Backing India's Builders We look for founders who understand how to work with India's intermediary-led economy and leverage AI to solve real-world problems, says Arjun Malhotra, General Partner at Good Capital

Arjun Malhotra, General Partner at Good Capital, believes the next big thing in Indian venture investing is the IPO pipeline. "It'll fundamentally change the Indian startup ecosystem. We're seeing multiple companies reach scales where IPOs become realistic milestones rather than distant dreams," he says.

According to a KPMG report, India saw nearly 80 mainboard IPOs, slightly higher than 76 in FY24, with total capital raised amounting to INR 1,630 billion, a significant jump from INR 619 billion in the previous year.

Malhotra is excited by the growing momentum, yet his core focus remains pre-seed and seed-stage investing. "We love the blank canvas moment, when founders are deeply entrenched in a problem but haven't figured out all the answers yet. This is when we can have the most impact, not just with capital but with our network and guidance."

So, what kind of founders catch his eye? "We back Indian startups that work with India's reality rather than against it. In our low-trust economy, people prefer dealing with humans they trust over faceless apps. So, instead of trying to eliminate intermediaries like everyone else, we invest in companies that empower these on-the-ground partners."

He adds that AI has become game-changing for this approach. "We're seeing AI not just automate tasks, but enable entirely new business models. India's more than 63 million small businesses desperately need workflow and system designs to improve their efficiency, but could never afford it historically. AI can now be the project manager they always needed."

Malhotra explains that Good Capital is sector-agnostic because its thesis is behavioral, not vertical. "We look for founders who understand how to work with India's intermediary-led economy and leverage AI to solve real-world problems."

This philosophy has taken them across sectors from Solar Square in renewable energy, Entri in education, MyGenie in construction management, to Xhipment in logistics. "That said, we do have a slight bias toward consumer businesses over enterprise ones."

However, Malhotra is wary of the B2B AI SaaS buzz. "Many investors view it as a 'safer bet.' But this has created a crowded space with a lot of similar solutions chasing the same problems. He believes the real opportunity lies in unlocking economic potential for India's massive base of small businesses.