[Investor Speak] Manish Singhal of pi Ventures talks deep tech investments in India

Pi Ventures was founded in 2016 with a mission to find, fund and support the best teams using artificial intelligence, machine learning and Internet of Things to solve real world problems for the next six billion.

Manish Singhal, founding partner of pi Ventures is one of the leading names in the deep tech ecosystem. Singhal co-founded LetsVenture.com for startups and early-stage investors in India. An alumnus of IIT Kanpur, Singhal is on board of startups like ApartmentADDA, Witworks, etc. Additionally, pi Ventures' portfolio companies include Sigtuple, ten3T Health, Zenatix, Niramai, Customer Success Box, Locus, Owe Me, True Lark, SwitchOn, Wysa, Agnikul and Pyxis.

In a conversation with DQ Deep Tech, Singhal talks about his current projects, investment thesis, changes ahead for deep tech and gives advice to GenZ breaking into VC.

Edited excerpts:

What are you focusing on at the moment?

We are working on two things: Making some of our companies reach the next level and find more companies in the disruptive space.

We started Pi in 2016 and raised a bunch of money. Initially, we started with a curated thesis on AI. Over a period of time, we began to realize how ‘disruptive AI’ is playing an important role in the way businesses are run. Our quest then became sharper in finding disruptive use cases of AI as well as other forms of deep tech.

We are good at one thing—finding out the points of inflection of different technologies. In 2016, we estimated AI will break out and then went in head first into the AI, disruptive AI landscape. Last year too, we witnessed some disruptive work happening in the space tech domain. We backed Agnikul.

Our thesis is evolving. We still believe AI has a lot to give to the world in the disruptive sector and we will continue to focus on that. For instance, quantum starts to pick pace, then we'll look at quantum computing too. We'll also look beyond digital deep tech as there is significant work happening on material science for engineering, nanotech, biotech.

What is your strategy in investing in these startups?

From an application thesis point of view, we look for three questions:

1. Are you solving a large and a global problem?
2. Are you solving it 10x better than others?
3. From an investment decision perspective: Are you a great team which can solve this?

We also look at what problems in the market that can be solved by technology in a differentiated manner. Thesis evolution happens by finding use cases which are large, global and solved in a differentiated manner by a technology which enables a solution for that use case.

What medium- and long-term changes do see in store for deep tech?

Entrepreneurs are taking bolder ideas to the market. There is capital available and a lot of follow-on rounds happening in deep tech. Companies are able to cater to a global demand right from India.

Covid has accelerated certain kind of use cases. The need for mental health has gone up. The need for mental health has also taken it to be delivered digitally as physical meetings aren't possible. Robotics automation in different cases has accelerated. Apart from the base factors, Covid has definitely given more impetus to certain use cases where technology is the way to solve that in the absence of physical resources or remote operations.

How has Covid affected the funding momentum?

When covid hit, there was uncertainty on multiple fronts. Investment decisions are about banking and betting on people. Meeting entrepreneurs, seeing what they do is an important part of the investment decision. An online meeting cannot substitute fully. When covid hit the first few months were just about everybody taking a step back and reassessing what the new normal of operations would be.

Somewhere, a semblance of new normal is emerging. And physical meetings are also happening but people have also come to terms with making some decisions on Zoom. So, people have pent up liquidity as they weren't investing for a few months. All that money is now actually in the market. There is a trending momentum. A lot of companies are raising money in our portfolio as well.

GenZ is breaking into VC. What advice would you give them?

VC is a long-term game. You got to be in it for long years to really see the full cycle of what a VC operation looks like and derive value out of work.

We are slowly going toward the world of specialization. If you would have built deep tech products before then you'll be able to connect with the founders better. So, in general we need to get more operators into the investing game in India especially. Basis that VC is a good exposure for young folks to get started with. At some point I would suggest all young folks should try and pick up some operating experience in the line of interest and then come back to the investing world.

What advice would you give startups?

Deep tech startups should build a business narrative along with the technology narrative. It is important to understand what business problem you are solving and articulate it well. Be focused on that problem and how technology can solve that it. There is a lot of maturity that has come into the Indian ecosystem in the last few years. The quality of entrepreneurs we are meeting is going up. The quality of idea is going up. Overall, we are in the right momentum.

What are your plans for the future?

One the things that inspire us at Pi Ventures is to see India on the deep tech map of the world. A lot of work happening in India and we are seeing more and more of it every year. In the last 30 years, I have seen how India has shaped its own perception from that of a service nation to a product nation to a deep tech nation. India has a claim to become a deep tech nation in the next few years. Whatever we do at Pi is to enable that vision. That's what we feel excited about.