The Lone Rangers: Software companies being built without help from venture capitalists – The Economic Times on Mobile

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The Lone Rangers: Software companies being built without help from venture capitalists

3 Oct, 2014, 0442 hrs IST, Peerzada Abrar, Krithika Krishnamurthy & Malavika Murali, ET Bureau

A majority of software product companies in India are being built without help from venture capitalists according to industry thinktank, iSpirt which is stepping up to boost this brigade, finds ET.
RateGain
FOUNDER : Bhanu Chopra

Bhanu Chopra drives a white Porsche Panamera to his office in Noida. That is, when he is not jetting around the world meeting customers and drumming up support for the proposed public issue of shares at his enterprise software firm RateGain.

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Although Chopra can seem like the archetypal technology entrepreneur riding high on risk capital funding, the 38-year-old entrepreneur has not raised a single rupee in venture capital. The decade-old company, which sells software for the hospitality and travel industries in 120 countries, is aiming for a share sale on Nasdaq that could value it at around Rs 6,000 crore. Chopra, who is the largest stakeholder, has also given stock options to several of his 350 employees.

“I can’t pretend to be frugal. I drive a nice car, travel business class and am still bootstrapped,” said Chopra, who pays senior executives at his firm an average salary of about Rs 1 crore per annum. When starting up has become synonymous with raising copious amounts of capital, contrarians like Chopra and ZohoCorporation’s founder Sridhar Vembu are emerging as torchbearers of the bootstrapped approach. Vembu’s Zoho, with over $100 million (Rs 600 crore) in revenue, competes against the likes of Microsoft in the enterprise software market. “Bootstrapping embraces the notion that to the extent that the future is shaped by human action, it is not much use trying to predict it,” said Saras D Sarasvathy, professor of entrepreneurship at University of Virginia Darden School of Business. Around 73% of software product companies in India are bootstrapped, according to software product think tank iSpirt.

The grouping has launched an initiative ‘BootUpIndia’ to recognise India’s best bootstrapped startups that will subsequently be mentored by industry peers. ET profiles eight bootstrapped startups which have the potential to be the next big winners.

EmployWise
FOUNDER : Sumeet Kapur

Sumeet Kapur’s first startup, a venture capital-backed customer relationship management solutions firm, went through a tough time during the dot com bubble burst in 2000. “The burn rate was high, even if you applied brakes, you were burning,” said Kapur, 50, who had to start again from scratch and started to work on the human resources software product in 2006. With funding being scarce, bootstrapping became a necessity for him. But it enabled the product to evolve based on the feedback from the customers.

the-lone-rangers-software-companies-being-built-without-help-from-venture-capitalists.jpg“It would have been a waterfall if I had raised the capital and built the product in one shot,” says Kapur. “I didn’t want to experiment with investor money. “Unlike his first venture, EmployWise was also able to whether the economic meltdown of 2008 as it was not dependent on venture capital. The EmployWise product is now being used by 50,000 employees across various sectors including technology, retail and manufacturing. But Kapur had to apply extra effort to build the firm due to which he was not able to spend more time with his family. “But I have an extremely supportive family,” said Kapur who likes taking his dog for a long walk every morning.
WHAT THEY DO: Hire-to-Retire human resources software delivered off the cloud in the software as a service model

FOUNDED IN : Product launched in November 2011

SEED CAPITAL: Rs 1 crore

REVENUE FOR FISCAL 2014: Not disclosed

TARGET REVENUE FOR FISCAL 2015: Rs 6 crore

USP: Innovation to keep costs low. Focus on generating customer revenues

Exclusife
FOUNDER : Anand Krushnan

Customer engagement was a new term for a large number of mom and pop shops – until Anand Krushnan jumped in to sell software to small shops and bring back those customers that crossed their threshold. Since early 2013, the team of 150 employees has covered 1,500 shops across India and has been frugal in doing so. By working out of his exemployers office, called Tangence, Krushnan has eliminated all costs related to infrastructure. Bootstrapped entrepreneurs have it worse than funded ones is a notion that Krushnan disagrees with. “Whatever you do, you can’t be stressed. I play badminton every day, and work for 12 hours a day. That’s how it has always been,” said Krushnan, 39 a graduate of at GM Institute of Technology, Chitradurga.

WHAT THEY DO: Helps small retail outlets acquire and retain customers

FOUNDED IN : 2013

SEED CAPITAL: Undisclosed

REVENUE FOR FISCAL 2014: Rs 3 crore

TARGET REVENUE FOR FISCAL 2015: Undisclosed

USP: Shifts the focus back on offline advertising

Inquirly Technologies
FOUNDER : Anjan Choudhary

Bangalore-based Inquirly Technologies, started up by Anjan Choudhary and his wife, bootstrapped with Rs 92 lakh and follows a business to business model. The 2013 startup sells software to restaurants, educational institutions and other small and medium enterprises.

It provides a tablet-based interaction software charging monthly and quarterly subscriptions starting from Rs 6,000 upwards and is looking to get onto the global platform by early next March, generating a revenue of Rs 61 lakh.

A business needs to achieve certain traction before seeking for investors, said Choudhary, who pooled in his paychecks during his stint at Accenture to startup and is targeting a revenue of Rs 6 crore by tapping into global markets early next March. “Anyone can use the product: from a ‘panwalah’ to a ‘planewalah’,” said Choudhary, an alumnus of Bangalore University.

WHAT THEY DO: Sells customer-engagement and interaction software for small and medium businesses

FOUNDED IN : 2013

SEED CAPITAL: Around Rs 92 lakh (through paychecks while working at Accenture)

REVENUE FOR FISCAL 2014: Around Rs 61 lakh

TARGET REVENUE FOR FISCAL 2015: Rs 6 crore

USP: Using low-cost technology to bring efficiency into greenfield industries like education and food management

VoiceTree Technologies
FOUNDER : Ankit Jain

Started by Ankit Jain and his brother, VoiceTree Technologies is a Delhibased startup that provides virtual software as a service-based call management system to small and medium businesses. Started up in 2010 with a seed capital of Rs 2 lakh, the duo started out in a threebedroom apartment.
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The duo was forced to bootstrap after being turned down by investors. “In retrospect, it gave us time to innovate and work on our product at our own pace,” said Jain, CEO, whose company is currently chasing a revenue run rate of Rs 4 crore and is looking to take its product to global markets in the next four months and increase revenue growth by 400% in the upcoming fiscal.

WHAT THEY DO: Provides an end-to-end call management system through SaaS called MyOperator to small and medium businesses

FOUNDED IN : 2010

SEED CAPITAL: Rs 2 lakh

REVENUE FOR FISCAL 2014: Rs 4 crore

TARGET REVENUE FOR FISCAL 2015: Looking at larger than 400% revenue growth

USP: Bootstrapping enabled consistent innovation of the product

ApnaStock
FOUNDER : Vinit Bhansali

Vinit Bhansali has bootstrapped successfully through all this three ventures, and how.

ApnaStock, his third venture, helps small builders procure construction materials at wholesale prices, and has done sales of Rs 1 crore since this January.

Despite running an ecommerce venture, which is traditionally known for guzzling money, ApnaStock has not spent a penny on Google or Facebook ads, let alone traditional media and closed a fifth of his deals on WhatsApp, and the rest through word-of-mouth publicity. “No one wants to remain bootstrapped forever. But quite often we lust after mentoring and networking, not money,” said 34-year-old CEO Vinit Bhansali. The company has signed 70 builders in Bangalore and said he wants the Bangalore-based company to reach a critical mass before seeking additional capital.

WHAT THEY DO: Helps small builders find material at wholesale prices

FOUNDED IN : 2014

SEED CAPITAL: Rs 1 lakh

REVENUE FOR FISCAL 2014: Rs 1 crore

TARGET REVENUE FOR FISCAL 2015: Rs 5 crore

USP: Help builders procure materials at lesser prices

Media Ant
FOUNDER : Mukesh Agrawal

Everyone wants to advertise but not everyone can afford it. Media Ant was born to help startups and SMBs showcase ads in newer and cost-effective media outlets.

“But people were not able to relate to the idea,” said Mukesh Agrawal, who started operations out of his balcony in September 2012.

Now, the company has identified 5,000 media options such as on credit card bills, washrooms and luggage tags for showcasing ads. For the first year, the company used a WordPress blog as their official website, and they still don’t own a printer at office. “With bootstrapping, life didn’t change much.
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It was my mindset that did,” said Agrawal. “It’s not that I can’t afford certain things like a printer, it is about spending for what you absolutely need,” said Agrawal, 29, who said the company is now beginning to attract investor attention.

WHAT THEY DO: Helps SMBs advertise on non-traditional media

FOUNDED IN : 2012

SEED CAPITAL: Rs 3 lakh

REVENUE FOR FISCAL 2014: Rs 4 crore

TARGET REVENUE FOR FISCAL 2015: Rs 8-10 crore

USP: Help fill a gap in the advertising industry

PowerStores Ecommerce
FOUNDER : Indrajit Chowdhury

Goa-based PowerStores Ecommerce offers users software where they can set up their own online website or store by registering themselves.

The decision to bootstrap was one out of choice, said Indrajit Chowdhury, CTO of the 2011-registered company, who started up with CEO Cory York. The decision to bootstrap was one out of choice. The process is similar to registering on Gmail, where users just need to provide basic details.

With subscriptions starting at Rs 7,000 a month, the startup has amassed over 800 customers in six months. It will focus on local markets in the coming months. The startup did not disclose the revenue figures, but is looking to expand its service to the Asian market.

WHAT THEY DO: Allows users to set up their own ecommerce store or website through a simple registration, similar to a Gmail registration

FOUNDED IN : Registered in 2011, but came out with the service in 2013

SEED CAPITAL : Rs 20 lakh

REVENUE FOR FISCAL 2014: Undisclosed

TARGET REVENUE FOR FISCAL 2015: Undisclosed

USP: Helps small businesses gain online presence

SignEasy
FOUNDER : Sunil Patro

In the summer of 2009 when Sunil Patro visited his fiance in Mexico, he received an offer letter from a US-based company.

Being in a remote location near Riviera Maya, Patro, 35, lost vacation time looking for a printer and a fax to return documents that required his signature over email. This experience gave birth to the idea of creating an electronic signature app that would enable anyone to sign and send documents from the phone.

After six months he founded ‘SignEasy’ by combining bootstrapping with travel during a backpacking trip to Latin America. The product development happened in Coimbatore with the help of an engineer, his fiance handled the customer support from Mexico and he conceptualised the product while travelling through Latin America. “I got enough freedom to shape my own entrepreneurial journey and build the product with my own pace and money,” said Patro, an alumnus of IIT-Kharagpur. His product has now got around 2.5 million downloads in 155 countries. The challenge that the startup, which has operations in the United States and Bangalore, faced due to bootstrapping is that it was harder to attract talent in the beginning.

WHAT THEY DO: Simplest way to electronically sign documents from your phone and tablet

FOUNDED IN : 2010

SEED CAPITAL : Rs 10 lakh (personal savings)

REVENUE FOR FISCAL 2014: Rs 2.5 crore

TARGET REVENUE FOR FISCAL 2015: Not disclosed

USP: Bootstrapping enabled to empathise with problem than the solution, having razor sharp focus, making it dead simple to enable people sign electronically in 60 seconds.

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About Ganesh Srinivasan Consulting

Management Consultant from India with International Solutions Selling, Projects Implementation, Joint Venture, Collaboration and Procurement experience Building a Global Team of Consultants and Niche Products and Services

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