Raj, welcome.
What does the venture capital landscape look like at the
moment?
I think it's really been the last few years, VC has been in a
period of slow down.
It's a cyclical business.
We tend to have these kind of seven-year booms and then a few
years where things slow down.
What's really been exciting is since the start of this year in
January, we've really seen the market starting to pick up.
I mean, one, there's been a secular tailwind driven by
generative AI from 2023.
It's very exciting in terms of how do you invest in it and stay
away from the hype cycle.
That's something that I think, as investors, we're very focused
on.
But it's beyond generative AI.
You're starting to see spaces like biotech, which have really
been slow for three years, but where fundamental innovation has
continued.
You're seeing biotech starting to come back. A lot of corporate
M&A interest around biotech.
And I think there's some geographic interest in markets
like India where there's a lot of belief around some of the
reforms the country's made and some of the amazing talent that
the Indian tech ecosystem has.
Can we go into more detail about AI, GenAI,
new technologies, how they are changing that landscape?
I suppose the opportunities, the challenges?
Yeah, I mean, GenAI
is really early.
It's in its evolution.
If you think about it, there's the, fundamental infrastructure
layer of generative AI.
And then on top of that infrastructure layer, there will
be an application layer. There'll be a horizontal
application layer and verticalized application layer.
But we're very early.
We're still in the stage of building the chips.
We're still in the stage of building that fundamental
infrastructure layer.
I think there's a few companies that are clearly early leaders
in this space, but it's gonna be a big ecosystem.
There's a lot of opportunities to build AI tools around coding,
development.
There's a lot of opportunities to build copilot tools, and
we're early in that ecosystem.
I think in 2025, you'll really start to see the application AI
layer also start to take off. And it's, in terms of investing
in it
right now, valuations are high.
There's a lot of excitement about it.
And I think as investors, we have to choose carefully and
there's a lot of excitement to partner with corporates in this
space.
And it's a place where I think BCG is really doing a lot of
differentiated things around AI.
Talk me through your decision making when it comes to making
investment decisions.
Has it changed?
How do you keep a lid on the excitement, as you mentioned?
I think our investment process has always been pretty
consistent.
It starts with great, great founders and great teams.
While we, yes, we are venture capitalists and we invest in new
technologies, fundamentally we invest in people.
So we focus a lot on the team. On the venture side of our
business,
We're willing to invest pre-product and in people with
great ideas.
But when we do that, it has to be people who we really believe
have the track record, who have the skill set in this very
nascent space.
Then we look at the product, if there is a product, there's not
always a product.
And if it's a company that has commercial traction, we focus a
lot on whether that commercial traction is really coming from
just acquiring expensive new customers or if it's coming from
a lot of repeat purchases.
We always put a little bit more emphasis in terms of being able
to grow your share of wallet with your existing customers
because that's a great sign that your product is something that
customers, after they try it out, are willing to continue to
pay for.
Raj, a pleasure as always.
Thank you so much.
Thank you for having me.