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Episode 103 · Capital · 48 min

India's startups are Indonesia's roadmap

Breathe Capital's bet is that Southeast Asia's 700 million people are not a separate market to be learned but a lagging copy of India's — three to four years behind on the unicorn clock, and increasingly staffed by Indians, who are one in seven founders in the region. Bhutani's rule for his own fund is blunt: back an Indian company only if the learning travels to Jakarta or Hanoi.

Venture capital India macro SaaS & enterprise

Shauraya Bhutani

Co-founder, Breathe Capital & Cap Connect · with Vishal Krishna

47:43

Said in this episode

▶ 5:48

700M

People across Southeast Asia

Six or seven countries with their own languages and cultures — he says the region behaves like Europe, not like India's single, culturally diverse 1.4 billion.

▶ 11:17

1 in 7

Southeast Asian founders who are Indian

The stat he cites from the previous year; many are ex-Flipkart and ex-Snapdeal operators now building in Indonesia, Vietnam and Singapore.

▶ 8:38

3–4 years

Indonesia's lag behind India

Measured on the unicorn clock — the gap between Flipkart reaching unicorn valuation and Tokopedia doing the same; he flags he does not recall the exact years.

▶ 12:48

Growth in Indian companies going to the region

His forecast for the next five years, against a present he describes as experiments rather than a wave.

▶ 33:35

$100–500K

Breathe Capital's cheque size

Averaging roughly $300-350K at seed and pre-Series A, with occasional participation in bridge rounds for more mature companies.

▶ 43:29

40 countries

Going to elections in the year of taping

India and Indonesia among them; he argues both economies are primed to grow either way and the results only set the velocity.

The brief

The argument in sixty seconds

Bhutani's claim is that Southeast Asia is not a separate market to be learned but a lagging copy of India's — and that the copy is increasingly being made by Indians. Roughly 700 million people across six or seven countries, closer to Europe than to India's single-country 1.4 billion, have run the same sequence India did: large consumer e-commerce first, then fintech and lending, then edtech, healthtech and SaaS. Tokopedia reached unicorn valuation three to four years after Flipkart did; today the seed-stage Indonesian founder sitting in front of him pitches an X for Indonesia where X is an Indian company at Series B or C, and at least five startups there are competing to be the OfBusiness of Indonesia. The transmission runs on three channels — a bigger, more digitised home market, shared pools of capital (Lightspeed's India team writes cheques on both sides), and migration, with one in seven Southeast Asian founders now Indian, many of them ex-Flipkart and ex-Snapdeal. The traffic flows the other way too: Meesho stumbled in Indonesia, Pine Labs held in Malaysia, VinFast is spending a billion dollars on an Indian plant, Gojek keeps engineers in Bangalore — and he expects that volume to go 5x in five years. Around the thesis sit his working rules: back an Indian company only if the learning travels, treat the edtech and buy-now-pay-later wreckage as a reset of business fundamentals rather than a sector failure, tell a founder 'not yet' before taking them to market, and never target a number of deals, because it makes you do stupid things.

Worth your time if you are

Indian founders eyeing Jakarta, Hanoi or Manila

Seed founders who have never raised from a micro VC

SaaS builders deciding how vertical to go

Operators weighing working-capital debt against dilution

Anyone who still thinks Southeast Asia is one market

Episode map

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

Venture capitalIndia macroSaaS & enterpriseFundraisingFounder journeyCredit & lending

01Delhi, Singapore, and a family of entrepreneurs 0:00 Cap Connect raises capital and runs M&A for founders while Breathe Capital invests at seed and Series A across India and Southeast Asia — built by a man who went to Singapore for a three-year business degree, stayed a decade, and became the first person in a family of entrepreneurs to take a salaried job before starting Cap Connect at 27 with his first boss. 02Southeast Asia is six or seven countries 5:20 He breaks the region down before discussing it — about 700 million people, Singapore the 5-6 million-person financial launchpad, Indonesia the 300-million giant spread over thousands of islands, Vietnam 80 to 90 million — and argues it behaves like Europe, not like India's culturally diverse but single 1.4 billion. 03An X for Indonesia, three years late 7:38 Indonesia ran India's sequence on a three-to-four-year delay — Tokopedia as the Flipkart of Indonesia, then the fintech and lending wave — so the seed-stage Indonesian founder in front of him now pitches an X for Indonesia where X is an Indian company already at Series B or C. 04One in seven founders is Indian 10:11 Three channels carry the influence — a larger and more digitally mature home market, shared pools of capital such as Lightspeed's India team investing on both sides, and migration, with one in seven Southeast Asian founders Indian and many of them ex-Flipkart or ex-Snapdeal — while Meesho's Indonesian failure and Pine Labs' Malaysian run show the corporate traffic is already two-way. 05The Jakarta 25-year-old 13:10 A 25-year-old in Jakarta consumes the same content and behaves much like one in Mumbai, so Indian startups that learned to serve the first 25 to 50 million premium consumers arrive in Indonesia several iterations ahead. 06Nickel, EVs and a thousand carmakers 14:40 Inbound investment lands too — VinFast's billion-dollar Indian manufacturing plant, Gojek's Bangalore engineers — while nickel, batteries and recycling open a commodity-to-EV value chain India could own, on the understanding that crowded sectors always thin out the way a thousand American automobile companies became four or five. 07The fund's rule, and why agri travels 18:50 Breathe backs an Indian company only when the model is applicable to Southeast Asia, and agriculture is the clearest example — more output from less input, a problem set specific to developing countries that a US startup simply cannot work on, in a country that eats roughly 95% of the rice and wheat it grows. 08Edtech's overpromise and the herd 20:50 K-12 edtech overpromised on how completely online would substitute for offline, the promise collapsed when lockdowns ended and parents wanted children back in school, and the fact that sophisticated institutions funded it is exactly the point — herd mentality does not spare big names, and hybrid models are what survived. 09Force-fitted fintech, and who survived 22:53 Not all of fintech is in trouble: buy-now-pay-later was a force fit that promoted buying things people cannot afford, while lenders running good unit economics from day one came through the reset of business fundamentals intact. 10Saying not yet: the advisory lesson 24:30 The mistake he owns is being overzealous early — taking founders to market before their business models were ready — and the correction is to soft-sound a few investors or acquirers first and relay the honest verdict, including 'run this as a standalone business and don't expect funding', because at seed you are backing a founder who is creative, flexible and persistent, not a model. 11Gen AI is everything, but build Bharat GPT 27:00 He refuses the 'another spoke in the wheel' framing — generative AI is everything, though the US stays the innovation hub — which makes localised models the Indian opportunity, built with focus and capital and noise-blockers, because a dollar spent on a copy-paste idea is a dollar taken from one that could last. 12What the HNIs know, and what micro means 30:20 The LPs are operators who read world events accurately for their own industries and rely on the fund only for the second and third layers of technology — and the fund is deliberately small, four partners rather than forty employees, writing $100K to $500K cheques averaging $300-350K at seed and pre-Series A. 13Debt, dilution and the working-capital hole 34:05 Smaller Indian exporters and retailers have confirmed orders and invoices and still get documented to death by large banks, so working-capital debt is the gap nobody has filled, while debt to protect against an aggressive valuation's dilution is fine only with visibility on repayment — equity you never return, debt you must. 14Nobody wants twelve SaaS systems 36:55 After crediting Zoho and Freshworks for Indian SaaS's reputation, he argues the category has verticalised too far — buyers want four or five consolidated systems covering 80-90% of usage, enterprises stay with Microsoft because procurement needs a defensible checkbox, and in Southeast Asia digitisation is shallow enough that ERP and bookkeeping get the first budget and everything else is luxury. 15Forty elections and a bullish Indonesia 41:35 Indonesia's commodities — palm oil, nickel — plus improving talent make him bullish for a decade even as tech funding stays nowhere near 2020-21 levels, and with India, Indonesia and 40 countries in all going to the polls that year, he argues fundamentals are already set and the votes only decide the velocity. 16Never target a deal count 44:35 Targeting a number of deals makes you do stupid things at his fund size, the smooth and slow path is eventually the fast one — and he signs off recommending Matthew McConaughey's Greenlights, a book about reading green lights in situations that look like anything but.

Takeaways

Ideas to carry out of this hour

Southeast Asia is running India's playbook, three years late

Indonesia's startup history rhymes with India's on a three-to-four-year delay — the big consumer e-commerce companies first, Tokopedia reaching unicorn valuation years after Flipkart, then fintech and lending, then edtech, healthtech and SaaS. The consequence for founders is concrete: the seed or Series A Indonesian founder Bhutani meets pitches an X for Indonesia where X is an Indian company already at Series B or C, and he counts at least five Indonesian startups competing to become the OfBusiness of Indonesia. India is the leader here not because it is bigger but because it is further along the digitisation curve on the same problems.

▶ 8:09 ▶ 8:38 ▶ 9:40

The strongest export is people, not capital

Three channels carry Indian influence into the region: a larger and more mature home market, shared pools of capital — Lightspeed's India team invests in Southeast Asia out of the same fund and carries its Indian learnings across — and migration. His headline stat, from the year before taping, is that one in seven founders in Southeast Asia is Indian, many of them ex-Flipkart and ex-Snapdeal operators now building in Jakarta, Hanoi and Singapore. The playbook does not have to be licensed; it walks.

▶ 10:28 ▶ 10:45 ▶ 11:17

The corridor is two-way, and about to get five times busier

Indian companies going out have had mixed results — Meesho went to Indonesia and could not make it work, while Pine Labs did a decent job in Malaysia and Lenskart is running in the region. Coming the other way, VinFast is putting a billion dollars into an Indian manufacturing facility, Gojek has long had engineering in Bangalore, and Singaporean companies keep Indian offices to serve demand or build for the world. Bhutani reads today's activity as experiments and expects the volume to increase 5x in the next five years.

▶ 12:18 ▶ 12:48 ▶ 14:07

Back an Indian company only if the learning travels

Breathe is not mandated to invest cross-border, but it will back an Indian company when the model is applicable to Southeast Asia — and the sector where that transfer is most obvious is agriculture. Indian entrepreneurs have more years of experience getting more output from less input, sustainably, and those are developing-country problems a US startup cannot credibly work on. The domestic prize is separate and large: he notes India consumes roughly 95% of the rice and wheat it grows, with most horticulture produce never exported, so the supply chain still has enormous organising left to do.

▶ 19:04 ▶ 19:37 ▶ 20:11

The bust was a reset of fundamentals, not a verdict on the sector

Edtech's collapse came from an overpromise about how completely online would replace offline in K-12, and it survived contact with reality only as hybrid models — but he stresses the backers were not amateurs, which makes it a herd-mentality failure rather than a novice one. Fintech splits the same way: buy-now-pay-later was a force fit that promoted buying what people cannot afford, while lenders running good unit economics from day one came through the same window intact. The problems both sectors addressed still exist; the business models around them are what got repriced.

▶ 21:16 ▶ 21:47 ▶ 23:41

The banker's real product is telling a founder 'not yet'

His stated mistake in the advisory business was being overzealous — taking founders to market before their business models were ready. The corrected process is to soft-sound a handful of potential investors or acquirers, then relay the answer honestly, whether that is 'launch', 'come back in a bit', or 'run this as a standalone business and do not expect funding'. On the investing side the same honesty runs forward: at seed the model will probably pivot between rounds, so what he is underwriting is a founder who is creative, flexible and persistent — with older founders more resilient because they have seen cycles, and younger ones more flexible.

▶ 24:45 ▶ 25:17 ▶ 26:03

Vertical SaaS has been verticalised too far

Zoho and Freshworks made Indian SaaS credible, but Bhutani argues the category has since created so many verticals that buyers are drowning: no SME or enterprise wants 10 or 12 systems, they want four or five consolidated ones covering 80-90% of usage, and too many startups build for rare use cases touched once a month instead of the convenience case. Enterprises stay with the established players because procurement needs a defensible checkbox — if Microsoft fails, it is not the procurement officer's fault. In Southeast Asia the digitisation is shallower still: horizontal SaaS does the job, ERP and bookkeeping get the first budget, and anything beyond that is a luxury most SMEs cannot afford.

▶ 37:55 ▶ 39:00 ▶ 41:05

A deal target makes you do stupid things

Breathe is a micro VC by construction — four partners rather than a forty-person institution, $100K to $500K cheques averaging around $300-350K, seed and pre-Series A, with occasional participation in bridge rounds only when the pull is strong. That size is exactly why he refuses to set an annual deal count: larger funds can promise thirty, but a target at his scale distorts judgement. His formulation is that they do not mind the smooth and slow path, because eventually that is the fast path.

▶ 33:35 ▶ 44:36 ▶ 44:54

The numbers, drawn

What the episode measures

Every figure below was said on air — timestamps included, caveats kept.

Conversation share

portion of the hour spent on each theme

Venture capital24%

India macro20%

SaaS & enterprise13%

Fundraising11%

Founder journey10%

Credit & lending8%

Computed from the chapter map of this episode.

Southeast Asia, as he sizes it

million people

Populations exactly as stated in conversation — Singapore '5 to 6 million' (upper bound shown), Vietnam '80, 90 million' (upper bound), Indonesia '300 million', the region 'about 700 million across six or seven countries', against India's 1.4 billion as his contrast.▶ 6:04

What a micro VC actually writes

$ thousand per cheque

As stated on air: a $100K to $500K range at seed and pre-Series A, 'average is about 300, 350' — plotted here at 325. Occasional bridge-round participation in mature companies sits outside this band.▶ 33:35

Worth keeping

Lines that stay

Today I'm sitting with a seed or a Series A Indonesian founder and they're like, we're building an X for Indonesia — and that X is usually an Indian company which is at a Series B or a Series C.

— Shauraya Bhutani ▶ 9:40

I don't know if this is a surprising fact — it's not to me. One in seven founders in Southeast Asia is Indian. At least, that was the stat last year.

— Shauraya Bhutani ▶ 11:05

A dollar gone to a copy-paste idea which will die out in five years is a dollar taken away from an idea which could have had sustainable impact.

— Shauraya Bhutani ▶ 29:40

Checking a box in Microsoft and then Microsoft failing — the procurement officer would be like, it's not my fault, it's Microsoft. Versus if you take a startup on, how do you justify that?

— Shauraya Bhutani ▶ 39:00

We should never target the number of deals, because it makes you do stupid things. We don't mind taking the smooth and slow path — eventually that is the fast path.

— Shauraya Bhutani ▶ 44:41

Clips that travel

Short on time? Start here

Indian founders eyeing Jakarta, Hanoi or Manila

An X for Indonesia — and X is Indian

The core thesis in one stretch: the three-to-four-year lag, the OfBusiness clones, and the three channels — market, capital, migration — that carry it.

7:38 → 13:10 · 6 min ▶ Watch clip

Operators planning a Southeast Asia entry

The Jakarta 25-year-old and the billion-dollar plant

Consumer parity across the corridor, then the inbound side — VinFast's Indian factory, Gojek's Bangalore engineers, and the nickel-to-EV value chain.

13:10 → 17:15 · 4 min ▶ Watch clip

Founders rebuilding a model after the funding reset

Edtech overpromised, fintech force-fit

Why sophisticated investors still followed the herd, and why day-one unit economics is what separated the survivors from the buy-now-pay-later wreckage.

20:50 → 24:30 · 4 min ▶ Watch clip

Operators weighing working-capital debt against dilution

Debt, dilution and the working-capital hole

Confirmed orders, invoices, and banks that document you to death — plus the one honest rule: equity you never return, debt you must.

34:05 → 36:55 · 3 min ▶ Watch clip

SaaS builders deciding how vertical to go

Nobody wants twelve SaaS systems

The consolidation argument, the procurement checkbox that keeps Microsoft in place, and why Southeast Asian SMEs buy ERP before anything else.

36:55 → 41:35 · 5 min ▶ Watch clip

Glossary

The jargon, unpacked

Micro VC

A fund small enough to be run by a handful of partners rather than a forty-person institution — Breathe writes $100K to $500K cheques at seed and pre-Series A.

LP (limited partner)

The investor whose money a fund deploys; Breathe's are largely HNIs and NRIs running traditional businesses, who understand the first layer of technology and rely on the fund for the second and third.

Working-capital debt

Short-term borrowing against confirmed orders and invoices to bridge the gap between paying suppliers and getting paid — the gap he says India's lending players still have not captured.

Revenue-based financing

Repayment as a share of monthly revenue rather than on a fixed schedule — one route founders use to raise money without diluting equity.

Vertical vs horizontal SaaS

Software built for one industry's specific workflow versus software any business can use; he argues India has verticalised too far for buyers who want four or five consolidated systems.

Tokopedia

Indonesia's marketplace giant — the Flipkart of Indonesia, which reached unicorn valuation three to four years after Flipkart did.

OfBusiness

The Indian B2B procurement and financing platform whose model at least five Indonesian seed and Series A startups are now trying to reproduce locally.

Bharat GPT

Shorthand used in the conversation for a home-built, India-specific large language model — his example of the localised AI that outsiders cannot build.

Connections

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EP 120 · Capital

Full transcript

The whole conversation, searchable

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