We aim to reach $150M ARR in 18 months: Nishant Jain of Netcore Cloud
In an exclusive interview with YourStory, Nishant Jain, Chief Strategy Officer and Head of M&A, Netcore Cloud, spoke about the company’s acquisitions, expansion plans, and the role of M&A for overall growth of an organisation.
YourStory(YS): Can you elaborate on your role and responsibilities in the company?
Nishant Jain (NJ): I think Strategy and Mergers & Acquisitions (M&A) is an inside-out job, which needs time, inputs, and in-depth market/domain understanding. My role at Netcore Cloud is to sharpen the strategic roadmap, market positioning, and competitive moats across the Group. I help with both organic and inorganic growth strategies.
The focus on the organic strategy is to drive revenues across all product lines, business units, and critical markets by identifying opportunities that are scaling and laying ideas for experiments. My role also involves taking these internal learnings to build a robust M&A pipeline aligned with the internal strategy. We are looking at two broad buckets – carving out niche areas for tuck-in acquisitions to enhance our product portfolio and focus on more significant investments to gain a larger market share in developed markets. The immediate strategic goal is towards securing top quartile SaaS metrics across all essential parameters and fast-track our IPO launch scheduled in 9-12 months.
YS: Netcore Cloud recently announced that it aims to increase revenues through international expansion. How are you envisioning the same?
NJ: We bucket international markets in two categories: Emerging markets (SEA, ANZ, Middle East, and Africa) and Developed markets (North America and Europe).
Netcore Cloud is today firmly positioned as a digital proxy for Emerging Markets through its full-stack customer communication, engagement, and retention platform for the fast-growing B2C market. We have been aggressively expanding in developed and emerging markets, concentrating on North America, South America, Europe, and South Africa over the last couple of years. Our revenues from emerging markets are growing at 100 percent YoY.
We have also recently ventured into other regions, including ANZ, the Middle East, and North Africa (MENA).
YS: Can you elaborate on the company's plans for international expansion?
NJ: We are making some bold bets to leapfrog in the developed market. We will soon announce a big bang investment that will give us a dominant position in developed markets as well. This will perhaps be India’s largest strategic investment in the SaaS ecosystem.
We want our international market revenue contribution to be 40 percent of the overall revenues by 2025.
YS: How do mergers and acquisitions play an important role in the company's overall growth?
NJ: Netcore Cloud has been very aggressive in its inorganic growth strategies. We have made three acquisitions and two strategic investments in the last three years. We have also learned about post-merger integration (PMI) and have successfully integrated teams, technology, and capabilities internally through these years.
YS: Can you share insights on Netcore Cloud's acquisitions so far?
NJ: Since 2019, the company has undertaken a series of three major acquisitions, the first being Quinto.ai (conversational AI platform), followed by Boxx.ai (AI-first omnichannel personalization and recommendation engine), and Hansel.io (real-time no code, product experience platform).
All three platforms, teams, and capabilities have been successfully integrated with the Netcore platform and these business lines are now in scale mode.
YS: How has it benefitted the company?
NJ: The acquisitions helped us expand our product portfolio by adding capabilities to our existing product suite and delivering full-stack customer engagement solutions to our clients. The acquisitions also helped us scale our business amongst the app and web-first brands in providing a superior product experience like contextual nudges and walkthroughs for the client end-user to boost their user retention, conversion, and feature adoption on the app and web.
YS: What are Netcore Cloud's larger plans in terms of acquisitions/strategic investment?
NJ: At the core, we are building a multi-product full-stack martech company that enables brands to communicate, engage, and retain their consumers better. We believe brands need to have a unified view of their consumers across all channels and digital touchpoints. Ultimately, the companies which will long stand are the ones that can give this unified view to brands.
Further, we aim to grow our ARR base by 2x in 18 months to reach $150 million and increase our developed market share of revenues. Larger acquisitions should be pivotal in achieving these goals.
YS: Tell us about your thoughts on the recent increase of M&A in the SaaS space specifically.
NJ: The SaaS market is highly fragmented, with more than 60 sub-segments, each having a Total Addressable Market (TAM) of over $1 billion in 2020, offering significant scope for consolidation. Exit momentum in India SaaS has improved over the last three years across secondary transactions and tuck-in acquisitions. Earlier, SaaS firms prioritized tuck-in acquisitions to augment capabilities but now will make bolder moves opting for scaled strategic investments and acquisitions enabling industry consolidation.
We at Netcore are leading the way for these bolder bets.
YS: Why do you feel that India's SaaS companies see global success and investment interest?
NJ: India has always had talent cost arbitrage over the developed markets for over two decades. We saw the golden era of IT services reap the benefits of this arbitrage over the last two decades. Add to this advantage; many global technology giants have put their R&D centers in India (like SAP Labs, Microsoft labs, etc.), which has inadvertently offered timely product development capabilities to our talent pool in India.
A mix of these two, cost arbitrage and product development capabilities, had proved to be the secret sauce for the early (2015-2020) SaaS success we saw in India.
However, we have notched up a level in the last two years by bringing innovative GTM capabilities to the mix. Indian entrepreneurs have leapfrogged the GTM paradigm. We are seeing a lot of digital-first, inbound-driven Indian SaaS companies providing intense competition to the developed-world counterparts.
The next frontier will be the 'design first, product' SaaS companies which will win the market.