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Last month, the Capria team had a highly productive week in Singapore. We attended and spoke at two industry events, met with our valued LPs and many new prospective investors. The consensus was clear: India’s structural growth story is undeniable. It is the most compelling emerging market narrative today.

But a crucial question kept coming up. Everyone sees the opportunity. The challenge is the noise. Global LPs struggle to look beyond the headline-grabbing opportunities. They want to avoid the high-burn consumer-tech frenzy. 

This is precisely where Capria’s strategy cuts through the clutter.

The Capria Advantage: B2B, Profitability, and Prudent Value

Our investment approach has been refined over a decade. It is meticulously tuned to find value outside the valuation wars. Our method for generating high returns is defined by three key differentiators:

1. The B2B Focus: We Are Happily Unsexy

When I say unsexy, I mean predictable revenues, growth and profits. And the fact that one does not have to burn oodles of cash to acquire fickle consumers as customers. We maintain that AI turbocharges these “unsexy” businesses so they can achieve their financial and operational goals at a greater pace. 

We strategically avoid the volatile consumer-tech landscape. Why? Marketing battles often lead to unsustainable valuations. Our sweet spot is B2B and B2B2C solutions. We focus on fixing deep, structural inefficiencies. Think logistics, supply chain finance, jobtech, new-age manufacturing and agritech.

These are the “unsexy” businesses. They do not generate massive media headlines. They generate healthy cash flow. They are built on rock-solid fundamentals. We insist that our companies prioritize cash-flow breakeven and have a clear path to profitability early on. This focus is our best defence against market irrationality and valuation bubbles. 

2. We Back Builders, Not Brand Marketers

We have a simple rule: valuations are a function of solid business fundamentals. Valuation is earned, not marketed. It is a metric generated by performance. We partner with a specific kind of founder. They are obsessed with unit economics, operating leverage and scale. They see fundraising as fuel for a healthy engine – not the goal itself.

The ecosystem is maturing, which helps. A significant portion of current seed flow is now led by second-time founders. They are aware that long-term value creation beats short-term valuation sprints. 

3. Maturing Exit Pathways Reward Our Discipline

Our disciplined, fundamentals-first approach is now paying off handsomely. India’s exit ecosystem has never been this strong. This provides predictable paths to liquidity for our winners.

First, PE and growth funds are actively hunting for our best-performing scale-ups. Second, strategic M&A is increasingly common. Our exit from Awign proved that. Finally, the IPO market is robust and receptive. Two of our portfolio companies are already on this path. The market is finally rewarding quality.

Last month, we closed an investment Nektar.ai. They are solving the data foundation bottleneck for AI applications – helping to fully integrate unstructured enterprise data with AI models for optimising existing business workflows such as Sales. They are growing at 45% per year, with 75% gross margins. Their early clients are Brex and Crunchbase. The two founders, Abhijeet and Aravind are seasoned professionals. Abhijeet, CEO, spent nine years as MD at Capillary Technologies. He scaled early operations at Capillary and managed 70% of the company’s P&L. Aravind, CTO, is ex-Capiliary and a third time founder. 

Nektar comes close on the heels of our investment in Enmovil, an enterprise AI SaaS platform for supply-chain orchestration with marquee logos such as Maruti, Nestle, TVS, Mahindra & Mahindra and several others as clients.   

Our strategy is playing out. Three out of six companies in the Fund III portfolio are EBITDA Positive at Series-A. Our pipeline is strong. We remain committed to applying AI across sectors. We now have exciting AI-first companies across enterprise (Nektar and Enmovil) and healthcare (5C Networks). We are evaluating an Industrial AI startup addressing deep pain points in advanced manufacturing (semiconductors and utilities). 

 

Best,

Surya