Flashback Friday: BookMyCab (Live Minds Solutions)

BookMyCab is an on-demand taxi service with options to rent metered city taxis as well as from their own fleet of cabs. Their taxis are equipped with real-time tracking technology to ensure complete passenger safety. They follow a stringent process of recruitment of taxi drivers and taxis. They also own exclusive rights to advertise on the taxis, i.e., on doors, and inside the taxis.

 

BookMyCab was founded in 2012 in Mumbai and operated with taxi licenses from state governments and approved taxi drivers only. They acquired CabOnClick, a Hyderabad based online taxi booking provider in Nov 2014.

 

Founder: Avinash Chandra Gupta Total funding raised USD 910,000
2020 status: Acquired by Wings Travel Management Number of rounds 2
Co-investors: Yournest, Centerac Technologies, Mumbai Angels

 

Why did you invest in BookMyCab?

It might be hard to remember, but hailing cabs in 2012 was a challenge, especially if you wanted to travel a short distance. BookMyCab offered mobility solutions to a growing target audience of people using smartphones and provided additional income for taxi drivers. The taxi drivers preferred long-range rides since they make more money on those, whereas getting a cab for 2-3 km was quite the task for the consumer. Their platform enabled taxi drivers to find passengers without having to stand in line and wait. Consumers could book a cab which would pick them up, an idea which is standard today. Investing in BookMyCab at the time was a no-brainer since they solved problems for both markets.

 

 

What was your competitive analysis for BookMyCab? As per reports, Ola had already raised 4 Million US dollars from Tiger Global when you invested in BookMyCab.

The most significant moat that BookMyCab had was being the licensed booking service for Mumbai. While Ola was utilizing tourist taxis for local travel (technically not allowed at the time), BookMyCab got the local ‘kali peeli’ taxis, licensed by the RTO. The license gave them a considerable competitive advantage in 2012, before the loosening of regulations that allowed Ola and Uber to expand aggressively. While the other platforms were working in a grey area, I thought this competitive advantage would be critical in fighting off the competition. BookMyCab had a fleet of close to 100,000 taxis they could onboard very quickly. In contrast, the competition had to spend copious amounts of capital to acquire drivers and give massive bonuses to keep them sticky.

 

What did you like about Avinash? Did his IIT Mumbai tag play a significant role in the selection?

More than the IIT tag (I’m not much of a believer in tags), what excited me about working with Avinash was that he was willing to get into the nitty-gritty. He was a part of Financial Technologies with Jignesh Shah, so he had a history of working in intrapreneurial positions. Convincing cab drivers to accept digital cash as payment was a big deal. I appreciated that he was willing to get his hands dirty.

 

The taxi market in cities like Mumbai and Kolkata is still fragmented (Yellow taxi in Kolkata and Kali peeli in Mumbai). Would you invest in a similar startup today if they are looking to consolidate the pending fragmented market?

Consumer preferences have changed today, and there already clear market leaders in this category. People would prefer to either book an Uber or an Ola due to the standardization of services, timely drivers, the cars are in better condition, and well, air conditioning. I wouldn’t change my decision to back BookMyCab in the past, but today, the market is very different from what it was in 2012. The cream-of-the-crop drivers are already on competitor platforms like Ola and Uber. By the way, both platforms also let you book kali peelis.

 

What were your learnings from your investment in BookMyCab?

Whenever you invest in an early-stage startup, they must become a market leader to cement their position. 80% of the investment, visibility, and revenue goes to the top two market leaders. Here are the learnings from my investment with BookMyCab:

  1. Push them to be more aggressive in acquiring drivers. This is not to say that Avinash was not aggressive; I should have encouraged him to be more aggressive.
  2. Early on, I focussed more on growth over profitability.
  3. Not to depend on permits as a competitive advantage. I had (too much) faith that the government would protect the license, and the competition operating in grey areas would ultimately be shut down. Public good consistently trumps legislation. I applied this learning in our investment in LenDenClub, which is doing exceptionally well.
  4. I learned a harsh lesson when Ola offered to acquire us, but the board declined the offer. Ola’s offer value grew by almost 15x over the next 2-3 years. If I had taken the deal, BookMyCab would be the biggest winner in our portfolio, but the lesson was learned. Therefore, if consolidation cements the number one position, then take the offer.

Unlocking of Behavioural Changes

Several founders wait with bated breath as the Indian economy reopens after a 76-day hibernation. Many of them wait in anticipation that there will be an outbreak of indulgence consumption or revenge buying that will flood the empty coffers of revenue starved companies. It is (however), not the time for founders to get complacent. There is a long road ahead once the dust settles and we will see the clear signs of permanent behavioral changes after this temporary hysteria fades away.

I believe that we will see permanent behavioral changes starting from the way we lead our lives to the products or services that we consume (and the way we consume them.) Although I agree with Fred Wilson that companies in telehealth, food delivery, and work from home would benefit from these behavioral changes, I would add a few more for those of us living in India.

One of them is online education. In the past, most online education platforms suffered as the instructors were camera-shy when providing instructions to an online audience. Many instructors also found the technology tools daunting and they avoided using them. However, I do not expect parents to enthusiastically send their children back to school. The lockdown provided an extended incubation period pushing instructors to overcome their fears and shortcomings. I believe that the imparting of education through online mediums will continue to expand. Vocational classes are next, then hobbies and even working out, creating great business opportunities. I have current and prospective investments that will benefit from this behavioral change.

Another one is neobanking. It is a travesty that our banks continue to function with 20th-century design and tech infrastructure. I had hope that the lockdowns would have forced them to take a relook at their online banking offerings and improve services for customers. However, our banks are too big to move quickly. This creates a great opportunity for neobanks that add a friendlier design and process layer over the old banking infrastructure. The next 18 months would be crucial for neobanks to scale massively before the traditional banks catchup. I have current and prospective investments that will benefit from this behavioral change.

Another one is multiplayer online gaming. Social distancing is disrupting the hospitality sector especially the nightlife industry with authorities in Japan going as far as demonizing nightlife districts. However, the human need for socializing is driving us online and onto apps like Ludo, Houseparty, and Tambola. Ludo King reported a 4x increase in DAUs with more than 50 million users interacting with their app daily. I believe that the joy of online gaming companies has just begun.

Like Fred mentioned in his post, the next 6-18 months will be an interesting period to study these behavioral changes. It is an important period for founders as they must navigate these uncertain waters, readjust, once again achieve product-market fit and then start scaling up again.

 

 

 

Is the Health vs Privacy Debate Reaching a Point of No Return?

Recently, I was on a weekly update call with one of our food delivery startup founders. They were restarting delivery operations from a multitude of small, but FSSAI certified kitchens. To rebuild consumer confidence, they developed technology that would not only let consumers know the food they were buying was prepared in a clean environment – it would also let them know that the people making the food were healthy at the time of preparation.

As the founders ran through the list of checks and updates they were keeping on the chef and the helpers, I asked a question that brought pin-drop silence to the Microsoft Teams call, “Why don’t we install live CCTV feeds from the kitchen to our control centers and give the consumer the ability to view the footage?”

My team and the founders immediately countered my proposal with issues related to privacy. While I have (for an insanely long time) believed that privacy is a myth, I believe that in a post-COVID world, privacy will lose out to health.

Not only will consumers demand transparency into what goes into their food. They would also want to know more about the people preparing the food as well as the people involved in its delivery. The need for more information will clash with the worker’s demand for privacy. The privacy evangelists may stand on the streets with placards demanding protection; unfortunately, we live in such novel times that companies that wish to protect privacy may find themselves out of business.

It was not a surprise to me that I found a tweet about a Chinese delivery app that has installed body temperature monitors on their workers. They provide a live feed of the temperature on the consumer’s app. Some could say that this is an invasion of privacy.

In fact, how long would it be before the consumers demand similar monitors and information on the chefs, the helpers, and the waiters? In fact, why not the suppliers? The cleaners? Where does it stop?

The Chinese are not global role models for privacy protection; however, the pandemic is pitting the ideological notions of privacy against the real danger to health due to the way this virus spreads. Interestingly this debate isn’t confined to the US or China; it rages in South Korea, India, and several other countries.

Therefore, Casey Ross is correct in asking if this is a 9/11 moment for the health-over-privacy debate. We gave up privacy for security then, what stops us from making that trade-off now?

Episode I – Harsh Shah, Co-founder of Fynd

Glad to have Harsh Shah as the first entrepreneur on #DamaniTalks, and I couldn’t have asked for a better founder to get us kicked off! Here’s our conversation below. You can catch the interview on IGTV.

Summary of topics:

  • Harsh’s history and the Fynd journey
  • Being acquired by Reliance Jio
  • Harsh’s monthly ‘newsletter’ updates
  • Being transparent with investors about failures
  • Different types of investors in Fynd
  • How has COVID affected Fynd
  • Fynd’s business model in a nutshell
  • How has being a part of Jio been different
  • Is it restrictive or empowering to have one investor
  • Tips for entrepreneurs who want to get acquired
  • Harsh’s personal interests
  • Being a founder investing in other founders
  • Recapping a round of funding with investors
  • Going from the idea phase to execution
  • Rapid Fire Round

Transcription

 

Anirudh: Hi everybody, welcome to the first edition of DamaniTalks (every Thursday at 9:00 pm on IG Live). It’s always been my thought that most VC events talk about raising money, but very few people talk about what happens after you raise money. I’ve (thankfully) been a part of the Fynd journey with Harsh for almost 5 years now. Let’s talk about your history and experience for a minute.

Harsh: It’s great to be here as well, aD! I did my engineering from IIT Bombay, worked for a couple of years in consulting and then analytics. In college, I was a part of the Entrepreneurship cell, and I had a startup in my final year, but I joined a consulting company. My co-founder and I quit our jobs in July 2012, came back to Bombay and started the Fynd journey. It’s been eight years, and I don’t think the journey is anywhere close to completion. Our focus has always been to work with technology in the retail space. Since then (touch wood), the 3 of us have been lumbering on together. 

Anirudh: I’m guessing part of having each other shoulders would also be smacking each other’s backs when you got the Reliance acquisition in August 2019.

Harsh: It’s been almost 10 months since the transaction, and initially we thought “that moment” would be when you sign, or when the money is wired to your account. It’s a much longer process that took 5 months to go through the whole transaction, and at the end of that, the main feeling was not happiness, it was relief. 

Anirudh: One of the things I like about the kind of entrepreneurs you were, was the monthly updates you would voluntarily send us. What inspired that “newsletter?”

Harsh: Firstly, a big thanks to Sakshat, who ingrained this is us. When he asked us for updates, we started with ppts, but quickly figured out that we also need to tell our investors what we required from them. At that point, we had around 20 investors, and since we wanted to give them all an update, the “newsletter” was born. We thought it was essential to get their thoughts and feedback on how we were running Fynd. No matter how many shares you owned in Fynd, you would get our update. 

Anirudh: You were also very transparent and candid about your failures in the updates. Did you ever feel like this could hurt you, and maybe you shouldn’t? 

Harsh: I always believed that our investors were on our side of the ring. All I thought was, “here’s a bunch of people who are working with us to make the company better.” We were doing this for the first time, and we can always use the help. Hiding failures would be more detrimental to us than just being honest. 

Anirudh: How has the journey been different from the different sets of investors you’ve had? 

Harsh: The insight of our investors on how to run a company at every stage was brilliant. We had 86 investors, three founders, and some ESOP holders before we got acquired by Reliance. Overall, I would categorize my investors into five categories:

  1. The angel investors and founders knew us personally, so the mindset going into those investments was they thought we could do something interesting and decided to back us. 
  2. The family offices like Artha are patient investors, who just made sure that things were going well. 
  3. Google told us that they thought Fynd’s problem was a tough one and understood that we didn’t scale up in the best way. But they believed in our idea and its long-lasting strategic value. 
  4. Jio has been different from every other investor. Their questions are similar to early-stage investors. They want to know how fast we can grow and scale-up, and only when we scale the idea, x1000 was it worth talking about it to them.

Anirudh: Let’s talk about current events. There’s an exit in August 2019, 4 months later a pandemic, another 4 months, and we’re in lockdown. What’s been happening at Fynd at that time? 

Harsh: We’ve been continuing with our roadmap, and now we have a partner who can give us access to an extensive use case, especially within retail. Our focus has always been to bring technology to retail, and now we have access to these doors to test out a lot of the ideas we were building. Before Jio, our focus has almost always been towards Fashion & Lifestyle, but we’ve been looking at other categories as well. Our top line and the number of transactions came down by a significant margin because of COVID, but the company and services we built received a massive demand. Many brands have pulled the trigger, saying that they want Fynd’s omnichannel platform to help them power their web stores, marketplace listings, etc. As a team, we’ve been super overworked, COVID has shaken us into accepting this reality immediately. 

Anirudh: What does Fynd do from a consumer angle as well as a brand angle? 

Harsh: Fynd provides a technology platform for brands to merge their offline and online channels. Our B2C business is most accessible to consumers, which has been used by around 20 million users. Funnily enough, that’s the smallest part of our business. As we started building websites for brands, we realized that many features could be made to be modular. The vision is that brands come to us; we build their store and give them the tools to build an ecommerce store and have it running within 4-5 days. And Fynd manages all the payments and logistics for sellers as well. 

Anirudh: What’s it like to be part of something as massive as Reliance Jio, and is it everything it’s made out to be?

Harsh: When we were in talks with Jio, everyone told us we would get lost and pushed around by the conglomerate, but kudos to Reliance, we’ve been quite happy. They respected our capabilities in what we’ve done and what we can do. They recognized what we brought to the table and how we built our company and culture. They want us to remain in that high-performing comfort zone, as long as our goals and interests were aligned. We talk to them often, and apart from being an investor, they play a significant role as a client too.

Anirudh: Now, you’ve gone from managing 86 investors to 1. Does that change the way things are right now – is it constrictive, or is it more creatively empowering? 

Harsh: I’d say it’s more creatively empowering since they’ve given us the independence to do things our way. We have a fairly large playground to experiment in. If an idea doesn’t work, we can go back to the drawing board, but if it works, then we have the resources to scale up massively. 

Anirudh: I’m glad we finally have someone in India willing to acquire entrepreneurs and let them be. What are some tips for entrepreneurs who want to get acquired by companies like Jio?

Harsh: None of us founders were looking to sell when Jio acquired our investors’ shares (87%). As a founder, if you’re just looking to get sold, that’s probably not the right mindset.

Anirudh: There’s a common misconception that entrepreneurs should always be thinking about their business. I did some research and learned that you’re an advanced open water diver, an avid reader, you travel, and you’re also into running.

Harsh: Haha, I went diving in the Galapagos in December, and my co-founder, Farouq, introduced me to it. Luckily, my wife and our friends are also into diving. It was magical to be inside the water where you hear nothing but the sound of your bubbles, and you can just forget about everything. 

Anirudh: That’s true, every time you go underwater, it’s just you, the surroundings and your bubbles and you’re one of the fishes. 

Now, you, too, are a founder investing in other founders. We’re about to close investing in one of the deals you referred to us. What was your inspiration to start investing, and what are some of your investments? 

Harsh: I don’t have any specific sector or typecast founder. It started as payback; I didn’t think about making money or returns. I respected the help I got from Zishan, Gagan Goel, Rohit and Kunal, Ramakant Sharma, etc. At some point, I decided that I’d love to be a part of the journey and put my money where my mouth is. I have about 16 investments right now, which are sourced through our networks of juniors, seniors, etc. in the industry. It’s about backing a founder who has ambition combined with the potential and capability. If you want to pitch to me, you can connect with me at harsh@fynd.com.

Anirudh: How did you go from building a business plan to getting that show on the road? When do you stop doing the research and start the execution? 

 Harsh: I think you do research continually on the market, but you should mainly focus on the problem and the competition. I think the moment you have identified a problem; then you can build a solution or a product. Don’t try to do anything too fast – take your time to perfect the product. Don’t overthink it; the product will keep changing. 

Anirudh: There’s a lean startup mentality – you go to market, then you learn and then build further. 

Harsh: You are never going to stop building. There is no version 0.5. Your product keeps changing! So just start making a lot of version 1’s.

Anirudh: What are 3 pieces of advice that you could think of that were beneficial to you? 

Harsh

  1. Kunal once said, “Know the organization you are trying to build – build it in line with your personality.” You need to think about the kind of organization you want to build at what scale, and how you’re going to develop that.  

 

  1. Vikram, currently the CEO of NSE, told me, “Maintain an organization chart and reassess your team at every stage.” He helped reorganize and gave us a meticulous structure and told us what we need to follow. We experimented with what he said, and his ideas made us a better company.  

 

  1. Sasha said, “It’s okay to pivot away from what you’ve got, even if it’s successful and profitable but not growing.” He shares many stories about different startups he’s worked with. Before we pivoted away from Shopsense, he said don’t give me my money back – come back in 3 months and tell us what you would do instead. 

 

Anirudh: What are 2 pieces of advice that you got that you thought was initially brilliant, but have now realized its non-sense?  

 Harsh

  1. Hey, this is happening in China – you guys should do it.  
  2. Just figure out growth, revenue can come later  

 

Anirudh: Fynd, at one point, has taken a hit on your evaluation but convinced your investors to recap. Investors gave equity back but were still willing to continue backing your efforts. What was that like? 

Harsh: In conversation with Abhishek – He suggested asking K Capital if they were okay with doing a recap; even Artha did this. We would rather do this than see our money go down the drain. The hit could be less than a write-off. They were never in the dark – the communication lines were always open. We shared a live dashboard with our investors instead of a presentation to see what was going on anytime they wanted.

Anirudh: Have your work hours changed since Reliance has acquired you? 

Harsh: Not really, but since Reliance works at a different timezone, there are more late-night calls. We’re the early risers who get into office at 8 am and out by 4/4:30. I still work 6 days a week, 7 days mentally, but the advantage now is I’ve got free time in the afternoon to spend time with my wife or nap. 

Anirudh: What’s a book you are currently reading?  

Harsh: Being a massive history buff, I’m reading ‘A Little History Of the World.’ I would also recommend ‘Range’ by David Epstein, which talks about how generalists can win in a specialized world. I look at myself as a generalist, which helped me figure out whether I’m doing something right or not.  

Anirudh: Revenue vs. Valuation?  

Harsh: Revenue comes first, except when you’re raising funds – then valuation comes first.  

 

Anirudh: What was the feeling like when the exit was done? Now the journey at least with these investors is over?  

Harsh: Some Investors wanted to continue, and almost all the investors asked us why we were selling. I think all the investors were making decent returns as investors – the lowest IRR was 30% – Artha made 62%. People wanted to stay invested, but we had to do the right thing for the company – if there was a better option, we would have taken it. It was one of the proudest moments of our lives when we were able to give back positive returns to our investors. The fact that we were able to give back the trust they put in us was very satisfying. When we first got our money – we put the money back in our company to pay salaries, etc. We went for dinner to celebrate, and then we started figuring out how to save on capital gain stats.

Anirudh: One piece of advice you would like to give to any Entrepreneur?

Harsh: Figure out how to make profits – what are the moving pieces that help you make returns. Figure out the equation and factors that are going to make you profitable. If you have already figured that out – then great, read a book! 

Flashback Friday: Rolocule Games

Rolocule Games is a game development studio creating realistic, casual, and social video games for tablets and smartphones. They design games using emerging technologies such as AR, VR, IoT, and AI. From designing award-winning Rolomotion™ technology for Apple to the recent Eagle Eye, which was an SXSW 2019 Innovation Awards finalist, Rolocule is emerging as amongst the leaders in leveraging cutting-edge technology in game design and experiences.

 

Rolocule created the official Australian open Tennis VR game in association with Australian open and Infosys. Their impeccable business ethic about being nimble and flexible has got them rapidly developing multiple games and pivoting, as industry change has become a case study at the world’s top business schools, Harvard and IIM-B.

 

Founder: Rohit Gupta Total funding raised INR 6 Crores
2020 status: Operational in Pune Number of rounds 4
Co-investors: Blume Ventures, Mumbai Angels, CIIE

 

 

  1. Why did you invest in Rolocule Games?

Other than being intrigued by the gaming sector, Rolocule had a fantastic team. What swung my decision was when they were trying to create a game which would utilize your smartphone as a gaming paddle, similar to how the Wii Remote functions. Their game Super Badminton for the iPhone was a huge hit – big enough that they were invited to Cupertino by Apple in 2013.

 

  1. What were the risks involved with an investment in Rolocule Games?

Like with any gaming company, it’s a zero-one risk; it’s either a success or a failure. Rolocule was going to be a success and a fantastic winner in our portfolio, or they were going to shut down. Creating, publishing, and promoting a game is an expensive proposition, and funding would only give them a few chances to succeed. It was also possible that the games would not be received well, and if there were 2-3 failures in a row, it considerably reduces the chances of following games being a success.

 

  1. Where do you place your investment in Rolocule Games when you see the success of games like FIFA, PokémonGo, etc.?

In my opinion, the two aren’t comparable. Apart from the difference in budgets, games like the FIFA series are licensed brand names from the organizations and backed by AAA game studios like EA Sports. PokémonGo has Nintendo’s name behind it, and Pokémon is a sensation on its own. Just these reasons are enough to set them apart, overlooking the fact that games like FIFA are updated and released annually. Rolocule exists in a different gaming space where they’ve integrated the technology in smartphones to software, allowing players to use it as a racquet or a paddle, like the Wii Remote.

 

  1. What are your learnings from your investment in Rolocule Games?

It taught me to be more realistic about zero-one plays, where you need to know when it’s not working and stop pumping more money into it. Initial success is not a guarantor for long-term success. It also taught me that not everything could be gets written off as simply; Rolocule went from becoming a game developer and publisher to just a developer of games. I’ve also learned that the defensibility of games is lower than usual. Similar to how most movies have a shelf life of 4-6 months, you have to reap everything you can in that window of opportunity.

 

  1. Would you invest in a similar startup today?

Yes, but with some caveats. As an investor, I would want better control. With the experience of backing a zero-one style business, I have a much better understanding of the space, and I would invest in an entrepreneur like Rohit again. Still, in terms of the venture, I would be more careful about the valuation and evaluate success, keeping in mind that initial success is not a guarantor of long-term viability.

 

 

My Favourite Funding News from Last Week (w20)

There is a slow recovery in the funding of early-stage startups. We are still a long way away from the heydays of 2018-19, but the growing pace of activity in angel networks & early-stage funds are promising signs.

After shortlisting the early-stage deals for week 20 from Traxcn, Inc42, and YourStory, we picked out the following as the best funding picks for the last week:

 

Name: Vernacular.ai

Amount Raised: USD 5.1 mn led by Exfinity Ventures and Kalaari Capital

What does Vernacular.ai do?

Edited from Traxcn: Vernacular.ai is an AI platform to manage customer engagement and call center automation solutions. It provides multi-lingual chatbots for automating customer service operations of enterprises using natural language processing and deep learning. Natural language processing helps the bots to extract meaning, context, and entities of incoming messages, thereby enabling companies to interact and engage in any language with customers.

Deep learning helps in pre-training the bot with domain corpus and augmenting with enterprise-specific data to achieve maximum accuracy for the same. The bots developed using the platform can be deployed to multiple omnichannel platforms, including Facebook Messenger, Twitter, Website, Mobile, among others. Some of the supported languages include Hindi, Gujarati, English, to name a few. Clients include Vistaar, Shriram General Insurance, Exide Life Insurance, and Barbeque Nation.

Why do I like Vernacular.ai?

Voice AI has enormous applications in a world where customer service standards aren’t keeping up with the expectations of customers. Customers want to get personalized treatment and in a language that they are comfortable conversing in. As an early investor in vPhrase, I have seen the vast revenue potential of applying artificial intelligence for customer communication.

 

Name: Mintoak

Amount Raised: USD 2 mn led by Pravega Ventures

What does Mintoak do?

Edited from Traxcn: Mintoak offers a POS solution called DOV that enables merchants to accept digital payments. The solution involves a POS hardware device along with software solutions. Merchants can accept various types of card payments, such as magstripe, EMV, NFC, and secure PIN. It also enables the acceptance of UPI payments. Merchants can also accept payments without internet connectivity through their patent-pending technology that allows a POS to the transaction to be completed using the voice channel, thereby improving transaction completion rates. It also offers a consolidated view of all transactions handled by the device.

Why do I like Mintoak?

Except-Jio, most mobile operators operate on seriously inadequate infrastructure to handle the bandwidth demands of India fintech companies in urban centers. I shudder to imagine how vendors in Bharat, where the network infrastructure is weaker, would cope up. Mintoak attempts to use a data-light technology to process transactions, thereby decreasing costs and improving efficiency – an actual Bharat-focussed tech play.

 

Name: MetaMorphoSys

Amount Raised: Undisclosed amount led by Good Capital

What does MetaMorphoSys do?

Edited from Traxcn: MetaMorphoSys Technologies provides a software suite for the insurance industry. It offers solutions for product development, claims management, risk management, and more. It also features software for insurance quoting, sales & marketing, underwriting, and more.

Why do I like MetaMorphoSys?

Insure-tech will be one of the biggest beneficiaries of the post-COVID environment. A CRM focussed on increasing the sales & marketing ability of insurance agents will be a need-to-have utility. Hitting a ₹50 lakh monthly SaaS revenue will be the first port-of-validation for MetaMorphoSys!

My funding picks of last week (w18)

Fundraising activity continues to slow down; therefore, my team and I had a tough time shortlisting our favorite picks with just a handful of deals to choose from. After shortlisting all early-stage deals activity for week 18 from Traxcn, Inc42, and YourStory, we jointly picked out the following as the best funding picks for the last week:

 

Name: QuillBot

Amount Raised: $4 Mn in a round led by GSV Ventures and Sierra Ventures

What does QuillBot do?

Edited from Traxcn: Millions trust QuillBot’s full-sentence thesaurus to get creative suggestions, rewrite content, and get over writer’s block. QuillBot uses state-of-the-art AI to rewrite any sentence or article you give it.

Why do I like QuillBot?

My team and I are Grammarly power users processing tens of thousands of words for our investment notes, meeting minutes, emails, blogs, private chats, and more. I believe that there is space for a Grammarly competitor, especially one that understands the Indianized English – also, can Quillbot (or Grammarly) build a plugin for PowerPoint, please!

 

Name: YAP

Amount Raised: $4.5 Mn led by BEENEXT

What does YAP do?

Edited from Traxcn: YAP offers a white label program management platform. They also issue a Yap Tatkal wallet, which allows their clients to provide their customers physical or virtual prepaid cards linked to their products. They also offer a QR payment solution in the mobile wallet.

Why do I like YAP?

The lockdown caught the banks with their pants down due to unpreparedness to go digital. The post-lockdown scenario is bleak for physical banking, and banks must prepare themselves to fully service their customers from the palm of their hands. YAP is building APIs to bridge that gap hence one to look out for.

 

Name: Mindhouse

Amount Raised: ~$680K from BTB Ventures, GGV Capital, Aartieca Family Trust, and Angels

What does Mindhouse do?

Edited from Traxcn: Standalone mental fitness and wellness center brand

Why do I like Mindhouse?

The COVID19 virus reserves it’s worst for those with weakened immune systems. Therefore I expect that fitness (physical or mental) will be on the priority list of most in the post-virus era. Mindhouse attempts to enter the space that mind.fit is operating in. Will it succeed?

My Funding Picks of Last (two) Weeks (w13 & 14)

After the turbulence of the last few weeks, I finally carved out the time to share my funding picks of Week 13 & 14 of 2020.

My team and I shortlisted the deals for week 13 & 14 from Traxcn, Inc42, and YourStory and we jointly picked out the following as the best funding picks for 17th March to 29th March 2020 period:

 

Name: Qtalk

Amount Raised: $1.6 million from Accel India & Lightspeed Venture Partners

What does Qtalk do?

Edited from Traxcn: QTalk is a mobile application that provides calling for friends and family members. It allows users to make affordable local and international calls using phone internet/network or WiFi technology. Its features include call recording/history/remainders, caller ID, spam blocking, calendar integration, and others.

Why do I like Qtalk?

Qtalk brings an interesting tech layer on top of a regular dialup app providing smart features like silence overrides, shared browsing, and call intent. The app offers WiFi calling, which is a much-needed feature to overcome the overloaded network infrastructure in India today.

 

Name: MedCords

Amount Raised: ₹7 crores from InfoEdge India

What does MedCords do?

Edited from Traxcn: Medcords is a medical record management solutions provider for patients, doctors, pharmacies, and lab centers. Prescriptions, bills, personal information, etc. can be uploaded to the mobile app. Doctors can view the past medical history of patients and can access other medical records of the patients. Patients can view all information related to their health, and also pharmacies and labs can access the record to provide services to patients. Also, uses analytics and provides trends to doctors and patients

Why do I like MedCords?

Maintaining medical records is painful. To aggregate one’s medical information, prescriptions, blood reports, and past medical history into one space are even more painful. MedCords aims at solving this problem. It provides a one-stop solution for one’s medical needs, and once it reaches critical mass, the data analytics layers will pay rich dividends for the investor.

 

Name: PitStop

Amount Raised: $2.5 million from Group Landmark, Blume and Goldbell Group

What does PitStop do?

Edited from Traxcn: PitStop is a closed marketplace for car service providers. It provides an estimated cost of service and offers the option for doorstep pickup and delivery. Provides status tracking after booking service. They claim to have the service done in 2 hours. Pitstop has expanded to several locations including Delhi, Bangalore, Hyderabad, Mumbai, Pune, and others.

Why do I like PitStop?

I am not a big fan of the fragmented vehicular maintenance space. However, Pitstop’s substantial revenues numbers put them a cut above the rest. That is the reason why it is on my list. Pitstop wants to use the data reservoir created from its vast customer base to offer services like vehicular insurance, etc. If it can continue its phenomenal growth in the post-Corona phase – this one could be one to watch out!

 

PS: Artha Venture Fund invested in Agnikul, a deal that got announced a couple of weeks back. While I am a big fan of the team and the deal, I keep our investments outside the purview of these picks.

You can read Vinod and my reasons for investing in this detailed blog: Why We Invested in Agnikul?

Founder Playbook: Getting ahead of Covid-19

The aftermath of the pandemic spread of the Covid-19 virus has hit financial markets where it hurts the most – their ability to bank on the future.

These are unprecedented times as countries close their borders, the Italian government shuts down businesses, and schools, colleges, and universities are shutting their campuses and moving classes online. The disruption in business and how it will get conducted in the near term has created a tectonic shift that is rattling global markets.

When the most capitalized financial market in the world starts oscillating like a 5-year-old getting on a swing for the first time – it is time to sit-up and take notice.

Even we felt the tremors far away, i.e., in the venture capital ecosystem. Sequoia’s calling Covid-19 spread The Black Swan of 2020. This spread is dangerous, and the situation could spiral out of control – quickly.

Therefore earlier this week, Vinod and I had organized a conference call with Artha Venture Fund’s founders to address this growing situation and to work out how we could get ahead of the problem. Here is a brief synopsis of how our founders are tackling this issue (thank you, Arvind, for these notes):

  1. Do not panic but stay vigilant
    1. Keep an eye out for a demand drop in the next 3-6 months
    2. Respond to it quickly and decisively
  2. Remember that a typical downcycle in VC lasts for 18-24 months
    1. Survive this period, and you will thrive when the tide is back
  3. Investors are tightening their belts
    1. Be prepared for long delays in fundraising
    2. Drop-off in valuations
  4. Prepare fresh budgets
    1. Be conservative in revenue estimates
    2. Cut unnecessary & discretionary spends
    3. Find ways to control the burn, i.e., increase revenues or cut the costs
  5. Despite your best efforts if you envision run out of money in the next 6-9 months, then
    1. Raise an additional buffer right away and extend your runway to 15-18 months

As an optimist contrarian, an economic upheaval offers the best opportunity to gain on the competition. One must remember that people will continue to consume goods and services, but the way they consume it is going to change – temporarily.

A founder must watch the customer’s consumption patterns closely, prepare to pivot the business to serve his customer base, and capitalize – even in these adverse business scenarios.

A note: I do not attempt (in any way) to disregard the seriousness of this virus. The severest impact of this is on the part of the population that has pre-existing medical conditions. To me, it means that entrepreneurs are in the higher risk category due to entrepreneurial stress they undergo (I have written about in the past). The recent turmoil is just adding to that stress.

Therefore stay calm, stay positive, keep your ears close to the ground but keep your hands clean and off your face. 😊