“We want to create a fund that truly backs the best companies” – An interview with Rashmi Gopinath, General Partner at B Capital Group

Interviews, Magazine | Mon 18 Oct | Author – Business & Finance

Rashmi Gopinath joined B Capital in January 2020. Since that time, she has primarily led the group’s enterprise software investments on a global scale. She recently spoke to David Monaghan about what appeals to her when looking for an investment, what the future of technology holds, and how companies can plan for expansion.

Note: This piece was originally published in Business & Finance magazine, vol. 58, no. 3, available to read, with compliments, here.

Rashmi Gopinath joined B Capital, a multi-stage global investment firm, in January 2020, primarily to lead the group’s enterprise software investments globally. This encompasses investments across cloud cyber, DevOps, AI and SaaS. 

Prior to B Capital, Gopinath was at Microsoft Ventures and Intel Capital. “I have been on the investing side since 2011, and spent a few years on the operating side as well, both with large companies like Oracle and GE, as well as start-ups,” she says.

Gopinath attained an MBA from Northwestern University, and specialised in Finance, Entrepreneurship, Marketing, and Management & Strategy. She graduated with honours in the top 10% of her class. 

The path into Venture Capital came post-MBA for Gopinath. “The financial investing and good marketing experience that I had gathered during the MBA and post-MBA, that’s how I ended up at B Capital a year and a half back,” she says. With a Bachelors in Electrical Engineering, she was able to leverage her technical background in the spaces that she invests in, which is primarily in the tech space. 

B Capital

B Capital Group began life in late-2015, and was founded by Facebook co-founder Eduardo Saverin alongside Raj Ganguly, formerly of Bain Capital. At that point, it was dual-headquartered between the US and Singapore. Since then, the company has established a presence in multiple regions, including China, India, Vietnam and Indonesia. 

The fund is global in nature and has portfolio companies and investments across North America, Latin America, Europe, Israel and Asia. 

“We’re currently at two-and-a-half to three-billion assets under management,” says Gopinath. “We look to primarily invest in enterprise software companies, and I would say that the key value that we add to the table is our partnership with the Boston Consulting Group [BCG]. 

“We leverage that relationship with BCG to get our companies access to the Forbes Global 2000, based on the client relationships that they have, as well as leverage the thought leadership and the strategic advice that BCG can bring to multiple areas that both companies can benefit from. That’s one of the unique differentiations for our fund as well.” 

Many of B Capital’s portfolio companies are category leaders in different sectors they have invested in: “We’re investors in a number of companies out of Asia, like Byju’s and DailyHunt and others which are definitely winners in their category. Recently, we made a number of investments across healthcare software, fintech, crypto, so it has definitely been a pretty strong year even during COVID and before that. It has been a good trajectory for us.”

Technology Investments

On what appeals to her in tech, Gopinath says: “Enterprise software is fairly good. There are a few different areas that we are quite excited about.”

She continues: “One of the areas is around the use of AI and automation and helping people become more productive and for enterprises to leverage the data troughs that they have to get access to the insights in a more meaningful way. 

“DataRobots is a great example, Labelbox is another great example, where they help create automated labelling for training data and help companies accelerate their time-to-value. We’re investors in a company called Clary, which is in the revenue operations space, and helps enterprises figure out how to predict their topline revenues in a more meaningful way by leveraging AI. So, there’s a number of good examples in the AI and automation space.”

Gopinath also keeps a close eye on the cybersecurity space, which has become front and centre of the tech world in the recent past, “especially given some of the tailwinds we’re seeing with COVID,” she adds. Indeed, in May 2021 hackers caused widespread disruption to the HSE, Ireland’s healthcare system. 

“Cybersecurity has definitely seen a lot of significant adoption over the past 18-24 months and we believe that it is here to stay.”

The Conti ransomware group, who were responsible for the attack, demanded $20m (€17m) to restore services or else, they threatened, the data they had gathered would be published or sold.

Gopinath continues: “Remote working is definitely here to stay, and enterprises no longer have the benefit of everyone being behind a company firewall. The internet is now the new enterprise domain, and so how do you protect applications, and how do you ensure data privacy across different geographies and different applications in a more meaningful way?

“And with cloud becoming more ubiquitous as a deployment framework, how do you ensure that the security in the cloud is the same as what you would get in your enterprise data centres? 

“Cybersecurity has definitely seen a lot of significant adoption over the past 18-24 months and we believe that it is here to stay. One of the companies in our portfolio helps Fortune 500 companies protect their most critical assets – their applications – from getting breached or hacked.”

The third area Gopinath mentions is ‘developer productivity.’ She elaborates: “We began seeing that, with the adoption of cloud technologies, with applications becoming more distributed, with data becoming more distributed, combining the developer and the opps framework becomes quite important for enterprises to be successful with their application deployment strategies. 

“And so, there’s a number of tools and capabilities in that DevOps framework that become important in helping enterprises to scale their application development cycles and produce applications in a more secure, consistent way. There’s a number of sub sectors in the broader devops framework that we’re excited about.”

Growth and Expansion

Gopinath’s focus for B Capital is primarily on the global stage. At the point where she typically looks at investing, companies have been able to demonstrate that the enterprise selling motion is working. “What I would be looking for investments is, number one, the team,” she says. “We definitely want to make sure that we are backing the best teams that are well-poised to continue to take the company to great scaling heights.”

She continues: “The second would be growth metrics. Some of the typical growth metrics we look for are all the way from annual growth rates to net retention numbers. What we’re typically looking for is companies, especially as they’re hitting stages in their cycle, is to start getting closer to where their benchmarks are.

“The third would be on the product and competitive differentiation. Understanding who they compete with and what the model they have does to compete on a global scale. The fourth is around the market size. We definitely want to fund companies that are tackling some of the biggest problems and have massive market opportunities.”

“We definitely want to make sure that we are backing the best teams that are well-poised to continue to take the company to great scaling heights.”

Earlier this year, the Intergovernmental Panel on Climate Change (IPCC) published the first part of a global assessment of climate science. It found unequivocally that human activity is creating damaging changes to land, atmosphere and oceans that are unprecedented in modern times. As such, businesses around the world are putting sustainability front and centre of their mission.

Sustainability is also a deciding factor for Gopinath when she looks at companies to invest in: “We take sustainability seriously and look for leading indicators towards long term sustainability adherence for our portfolio companies. We also have ESG guidelines at the fund level.”

On the subject of growth expansion, Gopinath notes that it comes through multiple factors: “One is through expanding the platform or product capabilities in adjacent spaces. So, if your product serves a certain sector, how do you organically build additional capabilities in the product, or consider inorganic growth means that will give the company the additional focus areas to go after so as to expand the product footprint?

“The second would be to consider international expansion, and that would be something we’ve seen in a number of our companies where, if they start off in a certain geography in North America or Asia or in Europe, how do they then move into new markets and new geographies where they can continue to grow their presence? Well, you can leverage channel partnerships, you can leverage your old sales team by starting to build your presence in those markets. 

“The third I would say is, and it’s a more organic way, is you’ve sold into 50 customers, now you need to sell into 100, so how do you organically grow your sales team and how do you structure a market engine that has the demand gen that feeds into an inside sales team, that then grows into a field sales team? 

“And at the series C or B stage, I would say that most of the market teams are still in early developmental phases, and as they get into the Ds and beyond, it starts to look more mature.”

For Gopinath, and for the team at B Capital more broadly, there are strong leadership qualities that they look for in the management team of start-up portfolio companies. “Number one is the ability to attract and retain top talent,” says Gopinath. “How are you building the brand of the company and how do you create a vision that attracts the top talent that you want in the company?”

She continues: “For example, one of our healthcare portfolio companies has this big bold vision of making healthcare accessible to everyone and making better care outcomes. People who are truly energised by the vision and creating those significant movements in healthcare would, as a result, want to know more and want to learn more about the company.”

“We strongly believe that diversity leads to the best outcomes, and so how do you build a team that has diverse backgrounds, diversity and ethnicity experience?”

Promoting diversity, equality and inclusion is also a major factor Gopinath looks for in leadership: “We look for, in our leaders, the ability to build up diverse teams. We strongly believe that diversity leads to the best outcomes, and so how do you build a team that has diverse backgrounds, diversity and ethnicity experience? Building a team that can help you get the best perspectives around the table?”

“The final thing is about truly building a transparent culture that employees are quite excited about being a part of, and that even as investors, a company that we want to be associated with. That’s something we help with through our own platform offerings. We have a talent team within our platform that can help our portfolio companies with org assessments and org effectiveness and creating high-performing team structures.”

In its short history, B Capital has established a reputation for finding visionaries and nurturing transformative startups. The group proudly invests across multiple stages, providing support, expertise and guidance to its portfolio companies, helping them to scale across borders. How does Gopinath envision the future of the company?

“Looking out into the future, we want to create a fund that truly backs the best companies in different categories, and as a result of that, be a small partner as part of a bigger transformation,” she says.

“Many of our portfolio companies have those bold visions of truly transforming the world, and if we have the ability to identify and invest in those companies, and as a result, be a part of that journey, I think that’s extremely rewarding and satisfying. We definitely want to continue to back the winners and back the companies that are truly doing transformational work.”

For more on Rashmi, you can see her speak to Ryan Browne, CNBC, in a fireside at DTS 2021 on the theme: The Investor Perspective: Emerging Enterprise Software & Crypto Trends For 2021 & Onwards

Note: This piece was originally published in Business & Finance magazine, vol. 58, no. 3, available to read, with compliments, here.