Investing Where Purpose Meets Profit: Ramanan Raghavendran on the Future of AI and Sustainability
Introduction
I am thrilled to introduce a very special guest, Ramanan Raghavendran, Managing Partner at Amasia, a global venture capital firm he co-founded in 2013. Amasia invests in software companies focused on climate and sustainability. Ramanan has an impressive background with over 30 years in venture capital and growth equity, holding leadership roles at firms like Insight Partners and General Atlantic. He is also deeply involved in nonprofit causes, serving as Chair of the Board of Trustees at the University of Pennsylvania and Goodwill San Francisco Bay.
Investing at the Intersection of Purpose and Profit
Jordi: I love the sentence "we invest at the intersection of purpose and profit." Could you tell us what that means at Amasia?
Ramanan: It's a good question. While we are measured on economic returns as a single bottom line investor, there are many ways to achieve these returns. At Amasia, we choose to invest in companies that fulfill a larger purpose beyond just building a successful business. We focus on companies that contribute to climate and sustainability. For example, we have invested in Clarity, which measures air quality globally, and TreeDots, which reduces food waste in Southeast Asia. These companies exemplify how we invest at this intersection of purpose and profit.
A Day in the Life of a Managing Partner
Jordi: How is a regular day in the life of Ramanan? What do you do as Managing Partner at Amasia?
Ramanan: My day is divided into three main areas: interacting with portfolio companies, evaluating new investments, and working with my team. I spend about 50% of my time on portfolio work, offering advice on growth or navigating challenges. Around 25% of my time is spent evaluating new deals, and the remaining 25% is focused on team interactions. I also dedicate time to my nonprofit roles, such as chairing the board at the University of Pennsylvania. Despite a busy schedule, there are enough hours in the day to manage all these responsibilities.
AI's Impact on the Tech Industry
Jordi: Since the explosion of AI with the Transformer models, how do you see your portfolio companies adapting to this new paradigm?
Ramanan: Our experience is mixed. Some companies like Dialpad, which went all-in on AI years ago, are benefiting from the increased focus on AI. For others in our climate and sustainability thesis, AI is more of an applied technology rather than a transformational one. It's crucial for entrepreneurs to focus on how AI can improve their product or customer experience rather than getting caught up in the hype.
Selecting AI-Driven Companies
Jordi: With so many companies now claiming to use AI, how do you decide which ones deserve your attention?
Ramanan: We have experienced AI fatigue, as many companies now present themselves as AI-driven. However, we focus on whether a company is solving a difficult problem effectively and whether it can scale. We are selective, making only two or three investments a year, and we prioritize companies where we can add value beyond just their AI capabilities.
Examples of AI in Amasia's Portfolio
Jordi: Could you share some examples of how AI has been applied in Amasia's portfolio companies?
Ramanan: The best example is Dialpad, which has integrated AI deeply into its products, including PBX in the cloud and meeting summarization features. They've built a proprietary database of millions of minutes, which gives them a significant advantage in the AI space. Dialpad's success is a testament to the value of long-term investment in AI.
The Future of AI
Jordi: What do you think AI will bring us in the future?
Ramanan: AI will likely follow a similar path to other technologies. While there are concerns about regulation and potential misuse, I believe AI will primarily serve as a tool to enhance human capabilities. It will have a transformational impact across various fields, particularly in academia. However, we must remember that we're only a year and a half into the current AI wave, and much remains to be seen.
Contacting Ramanan
Jordi: What would be the best way for people to contact you?
Ramanan: The best way is through you, Jordi. I receive a lot of inbound messages and can't respond to all of them, so I ask that you be the intermediary.