Insights and Updates from Lightbox

Hi and welcome to the January 2024 edition of Unbox, a monthly newsletter curated by the Lightbox team. Consider this newsletter your rendezvous with the Indian startup ecosystem written from Lightbox’s vantage point. If you missed the past newsletters, you can catch up here. If this was forwarded to you, consider subscribing to get this straight to your inbox. Now, let’s dive in!

Above the Fold

Looking Back. Looking Forward

A month in, 2024 has already been more than eventful for India’s startup and venture capital ecosystem. The downturn continues to rage on and there is still a fair bit of pain to be endured by the ecosystem in the coming months. But, there is plenty of reason for optimism as well. At Lightbox, we stepped into the new year armed with deep learnings from the past year that will prove invaluable in navigating the next 12-18 months.

Much of 2023 has been about building value in the portfolio. Out of our active portfolio of 14 companies, eight saw an expansion in gross margins, while nine companies significantly reduced cash burn and built efficiencies into their operations. Overall, the portfolio has maintained its growth momentum on the back of strong and differentiated business models.

Our priority over the next 12-18 months is to steer the portfolio towards profitability and we are on course to achieving that goal and delivering the returns promised to our investors. In terms of strategy, we remain true to our core of being early stage and extremely concentrated. A concentrated portfolio affords us the advantage of being able to engage deeply with each of our businesses and achieve favourable outcomes for our investors.

Four key learnings from 2023 

1. The highest upside will be commanded by businesses that find profitability sooner than later, whether they choose to go public or down the mergers and acquisitions path. With the free money era now behind us, businesses have re-focused their resources to demonstrate product-market fit and deliver on real business metrics. We are seeing much of that already playing out within our portfolio.

2. Product-market fit is constantly evolving and needs to be reassessed and factored into the business model at every juncture. We have seen many of of our portfolio companies tweak their business models to align with changing market dynamics and the outcomes have been extremely positive.

3. The pursuit of growth for the sake of growth is not remunerative in the long term. With the flight of free money, companies have learned this lesson the hard way during this downturn.

4. The availability of debt has been a lifeline for many businesses but early stage businesses need to rethink their strategies on how to better use debt.

India is the future now

The bedrock of our investment philosophy has been our abiding faith in the unfolding potential of the Indian economy. The compelling macro-economic factors at play embolden us to believe that our investments in real-world and differentiated businesses where unit economics are well understood will deliver significant value accretion over the next few years.

Lightbox’s Sandeep Murthy breaks down our strategic priorities and outlook for 2024 here.

Watch: Highlights from Lightbox’s Annual Investor Day 2023.

Portfolio Spotlight

Cashflow is Reality

Our portfolio is an eclectic mix of businesses that operate in diverse segments across the broader consumption market. What unifies them is their singular focus on organising vast fragmented markets with differentiated business models, underpinned by technology.

Bombay Shirt Company combines Mumbai’s rich tailoring heritage with technology to deliver made-to-order apparel at scale. Waycool harnesses technology to reduce wastage in the agri-food supply chain. Cityflo is taking cars off the road with its efficient and reliable daily commute bus service. Zeno Health is organising the pharmacy market to make high-quality medicines affordable and accessible for all. And, Furlenco is bringing high-quality furniture to the consumer’s doorstep with its omnichannel, rent-and-buy platform.

We bring you the stories of how these five portfolio companies are steadily building their path to profitability. Watch the video series here.


The Urgent Need for Upskilling India

India's golden demographic dividend is no secret. With a staggering 83% of the population in the working age, the country holds the key to unlocking a future of growth and prosperity. But here's the rub: the dividend will not pay off automatically. Without the right skills, it is in danger of morphing into a demographic debt, leaving the country saddled with underemployment and unfulfilled economic potential. Upskilling, at scale, is the need of the hour.

The flaws in India's education system are well documented. An estimated 55% of the country’s graduates are not employable. The anecdotal instance of the engineer who found driving a cab more remunerative than his corporate gig points to fundamental problems in our pedagogy. There is an opportunity for technology-enabled education to solve the problem by equipping people with job-ready skills through targeted training.

While India possesses rich resources and diverse industries, its biggest and most valuable export is arguably its people. A study released during the Davos Agenda Summit 2021 said that accelerated investment in upskilling and reskilling of workers could create 5.3 million (net) new jobs by 2030, and help develop more inclusive and sustainable economies worldwide. India has already seen the benefits of targeted training in the IT-ITES services sector. The sector, led by players such as Infosys, TCS, Wipro, has consistently invested in training and skilling programmers for its vast workforce. In FY2023, India’s IT-ITES service exports were at $194 billion, surpassing Saudi Arabia’s crude oil exports of $161 billion.

There are opportunities to replicate the IT-ITES success in several other sectors. We identified two – healthcare and manufacturing.


Despite shortage within, India is the biggest source of nurses in the world after the Philippines. Factors such as remuneration, dignity and recognition, especially in the developed Western economies are primary draws. If India were to invest in building the capacity of its healthcare workforce, it can meet its own needs and that of the world.

Shortages in the doctor-to-patient ratio and nurses are frequently discussed in the context of healthcare in India. What hasn't received as much attention is the significant demand and supply gap with respect to allied healthcare professionals – professionals who operate radiology machines, phlebotomists, psychologists, OT technicians, etc. There is an estimated 35 million shortage of allied healthcare professionals, presenting a vast opportunity for skilling graduates for the job market.

Virohan, an upstart in this space, is building a technology-enabled platform to educate and train young people to become future-ready healthcare professionals for diagnostics centers and hospitals.


Manufacturing is estimated to account for 21% of the GDP by 2031, compared to 15.6% now – and, in the process, double India’s export market share. For every 1% increase in the export-to-GDP ratio, India would need to create over 1.5 million additional jobs. While India's manufacturing sector has vast potential, the lack of skilled labor is a bottleneck. 

Roughly 80% of the workforce entering manufacturing has not received any formal training and often learn on the job. The consequences of an inadequately skilled workforce in manufacturing are clear: costly errors, prolonged downtime, and reduced competitiveness.

 Cusmat's innovative VR training addresses this challenge head-on, equipping workers with practical, hands-on experience without the risks of real-world machinery. This win-win solution empowers workers to upskill and boost their careers, while manufacturers benefit from reduced errors, improved efficiency, and fewer breakdowns.

The opportunities extend beyond healthcare and manufacturing. From construction to agriculture to hospitality, nearly every sector grapples with skill shortages and inefficient training practices. It is imperative to capitalize on the potential of India’s young demographic and equip it with the right skills. To achieve the $1 trillion export target, the country needs to invest in skill development, not just infrastructure.

At Lightbox, we are excited about upskilling as a space.

Authors: Harsh Shah and Akshat Jain

Hot Take 🔥

AI: Balancing Regulation and Innovation

Artificial Intelligence (AI) has proven to be pretty good at doing things most humans can’t even comprehend. While its all-round transformative impact has given rise to an unprecedented era of innovation and efficiency, the surge in enthusiasm is accompanied by a parallel concern about establishing effective controls and governance. 

Undoubtedly the AI space needs to be regulated. But the impact of regulation on innovation is always subject to debate, depending on who you ask. Governments find themselves in a  dilemma, as they seek to develop comprehensive regulatory frameworks to strike a balance between fostering innovation and addressing potential risks.

Traditional regulatory paradigms don’t work in the dynamic landscape presented by AI. Regulators have always struggled to keep pace with technology. More so with AI, which presents a unique set of challenges given its nature.

The Pacing Problem. Existing regulatory structures are slow to adapt to the pace at which technology evolves, and regulatory agencies are generally risk-averse. The policy cycle often takes anywhere between five and 20 years, whereas a unicorn startup can develop into a company with global reach in a matter of months.

Disruptive Business Models. Industry boundaries become blurred as innovative products and services hop regulatory sectors. The interconnected nature of business models makes it difficult to assign liability for consumer harm. For example, if a self-driving car crashes, who is liable – the software developer, automobile manufacturer, or the occupant?

The ‘Black Box’ Problem. Algorithms today make scores of strategic decisions, from what we should watch on OTT platforms to determining heart-attack risk. The rationale, source or basis for these decisions is unknown. Algorithms are closely held by the organisations that create them, or are so complex that even their creators can’t explain how they work. This is AI’s ‘black box’ — the inability to see what’s inside an algorithm. That’s likely to change, as some experts believe companies should make their algorithms public. In May 2018, the GDPR went into effect requiring companies to explain how algorithms using personal data of customers work and make decisions.

Read the complete article, penned by Lightbox’s Tanvi Ghate, here.

The Cafe Upstairs

Lightbox Espresso; Penn India Forum

In December, we launched Espresso, a platform designed to facilitate the exchange of learnings and experiences with stakeholders from the consumption economy. With Espresso, we decode India’s consumption economy via curated conversations with founders, investors, academicians, senior operating professionals and others navigating this space. Watch the January episode of Espresso here.

The Cafe Upstairs was also the venue for the Penn India Technology Forum 2024 in January. Now in its sixth edition, this was the second time Lightbox had the privilege of hosting the exclusive event. The conversation focused on AI and it's implications on healthcare and education. Fractal Analytics co-founder and group CEO Srikanth Velamakanni closed the evening with a keynote on the application of AI in the business world. More here.

In the News

Amaha’s new funding round

Amaha, a company Lightbox invested in back in 2021, raised Rs 50 crore in a new funding round. Amaha provides treatment and care for a range of mental health conditions such as anxiety, depression, bipolar disorder, ADHD, OCD, schizophrenia, and addictions. When we invested in Amaha, our thesis was that the need for a coordinated, technology and data-backed solution focused on mental health, with care at its foundation, would only grow. The new funding round validates that thesis. More here.

“The INR 50+ Crore infusion helps consolidate Amaha’s position as the leading mental healthcare provider in India and accelerates the company’s strategic expansion plans, as it continues to address the dynamic mental health challenges faced by individuals, families and organisations across the country.”

Amit Malik, founder and CEO, Amaha

Sandeep Murthy on the future of fashion startups

Lightbox’s Sandeep Murthy was invited by consumer-focused digital platform The Established to share his perspective on ‘The Rise of Venture Capital in Fashion Startups in India’ as part of a power panel at the recently concluded Ajio Luxe Weekend in Mumbai. Watch the session here.

I believe we’re going to see the emergence of brands because you just don’t have enough market share at the top, in any category, with any brand. Whether it’s fashion or beauty of jewellery, we have the opportunity to build these brands today.

Sandeep Murthy

The Golden Number


India’s stock market capitalisation touched $4.3 trillion in January, surpassing Hong Kong for the first time to rank as the fourth biggest equity market globally. India’s position as an alternative to China, supported by a stable political environment and consumption-driven economy are among the factors that contributed to the surge, Bloomberg said.

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