Online2Offline is an interesting category of startups that, in essence, lets a user browse online and brings her out in the real world stores (to make a purchase). A term made popular because of the likes of Groupon, it’s a model that has been in India since long, and is very relevant. JustDial is the original O2O company that went IPO, and, more recently, the success of startups like Zomato has made it relevant even more. Started about three years ago by Annkur Agarwal, with able support from co-founder Tirthesh Ganatra, PriceBaba is a product search engine (O2O) that claims to serve 3.5 million users per month. It recently expanded to four new cities-Chennai, Hyderabad, Baroda and Surat- taking the total tally to 11 cities. A total of 1500+ local shops are now verified on PriceBaba. The site claims to have sent inquiries worth INR 230 crores in 2014 alone. It’s been an arduous journey for the team, but their proposition is looking attractive, with the evolving market.
YourStory got in touch with Annkur for a conversation on building PriceBaba:
YS: Offline is starting to make a presence felt in the online world now. Is the feeling getting stronger? (in reference to growing momentum of startups that have armies on the ground)
AA: I am surprised with the number of O2O startups that I have personally come across in the last 12 months. Right from organising transport trucks to PriceBaba clones, there are several out there now. If we look at it, some of the big successes that we’re seeing are in O2O. Zomato & Ola Cabs, I think, are similar examples. Owning the transaction like Ola Cabs of course creates greater value. There is also innovation around this with startups like SquadRun that I really appreciate.
YS: You started out pretty early with the online research, offline buying thesis. What made you stick?
AA: It has been three years now since we stared. We’ve had several near death experiences already with the business relying heavily on funding in the first two years. We always knew that this would be a tough problem to solve and revenues would be hard. Of course, Pankaj & 500Startups have been a great support; we wouldn't be here without them. Whenever we’re in doubt about why we still do this, I go back to the reason why the company was started - To help our friends shop better, to answer their concerns about shopping. We still keep listening to them and build solutions. I am actually very excited about some of the releases we’re doing in Q1 2015. Also, seeing the success of Zomato, we’ve been quite inspired, and continued to solve this problem.
YS: Tell us about your information collection process.
AA: There is a ground force involved, just like Zomato or JustDial. At the same time we’re using technology as much as we can for automating things. I think the software infra we’ve built (and are building) would be a key differentiator in this market. We started in 2012 with an excel sheet printed and our retail partners filling the forms for us. Given that we’ve seen those days, what we’re doing today is already pretty advanced.
YS: How do you expand to other cities? What work went behind the announcement you made? Since when were you planning and doing things behind the scenes?
AA: Launching new cities is an intense process. A lot of planning goes into it, and we like to operate with minimum cash burn to execute the same. So, our processes are pretty frugal. We have some ideas from our experience of launching in 11 cities.We’d hopefully do the next 10 cities in less than half the time and cost than before. Given the traffic on the site now, our job is also easier. We already know which city we’re seeing demand from, so we know what to expect from there. Like, Chennai already has a lot of traction, even though we launched it only last week.
YS: How is the financial strength of the company?
AA: We’re lot more revenue-focused now, and more than half of the funding we’ve raised till date is still in the bank. We also managed to breakeven in October, but we’re now investing very aggressively on technology and operations. So, we aren't going to be profitable very soon (revenue model revolves around ads and premium listings).
We now also have Vinayak Hegde as a technical advisor to PriceBaba. His decade-long experience with Microsoft, Akamai, InMobi, Helpshift is very valuable to us.
YS: How often and how do you refresh your data?
AA: There are some internal SLAs that we cannot disclose, but prices are updated daily. Just what gets updated when and how is a bit of a trade secret. We are, of course, not going to rest till we reach realtime.
YS: What is the team strength right now? Are you raising additional funds?
AA: We are 30 wonderful men and women at work. All the startups that I know are always raising funds. Always. We are no exception. But then, telling it to the media becomes an embarrassing headline [laughs].