Gemba Capital 2024 Year in Review

“The best early-stage investments appear obvious in retrospect; however, very few of them are actually obvious when you make them.”

- Vinod Khosla

The above quote is true for all deals we do, and more so now in the context of AI and Agentic business models. Imagine, a personal AI assistant available 24X7 to talk, understands you and does your household chores or your personal AI secretary filing your tax returns, booking your table at a restaurant or your AI travel Agent that makes your custom itinerary based on your likes and dislikes and also does all the travel bookings. Your AI Companion, when you are lonely or your AI shopping buddy.

We will live in a world full of AI agents around us. These agents will talk to each other and we will have a new world of AI first apps on our phones. The way we have connected machines (IoT), we will finally have connected humans also. This revolution is a combination of hardware (wearables, chip design), software (cloud storage, interface) and compute (GPUs, LLMs,). We are living in exciting times where we have moved from Internet, to Smartphone to Cloud to Artificial Intelligence era.

Artificial intelligence is at a pivotal moment, poised to redefine the very fabric of human existence and societal structure. As we advance toward 2030, experts predict that AI will not only enhance human capabilities but also challenge our autonomy and decision-making processes. The future hinges on our ability to navigate these challenges, ensuring that technological advancements prioritizes beneficial intelligence over mere efficiency. The choices we make today will determine whether AI becomes a tool for empowerment or a source of existential threat.

2024 — A year gone by…

VC deals in India surged to 536 from 460 in 2023 and investments climbed to ₹19,900 crore (US$2.38 billion) from ₹15,371 crore (US$1.85 billion). Despite this, exits experienced a slight decline, dropping to 72 from 82 in 2023, with harvest values reducing to ₹21,974 crore (US$2.62 billion) from ₹28,993 crore (US$3.51 billion).

The technology sector continued to dominate as a pivotal area of focus, driving innovation and investor interest. A major boost came during Union Budget 2024, with the abolition of angel tax for all investors, effective from the financial year 2025–26. This move is set to unlock new growth opportunities for Indian startups. India’s ecosystem is not just growing; it is evolving strategically, strengthening its position as a global innovation powerhouse.

VC funds generated over $4 billion through IPOs and public market sales — twice the amount earned in 2023 and 2.5 times that of 2022. India has delivered $70Bn of exits to domestic and global VC investors, led by the most vibrant IPO market in the world. Contribution of Indiaʼs Tech ecosystem can be as much as 20% of Indiaʼs $7.5Tn economy in the next decade which would be a game changing outcome.

Gemba Capital Fund I made 6 investments in 2024

· We invested in Docube, which is building a chain of multi-specialty primary healthcare centers, enabling doctors to start their private practices profitably. We co-invested in $1 Mn seed round along with Enzia Ventures as the lead.

· We invested in Sanlayan, an Electronics Systems Design and Manufacturing (ESDM) business focussed on creating indigenous design led solutions for the Defence and Aerospace industries. We were the 1st investors to commit is $4.5 M seed round led by Jungle Ventures.

· We invested in EternZ, an online B2C jewelry marketplace focusing on fast fashion lifestyle jewelry. We co-invested in $1.1 M pre-seed round along with Kae Capital as the lead.

· We invested in LightFury Games, an E-sports and AAA gaming company. We co-invested in $8.7Mn pre-seed round along with Blume Ventures as the lead.

· We invested in Finodaya Capital, tech enabled financial services company providing Loan Against Property (LAP) to small businesses in India. We co-invested in $2.6 Mn pre-seed round along with White Venture Capital as the lead.

· We invested in Pazy, building a fully integrated operating system for FinOps teams for top 5 lakh SME and mid-market businesses in India. We co-invested in $750K pre-seed round alongside with Inuka Capital.

Gemba Capital Fund I Portfolio highlights

· Navadhan Capital, raised $5Mn in a Series A round led by Prime Ventures.

· Showroom has surpassed ARR of Rs. 100 Cr with EBITDA breakeven

· Kredmint has received NBFC license from RBI

· Docube — 2 new centers in BLR. Double digit EBITDA +ve at center level

· Sanlayan has completed their 1st acquisition of Dexcel Electronics

· Eternz onboarded 80+ brands on their marketplace.

· Shoption became EBITDA +ve and crossed ARR of Rs. 120 Cr

· Mannjal facilitated Rs. 700 Cr in annualized disbursements

· Alltius revenue grew 7x — on the way to cross $1M soon

Key team highlights

· Ranjeet Pratap Singh, Co-Founder, CEO at Pratilipi joined us as a Consumer tech Venture Partner

· Shashank Gupta joined us as an Analyst in the investing team.

Gemba Capital Portfolio by numbers (since inception)

Sectors to watch out for in 2025

Fintech

1. New age tech enabled NBFCs in rural business credit.
2. Co-lending tech platforms for regional NBFCs
3. Tech first Housing Finance startups in affordable housing space
4. Investment products for retail / mass affluent segment
5. Cyber security, fraud, risk and compliance products.
6. Micro savings, micro insurance, micro credit products
7. Financial products specifically designed for SMEs
8. Cross border trade / transaction enabler

Consumer tech

1. AI led personal assistant products/companions/co-pilots
2. Anime games, VR games and non-RMG game studios
3. Social/ Content apps which can be monetized faster
4. B2C Ecommerce in new verticals such as Jewellery, Home Décor, Sports
5. Specialty care clinics (chronic and non-chronic diseases)
6. Omni channel retail for Bharat and for mass affluent segment
7. Edtech — Vertical focused upskilling platforms
8. Quick commerce enablers — warehousing, logistics, manufacturing
9. Proliferation of quick commerce in Tier 3/4 towns

To conclude

Broadly, we have seen 3 types of businesses that have higher success:

> One that help you save money / or helps you earn more money

> Ones that help you save time

> Ones that help you save effort / or increases convenience

Businesses at an intersection of the above 3 is where magic happens. Imagine a product which helps you earn more money, saves your time and increases your convenience !

We feel 2025, will give opportunities to invest in such businesses. Gen AI is changing fundamentally how we operate, behave and interact with technology. Newer business models will get created and scale at a very fast rate due to high adoption. Sometimes, these businesses and the problems they are trying to solve is hidden in front of us — in plain sight. To see them, we need to question , be curious, and ask Why not? We need to be a bit more crazy — like the entrepreneurs we back. Hopefully we will be able to do this in 2025 !

Till then…

“Risk more than others think is safe. Dream more than others think is practical.”

- Howard Schultz

A token of gratitude

A big heartfelt thank you to all our founders, LPs, lawyers, fund admin, accounting teams, employees, venture partners, scouts — all of whom who have helped us in our mission in 2024.

Onwards and upwards from here as we strive to build one of the most respected domestic micro VC Fund in India.

Cheers,

We wish you all a great 2025 !

From all of us at Gemba Capital.

Disclaimer: This blog is a Year in Review performance blog and not a solicitation of any kind for anyone and neither it is a part of any marketing docket/collaterals/documents of Gemba Capital.