Monthly Archives: March 2020

The three-year-old bootstrapped startup, originally a consultant called Etrix, finds the market more favorable for its goods in Europe

Unlike bandwidth-intensive and hard to deploy AR applications, Scotty uses WebGL, a JavaScript API, to render graphics on a compatible browser

The invention of a Bengaluru company helped to deal with it at the height of the Covid-19 outbreak in the Chinese city of Wuhan, where the coronavirus originated. After two and a half months of a lockout, Wuhan will be coming out of quarantine on April 8, with new infections dropping to zero. As a Chinese official said to Bloomberg in February, “It’s like fighting a war.

Some of the steps Wuhan took was to set up on a war footing emergency medical centres. Ventilators were critical and many were from Huber & Ranner, a German manufacturer. The problem was that technicians had been unable to go to Wuhan to help mount them. That is where BlinkIn, based in Bengaluru’s Nasscom CoE, came into the scene.

To provide visual feedback from Pocking in Germany, Huber & Ranner used BlinkIn’s AR (augmented reality) app Scotty. Staff at the Wuhan hospital simply had to click on a button to get tech help. While pointing a phone at the ventilator and installation point, AR markers helped determine what to do as a technician talked to them about the process.

“WebGL lets you access the GPU (Graphics Processing Unit) of a cell phone to run algorithms for computer vision. That is how we offer AR interactions through the Web rather than a smartphone device, “explains BlinkIn’s CEO and co-founder, Harshwardhan Kumar.

The concept behind a lightweight app like Scotty is to have only enough AR for tech support “to get the job done then and there.” Unlike a full-fledged AR app, this involves limited computing resources and will entail heavy downloading and finding out how to use it.

FERST CUSTOMER

“Our strategy differentiates us from other businesses who are stuck in a showcase trip to create cool AR / VR experiences that are rarely rolled out. We’re really trying to understand a issue and create value for a customer, “says Josef Seuss, the German co-founder and MD of BlinkIn.

“What I do on a daily basis is create communication between us and our customers,” adds Reinhard Kurz, who is overseeing business development for BlinkIn. One difficulty, for example, was making a live video call when connectivity was poor. “We came up with an instant picture chat solution.”

Seuss was a digital transformation consultant to companies in Germany when he first linked to Kumar in order to do a project for one of his clients. Later, when BlinkIn was at last year’s iCreate accelerator programme in Ahmedabad, Kumar told him they were developing a smart visual bot.

He saw much interest in the drug when Seuss started asking around in Germany. He ended up moving to Ahmedabad to participate and becoming a co-founder of the BlinkIn founders in the accelerator programme.

Although Scotty opens doors to businesses with easy-to-use AR, BlinkIn’s deep-tech tool is the AI-powered visual bot Houston. Imagine an automated call to video conferencing that is getting smarter as it progresses. Houston can be deployed in multiple scenarios.

One of the early users is the German automotive association Allgemeiner Deutscher Automobil-Club (ADAC). The bot will help a consumer do an oil-level inspection in his vehicle, fit a child’s safety seat, and so on. “We will be doing a broader pilot around Europe with an automotive business,” Seuss says.

An Indo-German startup is taking advantage of the best of both worlds. AI and AR talent in Germany are limited and costly so the engineering side is in Bengaluru. And Europe is the main target market where Seuss and his team will directly communicate with potential customers.

CONNECTION DE GERMAN

After the Ahmedabad programme, the Indian creators of BlinkIn — Harshwardhan Kumar, Nitin Kumar, and Dhiraj Choudhary — went with Seuss to join an acceleration program for insurtech in Germany. They linked there with insurance firm VKB, which now runs a pilot to see if a visual bot can enhance the process of claims and reduce the time taken.

The three-year-old bootstrapped startup, originally a consultancy called Etrix, found the market to be more favourable for its goods in Europe. “We reached out earlier to companies in India that are eager to take our goods forward.

We have reached out to investors willing to invest in us. Yet after having a taste of the German environment, we had to rethink what we could lose in equity by raising funds in India or entering into agreements with Indian customers, “Choudhary says.

“We learned from day one to work remotely and to trust each other in both India and Germany,” Seuss adds. “We don’t have to sit next to each other all the time.”

  • Late-stage and stage companies plan to make a profit over the next four years
  • With the COVID-19 outbreak, start-ups and large companies have experienced a concentrated impact on their businesses, especially in the travel segment

A recent 2020 survey conducted in February shows that many Indian companies have prioritized growth over profitability, but that could change because of the COVID-19 outbreak that has affected thousands of businesses around the world.

A majority of startups in India still tend to expand quickly and users on a rapid scale, rather than increasing profitably, reveals a survey undertaken by InnoVen Capital, a venture debt capital provider. About 79 percent of InnoVen’s surveyed start-ups showed a strong bias towards growth over profitability.

Both late-stage startups and nearly 91 percent growth stage startups surveyed said they planned to be profitable over the next four years. Although 82 percent of consumer brands and 53 percent of fintech companies claim to be profitable in the next 1-2 years or at least expect profitability.

This notion of growth over profitability prevails, even as the report highlighted that startup founders in India are anticipating a weaker venture funding climate in 2020. Approximately 75% of founders surveyed by InnoVen said they had a favorable financing experience in 2019, but approximately 58% of founders expect fundraising to be more difficult in 2020.

InnoVen’s survey also showed that most founders will see funding and improving top management as the top priorities in 2020. Certain goals include enhancing suitability for the product market and concentrating on productivity, the survey showed.

Just 14 percent of the funders surveyed by the venture debt firm said profitability is a top priority for 2020, compared with about 27 percent who said fundraising was the top priority.

Read Startups by 2020: Key questions asked

Although a majority of the founders (57 percent) surveyed believe the most likely exit scenario would be through mergers and acquisitions and secondary exits, many founders are now beginning to look at IPO’s as a viable exit choice. Approximately 42 percent of the founders said an IPO could be one of their 2020 exit choices, which is a small increase from 38 percent in 2019.

Approximately 54 percent of growth and late-stage start-ups foresee a 5-year exit, with 62 percent suggesting IPO as a possible exit. Over 50 percent of Fintech start-ups surveyed said IPO is the most likely exit mode. 60 percent of start-ups in e-commerce think that secondary exits are most likely, while 64 percent of start-ups in the consumer sector feel that a merger or acquisition could be the most possible way out.

With the outbreak of the COVID-19 epidemic, however, startups and large companies have seen a concentrated effect on their industries, especially in the travel segment as many countries have approved foreigners ‘ travel bans and visa curbs. Venture capital firms have encouraged startups to hold cash and likely prepare for a downturn in funding.

Sequoia Capital, one of the most involved VC firms, said in particular supply chain disruptions are inevitable with a market slowdown. The firm has also advised investors and businessmen in an unpredictable world to challenge their cash cushion, fund-raising, revenue projections, headcount and capital spending.

Ashish Sharma, CEO, InnoVen Capital India said in a statement that the survey was conducted in February when the impact of Coronavirus was largely concentrated in China and that “it is reasonable to assume that the feeling has become more unfavourable in the past week.”

  • Leading car rental companies Zoomcar and Drivezy both cut short their current financing rounds
  • Zoomcar, which for its Series D round was supposed to raise up to $500 million, has now cut the funding round to just $100 million

Over the last two years, vehicle leasing companies running four-wheeler fleets have been facing a tough period. After their arrival in India in 2012-13, the startups have experimented with multiple business models, such as subscriptions and franchise. Now, investor pressure on car rental startups is mounting as they try a sustainable business model, taking a toll on financing.

Leading vehicle rental companies Zoomcar and Drivezy both shortened their ongoing funding rounds, three people said they were aware of the progress and requested not to be called. According to sources, Zoomcar had also discussed an opportunity to combine with its competitors.

Drivezy had discussions with SoftBank and Amazon in 2019 but both conversations fell through. Then, according to one of the people listed above, Drivezy cut its funding round from the $100 million it was targeting in early 2019 to less than half.

The company is now projected to collect only around $35-40 million to a valuation of $135 million, the individual said. Currently Drivezy is worth around $200 million.

In an emailed response Drivezy reported the developments. Digital news portal Entrackr announced in February that Zoomcar was having separate merger talks with Revv, a car rental startup based in Gurgaon.

But Revv and Zoomcar declined to hold talks.

Zoomcar, which was supposed to raise up to $500 million for its Series D round, has now cut the funding round down to just $100 million, two people added. The company recently said in a round led by Sony Innovation Fund, it raised $30 million with plans to raise another $70 million in the immediate future.

Nonetheless, a Zoomcar spokeswoman called Sony’s investment a “pre-series” round and denied that it will raise more money and slash funding.

All Drivezy and Zoomcar initially launched as an aggregator, buying vehicles directly from banks and other lending institutions on their balance sheets either through equity capital or through financing options. Nevertheless, as these companies started to grow, both companies switched to new business models to minimize capital (capex) spending on vehicle procurement.

In April 2016, Zoomcar had launched its’ Zoomcar Associate Program’ (ZAP), a model where private vehicle owners— individuals, fleet operators, dealers, etc.— could list their own vehicles on the website. For this, Zoomcar was reducing the vehicle production costs.

In 2019, too, Drivezy launched a similar franchisee model in which private owners were permitted to list directly on the website. The ZAP model, however, hasn’t scaled as planned, a mobility space investor who assessed Zoomcar said, asking not to be mentioned.

“In order for ZAP model to succeed on the supply side, you first need a lot of people who own cars to go and list on the platform for the weekend at least,” the investor said.

In 2018 Zoomcar launched a subscription service to solve this issue, enabling users to subscribe to a car for 6, 12, 18, and 24 months.

  • Companies are now looking to serve customers with longer-term commitments, rather than leasing individual desks or seats
  • As reported by JLL India, the share of co-working in overall office leasing increased from 8 percent in 2018 to 14 percent in 2019.

After a rapid expansion process, co-working Fundraising startups are looking to raise fresh capital and turn profitable to fund the next growth step, as demand for collaborative workspaces in India remains high.

The dynamics of shared workspaces are also evolving and shifting towards long-term dedicated enterprise customers and creating personalized goods, rather than pursuing smaller startups and entrepreneurs and leasing individual desks or seats.

Top providers, including WeWork India, Smartworks Space Coworking Pvt. Ltd, Awfis Space Solutions Ltd and Table Space Technologies, together with smaller firms such as IndiQube and CoWrks, account for more than 80 percent of flexible space leasing and pursue strategic expansion through an asset-light or revenue-sharing model to burn less energy.

Refer: The representation of women in Indian businesses is rising

“Today’s co-working market is mainly driven by the multi-city presence of top operators. Growth has so far been the priority, but now that it is a proven form of business, they are looking at profitability, capital raising, and the operational component. It’s a volume-driven market, so operators look at prime locations, bigger customers, “said Knight Frank India, national director of office transactions, Viral Desai.

Indique, which raised capital from WestBridge Capital India Advisors in 2018, is looking to raise $30-50 million to boost capacity, as the Bengaluru-based company looks to nearly double its 2.5 million sq.ft operational space in the next 12-15 months.

“Larger companies are seeking larger spaces. The momentum has built up and for more growth, we need a new round of funding. We are undertaking buildings that can be renovated or transformed into office spaces as well as distress properties trapped with lenders, “said IndiQube, co-founder and chief executive officer (CEO), Rishi Das.

This year, WeWork India has added 5,000 seats and is aiming to hit 10,000 seats by June. However, there are also a lot of riders on the fundraising plans it announced last October to promote growth. The New York-based Indian subsidiary We Co. is also planning to turn profitable this year.

“While we keep growing and holding on to our market share, the greater focus is on productivity. Capital is a big driver, how quickly or slowly we expand. Unlike before, when we tried to grow rapidly, we are now looking at deals where landlords finance the desks we are adding, in fully-funded management contracts or revenue sharing, “said Karan Virwani, who heads WeWork India.

Even CoWrks based in Bengaluru, who said it would raise $50 million last year, is still self-funded and so far has not raised any external money. According to Abhishek Goenka, CEO, CoWrks, though this year it will add 15,000-20,000 seats, no one is building more speculatively and shifting towards facilities that are designed to fit.

The co-working segment of India has seen tremendous growth in recent years and is now a hub for new workspaces. According to JLL India figures, the share of co-working in overall office leasing increased from 8 percent in 2018 to 14 percent in 2019.

Coworking Space smart works Pvt. Ltd, which turned profitable last year and last year raised $25 million from Singapore’s Keppel Ground, follows the conventional landlord offer and has begun to take up larger spaces across the top nine Indian cities. “Everybody today focuses on productivity rather than simply reaching the topline and there is no unreasonable expansion,” said Neetesh Sarda, founder of Smartworks.

Awfis Space Solutions Ltd is planning to set up centers in even smaller cities such as Kochi, Ahmedabad and Indore, one of the biggest and well-funded co-working startups.