Early-stage Investment Chief
"We think all things India consumer and SMB enablement - commerce and fintech - are going to continue to explode", Karthik Reddy, Blume Ventures
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Karthik started Blume as an idea of an institutional investor who needed to support very early-stage companies in 2010-11. He executed this idea with his co-founder Sanjay Nath. As more and more entrepreneurs emerged and the infrastructure fell in place mid-decade, the need for the support proliferated which resulted in the firm and Karthik deciding to cut portfolio width and focus on the depth. Blume ended up maturing to a more selective VC firm that would invest in founders and ideas which the team at Blume thought could change the world in the future. Karthik and Blume both want to make a significant impact in the latter stages of the start-up's journey rather than investing like most accelerators and seed funds to make a marginal impact post-Series A. Despite the small size and resources of the firm, it has shaped the early stage ecosystem, its behavior as well as culture. Karthik believes it is extremely fulfilling that the team has also built a robust pipeline which he believes will be ground-breaking long-term associations with companies in Blume's portfolio. Karthik aims to see Blume as being one of the top 5 investor names when there is a feeling of nostalgia about shaping the ecosystem. According to Karthik, Blume's primary role is Seed to Pre-series A funding. The priority for the firm as well as for Karthik is to find new business models or tech which will go on to solve a problem or change the consumer behavior, accompanied by a founder or founders obsessed to create solutions for a problem for the next decade or more.
Blume has invested over 150 companies since its inception. "We have other network programs now where we invest smaller cheques but this is the most applicable - where our presence on the cap table is significant. Of these, about 50% would have been picked or led by me, though my ratio is down to 20-25% in the recent funds." Karthik feels confident regarding India turning its corner and is convinced that large segments of the economy will be built by a new generation of digital or tech-first entrepreneurs. He also feels that Indian software products are also going to see unprecedented scale as global B2B customers accelerate to more remote productivity at scale and that the speed of scaling and growth possibilities are too attractive to not allocate a lot of risk capital. However, he feels that there are risks in early-stage investment that will always be high, despite algorithms or historical hilt learning. Karthik sees the investors as "manufacturers of serendipity." He believes that structural team building is integral to a company's long-term success. Karthik is very proud that Blume has played some role in the companies they have invested in, may that be Unacademy, Jai Kisan, Procol, Slice, etc.
PORTFOLIO SIZE: 80 active companies (150 lifetime)
AVERAGE TICKET SIZE/SWEET SPOT: $100-250K (Fund I), $250K-$1 mill (Fund II), $1-2 mill (Fund III), $1-2.5 mill (upcoming Fund IV)
TOTAL NO. OF EXITS: 30+