My Father Was Embarrassed by What I Did. Then the Oyo Exit Happened: Artha's Anirudh Damani

To be fair, back in 2012, I didn’t even realise I was building a family office. My family had been managing its own capital for a long time. The last time they were stock brokers was in 1989. Post that, my dad and uncle [Rajkumar Damani] only managed their top portfolio. Technically, we have been a family office since 1990. 

Coming back from the US, where I have seen how delegation of responsibilities happens, I wanted to implement that here. I first tried doing that within my dad and uncle’s entity, but it was difficult because they have been operating in a certain way for the last 25–30 years, and they were successful. We had real estate, equity and our own stock broking, among others. 

Trying to change that from within was getting difficult. So, I said let’s go outside, and that’s how the birth of Artha happened in 2012. We wanted to have a diversified portfolio, manage it professionally, but at the time we didn’t have that much capital to hire accordingly. I maybe had $1mn in capital, so I had to be judicious in terms of my team size. 

Today it may look odd, but investing in start-ups at the time was like investing in unlisted equity. Any self-serving, self-respecting stock broker wasn’t dealing in unlisted equity. Today it’s the flavour of the season, but at the time most brokers thought it was shady. My dad was almost a bit embarrassed to explain to his friends what his son was doing. To him, at the time, it was better to be a gambler than an unlisted equity investor. Times have certainly changed.

Entering the stock market in 1978 was considered extremely risky at the time; it was the alternative of that time. Before that, my grandfather moving into bullion trading was a major risk. Each generation explored what was new and alternative at that time. My grandfather was a financier for movies in the 1960s and 1970s. 

Earlier generations might have aimed to increase returns from 25% to 35%. That incremental alpha, compounded over decades, creates massive wealth differences. 

Today, the difference is that we now have access to professional talent. Earlier, families relied on munim ji [family accountants]. Today, we have CIOs [chief investment officers], analysts and structured teams managing capital.

It was the Oyo exit. When I started investing, the typical pain point for wealthy individuals—regardless of whether you call them family offices or not—was that they were putting money into private markets, but the capital wasn’t coming back. It felt stuck, almost like it had been locked in with no liquidity. 

Oyo became that belief-breaker. Between 2012 and 2016, it delivered roughly 350x returns in a very short period of time. It scaled globally and attracted some of the largest global investors.  

Typically, when early investors exited, large institutions would squeeze them, forcing exits at a 20–50% discount. In our case, we exited at a 5% premium to the last round. I think that moment triggered a broader change, both within my family and across the ecosystem. 

Around 2015–16, there was a surge in interest, almost like what we saw again in 2022–23. Until then, start-ups were largely seen as the domain of IIT [Indian Institute of Technology] and IIM [Indian Institute of Management] graduates. And then suddenly, you had a very young founder—barely 18, with no college background—building something massive.  

Oyo was a game changer. It even changed my father’s perspective. Until then, he felt that money was just going out with no returns. After Oyo, he became a huge proponent of start-ups. That one exit returned all the capital we had invested. 

That’s when the power law became real for us. You only need one investment that performs exceptionally well to return your entire portfolio capital. Everything else then becomes your profit. 

After that, many family offices started approaching us, asking us to co-invest whenever we made new investments. Between 2016 and 2019, we built our second fund. During that period, we made around 27–28 investments and exited nearly two-thirds of them. We generated roughly 6–7x returns in a relatively short period. It included Beardo [men’s grooming brand], Karza Technologies [fintech start-up] and ConfirmTkt [train ticket booking platform]. That gave us a framework on how to make returns.

The intent has always been to understand where deal flow is coming from and which sources create the highest value at the first level of initiation. 

Initially, we were only looking at deals coming out of private investment platforms. But over time, deals started coming in from everywhere—LinkedIn, Twitter, events. And of course, email has always been flooded. Since 2012, I must have received at least 30–40 pitches every week. 

But the reality is, we have always had a very clear idea of what we want to invest in over the next five years. We have always had a written thesis of how we want to invest. 

One of our first filters was simple: without a reference, we do not proceed. 

This is important because everyone can email you, but very few understand your investment thesis. The people who do are usually those within your network—people who interact with you regularly. 

We initially called this our principles of investing. Today, we call it S.C.O.U.T.^E—S stands for solving real human problems, C is category winner, O is optimised unit economics, U is unmatched right to win for the founder, T is tech-enabled, not tech-first and E is exponential scale. 

Once we built this framework, we layered technology on top of it. Initially, everything was on Excel and email. Then we used external tools. For the last three years, we have been working on Asana, heavily customised for our deal flow. Now, we are moving towards building our own agentic [artificial intelligence] AI-driven system. 

Every member of the investment team independently evaluates a company on S.C.O.U.T.^E. Each person assigns scores and weightages. We then take a weighted average. Typically, around 10 of us evaluate each opportunity independently. Based on the final score: above 3.5 out of 5—direct call with the founder; between 1.5 and 3.5—discussion required; and below 1.5—immediate pass, with clear reasons. 

This process eliminates nearly 85–90% of incoming deal flow. Between reference filtering and S.C.O.U.T.^E, we narrow down to the top 10% of opportunities. 

Even then, our process is rigorous. We typically meet a start-up 10–12 times before writing a cheque. The average timeline from the first meeting to investment is around 180 days, though it can vary depending on diligence.

I’ll outline our broader four-year strategy from our Fund II [Artha Venture Fund II]. We are focusing on four specific thematics.   

The first is deep tech in India, specifically space tech and semiconductors will be the main stream. In this, government’s RDI [Research, Development and Innovation] Fund is ₹1 lakh crore, SIDBI’s [Small Industries Development Bank of India’s] Start-up India Fund of Funds 2.0 for ₹10,000cr. So, there is a lot of thrust.  

Also, our experience with [space-tech] companies like Agnikul, GalaxEye and TakeMe2Space has given us confidence in this space. We now have a much clearer understanding of its potential. 

In semiconductors, global supply chain disruptions, especially related to China, have created a strong push for domestic capability. The Indian government is also very committed to building this sector. 

The second major theme is agentic or applied AI. India won’t do the LLMs [large language models], but it will win the small language model game and applied AI solutions. We already export software globally, so capability exists. It’s about applying AI effectively to solve real-world problems. 

Another key area we are focused on is fintech infrastructure. Even today in India, credit card penetration is relatively low. There are over a billion debit cards, but only around 100mn credit cards. Yet, credit cards account for roughly three times the spending of debit cards.  

This connects to our fourth theme: premium consumption. The top 6% of Indian consumers now have significantly higher purchasing power. Their consumption behavior is very different. They don’t want legacy brands. They prefer new-age brands.  

Overall, we allocate about 30–35% to deep tech (including semiconductors and space tech), 20–25% to applied AI, 20–25% to fintech infrastructure and 15–20% to premium consumption.

One key learning is that as you grow older, your perspective changes. Earlier, the instinct was to keep pushing—fight longer, raise another round, keep going. 

But over time, I’ve realised that founders who don’t think like athletes don’t succeed. An athlete constantly tracks performance. Every run, every serve, every delivery—they analyse everything. What did they eat? What were the conditions? What shoes did they wear? They track themselves against their own benchmarks and make micro-adjustments. 

Many founders avoid this because they’re afraid of what the data will show. Many people don’t want to face their report card. 

In failed companies, there is a common thread that I have observed—founders don’t look at data, don’t adjust and don’t hold themselves accountable.

It’s required, like the flying geese effect. In the US, the Rockefellers and the Vanderbilts built the ecosystem, then many family offices came up. You need the Ambanis, the Adanis, you need the Mahindras and the Bharti Mittals of the world, because they create the backend effect for other, larger family offices. Then you have your second tier and third tier. You want people to aspire to be part of a family office—our founders who exit. 

Now even the government and institutions are recognising that giving prominence to family offices is important. If India wants to go where it aims to in the next 20 years—Viksit Bharat—you will require 2,000 family offices, each managing at least a billion dollars of net worth. That’s how you become a $15–20trn economy.