The Small Industries Development Bank of India (Sidbi) signed a Memorandum of Understanding with Snapdeal, an e-commerce major in India, to provide financial support to its MSME vendors. The MoU was signed by Dr Kshatrapati Shivaji, CMD, Sidbi and Kunal Bahl, CEO, Snapdeal on July 14, 2015 at Sidbi office in Mumbai.E-commerce is the buzz word in the global as well as domestic market. The MSMEs find e-commerce platforms like Snapdeal as a promising ground for increasing their business opportunities. The e-commerce sector in India has become four times its size, from $3.8 billion in 2009 to $17 billion in 2014, growing at a CAGR of 37 per cent. The sector is expected to cross the $100 billion mark within the next five years, contributing over 4% to India’s GDP.Small Industries Development Bank of India (SIDBI), set up under an Act of Parliament, has been consistently promoting, financing and developing the Micro, Small & Medium Enterprise (MSME) sector since its inception on April 02, 1990. SIDBI continued its business model aimed at addressing the financial and non-financial gaps in the MSME eco-system. Some niche financial gaps addressed by the Bank are equity / risk capital, receivable finance, sustainable finance which includes energy efficiency (EE)/ clean production (CP) technology and services sector financing.Over the years, Sidbi has pioneered a number of innovative financial products and set up new institutions to cater to the diverse credit and non-credit needs of MSMEs. In its efforts to include larger number of MSMEs in its fold, Sidbi tied up with a number of intermediaries to increase its outreach. MoU with e-commerce giant ‘Snapdeal’ is one such effort in this direction.The innovative financial products are growth capital / risk capital, receivable financing / reverse factoring, energy efficiency financing, micro finance etc. Snapdeal promoted by Kunal Bahl along with Rohit Bansal, is one of the India’s most impactful digital commerce ecosystem, that creates life changing experiences for buyers and sellers. In its journey till now, Snapdeal has partnered with several global investors and individuals such as Softbank, Blackrock, Temasek and eBay Inc., Premji Invest, Intel Capital, Ratan Tata, etcFor addressing the problem of lack of required financial assistance, Sidbi and Snapdeal have joined hands to enable latter’s MSME vendors to scale up their online business through financial support from Sidbi.
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Ajay Batra's advice for startups os before you declare yourself to be one – have some honest conversations with self and other co-foundersAlok and Reeba have known each other from their school days. Their families have also come to know each other well. Alok is an engineer from IIT-Delhi, and Reeba has a Masters in Education from Jamia. Both are exceptionally bright and hard-working. But, that’s not all that’s in common between them – they are also co-founders of a startup called “iLearn360”-that is hoping to revolutionize school education in India. Given the lack of capable teachers, and focus on rote learning – iLearn360 has developed technology enabled teacher-training curriculum for B.Ed. students that specializes in learning assessments, and are planning to equip teachers in schools across the country with a cell phone app that takes the drudgery from CCE (Continuous Comprehensive Evaluation). Their dream is to make learning productive and fun for all.They have been working on their idea for six months; developing it, getting inputs from schools, making it multi-lingual and running it by experts in education. At this point they are quite clear on what their first product will offer, and they are excited about it. It’s time to take their startup from idea to implementation. Fortunately, their families have been supporting them all through – and the project has actually been funded by them.While discussing market positioning, they have identified two clean segments – CBSE schools in urban areas and State-run government schools in rural India. Currently, Alok and Reeba are discussing their revenue models and pricing framework for these schools. The technology has been given free to about 50 B.Ed. institutions – where it is being used fairly regularly, and to good results. Alok is convinced that an annual per-child fee of Rs. 500 and Rs. 300 will work for the two segment of schools. Reeba is not convinced about the latter.She has been watching the app being used in B.Ed. colleges (as a freebie) and feels that the socio-economic profile of students in government-run schools does not merit a charge – she want to give it free – as that’s the only the solution will be affordable.In fact, Reeba is increasingly becoming sceptical of the revenue and profitability of their venture. Her social leaning gives her unique perspective of the ground realities; whereas Alok’s business-sense prevails all analysis.Their differences are starting to grow – Reeba has been talking to the country’s biggest NGO’s to see if they would like to adopt their technology for free; while Alok has been busy tinkering their 5-year revenue/sales projections to show healthy profits to possible investors. Last week, in their meeting with the Chairman of a prominent private school chain – Reeba looked indifferent and distant.When Alok confronted her, Reeba admitted that her social leanings are way too strong for her to seek profit in a tool that enables learning in children. She sees their endeavour more as a nation-building exercise than as a commercial enterprise. This was a total “no-go” for Alok; he was angry and frustrated with Reeba; but had the composure to honestly ask for a dissolution of their startup. They still have to decide about the ownership of the IP that they had both created together.The above is a true story – with some facts changed. So often, we have witnessed passionate co-founders come together to create magic. Equally frequently, unfortunately, we have seen enterprises flounder because the co-founders’ ideas or value-systems don’t match.So, our advice to Startups is that before you declare yourself to be one – have some honest conversations with self and other co-founders around three areas:1. What excites me in life? What am I really passionate about?These questions are to be pondered by each co-founder individually. Don’t just be analytical about it; feel your emotions as well. These could result in vast range of possibilities, e.g. I am really passionate about: reading and writing fiction / improving the quality of education / mobile technology / helping others / taking care of animals / travelling the world.2. What are my life’s goals?This is also an exercise to be done personally by each co-founder. Some answers we hear are: building a hugely admired company / create something unique and innovative as my legacy / do social work for the under-privilegedLet’s not forget, that given how broad this question is, the above answers are often supported by some examples like: be happy / make lots of money / compassionate / caring3. How aligned are we as co-founders?With the first two questioned answered in their privacy, it’s time for some honest and open conversations between the co-founders. Care must be taken to ensure that the exchange does not go down the path of their shared passion, i.e. business of launching the startup. Instead, the dialogue is about fundamental values, emotions and dreams that each founder cherishes. The co-founders share, discuss – but don’t question – each other’s answers to the first two questions. The real impact of these discussions happens when they ask themselves the fourth, “Does our proposed startup align with our collective passions and goals?”This is not only a difficult question to answer, but the answers to this question can result in awkward situations. If all goes well, the team comes out with a clearer understanding of each other, and their overall purpose. If not, it’s better to surface these differences sooner than later.Wish Alok and Reeba had these conversations six months ago. The author, Ajay Batra, is the founder og Lutyens Startups
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Quikr offer of $170 mn fall far below the $235 mn valuation and Housing investors may turn it down, says Vishal Krishna There are rumours that Quikr’s investors have agreed to buy Housing.com for $170 million, much less than the $235 million valuation that the company garnered in 2014. One of the main reasons behind the fall in valuation was the spat between CEO and founder, Rahul Yadav and the investors. Sources in Quikr say that the deal may not come through because Housing’s investors may not accept a lower valuation in an all-stock deal. The second question to ask is whether Housing.com should sell their business at all now that the CEO has quit? Is this an early warning that all real estate classifieds will have to merge or consolidate because investors predict a slowdown in the property market? Magicbricks, RealtyCompass, CommonFloor and 99Acres may be running their course and will eventually be acquired in two years time. According to real estate consulting firm JLL India, the rental market has seen a slight drop of 4 per cent in metros. However, if the Housing.com deal comes through, then investors will still benefit because they will get stock of Quikr, which has been valued higher than Housing. By strengthening its real estate portfolio, Quikr can then take on its competitor OLX by adding more customers. Quikr is already a leading classified platform and adding Housing.com’s real estate classified data, in to its portfolio, is a natural extension to the business. Like all dotcoms Quikr claims more than 30 million monthly users, which is number also quoted by Housing.com. However, estimating the gross merchandise value of both these companies is anyone’s guess. We at BW|Businessworld say that only 15 per cent of that 30 million are regular customers as of now. The one thing that is in favour of these startup 3.0 firms is that the potential in India is huge and still unpredictable. It is a matter of time before many users move online.Housing.com has technology synergies that can enable Quikr to ramp up its operations. Housing’s in-house data team is trying to enable metrics for local real estate consumption. It has recently acquired a data analytics firm called Realty Business Intelligence to shore up the analytics team for an undisclosed sum. It also has 3D technology integrated on its site to help home buyers view their future homes virtually. A few months ago, when Softbank invested $100 million in Housing.com, in December 2014, it was a celebration. The founders became the poster boys, overnight, in the property dotcom market. But then the honeymoon period lasted less than a month. It soon turned into a nightmare for everyone, the CEO Rahul Yadav and the investors included. Everyone loves gossip in India and Rahul Yadav, the former CEO of Housing, gave them a taste of it. Only this time he began attacking founders of other companies and investors. He would not specify any particular reason for his diatribe against them. Media reports add that he would call them “unethical”. He would also call them “dull” and intellectually “incapable”. However, he eventually apologised to his company’s investors and got away with it. By doing so he had become the media’s new rebel and investor activist. Hopefully after resigning he will find some time to take on the investors or partner with them to create a new company.
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Within a few days of resigning as the CEO of Housing.com, Rahul Yadav has withdrawn his resignation. Founded by Rahul Yadav and Advitiya Sharma fresh out of IIT-Bombay, Housing.com is seen by many as one of the big success stories in India's e-commerce space. It shot to fame after Japan's SoftBank invested $90 million in the company. In a statement, Housing.com said: In the relatively short period of its existence, Housing has revolutionised the real estate market in India and it continues to lead and disrupt with world class product innovations. Today the Housing board met, and has been reconstituted to include all main shareholder representatives. After some good conversations the board has reaffirmed its faith in Rahul Yadav's vision at Housing. The statement also said that the Housing board met, and has been reconstituted to include all main shareholder representatives. Rahul commented: "After some frank and healthy discussions with the Board I have agreed to withdraw my resignation and I apologise for my unacceptable comments about the board members. I look forward to staying on at Housing as CEO and building an even greater company, while working in full harmony with the board." As per a newspaper report, Yadav, 26, wrote a scornful resignation letter on April 30 to board members and investors denigrating their "intellectual capability" and giving them a one-week deadline to "help in the transition." The investors responded a day later through the law firm Morrison & Foerster LLP acknowledging the resignation. "I don't think you guys are intellectually capable enough to have any sensible discussion anymore. This is something which I not just believe but can prove on your faces also!" Yadav wrote in the opening paragraph of his letter resigning as CEO, chairman and a member of the board. Yadav also got embroiled in a social media dust-up with Sequoia Capital managing director Shailendra Singh and later the Times Group.
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Robots have becomes a familiar site in factories. While at present they are machines that perform tasks for which they are programmed, eventually we intend robots to be self-learning machines that study patterns and causes and make their own decisions. This is what a few startups from India are trying to achieve and their robots can not only make their own decisions, but their software can also be updated remotely, are easy to use and ten time more cost effective than a robot supplied by the large companies. Startups like Grey Orange Robotics, GridBots, Omnipresent Robotics, Gade Systems and Systemantics have kick-started the robot revolution to rescue Indian manufacturing. If you just take the Indian automobile industry, as an example, the annual wage payout by large OEMs is around $3.5 billion or 10 per cent of the total revenues of the industry. This payout is growing and is marred by continous demonstrations to raise the wages for shop-floor workers. Many a time, the product quality standards are found wanting and this needs immediate correction. If India has to manufacture for the world then robots need to be deployed on a large scale. In two years, these startups would have inspired several other start-ups to build thinking machines. Sometimes there is a feeling that there are very few parallels between drones and robots. But there are differences and these robots matter to us. One would think in an industrial world dominated by a Denso, Siemens & Kuka, start-ups don’t seem to stand a chance. But the opportunity is large and predicted to be $1.5 trillion, in annual spends, by 2020, according to Gartner. The current spends are $800 billion. It is large enough market to make a dent, even today, and these young entrepreneurs are here just to do that. Robots To The RescueGridbots and GreyOrange Robotics are trying to achieve “singularity”, which basically means that machine intelligence will far exceed human intelligence. “Singularity will happen in 40 years. But before that a robot or a machine has to be a butler and solve problems that exist in factories,” says Samay Kohli, co-founder of Grey Orange Robotics in Delhi. The trigger of plunging in to robotics for Kohli and Akash Gupta, the co-founder, was their fondness for creating thinking machines and being science fiction buffs. It was obvious that they would try their hand at making robots from a young age and the passion actually took seed in their alma-mater, BITS Pilani in 2008. Their machines were recognized at the Robo Olympics for winning the Kung Fu championship and they also participated in a Robo Cup Soccer tournament. “These competitions, held every year, want us to build robots that can one day beat a human sports team,” says Kohli. Meanwhile his education helped him visit Virginia Tech and the University of Louisiana, in the USA, to study robotics. At the time of graduating, in 2010, college they founded the company in pursuit of making affordable robots for factories. They decided to differentiate and focus on a few sectors such as retail. The low hanging fruit was the grading and sorting of material in an ecommerce company or a warehouse or logistics company. Their argument for entering the segment was simple; “large industrial organizations are often sold versions of robots whose software cannot be updated for ten years and these systems need an entire IT system to manage them”, says Kohli. Being expensive, industrial robots do not make sense to several industries in agriculture, basic packaging and poly-pack material handling. Currently, industrial robots handle heavy equipment and commercial robots can handle only boxed items in warehouses. The idea of Grey Orange Robotics found its sweet spot. The team began building their bots for handling poly-packs, which immensely benefitted Indian courier and logistics system. They received angel funding of $1 million by the end of their first year and began approaching Flipkart and Myntra, ecommerce giants, to use their bots to sort material. Now the e-commerce industry has been using over 30 odd bots delivered by Grey Orange. What these machines do is that they are like a radio controlled car, but much more complex in tech, that goes around the warehouse and brings the item to the shipper. Then another product takes over where it sorts the items based on orders placed or cancelled. These robots can sort 500 items, per hour, while an average human can do about 300 items a day. This was the cost saving that they bought to the table of these companies that were dependent on logistics software to make the consumer happy. Also the company’s robots do not need onsite servers; any update of the software is done remotely. Sanjay Nath, founder of Blume Ventures, and one of the angel investors in the company, says “Indian startups, in the engineering segment, have huge potential to solve industrial problems. The number of startups will increase with the make in India campaigns being run by the government.” This year Tiger Global, the US based fund, invested an undisclosed amount, sources say about $8 million, in Grey Orange because the company could scale up to meet growing orders in the A-Pac region. The materials for the robots come from six countries. The precision parts and gear box comes from Germany, the chipsets and advanced electronics come from the USA and Italy. Today 70 odd engineers build these bots in Singapore and they are 6 times cheaper than robots provided by larger companies, which basically charge not less than $ 1 million. Pulkit Gaur, GridbotsWhile Samay and Akash solve problems for warehouses, Gridbots, an Ahmedabad based start-up, is trying to solve hazardous and dangerous problems faced by scientists in nuclear plants. Their robots dispose nuclear tubes or rods and nuclear waste. Pulkit Gaur, who founded GridBots, worked in a software company for three years before plunging full time in to building robots. While pursuing his software career he realized his passion for building software, for machine learning, and also building machines that could minimize human intervention. In 2010, he showcased a robot that could clean radioactive tanks, which garnered great interest and he was immediately contracted by government agencies to build robots for them. NTPC and the Bhaba Automatic Research Centre contacted the company to supply bots that could dispose nuclear tubes in to steel tanks with heavy water. It is difficult for an engineering startup to keep the money flowing because the timeline to deliver a product and receiving the payment takes months. Pulkit and team created a consulting arm to work with any company looking to set up robots in their facility. “Soon efficiency will need to be created in Indian manufacturing and many companies will adopt robots,” says Gaur. He is now scouting for opportunities in the food processing industry and automobile paint shops. Today 95 percent of GridBots work is done for the government of India. The business model for Grid Robots is to charge per robot deployed, which also includes an annual maintenance fee and software upgrade. A couple of months ago the Tata Power plant in Mundra had a unique problem because a 2-feet long wooden log had jammed one of the steam pipes. This had led to one of the five turbines, of 800 MW, to be temporarily shut down and the plant was incurring a loss of Rs 2 crore per day. Gridbots, was called in to bring their 150 mm (width&height) stringer robot to retrieve the wooden log and relieve the steel pipes in a matter of two days. After a grueling 36-hour operation, the robot was able to pull the ‘block’ out of the pipes. This start-up is currently self funded and it has sunk in more than Rs 2 crore. The good news is that it is finally preparing a plan to raise $4 million to invest in a R&D centre. However, talent is a problem. Pulkit Gaur has also created an education company, which teaches only robotics. The company called Edubotix sets up labs across the country’s colleges and schools. Gagan Goyal, ThinkLabs (BW Pic by Shubhabrata DasSimilar to Edubotix is another company called Thinklabs, which was started by ex-IITian Gagan Goyal in 2007. His company has set up robotics labs in 90 cities and has also trained teachers in robotics. It has been funded by Seed Ventures and has raised $1.2 million. “Today there is a need to inculcate robotics education from a young age; this is the only way India can tap talent to make robots in ten years,” says Goyal, founder of ThinkLabs. The company supplies smart kits, mostly Arduino boards along with 8 Bit microcontrollers, to school students and allows them to innovate based on logic. There are some who want to take their learning from University and the Corporate world to build robots and they are already readying themselves for a major push in manufacturing. Robots AssistantsOmnipresent Robots, founded in 2010 in Delhi, is one such company that has been in R&D stage for a while. Aakash Sinha, who studied robotics at Carnegie Mellon in 2003, moved back to India- in 2007- to set up the office of US based robotics company iRobot. A couple of years later Sinha, a veteran of building 3000 robots and robo-tanks back in the USA, realized that India had a unique set of use cases. That is when he jumped in to start his own company. “Everyone is catching on to the made in India campaign now. But our robots were being made four years ago and can be used at homes,” says Sinha. They started with pilot program and created a bomb disposal robot which was later accepted by the DRDO, at Delhi, in 2011. After a few years, one filled with iterations, along with the government agency, the company realized that robots can be used at homes too, say to clean and vacuum. They are now scouting for $2 million to scale up their business plan and operations. The whacky ideas don’t stop there. Others are thinking of applications in retail shops. Founded in 2012, Gade Systems – started by Sasi Kiran Gade – is trying to make the Corporate world accept robots differently. “Imagine robots helping you in the trial room or giving the consumer the store’s perspective on the product,” says Gade. It is not easy though because he is yet to create a business model. However for the moment he is hard at work to build several applications that can make the robot work for any given task. He has personally, through family sources, invested $70,000 and is in the process of raising $1 million by the middle of 2015. Today his product “the shopping assistant” is ready to be commercialized and is completely localized. Similar to Gade Systems is Systemantics, which was also funded by Blume Ventures in 2014, and the company had built a robot arm for industrial use with the help of the Department of Science and Technology. Robotics, as an industry, is still a nascent subject in the country and most of the robots are only programmed for limited operations. Visit a Tata Motors plant in Pune and you will find that robotics is playing a major role in the manufacturing industry, especially in welding, material handling, sealant applications, painting, foundry applications and automated press shops. They bring consistency in quality of the outcome. “There is significant amount of reduction in fatigue and safety risks. The applications are cost effective only in the areas mentioned above and one cannot provide a ratio at a manpower level,” says Girish Wagh, Vice President at Tata Motors. Similarly walk in to the Hyundai factory in Chennai and you will find that robots have been deployed for difficult jobs. “Our efforts are to harness human intelligence and use automation in areas where the jobs need high precision, which cannot be achieved even with a highly skilled worker,” says T Sarangarajan, VP Product at Hyundai Motors India Limited. He says that Robots can be used in some things which involve the 3Ds– “dirty, difficult and dangerous processes” or “where work could pose a health related risk”. For example, in the body shop, robots are used for high precision welding. Welding is difficult, dirty and accident prone task. The weight of the welding gun can at times go beyond 10 kgs and using robots minimizes the exposure of the worker to such hazards and ensuring precise welding. This culminates into greater stability for the end product. According to the Gartner Hype Cycle 2013 machines are becoming better at understanding humans and the environment — for example, recognizing the emotion in a person's voice — and humans are becoming better at understanding machines — for example, through the Internet of things. At the same time, machines and humans are getting smarter by working together. The pet peeve, of analysts, is to say that “smart” everything is the future of business. We must keep in mind that it is not in plain coding or services; it is creating an architecture or framework for digital services. The problem though does not stop there, the R&D spend in India is less than 2 per cent in manufacturing, because most of the R&D is happening at the global headquarters of MNCs. Maybe Indian manufacturing companies need the capital, in the form of loans and equity investment, to build or buy robots, which will be operated by human beings. Then and only then will the made in India campaign win in the long run.
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