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Accel funds ex-Zoho team’s startup Facilio that makes buildings smarter

Vishal Krishna
6th Apr 2018
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Facilio uses IoT and Machine Learning to assist building operations, sustainability performance, workforce efficiency and occupant comfort, all together in real-time.

At a Glance

Startup: Facilio

Founders: Prabhu Ramachandran, Rajavel Subramanian, and Yogendra Babu

Based out of: Chennai

Funding: Undisclosed funding by Accel

What do they solve?: IoT and Machine Learning to harness data from multiple buildings to make sense for building asset managers.

Not many have the gumption to resign a well-paid job in a popular cloud-based company, and turn their business ideas into a startup. It took Prabhu Ramachandran 17 years to realise he wanted to become an entrepreneur all along.

But, those learnings came from indomitable Zoho Corp, which, over the last decade, has captured the imagination of millions of SMBs. Its co-founder Sridhar Vembu instilled entrepreneurial values in many of his senior managers.

Some of the well-known startups from Zoho include FreshWorks and Azooka Life Sciences. Influenced by this growing zeal of startup fervour in the country and sensing a business opportunity in using IoT solutions in Indian corporate buildings Prabhu Ramachandran founded Facilio in February 2017.

Prabhu Ramchandran (centre) along with founders Rjavel and Yogendra Babu.

Prabhu ran Zoho’s subsidiary WebNMS suite of enterprise IoT services before Facilio, and worked there for 17 years. He was joined by Rajavel Subramanian and Yogendra Babu Venkatapathy who had also worked in Zoho for an equal amout of time.

“The trigger was the opportunity. If you look at the Bay Area, there are a couple of billion-dollar valued IoT companies. India has so many facilities that need intelligent software that gives a single view of all the systems,” says Prabhu Ramachandran, CEO and co-founder of Facilio.

Prabhu is right because companies like C3IOT and uptake.com went on to be valued at $1.5 billion, and raised more than $200 million. Kattera, another startup in the construction space, raised $250 million and was valued at $1.5 billion in three years.

The three individuals divided roles and entered the market in March 2017. Yogendra builds the tech, Rajavel conceives the product architecture, and Prabhu manages the company.

Within a month of setting up the company, the business caught the attention of VCs. Prabhu began building relationships with the venture community to raise money in the future. As luck would have it, the team’s pedigree and the articulation of the idea secured a commitment of millions from Accel India. The VC firm recently closed the round. “I was building a network by informing people about the idea. That’s how the meeting happened. They liked the idea, the market opportunity and backed our execution skills,” says Prabhu.

What does Facilio do?

Facilio makes software for facilities and buildings. You may think what a building’s got to do with software or intelligence. Think again. There are fire safety systems, air-conditioning systems, and lift systems.

From a customer point of view, it is very heavy on capital expenditure and operating expenditure because the customer spends millions on buying the facility and managing it. A building’s fitness is critical when it is a hospital or an IT services company because any outage is critical. It has a direct impact on the bottom-line because it drops efficiency.

Facilio uses IoT and Machine Learning to harness data from multiple buildings, across the country, and data is collated to make sense out of them for building managers. Apart from building systems, there is multiple software for analytics, which makes the life of the facilities manager difficult.

It stitches together all systems and converts their static data into intelligence by generating tickets about various anomalies in the systems. The company increases the lifecycle of an asset by 20-25 percent, and saves 30 percent on the opex.

Facilio Team

For example, take the case of just one building, two million square feet, has energy bills of Rs 3.5 crore a month. Its AC and lighting systems are constantly under pressure because they are not monitored properly. Comparisons of energy consumption between years are often ignored. There is a lot of wastage. In a smaller office, instead of the AC running at the ambient 24 degrees, it could be running at 19 degrees and lighting systems may be on all the time. If these are not monitored, the cost spirals every month and the CFO pulls up the facilities team for the money burnt on maintaining systems. Facilio aims to improve the quality of life in a facility and make the facilities workforce smarter with data.

According to ReportsandReports, a consulting and research firm, the Indian building management system (BMS) market was valued at $6.65 billion in 2016 and is expected to reach $19.25 billion by 2023, at a compounded annual growth rate of 16.71 percent between 2017 and 2023. Significant cost benefits to industrial, commercial, and residential users boost the demand for BMSs. Traditionally, operating cost was one of the major concerns for building owners as they had to incur a huge expense in the maintenance of the building because of the lack of advanced technology.

Globally the market size for facilities is $30 billion.

A simple business consideration for using BMS is being more energy efficient. Reducing energy consumption directly translates into reduced spending on energy, and saving power provides a good financial opportunity for businesses and helps improve their profitability. Ensuring that the BMSs in the buildings are operating at peak conditions will enable users to not only improve system efficiency but also reduce operating costs. However, lack of technically skilled workers and high initial implementation costs pose a restraining block in the building management system market.

“Technology that can scale globally is what investors are after and there are many such businesses coming up in India,” says Naganand Doraswamy, founder of IdeaSpring Capital.

Facilio competes with companies like Integrtion Wizards and Petasense in India. It currently has 12 global and Indian customers piloting its software and already has three paying customers. “Entrepreneurs must build for global scale and show value to customers. Just tech talk alone does not make a business scale up,” says Prabhu.

The company is unwilling to disclose revenues as they have just begun commercial operations.

In the end, the coming together of experience, networks, relationships and the ability to take the first steps to becoming entrepreneurs are things that make a business idea viable. The Facilio team proves that there is an entrepreneurial spirit in all of us provided we know what we are going after.

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