Tech billionaire and VC Tej Kohli says there are two specific qualities he looks for in every firm he invests in — scalability and the potential to change the world.
Kohli made the bulk of his fortune through e-commerce, building a portfolio of white-label tech and payment processing providers in the 1990s. He now invests in tech firms through his VC firm, Kohli Ventures.
Speaking to Business Insider about how startups can persuade him to part with his cash, Kohli said: “The company has to be scalable, and it has to be beneficial to other human beings.”
Elaborating on his view, Kohli cited Detraxi, a US-based biotech startup developing artificial blood, which Kohli says his VC firm has backed as part of a $100 million funding commitment.
“[A company can] look so exciting, but at the same time, you have to look at the people who are behind it. You have to look at how scalable it is. If Detraxi works anything close to what we say, it’s life-changing for the whole world. It’s the greatest invention since the light bulb,” he says.
He also cited Rewired, a robotics-focused venture capital firm which Kohli invested $100 million dollars into last June.
“Let’s look at Rewired’s investments,” said Kohli. “Rewired has invested in a company, Open Bionics, that makes prosthetic arms. We have invested in many companies which all have some kind of an application which can scale up hugely, indefinitely.
“At this stage of my life, I look at how companies can better other people’s lives. That doesn’t have to be exclusive from profitability. Both things can work together at the same time. I try to look for both those elements to the extent that it is possible.”
Kohli hunts for the “six Ds of exponential growth”
Kohli adheres to the so-called “six Ds of exponential growth” when weighing up at possible investments. First conceived by fellow entrepreneurs Peter Diamandis and Steven Kotler, the ‘six Ds’ is a business theory which holds that tech firms that end up growing exponentially share six key attributes.
Kohli explains: “Every new business has to be digitalised. It has to be disruptive. It has to be demonetized — when Google and Facebook were made, they never thought about how much money they were going to make. They just wanted eyeballs, and they got them. Now, of course, they make more money than anyone.
“They have to be dematerialised – you have phones with all these apps. They are deceptive with their growth [as exponential growth is deceptively slow at first]. And, of course, they have to be democratized.”
Another investment Kohli views as meeting these criteria comes from the burgeoning e-sports industry. In November 2018, Kohli invested $22 million (€22 million) in Team Vitality, a Paris-based e-sports team.
In June, Team Vitality won the world championship for the hit video game Rocket League – a game which had an estimated 50 million players worldwide as of last year.
According to the market research firm, eMarketer, the global audience for e-sports in 2018 was roughly 400 million.
Kohli said: “I would suggest that it’ll be at one billion very soon, and as I’ve said in another interview, that’s good enough for me. My job is, at this stage, is to [establish] what I see as the most advanced technologies and how they affect people. Coming from the e-commerce era, in the 1990s and so on, it was all about eyeballs. E-sports is also about eyeballs.”