Category: Articles

The Seed Fundraising Playbook for Indian Startups: A Founder’s Guide to Getting Your First Institutional Cheque

If you’re reading this, you’ve probably hit that inflection point. You’ve built something people want, you’re out of runway in 3-4 months, and you need capital to take this from a side project to a real company.

Seed fundraising in India isn’t what it used to be. In 2024, seed funding dropped 25%, and investors are being more selective than ever. But here’s the thing: strong startups are still raising money. The bar is just higher.

This isn’t a guide about “crushing your pitch” or “hacking the VC game.” It’s about understanding exactly what investors are looking for, when you should raise, how much to ask for, and how to actually get the money in your bank account.

Let’s get into it.

Part 1: Should You Even Be Raising Money Right Now?

Before you waste 6 months pitching investors, ask yourself these three questions:

1. Do you have something investors can evaluate?

You don’t need revenue, but you need something. A working product, early users, evidence that people want what you’re building. If you’re still figuring out what to build, you’re not ready.

Investors at seed stage are betting on potential, but they need proof of concept. That could be:

• • 500 people on a waitlist who actually engage with your updates
  • 50 paying beta customers
  • Strong month-over-month growth in a key metric (signups, engagement, GMV)
  • A product that solves a real problem you’ve personally experienced

2. Can you articulate why now is the right time for this company?

Markets change. Technology unlocks new possibilities. Regulations shift. What’s changed in the last 12-24 months that makes your startup possible or necessary now?

If your answer is “nothing,” that’s a problem. Investors want to back companies riding waves, not fighting tides.

3. Are you prepared to give up 15-25% of your company?

Startups typically reserve 10-20% of equity for seed rounds. If you’re not comfortable with dilution at this stage, you’re not ready to raise institutional capital. Bootstrap longer or find angels who’ll write smaller cheques.

Part 2: How Much Should You Raise?

Here’s the honest answer: enough to hit your next major milestone with 18-24 months of runway.

The Indian seed funding landscape in 2024:

Between January and June 2025, Indian startups raised $6.65 billion across 769 equity funding rounds. Startups founded by operators with prior execution experience raised an average of $1.56 million between 2022-2024.

Most seed rounds in India fall between $300K and $2M. Here’s how to think about sizing:

• $300K-$600K: Finishing your product and getting to initial traction. This works if you’re capital-efficient, have a co-founder splitting equity, and can operate lean for 12-15 months.
• $600K-$1.2M: Building a small team (3-5 people), scaling from 10 customers to 100, proving product-market fit. This is the “standard” seed round for most B2B SaaS and tech-enabled services.
• $1.2M-$2M+: Larger rounds for companies with more expensive customer acquisition, longer sales cycles, or hardware/deep tech requirements. Technology-led startups accounted for most capital raised in early 2025.

How to calculate your number:

1. List every expense for the next 18 months (salaries, marketing, infrastructure, legal, buffer)
2. Add 25% contingency (things always cost more)
3. That’s your number

Don’t inflate it to “grow faster.” Don’t deflate it to “look capital-efficient.” Be honest about what you need.

Part 3: When to Raise
(Timing Matters More Than You Think)

The wrong time to raise:

• When you’re 2 months away from running out of money (desperation shows)
• Right after launching with zero data

The right time to raise:

• When you have 6-9 months of runway left
• When a key metric is consistently growing month-over-month
• When you’ve just landed a significant customer or partnership
• When you can show clear progress since your last update

Pro tip: Start conversations with investors 3-4 months before you actually need the money. If they say “come back when you have more traction,” you have time to build it. If they’re interested now, you can close quickly.

Part 4: The Actual Process
(From First Email to Bank Transfer)

Month 1-2: Preparation

Build your target list (50-75 investors)

Not every VC is right for you. Research firms that:

• Invest at seed stage (check their portfolio)
• Back companies in your sector or adjacent spaces
• Have written cheque sizes that match what you’re raising
• Are actively deploying (check recent announcements)

Create a simple spreadsheet: Firm name, Partner name, Email, Warm intro path, Status.

Get your materials ready:

• Pitch deck (10-12 slides): Problem, solution, why now, traction, business model, market size, team, ask. Keep it visual, not text-heavy.
• Financial model: 3-year projection showing revenue, costs, burn rate, key assumptions. Nothing fancy, just a Google Sheet that shows you understand your unit economics.
• One-pager: Deck compressed into a single page. Some investors prefer this for initial review.

Month 2-3: Outreach & Meetings

The warm intro is everything.

Cold emails and mass LinkedIn messages rarely yield results, but warm introductions through mutual connections are far more effective.

Your best paths:

• Other founders in the VC’s portfolio
• Angels who’ve backed you
• Advisors with credibility in the ecosystem
• Accelerator/incubator networks

Don’t spray and pray. Reach out to 10-15 investors per week with thoughtful, personalized intros.

Initial meetings are about fit, not pitch perfection.

First meetings rarely end with term sheets. Investors want to:

• Understand what you’re building
• Assess if you’re coachable and self-aware
• Determine if this fits their thesis
• See if they like working with you

Be conversational. Tell your story. Ask about their portfolio and what they look for. This is a two-way street.

Month 3-4: Due Diligence & Closing

Once you have 2-3 investors showing serious interest, things move fast.

What investors will dig into:

• Product demo and technical architecture
• Early customer conversations
• Founder background checks
• Financial model assumptions
• Cap table and any existing agreements

Term sheet negotiations:

The two numbers that matter most:

• Valuation: Early-stage startups in India typically see $2M-$8M post-money valuations at seed, depending on traction and sector.
• Pro-rata rights: Investors want the option to invest in your next round. This is standard, don’t fight it.

Everything else (board seats, liquidation preferences, drag-along rights) is usually standard at seed. Don’t over-negotiate.

Closing takes 3-6 weeks after term sheet.

Legal documentation, fund transfer logistics, regulatory filings. Factor this into your cash flow planning.

Part 5: Structures & Instruments
(SAFEs, Convertibles, Equity)

In seed funding, SAFEs have become common instruments, comprising 64% of seed deals from Q3 2023 to Q3 2024.

Here’s what each means:

1. SAFE (Simple Agreement for Future Equity)

• Not equity now, converts to equity in your next priced round
• No interest rates or maturity dates, unlike convertible notes
• Includes a valuation cap (protects the investor if your valuation jumps)
• Fastest to close, least paperwork

Best for: First-time founders, quick closures, when you’re not sure of valuation yet.

2. Convertible Note

• Debt that converts to equity later
• Includes interest rate and maturity date
• If no conversion event happens, you technically owe the money back

Best for: Situations where SAFE isn’t suitable, or when investor prefers debt structure.

3. Priced Equity Round

• You set a valuation now, issue shares immediately
• More expensive (legal fees), takes longer
• Cleaner cap table, everyone knows their ownership

Best for: When you have strong leverage, clear valuation, and want certainty.

Most Indian seed rounds in 2024-25 are closing on SAFEs or convertibles. Save the priced round for when you have serious traction.

Part 6: Common Mistakes That Kill Seed Rounds

1. Raising on a dream, not a plan
   “We’ll figure out monetization later” doesn’t fly anymore. You need a credible path to revenue, even if it’s 12-18 months out.
2. Being vague about competition
   “We have no competitors” = “I haven’t done my homework.” Every startup has competitors, even if they’re incumbents or alternative solutions. Show you understand the landscape.
3. Optimizing for valuation over partnership
   A $6M valuation from an investor who ghosts you after signing is worse than a $4M valuation from someone who opens doors and helps you hire. Pick your partners carefully.
4. Talking to one investor at a time
   Fundraising is a pipeline game. You need multiple conversations happening simultaneously to create momentum and optionality.
5. Not asking for help
   The founders who raise fastest are those who actively ask for intros, feedback, and support. Your network is your biggest asset. Use it.

Part 7: After You Get the Money

The cheque hits your account. Now what?

First 30 days:

• Send investor update #1 (what you’re focused on, key hires, early wins)
• Set up monthly reporting cadence
• Make your first key hires
• Ship the features that’ll move your core metric

First 90 days:

• Hit the milestones you promised in your deck
• Build relationships with your investors (monthly calls, ask for intros)
• Start thinking about your next round (18 months flies by)

Seed funding isn’t the finish line. It’s the starting gun.

Seed Fundraising Checklist

Pre-Fundraise (4-6 weeks before)

• Build investor target list (20-30 names)
• Create pitch deck (10-12 slides)
• Build financial model (3-year projections)
• Prepare one-pager summary
• Set up data room (product, metrics, legal docs)
• Map warm intro paths for top 10 investors
• Practice pitch with other founders

Active Fundraise (8-12 weeks)

• Send 10-15 warm intros per week
• Take all first meetings (even if investor seems like a stretch)
• Follow up within 24 hours after each meeting
• Track all conversations in spreadsheet (stage, next steps, timeline)
• Share updates every 2 weeks with interested investors
• Run diligence process with 2-3 serious investors simultaneously
• Negotiate term sheets (valuation, pro-rata, board seat)
• Close legal paperwork (3-6 weeks)

Post-Funding (First 90 days)

• Send first investor update within 2 weeks
• Make first key hires
• Execute on deck promises (product launches, customer targets)
• Set up monthly investor reporting
• Start planning 18-month milestones for Series A

Closing Thoughts

Raising a seed round in 2025 is harder than it was in 2021, but it’s far from impossible. The companies getting funded are those with real traction, clear thinking, and founders who understand their business cold.

Focus on building something people want. Raise money to accelerate that, not to figure it out.

And remember: every successful company you admire went through this exact same process. The difference isn’t luck. It’s preparation, persistence, and clarity of thought.

Now go raise that round.

The first wave of D2C brands in beauty and personal care (BPC) won on distribution. They understood Instagram early, built micro communities, and reached consumers who were shopping online for the first time. That channel edge was enough then.

But the consumer has matured. Today, a great product is just table stakes. What truly matters is the story behind the brand. It can’t be an afterthought, it needs to be built into the brand from day one.

You can see this clearly in how the US market evolved around 2015. My favourite example is Sol de Janeiro. The brand is built around a single idea, Brazilian confidence, and every product reinforces that story. When someone picks up the Bum Bum Cream, they are subconsciously buying into that narrative of body positivity and joy.

The larger the truth your brand stands for, the larger the market you can chase. As disposable incomes in India rise, consumers will slowly move beyond buying for function and start buying for identity. Global incumbents already understand this. The only real defence Indian brands have is pricing. Local manufacturing and avoiding import duties allow us to meet aspiration without overpricing.

The Bum Bum Cream costs ₹2,460 for 75ml. That tells you everything about the opportunity. If we continue to think function-first, we’ll miss the chance to build truly outstanding, emotionally resonant brands.

Why We’re Not Worried About the Flood of Insta Brands

The backend of consumer goods is completely commoditised, whether you’re producing in China or India. Anyone with some hustle can find a factory and start selling a product through aggressive Instagram ads.

That can get you your first purchases. It won’t get you repeats.

A few of these businesses might reach ₹20–40 lakh a month in revenue with single-digit or low double-digit EBITDA. But they’ll hit a ceiling because repeat purchases and loyalty require two things: real product differentiation and meaningful brand building.

The Niche We’ve Identified

Bodycare is shaping up to be the next wave for challenger brands.

Take a look at Nykaa’s category pages:

• Page 1 for shower gels
• Page 1 for body scrubs
• Page 1 for soaps
• Page 1 for body lotions

In all of these, legacy brands dominate. Challenger brands have barely touched them. Even in categories like deodorants and body mists, where newer brands have managed some penetration, the products haven’t really evolved. The same sticky, heavy formulations persist, which simply don’t work in India’s humid climate.

Each of these categories is ripe for disruption.

The Opportunity Across the Routine

Pre-shower: Think Sunday oils that act as a barrier against hard water damage.

In-shower: Gentle scrubs that exfoliate without harming the skin barrier. Body washes and shower oils that leave you feeling hydrated rather than tight and dry.

Post-shower: Lightweight body mists that double as moisturisers. Creams that absorb fast without heaviness. Sunscreen sprays that are convenient and actually usable daily.

Most Indians don’t need thick body butters for most of the year. What they do need are modern, climate-suited alternatives that feel indulgent yet practical.

Products like Supergoop’s SPF body oil and Forest Essentials’ shower oil are great references, but both are priced at ₹1,500 and above, leaving the mass-premium segment wide open.

Strategy

• Start with bodycare.
• Expand into fragrances.
• Then move into haircare.

Around this, create focused ranges for pregnancy (stretch marks, scrubs, haircare) and menopause (bodycare + fragrance). Dove has already begun these wellness-oriented ranges in the US. India, with its declining age of menopause and growing awareness of women’s health, will be an important market for this next wave of products.

If we build with care, intention, and real consumer empathy, we’ll win.

Why Bodycare Has the Potential to Be Bigger

Bodycare is one of the few beauty categories that cuts across genders. Most Indian households share bathrooms, and therefore, products.

Men may not moisturise or use sunscreen, but they bathe. That makes bath and body products the easiest way to bring them into a self-care brand. Our customer visits have shown that men are just as engaged in bath care as women. This behaviour doesn’t always carry over to face or hair, where their concerns are different (think hair fall or balding).

That’s why our bath range avoids overtly feminine colours and naming. The idea is to make it universal.

How the Global Bodycare Landscape Is Evolving

Globally, bodycare is being redefined by brands that are turning everyday routines into intentional rituals. Indie players are moving the category beyond simple hygiene or moisturisation into experiences built around wellness, confidence and mood.

• Hanni recently raised $2M as it built a bodycare line centred on “ritual over routine,” now retailing at Sephora.
• Salt & Stone is redefining deodorants as a lifestyle product rooted in clean, high-performance ingredients.
• OLLY has expanded from supplements into mood-boosting bodycare that links scent and skincare to emotional wellbeing.
• And Dove has launched a women’s wellness range addressing menopause care, an early signal that large incumbents are starting to serve more nuanced life stages.

Across these examples, one pattern stands out: bodycare is evolving from a functional category into an emotional one. It’s about how people feel in their bodies, not just how they look. India is entering that same phase, only this time, we have the advantage of scale, climate-specific needs, and a young consumer base ready to adopt brands that speak to them more personally.

What’s Happening in the Market

India’s household BPC spending is at a turning point as disposable income rises. The country sits in a sweet spot for consumption growth.

One interesting data point: female labour force participation (FLFPR) jumped from 23.3% in 2017–18 to 41.7% in 2023–24. The share of “own-account workers or employers” rose sharply, especially in rural areas, from 19% to 31.2%. Experts see this as a shift toward independent work and entrepreneurship.

Add to that a historic decline in birth rates and smaller families. People have more discretionary income and are choosing to make their everyday purchases feel more elevated.

A growing female workforce also bodes well for BPC as women continue to drive innovation and early adoption in the category.

Unilever is already gearing up to go after body wash in India as premium consumers shift from soaps to washes. Their recent acquisition of Minimalist signals the same intent at the premium face care level. Personal care contributed nearly ₹9,000 crore to Unilever’s topline last year. The signal is clear: bodycare and adjacent wellness categories are becoming key growth engines.

The Moment Ahead

India’s beauty market has matured past the “Instagram-first” phase. The next decade belongs to brands that can build emotional resonance and product excellence in equal measure.

Bodycare sits right at that intersection. It’s functional, high-frequency, gender-inclusive, and underdeveloped. The opportunity is sitting there. The only question is who will build for it with enough conviction and care.

Fund-returners Porter (~2x) and HealthKart (1x) anchor one of the strongest seed track records in the country

When we started Kae Capital in 2012, institutional seed investing in India barely existed. The startup ecosystem was young, and the idea of writing structured pre-seed and seed cheques felt unconventional. But we believed India’s most iconic companies would be built from bold, untested ideas; ideas that simply needed conviction, capital, and care early on.

That conviction has compounded.

Today, we’re proud to share a milestone that underscores that belief: Porter and HealthKart, two of Kae Capital’s earliest investments, have together returned our maiden Fund I multiple times over.

Following a series of recent secondary transactions, Porter has already returned more than 2x the fund, while HealthKart has returned the fund on its own, with meaningful upside still ahead. These are not just standout portfolio outcomes, they represent proof that India’s early-stage venture model can deliver real distributions and enduring impact.

A Landmark Fund Performance

Launched in 2012, Fund I backed 32 companies across India and the US. Many of these grew into category-defining leaders that reshaped their sectors and validated India’s potential to produce global-scale companies from the earliest stages.

Kae Capital’s Fund I India vehicle fully exited with a DPI of 3.6x as of September 2023, while the overseas vehicle is on track to deliver over 5x DPI. Together, they mark one of the strongest maiden fund performances by a homegrown venture capital firm, not only in India but benchmarked against global peers.

The portfolio features enduring leaders such as 1MG, now the country’s largest online pharmacy under the Tata umbrella, and Certa, a fast-scaling global compliance and risk platform. Other notable outcomes include Fynd (formerly Shopsense, acquired by Reliance), Dailyround, Airwoot, and Eventifier, each contributing to the fund’s stellar performance and ecosystem impact.

In total, Fund I catalyzed over $900 million in follow-on capital, created more than 56,000 jobs, and enabled over $2.7 billion in enterprise value across its portfolio.

“When we raised Fund I, seed investing in India was almost unheard of. Our goal was simple, back extraordinary founders at their earliest stages and stand with them across cycles. To now deliver a top decile DPI number on that very first fund is deeply gratifying. It is a milestone shared with our founders, LPs, and the ecosystem that believed in us before it was fashionable to do so,” said Sasha Mirchandani, Founding Partner, Kae Capital.

Building a Model for Early-Stage Venture

Fund I’s legacy is not just measured in multiples. It established a new way of approaching early-stage venture; one rooted in conviction, discipline, and deep partnership with founders.

This foundation shaped every fund that followed. With Fund II, Kae backed companies that have gone on to define their categories: Zetwerk, now one of India’s most successful manufacturing platforms and a soon-to-be public market entity; Nazara, India’s first listed gaming unicorn; and Snapmint, a pioneering BNPL and embedded finance platform enabling consumer credit inclusion at scale.

Fund III, launched in 2022, is already showing strong momentum with fast-scaling brands like Traya, Foxtale, and RecommerceX, reflecting Kae’s continued commitment to backing durable, high-scale businesses driven by innovation and execution.

Across its three funds, Kae Capital has backed three unicorns, generated $7.7 billion in enterprise value, attracted over $2 billion in follow-on capital, seeded five companies with $100 million-plus in revenue, and contributed to tens of thousands of new jobs in the Indian economy.

“Fund I’s DPI is not just a number; it’s a symbol of what’s possible when early conviction meets enduring partnership,” said Gaurav Chaturvedi, Partner, Kae Capital. “We are proud to have played a role in shaping some of India’s most exciting companies and even prouder of the trust placed in us by our founders and LPs. This is only the beginning.”

What Fund I Taught Us

Every fund leaves behind a set of lessons. Fund I gave us principles that continue to define how we think, invest, and partner with founders today.

• Patience compounds
  Enduring companies take time. The ability to stay invested, mentally and financially, through the quiet years often determines the eventual outcome.
• Resilience over momentum
  Markets shift. Business models evolve. The founders who last are those who adapt fast but stay anchored to first principles.
• Founder first, always
  When things break, markets and models matter less than trust. Honest, early conversations often save more companies than strategies ever do.
• Teams are the true moat
  Strong, complementary teams outperform solo brilliance. Founders who can disagree well tend to outlast the rest.

These lessons became the DNA of Kae’s platform. They informed the construction of Fund II and Fund III, which are today backing some of India’s most transformative companies.

All Weather Partner

Kae’s performance is inseparable from its philosophy. The firm has consistently partnered with founders through pivots, crises, and inflection points.

Amrit Acharya, Co-Founder of Zetwerk, recalls: “From our first round to navigating COVID and scaling into a large company, Kae has been thoughtful, proactive, and solution-driven. They’ve consistently added value.”

Pranav Goel, Co-Founder of Porter, adds: “Having Kae Capital since the very start has been a sheer delight. Their unwavering support, especially during tough times, helped us cut through the clutter and focus on building.”

Such endorsements reflect a core truth: Kae’s success is built on trust. The firm remains one of the few VCs in India to track founder NPS, which stands at 88%.

Looking Ahead

As India enters its next wave of innovation, Kae is deepening its focus on sectors that will define the country’s next decade; AI, intelligent automation, manufacturing resilience, and deeptech. These are the technologies that will drive self-reliance, productivity, and global competitiveness.

Kae’s mission remains unchanged: to back visionary founders from the first cheque through scale, helping them build enduring, globally competitive companies.

Fund I is a strong reminder for us that conviction, patience, and partnership are the most valuable currencies in venture capital, and that, sometimes, belief compounds faster than capital.

In the early stages of building a company, founders are expected to wear many hats. From refining product and chasing growth to building teams and raising capital, every decision carries weight. At Kae Capital, we believe our job as early-stage investors is not just to fund ambition, but to stay deeply engaged through the messy, meaningful middle.

Venture capital is often described as patient capital. But in reality, what founders need most isn’t just patience; it’s conviction, context, and the kind of support that turns early promise into enduring progress.

For us, portfolio support isn’t a checklist. It’s a philosophy rooted in the idea that building a company is deeply human work, and that growth depends as much on context as it does on capital. Every founder’s journey is different. Some need help structuring their first board meeting. Others are navigating multi-city expansion, early hiring, or new regulatory frameworks. At Kae, we plug in where it matters most.

Building the Foundation for Scale

The venture world often celebrates outcomes – funding rounds, product launches, and exits. At Kae, we value those milestones, but we’re equally focused on what precedes them: the foundational work that compounds quietly over time. The clarity in a founder’s decision-making, the resilience of a team during tough cycles, and the trust built through strong internal systems.

Over the past few quarters, we’ve had the pleasure of working closely with companies like Eternz, GobbleCube, Knot, QuickAds, RecommerceX and Supernova, not just as investors, but as strategic partners. Our involvement has spanned everything from hiring and policy formulation to compliance, internal culture building, and founder coaching. These aren’t one-off interventions; they’re part of a deeper commitment to building strong, durable companies.

Culture, Context, and Continuity

Startups don’t just scale products; they scale people, processes, and decision-making. That transition is messy, often non-linear, and almost always under-discussed. One of the most valuable things we bring to the table is context, from having worked with early-stage companies across market cycles, sectors, and scale curves.

We understand what good looks like, but more importantly, we understand what good for you looks like. That means helping a two-person founding team draft their first ESOP plan. It also means helping a Series A company craft scalable onboarding and engagement practices that align with their values.

The Relationship Is the Strategy

Ultimately, the measure of our involvement isn’t in the number of roles filled or policies framed, it’s in the confidence of a founder who knows they’re not building alone. It’s in the belief that while the journey may be unpredictable, the partnership is steadfast. That’s what lets founders reach out when they hit a wall. It’s what allows for honest conversations, quick interventions, and long-term alignment.

And when people are supported with the right mix of context, clarity, and care, they build extraordinary things. Capital alone doesn’t build companies, people do.

India’s consumer landscape is in the midst of one of its most dynamic shifts. Rising digital adoption, evolving consumer aspirations, and the emergence of new-age distribution models are redefining how brands are built and how consumers engage with them. For founders and operators, this creates both unprecedented opportunities and complex challenges; how do you build a brand that lasts in an age of fleeting attention spans? How do marketplaces adapt when 10-minute delivery is no longer a differentiator but an expectation?

These were the questions at the heart of the recently concluded Kae Catalyst: Consumer Edition, where we brought together 70+ founders, investors, and operators who are building at the intersection of consumer and technology. The evening, co-hosted with our partners at Google Cloud, featured two insightful panel discussions that explored the future of consumer brands and marketplaces.

Panel 1: Built to Last – Building Brands that Endure

Moderated by Sunitha from Kae Capital, the first panel dove deep into what it really takes to build consumer brands in India. Featuring Kae’s portfolio founders – Romita (Foxtale) and Saloni (Traya), along with Rishabh (Sharrp Ventures), the discussion offered candid insights from founders in the trenches and a founder turned investor with a sharp eye for brand-building signals.

The 0–1 and 0–3 Cr Journey

Romita and Saloni spoke about the early days when everything revolved around product-market fit. Distribution, brand-building, and team culture are critical, but the founders emphasized the importance of single-minded focus, solving one problem for one set of customers with ruthless clarity. For consumer brands, it isn’t enough to have a differentiated product; the messaging, delivery, and customer experience must align seamlessly.

What stood out is how the bar for PMF has shifted. A few years ago, getting to ₹1 crore in monthly revenue was seen as a clear marker of PMF. Today, that milestone looks closer to ₹3 crore, proof that expectations are rising, competition is sharper, and brands need to go deeper to truly win.

At the ₹0–3 crore per month scale, the conversation shifts to building teams and processes. Founders reflected on how delegation becomes critical, and building internal conviction around customer-first thinking ensures organizations don’t lose touch with their early DNA.

What Investors Look For

Rishabh highlighted the early signs he looks for in consumer founders: clarity of thought, the ability to attract talent, and a nuanced understanding of distribution. Interestingly, he differentiated between evaluating early-stage versus scaled-up founders. For early founders, adaptability and sharp focus are key, while for scaled players, it’s about proving whether they can sustain momentum and evolve across channels without losing discipline.

Scale and the Distribution Puzzle

As Foxtale and Traya scaled, their approach to distribution evolved. From early dependence on D2C to balancing marketplaces, offline GT (general trade), and quick commerce, the consensus was that there is no single playbook. Founders must stay pragmatic and adapt to where the consumer is, whether that’s a digital shelf, a kirana store, or a quick-commerce app.

On the investor side, Rishabh noted that while there may not be a bias for offline or online, understanding unit economics within each channel is non-negotiable. Growth for growth’s sake is meaningless if contribution margins do not compound positively.

Brand vs. Performance Marketing

A recurring theme was the tension between brand building and performance marketing. Founders acknowledged the pressure to deliver immediate results in investor boardrooms. Yet, they agreed that brand equity is a long game, and the right time to invest is once the product has clear early traction.

As one way to think about it: performance marketing is like rocket fuel, it can give you an immediate lift and accelerate growth quickly. Brand building, on the other hand, is like gravity, it may not be flashy day-to-day, but it keeps the business grounded, creates resilience, and ensures your growth is sustainable. Wait too long to invest in a brand, and your product risks being seen as a commodity; invest too early, and cash burns without leverage.

Gen Z, the Attention Economy, and Contrarian Views

In today’s attention-scarce world, Gen Z consumer behavior is rewriting the playbook. Romita spoke about how authenticity and community matter far more than polished advertising. Saloni stressed inculcating consumer-backward thinking into every team member — building for long-term trust rather than chasing short-term metrics.

When asked for contrarian views, the panelists offered thought-provoking takes: that the D2C boom is not “easy capital + Instagram ads = success” anymore; that offline still holds immense power despite the digital hype; and that consumer brands should not shy away from “boring” categories if they solve a real need.

If they were to start today, each founder’s mental model was clear: identify underserved categories, build with authenticity, and never underestimate the power of distribution agility.

Panel 2: Beyond the Cart – Future of Consumer Marketplaces

The second panel, moderated by Harshad from Google Cloud, zoomed out from brands to the platforms that power consumer experiences. Featuring Kae’s portfolio founders – Manas (GobbleCube) & Anil (Snapmint), along with Raghav (Promaft), the discussion explored the fast-changing marketplace landscape.

What’s Broken in Current Models?

The panel kicked off with a critical question: what’s fundamentally broken about consumer marketplaces? Trust, discovery, and transaction friction emerged as recurring themes. Startups are experimenting with embedded finance, AI-driven discovery, and personalization to close these gaps, but as Manas pointed out, execution at scale remains the real test.

Beyond Buzzwords: Tech That’s Moving the Needle

AI, social commerce, and live streaming are buzzwords often thrown around. But what’s working in practice? Anil emphasized embedded credit solutions as a real unlock for consumer adoption, especially in a price-sensitive market like India. Manas added that agentic AI tools are helping brands grow smarter across e-commerce and quick commerce, not just spend more ad dollars. Raghav provided the investor lens: technologies that improve retention, lower acquisition costs, and reduce friction are the ones that will endure.

Competing in a Quick-Commerce World

The rise of 10-minute deliveries has completely reset consumer expectations. The panel acknowledged the operational and capital intensity behind these models but agreed that speed alone cannot be the differentiator. Marketplaces that combine speed with trust, affordability, and discovery are more likely to build defensibility.

The Next 2–3 Years of Consumer Marketplaces

Looking ahead, the panelists painted a picture of ecosystem-driven marketplaces, platforms that don’t just facilitate transactions but enable community, discovery, and financing. Differentiation will come from specialization and vertical depth, not just horizontal scale. Winners will likely be those who balance supply-demand liquidity with innovative consumer experiences.

Supply vs. Demand: Solving the Chicken-and-Egg Problem

When asked how to prioritize between supply and demand, founders reflected on their own journeys. The consensus: it depends on the category. In some cases, curating high-quality supply attracts demand; in others, creating a demand pool forces suppliers to show up. The key is sequencing thoughtfully and staying flexible, especially in the fragile early days.

Takeaways: A Consumer Landscape in Flux

Both panels underscored one thing: India’s consumer-tech story is only just beginning, but the bar for building enduring companies is rising sharply.

• For founders building DTC brands, the advice was clear: build authentic products, obsess over distribution, and know when to shift gears between performance and brand.
• For marketplaces founders, the challenge lies in moving beyond transactions to creating sticky, trust-led ecosystems.
• For investors, the signals to watch for are founder clarity, adaptability, and thoughtful scaling choices that don’t sacrifice long-term unit economics.

At Kae Catalyst, our goal has always been to create a space where such candid, experience-led conversations can happen. As India’s consumer ecosystem matures, we remain committed to backing founders who are not just chasing the next trend but are building with resilience, authenticity, and ambition.

Looking Ahead

At Kae Capital, we believe India’s consumer ecosystem is only at the beginning of its growth curve. This Consumer Edition was a reflection of our commitment to fostering these conversations and supporting the founders who will lead this transformation. A big thank you to our panelists, attendees, and our partners at Google Cloud for making the evening a success.

The journey of building consumer companies is never easy, but as the discussions revealed, it is in the complexity that the most exciting opportunities lie.

Overview

Spacetech plays an integral part in our everyday lives, enabling functions such as weather forecasting, air traffic control, global communications and broadcasting. These operations, along with many others, would be unthinkable today without satellite technology.

The space economy encompasses all public and private participants engaged in the development, provision, and utilization of space-related products and services. This includes research and development, manufacturing, and the operation of space infrastructure—such as ground stations, launch vehicles, and satellites—as well as space-enabled applications like navigation systems, satellite phones, and meteorological services. This sector also encompasses the scientific insights gained through these activities.

Market and Tailwinds

Currently, the Indian space economy is valued at ~$8 Bn with only a 2% share in the global space economy, despite being among the top 5 space-faring nations. India’s space economy has the potential to reach $44 Bn by 2033, capturing ~8% of the global market.

India’s space budget has more than doubled over the past decade. Department of Space, which leads both civil and military missions and oversees the Indian Space Research Organisation (ISRO) along with other space-related activities, has been allocated nearly INR 13,043 Cr (~$1.6 Bn) by the Government of India

On July 23, 2024, Finance Minister Nirmala Sitharaman announced the establishment of an INR 1,000 Cr (~USD 119 Mn) venture capital fund expected to accelerate the growth of space economy fivefold over the next decade. This fund aims to support approximately 40 startups with investments ranging from INR 10 crore to INR 60 crore, depending on the startups’ development stages.

The Indian space industry has experienced a revival over the past two decades: Indian space activities are no longer exclusively government-controlled. The Indian Space Policy 2023 seeks to create a collaborative relationship between the public and private sectors, fostering global partnerships and cross-border collaboration. ISRO will now concentrate on research and development, moving away from manufacturing operational space systems

In February of this year, the Indian government permitted 100% automatic foreign direct investment (FDI) in satellite component manufacturing and user ground segments, up to 74% in satellite manufacturing and operations, and up to 49% in rockets and spaceports. The removal of the angel tax is also seen as a move to reduce barriers to new investments. Additionally, on July 11, 2023, the Union government exempted startups providing satellite launch services from GST.

India’s Spactech Landscape (Source)

Use-cases in the downstream segment of Space Value Chain

Funding

Majority of Indian Spacetech Startup funding went into upstream startups

From 2016 to 2023, Indian spacetech startups attracted over $285 million, predominantly in the upstream sector

Source: Inc42

Downstream, Startups Make Up only 17% of Active Funded Startups

The downstream segment currently represents only 17% of active, funded startups, even though projections suggest that downstream services could make up two-thirds of the Indian space market by 2030. While India’s launch manufacturing and services sector has a strong foundation, the focus now needs to shift toward other upstream services, such as in-orbit and end-of-life services, as well as expanding downstream capabilities.

Source: Inc42

India’s Spacetech Landscape

Challenges

• Capital Constraints: Space startups are all deep tech, requiring significant investment without the prospect of immediate returns. These ventures involve long-term, high-risk investments with extended gestation periods, necessitating patient capital. One major challenge is the scarcity of seed-stage funding. Currently, no space startup in India has reached INR 100 crore (~USD 12 million) in revenue, which limits venture capital and private equity’s willingness to take on financial risks. This situation could improve if the government stepped in as a catalytic first-loss risk bearer, fostering trust within the ecosystem.
• Long path to growth and scalability: Dhruva Space, established in 2012, stands as one of the country’s earliest space-tech start-ups, yet it completed its Series A funding round only 12 years later, in April of this year. Among the roughly 200 space-tech start-ups in India today, only two—Ananth Technologies and MTAR Technologies—are publicly listed, and the sector has yet to see its first unicorn.
• High Costs and Infrastructure Limitations: Space systems are inherently complex and demand specialized testing facilities and infrastructure, which are currently in limited supply. Prolonged testing cycles impose heavy demands on time and financial resources, necessitating advanced expertise.
• Challenges in Justifying Return on Investment (ROI): Justifying returns on investment is a universal challenge across sectors, but it is particularly pronounced in the space industry due to the high costs associated with launching and maintaining assets in space.
• Concentration in Certain Segments of the Value Chain: The launch manufacturing and services sector is adequately populated, signalling the need to shift focus toward downstream services and other upstream services like in-orbit operations and end-of-life services.
• Escalating Cloud Analytics Costs: The cost of running analytics on the cloud is high and expected to increase. This presents an opportunity for companies specializing in data aggregation and fusion from various sources to provide actionable insights to end-users.
• Limited Access to Aerospace Testing Facilities: With the rise of private space companies in India, demand for aerospace testing facilities has grown. However, these facilities are currently limited to ISRO’s government infrastructure, creating a bottleneck for private enterprises.
• Talent Shortage in Specialized Skills: Founders and their teams must be well-equipped to navigate the challenging technical and regulatory landscapes

Growth Drivers

• Expanding Commercialization and Private Participation: The focus is shifting toward commercialization, with private companies leveraging space data and ISRO’s commercial arm, New Space India Limited (NSIL), enabling private sector involvement.
• Cost efficiency as a Competitive Advantage: India’s space missions, led by ISRO, have earned a global reputation for their remarkably low costs—often less than the budget of a major film. A prime example is the Mars Orbiter Mission (Mangalyaan), which cost about $74 million, far lower than Hollywood’s Gravity ($100 million) or Interstellar ($165 million). A major factor behind this cost efficiency is India’s focus on indigenous production and local sourcing. This approach reduces costs significantly while fostering a robust ecosystem of space-tech suppliers and manufacturers in India.
• Growing demand for Downstream applications: There are vast opportunities in downstream applications such as Earth observation, satellite communication, and positioning services. These sectors are expected to grow rapidly as demand for data-driven insights increases
• A Collaborative Innovation Ecosystem: Partnerships among startups, academic institutions, and government bodies have been crucial in cultivating India’s space tech ecosystem. Organizations like the Department of Space and IN-SPACe have provided essential support, including access to talent, testing facilities, and a supportive policy framework.
• Guidance from experienced experts: Many former ISRO scientists are now available to lend their expertise to startups, providing invaluable insights and guidance.
• Advances in Space Technology and Miniaturization: Innovations are making satellites smaller, more affordable, and more accessible. ISRO has demonstrated its capabilities with landmark missions like the Mars Orbiter Mission (Mangalyaan) and Chandrayaan.

Future state of space sector

1. Earth-Focused Sector: This segment revolves around space-driven applications and services that directly benefit activities on Earth, such as communication networks, Earth observation, and navigation systems.
2. Near-Earth Space Sector: Positioned between Earth-centered applications and space-based ventures, this economy includes space tourism, in-orbit maintenance, space-towing, satellite servicing, and advanced satellite constellations designed for Earth-based benefits.
3. Deep Space Sector: Encompassing ventures beyond Earth’s immediate surroundings, this sector includes activities like asteroid mining, interplanetary transport, space habitats, and ambitious exploration missions to celestial bodies, including the Moon and Mars.

Conclusion

Now is the ideal time for early-stage venture capitalists to invest in India’s spacetech sector. The industry is at a turning point, with factors like reduced entry barriers, increased foreign investment, government incentives, and a strategic policy framework fostering growth. Government support through GST exemptions and the removal of the angel tax further eases new investments. Collaboration between ex-ISRO scientists and startups is accelerating innovation and technical expertise. While patient capital remains a challenge, the potential rewards are significant. For VCs with a long-term outlook, India’s spacetech sector offers a unique opportunity to lead in a high-growth, high-impact field.

If you’re building in this space, reach out to me (nisha@kae-capital.com)

How AI is Democratizing and Revolutionizing Gaming

A New Frontier for Gaming

In Part 1, we saw how the current gaming industry is dominated by a few key players. However, advancements in AI—specifically Generative AI, Agentic AI, and the metaverse—are disrupting traditional structures and creating unprecedented opportunities for smaller studios, indie developers, and new entrants to break into this tightly controlled space.

1. Generative AI: Scaling Worlds, Assets, and Storylines

Generative AI is reshaping content creation by automating the design of worlds, assets, and storylines, allowing developers to craft dynamic, responsive game environments without requiring massive teams.

Examples:

• InWorld AI: This startup is developing AI-driven characters and environments that adapt to player choices, making storylines more immersive and unique.
• Scenario.gg: Specializing in automated asset creation, Scenario.gg reduces the time and cost of producing rich visual environments, enabling small studios to compete with larger counterparts.

Market Impact: Generative AI is democratizing game development by lowering barriers to entry, making it possible for smaller studios to produce expansive, visually compelling worlds.

2. Agentic AI: Building Intelligent, Autonomous NPCs

Agentic AI goes beyond simple NPC behavior, enabling characters that react in nuanced ways to player actions, adding layers of depth and unpredictability to gameplay.

Examples:

• SEED (Electronic Arts): EA’s SEED division is developing agentic AI to create NPCs with context-sensitive behaviors, providing a new level of immersion in their games.
• Fable Studio: Known for its work in VR, Fable Studio uses agentic AI to create evolving NPCs that grow and change based on player interactions, offering richer, unscripted experiences.

Market Impact: By shifting engagement from scripted events to adaptive, interactive worlds, agentic AI enables high replayability and player retention, opening the door for indie developers to create highly engaging, long-lasting games.

3. The Metaverse: Moving from Social Engagement to Fully Immersive Worlds

The metaverse concept envisions persistent virtual worlds where players can interact, transact, and experience activities that mirror real-world dynamics. AI plays a critical role here, enabling dynamic responses, economy management, and more.

Examples:

• The Sandbox: By merging blockchain with virtual worlds, The Sandbox allows players to own, trade, and monetize assets, creating an economically viable gaming model.
• Somnium Space: This platform uses AI to adjust virtual environments in real time, enhancing immersion by adapting to player actions.

Market Impact: The metaverse not only redefines social interactions within games but also creates new economic models where players can become stakeholders in virtual assets, making gaming a lifestyle and an economy.

The India Angle: Opportunities for Global Impact

AI-driven gaming holds unique promise for India, particularly in segments like real-time localization, vernacular AI for regional languages, and culturally nuanced storytelling. By capitalizing on India’s engineering talent and mobile-first audience, developers have a chance to create products that scale globally.

What’s Worked:

• AI-Driven Real Money Games: Platforms like MPL have integrated dynamic game mechanics that adapt to player behavior, maintaining engagement and monetization.
• Fantasy Sports with AI: Dream11’s algorithm-driven fantasy leagues have successfully tapped into India’s sports fervor, using AI to drive match recommendations and player interactions.

Challenges:

• Limited Resources for Indie Developers: Although AI offers democratization, smaller Indian studios often lack access to the latest AI tools due to cost and computational limitations.
• Fragmented Ecosystem: The Indian gaming market remains fragmented, with few resources and platforms to support cross-border distribution.

The Future of Gaming—Breaking the Monopoly

With AI-driven innovation, generative content, adaptive NPCs, and the metaverse, the gaming landscape is opening up in ways we haven’t seen before. These technologies allow new entrants to challenge established giants by offering more dynamic, personalized, and immersive experiences. As AI reduces the barriers to creating high-quality games, the potential for disruption is vast, not only for Indian companies looking to expand globally but for the entire gaming ecosystem.

This is an inflection point. As AI levels the playing field, the future of gaming will be written by those who innovate boldly—transforming not just how we play, but who gets to play in the industry’s sandbox.

If you’re building in this space, let’s connect. Reach out to me at: natasha@kae-capital.com

The Current State of Gaming—Monopolies, Money, and the Power Players

On the surface, the gaming industry appears vibrant and expansive, filled with innovative genres, a vast array of studios, and millions of dedicated players across the globe. But, dig a little deeper, and you find that a few industry giants control an overwhelming share of the revenue, IP, and even the technological platforms that underpin the majority of games. This has created a centralized, almost monopolistic ecosystem where a few players control not only the money but also the future of gaming innovation. In this blog, we’ll explore how these companies maintain their dominance and what that means for innovation and disruption in the industry.

Who Actually Makes Money in Gaming?

The global gaming industry, valued at around $200 billion in 2023 with projections to reach $268 billion by 2025, is far from egalitarian. Only a handful of companies control the lion’s share of profits and have the clout to shape the industry’s trajectory.

1. Game Studios and Publishers: The Titans of Content

The content in gaming is largely governed by major studios and publishers, often with proprietary franchises that guarantee recurring revenues. Here’s a closer look at these titans:

• Activision Blizzard: Known for powerhouse franchises like Call of Duty and World of Warcraft, Activision Blizzard (market cap: ~$62 billion) continues to drive revenue through a mix of in-game purchases, seasonal updates, and annual franchise refreshes. In FY2023, they reported over $8 billion in revenue, fueled by battle passes, microtransactions, and live-service models.
• Tencent: With control or stakes in over 600 gaming companies, Tencent is the world’s largest gaming company by revenue (over $32 billion in 2022). Their investment portfolio includes full ownership of Riot Games (League of Legends) and significant stakes in Epic Games (Fortnite). Tencent’s ecosystem spans publishing, game development, and distribution, giving it an unparalleled reach, especially in Asia.
• Electronic Arts (EA): With iconic franchises like FIFA and The Sims, EA (market cap: ~$34 billion) is another powerhouse that relies on recurring revenue through annual releases and microtransactions. EA generated around $7.3 billion in FY2022, driven primarily by in-game purchases in its sports games, where ongoing updates add continuous value for players.

2. Development Tools and Platforms: The Silent Powerhouses

Beyond studios, companies like Unity and Epic Games control the technology that powers the majority of games. Their influence is pervasive, as developers worldwide rely on these platforms.

• Unity: Powering over 50% of mobile games, Unity has become the go-to development engine for indie developers and smaller studios. They reported $1.4 billion in revenue in 2022, drawing income from licensing fees and in-game ad placements. Unity’s accessibility and robust ecosystem have made it indispensable, but it has also centralized control of mobile game development.
• Unreal Engine (Epic Games): Known for its fidelity and powerful toolset, Unreal Engine is favored by AAA studios. Epic Games, valued at $31.5 billion, not only generates revenue through licensing but also directly from its Epic Games Store. By offering competitive revenue splits, Epic has positioned itself as a challenger to distribution giants like Steam

3. Distribution Platforms: Controlling Access and Profits

Once developed, games must reach players, and distribution platforms play a critical gatekeeping role.

• Steam (Valve): Dominating the PC game distribution market with over 75% market share, Steam charges developers around 30% of their revenue. Valve earns an estimated $3 billion annually from Steam, benefiting from its monopoly-like hold on the PC ecosystem.
• Console Platforms (PlayStation, Xbox): Sony and Microsoft benefit not only from console sales but also from every digital purchase on their stores. PlayStation generated $17.4 billion in revenue in 2022 from game sales, in-game purchases, and PlayStation Plus subscriptions. This vertical integration makes them essential players in the digital gaming economy.

Engagement Dynamics: Few Games Capture Lasting Attention

While thousands of new games are released each year, only a select few manage to sustain engagement and drive long-term revenue. Fortnite, League of Legends, and Call of Duty exemplify games that dominate through frequent content updates, seasonal passes, and subscription models. These games set the standard for engagement and retention, shaping player expectations and creating models that smaller games struggle to replicate.

India’s Perspective: What’s Worked and What Hasn’t

India’s gaming sector, estimated at $3 billion with a user base exceeding 500 million gamers, has emerged as a unique market. Real-money gaming (RMG) and fantasy sports have taken off, driven by cricket and sports fandom. Companies like Dream11, Nazara Technologies, and MPL have found success by catering to local preferences, mobile-first access, and leveraging affordable smartphones.

Success Stories:

• Dream11: India’s first gaming unicorn, Dream11 has thrived by capitalizing on cricket fandom. By creating a scalable, monetizable fantasy sports platform, they’ve established a loyal user base and continue to lead the fantasy sports market.
• Nazara Technologies: With a diversified portfolio, Nazara has grown through strategic acquisitions and focus areas like gamified learning and esports. Their approach combines brand-building with category leadership in high-growth verticals.

Challenges and Failures:

• High CAC in Real-Money Gaming: With multiple RMG apps vying for user attention, customer acquisition costs (CAC) have surged, impacting profitability.
• Regulatory Ambiguity: The lack of consistent regulation for real-money gaming and fantasy sports has created a challenging environment, with companies often facing legal hurdles.

A Market Dominated by Few, Controlled by Many

The gaming market remains tightly controlled by a few players who wield control over content, technology, and distribution. For India, the path forward will require navigating regulatory challenges, diversifying beyond RMG, and capitalizing on unique cultural touchpoints to create global appeal. In Part 2, we’ll explore the transformative potential of AI in breaking these monopolies and democratizing game creation. In case you’re building in this space, connect with me here: natasha@kae-capital.com