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The B2B 'Golden Triangle' of Commerce, Finance & Logistics | Sachin Agrawal (Bizongo)
422 Plays2 years ago
Bizongo is not a B2B platform; it's a FinTech company disguised as one.
This is the core, non-obvious insight into Bizongo’s genius. By creating a platform to digitize the messy world of B2B trade, they built a machine to generate proprietary transaction data—an asset nobody else had. Sachin Agrawal reveals how this data became the key to solving the single biggest problem for Indian SMEs: access to working capital.
Sachin Agrawal is the Co-Founder of Bizongo, a B2B trade enablement platform revolutionizing India's SME manufacturing ecosystem. An IIT Bombay graduate, Sachin has masterfully scaled Bizongo to a near-unicorn valuation of $980 million. Under his leadership, the company facilitates an annualized $800 million in revenue with a lean team of just over 260 people and has unlocked over $600 million in crucial supply chain financing for thousands of SMEs. His journey has earned him recognition in prestigious lists like Forbes India 30 Under 30 and FORTUNE India 40 Under 40.
Key Insights from the Conversation:
- The Full-Stack Moat: Bizongo’s competitive advantage lies in its integrated "Golden Triangle" model, combining Commerce (BizongoBuy), Embedded Finance (BizongoFin), and Logistics (BizongoShip) to manage the entire trade lifecycle.
- Solving the Real Problem: The biggest challenge for Indian SMEs isn't discovery, but securing working capital to fulfill orders. Bizongo’s core innovation was to use its platform's transaction data to de-risk lending for banks and NBFCs.
- The Power of the Pivot: The early decision to abandon a low-margin commodity marketplace and focus on the complex, customized goods sector was the single most important moment in the company's history.
- Leadership Through Radical Candor: True trust in a high-growth startup is forged not through superficial harmony but through a culture of direct, honest, and often confrontational feedback.
- Extreme Capital Efficiency: By building a self-serve, tech-first platform, Bizongo has achieved immense scale and profitability at a small scale, with an impressive revenue-per-employee ratio.
Chapters:
[00:00] Intro
[01:46] The Initial Vision: Building the "Amazon for B2B"
[05:49] Securing Early Funding from Accel & Chiratae
[18:38] Evolving the Business Model & Monetization
[22:33] How Bizongo's Bill Discounting De-risks SME Lending
[31:02] The SME-Side Product: Digitizing the Entire Order Lifecycle
[39:46] "Life Coming Full Circle": Launching an Open Marketplace
[47:42] Bizongo's Scale & Incredible Capital Efficiency
[52:52] Strategy for Growth: New Categories & Geographies
[59:37] Learning Leadership the Hard Way & Using Executive Coaching
[1:04:02] Sachin's Management Philosophy: The "Why, What, How" Framework
Hashtags:
#FounderThesis #Bizongo #SachinAgrawal #StartupIndia #Entrepreneurship #B2B #SaaS #Fintech #SupplyChain #VentureCapital #MakeInIndia #StartupJourney #Leadership #BusinessStrategy #BusinessPodcast #AkshayDatt #IITBombay
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Transcript
Introduction and Bizongo's Vision
00:00:00
Speaker
Hello, everyone. I'm Sachin Agrawal. I'm co-founder and CEO at Bizongo. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take me on a tour. Take
Disruption in B2B and Challenges
00:00:34
Speaker
We have seen the internet disrupting how we consume products and services. There was a time when ordering food to your home meant that you needed to first find menus of local restaurants, then call and place your order, and then wonder when your food would reach you. Today there are multiple apps solving this problem.
00:00:51
Speaker
The same level of disruption is also happening in the B2B space. Traditionally, businesses who would need to buy custom-made products would need to go through a lengthy process of finding vendors, sharing an RFP, finalizing a vendor, sharing a purchase order, and so on. The whole process would run on emails and Excel spreadsheets.
00:01:10
Speaker
This is the market that Bizongo is disrupting. Bizongo helps companies to buy custom manufactured products through an online platform with complete visibility and dependability. The Bizongo platform solves for problems of both the buyer and seller, thereby enabling smoother trade and helping grow India's GDP.
00:01:29
Speaker
Sachin Agarwal, the founder of Bizongo, is an IITN with a passion for problem solving. And this conversation is really a masterclass on solving problems in the manufacturing space, shifting consumer behavior and building with first principles. Listen on as Sachin tells Akshay Dutt about how it all began.
00:01:46
Speaker
So our idea was to build an equivalent of Alexa and Amazon in the B2B space, which is more of a full stack solution where you can make sure that you are managing the entire process on a cloud platform and the goods get delivered to your doorstep eventually through that service.
00:02:05
Speaker
So that's what we had imagined and we started building around that only. And that's when our true struggles and learning started building in terms of how to... So I have like a question here before we come to the struggles. Amazon and Flipkart work because they are aggregating demand. It is not possible for one business to go out and acquire millions of customers. So Amazon is acquiring customers in bulk and
00:02:31
Speaker
Therefore, it adds value, but that is not the case here, right? It's not like these small vendors will have millions of customers. Each vendor will have maybe five to 15, 20 regular customers from whom they will get business. So is there really a space for
00:02:47
Speaker
building an Amazon for this kind of a contract manufacturing sector.
Pivoting the Business Model
00:02:52
Speaker
So I think in the true essence that you spoke about, we later on found out that there is no such space. But when I mentioned Amazon, it was more from a perspective of having a full stack solution.
00:03:05
Speaker
what that full-stack solution will do and what value it will add. We figured it out much later and that's why those struggles in the initial few years in terms of probably finding the product market fit. So yeah, I think we started building it and what we saw in the ecosystem that there are
00:03:23
Speaker
many businesses and enterprises who are continuously looking to buy packaging products. So we started with packaging as a category. Packaging in India is an $80 billion industry, very few people know. It's the fifth largest industry in India. And any product that you come across today, there is some packaging that is associated with it. We thought of packaging as a dark horse in terms of the entire industry business landscape. It actually turned out to be that way. Whoever customer we went to in terms of understanding how they were
00:03:53
Speaker
managing their packaging sourcing, packaging supply chain. There were hardly any mention of any digital tool or any, anything technology remotely associated with those processes and how they were managing it. So we were like, our eyes were lit and we were like, yeah, we have found the right space and we'll just disrupt it. And we started getting requirements from the customers, started building a full stack fulfillment solution.
00:04:17
Speaker
where we were keeping the inventory. So we used to learn from the business or enterprise that what packaging you are buying, we will find the best supplier for you. We will source from the suppliers, we'll keep the inventory and we'll supply you just in time within one Monday, two day, three day, or in some cases, six hours, 12 hours. And we started building for that.
00:04:36
Speaker
I mean, in the essence that you also mentioned that a powerhouse which is driven with fast fulfillment tags and servicing customers and bringing customer delight with that service. And we could just disrupt the industry, but only to realize later on that probably that's not how this industry must be disrupted. And inventory-led model, fulfillment model, which thrives on the promise of delivering fast, quick, and then great tags.
00:05:04
Speaker
is not something that the customers were really looking for. And we understood that it needs to be approached in a much more asset-like operating model where the true power of technology and digital tools come at the fore of bringing the change in the ecosystem, fixing the broken supply chains, fixing the customer-supplier interactions. Currently, all of that was manual ad hoc.
00:05:31
Speaker
And we were coming as a layer in between that broken supply chain to make it even more broken from that sense. And that's why that piece didn't scale.
Fundraising and Early Growth
00:05:41
Speaker
And like this was still bootstrapped or you raised funds for that piece? No, we had, I think we had raised our series A funds until this time. So we raised student capital from Excel, then we raised. How did that happen? Like you had no prior experience and like, how did you get such good names?
00:05:59
Speaker
So I think again, I would probably call it an outcome of the genuine and natural passion that could be short towards this space and our ability to think it from first principle, fail, learn, and do all of that. And if I look back, I can only find those reasons why someone would have invested in us.
00:06:19
Speaker
I think at that time in 2015, the startup ecosystem was starting to evolve. It was that era where the liquidity was still in abundance and people were looking for ideas to fund. So we got lucky in terms of the timing as well. And that's why we could connect with investors very fast. Of course, being from it helps you with the network and the connections. So all of that happened pretty quickly. And before we were launching the product, I think we had met 20 or investors and we had started building those connections and everything.
00:06:47
Speaker
We went into an event organized by Excel and Your Story for marketplaces and we had to pitch to a few of the Excel partners. They liked our pitch, we won the competition and the same day evening they called us to our office and asked us what you guys are up to. I remember pitching to almost every partner of Excel and on that day and the coming day and the next day they said that we want to offer you a seed round of funding and that's how things started.
00:07:14
Speaker
So there was around 650K dollars close to three and a half crore that we raised at that time that at least make sure that we had more time to continue to sharpen our hypothesis and because of that only we could take time to then arrive at a customized good segment as this as the segment of operation. And when we decided that we had no money, so we had to raise another round of funding. So in March 2016, we were able to bring in both Excel and Chirate to co-lead our series A round of funding.
00:07:44
Speaker
And that was $3 million, so close to 18, 19, 19 crore at that time. So yeah. And then the struggles that I spoke about those started post series, a round of funding, because that's when we started getting deeper and started getting very aggressive on the fulfillment led customer servicing model only to figure out one and a half years later, that's not scaling and
00:08:06
Speaker
What were the metrics that you saw which told you it's not scaling? Was it like the repeat business was not there or was it that the margins were not there? What were the symptoms? Yeah, I think the key symptoms was first the repeatability and the predictability of the business was not great. So repeat cohorts from the customers didn't look great. And more than that,
00:08:26
Speaker
While we were all for customer delight, customer experience and creating an Amazon type of aura in terms of how do you, the service customers, still our customers are not happy at all. And then we were not able to figure out that how can we make these customers happy? We are doing everything and the entire culture and the passion is toward delivering customer
Supply Chain Innovations
00:08:46
Speaker
service, but still it's not happening. So I think that was the biggest indicator. Why were they not happy? Like basically you're saying NPS score was not great. Correct, correct.
00:08:55
Speaker
So we used to do a lot of NPS survey and we figured out that the customers were not liking it logically. So, because what we had done there, we had built a fulfillment led service model where we were getting material from let's say a hundred or SMEs.
00:09:11
Speaker
who anyways were very less predictable in their ability to commit to certain tags, SLAs or timelines because the way they operated was absolutely manual, no use of data and technology. So we, we couldn't improve their performance.
00:09:28
Speaker
by coming in between because these were SMEs were still operating the way they were operating before we just applied technology in terms of how well we can service the customer but we didn't apply any technology in terms of how can seller service us or the customers better and that's what led to no betterment of the service levels so your customer used to tell us yeah research directly
00:09:55
Speaker
When we know that the supplier is going to give him material only in 10 days, but the expectation that we built through the design of the model was that we will deliver in two days, three days, but most of the time we didn't have the material from the supplier and it didn't work out.
00:10:11
Speaker
Yeah, because your SKUs are not fixed. For each customer, there are custom SKUs, so inventory-led doesn't really work here. Absolutely. I think you mentioned a very important point here, because every SKU for us was unique. We couldn't do that, that you've got 95% fill rate of these SKUs. So now this SKU I cannot send to any other customer, because I need that SKU of that customer to be able to service that. And that's why it was
00:10:40
Speaker
not resulting into any potential customer delight also and we realized that we started realizing that and we started realizing that as a technology company where can we truly make a difference to better this there was still we could observe the problems day after day and we were so committed that
00:10:58
Speaker
If there are so many problems, there has to be a viable solution which really transforms this because the opportunity was very clear. And then we started applying first principles in terms of understanding what we do, which truly makes a difference to this broken supply chain or this absolutely manual ad hoc management of hundreds or 200 SMEs.
00:11:19
Speaker
that one enterprise is working with. And we figured out that the real transformation that we need to do is in enabling this SME to be able to supply better. So helping with these SMEs and MSMEs with simple yet very powerful digital solutions so that they can perform better. And if they perform better, we are not even needed in between.
00:11:42
Speaker
They can directly supply to the customer, but they will need assistance support or digital interface, which enables them to do that in a much better way.
Digitized Platform and SaaS Transition
00:11:53
Speaker
So that's when the transition started happening to the desirable business model and what we are known as today in terms of a full stack B2B trade enablement platform.
00:12:04
Speaker
So we enable trade. We today don't play any part in terms of discovering a supplier or discovering manufacturer. What we do, we go to customers. We understand from customers that customers that you are currently working with these hundred SMEs, but these hundred SMEs are all operating manually, which is leading to a very poor supply chain efficiency for you, for them. And these are everything is broken manual ad hoc and not helping.
00:12:32
Speaker
any of those business. So we tell them that we will bring all your existing 100 SMEs on Bizongos digital platform will help you digitize your engagement with them. So we go to the customer by virtue of that we bring his 100 SMEs on Bizongos cloud platform.
00:12:48
Speaker
And we digitize the way those SMEs operate, and we digitize the engagement between this customer and these SMEs, which results in two great outcome in form of the supply chain efficiency, the engagement, transparency, analytics, and a lot of other things, which is a women's situation for both of these customers and suppliers.
00:13:11
Speaker
So that's how the business has evolved. And today we have a true cloud platform where we have got 500 enterprises, more than 5,000 SMEs who are digitized by us. And these customers are managing these SMEs on our cloud platform. And we have automated a very large part of the entire supply chain and the ecosystem by virtue of that.
00:13:32
Speaker
When you had the inventory-led marketplace, what was your product? A customer would upload some specifications of what he wants as a packaging material and then you would create that as an SKU unit and then you would further go to maybe five or seven vendors and get quotes from them. Tell me what was that product and then how did you change that product?
00:13:58
Speaker
Absolutely, I think you were bang on that's what we were doing gathering customers requirement putting that into much more objective specifications and then organizing RFQs and bidding across several sellers who could service that and this is the best price and best SLA commitment from the suppliers supplying it to the customers. So that's what we were doing and from there to
00:14:21
Speaker
And you would place the order exactly what order you receive, you place the same quantity only, or you would place extra quantity? Yeah, mostly same quantities, but because in an inventory-led model, you get carried away with customers' expectation and your ability to manage the supply chain. There were instances where we basis customers' promise. We started, yeah, our whole commitment, we started placing higher orders, and that led to we having higher inventory, which customer was later on not
00:14:48
Speaker
ready to buy because the customer himself didn't know how many quantities they may need and that's why the experience remains absolutely broken in that context. Plus packaging also is something where you might have seasonal changes, there might be some special offer you want to print that on it and
00:15:05
Speaker
Absolutely. So those are the reasons why, you know, customers who promise that they will buy these products in 2x, 3x, 5x quantities three months later, ended up coming back and saying that, you know, we have to do this design change and we can't pick up this inventory. And we started learning that there's a problem in the way we are designed the business model. So tell me the product evolution then. So from this product, what did it evolve into that the SaaS offering, which you converted it into?
00:15:33
Speaker
So, from being an alternative source of supply, which we were becoming by the virtue of the inventory-led model, we quickly transitioned to a full-stack trade development platform where we don't discover suppliers, we don't discover prices. We go to customers and we tell them that you bring your own suppliers on board on Bijango's platform and we will help you digitize all of that.
00:15:57
Speaker
And alongside that, we're able to create certain digital services, which led to value addition to both sides of the marketplace in a very quick fashion. So we first, we started building supply chain financing as a service.
00:16:13
Speaker
But before this value itself, the core product, just help me just describe it in words. What would it be? Customers would start creating SKUs for each type of packaging they need and start uploading those designs and all of that. And then what you were doing at the back end, you would do an RFQ and then vendors would build. So that process, then it became self-service. Instead of you doing that service, it became
00:16:42
Speaker
Absolutely. Yeah. So whatever we had built earlier in terms of over-managing ourselves, all those things, we shifted all of that and made it customer facing, where we try to make it more and more self-serve, that we are not needed. Our role is building product, building technology, which is enabling
00:17:03
Speaker
this customer and these suppliers to manage themselves, each other in a much more efficient way. So that was the base platform. We term it as a base platform where we are saying that we'll just digitize everything that you do today, which is manual ad hoc and broken. So that was the base platform.
00:17:19
Speaker
So customers could run the RFQ process, release a purchase order, and then the vendor can upload the invoice over there, get the payment, and even probably some logistics information also they can upload, like some tracking number. Absolutely. And all of those transformations which are going around GST, e-invoicing, e-wave bills, so the entire digitization which was anyways happening in the macro, in the oral economy did help us a lot because those became very essential needs of the suppliers.
00:17:49
Speaker
to carry out transactions and we had all of those ready-made solutions where they could really digitize their transaction base within a week, week's time and we made it quite simple for them to do that and all of that started seeing a great degree of adoption and the customer delight that we were always watching for and always wanted to see that.
00:18:09
Speaker
And this was monetized, this base offering. So we were not able to monetize it from day zero, but once we made customers and suppliers experience it, and once they started seeing the difference and the value that was able to create, it became a typical SaaS story that you offer them something for free for 15 days, 30 days, 60 days. And when they really see it making difference to them, you start monetizing it.
00:18:32
Speaker
We started monetizing base platform, but at the same time, then we started generating so much data. The monetization is on what basis? Is there a standard fixed pricing plan or it depends on how many seats or turnover of business?
00:18:49
Speaker
So we built simple models, which were giving us an idea of the percent that the percentage platform fee that you should charge, this is the turnover that they were doing on the platform. So let's say if someone is buying a hundred crore worth of good, the model would throw that we must charge then this percentage X percentage of that hundred crore for uses of this service. And the model kept evolving into account various parameters for us too.
00:19:14
Speaker
But we kept it simple. It was always an X percent of the turnover. But the real monetization start kicking in when we were able to bring in such a large ecosystem on our digital platform, started generating a lot of data insights and started learning, observing those data patterns and behavior. For example, what we saw there that these customers who were buying goods from these SMEs, they were paying them in 60 days, 75 days, 90 days.
00:19:40
Speaker
And the ability for that SME to survive for those 75 and 90 days after having invested in raw material, machinery and other fixed costs was very limited.
Supply Chain Financing Solutions
00:19:50
Speaker
And just by the virtue of enabling a faster payment to that SME, you can really actually transform the service levels that the SME can offer because today,
00:20:01
Speaker
The problem is not in the intent of the SME to supply you. He also wants to grow. He also wants to do business. He also wants to supply on time, deliver customer delight. But he hasn't got resources to buy raw material, to pay for salaries, and then wait for 75 days for the money to come for the next cycle. So we identified that as a huge gap, a very fundamental gap in the way this entire ecosystem operated. If these SMEs didn't get money faster,
00:20:31
Speaker
there was no way they could improve their service levels. So we identified that as a very strong value addition and what we started building as a FinTech platform. We call it supply chain financing platform. It's a SCF platform where now we have plugged in 25 banks and NBFCs.
00:20:47
Speaker
who see this transaction happening on Bizongor's platform, happening for months and years, we have built that transaction history. And basis that those NBFCs and banks are able to provide faster capital so that the customers pay suppliers in 75 days. Through these banks and NBFCs, we enable payments going to them within 15 days. And done it at scale today, close to $600 million sort of supply chain financing we have enabled through the platform.
00:21:13
Speaker
And that has led to the transformation that we were wanting to see in our early days, where we could see fantastic adoption. So by telling them that you will get money faster on this platform, we could actually make them do things which they would otherwise absolutely deny in terms of the digital adoption. And we started launching a lot of small pieces which made their engagement on the platform very truly digital and absolutely self-serve.
00:21:42
Speaker
So that helped us scale. And because they knew that these guys are very true to their promise of making sure the money hits my account in 15 days, they started adhering to all of those things. And that led to a very beautiful digitization of the supply side. And with that benefit coming in, we saw drastic improvement in the service levels. There were times when the suppliers were pushing us. We have got the materials ready. Why are the customers not picking us?
00:22:07
Speaker
from the scenario where customer was sitting on our heads and their heads to ask for the materials. So we saw a drastic, pleasant improvement in the way those SMEs started functioning. And that created an environment where we could think of building more and more validated services so that they can be furthered. And today what we have is a full stack. So I wanted to get into a little bit more detail on the build discounting that you are doing.
00:22:35
Speaker
Typically, it works like this. The vendor will get maybe 95%, 96%, 97% of the bill value instead of the full bill value within 15 days instead of waiting for 75 days. Who does the underwriting for this? Do you do underwriting and give it to banks and NBFCs or do you give them data and they do their own underwriting?
00:22:56
Speaker
So today it's a mix of both depending upon what data points and which SME, what longevity with the platform, what transaction history we are looking at. At early stage, when there is a very credible customer there who is buying from certain SMEs where we are.
00:23:13
Speaker
Let's say P&G is buying. So for example, so the beauty of this model, which is, which we called is a transaction led trade enablement is that here you are not taking a credit call on the SME. You're not underwriting the SME. You're actually underwriting the receivables from a very credible enterprise.
00:23:31
Speaker
So what has happened here that today, why these SMEs don't get any financing from banks and NBFCs? Because in the current ecosystem, they have to take a credit call on that SME, which is impossible today in any shape and manner. But what we have done here, we have changed the credit profile of this SME by having that transaction history and that control of the entire transaction to receivables of a very credible enterprise.
00:23:58
Speaker
And that's, that does the trick. And we are eventually underwriting the receivables of the enterprise, which is much easier to do. And basis that we are able to scale the program. We are happy to underwrite in certain cases when the receivables of enterprise are highly credible, predictable and everything. We are, we underwrite it in a lot of cases now banks and NVFCs because of that winters and transaction history and all they are seeing, they are also able to take those calls by the virtue of the receivables being of a very highly enterprise customer.
00:24:28
Speaker
This is like a hundred percent guarantee that the payment will go or can there be a dispute on what has been supplied that the customer says no i'm not paying this because the quality was not right for example.
00:24:42
Speaker
So that doesn't happen because in those 15 days, we get a confirmation from the customer that he had checked the quality and only post that confirmation from the customer. The payment is made out in case there is a dispute that has to happen before the payment goes out. So we have kept that 15 days window for that. And again, we have digitized that.
00:25:01
Speaker
part as well, where we have created this, what we call e-acceptance, where customer actually accepts the code and it comes as a confirmation in terms of an e-document to us, which truly reflects the acceptance, which can't be disputed at a later stage and doing it in a very scalable way, digital way. So yeah, I think that's also has helped us massively. Yeah, obviously for a bank, then they are purely funding, let's say P&G instead of funding some small SME. Got it. Amazing. Okay.
00:25:30
Speaker
or in an otherwise scenario, there is no way for that bank to lend to that small SMU or MSME. But now they can and that becomes a huge sort of market access for even banks and NBFCs where they want to service that market, but today they don't have a way in which they can and the platform gives them that access
00:25:51
Speaker
alongside very little risk and potential scalability. We've seen banks and NVFCs who started from 10 crore are now just buzzing close to 150, 200 on the platform because of the cash flow. What do you earn from this? Some percentage of the interest earning would be shared with you.
00:26:09
Speaker
Yeah, so another good part is that because this is again a transaction led supply chain financing, the SME and the supplier also doesn't see it as a loan coming to them. So it's not compared with the classic lending solution where I'm getting money at 11%, 12%, 14%. It's a trade discount that I ask him. I'm helping you with this faster payment.
00:26:32
Speaker
of a discount you can give me. And then your ability to extract value and margin enhance in a big way. We say in life, it is a game of perception and optics in the way people think and behave. I think it gets truly demonstrated here where just changing the setup and the behavior, this becomes a win-win situation for everyone and it still creates a much larger ability for us to continue to monetize and deliver that value in a consistent way.
00:27:02
Speaker
Does the customer provide a subsidy here to, say, would a PNG provide a subsidy? Not really. There is no reason for them to do that. I'm just comparing with typical BNPL where, say, if, for example, Hero Motors is offering a free EMI, then they are subsidizing that so that the customer buys more. But that's not the case here.
Efficiency and Profitability Through Self-Service
00:27:22
Speaker
that's not the case here because when they do that on they're doing it on the final product where they have enough room in terms of the margin here we are talking about the input materials where their economics are like they won't pay one point zero one percent higher if they have to manage it but the good part is that they're happy
00:27:40
Speaker
if they don't get any value out of it by purely by the fact that they have got 100 SMEs who are their suppliers. We are not changing them. So nobody is hurt sentimentally or in any other way. They are digitized and those SMEs start getting fast payment and because of that their entire headache of
00:27:57
Speaker
managing SLAs, quality, input material and everything goes away and they have a full digitized, absolutely transparent, 100% trackable with great degree of transparency, supply chain and their entire total cost of ownership, what we call goes down heavily because of this entire digitization. So they're quite happy bunch of people and they in fact become our ambassador.
00:28:20
Speaker
Of course, they don't bring 100 SMEs on day zero, they bring five, but they see the benefit and they become more ambassador to bring more and more suppliers on the platform. So, it starts organically. So, everything becomes very organic in nature. We get our customers organically, we get our suppliers organically, we get NBFCs, NFIs, our banks organically.
00:28:40
Speaker
to see the entire self-serve behavior, again, growing organically on the platform to make it a very capital efficient service model and very capital efficient status-like organization. And I truly give it to that that because of this self-service-ness that we've been able to achieve, we are at a scale, at a small scale, a bit of profitable and we have a very clear path in terms of how that profitability is going to only grow from here.
00:29:05
Speaker
So, you said in some cases you underwrite. What is the implication when you are saying that you underwrite? Does it mean you take on risk of that or you just give a score here? Like what does that mean? We take the receivables risk in that case where the, what we are telling to the FI that the, we are taking the guarantee of this money coming from this enterprise in this escrow account by this date. And that is basis the transaction.
00:29:29
Speaker
past transaction history, the acceptance of goods, all the documentation, everything that we have, there is no reason for that enterprise to not enhance. Fortunately, we haven't seen any voluntarily defaults or delays on that front. So we stay very scientific in terms of how do we select a customer whom we can work with in this model. So there is a lot of data science and intelligence which goes behind in terms of whether we should work with this customer or not. And if you work, what maximum exposure that we can have.
00:29:58
Speaker
so that we can continue to minimize those risks. I think again, that risk management can continue to improve, but we have a very strong data technology and intelligence layer now to be able to continuously improve and improvise on that front.
00:30:14
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion-dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts, and subscribe to the show.
00:30:34
Speaker
And you would earn a better margin when you are giving a default guarantee, basically. Like your earning shares would be higher in that case. This would be same as what FLDG, like most fintechs have this FLDG. This is same as that only, like first loss default guarantee. Yeah. OK, got it. Got it. OK. So you told me that because there is so much value add to the SME suppliers of working on Bizon Go Platform, you are able to influence them
00:31:00
Speaker
to adopt more digitization. Give me the SME site product. So we've spoken of the customer side product, like customer can share a requirement, get quotation, release a purchase order, receive invoice and all of that. For the vendor side, what is the digitization on the product? What all
00:31:18
Speaker
of their processes can they digitize, which helps improve efficiency. So in terms of the entire order lifecycle management, it again starts from the very basics of that SKU that the customer is buying. Now that comes to them in a very similar exact form that customer has defined it without any loss of information or there are so many changes which keeps happening. Sometimes you mentioned about that, your design got a little bit changed.
00:31:46
Speaker
It is lost on email threads otherwise, but here you get a live input of the real SKU that the customer wants to buy. You can only manufacture that. You can't manufacture anything else. So that's the first piece. Then of course you get the purchase order on this platform only. You can only accept the purchase order from here. As you accept the purchase order, it allows you, it helps you build a production plan that if I'm carrying this much inventory or if I'm not carrying inventory, this much I should produce in next five days, this much I should produce in next 10 days.
00:32:16
Speaker
basis that he produces, then he can ascend that intimation that I've produced, let me know when I can ship. Our customer has the ability to tell ship on this day. So he ships automatically his entire process of dispatch to delivery in terms of e-invoicing, e-wave bill, transporter selection and tracking. All of that is built on the platform. So it makes it very
00:32:39
Speaker
smooth and easy for him to deliver a fantastic experience to customer. So it's not us delivering an experience to customer, it's that SME who is directly delivering that experience to the customer and alongside all of those things we have found like simple things like vendor management inventory. If there are SKUs that the customer is going to repeat purchase from that SME, we provide the entire inventory visibility from him. So it becomes a classic just in time JIT supply chain model of automobiles.
00:33:07
Speaker
unimaginable in the industry of customized goods. Now basis the inventory that the supplier is carrying, customer can also plan it better in terms of their junctions and fulfillment and everything. So it minimizes the inventory losses and all of that in the entire supply chain. So the production planning sounds very hard to achieve because
00:33:27
Speaker
There would be so much value of experience like an entrepreneur would know from experience that for making 1000 pieces I will for example need 100 kg of this and 5 kg of this and 7 kg of that but how did you digitize this production planning bit to predict how much inventory he needs and what he needs to order?
00:33:47
Speaker
Yeah. So frankly, in terms of the production plan, you are absolutely right. We haven't achieved great success in terms of it directly creating an impact in terms of inventory management. But again, what we have learned from the JIT, classic JIT business model is that forget about production planning for a moment. If you are maintaining a minimum level of inventory at your end, you can produce whenever you want.
00:34:11
Speaker
If you are ensuring a minimum, let's say five days of inventory at your end for this product and execute any given point of time, you actually don't need a production planning. And with an objective of maintaining a certain level of inventory, we plan everything, which is much more simplified than it needing a very sort of complex design on the production side. So we make inventory levels as a target sort of thing. And then the corresponding production plan is so simple that
00:34:39
Speaker
make these products by this date. That's all. It's not that you have to do a lot of optimization there. So it's a simplistic design of the supply chain with the key objective of maintaining minimum days of inventory, leading to much higher efficiency and better.
00:34:55
Speaker
So this inventory is not the inventory of the finished SKU, but of the raw material that if you're saying like five days of inventory. So five days of the finished goods. Oh, five days of finished goods inventory. Okay. But this is supplier's own decision that, okay, I will keep extra, I will produce extra, or is it something which the customer gives some sort of
00:35:18
Speaker
information or there's like supplier's own decision that I will keep extra inventory. It is supplier's decision but it is agreed with the customer that I want you to maintain. If there is an SKU that the customer tells that I'm not going to continue to buy it, you don't need to keep inventory. I'll tell you when to produce and I'll wait for 15 days to get that. But if it is something which I'm going to continue to buy, so like that
00:35:40
Speaker
Classic parachute bottle that never changes. It changes once in a decade. So for those fast moving, high volume SKUs, you're solving a very large part of the supply chain problem where you don't actually need any demand planning. You don't need any production planning. It's just a continuous, what we call it is an auto replenishment, a classic JIT auto replenishment, which makes things much easier and simple for everyone.
00:36:03
Speaker
So from the customer side, you would have some integrations with their ERPs where you could do some of these. Can this be automated, like placing the order based on what is getting produced based on that data from the ERP, the platform automatically tells the vendor that does all of this happen?
00:36:22
Speaker
We have that ability but hasn't been utilized to any extent, I would say. Primarily because currently the internal ERP that the customers manage and how that is used to interact with the external supplier world, those are absolutely disconnected. So even in today's scenario, the ERP's role ends at generating the purchase order.
00:36:47
Speaker
and whatever is the external linked supply chains, which we call it as vendor-linked supply chains, those are still absolutely manual and ad-hoc. So, our solution actually sits as a layer on top of the existing ERP, where still we haven't seen any need of
00:37:02
Speaker
getting integrated to because they are anyways not talking today. There are anyways, there are more systems or no processes built around that. We are assuming that in future as things mature, those integrations will further help us bring in more automation, efficiency in the entire demand planning, replenishment and everything. But I think that's still a probably few years away when we get to that.
00:37:25
Speaker
Okay. You were talking of adding on more features, like what are they now? Like what have we not covered so far? We've covered bill discounting. We've covered the base platform. What else is there?
Marketplace and Global Expansion
00:37:35
Speaker
So we have launched, for example, bidding as a platform. So earlier you understood very well that how did we try price and seller discovery, which was massively unscalable and didn't yield the desired result. Now we have again changed that in a more of a self-serve mode.
00:37:52
Speaker
where the customer now has the ability to organize bidding across his own suppliers. So today, customer has got 10 suppliers who can supply him the material.
00:38:03
Speaker
But purely because the suppliers are all disconnected. Someone is interacting on WhatsApp, someone on email, someone on phone. Today, there's hardly any bidding which happens between the suppliers to discover the best price. And that concept of the best supplier getting the maximum business share doesn't get actually implemented in the real world.
00:38:23
Speaker
So we've enabled that on our platform, the bidding platform allows them to digitally manage the entire price discovery process. So it's more of an Ariba type of an experience that we are trying to build there and tailor made for the customized goods so that true price discovery can happen and there is a continuous benefit that the customer can extract and then suppliers also get access to more and more demand.
00:38:46
Speaker
So it becomes a classic, true, real marketplace where the demand is disturbing supply, supply is a discomforting demand, and everything is growing organically. So we have launched that just a few months back. This is open to all vendors on Bizon Go. For example, PNG has its 100 vendors, or HUL has its 100 vendors. So these vendors can be discovered by other companies also. Right now not. Right now, it is only helping you manage your own suppliers, whom you work with,
00:39:15
Speaker
or whom so you can add more and more suppliers, but it is only helping you manage your existing supplier ecosystem. What we are building now is an open marketplace where we will open the access of other customer suppliers as well after their consent to have that entire marketplace effect playing in form of supplier discovery as well. So that is something which is work in progress. And we see as a huge potential value addition that we'll be able to do to this ecosystem. So that's the second piece around the entire
00:39:45
Speaker
which is like life coming full circle, going back to the original idea. Amazing. That's price and seller discovery. And the third piece, which again is very close to our heart as founders, is a SaaS label management platform that we have launched. It is called Artworkflow.
00:40:03
Speaker
and it enables you as an enterprise to manage the entire asset library of your SKUs. Because you're talking about customized goods, every SKU has got its own unique characteristic in the form of the text on the SKU, design on the SKU, colors, so many things which are again impossible to be managed manually.
00:40:23
Speaker
The truth of the matter is that everybody is trying to manage it manually. We found that opportunity and we have built a very beautiful label management platform, which brings in a lot of advanced technology capabilities in terms of being able to read the artwork, the colors, the fonts, the errors, the compliance with various regulatory frameworks, and all of those things automatically, and provides you a collaboration platform where you can
00:40:52
Speaker
is the entire upstream journey of bringing an SKU to the life. What do you mean by upstream journey? Sorry, I don't understand that. Upstream journey, as in like before you buy any SKU, you have to define the SKU, which is the colors, font, design, text, and everything related to that. And those
00:41:12
Speaker
Continue to change. Multiple stakeholders have to approve it. Your legal team, your marketing team, your finance team, all of them have come on the same pace to approve that. So that entire upstream approval workflow collaboration piece can now be carried out on our platform integrated with your entire supply chain.
00:41:32
Speaker
So the moment everybody approves, only then it moves into manufacturing. And you would, when you will probably search online, there are so many cases of product recalls and label inventory going waste because the wrong articles are printed. They were not compliant. They were not as per the desired condition and all of that.
00:41:51
Speaker
So it brings a huge element of sustainability also into the question where it takes the possibility of any such errors happening and bringing absolute automation in the end-to-end. The true picture of a full-stack solution gets realized as we have this integrated. The good part is that we have started getting now global customers. We have enterprise customers from four different countries today using our art program platform and something that we see as a great tool for us to start imagining our global journey.
00:42:21
Speaker
as an organization. So does this also have like a Canva like element in it where you can do the design part or is it primarily workflow? Right now it is primarily workflow. We are continuously working on product development and seeing how can we use existing tools to facilitate the creation of the artwork as well. But right now I think our hands are full in terms of scaling the workflow and collaboration capabilities itself. There are so many interesting things that we are able to do there.
00:42:50
Speaker
So I imagine packaging label design would be pretty complex because it's a three-dimensional design that you're making. And it may not just be straight. It could be a circular design. There could be all sorts of shapes of it. So all of that can get
00:43:07
Speaker
clearly captured here like what are the angles what is the exact precise measurement where is what to be placed and so that there is absolute clarity for all stakeholders everyone clearly understands what will we get in the end. We have a free demo tool also available online on cloud and you can play with artworks and you will see very surprising revelations in
00:43:27
Speaker
way you can see and imagine an artwork and the various components of it. So yeah. Great. And what is this price debt? So again, price like a SaaS solution, it is basically the number of artworks that you manage and approve on the platform. And so we made it a very
00:43:42
Speaker
attractive variable price, this is totally basis consumption and uses and our CSAT score for the solution is beyond 70, 80 always. So the customers have truly liked, they've got more than 90% retention, continuous renewables and all the beautiful qualities of a true SaaS platform getting reflected in the solution. So the plan is to double down on it and make it one of the very powerful SaaS offering that we are able to create in this journey.
00:44:11
Speaker
I read about an acquisition of an IoT player that you did. So is there some feature that you're planning there? So I think the point that you had mentioned earlier in terms of the production planning and how it is a very difficult concept to execute and create impact out of
IoT and Technology Integration
00:44:32
Speaker
it. But we saw a much more simplistic way. If we are able to look at the operations of a factory,
00:44:38
Speaker
on a digital screen replicated what we call, what we term it as a digital twin. So you create a sort of a digital twin of a factory where you observe the material flow, process flow, the machine running time, energy consumption, and all of these things.
00:44:55
Speaker
And you find out those classic bottlenecks, which if removed from the process by applying very simple logics, algorithms, and intelligence, you can actually improve the production efficiency or the throughput of the factory on a whole. So rather than going into at an SQ level, if you apply it on a factory level and try to identify one or two or three things which can improve the efficiency of your manufacturing process,
00:45:23
Speaker
that is a much larger impact in terms of the entire manufacturing planning and it's not that it's not done so the acquisition that we did these guys were building these solutions for the likes of Maruti and Bosch in an advanced manufacturing setup so we are trying to bring that same technology for our SMEs and MSMEs where we can bring in very simple tools for them to
00:45:44
Speaker
better than manufacturing output. So that's the acquisition for again in the pursuit of really bringing digital transformation in the SME manufacturing ecosystem. It's going to be definitely time taking and it's going to be a bit medium to long term, but it aligns with our dream and aspiration of truly making every factory in India a cloud factory
00:46:05
Speaker
Where if a guy, even sitting in North America who wants to buy, let's say an enterprise customer wants to buy Gucci jeans from an Indian manufacturer, he can see everything live from there. And a true cloud factory infrastructure is produced from India. So yeah, again, a larger long-term dream, but I think right now for us to start investing into that.
00:46:26
Speaker
Will it be machine learning that there'll be cameras which will let you measure what is the raw material getting consumed? And then there'll be some devices measuring electricity consumption. So it's primarily IoT enabled. So there are hardware sensors who can track the movement of material inventory and other things in the warehouse and they can speak to the machine because most of these machines today come with that capability of giving a data output, which can be read through a software or a hardware solution.
00:46:56
Speaker
So bringing all those data inputs from the machine and capturing the key moments through IoT enabled infrastructure in the factory, you are able to devise those outputs. And again, the very fact that these today, there is no science or intelligence that goes in the way that those SMEs today manufacture, even a very small tweak results into a massive impact, which comes into the setup. So if you can affect the manufacturing efficiency of a Maruti or Bosch, who are
00:47:23
Speaker
super advanced in the way they carry out manufacturing, bringing the similar technology to these SMEs, we believe we can create a much larger impact, much wide based and much more empowering for these manufacturers. So yeah, that's how we're thinking about it. Yeah. What else? What other parts of the business that we have not discussed so far?
00:47:42
Speaker
I think a lot of this comes from people and the team that we have built and how we have built an environment which is full of trust, transparency, ethics, governance, radical kind, what we fondly call it, where just a team of 260 people at this scale. That's why we are so capital efficient. What is the scale? Help me understand what is your turnover per employee or what is your total turnover today?
00:48:08
Speaker
So this month, we'll end up touching close to $800 million on analyzed revenue. So it will be close to $3.4 million per person, which is quite high. Yeah. How do you measure turnover? Are you measuring the turnover on the base platform from your customers? The value of goods, yeah. The value of goods transacted because everything flows through us. It's a transaction-led trade enamelment platform.
00:48:35
Speaker
This number is actually the GMV number, like it is not the revenue per se. It is revenue because in accounting terms, it gets invoiced through us. Supply invoices us, we invoice customer in a transaction led model. So from an accounting standpoint, you're offering it as a SAS, right? So it's like a combination. It's a transaction led. Okay. It's a combination of SAS and e-commerce here. So the delivery of the services is SAS like, but still at the heart of it, it's a transaction led model to provide it
00:49:05
Speaker
are the necessary components for building that SaaS. So that's how we look at it. So when you are charging the customer for the platform, is it through a markup on the invoice? Like you mark up the vendor invoice to recover your platform fees or it's a fixed annual?
00:49:23
Speaker
Like for art workflow, the way we charge its basis, the number of artworks for bidding, we intend to charge the number of bids that you can, you are carrying out. So again, we have made it very modular and consumption basis so that there is little sort of friction in adopting or trying it. And again, typical.
00:49:40
Speaker
This would also mean that this is a post-paid SaaS, not a prepaid SaaS. Most SaaS tools are prepaid, right, where you charge in advance. This is more like a post-paid because you will charge based on consumption, which means that at the end of the month, based on how much consumption has happened in the month, you will
00:49:58
Speaker
Raisin invoice. Yeah, but there are like, there are price models built, which tell you that if you, let's say approve up to 500 artworks, this much, it will cost you and there is a base price. So it is designed in again size like with certain buckets. And if you cross those, of course, there is an additional charge. But again, from that perspective, I would call it a prepared model only because there's a pricing, which is clear to the customer and starts paying before he uses.
00:50:25
Speaker
Okay. The base price is paid upfront and if they cross a certain threshold, then you got it. But what is your earning? Are you at liberty to share that? In terms of your earning, would one be the SaaS subscription fees and second would be what you earn through interest sharing from NBFCs? So what is that number?
00:50:46
Speaker
So all of that today amounts to close to 4% as net margin that we are able to make on the value of goods. And that suffices for all the cost and expenses that we have in business that we are able to make close to 1% a bit on the business at this scale and still growing at least a 10% month on month scale to be able to truly benefit from these self sub model and bring in capital efficiency and scale at the same time.
00:51:11
Speaker
Like 10% month on month growth is driven by acquisition of more customers or is it driven by existing customers increasing the transactions that happen through the platform?
Growth Strategy and Market Expansion
00:51:22
Speaker
Like what is the growth strategy? It's a very beautiful blend of both because the market size and the market opportunity is so big. We are at a $700 million, but by the market is at least a $300 billion market that we have the ability to capture. So from that perspective,
00:51:39
Speaker
it's us who is saying no to the business today where we are limiting the growth but all our existing customers as well as the new customer in pipeline are wanting to transact more and more. Why are you saying no? Is it that there are some kind of customers you don't want to touch yet? Correct. Yeah. Okay. What is that? Is it based on the product type? Certain product categories you don't want to do right now?
00:52:04
Speaker
Not really. I think it's primarily driven through the entire risk assessment that we do, because at the end, we are taking some risk on the receivables or the customer. And we want to be very prudent and very scientific in terms of, so we today we analyze close to 50 data points from the customer and then we analyze another 20, 30 data points on the SME before taking a call that whether this transaction is.
00:52:25
Speaker
should be funded or not. So again, just want to be more and more careful, prudent, scientific and disciplined about this because if you are able to have a very strong foundation built around this, we will secure our future in terms of how we'll scale it because we know that the market opportunity is very big. So important for us to be armed with all possible potential solutions and risk mitigation efforts so that we can truly capture and realize that.
00:52:52
Speaker
I see a couple of ways in which you can expand or diversify. One could be, for example, you could get your own NBFC license. Is that something which you have in mind? So again, we believe in the power of platform and a power of technology, bringing a lot of ecosystem players on the platform. India today has 1000 NBFCs and we believe that we can bring
00:53:17
Speaker
those 1000 NBFCs on this platform to service a market which is very large and still yet absolutely un-serviced. So we believe in that sort of an approach and that's what we'll keep building towards. And that makes the analysis or ability to go global as well, because as a fintech platform, you can do that where the NBFC can be based out of Indonesia, Singapore, Thailand, Malaysia, Bangladesh, anywhere.
00:53:42
Speaker
we can just plug and play while if we try to do that, we are constrained by a lot of regulations and a lot of other things which will eventually limit our scalability and not make us a true tech platform. So yeah, I think that's how we think about it. The other expansion or diversification you could do is getting into
00:54:00
Speaker
regular consumables not the custom build consumables because if that customer is already his purchase team is using you for one kind of purchase then they could use you for the other kind of purchase also so is that something you plan to do so that's actually naturally have started to happen and in fact it's transpiring in a way where
00:54:19
Speaker
If they are buying anything from an SME or MSME, where their own effort on managing the SME and getting the best out of the SME is very limited. It's something that they are wanting to bring on the platform. So that's why today we are doing packaging, which is 40 to 45% of the revenue base. We launched Textile in April two years back that is already constituting 40%. This is like Textile, which is purchased by a van who's saying,
00:54:48
Speaker
buying textiles to make jeans. Okay. And in fact, when he gets that jeans, he gets it contract manufacture. So he managing his contract manufacture of jeans on Bajongar's platform. So that alongside food and FMCG inputs, we have started getting into those. And again, all of these are net. Give me an example, like in food and FMCG.
00:55:08
Speaker
Like you will be purchasing special ingredients in some cases as a food company pulp and anything which goes as an input material in making of your finished food. So all of that can be is again, primarily coming from SMEs and can be digitized by using the same platform. So wherever we are seeing anything outside of commodity, which is very large by that they are making, there is hardly one or two suppliers who are involved there. They don't, they don't currently need any, anything additional to manage that. But.
00:55:38
Speaker
Everything else is something that we anticipate coming to the platform and getting digitized. Becoming like a Mooglyx or having that as one of the offerings like Mooglyx does like where they can, businesses can place orders for very standard SKUs.
00:55:54
Speaker
Now that's why the entire branded finished goods play, as I had mentioned, that's a very different supply chain because it has got distributors, wholesalers, traders, retailers, and all of them involved. And, or broad assumption and basic hypothesis is that, that, that has to be serviced through an inventory led model. And that's what Amazon business has done globally, disrupting most of such businesses. So you have to compete with Amazon eventually to really succeed in that inventory led game.
00:56:24
Speaker
And that's why not something that we, you know, we dare to do keeping away from us from that side of our service model.
00:56:32
Speaker
Basically, anything which an SME is manufacturing, you want that transaction to happen through Bison Go. And later on, expanding to exports, because there is a huge export capability in packaging, textiles, specialty chemicals. All of these are SME driven in terms of manufacturing. And then in future, having sort of an upstream integration as well, where we can enable these SMEs to digitize their upstream supply chain as well. So those are the few. What do you mean by upstream supply chain here?
00:57:01
Speaker
So in the example that we spoke, Vanusan buying gins from their contract manufacturer, the SME then has to buy fabric or yarn from our raw material supplier, which also is quite broken today as an experience and which results into true price efficiency. If you are able to help the SME do that more scientifically. So we are bringing raw material intelligence, raw material price tracking, and again digitizing that entire part as well and connecting it
00:57:30
Speaker
with the downstream transaction to build what we truly call is a full stack, multi-stack supply chain solution. Today, it doesn't exist anywhere in the world. If you're buying the finished goods, what fabric it is made of and how that is flowing through the supply chain, giving that complete tracking on one single cloud platform is what we eventually wish to build for. And you can imagine the so many things that we have plans of doing and that's what keeps us awake.
00:57:58
Speaker
Tell me the plan on the export side. Would you do the same? Like tell a company buying from India, like say IKEA sources from India for the global supply chain. So you tell IKEA that get your vendors here or would you tell IKEA that we will find you vendors? Like what is the approach?
00:58:15
Speaker
No, again, the former one where she tells that we will digitize your supply base and maybe not just in India and Southeast Asia. And we are seeing those global macro shifts where these sourcing are shifting from China and Russia to Southeast Asia and South Asia. So we see
00:58:34
Speaker
us becoming a global trade animal platform where the entire Southeast Asia and South Asia suppliers are there and a lot of these customers from the US, Europe, Middle East are managing them through Bijango's cloud platform.
00:58:47
Speaker
Do you also see selling other products to SMEs like say insurance or like you know maybe say an ERP product for SMEs where they can manage their bookkeeping, their payroll and all of those like you have this profit book and quick book and all of these and so do you see yourself getting into all of those areas also?
00:59:07
Speaker
So yeah, I've formed a small team in Bizonga where we are starting to work on what we are terming it as a business app store for SMEs, where, you know, anything which can be digitally be serviced to these SMEs for their business needs. Either we'll probably build few of those ourselves, but largely a marketplace where we can bring in the best of class app to them at a reasonable rate so that they can digitize their business. So we are starting to imagine it early days, but yeah, something which is interesting.
00:59:37
Speaker
So tell me about learning to manage a large team. You were pretty young. I guess you must have been 23, something like that, when you started off Bizon Go. How did you learn to manage people?
Leadership and Company Culture
00:59:48
Speaker
You have 250 odd people today. So tell me about this learning, like building teams, growing an organization, managing people, aligning people.
00:59:57
Speaker
No, I think those learning also frankly came in a hard way, I would say, where we had our own share of failures while all three of us as founders were very sensitive about the kind of culture that we build and we had a lot of focus on the same. In our early two, three years, we realized that again, in spite of all of those efforts and outlooks, we were not being super successful at that. And at that was a time. In what way, like what were the things you were seeing that were going wrong?
01:00:26
Speaker
Again, I think the measure, the best measure for us was employee NPS. And that was. Okay. You were measuring that. Okay. Yeah. And that was not looking good. And it took us time to identify that what, where we are going wrong. And that was a time when all three of us started opting for an executive coaching program. So we went through an executive coaching. My coach happens to be the XMD of pyramidal enterprises. And I think we all three can very proudly say that really changed to transform the way we started looking at
01:00:54
Speaker
being a true leader versus being a passionate entrepreneur who is trying to drive everything through passion, but not a lot of leadership trades. So I think those things really helped us identify what really makes it for building a culture where you can bring the best out of the people.
01:01:12
Speaker
As I had previously said, I think the key learnings were that we have to be super transparent, radically candid, brutally honest in each of our conversations with our people on a large forum, in one-on-ones, in a small forum.
01:01:29
Speaker
be vulnerable and give them an environment that they can blindly trust. We saw the magic unfold where people started achieving what we never thought was not even possible. So we started breaching our targets. We started overachieving beyond our imaginations and ambitions.
01:01:44
Speaker
But again, my personal learning is that it is not something that is built and will be surviving forever. Every day you have to practice as an organization, you have to set up those examples, you have to really make that as a pulse of the organization where everyone does that on a continuous basis to keep that culture alive, which is not easy. But we believe we are building that environment, we are creating
01:02:09
Speaker
those leaders who are starting to behave in this way. And if you are able to continue doing that, nothing is unachievable. This is what I truly believe. So this is the first time I'm hearing a startup founder talk about getting an executive coach, which is such a refreshing thing to hear. Most founders believe
01:02:29
Speaker
themselves to be extremely talented and so on. But what made you feel that you need executive coaching? Was it prompted by the VCs who invested in you, they suggested, or you started seeing things going wrong and you thought, I need an expert to help me?
01:02:48
Speaker
Yeah, I think it was a combination of both. We really appreciate the efforts of early stage investors like Accel, Charate and the corresponding people who have been working with us. They have been true supporters of entrepreneurship and have always been trying to find a solution alongside us. So it was actually a combination of
01:03:05
Speaker
both of that, they are telling us that something like this exists. And again, I had previously shared that I think as founders, one thing that we really admire about ourselves is self-aware and we are honest. And if something is not going all the way, we tell each other that this is what is not going right. And we try to find solutions which can make us
01:03:26
Speaker
better. And because our ENPS score was not looking up, we told ourselves that we must be doing something wrong as founders, not being able to do that. And now we have a very sort of a coaching culture where all the first time managers and other leaders, we are continuously enrolling them into coaching program. And we've seen the people getting transformed in form of how do they lead people. And that's truly satisfying outside of the business impact.
01:03:55
Speaker
Also, as you see young people, entrepreneurs, passionate, getting transformed into people leaders, you feel great about it. What is your management style? Do you focus a lot on performance and achieving goals or do you do a lot of delegation? How do you make sure that there is alignment of achieving what needs to be achieved and yet maintaining a high employee and peers?
01:04:18
Speaker
So I believe in a very hands-off approach. And then when I think it fundamentally, I like the framework of why, what, and how. And I believe that if you make the why very clear to people, that why we are wanting to do something that we are wanting to do, and what we really want to achieve out of it, as a leader, your responsibility is to have alignment on that and have alignment in a form where you have truly heard everyone
01:04:46
Speaker
You have been absolutely candid about your why and your what, those clearly defined, hearing from people in terms of their inputs, and in fact, let them only define what once they've understood the why. I think my job is to just align people on why, share my why, and have that, bring that alignment, then let people define their why, what.
01:05:08
Speaker
And then we see how automatically getting by execute. That's what I would probably describe how I started operating as a leader. Do you have like annual goal setting performance review based on goals achieved? So all those hard measures of performance management are in place.
01:05:25
Speaker
Yeah, I think I believe again in the event of absolute trust and transparency that's needed and having a consistent communication with the person in terms of what's going, what's not going right only helps build that environment of trust where something is not going, the person must feel that you are standing with him in those tough times. You have, he has your back and full support where he can just get over it and start creating impact.
01:05:50
Speaker
So the performance management system is essentially a tool to ensure communication. It's not like a tool to reward slash penalize, but it's just to ensure communication is happening on communication. Okay. And feedback is going. Okay. Amazing. Amazing. Okay.
01:06:07
Speaker
And just make the other person feel absolutely psychologically secure, that he can confine in you, he can share anything and everything with you, and he has your back. I think if you provide him that environment, in 99% cases we have seen his own ability, his or her own ability to get out of any problems and situations and emerges as truly realized. Okay, okay. And tell me about the funding. So you raised 3 million series A, and then subsequent to that?
01:06:37
Speaker
Yes, subsequent to that. 2016, you raised that series A from Accel and Chirate. Then we raised the series B round of funding from B Capital and IFC who led the next round that was I think in 2017, that was close to $15 million.
01:06:54
Speaker
So, we released $15 million in Series B. Then 2018-19, we released Series C. That was close to $45 million where we had a shorter ad-wac, this alternative investment firm coming and leading the round. And the last round, which happened last year,
01:07:11
Speaker
We raised $110 million led by Tiger there and had CDC and IFC AMC coming as new investors on board in that journey. Have you gone global beyond that one artwork management product for the other products? Have you started going global, like for the base platform? Not yet. But that's like in the roadmap for how soon?
01:07:36
Speaker
So, I think we are observing how customers are adopting the artwork flow platform because that's a true SaaS offering and that's what is received very well in the larger or developed markets at least. So, we are seeing basis that how we can maybe try with bidding platform which is also a pure SaaS offering. So, we have not yet decided whether the transaction led model is the way to go or the overseas markets.
01:08:01
Speaker
So first we'll try with all SaaS offering global market and see how those are getting received. And maybe by that time have an absolute marketplace version of the platform where we don't need to be part of the transaction and even the base platform can also be offered as a SaaS offering. So we want to just test and validate that hypothesis before we take it in that way. Probably for countries like Bangladesh, Sri Lanka, Nepal, you could just directly offer what you're doing in India without much modification.
01:08:30
Speaker
Absolutely. So I think for enabling domestic trade in any of these geographies, even the likes of Indonesia, Malaysia, Thailand, emerging Vietnam, all of these emerging markets, that should be very much doable. But our eyes are more on enabling cross-border trade enablement where SMEs in India can supply outside, again, being more passionate about transforming Indian business ecosystem and how we can enable SMEs here. So that would be the first intent.
01:09:00
Speaker
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