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.

Flashback Friday: CarveNiche Technologies

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

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

 

  1. 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.

My funding picks from last week (w05)

There were 15 deals in week 5 of 2020 that were available on Traxcn, Inc42, and YourStory,
I sat with our funding team, and after some enlighting discussions, I have shortlisted my picks to:

Name: InterviewBit
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! 😊

Name: AdonMo
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.

Name: YoloBus
Amount Raised: Rs. 4.28 crore
Investors: Undisclosed
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!  

My funding picks of the last week (W49)

Most funds are winding down their operations in December; therefore, there wasn’t enough funding news from which I could shortlist. Yourstory reports that there were 17 deals in total with less than 50% meeting the criteria of the early-stage deals for this section of this blog.
The launch of the first cohort of Sanjay’s 100x.vc should change that this week, and I should have a tougher job to choose my top picks next week!
 

Sarva.com raised ₹20 crores from Fireside Ventures

What does Sarva do?
Sarva is a wellness start-up that offers a wholistic ecosystem for mental, physical, and emotional wellbeing that utilize the ancient practices of Yoga. Sarva’s website claims to provide 25 forms of yoga taught through studios in 14 cities and has membership plans similar to Cure.fits memberships.
Why do I like Sarva?
The success of offline plays like Cure.fit and Bombay Shirts have brought back confidence in the augmented real estate brand plays.
Yoga has a mass appeal, and while Cure.fit does offer Yoga classes, I like the specific niche that Sarva’s is pursuing. Several Yoga schools in various cities provide personal trainers, but very few (maybe none) have tried launching a national brand like Sarva. The rest of the ecosystem is fragmented and regionalized.
I am a frequent user of Cure.fit (when I am in town) I love the flexibility of choosing classes that work with my schedule at a location closest to me on a given day. I suspect that with their war chest full of money, Cure.fit could quickly launch a Yoga studio vertical too. However, I suspect that the difference could be in the execution.
I found a Sarva studio in Nariman Point, and I will take a trial class to compare the two before I say any further.
 

Indyfint.com raised $2.1 million led by Saravanan Adiseshan

What does Indyfint do?
IndyFint offers a plethora of bank-like services for businesses (as per their website) as well as a marketplace to provide loans to merchants, employees, and students (as per the YourStory article.)
Why do I like Indyfint?
I am a big believer that the Indian banking system is ripe for disruption. Banks use IT systems, policies, and operating procedures that are decades behind the business requirements of today. Previously (and in frustration), I had written a wish list for what I would like for a bank to do for me (as a corporate customer).  Therefore I have a soft spot for those attempting to take on the big banks!
I am not 100% sure that IndyFint is attempting to become an alternative-banking platform but I like the services they offer on their website. Just like them, several other start-ups are trying to break the stranglehold created by Indian banks. I support the disruption, and I forward to helping one of these disrupters with our money as well!
 

Dhruvaspace.com raised ₹5 crores from Mumbai Angels

What does Dhruva do?
Dhruva builds nano-satellites that work with ground sensors (also produced by them) for applications in agriculture, weather monitoring, infrastructure, etc.
Why do I like Dhruva?
Space is the unclaimed territory. Nano-satellites flattens the playing field that was previously occupied by big corporations or large governments. With billions of dollars at their disposal to send up massive satellites, their money power acted as a moat to fully exploit real estate a few hundred kilometers above our heads.
Nano-satellites and alternative delivery mechanisms democratize access to space. They provide access to applications that were (until now) were outside the reach of most of the world.
I believe that the market for nano-satellites will be worth tens of billions soon and add to that this is an Indian company that is attempting to compete in this space (pun intended). It is difficult not to love that!
 
Artha India Ventures invested in Kratikal’s Pre-Series A round. The announcement took place last week, but I chose not to review that investment in this section.