Anand Lunia, the tall, lanky, and bespectacled co-founder of the VC investor India Quotient, made a name for himself with his firm’s 2015 seed investment in ShareChat, an Indian local-language social network.
The company was the poster child for Lunia’s India-first philosophy. The 53-year-old investor had long criticized foreign companies’ alleged hegemony in India’s tech sector, calling for protectionism and localization to boost the country’s startups. He argued that companies like Google should pay more taxes and be required to list their sprawling local units.
For a time, Lunia’s locals-first approach seemed to be a winner. When India’s government banned TikTok and other Chinese apps, ShareChat and its sister apps became national sensations among India’s blue collar workers. During the pandemic, it became an investor darling too: its valuation jumped from $600 million to $5 billion in two years, drawing Google and the erstwhile Twitter as investors.
By March 2022, near the peak of that hype cycle, India Quotient’s million-dollar investment out of its tiny $20 million second fund had grown by 77x.
After that spectacular launch on the back of ShareChat, India Quotient went on to raise five funds totaling $320 million. Despite being small by modern VC standards, it has developed a reputation of spotting contrarian themes that proved profitable.
Still, India Quotient’s fortunes have been closely tied to those of ShareChat, which hopes to make a public market debut soon. Now, documents exclusively obtained by Newcomer show how the lack of an exit for ShareChat (beyond some small secondaries) and its uncertain valuation have hobbled the performance of India Quotient’s second fund, and could ding the third as well.
It’s a story of how the much-discussed power law of venture capital — almost all the returns come from a few breakout stars — doesn’t always play out in the way one might expect.
The documents cover India Quotient’s performance from 2022 through 2025. They show how the firm reacted to whipsawing pandemic-era valuations — implementing a massive across-the-board write-down at one point — and how the ups-and-downs of ShareChat drove performance.
It was an all-too-familiar scenario during that period, and the fallout still haunts the return metrics of many a VC firm.
