5-Minute Interview with Ruchira Shukla and Karthik Chandrasekar, Synapses
Dr. Dorothy Kelso
Managing Director, SuperReturn | Board Chair | Emerging Manager Champion
In this series of 5-minute interviews, I shine the spotlight on up-and-coming fund managers in private markets across the globe. All geographies. All strategies. All sectors.
Here's my conversation with Ruchira Shukla and Karthik Chandrasekar, Co-Managing Partners and Co-Founders at Synapses.
Quick facts about Synapses:
Q: What is Synapses’ investment strategy?
A: We invest in science-led engineering start-ups that are tackling pressing global climate and health challenges.
Q: What is the size of the market opportunity in climate and health?
A: Trillions of dollars are required to solve for climate and health globally. India alone needs over $170bn every year in climate finance to meet its 2030 NDCs. Decarbonization, resource efficiency, climate-resilient agriculture, and agile, data-driven healthcare systems are an imperative for the world to be equipped to face the growing climate crisis.
Q: Why the focus on science-led engineering start-ups?
A: While most of the global capital has been deployed on renewable energy projects and e-mobility services, the growing climate crisis and its dire impact on human health will not be addressed by infrastructure projects alone.
There is a pressing need for venture capital investment to go to IP-based engineering and science innovations. These IP-led solutions, including hardware and software systems, are needed to scale decarbonization and adaption solutions and make them future-ready.
By supporting these engineering solutions, we are able to scale them across countries so that they can grow to become global leaders in their spaces. This focus on building technology transfer bridges to support the scale-up of cross-country innovations is a unique differentiator of ours.
Q: How do you source these deals?
A: To build our proprietary and curated pipeline, we have built a platform structure that includes an incubation engine, a seed fund and a venture fund under the Synapses platform umbrella.
The incubation and seed fund vehicles support pipeline discovery and validation. When we feel that the thesis might be nascent, we put the company through our incubation and acceleration program (AIC-Synapses) to build a pipeline of potential start-ups.
We then support the best companies through the seed fund before they are ready for an investment by the Synapses Venture Fund. In such cases, start-ups have been significantly de-risked by the incubation and seed fund before they are evaluated by the venture fund. This creates a unique, derisked pipeline, not just for us, but for the broader climate investor ecosystem.
In addition to building a pipeline through our platform, we proactively source deals based on thesis deep-dives into specific problem spaces and use our networks to find the most compelling start-ups in this area, or, if needed, cold-call start-up founders.
We also get significant inbound deal flow from the venture community, multiple angel investors and network of incubators and accelerators, particularly academic ecosystems, that we work closely with.
Q: Your platform approach sounds quite unique. How do you leverage the academic ecosystems for deal flow?
A: By working closely with academic ecosystems within India and globally, we build synaptic connections in the form of cross-linkages and partnerships. These collaborations include connecting science-led engineering start-ups to relevant academic research groups, and mentoring start-ups from academic incubation programs and cross-pollination of these learnings, all of which also benefit our portfolio and pipeline.
Q: What hands-on expertise do you have?
A: We are both seasoned investors, with over 25 years of experience across various leadership roles in Asia, US and Europe.
We have led venture investments across countries over the past 15 years and seen multiple venture cycles. Ruchira led the IFC’s disruptive technologies investment business for several years and spent over 12 years at IFC. Karthik has been investing in early-stage climate businesses for over 15 years and led Sangam Ventures, an India-based climatetech fund.
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Q: How are you building your team?
A: We co-founded Synapses having known each other for five years and led investments out of the seed fund before setting up the Synapses Venture Fund. The current team of 6 professionals have been working together for 4 to 6 years.
Q: How do you see your business scaling?
A: We are building a multi-generational platform that will outlast us. Starting with Synapses Venture Fund I, we hope to have multiple funds in the future, each focused on building 5-10 global winners in ClimateTech and HealthTech.
Q: What are the key ingredients of your success?
A: The ClimateTech and HealthTech solutions needed today sit at the intersection of a) science-led engineering innovations applied to b) agile, resilient and future-ready infrastructure-like solutions that c) need to be deployed at utility scale.
Commercializing innovations at this intersection is hard and requires deep sector immersion. We are taking on this challenge because solving for this complexity is what drives alpha and impact.
We only invest in start-ups that have a proven product and 2-3 paying customers with positive, high-quality feedback and validation from their reference customers. The above nuances are the key to successful venture investing in the CleanTech and HealthTech space.
Q: What’s the biggest challenge you have had to overcome?
A: A lot of LPs believe that the pipeline for science-led engineering innovations is not deep enough, and their view is influenced by the fact that most VCs have chosen to focus on digitization-led models rather than engineering-led solutions.
Even VCs that have a deeptech focus have a different approach from ours as they have chosen lab-stage moonshots with a different risk-return profile.
We have demonstrated through our portfolio and pipeline that we can successfully source engineering innovations from over 300 cities across India. The pipeline is both deep and broad, and we are doing the hard work to discover, validate and support these innovations.
Q: What valuable lesson have you learnt that helps drive your approach?
A: Having seen several boom-and-bust cycles in the venture space, we have learnt that returns are generated not by timing of investments and exits but by building lasting market leaders.
The mindset of co-building with founding teams, and providing active support on strategic and operational matters, is pivotal to creating profitable global businesses that deliver significant development impact as well as financial returns.
Q: What advice would you like to share with our readers?
A: Be deeply committed to everything you do, and the rest will follow.
#privatequity #venturecapital #innovation #investing #entrepreneurship #india #healthtech #climatetech #engineering
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3moWhat do you mean “spare time”? Shouldn’t you be focussing more attention on SuperReturn Interplanetary The Moon? Tsk tsk. ;)
CEO of GIG Group; Autobiography #FindingMe soon to be a major motion picture!
3moGood article.