Sramana Mitra: Technology consumer products and consumer electronics hasn’t really happened in India. It’s all been from elsewhere. China is very strong. Chinese products come into India fairly aggressively, right? The competitive landscape is very tricky. You’ve invested in about 25 companies.
Why don’t we talk about a few case studies of what you have invested in. Take us through the journey of when you saw these companies, what did they have? What caught your attention to convince you that this is something that you want to invest in?
Swapna Gupta: The first investment that I did was when I moved to Qualcomm Ventures. This is a company which is very unique in the sense that it’s an enterprise service. However, it’s an enterprise service for India alone. We all hear of stories of enterprise companies who have made it big by focusing on the global market from India. But this is one company which actually started to believe that it can build for India from India. They essentially picked a very specific problem, which is the employee transportation problem in India.
The second largest component of any large corporate PNL after payroll is employee transport. It’s very unique to India because it is one of few countries where employers transport the employees back and forth from their homes. Is there a way to cut down that cost for the corporate? They built a great software platform that optimizes the efficiencies to bring down the dead miles. They could save up to 30% of costs to corporate.
They became a household name at every corporate in Mumbai. Today, they may have hundreds of customers. Those are the kind of stories that can be built out of India. These are very specific Indian problem.
Sramana Mitra: What did they have when they came to you to seek investment?
Swapna Gupta: I think they had four customers maybe. What caught our attention was that those customers were not Indian companies but actually large corporates. When they came to us, founders were ex-Microsoft. They actually convinced Microsoft to buy this model and Microsoft is not an easy nut to crack. That convinced us that if they can do it for a large corporate like Microsoft that has tough policies and procedures, they can easily do it for hundreds and thousands of others.
Sramana Mitra: So that’s one. Let’s do another example.
Swapna Gupta: A company that we invested in recently is called Shadowfax. It’s a very interesting story because, increasingly, India is becoming an instant gratification economy. Traditionally, logistics in India has been built on two to three-days redemption. Now, you need everything to be done in 60 to 90 minutes. You have to build a new infrastructure. That was non-existent in India.
Shadowfax has built a strong network of delivery personnel. It survived the aftermath of high valuation, multiple funded companies. It has came up strong. This was a very positive approach saying that we’re going to be the first logistics company to cater to all the instant gratification company, which is Amazon, Swiggy, or Bigbasket. It’s a curve I can see going up and I need to ride on the curve.
Sramana Mitra: You’re saying that, in this case, Amazon, Swiggy, Bigbasket, and comparable companies are willing to outsource their last mile delivery to this company?
Swapna Gupta: There is a reason too. If I’m a Swiggy, my peak times would be possibly early morning, afternoon, or late night, but there is a lull period. What do I do with my fleet during that time? Same with Amazon. You take most of the deliveries when they are in the office, so there’s lull period during the rest of the day. For grocery companies like BigBasket, most of the deliveries happen during early morning or at late night. You don’t want to build a network just for that. So, if there’s a third party that is able to optimize the fleet, you would go for it.
Sramana Mitra: So, they staff up the peak periods and outsource the lull periods, interesting.