From World Bank to Web3: A Journey of Investment in Tech and Blockchain
CXOToday has engaged in an exclusive interview with Ms.Kavita Gupta, Founder – Delta Blockchain Funds & FINTECH.TV
– What prompted you to start investing in tech?
I started my own company after working for years at the World Bank and IFC.I started a company known as WEMYND which was a citizen journalism platform with a world class reputation system, and we got acquired after two years.Once we were acquired, I realised that I went through the whole cycle of raising money for my start-up and I really got very excited about the whole idea of diligence.I then got a great opportunity to work in Eric Schmidt Family office, he is Google’s ex-CEO, where I invested in early stage companies.
– How did you do this? What did you think about the market in those days?
My investment journey actually started during my World Bank, IFC days.I was fortunate to start investing in emerging markets; Africa, Middle East and Latin America in the beginning of my career, which was during the years 2008, 2009, 2010.I was investing in early stage of technology in emerging markets.Mpaisa, which is one of the world’s first phone-based payment system, I was an early backer in that company.
Mpaisa is similar to what Paytm is in India.And I think the market at that time was huge but the confidence in technology was low.
Which is very different from today, where the confidence in tech is very high but now you have more competition, same audience; same number of people who can adopt it but now you just have to compete your way in.
– What were some of your best investments in the space?
From the non-web3, I would say, Sale drone; which is the underwater technology, Bloc power which is the providing free electricity, or low-cost electricity by using solar panels, would be some of the great investments but at the same time when I think about web3 and crypto, I invested early checks into companies like Quantstamp, BlockFi, Sorare, Polygon, Starkware.I think these are some of my best investments in the space.
– Why aren’t there many women VCs or PEs, investors etc? What do you think has been holding them back when it comes to investing.
I think when I started my career on the trading floor, there were hardly any women on there or in investment roles.
In the VC world, I think it has always been a boy’s club.Even between the founders and the investors to a large extent today, to be honest.But the situation is slightly improving, with women participating more in the field, I’m sure in the coming years you’ll see more female partners and fund managers.
– How do you think you can make the ecosystem more inclusive for south Asians / women
Women need to have stronger network, networking among women themselves is also important.Sourcing of deals, having our own conferences to meet lot of founders to understand, to promote each other to support each other to mentor each other, we need our own back channels to understand that if something goes wrong how to support each other, connect for hiring, etc.And it has started, and it is, there are so many networks today which never existed when I started my career in 2005 & 2006 but it still needs to be better.And in our own portfolio of around 50 companies, I have only 1 woman founder now.
We invested into one company that didn’t work, so I only have one woman founder active who is south Asian– a company out of India by Kavya Prasad, it’s called Lumos Labs.But the thing is, even as a woman GP, I don’t get a lot of decks which are from woman founders.We need to work hard on that too.
– What do you think of India’s tech, startup and crypto ecosystems?
India’s tech ecosystem is one of the world’s most elite ecosystems.We have proven to the world that we have some of the most analytical thinkers and founders.We also have a technically qualified workforce that can build products for native use and also build for all over the world.Before the government started cracking down on crypto and Web3, we had companies like CoinDCX and CoinSwitch Kuber which were building for Indian users and, we also had companies like Polygon which created technology for the whole world and continues to be a multi-billion dollar company.
But now, because of government regulations, most of the companies are moving out of India.
So talent is not a problem, adoption is not a problem, I think Indian founders in both web2 and 3 space are already at the front, they are also as the operators’ as the top CEOs in the front, and investing has been really really more fascinating.
– What areas are you most excited about now?
I have always been interested in infrastructure so I was very early in infrastructure for fintech then supply chain technology then drone technology then renewable energy and now days I’m very excited about the web3 infrastructure, what one might call the non-sexy plumbing on which the whole ecosystem is built.I feel like we are in the golden space for investing in web3.We are seeing everything being built in front of us.
And coming from the web2 investment experience, you know what has worked, what hasn’t worked and how to make sure it goes in the best way.
– Is there a start up winter? What are your views on the same?
There is always a cycle of startup winter or summer based on the market how much money is available, how are the valuations going, but when it comes to the technology build up or the product market fit, I don’t think there is a startup winter.Because if you have a product which has a good market fit and is at the right price value, then you can create an impact even in the bear markets.So with respect to valuation, yes you could say there is a winter, but with respect to the demand for the product, the building of the products, the founders coming into space and adoption, I don’t think there is a winter.
– What is Delta Blockchain Funds investment philosophy?
DBF started as a pre-seed stage early investment fund.We invested in a lot of infrastructure technology as we said, we have been very fortunate to be a part of companies like AI stack which are redefining how the indexing, meta taggings and data availability going to be available for onchain users and web3 for developers and over time, individual users.Layer swap, which is a company which is a multi-million dollar profitable, already in the space on an annual basis which is across chain settlement with an amazing user experience where the user doesn’t even have to know which chain they are on.Karma3 labs, an amazing Indian Founder out of silicon valley which is creating the first ever identity compute for on-chain identities.Lumos Labs an Asian woman founder, Kavya who is building the developer community ecosystems, etc.
So yeah we have always been always about what sort of tools and infrastructure will steer the ecosystem ahead.We invest in companies that are going to scale up the ecosystem by 1000x, that’s what we try to do at Delta.
– How do you envision the crypto ecosystem 5 years from now?
I think the crypto ecosystem would move beyond the crypto native technology investors.I always see the place between crypto and blockchain.These are the two big spaces.If you are only talking about the crypto currency as the usage we are going to see stable coins, CBDCs being standards around the world, making it super easy for a regular consumer, a consumer who is a shop owner next to you to be ordering international products for their shop using CBDC, and having no issues on settlement immediately.We are going to see the CBDC in your supply chain settlements, foreign exchange settlements etc.We are going to see TradeFi with respect to a lot of your bonds, futures options the whole trading markets being on-chain.
When we talk about blockchain, we are going to see not only the payment system on chain, but we will also see technologies like incentivisation of when you are shopping online and using that incentivised model cross chain or even in the market to have points.We are going to see real assets onchain whether its fractionalization of property or an ownership of that fractionalisation of your units on public markets etc.So I feel like it will be a very big major mainstream technology.
– Anything more on the space?
I think as a big blockchain believer since 2013 I want to say that blockchain technology is a technology which is ultimately going to be just a part and parcel of the products you use.
I don’t see a future in 10 years down the road where you will see a blockchain fund like today.As there is no internet fund or a database fund today because that is just what you use or that’s just what basic tech stack is.I feel like this place will evolve in a big way but that is going to be a part of our day-to-day technology interaction without us even knowing.
And crypto currency whether in the form of stable coin, Bitcoin and Eth on the Ethereum network will continue to be a huge force in our life..