Every startup has that one moment which changes its course. For Bengaluru-based Blowhorn, it was in 2017 when it received an undisclosed funding from Venture Capitalist Tim Draper of Draper Associates.
For context, companies like Skype, Tesla and SpaceX count Tim Draper among their investors. Now, Blowhorn does too. The intra-city logistics company is Draper’s first investment in India.
Apart from Draper Associates, other investors that took part in Blowhorn's 2017 funding round of $3.8 million were IDG Ventures, the Michael & Susan Dell Foundation, and Unitus Seed Fund.
Blowhorn offers its services for businesses and individuals, and brings together a network of mini-truck owners and consumers. Its tech-enabled platform offers mini-trucks to transport goods to multiple cities in India.
Its algorithm works similar to that of cab aggregators like Uber and Ola. When a consumer requests for a truck, it is processed to match an existing mini-truck, and consequently the driver is connected with the consumer. The time frame could be as little as 30 minutes, and can also be scheduled to a later date and time.
Blowhorn had a vision and mission to build the world’s best intra-city logistics company. "The way to do it was to solve the toughest logistics problems," says Co-founder Mithun Srivatsa.
Even at the seed level, the team built projections with scenario sliders, which the investors could use to stress-test the business model. Mithun and his team started fundraising with Indian investors after launching the project and gaining traction.
Speaking to YourStory, Mithun said:
"We had years of experience and contextual intelligence in logistics, but we did not use it as our primary pitch. We put in the hard yards and had done months of primary research to market-size and understand the supply and demand sides."
Mithun says their conviction in the business model never wavered. He added, "What we did not do was change or tweak our model to potential investor whims. For us, seed pitches were more on vision and relevant market-size."
In Series-A pitches, the founding team talked about traction and suggested to potential investors to try Blowhorn's services for a sustained period to understand the company better.
The Tim Draper fiasco
Recollecting Blowhorn’s initial seed pitch with a set of investors, Mithun recalls the demo-day at Draper University and the meeting with Tim Draper. The time allotted was two minutes for the pitch, and one minute for a question-answer session. Mithun’s pitch video did not play, and he had a room-full of people staring at a blank screen. He laughed it off, quoted Murphy's Law, and went ahead to talk his points.
"The slide started to work in between, and the key thing was that I was not shaken, nor did I fumble. I was prepared in every way possible, I had a plan in mind even if the video did not work, I anticipated the questions beforehand, and I was able to answer and clarify all the queries."
Later in the day, Tim and Mithun spoke for five minutes, where the former told the latter how much he would invest. Mithun, in turn, told Tim he would not be using the money just yet, but after he had built the platform and was making profits. Around this same time, an analyst from Unitus Seed Funds read about Blowhorn in TechCrunch and was keen to meet with the company.
"The key thing was that we were always available in places when it mattered. When the analyst scheduled a meeting with me, I could either raise funds or run the business as my Co-founder Nikhil was in the States, earning. I was bootstrapping in India, and making zero money while Nikhil was earning more, and hence I suggested that Nikhil stayed there."
How do you close a round?
Over a couple of meetings with Unitus Seed Fund, Mithun was able to anticipate the questions, and had the answers prepared. He had also prepared himself for the worst-case scenario. "I built the business model myself, I was aware of every single cell in the excel sheets. That gave me the resolve and confidence at every stage of funding."
Mithun and Nikhil met investors from IDG Ventures and Michael & Susan Dell Foundation at a few Unitus events. One day, Mithun happened to ask IDG and Michael & Susan Dell Foundation if they could invest in Blowhorn to help close the funding rounds and they instantly agreed.
"There, we discussed the impact and numbers. In seed rounds, you speak about market size, USP and planning, but fortunately for us during seed, the product was already built and generating revenue. That made it really easy for us to close the rounds because we already had tangible numbers to show. But I have to admit that logistics as a sector is like an ugly child and nobody wants to touch it, and hence we had to build confidence in the space."