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The digital brain for green energy projects | Puneet Jaggi @ Prescinto
301 Plays1 year ago
If the term climate warrior could be used to describe a startup founder, then Puneet Jaggi would be the perfect candidate for the title. Prescinto is an enterprise SaaS startup building the smart operating system for green energy projects. Puneet shares his phenomenal vision towards climate change and Prescinto’s achievements so far.
For much such interesting founder journeys, subscribe to our newsletter at www.founderthesis.com
Read more about Prescinto:-
1.PV magazine speaks to Puneet Singh Jaggi, co-founder and director of Prescinto Technologies
2. Radiance Renewables Picks Prescinto To Monitor Its Solar Assets
3.Prescinto enters European market with AI-powered PV efficiency software in Greece
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Transcript
Introduction to Precinct Technologies
00:00:00
Speaker
Hey, everyone. My name is Puneet Singh Jaghi. I'm the founder and CEO of Precinct Technologies and extremely excited to be here today.
00:00:19
Speaker
If the term climate warrior could be used to describe a startup founder, then Puneet Chagi would be the perfect candidate for the title. Puneet Chagi along with his brother Anmol Chagi are responsible for multiple green tech startups. And the first one they started straight out of college was Gensol, which is today a publicly listed solar power company.
Journey from Gensol to BlueSmart and Presinto
00:00:38
Speaker
They have since gone on to launch BlueSmart, which is an EV ride hailing startup, and Presinto, which is an enterprise SaaS startup building the smart operating system for green energy projects.
00:01:14
Speaker
and coming soon, an electric vehicle manufacturing company.
00:01:16
Speaker
I always had the entrepreneurial bug, so I was taking part in a lot of business plan competitions and winning them across the country. That gave me confidence of this particular idea more in the field of accounting and accounting regulations that I could do something.
00:01:32
Speaker
That's another one. And then, like many of my friends, I was also sitting for CAC. So I thought that maybe I'll play one of the good management institutes and probably land up there as well. So I was evaluating different options. Ultimately, it came down to, I got into shell and I was very excited about getting into shell and getting started over there.
00:01:56
Speaker
It was a great company, great culture. But what happened is that being a part of the great culture, these guys, they gave us about 100 days of between when we graduated and when they
Early Days and Evolution of Gensol
00:02:10
Speaker
started. And the idea was that, why don't you explore some topics? Why don't you explore some interesting things to do?
00:02:17
Speaker
Yeah, exactly. So my elder brother was this hungry wolf sitting on the other side of college, who was just waiting for me to join and then put me on the floor and start visiting some solar farms, some remote part of Andhra Pradesh. So yeah, I still remember I graduated end of May. And as a first of June, I was checking out solar plants and farms in different parts of the country. By the time the 100 days got over,
00:02:44
Speaker
I was so neck deep into business that there was no way I was ever looking back. The potential for knowledge gain, the potential for wealth gain, the potential for learning exposure, everything was so much as an entrepreneur by comparison that I decided to stick along for the journey.
00:03:06
Speaker
So this you're talking about Gensol, what he started in his dorm room, which today is like a publicly listed entity. That must have been a phenomenal journey of your dorm room to IPO. I would love to hear that.
00:03:22
Speaker
So, I mean, in hindsight, of course, it is all very glamorous, looks very sexy. But while you are building, and there were lots of ups and downs that we had. We were originally in the carbon markets. We were doing very well in the carbon markets. What was the original business plan or the, I mean, what was the original version one of Gensot? Like, what were you doing there?
00:03:48
Speaker
So the Virgin Man of Gensal at Anmol had started out of the dorm room, who was being a consultant to something called carbon credits. These are benefits given by United Nations to renewable energy projects in developing countries specifically. And there is a sophisticated process that you have to follow in order to get to those benefits.
00:04:10
Speaker
So what we did was that we were consultants for that sophisticated process, creating reports, submitting it to you, and getting things validated, working with ministries, and so on and so forth. But that business was very, very, worked very well for us. I think we were among the top five consulting firms in the country back then. The problem was that- Top five consulting firms in carbon space or? In carbon, exactly, in carbon space.
00:04:38
Speaker
So we grew to a team of about 120 people, had 80% market share in Western India. So lots of interesting things going our way. Who are eligible for carbon credits?
00:04:56
Speaker
This is any kind of people who are using carbon dioxide from the atmosphere. It can be renewable energy players like solar and wind players. It can also be co-generation biomass players. There's a bunch of different ways in which you could remove carbon from the atmosphere, and all of them are. OK. And there's some sort of a protocol which you follow and earn credits. And those credits are revenue sources. You can sell those credits. Correct. Absolutely. These are traded across the world and so on.
00:05:26
Speaker
What happened, however, was that after the world was hit by recession in 2008, the demand for these credits significantly came down because these credits are basically supposed to be bought by the polluters, primarily in European Union, but there was no more generation, no more industrial production, which was happening, and as a result, no more pollution. So nobody had the requirement for buying these credits.
00:05:52
Speaker
On top of that Kyoto Protocol, which is the protocol that was governing this mechanism, that was not ratified in 2011, 2012 and as a result of that, the entire mechanism collapsed.
00:06:05
Speaker
Not ratified by US? No, it was generally not ratified by UNHCCC. It did not have the support of all the nations of extending the Kyoto Protocol as is. Everybody wanted to make changes. And to be fair, there was very valid concerns.
00:06:25
Speaker
Now the thing was that considering that we had already built up a practice in that, so we had kind of doubled down on the carbon practice. So that was a slightly tumultuous time for us. The silver lining however was that in 2010 when I had joined, instead of getting into carbon, I started the solo consulting business.
Expansion into Solar Operations
00:06:45
Speaker
and solar was this thing which was I mean there was less than a thousand megawatts installed in India in 2010 so very very new sector absolutely nobody had much clue about it now when when we in fact when we went to our first customer
00:07:03
Speaker
He said that, you know, why should I be paying you? You should be paying us because you guys don't know anything. You'll be learning at my expense. And the second customer who we really signed up with, he kind of barely agreed to kind of cover up the bills that we had. And that too, after our second or third invoice, he let us go considering that he said that was kunkuthun nahi yata.
00:07:32
Speaker
This was like design services you were giving them? Design is the point. We were doing detail project reports. We were doing design engineering. We were doing project management. It's called owners engineer, lenders engineer, that kind of stuff.
00:07:47
Speaker
But by our third customer, we had understood the game a little bit and we were then able to start completing our contracts and being there and then win the fleet contracts.
00:08:01
Speaker
And it's important to note that the market at that time, the knowledge at that time for solar industry is not what it is today. Everybody understands solar like a household name today. Back then, nobody knew anything about it. So solar was equivalent to space shuttles. So that's all the solar that people cared about. So in that sense, it was a very interesting, revealing journey, learning journey for all of us.
00:08:25
Speaker
trying to sell something that you haven't got expertise in yet and then being able to somehow connect the dots, borrow knowledge and try to still deliver and to delight for the customer and then go back to the customer for the next three daughter. It was a very interesting and revealing time for us. Now, as we went along, so we pivoted from being a carbon consultant to a solar consultant.
00:08:55
Speaker
In solar consulting, then we got some scale. Eventually, we were consultants to close to 33,000 megawatts of solar projects. Considering India has about 60,000 megawatts installed, that's practically every alternate megawatt of installed project that is there in the country. From very early days where we didn't know anything, now we were
00:09:18
Speaker
doing due diligence for some of the largest funds. We were solarizing airports in foreign countries. We were designing projects which were the largest in India. Even today, we have some of the largest projects in the country, so on and
Ventures in Tech and EV Industry
00:09:34
Speaker
so forth. So it was a very
00:09:35
Speaker
very interesting journey. Does that mean that you, I mean, did you remain a consultant or did you actually start operating also and running the execution also and so on? That's a very interesting question. So what happened is that earlier we were just being consultants. That means our risk was limited to our fees, right? But it seemed that the market is growing and others are making good money by executing projects as well.
00:10:06
Speaker
So one of colleagues who was there in the business development team
00:10:12
Speaker
He said that, you know, what if I am able to get you a project of PPC to construct with same margins as you have in consulting? What is PPC, you said? PPC is project consumption project. Okay. Yeah. So when you take the order to construct the entire plant, engineering procurement and construction. Okay. Right. So you were like, okay, give it a shot. And we got a first small scale project, a 10 kilowatt project in Delhi to begin with.
00:10:40
Speaker
And we understood that it was great margins. Back then, since solar was a very nascent industry, there were not a lot of players. So we were able to get really good margins. So that was the beginning of the EPC journey for us when we started constructing solar projects for our customers.
00:11:00
Speaker
It helped our consulting business as well because we had our ears to the ground. We really understood what goes into building a project, what are the pricing or different elements, what are the warranty terms, how are you able to negotiate, right? So it really helped us. Consulting helped EPC, EPC helped consulting in that way. Now, both the consulting business and EPC business were great.
00:11:24
Speaker
So an EPC business would be like say what L&T does, right? Yes, absolutely. L&T is of course the biggest name. They are the builders of the nation. So they are huge when it comes to this. But essentially that's exactly what EPC business is.
00:11:42
Speaker
Now both consulting and EPC business were great, but we were thinking that although this is giving us good money, this is getting cash flows, we are able to get some margins, we are able to grow. But if you look at the consulting and EPC businesses, traditionally they are not very highly valued businesses. You are not able to create good valuation out of these businesses.
00:12:07
Speaker
And the reason for that is that there are two triggers to create a valuable business. One is that you need to be able to have annuity income, which means predictable long-term cash flows. Or alternatively, you need to be on a super hyper-growth kind of trajectory. So unfortunately, consulting and EPC business do not follow either of these two trajectories. Right. They can't scale like a tech business.
00:12:32
Speaker
Yeah, I mean, I used to think that, but if you would know the Jim Sol's growth over the last three years, now I have changed my views because we are growing at 3x, 4x over the last year, even an ETC business at the base of a couple of hundred crores. But that said, back then we didn't feel that, so we thought we'll get into operation and maintenance. Now, operation and maintenance was very interesting because
00:12:59
Speaker
operation maintenance is basically these projects are there for 20-25 years and you can get into maintaining of these projects and you know in putting it very colloquially it's difficult to let go of your maid who is working at your home
00:13:17
Speaker
because she knows how to get things done at your place. You know the chemistry that you will know with her or him over time.
00:13:30
Speaker
So again, if it is so difficult to get a maid out of your place, it's so much more difficult to get an operator out of your plant. There are technical eminence involved. There are remote sites. There's a lot of tribal history that you end up accumulating over a period of time. So it's a great, very, very sticky business to get into. And we double down on that. We grew to about
00:13:57
Speaker
4,000 megawatt that we manage today being the largest independent operators of solar projects in the country. And the beauty of this is that this was annuity business, which means that even if I did not sell a single megawatt more, I'll still get the income that I was getting last month only by virtue of my existing contracts. And most of these are long-term contracts because project life cycle is 25 years. So that was a great, great business, predictability of cash flows, good valuation creation business.
00:14:28
Speaker
Now, after having built Gensol, consulting, EPC, operational maintenance, something that both Amul and I realized was that, okay, now we're getting valuation as well, which is great.
00:14:42
Speaker
but we have put up a team which is 800 people strong. When is this? Which year? When you hit
Gensol's IPO Journey
00:14:49
Speaker
800. I think this is until about four years back or so when we were close to about 800 people. Okay, 17-18. Yes. Right? And so we have already built that team and the thing is that we are getting about say 100.corros of revenue which is amazing.
00:15:07
Speaker
And what was the split for that 100 course? How much from EPC? How much from operations and maintenance? How much from consulting? Rough split. I think it would be probably 50% from EPC, 30, 40% from consulting, sorry, from O&M and another 10, 15% from consulting, something like that. Right? So we thought that what do we do now? Because the problem that we had started to face is that
00:15:32
Speaker
800 people is equal to 100 crores, but all of these three businesses are very headcount-dependent, very manpower-dependent businesses, which means that if you want to become from 100 crore to 300 crore company, you have to go from 800 people to 2,500 people.
00:15:48
Speaker
Now, with all due respect to the large industries in the world who employ a large amount of workforce, it seemed to be a path which had a lot of friction. It seemed to be a path which was going to be slower and that we won't be able to grow at 3x space or 2x space year on year with this friction.
00:16:13
Speaker
We decided that what is that one thing where friction is not there or where your growth is not linked to headcount and technology was the answer. So we want to do something in the field of technology. There were two opportunities. One was in the traditional business that we were doing which was solar and renewable energy and which was B2B building a software for this industry.
00:16:36
Speaker
And there are more of other business reasons why we want to do that. The other is that we were very fortunate to get into the carbon industry when carbon industry was young. We were fortunate to get into the solar industry when solar industry was young. And then at that point in 2017, 2018, the EV industry was very young.
00:16:57
Speaker
So we said that we'll do something in the electric vehicle industry as well. Now the rest is history. I've already talked to one more, so you know about it. But we started with 15 cars in electric vehicle that we did not know what we were going to do with it. And today that 15 car fleet is a 3000 car fleet in Delhi and Bangalore. And it's one of the most loved electric vehicle brands, cab brands that is there in the country.
00:17:22
Speaker
And on the flip side, on the other side, we focus on B2B, B2B SAS with Presento, which is basically we put in all our domain expertise that we had so far, and we tried to build a tool to improve performance of solar projects to begin with, but now also wind and energy storage projects across the world. So that was the reason why we got into the tech fields. And as they say, the rest is history.
00:17:52
Speaker
We are very fortunate today that Blue is doing tremendously well. Presento is growing at 3x every year. Gensol is growing at 3x every year. The stock is up to 1,500% since last year. Parham, which is the operation and maintenance business,
00:18:13
Speaker
that business has grown 60% last year alone and now going international. So we're very fortunate that God has really blessed us with respect to almost all our businesses and we have got a fairly good grounding beneath our feet now. So when did the IPO happen?
00:18:33
Speaker
This is about three years back that we did IPO. What was the trigger to do an IPO? Why did you want to go down that route? What was that experience like, that journey of listing?
00:18:52
Speaker
There were two elements of it. I think one was that we wanted to raise capital and we were evaluating different ways to raise capital. IPO seemed like one of the ways to raise capital. What did you want capital for?
00:19:05
Speaker
Our growth, I mean, we wanted to grow an EPC. We want to get working capital for our EPC business. We also wanted to figure out international markets with respect to our consulting. We wanted to grow the O&M business as well. So it was primarily meant for growth that we wanted the capital. But you could have, there were three sources, VCs, PEs, or maybe debt, and getting more equity through IPO.
00:19:34
Speaker
So one was evaluating our options. We felt that IPO could be a real option for us. And that time the whole SME listing was just picking up and Bombay Stock Exchange was very bullish on its SME listing that had a couple of good experiences in the past as well.
00:19:52
Speaker
So, and then there was an emotional element amongst all of this that every entrepreneur wants to see the name of his company on the ticker, going around the screen, right? So there's this emotional, there is sometimes, some days it will be green, hopefully more green than red, but that's a different thrill and a dream to every entrepreneur. So we also had that dream. Went through the process in hindsight, I mean,
00:20:20
Speaker
The process of going through the IPO was actually much more difficult and much more wrong than what we had initially envisaged. But that said,
00:20:33
Speaker
Having learned what we have learned and having given the returns to our investors and shareholders who trusted us, I wouldn't want to change a single thing going back in. I would still want to go through that tough route, but being able to get this journey. Now, the next ambition is to do this in international markets as well.
00:20:54
Speaker
Wow, amazing. So what would like some of your learnings from that IPO process, like you know, advice to other people who are considering IPOs? Well, first and foremost, I think you need to be mentally prepared with the volatilities of the market.
00:21:13
Speaker
You need to be mentally prepared to get into scrutiny of every person who has a single share of your company because you owe an explanation to them. They have bought into your dream, they have bought into your company and you owe each and every one of them an explanation for the investment and trust that they have put in you.
00:21:38
Speaker
Another thing is going to be, this is not quick and easy money. This is something that will permanently get tied to your reputation. Do not get into it.
00:21:54
Speaker
thinking it's easy, it's simple. Please get into it with your full commitment and with the full awareness and knowledge that this is going to become a long-term play and not a short-term play.
00:22:10
Speaker
But if you are prepared for the journey, this is one of the most rewarding journeys that you will ever get in your life. As I said, having gone through the rigors of it, I will still not change a single day.
00:22:27
Speaker
And so you listed first on the SME platform and are you still on the SME platform or do you move to the main platform? Yes, we are still on the SME platform. We listed with a larger lot size, now it's a smaller lot size but that's still on the SME platform and there are some conditions that one has to meet before they kind of migrate to the main board. Now we are we have done with most of the conditions so hopefully soon we should be on the main board as well.
00:22:53
Speaker
Here's a quick update for our listeners. Jen Saul was listed on the main board after we recorded this episode. Main board would have more liquidity and I think the ticket size is also much smaller. Like in SMEs there's a minimum lot size mandatory. Correct. Correct. So the liquidity is much higher. The rules of capital are much more deeper. You are able to
00:23:18
Speaker
have a lot more credibility by even main board into the SME board. I mean, that's it. There's a fair bit of liquidity, at least in our stock. So we are aware that, you know, it's not too bad being an SME, but as I said, main board is just where the big fish are. So it's pretty good.
00:23:38
Speaker
Yeah, that's when you know, like I guess mutual funds and institutional investors also start investing in the stock and right.
BlueSmart's Strategic Success
00:23:46
Speaker
Correct. I mean, we were fortunate that in the preferential round that we did very recently in general, we were able to get institutions as well. But that said, it's a lot more easier to get institutions when you're in the main role. Right, right, right. Okay. Okay. And so what was your role in blue? Were you actively involved in that or was that mostly at all doing it?
00:24:08
Speaker
So initial stage of almost every business, everybody ends up doing everything. So we don't really have got well-made job descriptions, but Blue was largely in moles baby and then Spuneet Goyal is co-founder. And then there are other team members who came by and joined the C. So I guess my biggest contribution to Blue over the years has been that the CEO and CTO of Blue are one batch college juniors of mine.
00:24:36
Speaker
I was able to get them to join us in the initial stages of the company and these are two very fine engineers, operational marketing genius, one of them the other is a tech genius. So that's I guess my largest contribution and my calling to anybody in blue. But that said, I think it's come off page now. It has one of the most seasoned teams that is there.
00:25:01
Speaker
We've got people who are ex-Uber, we've got people who are coming from the best of the technology and mobility backgrounds. And yeah, it's a juggernaut already and it grows every day in size and love in every parameter that is of the quality.
00:25:19
Speaker
Amazing. This mobility space needs a lot of burn. Even the existing players are struggling. What made you take that bet on mobility? Especially that B2C mobility, that passenger mobility.
00:25:41
Speaker
So there were a couple of things and I would be wrong to say that we had it all figured out on day zero. It was not that we started that, this is okay, this is our market research, this is the 1000 day plan and this is how we'll be able to become a billion dollar company. It wasn't like that. So there were a lot of iterations, hit and trials. We got lucky a bunch of times. But there were a few foundational pieces on which the business got based.
00:26:10
Speaker
One foundational piece was that we always wanted to be in B2C and not in B2B. And the reason for that was that when it comes to B2B, knowing from our own experience of doing B2B businesses over the last 10 years, beyond the point, it will always be a race to the bottom.
00:26:27
Speaker
If your services are same as your competitors or the differentiation is not very huge, it's going to come down to the best possible pricing and ultimately transportation is a utility business. So we did not want to get into that. We did not want to
00:26:46
Speaker
He wrote all the value away. So although B2B seemed like the most logical segment for electric vehicles, yet we were very clear that we wanted to be into the B2C space, wherein our relationship is directly with the customer. And it's not a matter of getting into RFQs and procurement cycles of large businesses and companies. That was one part. The other element that we got very right very early on
00:27:13
Speaker
is that within our space, we are probably amongst a few companies or the only company which pioneered the model of decoupling asset ownership from the driver. So in blue, the cars are not owned by the drivers and this is of amazing consequence and significance.
00:27:37
Speaker
All the problems that you have today, Bola, Uber, much bigger brothers than us, much larger companies, the problems of cancellations, the problems of cars which are not as well maintained, the problem that the driver is going to ask that, why don't you give me a direct ride instead of trying to book it through the app. A lot of those reasons are because people are just trying to get their ends meet.
00:28:06
Speaker
Unfortunately, the drivers do not come from the most elite of society strata. If they have somehow put in the money to get a car, they have taken a loan against that, that loan they are not getting at the same cost as you and I, or even corporates can get. Yeah, because they are risking for hours. Exactly.
00:28:29
Speaker
On top of that, if you look at them, they do not have the privilege of having large parking lots to keep their cars safe. They do not have the privilege to make sure that the servicing of the cars are always done right. And then when the incentives get cut or when the commissions of the tech companies increase,
00:28:50
Speaker
that leaves them hanging with even lower amount of money. And God forbid something like COVID happens and there is no option but to have the emails bounced and the cars to get impounded. So that is the reason why many of them are selective when it comes to which sectors they want to ride on or why you will see a driver who's stressed with 13, 14, 16 hours of driving straight, why you will see them not switching on the AC.
00:29:20
Speaker
But fundamentally, as a human being, nobody wants to give a bad service. Nobody wants to earn a bad name. Everybody wants to do good. Everybody wants to take pride in their job. These are the circumstances that lead them to getting into these problems. Now, on the contrary, when you
00:29:38
Speaker
When you give them dignity of job, when you give them a uniform to wear, when you give them a dependable structure of remuneration, when you give them the respect without the burden of EMIs and car maintenance, you just see the amount of love that they have for the customer, the amount of service that they want to give. And it's absolutely amazing. It's absolutely amazing. So I guess that was one great
00:30:07
Speaker
one great insight that we got right early on and that has been a game changer. I mean people don't, even if you have to ride an electric car versus an IC engine car, maybe you will be willing to spend 5 rupees extra in a ride. But if I ask you to spend 200 rupees extra, maybe you'll also think twice, right? So there are very less people who do electric vehicles for the good of the planet. Most people
00:30:35
Speaker
need to just go from point A to point B in the most cost efficient, dependable, reliable way possible. That's the reason why people tend to love blue because it's dependable, it's reliable, it's cost efficient, it's clean, and then there is a sense of pride because you're doing good for the environment.
00:30:56
Speaker
The key difference here or your mode here is you own the cars, which allows you multiple unlocks. For one thing, you are able to get a better rate of interest than a driver would. So your cost of ownership would be lower. Second thing, EVs anyway, I think cost of ownership is lower. The running cost especially is lower. Third thing, you are able to
00:31:19
Speaker
have more influence over driver behavior because you have more power basically in that equation. So you can influence driver behavior in terms of making sure that they are wearing a uniform and things like that, which an Ola or an Uber may not have that kind of influence. So there are multiple things that went right for blue. So this is
00:31:46
Speaker
So first of all, we don't own the cars, we lease the cars. So Blue is an asset-like model. It's a tech company. It's not an asset-heavy model. That said, there is a lot more control that we are able to have on the cars because electric cars, they run for about 200 kilometers at a time nowadays,
Presinto's Technological Growth
00:32:09
Speaker
and today's commercially available cars.
00:32:11
Speaker
And we know after about 125-130 km, we would want the car to come in, but the drivers still have hours available to drive. So the driver will come in the morning, will pick a car, will drive about 120 km, get back the car to a half-deposit car, take the next car and go back again to drive. Right?
00:32:31
Speaker
Similarly, the car will get charged in about one and a half hours and will be available for the next driver to pick up. So every car gets driven twice in a day, every driver drives two cars in a day. That's the beauty of the ecosystem. Another mode that got built is that if you want to build the Uber of India, you also have to build the Indian oil of India.
00:32:52
Speaker
Because so far, the electric Uber of India, if you want to build, you also want to have to build the electric Indian oil of India. Because so far, the Ubers and Olas of the world, they have not ever lived in the constraint of fuel. There was no constraint of fuel ever. If ever fuel gets over, go to the patrol pump. It will take two minutes. Get it filled. Be on your way.
00:33:17
Speaker
But now there is a constraint of fuel involved as well. So there is this charging infra that you require and the charging infra as of today requires one and a half hours of even in case of fast charging. So you have to solve that problem. Every time that you're picking up a ride, you need to calculate what is the distance from, what is the current charge of the car? What is the distance that the passenger is at?
00:33:40
Speaker
After that, what is the destination distance? Once that type gets over, what will be the left charge? Is it going to be enough to reach the closest charging point? After reaching the charging point, is there going to be a slot available? Otherwise, should he be directed to other charging point? So on and so forth, right? So there is a very
00:33:59
Speaker
Very complicated decision making. So again, we have got some of the best engineers and technology team working at Bloom. So they have come up with some of the best algorithms to make sure that we have got great passenger ride matching that happens.
00:34:19
Speaker
And because of all of this, you know, the cards are available to people on time, they don't cancel. And more often than not, I'll say 99% of the times the customers are super happy. Amazing. And I think Blue is on the verge of a unicorn round, right? Like the next fundraise would be like a unicorn fundraise.
00:34:52
Speaker
So the standard answer that anybody who in any of our businesses that the blue or presento or public listed gensol is that our job is to create a great and valuable business.
00:35:11
Speaker
It's looking the eyes of the beholder. It's the investor's job to pay a value to that business. Our job is to create a great and valuable business. What is Gensol's valuation, like the market cap? I think it will be closer to about 1,500 crores today. Amazing. OK. So let's talk about Presento. What was the opportunity that you saw and hence started Presento?
00:35:41
Speaker
In the renewable energy world, back from 2010, when in India alone, there was less than 1,000 megawatts, and today it's about 60,000 megawatts of solar. And the example of solar is also extendable to wind, and the example of India is also extended globally. So the entire world saw a huge, huge amount of renewable energy capacity come in the last decade or so. Approximately $3 trillion of investment has gone into the sector over the last decade.
00:36:11
Speaker
But when this investment was happening, the profile of the investor was also changing. Earlier, it was people with a couple of crores or a couple of million dollars who could put in the money and get good rewards. But today, it is driven by institutional investors, very large energy companies, very large pension funds, very large sovereign wealth funds who put in money in the sector.
00:36:34
Speaker
Now, these people have got a lot less risk appetite. There are a lot more risk averse in comparison to the original set of investors that were there. And in case of solo projects, wind projects, which have put a very long life, right? They are there for 15, 20, 25 years time, if not more. The single largest risk is that you put your entire money upfront today, and then what happens if your project does not perform?
00:37:03
Speaker
I'll tell you what happens. Even if it underperforms by 10%, you end up eroding the equity that you have put in the project. If it's underperforming by 25%, you end up eroding the debt. So it will be difficult for you to repay back the loan that you have taken on the project. So that's why it's important to protect the generation and to improve the generation of the solar project. Now, although this problem was a no-brainer and very well understood,
00:37:33
Speaker
However, what we saw in the market, the different tools and digital tools that were available, we did not find them up to the mark, right? And we were trying to understand it right. So first and foremost, I mean, from wearing a consulting hat and an operator's hat, we understood that manually it's not going to be possible to figure out how to improve generation. These projects are spread across hundreds and hundreds of acres of land, or they generate millions and millions of data points every day.
00:38:01
Speaker
So it's impossible to kind of do a walkthrough audit, sit in middle of a solar plant and tell that these are the three things that you can fix and you'll be good. The reason for that is that A, it's a point in time analysis. I mean, whatever judgment you make, it's true for right now and today, one month on the line, the results will be different. The second problem is it's just not possible to cover that breadth of area, that depth of data points manually.
00:38:32
Speaker
The other angle, as has been none in the past, is you download these dumps of data over your computer, you try to figure out you are using Microsoft Excel, using Google spreadsheet, but the sheer volume of data is so high that these tools, conventional methods won't work. So you require a strong digital tool. Now, in the digital tools that we saw, particularly of American lineage, of European lineage countries, which have been more advanced than us when it came to deployment of renewables,
00:39:00
Speaker
We saw that the tools that they had developed were very good, but they were good in getting the data from the site to the screen. They were not very good at telling you where you're losing power, how you can improve generation.
00:39:12
Speaker
So that's the missing gap that we were playing towards, that's the missing gap that we wanted to fix. Now the reason why we thought they were not very effective in doing that is because it requires a certain bit of domain knowledge to be able to understand that how can you go about improving generation. And having the engineering experience behind us, having the operational experience behind us, we kind of came with very good hands-on knowledge over a decade of experience to be able to build such a tool.
00:39:40
Speaker
So that's what we double down upon. What we do is that we collect the data from the sites. We get it to our cloud. We run our data science models on the cloud, which are guided by the boundaries of our domain. And from there, we are able to give these beautiful nuggets of insights. You're losing 1,000 units of power on a certain set of panels because they are dirty, 2,000 units of power on another set of panels because they are degraded, 10,000 units on a third set of panels because the radiation was lower, et cetera, et cetera.
00:40:11
Speaker
Now these insights by themselves are very important, they are incredible, they can make a lot of impact, but that impact happens only and only once these insights are acted upon. So you have to make sure that your site crew members are nudged by these analytics and insights to take an action, right?
00:40:33
Speaker
That's where we built a sophisticated computerized maintenance management system wherein the insights get converted to job tickets or work orders and get shipped to our mobile app. The mobile app carried by the site crew member gives them a guidance that what do they need to do? Where do they need to go? What tools do they need to carry? What safety precautions do they need to take? And when they act upon those work orders, the generation goes up.
00:41:01
Speaker
So the central is today able to make an impact of about $5,000 of improved revenue per megawatt per year. And we charge less than one tenth of that. So that's why today we are deployed on 13 gigawatts across 14 countries.
00:41:16
Speaker
Wow, okay. So, essentially, presenters like the operating system of a solar power plant, like, you know, in the sense that the way you are directing people on what task needs to be done and so on, it sounds a lot like how an operating system works on a computer hardware. So, that's something that we like to call ourselves. We are an operating system for, we are the brain of a
00:41:43
Speaker
of a solar plant. In full disclosure, we started with solar, but then we got into wind, then we got into energy storage. It was a pretty amazing journey because we were led by our customers to open these new verticals for us.
00:41:57
Speaker
So, I'm guessing that your first customer must have been gensol only, right? You would have initially built and tested, refined with the gensol operational projects, which would have helped you to have a mature product before you went out to excel clients.
00:42:20
Speaker
Yeah, we were we were our own guinea pigs. So all the experiments and ourselves before we kind of started selling externally, presenters, not a very young company, it's a five year old company, the first two, three years of our business, you are just building product.
00:42:37
Speaker
which could carry its own wage, which had enough meaning for it to be attractive to third parties. And once we were able to build a product with enough depth, that's when we were able to get our first 2,000 megawatts.
Maximizing Revenue in Renewable Energy
00:42:53
Speaker
Now, that's where the magic really started to happen, because now we had the data to put data science on top of. Without data, there is no training of the model. There are no models that we can build. Nothing we can do.
00:43:04
Speaker
So that's when the real magic of machine learning, data science, artificial intelligence started playing out. And today, probably we are the most intelligent platform in the world. Wow, amazing. So I want to get a little bit more technical also. Maybe you can explain the technical stuff in a layman language. So what are the data streams which are getting captured? What all sources of data do you have?
00:43:32
Speaker
What is the interplay between them, which leads to those insights? Like you could explain with some examples if you want. Sure, sure. So, first and foremost, we need to understand that unlike the generation sources of the last decade,
00:43:50
Speaker
solar and wind and energy storage, these are very smart generation sources which are able to create a lot of data. These are quality coming equipped with a lot of smart sensors, which means that we don't have to deploy any new hardware when we go into the site.
00:44:08
Speaker
we are able to get all of this data ready-made at any solar plant, or wind plant, or storage plant that you want to go on Earth. So what happens is that Jacinto taps into the flow of data from these sensors, which is already coming. What kind of sensors? Give me some examples. What all data streams are you capturing? In case of solar power plant, let's look at that. So we have got thousands of solar panels in the solar field.
00:44:37
Speaker
You've got radiation pollen on these panels, which leads to these panels creating DC current. But you and I don't use DC current. We need AC currents at our homes, factories, and hospitals. So that's why there is an inverter in between, which converts the DC current to AC current and feeds it to the grid. The panels are done devices. They are not able to generate any data. But the inverters, they are made by GE, ABB, Schneider, large electrical and electronic prehemals.
00:45:05
Speaker
And these are able to create a lot of data. So we get all our current, voltage, frequency, all of the electrical data from these devices. On top of that, we have got weather stations, which are able to record the temperature, the radiation, the wind speeds. And then we have got smart meters, which are able to capture the amount of power that you are withdrawing from the grid or feeding into the grid.
00:45:33
Speaker
So Presenter is able to take data from all of these three different data sources and get it to the cloud. On top of that, then we are fortunate that we have been able to build a text tag that is able to integrate data from other data sources also. For example, we have got our app which is able to give us data with respect to work orders, work order completion, the location of completion, the consumption of spare parts, et cetera.
00:45:59
Speaker
then we are also able to integrate data that is captured by drones. About 80 to 100 feet above the ground level, the drone flies on top of a solar beam, and it carries a regular camera and a thermographic camera, and it captures thousands of photographs of the entire solar plant. We get these thousands of photographs. We stitch these images together. This drone deployment is a standard feature. All solar plants deploy drones.
00:46:27
Speaker
All solar plants deploy drones, but as a platform which is able to integrate the drone data along with monitoring data all in one place in one platform, I think that's something of a global first that present today.
00:46:43
Speaker
So once the data is essentially there, then you run your computer vision scans and you are able to figure out which thermal signatures correspond to which kind of faults, and then you are able to kind of dig down into the performance at a module level also as a result.
00:47:00
Speaker
Last but not the least, we also integrate with third party weather data whenever we have to forecast generation. And now we are also tapping into the flow of data from power exchanges. So the next evolution of Presenter is that from a platform that focuses on improvement of generation, we want to become a platform that focuses on improvement of revenue.
00:47:27
Speaker
Now, one part of improvement of revenue is improving generation. The other part is improving the price of power that you're selling, which means that I can... Isn't there like a standard fixed price for power tech? Yes. So there are two kinds of power agreements that you have. One is fixed price agreements and the other is merchant power, where you can sell power on the open market to the highest buyer, to the highest bidder.
00:47:54
Speaker
Right. Now, till the time the sector was was recent in order to get credibility in order to make sure that financing was available, the government signed long term power purchase agreements. But now, particularly abroad, but I'm sure very sure I'm sure very soon in India as well, we will start seeing projects with merchant power, which means being able to sell power directly to consumers or to the exchange to the highest bidder.
00:48:24
Speaker
Now, the interplay of storage is important. So the power will get generated in the morning, but the prices are not the highest in the morning, right? Solar power will be the utility time. So you'll store that into your energy storage and discharge that power in evening when the prices are the highest and the demand for power will be highest, right? And this process is going to allow you to be able to get the maximum return on your investment in solar and storage.
00:48:51
Speaker
But you need an intelligent platform that tells you how much you need to sell instantly, how much you need to store in storage, at what point do you need to sell power when the prices are expected to be maximum, and after doing it all, how much return have you really made versus in a big startup kind of an arrangement. Okay. This revenue optimization is more of a global product or even in India, there is this opportunity like this kind of...
00:49:20
Speaker
So this is not our own opportunity of scale as of today in India. But that said, when you look at the US market, there are seven ISOs or seven large areas in which the electric grid is distributed. Each of these ISOs have got their... What's an ISO? Independent system operators. So these are basically your electric grid operators in different parts of the country in the US.
00:49:48
Speaker
Each of these operators have got their own rules by which their power markets are governed. We have now pretty much made our system for one ISO and then we take it to the others and then we'll also go into other international markets. The UK market is one of the most sophisticated. Australia is coming up in a huge way in this market as well. Although India is a little behind when it comes to
00:50:15
Speaker
deregulation of sectors and such free trading of power as we have seen in these spaces, but we will very soon get there. The reforms in the Indian Electricity Act are enabling us to get there very soon. Okay, amazing. What is your revenue split by country? Like which country contributes how much to a presenter?
00:50:36
Speaker
So majority of revenue is still India based because we started in India, a bunch of our portfolios in India. It's only in our last couple of months that we have really started focusing on our international expansion, where now we have teams across US, across Europe, across Brazil, and then growing from there.
00:50:57
Speaker
Okay. Okay. Okay. And what is your ARR, the current annualized revenue run rate? We're a little more than a million dollars as of today, but fortunately growing pretty fast. So what is the opportunity here? Like, you know, what is that total addressable market size? Like how big could this revenue number be? What's the target you have in mind?
00:51:22
Speaker
The targets can be very, very bullish. But let me tell you what I've heard from seasoned VCs and seasoned SAS players.
00:51:32
Speaker
So a good SaaS company, a top tier SaaS company, after it has hit about a million dollars plus in ARR, is able to grow at 3x, 3x, 3x, 2x, 2x over the next five years, which means one becomes 3 million, three becomes nine, nine becomes 27, 27 becomes 54, and then it becomes underneath. So that's your pathway to become a billion dollar company. That's your pathway to become a centaur, a hundred million dollar revenue company over a period of time.
00:52:03
Speaker
So although our interest and our mission is more ambitious than this, but that's a fair estimate for us to aim for. Is the market like deep enough? Is there so much money being spent on operation and maintenance? No, absolutely.
00:52:29
Speaker
Bloomberg has digitization of energy market by 2025 to be a $64 billion market. And this is only the digital spend. This is not hardware and sensors. But we believe that that's an understatement. We believe it's going to be excess of $100 billion market.
00:52:49
Speaker
Now, a part of this market is renewable energy, a part of this market is energy storage, but then there are other elements also like distribution, digitization, smart meters, digitization, building energy management systems, and so on. In our own estimate, we believe that the market size for a product like ours, say by 2030, is going to be closer to 10 to 15 billion dollars.
00:53:17
Speaker
So there are multiple unicorns in every niche of the market that are waiting to be created. There's a lot of depth in the market. And generally speaking, whichever projection that we have held today, three years down to nine, I'm sure we'll find this to be conservative.
Growth in Renewable Energy Sectors
00:53:33
Speaker
OK. Amazing. OK. OK. So it's just a very interesting time in the trajectory of these two sectors that we are in. You look at energy sector.
00:53:44
Speaker
And you'll see that over the last 70 years, your electric grids have not changed much. It's the same chimney smoking.
00:53:54
Speaker
coal and gas-based plants that are there, same transmission lines, down to the same transformers just before your homes that feed in electricity to your homes, right? Not much has really changed over the last 70 years. It's only in the last 10 years that these new kids on the block, solar energy and wind energy, have really changed the rules of the game. So much so that by 2030, 50% of entire world's power is going to be coming from solar and wind.
00:54:23
Speaker
Right, so that is one level of disruption which is happening. Then there is this other angle of disruption which is on the digital side. You know, infinite computational power that is available in the cloud. You have got mobile, any funny which is available, so distribution connections which are available. You have got internet access, which is pretty much global now and at the cheap prices, right? All of these different elements were not available a decade back.
00:54:52
Speaker
So from one side there is a huge disruption in the electricity sector, the other side there is this huge disruption coming in technology and we are very fortunate to be to be born in an era
00:55:05
Speaker
where we are at a cross-section of these two disruptions. So just kind of hoping that we are able to make the best use of it. Amazing. Is green energy in terms of cost of green energy, is it comparable to the traditional energy? What are the factors which are driving this, like you said, 50% of energy output will be from renewable energy?
00:55:34
Speaker
So, is it purely just like that ESG pressure of being good for environment or is there also a cost benefit analysis here which is causing this? So, it's not comparable, it's cheaper, right? So, if you looked at the last few thermal plants that have been given, you'll see prices between 4 rupees to 5.5 rupees per unit of power for new thermal plants.
00:56:04
Speaker
If you look at the last few auctions of solar and wind, you'll find prices between 2 rupees and 3 rupees, sometimes even going below. So A, it is cheaper, particularly for countries which are in the tropics, where solar power, solar radiation is bountiful, then it's no-brainer that this is a significantly cheaper power source that is there. That said,
00:56:29
Speaker
It's not as if there is no role for other sources of power. Till such time that the prices of solar plus storage combined are cheaper than the 24-7 power that you are able to get from coal and gas. Till that time, there is work to be done. Because one of the problems in solar is it's not available 24 hours a day. Right. So what happens when sun goes down and in the nighttime also you need power?
00:56:57
Speaker
For that, the cost of solar plus storage has to come down. Now, till about three years back, this was a distant dream. But now, with all due regard and thanks to the electric vehicle revolution, we are seeing gigafactories come up. And as a consequence of that, the storage capacities of the world are going up through the roof. Energy storage as a sector is expected to grow at 30% CAGR over the next decade.
00:57:26
Speaker
Today, we have about 30,000 megawatt hours of storage. By the end of this decade, we have 700,000 megawatt hours of energy storage. So such huge amount of markets, and this is only stationary energy storage to be put along with solar and wind plants and so on. So such huge amount of growth is expected now, considering the prices of storage is also coming down. And that's what we see happening in more mature markets already. And that's what is going to happen in India as well.
00:57:54
Speaker
Okay. And Presenter is also reducing cost of storage, right? Like through your algorithms and like the platform that is, okay. How do you do that? I think storage is more efficient. It's not that we are reducing cost, but we are trying to get more efficiencies, increasing more uptimes of the storage devices. So essentially what happens is that
00:58:19
Speaker
The storage is a lot more complicated than solar and wind because in solar wind, you just generate power and feed it. So there is one side flow of power. But in storage, there is two and pro both sides storage has flow of power. There is charging and discharge. The other element is that in case of solar and wind, the insights used to come from data, but the action was being taken by a human being on the ground. Yeah.
00:58:44
Speaker
Whether that be starting an inverter, a turbine or whether that be replacing a component, initiation of cleaning, whatever. In case of storage, even the control is done by software. A human being does not need to intervene.
00:58:59
Speaker
As a result of that, software has got so much potential to improve performance and to be able to make a much larger disproportionate impact in case of storage vis-a-vis storage and wind. So we are that much more excited about storage as a result.
00:59:17
Speaker
Amazing. Okay. Amazing. So what do you see as the product roadmap for Presento going forward? Like do you see yourself getting into allied areas or like solar wind and storage? These are like your three focus areas. And within these two focus areas also, is there further work that needs to be done? So there are three or four different directions of possible growth for us.
00:59:43
Speaker
The first way of growth is of course that we keep on getting deeper into the sectors that we are already in, right? So for example, last year we were doing four buckets of losses that we were identifying for our customers. Now we are identifying 12 buckets of losses in solar, right? So getting into using... What are these buckets of losses, if you can name a few?
01:00:06
Speaker
You lose energy because of different reasons, right? Dirty panels, degraded panels, but then there are other reasons like shadow falling on panels or snow falling on panels, radiation being lower than expected, temperature being higher than expected, so on and so forth. So we were till last year identifying four different reasons of losses. Now we identified 12 different reasons of losses.
01:00:29
Speaker
The same is extended to rain, the same is extended to storage. We are now working on ability to predict these losses into the future as well, to predict faults into the future as well. We are working on interesting use cases like financially intelligent regulations. We should be able to tell you how much you're losing, what is the dollar impact of that, what does it cost for you to rectify that, and at what time does it make sense for you to press that trigger.
01:00:58
Speaker
financial intelligence recommendations. So these are some of the things to go deeper and deeper into solar wind and storage as well. In storage, we want to support more chemistries. We want to be able to get into the power markets, etc, etc. The second element of growth, this is getting deeper into our existing domains. The second element of growth is getting into new geographies.
01:01:21
Speaker
Right? So US and Europe probably is about 70% of the global market of a software. So we need to have very strong end roads. We have recently made some end roads in Brazil as well. South America is promising very fast growing market as well. Tropical countries, basically. Yeah, we need to grow by geographies. And India is probably 5% of the global market. So India is meaningful.
01:01:45
Speaker
But that said, it's a no brainer that we need to go into international markets as well. So that's the second axis of our growth. The third axis of our growth is when we look at getting into different other verticals. So we went from solar to wind because a lot of solar customers also end up owning wind assets. There's a 70% overlap between solar owners and wind owners.
01:02:13
Speaker
So it was a logical, easy, upsell opportunity for us. From solar and wind we went to energy storage because that's where the future of solar and wind is headed in order to be making power available 24-7. You require solar and wind to be available within energy storage.
01:02:30
Speaker
That's why we went to energy storage. Now, if one of our customers tomorrow is going to say that, you know, hydro is an interesting element, or electric vehicle charging is an interesting element, or smart meters is an interesting element, or transmission and distribution automation is an interesting element, those are the places that we can keep on
01:02:49
Speaker
going ahead. At each of these times, when we have gone into a new vertical, it was a customer who handheld us, who gave us the data, who gave us the expertise to actually make inroads into that vertical. Today, we have about 10,000 megawatts of solar, 3,000 megawatts of wind, a couple of hundred megawatt hours of energy storage onto the platform across the world.
01:03:12
Speaker
What you and Mola are creating is, I would say, the current version of, say, what the Tata family or the Bredla family would have created in terms of a group of businesses. So do you have a holding company structure which holds all these businesses? And what's a 20, 50-year journey for the group as a whole? Wow.
01:03:42
Speaker
That's probably too long a timeline for me to be able to make any projections.
01:03:51
Speaker
There'll be a couple of values that we will just try and go to. And we'll just keep on building businesses on those values. The wealth generation is going to be a consequence. And we don't have a number in mind. We don't have anything specific of a target. The way that we put it is that the moment you make a business to sell, you lose your real focus.
01:04:21
Speaker
The moment you are making a business to please a customer and building a business for perpetuity, you automatically get shooters for such a business.
01:04:32
Speaker
the money, wealth creation, investor interest is a consequence of a great business and not the other way around. So we don't have any such thing. The values that we are hoping that we'll always be to buy, both of us and across all our businesses, we are very, very focused on customer centricity.
01:04:57
Speaker
You know, customer is the center of our universe. Customer is God. Customer pays money. That's why we eat food. I mean, it's as simple as that. And that's something that I think has been drilled down to every last person who is there in any of our businesses.
01:05:11
Speaker
The other element is that we are strong and very vociferous, advocates of fighting climate change. This is all that we have ever done. This is all that we ever intended to do. And we don't do it only for the goodness of the heart, although it is deeply satisfying to go back to bed in the night, go to sleep peacefully, knowing that you did something meaningfully good for the environment today. But we also do it because there is money to be made.
01:05:39
Speaker
The next 1000 unicorns are going to be coming from climate tech. There is no two ways about it.
01:05:45
Speaker
So we believe that this is a huge challenge and a huge opportunity in which hundreds and thousands of entrepreneurs will have to create businesses to make a meaningful impact on Earth. So as long as we are true to these few fundamental tenets, the rest will take care of. As for holding company, yes, there are some structures that have got put in place over time.
01:06:15
Speaker
We do not very consciously put that in place. At some point of time, I think we'll have to stop playing games and try to put something more serious. Today it's not bad. Okay. And then today you're not really thinking of branding it as a group yet. These are like individual businesses run by either you or a mall or jointly. Yeah. So, so we, we, um,
01:06:42
Speaker
So Blue is a consumer brand, that's the only consumer business that we have, right? So Blue is a, I think it's a great consumer brand and we protect it a lot. You've also acquired an EV manufacturer recently, right? Yes. So Gensol acquired an electric vehicle platform, technology platform.
01:07:06
Speaker
to get into the manufacturing of electric vehicles as well. And will that be a consumer business or?
01:07:15
Speaker
So it will have multiple components. One of those components is meant for passenger vehicles as well. And then there are fleet vehicles, and then there are cargo vehicles that are a part of that platform.
Future in EV Manufacturing
01:07:27
Speaker
Early days, it's not a huge platform. Hardly 15,000 cars a year is what we are getting to start with starting early next year. And then we'll be taking it to phase two and then getting it to more scale as well.
01:07:42
Speaker
What will be the number of cars in Phase 2? Phase 2, we are hoping to get a 60,000-car plant getting ready. But as I said, let the Phase 1 happen. Let us feel happy with whatever we are building. Let us iterate on the product.
01:08:02
Speaker
And where are you setting up this plant, the EV plant? This is coming up in Chakan, in Pune, that is one of the automobile hubs of India. So that's where the first plant is coming up. And this will have a very large made in India component, right?
01:08:20
Speaker
Yeah, I mean, we are sourcing a lot of our equipment locally from the from the ecosystem that already exists in Chakin. And my dream is that one day, everything 100% is going to be made in India. Unfortunately, we are still dependent on some imports that will sustain what happens. And this will make four wheelers like that's the focus.
01:08:44
Speaker
That's the interesting part, the form factor of the first model of car that you'll see on the ground. It's a two-seater car with three tire base. So two wheels on the front and one wheel in the back. It's got a very sporty, very cool look to itself. So anybody who sits in this, I mean, it's a
01:09:03
Speaker
It's a really cool fun car to drive. And electric cars, they come with great acceleration. They come with a great amount of intelligence. There's a lot of AI that has gone into the car. A lot of intelligence that is getting built into it. So it's going to reward the consumer with a new kind of an electric experience that they have not seen in the past. So this would be like a consumer product between a two-wheeler and a four-wheeler, even from affordability.
01:09:33
Speaker
Yes, so one thing that we understood is that India as a country has 70% of its sales happening in the sub 10 lakh segment. But even until today, I don't think there is a tar and electric vehicle available in that segment.
01:09:53
Speaker
So that is the reason why we wanted to launch a car which was a lot more affordable but was nevertheless able to pack the best bunch of all the beautiful things that are possible with electric vehicles are able to bring a cool new zinc to itself that an EV is able to bring
01:10:11
Speaker
And not only in terms of the technology, but also in terms of form factor that is a good aspiration product to own. So we took care of all of these elements as well when the car was being designed. And yeah, so now we are hoping for a good response considering the price range of the product, considering the cool form factor of the product. And the way that we joke around internally is that probably the first few cars we are going to deploy in blue platform
01:10:42
Speaker
So what that means is that, you know, the customers will be paying us even for test sites because they'll drive in blue. It's okay, okay. But a two-wheeler on blue, I mean, I'm just wondering if it'll suit Indian sensibility. See, the thing is like Tata Nano as a project failed because it was not enough of a car.
01:11:07
Speaker
So this sounds a little risky, what you're describing, like a two-seater. Let me tell you two facts that are there. One is that vast majority of rides in India are single passenger rides. So as far as picking the box is concerned, a single passenger ride, we are definitely able to take care of that.
01:11:29
Speaker
The second, the affordability after a 20 rupee, 22 rupee, 28 rupee, a kilometer kind of a four-wheel ride is that of an auto, right? Which is probably 15 rupees or 18 rupees kind of a ride, depending on different cities that you are in. Now, what are you getting in an auto? You're getting a rickety ride.
01:11:49
Speaker
You're not getting necessarily all the safety that you have in a car. You are not even getting an experience. You're not getting air conditioning. There's no environment connection. But you're still paying 15 rupees, 18 rupees, a kilometer for that.
01:12:07
Speaker
Now, if a four-wheeler is able to give you the safety, the technology, and the experience of a car at the price, which is somewhere between an auto and a car, it creates a category of its own. So I guess that's going to be the... I mean, four wheels are not going away anywhere. It's not that this is going to come at the expense of a four-wheel market.
01:12:29
Speaker
And over a period of time in the roadmap of the EV manufacturing, there is a four-wheel drive which is also planned, there is a passenger vehicle which is also planned, which is a part of these two.
01:12:46
Speaker
We have tried to do our bit in getting innovation when it is entering into new sectors, launching new models. So why should faculty be any different? Right, right, right, right, right. And what are you branding? Have you finalized the brand yet?
01:13:03
Speaker
No, we haven't. There are much better branding minds than ours. And the factory, is it like a robotic factory, the way you heard Elon Musk building robotic Tesla factories, which gave him a lot of problems also, but is that how you're going?
01:13:26
Speaker
So we do have a lot of automation, yes. But there are no beautiful, red painted robots, long, long lines that we are building. I guess this is a very humble effort from our side to create something which is unique. God willing, at some scale, we'll start comparing ourselves to must factories as of today. I think one interesting trend I've seen in India is that
01:13:57
Speaker
EV is picking up for cargo vehicle space, not much for passenger. And I think in China it's the reverse. I believe in China the passenger vehicle EV space is extremely hot and you have a lot of innovative vehicles there. And I think China is now the biggest EV four-wheeler passenger market in the world. What do you think will play out in India?
01:14:17
Speaker
So, I mean, cargo has its own role to play and so does passenger. The reason why cargo is happening faster is because cargoes are a lot more predictable loads. Cargoes have got a lot more predictable rules. You can plan for charging, discharging. You can plan for charging stations.
01:14:36
Speaker
there is no range anxiety associated right a cargo passenger is a lot more sensitive to the cost per kilometer and electric vehicles the cost per kilometer is lower whereas a passenger who's buying a car for private use right he is a lot more conscious of the brand conscious of the way
01:14:58
Speaker
what the car tells about him and so on as well. Right? So there's a no brainer. I mean, I mean, even if you look at it, the EV adoption and fleets is the highest today, right? In comparison to the private. Right. Because of predictability of fruits, because you have got an ecosystem that you could manage and so on. But that said, when you look at, when you look at the US market,
01:15:23
Speaker
In the US market, there are so many tax laws that you would find today, right? It is one of the highest selling cars that is there. So there is no reason that once you take out these pain points, when you reduce the range anxiety, once you are able to get a car in the price points that a consumer can afford, once you're able to build an aspirational product that people are proud to drive in, the private utilization and private ownership will also rise.
01:15:53
Speaker
It's not cargo versus private use, it's cargo and private use.
Expanding Blue's Charging Network
01:16:02
Speaker
Are you also looking to start charging, like you said, the electric version of Indian oil needs to be built? Is that on the roadmap for the group? It would make sense as another piece of the puzzle for the group to build.
01:16:19
Speaker
So we had to do that. I mean, Blue is already doing that. So Blue has about 1700 chargers on its network already and only increasing. And Blue's chargers have some of the highest utilization that is there in comparison to what is available in public domain. And these are open to public, the Blue chargers?
01:16:40
Speaker
So only very recently have they been made open to public and we are seeing percentage points improvement in utilization as a result. So these are very early days for us, but earlier they were kind of captive to only a blue tree. Right. Right. Okay. Okay. And that will be a separate, like you want to spin that off as a separate business or it'll remain inside blue.
01:17:04
Speaker
Once again, we are more focused on building the business, spinning it off, unlocking of value, structuring deals, leaving it to better things. Because some of the best investors are backing us in blue, so they are a much better place to figure out how to unlock that value.
01:17:24
Speaker
What we are more interested in is that every ride that is being taken is a ride that is a 5-star rating and not every passenger is a happy passenger. Every driver is a proud driver. That's something that we are interested in ensuring. I would be fascinated to talk to you in future because I feel that
01:17:44
Speaker
As the group grows, currently you have the operator mindset. You're an operator and you're very hands-on. This would eventually become into the portfolio manager mindset, I'm guessing, where you are looking at the portfolio and how to derive synergies and opportunities for cross stuff like that, like what would be happening in a Tata or such kind of groups, I'm guessing.
01:18:10
Speaker
I mean, thank you. I mean, I love the fact that you're bucketing us with such elite people, but there's a long, long time to go before we can count ourselves amongst those people. That's it. I think what Moll and I bring to the table is this exact operator mindset. I mean, so
01:18:36
Speaker
There will be a time when probably the group growth is going to be 20, 30% and not 200, 300%. And they'll be much better professionals than us to run the business at that time. But today, when the aspiration is to have a multi-fold, multi-bagger kind of growth, I think we are pretty good people to run the business as operators.
Final Reflections and Engagement
01:19:02
Speaker
Let's see what the future holds, who knows.
01:19:04
Speaker
All right. Amazing. More power to both of you. And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad at T H E P O D I U M dot in