Prime Venture Partners Podcast

India & US Fintech in 2025: Sheel Mohnot from Better Tomorrow Ventures on PrimeVP Podcast

• Prime Venture Partners: Early Stage VC Fund

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What’s next in fintech? In this high-signal episode, Sheel Mohnot (GP at @ Better Tomorrow Ventures) shares deep insight into the future of financial services, AI’s impact on SaaS, and how VC is evolving in 2025.

🔍 In Sheel’s candid chat with Sanjay Swamy, You’ll learn:

 • What US fintech can learn from India’s public infrastructure (UPI, DEPA, account aggregation)
 • Why SaaS isn’t dead—but must evolve beyond subscription revenue
 • How Sheel evaluates founder-market fit, velocity, and tenacity
 • The co-lending revolution in India—and why it’s a structural shift
 • Why BTV is betting big on hands-on accelerators and early-stage velocity

📌Timestamps:

 00:00 – Introduction

 01:30 – Sheel’s journey from Pittsburgh to VC

 08:15 – U.S. vs India: Fintech regulation 

 15:30 – Is SaaS dead? The AI disruption

 20:15 – India Stack vs U.S. payments

 27:30 – Can Indian fintech go global?

 30:00 – IPO readiness: India vs U.S.

 34:00 – Will BTV invest in India?

 45:00 – Red flags & founder filters

 50:00 – What gets a “yes” from Sheel

 54:00 – Fintech outlook for 2025

 57:10 – Clubhouse, Bieber & Taco Bell wedding

🔑 Key Takeaways:
✔️ Vertical SaaS is fintech in disguise – and it’s how modern software will scale revenue
✔️ AI is not just augmenting work—it’s replacing it in areas like accounting and underwriting
✔️ Regulation ≠ obstacle – In the U.S., a patchwork system creates an edge for savvy startups
✔️ Early-stage investing is about founder-market fit, and spotting overlooked “superpowers”

📌 Follow us:
LinkedIn: https://www.linkedin.com/company/primevp
Twitter: https://twitter.com/primevp_in
Website: https://primevp.in

#Fintech #SaaS #AI #Startups #VentureCapital #IndiaStack #SheelMohnot #BetterTomorrowVentures #DigitalTransformation #FounderInsights #InvestorInsights #FutureOfFinance #PrimeVenturePartnersPodcast

Speaker 1:

We've read about the Taco Bell wedding.

Speaker 2:

We've heard about the Justin. Bieber video. I had, or maybe have, over 3 million followers in between Oprah.

Speaker 1:

Winfrey, it took me a long time to understand what Fit Daisy stood for.

Speaker 2:

Fund 1 was 75 million. We're currently investing out of Fund 2, which is 150. Fintech is hot again. You know, if you're not a bank, it's actually in some ways better than being a bank. There are more seed deals happening in New York than in San Francisco Bullshit metrics. What I'll say? Like they talk about something that like a proxy for a proxy for a proxy for a proxy for revenue, just like, tell me the damn thing.

Speaker 1:

Hi everybody. Sanjay Swamy here again with the Prime Venture Partners podcast, and I have a really good internet friend of mine and probably of several of you who follow our podcast the one and only czar of social media in the fintech world. That's the new word these days. I think I'm one of the few who has not asked him how to pronounce his last name. I hopefully got it right. Yeah, but welcome Sheen to the show. I was listening to the TechCrunch podcast the other day and the lady was saying oh, I wish I'd asked you before the show, but yeah, great to be on Excited to chat.

Speaker 2:

It's been a while, so just good to catch up too.

Speaker 1:

Before we get started, I think it'd be great for people to know a bit about you, and it took me a long time to understand what at Pit Daisy stood for.

Speaker 2:

I understood the Daisy part then later realized you're from Pittsburgh.

Speaker 1:

And so that's what that probably stands for. Yeah, that's right.

Speaker 2:

I understood that they see Padre and they can realize you're from Pittsburgh, and so that's what that probably means.

Speaker 1:

Yeah, that's right. So great to have you here, sheel, and, of course, big fans of the core key posts that you keep putting out on Twitter, but most of them, if you read between the lines, there's some really high quality content as well, and sometimes, of course, very directly. So let's get started. A little bit about your journey and how we got to where we are today.

Speaker 2:

And then we'll talk about your views on the market today. Yeah, sounds good. So backstory I grew up in Pittsburgh, so I'm a Pittsburgh Desi. I've had that screen name. It originates from 1995, so it's an old one 1995. So it's an old one. And you know, I grew up in a household with my parents both grew up in India, but I grew up in Pittsburgh. I was going back to India every you could say year or two years throughout my childhood and then, you know, as an adult, I went to Carnegie Mellon University, also in Pittsburgh, and ultimately went into software. I made software for hospitals at a company called Cerner. Then I got into management consulting, ended up spending some time in uh, in india. Actually, as an adult, I, uh, I went to india. I was there 2006 and 2007 and I was working in microfinance, living like my borrowers, uh on. I think it was 2 000 rupees a month is what I was. Which year was this? All my expenses 2006 and 2007.

Speaker 1:

And which part of India? I?

Speaker 2:

was in Ahmedabad. I see Wow, and so it was a cool, it was a great experience. You know, something I never could do today, but in my young age I was uh, I was more capable, such things, yeah it's all relative.

Speaker 2:

Yeah, it's all relative, but um, and then, uh, you know, went back to consulting. I worked at bcg serving financial institutions. Um, a friend of mine had an idea for a company. We we ended up starting a payments company. That company got acquired in 2012. I started doing some angel investing, found I really liked it. Another friend of mine had an idea for a company, said why don't we do this together? It was an auction company. So I ended up starting that company about a year after the exit of the first company, and that company, too, ended up having some modest success in 2015. And from that point onward I've been investing and started out investing my own capital. I had joined 500 Startups, ran a fintech focused fund there called 500 FinTech, and then we started BTV about five and a half years ago now, and BTV stands for Better Tomorrow Ventures. We started fund one was 75 million. Then we're currently investing out of fund two, which is 150. And shortly we'll be investing out of fund two, which is 150.

Speaker 1:

And, uh, shortly we'll be investing out of fund three very cool and, uh, broadly, uh, your funds focus on on what areas, what geography, what verticals?

Speaker 2:

yeah, so we we lead pre-seed and seed rounds in and around fintech. And when I say around fintech or fintech adjacent, what I mean is, you know, there are a lot of businesses which today may not look like fintech companies but in the future will. As an example, vertical SaaS. As an example, vertical SaaS so in the United States there's a large, now public company called Toast that builds restaurant point of sale software and when it started out it was a point of sale company charging $100 per restaurant and now 83% of their revenue comes from financial services. And we think that there are a lot more opportunities to build businesses like this, and every future vertical SaaS company will have a large component of fintech. And so maybe you charge $100 a month for your SaaS product, but then you make another $200 on payments, you make money on lending, you make money on banking, accounting, payroll, et cetera, and ultimately, 80% to 90% of your business is a fintech business.

Speaker 1:

And do you think all of these companies? I mean? I shared a very similar point of view in India, in fact my partner any company that's not doing well, they say, can I just hand it over to Sanjay and he'll turn it into a FinTech as a joke. But you know, I think that's certainly the one big profit pool and I think that benefits a lot from digitization of what used to be traditionally offline processes.

Speaker 1:

Right, the question I had for you is these are all regulated spaces and traditionally not something that such founders would have a background in, right, and in India it's becoming certainly more and more clear that you just need to become a regulated entity by the RBI and get an MDFC license and so on. How is the landscape in the US and do you see it going more in that direction? Or do you think there'll be specialized companies with sort of an embedded finance type of module that they will be licensing, and is the opportunity there? Or is the opportunity in the software company that is targeting the customer, or both? How do you think about it?

Speaker 2:

Yeah, it's interesting In the United States. So, first of all, as you are very well aware, we had a change in leadership here a couple months ago no really, and I think it has some implications which we can cover. But what I'd say overall is it's different than India. So let's just use banking as an example. There are pretty great advantages to not being a bank. So we can use the neobanks as an example.

Speaker 2:

Chime is the largest of them on the consumer side, the largest of them on the consumer side. So Chime as a neobank, they serve a population that does not have a ton of money like underbank population, and they're able to actually make a lot more money on this customer than they could if they were an actual bank. And the reason for that is the way that you make money off this customer is interchange when they swipe their debit card. And the United States. About 15 years ago, there was a regulation called the Durbin Amendment, the Dodd-Frank Durbin Amendment. Yep, Exactly, Exactly, yes. That regulated how much banks could charge on interchange, and banks with some $10 billion in deposits were able to charge more on debit interchange than larger banks. And so it actually. You know as you scale, you know if you're not a bank. It's actually in some ways better than being a bank and getting a banking license in this country is a real pain, it's tough?

Speaker 2:

Yeah, it's tough. And we don't exactly have a NBFC equivalent in the United States yeah, exactly. And then the same is true in a bunch of other industries. I think there are some areas where you do want to get regulated and, for example, we have this concept of a money transmitter, and it's kind of strangely still done state by state, and we do encourage our companies to get the money transmitter licenses. So in some cases we do encourage them to be licensed. But for the most part the regulatory environment isn't necessarily set up only for regulated entities to succeed.

Speaker 1:

Cool. So you expect that fintechs will partner with regulated entities that build a muscle for partnering with the fintechs and plow along much faster and, in some ways, stay unregulated. What about some of the larger players? Like you know, all these things work very well when you're small, but when you get to the scale of someone like a Stripe or a Chime as well, isn't there an expectation that they will eventually need to get regulated? So is it a zero to one and one to 10 phase where they can get away or, you know, can they stay unregulated forever?

Speaker 2:

You know it. I think it depends on what you mean by regulated. Like you know, when I say there, there's no such thing as an nbfc in the united states, like there's sort of. That's mostly true and that, like you know, we have a regulatory. We don't have like an rbi regulated nbfc type of thing, but but they're all there's like patchwork framework throughout the united states, so, um.

Speaker 2:

So I mentioned state level regulation for money transmission, so these guys all have that. Then they also have lending licenses in each state in which they're in business and so they are regulated in some ways, but not via a centralized regulator like in India. It's basically a bunch of different layers and fragmented, and then you know it can be frustrating. Also, united States, like you, might be regulated by the FTC. We talked about the Dodd-Frank Act. There's the Fair Credit Reporting Act, equal Credit Opportunity Act, the Consumer Financial Protection Bureau, which Trump is eliminating, all these different and the OCC, which is the Office of the Comptroller of the Currency which controls banks, fdic. All these are different regulations but in some ways, like we don't have a centralized regulator, like I think is the case in India, more so than the United States but these are all regulated in some way.

Speaker 1:

Right, well, so let's move on to some of the areas that are exciting you a lot. I think you tweeted recently about SaaS. Is there or not there?

Speaker 1:

It depends on which side of the venue you've been from and we're all going through that. You know this extraordinary excitement around, obviously, the foundational layers of AI, but I think some of the applications you know we're looking at it. In fact, I finally went and hired engineers to actually build out some tools for us in our own operations. Initially the finance team just grabbed him and said, oh, we need to do all of the MIS reporting and stuff like that. But eventually, of course, I think a lot will get into our own research and underwriting of areas and startups and founders and so on. But you know, in terms of building large companies here around financial services, fintech and with this whole AI boom that's happening, this whole dynamic of companies moving to a thought process where they could build their own software themselves and probably, you know, build much more targeted offerings how are you dissecting this whole space and what scares you? What excites you?

Speaker 2:

Yeah, so a lot of folks are saying, okay, saas is dead. I don't think it's dead. I don't think that's the right way to think about it. I do think in our own work, what I tweeted about was we were looking or we are, I should say, still looking at a software to help us manage our own business, to manage information we get from our portfolio companies.

Speaker 2:

There are a few providers that offer this solution. They're charging like 25 or 30k USD per year, and so we've been thinking, okay, that's a lot of money to spend for software. Like, could we just build it ourselves? So we're starting to prototype and while I have some technical background, I haven't really built anything in a very long time 15 plus years. So I started playing with all of these new AI products and it's pretty impressive what you can do pretty quickly, and so it feels like if I'm rethinking, if I'm already rethinking the 25K per year contract with somebody, then you know, know, I might be ahead of the curve a little bit, but there's a lot of that coming.

Speaker 2:

So I I do think there's a world in which the the you know, the future looks a little bit different and more, more customized. I think there are a few things we still think are important to get right. So like, if you, if you do invest in SaaS, I think and we're still trying to figure this out but what we're looking for is some sort of complexity barrier, so like, is it hard to solve technically or is it something fairly easy? You know, we have businesses that are, I don't know like. The first thing that came to mind is like there's a business that when you enter into an office like you, you, you enter your name to check in and like that's.

Speaker 2:

Envoy Right and like. I'm sure they have many more products now, but it seems like, okay, could I build that myself in a relatively short period of time. Yes, what's their right to win? It's not that hard technically, but they might have some other thing, and so the second thing that they probably do have that I'm missing is they have some network effects Like they're able to have. They have information about people across, across buildings and all sorts of stuff like that, so maybe there's an advantage He'll always take that third cup of stuff like that.

Speaker 1:

So maybe there's an advantage there He'll always take that third cup of coffee.

Speaker 2:

Yeah, exactly, do they have some sort of integration or workflow stickiness? So this is the thing in my business, I think we think about a lot. It's like, if we're investing into a company, what's their right to continue existing? And I think it's really where we have landed on is, are they embedded into the workflow? So we have invested a bunch in these you know what we call services as software businesses and we're finding that there's a large demand from these enterprises to adopt AI. And where they want to adopt is where there's a hair on fire problem. If we can't hire enough people to do a particular task or it's too expensive to do a task and so we don't do it, that's a big opportunity. I can give you a couple of examples. So we're investors in a company called Basis it's an AI for accounting product and they ultimately will be doing the work of a junior accountant.

Speaker 2:

And in the United States there's a huge accountant shortage. And the United States there's a huge accountant shortage Basically, people. It became very uncool to become an accountant and so people stopped doing it. Like, even from the time when I graduated college till now, the number of new college graduates in accounting have dropped 50%, but actually the demand is still there, more than ever, so there's a strong demand for accountants. We're actually importing them. There's a lot of decent number of H1Bs that are accountants, but even then there's a shortage, and so these guys are automating the work of a low-level accountant, and all of the accounting firms want the product. It's like a no-brainer for them, and so that's. One Another is we have a company in the loan underwriting space called Kaj. They do a bunch of work to automate SMB loans, do a bunch of work to automate SMB loans, and so what that enables is a lender who previously was taking so much work to do the underwriting it didn't make sense to do a loan under $50,000.

Speaker 2:

Now, that lender is able to do a loan that's like $20,000. So it is furthering the business. Then we have a bunch of others in this sort of broad theme that's like truly20,000. So it is furthering the business. Then we have a bunch of others in this sort of broad theme that's like truly automating work.

Speaker 1:

So it's kind of interesting some of these opportunities, at least in India. I mean, obviously, basis is the core thing, right. I think it's going to be a problem everywhere in the world, especially if a lot of the H1Bs start taking all the accountants from India to the US. Then we're going to have a shortage on this side of the world. But I think the one thing that happened in India over the last decade and I had a small role to play in it in the early days especially was this whole development of India stack and a public infrastructure with the account aggregator where digitally signed information can be made accessible, you know as JSON, so they are machine readable, and verify documents, you know with a, you know private, with a digitally signed hash so you can even verify all the information without going back to the source.

Speaker 1:

I think the US has still stayed relatively offline, focused and certainly proprietary data focused, right, and I think interoperability and openness has sort of happened in many areas, but in many of happened in many areas. But in many of these financial services areas it still seems like, you know, you have companies like Plaid and the others that did a lot of the connectivity, but it sort of went the path of let's create more large private companies rather than interoperable utilities, right, and is that a fair assessment and do you see any of that changing or do you see this is going to create more opportunity that we could back as a mindset? Yeah?

Speaker 2:

Yeah, I think the India stack has been obviously phenomenal. But, like identity payments in particular, I think in the United States there's a lot of inertia not to move in this direction. Some of it sort of surprises me, but I think the identity stuff Americans think of themselves as individualistic and for some reason fight identity, fight national identity in a big way, so people don't want their fingerprints or facial recognition. People fight this in a big way. You know we have the social security number but there are no biometrics. So there's a lot of fraud and identity theft.

Speaker 1:

It would be much better to implement. We've been reading about it. It's just wrong.

Speaker 2:

At least, that's what a lot of stuff has been claimed of, and so we're still using state-by-state driver's licenses for identity verification, and the reason is this privacy concern that people have, unfortunately, and so it holds us back, for sure. But it also allows opportunities for a bunch of these private companies to pop up. And so, on the identity side, you have a bunch of companies that have built sizable businesses just managing identity Persona and many, many others. Identity persona and many, many others. Um, but yeah, it of course would be much better if we had an adhar type system. And then, on the payment side, yeah, like freaking wish we had real-time bank to bank payments. Yeah, but look, it's, it's. We don't have them because the banks really don't want it. They lose money. They're making money on those two days afloat and that's how they make a lot of money.

Speaker 2:

We have this new payment infrastructure launched what was it a year and a half ago called FedNow launched. What was it a year and a half ago called FedNow, which is a new instant payment infrastructure for real-time payments, but it's not mandated. So if it's not mandated, then the banks aren't going to do it because there's no impetus. So the banks that are doing it are mostly like small banks, and until and until you mandate it, it's not going to happen. So then what do we have is our ach automated clearinghouse system, which is slow, and then we have third parties. So, like the, the businesses, like paypal, venmo cash app, why do they exist? How are they existing? It's because we don't have a system like UPI that lets you do it fast and free, and so what these guys do is they primarily make money. If I pay you today, it doesn't settle for a few days, but if you want to get paid instantly, then they'll charge you a few percent and you can have the money today, right now so that's discounting, basically, yeah that's right.

Speaker 2:

So that's how these private companies paypal, venmo uh, paypal venmo venmo is owned by paypal, but you know they operate independent apps and cash app all operate.

Speaker 1:

Wonderful, so maybe we'll switch gears. Sorry, you were talking about account aggregation.

Speaker 2:

Briefly, yes, you know, yeah, you guys have a great, was it DEPA?

Speaker 1:

How do you yeah? Depa D-E-P-A, DEPA yeah, yeah.

Speaker 2:

Yeah, that allows individuals to control their own.

Speaker 1:

The law it's coming into. I mean, it's becoming a law now, so it's become a law. So I think the importance of you know enforcing it, making sure you can prove that you have not violated it, et cetera, becomes very important for, certainly, the large financial institutions. And in India, as I said, everybody's regulated. It might be a different level of regulation or everybody's getting regulated, so that's creating, I think, a lot of opportunity. And you combine that with some of the new AI stuff going on and I think it's going to create one big opportunity here for sure. Yeah, makes sense. Is the market large enough for a company to sustain itself doing only India? There are a few pockets where that's probably true and then, if not, will this be a global wave and then the Indian startups can find a way to adapt themselves to the international opportunity? That's really the big question we ask when we look at uh technology, or fintechs, so to speak, in the post financial services players yeah, even so.

Speaker 2:

So question for you is like even with a india-based, fintech-based portfolio, how many of those companies do you think about going global? Is it super common, even in FinTech in India?

Speaker 1:

So I think global is, I think there's the United.

Speaker 2:

States I mean US there's.

Speaker 1:

Europe, right, and then there's the rest of the world, right. So I think the rest of the world probably is much more practical to expand into over time, is much more practical to expand into over time and several of the early, I would say because the Indian banking system is very mature from a technology adoption perspective and other countries are looking at India as being a thought leader and saying, can we bring some of this stuff? Because they don't have the expertise necessarily to implement a lot of that. In terms of targeting the US market, for example, I think there is going to be a wave of India-based startups that are going to come after, perhaps unbundling some of the first wave of fintechs that have become in the tens and hundreds of billions of dollars. So I think there'll be that kind of an opportunity. It will probably start with cross-border shield as the world moves to China, plus one strategy, and a lot of Indian exporters start exporting to the US and trade starts going across multiple geographies a lot more from India. So I think there will be cross-border opportunities. We have a startup, for example, that takes its consumer payments using PayPal right, and PayPal charges 7%, right, and they look at the balance sheet and they say oh, you guys are not really that solid, so we're going to withhold your payments for 90 days, right, and that starts a domino effect of why the company gets weaker, and then they've got to figure out a way to discount invoices. So I think there'll be a lot of that opportunity.

Speaker 1:

As you said, a lot of SaaS companies from India you know SaaS, you know from India for the world. There will be fintech opportunities for them. So I think they can start probably playing, you know, a similar game to some of the things you were mentioning, but launching services for north american businesses, that would probably happen at some point, and coming to the american consumer is probably a long shot. I don't see that happening anytime soon. I mean, there will be certainly people who will attempt it and maybe go after the indian diaspora and their cross-border dealings, because you need to have some edge when they're trying to go to the consumer, and I think it's a long shot. Now I could see an Indian origin founder or someone with your background, perhaps with close ties to India, setting up a team in India and being a North American founder. I'm discounting those as Indian startups. Yeah, yeah, yeah know Indian startups yeah.

Speaker 2:

Makes sense Cool.

Speaker 1:

But but no, it's, I think, definitely from if I look back 10 years ago. The other big thing is, I think India is starting to emerge as a market where you could build a company that's doing several tens and possibly hundreds of millions of dollars of revenue, and the IPO markets in India are such that you could IPO as soon as you're sort of north of, say, 60-70 million dollars of revenue and are profitable yeah certainly and certainly at, you know, at 100 million right.

Speaker 1:

so if the markets stay this way and I suspect that number will move north over the next decade, but I think there will always be opportunity for well-run profitable companies growing 30% year-on-year at that scale, to go public. So I think this will remain a very attractive market and unless founders feel that they have a real edge and a reason why they can win in the US, it's unlikely that they will target them. I'd love to see a founder come and say we'll build something very, very US focused, because definitely the opportunity scale is really big and I'll pick up the phone and call you if I need someone for sure.

Speaker 2:

Yeah for sure. Yeah, it's interesting. I think, like the us equity markets have largely been closed the last few years and I think to your point on what it takes like here to attract any attention, you need to be in the 400 million plus revenue range and like we have a couple companies in the 200 plus range that in a previous generation would have been public already. But, now it's just. It's also very expensive to go public here.

Speaker 2:

And it's not a one-time expense, it's an annual thing, so it's tough and you know, you also also see, I think we're seeing in india right now. It feels like the uh, the companies are trading at higher multiples than they are in the united states.

Speaker 1:

So yeah, maybe the indian consumer is pretty excited, but but in general, yes, okay, yeah yeah, but that's the nature of the beast.

Speaker 2:

anyway, I think what we look at I mean good for you in liquidity.

Speaker 1:

I hope so. We should be testing over the next few years. But generally, what our thinking is can this company get to, say, $50, $70 million of revenue, be at you know, 25%, 30% EBITDA, and do that with $20, $25 million of investment over its journey and beyond that, will it go public? Will it continue to grow at 40%, 30%, whatever these are? The timing of the IPO is not necessarily in our hands, but that sort of seems like a goalpost that we can consistently strive to achieve, right for companies and that also moderates the type of companies we can back. Our stage is slightly after yours. We do mostly pre -Series A. Yeah, Valuation-wise, the trend may be similar from India and the US market in terms of the valuation zones, but I think we have gravitated.

Speaker 2:

What would that be for you? What is the valuation zone?

Speaker 1:

To say this on a public podcast would be interesting, but it can be anywhere from 6 to 30, so that's the zone and I would say our median will probably be around 15. We have gone higher depending on how mature the company is, right. So I mean, the three factors obviously are the team, the opportunity size, the rate at which you know. I mean I think I just look for crazy customer love, right, whoever your customers are, whether it's one or three, right, they just have to absolutely say the greatest things about you guys, and hopefully there are 3000 of them who are waiting in line.

Speaker 2:

And when companies go public 60, 70 million of revenue, are we talking somewhere in the If they're profitable 10X revenue?

Speaker 1:

okay, yeah, so rule to. So a rule of thumb is triangulating between 10x revenue and 30x of EBITDA and if you're lucky it could be power 12 months revenue for both those metrics. Okay, right, so if you're doing 60 million and growing at 30% and are at 30% or 25%, let's say EBITDA, then that's about 100, that's about 15 million EBITDA. So 30 times that is about 450 million, 30 to 40 times that. So you kind of get back to more or less the same number. Sounds right, makes sense. Yeah, more or less the same. The same sounds right, or the same number. Yeah, so that should be somewhere between 500 to 700 million. Again, depending on how man, how I wish.

Speaker 1:

Uh, come on, let's do stuff together I guess yeah which actually leads me to to the question about india. Right, I mean, you have strong affiliation here. I won't say say roots necessarily, but I'm sure roots as well, or certainly roots of the roots. How have you looked at this market? I know you've personally done some angel from time to time, but have you looked at it recently? Do you think it'll be a part of your story or just so laser focused on the US that it just doesn't matter as a fund?

Speaker 2:

So you know, I would say it's not a like high priority area for us, but I'm totally open to it. I think the challenges I have had are you know, it feels like the only ways to make money and tell me if I'm wrong feels like the ways to make money are as a lender or, you know, maybe increasingly in wealth management or AUM businesses. And if I look at how our companies make money, it's very different. It's like they charge the customer, that's the best revenue, and then maybe the second best revenue is payments revenue. And then you kind of go down the list and lending revenue we think of as like the worst type of revenue and we also think I personally just feel like I don't quite think it's the right fit for a venture model, because in lending you're giving out money and the venture model is about growth and it's easy to grow when you're giving out money. So that's what I've struggled with in India, but not to say that we wouldn't invest or anything like that.

Speaker 1:

Yep, yep. So I'll tell you a couple of things to keep an eye on. And that has changed a few of our thought processes as well. We actually stayed away from the NDFCs for the longest time because we just felt that, you know, as an early stage investor, first institutional check in the company, and you know we're just going to get diluted over time because these things are going to need to raise a ton of capital. And that used to be the model. But over the last three years and we have two, three companies now one at the infrastructure level, which is night fintech, as well as a couple of mbfc, metafin and and also finite, which is doing retail, um b2b financing.

Speaker 1:

In all of these cases there is this new concept of co-lending that is coming, which is a very india specific thing, as far as I've understood. And what co-lending does is it kind of requires earlier, uh, an nbfc used to get wholesale capital at a wholesale from a bank or any other financial institution and they would lend it out to at a higher price to the uh, the customer, and they had these verticals of customers that they understood best, whether it was a farmer in farming, whether it was a small business in rural india, whether it was a certain category of consumers who would be, you know, forced to pay higher interest because they didn't have a good credit score or a credit rating. But the regulator sort of started pushing the banks more and more to saying, look, you've got to share in the underwriting and in the upside, which means you've got to co-lend right. So at the infrastructure level, what that's done for Knights and Tech is it's created an opportunity to provide a co-lending platform where the banks and all their NBFC partners use the same platform, because, as a consumer, I don't care that your billing date is the 6th of the month and the other guy's billing date is the first Friday of the month. I'm just making one repayment. The fact that the money came from two pockets please don't make me sign two contracts, don't make me sign up with privacy policies of two entities and so on. So that whole piece has to be streamlined.

Speaker 1:

And if you're a bank working with, say, 20 large NBFCs and vice versa, those 20 NBFCs are working with five banks, all of a sudden you have this network effects that offer complexity and point-to-point integrations, and stuff like that become an issue. So there's sort of a middleware play that they inserted themselves very cleverly into that they inserted themselves very cleverly into, and so that's one side of it. But what it has also done for the MDFC is that it's given them a lot of leverage right. And so what we have realized is you probably could get to critical mass, you know, with you know 15, 25 million dollars of your own raise, because you're going to get a lot of leverage and eventually the profits will start, you know, feeding the contribution that you have to make. So it's made us rethink. We made two, three bets now and so far they seem to be really exciting companies.

Speaker 1:

But you know, I could see that as being a model, because we had a credit starved country and there is no way the large banks are going to be able to serve the customers without you know sort of dedicated partners who know the customers very well. You know it's it's still largely a lot of business is done offline, despite upi being at. You know 15 billion transactions a month and so on. So I think this process in india will create some sort of unique opportunities. Whether it's replicable in other parts of the world, I don't know, but that's what has given us some feel that there are a lot of lending opportunities to be tech businesses or tech-first businesses that will have infinite scale, or at least meaningful enough scale. But we'll see Switching gears.

Speaker 1:

A little bit Shil to. You know. You guys launched an accelerator right and you did a couple of batches in the Bay Area and now you said you were taking it to New York City. So tell us a little bit about how that came about, what the experience has been and why are you taking the next batch to New York.

Speaker 2:

Yeah, so my first foray into venture was through accelerators, right, so I I had been angel investing, but then I joined 500 startups and I ran a fintech accelerator for a few years, um, and it was very successful. So, um, gary Tan recently tweeted that, of some particular date, 4.5% of YC companies up to a certain date became unicorns.

Speaker 2:

Our number actually over 7% of ours did so we actually it worked really well and the fund has been awesome as a result. And so when we started BTV in 2019, it was always part of the plan we said let's just replicate the success we had. We would do a few things differently, but by and large, we know how to do it, and so we started. And then, obviously, the pandemic happened and so we didn't get to it for a while and then we finally did it in 2023, the first cohort it was seven companies here in San Francisco and then we've had two more cohorts since then, so we've had three cohorts and the idea and it was partially like we'd had success with it before partially. Our own founders who went through it and ended up being successful said hey, like my friends are starting a company, where can I send them to have an experience that we had.

Speaker 2:

And what we offer is different, is very different than YC. It's a very hands-on program where we are working closely with the founders, so we're in the same space every single day and it's not like you have to prepare your questions for a group session with us once a week. It's like tap me on the shoulder, let's jump on the whiteboard and we bring in a bunch of experts in go-to-market design tech and others and along with some great speakers, and the companies have a lot of camaraderie amongst themselves. In the past we had a company acquire another company in the cohort. So that was the original impetus and it's gone well so far, happy with the results. Now I'll tell you, it's a tremendous amount of time, it's a big commitment from us, so we're constantly evaluating. You know we think that the the outcomes so far have been quite good. It's constantly an evaluation of does it make sense from a time perspective and how do we?

Speaker 2:

And the thing is like this is yc is a program that's built for scale, like they have 200 companies in a cohort or whatever. It is now um versus we have six, seven, eight companies in a cohort and the nature of what we do will never scale. We don't want it to. But then it's a question of we're constantly evaluating every cohort, like did it make sense? Was the outcome, was the juice worth the squeeze? And so far we felt like yes, it is. I'm going to New York. The next cohort starts in a couple of weeks in New York, and the idea of New York was actually in FinTech, united States, san Francisco overall for tech has been the place to be, but New York over the last five or six years has really become a formidable number two, and in FinTech it's actually number one. If you look at seed deals, there are more seed deals happening in New York than in San Francisco, and the same is true in our portfolio.

Speaker 2:

We have more companies in New York than San Francisco, so for us it just made a lot of sense that we would try to do it there. We have two team members also in New York now and then I'll be out there for a few months. So, yeah, looking forward to it, it's just a really fun time. I kind of miss the operating days, and each of us do. Everybody on the team was at one point an operator, founder, and you get closer to it. It's not the same, but when you're in the same space, when you're helping solve a problem that might come up, it does feel a lot more like operating than investing, and that we love that and do you?

Speaker 1:

I mean? I was looking at the yc cohort this time and it felt like there were four companies solving the same problem. Um, yeah, there is. Do you selectively make sure that they're not directly competing with each other so that there is a willingness or desire to help? Do you, I mean, do you just look at every single company and then not bother about that, because there could be helpful or awkward situations, depending on how things?

Speaker 2:

are yeah, yeah, yeah. No, we don't invest in competing companies.

Speaker 1:

Even at the accelerator stage. Yeah, even at the accelerator stage.

Speaker 2:

Yeah, even at the accelerator stage. You know, what we're doing is so bespoken hands-on that it's not like I think YC can incredibly say like you know, we're not that involved in what you're doing anyway, so it's fine that we invested in something else, but for us it just doesn't make sense. It's not how we operate For better or for worse, but overall it hasn't really been an issue. I can only think of one time in my last several years where I felt like I wanted to invest in a company but couldn't because of a competitive deal in the portfolio.

Speaker 1:

Yeah, and in terms of just this, accelerators, we keep debating this or some variation of this from time to time, because we're also early stage Once something is in the accelerator and at what point do you say, look, this is a large space and this company is not executing for whatever reason, but there is somebody else executing and we should perhaps back then, or would we just? You know, I can understand when it's a main deal, right when you've gone through the whole diligence, but an accelerator opportunity, it's always a tricky one.

Speaker 2:

It is tricky. I think we would be open to it. We just haven't, uh, we haven't had to yet fortunately no good. It totally can be a sticky situation. I think it's hard to have a blanket rule.

Speaker 1:

It's like you always want to do good by your founders and sometimes you have to give up some opportunities also sometimes you have to give up some opportunities, yeah, um.

Speaker 2:

Now what I'll say is the one time that came to mind where we didn't do a deal because a founder in our portfolio blocked it. In hindsight that was a great company. It's um valued at a significant multiple over the round that we would have done, and so that is in some ways a miss, but fortunately we can sleep okay because the company that blocked it also is doing very well.

Speaker 1:

Also is doing very well. That's good. That blocked it also is doing very well. Also is doing very well. That's good. Cool, hey, maybe a little bit of rapid fire and then we'll. I don't have too many questions. Yeah, but related to startups as well. What's the one thing a founder can tell you in the first meeting or at any point where it's a turnoff for you?

Speaker 2:

So many things. There's lies, there's bullshit, metrics, what I'll say. They talk about something that like a proxy for a proxy for a proxy for a proxy for revenue, just like, tell me the damn thing Arrogance, proxy for a proxy for revenue? Just like, tell me the damn thing um arrogance. Um, all those things I think are are turnoffs for me.

Speaker 1:

Yeah yeah, yeah, to me I feel it's it's the one thing you said right when you don, you don't. When, when it feels like they're, they don't really believe what they're saying, yeah and and, and that translates to a lot of the other things that you just said right, where we try to cover things up. I personally, I maybe I shouldn't give this out here, but I, I I read eyes a lot and I always feel that you know, the mouth can tell all the lies, but the eyes cannot. So, yeah, look at me. I do stare people down and maybe make them a bit uncomfortable, but to me it feels like, look, I just want to know that you believe what you're saying.

Speaker 1:

Right, who knows what the future is going to hold, but at least if you seem to have conviction of what you're trying to build, that's a start, and that's a great start because at the early stage, I mean, if the founders themselves are sort of shifty or uncertain about their I mean of the clarity of their beliefs, right, forget about. You know, they may pivot one day later, but that's fine. But at any point in time, you've got to believe that this is the best thing you're working on and what gets you super excited about a startup.

Speaker 2:

You know, it's just like a founder makes me believe, believe in them, believe in the opportunity, and is just executing so fast and hard at it. So I think you things that I think about, as all great founders we've backed have, and that's number one, is speed of execution. That's something we can generally see in between our first and second meeting. I try to understand, hey, what have you done? And it's a good indicator. And then tenacity, like are they breaking through walls? Like what's a challenge you've had that you had to overcome. Those are things I think. If I see some combination of those two things and intellect and a bigger market opportunity, I get really excited.

Speaker 1:

And for deals that you do go through. What is the typical elapsed time and how many meetings do they have with you guys during that period of time?

Speaker 2:

You know it varies widely. It's really like we don't have a set process, which can be frustrating when founders ask us. But it's really like, how long does it take for me to earn to get to conviction? Really like, how long does it take for me to earn to get to conviction? And in some cases I've basically gotten there in one meeting. But you still, of course, want to have have a couple more meetings, but in some cases it's taken me weeks, months in fact. In one case I invested in a company that I met after a year and a half um.

Speaker 1:

We've done that too.

Speaker 3:

In fact, we're right now looking at a company that went to IC and we passed.

Speaker 1:

They've done clearly very, very well we're revisiting it the two, three things that we were concerned about. They've obviously proven that they should not have been concerned so far. This is a business that humbles you so fast. It's not funny. You know, and you know every time you think you have figured it out, something new will happen.

Speaker 1:

In fact, the other day I was telling somebody you know, with 40 odd companies in the portfolio every day somebody's having a good day, somebody's having, uh, an average day. Some probably several are having a crappy day, right. And so when I wake up in the morning, I look at my WhatsApp messages. If somebody's giving me good news, I'm actually shuddering for the rest of the day, but if somebody's giving me bad news, I say now I've got something to look forward to today. Somebody is going to hopefully save the day, right, so, and make me feel better. We're going to hopefully save the day, right, so, and make me feel better. So if I get good news in the morning, I just go back to sleep, don't look at the phone anymore, but it's sort of the opposite of how one would think, right?

Speaker 1:

Normally, you'd say, oh, this is probably a good news day. There is no such thing, look, sheila. I can keep on going on and on, but I'd love for you to maybe leave a couple of nuggets for founders in terms of the markets today, the funding climate, what you're seeing as global trends, and if you were a founder, what would you be focusing on?

Speaker 2:

Yeah, so what I'll say is FinTech is hot again. It was pretty rough for a while, I think you know 21,. Everything was sky's the limit. 22 and 23 were overcorrected, and then 24, 22 and 23 were overcorrected, and then 24, things are looking good. And in 25, actually we had so far already in 25, actually in the first six weeks of 2025, we had 10 companies in our portfolio raise up rounds Wow, which is just like a crazy number. Usually you would have like one or two or three in a month. So it's been busy. So the outlook for fintech, I think, is improving quite a bit. We're seeing a lot of the generalist funds who were out on fintech a year ago. They were saying, oh, now we're investing in AI, enterprise, vertical, SaaS, whatever the topic was. They're back, and a year ago, when I would send them a deal, they would say, sorry, we're not looking at that. And then now they're saying, hey, what's in your portfolio? What can we invest in? So I'll say FinTech is exciting.

Speaker 1:

That's great to hear.

Speaker 2:

Yeah, what were the other questions?

Speaker 1:

No, I think it's generally advice to founders, right? The last few years have been around focus on growing into your valuation, focus on getting to break even, focus on stuff like that. So where do you see, is it back to thinking about growth, about growth, back to thinking about aggressive growth? Um, what is the advice you give founders?

Speaker 2:

Yeah, so, um, so yeah, we, we've totally moved from growth only mindset in 2021 to profit only mindset in 2022. And that was an overcorrection. I think now we're probably somewhere in the middle where you do need to look. As venture capitalists, we're investing in growth, like we're. We're investing in a company, we're investing in the five what what's happening five years from now, and we want to be able to see that you've grown, and so it's simply not exciting if you're not growing fast. But what's new is I'm increasingly worried about these companies that are growing really fast. You have a bunch of companies that grew from zero to 100 million in less than two years. But I'm worried about how sticky is this revenue, and that's something I probably never used to worry about before, but I think a lot of this AI revenue is not that sticky.

Speaker 1:

I agree.

Speaker 2:

I would say in terms of, like other advice, it's really you know, solve real problems and spend time with your customers, understanding that it's a clean, it's a clear, painful process, a painful, uh, challenge that they're facing. Um, you know, think through distribution very early. You know, think through distribution very early. How are you going to get to these people? Make sure that you'll be able to get great unit economics at scale.

Speaker 1:

And, you know, don't overlook both risk and the regulatory environment that you're in Cool. Well, that's really good and serious advice. Maybe we'll close with a little bit of some of your extraordinary fun experiences in life. I read about the Taco Bell wedding We've heard about the Justin. Bieber video.

Speaker 3:

We've heard about.

Speaker 1:

You know, you talked about clubhouse. I had to scratch my head saying, yeah, that did exist during the pandemic. Yeah, it was a big deal back then it would be great to hear from you first hand. I really appreciate the time you spent with us, but maybe we can close with something fun for our audience here I can link it all together, actually Clubhouse was an audio based for our audience here. Sure, I can link it all together actually Okay, even better.

Speaker 2:

So Clubhouse was a audio-based, or I should say is, I believe.

Speaker 1:

Clubhouse is an audio-based social network. I think it's okay to say more with this particular case.

Speaker 2:

Yeah, yeah yeah, had its heyday in 2020 and 2021, and I was a very avid early user, so I joined when I think it was in the first few hundred people and you know just the pandemic. I was super bored. I'm an extrovert, so I love talking to people and was just enjoying talking to people on there ended up becoming, um, you know, as as that platform grew, uh, so did my following. I think I think I had, or maybe have, over three million followers on that app, which is not not worth a damn today, but, um, it's funny, there were lists of, like, the most followed people and I was like in between oprah winfrey and some I don't know some famous musician, that is something crazy, but um, but, but uh, how, at least the other stuff is um.

Speaker 2:

So during the pandemic I was in a zoom dating show called the zoom bachelor and uh, in clubhouse they were we. I went on clubhouse to discuss it after the show and this guy was in there who had watched it uh, scooter braun. He was justin beaver's manager and it was like, oh, what are you working on? And he said he enjoyed the show. Whatever he said oh, why don't, why don't't you come on this music video? And so I ended up sending him something and getting him this Justin Bieber music video.

Speaker 1:

We got to get the clip and put it to the promos here.

Speaker 2:

And how did the Taco Bell wedding happen? So we got engaged and I had posted on Twitter or whatever. And then taco bell had this contest we'd love to host a one lucky couple's wedding in the metaverse. And this was kind of, at this point, like I was never bought into the metaverse to begin with, but at this point it was kind of on the waning end. It was, uh, august of 2022 and um, but I love taco bell. So, um, I, you know, I was on a road trip with my wife and I said, hey, you know, there's this contest, I think we should do it. They'll pay for our wedding. Of course, it was one of many weddings.

Speaker 1:

It wasn't our, you know main wedding, but, um, that we I followed a few of them around the world on social media.

Speaker 2:

So we submitted a two-minute video. I just thought it would be funny to submit a video. We submitted a video and then we thought, okay, we'll submit it because it's fun to make the video, but if they choose us we'll say no. And then, once they chose us, they convinced us. They said you know, it'll be your wedding, It'll be an Indian wedding. You can bring on whoever you want and you'll be part of the Taco Bell family for life.

Speaker 1:

So I said you know how can I say no to being part of the Taco?

Speaker 2:

Bell family for life and you know they've been great. They've taken us to concerts, the Super Bowl, a lot of other stuff, wow. So it's been fun and actually one. One cool thing as it relates to business is actually I was able to introduce them to a company recently, fintech company that uh has a has uh actually I don't want to say what the product is, but but uh could be very relevant for them, which which is kind of cool.

Speaker 1:

Very nice, Amazing. I have a funny Taco Bell story as well. I just got married as a student, had no money and there was a Taco Bell just around the corner that my wife and I used to patronize. But we went and said let's go out for a long romantic drive. So we drove 125 miles around big Washington, went all the way around and came back to the same.

Speaker 1:

Taco Bell and then had a $5 dinner. So we keep remembering. But you know those are the fun days too and I think sometimes, yeah, these experiences, you know, as unique as they are, of course yours are like extraordinary. I'm going to set a very high bar for your entrepreneurs, I'm sure. Still always a pleasure chatting. I think you know we could go on forever, but really appreciate you making the time. I know it's in the evening, your time on the Sunday, but look forward to, you know, continuing to stay in touch. You know, following you on Twitter, for you know our audience, of course you know following you on Twitter, for you know our audience, of course you know we'll, we'll, we'll tag bad pit, they see, and certainly, you know, require. I recommend everybody who is just out to have some fun doing it to follow shield on on Twitter, for sure.

Speaker 1:

I don't know if his LinkedIn posts are the same, sometimes a little more professional, which is not really what he is the most famous for on social media. I think it's it's it's the wacky humor that that keeps all of us going, really appreciate it and look forward to catching up soon in person.

Speaker 3:

Dear listeners, thank you for listening to this episode of the podcast. Subscribe now on your favorite podcast app for free and you'll be the first one to know when new episodes are available. Just search for Prime Venture Partners Podcast in Apple Podcast, spotify, castbox or however. You get your podcasts, then hit subscribe and if you have enjoyed the show, we would be really grateful. If you leave us podcasts, then hit subscribe and if you have enjoyed the show, we would be really grateful if you leave us a review on Apple Podcast. To read the full transcript, find the link in the show notes.