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An entrepreneur is not a probability, but a possibility, says Renuka Ramnath of Multiples

Renuka Ramnath, Founder, MD, & CEO of Multiples Private Equity, shares some of the core tenets of her approach in creating a successful PE firm.

An entrepreneur is not a probability, but a possibility, says Renuka Ramnath of Multiples

Monday February 13, 2023 , 7 min Read

Multiples’ success story as a homegrown private equity firm goes well beyond the wealth creation it has done by investing Rs 15,000 crore in 30 companies. Its framework challenges the prevalent norms of investment and sets a new benchmark in growth funding rooted in values of nurturing and supporting entrepreneurs.

In a conversation with Shradha Sharma, Founder & CEO of YourStory, Renuka Ramnath, Founder, MD & CEO of Multiples, shared the secret sauce that went into creating a company that’s changing the rules of the game.

Renuka said the genesis of Multiples lies in two serendipitous events in her life. First was her visit to Harvard Business School for a programme where she was deeply influenced by stories about miraculous come-backs of entrepreneurs from extreme business lows.

“I wanted to worship entrepreneurship because it creates jobs and it gives meaning to so many million lives. The virtues of entrepreneurship completely drew me into the investment business,” Renuka said. The second incident was a chance meeting with Infosys Founder NR Narayana Murthy, who gave her a book with a note that got etched in her mind--“go and build the most respectable company”.

At the time, she was moving on from her role as the MD and CEO of ICICI Ventures, Renuka dealt with a period of ambiguity because her personal identity was deeply rooted in ICICI. She had unfulfilled ambitions of taking ICICI Ventures even bigger than it was. However, she realised that she could still build that company she had been envisioning, albeit outside, which led to the birth of Multiples.

Over the years, Renuka developed the playbook, which has helped Multiples become one of the most prominent late-stage PE firms with investments in marquee startups such as Delhivery, Dream11, Licious, and PVR.

Following are some of the core tenets of her approach.

Value the entrepreneur: “You are not investing behind the business plan. You are investing behind the dreams of the entrepreneur,” Renuka said, describing how all Multiples employees are trained to think like an entrepreneur first and financial investor later.

For each Multiples deal, the person behind the idea is an important consideration. For example, Renuka found Delhivery co-founder Sahil Barua to be unlike the usual corporate executive and someone oozing with determination to fight all the odds to establish his startup. Renuka feels that while companies may achieve varying levels of success depending on several factors, she believes in every entrepreneur in the same measure. Every entrepreneur for us is equally important. She or he is not a probability, but a possibility,” Renuka said.

Don’t be limited by cliches: When Multiples invested in fantasy sports platform Dream11, naysayers touted it as an unusual deal. Renuka feels that such opinions are held by outsiders who don’t understand Multiples.

“If it is a very good macro-opportunity in the hands of a very capable entrepreneur, it’s a Multiples opportunity,” Renuka said, asserting how she has not allowed herself to be a victim of market cliches pertaining to any terminology, industry, type or stage of investment.

Talking about the frenzy around unicorns, she said, “Unicorn became a short-cut word to propagate and propel the startup ecosystem”. She feels that it is a jargon the market came up with unnecessarily and actively advocates the idea that there are many valuable companies which are not unicorns.

Stay ahead of the curve: Multiples recently raised another round of investment making it a $3 billion fund, and Renuka is clear that the firm will not repeat what it did in the previous round, even if it has been successful in the past.

“If I have done something worthy, everybody is already copying me,” she said, explaining her rationale. When crowding happens, the returns get readjusted to the person who has the lowest return appetite, and therefore repeating past strategies can lead to failure. Renuka spoke about being focused on staying ahead of her competitors even as a young student. Not only was it important for her to stand first in her class, but also to be ahead of the next rank-holder by a significant margin. She has brought the same thought process to Multiples, combined with a realistic and humble acceptance of failures. “It’s not okay to have failures. And yet we will grow in our mind and our heart to accept failure, because we are humans,” she said.

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Back companies through good & bad times: Speaking of PVR’s tumultuous journey to success across market challenges ranging from DVD, piracy, stand-off with distributors, IPL, OTT and the pandemic, Renuka shared that Multiples continued to invest in PVR even at the time it was shut. “That’s what it takes. You can’t call yourself entrepreneurial and behave like a bean counter,” she said, emphasising the importance of supporting founders when they need their investors the most.

Renuka is also mindful that every startup has other stakeholders in terms of employees, customers, and vendors who get impacted and create a ripple effect should any startup fail. “We are all very emotionally vested in our companies. We live our companies,” Renuka said, talking about how she was pained to see the millions of footfalls in PVR be reduced to a zilch during the pandemic. She spent the entire day of December 31, 2020, at a PVR just to reinforce her belief that it was not dead and would make a comeback.

Renuka’s personal journey has not been without grave setbacks, which she has had to overcome. Talking about her coping mechanism, Renuka shared about the time in her life when she lost her husband to an accident moments after she was talking to him over the phone about a haircut for her daughter. “What has helped me overcome some of the tragedies is the ability to quickly reset my life to a purpose,” she said, mentioning how she decided in that moment that nothing would change for her children and she donned the role of a mother, father, and a provider.

Despite being a single mother and heading a very challenging business, she is strongly of the opinion that women must have their own aspirations and that it doesn’t need to come at the cost of family. Her advice to women is that they should share their aspirations openly and be aware that supporting children doesn’t mean being at home all day long, but just being there when children need them.

Perhaps Multiples draws its DNA of strong financial performance with deep nurturing values from Renuka herself who combines a sharp business mind with deep maternal instincts. Renuka equates nurturing a startup as raising a child and says that Multiples is nothing if not the startups it is known by. Interestingly, despite being in a profession where money speaks, her personal attitude towards money is that apart from providing a deep sense of security, it doesn’t solve all problems.

“I don’t belong to the camp that believes money solves all problems. If you don’t keep money ring-fenced in one remote corner, it has the potential to harm you more than make you,” she said. For Renuka, it’s more about wealth creation than money making. That wealth includes not just the returns they are able to give their investors, but also the relationships built over years. In her own words, “Transactions are for a time; relationships are for a lifetime”. And that perhaps is the final ingredient of Multiples’ secret sauce.

(The copy is updated to correct a typo)


Edited by Megha Reddy