A company that my brother cofounded just got acquired for around $50 million in cash. It had 40 employees and found a use for some cool technology that they developed in providing a Zero Touch Fraud detection solution. This year revenues were around $3-$4 million and next year may touch $10 million. I think they started the company in 2003. It took them 3-4 years to get to $50 million.
The reason I posted this was to get Indian product entrepreneurs thinking.
Are there some Indian product examples similar to this ? Are there any barriers that prevent Indian entrepreneurs in doing a 40 turns 50 in 4. ? I am sure there are quite a few barriers but Indian ingenuity is supposed to get past them. Right ?
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@Krish,
Good points…not sure about the commercial section though – if the acquisition was pure-cash, not sure where depreciation comes into the picture (I would guess that the earnings-dilutive/accretive dimension has no connection to the acquisition costs)
@Pukhraj,
My company, InstaColl, is shortly launching a product in the security domain – I see that you are in Bangalore and are in the same domain…if you are interested in comparing notes and/or see if there is anything we would work on together, drop me a line at sumanthratinstacolldotcom.
Cheers,
Sumanth
VCs and the Theory of Relativity!
————————–
I totally agree with what ABC has said and it makes interesting reading. It manages to throws up many intelligent questions. Something that really made me think hard, just want to share a thought …
ABC says that most VCs are looking for a google to happen to them. True. I feel that some VCs have a distorted view of the Theory of Reativity, which they are rightfully entitled to. They will wait for their google, while the rest passes them by, and it still makes them happy to feel the movement without moving. Standing still while goods deals passed them, they subscribe to Relativity.
I remember what what my grandfather told me when I was very young … he said “standing water and still money spread illness, its better that they keep moving”.
cheers
Deepak
I am not so much worried again about whether its a product or a service company. I would be more interested in a company that changes the way of life for a consumer – business or individual. In that sense so far indian companies have done magnificently well when there end users were businesses (infosys, wipro etc) but when it comes to the end user being a individual i dont think they are doing that great (even mobile firms – i hv had such sad experiences with my phone or sometimes with my interent). So its also a mindset issue i think. Google sells to people who sit on the net and who can change their allegiance at a click to another search engine whereas an business buyer would never do that – that probably makes google innovate way lot more than say an infosys or wipro(not that they dont, but not as much as goog).
Regards
Madhu
I have a diferent take on this entire issue of risk taking and entrepreneurs ‘in India for India’. Experience has shown me that when we actually roll-up our sleeves and dirty our hands, seeking to raise risk capital in India for a start up, we do not find any takers among VCs. While everyone encourages and wants to help, actual funding has not been forthcoming, atleast until now.
If we look outside of technology start-ups, we will find several attractive investment opportunities opening up in India where start-up funding is necessary because of increased entrepreneurial interest in these segment. I know the recent example of a capital intensive financial services start-up set up with initial funding of Rs 1 billion where VC were completely absent. The Round I funding in this case was fully mobilised from private individuals and overseas corporates operating in this market space
Something for VCs to think about…anybody hearing?
A fine example of an indian product thats going places globally is Subex Systems! With their acquisitition of Azure Solutions, they have strengthened their position as the market leader in the revenue assurance space. I think this will be a company to watch in the coming years!