B2B ecommerce startup Moglix CEO on building "the catalogue for India"
“India operated pretty much without catalogues pre-Moglix. I would take the liberty of saying that Moglix is the catalogue for India.”
This is a powerful statement. But in his 15 years of professional career and six years of entrepreneurial journey,Founder and CEO Rahul Garg has proved that it can be the most disruptive company in the manufacturing sector globally.
In a recent conversation with YourStory Founder and CEO Shradha Sharma, Rahul shared his journey to becoming a unicorn, building a B2B ecommerce business in the fragmented manufacturing sector, and nurturing the internal company culture at Moglix as a single founder.
Launched in 2015, Moglix is a Singapore- based B2B ecommerce platform for manufacturing goods. With close to 5,00,00 stock-keeping units (SKUs) on the platform and over 28 warehouses, the startup claims to be the largest ecommerce platform of industrial goods in India. It runs a supply chain network of over 16,000 suppliers, serving over 5,00,000 small and medium-sized businesses and enterprises (SMBs) in the country.
“I started with the goal to bring the same level of convenience, technology, and supply chain efficiency that we see in our consumer world to the B2B world. And that is how we will build the infrastructure and capabilities, which will be required in the next 20 to 50 years for our country to become a manufacturing infrastructure powerhouse across the world,” says Rahul.
Watch the video here:
In May 2021, Moglix entered the much coveted Indian unicorn club at a valuation of $1 billion. The Series E funding round of $120 million was led by Falcon Edge Capital and Harvard Management Company (HMC). Other investors on Moglix’s captable are Tiger Global, Sequoia Capital India, and Venture Highway. So far, Moglix has raised $220 million in funding.
Moglix has also been working at the forefront since the pandemic hit the country in 2020. It shipped PPEs to 25 countries during the first wave, supporting them in their COVID fight. This included countries like Israel, Brazil, Mexico, Germany, the UK, and China, among others.
Decision of being a single founder
Rahul reminisces that back in 2015, the idea of building something in the B2B manufacturing segment was not something a lot of people showed interest in, and rather termed as “waste of time”.
“I was fortunate to have a creative freedom which not many entrepreneurs have today. We travelled for a year, spoke to customers, and suppliers and came up with our own thesis on how we should operate. Not many founders get this luxury,” he adds.
Also, he believes whether being a single founder is a disadvantage depends on a lot of parameters in a contextual matter. If you are starting at 22 with limited exposure, having a co-founder would have been an advantage in terms of augmenting skills. But if you are starting a company after 10-15 years of experience, you would know how to run an organisation and possess the required skills.
“Anybody comes with an axiom, do not listen to those people because we should operate on theorems, we should not work on axioms in life,” says Rahul.
He says: “As the song ekla chalo re (walk alone), you will if you are in the right direction and if you have the right intention, people will come along and it will be formed. I think the question is: are you short-term oriented or long-term oriented,” he adds.
Four things that worked for Moglix
Rahul shared that Moglix was one of the first movers in the segment. “We didn’t have any correspondence with this kind of model. We were like a ‘Mowgli’ in the jungle,” he chuckled.
According to him, there were certain things that worked for the company. Here are a few of them:
1. No new market was created:
Rahul emphasised that they did not create any new market with Moglix, but instead created new ways which can completely change the way the ecosystem operates.
“The way we are positioned as a company, we believe that we will have to go out and build the entire ecosystem of services that are required for the industry and it's hard to cross that initial cliff and it’s hard to scale. It's very hard. We felt that this is a problem many of the companies encounter. It's like dead inventory lying in their stores and after a few years it’s just junk,” he adds.
2. Experience matters:
Rahul started up after 15 years of work experience. He was at Google for five years and had a vantage point where he saw companies like Alibaba, consumer commerce companies, and travel companies. He also had a unique perspective because he grew up in Faridabad, which was like the manufacturing hub of India in the 70s and 80s.
“The interesting thing when I started my entrepreneurial journey was that I was able to bring the impact of what I had learnt in technology and advertising by roaming around the world into something that was very core to the country and the economy. That's how the pieces started coming together,” he adds.
3. Investor belief:
As Rahul describes, Falcon Edge had known the Moglix team for more than 12 months and Harvard had been tracking them for a while looking to make their investment debut in the Indian startup ecosystem.
“The investors had a strong belief in what we were building. I think we might have the fastest term sheet we ever thought, I mean from the time we created the deck to the term sheet was six days, which is as fast as it can be from a company standpoint,” he adds.
4. Wealth, trust, and partnership go hand-in-hand:
Rahul believes that it is very important to create wealth for people. But a significant amount of trust and partnership is equally important. As a single founder, he built the leadership in early days, but what took time was building the trust of the team and clients. Also, while raising venture capital for the company, Moglix created wealth for its employees through ESOPs.
“Our stock today covers more than 300 people in the organisation. It runs into several hundred crores now as a company. We have made it liquid for the last two years. It's almost like a blank cheque we have written to people that we do fix price at the points of fundraise and so on and so forth,” he adds.
Rahul’s ambition is to see India become a $10 trillion economy over the next 10 years, but that would need a collective effort from the country, he says.
While Moglix is busy strategising its global expansion plans, Rahul emphasis that the dent is far smaller given the size of the sector.
“But you can start to at least make a small change in the sector so that people realise that the potential of this impact on the country and on the sector can be phenomenally high,” he adds.
The GST transformation that happened in 2017 fundamentally changed the landscape of how businesses would transact with each other in the future.
“The good thing is we started two years ahead not knowing our prime minister will actually make that change happen. This was long overdue I would say for the economy and for the supply chains in B2B. At this point in time, I don't think that much innovation has gone into the sector. We at Moglix are trying that as an organisation,” he concludes.