Listen: Sandeep Murthy on why Lightbox thrives on the 'do-or-die' venture capital model

Mumbai-born Sandeep Murthy had a somewhat tumultuous ride as a venture capitalist in India, before finding a home in his own firm, Lightbox.

After ditching a career in investment banking with Credit Suisse in the US, Murthy came back home to lead India investments for Sherpalo Ventures and Kleiner Perkins, both well known Silicon Valley based venture capital firms, around the time that the asset class was starting to find its feet here.

Apart from managing the local portfolios of the two firms, Murthy found himself doubling up as CEO of online travel startup Cleartrip, one of Kleiner’s earliest investments here. The Cleartrip experience gave Murthy valuable insights into the operating dynamics of an early stage startup and in some ways became the foundation for Lightbox’s guiding principles. 

Lightbox bills itself as an operator VC that gets closely involved with all its portfolio companies with respect to their short and long term strategies, product development, market connects and more. The deep involvement model, not particularly common in India’s venture capital market, comes with a downside -- a small and concentrated portfolio that leaves little room for failure. Murthy quips that a smaller portfolio compels the firm and its team to think and work like a “do or die VC.”

In the six years that Lightbox has been around, it’s invested in less than 20 companies. A portion of that portfolio is legacy investments, including Cleartrip, from the Kleiner and Sherpalo portfolios that Lightbox acquired as part of Fund I. The firm’s portfolio from the second fund, raised in 2014, includes investments such as Rebel Foods, Droom, Furlenco and Melorra. It has also scored an exit. In April last year, portfolio company Embibe was acquired by Reliance Industries.

Last month, it raised a $209 million third fund, taking its overall funds under management to a little over $400 million. The new fund has already started making investments and the latest are offline pharmacy chain Generico and hyperlocal delivery platform Dunzo.

In this episode of TechCircle Dialogues, Murthy, who generally likes to keep a low profile, sits down for a candid chat about the transition from Sherpalo and Kleiner to Lightbox, how the firm’s operator-VC model works on a day-to-day basis, the dynamics of the founding team that includes Sid Talwar, Prashant Mehta and Jeremy Wenokur, and turning brick-and-mortar startups into technology plays.