Episode 6: Aditi Sharma- Building a Corporate Venture Ecosystem

About Aditi:

My next guest on The One Percent Project is Aditi Sharma. She is the Head of Startup Programs & Investments at Grab Ventures. She has spent five years at McKinsey & Company post her M.B.A. from Indian School of Business in India. 

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In this conversation, she talks about:

  • Her journey from her entering college to Grab Ventures.

  • The evolution of the Corporate Venture Space in Southeast Asia.

  • Hypothesis and framework behind building Grab Ventures.

  • The impact of COVID on businesses and trends that are emerging post the pandemic.

  • Who is the perfect founder for Grab Ventures?

  • Super Apps and opportunities.

  • Southeast Asian markets their evolution and the opportunities within them.



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Transcript:

*The transcripts are not 100% accurate.

Pritish: Welcome Aditi to The One Percent Project.

Aditi: Thanks for having me Pritish

Pritish: You have had an amazing career. You started off in Thapar university back in Punjab, India. Thapar is one of the leading engineering schools.  Your first job was with S.T. microelectronics then you went to study at Indian school of business from there you worked at McKinsey, and now you're in Singapore heading startups and investments for Grab Ventures. How has that journey been?

Aditi: It's been a thoroughly exciting and a great learning experience. Seeing, the technology sector from various parts of the value chain has been like a really really exciting part of it. I started on the development side as an engineer, then moved on to take a more advisory and ops transformation kind of role as a consultant and now more in the partnership investments, venture building an ecosystem and enabler kind of role. I think that's given a very good understanding of the dynamics of the sector itself and a sector that is ever-evolving. So yeah, absolutely fun.

Pritish: What are your thoughts about corporate venture space in Southeast Asia versus the rest of the world? 

Aditi: I have actually when he worked in India and across Southeast Asia. So I can probably make an observation on how I see the region came about to be a technology hub that makes it distinct in that sense. Three kinds of technology hubs as we look globally.  First is the tech hubs like Silicon Valley or Bangalore in India. Which started off as a sort of startup ecosystems and the corporate went chasing in search of innovation. So that is, that gives them one unique character. I think the second distinct ones that I see would be the ecosystems in China, where you see two to three distinct ecosystems developing around B.A.T. H.Q. and now even ByteDance. So sort of large tech ecosystem, which had startups seeding around them. I think Singapore and I believe Hong Kong, sort of sit in a third bucket, which started as the APAC HQ of corporates, and overtime also became the Silicon Valley of the East of sorts. It's interesting how both sides of the ecosystem and the investing space were sort of developing in parallel. Which gives it a very unique character in terms of dynamic in terms of the maturity of the ecosystem and also the pace of the tech development, it's unique,  in that sense, the corporate venturing, the space in Southeast Asia and how the corporates and startups interact with each other.

Pritish: What was the initial hypothesis Grab Ventures started off, what kind of frameworks, what were your initial thoughts that you wanted to achieve, and how did you go about it?

Aditi: The mandate always has been focusing on the next sort of disruptive businesses for Grab. The framework and the thinking on what that could be, has been sort of a constant all along. Depending on essentially two things, both of which are actually very, very customer focused. The first being where is the opportunity meaning where we see customers that are unserved or underserved by the current alternatives in the market. So the first part is the opportunity from a customer lens. The second part is where do we believe as a platform, we have a reason to play and the ability to serve these unmet needs. So this would be areas where there's some sort of adjacencies to the core assets and capabilities that we have as a platform. So I think those two customer angle sort of drive the decision on where choose to play as a venture team.

Pritish: I think that has actually led you to focus on GrabFresh, GrabWheels and GrabKitchen. But the post COVID situation may slightly change. Do you see any of these pushing off faster, or do you think a new business unit may emerge because of the post COVID learnings?

Aditi: Post COVID sort of, there are two key themes that we see emerge in the ecosystem. I think one,  it was definitely, coming up, into 2019 already, but the pace is just much more accelerated, which is around creating more sustainable businesses. So there's a lot more focus in the post COVID world on that which is a great thing—especially coming in from an investing standpoint. I think the second is, as you were mentioning Pritish, there are some sectors that are sort of moved in terms of demand. They've helped accelerate the change in consumer behaviour. Especially sectors like groceries, sectors like remote working, Adtech. The COVID pandemic and the situation that has created a lot of opportunities and shifted up the demand curve to a higher base from where these opportunities can grow. We definitely see some of the sectors that you were mentioning moving much faster, and some very new interesting opportunities emerge as a lot of users are spending more and more time online working remotely.

Pritish: The three business units that you have within ventures. How do they interact with the startups? Because now you are on your batch three and your first batch had a startup called Bookmyshow which started in 1999, which has millions of users in India and Southeast Asia and you have younger startups which started in 2015, 2016. So how do you mentor them work with them? Because there are two different levels of growth paths.

Aditi: That's a good question, Pritish. It's quite a diverse spectrum of startups that we work with and how essentially that works is even though we are selves are rather a small team of startup advocates, venture builders, but, thankfully we have a much larger ecosystem of internal and external experts bank on. So, for example, when we are doing for the growth ventures velocity when you're doing any workshops on functional topics like growth hacking or anything around user acquisition. We have a large base of internal experts. People who actually help build the platform in the early days, we can bank on them. So that's a huge asset at the same time. You also have the privilege of having a large network of friends of Grab. Who have been kind enough to offer their time and support for the portfolio to help them grow. Whenever we are doing a fundraising workshop, There are very experienced V.C.s in the region who we could always bring in, who can give the founders very state-specific advice. Be it a pre-seed startup, plus seed and next stage. Having that broad ecosystem has been really helpful to support the portfolio. We also hear that that's the value proposition that connects a lot of the startups that we work with.

Pritish: As a venture team, how do you assess your success?

Aditi: We measure our success based on the two key stakeholders that we have. One is definitely the founders. So the measure, our success by the success of the founders that we support. So that is a key metric. The startups that we are working with how they're raising the follow on funding, how well their base of users is growing, how the product is coming along that's one key metric, the success of a founder. The second one definitely is the value that you're creating for Grab in terms of growth in terms of solving the user needs better. Those would be the two areas how we continue to monitor. How well they are delivering to the original mission of creating new disruptive businesses or tapping opportunities for Grab.

Pritish: Who is your perfect founder?

Aditi: Yeah. I think, as you mentioned, the stage of founders I think work with is actually very diverse. Working with, pre-seed founders all the week growth and lead stages, but stage independent. I think there's, a  key, common denominator of similarity, vision, and culture with Grab. What that really comes down to is do the founder partners that we work with share the same vision of making a real difference to the consumers—so very customer-centric lens. If you ask folks at Grab, it's actually very common to have emails or sharing from Anthony at town halls around what he's hearing from customers. He spends a lot of time with customers, and you keep hearing a lot about it, what he's hearing. There's a very, very strong element of customer-centricity. That's something you seek out in the founders that we work with very closely. When I started off, this felt like a very fuzzy thing to measure, but I think over time, I've seen that this starts very clearly reflecting in how founders would think about the product, how they would think about their business strategy and how even they would think about their partnerships. I think that core customer-centricity vision is a key or to what a perfect founder for a Grab ventures portfolio looks like.

Pritish: The market that Grab, as well as the venture team, operates in Southeast Asia, is a huge opportunity and at the same time, it's a heterogeneous market, every market has its own culture, new answers, languages, upbringings and consumer habits. How do you see somebody entering a certain market and emerging as a regional leader?

Aditi: I think there are two elements or two levels to the opportunity. And I think Pritish one part is establishing yourself in a core market. There our learning has been, being hyper-local is key, as you mentioned each of the markets, even within each country, The user needs are so diverse. You can have very long conversations when you meet folks in Indonesia about how east Java west Java is different, how Java is different from all the other islands. Being hyper-local is really the key. How can you localise your solutions to the need of each market? Win the heart of customers really delivers customer delight. The second level of it comes to when you talk about a regional player; one element is how do you still create any strong foundation of a scalable platform that scales well across geographies be it in terms of the core platform, the architecture itself. How can you build something that really scales quickly? How the product is being localised. On the second part, I also think there is, there is a strong business case, to taking the support of larger platforms, platforms like Grab and other platforms in terms of scaling across the markets in the region. So I would think that those two, those two areas can really help startups on being hyper-local, but at the same time, having both strategic partner base to grow.

Pritish: Yeah, that actually leads me to a more interesting question, which is Super Apps. Once you become a regional player, how do you really focus on being a Super app and will Southeast Asia have multiple soccer players?

Aditi: You asking me to be the wizard? I think, yeah, definitely potentially, Yes. As you mentioned, the market is really big. The market is really complex; it's a huge opportunity in that sense. We definitely see already and see the opportunities from multiple players to come, service various opportunities. How? I think again, comes down to being hyper-local and still have a very strong regional foundation that also links to our own approach. Long back, we came to realise this is so complex; we can't do everything on our own. And that is why we've taken a very partner-centric approach where we are the core and who are sort of the partners we can bring around. It creates something very exciting for the users, and that's how we work with the founders in G.G.V. and some of the other programs we do.

Pritish: If I have to look at industries on which SuperApps should focus. Do you think FinTech is the biggest opportunity or there are other industries that SuperApps would need to focus on?

Aditi: FinTech is, definitely a huge opportunity, and that also would link to a lot of startups. Look at the number of startups coming up in the region, there is a lot of FinTech startups, and within FinTech itself, you see many different opportunities:  payments,  lending wealth et ceter. Given the ecosystem given how big the base of unbanked and underbanked population financial services and FinTech is a huge opportunity. But I would think that from a SuperApp angle, that would be big, but not the only opportunity, V.C. in Southeast Asia loves food. It's the common, binding force. So you see a lot of interesting stuff evolving around food., the complexity of the region makes logistics a huge opportunity, and you see a lot of ecosystems developing around that opportunity space. There are a lot of core pillars around which you are seeing, and you will see Super App ecosystems evolve.

Pritish: You talked about food, and recently  Grubhub was acquired. Do you see consolidation in this market as we go forward?

Aditi: Yeah, But I think, the good thing that you see with the COVID scenarios there's a lot of steam that has gathered around the market and you see a lot of interesting opportunities coming around it. Food, just centring around food delivery, is not the case anymore thing. There are a lot of sizable use cases that are coming around, food delivery. Prepared food delivery is one space. Take-out has accelerated as a use case in the market.  Semi prepared meals are coming out as an interesting opportunity. There might be some consolidation, but you also see larger opportunity spaces coming around, which you could see newer and newer players and verticals kind of emerge.

Pritish: So among all the countries or regions in Southeast Asia, which one are you following closely? And you find a lot of promise in.

Aditi: It is like asking a parent to pick the favourite kid. Yeah. I think, as you were also discussing earlier,  different markets in the region are at a different phase. I think it's how big the population is, more simplistic way of looking at it. I don't see one opportunity is bigger than the other. It's just very, very different. And each of the markets given the maturity of the ecosystem are at a different point in the S Curve, I think, for purely from a numbers perspective as a smaller market, but really sophisticated, more mature. You've seen Indonesia go around on the curve. You've seen Vietnam; there's an interesting opportunity in the Philippines and Thailand. And then there is a whole new area of frontier markets, so everyone is at a different phase. And, also will be interesting to see how does the overall regional dynamics sort of evolve post COVID scenario as well. Definitely, the next year is a pretty time to watch out.

Pritish: Southeast Asian startups have really ticked off all boxes, grown and done well. But I haven't seen Southeast Asian startups going global.

Aditi: Two thoughts there. One, I definitely see several examples in the B2B tech space of Southeast Asian startups that are set up here, homegrown and have gone on to service much wider base of the market globally, for example, in U.S., Europe, et cetera. There are examples whether you see less or more in the future. I would also think it is driven it's more of a strategic choice that the startup founders here are making, as we were discussing, The market in Southeast Asia it's called Southeast Asia, but, it's just many, many, complex markets all rolled together 600 million-plus population. It's even more of a strategic choice where the founders are looking at focusing on one core market, excelling in that and g in the region around it or picking up. You see plays where startups are founded in Singapore. They've gone through similar North Eastern, North Asian markets have gone to Australia. So it's more a strategic choice. 

Pritish: A quickfire round. I'm going to ask you questions, and you need to give me a one-word or one sentence. Whatever first comes to your mind—favourite book or blog.

Aditi: as you can see, I am excited by podcasts right now.  The Knowledge Project is, definitely something I am listening to a lot these days.

Pritish: Idea or Team?  

Aditi: Team

Pritish: The hardest thing about your job?

Aditi: I think productising what's the best available inside and bringing it to a very big variety of founders out there.

Pritish: one thing that you would have loved to know before you started off?

Aditi: Pace yourself. I think, yeah, not look forward to retiring at 40, but,  more, all about the purpose and creating value for as long as actually, you can.

Pritish: The last one, Gut Or Data?

Aditi: interesting data. Otherwise, you would. Doubt if I have a consultant or not.

Pritish: I won't. Thank You.

Aditi: Thanks, Pritish.

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Episode 5: Karthik Prabhakar- Indian Venture Capital and Early Stage Technology Landscape