Satya Prabhakar's Sulekha was started in 2007 and has become a pure-play digital platform for local services where consumers and service providers are connected with each other.Rishabh Mansur
At some point, most of us have kept a Yellow Pages book at home. The thick, heavy directory listed thousands of local plumbers, electricians, tutors, repair services companies, and more.
But with the advent of the internet and digital mediums, it made more sense to list them online. In 2017, The Guardian reported that Yellow Pages would stop printing from January 2019 and go fully digital.
But Chennai based-entrepreneur Satya Prabhakar had long seen this coming. In fact, he made his move ten years prior. In 2007, he started Sulekha, a digital platform for local services.
And as people increasingly started looking for services online, Satya led Sulekha to become the multi-million dollar, end-to-end local service fulfilment brand we recognise today.
“Our turnover is undisclosed, but we rake in tens of millions of dollars every year,” Satya says, adding, “Sulekha is among the very few internet businesses in India that can claim EBITDA (earnings before interest, tax, depreciation and amortisation) profitability.”
And over the last three years, Sulekha has carried out significant platform enhancements, he says. Besides its headquarters in Chennai, Sulekha works out of Austin, Texas, for its US and Canada operations.
The digital services platform now gets over 20 million users per year and has over 70,000 paid service partners.
Sulekha’s investors include Norwest Venture Partners (Silicon Valley), Mitsui Corporation (Tokyo) and GIC (Singapore).
In an exclusive interaction with SMBStory, Sulekha founder and CEO Satya Prabhakar explains how the brand works and recounts how he led it to success.
SMBStory: What services can one avail on Sulekha?
Satya Prabhakar: Sulekha has enabled thousands of experts in every city to become larger through the conversion of leads to sales and profits. They rely on Sulekha for more than 50 percent of their business in diverse categories. These include packers and movers, pest control, SAP training, Big Data training, security guard service providers, CCTV installation, home appliance service, and more.
Sulekha is number one in India as per our estimate of digital scale in terms of consumer acquisition/retention and service partner/expert acquisition and retention.
SMBS: How has Sulekha stayed relevant in the digital era?
SP: Sulekha used to run an online listing service prior to 2015, which was like an online Yellow Pages. This served a utilitarian purpose of connecting consumers with a range of local businesses in more than 100 cities across India and USA.
However, Sulekha pivoted in 2015 to become a pure-play digital platform for local services where consumers (with service needs) and service providers find each other.
The service partners are also business app-enabled and allows Sulekha to track the progress of needs across 1,200 diverse categories. Further, consumers and service partners are matched in a detailed fashion using a series of questions and artificial intelligence.
SMBS: How does this make Sulekha unique?
SP: Our platforms allows for a horizontal service spread across diverse subcategories. The underlying platform of matching consumers and experts works across software, match-making, business-app and need-fulfilment tracking. Domain-specific innovations are done in each hub to capture nuances in each of them.
Sulekha is able to make every consumer use our site three to four times a year, by operating horizontally and this allows us to spread the customer acquisition cost over multiple services.
SMBS: Who are the competitors?
SP: There are companies such as Mr Right or Urbanclap that provide small-value services through sub-contractors. However, Sulekha doesn’t compete with them for expert services. Online listing services such as Google Local Search or Just Dial also connect consumers with service providers but they may not have the most engaged service partners/experts.
Sulekha focusses on providing quality expert services through a combination of match-making skill, large number of reviews and ratings and a continuous ability to acquire and retain consumers and service providers at scale.
SMBS: How does Sulekha leverage digital mediums to market itself?
SP: Sulekha’s new tagline happens to be ‘The Fast, FREE way to get experts” and we are promoting this with a multi-crore online budget .
We use Facebook, Instagram, Google and more to acquire consumers and service partners. Sulekha is amongst the top 100 spenders per year on Google’s multiple search and video platforms. This lands us consumers on a massive scale.
SMBS: What were the key milestones in Sulekha’s journey?
SP: Sulekha has utilised its Series C round led by Singapore’s sovereign wealth fund of $28 million to primarily innovate on the local services digital platform and move away from our prior online listing service.
The other big milestone was migrating roughly over 50,000 service partners/experts away from SMS deliveries of consumer enquiries to using the Sulekha business app. This was fairly disruptive for a lot of them, as it forced these service partners to track their work closely –something which was not visible before this .
Another milestone was being accepted by more than 95 percent of the of service partners, who saw the benefits of the Sulekha business app and made our convictions of moving to the app even stronger.
SMBS: What were some of the main challenges in running a digital services platform?
SP: Sulekha had to face a lot of challenges with its operations in India if compared to the US business.
We had to ensure that the listings and classifieds offered to consumers translated into tangible need fulfillment for all of them. This means it was challenging being accountable for all the display advertisements we ran. For instance, Sulekha had to ensure that most experts called back the consumers with valid quotes within two hours.
We also had to ensure that the selected expert completed the job with reasonable satisfaction for the consumer. Sulekha also had to move from having a handful of corporate customers to having over 70,000 small business customers.
Each of those changes took significant process, system, and people change. It was hard doing all of this at scale but it allowed the company to prosper and grow in a fast-growing area of local services fulfillment.
SMBS: What is the way forward for the company?
SP: At the moment, Sulekha gets more than 85 percent of its revenues from its repeating service partners/experts and this is a testimony to our ability to retain its customers.
But we want to continue growing. One area of focus is strengthening the core by spending on brand building and greater consumer delight. We also want to boost our presence in tier II and tier III cities.
Sulekha is also growing the business to other countries such as the UK, Malaysia, Singapore, UAE, Australia, South Africa and New Zealand. We also want to bring value added services such as finance, insurance and other components to the service providers.