Interview: Shubham Jhuria, CFO & Partner at Aeravti Ventures

An interview with Shubham Jhuria, CFO & Partner at Aeravti Ventures

In this exclusive interview, we speak with Shubham Jhuria, the CFO & Partner at Aeravti Ventures, a leading venture capital firm. With his deep expertise in financial strategy, investment management, and startup growth, Shubham has been instrumental in shaping the firm’s success.

We delve into his journey, the evolving venture capital landscape, and how Aeravti Ventures is positioning itself to drive innovation and deliver long-term value to its investors and portfolio companies.

What key characteristics do venture capitalists look for in DeepTech startups when evaluating potential investment opportunities?

Shubham Jhuria: When evaluating potential investment opportunities in DeepTech startups, venture capitalists prioritize two key aspects: the level of innovation and the potential for commercialization. (beyond the general common characteristics of a sound investment)

The value proposition of investing in a DeepTech startup lies in its ability to disrupt the market by delivering groundbreaking advancements or transformative upgrades to existing technologies or processes. However, innovation alone is not sufficient.

Even a startup with category-defining technology must demonstrate a clear path to commercialization. If the company does possess category-defining technology but lacks in commercialisation ability, then it is not a company, it is a project.

How does Aeravti Ventures differentiate itself in the DeepTech sector, and what specific evaluation criteria do they employ in their funding decisions?

Shubham Jhuria: At Aeravti Ventures, we evaluate DeepTech startups using a comprehensive framework that includes standard factors such as Innovation, technical feasibility, commercial viability, market size and growth potential, Ideal Customer Profiles (ICPs), IP Capability, etc. However, what truly makes the difference in the framework is the competence and vision of the founders.

Early-stage DeepTech startups often operate with limited resources—minimal revenue, small teams, and concepts or prototypes that are still in development. This makes assessing their potential an exercise of guess-timates.

In such scenarios, the quality of the founding team becomes a critical determinant. Navigating the competitive and rapidly evolving DeepTech landscape requires visionary founders who possess not only ambition but also the strategic acumen to make the right decisions at the right time.

At Aeravti Ventures, we differentiate ourselves through our deliberate and patient investment approach. We take the time to deeply engage with founders, validate their vision, and assess their execution capabilities before making a decision.

Typically, we prefer to lead Seed Rounds, ensuring our thesis is rooted in a strong partnership with exceptional founders who can transform bold ideas into transformative businesses.

How do technological advancements and shifts in market demand influence the investment focus of firms like Aeravti Ventures in the DeepTech sector?

Shubham Jhuria: In the DeepTech sector, tracking success and growth requires a long-term perspective, as startups often take years to mature, where you are waiting on the sidelines before achieving what is perceived as “overnight success.”

Therefore, owing to long gestation timelines, market demand fluctuations play a relatively minor role in shaping our investment focus.

Demand cycles in this space tend to be dynamic, but they usually stabilize over time, unless an extremely negative sentiment permanently brings down future growth potential.

On the other hand, technological advancements play a pivotal role in our decision-making process and investment thesis.

The foundation of investing in a nascent tech stack lies in its potential to drive meaningful disruption four to five years down the line. Therefore, the presence of alternative tech stacks being developed in parallel poses a significant risk.

A breakthrough or successful commercialization of a competing technology can undermine the relevance of the core technology we back.

To mitigate these risks, we stay deeply engaged with global industry trends, monitor advancements in emerging technologies, and remain attuned to customer sentiments.

This proactive approach helps us identify potential threats early and build a robust thesis around the promise of long-term technological impact.

How important is the role of Entrepreneur Partners in Aeravti Ventures’ investment strategy for DeepTech companies, and how do they contribute to a startup’s success?

Shubham Jhuria: Entrepreneur Partners (EPs) play a vital role in Aeravti Ventures’ investment strategy, particularly in the DeepTech sector.

With a network of over 25 EPs—comprising current and former entrepreneurs who have built multi-million-dollar businesses across diverse categories and geographies—these partners bring deep domain expertise and invaluable insights into various industries.

Their contributions are multiple but largely include:

1. Startup Identification:
   EPs help us identify promising startups within their respective geographies and sectors. Acting as a first layer of filtration, they assess these startups’ potential before forwarding them for evaluation by Aeravti’s internal team. This ensures that only the most promising ventures reach our pipeline with curated insights.
2. Operational Support and Knowledge Sharing:
   Beyond identification, EPs actively assist our portfolio companies in critical areas such as market access, hiring, technology development, and business building. This hands-on support enhances a startup’s ability to navigate challenges, avoid mistakes, and scale effectively.

Additionally, EPs play a crucial role in creating a feedback loop during our evaluation process. Their insights provide a broader understanding of market dynamics, industry trends, and the practical execution feasibility of a tech-heavy idea.

This feedback is especially critical in the DeepTech space, where navigating industry tailwinds and gauging long-term potential are key to building conviction.

In essence, Entrepreneur Partners are a cornerstone of Aeravti Ventures’ approach, bridging the gap between innovation and practical execution to drive the success of DeepTech startups.

How has the ecosystem for DeepTech investment evolved in recent years, and what implications does this have for both established firms and new startups?

Shubham Jhuria: The evolution of India as an emerging global hub for DeepTech startups has been remarkable, though this trajectory was less apparent in 2018 compared to today.

Over the years, several grassroots developments have converged to create an environment that fosters innovation and growth for DeepTech startups.

Key drivers of this evolution include:

1. Increased Availability of Grants:
   A significant shift has been the growing availability of grants from government bodies, private institutions, corporates, educational institutions, and research organizations. These grants form the foundational layer for innovation by enabling founders to transform their ideas into prototypes without solely relying on angel investors. This early-stage support is pivotal in translating ambitious concepts into tangible progress.
2. Expansion of Incubators and Accelerators:
   The rise of incubators and accelerators across the country has provided critical infrastructure for DeepTech innovation. College-based incubators, in particular, have played a significant role in converting student projects into potential businesses, offering mentorship, resources, and a launchpad for viability testing.
3. Availability of Early-stage capital:
   The number of investors open to evaluating and backing ideas with patient capital in the domain has increased as the grassroots developments have enabled a wide range of ideas for the investors to filter from.

Implications for the Ecosystem:

The visibility of the above stated early-stage support has encouraged more founders to pursue DeepTech ventures.

By the end of 2023, 3,600+ DeepTech startups were registered in India, with approximately 480 new ventures emerging in 2023, reflecting a twofold increase from 2022, which saw around 215 new entrants.

This surge in activity has broader implications for the ecosystem:

• Enhanced Quality of Founders: The growing number of smart, technically skilled founders pursuing disruptive ideas creates a pipeline of startups that are not only innovative but also well-positioned to address complex challenges.
• Better Investment Opportunities: For investors, this evolution translates into a greater ability to make well-rounded investment decisions. With a stronger pool of startups, investors can identify high-potential ventures with greater confidence.
• Sustainable Growth Cycle: As more capital is deployed into high-quality startups, it fosters a cycle of continued growth and innovation. This dynamic not only strengthens the DeepTech sector but also reinforces its long-term viability.

In what ways do incubators and accelerators enhance the funding prospects for DeepTech startups, and how can founders leverage these resources to optimize their growth potential?

Shubham Jhuria: DeepTech startups often face heightened risks in their early stages, as founders typically seek funding to conduct further research or develop initial prototypes.

This stage represents the peak of uncertainty for venture investors. Incubators, accelerators, and similar support models play a critical role in addressing these challenges by offering:

1. Guidance and Mentorship: These organizations provide startups with strategic guidance, industry expertise, and hands-on support, helping with complex technical challenges.
2. Network Access – Improving the startup’s visibility on the industry applications and demands.
3. Capital Support: Many incubators deploy funds from government grants, seed fund schemes, state subsidies, and similar sources. This enables startups to secure research capital more quickly while fostering collaborations with relevant government bodies and organizations.

With India’s expanding startup ecosystem, founders have access to a variety of support models, including incubators, accelerators, venture studios, and venture builders.

However, founders must carefully evaluate these options, ensuring they align with their specific needs and have the expertise to support DeepTech ventures effectively.

Optimizing Growth Potential: By leveraging these resources, founders can reduce risks associated with unproven concepts. This not only strengthens the startup’s foundation but also makes it more attractive to venture investors, allowing them to mitigate the risks associated with the early-concept startups.

Ultimately, incubators and accelerators have the ability to act as crucial enablers for DeepTech startups, bridging the gap between innovative ideas and sustainable growth.

Shubham Jhuria’s insights reveal the critical role of financial leadership in scaling high-growth startups. As CFO & Partner at Aeravti Ventures, his strategic focus on risk management and value creation is helping to redefine how venture capital can foster innovation.

His vision for the future emphasizes a thoughtful, calculated approach to investment that balances risk with opportunity. Shubham’s leadership not only shapes the financial direction of Aeravti Ventures but also helps guide its portfolio companies towards sustainable success.

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