The urban population is spoilt for choice. There are apps for every kind of delivery, from food to clothes to massages. Recently in this sphere, there have been two big developments. Akosha, an online complaint-redressal company, pivoted to Helpchat, a messenger-based personal assistant platform that helps people get things done. Akosha started in 2010 and recently raised INR 100 crores from Sequoia Capital. In the last four months, its focus on the mobile app has become laser-sharp, and it is leaving no stone unturned in bringing all of its consumers onto the app. The PR note about the pivot quotes Ankur Singla saying, “We started as a complaint platform, but, as more people started using our service, the nature of the queries we received changed, and we realised that people were seeking all kinds of help.” (see our 2011 interview with Ankur)
Sensing a much larger play, Akosha entered into an elaborate repositioning exercise with Mumbai based agencies Ogilvy & Mather and Open Design. Haptik, its Mumbai-based competitor, which launched much later, but employed a mobile-only strategy from the word go, has also been rethinking their positioning. Backed by Kalaari Capital, Haptik calls itself ‘everyone’s personal assistant’, and helps people get things done over messaging. From filing complaints to web check-ins to making restaurant reservations, a user of the app can get anything done.
Another interesting development was Roadrunnr raising $11 million from Sequoia Capital, Nexus Venture Partners and Blume Ventures. This is a B2B company which has a fleet of delivery vehicles that can be used by local businesses for on-demand delivery (check out Africa’s Sendy). Again on the B2C side, Sequoia has already invested $1.6 million in Goodservice, a chat based concierge app. What does it do? Goodservice offers customers a single destination to get anything done, a ‘personal secretary available 24/7’, if you will, over chat. Using the Goodservice app, a user can chat with a Goodservice agent who understands his or her requirement and helps them get what they need. GetMyPeon, a startup which has been in the market for a while, but missed the positioning as a ‘personal assistant’, also caught on the bus and has raised INR 1.5 crores.
The sudden rush towards positioning oneself as a personal assistant app is understandable: 1) Investors are excited about it 2) The waves from the West are strong. Yes, neither of these points talk much about either the market response,or the value these companies are creating for now. The excitement seems to be around ‘customer experience’, ‘use of technology’ and trends in the West.
Magic, a YCombinator startup, is big on this “text us to get whatever you want, on demand, with no hassle”model. DoorDash,another startup from Palo Alto, California, recently raised a massive $40 million series B round from Kleiner Perkins along with other investors. Recode calls it the instant gratification economy, and there are a gazillion start-ups in the West that are raising money on the same thesis. Consolidation is also on the way – Caviar was devoured by Square while Eat24 got eaten by Yelp.
There are more examples in India. Meet Grofers, (also funded big-time by Sequoia) which is building a huge crew of delivery boys, who will home-deliver anything a consumer might want. It could easily extend its services and become a personal assistant. Peppertap is another big player in the same field. Ola, the cab app from Mumbai, is also into food delivery and it can definitely diversify and extend the offerings.
Technology v/s human power
An interesting thing to note is that all technology-powered startups have a huge army of ‘delivery boys’ or ‘experts’ that does most of the heavy lifting. For example, Helpchat has close to 500 people, Haptik more than 200, and Grofers is at about 2000. And the numbers are only likely to go up. NLP (Natural Language Processing) is big when it comes to the technology powering the apps. The thesis is that many of the queries being answered by humans today will eventually be answered by bots. But then, what will happen to the jobs that have been created? Maybe that is a discussion for a later time, though. In the field of on-demand delivery, there will always be a fleet of people laying the groundwork (until maybe drones take over).All this is great, but do these companies warrant such high valuations? At the end of the day, scalability for most of these ventures follows a linear curve; the age-old tech VC explanation about exponential growth doesn’t really hold true. We asked Sequoia Capital, here is the stand point they take:
At Sequoia we never make a new investment that conflicts with an existing portfolio company. However, post funding, founders sometimes decide to pivot their company¹s direction based on the market and their businesses needs. As investors we respect and support the decisions of our founders.
In situations where such pivots lead to conflicts, we go to great lengths to ensure that we do the right thing, including having different board members, and setting up internal informational controls.
For example, when we invested in Peppertap and Grofers one was a B2B logistics company and now both have a B2C model. We have, and always will, support both companies.
Similarly, when we invested in TinyOwl, Zomato had no plans to get into the food delivery business, and we proceeded with the investment only after informing and discussing with the founders of Zomato.
In an ecosystem evolving and growing as rapidly as India, some conflict is unavoidable. Our role as investors is to support our companies and our founders, and we are confident that by thinking first principles we are doing the right thing in each such situation.
Lastly, we have been investing for 10 years in India. We have observed that while some of our companies may compete for a while, over time companies tend to enter into new products and new markets thus removing the conflicts. A good example is Pine Labs (POS) and Prizm Payments (ATM) which competed initially before becoming dominant leaders in the POS and ATM space respectively.
As far as the mobile only messaging personal assistant apps go, consolidation is definitely on the cards. The times are very interesting and there are multiple directions in which each of these companies can go in. Till then, ride on!
(image credit: ShutterStock)