How Gurugram-based software startup Techjockey reached Rs 8 Cr in revenue runrate within 2 years of inception
While starting their first business around IT reselling and system integration, two college friends realised a huge potential for software reselling in the SMB market. Starting Techjockey in 2016, the duo has already raked in Rs 8 crore in revenues since inception.
At a glance:
Founders: Akash Nangia and Arjun Mittal
Founded in: 2016
Where it is located: Gurugram
The problem it solves: Software reselling to SMBs
Many a great startup stories start with two college buddies putting their heads together to think up solutions to India’s pressing problems. Techjockey’s story is no different. Serial entrepreneur Akash Nangia and Arjun Mittal have known each other since college. Akash pursued Economics while Arjun graduated in B.Comm Honours from Shri Ram College of Commerce. The duo graduated in 2008.
At his last job at Zomato, Akash served as Vice President for Corporate Sales and Media Alliances, while Arjun had moved to Boston to work as an analyst with McKinsey & Company.
Entering the entrepreneurship realm in 2012, Akash started SISL Infotech, an IT reseller and system integrator, helping customers bring automation to their business functions with IT software and services. And, soon, Arjun followed suit, joining Akash.
Over the span of six years, SISL Infotech started scoring big clients, including government projects with the Prime Minister’s Office and the Delhi Metro.
While doing this, Akash and Arjun both found a largely unaddressed market of software reselling to small and medium businesses, especially in Tier II and III markets.
This propelled them to start their second venture, Techjockey, which was incepted in February 2016. The Gurugram-based startup defines itself as a software discovery, consulting and selling portal. The online platform has a vertical-focused approach that provides software solutions to various small and big enterprises, startups, small and mid-sized enterprises (SMEs), corporates, and individuals all over the country.
Speaking about the Eureka moment, the founders state,
“Usually, for SMBs in small cities, there is a local cybercafé person advising them on the IT infrastructure. Plus, we saw that cloud was actively evolving along with Software-as-a-Service (SaaS) models, and the consumer didn’t have to go to the vendor anymore to get subscriptions. But there lacked one platform that could sell as advice on software solutions for these SMBs.”
The founders also got an initial team of telecallers to validate the idea. Within weeks, the startup was notching up sales to the tune of a few lakhs, with just selling software to SMBs.
“Our targets are essentially small companies with an organisation of five to 50 employees on an average,” adds Akash.
Building the business
After the formation of its core team, the first thing the company did was to create a team that would help Techjockey build its inventory on the platform through partnerships.
Techjockey offers solutions split across various departments, in 27 types of businesses, including retail, ecommerce, ITES, hospitality, healthcare, education, automobile and manufacturing.
The platform today sports products from more than 1,200 IT software vendors, including Microsoft, Tally, Sophos, Greytip HR, Spine Technologies, with close to 2,100 products listed.
According to the founders, the platform witnesses close to 40,000 visitors every month.
Techjockey also has content and explanatory videos on how to use a particular software suite. However, the core business model of Techjockey involves listing quality, unrepresented software solutions and offering them to buyers through advertisements for the vendors and creating an opportunity for them to reach out to customers across the country.
While directly selling a software subscription, the company makes a fixed margin of 15 percent. According to the founders, the sales cycle can take almost 4-5 calls to close, and the company sees close to 100 sale transactions a month.
From a repeat rate standpoint, the company pointed out that for the month of June they had had a repeat customer base of 200 customers. The average ticket size of this sale is anywhere between Rs 1 and Rs 1.5 lakh on a monthly basis.
The company also advertises on behalf of software vendors. In that case, the average ticket size goes from Rs 50,000, all the way up to Rs 1.75 lakh. At any given time, Techjockey has close to 10 to 22 advertisers active.
Further, the company claims to have touched at least 1,600 SMEs with their products.
The startup is also looking to develop an IT bank, wherein Techjockey will manage an SMB’s entire software subscription. Further, it will notify the systems when the subscription is expiring and push for repurchases.
“It is essentially automating the process where the company maintains Excel sheets with information about the systems and software installed in them. With the administrators changing in a company, it becomes an even bigger challenge,” say the founders.
Through this strategy, the startup is eyeing better conversions.
At present, the firm is looking to target international markets but is aggressively looking at deepening its outreach in Tier II and III cities by exploring a reseller model, wherein Techjockey’s product portfolio will be on offer.
The company has close to 120 resellers across six cities in India, which they quickly plan to scale to 650 resellers in 22 cities, over the next few quarters. The platform is also working with SMB industry players like Power2SME and GoDaddy to expand its customer reach.
With a target of 2,500 IT vendors by December, the company is looking to double the current number listing their products on the Techjockey platform. The company is also looking to reach 100,000 visitors on a monthly basis around the same time.
According to the founders, the company is making an average revenue of Rs 20 lakh to Rs 25 lakh on a monthly basis. Techjockey had made revenues of close to Rs 8 crore in FY 18. They also claim that this number stood at Rs 3.5 crore in FY 17.
Today, the total number of registered and unregistered SMEs stands between 40 and 50 million according to various estimates. And Google states that only 32 percent have an online presence, which creates a certain runway for Techjockey to expand its business.
Further, behemoths like Google have also undertaken market expanding initiatives like Digital Unlocked, a free training programme to teach small and medium businesses basic digital skills to get online and start using the Internet to grow their business.
The Internet search giant announced this initiative last January.