Dhanasree Molugu is an associate at Blume Ventures, India’s most active venture capital firm. She was previously Blume’s first ever analyst. Prior to Blume, she worked in the emerging markets group at Deutsche Bank. She’s moving from Mumbai to Beijing to act as a channel of investment and knowledge transfer between India and China.
What attracted you to venture capital and working with startups?
I was born in Hyderabad and moved to Mumbai to get an engineering degree at IIT Bombay. After graduation, I started my career in investment banking. I soon realized that I wanted to focus on the intersection of tech and finance rather than pure play finance - especially as India continues this period of rapid growth with technology acting as a main catalyst.
I started discussing my next career move with friends and colleagues. I ended up volunteered with a few startups, helping them out on startup fund models and marketing plans, alongside my 16-hour days in banking. I worked part-time with three startups over a period of 6 months. I enjoyed working for bootstrapped businesses, but I didn’t have my heart set on one sector. If you work at a startup, you need to be 100% aligned with the vision and product. I couldn’t find that one startup. That’s when a senior advised me to look at venture capital, and it emerged as a perfect fit for my skills and interests.
Why Blume Ventures?
Blume Ventures is a proudly egalitarian workplace. I know office environments from startups to banking, and the latter is particularly hierarchical. Blume Ventures has a small team with an open culture. You get super efficient working in that kind of nimble environment. I really wanted to work in a place where I could make a substantial contribution and I figured that Blume would be a great place especially as its first and only analyst. It was a strategic move. I knew I could go beyond the call of duty with a kickass team. Now, I’ve been here for 2.5 years - I've worked on more than 12 investments and directly managed 8 portfolio companies.
The second reason is that everyone is not just intelligent but super empathetic. My colleagues at Blume are at least 8-10 years older than me and I'm able to learn so much from them. People like me who come from a technical background get very analytical about investments. From working at Blume, I realized that the numbers are just one component – you need to understand businesses, people, macroeconomic factors, industry, and more.
Blume's partners and principals have also taught me the importance of relating to founders. These entrepreneurs are on one of the most lonely and tiring journeys. Blume is known for being astute and compassionate, making them a desirable partner for early stage companies. I was eager to join a VC with that attribute.
Venture capital is not a typical career path in India. What made you take the leap?
Other people might not have done the same thing. Our parents are part of this post-industrial and pre-internet economy. As their children, we young Indians try and live up to their ideals like having a comfortable job with a reputed brand. They want you to take the tried and tested path.
They’re not wrong, but our generation is able to try new and different careers. As an example, I've had the opportunity to be a part of LP and board meetings. I’m even on the board of a few companies. If I hadn’t taken this risk, I would not have this incredible exposure. It’s definitely a balance between comfort and risk, and my decision to go into VC was definitely taking a leap since it’s a less mature industry in India.
With your experience in banking, you could’ve gone into growth equity and late-stage investing. Why focus on the early stage?
I think the early stage is the most interesting and strategic phase to invest in a company. It’s also where I could learn the most. I improve through people and my interactions with them. There’s a saying that you’re the average of the five people you spend the most time with. I think that’s absolutely true, which is why I wanted to surround myself with smart people in venture. Interaction in banking is fairly limited, but at the early-stage, I encounter new businesses and brilliant entrepreneurs every day. The breadth of people I meet is just unparalleled. I might have a call with Japanese investors in the morning, get pitched by social enterprise founders in the afternoon, while meeting with portfolio company executives throughout the day.
You don’t get to typically work or contribute substantially with founders as directly at the late stage, especially at an analyst or associate level. But with seed and Series A companies, I get to work alongside entrepreneurs as they build their business and brand from the ground up.
What skills did you bring from banking in emerging markets? Did it help you start developing any investment theses that you brought to Blume?
Apart from coming up with strategies for trades, my work in banking focused on macroeconomic research and commentary on the markets. It gives you a top down view on things. For example, understanding the political environment in Turkey post Erdogan’s election led us to believe the economy would be destabilized. In venture capital we’re looking at grassroots innovation from the ground up instead of top down, but understanding macroeconomics and policy is incredibly helpful.
If I’m looking at a fin tech startup in India, I need to understand the regulatory framing by the Reserve Bank (India’s central bank). How does RBI perceive fintech’s cyber and liquidity challenges? It helps us better assess the sector and associated risk, though it doesn’t directly inform us which of those startups will be most successful. For that, you need a different skill set that comes from a tech background and startup operating experience.
You're interested in emerging tech (AI, ML, etc.) as well as pure-play consumer apps. What makes India an environment ripe for these types of startups?
I think there’s a disconnect in the way American VCs perceive Indian startups versus the way Chinese and South Asian investors understand our ecosystem. Everyone is generally bullish on India but most people look at the US for cutting-edge innovation. They miss the pioneering activity in India.
Most VCs see India as a consumer market play because of our huge population, overlooking our engineering talent. We’re in a period of reverse brain drain. For example, I recently met with an investor who left Andreesen Horowitz to return to India. We’re also seeing major developments in AI, ML, VR and blockchain.
India is interesting because we don’t have proper, comprehensive infrastructure. And I mean that in every sense: physical, legal, and digital. Instead of the government driving change, we see the drive coming from the startup community. Just look at the way India has leapfrogged technological development. Digital payment adoption here is unlike anywhere else in the world. The United States is the land of PayPal and Visa, which we skipped for a more democratized payments system like UPI. We’ll continue to do that. The power of the internet and smartphones has unleashed so much potential and ambition for young Indians. They’re not settling for what’s been handed down by the government. Young Indians are pushing the status quo.
Facebook has a VR/AR accelerator in Hyderabad. Google has invested in a few Bangalore-based startups including Dunzo, a productivity management application in Blume's portfolio. In America, many upcoming startups may drive incremental changes since the infrastructure has already been established - but in India, every startup is part of this massive acceleration and it is being aided by emerging tech like AI, Blockchain etc. Hence, I am very bullish on emerging tech startups in India.
You've written extensively about the startup ecosystems in China and India. Something interesting I've noticed is that Chinese LPs and VCs have invested more in Indian startups than American firms. What do you think are the factors behind this major capital infusion from China?
India is receiving a lot of interest from Chinese VCs and LPs. Tencent made a good exit from Flipkart (recently acquired by Walmart). Alibaba has invested in Paytm, India’s most popular payments application. We haven’t seen so much direct investment interest much from the West. There have been small acquisitions, but not to the tune of $1.2B by Tencent into FK and $300M from Ant Financial into Zomato (a food delivery startup).
The average American and Indian customer is very different, but China and India have many similarities. We both face urban-rural divides. China has a huge middle class and India’s is growing. Both populations are typically price-sensitive but they're value conscious on distinct services like education. I think Chinese investors feel pretty comfortable in India even when you look at startup culture. The US values work-life balance (which I certainly endorse), but the startup culture in China and India is similarly intense. At the end of the day, Chinese investors see consumer, demographic, and cultural similarities that make Indian investments less precarious.
You're a founding member of Arka Venture Labs, a unique cross-border investment and mentoring platform for Indian B2B startups to scale in the US and other global markets. Why did you help launch ARKA? How has this initiative been successful?
India has a lot of potential to produce global products using emerging technology, as we previously discussed. I think of it as the Estonian or Israeli model. 40-50% of Indian startups have potential to address a global market, with 20% of those startups in emerging tech. In my second year at Blume, we were thinking of ways to tap such Indian startups early enough in their lifecycle to help them solidify a global presence and accelerate their go-to-market strategy. Because I had already begun specializing in emerging technology, I was a good fit to represent Blume in this initiative.
When two other funds were interested, it was the right opportunity to launch. Alongside Benhamou Global Ventures (BGV) and Emergent Ventures, Blume recently announced the launch of Arka. We’re working with B2B startups that have a minimum viable product (MVP) with a strong potential in the US or European region. BGV and Emergent are great partners for building connections and navigating American and European legal environments; in India, we can help sourcing and guiding companies. It’s too early to say where Arka will go but I’m excited by our hypothesis and the startups in our accelerator so far.
You have the distinction of being one of the youngest women in India's venture community. Have you faced major challenges in the space - regarding your age, gender, or something else?
When I am discounted, it’s a combination of gender and age. Gender bias is more implicit, but the age part is huge. If someone discounts and belittles you, don’t waste time with them. It’s their loss.
Of the people who are skeptical because they think you’re a kid, you can bring those people around. Go the extra mile to help them and add value. Once they see that you deserve to be here and that you’re asking the right questions, you can help them in ways that others can’t. It takes time to build that credibility. But what young people lack in age and in experience, we make up for in diligence and attitude.
People research each other before meeting. I found that thought leadership helped me a lot because if you have published credible work, people take you more seriously. At Blume itself, my partners and colleagues value opinion and good criticism irrespective of where it comes from. Smart founders know to take feedback and should value utility over simplistic factors like age, sex, and background.
What kind of guidance and support do you receive from India’s venture community?
All of my mentorship has come from the team at Blume. Managing Partner Karthik Reddy taught me how to understand investment parameters and assess product-market fit. I learned the value of network capital - building, maintaining, and leveraging one’s network for the portfolio - from Sanjay Nath. Rohan, Sajid, Arpit, and Avantika, Blume’s principals, helped me manage with the working details of due diligence, portfolio operations, and competitive analysis. They’ve mentored me and hugely impacted my professional career.
Circling back to women in VC... there aren’t many in India. I know other analysts but mentorship is not the same with peers and juniors. So, it’s difficult when there aren’t many female mentors to begin with. I did help hire and mentor Blume’s recent analyst hires. Both are men. And I’ve helped a lot of my juniors who’ve joined other Indian venture firms like Nexus and Matrix. I’m lucky to come from one of India’s Institutes of Technology (IIT) where seniors have taught us so much and been our mentors right through. It’s in my culture to give it back to anyone who asks for help.
Any advice for young women who want to enter venture capital - on the investing, operations, or platform side?
Don’t be afraid to reach out because you never know what works. Start forming your views early on. There’s no substitute to hard work so it’s important to read voraciously, follow all the tech blogs, and get on Twitter. As an analyst, you don’t necessarily have to understand how VC as an asset class works, but you do need to have a keen interest in technology. If you don’t, there are other things in business you would enjoy more.
Two things matter for breaking into venture capital: yourself (which you can improve) and your network. The latter sometimes places you at a disadvantage because of where you grew up or the school you went to. But think of it as a partial impediment because you still have the ability to learn. Demonstrate your personal brand by publishing your views and opinions. You can start with exactly what you’re doing with Negotiating the Terms - a website! Show that you understand technology, form individual views, and can create your own equity - you’ll be a great candidate for VC firms.