are small farmers, right? And they do need that protection.
00:55:39
Speaker
um But I also think there is a tendency to micromanage and overly protect the agricultural space in ways that are very, very detrimental. I've been saying this for almost two decades, right? Like in India, in agriculture, we we in certain parts of agriculture, it's it's almost bizarre. We subsidize inputs, chiefly fertilizer. We fix the price of outputs.
00:56:03
Speaker
it's the you know The whole thing is like positively Soviet. Right. And I would much rather. Right. and and And it doesn't reflect the way we manage any other part of the economy. And it doesn't reflect the fact that it's fucking 2025 people. We don't need to do this anymore. Like we have. Right. We have Adhar.
00:56:25
Speaker
we have you know you know we we we We have UPI, right? And the PM Kisan program is actually brilliant, right? The PM Kisan program gives farmers a few thousand rupees, right, directly into their jandan or private bank accounts.
00:56:41
Speaker
Cool. what if we just change What if we just use that? What if instead of 6,000 rupees, it was a lack? We give a lack to every farmer in this country. but we're not subsidizing fertilizer anymore. and we're not And we're not playing with prices. You get a lack, you're a cultivator, have a lack, okay?
00:56:59
Speaker
But that's it, you otherwise figure out your shit. Like instead we've created a sort of permanent bureaucracy that is engaged in in like this Soviet game of balancing supply and demand, like full Marxist economic style.
00:57:14
Speaker
and and and and And it's just like, We have the best digital public infrastructure in the world. Let's use it and get out of this other shit and let people decide what they want to grow.
00:57:27
Speaker
This ah direct transfer ah of the subsidy, ah like realistically, do you think it can happen? I think it could happen. I think it requires a degree of bravery.
00:57:42
Speaker
but Let's take a step back. The last time we tried agricultural reforms, it ended with riots and dead farmers in Delhi. Okay. um So I think there's a real reluctance to to to tweak things um kind of given that.
00:57:59
Speaker
I feel like it could work if... A, sort of the same way that that the reforms in 1991 worked. Like in a crisis, it could happen, okay, because we have to. But I think it's also about, you know, making it clear that like whatever we're giving the farmers is so much that they're willing to relent on the rest, right? The the challenge will be like, give me the lack and let me keep the subsidies, right? It's just like...
00:58:27
Speaker
But I think if that amount is moved high enough, it could be very, very, very interesting. It's just politically very difficult to do because we're so addicted to these systems that we've had forever. like this notion of like And there's a good reason why India started subsidizing fertilizer in the 60s and 70s is it was a critical part of the Green Revolution. It was very, very expensive. It was hard to get people to build the plants.
00:58:50
Speaker
Right. And so there's a reason for these things. But the problem in everything public sector is there's no sunset clause. So even if you started something for a good reason in the 1950s or 60s or 70s, boss, it's 2025. Yeah, yeah, yeah.
00:59:06
Speaker
ah You know, I have very superficial understanding of the reforms which were attempted, which did not really happen. ah Can you help me understand what what was the reform that the government was attempting?
00:59:19
Speaker
There were a bunch of them. Like, the the fundamentally, there were a couple of things at a very, very high level. Okay, at a very, very high level, because I mean, honestly, it's been five years, and I'm probably a little blurry. um One of them was essentially a major reform to the Mundi system.
00:59:36
Speaker
Okay, essentially saying, hey, um we don't like anyone can create a private Mundi, anyone can buy and sell from anyone else, and we are going to break the monopoly of this Mundi system.
00:59:49
Speaker
um The other, you know, the the challenging thing about that is Mundi system is a major revenue generator for a couple state governments, especially in Punjab. um I think they make 6,000 crore year in Mundi SES.
01:00:02
Speaker
um And so, and and and a lot of that, you know. And so I think there you know it was politically a bit naive to sort of threaten those channels without having real alternatives. But the vision was essentially like a free market for people to buy and sell, which is not a radical idea. There are some states that don't have monies that never have or that ended them 20 or 30 years ago. But there is quite a bit of, especially in North India and parts of the Kavari Delta,
01:00:35
Speaker
this kind of Mundi system linked to the public distribution, linked to the Food Corporation of India, linked to the public distribution system, and threatening to kind of reform that sent people out on the streets. That was the first thing. The second thing was changes to the Essential Commodities Act. The Essential Commodities Act is this super, super fucking imperial British law that like so like so many of these kind of colonial hangovers, um you know, empower the government to essentially prosecute the private sector for storing commodities, right? For, for you know, engaging in trade, for for for storing things, right? it's It's essentially an anti-famine tool, but it's a sledgehammer.
01:01:23
Speaker
um and And as a result, it it you you see it get deployed sometimes when it's just like, prices are rising, deploy the Essential Commodities Act. And it's like, You don't do this in any other sector.
01:01:34
Speaker
Okay. Like, it's not like, you know, you know, like Bombay rent prices are rising. Let's like slam them. Like, I wish that would have helped, but like, you know, it's, it's, it's sort of like an overly empowered, right.
01:01:49
Speaker
Public sector. Admittedly, this is an issue of food security. Right. But it's, it's, it's, It's sort of like you know deciding that that you know the private sector can never be trusted.
01:02:02
Speaker
right It's very, very like nineteen fifty s profit is a dirty word you know, mentality that has ah that exists in the agricultural sector and in no other, right?
01:02:14
Speaker
um and then and And it was an effort to kind of reform that and make sure that like that couldn't be used and abused the way it historically has been. And then the third piece of the farmer reforms um was a better, more standardized system for contract farming. That was the least controversial of the three.
01:02:32
Speaker
right It was really the Mundi thing had very negative implications for states that make lots of money off their Mundis. um And for farmers that are primarily in this kind of FCI PDS, I grow food with subsidized fertilizer and free power and sell it to a Sarkari buyer and don't have to think about what I grow from year year. And so that sort of small, like about 10% of Indian farmers or 8% of Indian farmers just freaked out that this was all coming to end it it coming to an end. The funny thing about it is the reforms weren't even saying that. It was the prospect of change.
01:03:12
Speaker
change that sent people out. It was almost like, if you think about like in, in in West Bengal, it was like a a union strike because like someone agreed to a new work rule that later on might create automation.
01:03:27
Speaker
Right. It was like, no, no, no no compromise, no surrender. Right. Like we're going to go to the streets over this and, and they won. Right. Like the government pulled it all up. Um, you know, and, and, and obviously it was,
01:03:41
Speaker
During COVID, there were so many other considerations. But I think it will be a long time before anyone does that kind of agricultural reform. There are other reforms that are happening. There are some major land reforms that have happened. There's land digitization. There's a bunch of good stuff. There's the building of the agri-stack.
01:04:00
Speaker
um but But I think that's... ah The agri-stack is essentially... Like, if you think about... The India stack, the India stack is, right, I have, right, a mobile phone number linked to my adhar, linked to my bank account, okay? And that's the building blocks for for a lot of the UPI.
01:04:20
Speaker
The agri stack essentially says, I have an adhar and I've linked it to a piece of land, oh right? So this this little piece of land in this taluk delineated with these borders is owned by this dude, right?
01:04:36
Speaker
And they're even, i think, trying to also make a distinction between the owner and the cultivator.
The Agri-Stack Initiative: Streamlining Agriculture
01:04:41
Speaker
right which is a very important distinction to make because in theory, right subsidies should go to the cultivator, right even if they've leased the land but don't own it.
01:04:50
Speaker
So it's an effort to like build this next layer of digital public infrastructure for the agricultural sector. And then there's a bunch of, like the the aspiration is huge. The aspiration is like, we know what's growing on each hectare of Indian land and then you know can be even more precise. But I think if they just build the simple nexus of here's the parcel, here's who owns it, here's who's growing on it, oftentimes will be the same.
01:05:17
Speaker
That would be a a game changer. The fact that India is a small landholder dominated is because of these protection policies that ah there is no private participation allowed in agriculture.
01:05:31
Speaker
No, i don't think that's I don't think that's... I mean, India was going back for hundreds of... thousands of years, right, an agricultural country. um And I think, you know, if we go to 1947, right, at the time of independence, um India and Pakistan go in very, very different directions with respect to agriculture, right? um India goes in this Gandhian, Nehruvian direction of land reform immediately after independence.
01:06:05
Speaker
right For the next 20 years, there are meaningful land reforms. There are land sealing acts. There are efforts to break up big estates. Pakistan has never gotten rid of zamindars. Pakistan is still a zamindari system. You still have people that own 20,000 hectares, 10,000 hectares. India doesn't have zamindars anymore.
01:06:24
Speaker
um And so I think that was the thing that really created more of the smallholder system. But that's not a bad thing. right You don't want one feudal landlord in Punjab owning 20,000 hectares. We did that. It sucked.
01:06:39
Speaker
That was there. But where does that keep the more productivity? No, what's interesting is Pakistan is less productive per hectare than India. ah There could be other reasons. i mean There could be other reasons, but but in general, smallholders are not unproductive.
01:06:54
Speaker
right um if you like like they're not like If you think about a smallholder, they're a micro-entrepreneur. So let me let me let me flip it back on you. Is a kirana shop unproductive?
01:07:08
Speaker
No, it's still... Exactly. There's your bias. yeah okay think of when you When you think about a kirana shop and you're like, this banya is on top of every pesa. okay yeah yeah right That's the same with a smallholder farmer.
01:07:24
Speaker
and There are no management fees in a Kirana shop, right? They don't they don't have management. No, but there's no management. They they live and die by by the price they buy and sell at and the services they provide and how they bundle things and the convenience they provide. And it's actually very funny. um It's no longer as relevant in this quick commerce era, right?
01:07:43
Speaker
But like when i when i when I lived in India, people were always like, do you like modern retail? I'm like, no, no, I i love my Kirana shops. Like... um Like they were doing delivery before anyone, right? um And so, um yeah, I think when we think about smallholder farmers, sort of take the the mental model you have of a Kirana shop and just say, this is that for agriculture.
01:08:09
Speaker
Okay, got it. But ah what kind of deregulation are you in favor of? I'm in favor of largely getting rid of the i'm sort of I'm sort of in favor of getting the government out of the business, okay?
01:08:26
Speaker
okay Like if you ask me, right, we don't need to give people bags of rice. We can give people money in a bank account and we don't need to subsidize farmers by running the largest agricultural procurement system in the world where we dump grain into shitty, shitty go downs where it gets eaten by rats. Instead, we can just give them money like we like we're in a world of like stable coins.
01:08:52
Speaker
Right.
Transitioning to Market-Driven Agriculture
01:08:53
Speaker
And, you know, and like we have all these all of this incredible financial technology and we have all of these systems from the 60s and the 70s from like forget about a pre digital era, a pre working telephone era.
01:09:08
Speaker
OK. and and And it's just ridiculous. Like i would I would get rid of all subsidies on fertilizers. I would get rid of the Food Corporation of India. I would get rid of the PDS because we can just give people money that can buy their food. Okay.
01:09:24
Speaker
um I would get the government out of the bi out of like running trucks and businesses and all of this, right? um Because it's ridiculous and it's inefficient.
01:09:35
Speaker
um and But at the same time, I think we can give farmers more money. Like, ah you know, we spend an insane tens of thousands of crores on all of this stuff, okay?
01:09:48
Speaker
and it's And it's just like, what if we just gave that money to farmers? Like instead of running around, you know, managing input prices and output prices and public go downs and all of it, we just like figure out what that costs and just give it to the farmers.
01:10:04
Speaker
Yeah, unleash the free market. Like unleash the, like I'm not, and the funny thing is i'm not a libertarian, okay? Like I actually think, like if you, like you you saw that with my perspective on trade, I'm like 100%, keep the milk out, like protect, protect livelihoods, protect rural India.
01:10:20
Speaker
But like this notion that we need to tell people what to grow is insane balls. Like it's just, it's it's it's so, so Soviet. I understand that like it's it's it's bizarrely communist.
01:10:36
Speaker
What's the probability that this will happen in the next? Oh, it's in like nil, like 0%. Okay. Like 0%. Okay. Like zero percent okay like there's no chance. um It would take a real crisis.
01:10:49
Speaker
um It would also just take a very different economic philosophy. Right? Like... um I think the prime minister does most things quite well um and and is and is a great supporter of of of the agricultural system and a great protector of it. And I think a great supporter of the startup ecosystem.
01:11:11
Speaker
But i you know i don't I would not describe the NDA as a libertarian party. right like I don't think there is sort of a notion that there should be less government. right like I think we're a long way away from like maximum governance, minimum government. like That didn't happen. like that wasn't That was a slogan from 11 years ago, but that's in practice very hard to execute on.
01:11:35
Speaker
I think there has been great digital public infrastructure built, like incredible. um But I think it's it's very hard to tell people to surrender their power.
01:11:46
Speaker
It's very, very hard to tell bureaucrats you should do less. Can you help me see India through the eyes of an immigrant? yeah because I have always seen India as someone who's born in India. you know I don't realize some things might be weird or funny or like you know things which are only in India. like ah you know As an immigrant, what what are some of those observations you have?
01:12:08
Speaker
about India or work culture or corporate culture or or just how India operates.
Work Culture and Social Dynamics in India
01:12:14
Speaker
I don't think about it that much, but I, I, I would say it's, it's one thing that's interesting is everything starts late and goes late. I don't mean in terms of punctuality. I mean, just, there's no notion of early office hours. Right? Like, and and to be clear, I haven't worked in America since like professionally since 2004.
01:12:32
Speaker
But like, it's very common in America that people will be like, yes, let's do a meeting at 7.30am, which is like, completely unthinkable. Like in India, 9.30 like, oh, really, huh? I feel like that's I do think there's a little bit of a let's meet for breakfast thing that happens in places like Bangalore. But yeah,
01:12:52
Speaker
I think that's that that would probably be one insight. um You know i I think as a foreigner, you you start to realize that when you get that wedding and but invite, you better go to that wedding.
01:13:08
Speaker
Like that was, you know, that people actually, like, it might you might be one of 4,000, but they care that you show up. um You know, i i think... um I think Indian friendships are some of the deepest friendships I've built. um you know i think there is I often describe someone as as sort of the ultimate reciprocity. There's sort of an expectation that like if I show up at your door, i can stay as long as I want for whatever, and you will provide whatever I need, but it's mutual.
01:13:38
Speaker
Right. And that expectation that that doesn't exist in Europe, that doesn't exist in America. Right. This notion of like when someone is in your inner circle, right, that they have this ability to impose and you have a reciprocal ability to impose and that we're sort of all in it together.
01:13:55
Speaker
um You know, i I remember many years ago when I was going through a really tough time in my life, I i literally like showed up at a friend's door and stayed there for a month. Like, and, and there was never a word. There was no notion that like, this was weird or that that there was, you know, it was just like, Hey, what time do you want breakfast?
01:14:14
Speaker
Yeah. Yeah. um That's normal. Yeah. You know, and so, um yeah, i um, it's also just changed a lot. It's a lot, you know, um it's been over the last two decades, you know, i think certain things have gotten much, much, much easier. Banking is much easier. Everything digital is much easier. Telecom is much easier.
01:14:38
Speaker
Traffic in Mumbai has recently gotten easier. Um, maybe, um I still think of of the Delhi Metro as a masterpiece of public transit because I remember what Delhi was like before it.
01:14:51
Speaker
um Other things haven't changed. you know The environment's gotten consistently worse. The air has gotten consistently worse. um I think like there's not a lot of foreigners that stay very long.
01:15:05
Speaker
right like like i think it's it's interesting... You know, there are a lot there are a lot of Indians in Singapore. There are a lot of Indians in Dubai, right? And and those are cities that are very expat dominated, right? Dubai is obviously entirely expats, like 10% Emirati, right? um and And Singapore is, you know, I think one seventh expat, okay, maybe.
01:15:29
Speaker
um And then you go to like, you go to India and I would estimate there is less than one lakh foreigners that live in India. My best guess, I'm sure the Ministry of Affairs. You're not including people from Nepal and Bangladesh in this number of years. I am not. I don't need to do that. There's enough of that talk.
01:15:50
Speaker
but But in terms of you know people from, you know you you have clusters, you have clusters of Japanese and Koreans from the auto sector. You've got some Europeans from,
01:16:01
Speaker
But it's very, very, like there is not really a big expat community in India at all, right? Like it's tiny, it's microscopic, it's totally irrelevant. if And if you go to any of these sort of bastions of expats, like let's say, you know, the the um International School of Bombay, okay?
01:16:20
Speaker
International School of Bombay is 50% Indian, right? Like it's actually really a posh Indian, but but Indian. Yeah. You know, there there there aren't expat neighborhoods, right? You could say, oh, okay, there are a lot of expats in Bandra in Mumbai or or, you know, in Panchal Park in Delhi or in, um you know, Indranagar.
01:16:41
Speaker
You're talking about maybe max hundreds of people, right? It's a very, very, very, like, I think there is almost no expat community in India to speak of. India's hard for expats, right? I think. I don't think it's necessarily. i think I think it's actually more economic than anything. I think India is a talent exporter. They don't really need expats, right? Like if you think about it, like you think about all the CEOs globally that are Indian, India sends talent everywhere.
01:17:09
Speaker
yeah So there's not there's there's surplus talent. There's not really a deficit. So in general, if an expat moves to India, it's for something very it's because they're passionate about it or married to an Indian or what have you. It's very rarely because there's like an incredible need that they're filling in an ecosystem.
01:17:28
Speaker
um you know And and and i think the I think the lack of sort of outdoor space is very, very different um
Challenges for Expats Living in India
01:17:40
Speaker
from other places. The lack of sort of like you know sports infrastructure and stuff like that is very, very different from what you experience in in North America or or Europe or what have you. And kind of between that and the environment, I think expats don't last very long.
01:17:55
Speaker
Very few do. Okay. So let me end by asking you for advice ah that you may want to share with founders who hope to get funded by Omnivore.
Aligning Entrepreneurial Goals with Venture Funds
01:18:06
Speaker
You know, what should be their approach towards solving problems, building, scaling? God, that is an incredibly, incredibly broad question. So ah look, the mental model that I use for for when I think about startups is always what I call like four Ts. It's not, by the way, this is not interesting. This is like every VC, right? It's like team, TAM, tech, traction, right?
01:18:31
Speaker
um The first thing that I will always ask founders is like, have you, and where a lot of founders really, really fuck up is like, Have you built the right team?
01:18:43
Speaker
Right? Do you actually have the people that you need around you? Have you been able to get the right co-founders? I think a lot of people don't think about this the right way. Okay.
01:18:55
Speaker
um Right. They're like, no, I don't need any co-founders. I'm brilliant. And it's like, cool. And if you get hit by a bus, what happens to my money? Okay. Like,
01:19:08
Speaker
you know, and ah I mean, that's one element, but the other element is also just like, oh, you're good at everything. Sure. Cool. I'm sure that's true. Okay. um Right. and And then it's like, you know, and then it's like, sometimes you see this phenomenon where it's like the founder finds someone who's just like them, right? Like we were at, you know, we're batch mates and we studied exactly the same thing. We worked at the same place. And it's like,
01:19:34
Speaker
Great. Two of you, instead of like, I don't know, someone with a complimentary skill set. um so you know or Or then there's this tendency to be like, we are the co-founders, right? And therefore everyone else should be an employee, even though we started this two months ago and have no traction.
01:19:53
Speaker
And it's like, uh-huh. Yeah. So I think like, it's really like people just, the the team thing is the thing that gets screwed up the most. It's just like, I don't know. I think for the first year of your business, if someone joins in a senior capacity, call them a co-founder because dude, have some fucking humility. Okay. The journey has barely started and share value or you're never going to create any value.
01:20:18
Speaker
Um, I'm kind of militant on that. Um, it's not like we would never back solo founders we have. Um, but I think in general, we prefer to back like really strong, diverse teams of, of people with complimentary skillsets.
01:20:32
Speaker
Um, so that's a big one. I think another thing is just in this, you know, whole question of, of TAM, it's just a proxy of like whether what you're building is big enough for venture.
01:20:47
Speaker
And I think a lot of people really, and and and and more specifically, like big enough for the fund you're chatting with. Right. and And people, I don't think, realize how much this matters. It was really interesting. We did Omnivore helped start a nonprofit recently called Biowave, which is focused on building India's life sciences economy. And we did it together with Nucleate, which is an organization of life science postgraduate students globally, which is run by an Indian, but like has like all the life science students at at Harvard, and MIT and ISC and other places.
01:21:23
Speaker
And with IndieBio, which is the world's kind of best super early pre-seed investor in the life sciences. And so we started BioWave. We had this kickoff event in Bangalore and Rajan came from Peak. And you know he was talking to the crowd and and and you know people are asking questions. And he said, like you know we need people that are building for crazy, crazy outsized outcomes and scale.
01:21:48
Speaker
we're a $2.4 billion dollars fund now. Like nothing moves the needle that I've seen from the space. And like we're a $215 million dollars fund, right?
01:22:00
Speaker
The outcomes that you need from $2.4 billion or $215 million are very different from, you know, a nice 200 crore fund. But entrepreneurs don't tend to think about this a lot. um and And so I realize i'm I'm sort of discussing TAM, but it's, it's, it's,
01:22:19
Speaker
You need to think about whether you're building into a big enough space to build something sizable. And then you need to think really hard about whether the fun that you're chatting with is the right fit for the size of the opportunity you're pursuing.
01:22:33
Speaker
Right? Like it it comes down to like, you know you have to ask this question. I sound i sound very Gen Z, but like, does the math math does the do the maths math? Okay, like, right, this notion of like, okay, like how big of an outcome and then if someone owns 10% of it, and how big is that relative to their fund is something a lot of entrepreneurs don't think about, but they should.
01:22:57
Speaker
right There's a whole thing about like, if you're pitching me, tell me how you're going to move the needle for a fund of my size, not like whether it's good for you. There's a lot of outcomes that are life-changing for founders that do not help funds.
01:23:11
Speaker
right um And then you should think about like if if venture capital is what you want to raise. and And then... you know um I think those are those would be like two pieces of advice. like get the team thing right and really think about the, you know, whether if you're pitching me, what you're pitching is like, has product market fit for my fund?
01:23:35
Speaker
Like do that math yourself. Don't make me do it. ah I've heard other VCs say that great founders make their own time. I agree with that.
01:23:46
Speaker
and No, no, I absolutely agree with that. I think there were plenty like, what was the TAM for, you know, just, I used the word stable coins recently. What was the TAM for stable coins 20 years ago? was zero. Yeah. Okay. yeah yeah so So I agree that great founders make their own TAM, but I think there's lots of people that are building nice businesses that shouldn't raise venture capital or that are building really good businesses, but they should chat with smaller funds that that actually would would be happy to invest in them, that could where where the fund will be very happy with the same kind of outcome as the founder.
01:24:21
Speaker
and And people have a habit of chatting with the largest funds where it's like you will never, never be okay for them, right? Like you're never going to work for them.
Opportunities in Agri-Fintech and Rural Consumer Brands
01:24:31
Speaker
but What are the large time opportunities in the next 10 years within the spaces that you look at? I think there is a huge opportunity in in agri-fintech. um I think in general, the source of credit to farmers is a mess. The source of savings, the source of you know wealth creation and insurance and all of that is really, really, really, really broken.
01:24:57
Speaker
And so I think that's a huge opportunity. I think there is an enormous opportunity to build consumer brands focused on rural India. right like you know I think tastes are different. i think um you know I think there's rising income levels in rural India. There is not the same blood red playing field with respect to retail. And so I think um there's there's a huge rural consumer play.
India's Position in the Global Bioeconomy
01:25:24
Speaker
I think the bioeconomy is something that um is an enormous, enormous opportunity for for founders that are technical. What do you mean by bioeconomy?
01:25:35
Speaker
Companies that do biology, companies that do chemistry, companies that are working on new molecules, new enzymes, Bioprocessing, biorefining, biomanufacturing, all of that stuff.
01:25:50
Speaker
Right. um I think that is, you know, a a huge opportunity. um And it's not one enough, you know, we've we've had like decades of people that were like B-Tech biotechnology becoming software engineers. And it's like, yeah.
01:26:05
Speaker
Y'all need to stop doing that and start actually doing biology. um and And I think that that it's a little bit scary, honestly, how far behind the ball India is in the life sciences economy. like This is why we started BioWave. like The Americans are like racing ahead. The Chinese are really close to catching up with the Americans and the Indians are like,
01:26:30
Speaker
nowhere, just nowhere. and And it's like the same thing. it's yeah I'll give you a real simple example. You know, if we were to say who are like the new money, the new up and comers, right? um Entrepreneurs that have made fortunes. Okay. So cool. Like let when I first started getting professionally involved in India, 2005, right? Like you you had you you had these people that had become very wealthy through the tech sector, right? Like Ananda Nilakani, for example, right? Or a Narayanan Murti. But like now, all of these years later, you have the Binnie Bunsels and Sachin Bunsels and Hajar other right entrepreneurs that we can point to that like made their money through software and technology and all of this. Cool. Biotechnology, 2005. It was Kiran Mazumdar-Shaw. 20 years later, who's there?
01:27:24
Speaker
Yeah. Who's there? and It's still Kiran. It's still Kiran. Like, wheeling her out for like... like It's still... You know, i mean, it's ridiculous. And it and and it should be it should be a point of national, like, shame and frustration. And it should also be, like, the ultimate, right, sort of wake-up call.
01:27:43
Speaker
um And there are people that are doing amazing work. Like, if if you think about, like, Taslim Arif Syed, who runs C-Camp in Bangalore, is, like, this, like, public sector, right, guy who's just lifting harder than anyone else. The Bayrak, you know, chairman is doing a great job. Like, like, The government actually in life sciences has, has but the private sector hasn't fully stepped in. And like, guys, it's fucking time.
01:28:07
Speaker
Okay. Like this ship is sailing away and like you're stranding one, one seventh of humanity behind, you know, continuing to be like, we'll make generics. It's like, okay.
01:28:20
Speaker
Like, are you kidding me? Like we can do things now with AI and and protein folding and all of that. You know, this technology is is, the cost of this technology is rapidly dropping. The ubiquity of these tools are getting, you know, are are getting, you know,
01:28:36
Speaker
much easier to use, but you have to want to. You have to make it a national priority and build accordingly. and And I'd like to say it is getting better. You do see entrepreneurs that are building in this space, right? you've got We have our portfolio company Loopworm, and we've got BioPrime. And you know there there you saw this deal earlier this week, Backalt, that did. Like there are more and more entrepreneurs that care about this, but it's like a fraction of the number of people that want to like, you know, deliver you a fucking taco.
01:29:09
Speaker
Right? Like, sorry, I sound like the commerce minister. I said, it's,
01:29:19
Speaker
I'm sorry, I'm going to get blasted for this. But like, I i i mean, to be clear, when that when that speech happened, like my reaction was was very schizophrenic. My reaction was like, on one hand, I'm like, sorry about, like, actually, there is some truth to it. Okay? Okay. then, um but the flip side was also like, people forget that that china had that the China's deep tech takeoff is really in the last decade. And they had built some enormous, enormous food delivery and ride delivery and gig economy companies that later on became AI companies.
01:29:57
Speaker
um And so I think we like forget that sometimes.
Global Tech Giants vs. Local Digital Development
01:30:01
Speaker
i i This is going to sound funny, but I think the original sin in some ways of of our ecosystem right kind of goes back to the like early 2000s where China booted Google out and India was like, sure, you can you can be here. And I'm not hating on Google or anything, but I think...
01:30:20
Speaker
you know, from a digital sovereignty perspective, we kind of missed a beat and lost an opportunity to to build things domestically um that that, you know, very clearly is costing us in this AI world, right? The inability to sort of get a very successful LLM um out of India right now is very much linked to the fact that there is no Indian Facebook and there is no Indian Google because the Indian Google is Google and the Indian Facebook is Facebook.
01:30:47
Speaker
meta, whatever the fuck you want to it. And you know, it's like, let's not do that in bio. Like, let's actually get our ass in gear here.
01:30:59
Speaker
What else? No, that's it. ah Thank you so much for your time, Mark. i had a lot of fun and it was an educational conversation. Thanks. It was a pleasure being here.