How does Shaadi.com’s Anupam Mittal make money

You said in a LinkedIn post that focus, rather than diversification, is the key to building wealth. How does that apply to your personal portfolio?

In my case, I tried public investment. I’ve also been trying to invest in creative assets for a long time. I’ve also invested in real estate, and none of that really worked for me and for a variety of reasons. Maybe, I’ve got the real estate cycle wrong. One thing I’ve noticed about real estate is that it’s highly liquid, especially if you’re buying land. It’s like buying a lottery ticket. You don’t know what will happen, when will it become liquid, etc… I find that on the public markets I spent a lot of time watching the market, watching the stock price and watching. My stock price goes up or down. So for my thinking type, that doesn’t work either.

I like something where I can invest my money and not have to look at it for a long time. And for me, it turned out to be an early stage investment, and what I noticed was that at first, it was very illiquid. However, over time, if you regularly invest in the early stages and build a large enough portfolio, there will be frequent liquidity events. If you are choosing wisely or have access to the best deals, making extraordinary profits is not as difficult as you can see.

So, how long does it take to get rid of your investments?

Five years is what I was hoping for but exiting investments in India usually takes more than 10 years, especially if you are waiting to exit through an initial public offering (IPO). I had about 20 exits in about 4-5 years—a few more years and a few more. Average is around 4-5 years but big alpha contributors usually take 10 years. If you’re looking for a 1,000x profit, then you have to let the company grow.

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If you split your portfolio between startups, public equity, debt, etc., how will it be divided?

I have invested in startups and my own operating companies (including shaadi.com). I didn’t invest much in debt because I started from scratch. I also have a few assets that can make up 5-6% of my portfolio. The rest is about 2% is debt and 93% is investment by private companies. This makes my portfolio highly concentrated.

How many startups have you invested in so far?

More than 200, and now with shark season, this number is more than 220.

But are the profits tilted to the few?

Profits are always skewed. Sixty of the companies failed, while 20 saw good exits. Sixty more will probably fail. Another 40 will give me back, of which 10 will be a super extraordinary profit. I can get 7-8 unicorns in my portfolio.

What is a good return on CAGR (compound annual growth rate)?

I have been doing this for 15 years. My realized IRR (internal rate of return) — in 15 years because I started with such a small amount — is about 40%. With the companies in my portfolio, I think I can maintain an IRR of 40%.

You mentioned that you are tracking stock prices on a daily basis. With private equity, how often do you track your investments?

So we have a system. Most companies worth watching send us monthly or quarterly MIS, and generally we’ll look at it whether we need to do any in-depth research. If it’s on the right track and everything is fine, we don’t really mind. If it’s also working very badly, we don’t mind because there’s nothing we can do about it. Too late. If any of the founders have written to seeking help in certain areas, we’ll step in and help. So we talk to them about finance, help them raise A-chain or B-chain, connect them with angel investors and with customers.

Name two startups that you consider your best investment ever?

In the case of investments made, it was Interactive Avenue, which became India’s largest digital advertising agency, and Makaan.com, which gave me the best returns. In case it hasn’t been done, there are a few like Ola, Rupeek and Jupiter, neobank. There is also Animall, a breeding platform in which I own a significant stake.

As a percentage, what would the 10 best performing companies make up your portfolio?

The top 10 will account for 2/3, or about 60-70% of the portfolio. It’s also because many investments have been made very recently and haven’t really increased in value.

Now, since most of your portfolio is in illiquid companies, how do you manage your emergency funds?

I have a pretty good line of credit with banks and wealth managers based on my assets. I pay 9-10% interest. The return that I am making is about 40-48% so far. So I don’t block my money there. However, there are times when I use my credit line and times when I don’t.

Do you have life or health insurance?

I have both, but health insurance is through the company. We have a corporate plan. And life insurance is not something I buy myself. It’s something my dad signed up for me when I was very young. So I didn’t buy any life insurance policy. And yes, it is a LIC policy.

How do you protect yourself from inflation?

Do I need to protect myself if I am making more than 40% profit. Sure, with inflation even at 7-8%, my real return will drop, but I’m not trying to optimize for 2% gain. I’m playing for abnormal profits. That’s why I say I don’t understand quantification and optimization — instead of 8%, how do I increase my returns to 9%? Mera dimaag nahi chalta, (I don’t think so), that’s not my personality. Mere ko hisaab me maza nai ata hai (I have no interest in keeping an account). My goal is to be so rich that you don’t need to keep an account or a budget. That’s the whole goal. I am trying to find alpha return.

So inflation doesn’t trouble me as much. What bothers me is the lack of liquidity and lack of capital; As the market became tight, money became expensive and many companies began to have difficulty raising money. So my adjustments mainly revolve around my investment strategies. Essentially, in such situations, you stop doing capital-intensive business and momentum activities, and you reorient your strategy.

How much time do you have to research a startup’s pitch before it hits the shark tank?

I don’t have any time to research the pitch. No prior research. You don’t even know the name of the company or field. The first time we see the picture of the founder is when the door opens. So it’s all real time.

So you have some windows to view the documents after the program ends?

No, we don’t have any windows. Ideally, we’d like to do it as quickly as possible, but the truth of the matter is that many founders joining such a program are at a very early stage, and in many cases, they haven’t even started yet. company establishment, a lot of misplaced compliments. So it can sometimes take them months to get them in place. For companies that are a bit more mature, it happens more quickly. With such companies, you can complete the action within weeks of the shark season’s end.

What about the claims made by the startups on the show?

I think there are cases where 20% of the time a deal doesn’t happen. Most transactions are done because platform participants are informed that there will be a diligent process to check their claims. So, in general, most people cling to the truth.

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