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Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq (Part 5)

Posted on Friday, Jul 4th 2014

Sramana: Let’s talk about your financing strategy. You raised a round in 2012 and another in 2013. How many customers did you have by the time you raised your first round?

Mohammed Farooq: We had three customers. Texas was our largest customer because they had six different agencies, so it’s almost like we had six separate customers there. We also had NJVC and a company out in Washington D.C. that had just signed on.

Sramana: Who did you raise money from?

Mohammed Farooq: We raised money from S3 Ventures here in Texas.

Sramana: Who led your second round?

Mohammed Farooq: A local firm called Corsa Ventures. They are a smaller venture company, and S3 participated in that round as well.

Sramana: How has your customer acquisition ramped up?

Mohammed Farooq: Last year, the broker market was still building up. We are seeing traction this year. Last year, we acquired two new large system integrators and they wanted to be the brokers in the supply chain.

Sramana: It appears your go-to-market strategy is through system integrators. Is that an accurate observation?

Mohammed Farooq: That is a correct observation for 2013. In 2014, we saw a lot of activities starting in the enterprises. We made the shift to do two things. We’ve worked through our system integrators to reach enterprise customers. We started reaching out directly and started signing our first enterprise customers early next week.

The interesting thing about system integrators is that they are not just our channel, they are also our customers. They deployed our product to be an aggregator and broker in the cloud. They wanted to provide a single face to the cloud to their customer. They licensed the technology from us under a SaaS model and they white labeled it. Our technology runs their business.

Sramana: What is the thought process behind direct sales? I imagine it is easier to identify the projects through the system integrators.

Mohammed Farooq: It definitely is easier. There are specific reasons why we have taken that approach. First, cloud broker and cloud consumption in the enterprise is at a very early stage. Most of the cloud adoption has happened by developers at Amazon. Now, as enterprises have really started to adopt Cloud, they are realizing that they have to change their business model. They are all learning and adapting.

We made the decision to go directly to enterprises and learn from that in parallel to our system integrators. I will use the enterprise deal that we just secured as an example. We won that deal directly and we will conduct the first phase, and then we will hand the deal off to a systems integrator.

This segment is part 5 in the series : Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq
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