Sramana Mitra: Let’s talk about funding. When did you receive your funding and what preceded your decision to raise funding?
San Banerjee: From the very beginning, we have sought out people who could serve as advisors for us. One of our earliest advisors was Sharad Sharma. We also had Manish Singhal, who we met through our entrepreneur contents. He joined us after the competition as a formal advisor. In February of 2013 we decided that it was time to scale our business. The product was proven and mature. We had figured out the support process. We felt we could show value to investors.
We created our first pitch and gave it to Bhupen Shah, who we were introduced to by Manish. In our very first meeting he committed to invest in us. We were very pleased with that because the purpose of the pitch was to get his feedback on the pitch itself.
Sramana Mitra: What was your pitch to the investors? Everything sounds great. You have a mature product with customers and a validated pricing model. However, there are two general questions which float above Indian SaaS deals. First, there are always concerns about the growth rate because the Indian sales cycle is abnormally long. Second, there are concerns about the Total Available Market. Tell me more about those two aspects.
San Banerjee: There are around 4 lakh apartment complexes in India that hit our demographic. That became our TAM. Our software is sold to complexes where rent rates are above 26,000 rupees. On AppartmentADDA, each complex has its own secure ADDA. Every resident has credential which allows them to log in and conduct business associated with their apartment complex. This is like the Facebook of apartment complexes with management capabilities.
There are other possibilities there as well. Suppose you want to open a new school in a particular area and you only want to advertise to apartment complexes in that area. Your only option would be to put up a billboard that is very expensive or to approach each management committee to put a notice on their board. We now have the ability to automate that with AppartmentADDA. Management committees are open to new revenue possibilities because management costs are sky rocketing. This gives them a new revenue stream.
Sramana Mitra: Are you doing revenue share deals with the apartments?
San Banerjee: Exactly.
Sramana Mitra: Is that a validated model or is it a concept?
San Banerjee: This has been verbally validated. We have had discussions with several management committees, and they are excited about it. We have become trusted advisors and they know that we are not going to sell their private data. There is a tremendous amount of trust that we have established. When we approach them with a new possibility like this they really believe in the promise.