Blume: The nice guys who win

One of the things that is well known about venture is to be contrarian and be right. 

Blume released their Omega Files a couple of days back which is a deep dive into the stories and numbers behind their first fund. I thought it was an extremely gutsy move - for I can't think of something like this being done via a VC firm ever. But for those that know Blume closely - it’s not surprising - the fund has always been big on transparency, and trying pushing the boundaries of venture in India further. I HIGHLY recommend reading it.

As you might have seen, the biggest success of the fund has been GreyOrange . I’ve been lucky to see the story unfold up close (atleast in the early years) and thought it is timely to share that as well.  

GreyOrange was started by Samay Kohli and Akash Gupta (along with their advisor Wolfgang Höltgen who joined soon after and put in the initial cheque), who were the most robotics obsessed folks in India in the late 2000s. Samay was one year my senior in college and Akash a couple of years junior. They had pivoted from conducting robotics workshops and selling robotics kits to college students to something more.....ambitious: robotics for warehousing. 

On paper the idea made a lot of sense: 

• eCommerce was finally showing scale. Globally AMZN was doing $32B in revenues ($100B marketcap) and Walmart was just ramping up it’s ecommerce division with $5B in sales. In India, Flipkart had just raised a round at a $1B valuation and there were lots of ecomm companies cropping up and seeing scale. While demand was the relatively easy thing to solve for - warehousing and supply chain was the real bottleneck to scale.  
• GreyOrange with its sorting and picking systems (a mix of conveyor belts, and autonomous robots) was the perfect solution for the logistics and ecomm sector and could ride the wave. Shovels in a gold rush kinda move.
• It was one of those, “massive if true” kinda bets, with a decent moat since it’s not the kinda business someone could build out overnight. Mechanical, Electronics, Batteries, AI - oh it was a complex beast.  
• The only other player of its kind, KIVA SYSTEMS INC , was recently acquired by AMZN for $700M, and stopped taking on new customers - so the market existed and was kinda open for a new player to come in.

The problem was it was against everything VCs liked, and AFAIK no one wanted to fund these guys.

• Young founders just out of university having never had a full time job - leave alone starting a company 
• Very asset heavy - oh think of all the COGS - with a very complex global supply chain for electronic parts. 
• A pilot or LOI here and there - but no tangible real revenue.
• A hundred reasons why it wouldn't work.  

Me along with others like Abhinav Khushraj , Raju Reddy , Vijay Sharma , Nakul Jamadagni were setting up BITS Spark (BITS Pilani’s alumni angel network) and was also part of the team organizing the first BITS Alumni Global Meet when Raju introduced me to Sanjay Nath where he was an LP (I didn't even know what LP meant). I remember meeting Sanjay at a hotel lobby in Delhi while he was wrapping up a meeting with Ketan Kapoor of Mettl (another Fund 1 multibagger). And in that meeting told Sanjay about this little outfit in Gurgaon called GreyOrange. 

I think the only thing Sanjay loves more than Blume is BITS and he agreed to meet Samay. A saner Sanjay would have stayed away and continued to invest in consumer and SaaS. Spark, Blume and other angels ended up investing in the first round of GreyOrange at a rich valuation of 12 crores rupees, which was probably around $2.5M dollars with Sanjay joining the board. That was crazy. This wasn't the kinda valuations that early stage companies got (it was more in the $200K-$1M range). And boy was it a crazy cap table. With I think 30+ angels if I recall correctly (it was quite a challenge following up with everyone ;)). This is the pre-AngelList, Carta era. The investors of that initial round have seen the company grow 200x+ in valuation (years later Sanjay did another such deal - which might as well be another fund returner - backing Awais Ahmed / Kshitij Khandelwal at Pixxel - another BITS Spark “moonshot” company started by young BITSians who never had a job,  this time with co-investors like Lightspeed , Omnivore , Athera Venture Partners (formerly Inventus India) ).  

A year later, I was working at Aavishkaar, an impact investment firm and figuring out next steps in life and approached Karthik B. Reddy and Sanjay for advice. Sanjay invited me home for dinner. I reached his Bandra home on a humid evening and found Samay there. Sanjay very cleverly excused himself and Samay and I spoke the entire night. I quit my VC job and joined them as an early employee in a generalist role - which I guess today might be called as a Chief of Staff.  Almost all of the early team has still stuck around Varundev Solanki , Naveen Boppana Gaurav Kejriwal Gaurav Kumar Apurva Vadera .

Later on, Sanjay introduced us to his father Dileep Nath, and via their Singapore network helped us expand in SEA - which eventually led to GreyOrange’s first international customer (Kerry Logistics). And round the same time, the Flipkart founders got involved, and Lee Fixel from Tiger Global put in a $5M (which was quite uncommon at that time).

And the rest as they say is history…

A couple of years later - as a few of us BITSians started Belong.co - an AI powered HR Tech company - our first cheque came from Blume (along with Matrix) - interestingly my other co-founders Vijay Sharma , Sudhee Chilappagari were also working at other Blume funded startups (Exotel) ( Saiteja Veera / Saumitra Purohit joined soon). At Belong - we had a leaderboard around who has made the most introductions for bizdev when it came to enterprise deals - and voila Blume was at the top of that leaderboard (Sanjay, Karthik and a little help from Jitesh Luthra ). We had some incredible investors in Matrix and Sequoia too - and we wouldn’t have grown without their help - but I don’t think we’d have grown without Blume either. Many years later I joined Appsmith started by good friends Abhishek Nayak and Arpit Mohan who's first venture Gharpay was also backed by Blume. The web gets more and more tangled :)

This is just one of the many stories from the annals of Blumiers and I know many Blume current and ex portco founders have similar stories. There’s a LOT of founders in the ecosystem today who swear by Blume and you often hear them say something like - I don’t care who else is investing in the round - but I’d also want Blume on the journey. That’s the kind of reputation that takes years to build - Blume did it in a decade. By always doing right via founders and nurturing relationships.

There’s a Greenday song called Nice Guys Finish Last - no offense to Greenday but Blume proves them wrong. 

Here’s to wishing them an incredible next phase of the journey. 

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My name is Rishabh Kaul, and I am ex-founder/VC, operator and active angel investor in global B2B SaaS and developer tool startups.