Why SEDEMAC Mechatronics is in Inventus Advisors’ anti-portfolio1 min read . Updated: 14 May 2018, 09:23 PM IST
With capable, well-intentioned founders even the government/regulators are likely to act reasonably
The one that got away, for us at Inventus, was SEDEMAC Mechatronics.
SEDEMAC is a rare technology firm that evolved out of research at an Indian university. Shashikanth Suryanarayanan (“Shashi"), the soul of the firm, is a classy mechanical engineer. After his PhD and a subsequent stint with GE in the US, Shashi returned to India to serve as faculty at IIT Bombay. Some of his PhD students form part of the SEDEMAC founding team. We explored a Series A in SEDEMAC, in the early part of this decade. SEDEMAC, then, had two products (a) an electronic governor for diesel engines used for power generation and (b) an ignition timing control for 2-wheelers. The firm then had reasonable traction on (a) and it was early days on (b).
Most everything checked out during our due diligence—the team, early traction, large potential customers/partners taking notice and like-minded seed/co-investors. We passed, then, due to an inadvertent regulatory infraction. This, as it happened, was subsequently condoned for a piffling amount. Clearly, we made a mountain out of a molehill. Our co-investors displayed more horse sense. The firm has scaled nicely since and has added significantly to its offerings. It has many large OEMs/genset makers as customers. One of those heart-warming B2B successes that comes from application of multi-disciplinary skills (electronics and mechanical engineering—hence the Mechatronics in the firms name).
The sequel is a subsequent investment of ours, where, chastened by the SEDEMAC experience, we overcorrected. Made a molehill out of a mountain (of possible regulatory concerns) this time! That investment, by the way, is turning out to be a rocket ship. Lesson learnt : With capable, well-intentioned founders even the government/regulators are likely to act reasonably—not throw the baby out with the bathwater, that is.