High on Tech, Low on Investors

Start-ups in India are in a nascent stage when it comes to acceptance by organizations and investors. Validation from the market is chiefly necessary for a startup to gain recognition and traction before it could hope for steady sales and sees some cash flow from investors

A young entrepreneur who graduated from IIT Guwahati found it difficult to access digital files on web. Bookpad allows users to open documents on laptops in any formats.

But doesn't Dropbox already has this facility? Aditya explains, "If someone uses dropbox to store his resume and wants to view it in the dropbox itself without downloading it, then?. Dropbox does not have that support right now. Here Bookpad will come into play and Dropbox can use our technology so that its end user can do a lot more thing with its app. So our technology integrates with Dropbox to serve the end user's purpose".

Bookpad is very high on technology and not the only one in race.

Touchfone is another startup which has developed a technology to deliver videos across all devices, even under bandwidth starved conditions. Its StrmEasy works on 2G, 3G, 4G, and Wi-Fi networks and delivers videos on a wide range of mobile devices, tabs, PCs and TVs. Touchfone proprietary technology with adaptive encoding and proprietary player delivers best quality video possible even on 2G networks.

"To deliver the video on high bandwidth network is not a problem but the challenge comes in when the bandwidth gets squeezed. That is when lot of innovation and technology comes in to play", explains Brahmayya Akella, Co-Founder and CEO, Touchfone.

But startups need investors for funding. "We are looking for investors", says Mahesh Subramanian, Co-Founder and CTO, Touchfone. "But, in India investors are interested in e-commerce, and travel sites", says Aditya. He further adds, "It is challenging to get investors for startups which are technology based. So we are chiefly looking at investors in US."

Infact Zoomcar managed to get quite a few investors from the US since its inception. It is a vehicle rental startup providing self-driving car service in Bangalore. David Back and Greg Moran, both 28 years old and from the U.S., launched ZoomCar in February after dropping out of business schools. ZoomCar has 20 locations in Bangalore where customers can pick up and drop off cars.
Commenting on the technology, David says, "When you get to the car there is not going to be someone handing you the keys. But you will use your phone text message or our smartphone app to unlock the car. And the keys will be inside the car. So it is a purely tech enabled process", explains David.

CLOUD HAS EGGED ON STARTUPS
"The wide-spread adoption of cloud infrastructure, explosion of computing devices, and the SAAS economy has created the right market for disruptions", explains Sandip Kumar Panda, Co-Founder and CEO, Instasafe.

InstaSafe is a Cloud security SaaS technology provider focusing on enabling businesses to adopt and embrace Cloud computing technologies and applications safely and securely. The company envisions providing a secure and safe Cloud platform, acting as an intermediary addressing all the concerns for cloud adoption.
Zing HR too is leveraging cloud adoption by providing organizations automated HR process. Vivek Tikoo of Zing HR explains, "We are helping them to get best practices on the cloud for HR so that business processes are quickly implemented and they don't have to wait for very long process cycle time. It is an attempt to help SMBs to quickly adopt the cloud and help them see the benefits".

FOREIGN INVESTORS ARE MORE VIABLE OPTION?
On May 31 last year, Larry Summers a then leading candidate for Federal Reserve chairman invested $30,000 in ZoomCar India. ZoomCar says it has received more than $500,000 from outside investors, including $215,000 from Empire Angels, a New York-based investment firm.

Aditya rues the fact that "It is challenging to get investors for startups which are technology based. So we are chiefly looking at investors in US". To woo investors Bookpad has registered itself as an US company in California. "Our company is registered in US and we are looking at US customers. We are having customers in India too but we feel the majority of market for us is in US", says Aditya.

E-COMMERCE VS TECH STARTUPS
E-commerce companies attracted millions of dollars of investments since its inception and it continues to draw investors paycheck more than technology startups in India. The reason being they hope this industry will gain sizable market share as more young people with higher disposable income start buying online.
The e-commerce market is growing at an average annual rate of 34% since 2009 and was expected to touch $13 billion by end 2013, according to a 2013 report on e-commerce by the Internet and Mobile Association of India (IAMAI) and audit firm KPMG.

According to the report, travel operators (rail and air tickets and the like), were expected to account for 71% of this, with sales of other goods accounting for the rest.

Is getting investors for startups difficult? Sandip Kumar Panda of Instasafe says, "Investment is linked to risk and reward and both these keep evolving all the time for various business in line with market. Innovations with business connect with good teams does attract investments even in India". E-commerce being a proven field for reward for investors continues to get their attention.

E-commerce was born with a goal of revenue generation and not to showcase technology. Startups are lot more inclined to garner revenue by developing their own technology and make them available on a wide platform. The budding entrepreneurs are driven by the fact of the sheer capability their technology brings to the table which in time they hope to garner sales from respective verticals they cater to.

For that matter even many prefer B2B platform because they would simply prefer to concentrate on the technology they are serving and think less about customer acquisition.

"B2C is a game where customer acquisition is more important than technology plays around. And we figured out that is not our DNA in terms of going out and getting subscribers onto your B2C platform. And the content game is not our cup of tea", says Mahesh Subramanian, Co-Founder and CTO of Touchfone. Though previously a B2C company Touchfone has migrated to B2B platform and become a sales driven startup. And it has proved advantageous for Touchfone. "With this transformation many of our competitors have become our customers", says Subramanian.

Even Bookpad has similar strategies to grow in future. "With B2B we have steady revenue coming in which will further encourage us to explore opportunities in B2C segment. The matter with B2C is you do not know whether you will make the money now or two years down the line", says Aditya.

GETTING INVESTORS AND CUSTOMERS
"The startup accelerator at Microsoft has been of immense help to us", says Sandip. "Marketing insights support in customer development program of the accelerator, connecting with partners, and the huge investor connect are some of the advantages we have had here", explains Sandip. It has also helped them double their customer base during their time in the accelerator.

Microsoft accelerator is a part of Microsoft ventures to support startups around the world in terms of business insights, customer reach and investor connect.It is a four month long program in India startups can brace themselves to be full-fledged organization in the future.

Ravi Narayan, Director of Microsoft Ventures told DQ Channels about the intention behind the Acelerator program. "The Microsoft Ventures fund helps Microsoft find companies that are strategically aligned with our story, where we like to go and venture. So we are the eyes and ears in the startup community to work with those kind of companies and allow them to then find strategic ways to work with Microsoft", explains Ravi.

The program is looking out to find companies for the Microsoft organization and whether some alignments that is there. At the same time Microsoft want startups to start associating it as an organization which can help them to grow their companies.

But there are a few criteria which is prerequisite to join the Accelerator program. "The startups that we usually bring in are people who have a lot of promise and potential. Either they have already built the product and are able to demonstrate that there is a huge opportunity and market through their product, or some very fundamentally sound ideas and very great entrepreneurs who want to come and work with us", comments Ravi.

Investor connect is another opportunity which is being brought by the Accelerator program. After the program ends many stratups will gear to bring in investments from various sources.

"Our technology is now proven with 1+ year usage by 25+ Enterprise & SMB customers. We are now currently focused on ramping up our customer base and enhancing our offering basket. We are confident of raising money at the appropriate time with our customer traction trends", says Sandip of Instasafe about their upcoming investor plans.
Instasafe intends to disclose its fund raising program, increase their higher accounts and as they are privately funded, they are in the works for fund raising program.

START-UPS FUTURE
Startups in India are in a nascent stage when it comes to acceptance by organizations and investors. Validation from the market is chiefly necessary for a startup to gain recognition and traction before it could hope for steady sales and sees some cash flow from investors.

"To get the initial access into a large company even after we demonstrate our product is difficult for a startup", comments Brahmayya Akella, Co-Founder and CEO, Touchfone. But betting on their technology Touchfone hopes to run a hundred million videos from 2 million now a month in another two years.
"Twitter is a B2C product and they figured out the revenue generation after 3-4 years. In India right now for last one-two years we have seen lot of startups coming up and not all of them are into e-commerce. The trend is sort of going towards pure technology-based product companies where the focus is solely technology", believes Aditya Bandi.

The startup future of India does not seem bleak at all. As Sandip feels, "India has the best talent pool for start-ups. Costs are also relatively low as compared to developed markets. Domestic opportunities are amongst the best in the world. We are very bullish on India and Start-up eco system with the right support from government and Indian business embracing local innovations."

Even the quality of technology that Indian startups are bringing every day is amazing as is felt by Ravi Narayan. "We are beginning to see the quality of startups is improving batch by batch. The amount of possibilities that these startups bring to the table is enormous. The first batch that we had there were few companies which were interesting but now it is that startups are testing the boundaries of the platform that we provide," exclaims Ravi.