It was 2012. I'd just started working at Pluggd.in, the startup and tech site run by Ashish Sinha. Yourstory also covered startups those days. Mainstream media was still covering quarterly results at IT services companies and listening to the same "management commentary," every three months.

A new fund had launched a few months ago. They called themselves a micro VC and they were writing cheques faster than you could get from Silkboard to M G Road in Bangalore. I exaggerate, but you get the drift. The fund was called Blume Ventures. It was run by Karthik Reddy and Sanjay Nath.

Using their first fund, about Rs 60 crore of Indian capital (most of the money that comes into Venture Capital in India is foreign), Blume backed 70 companies. Some of them are well-known names now. Blume was also a backer of FactorDaily, the media company Pankaj and I started some three years ago (Read Lessons from a rookie entrepreneur by Pankaj here).

Cut to 2019.

Plugdd.in is NextBigWhat.

Yourstory is Yourstory.

You've been reading my story on this newsletter.

Mainstream media has dedicated startup pages now.

Blume is raising its third fund (nearly $100+ million).

India has over 20 companies valued at over a billion dollars. This year alone about half a dozen of them were born (thanks to Softbank and some late-stage investors). Indian startups have been in hot pursuit of growth, sometimes even showing utter disregard for unit economics.

Many times this is because companies heavily subsidize goods for new consumers hoping to create new market behaviours. After the WeWork fiasco, we've started hearing some chatter about profitability.

In the balancing act between profitability and growth, the Indian ecosystem should have grown enough by now to show a few big exits, but apart from Flipkart, there aren’t many.

Truth be told, profitability is nowhere in sight for many startups. Some have begun to question if this has become a “mindset” feature of the Indian startup multiverse.

Earlier this month, Karthik wrote a provocative blog about why Indian companies need to show that they have the mettle to go public or list their stocks to be traded at an exchange. He argued that though this brings on the burden of compliance, it is high time Indian startups started showing "cash exits," and not markups to paper valuation.

Ravish and I decided to do this week's Use Case podcast with Karthik to unpack what he meant by that and why it was important. With Karthik, who has shaped Blume’s investment philosophy for almost a decade and brings a wealth of prior experience across financials, technology and media, we also tried to contextualise what is happening with venture capital in India. We hope you like it. This one is meant to create ripples!

You can listen to the show directly in this browser on your phone/desktop by clicking on the play button at the top of the email. Alternatively, you can find this episode of the Use Case podcast on Itunes/ Spotify/ Google Podcasts. Listen to it directly, or download it for later.

If you do like the podcast, consider asking a friend to subscribe to this newsletter. Or share it on your social feeds. We'd really appreciate a shout out. Should you have any thoughts on the subject, please feel free to write to us on email or tweet it out!

Other recommendations this week

💥 Mihir Dalal's book on Flipkart which was published earlier this month. Check out here.

💥 Sajit Pai's Tweet thread on Karthik's blog post. Read here.

💥 Set of talks by Vijay Shekhar Sharma, Bhavish Aggarwal and others from TechSparks 2019 by Yourstory. Check here.

Cheers,

JPK

Why don't more Indian startups IPO? With Kar…

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