Key Takeaways
- • Mehekka Oberoi, Fund Manager at IIFL Fintech Fund, evaluates fintech startups on whether the problem would persist without external funding, whether customers pay for measurable value, and whether usage deepens over time.
- • She weights founders at roughly 65-70% of her assessment and the product at 30-35%, citing founder adaptability as the key differentiator in early-stage businesses.
- • Her valuation approach combines the cost and effort to replicate the technology with a forward view of what the business could realistically become over four to five years, and she cautions against letting market multiples set the price alone.
- • The fund focuses on B2B fintech across lending technology, wealth technology, regulatory technology and AI-native solutions, and uses IIFL's position in financial services to support portfolio companies with customer introductions and governance practices.
Summary
Mehekka Oberoi, Fund Manager at IIFL Fintech Fund, outlined her approach to fintech investing in an interview with Indian Startup Times. Her background spans institutional equity, investment banking, financial services and fintech, and she came to venture capital through IIFL's existing work with fintech technology partners, several of which later produced significant investment outcomes, according to her account.
The fund's thesis centres on B2B fintech, including lending technology, wealth technology, regulatory technology and AI-native solutions for enterprises and financial institutions. Oberoi applies three tests to each business: whether the problem would persist if funding dried up, whether customers pay for measurable value such as cost savings, lower operational effort or reduced compliance costs, and whether usage deepens over time through added modules or higher volumes. She identifies subsidised customer acquisition, artificially low pricing and reliance on regulatory loopholes as warning signs of trend-driven businesses.
On founders versus product, Oberoi assigns roughly 65-70% weight to the founder and 30-35% to the product. She looks for adaptability, including how founders respond to challenged numbers and whether they have lived the problem inside a financial institution, while stressing that founder quality cannot substitute for product-market fit.
For valuation, she combines a replacement-cost view of building the technology with a forward estimate of realistic value over four to five years, accounting for comparable listed companies, recent acquisitions and dilution from future rounds. She cautions that market multiples in strong markets may not hold years later. Her biggest due diligence red flag is a gap between founder claims and data, such as a startup claiming 20 enterprise customers while bank statements show payments from a handful. She also flags revenue concentration, regulatory shortcuts and very small founder stakes.
On value-add, Oberoi says the fund helps portfolio companies understand how banks, NBFCs and brokers evaluate technology, offers access to IIFL group professionals in marketing, HR and technology, and provides customer introductions on an arm's-length basis. On AI, she notes that improving and cheaper foundation models make thin application-layer products easier to replicate, so she judges AI companies by performance on accuracy, speed and cost at scale within real workflows.
The fund's thesis centres on B2B fintech, including lending technology, wealth technology, regulatory technology and AI-native solutions for enterprises and financial institutions. Oberoi applies three tests to each business: whether the problem would persist if funding dried up, whether customers pay for measurable value such as cost savings, lower operational effort or reduced compliance costs, and whether usage deepens over time through added modules or higher volumes. She identifies subsidised customer acquisition, artificially low pricing and reliance on regulatory loopholes as warning signs of trend-driven businesses.
On founders versus product, Oberoi assigns roughly 65-70% weight to the founder and 30-35% to the product. She looks for adaptability, including how founders respond to challenged numbers and whether they have lived the problem inside a financial institution, while stressing that founder quality cannot substitute for product-market fit.
For valuation, she combines a replacement-cost view of building the technology with a forward estimate of realistic value over four to five years, accounting for comparable listed companies, recent acquisitions and dilution from future rounds. She cautions that market multiples in strong markets may not hold years later. Her biggest due diligence red flag is a gap between founder claims and data, such as a startup claiming 20 enterprise customers while bank statements show payments from a handful. She also flags revenue concentration, regulatory shortcuts and very small founder stakes.
On value-add, Oberoi says the fund helps portfolio companies understand how banks, NBFCs and brokers evaluate technology, offers access to IIFL group professionals in marketing, HR and technology, and provides customer introductions on an arm's-length basis. On AI, she notes that improving and cheaper foundation models make thin application-layer products easier to replicate, so she judges AI companies by performance on accuracy, speed and cost at scale within real workflows.
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