A quick US trip | Part II | Chickens > Eggs

The debate about Deeptech, what does the AI opportunity hold for India, is Indian ITeS at a major risk of getting disrupted and do we have a shot at glory on some of these fronts? These were the questions that kept coming at me over the short US week (early April 2025) and so,.…What did I find myself repeating?

When is Deep tech’s moment — why Mr Goyal struck a chord?

I was reminded several times of the then-fresh Mr Goyal’s statements. They were suitably provocative. The debate on what innovation was priority was and is moot in my opinion. All innovation (especially business model) in India is gold, pure gold.

But, it still begs the bigger question — why aren’t the innovation-led global startups scaling rapidly enough from India? When I remarked to an astute investor that it’s a ​“chicken and egg” problem, she retorted ​“What comes first then? The Chicken or the Egg?”. I paused for just a few moments and the answer was obvious ​“It has to be the chicken,..always. There is no other way. Whoever are the first and frontier players in delivering global winner status to desi innovation HAVE to appear magically.”

They’ve barely been supported by Indian venture capital, hardly found any buyers of the tech or the solutions in India, they struggle for talent that can be easily ported to global sales front ends, build with a fraction of the capital that their peers in the US would but everyone simply says — ​“Enough with all the excuses. Where are the great deep tech companies.” One banker tells me at an IPL match yesterday — We don’t need Blu Smart frauds, we need BYDs of India. Love the armchair optimism and ambition.

Laying of any number of eggs is futile until they deliver the Chickens. The only role models that matter are the Chickens — where are they?

I think we are reaching the 20 – 25^th year phase of the Indian Venture ecosystem (99%+ of the current ecosystem’s firms and stakeholders were delivered post 2005). The moment is near. We are going to see some incredible deep tech exports from India — the revenue takes time to scale but we should see a few dozen companies with $100+ mill revenue built on entirely indigenously developed tech and IP out of India. We think Grey Orange, Carbon Clean, Pixxel (just amongst our portfolio), Ethereal Machines and many others have a shot. The chickens will all emerge, magically. Without the role models, there can’t be an explosion of them.

A SaaSy stepover to AI

When folks asked about how a SaaSy India will adapt to an AI first world, one feels somewhat comforted by the speed at which the tech stack is being rewritten at high speed to morph their old selves. It’s not gone unnoticed that SaaSBoomi is now BoomiAI. There’s all forms of strong signals that this transition is afoot. Unlike ITeS — a little bit about that below.

More importantly, what’s the fate of new pipeline we are seeing in this space? There is a small advantage of moving from seed to Pre Series A / Series A stage risk at Blume. We used to (only partly) joke in 2017 – 2020 that our founders are too slow to get to US launch and PMF and we should add the L‑1 or O‑1 application as a Condition Precedent (CP) in the SHA. It was an improvement on the 2011 – 2015 vintage but still not good enough in terms of speed to the US shores. In the first avatar, founders struggled to invest into the US, most of them were underfunded to make the move and lacking the courage to break their desi PMF and push for a US one, especially given very little budgets for GTM acceleration.

Even with the shift to ​“post investment CP”, the shift and adaptation was taking too long. This time, I met an unusually large number of ​“Indian” founders who have raised $1 – 3 mill, demonstrated PMF and early GTM success and showing enormous confidence to scale to $100 mill of revenue. The long shot doesn’t seem so distant to most of these founders. Love the shift in attitude. Love the quiet execution and tough or boring problem statements being chased.

The slothy behaviour of Indian ITeS

Indian ITeS behemoths — They’ve been terrible buyers of products; non existent. Don’t have a bone to integrate acquisitions other than other profitable ITeS, mostly in overseas markets. Are they being too complacent in this fast paced shift to AI?

I was in a MSFT roundtable early last week post the US trip. The perceived lack of preparedness by Indian ITeS for the coming AI rewrite of the software and automation industry seems palpable amongst the participants. From folks in NYC questioning if they are sleeping at the wheel to the earnings estimate drops from the IT giants this quarter, from the folks selling co-pilots at MSFT to seeing the (super slow) pace of evolution and adoption at the industry, there seems to be an unparalleled size of concern in the 35 years of the steady rise of Indian IT Services. The consensus view is that the BPOs and KPOs were moving with elevated paranoia relative to ITeS. Couple of us nodded at a third person suggesting that it won’t be surprising to see massive consolidation in the space of the kind we’ve not seen before — maybe over the next few years.

And I hope the desi startups are what end up taking up a chunk of the disrupted value erosion in their favour.

Consumer AI apps — the boldest prediction

Part of my job as VC is optimism, part of it is to make the boldest bets.

We invested in a couple, almost done with another, looking at one more and we think we are just seeing the first wave of the boldest of the Indian founders, who will build global consumer companies on the back of the great AI rewrite of how consumers engage with certain app-first experiences.

India’s Deep Seek moment is being orchestrated by the Indian Govt. Yes, its all good.

India’s Tik Tok moment is what I’m even more exuberant about.

My bold prediction to who cared to listen was that if there are 10 amazing global consumer apps built AI-first, there’s a chance that India has a share of 2 – 3 in that list and even if not Tik-Tok scale, we should have companies that are $5 – 10 bill in value by the end of this decade, 2030.

Once again, is this believable? Is it the Chicken or Egg that comes first? There’s no debate — it has to be the Chicken. We have to magically deliver some big hits out of left field (baseball reference).

Game On!