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  • Vivek Jhorar

Tremis Capital Annual Letter 2022

Updated: Mar 9, 2023

Greetings and welcome to our 2022 annual letter! We are thrilled to share with you the insights, reflections, and learnings of the past year. Our annual letters serve as a time capsule of sorts, capturing the essence of Tremis at this moment in time for future reference. And while these letters are primarily for our internal use, we also make them publicly available as a way to stay transparent and accountable.

Now, let's dive into the year that was. 2022 has been a wild ride, full of both highs and lows. But through it all, we have remained dedicated to our mission of investing in tech-scalable start-ups and being part of the growth story of the next set of disruptors. And despite the challenges, we are proud to say that it has been a net positive year for Tremis and our portfolio.

For those unfamiliar with Tremis, we are an early-stage venture firm that supports innovative and ambitious founders. If you want to learn more about us, be sure to check out our website, portfolio, and blog. We don't set our sights on the wild dream of 100x returns. Instead, we focus on backing startups with the potential for sustained high growth in a capital-efficient manner. We don't discriminate based on industry, as we believe that truly disruptive ideas can create new markets.

As investors, we understand that it is the founding team's job to build the company, not ours. We are here to provide guidance and support, but ultimately it is up to the team to execute. That's why we rely on industry experts to provide feedback and help us make informed investment decisions.

We also place a strong emphasis on data-driven decision-making and are more likely to invest in startups that have robust KPI tracking systems in place. This helps us to see that the company's culture is focused on continuous improvement and growth.


It has been a mixed bag on being a prolific and productive year for our venture firm. We are pleased to announce that we completed a total of 7 investments this year, while few others are still ongoing. Three of our portfolio firms successfully raised an upround and 1 experienced a markup due to M&A Activity. In addition, we have successfully exited one of our investments. Our IRR remains high at ~50% despite the bulk of the funds being invested in the last 7 months.

Due to the success, we were able to expand significantly and the amount invested in 2022 grew >4.5x compared to 2021.

Note: IRR calculated as on 1st December 2022 on the basis of term sheets received from lead investors and M&A Activity. Investment Transaction fees (excluding forex fees) are taken into account.

One of the highlights of the year was the diversity of the startups we invested in. Each of the companies we supported operates in a different sector, which has allowed us to broaden our reach and support a wide range of innovative ideas.

We are grateful for the opportunity to work with such talented founders, and we look forward to continuing to support and grow these companies in the future.

We have realised that by limiting ourselves to a specific geography, we may miss out on some truly innovative and promising ideas. As a result, our investment thesis has evolved to be geography agnostic, but we retain India focus. We believe that a great idea can come from anywhere in the world, and established business models can be successfully replicated in underrepresented regions. This has allowed us to cast a wider net and consider a greater range of investment opportunities

We are thrilled to have on boarded a number of amazing individuals and limited partners (LP) who have been incredibly supportive of our portfolio companies. They have provided valuable guidance and mentorship and helped us enhance our evaluation process by offering insights and domain expertise.

We also found out through anecdotal evidence, that other syndicates experience approx 20% drop rate in terms of LPs not wiring funds post commitments. Fortunately for us, such drops were an exception to the norm, with only 4 such cases through the year. We remain a private syndicate with high touch points, regularly interacting with most of our LPs.

Another peculiar similarity between our founders, all of them have prior work experience. Its a coincidence since we do evaluate companies by founders who are straight out of college or dropouts. Some of our most exciting conversations have been with college dropouts.

From a gender representation perspective, 5 co-founders are women heading 4 companies. Of course, this is not the ideal 50:50 ratio, but most of the deal flow is composed of companies with male founders, which seems to be a function of the socio-economic environment.

We do not seem to rely on college credentials either, as 7 co-founders don’t possess the coveted IIM-IIT/Ivy League Tags.

In terms of deal flow, referrals are our largest deal flow and 3 deals originated through referrals in our network. 3 companies we funded, the conversation originated from cold LinkedIn messages. One deal developed through internal outreach efforts.

Our co-founder, Mr Pushkar Singh, has also received media attention, being featured in a number of prestigious publications such as The Times of India, The Economic Times, Outlook India, Entrepreneur India and The Financial Express. This recognition is a testament to the impact and success of our firm's work.


2022 will be remembered for the slowdown in deal-making (especially the second half of the year). While the so-called “Funding Winter” has set in for late stage deals, syndicates like us making early stage deals only benefited in lieu of the anticipated pressure on valuations. Some challenges we faced are as given below

  1. Fewer Startups with marquee investors as lead that we encountered, particularly in the second half of the year. As a result, we had to be more selective in our investments and reduced the number of pitch calls with companies. We had initially aimed to invest in 12-15 companies but ended up only investing in 7 (with few more pushed to next quarter for closing). Many of the approaching companies were in the ed tech and D2C space, which we are not currently focused on.

  2. Pressure on Valuations: We also experienced pressure from our limited partners to invest in companies with lower valuations. Managing this pressure while also maintaining the expectations of founders has been difficult. In order to address this challenge, we have had to be more selective in our investments.

  3. Lack of original ideas: Another challenge we faced was the proliferation of imitative companies in the market. While it is always exciting to see new ideas, it can be challenging to identify those that are truly unique and differentiated from those that are simply copying established players.

  4. Regulatory Challenges: As we use investing platforms registered with regulators in India & US, certain regulatory changes implemented lately have made it tougher for us to pursue international investments. The new remittance rules by RBI (Reserve Bank of India) also made it difficult for few resident Indian LP’s to invest in overseas deals. We will continue to be cautious and ensure the regulatory changes are being adhered to while pushing our investment efforts.

Overall, it has been a challenging year, but we remain confident in our ability to navigate these challenges and continue supporting the growth of our portfolio companies. Despite these challenges, all the companies that we invested in 2021 successfully raised an up-round, received a mark up (or exited).


In 2022, we faced adversity, which allowed us to learn more about our founders and see their character and values in action. This was a valuable experience as it allowed us to see how they responded to challenges and how their values guided their actions. We were pleased to find that our choices regarding the founders have turned out to be largely correct, which was reassuring. It is crucial to ensure that our values and beliefs are compatible with those of our founders. This alignment of values is crucial for the success and longevity of any organisation or partnership. Still, it can be difficult to assess during good times when everything is going smoothly. We hope to continue working well with our founders in the future as we believe this will help contribute to the success of our organisation.

We have also experienced a decline in GMV and ROAS due to poor decisions and adverse market conditions in one of our investments. However, we were encouraged by the resilience of this team, who were able to bounce back from the setback. This experience reinforced the importance of careful decision-making and the need to stay vigilant in monitoring the performance of our investments.

We are still concerned about a couple of our investments but a good capital runway during these times reassures us. The gritty founders are resilient and bidding to grow well. To ensure success in our investments, it is important for us to trust in our founders and actively engage with them more.

What's In Store (2023)

While predicting the future is a fool's errand, we in the VC industry nevertheless try to do it all the time. Some notable things we expect in the future include :

  1. The gaming ecosystem, which includes companies that enable it, is expected to grow as more people turn to gaming for entertainment and socialisation.

  2. We remain optimistic about the blockchain & tokenization aspects of web3, particularly in regard to consumer applications, and enablers. We anticipate funding will recover in late 2023, although Indian exchanges may face increased pressure.

  3. The creator economy, which includes online platforms that allow individuals to create and share content, is likely to experience consolidation, with at least 5 mergers/acquisitions or failures.

  4. Startup Funding is expected to make a resurgence in late 2023. We expect more money being raised in 2023 than 2022.

  5. Generative AI, which refers to AI systems that can generate new content or solutions, is a technology to keep an eye on. It has the potential to revolutionise industries such as design, art, and journalism and is likely to receive significant investment and attention.

  6. Climate tech and health tech are expected to receive disproportionate funding as investors and companies recognize the importance of addressing these global challenges. These sectors are likely to see a range of innovative products and services emerge as companies work to develop solutions.

  7. D2C and e-commerce will continue to face pressure as the hypothesis of building a moat around the brand is under fire, particularly with CAC rates shooting up. We shall be avoiding the sector unless a superstar comes calling.

We at Tremis have set up a goal of investing INR 25 Cr (3 Mn USD) across 12-15 deals for 2023. The year starts with investment opportunities being listed in the student accomodation space (India) and a mobility startup focused on a large developing market (non India). Stay Tuned !

Thank You

As we reflect on the past year, we are filled with an immense sense of appreciation for the journey together. Despite the obstacles and challenges that have come our way, we have persevered and made a significant impact on the startup ecosystem. We are grateful for the trust our LPs have placed in us, and for the opportunity to work with such talented and innovative founders.

We're thankful for your unwavering support and partnership as we strive for greater successes. Thank you for being a part of our journey.

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