India’s startup ecosystem is undergoing a meaningful shift. Founders and investors alike are placing greater emphasis on execution, capital efficiency, and long-term value creation, with attention moving away from the playbook of rapid scale at any cost. In this evolving landscape, Manu Rikhye, Founding Partner at Merak Ventures, brings a perspective shaped by two decades of operating experience and over a decade of early-stage investing.

In this conversation with Indian Startup Times, he reflects on his journey from operator to investor, how the ecosystem has matured, what defines exceptional founders, and where the next wave of opportunities is emerging.

From Building Businesses to Backing Founders

Manu spent nearly twenty years as an operator before turning to investing full-time. His last corporate stint was at Encore Capital, where he set up the firm’s India operations out of a basement in Gurgaon’s industrial belt and scaled the business into a 2,000-person operation contributing close to $100 million in EBITDA to the parent.

That operating foundation shapes how he invests. His investment journey began as an angel over a decade ago and evolved into fund management, starting with a $25 million fund that backed 17 companies across two themes — tech-enabled businesses and emerging technologies. At Merak Ventures, he has taken that same focus forward with his partner, Sheetal Bahl. Sheetal leads on emerging technologies while Manu focuses on tech-enabled businesses, and together they continue to invest in early-stage B2B founders solving the kinds of hard, real-world problems Manu encountered in his own operating years.

What Sets Strong Founders Apart

Perseverance sits at the top of Manu’s list of founder traits. Almost nothing a founder sketches on a slide plays out exactly as drawn, and he looks for the grit and determination to see a business through the inevitable detours.

Equally defining is the depth of a founder’s understanding of the problem they are solving. Manu points to portfolio examples across very different sectors. AbleCredit is applying AI to business workflows starting with financial services, and its founders are deeply embedded in that ecosystem. Progcap’s founding team came in with an intimate grasp of supply chain financing and its stakeholders. 4baseCare, a genomics company focused on oncology, was built by founders who understood both patient needs and the realities facing prescribing doctors. The common thread is founders who have lived the problem rather than studied it from the outside.

Execution is the second differentiator. Manu highlights how, in deeptech especially, the best founders resist the pull of staying inside the lab and instead get a working pilot in front of a customer early. That single discipline, he points out, can cut six to twelve months off an R&D cycle.

The third is team building. Building a company is a marathon, and the founders who go the distance assemble teams that are aligned on talent, culture, and shared values. These are people a founder ends up spending the majority of their waking life with, and cultural fitment matters as much as capability.

How India’s Startup Ecosystem Has Evolved

Over the last two decades, India’s ecosystem has moved from imitating Western business models to taking on audacious problem statements. Some of them nuanced to India’s specific needs, others aimed at building deeper technology businesses that serve the world.

The real inflection, Manu argues, came in 2022. Tighter capital conditions forced founders to learn how to operate in a cash-constrained environment. Conversations with investors are now led by unit economics and profitability rather than fundraising roadmaps. Execution quality has improved visibly, both in businesses built for India and in deeptech companies using the Indian ecosystem to attack large, frontier problems.

The build-for-India and build-for-the-world questions now sit alongside each other rather than in tension. Founders building for India are doing so with a sharper appreciation of how consumer and enterprise needs here differ from global markets. At the same time, a growing number of Indian founders are building product-led and deeptech businesses that address global customers, and the success stories to back that ambition are beginning to accumulate.

The Role of Investors Beyond Capital

For Manu, the biggest adjustment in moving from operator to investor was learning where the boundaries of a board member’s role lie. Operators instinctively want to solve problems themselves. Board members advise.

Effective boards, in his view, challenge founders hardest when things are going well — asking the kind of questions that force a team to step back from the detail they are closest to and notice what they might be missing. When the business hits a difficult stretch, that same group shifts into supportive mode, helping founders navigate uncertainty with clarity.

Trust is the foundation of this dynamic. Founders should feel able to pick up the phone in the middle of a difficult day and know the advice they receive will be balanced, objective, and free of self-interest. Equally, board members need to guard against hero worship as companies become successful. The fiduciary role requires asking uncomfortable questions and holding the bar high on governance and compliance, particularly as portfolio companies scale.

A Disciplined Approach to Risk

Manu’s exposure to distressed assets has shaped how he thinks about risk. Most of the work, he believes, happens upfront at the time of underwriting through thorough due diligence and a careful read of the business. Once capital is deployed, the room to manoeuvre around a poor initial decision is limited.

Difficult periods will still arrive. When they do, data becomes the guide. Decisions are made with objectivity, emotion is held in check, and the founder — often under considerable strain — is met with empathy and support. That combination of analytical rigor and human steadiness, in his experience, is what defines the strongest long-term relationships between investors and founders.

Why DeepTech and SpaceTech Are Gaining Momentum

Merak (through growX Fund I, which the Merak team manages) has been investing in deeptech and spacetech before it was even a defined venture category. Sheetal Bahl is among the earlier institutional investors backing spacetech in India, with Pixxel and Bellatrix — both space-qualified today — as early bets from the growX Fund I portfolio.

After an eight-year gap, Merak returned to spacetech recently with an investment in SatLeo Labs, a thermal satellite intelligence platform. What drew the team to SatLeo was the balance between deep technical capability — the kind needed to build thermal and optical imagery satellites — and strong commercial instinct. This balance, Manu notes, is what separates deeptech companies that keep building in a lab from those that become scalable, viable businesses.

Key Sectors to Watch in the Coming Years

Three themes anchor Manu’s view of where outsized opportunity will sit over the next three to five years.

The first is the application of AI across enterprise workflows. The opportunity Merak is chasing sits at the application layer, where domain depth and engineering talent combine to solve specific, high-value problems for businesses. AbleCredit and CredResolve are addressing credit underwriting and debt recovery in financial services with ambitions that extend well beyond the sector. Helium is applying similar tools to help e-commerce businesses operate more efficiently. Adjacent use cases span IT, insurance, and healthcare. If the consumer internet era defined India’s first generation of headline companies, Manu sees the enterprise AI era producing a different kind of winner — slower to emerge, deeper in the stack, and built around hard workflow problems.

The second is the intersection of biology and technology. Falling sequencing costs are making population-scale genomics viable, AI-driven drug discovery is moving from promise to commercial reality, and India’s cost advantage in clinical trials combined with its growing biotech talent base gives the country a natural role in the global value chain. Merak has early conviction here through 4baseCare, a precision oncology company in the growX Fund I portfolio. The most compelling opportunities, Manu believes, will emerge where these capabilities converge: genomics with AI, drug discovery with data platforms, clinical operations with intelligent workflow software.

The third is manufacturing. Manu calls this a watershed moment for Indian manufacturing, one the country has been chasing for close to seventy years and one that finally feels within reach. Venture capital participation in the sector is inherently challenging given its capital intensity, which shapes Merak’s approach: focus on businesses at the top of the value chain, where design and technology define the economics. iDo Devices, an original design manufacturer in electronics, embodies that bet. The iPhone’s India trajectory offers a useful reference point for the broader shift. Less than 10 percent of the device was indigenized when Apple first began manufacturing here; that figure has since crossed 20 percent and continues to climb. Companies positioned at the ODM layer stand to capture a disproportionate share of the indigenization wave as it compounds through the decade.

Advice for Founders Building for the Long Term

For founders building in deeptech and other complex sectors, Manu’s advice is practical and grounded. Solve a real problem. Build with strong fundamentals instead of chasing short-term trends. Stay close to customers, test early, and iterate on the feedback they give you. Hold the balance between technical ambition and commercial viability so the solution can actually scale.

Above all, be patient. Building a company is unpredictable work, and resilience is often the deciding factor in whether a founder can navigate both the wins and the setbacks that a long journey brings.

Conclusion

The Indian ecosystem Manu describes is one that has traded speed for depth. AI at the enterprise layer, technology at the edge of biology, manufacturing at the top of the value chain — none of these are fast wins. They reward founders who stay with a problem long enough to understand it and investors who can hold the line when progress slows. If the last decade of Indian venture produced scale, the next is likely to produce substance.

Interview conducted by Sandhya Bharti