Here's how bootstrapped Collectcent overcame early losses and invested heavily in people and technology to become profitable.
For over 18 years Andesh Bhatti had been running strategic portfolios to drive revenues and scale businesses for different companies in the IT and mobile domains. His passion lay at the intersection of the internet and mobile, and the innumerable possibilities it had created. So his passion for technology and the advertising business led him to start Collectcent in 2013.
Back in 2013, the mobile advertising domain was making money on the ‘cost per impression’ model. This was because the industry was still nascent and advertisers weren’t seeing high conversions rates.
Aiming to change the industry model, Andesh started Collectcent with a data-driven performance model, where brands would be able to see tangible value in their advertising spends. The first year was tough and the startup incurred some losses as Collectcent would generate revenue only when it helped a brand convert an ad, which could be through an app install or purchase. Talking to YourStory, Andesh shared,
Initially we were running into some losses. But the situation improved. We started with limited clients to understand their needs and improved our technology and operations.
The intent was to use proprietary technology and a consulting approach to help brands reach their target audiences, increase sales, visibility, and revenue. With a hands-on approach on technology, Andesh and his team were able to taste success and get global and Indian companies such as UC, Alibaba, Apus, Hungama, One97, Nazara Games, as clients. Andesh shared that since its launch in 2013, the venture has seen an average growth rate of 200 percent year-on-year.
Collectcent is a bootstrapped company and Andesh notes that after a few initial hiccups they have been generating profits since month six of inception. Andesh said,
We are still profitable. The company has an employee retention rate of more than 95 percent. The adtech space has high attrition, so I am happy that most of core team is still around.
Headquartered in Gurgaon with 130 employees operating across different roles and time zones ranging from technology and operations to sales and marketing, Andesh attributes his company’s success to the flat organisational nature and in-house technology.
Andesh believes that the key to employee retention is the ability to understand unique circumstances, give individual attention to employees, place them where they can perform best and guide them to face challenges.
Tailored for mobile devices and desktops, Collectcent can help clients customise their digital advertising campaigns to be engaging, immersive and in the case of video ads, also skippable, where the user has the option to either skip the advertisement or watch it.
Andesh noted that Collectcent has built a proprietary self-learning tech platform that adapts to different publishers, brands and user environments. The startup’s main clientele currently include large and small e-commerce companies, transportation companies, players in the BFSI space etc. Some of these include companies like- Amazon, Flipkart, Paytm, Hungama, Nazaara, VuClip.
Andesh noted that they mainly work on quarterly or annual contracts with clients and ensure clients have vast reach and are also protected from fraud. He said,
Technology is one of our key differentiators. We have built self learning algorithms in big data environment that are able to target users who have higher propensity to be interested, click and then buy. Our fraud detection algorithms can also distinguish between real and bot traffic. This way, we kill bot traffic before its hits the system.
The digital ad ecosystem is dominated by Google and Facebook, and eMarketer had estimated that the two companies were expected to rake in a combined 63.1 percent of the US digital ad investment in 2017. Andesh believes that the digital ad ecosystem is large enough for smaller plays to grow and thrive. Facebook recently announced how it plans to change its newsfeed to show more posts from friends and family and less public content, including videos and other posts from publishers or businesses. This will definitely affect brands and advertisers in the near future.
Talking about the industry as a whole, Andesh believes that it will be entirely led by big data and the entire ecosystem will need to work hand in hand. He said,
Innovation has to be supported by both publishers and the ad networks.
Bootstrapped so far, Andesh noted that Collectent is currently profitable and has enough cash reserves. So he aims to raise external funding only for strategic purposes, if at all. Apart from India, Collectcent is currently active and has a presence in countries like North America, Europe, SEA, Latin America, Middle East, and Russia. Talking about their future plans, Andesh shared,
Going forward, we plan to expand into markets where we have low penetration but overall digital penetration is high. China and Japan are also some markets we are currently exploring. We will also continue to invest in technology, which is our backbone.