Due Diligence on a Quantum Algorithm Startup from IIT Madras

Vasu evaluated a quantum-inspired data compression company founded by researchers from IIT Madras. The company was pre-product-validation: it had built quantum-inspired algorithms that could run on classical hardware while remaining compatible with future quantum systems. The bet was early, but the founder pedigree was strong and the data compression problem was structurally significant given the volume of data being generated across India's defense, space, and vision AI sectors.

Validating the Problem and the Customer

He led the primary research workstream independently. He mapped the potential customer base across vision AI applications, identifying drone companies, space tech firms, and defense tech operators as the most likely early adopters. He then conducted direct interviews with companies including Tech Eagle, IG Drones, Dhruva Space, Sat Labs, SatSure, and Constance, a vision AI solution for retail applications.

The conversations confirmed that the problem was real and that customers were willing to pay. The existing compression models in the market were inefficient, with significant data loss, and the companies he spoke with were actively looking for better solutions.

He also engaged quantum scientists to validate the technical approach. He spoke with a quantum computing professor from IIT Madras and a quantum expert from Ahmedabad University, as well as researchers from ISRO. The key finding was that the quantum-inspired approach, running on classical hardware, meant near-term revenue was achievable without waiting for quantum computing infrastructure to mature.

The Gap Between Founders and Customers

The most significant finding from the research was a disconnect between how the founders perceived their product and how customers valued it. The founders, coming from a research background, were underestimating the commercial value of what they had built. Customers indicated they could reduce costs by more than half using the technology, and saw additional value in energy efficiency and reduced data loss, benefits the founders had not fully articulated in their pitch.

Vasu brought this back to the founders directly after completing the customer diligence. The investment was made, and several of the companies he had spoken with during due diligence subsequently entered pilot programs with the startup.