By Chris Hornby, Director, Executive Search, Sheffield Haworth
Adhrita Nowrin is an entrepreneur and investor with over 10 years of experience building, funding, and advising businesses in multiple sectors, including FinTech, fashion, real estate, deep tech, and investing. In March 2021 she co-founded the FinTech platform Askria.ai
In this Q&A, Adhrita talks about Askria, innovation, and startup financing.
Q: It’s been around 18 months since you started Askria. Tell us about the product and your journey so far.
A: I’ve been a founder and an investor in my career. I’ve personally experienced various challenges over the years, including biases in decision-making, lack of data, information asymmetry, limited financing advisory and lack of resources.
I started Askria in 2021 with the aim of tackling some of these challenges by building a data-driven platform – a digital CFO for startups. Our financing approach aims to create a more inclusive and more financially sustainable startup ecosystem, and to democratise fundraising by creating a smart decision engine for startups and investors. Investors can also use Askria as a due diligence and post-investment tracking tool.
Today, 98% of businesses don’t meet the venture requirements for equity financing and 30% don’t have the assets necessary for debt financing. This has led to a $3 trillion global funding deficit. Current fundraising processes are also manual and time-consuming for founders and investors.
When we started Askria, we spent six months researching existing solutions and market needs, and conducting interviews with startup founders and investors. That’s how we identified the market gap.
After the research, we started building the core team and spent time hiring product designers, developers, data scientists, and financial engineers to build the first version of the product. As part of that process, we also raised our pre-series capital from one VC and a couple of angels and we have now developed the MVP over the last few months.
We have about 200 startups signed up right now – pre-seed, seed and series A. We have secured 100+ funders on the platform covering different types of financing options.
Q: There remain very few female founders in Europe and the US – even less so from Asian backgrounds. How do we promote greater participation of people from broader backgrounds as founders of tech startups?
A: The current state of diversity in the space – where only one in six founders is Black, and only 3% of venture capital funding goes to women-led companies – is unacceptable. Especially since making capital more accessible to diverse founders would unleash a new era of innovation.
“The current gender bias in venture capital and the missed investment opportunities that result from it is one of the most pressing issues facing the industry.”
Research has shown that diversity in a portfolio can lead to better investment returns for funds and at the individual portfolio-company level. For example, venture firms with at least one female founder generate 9.7% more profitable exits.
What more proof do we need that the current gender bias in venture capital and the missed investment opportunities that result from it is one of the most pressing issues facing the industry?
I think we need to solve these challenges simultaneously. It’s not just about encouraging more diverse founders, but also getting more diverse investors to the table..
We can see the industry incorporating machine learning, predictive analytics, and other quantitative approaches to evaluate startups in order to control biases.
Artificial intelligence (AI) is being implemented in VC processes across the board, from automating screening to augmenting investment decisions for higher returns. Researchers at the University of St. Gallen constructed an investment algorithm and then compared its performance to that of human investors. The algorithm outperformed the average returns of the human investors by 184%.
So the question is not whether we should replace human decision-making with AI, but rather how to combine our strengths and augment our weaknesses.
This is one of the main inspirations behind what we are building at Askria. Building a data-driven system helps investors decide who to invest in based on KPIs, which should help minimise any unconscious (or conscious) framework biases around gender or ethnicity or anything else.
“Startups don’t necessarily need to be founded by women, but they do need to have female senior leaders to bring that diversity of thought and experience.”
Beyond looking to use data and algorithmic decision-making to help eradicate biases in investment decisions, there is another approach which would be helpful. That’s bringing in more female co-founders or leaders into existing startups.
Startups don’t necessarily need to be founded by women, but they do need to have female senior leaders to bring that diversity of thought and experience that can be so beneficial to a company’s chances of success.
Q: What advice would you give entrepreneurs looking to build a company for the first time?
A: There is no strict rule for how to approach fundraising, what the journey looks like, or at which point you want to fundraise.
The first question is when is the right time for fundraising? I’m not the only founder who will tell you this. This is still a network and relationship-based industry, where you should be building relationships and planning your fundraising a year before you need it.
“You can be making as little as $5,000 in monthly recurring revenue and qualify for certain kinds of alternative financing.”
Having more ecosystem partners, other founders, recruiters, accelerators, advisors – it’s better for founders to build those relationships as early as possible, unless they come from a background where they already have those networks. For first-time founders, it’s always a challenge. Personally, I would always focus on developing that network as early as possible.
I am a big fan of bootstrapping companies, where you would ideally find product-market fit before going for outside capital. One benefit of alternative funding is you can be making as little as $5,000 in monthly recurring revenue and qualify for certain kinds of alternative financing. For that, you don’t necessarily need a big network, just access to different types of investors, which Askria would give you. From our research, there’s a huge $3 trillion gap in the startup market where founders could benefit from alternative financing in as little as 24 hours with the kind of traction that traditional finance would never even look at.
Q: There are a lot of financial analytics modelling platforms, we’ve seen some successful, some less so. What’s particularly unique about the product you’re building?
A: Quite a few companies have come along in the last couple of years that offer financial tools but what makes Askria stand out is that with our model a company doesn’t need to have any knowledge of finance or modelling. Our product enables founders to focus on the product and customers while we take care of the financial model and fundraising journey.
Q: What can we expect to see in the future from Astria?
A: Over the next 12 months we plan to launch this product to 10,000 businesses via different channel partners. Some of our funding partners will launch Askria as part of their proposition. It’s all about getting the product out there, getting it established in the market, and we’ll be looking to service SaaS, ecommerce, and web3 marketplaces.
“Our vision is to develop a pure performance-based financial tool and financing engine to help revolutionise diversity in the startup and VC space.”
Longer term, our product vision is to have a smart engine platform where a company can get matched with capital and instantly funded based on their KPIs. No prejudices, no extraneous factors – a pure performance-based financial tool and financing engine to help revolutionise diversity in the startup and VC space. That’s the next step for us.