We are obsessed with founders trying to build beautiful businesses on the classical premise of compounding business models, customer trust, employee growth, operating efficiency, and visible and invisible moats.
We provide patient capital to founders building compounding businesses
They are all in, they don't think about a fallback option. They know that the path that they have chosen will yield meaningful fruits in a decade, if that. They have tremendous tolerance for pain and yet are eternal optimists. For them, a customer email noting delight is more blissful than announcing financing round
They have been in the trenches and have often experienced the pain they are trying to solve, first-hand. They are passionate about their area of expertise, and can convince you that they are solving the most important problem that you have not thought about
They see their products as extensions of themselves, adept at both big-picture trends and the finer details that elevate products. They have realized the importance of relying on teams for scale. They feel that they can do more on customer service and customer experience, even if NPS scores are great
Backing industry redefining smart software solutions
Backing businesses geared towards the new wave of consumers
Backing visionaries driving engineering innovations
PMF is hard to define. We think you have a PMF when your product is satisfying a meaningful customer need. As a result, your customers feel the need for your product, your retention rates are high. You know how to sell, who to sell to, and you know a path to monetize at scale. Companies in PMF may not feel elegant because they are too busy getting to PMF, but it is the only thing that matters.
We are looking for companies that are trying to be category definers. Such companies, when young, find it incredibly hard to explain their space - what it is called, what is the TAM, what do they actually do, why are they not building in the XYZ other space that is 10x larger as per Gartner? We like to sit with them, and understand the world through their eyes.
We are looking for companies that have spent many iterations and several years just building and refining their product. Their products cannot be replicated by money but only with time, and a very deep sense of complex (and often unstated needs of customers).
Venture insights that matter
If you are a founder raising capital, we would love to hear from you.
Please write to us at founders@tenacity.vc with a description of your team and company, as well as the problem you are solving – either with a few bullet-points, a short slide deck, or whatever other format you like!
We will respond as soon as we can
India's developer pool is amongst the deepest globally given the rich history in services exports. As big bulky software stacks are being replaced by cloud led SaaS, there is a meaningful opportunity for focused Indian founders make a meaningful mark in the global SaaS industry.
There is a unique opportunity to improve efficiency, enhance user experience, and achieve better economics in most industries by leveraging best-in-class horizontal software. India has produced Freshworks, Postman, Zoho and many others that have taken a reasonable global market share in their segments.
Vertical software, built purposefully for specific industry workflows, drives greater adoption and market penetration over time in markets that may look small initially but grow with time. Similarly, Zenoti, Rategain and others have created space for themselves in various industry verticals.
The emergence of intelligent software - copilots and autopilots - for everyone, will help us work more effectively and efficiently, and open up many AI-first application and tooling markets.
We are focused on investing in Enterprise Software across verticals - Horizontal SaaS, Vertical SaaS, Infrastructure.
Our platform technologies, or 'digital marketplaces' thesis, stems from a core belief: the inefficiencies of matching supply with demand in many segments can be streamlined through software-enabled workflows. These workflows—sourcing, procurement, curation and recommendation, logistics, fulfillment, contracts, payment, terms, etc.—still involve humans across multiple entities in most spaces. By leveraging technology, the platforms can provide a seamless experience for users seeking goods or services and for those looking to fulfill those needs, effectively commoditizing the undifferentiated heavy lifting that supply and demand engage in.
We believe that new platforms will keep coming up for the next several years, and potentially decades on both B2B (e.g., Alibaba, Upwork, Delhivery) and B2C (e.g., Zomato, Bookmyshow) fronts. In several cases, the platforms create their own supply (vs. just aggregating from others).
Platforms where the underlying product or service is a good margin business, even before any efficiencies of scale or platformization, are our core focus areas. These margins can occur either when the underlying business operates in a market with good margins (such as international markets) or in the Indian market, within select product categories where the margins are excellent. You will not find us trying to aggregate areas with very high burn rates; instead, we focus on more niche areas.
Software is going into places where it has not gone before. While we explore software only plays - there are some emergent areas where software is penetrating through some mix of cloud, AI, machine vision into hardware solutions that are, as a result becoming intelligent and very disruptive. The core engine here is software, and the delivery mechanism is hardware.
With conducive regulatory support, abundance of deep-tech talent, opening up of new local and global demand pools for Indian hardware disruptors, we believe, in our next few years there will be interesting opportunities where sleepy hardware companies will be woken up by disruptive software led hardware. Some of these plays might be in robotic applications, aerospace, defense, semiconductors, quantum computing.
We expect to start nibbling in this space.
