Mehekka Oberoi, Fund Manager, IIFL Fintech Fund, approaches fintech investing through this combination of market understanding, founder capability and business fundamentals. With experience spanning institutional equity, investment banking, financial services and fintech, she brings a perspective shaped by both evaluating businesses and understanding the problems financial institutions face.
In a conversation with Indian Startup Times, Mehekka discussed how she evaluates fintech startups, distinguishes durable businesses from those driven by market momentum, assesses valuations and founder capabilities, and identifies opportunities emerging from artificial intelligence and India’s evolving venture capital ecosystem.
From Investment Banking to Venture Capital
Mehekka began her career in institutional equity and investment banking, where she developed an understanding of business fundamentals, financial statements and the regulatory factors influencing companies. Her subsequent experience in fintech gave her a closer look at the operational challenges faced by financial services institutions.
Her transition into venture capital grew naturally from this experience. At IIFL, she was involved in evaluating fintech investment initiatives, while the broader group already worked with several fintech companies as partners.
raised a natural question: could the companies IIFL already worked with as technology partners grow into substantial independent businesses?
.”Whether I am evaluating a technology partner or an investment, I start in the same place: what problem is this actually solving?” Mehekka said.
Knowing the challenges financial institutions face from the inside makes it easier to judge how widespread they are across the industry, and therefore how large the opportunity could be and whether a company could become a worthwhile investment.
She noted that several companies initially brought into IIFL’s ecosystem from a business perspective also went on to generate significant investment outcomes. This reinforced the natural connection between identifying useful technology solutions and recognising businesses with growth potential.
When asked about leaders she admires, Mehekka named Indra Nooyi, highlighting her admiration for leadership rather than identifying a single role model specifically within investingciting her leadership as an example she looks up to, rather than a role model drawn from investing alone.
What Makes a Fintech Startup a Durable Business?
At IIFL Fintech Fund, Mehekka’s investment thesis focuses on B2B fintech businesses, where IIFL’s understanding of financial services gives the fund an informed view of what institutions need. The opportunity spans several areas, including , lending technology, wealth technology, regulatory technology and AI-native solutions serving enterprises and financial services institutions.
.But a promising sector is not the same thing as a durable business.
Mehekka evaluates whether a company sits within the workflow of a regulated institution, solves a problem that continues to exist regardless of market conditions, and has a clear way to generate revenue from its solution.
.She puts every business through three questions.
First, would the problem continue to exist if funding dried up tomorrow? The test is about demand, not runway: if customers would still need the solution in a downturn, the business is likely to be more durable than one sustained by investor enthusiasm.
Second, are customers paying because the product delivers measurable value, whether by saving money, cutting operational effort or lowering compliance costs? A product adopted as a fashionable experiment or pilot rarely has the same staying power.
Third, does usage deepen over time? Mehekka looks for customers who spend more, add product modules or push greater volumes through the relationship. A business that grows within its existing accounts has more room to run than one whose contracts stay frozen after the first sale.
The warning signs of a trend-driven business are familiar: subsidised customer acquisition, artificially low pricing and models that lean on regulatory loopholes. Durable companies look different. They retain customers, expand contracts and win referrals from buyers who are genuinely willing to pay.
The distinction, in her view, lies in whether growth reflects a product becoming more valuable to customers or simply the temporary appeal of a trend.
“If funding dried up tomorrow, would customers still need this? That one question filters out a lot of trend-driven businesses,” she said.
Why Founder Capability and Product Quality Both Matter
A great founder needs a real product, and a real product needs a great founder. Neither, Mehekka believes, is enough on its own.
.A strong founder cannot indefinitely make up for a product without product-market fit, and even a promising product can stall under a leader who makes the wrong calls as the company evolves.
So which matters more? Mehekka gives founders the greater weight: roughly 65–70% of her assessment, with the product accounting for the remaining 30–35%.
.The reason is adaptability. A capable entrepreneur may recognise when a business model needs to change, respond to market feedback and make a timely pivot. These qualities become particularly important in early-stage businesses, where the original plan may need to evolve as the company learns more about its customers. She looks for early signs of this: how founders respond when their numbers are challenged, how much their thinking has moved between meetings, and whether they have lived the problem inside a financial institution.
Product quality remains essential. Investors still need to establish whether the offering solves a real problem, whether customers need it and whether the market is large enough to support a substantial business.
Founder quality, in other words, is not a substitute for product-market fit. It is what turns a genuine market opportunity into a business that is built, improved and scaled.
How IIFL Fintech Fund Approaches Startup Valuations
is where early-stage investing gets hardest. With a limited operating history, there is little to anchor estimates of a company’s future performance.
Mehekka explained that her approach combines two perspectives: the cost and effort required to build the technology, and the company’s potential future value.
The first involves understanding what it would take to develop the product and technology from the ground up, including the time and resources required This acts as a sanity check, indicating what it would cost to replicate what the company has already built, while the forward-looking view sets the price.
The second looks forward: what could the business realistically become over the next four to five years? Investors examine comparable listed companies and recent acquisitions in the sector, and account for dilution from future fundraising rounds.
The objective is to determine whether the entry valuation leaves sufficient potential returns to justify the investment risk.
.Market multiples, she cautioned, should never decide the price on their own. In a strong market, comparable businesses can command elevated valuations. The real question is whether those valuations will still hold several years later.
.”If the entry price does not offer a meaningful return under a reasonable outcome, the investment does not make sense,” she said.
For Mehekka, valuation discipline means balancing what has already been built with what the business can realistically achieve, rather than allowing prevailing market enthusiasm to dictate the price.
The Red Flags That Can Change an Investment Decision
For Mehekka, the biggest red flag in due diligence is a gap between what a founder claims and what the data shows.
.A startup might claim 20 enterprise customers while its bank statements show payments from only a handful. The problem is not the gap in the numbers. It is whether the founder has been honest about the business.
Mehekka believes transparency is fundamental to the investor-founder relationship.”Whether a company has two paying customers or ten, I need an accurate picture before committing capital,” she said. A lack of honesty at the outset can undermine the relationship after an investment has been made.
Revenue concentration is another consideration, particularly when a company depends heavily on a small number of customers without a sufficiently contracted pipeline.
Regulatory compliance also receives close attention. Mehekka said the fund does not invest in businesses that rely on regulatory shortcuts or workarounds that could create problems later.
Founder ownership matters too. If a founder holds a very small stake from the start, it raises questions about future dilution, fundraising and the founder’s continuing stake in the company.
Reference checks provide another layer of assessment. Conversations with customers, clients and people familiar with the founder can help investors build a fuller picture of the entrepreneur’s reputation and working relationships. Mehekka pays as much attention to hesitation as to praise: when former colleagues or customers go quiet, that can be as telling as a strong endorsement.
Together, these checks help investors look beyond a polished pitch and assess the credibility, resilience and long-term prospects of the business.
Venture Capital Support Goes Beyond Funding
Founders at the venture stage need more than a cheque, Mehekka said. They need guidance, expertise and support as they build their products and scale their businesses.
In her view, the most valuable support is helping founders understand how banks, NBFCs and brokers actually evaluate and buy technology. Given IIFL’s position within financial services, the fund can help portfolio companies understand these customers’ needs and improve their products accordingly.
This can include advising founders on product features, go-to-market strategy and the capabilities required to address institutional customers’ requirements.
IIFL group’s expertise also provides a support system for founders. Mehekka highlighted access to professionals across functions such as marketing, human resources and technology, who can help companies work through specific business challenges.
Customer access is another important part of this support. Since IIFL entities operate within financial services, the fund can help portfolio companies obtain references and introductions to other institutions where there is a genuine fit, on an arm’s-length basis, potentially supporting customer acquisition and expansion.
Mehekka also stressed the importance of building governance practices early in a company’s development. Establishing management information systems, regular reporting and clear operating structures can help founders understand their businesses better and prepare for future growth.
Capital lets a startup pursue its plans. Guidance, customer connections and stronger internal processes help it execute them.
Evaluating AI Beyond the Product Label
As AI spreads, investors face a sharper challenge: telling companies with real technological advantages apart from those simply building features on top of existing models.
Mehekka acknowledged that this has become a difficult area for investors to evaluate. Foundation models are improving and becoming more affordable, making it easier for competitors to replicate products that rely on a thin layer of technology without a distinctive advantage.
So she looks past the AI label to how well the technology actually performs inside a business workflow.
One consideration is whether the product holds up on accuracy, speed and cost at scale. A product also needs to demonstrate measurable outcomes, such as faster customer onboarding or fewer operational tasks, rather than simply offering AI-enabled features.
Proprietary data and feedback loops strengthen a company’s position, improving the product over time in ways competitors struggle to reproduce.
Deep workflow integration matters too. Once an AI product is embedded in a lender’s or broker’s processes, it is much harder to replace than a standalone tool.
Mehekka also highlighted trust, compliance, explainability and safeguards against inaccurate outputs as important considerations, particularly in regulated financial services.
For AI-native fintech companies, the question is therefore not just whether the technology works in a demonstration. Investors need to understand whether it remains reliable at scale, delivers measurable value and is sufficiently integrated into customers’ operations to establish a defensible position. As she put it, “If a well-funded incumbent can replicate it in a quarter, it is a feature, not a company.”
Where India’s Venture Capital Opportunities Could Emerge
Looking ahead over the next three to five years, Mehekka expects India’s venture capital ecosystem to deepen as more domestic capital enters the market.
She pointed to the potential participation of Indian institutions, family offices and alternative investment funds as a factor that could expand the pool of capital available for venture investments. She also sees growing acceptance of venture capital as an asset class in which investors are increasingly willing to take risks on emerging businesses.
.As that capital deepens, she sees opportunity across several segments.
Infrastructure technologyInfrastructure for banks, NBFCs and brokers, regulatory technology, wealth technology, credit solutions for micro, small and medium enterprises, and AI-native businesses are among the areas she identified as having potential. India’s digital public infrastructure strengthens several of these: Account Aggregator and GST data are making MSME lending easier to underwrite, while tighter compliance requirements are creating demand for regulatory technology.
These opportunities reflect the broader themes running through her investment approach: technology that addresses persistent problems, products that become part of essential business processes, and companies capable of generating measurable value for customers.
For investors, the challenge will be to identify which businesses can turn these opportunities into sustainable enterprises. For founders, it will be to build products that customers continue to use and pay for, even as market conditions and investor sentiment change.
Looking Beyond Market Momentum
Mehekka’s perspective on venture capital centres on the relationship between a genuine customer problem, a capable founder and a business model that can sustain growth.
Her approach to fintech investing combines an understanding of financial services with an emphasis on customer value, transparent reporting, realistic valuations and regulatory discipline
For India’s startup ecosystem, the next phase of growth may bring more domestic capital and opportunities across technology-led sectors. But identifying lasting winners will require investors to look beyond market excitement and focus on what makes a business valuable over time.
-By Aakriti Jaiswal
