Investment Shift Supported: Orios Ventures Transforming Early-Stage Funding Landscape
In the dynamic world of Indian venture capital, Orios Venture Partners stands out as a pioneer in making strategic investments during a startup's transitional phase—when they are pivoting from a struggling business model to a potentially more scalable and successful one.
Rehan Yar Khan, Managing Partner at Orios, compares this approach to the agile Mighty Mouse, stating that while the fund may not park a huge capital, it promises high-multiple returns. Khan encourages founders to build in India, praising the country's startup ecosystem as one of the best globally, with great IPO markets, deep venture capital, and a massive consumer and B2B market.
Orios' strategy involves entering companies after a pivot, when the product is more attuned to the market and valuation resets downward, allowing Orios to buy into three-to-four-year-old startups at the price of an early-stage company. This approach is not without its risks, but Khan believes that markets view pivots as failures, while Orios sees them as learnings where the alpha lies.
One standout example of Orios' pivot thesis is Country Delight, a startup that pivoted from a dairy business to a D2C milk brand and delivered a 100x return on the first cheque. Other notable companies that made critical pivots in their journeys include Amazon, PayPal, and Instagram.
Reliance, a large Indian business, originally started as Vimal and pivoted to the polyester business and then petrochemicals. Orios is looking at space-tech firms from the 2021 wave, fintech players that have matured post-regulatory changes, and broader applications of AI rather than foundational models.
The rationale behind this approach includes early-stage engagement during pivot points, bridging funding gaps, and a contrarian mindset. By deliberately taking positions counter to prevailing market sentiments, investors capture disproportionately high returns when those bets pay off.
This strategy aligns with broader principles of contrarian investing in India, seen not only in venture capital but also in equities, where buying temporarily unloved assets or companies can generate alpha over the long term.
Orios keeps its fund size deliberately lean, with its fourth fund recently closed and total AUM hovering around ₹2,000 crore. Rehan Yar Khan, Managing Partner at Orios, advocates for disciplined contrarian bets on pivoting startups in Indian venture capital, a strategy that defies conventional wisdom but delivers extraordinary returns.
Rehan believes Orios' model resonates most with family offices that are seeking high-alpha, high-conviction bets. He expresses hope in the Indian startup ecosystem, stating that there has never been a better time to build. This approach isn't just about numbers, it's also about investing in the grit of founders who take the painstaking call to pivot their ventures.
In summary, disciplined contrarian bets on pivoting startups fuel outsized returns in Indian venture capital by identifying and funding companies at pivotal transition points, turning moments of uncertainty into significant growth and value creation opportunities.
- Rehan Yar Khan, Managing Partner at Orios, suggests that family offices seeking high-alpha, high-conviction bets might find the firm's strategy of investing in pivoting startups appealing, as this approach often delivers outsized returns in Indian venture capital.
- Orios Venture Partners, a pioneer in Indian venture capital, focuses on making strategic investments during a startup's transitional phase, particularly in areas like technology, fintech, and space-tech, seeings pivots not as failures but as opportunities for learning and potential success.
