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Episode 76 · Capital · 46 min

Nobody asked for a super app

WEH went from a ₹20 crore first fund to ₹115 crore by writing nine cheques instead of ninety, and its bet is that India will not consolidate the way China did: no user has ever asked for a super app, and B2B can hold ten large companies each at five per cent of the market. Fund one is sitting above 40% IRR and has already begun returning cash.

Venture capital Consumer India D2C & commerce

Rohit Krishna

Partner (GP), WEH Ventures · with Vishal Krishna

45:48

Said in this episode

▶ 2:25

₹20 cr → ₹115 cr

Fund I to Fund II size

The 2017 debut fund was ₹20 crore, deployed from 2017 to 2019; the second, launched in 2020 amid the pandemic, is about ₹115 crore.

▶ 30:51

40%+

Fund I IRR, investor cash-flow basis

Rohit's stated figure for the first fund, measured on investors' cash flows rather than WEH's cost basis; some positions have already been partly exited.

▶ 2:45

9 → 15–18

Companies per fund

Nine names in the ₹20 crore fund meant needing only two or three winners; the second fund will hold 15 to 18, keeping reserves to follow on into the successes.

▶ 31:17

~80%

Fund I investors who re-upped

About 60% of Fund II came from Fund I investors, roughly 80% of whom doubled down, and Rohit says almost all of the capital is domestic.

▶ 21:24

$50 bn

India's annual food-product exports

Cited as evidence India is food-surplus and not failing at agriculture; the problem is 50-60 years of accumulated supply-chain inefficiency.

▶ 31:49

~30

Similar companies passed before smallcase

WEH looked at roughly thirty comparable investing-side startups before writing into smallcase. That discipline, he says, separates a fund from an angel.

The brief

The argument in sixty seconds

Rohit Krishna's claim is that a small seed fund's only real edge is concentration plus a tolerance for being wrong in public. WEH raised ₹20 crore in 2017 and put it into nine companies; the ₹115 crore second fund will hold 15 to 18, keeping reserves to double down on what works. Being small in 2017 meant losing deals to bigger names and taking the wrong companies to its own investment committee. That, he argues, is exactly what made smallcase possible in 2018, when tier-one VCs were declining it over market size, and a cattle-trading marketplace possible in 2019, when no such thing existed anywhere. The second claim is structural: India will not consolidate the way China did. Nobody has ever asked for a super app, Bharat users are happy to keep twenty apps and open all twenty, and B2B is so far from winner-take-all that ten firms could each make tons of cash on five per cent of the market. Under all of it sits UPI. Jar's autopay moves ₹50 and ₹100 a day into gold without the user opening the app, and Animall's dairy farmers buy listing credits and take payment without the 20-30 kilometre trip to a branch. The failures instruct too: right theme, wrong team, and a chronic underestimate of Indian fintech regulation, now a pre-investment test rather than a later problem. Fund one is above 40% IRR and has started giving exits; the harder bet (exports) is being placed now for the next decade.

Worth your time if you are

Founders raising seed money into a slower market

Emerging managers running their first small fund

Agritech and Bharat operators past the pilot stage

Investors choosing between the team and the thesis

Episode map

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

Venture capitalConsumer IndiaD2C & commerceFundraisingFounder journeySupply chain & agri

01Cold open: public markets to general partner 0:00 Vishal frames the India story at the close of 2022 (UPI heading to the UK, D2C, agritech, content) before Rohit traces his route from Spark Capital's public-markets desk to an investment bank started with Deepak in 2016, a ₹20 crore first fund in 2017 and a ₹115 crore second in 2020, run seed-stage and sector-agnostic by a team of four. 02Small fund, cheap mistakes, binary bets 4:06 Being a startup fund that had to sell itself to founders meant losing deals and taking wrong companies to the IC, and Rohit argues that tolerance is precisely what let WEH back smallcase in 2018 when tier-one VCs were questioning the market size, and a cattle-trading marketplace in 2019 that had no precedent anywhere in the world. 03Deal counts lag; dry powder does not 7:20 Falling deal counts are a lagging indicator, he says: funds from large to small closed their raises by the end of 2021 and are sitting on capital, so the real constraint is founders willing to spend ten or twenty years on something rather than chase fast follow-on rounds, and those teams get funded at any stage. 04UPI, Jar, Animall and the for-profit case 11:05 Without UPI none of the Bharat stories exist. Jar's autopay saves ₹50 and ₹100 a day without the user opening the app, and Animall's dairy farmers buy premium-listing credits and take cattle payments without a 20-30 kilometre trip to a branch. Rohit insists these must be built for profit, because only that mentality funds the scale a marketplace needs to work at all. 05Vernacular content solved; monetisation still open 15:50 India went from a dearth of vernacular content in 2016-17 to Indian-language material in every format (GIFs, short video, long video, even default YouTube results), and the unsolved half is monetisation, where virtual tipping, subscriptions and vertical platforms like the spiritual app Apps for Bharat each earn in their own way. 06Content-led commerce and the moving goalpost 18:50 Content-to-commerce asks you to win two hard games at once, and quick commerce keeps moving the second one: Prime's one-day stopped being the bar the moment Zepto hit 20 minutes, so WEH prefers to back one slice of it, like the vernacular search engine Zevi that sells into D2C brands. 07Agri: lead with trade, not product 20:50 India is a food-surplus exporter running on 50-60 years of accumulated inefficiency, and Rohit's read is that product-first digital plays stall in most agri categories (an IoT device hands a farmer data he has no use for) while a trade-first offer of a 20% premium buys the right to change behaviour. 08Nobody asked for a super app 23:20 Consolidation is not coming, he argues: no user has ever asked for a super app, the expectation is imported from China, and Bharat is happy keeping twenty apps and opening all twenty, which is why WEH funds vertical networks, and why a vernacular audio app can be cash-positive on subscriptions without ever becoming a unicorn. 09The passes: VR in 2018, drones later 25:30 A 2018 VR pitch event WEH ran in Hyderabad drew about 100 applicants and 15 to 20 pitches, of which he reckons five survive today; drones, examined two or three years ago, were passed as too early and have stayed a largely defence-funded market. 10Content, commerce, and the B2B long tail 27:40 The forward book is content, where monetisation can now start in year one rather than year five, plus everything around commerce, from warehouse robotics to conversion, and B2B, where he expects ten large companies to each make tons of cash and still hold five per cent of the market. 1140% IRR and LPs who doubled down 30:00 Nine companies meant needing only two or three winners; Fund I stands above 40% IRR on an investor cash-flow basis and has begun taking chips off the table, and roughly 60% of Fund II came from Fund I investors, about 80% of whom re-upped, almost all of it domestic money. 12Exports as the next decade's bet 32:20 The theme he is underwriting now is exports: India is tiny in global terms, manufacturers and agri supply chains will set up new plants if you hand them export demand, and bets placed this year and next should play out over the following five to ten. 13Right theme, wrong team 33:50 Asked what actually went wrong, Rohit points to product-first bets where WEH was early to the space and often its first investor: the theme was right, the founding team was not. Without founder-market fit the founder gives up in year two, five or seven when the market turns. 14The fintech regulation they underestimated 36:10 WEH badly misjudged Indian fintech regulation, assuming a good product would find a way to launch; Rohit now thinks the regulators are right and will not write an early-stage cheque unless the founder can explain how they will navigate them. The two then turn to whether the startup narrative ever reaches equilibrium. 15Hiring where you have the luxury of time 38:40 In hyper-competitive categories you raise big and buy the best talent, but where you have time his advice is a satellite office or a full move to a smaller city (two recent investments hired strong teams at a fraction of HSR Layout prices), and he defends people who stay in Chennai as ambitious, not unambitious. 16Be aggressive; sleep well; read Pixar 41:50 His outlook for the year ahead is to go all out rather than hoard cash, his guide to happiness is staying detached from the industry's highs and lows so you sleep, and his reading runs from Creativity, Inc. and Shoe Dog to Kahneman's Noise, plus a podcast about how funds actually make decisions.

Timeline

The arc, briefly

How a ₹20 crore first fund became ₹115 crore, dated from the conversation.

2016Rohit and Deepak start an investment bank. The two connected that year while both were working out the early-stage venture space, and ran the bank for about a year to get comfortable with the ecosystem. He had come off Spark Capital's public-markets desk.

2017Fund I closes at ₹20 crore. Deployed through 2019 into nine companies by a firm of four, two of them partners, that had to sell itself to founders because it was a startup too.

Early 2018A VR pitch event in Hyderabad. Around a hundred companies applied and 15 to 20 pitched, of which Rohit reckons five are still alive. Drones got the same look a few years later and were passed as too early.

2018smallcase, over the objections. Tier-one VCs were declining the company on market size, and WEH had looked at roughly thirty comparable investing-side startups before writing in. Its first D2C brand, backed the same year, did not survive.

Late 2019A cattle marketplace with no precedent. Animall was funded into a category that existed nowhere in the world, and its dairy farmers buy credits to promote a listing and take payment into a bank account instead of travelling 20 to 30 kilometres to a branch.

2020Fund II, about ₹115 crore, raised through the pandemic. It will hold 15 to 18 names, deliberately fewer than a fund that size could carry, so there are reserves left to put more money into whatever works.

2021Everyone finishes raising, and the wrong founders arrive. By the end of the year almost every fund from the largest to the smallest had closed, and follow-on rounds were quick enough that people started companies for fast money rather than the next ten years.

2022Fund I is above 40% IRR and taking chips off the table. The figure is measured on investors' cash flows, not WEH's cost basis. About 60% of Fund II came from Fund I investors, roughly 80% of whom re-upped, and almost all of that money is domestic.

2024Exports is the bet being placed now. India is tiny in global terms, and Rohit expects cheques written this year and next to play out over the following five to ten. His advice for the year ahead is to go all out rather than hoard cash.

Takeaways

Ideas to carry out of this hour

A small fund's edge is concentration, not coverage

WEH's ₹20 crore first fund went into nine companies, and the ₹115 crore second will hold 15 to 18, deliberately fewer names than a fund that size could carry. The point is dry powder: enough left to invest again into the ones that work, which Rohit argues is simply a better capital-allocation model for LPs than spreading the cheques thin. Underneath sits a claim about the business itself: in venture a larger team does not find better deals, solo GPs are common in the US, and WEH runs on four people, two of them partners.

▶ 2:37 ▶ 2:52 ▶ 3:52

Being small made being wrong cheap, and that bought smallcase

In 2017 WEH was itself a startup, selling itself to founders while losing deals to bigger names and taking the wrong companies to its own investment committee. Rohit's argument is that embracing that, never once feeling bad about a missed deal, widened the aperture enough to write into smallcase in 2018, when tier-one VCs were declining it over market size, and into a cattle-trading marketplace in 2019 that had no analogue anywhere in the world. Even the losses compounded: their first D2C brand, backed in 2018, did not survive, but four years inside that category is what shapes the commerce bets they are making now.

▶ 5:20 ▶ 6:05 ▶ 6:52

UPI is the floor every Bharat business stands on

Without the payment rails none of these companies exist, Rohit says, because the alternative is cash and no cash business is sustainable. Jar's UPI autopay moves ₹50 or ₹100 a day into gold without the user opening the app, engagement that makes time-spent, DAU and MAU beside the point. On Animall, dairy farmers in the remotest districts buy credits to promote a listing and take cattle payments straight into a bank account, skipping a branch that may be 20 to 30 kilometres away.

▶ 11:48 ▶ 12:04 ▶ 13:05

Bharat has to be a for-profit market or it does not scale

Rohit rejects the charitable framing outright: what works for Bharat is built from first principles for Bharat (Jar works because it is only gold), and these companies create impact precisely because they reach millions who otherwise had no access. His mechanism is capital. A not-for-profit framing caps what you can raise in the first two or three years, and a marketplace that never reaches scale has neither buyers nor sellers; the village capital fair set prices once a fortnight, the app does it daily, and only a financial investor's mentality funds that.

▶ 14:19 ▶ 14:49 ▶ 15:19

In agri, lead with trade and let the technology follow

India is food-surplus and exports around $50 billion of food products a year, so the problem is not output but 50-60 years of accumulated inefficiency that no software release dislodges. Product-first digitisation worked for Animall but stalls across most agri categories, because without money on the table the rest of the ecosystem has no reason to listen to you. The trade-first version (I will buy your product at a 20% premium, and here is what you must do if you want to sell to me) buys the right to change behaviour, and he is seeing more founders take it.

▶ 21:36 ▶ 21:50 ▶ 22:49

India fragments where China consolidated

No user has ever asked for a super app, Rohit says; the expectation is borrowed from China, and Bharat users are happy to keep twenty apps and open all twenty for different reasons. That is why WEH funds vertical networks (a spiritual platform, a vernacular audio app already cash-positive on subscriptions) rather than horizontal aggregators, and why a company can make a lot of money for its investors without ever reaching unicorn or five-billion-dollar status. The same logic runs harder in B2B, where he expects ten large companies to each generate enormous cash while still holding five per cent of the market.

▶ 24:02 ▶ 24:34 ▶ 28:17

The recurring failure is right theme, wrong team

WEH's product-first bets failed in a specific, repeatable way: they were early to the space and often its first investor, so the theme was right and the team was not. The missing element is founder-market fit, and Rohit admits they have written cheques knowing full well it was absent. Without that passion, when the industry turns, and it will, the founder gives up in year two, or five, or seven, because the thing has to be worth the majority of an adult life.

▶ 35:09 ▶ 35:25 ▶ 35:53

Regulatory navigation is a pre-condition, not a later problem

In fintech WEH badly underestimated the regulatory challenge, having assumed an interesting product would find a way to launch. Rohit now thinks the regulators are doing the right thing (you cannot be casual with money), which makes the constraint permanent rather than a phase to wait out. The operating rule that follows: if a founder cannot explain how they will navigate the regulatory hurdles, WEH does not invest at the early stage, and 'we'll figure it out later' is not an answer.

▶ 36:16 ▶ 36:36 ▶ 36:53

The numbers, drawn

What the episode measures

Every figure below was said on air, with timestamps included and caveats kept.

Two funds, three years apart

₹ crore

Fund sizes as stated on air: a ₹20 crore debut deployed from 2017 to 2019, and a second fund of about ₹115 crore raised through the pandemic and being deployed now.▶ 2:25

What became of the 2018 VR cohort

companies

As stated in conversation: about 100 applicants to WEH's 2018 Hyderabad VR pitch event, 15 to 20 companies pitching (lower bound shown), and his estimate that roughly five of the hundred survive today.▶ 26:16

What UPI took out of the loop

two portfolio companies, and the step each one deletes

Rohit's two examples of what the payment rails removed. Jar's autopay runs without the user opening the app, which he says makes time spent, DAU and MAU beside the point; on Animall a dairy farmer takes payment into an account instead of riding 20 to 30 kilometres to a branch.▶ 11:48

Where China consolidated, India splits

the same claim, drawn in two markets

Rohit's case against consolidation. He says the super-app expectation is borrowed from China and no user has ever asked for one, and that in B2B ten large companies can each make tons of cash while still holding five per cent of the market.▶ 24:18

Worth keeping

Lines that stay

No one has literally asked for a super app, ever. It's just that because we're trying to emulate China, it's normal for us to think it will become like that — but they're more than happy to have 20 apps on their phone and open all 20 for different reasons.

▶ 24:18

People are just saving 50 rupees, 100 rupees every day — and you don't even have to open the app. So forget time spent, forget DAU and MAU; you have very active engagement where people are investing without having to look at a product.

▶ 12:18

We knew we were ahead of the market, we were probably one of the first investors in the space. So we got the theme right, but we got the team wrong.

▶ 35:09

If a startup is not very clear as to how they'll navigate the regulatory hurdles, we will not invest at the early stage. You can't say we'll figure it out later.

▶ 36:45

Just don't let it get to you, whether it's the highs or the lows. As long as you're slightly detached, it works really well.

▶ 42:58

Clips that travel

Short on time? Start here

Emerging managers running their first small fund

The ₹20 crore fund that backed smallcase

Why losing deals and taking wrong companies to the IC was the price of admission, and how that produced smallcase and a cattle marketplace with no precedent.

4:06 → 7:20 · 3 min ▶ Watch clip

Fintech operators building for non-metro India

What UPI actually unlocked in Bharat

Jar's autopay at ₹50 a day, Animall's farmer credits, and the blunt argument that Bharat is a for-profit market or it does not scale.

11:05 → 15:50 · 5 min ▶ Watch clip

Agritech founders selling into farmer supply chains

Agri rewards trade first, product second

The IoT device nobody can use versus a 20% premium that buys the right to change behaviour, in an ecosystem 50-60 years in the making.

20:50 → 23:20 · 2 min ▶ Watch clip

Founders sizing a vertical rather than a horizontal market

Nobody asked for a super app

The anti-consolidation thesis in full: twenty apps open at once, subscriptions that work in Bharat, and B2B where five per cent is a big business.

23:20 → 25:30 · 2 min ▶ Watch clip

Investors choosing between the team and the thesis

Right theme, wrong team

Founder-market fit as the actual failure mode, and the fintech regulatory underestimate that turned into a hard pre-investment test.

33:50 → 37:10 · 3 min ▶ Watch clip

Glossary

The jargon, unpacked

GP (general partner)

The partner who runs a venture fund, makes the investment calls and carries the duty to its investors; Rohit says becoming one changed his title more than his work.

LP (limited partner)

An investor who puts money into a venture fund rather than directly into startups. About 80% of WEH's first-fund LPs came back for the second.

Dry powder

Capital a fund has raised but not yet invested; the reserve that lets a concentrated fund put more money into the handful of companies that are working.

IRR

Internal rate of return, the annualised return on a fund's cash flows; Rohit quotes 40%-plus for Fund I measured on investors' cash flows, not WEH's cost basis.

Up round

A follow-on financing raised at a higher valuation than the previous one. The show's intro credits WEH's portfolio with twelve of them.

Founder-market fit

Whether a founder's own knowledge and passion match the market they have chosen; without it, Rohit argues, they quit in year two, five or seven when the sector turns.

Trade-first

Entering a supply chain by actually buying and selling the goods, often at a premium, before trying to sell technology into it, the opposite of a product-first digital play.

Bharat

Shorthand for non-metro, largely vernacular India: the customer base behind daily gold savings, cattle listings and vertical Indian-language apps.

Connections

If this resonated, go here next

EP 131 · Capital

Full transcript

The whole conversation, searchable

Auto-generated captions, lightly cleaned. Click a timestamp to open that moment on YouTube.

The argument in sixty seconds

Worth your time if you are

Where the conversation travels

The arc, briefly

Ideas to carry out of this hour

A small fund's edge is concentration, not coverage

Being small made being wrong cheap, and that bought smallcase

UPI is the floor every Bharat business stands on

Bharat has to be a for-profit market or it does not scale

In agri, lead with trade and let the technology follow

India fragments where China consolidated

The recurring failure is right theme, wrong team

Regulatory navigation is a pre-condition, not a later problem

What the episode measures

Two funds, three years apart

What became of the 2018 VR cohort

What UPI took out of the loop

Where China consolidated, India splits

Lines that stay

Short on time? Start here

The ₹20 crore fund that backed smallcase

What UPI actually unlocked in Bharat

Agri rewards trade first, product second

Nobody asked for a super app

Right theme, wrong team

The jargon, unpacked

If this resonated, go here next

Inefficiency at scale, as an asset class

The cheque is only a quarter of the deal

The CTO Who Reads Cartesian Skepticism Before Term Sheets

The whole conversation, searchable