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Why Distribution, Not Product, is The Real E-commerce Moat | Dr. Somdutta Singh (Assiduus Global)
243 Plays1 year ago
"Distribution is a 300-year-old industry. I didn't invent it, I just innovated on it."
In a startup world obsessed with shiny new products, Dr. Somdutta Singh argues that the real, sustainable moat lies in mastering the age-old game of distribution. Her company, Assiduus Global, is built on this very principle, proving that innovating on the "how" of selling is often more powerful than just the "what".
About Dr. Somdutta Singh
Dr. Somdutta Singh is the Founder and CEO of Assiduus Global, an AI-powered e-commerce accelerator helping brands scale across more than 12 global marketplaces. A serial entrepreneur with a remarkable track record, she achieved her first multi-million dollar exit by age 26 and later built and sold a portfolio of D2C brands for approximately $30 million. An alumna of MIT and Harvard Business School, she is also a prolific investor in over 50 startups and a passionate advocate for women-led innovation.
Key Insights from the Conversation:
- The "Scratched-Itch" Founder Journey: Assiduus was born from her own struggles taking her D2C brands global, creating the exact solution she wished she had.
- The "Anti-Aggregator" Model: Unlike Thrasio-style companies that acquire brands, Assiduus partners with them, allowing founders to retain ownership while Assiduus manages the end-to-end sales process.
- Data-Driven Niche Identification: She built her profitable D2C brands by using marketplace APIs to find high-demand, low-penetration categories (like sexual wellness) and reverse-engineering products for those markets.
- Profitability Over Valuation: Dr. Singh champions a business philosophy focused on building profitable, sustainable companies from day one, rather than chasing vanity valuations.
- Cross-Border Compliance is Key: Successfully scaling globally requires deep expertise in navigating complex and varied international regulations, licensing, and compliance, a core value proposition of her business.
Chapters:
(00:29) - Early Life & The Entrepreneurial Spark
(08:06) - First Venture & The Million-Dollar Exit at 25
(18:30) - Building a D2C Empire: The Profitable-From-Day-One Playbook
(25:41) - The $30M Exit & The Philosophy of Knowing When to Sell
(34:55) - The "Scratched-Itch": The Origin Story of Assiduus Global
(37:27) - The "Anti-Aggregator" Model: How Assiduus Wins
(47:24) - The Playbook for Global Expansion & Lessons Learned
(1:07:56) - The Tech Moat: Inside Assiduus's Proprietary Platform
(1:22:12) - The $15M Series A: Why She Raised Capital When Profitable
(1:26:48) - Her Personal Investment Thesis & How to Get Funded By Her
Hashtags for YouTube:
#FounderThesis #StartupPodcast #Entrepreneurship #IndianStartups #Ecommerce #D2C #SomduttaSingh #AssiduusGlobal #CrossBorderEcommerce #BrandBuilding #StartupFunding #VentureCapital #ExitStrategy #Bootstrapping #WomenInBusiness #FounderStory #BusinessStrategy #SaaS #SupplyChain #Leadership #MakeInIndia
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Transcript
Introduction of Shomdatta Singh and Asydus Global
00:00:00
Speaker
Hello, everyone. A very, very warm welcome to all of you guys on this amazing episode with Akshay, a founder thesis. I'm Shumdatta Singh, founder and CEO of Asydus Global, Inc. We are a next-gen e-commerce accelerator helping brands sell globally.
00:00:32
Speaker
I am particularly
Overcoming Personal Challenges and Entrepreneurial Beginnings
00:00:33
Speaker
proud of this episode of the Sounder Thesis podcast, as we are not only featuring a phenomenal sounder who has stayed out of the limelight, but a rare serial female sounder who is now building her third business. Shomdatta Singh is not only a fearless entrepreneur,
00:00:50
Speaker
but is a fighter who overcame great odds in her personal life. She started her first venture while still pursuing her graduate degree, and that venture was acquired and gave her the capital to start her next venture in the e-commerce space in the US, which was eventually acquired for millions of dollars. Shom is currently building a CIDUS, as her most ambitious venture yet, which is on track to hit an annual GMV of $500 million.
00:01:14
Speaker
Stay tuned for Shom's freewheeling conversation with your host Akshay Dutt, where she talks about spotting unserved opportunities using data and gut and shares her take on the D2C revolution.
00:01:35
Speaker
That's a very, very exciting question, Akshay. And I think the best people who are suited to answer this are my parents. But in their absence today, I will take the moral responsibility to share. What I barely remember in the first few years of my life is that I used to get very excited when I would see children one, one and a half years would start walking. And the thing that always made me want to push myself is that I was wheelchair bound in about three and a half.
00:02:04
Speaker
And the reason being because I was born with a cerebrospinal tumor. Imagine both parents are doctors and the irony of life that their first child being delivered to them, the doctor tells my mom that, you know what, she has a cerebrospinal tumor that is in such a pivotal place that if we operate, the chances of her losing her motor functions is inevitable.
00:02:29
Speaker
And I tell my mom this, you took a risk with me the moment I was born. Therefore, I've always had this tenacity to take risks all my life. And that's what entrepreneurship is. But the first few years were interesting because, you know, my dad... How did you?
00:02:44
Speaker
How did you learn to walk then? Did you get the surgery? Yes, multiple surgeries. I have a silicone rod in my back, about seven surgeries in and out of hospital for the first 12 years of my life. You know, there are a few organs that I don't have, but they're all manageable. Yes. And that's super amazing, right? Means you wouldn't remember my story if I had an ordinary life.
00:03:07
Speaker
They said extraordinary experiences make extraordinary people. That's what my dad always told me because he gave me perspectives of life differently. You know, when somebody would say disabled, you guys should consider having another child.
00:03:22
Speaker
My dad said, yeah, of course, she is disabled because she hears the word able in it. It's perspective. So you always taught me to see and hear things differently. And that's why the outlook towards my life, you know what I see in my life is very positive, right? Means I don't crib about the small things. I don't feel bad about the small instances. I think, okay, they're an opportunity.
00:03:42
Speaker
So yeah, that's what the first few years were. I started walking in about four years in a few months and I had excellent support from some of the best doctors, some of the best physiotherapists and as my first part of the school was not like a regular going
00:04:04
Speaker
child at school, I didn't have my kindergarten and all. I directly went to BSS when I was in my second standard. And guess what? Homeschooling was not a big thing that time. Homeschooling was not something that was a very prominent concept in Kolkata, at least, where I was born. But I wrote the entrance exam for the second standard and I was second in the class.
00:04:27
Speaker
Interesting times, that's what I see. Being able to walk the first time when everybody else was running to homeschool the first few years to getting into a phenomenal school which changed my life and I'm happy to share more. You have a little bit of a...
00:04:47
Speaker
a streak of a performer just in the way you articulate, the way you express yourself. Where did that come from? It's very much like a showman in the sense, like a larger-than-life approach of talking, articulating. Where did that come from?
00:05:05
Speaker
My dad, you know, you hear this often that a father is a girl's role model, but if you really need my dad Akshay, you will understand why he's an external human being. My dad is a student of Ramakrishna Mission and while he became a very successful doctor in his later years, he was a brilliant musician.
00:05:25
Speaker
a phenomenal theatre artist. My dad would do monologue in Academy of Fine Arts and he wrote poetry. So I grew up around the man who believed that your right brain is the most important aspect because the left only knows how to execute.
00:05:42
Speaker
unless you are very creative, you can't create a place for yourself. And only creative people create legacy. So I'm trained in Hindustani classical. I play the sitar, I play the harmonium. So these are things that I grew up in as a student because I was not very active in sports.
00:06:01
Speaker
in my younger years, I had to make it up somewhere, right? So I was brilliant in elocution. I would do theater. I would do things that had a lot of attributes of showmanship, right? Over time,
00:06:15
Speaker
You know, I could even run and take on others. But I never could swim and do other things with children my age could. So this was where I made up for it. And over time, I figured that my ability to interact with people is a blessing from Koda Saraswati. Not everybody has it. Your oration, your ability to basically engage with people. Unless you have that aura, it doesn't happen. But it comes from my dad, completely from my dad.
00:06:40
Speaker
Amazing. How did
Educational Journey and Early Entrepreneurial Success
00:06:42
Speaker
you land up in the US for higher education? It was always on my vision board. My dad always told me that manifestation is insanely powerful. Let me give you a little bit of background about where this comes from.
00:07:00
Speaker
Because I was the first former years of my life, were not like a regular child doing the things they would do, my dad used to put me in a library where he said, consume as much knowledge as you can, because one day that will be your differentiator, right? So there's this beautiful saying in Sanskrit in Rigveda,
00:07:25
Speaker
A man or a woman is wasted. Knowledge is not put to the right use. And money is wasted if it doesn't multiply. So that's the grooming of my father. And what happened was, because I was to consume so much, my interest in economics came in. And even though there was nobody in my family who came from that background, but that was what grew my interest. Because I figured that that was the fundamentals of everything in an economy, in a country.
00:07:50
Speaker
being overlaid. Businesses were built on that. It's a theory of science and art. And that's where I'm like, where would I go for further studies? And I wouldn't say that, like any other child, I had identities on my mind. I wanted to go to the best of schools, also because I felt the need for value.
00:08:08
Speaker
I'm also not going to lie about the fact that today, if you ask me, I wouldn't have cared so much about going to the U.S. But that time, it mattered because I needed validation. I wanted that stamp of a great alma mater, right, that I went there because I felt I wanted to be accepted more. So that's where the education wanting to go to the U.S. came from and also
00:08:31
Speaker
You know, in Bengal, education was very segmented. You could do an MBBS or law, a chartered accountancy, an engineering, but if you wanted to do something a little more on the other side, which is economics, arts, political science and all, you did have some of the best universities. So I came to Bangalore and that's where I did my undergrad. But for post-grad, the goal was to get that stamp from a higher education, but also
00:08:55
Speaker
be around people with whom I could learn more. That's again something that's said, that you want to surround yourself with not just people like you, but people other than you to kind of have that cross-level learning. So that's why I went to US to study my post-grad.
00:09:11
Speaker
And that's where you had your first experience of entrepreneurship. Tell me about that. Oh, that's phenomenal. You know, there's one thing that US does is it pushes you to think differently, you know, of course, we are a young country, very young in terms of our independence or thought process, we still have a little bit of the managerial mindset of the colonial hand.
00:09:31
Speaker
But US has had many years of experiences in building entrepreneurs, right? Means that's how the country has flourished. Because it's a country of immigrants, but they've flourished because of the ideology of entrepreneurs.
00:09:42
Speaker
So when I was in school, and it was one of the top schools, one of the top two schools, and of course, globally, as well as based out of Boston, and then I was surrounded by people who were constantly innovative, right? They are constantly thinking of new ways to make money. And it's a hustler mindset. You were doing an MBA?
00:10:03
Speaker
No, I was doing a post-grad, so it's not exactly an MBA, it's a Masters in Economics, right? Okay, got it. Yeah, it's Masters in Economics. I did an MBA even later than that, I've done multiple other Masters, etc., but that was a Masters in Economics, in Microeconomics.
00:10:20
Speaker
And I was surrounded by these people who were engineering grads, you know, grads who are basically from MBA, and they're all thinking, they're all hustlers. They're all thinking of making money quickly, smartly, at a young age to be more self-sufficient. This school had people coming from many different backgrounds, you know, not very illustrious money family. They were all taking talent from backward classes with the idea to make an impact and difference.
00:10:50
Speaker
That's where I founded my first company with a co-founder who was an engineer, an ad tech company called ACT, which within two years got acquired. We raised money, both from the Institute and from external investors. But it was an amazing experience. At that age, I was just less than 23 years old, doing something with people who are smarter than you.
00:11:12
Speaker
I'm telling you very honestly, I had a co-founder way smarter than me and he taught me coding. So these experiences is something that I think India still, now it's reached a stage where it's learning, but that time it wasn't pretty much there. You know, the late 2000s is not there. Yeah. What was the product, the ad tech product? So how are you making money?
00:11:33
Speaker
Yeah, so we were basically helping FMCG brands identify the fastest ad network to monetize based on the product. So if somebody is promoting Clorix, right, they would figure out maybe the news channels are the best because that's where people spend more time and the product like that will convert there.
00:11:52
Speaker
For other brands, for example, something like Datal, which is an antiseptic, or Brute, which is a, you know, what you call it, it's more of a deodorant. The channels for you to reach were very different. And we were just at a stage where social media was picking up. You know, it was just boomy. So it was super interesting with speakers, but people were experimenting with social media.
00:12:12
Speaker
Plus, you know, aggregator networks, partner networks, affiliate marketing, which is speaking up. So we were helping identify, they would intelligently pace the ads online using our product. And for every ad placement, we would get a certain percentage. How did you get the intelligence of which ad will work best?
00:12:31
Speaker
Yeah, so we were basically using crawlers, crawling across 250 live data sources, and then using machine learning to do predictive analytics on top. That's how the ad monitoring and ad placement. So for example, if you saw that a lot of shoes are being advertised on Instagram, then your algorithm would recommend that if you want to advertise shoes, then go to Instagram.
00:12:54
Speaker
Absolutely. Not just that, the conversion. So if you see that advertisement was not the only metric, if somebody clicked, went to the website and stayed on that for conversion, and we had given those parameters, right? 30 seconds, one minute, one and a half minutes. Based on that, we would do ranking. And that ranking would be determining where you should do the ad place. So the goal is it's part of conversions.
00:13:20
Speaker
There's proprietary data. How did you get access to this data? Like who clicked and how many seconds this stayed on the website? Oh, no, it's not. So if you see most of these platforms give you open APIs, even Facebook does or Twitter does, right? How do you think these some of these SaaS products or analytics products that give you
00:13:38
Speaker
intelligence on social media is the open APIs. So you become a part of their joint development program using that API and they can give you further access because they know that you're basically not utilizing it for any other, I would say, wrong intent or wrong data optimization process. You basically subscribe, become a part of the joint development program. Even Google has Google.
00:14:01
Speaker
If you see Google's Black Box program way back in 2012-2013 was about that, developer APIs using their data for ad and content monetization because they're also aggregating data through third-party resources and projecting. So you're basically building a layer on top of the operating layer and using that for production. And so you were building an ad network essentially like an in-movie?
00:14:25
Speaker
We were different than Inmobi in a way that Inmobi created an ad network. We were more a protocol-based behavior analytics. So we were a recommendation engine, right? So we were basically recommending, like if they used an ad agency, they would use our recommendation engine to enable better optimization. While Inmobi basically became an ad content aggregator platform and much more than that.
00:14:47
Speaker
So you would further work with an Inmobi to execute the ads and Inmobi would share the commission with you. Absolutely. Very similar to that. That's a beautiful anecdote, yes.
00:14:59
Speaker
Okay, almost like affiliate marketing in a way. Yes, but your predictive analytics, you're giving the power to the brand because typically what would happen is agency played in the dark, right? The brands didn't know what was happening and you want to enable them to make decisions more intelligent. So it's more of the power to the brand than just, you know, the agent. Okay, so which year was this company acquired? 2014. Okay, and you had finished your education by then?
00:15:29
Speaker
Yeah, I had already finished my education. By 23, I had already kind of finished it and then stayed on for two years to kind of build this out pretty 25. By the time I was 25, it kind of got acquired and then I moved on, came back to India for a stint. Did you get a sizable amount of cash from the acquisition? I would say it feels good when you're a millionaire at 25, for sure. Wow, amazing.
00:15:54
Speaker
Which, you know, my dad under then thought I was crazy because I had a great, great, great job offer that I declined to pursue this dream. So kind of, it feels good. It means, you know, that you are able to tell your parents that what I'm doing is not just fun or whimsical, but it also has money and sustainability attached to it. Because, you know, Bengali middle class, Brahmin families, they care about that. They don't care about if you're wanting to change the world.
00:16:22
Speaker
Incredible, incredible. Okay, so you came back to India 2014 then? Yeah.
Launch and Growth of AmplySell
00:16:28
Speaker
That was an interesting time. So I kind of started doing a lot of active investing. One of the things I got super excited about is, you know, what can I do post that? So one of the things which I learned, you know, building my first startup was, you know, that the agency model worked very, very well. And I, on a side, invested in a company that was doing a lot of agency work for brands, but that was not my full time.
00:16:53
Speaker
I was very, very actively involved with startups, part of a lot of the mentorship program. Which agency was this that you invested in? Yeah. So this was basically working directly with startups and brands to kind of, you know, what I learned from my first startup kind of helping there.
00:18:09
Speaker
Thank you.
00:18:11
Speaker
Okay.
00:21:30
Speaker
So tell me the first product you launched and the journey of that.
00:21:49
Speaker
because it's a very controversial category. You have to understand that you will never see, way back then, I'm talking about it's almost 10 years back, when you are going to a CVS or a Walgreens store, you're not going to see the top shelves having sexual wellness products because it was still a taboo, right? Women wouldn't talk about them needing Viagra for their sexual needs, right?
00:22:12
Speaker
It's a very man thing. Now, how do you disrupt something like that? Where do they feel the safest? Online. Because you can't see me. You don't know who I am. I feel more comfortable to make a purchase because I have anonymously.
00:22:26
Speaker
You cannot figure out where I am, who I am. I can create any account of it. As long as I have a valid credit card, I make a transaction, right? So the first product was AmplySell, which still, if you go online on auson.com, is still one of the top sellers and launched this brand with Distortion Boosters, female bike brand.
00:22:44
Speaker
a plethora of other sub-products over time, but those were the two top sellers, and then keto supplements. So testosterone booster alone, just the testosterone booster, no, nothing fancy, ampecent testosterone booster was sending half a million dollars a month by the first year.
00:23:03
Speaker
So imagine even now if I just go online and do just a search and show you some of the brands you've never heard of Akshay, they'd do 3 million, 4 million a month and these are all private label brands. So the private label revolution in US started and I was one of those first experienced few sellers to kind of become million dollar sellers. I figured out the math how to do it, right? You kind of create and then you basically
00:23:29
Speaker
send through that platform even if you have a cost of acquisition which is 30-40%, still the markup section. Your cost of production is less than $2. Labelling and all will cost you about $3. You have marketing, Amazon fulfilment cost another $10. You're selling the product for $19.99, a capsule of 60 caps soon. Imagine, and it's monthly recurring our share.
00:23:50
Speaker
These things, nutraceutical, health, beauty, skin care, consumables, are monthly recurring. They were to subscribe and save. So what is my cost of acquisition? Negligible. I acquire Akshay Mal. Every month, you will get for the next six months the same products. So there's nothing more smarter than that. And the journey started with identifying high-searched keywords, high demand, low penetration. And we used APIs for that. We built a tool on top of it, completely. Our own private tool never sold it as a SaaS.
00:24:19
Speaker
But that's how pretty much the journey started. Doesn't this need some sort of an FDA approval or something? So the way it works is, and that's, again, a brilliant question. So this is for all the listeners. Guys, license and approvals is a big thing that will burst today. How does it work? Is the manufacturing plant that needs to be FDA compliant?
00:24:45
Speaker
is the R&D facility that needs to be FDA compliant. If you are starting up as a, what do you call it, a D2C brand, you typically partner with a manufacturer because no D2C brand that a private label has the money to set up their own manufacturing plant. It's the plant that has to be FDA compliant. If the plant and the production facility is FDA compliant, it has a stamp of FDA on it. Because remember, they will never touch an ingredient that they can't sell.
00:25:14
Speaker
So that's the funding. So similarly in India, the way it works is that the distributor that has the drug license, you need to have a pharmacist on record, in your facility if you're selling drugs, except for schedule H. Of course, it's a different game altogether. You need for site license to sell food products. If you're importing beauty products, then you need a CDSO license. So these are different licensing requirements. Now, licensing in India is
00:25:39
Speaker
Very different than US's FDA compliance, right? One should not confuse the two. There's nothing called as ABRT and license. The FDA is proceeding to the manufacturing facility and all. If you come to GCC, I'm giving you a little bit of extra Gyan Akshay because, you know, the whole idea is for people to learn. If you come to GCC,
00:25:58
Speaker
the distributor, or you have to have an entity here that has to have a trading license. On top of that, for every product that is consumable, beauty, et cetera, needs to have either a license or product registration from municipality, which is equivalent to our facade, or MOH, which is Ministry of Health, which is equivalent to our drug license. So these are the requirements. And unlike India, India, you don't need to know every product you don't have to register. In UAE and in Singapore, you have to register every single product.
00:26:27
Speaker
because it's in Saudi as well. Every single product needs to be registered either with municipality or with MOH and they do a quality check. So these are compliance requirements which are very different than in region, not going into Europe and Brazil and all. It's another volume altogether, but it's a good thing to know if you're a privateer. Got it. Okay.
Strategic Exit and Financial Prudence in Entrepreneurship
00:26:50
Speaker
You said this company was acquired and you got an exit of about $30 million. Yeah.
00:26:55
Speaker
In how many years did it happen? What was the ARR like by the time it got acquired? Just a quick run through of that journey.
00:27:03
Speaker
Absolutely. So in the first year, so this I ran for about four years, Akshay, and the brands were individually sold out. So they were not like, you know, one company acquiring, there was no Mensa or Thrasio when I exited. It is all through Tripa and Etsy International. So these are market, these are, I would say marketplaces where the brand meets a seller or a buyer. So if you own brands, you can list those brands up for sale. And typically what happens is the buyer can be a company or can be an individual.
00:27:32
Speaker
who wants to acquire that brand, which means you're going to give away your seller-central access to them. They do a due diligence on the total seller, you know, what will give you access to your seller-central will kind of, you know, do all of that with your tax returns. Typically, the way the MAC works in US is it's on profit. So the valuation you get is 10x of your profit.
00:27:53
Speaker
So that's a benchmark. So it's usually on that. And then you have your inventory. So there's a valuation for your inventory, how much you're holding, plus your trademark. So these are the three levels in which you get the valuation. And they were sold through FE International and Slipper. Some of the brands were acquired by now a very famous aggregator. I cannot name them, but a very famous aggregator now in the US. But some were by individuals. And one of the brands, which was a sexual wellness brand, was acquired by a pretty large organization.
00:28:21
Speaker
That's pretty much how the exit happened. But when you asked me the ARR, let me give you some of the math. The first year, we did almost about six and a half million across four brands that we had that time. By the time I exited, it was about eight brands. But the sexual wellness brand always had the highest revenue because it had the most amount of sales, followed by a kids head supplement line called Smart Vitamins. And then there was an Ayurvedic supplement line called Biotheria and so on. So those were the top three.
00:28:49
Speaker
And I would say the plate was 60, 25. And what was the ARR at the time when you sold? So 60% was, yeah, so combined ARR we were doing was about 18 and a half to 19 million a year. Okay. And you were the only founders?
00:29:10
Speaker
Yes, I was the only founder of the team, but never took external investments, nothing. It was all my money that I got from my first company that I kind of invested in. And that's kind of the exit and the team had equity. So one of the things I'm always a big proponent of, Akshay, is that you may have founded the company, but you can't create a company without a great team.
00:29:31
Speaker
Right. So my team had substantial, a substantial part of the equity was for the team. Of course, I still always had the majority stay. So, but the team benefited a lot. Like one of my team members says he bought his first penthouse and the first car because of that. Right. And that's, that's my dream, even with aside is what I'm building right now. That is my, each of my top employees can get a 10, $15 million exit. I know that I'm successful. My matrix of success is not making money for my team.
00:29:59
Speaker
Those people who have hustled with me get a great exit with me. And that's my vision. And this business became profitable from the first day itself? First day. First day profit. I'll tell you the story, right? So when we listed the first product, we did about five sales that day because we had not started marketing at all. 35% profit, right? Because no matter what you do, you have margin.
00:30:28
Speaker
So there are times when we would give discount, we would list it at like, let's say 1999, give it 30% discount. No matter what, my cost of sale was never more than $10. So you can, you can do the math, right? There's a cost of doing business. And what was it? I didn't have an office. Most of the team were remote. I had Filipinos that were working for me. I had people from Africa that were working for me. I would hire people on artwork and fiber that were working for me. And less than five full-time employees, the rest were all outsourced.
00:30:58
Speaker
Because what ends is that you don't need anything else, right? Warehousing, it's Amazon fulfilled. You're just shipping the products. Who's making the products? The manufacturer. You're shipping, they're just renaming everything. You give the MOQ, they ship it to Amazon. Then you're managing the listing, optimization, ads, selling. Simple. And you're getting the money in your bank every 15 to 30 days, depending on your volume.
00:31:20
Speaker
Amazing. Amazing. Amazing. Why did you sell? I mean, you know, you could have taken that to maybe a hundred million ARR in a couple of more years. Exactly what I thought. You know, one of the things which is super important to understand for all entrepreneurs, especially the listeners, right? A smart entrepreneur knows when to exit. Detachment?
00:31:43
Speaker
is what makes you a solid, solid, solid entrepreneur. So, you know, the dhanda, the old-school way, if you see the data as the build-out, so the biggest enterprise, they've either always worked with, you know, through lodges and acquisitions or have sold a part of their business when it was required, right? That's how the vanguards and the blackrops of the world has become what they have.
00:32:04
Speaker
There are two ways people exit. You go public or you send private. Now, I did think that I could make that company Procter & Gamble & Johnson & Johnson, but you're young, right? When you're young, you think you know it all. And then you graduate. I say the graduation of an entrepreneur or an individual is from the know it all to let me get people who actually help me accelerate and figure out the word, not knowing it all.
00:32:32
Speaker
So long story short, I thought I'd become the next proctor in the Apple. That's the vision I started with. And I figured out the reason they are big as they are is because of cross-border distribution. They don't do everything. They have the middleman. Now, the middleman in retail is what makes brand sustainable, scalable, long-term, memorable. I mean, that's the storyline. Simple. I create somebody else accelerate. But nobody was doing that when it came to e-cops.
00:32:59
Speaker
Just like a few minutes back, I talked about the compliances. They're very stringent. So you cannot yourself get a drug license if you're a manufacturer of the product also. You own the plants. That's why you never see a pharma company own their own pharmacy stores. It doesn't happen. So there's a lot of these compliance checks that are there. And I figured that then this whole mode that I had created will not stay.
00:33:23
Speaker
And beyond this, scaling it to the next level would be, I would say, then you have to take a lot of money, then it's no longer your company. And I'm like, what is the smartest thing to exit now when the market is on? You see today, all the stories that I'm now going to name, and you and I have seen unicorns create and fail. And somebody, I just recently spoken and even when I said, I don't believe in the term unicorn, they don't really exist, right? They're fantasy.
00:33:47
Speaker
You've never seen a forest with a horn and wings, man. That doesn't work. That's why they don't stay for long. Even the ones that have gone, you have all gone bust. And I love Rakesh Jhun Bala because he was one man who knew this, this, this fantasy will one day come to an end. So I sold when the market was super duper hot. I wouldn't have got the same one.
00:34:10
Speaker
It's very smart to know when to exit. See, also Akshay, I come from middle class background. When I see money, I take it. Simple, right? Because I told you what my dad told me, right? If you don't know when to multiply your money, you're an idiot. So I took that, I exited, and if I didn't have that money,
00:34:28
Speaker
I wouldn't have been able to quit the scientists, right? Means today it is a way bigger joint than I ever thought or envisioned it to become. And that money was necessary because nobody would have believed me and I would have gone and asked for money just to let you know and all the listeners that, you know, entrepreneurship is a hustle. But as a woman, if you're looking to raise money, it's the worst hustle and it's not a worthwhile hustle to get into. Unless you have a very strong moat and profit on your books, you're unnecessarily going to be banging your head against the wall.
00:34:57
Speaker
And nobody is going to listen. And you know the story of Canva, like 100 plus rejections. I don't have the time or interest for that. I'm like, I'm going to use my energy for the right thing. So that's anyways, I knew that was the right thing to do. I did it, took the money with some as pink's deposit, some funds that is going to give me a multiplication effect.
00:35:17
Speaker
I have some public market investments as well. I figured out one thing that my FD should take care of my life. You know, that's what takes care of my sustainability part because I didn't take money, salary from a scientist for the longest, like until we raised the CDC has to never take salary from a scientist. So that's kind of was my modus operandi that my basic necessity should be taken care of, then everything else is fine, right? So I can experiment with it. So that's kind of, you know, how I exited by
00:35:45
Speaker
2017, 2018, September 10, founded Aciders. I'm like my mom and dad tells me stop. I've just got started. When I put my benchmark, 45, I'm done. I'm not doing this. After that, I have bigger plans and I'll share that with you. But yeah, this is pretty much it. Tell me the process of ideation for deciding about Aciders.
Innovation in Cross-Border Brand Acceleration
00:36:10
Speaker
You must have evaluated ideas and come to a decision on this is what I want to build.
00:36:15
Speaker
You know, the reason the Kacha Banyans of the world, the reason Rupa Underwear did so is because need is the mother of invention. I do not agree with entrepreneurship that tries to create things you're not ready for. What was my lesson of wanting to take my brands global? Was that you need a middle man.
00:36:37
Speaker
Now, the middleware in the world of technology is a middleware between the operating system and your last mile sits the middleware that acts as a layer that encapsulates everything, utilizes the data for efficiency, and builds an ecosystem of it.
00:36:54
Speaker
right? So that's what the Amazons and the Flipkarts did. They didn't invent something. They already knew people were buying in Walmart and stuff. They knew this need existed. They simplified it because people's time was the biggest asset. They knew that people want ease of doing transactions and ease of buying and they made the ease of buying as marketplace. So what I did was I took that ease of buying on marketplace
00:37:21
Speaker
wanting to take brands across border because I couldn't take mine. I said, as a middleman, you can do it. So let me disrupt something. But distribution has existed for 300 years. Actually, I didn't invent it. I just innovated on it. I knew this is a multiplication effect. Because one, clients need it. The need was validated because I had the need. If I as a young entrepreneur needed it, then imagine how many brands needed it.
00:37:46
Speaker
right? If they need it and if a brand sitting in US wants to enter India, you think it's possible? It's not possible. It's a nightmare. That's why Amazon is starting their global selling program. But because the nightmare exists and it continues to exist, I'll continue to survive inside. So the business is the boss, not the founder. So I built a CIDUS to be a business that will be
00:38:07
Speaker
scalable and sustainable because it's funded by clients and it is recurring need that will continue even if I die. God forbid. It's the truth. That's why the best businesses are built with your basic needs. Haldiram is big. Himane is big because this need you like is easy. Simple. The snacks that you would have, otherwise you're now having in a package where you know it's healthy and all. That's why you buy Haldiram. So not that they invented that, right? It's the innovator on top of something that you already needed.
00:38:37
Speaker
So, we recently featured Ace Turtles founder Nitin. Ace Turtles would be a metal man, right? They've got Lee, Wrangler, Toy Zarass, Baby Zarass. They've got these brands into India. So, you want to do what they are doing? Not you want to, but you are doing what's the difference?
00:38:56
Speaker
So the only difference between Ace Turtle and us is that we are a full stack middleware. Now, Ace Turtle is like a enabler that does cross-border brand activation, right? We're not doing that. We're also the sellers. So what we do is they do, let's say they're doing fashion. We're not focused on fashion. We're an FMCG.
00:39:16
Speaker
I generate 20 countries. My goal is not to break brands just to India. I am taking brands from Brazil and bringing to India, taking brands from India and going to US, Brazil, GCC, South East Asia, taking brands from Korea. So you see, I am a cross-border conglomerate that accelerates brands depending on demand, intelligently using technology in different countries.
00:39:38
Speaker
I am not going to get a Wrangler or a Leigh just because India is the market I've operated. No. If there is no demand, I wouldn't touch it. But of course, if no, there is demand, so they're doing it. We do the same thing in a crossword, but we are the seller. We control the buying and selling of the inventory into it from all these brands. And we even tend like, for example, a Unilever. Listen, this particular brand of yours has got to do better in this job. It's helping you manage inventory and supply chain more internally.
00:40:09
Speaker
So, eStattle is actually doing full stack, like Lee and Wrangler, they do everything from design to merchandising to opening stores to selling through e-commerce, even manufacturing.
00:40:27
Speaker
So the whole thing, basically what Reliance Brands does. So we are not that, right? See, A-standard is a digital transformative engine for brands looking to enter a new currency that has its own issues. Like what is Zilingo did?
00:40:42
Speaker
Southeast Asia to some level. We are not that. They don't exist anymore. But when they existed, that's what they did. They allowed you to find somebody who's going to do merchandising for you, production for you, you're going to launch the brand, you're going to do marketing for them. But that's a very different business model. You're working with them as a partner for market and tree and expansion. We are not that.
00:41:03
Speaker
We are working with a Unilever or a record award to enable them to sell better on e-commerce marketplaces across the world by managing the distribution supply chain. I don't know any manufacturing for them. They're already experts in what they're doing. I am helping them sell better, faster, giving them cost arbitrage, and giving them analytics. I cannot name some of these FMCG brands, but let me tell you this. They use our data to decide on the acquisitions they're going to
00:41:31
Speaker
We are their partner for Accineration. We're not an aggregator. So, why we're different than an Apple or an Ace Turtle or some of our Reliance brands is they are enablers to get market access.
E-Commerce Optimization and Client-Centric Strategy
00:41:45
Speaker
We are cross-border distribution and supply chain for sales Accineration.
00:41:50
Speaker
So when a brand finds it very hard to enter a market for production, they would work with an east turtle to do that. Because India imports are so complicated. Unless you find a local manufacturer, it's very difficult for you to scale in the country. That's not an area we are interested in, right? That's why we don't do fashion. We don't do accessories or anything like that. We are an FMCG, HPC, health, personal care, consumables. We do a bit of home and kitchen, a bit of consumer electronics.
00:42:16
Speaker
These are big enterprises which are looking to reduce cost, to get better efficiency, to enter a market more quickly and to not take the headache of managing the entire distribution of supply chain. That's why they work with us.
00:42:30
Speaker
Okay, got it, got it. So, is essentially India focused only first and second thing, they are full stack from design to manufacturing to offline. Yeah, we are not into designing, delivering now. Your online focused e-commerce essentially, you are an e-commerce go-to-market channel.
00:42:52
Speaker
That's right. So typically what happens with companies like East Turtle and all is that the brand gets into a partnership, they'll have a certain budget and after that it is their headache. No, here it's a partnership. We don't buy inventory. We pay upon sales. They stay engaged with us through the whole process.
00:43:09
Speaker
We are taking them while they still are hooked into how to optimize, get better data, to do better inventory planning. This is a very different model. Our goal is not to just take them to the market. They control their manufacturing completely end-to-end because they never want to let go of that. They work with us so that we help them with growth of sales on accounts and give them the data.
00:43:32
Speaker
Okay, got it. Interesting. Tell me about the first deal you cracked for this. What was your go-to bucket? You know, your zero-to-one SIDUS? I think, you know, see, there are some brands, of course, you know, they have an NDS I cannot name, but this is a huge pharma company and they don't mind being named and I checked with them. You know, in India it was Cipla, in the US there were multiple other brands that we work with. But in India, the first one was Cipla because, you know, we're doing this podcast in India, you know, I want to definitely share this. Cipla,
00:44:02
Speaker
had less than a lakh of rupees of sales when we launched them in 2018. Which country? In India. We started with India. Now we're taking them global, right? So Cipla health and Cipla. So you know Cipla as a brand. This is medicines or OTC products?
00:44:18
Speaker
All OTC, right? Everything that you can sell online is OTC. Now, OTC is factored into two categories, something that requires drug license, something that doesn't require, which is food. So we are selling their drinks called ProLite also. We are selling Kotex also. And Kotex requires a drug license. ProLite does. So there are these categories, right? So when we got them, we were the first to launch them on the marketplaces. They're still one of our oldest brands. And it's a 0 to 100 crore story.
00:44:46
Speaker
So that's how big the brand is right now. And then they've acquired multiple other brands. They keep bringing into the portfolio. You know, we have become a partner. So Sipna, the way brands look at us, instead of them having their own e-commerce division, which will take care of growth and sustainability, scalability, et cetera, et cetera, they now have a partner like Asaitis. And now they want to enter five other countries. They don't have to look for five other partners.
00:45:12
Speaker
That's why the name goes, right? We say perpetual growth by being next to you, aside us, next to you. So while we are next to you, we deliver perpetuity.
00:45:22
Speaker
So, and what is the model here? It's a commission on sales or like, how do you work? Yes, we had multiple models. We basically have a revenue share model. It's a win-win, right? Unless I deliver for you, I don't get up any. So it's definitely like, but I control the sales, right? I'm selling the product. So I control the entire inventory, the dry supply chain. The second is, of course, we have an analytics platform. We have a B2B shipping platform.
00:45:48
Speaker
So there are multiple revenue channels for us, but the biggest is the percentage of the total GMV is how we make our model. So in a typical distributor model,
00:46:02
Speaker
The company will sell its inventory upfront and maybe give you like a 90 day period to pay for it. It's the same thing. So they will sell you. And they will take the return. So even in a retail model, if the products do not get sold in 180 days, the brands are mandated to take the return because it's also a policy of protection, etc. that is already there for the distributors that exist in retail. It's the same model.
00:46:28
Speaker
See, Cloudtel existed in India for a long, long time, doing $1.3 billion of business. And today's chairman of Cloudtel sits on our board, right? So the model is very simple. Why did Amazon enter into a joint venture with Narayan Moti to start Cloudtel? Because distribution is an insanely money-making business.
00:46:47
Speaker
And it's a constant business, always going to stay. But when you don't comply with the laws of the land or the compliances of the land, then you get kicked out. That's what happens. We're super compliant. Our focus is stay true, stay committed, and stay transparent, right? Whatever it is, that is something. That's why we give access to all the data, the live data to the brands.
00:47:07
Speaker
We have two patents filed with USPTO for the technology we have built. We're filing a third one. Nobody has what we have built in the past. It's so integrated, so cross-border, so multi-channel, almost 12 marketplaces, multiple D2C stores. It's a big ecosystem now that we have built, but in terms of the optimization and etc., like you said.
00:47:30
Speaker
Brands are already used to the credit period. Brands are already used to SOR as a model. We're just kind of amplifying. SOR is like sell or return.
00:47:38
Speaker
Yeah, in FMCG, it's less than 0.1%, because customers cannot return. It's a non-returnable category. Unless they say that the product is damaged where you cancel the order, and it's the marketplace that bears the cost of it, but otherwise, it's a non-returnable category, right? So that's the advantage of being in this category, and that's why we don't fashion, because it's insane return. It is not a long-term solution. And also, Akshay, tell me one category that is inflation and recession.
00:48:11
Speaker
Whatever happened, you have not stopped having your dal, your roti, your chagwad, applying your skincare, buying your makeup, taking your nutraceuticals, buying your sugar pills, all of that will not stop. So that's why, and also they make the most money. You've seen the pandemic, right? Means that's where the money is. So yeah.
00:48:34
Speaker
Your journey from India to 18 countries, was it part of the plan on day zero, or did it happen by virtue of customers asking that? Okay, what did you guys say? The day zero is always an experiment, right? It started with the US, by the way. Oh, it started with the US, okay. Yes, so we are taking Indian brands to the US or US brands in the US?
00:48:59
Speaker
Yes, we have three models. Home, country, home brand. Home brands, home country plus cross-border, or just cross-border. So there are several brands which does the home countries themselves, but we only do cross-border for them. And there are several brands who want us to manage everything which meets home country and cross-border.
00:49:17
Speaker
right? Or just home country. So the initial year, the first year started with home country. The second year was home country plus cross corner. So that's how the multiplication effect happened because they want you to build trust and trust is where their base is, right? So that's how it started. So we are a US parent company and then we have subsidiary in the UK, India, Southeast Asia, which is Singapore.
00:49:39
Speaker
We have Denmark, we have UAE, and that's kind of the whole structure of how we operate in, of course, India. So, but we started with that, but the zero to one journey was starting with these home geographies and that kind of, you know, showing the value that we can bring profitability into. But the way the company has evolved is by listening.
00:50:00
Speaker
You know, it's like when we grow up, right? Your parents, we always don't listen to your parents because experience is invaluable. Clients know what they want. They know their problems. And if you focus on solving that problem, they will give you it. Because they don't want you to experiment with their business. They want you to add value to their business.
00:50:20
Speaker
Nobody wants to take a risk on an existing ecosystem. They want to take a risk of adding value. They're happy to take a risk and experiment. Yes, it never started to go to the point of what you asked me. We thought we'll do U.S. in India. The first two years was actually that.
00:50:40
Speaker
And both borders, like home country and cross border. And then GCC started. Because again, flying started telling us, let's go there, let's go there, let's go there. We figured out nobody else was doing it. In GCC right now, what a scientist does as a cross border, nobody else is there. We are the biggest players, right?
00:50:59
Speaker
Then came Europe, Europe and UK. So first came UK, then came Europe because UK was just taking off. And I always give credit where it's due. We followed Amazon's footsteps. They're the best market validators. They're entering a market. Trust me, they've done the due diligence. They're not experimenters at all.
00:51:17
Speaker
They acquired, you know, Suke and then that became Amazon and GCC because, you know, none of these international companies can enter these restricted regions without an acquisition. And of course, the local marketplaces like Moon, they're doing phenomenally well. So we're like, OK, GCC is the place to be high income, great penetration, great return on investment. You know, scaling is the next level of scale. Then came, of course, you know, UK and Europe and then Southeast Asia. So each one actually started with the client saying, let's go there.
00:51:47
Speaker
And we were just, okay, let's go there. Now we're doing Brazil, we're starting South Africa. So these are all over time. We've added things over time. Europe just started last year. Now we're accelerating it. We're planning to go live in Brazil next year. So these are all things we've listened and learned of.
00:52:05
Speaker
What's the process of opening a country like, say, Brazil? Oh, it's a long process. It's a long process. So you, first of all, have to understand the compliance of the region, right? That's the biggest challenge. When you're there, the kind of operation support you need, the local government, you know, the volatility of the market, like, for example, right?
00:52:25
Speaker
The currency is very volatile, extremely volatile. So we do a different model. We have a partnership model there. So it's like you determine on the currency, on the growth, on the internet penetration, on the e-commerce penetration. All of these are vital in the political ecosystems as well. Because you don't want policies to change just like that and you get it.
00:52:47
Speaker
So, several of those things are important. It takes about a good eight to 12 months of research and due diligence to enter a new market. But it starts with company registration, compliances, you know, setting up a partnership with 3PL. So, it's a long process. So, that's why it's not like an overnight whim of going and entering a market. South Africa has been almost now 18 months when we've been doing due diligence on the market and now we've been planning to enter it. Residence has been more than two years.
00:53:14
Speaker
Do you handle last month delivery for all your brands or is it Amazon fulfillment? No, it's the marketplace. So there are two models actually. So the marketplace takes care of the marketplace fulfillment. So if it's Amazon, Walmart, eBay, you would pick it up from our warehouse and then we kind of ship it. In most of the places we sell a flex. Sell a flex means that our warehouses are kind of compliant with the standard of operations that these marketplaces require and we kind of fulfill that.
00:53:43
Speaker
When we do D2C fulfillment, which is also a pretty large chunk of our business, is the local full-service partner. It can be Aramax and GCC, FedEx and UPS in the US. We work with a ship rocket in India, delivery, depending on the job reviews, shipper in CSO. Depending on the job reviews and the type of channel where we are fulfilling for, it's either Amazon or the marketplace full-service, or it's the local partner that we already have an affiliation with.
00:54:12
Speaker
So this local partner would be an e-commerce sales agency? No, the local partner is a logistics partner, like an RMX or FedEx. No, no, we don't work with any agents. Okay, got it. There are only two left, either the marketplace, a scientist is between and the third part is a logistics partner. That can be Amazon or that can be RMX.
00:54:36
Speaker
Okay, you said you have a B2B logistics, what is that? Yes, we do. So we basically have ship with assignments where we already have existing partnership with all of the big logistics partner that we talked about. So a lot of times when you are doing an exporter, the paperwork is a nightmare.
00:54:54
Speaker
whether you're doing from India or US either way right in or out so for brands it becomes a big big big challenge to do with themselves so we've built over time it's taken almost three years for us to build this product in a platform where they can use our platform to choose a shipping you know partner depending on the region where the shipper has the highest penetration and all the paperwork is automated they just have to print the shipping label put it on their box and ship it so which we
00:55:21
Speaker
If a brand has to ship their products from India to GCC, they go on to ship with the siters, finish all of it. And it's less than 10 minutes. They can finish, just print the label and done. And we have something very unique, which a lot of people, we give you data on an ongoing basis for you to understand, you know, which maybe you need to optimize your shipping. Maybe C is better than, you know, air because you're doing the volume and where your cost efficiencies lie. So we give that level of intelligence so that they can work on their better.
00:55:49
Speaker
And this again came from customers asking you for it.
00:55:53
Speaker
Absolutely. I'm telling you, we are a customer-led, customer-funded, and a customer, you know, in, I would say our innovation partners are our customers, right? Complete end
Lean Growth and Profitability without VC Funding
00:56:04
Speaker
-to-end. We're super grateful that when we raised our series, we had some phenomenal, you know, investors who believed in us, but that money is going for scale. So we've never burned, we're never burned. We are insanely, we're pack positive from the second year of our operation. From the last four years, we've been a pack positive.
00:56:21
Speaker
So we were very reluctant to raise, you know, without being prudent. So when we wanted to raise was because Cloud 10 exited and we wanted to make the market fair. So, yeah. Now, in short, it's turning. You listen to them, they're the best teachers. Pat, possibly same as Ebita positive.
00:56:38
Speaker
No, they're not the same. It's a beautiful thing about, you know, accounting. Every time you're earning before tax amortization, what you're left with, sometimes you're very a bit positive. After that, you're left with zero. All of the taxes are after everything paid, we still have money in the bank. Okay.
00:56:58
Speaker
Okay, so taxes could be the difference between profit and no profit, basically. An amortization. So a lot of times, people are amortizing a lot of things, right? That's why earning before taxes mean you have a million dollars. Okay, after everything you're left with minus, you know, $20,000, then you're not an act worthy. Got it. Basically, you have to own a tax.
00:57:23
Speaker
Okay, so EBITDA is more of a vanity number. Okay, okay. And as I say, there are two worlds that exist in the world of entrepreneurship. Dhanda world, the old school world, which is the tatas and the bildas of the world, which is I follow, and me paisa kitna hai, versus the world, which is about valuation, which I do not follow, because it means nothing. It's only, like you said, a beautiful metric to get more money. And that's not what I'm...
00:57:54
Speaker
When you started the health supplement business, you used Amazon's open APIs to tell you what to build and sell. Did that come useful here also? Did you go out to a supply because you knew that what supply is offering will sell, that there is a demand for it? 100%. I always say this.
00:58:23
Speaker
Like I told you right, Amazon, eBay, Walmart, Flipkart, they are your best teachers because they are the closest to your customer, right? They know who the customer is and what the data is available. If you are smart enough, you know how to utilize the data for efficiency and care.
00:58:38
Speaker
We of course knew. Given that I Soul Health supplement myself, I knew Cipla Health will do very, very well. And the thing was, it has a brand, it has a recall. So you always want to go after not reinventing the wheel, after optimizing and monetizing on existing brand recall. And that's what we worked with, right? People weren't looking for those keywords. Cipla had those products and they had the brand value. So it was a
00:59:03
Speaker
Did you make any bad calls where you took because so the thing is 100% made a lot of bad calls. And that's all I'm saying, you know, it's, it's, it's, I told you, right. It's from the know it all to wanting to fix it all kind of attitude.
00:59:22
Speaker
When you are doing well, and we started with enterprises, we thought we would do a great job with D2C. Because I came from the D2C pack. But I forgot, Indian D2C.
00:59:35
Speaker
are all about the money that they raise. Most of them have no value. They lack quality. They lack long-term value. They lack the ability to go global. They cannot compete with the brands that already exist. Of course, India was a late rumor in the D2C revolution. There are some phenomenal brands, because I've invested in them. I know that they're phenomenal. But still, if you see for them to grow cross-border,
00:59:57
Speaker
is not going to work. So I'm a big fan of it, because what both did was they knew the value, and they monetized on the value. And they understood that India is a price-sensitive market, and they went after that. But there are certain brands that are just not a fan of, and I know they're good. So the lesson that I learned was that just because I'm doing well in one segment doesn't mean I'm doing well in the other. We wasted a lot of our time and energy trying to scale this brand. We didn't have it.
01:00:27
Speaker
So those were the bad comments. And then we quickly learned from that. And we said, no, we're going to stay true to what we understand, which is enterprise as an SME. Also, be a part of the larger vision. Let them acquire the D2C brands, et cetera, but not try to scale these D2C brands, especially from India. It's a phenomenal D2C brand. We work from Israel and the US and all that. The mindset is very different actually.
01:00:51
Speaker
The other thing is, I thought that because we did very well in the US, we could do it. The mindset is great. So, learning, those are bad thoughts, right? And then I realized that, you know what, I'm not going to, you know, I'm going to, what do you call it, delegate those decisions to experts that we hired in the team to debate, deliberate, discuss, and then decide. So, we have this formula, we say the 4D, all crosses, and then we decide.
01:01:17
Speaker
Interesting. So what you're saying is you went after these D2C brands, like say Mama Earth and similar brands, for cross-border. Like Mama Earth is already doing D2C in India, which means they don't need you for e-commerce, right? I mean D2C is essentially e-commerce. So you were offering them a cross-border, which did not work out for Indian brands going cross-border.
01:01:39
Speaker
Yeah, so I wouldn't take Mama or Arnold as an example, but there are other brands, like for example, there are many brands which are phenomenal in India, because also the compliances are simpler in India. When you want to take them outside, it requires a lot of investment, it requires a lot of capital exposure, which they can't take. Also remember, let me segregate that every brand is D2C, every brand that sells direct to consumer is D2C.
01:02:03
Speaker
What we mean by in the D2C parlance of India is the young brands trying to disrupt the consumer market. So they can be single brand, single rescue, single domain. Some is doing sexual awareness. Some is doing pet care. Some is doing food. It is very complicated. Unless you have a diverse portfolio, you cannot monetize. So they need money constantly to support their people. So they're great for India, but you can't take the process.
01:02:29
Speaker
Because it requires a different tenacity and a different... I would say also the money backing, right? Means you work with a big giant, they will be happy to get the market share by burning for the next two years. It's not going to happen. In Indian, right? Young, that's the challenge.
01:02:47
Speaker
Why does a D2C brand need money constantly? And you're saying that because they don't have enough SKUs, what is the connection here? It's not just one, just not, that's not one. So first thing is, remember, when you are, let me put it this way, right? Now, think about a man, like a condom brand, right? How many years of mankind be in operation? 20, 30, yeah. Decades, a couple of decades, right? What do they have? They have market share. Now, you're a young condom company.
01:03:16
Speaker
Who are you head on competing with? Somebody owns the market share. He's going to eat you up. So what do you need? You need money for marketing. You need money for production optimization. None of these D2C brands own their own factories, except for one owner. And where have they got the car factory from? By taking money from investors.
01:03:36
Speaker
What you're doing is see the landscape. You're competing with the giants. To compete with the giants, you need that kind of influx of capital. The reason both did so well is because the ones that they were competing with were all external companies. So there was a story and an ethos and that's what I know. He knew what he was doing and what he was capturing and where the gap was.
01:03:58
Speaker
When you're competing with existing giants like a mankind or a Glenmark or a Aitua, they will eat you up. Why would they give away their market share? So what do you need? The deep pockets.
01:04:11
Speaker
It's a game of marketing. You need money to manage marketing. Where are you going to get it from? Investors. So you are going after the same capital and there are 20 companies, same product. Where is innovation? The other thing is innovation. These giants have a R&D facility, sitting and innovating and filing patents. What are you competing with? Innovations. You don't have money for marketing. You don't have money for innovation. What are you going to do?
01:04:34
Speaker
Got it, got it. You yourself were a D2C founder in the US where you built up profitably brands which had, I think what you said is that there was a need for it, but not enough catalog for it, right? That customers were searching for it, but the catalog on e-covers was not there. So I'm sure there would be such brands in India also. I would say this, right? Your life is your best teacher. Where did I start my companies? All in US, not in India.
01:05:05
Speaker
What is the difference, Akshay, between US and India? The pricing. One is a quantity and a price-sensitive market. The other is a quality-sensitive market. The double standard is in the ecosystem. Not me as a firm. I'm smart enough to know and what works. I'm not going to waste my time. That's what I said. I work with D2C brands in US because they
01:05:29
Speaker
of the vision, the money, the scheme, the growth. The other thing, I don't take others' money to work. I put my own money to build that company. So nobody can question me what I did with it. But when you're taking money from others, accountability comes in. Action becomes more what you call it. Your focus towards action becomes more thought through, right? Now, question is the last part.
01:05:53
Speaker
What did I go after and you answered it? I went after a segment that had high demand and low penetration. Do you think there are brands in India that are doing it? And even if they do, what are they competing with?
01:06:05
Speaker
I see. To make the product, if I saw it implicitly in India, I would have been a failure from day one. Who would have paid $19.99 for a bottle of $60? It would have been $400. So I chose a market where I could make money.
01:06:24
Speaker
The theory when you say, why are unions so successful outside is because they know your value and work. Simple. And let's understand something. There is something called as nation building and being nationalistic, and there is something called as being prudent and pragmatic. I choose the name. I love my country, but I know what works and what works. I'm not here to disrupt something. And like I said, a true entrepreneur doesn't try to change the world. A true entrepreneur tries to change a small low hanging to optimize and scale the world. That is a smart thing.
01:06:53
Speaker
Amazing, amazing. So what you're saying is that fundamentally Indian D2C is not... I mean, these are all companies which eventually will get acquired and that's how they'll reach scale, like when an FMCG company...
01:07:10
Speaker
Either you are a bot, which to me is the best D2C brand that we have ever produced. Smart, fruit, pragmatic, went after low-hanging. Consumer Electronics is a monthly recurring need because you are okay to give away a headphone and buy it again.
01:07:30
Speaker
They went after what need is, you know, they went after what I did in US, right? Then there are brands that wanted to be a part of what you call, let's say, you know, let's all wash our hands. You know, it doesn't work. You can get a Ganga if once can kind of, you know, flood you away also.
01:07:47
Speaker
But the point is very simple. What do you ask? There are some great leadership rights. I love snort farms. I think it kind of went after a very, very good segment, which is mothers wanting to give their children good quality food. And their quality is phenomenal. The second thing that you ask.
01:08:04
Speaker
I think some of the founders were super smart. They built because they wanted to get acquired. Like I did, built to exit. There's nothing wrong in that. They were not all looking to go IPO, right? They were looking that I make a good exit. And you know, there are enough stories of exit that has happened over the years. Indurama is getting acquired by Cipla, Oziba getting acquired by UNID.
01:08:25
Speaker
There are smart, amazing stories. But I give kudos to those founders because they were building to exit. They at least know what their modus operandi and exit plan is. But those that are thinking, oh my God, I'm going to change the world, sitting in India is not going to happen. So there are some great examples, and I think that is enough.
01:08:42
Speaker
It's been 10 years. If we had produced a boat and a surf pump and a new zebra and then a duramas, I think we've done a good job. So I don't think India's in a bad state. The US has taken many years to get there. It's just that some of the new age brands that are trying here, I think entrepreneurship has become more of, Oh, you know what? It's fancy. Sounds sexy. Let's do it. And that is the problem.
01:09:05
Speaker
Correct. Interesting. Okay. So coming back to Sidus, you said you have a couple of patented technologies. It's in pending. So we are, you know, one is coming this year, the other one is early next year. So we have, yeah, so why I wanted to correct because, you know, we haven't got the patent yet, it's patent pending, the application is already updated. But in USPQ, the way it works is after your application is accepted, there's still a process that people want to
01:09:34
Speaker
risk concerns, et cetera, because the patent gets granted for a 10-year period. So yeah, so that's kind of it. I'll let you ask the question. What are these technologies? Yeah, so without dwelling too much into it, the first is the entire stack of from, you know, from listing automation to the fulfillment delivery with multiple marketplaces that we have built is first of its kind.
01:10:00
Speaker
We have a patent for ship with a CIDUS. So we basically have a multi-platform patent for that in terms of the automation of what we have. The third one that we have filed is the data in terms of what happens is we do predictive analytics on inventory planning and fulfillment, et cetera, which is over time become super strong because we use machine learning. So that entire innovation is something that sits at the back end as an operating system that enables the rest of the system.
01:10:28
Speaker
So your first one is when you onboard a brand, there is a way for the brand to choose that I want to sell in these five countries.
01:10:40
Speaker
can tell you if they are the right countries for you or not. So it can actually help you identify based on SKU. Imagine it can even tell the brand that you have, it leads the label and tells you, so that's where we use AI, tells you, this ingredient is a bad ingredient in this region. You can't sell it. So you can't sell it as Tostra Mustard or Ashwagandhar, Shilajit, GCC without taking special approval. So it can even tell you that so you don't waste your time.
01:11:09
Speaker
Amazing.
Tech Stack and Operational Excellence in E-Commerce
01:11:10
Speaker
Amazing. So like the journey of a brand from deciding to work with a side is still going live on e-commerce platform. That journey is what you have created like a process flow. Okay. Okay. Okay. Back in how the engine talks to the different streams, how the data flows, it's basically an algorithm around it that we have.
01:11:34
Speaker
How does it happen? Like if a brand comes to you and then this go live on e-commerce platforms, what's the journey in between?
01:11:42
Speaker
So first is we do the seller qualify, right? We decide which SKUs. Once we have decided that, we give them a projection. Again, the machine over time has enough data to predict what we can send along with what we get. Once that is done, we give them the purchase order that supplies the goods to us. And after that, we have a listing automation platform where you can upload one CSV file and you can give publish across multiple countries and marketplaces in less than three minutes. Once that happens, then optimization happens. That's where the management intervention comes.
01:12:11
Speaker
So while the machine does the upload and tells you that this is the right way to list, but you have to have a human intervention where it tells you, should I accept or should I decline? That's the only human interference we have. And then after that, as the orders start blowing in, basically, the closest warehouse based on the customer's Bitcoin will identify the order from which platform warehouse should be.
01:12:36
Speaker
The logistics partner comes in twice a day. It takes the ownership. Everything happens in less than 48 hours. And then you, if you're the brand, you sit just like you are right now, log into the dashboard and watch the line of data on what is happening. Whether I'm selling in Japan or Singapore or Europe or UK or US, you know exactly how many units, how much of sales, fulfillment data, cost of fulfillment.
01:13:04
Speaker
Because we run the apps, you get to see keywords we have been on. So we'll give you full transparency. And then if you want to change the pricing, you can play around with it. The goal is it's still your baby. I'm the caretaker. It's a joint. You don't lose control on your baby, but you also need me as a governance to take care of your baby. So that's the whole idea because you don't have the time.
01:13:26
Speaker
Okay, interesting. How does the product get to different countries? Like if they want to start selling in five different countries. So you will place a purchase order and then you will through the... It depends on the brand. Yeah, it depends on the brand. So either the brand can ship the products to us directly into the country and to our warehouse so that they get the, you know, the export benefit or we can be the exporter and importer on record.
01:13:51
Speaker
Okay, so you buy it in the country of origin and then you export it as one option? That is one way. The second is a brand like for example, somebody like a Unilever, you know, they're international, they can give you anywhere the products and then you start selling. Yeah, it depends. We have the full flexibility. We allow the
01:14:09
Speaker
Okay, interesting. Okay, got it. How do you do cataloging in an automated way? Is there an API? One of them has an API. A catalog is an API, of course. So if you hear all these...
01:14:24
Speaker
SaaS products that were built to do cantaloules because they give you API, right? So the thing is we are not a SaaS product. We don't sell the product. We sell, we are kind of, you know, a platform as a service, a PaaS. So we kind of use the APIs, which is already integrated into the OMS, WMS, kind of build everything.
01:14:43
Speaker
OK, so something like, say, a uni-commerce, which is a SaaS platform for managing your e-commerce sales. So they have an API through which they do the catalog creation and all of a sudden. OK. OK. Got it. OK. OK. That's clear to me. So you also spoke of an analytics product. Can you just spend a minute on that? What does that do? Absolutely. So we have like a seller hub. So that's what I said. As a brand, you can log.
01:15:09
Speaker
and see what is happening with your brand at an SKU level in multiple countries and marketplaces, one uniform analytics. So it's like a unified dashboard, no matter if it's your G2C store, can be shopped by any other store, or your Amazon, or your Walmart, or your Flipkart.
01:15:27
Speaker
So whatever sales, whatever market basket, repeat purchase, PE code, where is the highest? Imagine you can even figure out, maybe you didn't even know that Calcutta has the highest concentration of customers buying your products. So you want to do a retail activation.
01:15:42
Speaker
So now we've changed the secondary data to become the primary method for doing offline activation. So imagine how we have turned it in the red, right? So that's online. So you can see it live. So you have the confidence that nobody's around with your brand. There's no manipulation of data. Okay. Interesting. You also, like you spoke of some companies using this data for deciding on acquisition targets. So you sell this data access as a service, like
01:16:12
Speaker
Yes. So we don't just send it for acquisition, but it's our own platform as a service, right? So when they're signing on to our platform, they already subscribe to it, and it is only for our clients. We don't send it outside. So it's for a client. Only when you're a client of us, either do you have access to it also, that way we're protecting you from any kind of data leakage, et cetera.
01:16:34
Speaker
So we are giving the client or the brand access to this on a subscription level. It can be a monthly or yearly subscription. And because they see the market basket and their repeat purchase, and there's a lot of other data on the scene, on the entire basket of sale, they get to see repeat purchase and they know the market basket and they know brands to go after because if somebody is buying Oreo with your milk regularly, then maybe this is a great acquisition.
01:17:01
Speaker
Okay, so the e-commerce companies share the entire cart with you when somebody is checking out.
01:17:11
Speaker
Oh, yeah, absolutely. You have to know. We're in the fourth movement arm, right? Except for the logistics, the warehouse, it's fulfilling products. So this is like the cart of products that you are managing, not the cart of the customer. Like you might be buying 10 things out of which five things are being managed through a side as the other five or not. So you'll come to know those five.
01:17:31
Speaker
But you know, you can look at the full cart.
E-Commerce Fulfillment and Brand Strategies
01:17:35
Speaker
So basically, Akshay, you go to Amazon. You are picking up a Cipla product and along with that you buy another brand's product. When both the sellers get whichever the brand, the other seller is versus an us, whichever whoever gets, they see the full order, I will fulfill Cipla and the other brand, that's how it works.
01:17:55
Speaker
Ah, amazing. So that's very, very rich data, which you have then. Yeah, of course. Amazing, amazing, amazing. OK, got it. Cool. So why would a Unilever not want to do this in-house? Because eventually, I'm sure Unilever will realize that this would become sizable. Maybe one third of the sales would happen through e-commerce one day. And today, it might be a single-digit percentage, but the trend is
01:18:24
Speaker
is definitely there that one day, one third of the sales will be through e-commerce. Why would they not do this in-house when everything else they're doing in-house? Like all the other channels they do in-house, why would they not do this channel in-house? So there are three paths to this question. The first path, why has UNIT ever not become a warlord?
01:18:43
Speaker
Have you ever wondered why does Unilever products sell on Walmart and why did Unilever decide to not become a Walmart? The first thing is compliance and regulation. It's a competition law, right? The second thing is why would they get a Microsoft license like thousands of employees globally or SAP or anything like that?
01:19:01
Speaker
The second answer is it's called focus on your core and optimize everything else through the experts, right? The reason multiple companies over time has come and evolved is because everybody wants to push on their if they want to do it all, then they will never be able to bring build a healthy bottom line. It is called the economics of scale. The third part is Unilever doesn't do it all. That's why they have a distributor
01:19:27
Speaker
They create, it is the retail distributor that takes the product to the wholesaler and the engineer. No matter what you do, Unilever will always find a way to make their product bottom line more healthy and profitable and have an expert manage the entire supply chain so that they can focus on their core, which is building and buying products.
01:19:49
Speaker
So offline is already happening
Exploring Offline Distribution Opportunities
01:19:53
Speaker
like this. There is a person in the middle who is... Distribution, as I started the podcast by telling you, distribution is a 300-year-old industry. That's why I quit my brands and started this because this was a given demand. We just had to figure out a way to automate optimisation. It's never going to go away.
01:20:13
Speaker
Right, right. Interesting. Do you see an opportunity of getting into offline distribution? Because I think offline distribution is totally unorganized, right? I mean, there's no large player there. These are like each region would have one, you know, like Delhi White House. I think each region will always have that because again, there are laws governing laws that kind of manage it. Offline distribution is a different giant by itself.
01:20:38
Speaker
Of course, in future, you know, we definitely consider Omnichannel to partner with offline distributor because we get exclusivity for most of the brands we work with and when we get them into a region, we can still control the online and the offline distributors can buy from us, but we'll never become offline. Because, remember, brands work with us for data.
01:20:58
Speaker
you can't manage data there. So when I fulfill the purchase order for the offline distributor, I will know that this is the demand I've generated, and that's where the data will end. You can't be on that. Also, Akshay, why to buy it more than you can choose?
Global Market Goals and Growth Strategy
01:21:12
Speaker
This itself is a $15 trillion economy. I'm just looking to do $1 billion in GMV in the next eight years. So you're saying $15 trillion is global e-commerce market size? Yeah, for HPC. I'm just talking about HPC. That's a TAM.
01:21:28
Speaker
What's HPC, sorry? Health Personal Care Consumer. That's 15 trillion. So, even if I do 20-30 billion in the next 4-5 years, see, I am not here for valuation game like I do. I believe slow and steady wins the race.
01:21:47
Speaker
PNG is a 183-year-old company. It's low-end study. I'm not trying to change a model and trying to build it in 10 years. It's not going to happen. I want to learn, adapt, and learn, adapt, and grow. So it's a step-by-step process. I just don't want to grow. It doesn't. It's not going to happen.
01:22:04
Speaker
So we are very, very, very, very prudent. Like, you know, that's why passion and prudence should go hand in hand. I'm passionate about what I'm building, but the business is the gross. That's why we couldn't talk where we want to go. It's a step by step process. We're not looking to change or just because it sounds great on books to replace it. We want to stay profitable. That's my bottom line.
01:22:26
Speaker
Would you want to do private labels? I mean, because you've built the pipe. Never, never. You know, see, it'll improve your margin profiles.
01:22:37
Speaker
No, the thing is you never should violate the very ethos on which you build the company. The reason I exited my private label is because you can't compete with your clients. I'm not looking to become an Amazon and exploit the data of my clients and use that to build my own private label, which is against competition law. Why would any brand trust me?
01:22:57
Speaker
right? I will never do that. See, for me, business is about, it thinks it's about trust. I'm not going to go against that to make short term gains. I'm not going to lose the long term trust of my brands. And here you can, you know, it takes a lot of time to build credibility, it loses a date, you know, get out of it. So I don't want to do anything for short term gains.
01:23:21
Speaker
Got it. Okay.
Fundraising and Revenue Growth
01:23:23
Speaker
Tell me about your funding round. How much did you raise? Why did you decide to raise when you were Pat positive? We decided to raise only because of CloudTale's exit, because they left a big, big, big market share. And I thought that that's going to be like, everybody believed that that's going to be the big thing for us, because we are CloudTale into, you know, multiple other countries. So we could kind of monetize and optimize it even further. So that's why we raised the capital.
01:23:48
Speaker
Cloudtail is doing like exclusive, was doing exclusive distributor deals like Cloudtail would be the, but Cloudtail is only doing Amazon, right? So it would be different. That's what I said. That's what I said. It's Cloudtail plus into 10X, right? Because I was doing Cloudtail. I'm a Cloudtail plus multiple marketplaces for multiple geographies.
01:24:11
Speaker
Because the brands had exclusivity with Clubtel, even for Amazon, which is the biggest, you couldn't take them away. It was 1.3 billion of business they were doing. And about 200 plus million was just coming from HPC. So if you had to go after these brands, you needed deeper pockets than just the profit that you had in the bank. So we raised the money for schemes. That's the first part of your answer. Did that thesis prove true?
01:24:35
Speaker
100 percent. 100 percent. We have quadrupled our revenue, quadrupled. Absolutely. I told you Akshay, we do not do anything without betting it 100 times, if this is a correct way.
01:24:49
Speaker
So we did it. And that's why today the chairman of Ploutel sits on my advisory board. So we have had Carlos Cashwell, who invented the concept of like, you know, Thrasieu is the first parent of aggregation. He's an investor and sits on my board, right? So we have got people who believed in it and then done it and were the founding fathers. And they said, what are you doing is amazing. We want to support you in this journey.
01:25:13
Speaker
So yeah, we vetted it, we validated it and then we went ahead. The round was a 15 million, went up to 17 and we were oversubscribed and it's been a phenomenal journey so far and we're super excited for the next few years ahead of us and yeah, like I said, slow and steady. How much did you dilute for this 17 million?
01:25:36
Speaker
For any series A founder, I own way more than anybody can imagine. So I still control, forget about majority, way more than majority of it. So yeah, that's how I'm gonna keep it. So it would be like a single digit percentage, maybe high single digit. Yeah, yeah, yeah. Amazing, amazing. Phenomenal. Okay.
Philanthropy and Personal Investments
01:25:58
Speaker
Though you could have put in your own money because you had that 20 billion. I already did put in my.
01:26:04
Speaker
I already put in my own money. Otherwise, outsiders wouldn't have been able to survive for five years. We just turned five in September. Like I said, I have always believed if you can't put your skin in the game, don't expect to take anything from anyone. It just doesn't work. This is the first time you're raising external capital.
01:26:26
Speaker
you could have continued to fund it through your own kitty, or was your kitty... No, so I had a substantial amount of my kitty that I had already kind of, like I told you, managed life, you know, I had a lot of other investments. Also, me and my dad run a charitable foundation together, which works with Ramakrishna Mission, various other, you know, institutions to support education for underprivileged women.
01:26:55
Speaker
And I've always been a philanthropist at a very young age also because I believe that without giving back, you never get back anything. So a pretty large sum was put there because we don't raise external money in the foundation. We put in whatever from the family we can to support because that's what I believe in. That's the right way to give back.
01:27:15
Speaker
And I'm an LB in a lot of funds. I've invested in a lot of startups. So there was one part of the capital that was kept for that. And later was, of course, for my own investments, et cetera. So I'd already invested a substantial amount of my own money into the company, where I felt that this was enough. So we had a lot of investor interest. We wanted to kind of get the right strategic investor and build a good sounding partnership, which is you will not get good people to come in if they don't have a little bit of skin.
01:27:45
Speaker
So we got the good people. And they're all experts in the industry that they are. They're coming. So that's something which was essential for us to go to the next level. We need the good people to guide us to the next level. So yeah. All right. Amazing. Are you still an active investor? Can listeners of the show send you their pictures? Oh, 100%. 100%. I'm very much an active investor. What's your thesis? What kind of businesses do you invest in? What are your figures?
01:28:11
Speaker
You know, one, D2C brands, new age, you know, segments that have not been explored before. And the good thing is when we invest, we also kind of try to help the brand accelerate, get the right accesses, et cetera. I invest a lot in FinTech, a big area that I'm super, super bullish about because that's a no-brainer again. What within FinTech, like lending? Cross-border lending.
01:28:36
Speaker
Green, green, cross-border payments. Huge, huge, huge area. Lending is a huge area. Some pushover bullish about that. My one core thesis is that I do not touch a company that at least doesn't have one woman profile. You know, if you do not have the extra X chromosome, which women have, we have two X's. I don't think a man, a lot of the failures are actually just men led company with all due respect. So have a woman's balance.
01:29:04
Speaker
Again, you never know. I'll tell you something, Akshay. It's more than what meets the eye. I cannot disclose about those things on the channel. I have myself seen a lot of ugly side to this industry when I was raising my capital. There's no smoke without fire.
01:29:25
Speaker
Let's just put it this way, that there was one Zilingo, but there are 100 others, you see the Baidu's of the world. Then why do we only glorify that one woman? That we don't know what actually went wrong, right? Sometimes it is the reality of life. Let's just take it that way. So what I would say is that, you know,
01:29:42
Speaker
That's one of the pieces that I have. The other is really a tick. I think that's a huge opportunity. Content is the king. You're doing anything disrupting AI, generative AI. I am super-duper passionate. No bullshit. No, not on paper that, oh, I'm going to do, blah, blah, blah, AI. I say the word AI. Remember, I know the difference between AI and machine learning, so you can't sell me shit. It doesn't work. But yeah, I have a sonnet company.
01:30:06
Speaker
solving a real hardcore problem using generative AI that has a use case more than happy to support because I also try to do something actually when I invest I try to find right partners to help them get the money they need to accelerate the business when it comes to clients right so I like to help that way so those are my cases I also invest in funds so funds which are new age you know if you're a new money manager new age fund
01:30:31
Speaker
Again, doing something big, big, big on supply chain and distribution, if you're disrupting something around that, happy too. Because focus funds have done well. That's what if you see the history say.
Investment Focus and Opportunities
01:30:45
Speaker
So don't try to do it all. Rather focus on a domain and keep that focus. I'd be more than happy to do that. And what kind of tech size do you write for startups? Anywhere between 150 to I've even done a million dollars.
01:30:59
Speaker
Okay, got it. Amazing. It's the highest. All right, amazing. Do you want to share your mail ID for people who want to send you a deck or they can just go to a website and...
01:31:13
Speaker
Yes, I have, you know, Shom, so DrShomdata.com is my website. If you just go to contact us, I have a team, it's not personally me, I have a team that basically looks into it. But they're super responsive, usually get somebody, you know, the thing is interesting, no fave, they get back within 48 hours. And I also want to be absolutely honest, Akshay, I do not go into the first pitches until it has been vetted by the team, then I kind of
01:31:38
Speaker
I like to always meet the founder, have a cup of tea, not just Zoom. I'm still very old school that way. I believe until you sit across someone, you never get the vibe. So yeah, that's how it works. We don't do more than six, seven investments in a year. But those we do, we kind of want to support them to kind of scale and so on. So yeah. All right. Amazing. Cool.