Hosted by ACT, UnHerd brings you the unheard stories of individuals who are challenging conventional principles to disrupt the social impact landscape. From social entrepreneurs to venture philanthropists, dive into real-world conversations on what they’ve experienced and learned about changing the status quo.

Our seventh episode welcomes Mohit Bhatnagar (MD, Peak XV and Board Member, ACT) who, in conversation with Aakanksha Gulati (CEO, ACT), shares his learnings on what it takes to catalyse social change through collective action and his insights on the importance of founders building for Bharat.

Listen to this episode on our Spotify channel or watch the conversation on YouTube.

Aakanksha: Hello folks and welcome to the seventh episode of UnHerd, a podcast hosted by ACT that delves into the extraordinary stories of individuals who are challenging conventional principles to disrupt India’s social impact landscape. 

Our guest today is a pioneer in the Indian venture capital space. He’s a Managing Director at PeakXV, formerly known as Sequoia Capital India and Southeast Asia – one of the largest venture capital firms globally.

Mohit has helped catalyse some incredible founders and has led investments in companies that you might have heard of – like Zomato, Freshworks, OYO, Meesho, and Cars24 amongst many others. He started out as an engineer at Ericsson, soon after which he co-founded a mobile startup called Brightpod. He then returned to India from the U.S. to join Bharti Airtel in 2002, helping scale it to the first 100 million users.

Armed with sharp insight on how the internet and technology could disrupt India in the coming decades, and with a deep desire to be part of India’s growing entrepreneurial energy, Mohit transitioned into the venture capital space where he’s played a significant role in leading India’s journey towards becoming a global startup hub. How I know Mohit, however, is as a philanthropist with a big and bold vision – a vision somewhat different from what we’ve seen in the philanthropic space in India over the last many decades and we’d love to deep dive into that more today. 

Welcome to UnHerd, Mohit!

Mohit: Thanks, Aakanksha! You’ve done me proud with that introduction.

Aakanksha: I think that was just a short version of everything you’ve done over the years! But getting right to it, Mohit, I’ve heard you describe yourself as an accidental VC, but as someone who’s looking from the outside, even when I connect the dots backwards – to me, your professional journey makes a lot of sense. A young engineer and failed startup founder with immense learning. Then a professional who led an internet mobile juggernaut’s growth in its early years. So it’s no surprise that you were able to channel all that knowledge into leading India’s tech startup boom from the forefront. But connect the dots for us a bit on your philanthropic journey. How did your interest in social impact come about? Were the seeds planted in your early years or was this a gradual evolution?  

The Spark That Lit The Fire: Catalysing a bias for ACTion, the startup way 

Mohit: So Aakanksha, I became a VC all the way back in 2006 and one of my early investments was in Ujjivan Microfinance, and it allowed me to see how you could create a very successful commercial public small bank while also alleviating poverty. I saw the double bottom line impact that, in this case, venture capital could provide – where you were basically not just creating a very well run, profitable enterprise, but you also did good for the communities that nurtured that company. I saw that same trend play out when Zomato gave birth to Feeding India and to Robin Hood Army, where it was all about creating a business around food, but it also meant you could actually feed the hungry and the not-so-privileged. At Freshworks, creating programs that allowed Computer Engineering and Science to be offered to folks who did not have access to it, to helping women come back to work after a break. So I just found all these different entrepreneurs who were building very exciting businesses, but while they were doing that, they had somehow found this ability to actually nurture and give back to the community; to the communities that were sort of giving birth to them.

Mohit: I think it is firmly established for me that founders are very unique human beings. They have this uncanny ability to go long, to be relentless in their pursuit of trying to achieve something that creates a large company, but also solves a really hard-to-solve problem. And so, if they can build these massively successful companies, they can definitely also lay the foundations for a better world. And I think that’s where it all began to come together.

Aakanksha: Let’s get a little bit more personal, Mohit, because I think as you started noticing this in your professional journey, I know you also started dabbling as a donor, you were starting to sit on some not-for-profit boards. And in particular, I know there’s a plan that was made on the back of a napkin with Ashish Dhawan. So share a bit more about that? How did all of this culminate into you saying, hey, actually, I’m someone who also wants to become a philanthropist?

Mohit: Given that I was convinced that founders can create massive change, I started writing grant checks in an individual capacity to some small businesses. I remember this one particular founder who came to me looking for a consulting gig. He had unfortunately gone blind during the course of a very successful career. And I told him, instead of giving you a consulting gig which will get over in six months, why don’t you actually create a company that can actually help blind people navigate their mobile phones more efficiently because you seem to be doing it quite well. You just arrived for this meeting with an Uber!  

And so, Pramit created this software application called Louie that actually helps blind folks voice navigate multiple mobile phone screens. And I was going about this journey enjoying these kinds of creations, till I realised that they all suffer from the same common set of problems. They need their next round of capital, they need to hire world-class talent, especially on the engineering side, to build really world-class products. They need networks that can actually help them scale and get promoted across various state governments or various private enterprises. And it was with that thought that I sat down with Ashish (Dhawan) because he had obviously lived a private equity journey and had now started Ashoka and was giving back at scale.

And I think that’s the napkin you’re referring to, where we actually used the placemat at Amour Cafe at Malcha Marg to actually draw out a little bit of a picture that shows how we can have these different verticals around Health, Education and Environment where we can create a platform that allows them (founders) to get easier access to funding, easier access to people and easier access to government, when it makes sense. And I think that was the birth of the idea, at least in my head.

Aakanksha: So it seems like all of this was brewing, it was culminating into something that was drawn, and then COVID happened. And I think that’s when we saw a lot of this coming together in a big way Mohit, because ACT raised almost 600 crores during that time and deployed it to create great impact. I have always felt that it really brought your philanthropic aspirations and mission and vision to life in a big way. So share a little bit from that time? What did you learn about philanthropy, about impact in ACT’s first avatar, and maybe also, what did you learn about yourself?

Mohit: Yeah, it was a crazy time. I think COVID was the closest I’ve seen to war. As things were just failing all around us, each one of us looked inward, made sure our families were safe, made sure our firms, our companies, and our employees were safe. But it was at such a scale that I think it shook us all from inside. I remember a bunch of us investors and founders – Abhiraj (Bhal) from Urban Company, Mekin (Maheshwari), Prashanth (Prakash) and Shekhar (Kirani) from Accel, GV (Ravishankar) from Sequoia. We all got together and we were like, we’ve got to do something here. And I think what resulted was a very special period where literally on a daily basis, we were spending close to 10 to 12 hours reviewing ideas that could actually put a dent into this massive challenge that India was facing.

To pick one, I remember oxygen being by far the single biggest challenge – as to how we basically get all forms of oxygen into India and Indian hospitals quickly. And we had a group that was basically overnight learning all about PSAs or these oxygen plants. We put 106 of these machines, using startup ecosystem infrastructure. And we got them put into the smallest hospitals in the widest, most far-out states of India. We had to lift close to 30,000 plus oxygen concentrators from places like China and others. And we used the logistics infrastructure of the startup world, think Delhivery, think Flipkart, and imported these machines and then were able to distribute them. We used the balance sheets temporarily of many of our startup ecosystem players like Zomato and others to actually help place the orders for many of these oxygen tanks. So my single biggest learning was how everybody came together.

Mohit: But the reason it was working was just shared trust in the collective – that we were trying to do this in a much more purposeful way for the country. So the single biggest learning is doing this in a collective way is way better than trying to do this individually. 

Aakanksha: I remember I was watching it from the outside during that time. And I remember the word that kept coming in my mind was…it just felt magical. And you use the word ‘collective’, and I know many people since have spoken about how ACT was one of those really great examples of collective philanthropy and collective action. And I think for me, a few things that really stood out during that time was one, there was no full-time team. At the peak, there were 400 or 500 volunteers, and yet work streams were forming, great outcomes were being delivered, people were really creating their own seat at the table, building conviction about what was the need of the hour – they had a high bias for action, were using data and experts, and leveraging the ecosystem across the private, social and public sectors to really bring it all to life. But transitioning from that, what would be interesting is to share about how that evolved into ACT in its current avatar and how we describe ACT today is that we call ourselves a tech first venture philanthropy platform for social change in India. But embedded in that are at least three ideas, if not more. The first, around tech first solutions for social change. The second is around venture-like grant making. And the third, which you’ve spoken a little bit about already is this platform approach. So share a little bit about how that kind of evolution happened? What were the underlying insights and what really gave you hope that this would really be the next chapter that would be worthwhile?

Mohit: Like I said, COVID was a little bit of a wartime scenario. And when we all reflected as it was coming to an end, I think we all realised that we had all gained more than we had given. It was very fulfilling for a lot of us involved that we were able to think beyond our own personal needs and come together to do something a little larger and more purposeful. And so, there was this strong thought that we have to sort of keep the platform going because we don’t know when the next crisis is going to come, and we certainly feel like we can create impact, so this is something worth doing. 

There were two big challenges. First is, everyone made time for fighting COVID and then everybody went back to their day jobs. And so from 350 volunteers who were fighting COVID along with us on the ACT platform, we had to now quickly transform to a full-time team. And I think that’s one of the biggest wins that we’ve done collectively here with your help and your leadership, is to actually build a solid, high-quality team. 

The second thing I realised is health consumed us all during COVID, but a lot of folks in the startup ecosystem cared about other causes. Things like education, environment, equal rights for women were equally important causes for many folks in our ecosystem. And since this had to be a collective and a platform, it was important that it stood for the three or four largest purposes that folks cared about. So we broadened it from just Health to include Education, Environment, and Women as three new verticals. Each one of them having their own dedicated teams, each one of them having their own IC where ideas are brought up to the IC and grants are given. 

[It is] super important that we include people who know the most about the problem before we try and attempt to solve it with the tech-first approach. So If you look at our three ICs, we have an Education IC, an Environment IC, and a Health IC. On the ACT For Health IC, we have people like Nachiket (Mor), who actually spent decades thinking about how public health can be envisioned for India. People like Dr. Ajay (Nair) from Swasth, Sandeep (Singhal), who’s a venture capitalist. Similarly in ACT For Environment, we’ve got GV (Ravishankar) and Prashanth (Prakash), who try and filter through ideas to see where most change can happen. On ACT For Education, we work together with Ashish Dhawan, who has spent time at Central Square Foundation, creating a beautiful institution there. Mekin (Maheshwari), who’s ex Flipkart, but now spends all his time helping education through government initiatives. I think bringing in these cross-functional experts is one way that this platform comes alive for me. 

The second thing is solving common sets of challenges. It’s easy to say we should be tech-first. It’s really hard for us to expect our grantees to hire and access world-class tech talent. So if you see that as a common need, you can create a platform like Tech Advisors, where we go out to the startup ecosystem and say, we don’t need your money, we just need your time. If you’re a programmer and care about social causes, can you spend some time with our startups and actually help them create the right technology architectures? For example, how needle moving would it be for a grantee at ACT to get a 12 week access to a UI/ UX expert from Urban Company or an ex Google Engineer that actually spends a 12 weeks sprint with them and gets that thinking and process correct. 

And when you’re starting something as wide as gender parity, you need to come from a place of actually seeing what the current data is. And we can talk about this till we go blue in the face, but I love the team’s approach of saying, let’s make gender parity first come alive in our own startup ecosystem. And to that extent the WISER report – that has 200 startups participating and has McKinsey putting together the structure and then working with people like Udaiti to put together an annual research – is highly thoughtful and insightful around the current state of affairs. 

I think at this point now we have close to 40 grants given across these different verticals post-COVID. And close to 15-20% of them have got follow-on funding, which by the way, just to digress, is exactly the venture model. 

The venture capital model is that of the power law. Out of all the investments we make, close to 10% or 15 % of investments are the ones that really drive the mega returns of the fund. And I think that’s the new thinking that I hope ACT can bring to the world of venture philanthropy. I think what we want to try and catalyse here is moonshot ideas to solve really hard-to-solve problems that haven’t got solved. And it’s completely okay for 15% or 20% of the ideas that we give initial grants to be the ones that scale. Because these are hard problems and not every idea that we apply to it will work. And so this ability to think that risk is good, not everything has to work and it’s okay to fail so that you can come back stronger on your second idea and we collectively learn is the venture philanthropy model that I think we really want to try and underscore.

Traversing Tough Roads: Balancing risk and impact

Aakanksha: I want to double click on one thing you said Mohit, because this used to come up a lot in our early days, less so now. But you know, a lot of people would ask us that this is philanthropic capital. And some of the solutions are not going to make it, which has happened by the way. There are some incredible solutions that we backed, who unfortunately were not able to figure out a sustainable business model that worked for the Bharat audience, which we are very, very centred on. And so, that’s one of the things that comes up – how do you make peace with the fact that this is supposed to be money for impact, but you’re saying that we need to have a risk appetite. Would love to hear your take on that.

Mohit: Look, at the end of it, you’re solving for impact. Everything else is mere conversation to get that impact. I don’t think we benefit the world or India by becoming the 101st foundation that does it the same way. What we’re attempting to do is an experiment called venture philanthropy with this new approach of risk taking and moon shots. It may or may not work in itself, but we are willing to give it a go. And I think the answer is, as long as we hold the bar high on impact. So for example, let’s take a company like Rocket Learning that we’ve partnered with. When we first started with them, close to a third of their annual budget came from ACT. But today, less than 10% of their annual budget comes from ACT. So it’s an example of how we can catalyse others to start giving and participating in growing some of these social unicorns.

Rocket Learning has over 3 Mn learners across 10 states of India. They have finished an RCT with J-PAL that suggests quite carefully that anyone who goes through a Rocket Learning course is better prepared to succeed in school. Parents are changing behaviours to actually spending more time with their children to make them successful in school. I think it really doesn’t matter whether there are two other Rocket Learnings that did not work in order for Rocket Learning to work. It’s more important that the 3 Mn learners and that Rocket Learning scales to 30 Mn. 

Aakanksha: Very, very well put. So building on the Rocket point Mohit, what do you feel actually has been the most exciting part of the last three years given our current model of venture philanthropy? It has been a short span of time obviously, and like you keep reminding all of us, this is not a time to declare victory at all, far from it. But share a bit on what’s been exciting and fueling that energy for you?

First Principle Lens: Developing successful models of change for Bharat

Mohit: Yeah, I think it’s important to remember that nothing’s really done yet. It’s 1% done, if that, and we’ve got miles to go. I would say there are three things that are beginning to give me at least confidence that we’re on the right track. The first one is it’s hard to be a founder in the social impact sector. It’s super hard. It’s a frustratingly long time to be able to see the impact that you’re trying to see. It’s super hard to access capital for you to actually attract the best talent and then go long. It’s super hard to work with many other constituents and partners who actually ask more questions and ask for precise answers way before you’ve actually discovered what the answers can be.  

I think that, when we create a Rocket Learning, where someone like Azeez (Gupta) who graduated from Harvard and had so many other options in life that he could spend his career on, decides to become a social entrepreneur. Someone like ACT, along with the ecosystem, supports him. He then becomes a role model. He, Utsav (Kheria), the entire team, then become role models for the next set of founders who have a choice to either go into the for-profit commercial world or actually go in the social impact world. So I think we’ve helped create a few role models. I look at Karya, look at Rocket Learning, I look at many of our other founders. They’re beginning to demonstrate some of the characteristics and skills that inspire the next gen.

I think the second thing we’ve done is, outside the individual company, we’re beginning to establish a few new business models. For example, Karya uses this concept of, we’ll pay you well for the work you do. They actually use rural Indian women to help perfect the models, the AI models being created by the Valley companies. And you can ask anybody to upskill. Sometimes the benefit of upskilling and paying for that upskilling is not so obvious to the person, but not only are these women now earning, they’re actually gaining their confidence and now they’re going to be upskilling themselves because they want better lives for themselves and their families. So I think these are new business models that we will try and put into place, which again should help provide new frameworks for the next gen. 

And finally, capital is scarce in social impact, and I think when we provide this initial seed capital from ACT, it allows business models to get created. It allows companies to move the ball forward. Cloud Physician is one of these companies that ACT had partnered with during COVID time, when it was so hard to go face-to-face for medical reasons. Cloud Physician’s remote management of ICUs was a critical reason that ACT gave them a grant. Well, that business model has scaled and today is very relevant because now Cloud Physician now services over 200 hospitals across India in a for-profit manner and they have attracted venture capital funding for their next round. So giving rise to new business models that then catalyse further rounds of funding would be the third thing. So role models, new business models, and catalytic funding would be the three things I think that make me feel we’re on the right track.

Aakanksha: Love it. And so the flip side of that coin, what do you feel have been the biggest challenges or, even in the coming time, roadblocks that we might face? And I’ll share some candidly, which again, we do grapple with. I think the first big one is just this – the hope but also the peril of really betting on tech first solutions, right? I continue to believe that given the scale of our country and if we really want to see some big change in our lifetime, I feel technology is key and that both digital tech and deep tech are going to be critical enablers. Having said that, they do come with their own challenges, again, because of the (Bharat) audience that we’re working with. There are behavioural roadblocks, access roadblocks, affordability roadblocks that come in the way. So that’s one big one. 

Another one that we also hear about a lot is it is going to be hard for one solution to really be able to attack all of what is Bharat, right? It is just a very, very diverse population that varies across cultural context, language, again, economic layers and so much more. What do you see as the biggest challenges that ACT needs to be prepared for in the coming time and in being able to really double down on this tech-first venture philanthropy model?

Future Forward: The path ahead for social entrepreneurship

Mohit: I hope to see more founders and more capital. These two things would be the challenges that I would focus on. I feel with things like ACT and other foundations out there, we just don’t see India’s best talent stepping in to solve some of these hard problems. And I wish I could wave a magic wand to tell people that this is a more purposeful, better mission to follow in life. And if you can give your best years to solving hard problems in education and environment and healthcare, I think we’d all just be way better off. So attracting India’s best talent to these problems is probably statement number one. To that extent, I want us at ACT to try new experiments around incubation, where we actually pick some of these hard problems. So that would be one problem area. 

Second is, I hope eventually, if you go out and you become a $10 billion company, I would want you to give 1% and create a foundation of your company. If we can create a $100 million foundation across 10 companies, that’s a billion dollars of foundation (capital) that can emerge from the startup ecosystem.

Mohit: It’s not just the quantum of money, but those same founders will have a massive vision and ability to actually execute against that vision to use that money in a very catalytic way. So I want to attract more capital that comes not from things like CSR, which is a little bit of a tick box for many, but literally put a percent of your very valuable company into giving back to the communities that have actually nurtured you to be so successful. Capital and people.

Aakanksha: Thank you for surfacing both of those. I want to go back to founders because actually that’s been a theme, I think, in everything you’ve shared today – how your journey in the space began, what’s going to be really valuable in the coming decade as you just articulated. And so one thing again I’ve heard a lot of VCs talk about is – here are the traits of a successful founder, founders who are going to go on to build great companies, maximise shareholder value – these are their recognizable traits. Over the last four or five years, what do you feel are the traits of a successful social entrepreneur? What are the qualities you feel they exhibit, the skills they need to bring to the table to ultimately create what you said, the double bottom line?

Mohit: I think one common trait, whether you’re getting invested in by PeakXV or you’re getting a grant from ACT. Founders need to show up every day. And they need to do that for over a decade. If you really, really apply yourself to a problem for that long, you will find a way. You will crack it. And so this trait of going long, not taking short-term decisions, but knowing that you’ll be doing this and working on this problem 10 years later, just is a very different kind of human being who doesn’t flit or get distracted every time there’s a challenge that comes up. I think the one thing that’s different that I’ve noticed in our social impact entrepreneurs is you don’t need to be so sharp elbowed. For you to win, nobody has to lose. There’s the ability to be a whole lot more collaborative knowing that you have like-minded folks who are trying to solve the same problems and the ability for you to share. For example, India is such a great example of creating Digital Public Goods. I would want ACT to give a lot of grants to a startup who then creates digital public goods that are easily given and transferable for no cost to other startups so that they can keep building on top of that. So I think this collaborative nature is a core part of our entrepreneurial ecosystem.

Aakanksha: Couldn’t agree more. Mohit, you’ve seen a huge transformation in India, would say, maybe 2010 to 2020 with the startup economy and again, India becoming this hub of the largest number of unicorns only behind, I think, U.S. and China. What is your hope for India at large for the coming decade? Especially when it comes to the kind of social change or social movements you want to see in the country, what comes to mind?

Mohit: I think one of the biggest issues going on in the world right now is that the rich are getting richer. Globally, we’re seeing issues around immigration into rich countries and the set of social challenges it’s creating. I think given the size of India, it is hard to move the country as one together. There will be these pockets of acceleration across different parts of our population.

Unless we are able to constantly think of things like the digital divide, constantly think of how digital payments can allow for a more inclusive future, I think we risk seeing some of the frustration and then some of the negative elements of that. And so the dream I have at least is while we continue to measure our success in GDP and growth and so on and so forth, is this ability to measure our success in how many people are able to get a solid education up to 10th grade. How many people have access to basic and better than basic healthcare. The environment, I would say, continues to be a lower priority in India than it needs to be. It gets a lot of lip service, but we are getting more and more accustomed to living in dirty and polluted cities, that’s got to change. So I think India of the future is one where the quality of life, I would say the disparity is not as much.

Mohit:  I think it’s super important at this stage to create very successful role models that others can follow. India had its first set of IITs and they’ve become globally so successful and sought after. Ashish is trying that with Ashoka and you know, Ashoka’s success in itself will not change India, but Ashoka’s inspiration to so many other institutions getting created will transform education. So I feel like that’s the role we play at ACT. Our job is to create social unicorns, if you will, that really deliver an impact in education, in the environment, in health, in gender equality. And if we’re able to do that, not only will we see that one success in that one or two companies, but we should hopefully create a little bit of a snowball effect.  

Aakanksha: Superb. And I’d love to end with a call to action, Mohit. If you had to make a clarion call for the young people in India; folks who are in a position to lend their voice, to lend their time, to lend their money, what would be a big bold call to action that you would make?

Mohit: Look, honestly, this is not a ‘nice to have’. This is not a clarion call; I would say it’s each of our responsibilities to get involved and make yourself accountable to yourself that you need to not just pontificate and talk about these issues, but get involved to solve them. If you think the ACT way is a way to solve it, get involved with us, with your time, your money, or your voice. If you feel there’s a different way to do it, that’s fine too. But get involved. Don’t be a bystander passively to the set of challenges that India faces.

Aakanksha: Love it. Thank you so much, Mohit.

Mohit: Thank you Aakanksha, thanks for everything you and the team do.

Aakanksha Gulati: This brings us to the end of our seventh episode of UnHerd, a podcast presented by team ACT. If you enjoyed this episode, subscribe to our Spotify and YouTube channels, where we’ll bring you more Unheard stories of people who are passionate about creating impact at scale in differential ways. People who truly stand apart from the herd. Follow us, like, subscribe and share!