Thursday, 2023 October 5

‘We want to make Southeast Asia accessible to our startups’: Q&A with Tanul Mishra of Afthonia Lab

After spending more than three years at Paymate, a fintech company, and going through the grind of running a food delivery startup Eatelish for five years, Tanul Mishra decided to start an incubator to guide and shape idea-stage companies into becoming something bigger.

In May last year, she launched Afthonia Lab, an incubator that mentors entrepreneurs focused on building fintech services. Speaking to KrASIA, Mishra said while she was able to lean on a wide network when she was building Eatelish, there are many others who don’t have that kind of advantage. An incubator could change the fortunes of early-stage companies that are brimming with potential.

According to Mishra, as the India’s technology startup ecosystem expands, we will need more incubators. Currently, India has about 500 incubators, she said. On the other hand, China had 7,500 incubators in 2016 that fostered more than 223,000 businesses, Mishra pointed out, citing data from the Torch High Technology Industry Development Center, while the United States had over 1,500 incubators by 2017. While India has the third-largest startup ecosystem after these two countries, the gap is huge—and that’s where Afthonia Lab comes in.

In the last year, Afthonia Lab has worked with four early-stage startups, two of which are ready to strike out on their own after the incubator helped them find the right market fit. Now, Afthonia is looking to bring on board six more startups by 2021, and it has plans to veer into Southeast Asia as well.

The following interview was edited for brevity and clarity.

KrASIA (Kr): What was your key motivation behind starting an incubator?

Tanul Mishra (TM): While running Eatelish with my co-founder Shipra Bhansali, we figured that it took us longer to reach where we wanted, purely because we didn’t have a structured and supportive ecosystem to take us forward.

It’s never easy running a business, one worries a lot, has thousands of questions, and some are borderline existential questions. One needs to answer these before staring up and many a time, we have seen that young entrepreneurs don’t even ask the right questions in the first place.

That is why I thought of starting an incubator, basically a space where we can provide the necessary tools to founders to reach the next inflection point.

Tanul Mishra, CEO of Afthonia Lab. Courtesy of Afthonia Lab.

I didn’t want to start a generic incubator, because every business has certain domain knowledge that is specific to that space. We want to give that expertise to entrepreneurs so that the program is more attuned to their needs. Having worked with a fintech company and seeing the opportunity in this space, I decided to focus only on fintech companies.

As an incubator, I consciously wanted to focus on two aspects: One, I didn’t want to go into a batch-phased system. Every startup has an individual need. Running a batch or a cohort didn’t seem like the way to go for us. Secondly, we wanted to ensure our startups have access to global markets.

Kr: How do you decide which startups to work with?

TM: Our objective is to understand the vision of a startup. At the end of the day, our job as an incubator is to sharpen the vision of the founder or the founding team, and help them build a scale-able, sustainable, and a responsible startup.

Once a startup approaches us, my team and I have a call with the founder. We try to understand the founder and form an initial blueprint of what we think their strengths and weaknesses are, the markets they’re looking at, and what they can leverage. Are there any regulatory issues? Are they oversimplifying the solution, or are they complicating it? Do they really need funding? Can they do this without funding? What’s the fastest way to get them to the next inflection point without compromising on the liquidity or cash flow? We try to gauge the company and the founders on these issues.

After this, we get the startup to have a call with a local mentor for the India market and a mentor from outside the country who can guide them with a global play. We also set up a call between our tech mentors and their tech team. This is to learn about their solution and figure out if they’re missing anything, and if they need any tech mentorship.

Then, after the internal due diligence, we talk to the founding team about acquiring a tiny percentage of equity, and if everything goes well, then they’re part of Afthonia Lab.

Kr: What kind of changes do these startups go through once they graduate from Afthonia Lab?

TM: Once the onboarding is done, we share with them the blueprint that we created during the interview process. Among many other things, it outlines our expectations from the company and what we think about the startup and the founding team. It is necessary for the founders to understand what we have in mind for them and for us to have a basic agreement.

We have an open conversation with the founder, we tell them what we need, tell them what works for them, areas we think they need to work on, and potential growth path for the company.

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It’s not about changing the founder’s vision, it’s about refining it, which is usually in line with their thinking.

Each of them have one or multiple mentors assigned, depending on their domain. It’s a personalized program, where they have a one-on-one relationship with a mentor who walks with them through the whole journey.

Kr: Can you tell us about one or two of the startups that Afthonia Lab has worked with?

TM: One of the startups that we had was Ginger Root Code Factory. They came to us with just the concept, but we liked the founders and their idea. It’s a financial infrastructure company that wanted to start by focusing on payment processing. The first thing we did was, we connected them with a US mentor, because our sense was that while India is doing far better in the payment space, it’s also a little bit of a crowded market and their ability to do this internationally would be better.

The mentor in the US guided them through the product development stage. While they were in the concept stage, we helped them raise money through angel investors based in India as well as abroad. Currently, the mentor and the international investor are opening up business spaces for them in the US.


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They were not even looking at that market. Most startups do not have a global vision. I understand where they’re coming from. Breaking into an international market requires connections and credibility. Unless you have some credibility, no one is going to hand over their API to you, especially in the financial technology space. For a young startup, it’s very hard to get that credibility, which is where our mentors and advisors come into play.

We also opened the the US market for a blockchain-led fintech startup. There’s an insurtech firm which is working with them, and another fund is using their service in the US. In another four to five months, they won’t need us.

Kr: How many startups are you working with?

TM: We have about four startups right now. Heading into 2021, we’re actually looking at adding maybe another five or six startups, so in total we will have around ten companies by 2021.

Kr: At what stage are these startups when they approach you?

TM: One was at the concept stage, the other one was at the prototype phase. So it could be anywhere from the concept stage to early traction stage.

Kr: Fintech is quite evolved and growing fast in Southeast Asia. Do you plan to launch Afthonia Lab there?

TM: There is a lot of interesting work happening in Southeast Asia, so it is a natural progression path for us to take our startups to the region. While Singapore has a robust fintech ecosystem that is backed by the government, I think the less-talked-about market is Indonesia. They are building some really great products in the fintech space. Other than this, I would like to explore and see what’s happening in Malaysia. So, Singapore, Malaysia, and Indonesia are the three markets I am looking to explore this year.

We want to make Southeast Asia accessible to our startups, just like we have done with the US market. I’m sure there are companies that are looking at fintech solutions, which some of our startups would be able to provide. We are looking at plugging our startups into the corporate network of Southeast Asia.

Secondly, as we have made Indian startups accessible to angels based in the US, I want to explore that in the Southeast Asia market as well. Our understanding is that there are many angel investors who want to invest in early-stage startups in India, and we want to facilitate that.

Then, I also want to explore the idea of working with Southeast Asian fintech companies. I’m sure there are a lot of Southeast Asian startups that would be keen to access the Indian market. Obviously, we will have to figure out a financial model for this.


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