In 2012, I invested in Squeakee Media Pvt Ltd. Here are some of my learnings from my investment…Continue reading
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|
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:
- Long-tail sales cycles
- Larger budgets to hire experienced B2B sales reps
- 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.
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.
|Founder:||Suresh Pillai||Total funding raised||INR 2.25 Crores|
|2020 status:||Operational in Chennai||Number of rounds||2|
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.
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|
- 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.
- 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.
- 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.
- 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.
- 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.
Exotel is a cloud telephony (IVR, missed call management, etc.) service provider offering various products for a hassle-free experience. Service includes Voice for a loud and clear experience, SMS for improving the customer experience, OTP based authentication, and VoIP based app to app calling for small and medium enterprises in India.
Exotel helps in building a reliable and efficient business communication system.
Exotel currently handles over 11 million customer conversations every day on an average. Last year, they were dealing with nearly 5-6 million calls a day, which has doubled now. Exotel has thus far acquired two companies - Voyce, a platform that allows businesses to gather customer feedback, and Singaporean voice-based social media startup Croak.it. Exotel had a revenue of more than 120 crores in the last financial year.
|Founders||Total funding raised||
INR 4 crore
|Number of rounds||
|Co-investors:||Mumbai Angels & Blume Ventures|
- Why did you invest in Exotel?
Freshly back from my professional & entrepreneurial stint in the US. Exotel reminded me of a vEPABX service that we utilized the customer service & operations team. It improved our efficiency and service delivery quality. Therefore, it was a surprise for me (circa 2012) that Indian SMEs didn’t have access to this critical technology that would reduce their communication costs.
Therefore Exotel, was a no-brainer investment for me as I knew that they would become the backbone for many businesses in India.
- What were the risks involved with an investment in Exotel?
The most significant risk was the excessive regulations that controlled VoIP calling at the time. Exotel wasn’t allowed to directly purchase minutes from Indian telecom operators, and unfortunately, they tried to bully the company through complicated pricing plans.
Despite all the difficulties, the team worked dutifully in securing the necessary licenses and offering such great value for business owners & startups.
- What were the possible avenues of an exit when you evaluated the investment opportunity at Exotel? I believed (at the time) that a telecom operator would see the stickiness of an Exotel customer and their excellent margins on non-voice revenues to snap them up. Unfortunately, most of the telecom operators have concentrated on the B2C customer with a step–motherly treatment for business owners – despite the knowledge that businesspeople are willing to pay more for better service.
- What are your learnings from investment in Exotel?
Shivakumar Ganesan, aka Shivku, is a second–time founder, an alumnus of BITS-Pilani, Yahoo, and Flipkart. To find a founder with such an impressive resume was a rarity in those times. Therefore, as an investor, we had to learn how to support someone like Shivku. Another significant learning for us was how to invest in startups that operate in highly regulated areas. Exotel along with United Mobile Apps gave me (and my team) a wealth of experience that helped in later investments like BookMyCab, LenDenClub, Confirmtkt, Rapido, Tala and Karza Technologies (to name a few)
- Would you invest in a similar startup today?
Yes, I would. However, I would structure part of my investment as debt or as payment via dividends. Companies like Exotel threw out a lot of cash, which can be daunting for traditional VC funds to evaluate for future funding rounds.
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:
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!
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.
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?
As I approach my personal goal of personally investing in 100 startups within 10 years, it was time to reminisce. Each new investment gave me a new experience, sometimes good, sometimes bad and sometimes ugly. Last week I wrote about my first angel investment, United Mobile Apps. This week is its investment #2!
CarveNiche is an innovative EdTech startup. They developed advanced EdTech products such as beGalileo (India’s largest personalized after school math learning program for K-12 education), Wisdom Leap (free online source for K-12 education), and Concept Tutors (personalized 1:1 tutoring focussed on the international market).
CarveNiche created a niche in the EdTech space. It is the first to develop a product using the latest technology, such as Artificial Intelligence (AI), to teach a subject like Maths. The flagship brand, beGalileo, recently became India’s first after school Math learning program to be available as a Windows App.
At present, they have over 750 women entrepreneurs who are running their centers through CarveNiche. The renewal rates exceed 90 percent, which shows the value they provide to the students and parents.
|Founder:||Avneet Makkar||Total funding raised||INR 5.5 crore|
|2020 status:||Operational with HQ in Bengaluru||Number of rounds||3|
|Co-investors:||Lead Angels, Mumbai Angels, Calcutta Angels|
- Why did we invest in CarveNiche?
CarveNiche’s initial business model was to deliver a superior classroom experience for the school students by utilizing the latest digital hardware with a customized software platform. The platform provided instructors the ability to track the progress of each student and personalize the student’s teaching plan based on how well the student grasped the subject. The platform also offered a messaging service to connect parents & teachers so that they could track the progress of their students at school & home.
I liked the founders. It was a known fact that Indian schools lacked modern equipment to upgrade the delivery of instruction in the classroom. Looking at the massive size of the market, I decided to invest based on the broad target market, solid team, and their clear understanding of the problem and its solution.
- What were the risks involved with an investment in CarveNiche?
The risks presented themselves in three ways.
- Long sales cycles: The company had a tiny window to sell its offering to school administrators, their boards, and their trustees. Next, their team must negotiate contracts, find financing to help the school purchase the required equipment. After that, CarveNiche would implement the solution and train the instructors on how to use their platform. If the company could not complete all these steps before the start of the school (academic) year, the sales decision, the invoicing, and the revenues from it would get postponed to the following year. The company must continue to fund its sales team for long periods before they could see the results of their efforts or get feedback to innovate on the product.
- Providing subprime debt: Most Indian schools do not have a profitable business model. They must regularly fundraise to meet their budgetary needs. Therefore, most schools could not afford the hardware for CarveNiche’s solution – unless provided with equipment financing.
With most of these schools running operating deficits funded by government grants, donations, and trustees, these schools had an inferior debt profile.
To survive, the company had to come up with an equipment leasing/purchasing plan, and they approached us for that financing. We gave subprime debt to a few schools to evaluate their ability to repay, but most of the schools defaulted on their obligations to CarveNiche and us. That experience burned a severe hole in CarveNiche’s bank account, forcing them to abandon this product offering and the selling to schools’ business model.
- Founder risk: In a first (for us), one of the cofounders (Saraswathy) quit a year after we had funded the company, which overloaded the sole cofounder, i.e., Avneet. She wrote about her challenging experience in an article in 2016.
- How long did you plan to invest in CarveNiche?
At the time of the investment, it seemed like CarveNiche would scale quickly and get acquired by a larger player like Educomp. However, our investment coincided with the start of the demise of Educomp, and even though the company raised a couple of follow-on funding rounds, they had to (thankfully) pivot to a B2C business model.
- Would you invest in a similar startup today?
I learned from CarveNiche’s experience that trying to build a massive business that sells to institutions that possess inherently unprofitable business models is like living in a fool’s paradise. The Modi government invests 4.6% of GDP in education, so I know there is money to be made in EdTech.
However, I find that the B2C plays must spend a lot to acquire a customer, and their LTV / CAC ratios stay <1.
In B2B, I have not found a group of founders that understand the pain that CarveNiche went through and have developed a business model that addresses those issues; therefore, we have cautiously stayed out of this space.
CarveNiche’s new business model providing online tutoring has promised, even if it was a bit niche. However, it has scaled beautifully in the COVID19 era. The company has turned around and raised a new round to aid its growth. Avneet has stayed the course despite several setbacks, so she deserves every bit of the luck that comes her way.
In conclusion, I would not invest in the original CarveNiche business model – but I would invest in Avneet.
- What are your learnings from the pivots that CarveNiche has made over the years?
CarveNiche was my 2nd angel investment, and it taught me many lessons that continue to guide me today. I’ll share a couple of them:
- Follow-the-money: It is essential to understand how long it will take a business to convert billed revenue into money in its bank account. If the path to getting the money is long and fuzzy – avoid that business model. As a founder or an investor.
- Avoid investments in long working capital plays: If it takes a long time to close a sale, then a long time for to invoice for sale, and an even longer wait to get the money from that invoice into your bank account – what is getting utilized to keep the lights on today?
If the answer is venture capital, then I would not invest in that business.
Amount Raised: $20 million
Investors: Tiger Global Management & Sequoia India
What does InterviewBit do?
Edited from Traxcn: InterviewBit is an online platform for tech interview preparation. The platform offers gamified lessons with video tutorials, primer problems, and guided solutions for programming, scripting, databases, system design, puzzles, etc. The platform also enables the candidates to get connected with the right companies worldwide based on skills and preferences.
Why do I like InterviewBit?
I like focussed vocational plays. Last year I had picked out GreyAtom as a funding pick as it provided an upskilling platform for data science and web development employees. Therefore picking it isn’t a surprise that InterviewBit got selected even though the $20 million round from Tiger & Sequoia is bigger than a typical Series A round in India.
InterviewBit solves an exciting problem of finding, interviewing, and evaluating tech talent, which is the Achilles heel of the best of Indian start-ups. The CAC for such plays is quite high, but considering the 18-35 lakh rupee salary bracket they target, the rewards may outweigh the costs.
Only request – can someone create a platform for finance and accounting employees! 😊
Amount Raised: Rs. 21.4 crores
Investors: Bace Capital, Astarc & Mumbai Angels
What does AdonMo do?
Edited from Traxcn: Adonmo provides an in-transit cab advertising platform for advertisers to reach their target audience. It enables advertisers to place their ads on top of the cab and select the target location and relevant time slots to display advertisements and track their ads in real-time. It uses a proprietary computer vision and hyper-local technology to identify its viewers and advertise.
Why do I like AdonMo?
It was unbelievable that I had created a business plan to provide contextual ads based on geo-location on top of taxis during a 6-7 months stint in Kolkata in 2012 or 2013. I had reached out to taxi-top display manufacturers in China who could provide the hardware required for this service. These plays were very popular for advertisers in Africa as most homes did not have electricity – therefore, taxi-top displays were the primary distributors of advertising. But AdonMo is precisely doing what I could not i.e., EXECUTE on the idea.
I am excited about AdonMo as it disrupts the hold billboard owners have enjoyed for several decades. A moving billboard provides better and deeper reach to advertisers with exhaustive reporting and must work out to be of much better value than a billboard.
Amount Raised: Rs. 4.28 crore
What does YoloBus do?
Edited from Traxcn: Yolobus provides an online-based platform for booking intercity tickets. Users can book tickets by giving details like location, date, time, etc. It offers features like real-time tracking, in-cabin Wi-Fi, Toilet, Pantry, CCTV cameras, etc.
Why do I like YoloBus?
There are several intercity bus services. So what is interesting about just another intercity bus service?
There are several intercity bus ticket booking platforms – So what is interesting about just another intercity bus ticket booking platform?
India is home to the world’s largest and fastest-growing middle-class population. India’s growth pulled 271 million people out of poverty between 2006 and 2016. It is only a matter of time before India’s per capita income will cross $4000 with and a majority of the Indians will belong to the middle to upper-middle class i.e., aspirational class.
This vast majority of people will have a very different consumption basket and preferences compared to the sustenance living Indian, and services like YoloBus cater to a growing section of the Indian audience.
While Yolo may get considered a bit ahead of its time, if it can keep its costs of operation and customer acquisition in control and sustain – there is a big market for it to capture!
One question, though – why are the investors undisclosed? The first time for me to see a release in which the amount gets disclosed but not the investors!