Startups need more than just investment to grow, says Startup-O's Anuj Jain
Startup-O Co-founder and CEO Anuj Jain tells YourStory how his company is building the Asian startup ecosystem, one step at a time.
Startup-O connects startups with investors and his website claims one can funded in under 10 weeks. He also mentors startups and even trains founders and angel investors across Asia, mainly Southeast Asia.
Meet Anuj Jain, Co-founder of Singapore-based Startup-O. He, along with Co-founder Nitin Nath, has worked extensively to help startups grow, scale and find customers. Like many startup founders, Anuj was part of the corporate workforce, having served at organisations such as Procter & Gamble, GlaxoSmithkline, and Wipro. In the startup ecosystem, he helped with the successful scaling of a Jungle Venture portfolio company in the Food and Beverage SaaS domain before he Co-founded Startup-O in 2016.
Chatting with YourStory, he says he has ‘Go To Market’ knowhow across 14 Asian markets, from ‘Japan to Jakarta’.
When they started up, Anuj and Nitin decided to build a model that offered a unique proposition that resonated strongly with various stakeholders -- founders, experts, investors, incubators, accelerators, asset managers -- in the fragmented startup ecosystem. Edited excerpts of an interaction.
YourStory: What does Startup-O do?
Anuj Jain: Startup-O is an online rating, investing and venture-building platform for tech startups. It deploys a proprietary process that combines an assessment by domain experts with algorithms to discover promising tech startups from across the Southeast Asian region and beyond. The chosen startups get speedy access to seed capital and global experts' network.
Startup-O follows a platform-fund approach where we have typical venture fund economics for the Startup-O Ventures arm of the business. The Startup-O platform doesn't charge any fee for pre-curated startups from a range of partners across the South and Southeast Asian region, and we have now also added some European partners. Other revenues are all success-based, including from helping companies build revenues with help of our network.
The Startup-O platform runs a quarterly online programme that helps promising startups participate in the programme from any location, and expedite their chances to get discovered, get amplified, and get funded within 10 weeks.
YS: What were the challenges you faced?
AJ: The challenges we faced were similar to other startups, and a few were due to our unique model. An investor/mentor told us early on that we were going to be in the seed level investment round, which is a ‘red ocean’ - highly competitive, and this will require heavy lifting. We went head-on as this would allow us to stand out with our innovative model, and act as an entry barrier for others.
Secondly, with a platform-fund model, we could not raise money from usual startup fundraising sources like venture capital firms for scaling our resources. This forced us to create a sustainable financial model with distinct revenue streams that fuelled growth. Lastly, we faced issues of being ‘new and innovative,’ with our data-driven transparent model. Our belief in continuous improvement helped us sail through these challenges with very encouraging results at the end of our two-year journey this February.
YS: How do you assess startups?
AJ: Our experts assess, and we convert the assessments into data using proprietary frameworks and put platform algo to eliminate individual biases to rank the cohort onboarded in an objective way. Our fund and fund partners then invest in the top-ranked companies and we get involved with top potential companies to build their ventures involving our networks globally.
Like any venture fund would do with multiple road shows and hundreds of meetings with HNIs, family offices and industry captains, each startup gets assessed by global experts on nearly 270 parameters that get converted into a rating algorithm to decide the portfolio for the fund. The startups connect with six to eight global experts on the platform in four distinct stages, where they present their business model, go deep into financial modelling, technology diligence, and finally get evaluated for overall investment analysis.
The platform thus eliminates biases and the subjective nature of early-stage investing, and relies only on data and enables transparent decision-making.
Furthermore, once the startups are selected, our expert committee gets involved in venture building through the support of their network. The venture building programme has been appreciated by the founders as this enables traction across geographies.
YS: How do you discover the startups?
AJ: Every quarter, our partners from across the region and global experts recommend nearly 200 promising startups that are curated in local ecosystems. We allow 75 to 100 startups to go through a 10-week online assessment programme, and then invest a seed capital in up to five of the top-ranked startups. We also help others in the platform community with various network connections, venture building, as well as other resource assistance they may require.
Every participating startup receives a detailed diagnostic report, which will provide actionable feedback, and we see many ventures pivot and come back to participate. We believe the relationship is an ongoing one, and we treat all the startups on the platform as part of our community who deserve to be enabled in more ways than one.
YS: Who are your partners?
AJ: Some of the key supporting partners of our platform are IP Bridge from Japan, Javelin Wealth Management from Singapore, A*Star ETPL Singapore, and SPRING Singapore. Apart from that, there are notable brands and country partners such as Founder Institute, IIMC-IP, Mediapreneur, Amazon Web Services, Hubspot and many more.
The core ethos of the platform can be summed up in three words - Fast, Transparent and Collaborative.
YS: How do you help the startups and what do they gain in return?
AJ: Our platform helps startups get discovered and get funded. The top three to five startups from every quarter’s programme get funded from our captive fund, and the rest get connected with other funding sources, companies, and family offices. We also help other potential startups that have early traction with our venture building networks spread across different geographies.
We are an 'ecosystem on a cloud' as some people call us in Southeast Asia. We have a network of over 15 sourcing partners from across nine countries, more than 70 experts who evaluate (not mentor) startups and notable supporting partners like IP Bridge ( Japan), A*Star (Singapore), Enterprise Singapore and many other brand partners including Hubspot, Amazon, Mediapreneur, Founder Institute, Innospark and so and so forth.
We work on assessment, investment and venture building with our unique platform-fund approach. We have 850-plus startups on the platform from across 40 countries that resonated with a rigorous but fair process of assessment that allowed them to access Singapore-managed capital and global networks with the convenience of a click-through online interactions.
YS: Do you have an example of a startup you’ve worked with and helped to scale?
AJ: Almost all companies in our portfolio have access to experienced mentors in structuring policies, sales processes, opening doors at senior levels for B2B companies, fundraising, negotiating and preparing them for Series A / Series B discussions.
A fintech company entered our portfolio in mid-2017. Not only have we helped the company raise additional capital, but mentors on the platform are helping them to develop new financial products and create a strategic partnership in a new emerging market for them - where their technology is being adopted for that market.
Another success is following the three accelerants in a portfolio company’s trajectory - first is the creation of a global reseller network, then the achievement of a couple of high-profile POCs (proof of concept) with marquee customers (that later turned into contracts), and finally a successful next round raise from a well-known institution - all within nine months from the investment date.
YS: How do you make money? What is your source of revenue?
AJ: The revenues are linked to the success of the startups as we consider startups as our customer. The platform shares the performance fee for the technical advisory, diligence and venture building resources, while startups share a cash fee upon successful fundraising. All other startups just pay $1 without any dilution of upfront equity. This is especially attractive to the founders as we believe that founders who have their skin in the game deserve a fair chance to access capital and networks needed for their onward journey.
YS: What can we expect in the near future from Startup-O?
AJ: As a platform that has gone beyond its preferred area of focus in South Asia and Southeast Asia, we have established new incubator partnerships from Europe and more are in the making. Our focus on venture building is going to escalate to new levels, compared to what we have seen last year. Also, our platform will warrant us to open up to family businesses, which have shown heightened interest in these ventures – early revenues with proven technology and founder teams. This year it will emerge as the ‘Platform of Choice’ for entrepreneurs and investors alike.