Flashback Friday: Triggero

Triggero was an enterprise rewards and recognition services platform. Triggero worked on a SAAS model and was a provider of an enterprise social recognition platform designed to encourage the culture of appreciation. The company’s enterprise social recognition platform was easy to use. A powerful workflow engine that helped in employer could be custom moduled and self-managed, enabling leaders to drive culture and manage change in the organization.

 

Triggero was instrumental in creating a productive & motivated workforce, energize sales & distribution eco-system. Triggero had partnered with some of the prominent organizations across industries like Telecom, BPO, BFSI, White Goods & IT.

 

Founder: Paras Arora & Abhishek Singh Total funding raised USD 75,000/-
2020 status: Shutdown Number of rounds 1
Co-investors: Mumbai Angels

 

Why did you invest in Triggero?

Triggero was a powerful B2B SaaS platform in the HRMS space, looking at creating a rewards and recognition platform for in-house employees. One must remember that Triggero predated the entry of  Yammer, Slack, or Microsoft Teams in India, platforms that most of us have made an integral part of our work lives today.

Triggero also provided managers the ability to reward employees by giving them points that could get redeemed at the Triggero store for gifts. It was a unique offering.

 

What were the risks involved with the investment in Triggero?

I know now (but I did not know when I made this investment) that rewards & recognitions platforms make the best sense for companies that house large teams managed by a well-established HR department. Therefore selling to medium to larger-sized companies carried its own set of risks like:

  1. Long-tail sales cycles
  2. Larger budgets to hire experienced B2B sales reps
  3. They are competing against legacy systems and high switchover costs.

In 2012 employee rewards and recognition were unknown. Even employees associated HR with Holidays and Rangoli,’ and business owners looked at HR as a cost center. Therefore, I realize (now) that Triggero was probably too early for the Indian market. The company should have raised a much larger round of funding to buy itself time, which unfortunately at the time (and possibly even today) was not available.

 

What was the primary reason behind dead pooling Triggero’s investment?

There were a couple of factors that affected this decision. Triggero lost a major client shortly after we put in the first tranche of investment. The company started to hemorrhage money due to the loss of revenues. This investment also enlightened me on the considerable time lag between billed revenues and banked revenues in a post-paid B2B revenue model.

The founders’ plans to scale fast took a severe hit, and they could not afford the capacity that they had acquired to build their platform. Considering all the issues that the company faced, it did not make sense to continue investing in the company, and I wrote off the investment.

 

What mistakes did Triggero make, and what was your learning as an investor?

Triggero’s biggest mistake was that they tried achieving B2C growth as a B2B company. Therefore, instead of waiting for purchase orders to build development and delivery capacity, they made capacity and then tried chasing sales – a dangerously desperate situation that any B2B founder should not find themselves in. Therefore, a lot of the expenses got frontloaded before revenues flowed in.

Secondly, I firmly believe that they didn’t raise enough capital. Triggero’s angel round did not give them enough runway to experiment, and (with the benefits afforded to me by hindsight), the founders and the angels should have decided against investing the money. Instead, we could have waited until Triggero could raise a more substantial round to give Triggero the runway to become a significant player.

Third I learned the importance of tranche-based investing. It is an essential method of risk mitigation for early-stage investors in cases where the venture doesn’t go down the desired path.

 

Would you invest in a similar startup today?

I believe that the world has moved on from R&R platforms, and Triggero would have a tough time finding a niche in the corporate domains where Slack, Teams, WhatsApp, and Yammer dominate communications.

It had the potential to be an Indian version of Yammer (that Yammer/Microsoft could eventually acquire), but alas, we did not get the required scale and adoption.

 

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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.

#DamaniTalks – Episode 1 with Harsh Shah, Co-founder of Fynd

Having Harsh Shah as the first entrepreneur we had 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.

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! 

My Funding Picks For The Last Week (W25)

Every Monday, I sit with my team to review the funding activity of the previous week. From that list, I pick out three companies that I would have loved to invest in or find founders that are doing similar things. Click here to know about my rationale behind this weekly exercise.

 

While the funds raised by India’s startup ecosystem (barring Jio) fell, it was heartening to note that we continued to maintain 2 deals per day average with 13 startups raising $27 million. Out of the 13 deals, 10 were in the early-stage (compared to 13 last week) rounds, which made the cut for my weekly analysis.

After sifting through the news (aggregated from Tracxn, Inc42, and YourStory), I pick out these three as my favorite funding news from last week!

 

Name: Myelin Foundry

Amount Raised: Undisclosed from Pratithi

What does Myelin Foundry do?

Edited from Traxcn: Myelin Foundry is a video distribution solution provider. It helps to deliver ultra HD zero-rebuffering streaming, on any network and reduce the time and cost to market and deliver AI-powered content.

Why do I like Myelin Foundry?

At first look, Myelin reminded of Pied Piper from the show Silicon Valley. However, after checking out their products page, I am very excited about the tech stack that Myelin is attempting to build. If they can stream HD content through EDGE network – it could be a game-changer!

 

Name: Ameliorate Biotech

Amount Raised: ₹2cr from Friends of PadUp, Villgro USA, Vinners, LetsVenture, SINE IIT Bombay, and DERBI

What does Ameliorate Biotech do?

Edited from Traxcn: Ameliorate Biotech develops recombinant therapeutic proteins and diagnostic kits. They have developed their technology to produce a recombinant protein in an antibiotic-free process. They are developing biosimilar products for treating oncology, Autoimmune disease, ophthalmology, and nephrology.

Why do I like Ameliorate Biotech?

I am not a fan of biotech startups because of the long development cycle and high mortality rates of these companies. However, I like the experience the team of Dr. Rashbehari Tunga & Dr. Binit Tunga has in this field, and I’d want them to succeed.

 

Name: YoloBus

Amount Raised: $3.3M from Nexus Venture Partners and India Quotient

What does YoloBus do?

Edited from Tracxn: YoloBus is an online platform for travelers that provides intercity bus services. Travelers can select their route, choose pickup/destination, enter travel date & make bookings via the app by making an online payment. Their app is available for iOS & Android devices.

Why do I like YoloBus?

This one deserves another mention as I had shortlisted this deal in February 2020. Intercity travel must start once again, and I expect domestic tourism to boom first. However, the quality will trump cost when it comes to matters of health, and YoloBus has a great chance to capitalize on this new trend!

Flashback Friday: BrandIdea Consultancy

BrandIdea is a business intelligence tool for marketing and sales information. They offer a SaaS-based business intelligence enterprise tool that helps companies analyze their markets & last-mile sales data. It Integrates and models data from a multitude of sources and client’s internal data to provide analytics to gain insights & maximize the ROI of marketing campaigns.

 

Using advanced Data Science techniques, they generate visually enriched granular analytics streams that are dynamic, deep, and point to precise directions that help companies to make the right decisions. Critically, these analytics are granular – at the micro-market level, thus creating a bottom-up, aggregating impact of customized marketing actions. So not only can the companies re-visit their decisions at short intervals to course-correct or shift priorities periodically, they can do so at every geo-location, creating the bedrock for growth.

bic

Founder: Suresh Pillai Total funding raised INR 2.25 Crores
2020 status: Operational in Chennai Number of rounds 2
Co-investors: Mumbai Angels

 

Why did you invest in BrandIdea?

In a market as broad and diverse as (pre-digitalized) India, information at the last mile was always challenging to collect, and the data that existed was inaccurate. BrandIdea provided a solution using which large brands could gather granular and in-depth information about that last mile. This information not only helped the brands with their marketing efforts but also their inventory and other aspects of their business.

BrandIdea was the first enterprise tech company that I invested in. The decision was driven by the fact that their enterprise clients had massive marketing budgets and teams that would be willing to pay for that level of granular data.

 

What were the risks involved with an investment in BrandIdea?

As with any B2B SaaS play, there are a few issues we knew we would face.

  • One of them is the long decision-making timelines that large conglomerates like Colgate, Tide, HUL, Unilever, etc. have. However, it is worth being said that once the partnership is complete, these partnerships can be very lucrative.
  • Enterprises have long gestation periods to make a decision; therefore, another risk with Enterprise SaaS is the sales-cycles are going to be extended. You need to maintain firm control on the burn and accommodate for completing those decision cycles.
  • Another risk is that Enterprise SaaS companies can become profitable but not scalable. This could turn it into a lifestyle business, where the founder makes enough money to live comfortably but doesn’t grow, and as a VC investor, you’re stuck. B2B SaaS plays need to move quickly towards $1M per year in revenue before they can be considered a moderate success. The longer it takes to get there, the lesser the chances of it getting further VC interest.

 

What are your learnings from your investment in BrandIdea?

As I mentioned earlier, there are long gestation periods, and it’s a lot of relationship-building with enterprise SaaS companies. It takes a while to get a lot of clients, and the slower that process is, the worse it is for a VC investor.

This was also the first time we invested in a family-operated business, by Suresh and his daughter, and his daughter eventually left the company.

We learned how to evaluate such companies better. If a company gets into a lifestyle-business model, how do you, as an investor, get your money back; or get good enough dividends. We are still learning that.

 

Would you invest in a ‘BrandIdea’ if it came to you today?

When it comes to enterprise SaaS, we’ve learned that it’s a long process to build a company, and as traditional investors, our IRR expectations are upwards of 75% per year. While BrandIdea didn’t burn too much capital, they didn’t grow fast enough for our liking. Therefore, we don’t think that we are the right investors for them, and they aren’t the right investments for us.

 

What are the exit opportunities that can be foreseen for BrandIdea now?

The possible exit opportunities would either be a founder/company buyback, or the business gets rolled up into a large company offering a suite of products to similar enterprises.

 

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?

My Funding Picks For The Last Week (W24)

Every Monday, I sit with my team to review the funding activity of the previous week. From that list, I pick out three companies that I would have loved to invest in or find founders that are doing similar things. Click here to know about my rationale behind this weekly exercise.

 

As most of India reopened, so did the funding lords! There was a marked increase in the number of startups that raised capital with 19 startups raising $92 million. Out of the 19 deals, 13 were in the early-stage rounds, which made the cut for my weekly analysis.

After sifting through the news (aggregated from Tracxn, Inc42, and YourStory), I picked out these three as my favorite funding news from last week!

 

Name: Cube Wealth

Amount Raised: $500k from Beenext and Asuka Holding

What does Cube Wealth do?

Edited from Traxcn: Cube Wealth is an automated investment management app which, offers personalized recommendations from financial advisors. Users get provided with an option of goal-oriented financial management. Users can set their financial goals, and Cube Wealth saves for the same via EMIs. It invests the money in diversified asset classes, including liquid, MFs, equities, P2P lending, and gold. The app is available for iOS and Android platforms.

Why do I like Cube Wealth?

The Indian wealth & investment management space is broken. A user must struggle through a multitude of apps to gain a full understanding of their exact financial positions. The decentralized information works against the middle class as they cannot seek better deals for their investments. Besides, the power of wealth aggregation that the larger family offices platforms utilize to get access to closet deals or better negotiation terms aren’t available to a middle-class family. Platforms like Cube seek to address this imbalance by using technology & scale to provide premium services at an affordable cost. With 500 million people set to enter the Indian middle Cube has a bright future ahead of them!

 

Name: Credgenics

Amount RaisedUndisclosed from Titan Capital

What does Credgenics do?

Edited from Traxcn: Credgenics offers cloud-based debt recovery solutions to banks and lenders. Its features include collection strategy, analytics for profiling & collection, automated communication for customer engagement, and more. It provides solutions for alternative dispute resolution, insolvency & bankruptcy, fintech laws, and more.

Why do I like Credgenics?

Collections are an art, and while it is easy to lend money, not every fintech company can build a strong collections team. Therefore I am excited that there are startups like Credgenics that we can get our fintech companies to outsource their collections operations too. And it isn’t a surprise that bad debts make excellent business sense!

 

Name: IVF Access

Amount Raised: $5M from Vertex Ventures SEA & India

What does IVF Access do?

Edited from YourStory: IVF Access is a Bengaluru-based healthcare startup focused on providing In Vitro Fertilisation (IVF) treatments in India. Led by an experienced management team, IVF Access is setting up a chain of IVF centers in India, providing Assisted Reproductive treatments such as IVF and IUI. They offer nationwide access to IVF treatments with an innovative technology platform and state-of-the-art labs.

Why do I like IVF Access?

Babies are a multi-billion business opportunity. Therefore, it is not a surprise that the business of making babies is massive. Due to lifestyle-related issues & an increase in the age at which couples have babies, there is a marked increase in IVF clinics. While the market IVF market size is small, it’s going to grow to $1.50 billion by 2026.

IVF Access is an early player in providing a single brand for IVF clinics and could capitalize on a deeply fragmented space!

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.

 

 

Book Review: Ikigai

In my recent memory, Japan has always held the crown for the longest living humans –  almost 20 years higher than the world average. Therefore, it isn’t a surprise that Japan also has the highest centenarians per capita, i.e., the highest ratio of people that are over 100 years old as a percentage of its population.  

Within Japan, the island of Okinawa (aka The Land of Immortals) has the highest rate of centenarians per capita. Okinawa also holds the global immortality title as it has the highest occurrence of centenarians in the world 

The nutritionally dense but low calorieOkinawa diet is credited to be significant factor behind this phenomenon. However, the legend of Okinawans is more than what they eat, which is what Ikigai: the Japanese secret to a long and happy life delves deeply into.  

The word ikigai translates to “the happiness of always being busy, and it is the reason we get up in the morning. What is ikigai, and how do the Okinawans follow it is the concept that reverberates throughout the book.  

Here are my favorite highlights from the book 

  • Okinawans live by the principle of ichariba chode, a local expression that means “treat everyone like a brother, even if you’ve never met them before.  
  • Eat only until your stomach is 80% full  
  • Most health problems are caused by stress 
  • The mind has tremendous power over the body and how quickly it ages 
  • If you keep moving with your fingers working, 100 years will come to you  
  • The last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s own way 
  • We don’t create the meaning of our life – we discover it  
  • We all have the capacity to do noble or terrible things. The side of the equation we end up on depends on our decisions, not on the condition in which we find ourselves.  
  • Accept your feelings. 
  • If we try to get rid of one wave with another, we end up with an infinite sea   
  • We shouldn’t focus on eliminating symptoms, because recovery will come on its own 
  • We can’t control our emotions, but we can take charge of our actions every day 
  • It is much more important to have a compass pointing to a concrete objective than to have a map 
  • Technology is great if were in control of itIt’s not so great if it takes control of us. 
  • The most important thing is to be disciplined in completing the cycle.  
  • If you are not truly being challenged, we get bored and add a layer of complexity to amuse yourself  
  • The most important thing is to focus on the journey 
  • Humor can break negative cycles and reduce anxiety  
  • A happy man is too satisfied with the present to dwell on the future  
  • The secret is smiling and having a good time  
  • Spending time together and having fun is the only thing that matters  
  • To live a long time you need to do three things: exercise to stay healthy, eat well and spend time with people  
  • Talking each day with the people you love, that’s the secret to a long life 
  • They celebrate all the time, even little things, Music, song, and dance are essential parts of daily life  
  • They ate an average of eighteen different food each day 
  • More than 30 percent of their daily calories come from vegetables  
  • Serving food on many small plates makes it easier to avoid eating too much 
  • An active body leads to a calm mind  
  • They concentrate on the things that they can control and don’t worry about those they cant 
  • To practice negative visualization we have to reflect on negative events but without worrying about them 
  • Worrying about things that are beyond our control accomplishes nothing.  
  • It is not what happens to you but how you react that matters  
  • Only things that are imperfect, incomplete, and ephemeral can truly be beautiful because those things resemble the natural world  
  • This moment exists only now and won’t come again  
  • To build resilience into our lives, we shouldn’t fear adversity  
  • Setback is an opportunity for growth  
  • Each moment will hold so many possibilities that it will seem like almost an eternity  
  • Life is not a problem to be solved  
  • Just remember to have something that keeps you busy doing what you love while being surrounded by the people who love you. 
  • Today is all you have. Make the most of it.