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India's hottest start-ups This is Business Today’s Third Annual Listing of hottest start-ups and, pretty much like the two previous lists in 2007 and 2008, this listing is also completely subjective.
This is Business Today’s Third Annual Listing of hottest start-ups and, pretty much like the two previous lists in 2007 and 2008, this listing is also completely subjective. But we did not put the names of the companies—drawn by a host of venture capitalists, consultants and even our reporters—on a board and throw darts at them. Nope, we took a long hard look at all the names we got— and we got a lot—and we looked at how viable these businesses would be. So, while a company might have some great guys working for it and a solid idea, we looked at whether it would still be around by the time Business Today’s 20th annual list of Hottest Start-Ups comes about.
Did we have any criteria? Yes, we did. All companies, save one, on our list are around three years old or younger. Though MeritNation is rather old, the company changed totally in 2007, keeping the old name but little else. The second is that the company has to be an “Indian” company: some nominations were great and did all their business in India but were registered abroad.
The third criterion, as we explained, is survivability and that involves doing something new in India. Not reinventing the wheel by creating “India’s Facebook” or “Twitter for India”— those services already exist and are called Facebook and Twitter, respectively, and the lack of borders on the Internet mean that Indians use them far more than local social networking sites. All our companies are doing products—in hardware, software, services or healthcare— uniquely honed for India.
We are pragmatic enough to realise that we might get some wrong. Our companies in the 2008 list (page 106) have had to change their plans, because the world has changed (and how!) since this time last year. But we are sure that our class of 2009 will not just survive the slowdown but are going to be the standardbearers of India Inc. in the future.
Inbiopro Money from Molecules
Bio-blockbusters: Chatterjee (L) and Iyer Rodrigues
Inbiopro, set up with the aim of taking potential blockbuster molecules from biotech firms and building them up to the preclinical and clinical trials stage, broke even within a year and has already delivered three molecules for trials. Two founders—Chief Executive Sohang Chatterjee and Chief of Operations Kavitha Iyer Rodrigues—have worked together in biotech, while a third, Aditya Julka, had worked with them at consultants McKinsey & Co. and then at Millipore and Avesthagen, both lifesciences and biotech firms.
“We are focussed on capability rather than products,” says Chatterjee, “we provide a sizeable difference in time-to-market and costs to our customers.” Inbiopro works for the emerging markets, touted as the next big thing in pharma.
It has attracted two rounds of venture capital investment from Accel India and is using some of the money to upgrade and expand its labs in Bangalore, but it is in no hurry to expand—its two-floor office in the industrial suburb of Peenya houses fewer than 20 people. The focus: executing complicated projects.
“All three founders have the required skill and experience,” says Prashanth Prakash of Accel India. Inbiopro has never missed a trick when it came to cutting costs and hitting break-even: it began life in an apartment owned by Iyer Rodrigues’ parents and tapped them (both are IIM professors) for their business plan. Today, it is located in a nondescript office building, not in Bangalore’s expensive central business district. “We’re not a page 3 company,” says Chatterjee, “we’re happy flying under the radar and focussing on the bottomline.”
Location: Bangalore
Year of founding: 2007
Founders: Sohang Chatterjee, Masters in Microbiology from National Centre for Biological Sciences, which is part of Tata Institute of Fundamental Research and Ph.D from Cornell, Kavitha Iyer Rodrigues, Masters in Clinical Microbiology from Kidwai Institute of Medical Sciences, Manipal and Working MBA from IIM Bangalore & Aditya Julka, M.Tech in Bioprocess Engineering, IIT Delhi and completing MBA from Harvard Business School this year
Nature of business: Bioscience Funding: Accel Partners ($3 million)
Will make money by: Already profitable
Number of employees: 19
Revenue: Not disclosed
Size of target market: $70 billion
Key competitors: Companies like Gala Scientific, Charles River and BioReliance in the US. Claims no major home-grown competitor
Biggest threat: Slow pace of regulatory approvals in the US and European operations for generic biotech drugs
— Rahul Sachitanand
Carnation Motor Mechanic
Jagdish Khattar
A Start-up after retirement? Trust Jagdish Khattar to do it. The man who became synonymous with the Maruti Suzuki success story decided to change the way Indians maintain their cars. Just weeks after stepping down from Maruti Suzuki, in December 2007, he set up Carnation, which is to be a chain of service centres that can handle 80 per cent of the models and makes on Indian roads. “In developed markets the concept of a branded service player is well-established. In India, other than Maruti and Tata Motors, manufacturers do not give their owners much choice but to go to dealerships to get their vehicles serviced… owners end up with unlicensed neighbourhood mechanics,” explains Khattar.
Carnation’s first outlet is in Noida and Khattar plans to have a nationwide presence by the middle of next year. “Insurance companies and large car fleet operators have come to us as we can save them massive amounts of money,” Khattar says. Carnation isn’t going to be only about service: Khattar plans to foray into car sales and mechanic training schools. Sometimes, with start-ups, no matter how good the idea, experience matters. And Khattar has plenty. Little wonder, then, that the name Carnation has the tag, “A Jagdish Khattar Initiative”.
Location: Noida, NCR
Year of founding: 2008
Founder: Jagdish Khattar
Nature of business: Multibrand Auto Sales Maintenance and Allied Services
Funding: Rs 80 crore from Premji Invest, Rs 28 crore from IFCI ventures
Will make money by: The 2nd full year of operations (2010-11)
Number of employees: 500 by March 2009, 5,000 by 2012
Revenue projection for 2009: The rollout commences from fiscal year 2009 and the revenue ending 2009-10 is projected at Rs 300 crore
Size of target market: The auto service industry is estimated at Rs 2,500 crore Key competitors: Mahindra First Choice operates in the branded used car market
Biggest threat: Extremely dependent on Khattar’s personality to drive marketing and sales; Khattar is already 66 years old
— Kushan Mitra
nvention Labs Engg Products Inventing for India
Tinkerers in their garage: (clockwise from top left) Ibrahim, Chandrasekaran, Shivanna and Narayanan
They have a common passion: developing engineering products. They share a common aspiration, too: give Indian engineering an identity like the way German engineering is known for precision and durability and Japan for micro and nano technology. To achieve this, Ajit Narayanan (27), Adib Ibrahim (28), Aswin Chandrasekaran (27) and Preetham K. Shivanna (26)—all from IIT Madras—have set up Invention Labs. “Indian conditions are unique. Using a foreign technology or retrofitting has not worked. We want to invent India-specific products,” they say. Set up in June 2007 with an initial capital of Rs 15 lakh and a seed capital of Rs 5 lakh from IIT Madras, Invention Labs currently has 11 employees (including the founders). It has developed a few products: Kavi—a handheld communication device for children afflicted with cerebral palsy and machine vision systems for quality control (the current downturn has affected sale of this product). It is betting big on retail vending machines—prototypes of which are under development. Meanwhile, its servicing business—designing of sub-components and parts for various industries—ensures adequate cash flow for this start-up to keep its activities going.
Location: Chennai
Year of founding: 2007-08
Nature of business: Engineering products development
Sachin and Binny Bansal (no, they are not related) found themselves in boring technology jobs after doing their computer science from IIT Delhi in 2005 and got their creative spark only when their career paths converged at Amazon India, the world’s largest online retailer. Amazon has only development centres in India—and the two figured they could very well replicate its online retail model. “Initially, we thought of opening a comparison shopping engine. But after studying the e-commerce space we realised there were no good players in India,” explains Binny. “We thought of books, as online sales for books is good, there is no touch and feel factor and the suppliers are also e-enabled,” explains Sachin. In September 2007, they quit their jobs to set up the company and had the site up and running in a month. “It was an enormous task to get tie-ups with the major book vendors, as we didn’t have an off-line book store. … Another major challenge was to get the approval for the credit card payment gateway. …we had to convince Axis Bank for the payment gateway and that wasn’t easy,” says Binny. Against the Rs 4,000-crore books market, online business is a measly Rs 25 crore. “We want to be number one in online book sales,” says Binny. The company is growing at 35 per cent per month.
They’ve been posting robust double-digit growth for two quarters now even as their peers struggle to come to terms with the downturn. Virendra Verma finds out what makes these companies tick when business dips?
