Building Companies That Last: Sanjeev Bikhchandani on Founders, Funding & Growth

本站添加: 2026-06-03

[00:00:00]Behind every company that reaches the public markets is a long period of uncertainty. Nobody really sees the wrong hires, the pivots, the near misses, the moments where conviction is tested. And in the world of new age tech, understanding the business often means understanding the founder behind it. Welcome to the new age playbook.

[00:00:22]From incubation to public listing, a conversation series with the founders, builders and investors, shaping India's next generation of companies. Through these conversations, we go beyond headlines and valuations into the thinking behind the business, the choices that shaped the company, the lessons from scaling, and the realities of building through changing market cycles, but also what transforms a growing company into one that is truly ready for long-term capital, institutional trust, and eventually the public markets. And there could be no better guest to begin this journey than Mr. Sanjiv Bchandani.

[00:01:04]Long before India's startup ecosystem became mainstream, he was building for the internet economy. At a time when digital businesses were still unproven, he built one of India's earliest and most enduring internet companies and helped take it to the public markets.

[00:01:21]But his journey didn't stop there. As an early backer of companies like Zomato and Policy Bazar, he also witnessed India's new age ecosystem evolve from the other side of the table as an investor identifying businesses, founders and models that could endure through cycles. Few people have had a front row seat to the evolution of India's digital economy quite like he has and that's what makes him the perfect first guest for the series.

[00:01:50]Today we talk about billions of dollars.

[00:01:52]We talk about uh you know listings of uh IPOs which are happening uh dime a dozen. We're talking about unicorns and Sunnicorns. But back in late 1980s uh none of this was even thought of. uh you had actually done your IM Ahmedabad the you had passed out of and you were in a corporate cushy job in HMM uh the owner of the Holix brand at that time and you quit that cushy job and walked away from a corporate life and uh you started working out of your father's uh uh house or room and with no capital and uh internet and household was not even a household name at that particular point of time. So my question to you right now sir is that did you get some kind of a specific signal at that time that there was a noise from the old economy that you were not uh very comfortable and you thought that the future lies in info edge because there was no playbook there was no precedence you didn't have anybody to follow what went through your mind sir >> I think uh look I have always had a dream to be an entrepreneur to be independent to be on my own and having worked for 5 years in the corporate sector 3 years before going uh business school uh in advertising and two years afterwards and after 5 years in two multinationals I had figured it was time uh and I quit with no big ideas just said I'll try something let's see what happens and for 7 years uh I drifted doing a whole bunch of small things there was no big idea there was no uh great big ambition it was just to be independent and uh and I was having fun right uh In 96 I saw the internet for the first time. It had just come into India and uh I thought uh let me try something. Let us try something on the internet. And we be we got we used to get uh 29 newspapers and magazines from around the country. Uh those that carried appointment ads and we would take the appointment ads and put them in our own format and our own words and upload them on the internet and we called it noy. Uh and um as luck would have it, it uh it began to get traffic.

[00:04:00]Uh you know, we had hit a hot button quite inadvertently.

[00:04:05]And uh we began to get traffic. Once we began to get traffic, uh people began to apply to those jobs. Once people applied to those jobs, we began to ask companies for money to list jobs that they had not advertised in the papers. And so gradually we got revenue in year one, we got 2 lakh 35,000.

[00:04:22]>> Year two, it jumped 7x uh you know um 18 lakhs. Okay. And that's when I kind of figured that we may have stumbled upon a big idea because I had never seen anything jump 7x in one year even of a small base. And the next year went to 36 lakhs. Uh and that's when uh we were fortunate enough in April 2000 to raise venture capital from ICIC venture. So you know we have a long and old relationship with ICIC the ICIC group.

[00:04:47]Uh I in fact did I did our IPO.

[00:04:50]>> Yeah.

[00:04:51]>> In in 2006. Um and um so we raised venture capital and uh as luck would have it the market melted down. The dotcom bubble burst in April 2000 within two weeks of raising money.

[00:05:04]>> Okay.

[00:05:04]>> So we got lucky. We didn't have we got the money at a high valuation, >> right?

[00:05:08]>> And we didn't have time to spend the money foolishly, >> right? So you had the cash to spend it and you had the time >> we had the cash to we had the cash in the bank. We didn't spend it, >> right?

[00:05:16]>> Uh because the market melted down. We were very cautious and uh we just put it in fixed deposit in the bank, >> right? and began to spend it slowly, >> right? And um you know, we did some new products, moved into a new office, uh some technologies, some servers. I'm >> curious to understand, sir, must have been one of the many ideas that struck you in the '90s or the late '80s as a business idea and then this must have hit off. Well uh you see when you are when you are in your 20s and you are starting a business uh you know and uh you have an entrepreneur ambition um and you have some imagination you get three three new ideas every day right but if you get if you get a few hundred ideas then you you're fortunate if you implement one so in the seven years uh from 1990 when I quit my job till 97 when we got no I must have pursued about 15 or 20 small ideas >> okay >> uh there was a salary survey there was a trademarks database case there was some other reports there was some teaching there was training there was writing u you know there were some small time consulting projects there I mean maybe 15 20 small things and no was the 21st small thing >> and that happened to be a big thing actually quite fluke >> I think that then we will probably now transition to uh you when you started infoed you of course had ner.com as a part of the operating business of that particular company but I think you made legendary bets on multiple other companies which subsequently got listed and have become multi-baggers in its own right. I think when we look at uh your history of the way you've gone about doing it, it's an absolute masterclass in the way you allocate uh uh capital.

[00:06:52]So what I wanted to ask you is was there a common thread in something that you saw whether it was Zumato or whether it was uh PB fintech was there a common thread in some of the successes that you managed by way of uh investing and was there an inflection point at some level where you thought that okay this is going to become a 100 time 100 bagger kind of a thing.

[00:07:13]>> You know in hindsight it looks like we are smart and we planned everything but that's not how it actually happened.

[00:07:19]Okay. So we were not meant to invest in startups. Uh what had happened was that uh when we were doing the preparing for the IPO uh you know there's a the DRP the in the DRP there is a section a very important section called objects of the issue.

[00:07:37]>> Yeah.

[00:07:38]>> Uh now we were hands-on on the DRP you know there would be there were two bankers there was city bank and and you guys Isaac. So uh you know there'll be two three people from each of the bankers. There would be lawyers, you know, there would be our finance team, there'd be us. We'd all sit in the conference room at in our office and we'd project the DRHP on the screen. Uh, and we went over it clause by clause.

[00:08:00]So, actually uh our CFO Amish Raguan Shri and I and others Sudhir Bharav our company secretary Ahmed Gupta we more or less knew the DRHP by heart because we had done every clause ourselves you know and and discussed it threadbear.

[00:08:16]So there was a section which said u objects of the issue. So I told the team that listen I'll go home to write this section I will write because I know the objects of the issue and I know why we're doing an IPO. So I came back next day and I had five or six bullet points there and you know I said you know why we doing an IPO is because uh we want perpetual access to capital. We want to give the investor an exit. We want the ESOP to have value. We want our stock to have currency. We want to you know uh you know put ourselves in a different strategic space as compared to other internet companies. So the so the the bankers that's city bank and you um you know we were told that listen this won't do okay.

[00:08:56]>> Uh this is why you want a listing. This is not what you'll do with the money.

[00:09:00]>> Uh you have to tell uh sebi what you'll do with the money. Uh so there's a standard cookie cutter uh five bullet points which we'll cut, paste and put.

[00:09:11]>> Okay.

[00:09:11]>> Organic growth, inorganic growth, general corporate purposes and though or there were two others and um I said fine. So they put those IPO went through.

[00:09:20]>> Mhm.

[00:09:21]>> Uh but the truth is we you know we didn't actually need the money for those things >> because you started generating profit.

[00:09:27]>> We were already profitable. We were making money every month. cash was going up and our auditors price for a house should come in every quarter and present to the board use of IPO proceeds nil.

[00:09:38]>> Okay.

[00:09:39]>> So after two quarters the board said you know guys uh this can't go on you have to use the money because otherwise uh sebi will get hassled. So please find a use for the money you raised. U so we said look we don't need it for inorganic growth. We don't want it for general corporate purposes. We don't want to buy land and building that's bad use of capital. So we said inorganic growth but there was nothing to acquire uh of any good quality at any decent price in the internet space you know back in 2007.

[00:10:08]Then we hit upon the idea that why don't we invest in startups. Uh that's also a form of inorganic growth. Uh and there are plenty of entrepreneurs trying there's a shortage of venture capital.

[00:10:19]There wasn't too much venture capital in 2007. Um and the board said okay. And so that's how we began to invest in startups. It was not a strategy. It was a need for compliance.

[00:10:30]>> Okay.

[00:10:31]>> Okay. Uh now I was told you can invest about 150 160 crores next 3 4 years. We began to invest in 2007. By 2012 we had done about 200 crores.

[00:10:41]>> Okay.

[00:10:42]>> And 11 companies eight nine companies perhaps. Uh of those two was Zamato and Polyaza. Uh but nothing looked like succeeding.

[00:10:53]So we put a break on it and did not invest for the next four years in any new company.

[00:10:58]>> That is from 2012 onwards.

[00:10:59]>> 2012 to 16.

[00:11:00]>> Okay. And by 2016 it was apparent that uh Zamato and Polyazar are going to be successful. So then we got the confidence to start investing again.

[00:11:09]>> Okay.

[00:11:09]>> And we began to invest. By 2018 our CFO came and said guys we have a problem. He said what? He said we you know we we'll probably hit a home run in UT policy bazaar and if we exit we will might get classified as a NBFC because uh our um financial income will operating income.

[00:11:32]>> Okay.

[00:11:33]>> Right. And therefore uh you know uh and if you get classified as NBFC RBI regulations licensing >> you want to open a new sales office for no you have take RBI permission that's not a good idea. So it was decided we we'll do a fund for all new investments.

[00:11:48]We'll do a fund.

[00:11:49]>> So that was when your venture capital fund was >> that's right. So 2009 again because of regulatory reason need need for compliance. We we did the >> So you actually had a problem of exit in that if you exited from your investing companies at a huge profit you would be qualified. No we we've discovered since then that that may not be the case but uh >> so I have a different question on the exit sir. Uh my question is just like how as important it is to determine the right time and right investment strategy to uh buy you also need to have an exit strategy. So have you uh I mean I know that you have brought down your exit uh your stake in Zumato and policy bazar to some extent but in other companies have you really thought about how what what is the kind of discipline that uh you would advise people to have from an exit perspective?

[00:12:33]>> So we're not good at exits. Okay. Uh we are builders uh we believe in long-term future of companies. uh which is why we stay for a long time. We went into uh policy bazaar in 2008 it is 18 years we are still there. We went to Zamat in 2010 um 16 years we are still there but it's also worked for us because uh you know if we had exited uh in like any fund by 2017 18 uh in those two companies we would have made a fraction of the money we made.

[00:13:02]>> Absolutely.

[00:13:02]>> So I think I think uh India may long-term you know you have to I think play for the play the long game. uh you know I was talking once to the late uh Rakhinwala this is during covid and you know we on a zoom call we have both contributed university so we are both co-ounder university so we were just having a chat on on zoom and I asked him a question and he said Sanjie u if you find a truly great company why not stay forever okay >> now I'm not saying I'm going to stay forever but this is a hill rise also he said that's what I've done at Titan and it's really worked for me >> okay >> uh so you should you should I think really long term.

[00:13:40]>> Okay. Uh so now I think we'll transit uh to a little bit on AI and its impact on India in the Indian context of course.

[00:13:47]So so what AI is uh doing is actually it is actually now creating a fascinating par paradox according to Giza. Um there is uh on one level this valuation uh of platform companies and SAS companies which are actually you know coming down in the international markets but there is also an existential question about job losses uh consumer stability and what will happen to when productivity increase happens because of AIE improvement what will happen to job losses and all that. So from your position sir you have seen everything you've seen platform companies you have been uh you know there uh so what is your feeling about this uh challenges is India uh going to face some kind of a uh problem do face this challenge as we go ahead >> so look there's a lot of talk a lot of noise a lot of apprehension and even we are apprehensive okay because the truth is we don't know even we don't know so nobody knows you can't say for sure but you know I take heart from a from history. Okay. So in 1985 I had was in my first job I was 21 or 22 years old and uh it was the Rajiv Gandhi government and that government had said we are going to put computers into banks.

[00:15:01]Uh now the all now that time most banks were public sector banks. Uh and they had a very powerful union the allindia bank employees association. It was one of the most powerful unions in the country and immediately uh there was an uproar and there were strikes and there was all sort you know that we're going to lose jobs and the government got the computers for a couple of years nobody used them employees just refused to use them but gradually they began to use them and nobody lost jobs they just improved the productivity uh now of course AI is spreading at a much faster pace than u what happened in 85 I'm not saying that it's that people won't lose jobs they uh and in the past also when technology has changed people have lost jobs. I mean there when I started my career they there were manual typewriters they were secretaries they have reskilled later on I mean those specific people may have reskilled may not reskilled >> but new jobs are created >> right of course >> right >> or the TX operator what happened to TX operator there was a job there >> uh nobody uses TX it's over >> okay but new jobs have been created >> right >> so I don't know uh uh you know uh my advice to young people who are worried that you know uh jobs will vanish. Look, you don't have to care whether jobs will vanish. You have to make sure your job does not vanish. And if you want your job to not vanish, you know, just pick up AI skills. Learn to use AI platforms.

[00:16:28]Pick up two or three AI platforms every month. They're useful. And if you have mastered a few useful platforms, believe me, your job will be secure.

[00:16:38]>> Yeah. Yeah. So I think sir one similarity between the '90s and thing that which I personally see is the fact that initially when internet happened there was a lot of capital investments and so a lot of uh computer companies and all that India was never there as a part of that but once internet was uh well and truly developed Indians you know started using it for the benefit of productivity and all that maybe something similar where in the period where AI infrastructure is being developed India is not big in it neither neither is it in AI infra or is it in semiconductor so on and so forth but when it is done >> we may we may not be producing semiconductors >> to the extent that China does Taiwan does US does >> but we will be consuming them at >> that's the point I was going >> okay >> and that will likely increase our productivity you know uh and uh will some people lose jobs possibly so but many more new jobs will come up so what net net what will happen I don't know >> but in the past whenever there's A new technology has come. There's been some disruption. Uh yes, there has been disruption but there have been many many more opportunities.

[00:17:44]>> Okay. Right. Sure. Shifting on to the current new age companies and what is happening in the market uh right now. Uh sir, I don't want you to of course talk about any specific stocks. It's more about broad sectors and uh broad macro themes uh that I wanted you to address.

[00:18:00]uh so there has been a time when there has been very aggressive funding of uh uh new age companies very aggressive valuations and all that but over the last say one year one and a half years I think some level of uh mediocrity has come to it some level of correction I would say has come to it and today uh would you advise promoters to go for minimalistic funding build your business grow and then you know take it or do would you want to you know tell them that uh uh go for aggressive >> see there is no one size fits all. Okay.

[00:18:31]But having said that, uh it is also now these things are market cycles. uh when there's lots of money as there was in 99 2000 uh again in 2008 to 10 I mean well before before the global just before the global financial crisis and then uh with tarp and then just before covid and then again a couple years later there will be abundant capital right and when there's abundant capital it finds its way everywhere all over the world and it usually starts off in the US because that's where you know the notes are being printed did and that's what the Fed was expanding balance sheet and it was the largest central bank in the world >> uh and some of that money followed way between India also >> and uh and and therefore valuations went up >> uh a huge tsunami of capital came in uh some companies raised up a ton of money uh others less so uh and the truth also is that if a company gets too much money too soon and too easily It very often tends to spend it suboptimally, >> makes mistakes.

[00:19:39]>> Well, you assume that the money will not stop coming.

[00:19:44]>> Ah, right.

[00:19:45]>> Okay. And then uh if it does stop coming, which it often does, but by then you built uh high cost structures uh and not enough revenue and not no and and no profit, uh that's when you get into trouble.

[00:19:59]>> Correct. So I I think smart entrepreneurs will will sort of raise the money that they need a little bit more and a little bit more and possibly a little bit more than competition or at least as much as competition but then not spend it foolishly. So you have been uh here for 30 years in this 30 35 years uh or maybe 40 years in this market and you have built invested shaped the entire internet uh boom uh uh right from the beginning. So uh what is it that you think still excites you at this point of time and both from your perspective as a personal as well as from a national >> I think young people uh fresh ideas uh when you know you meet a young startup uh and they're doing good work uh and they talented and intelligent and hardworking uh I find that I I get a lot of energy uh so when you meet young people doing good stuff you get a lot of energy and if I just met I'm 62 if I just met 65 year olds only uh you know I may not get that energy.

[00:21:00]>> Okay. So move along with the younger set of people to get the ideas and sir any learnings over the last 30 40 years that India can borrow from a country like US or a country like China because they have had two very different types of regulations different types of so I think I think India has benefited a great deal from uh investments um in technology uh some of it private sector but and a lot of it from the government uh I mean take the UPI Yes.

[00:21:31]>> Uh the India payment stack, right? That is largely a government's endeavor and that has been transformational.

[00:21:40]uh I think China and India have got the best payment stacks anywhere in the world and if a lot of the west and other countries don't trust China so much then it is a India is a natural recipient of of of you know that competency really built >> right >> the benefit of that I think I think the health stack the digital stack uh uh you know I think enabling regulations I think startup India uh these are all things the government has done and having created the right environment right all the regulation around you know digital India on around around mobile telephony uh and then the you know the private companies come in and and and build on that great so a lot of that is uh something which I think India has benefit benefited from in the last 20 30 years >> uh and we must continue leverage of course you know there's a whole areas where we are behind the US or behind behind China >> right >> and we need to work on >> right >> but by and large I I think uh what's happened in India in last 25 30 years uh you know has been good.

[00:22:46]>> Okay. Excellent sir. So now we'll shift to the rapid fire uh section. So um when you decide to invest in a company you obviously you search for what is the problem that that company is trying to solve. While looking at that do you rely on intuition or would you want to do a detailed market analysis?

[00:23:04]>> I mean it's both you need but it's not market. I mean you see you you you have to understand the consumer and you have to look for indications that uh you know this thing has got some natural traction that customers are coming they're coming repeatedly the company doesn't have money so it can't spend on advertising but customers are coming anywhere >> okay >> and if that is happening chances are the company's onto something >> okay >> uh while running a business sir you will go for huzzle what you call as jugard or will you go for a system process-driven execution >> you need both Uh so actually uh you know when you when when you see a startup a startup to succeed needs you know many things but three you it needs people with three qualities may not all be the same person. They could be three different founders but you know uh hustler hacker visionary >> hustler >> hacker >> hacker visionary >> visionary. So you need somebody with a big idea strategy and thinking right you need somebody who's a hustler making it happen right >> raising the money making sales happen you know uh >> uh and hacker the guy who's building the actually absolutely beautiful answers sir uh when you look at choice of an organization structure in a company that you have recently invested let's say would you advise a company to go for a small team with a relatively higher pay per head or would you tell them go for a large team with a lower blended pay cost >> I think at the beginning you need missionaries, not mercenaries.

[00:24:26]>> Okay?

[00:24:27]>> Uh people who believe in the idea, believe that they're doing a good thing.

[00:24:32]Uh and they're not doing it for the money. Now, obviously, they have to be paid well enough to live, maybe a little bit more.

[00:24:38]>> Uh but they should be generously compensated with stock.

[00:24:42]>> So, if they believe enough in the in the endeavor, in the vision, in the in the company, >> they should believe that that stock will have value in the future.

[00:24:51]>> Okay. Great. and uh rewarding top uh performers cash bonus or esops uh both actually see people in sales want sales incentives >> right but if you don't give them esop afterwards when the stock gets valuable uh they will look back and feel cheated >> right >> uh so I recall in you know in the early 2000s you know when we began to give we gave ESOP to people they would not value it because there had been no example in the past of you know people getting wealthy on ESOP But and so they said look we want uh you know cash prevent money but eventually we had to give both so we did give both >> but you feel uh stock being a currency for a listed company ESOP is a very good way of defaying cost so and make the employees participate. No, it's not.

[00:25:39]You're not deferring cost actually. You know, I mean, ESOP does have a cost and you know, Black Shoes.

[00:25:47]>> Yeah, Black Scholes cost.

[00:25:48]>> Okay. Uh and you it goes into your P&L.

[00:25:51]>> Uh and because when you dilute cubing stock, you're diluting shareholders, it does impact your EPS.

[00:25:56]>> Yeah.

[00:25:56]>> Right. As your shareholder base uh your share base goes up. uh but uh you but but but you see and also when you give stock in a private company and then it goes public and it's a good IPO then the kicker is that much higher >> and that much higher yeah >> whereas if you after a company is listed and you give stock there's a limited amount of uh rewards you can give a stock >> right >> uh sir organic growth versus inorganic growth >> so historically we have never been good at organic growth we've done some but we've not done any big acquisitions uh we think big acquisitions are um hard to integrate. Uh we prefer to build. So we are builders not buyers.

[00:26:34]>> Okay.

[00:26:34]>> Uh but having said that we've done some acquisitions >> but you would advise people to be on the lookout for both kind of opportunities.

[00:26:40]>> Yeah. I mean both can work.

[00:26:42]>> We have been unable to do a big acquisition.

[00:26:45]>> Okay.

[00:26:45]>> Perhaps uh we are conservative.

[00:26:49]>> Okay.

[00:26:49]>> Uh sir a few questions from the point of view of an investor not as an entrepreneur but as an investor. Uh you invest in a business model versus investing in the right team. What is most important >> early stage? Uh the team uh is very important. Uh obviously uh they have to be chasing a good idea.

[00:27:07]>> Okay. Sure. Profits or cash flow? Cash flow first?

[00:27:10]>> Cash flow first.

[00:27:12]>> Profits is something with this which will come later.

[00:27:14]>> Prof. See when you're doing a startup and you're bootstrapping, it's operating cash flow that counts that ensures you can pay your salary at the end of the model. Now the the profit was something the CA would determine at the end of the year.

[00:27:28]Okay. This is the profit. This is the tax paid.

[00:27:30]>> Yeah. Right. So cash is more important.

[00:27:32]>> Exactly.

[00:27:33]>> Uh and uh in a company how would you like the capital uh to be returned to you? Would it be in the form of dividend or a buyback or maybe you don't want the company to give back the cash you want them to invest. I think a company should invest and grow and eventually go public because as an investor we will get our best returns when a company goes public.

[00:27:54]>> No. Uh that's right sir. But if they are generating cash profits would you want them to look for acquisitions and grow the business or you would want them to return the money to the shareholders?

[00:28:03]>> I would want them to grow the business because startups are about growth.

[00:28:06]They're not about giving dividends.

[00:28:08]>> Yeah. Exactly. Uh most important trait in a founder integrity or intellect. the the single most important quality of a successful entrepreneur is there the ability to create trust across the tables. uh I'm able to talk to somebody and generate trust whether it's a prospective employee whether it's a co-founder whether it's an investor whether it's a customer whether it's a the tax man who comes calling right can I create trust across the table if you're the kind of person who can create trust across the table that's half the battle one >> okay wonderful last question sir uh what is a better tradeoff a low valuation low growth company that you're acquiring or a high valuation high growth company >> we would go for growth you would pay the price for Because you know the valuation today's valuation which seems high today would seem very very cheap 2 years from now if the company is growing very fast.

[00:28:59]>> Okay. Absolutely. Yeah.

[00:29:00]>> Of course you pay high valuation then the company fails to grow. You have a problem.

[00:29:03]>> They have a problem.

[00:29:04]>> Yeah. So you said you are conservative but actually went for the aggressive option.

[00:29:08]>> Uh yeah I mean yeah.

[00:29:11]>> Okay. Thank you very much. Thank you.

[00:29:19]Investments in securities market are subject to market risks. Read all related documents carefully before investing.