TechSparks 2019: Indian market can be won by scaling up investments in technology, say experts
The 10th edition of YourStory's TechSparks kicked off on Friday with various startups and entrepreneurs sharing their ideas on how to bring about a change in the Indian market. The two-day event focussed on the theme 'India 2025 - Inclusive, Future-ready, Intelligence-led’.
In a panel discussion on Winning the Indian Market, industry stalwarts Munish Varma (Managing Partner, SoftBank Investment Advisers), Yashish Dahiya (Co-founder and CEO, Policybazaar), and Suraj Saharan (Co-founder, Delhivery) shared their views on how to build and scale a startup to woo customers in India.
While Yashish spoke about the under-penetrated market that provided the opportunity for his startup, Suraj said that the largely unorganised market and high cost of logistics opened the door for a huge potential for his business.
Speaking about market opportunity, Yashish said,
“There is a big middle-class in India. They have no answer to death, disease, and disability. That one answer was not there in the insurance industry. So, the last 11 years has not changed at all and that allowed us to deep scale every year.”
When Yashish founded the largest insurance service provider in India in 2008, the business model adopted by the firm had flaws that would have taken the company down sooner. It cost Policybazaar Rs 20,000 to get a customer and earn Rs 1,000 from them.
“Selling insurance is very hard. So, we used to have a lot of advertisements for lead generation and revenue. And till 2011, about 95 percent of our revenue came from it. But I always told my investors that that was not the way to make money.”
Yashish told his investors that the company was working on a stable and foolproof business model and, finally, in 2011, Policybazaar was able to make money out of sales.
Japan-based SoftBank has been associated with Policybazaar and has invested more than $200 million last year in the insurance startup. Munish Varma said, "Policybazaar’s mission statement resonated with us. Insurance being under-penetrated, the startup found good teams and a good business model.”
Similarly, Softbank looked at Delhivery as logistics is largely an unorganised and high-cost sector, Munish said adding, "That provided a good reason for us to look at these business models."
Reiterating the importance of investment in technology in a startup, Suraj, who co-founded logistics firm Delhivery, said there is very little tech investment that has gone into the Indian market. The ultimate objective is to reduce the cost of logistics in India, which is about 13 percent of the GDP.
“We are trying to reduce the cost of logistics. We started out as a pure ecommerce logistics player. The idea hasn’t changed until today. We keep looking for spaces where there is least tech intervention and tech innovation, and try to bring in products and solutions. This philosophy has allowed us to be the leaders in the different spaces we have been a part of."
Being in the logistics sector, Delhivery invested in tech and automation to ease its work process. “We used to generate huge amounts of data. Over time, we used that data to a point that today, we are no longer people dependent”.
Suraj added that the logistics firm did not face hurdles during the festive sale season like it used to earlier, as Delhivery has put in an automated system that is able to scale up and handle larger volumes.
“You need to have a good tracking system because customers are tech-savvy. Logistics has traditionally always operated on pincodes. But now, we have created our own address disambiguation service, which breaks down the address into a locality. I no longer use pincodes in our network. All that has been possible because of the investment made in technology,” Suraj continues.
Speaking about the low attrition rate, Suraj said, “We started with five founders. That itself has got us a larger network. We use ESOPs more freely, and take the top management into confidence. Higher referral and being transparent has also helped us."
Adding how SoftBank plays a role in helping its portfolio companies in hiring, Munish said,
“SoftBank’s portfolio companies across the world in many cases are leaders in their field. When a portfolio company expands geographically, we are there to support. We are reasonably active in our own network to hire for our portfolio companies. Our network is large and international”.
(Edited by Suman Singh)
YourStory's annual extravaganza TechSparks brings together the best and the brightest from the startup ecosystem, corporate world, policymakers and, of course, the investor community. Over the past decade, TechSparks has grown to become India's most loved tech and startup platform for knowledge sharing and networking. A big thank you for all your support over the years and a big shoutout to our sponsors.