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IndiaMART’s 25-Year Journey of disrupting B2B commerce | Dinesh Agarwal
183 Plays4 years ago
"It takes much longer than you think. Everybody thinks that things can be changed big time in three to five years. It probably takes more, you know, seven to ten years." This powerful insight from Dinesh Agarwal underscores the journey of building IndiaMART, a testament to perseverance and a long-term vision that began when the internet was nascent in India. It's a crucial reminder for founders that enduring businesses are marathons, not sprints.
Dinesh Agarwal is the Founder and CEO of IndiaMART.com, India's largest online B2B marketplace. Starting with a modest seed capital of just Rs 40,000 in 1996, he steered IndiaMART to become a publicly listed company that surpassed Rs 1000 crore in revenue in FY2023 and facilitates nearly 1% of India's GDP. His journey spans over 25 years, building a platform that now employs thousands and serves millions of SMEs.
Key Insights from the Conversation:
- The Internet Spark: Witnessing the Mosaic browser in the US sparked the vision for an interconnected digital marketplace for India.
- Bootstrapped Beginnings: IndiaMART's foundation was built with immense "sweat equity," including manually mailing free listing forms to exporters.
- Resilience Through Crises: The company navigated the dot-com bust by maintaining profitability and weathered the 9/11 impact on exports by adapting and focusing.
- The Game-Changing Pivot: Shifting focus from exports to the domestic Indian B2B market around 2007-08 was a masterstroke that tapped into a burgeoning opportunity.
- Learning from Scale & Failure: The aggressive "52 offices in 52 weeks" expansion taught crucial lessons about sustainable growth, and the Tolexo venture provided insights that strengthened the core IndiaMART platform.
- Values as Bedrock: Core principles derived from Indian epics and leaders like Gandhi guided decisions, especially during tough times, emphasizing commitment and simplicity.
- Long-Term Vision: Building a significant enterprise is a lifelong journey, requiring passion and adaptability beyond initial financial goals.
Chapters:
- 00:00:00 - From US Internet Boom to India: The Spark
- 00:08:15 - Rs 40,000 & a Fax Machine: Starting IndiaMART
- 00:17:30 - Surviving the Dot-Com Bust as a Profitable Venture
- 00:26:45 - 9/11 Crisis & The Critical Pivot to Domestic B2B
- 00:35:10 - "52 Offices in 52 Weeks": Lessons from Hyper-Growth
- 00:44:05 - When a $100M Funding Fell Through: Back to Basics
- 00:52:50 - The Tolexo Experiment & Strengthening IndiaMART Core
- 01:01:20 - Leveraging Demonetization & Jio Wave for Growth
- 01:09:40 - The IPO Journey: Resilience, Timing, and Wealth Creation
- 01:18:15 - Future Vision: Building a B2B Ecosystem for India
- 01:25:30 - "Takes Longer Than You Think": Advice for Founders
Hashtags for YouTube Description:
#DineshAgarwal #IndiaMART #FounderThesis #IndianEntrepreneur #StartupIndia #B2Becommerce #Bootstrapping #IPOjourney #BusinessLessons #MakeInIndia #DigitalIndia #Entrepreneurship #StartupStory #TechIndia #Leadership #IndianStartups #SME #Marketplace #OnlineBusiness #Motivation
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Transcript
Introduction to the Podcast
00:00:00
Speaker
Take a look at this, I'm dead. Hello. This could be a great intro. Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Subscription Reminder
00:00:25
Speaker
Don't forget to subscribe through htsmartcast.com, Spotify, Apple or any other audio streaming platform. Hi, this is Dinesh Agarwal. I'm a founder and CEO of IndiaMart.com. India's B2B marketplace for small and medium enterprises. Nowadays, large enterprises also use that.
Dinesh Agarwal's Early Life and Career
00:00:51
Speaker
Picture this, a boy who grew up in the 70s in a small town near India Nepal border, growing up surrounded by actual freedom fighters and living through the infamous emergency period. This boy, who could hardly speak English during the school days, went on to do an engineering degree and lived the dream of working in the Silicon Valley in a software role. Would you believe me that today his company is a $3 billion dollar publicly listed company and the biggest B2B marketplace in India.
00:01:21
Speaker
You may have already guessed it. In this episode, Akshay Dutt is talking to Dinesh Agarwal, founder of IndiaMart and a true patriot at heart. Here's Dinesh talking about his early career after completing his engineering degree. I think I learned the trips and tricks of optimization of technology at CDOT. Even today, when something has to be optimized, I give examples.
00:01:57
Speaker
So there must be something wrong with the software. Hardware has improved thousands and thousands of times over the last 25 years. It is the software which has deteriorated thousands and thousands of times. And I keep giving this example.
00:02:14
Speaker
that if you open up the Microsoft Excel of 1992, 1994, and if you use the Microsoft Excel today, after 2020, you will not find a single difference. So this was, in terms of programming, in terms of discipline of programming, in terms of complex programming, modular programming. And those were the days when 1992 there was a
00:02:44
Speaker
you know, everybody started to migrate to US, especially the computer science engineers. And I was initially not very interested that I wanted to do more of a systems engineering and do R&D here for India.
Patriotic Motivations and Return to India
00:03:01
Speaker
So India and computers have always been my two loves. And I used to hate the
00:03:11
Speaker
the concept of all Indian IITians or all Indian engineers going to US and doing work for US and Europe and trying to automate things there. But it is not benefiting India other than bringing some few dollars of remittance. So it helped the economy by bringing remittance and by bringing exports.
00:03:37
Speaker
But it actually didn't help the working conditions in India. Nobody made software for India. So this patriotism must have come from your grandfather. Yes, a lot. I know I had a lot of influence. I think my grandfather used to, you know,
00:03:54
Speaker
tell me stories, whenever, any total stories he would tell the, and that stayed with me. And my grandmother used to read and listen to Ramayana quite a bit at home. So I think the two big influencers are Ram Chalithmanas and Gandhi on my thing.
00:04:21
Speaker
So in 1992, towards September, October, I also went to US from HCL. And HCL America, that was a very unique experience, first time experience going to US, very different. I think I learned a lot of quality work there. In US, there is a lot of quality consciousness.
00:04:49
Speaker
But at the same time, I think the speed of work is way too slow. So you are given all kind of computers, all kind of facilities, all kind of best of the offices. But I think the work per week that you supposed to do were hardly 10, 12 hours. But in general, because this was a new field, and most people would take a lot of time,
00:05:19
Speaker
try to do better planning and everything. But I think I found in US my two, three years working at different, different projects, I found the pace of work was slower, but it was very high quality work. People were, and I think that has helped me.
00:05:39
Speaker
in India to do work which is a better quality, which is error-free, which has a very fundamentally right thing. So I think CDOT and my US instant gave me a very good perspective on technology. So I think fortunately I stayed in US for almost like three, four years.
00:06:09
Speaker
And they were mostly related to software dealing with the interconnectivity and networking related software. And I saw really the internet happening in US. The internet, because as I said, in 1991,
00:06:43
Speaker
So I was a very ugly exposure to internet. There were few incidences when I had to find some information. And in a very structured environment in US, going to library or trying to find information over the phone was difficult.
00:07:07
Speaker
And in those early days of internet trying to find information on the internet was easier and better. But it was all text-based internet. You need to log in, you need to tell net, you need to go FTP, you need to do. There was no word-wide web. And I remember I was in a lab.
00:07:30
Speaker
And there's a girl on the other side, a Chinese girl who's opening a computer, and she was clicking on this Muzak browser. And the first time I saw that globe, as she clicked Muzak browser, and the entire, instead of the
00:07:52
Speaker
the text-based internet where you have to log in, download the file and open, everything was happening on the click because the STTP protocol makes it easier and the pictures were coming, the text was coming. So as if the convergence was coming.
00:08:11
Speaker
So I felt like, you know, this is the God and it is going to eat, you know, the software is going to eat the entire world. Yeah. Okay.
Digital Future Vision and Founding of IndiaMart
00:08:20
Speaker
Okay. I actually felt that way. Okay. Okay. Sorry.
00:08:44
Speaker
this tape record or video cassettes are way too restrictive. Why can't we have video on demand? Why can't we have songs on demand? Why can't we have information on demand, pictures on demand? So why can't everything could be, the entire world could be a digital library and we could do a voice and text and pictures and videos and audios using computers.
00:08:56
Speaker
I could see the convergence because I always used to think
00:09:10
Speaker
And I could, I mean, when the browser, I saw the browser, and I could almost imagine that all of my wish list is coming true. So that was, I think, what you call Eureka movement for me, when I kind of fell for internet. So that was, and then,
00:09:39
Speaker
Then I got married. I had one son in US only. I came to get married, went back. My father-mother also came and stayed with me for six months. But then once all that happened, I
00:09:54
Speaker
I had visited the US. I had seen things. But pace of work and my urge to start a business and my urge to come back to India kept on getting stronger. In fact, you won't believe when I met my wife, arranged marriage clear. The only question I asked is,
00:10:42
Speaker
And unfortunately she also came from a family background.
00:10:48
Speaker
My wife's side is a very religious family background, and they are the founders of Gita Press. Gita Press is one of the founders. And they also have a very large extended family, joint family. So she was also very happily, you know, a representative. And so I think our cultural matching happened.
00:11:13
Speaker
And so we came back in September, October. I think I remember the day. It was 15th of August, 1995, when the Prime Minister of India from Lalkila announced the arrival of internet in India. Okay. Through VSNL. Yeah, VSNL. And I remember the very next day, same day I told my wife that,
00:11:41
Speaker
And very next day, I told my manager that I'm going back to India. Please release me as soon as possible. He said, OK, team, I need to release. So I took a transfer to India and here in Noida. And I spent five, six months a year at India. There was hardly any project here because India made other projects.
00:12:05
Speaker
So a great engineer sitting in India was a waste of time for most companies. It's like labor on the bench, not doing anything. Because they didn't have many projects to work here in India. And that gave me time to actually, when I came back to India, I didn't know what to do. I just knew that I have to do something in internet.
00:12:31
Speaker
And the basic idea was that I will become an internet service provider.
00:12:35
Speaker
But when I came to India, I found out that internet service provider license is restricted to BSNL only. And it was not given to any private. So I started to go to different trade fairs to understand what all other computer related business can be started with. I mulled over becoming a computer distributor like a Readington or something. I mulled over starting.
00:13:03
Speaker
educational internet, computer and internet education like an IIT. And then one fine day me and my friend Vikas Mishra and Madhupagarwal, the same, my colleagues, one who joined TCS and one who joined.
00:13:23
Speaker
So we were sitting in cannot place in United coffee house and my friend mentioned that why don't you look at the making websites.
00:13:35
Speaker
And that idea immediately clicked to me that, OK, yeah, we should be making websites. Website is an internet thing. And so I immediately came back and started to understand, OK, website, because I was a hardcore software engineer writing device drivers and telephone signaling programming. I didn't have any idea about this new age
00:14:02
Speaker
a thing called browser and HTML and CGI or parallel or anything. But I think it was easy. I figured it out. I remember days when I finally decided that, OK, we want to make a website. So website, we want to make a website. I remember bringing one computer from US and in an unassembled
00:14:31
Speaker
So I brought a motherboard, I brought a graphics board, I brought a keyboard and other things. So that's how my first computer was made.
00:14:44
Speaker
But, so, website kyopar bhakar, thank you, website bananakar jab de site kya. So, I learned website, but, ya takya website kya skile banai ja, should we make website for, you know, exporter, should we make website for Indian corporates, should we make website for foreign companies. So, I, you know, somehow it was decided that, you know, India met the computers or internet it nahi nahi.
00:15:10
Speaker
by the time Rediff had already come in and Rediff has announced that they will make websites for 500 large corporates. So I said that that space is already taken and I think I wouldn't do make websites for exporters because you asked me when I was there. And Indian goods were
00:15:38
Speaker
Generally not available if they were available, they were available through middleman's like merchant exporters and they were available very expensive. However, the China goods were already becoming very popular in US. I think that's where because these exporters used to travel to US and Western part of the world.
00:16:02
Speaker
And they were probably more adept to having computers because they used to travel. So they were in the exports. They had these buyers. So we decided that we'll make websites for exporters. And for that purpose, to get what kind of website, how to get the list of exporters, I think I visited these export promotion councils, Federation of Indian Export Organization, and many of these.
00:16:32
Speaker
because I wanted to get a directory of those export companies. So this is how India Mart basic idea started. But initially, you had a platform idea or you were individually making websites. You would call the export. The platform idea evolved. So I'm coming to that story. The basic idea was to export websites.
00:17:03
Speaker
We went around and
00:17:11
Speaker
met these export promotion councils to give them, give us the exporters data so that we can contact them. I also had to book a domain name, name the company. So I remember my first company name was Intermesh Systems. It was a proprietorship firm called Intermesh Systems. And how do I find the name Intermesh? So Microsoft Wordmake is Aurasutta.
00:17:38
Speaker
So I tried looking at web internet. You have internet, you have internet, you have the word intermeshed. Intermeshed is another word for internet, actually. So, intermeshed systems, my father was here.
Business Beginnings in India
00:18:01
Speaker
My father was here. My father was here. My father was here.
00:18:05
Speaker
I keep quoting this. In India, India is the easiest place to start a business if you are starting a small business. You don't have any legalities. You just name your business, go to the bank and say that I want to start this business in the name and style of this firm called Intimate System and I am going to be the proprietor of that business and please open a current account and your business is up and running.
00:18:32
Speaker
You don't really have any registration requirement. All that starts only when you grow up to a certain size in terms of number of employees or in terms of employment. So India may start karna business is the most easiest one. Scale karna is difficult, but start karna is the most easiest one.
00:19:13
Speaker
Out of fear, I didn't register india.com or businessindia.com or india business because I thought, I don't remember, but I somehow started on an india mart.
00:19:20
Speaker
So for your work, check domain name. So domain name is india.com.
00:19:50
Speaker
It was a very difficult task. I think I remember running around bank to bank, trying to transfer money. And those days, the domain name registrar won't take a wire transfer. There was no way to wire transfer money from here to register a domain. And these wire transfer people had a lot of paperwork. Because of that, foreign currency can control the whole time.
00:19:56
Speaker
because it is going to be a business mart.
00:20:22
Speaker
So then I, fortunately, I was carrying my money in the bank account because I had heard a lot of horror stories where people went back to India. And within six months or within nine months, they came back to the US saying that India may can't survive. So I kept my bank account and whatever money I had left open in the US. So I actually requested my friend.
00:20:50
Speaker
in US to pay up $135 for me and registered this domain name in my name because I didn't have a credit card or anything here. That's how we registered the domain name and I never gave that money to my friend. Ramitaneja is the name of my friend. So I quote him so that I can tell him that I will still hear you.
00:21:21
Speaker
And so we thought that Kiski website, so we participated in some trade fair, internet connection.
00:21:48
Speaker
And people came and some exporters came.
00:21:58
Speaker
I was looking at those directories to get the number of exporters.
00:22:16
Speaker
So I said, these directories are very phone numbers updated, email ID, and some of them were very old directories. So I said, let us create an online directory of the exporters. And I actually requested these export promotion consoles, et cetera, to give me permission to publish their directories as it is.
00:22:47
Speaker
which they kept on saying, but they didn't. So in the meantime, I said, since we can't copy your data, we will at least take the permission from individual people and... Directly put it up. Directly approach them to list them. So I am like free listing form.
00:23:13
Speaker
that, you know, if you want to register your business on internet, please send your information, name, email, phone number, this, that. And if you want to make a website on internet, please click here, or tick here. And those are the paper-based forms. And if you want to make a website on internet, please click here.
00:24:05
Speaker
My wife Chetna would write all the addresses on the
00:24:11
Speaker
on the envelopes and we will, I got that offer pre-listing form printed from my friends, relative printing press. The D.S. group has a printing press. So we have to do that. No, no, no, no. D.S. group has to do that. We have to do printing press with the offset printing press.
00:24:45
Speaker
So I would just give them a list of my directories. Chetna will write the addresses and Mami Papa will put up these stamps and then I will go and deposit them into the post office.
00:25:06
Speaker
to receive facts. But getting online was a Herculean task.
00:25:35
Speaker
So I didn't really have a phone number. So I had formed a company. I had started to put up a bank account. I had a visiting card. We didn't have a phone number. So the only thing that we had was a fax number.
00:25:58
Speaker
So you can reply back to us using facts or reply to us using liquor because I didn't have a phone at that point of time. And every day, I would say to myself, I have written facts on my phone. So I have to travel from Patparagans to Mayur, we have to pass.
00:26:33
Speaker
And the first fact, first few facts came out of one facts came from Devender Singh who was the computer operator or IT system manager at Nirula's corner house.
00:26:50
Speaker
So, and I remember a few other faxes coming in. So, I think my first client became Nerulaz. Nerulaz said,
00:27:19
Speaker
and they generally want to place order on on birthdays and anniversaries and weddings for cakes to their loved ones in India. So it was the first website and first e-commerce website in India. So the vendor GMRA map a IT manager say or Samir Kukreja ji map a marketing manager say.
00:27:50
Speaker
So in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime, in the meantime,
00:28:11
Speaker
But going forward, I think this is not going to be a viable business model. Whereas, Rediff used to charge for one website. So I said, this is not going to be a business model. So that's when we started to think,
00:28:41
Speaker
And we named IndiaMart directory as the global gateway to Indian marketplace.
00:29:08
Speaker
No, no, no, no, no, marketplace word, marketplace word, marketplace word, marketplace word, something like that.
00:29:21
Speaker
So that day, that time we made, the second thing we said that
00:29:47
Speaker
You can put it directly, but I don't know. So it's directed, you know, kafia chalogone response, then a shurukiya, US may or UK may and Australia may.
00:29:57
Speaker
that the government of India has started this great initiative of making this online businesses online. So I said, thank you. I never, never government of India. And they will they would want to contact these exporters. But I passed on the email ID, a computer ID. So so we used to job inquiries every day. Every day was inquiries.
00:30:27
Speaker
We will print facts. And next day we will print by envelope. An envelope used to say that yet another business inquiry through India Mart. And that continued for five years.
IndiaMart's Growth and the Dot-Com Era
00:30:45
Speaker
From 1996 mid to all the way to 2001 or so.
00:30:54
Speaker
Every day, thousands of inquiries will come. Initially, maybe 10, 15 inquiries came, then hundreds of inquiries came, and then thousands of inquiries came. And they will get printed facts overnight and sent by postal to the exporters in India. And they will then realize that there is a demand from foreign.
00:31:19
Speaker
And that's how it used to work. Even if somebody wanted to import something through embassy, it's the same process embassies used to follow. Embassies would actually send you a letter saying that, and that's how the exports used to happen. It was very cumbersome.
00:31:38
Speaker
But what is the fund of sending out? The website of sending out. The website of sending out.
00:31:56
Speaker
Blackjack tools, you know, tools keep up site when I am the aircon International website when I never ask him and I miss SBI cake regional manager say on key website when I read the State Bank of India key or be both sorry exporters stage in key website when I am
00:32:14
Speaker
but these were like normal stand-alone website like sbi.com. No, no, no. These were like mostly, mostly more, all of them were indiamart.com slash nirulaz. Later on they became a domain name because domain name register can now be used. Okay, okay. So, you like leverage that for these things. Yes, you can leverage that for these things.
00:32:43
Speaker
I think the time was running fast. Every month, things were changing. From 1st April 1996 to 31st March 1997, first year was the revenue period.
00:33:11
Speaker
I think it's important to know that there's a lot of facts that you can find on the phone. There are a lot of facts that you can find on the phone. I think it's important to know that there are a lot of facts that you can find on the phone. I think it's important to know that there are a lot of facts that you can find on the phone. I think it's important to know that there are a lot of facts that you can find on the phone. I think it's important to know that there are a lot of facts that you can find on the phone.
00:33:40
Speaker
It was really bad designs.
00:33:58
Speaker
Basically, the job based on yet another inquiry was a lead generation for you. Yes, it was a lead generation for them and it was a lead generation for us also. Because we used to call those same people. So the whole entire database, you know, go marketplace, flywheel.
00:34:26
Speaker
Because we created this free listing database, I remember by the end of 1997 we had like 10,000 plus companies on our website.
00:34:44
Speaker
and enquiries will go to them and we will call
00:34:58
Speaker
contact the supplier or not. So that and that's where you'd like the entire and online registration be website Cooper online registration free listing from which I look at the
00:35:16
Speaker
So free listing, or free listing, is a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair. It's not a real trade fair.
00:35:41
Speaker
So that's how we build that database. So it actually worked both ways. So that's how the whole marketplace business started. But then next year, we ended up doing almost like Pachisla Krupeka business. And internet was going very, very quickly.
00:36:26
Speaker
So in 1996-97, we had to take an office, which was nearby to my home.
00:36:38
Speaker
And 1997-98 was a great year when we did about 24 lakh rupees of business. We were actually in a business business. We had a lot of internet business. We had a search engine optimization. Search engine optimization is a word of many.
00:37:10
Speaker
So, we used to be particular about it. It is not only for your visiting card. You know, that whole process is called search engine optimization.
00:37:34
Speaker
So we will register those every page that we will create. We will register them onto Yahoo and Altavista and so many other directories, open directory and other directories. We will register them. So that's how people when people in US and UK and Australia and Europe, they will search anything from India or anything. They will find our pages and it
00:38:00
Speaker
It became an easier selling tool. And that's how that became the selling tool. So that's how the business model started to roll.
00:38:18
Speaker
We were charging 15,000 rupees per page and then additional page was some 10,000 rupees and if you want to make a full website it was 50,000 rupees full website with your domain name very few people will opt for that one or two people in a month
00:38:36
Speaker
But most of them, so by next year and we had 100 plus customers. And it started to work nicely. And every day sending those thousands of inquiries by post became a big process. So that's how it all started to roll. Then somewhere towards the end of 1998, suddenly there was a lot of interest in internet.
00:39:04
Speaker
India.com. India.com. Hotmail.com. India connect and so many others. And then venture capital. We would suddenly see that something called in India.com has happened. We didn't know.
00:39:34
Speaker
Either we are doing something wrong, our business is not doing well, but our business was doing okay. We were a cash positive business. By March 99, so March 97, it's 6 lakh, March 98, 24 lakh and March 99, 53 lakh.
00:39:58
Speaker
But by March 99, suddenly there was a lot of euphoria. Would not combo basically Joe's type of water? We talked to them.
00:40:20
Speaker
We talked to them. We were well off from the family side. So if we needed any capital expenditure, but in fact, one interesting point was that hiring one person as a designer or as a
00:40:43
Speaker
was more cheaper than buying one computer because the computer will cost you 50,000 rupees and hiring a person would cost you maybe 3,000 rupees or a 4,000 rupees or a maximum 5,000 rupees. I ended up hiring one person called Rustam Singh because he had a laptop. So my entire, you know,
00:41:05
Speaker
investment would go on to buy a computer or office equipment or things like that, or office space or office furniture. But other than that, I think whatever revenue we were making, we will pay up for our salaries and other expenses. So from that perspective, we were a cash positive business from day one. Day one means from the year one, and remain cash positive for a long period of time.
00:41:31
Speaker
So, venture capital, etc., we didn't understand. So, I can tell you how things can, how money and things can change a person so easily. So, March 1999, we didn't understand the word venture capital. And then within six months, we became so... September 1999, we became a company. Yeah, with the sole proprietorship.
00:42:13
Speaker
And he remained our auditor for a long period of time.
00:42:27
Speaker
So he said the private limited is for private companies or limited companies are which take external funding and become public. So imagine
00:42:53
Speaker
how many and how other things can change a person. Within six months, a person who is not knowing what is the venture capital and immediately thinking about, you know, because by the time, you know, Riddif had, you know, the whole entire 99 was a year, you know,
00:43:13
Speaker
of transformation. Riddif had listed, Siphi had listed. Infosys is kind of listing with you. Infosys is kind of listing with you. But Infosys is kind of a business model. They were still working for foreign. But they were still working for the software. So, what do you think about this?
00:43:39
Speaker
I always took pride that because of whatever I am doing, it is helping the Indian economy, it is getting business into India, direct business to small and medium enterprises in India and exporters in India.
00:43:53
Speaker
However, Infosys is only generating employment. In our case, we are generating employment as well as making computers usable here in India, internet usable here in India, and export and import happening at a broader scale rather than a few large companies doing exports.
00:44:15
Speaker
So that was the, and I think the businesses started to do well. In fact, by the end of 1999, CFI purchased indiaworld.com for 500 crore. Okay. 500 crore in those days. Imagine. Yeah.
00:44:43
Speaker
The first one that I remember was Raju Gandhi assassinated. The second one, we remember India World. She purchased India World for 500 crore.
00:45:01
Speaker
And the third thing that I remember, for the first time ever, the first page of Times of India was not a news page, it was an advertisement called india.com, I-N-D-E-L-A. Yeah, yeah, yeah, I remember. I used to read newspaper because obviously, I remember all these.
00:45:29
Speaker
So I think between the September 99 and March 2000, I think we also started to look at venture capital. We started to get a few venture capital calls. We started to understand them.
00:46:02
Speaker
This was happening week after week. I said there is something grossly wrong and then this 500 crore news came in. So we actually said we need to appoint a banker or something.
00:46:18
Speaker
of these KPMG and Anstrand Young and all them. And on the website, the website is called and nobody would respond after one or two or three follow-ups. Finally, Anstrand Young responded with the same person who had done this India world valuation.
00:46:43
Speaker
Sanjeev, Sanjeev Agarwal was the person. And he was kind enough to spend time on internet and came to our office and started. So I'm not going to go to a business plan. And then he said it was up to market crash. So the entire 99, 2000 was the worst time for us. When I recall, because we got derailed into so many things and our people were
00:47:13
Speaker
post because, you know, imagine internet business, you don't know what the HTML is. So I used to hire a very fresher set of people. So I used to hire people and
00:47:44
Speaker
teach them. We used to have 8 to 10 days training program. I used to actually make them learn what is internet, what is computer, what is website, what is content, what is Photoshop, what is HTML.
00:48:05
Speaker
my people started to leave. My people started to leave because there was double salaries were given by these new startups at that point of time. So that was a little bit difficult year. Not that, I mean, difficult in terms of revenue or something, but it was difficult year in terms of people retention and salary increases.
00:48:33
Speaker
But then somewhere in the middle of 2000, suddenly these dot coms started to disappear overnight. So I think the entire industry went into coma. And our golden period started.
00:49:01
Speaker
So as the entire hype and hoopla around the dot com, around the dot com hiring, around the newspaper, around. So otherwise we were there was too much of a media attention. Somebody is making this portal. Somebody is making that portal. Somebody is making marketplace. Somebody is making e-commerce. Rediff is launching e-commerce job portal, matrimony portal, you know, everything was happening.
00:49:29
Speaker
And there was a talent crunch like anything. And business models were starting to look unviable. But then after this crash happened, I think we were because actually Indian economy was booming and Indian exports were booming.
00:49:53
Speaker
A great time started for us between the crash of 2000 and 2001. So I think we grew leaps and bounds during that 2000 and 2001 time period while the dot com was crashing and crashing and crashing and people were losing jobs and lots of monies were written off like anything. So what kind of revenue did you do by 2001?
00:50:23
Speaker
So from 1999, March 1999 were 55 crores, March 2000 was 1.5 crores and March 2001 was 2.8 crores. Okay. Which is pretty big. Actually you were doubling almost like every doubling or even more higher every year.
00:50:52
Speaker
And we were purely focused on business. And with no external funding? With no external funding, we became grossly profitable. So we were all good.
00:51:15
Speaker
Then one fine day, I remember somewhere around, and in the month of 2001, because I went to IMT, I am going to test the interview here. This would be like evening classes, yes, something like that.
00:51:46
Speaker
I remember, you know, business word calling, calling us one day. Are you still around? Are you? So we said yes, we are very much around.
00:51:59
Speaker
And we are doing a survey on dot-com companies, and we have sent you an email to your PR email. No news is being printed in the last one year. In fact, we became untouchable world.
00:52:29
Speaker
So, you guys are not responding. We are very much around. How much losses are you making?
00:52:39
Speaker
So we said, no, we don't make losses. We have always been a profitable company, and we remain profitable. And as you know, everybody makes losses. Everybody, nobody makes losses in the business. Everybody does business for the purpose of sustainability and profit and all that. So that's not possible. I said, yes, that's possible, very much possible. So they said that we would like to check your papers. I said, come on. We'll show you all the.
00:53:20
Speaker
So that was, you know, they came out with the news, with the edition in 2001, May, May 2001. Who is this man in the middle of .com carnage? India was actually made profit. Wow. Okay. And I remember the six companies mentioned in that was nokri.com and Chennai Bazaar and metal junction and make my trip and some of those companies.
00:53:34
Speaker
filings and all the income tax returns and everything. So they came and they said,
00:53:49
Speaker
So we and hangama.com. And so these were the six companies that were mentioned. And we were like on the seventh sky. And that's how we came to know.
00:54:12
Speaker
So, we I think put out more focus on our B2B section and we were doing all okay. But then September 11… Model was the same.
00:54:22
Speaker
Yeah, model was same. We started to push the office, hire more people, took more office space, and everything was going well. And finally, we were feeling here, office space, we had gone from one building to three buildings, and three different buildings in 1990, in 2001 timeframe. And we were like almost 100 people, and the business was booming.
00:54:53
Speaker
So we said that we want to now want a bigger space. And so, so I'm not going to kill you. I mean, let you will be based back care care loan over a lake. I don't make office key. I mean, the poor on evil, the poor on a factory. And you have worked for a new way. I make but office. Because every time I had such a man in an office, like one of the most common.
00:55:19
Speaker
And that was around August, September of 2001. I was going to evening classes. We took loan. And then September 11 happened. And World Trade Center paid an attack. And overnight, my business fell down by 50%.
00:55:44
Speaker
Because exporters can't export business. Just like Covid-19.
00:56:11
Speaker
And these were like repeat paying customers. You were selling a subscription service.
00:56:21
Speaker
Yeah, we were telling subscription service. We have always been selling a subscription service or advertisement service. So most of them said that, I can't pay you money or I can't pay you money. Imagine, you know, 31st August, you know, first September, 10th September, and 11th September.
00:56:49
Speaker
Now we had a loan of 50 lakh rupees, business was down. So I think that was the time and so I left my MBA. So I think we put more focus on cost cutting and our cost control.
00:57:08
Speaker
I think that was the time that taught us everything. But the business continued to grow. I remember that was the only year when our business grew the least from 2.81 crores to 3.25 crores. But it was still growing? Yeah, I mean, we were way too small, probably towards the end of 2002.
00:57:36
Speaker
But then the Afghanistan war happened, US attack Afghanistan. I think that 2002 was the worst year for Indian economy point of view also. But then from 2000, because we got our office finally made. And at that point of time, we made this 18,000 square feet single large sprawling building of a dot-com company.
00:58:06
Speaker
That became our signature piece. Because 2000 may or 2001 may, it had become, that's a dot com. So dot com had become like a taboo. Yeah, but now we'll get there.
00:58:39
Speaker
So we would then bring customers to our office and say, sir, our office can be showcased. And from then on, I think the ball started to roll and we became in the export import marketplace. And India as a marketplace became very super hit from that perspective.
00:59:02
Speaker
I think next several years was more about sales and customer service and everything. So we grew from that 2-3 crore rupees to 1000 customers to 10,000 customers in 2006. That's when we completed about 10 years and about 18 crores of revenue.
00:59:28
Speaker
all was going very good. And we were 100% export focused business. Somewhere around after that, 2007 or so, we started to feel domestic economy also taking up shape. And a lot of Indian people started to come to our portal as a buyer or as a seller, which exporters didn't like.
00:59:59
Speaker
you know, at the same time, you know, so this domestic economy started to grow very well. And then towards the end of 2007, the rupee became very strong at 38 rupees per hour per dollar from 45 rupees per dollar. And export started to become unviable. China had become a
01:00:24
Speaker
super hit in exports. So that 2007-8 as a year was very different. Many things happened. Indian economy started to grow very well. Indian economy grew like 8% or so during those years. Indian domestic internet ecosystem had become reliable enough. Mobile 2G internet was starting. Apple iPhone had just launched.
01:00:54
Speaker
Alibaba had done an IPO in China and became a $17 billion company, a $17 billion marketplace company, a market care company. And exports started to kind of taper off. Earlier exports were growing like 25% year or year for India. The exports didn't grow in 2007-8. So we said that we at India Madhmi and Bridget sat down and said that
01:01:24
Speaker
Now we would like to focus on domestic economy. And this time, we will probably, for the first time, we will raise money externally. Though we had about 25 crore rupees in bank, which we had saved over these many years. But we said, no, this time we would want to raise external funding. We would want to focus on domestic economy. We would want to focus on mobile.
01:01:54
Speaker
By the end of 2008, in the middle of again a carnage when the entire world was reeling under stock market crash, we raised a million dollars from Intel Capital. So actually the money came in on 28th November 2008, which was the lowest day of stock market in that decade.
01:02:22
Speaker
So we raised 49 crore rupees. So rupee went up to 49 rupees per dollar. So we raised $10 million, 49 crore rupees. And over the next year, 2009, we started to re-engineer our business for domestic B2B.
01:02:43
Speaker
One thing I want to ask here, Intel Capital, how did that happen? Like, you know, typically, fundraise is like one of the big challenges for founders. Of course, I can tell you between 2004 and 2007,
01:03:08
Speaker
Often people used to come to us, various kind of various venture capitals would come to us. And since we were a profitable company, we were generating four or five crores of cash flow per year. So we were like, we were not very heavily interested. But I think the number of venture capitals kept coming to us.
01:03:36
Speaker
But then, as the Alibaba IPO happened, and Alibaba from a $3 billion market cap went to $17 billion market cap in September 2007, I think I had a flurry of VC inbound requests. So over the next two, three months, we had too many inbound VC requests.
01:03:58
Speaker
Basically, everyone wanted to have the... Because we were being called as the next Alibaba of India.
01:04:10
Speaker
So we were fortunate enough that we got a lot of inbound interest and a good valuation and everything. It's just that the entire 2008, while we said yes to VC, the paperwork took six months and the market kept on melting, melting, melting, melting. So I remember, we had to re-newish it some of the conditions or some of the valuation, et cetera.
01:04:41
Speaker
But that was OK. So we raised this 49 crore. We already had 25 crores. So we had about 75 crores in the bank. And we had never become a cash negative. So we were a cash positive business.
01:04:59
Speaker
We set up a board, I know. I remember Saru Srinivasan who was the person who was leading from the mental side along with Sudhir Kupam. She became our person from the mental capital and she said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I said, I
01:05:28
Speaker
And Sanjiv said that I can't, because I have listed, I'm a state company, I don't want to become an executive board member, a non-executive board member at any other internet company, but I am already on the board of Make My Trip, why don't you talk to Deep Kalra. She reached out to Deep Kalra and Deep Kalra happily agreed to become our board member.
01:05:51
Speaker
She also had a connection with Mr. P.N. Vijay. P.N. Vijay was an ex-SBI and ex-city banker who used to run us P.N. Vijay.com. So we had set up a very good board in 2009 because of the internal capital help, especially Sarishya Ransun help. So we had Nachiket, Mohr, Deep Kalra,
01:06:17
Speaker
as our board members and two are the founders and then so I think over the year 2009, we decided to kind of focus on domestic business, focus on sales, focus on improving our product for domestic B2B. But we were very cautious.
01:06:46
Speaker
We would not go on and make losses. We would not expand. So by the end of 2009, March 10, we grew by hardly 20%. So from a collection of about 50 crore rupees, 50, 55 crore rupees, maybe 60, 65 crore rupees.
01:07:11
Speaker
And I remember very well when Nachiket Mohr said, and we boasted that now we have 100 crore rupees in bag. So 58, 58. So Nachiket said, what would you do with this 100 crore rupees if you can't grow? If you are growing at 20%, you have to grow at 100% and like that.
01:07:36
Speaker
I said, you know, and we were always like job sales. So we were a very conservative business because our product was good. So we started up, took this challenge that now. So we were doing like four or five new sales of the new customers every month. And we took a challenge. And I remember in the year 2010, from January to December,
01:08:06
Speaker
In 52 weeks, I opened up 52 offices across 35 cities in India. Wow. And for every office, you would personally travel? For most of them, I personally travel, find the location, find the office, get the furniture, hire the people, and one every week. Every Tuesday, one new office has to be inaugurated. That must have been a tough year.
01:08:36
Speaker
Yeah. I mean, that must have been, and we grew our employee strength from say 800 to almost like 4,000. Okay. And most of these would be sales skills. Yeah. And we also grew our sales from, you know, 500 sales per month to almost like 5,000 sales per month. So I think, you know, and we just did sales, sales, sales, sales in that year. So I think that was the
01:09:05
Speaker
And we became from 60 crore to 100 crore rupees company and 100 crore to 135 crore rupees company in terms of collections. So we started to grow big time in the year 2010, 2011. But as the luck would have it, and we were on a spree to raise another round of large round of money. But as the luck would have it, these customers that we brought in, a lot of them became very unhappy.
01:09:36
Speaker
because we were just selling, but we were not really understanding the domestic business properly. We were trying to replicate whatever we were doing for international business, the same business we were trying to replicate domestically with few functions here and there. But in general, we became a very sales-obsessed company.
01:10:03
Speaker
anybody who could not do sales was fired as an employee. So we became a very brash company. Unlike in the previous decade, where we were a very employee-centric company, no employee would ever leave, no customer would ever leave, no customer service and employees were like our value system.
01:10:30
Speaker
And in the middle of that, this large fundraising that we were doing, they walked away. Why did they walk away? They walked away because they asked me one simple question.
01:10:44
Speaker
that whether you want to correct this current mess or whether you want to grow this further. Because I had read a lot about this scale and size and threshold and the marketplace.
01:11:08
Speaker
move fast, break things. So I said, Abhi, we have done 50,000. So from 15,000 customers, we became to 50,000 customers in two years. And I said, no, we have to first become 100,000 paying customers and then we'll look at these things.
01:11:34
Speaker
But they also came to know that many of them are not happy. Many of them are happy also. But many of them are not happy. So I told them that let us first go to 100,000 customers and then we'll actually fix all of this.
01:11:58
Speaker
And that didn't gel with them. And it was the right thing to do. And which was the very good thing that happened to me. We were losing 5 crore a month.
Financial Challenges and Operational Focus
01:12:14
Speaker
From 100 crore rupees, our cash balance has come down to 25 crore rupees in these two years.
01:12:23
Speaker
We, from a revenue of 60 crore rupees, we went to 135 crore rupees. So we were doing 10 crore rupees per month revenue. And we were left with less than six months of cash runway. And this new 100 crore funding walked away.
01:12:53
Speaker
I think that is the best thing that had happened to us. I think I got back to basic. You were looking for inspiration. I was looking for...
01:13:23
Speaker
And I was looking to go back to value system. Even one single drop of poison can turn the entire jar of nectar into poison. And it was like very, you know, so it can't be called a non-violent movement.
01:13:49
Speaker
And Nehru kept on, and many, many other leaders kept on saying, Sir, this is our moment. But Gandhi called of that moment. So I became very obsessed with the customer service and employee service in that degree, and cost structure come.
01:14:17
Speaker
Within three months, we again became cash positive. So from five crore rupees, negative. Within three months, we became cash positive by the end of 2012. How did you do that? Did you lay off people? Did you close offices? We never laid off people. We always say, we stopped hiring people.
01:14:47
Speaker
We just stopped hiring people. And there were a lot of things being wasted and all that. So not that we stopped growing and all, but we just stopped hiring people. So do more with the existing set of people.
01:15:04
Speaker
And we started to look at every process. We started to look at every quality parameter. We started to look at customer satisfaction, customer tickets. What happens is when you throw money and when you throw people at the problem, multiple money also gets wasted. And a lot of people do the duplicate work. So actually, you end up spending a lot more money on people.
01:15:34
Speaker
when you don't have a very set process in reengineering person, or customer satisfaction person, or employee satisfaction person. So small things get ignored at multiple levels. So an entire 2012 was a very formative year for us.
01:16:02
Speaker
We learned few things, what kind of people to hire. So fortunately for us, one of my friends, Dinesh Gulati, who was also my batchmate at HBTI, he was a part of Airtel and Reliance Infocom as a CEO. He had recently shifted to Delhi and he met and he joined India Mart in the February, March, 2012.
01:16:31
Speaker
And that year, we corrected so many things. So the entire 2012, we did a lot of corrections, a lot of product innovations, meeting with customers, understanding what small, small things they were facing, how internet can help them, how it works better on mobile. I think that entire 2012 was a formative year.
01:16:55
Speaker
We redraw the value system because whatever we were doing as an export business until 2008, 2009 was a wonderful business. We never lost customer. We never lost people. We had a very good reputation. But whatever we built over just on the back of the money in the 2010, 11, 12, 10 and 11, I guess, 10 and 11,
01:17:23
Speaker
didn't have the entire value system. Because we didn't know how to build a business scaling up by way of money. We knew the brick by brick way of doing things. When you do brick by brick of doing things, you don't have to set up too many processes in a hurry. And that's what has happened with many other companies. I can't name them.
01:17:52
Speaker
So many companies if you see in the previous decade who have raised a lot of money and then expanded quickly and then also vanished quickly. And there are some great stories around that. So we work kind of stories or housing kind of stories.
01:18:15
Speaker
So I think we also did similar mistake. But I think the only good part was that because of our 15 years of running a business big by big, we knew how to go back to big by big. So that's what we did. And economy also went into a tailspin. Because in 2012 and 13, I think the economy was as bad as 2019. We were back to less than 5% GDP growth.
01:18:46
Speaker
March 2013 GDP growth rate was like 4.5%. So economy was bad and we were also, but when you do, and this resembles, we did a lot of good things in 2001 too when the economy was very bad. We did some of the very good things in 2012-13 when the economy was very bad. And we are again doing some of the great things in 2019-20 when the economy is too bad.
01:19:17
Speaker
And that's why we now have learned that when the economies are bad, that is the time to innovate and that is the time to actually tighten your belt and increase the stakes in terms of processes and product improvements and all that. Because that is the time you don't have the luxury of being loose or being easy.
01:19:49
Speaker
So I think by the beginning of 2014, we found our product market rate at India Mart. Because during the 12th and 13th, we were struggling to find product market rate or growth at India Mart. We had also started to see that a lot of e-commerce growth had to start to happen. So one thought was that, is it because
01:20:17
Speaker
the entire Legion business model or advertising as a business model is going to go down, go dead. And will the entire world is moving from discovery to delivery? Because there was too much of a hype between 2011 and 2015 around this e-commerce. And there was this industry buying and
01:20:41
Speaker
Not only industry bag, not only industry fashion and you to Selekar K, let's buy Selekar K, Minthra Selek, Sabi Kuch, Flipkart Selek. And our customers had also started to say that why can't we set up a system where India Mart can help us procure directly rather than
01:21:06
Speaker
So on one side, between 2012 and 2013, on one side, we were correcting things at India Mart. On the other side, we set up a business called Tolexo, which was on the lines of granger.com or granger industrial products, or amazonsupply.com. Amazon supply of the business happened at that point of time, similar to what industry buying.
01:21:34
Speaker
So we set up, we said that since Dinesh Gulati was here now, we could spare Brijesh from India to take care of this new initiative called Telexo. And so somewhere in 2013, this whole business was thought over. And in 2014, Telexo was
01:21:57
Speaker
trying to build a scale-up solution of the e-commerce. So in 2014, there were, again, two diverse things that were happening. One, IndiaMart started to do well on the back of improvements that were done in 2012 and 13. And Polixo started to do well on the back of this whole e-commerce thing. Because at IndiaMart, we didn't have prices. We didn't have product specification. We were more like a classified listing website.
01:22:29
Speaker
At the lecture, it was all like everything was like every product, product with the specification, photos, and then payment and delivery. So everything was there. But we could do that only for a few categories, because you can't do that on India Mart. You have like 50 industries, one lakh categories. You can imagine the name and item.
01:22:58
Speaker
and you will have it on India Mart. We take pride in saying that if you can't find it on India Mart, probably it has not yet come to internet in India. If a new product will appear somewhere on internet in India, it will definitely be found on India Mart. So on one side, this 2014-15, Prolexo started to do great
01:23:28
Speaker
great, India Mart also started to do well. But then we realized that the lecture is this whole e-commerce is the last making business because one, we were unnecessary spending way too much money on the marketing, which was not to be spent on India Mart because India Mart had an inherent search engine optimization. There were so many people automatically coming to India Mart.
01:23:55
Speaker
The lecture could focus because it has to do everything. It had to do the product specification and everything. It could only do very few categories or very slow expansion into the number of categories. Three B2B logistics were a negative value add at that point of time. Trying to do B2B logistics the way B2C logistics are done.
01:24:26
Speaker
Home delivery is a new concept altogether. Business deliveries are a 100-year-old or 500-year-old concept. So business deliveries are well-sorted. It is the home delivery which was the new concept which was being sorted out. And we were unnecessarily trying to apply the concepts of home delivery to business delivery.
01:24:55
Speaker
of the shelf product. Customized products would not possible. It would not have handled a customized product. It could not handle truckload of the things. So we realized that whatever we are doing at Tolexo, if we could do that on India mark and leave out the delivery part, let the delivery be fixed between the buyer and seller because every category has a very different delivery mechanism.
01:25:26
Speaker
very different order. Post order mechanism is very different in every category. It can't be same for a crane. It can't be same for a cement. And it can't be same for a headphone. And it can't be same for a mobile cover. But the good thing was we realized that people needed prices.
01:25:51
Speaker
people needed photos, people needed specifications, people needed videos. So people needed and people needed trust. So we started to, you know, we somewhere in 2016, and we started to feel the pinch of doing this in the 2016 itself, beginning itself.
Strategic Mergers and Marketplace Evolution
01:26:14
Speaker
But, you know, final nail in the head happened around demonetization.
01:26:22
Speaker
Post demonetization we decided that we need to wind up to Lexo as an e-commerce business and merge that entire thing into India Mart. That further worked as wonders because now India Mart became a zero commission marketplace
01:26:49
Speaker
without delivery. Where people could list products, upload videos, upload photos. They could interact with each other, they could buy. So today we are the largest price discovery platform for any product in India.
01:27:04
Speaker
whether it is a medicine, whether it is a component, whether it is a raw material. And in the last four or five years, we have got more mentioned about because of the prices of unique products than anything else. So when there is a news that the Dhanmantri eats shitake mushroom imported from Korea, price of that is quoted from India Mart.
01:27:32
Speaker
When somebody says there is a shortage of a smog gun to reduce the pollution, the price of a smog gun is quoted from India Mart. So India Mart became a destination of choice after merger of the Tulekso business model and India Mart business model.
01:27:59
Speaker
Except that you can instead of say that buy now and nobody wanted to do a payment of a crane on using credit card. So you won't imagine if Amazon's or Flipkart's average order value is $15, $16 or say 1,000 rupees, 2,000 rupees. If Iran is so-called a B2B platform,
01:28:27
Speaker
its average order value is $60, $70, which is like 5, 6,000 rupees. India marks average order value is 5, $600, which is like 35, 40,000 rupees or 50,000 rupees. So I think we found that the B2B has a much, much better role to play with the conversational commerce.
01:28:56
Speaker
rather than the plain vanilla e-commerce and I think the rest is while demonetization forced people to learn digital adoption, geo happened and
01:29:13
Speaker
When something like a geo happened or when something like a domestic bid to be happened, I think people who were ready to take the opportunity or to exploit the opportunity benefited. So when nobody happened, since we did a lot of work during 2012, 13, 14 to make sure that our product works nicely on mobile, nicely on mobile app, nicely
01:29:40
Speaker
I think when the geo happened, we got a lot of flip or a lot of benefit. And the same happened in 2020 when the COVID happened. Our traffic grew by 40% in the quarter of July, August, September.
01:30:02
Speaker
Yeah, because people were not going to market, they were instead searching online. Yeah, and we played a lot of role during the March, April, May to make sure that nobody knew the face mask. Nobody knew. And we called every supplier of a paper bag that can you make a face mask? We called every supplier, can you make a face shield?
01:30:32
Speaker
We actually worked to make sure that the supplies are available. But this is going to be this bad? Yeah. You had data showing you, you know, from February itself, we had to start to see the cost of the inquiries of these items shooting up like anything.
01:30:58
Speaker
because the China got disrupted. But we couldn't really act on that data before the lockdown. And when we came back, for 25 years, we never had a walk from home. And suddenly, the next five days, we had to shift everybody to walk from home, shut down the call center and everything. And that's like a complete new experience on its own.
01:31:27
Speaker
How did you manage that? Like, you know, thousands of people who come to office, instead of that, they have to work from home? I think, you know, being a, so we didn't do work from home, not because we could not do work from home. I can tell you one simple example that it's been from 2011. I don't have a dedicated computer or a dedicated laptop of my own.
01:31:58
Speaker
I have a computer on my desk in my office. I have a computer at home. I have iPad in my bag and I can log in from anywhere, any computer in the world and work as effectively as a CEO without having a dedicated computer. All our business anywhere on some cloud.
01:32:22
Speaker
We don't have any servers in our office. I entire our ERP system and everything. Because if we were hosting others website, why not host our own internal website or intranet or extranet inside our office? So we had everything already work from in the setting up already in the work from home culture.
01:32:46
Speaker
It's only the calling systems that the call used to land to the people using call center or using EPPX. That was the only thing that we needed to manage because that now had to land to their mobile numbers at their home.
01:33:06
Speaker
So that was the only big piece that we needed to handle. How do we handle calling? Other than that, all our software, all our internal software, all our servers, everything was anyway on the cloud. Did you like form a thesis? Remote work is good for long term. Yeah, it's not something which you want to do long term.
01:33:29
Speaker
So one thing we realized that, you know, calling everybody to especially all the sales people to the local offices, all places, you know, for example, in Delhi itself, we had 12 different branches. Or Mumbai, we had eight, nine branches, and everybody was required to come every day in the morning and evening to report at the office.
01:33:50
Speaker
though they had to go directly to their client, I mean, they had most of the work to be done either calling the customer or going to the client premises. I think we realized that that has no value or very little value.
01:34:08
Speaker
you could do that probably coming once a week and doing a training session or a meeting session or a review session rather than everybody trying to come every day in the morning and evening to report back to the office. And I think we found that to be definitely gone. So we didn't talk about the IPO. So IPO first time around 2014-15
01:34:40
Speaker
So the IPO dream was to do in 2001-2. But then 2001-2 I told you that whole September 11 happened. And then we were probably getting to IPO ready in 2007, 6-7 after a very good runway of five years when the product market fit was there. And then this export business almost vanished and the whole technology started to change to mobile.
01:35:08
Speaker
Then again in 2014-15 when at one point of time India Mart was also doing well and Tulexu was also doing well, we thought of doing an IPO but then Tulexu needed money very fast and IPO was a little bit time taking so we said that okay let us raise another round of private money, PE money to put into Tulexu because we didn't want to
01:35:35
Speaker
time the IPO, IPO could not take its own time, 9 months to 1 year. So and it also depends on the external market. So we raised the only second round that we raised as a private equity was 1 in 2008 and the second one is 2016, 15-16, 15 and so the IPO finally we thought of doing the IPO in 2017-18.
01:36:02
Speaker
And we started to prepare for that from first January of 2018. By June of 2018, we filed the DRHP. The idea was that we'll get over the IPO by October November, Diwali around. We did the entire roadshow meeting investors between July to September, October.
01:36:30
Speaker
from my last meeting when I came back to India the market started crashing based upon the ILFS crisis and so IP was again postponed but then our numbers kept on doing well so our December numbers were okay our March numbers were okay and we said how much did you do with your top line that year yeah so March 19 we did about
01:37:01
Speaker
510 crore rupees revenue from operations and about total revenue from operations and income other income 548 crores, March 20. So March 19 we did 28% revenue growth and everything. So we said we are not waiting for market to improve.
01:37:22
Speaker
And it was election time. We went on to the second road show. And we were the first IPO immediately after the election. So we got listed on 4th of July. Fortunately, we got listed on 4th of July 2019.
IndiaMart's IPO and Legacy
01:37:40
Speaker
And 4th of July happened to be my grandfather's birthday. Wow. That is so symbolic. Yeah, that's so symbolic. I actually remember that day that, oh, today's father's birthday.
01:37:52
Speaker
ringing the bell in a National Stock Exchange that day felt that his blessings and his teachings has come had come live and I had paid a great it was a great tribute to my grandfather. So we an IPO was a see all is good in the IPO. I think the the entire price discovery mechanism in IPO is is
01:38:22
Speaker
is not I would not say that is up to mark because you see most of the IPOs they should they say that there is a price discovery but their prices move big time after the IPO either on the negative side or on the positive side that simply tells you that the price discovery is not right
01:38:45
Speaker
If the price is, and it is world over a problem, but in India, it is far more a problem. And it unnecessarily eats up a lot of time. Maybe because of that is the reason a lot of people are doing private route or this backgrounds and things like that. But I think it's a great experience in itself.
01:39:10
Speaker
You meet hundreds of these very qualified investors. You know how to tell your own business, tell your own story of ups and downs within that 45 minutes. That gives you a lot of clarity. Every quarter you need to interact with investors, do an investment call. It brings a lot of discipline.
01:39:33
Speaker
It brings a lot of liquidity to yourself and to your employees and a lot of pride. I can tell you around 14% of our equity is held by employees of India market, either as a stock or shares gifted in the past. So 14, 15% at today's value.
01:39:59
Speaker
which is like 20,000 crore rupees market cap, which became yesterday. That works out to be almost like 3000 crore rupees wealth created for employees only. And that's about for 500, 600 employees. So for 500 employees, about 300, 3000 crore rupees wealth got created. So IPOs are great wealth creators.
01:40:25
Speaker
But IPOs don't create wealth on their own. Your company has to perform, because IPOs can be very rewarding and can be very punishing. So I think we have been lucky, and we have got a very good team, and we have got people who believe in the vision of digital India, who believe in the vision of
01:40:56
Speaker
making it easier to do business in India and who believe in the vision of respecting each other's views openly and criticizing what is right or what is wrong. So we have got a very team which is very openly open work culture team. So I think I've been very lucky to have team. I still have some of my earliest employees.
01:41:24
Speaker
out of the 4,000 odd employees that we have directly on our payroll today, close to 800 people are more than five years with us and close to close to 150 people or more than 150 people are more than 10 years with us. There are people who are working with us for more than 15 years. So our top
01:41:49
Speaker
team of 20-25 people has people who are working with us for 20 years and who are working with us for two years. So we have a very good mix of old and new culture yelling. And I think we continue to solve problems for India. Today, we believe that almost close to 1% of Indian GDP flows to India.
01:42:20
Speaker
So what is your future plan for the listed organization now? I mean, so, you know, like say when InfoEdge got listed, it eventually became a like a holding company of multiple startups. Is that something which you also have in mind or like what is your roadmap? Every company takes its own path. And I don't know whether InfoEdge was initially planned like that.
01:42:49
Speaker
I think it was initially planned like a string of pearls that like that.
01:43:02
Speaker
But I think that took a little time and in fact, Nokri business continued to generate good amount of cash, which they were fortunate to invest during the downturn of 2008, 9, 10 in two great companies that turn out to be two great companies like Yamato and Policy Bazaar. However, they have invested now into 40, 50 companies.
01:43:28
Speaker
So they are they are a great company and every company follows a very different path.
01:43:36
Speaker
We as a company, we still think that we need to create an ecosystem for business in India. We need to focus on trusted product discovery and product delivery and software as a service. I continue to believe that still people do not make software for small businesses and medium-sized businesses. The softwares are made mostly for desktop. People haven't yet realized the power of this mobile computer that everybody has in hand.
01:44:05
Speaker
after some time when people will be bored of using WhatsApp and YouTube and and other communication and information and entertainment channel. Why should not do Dvala have a software? Why should not travel? You know, newspaper Dvala has his software. So as you have the hardware, as you know the how to use the hardware and India has
01:44:32
Speaker
India is emerging is a very young country at 50% of India is today less than 30 years of age. And these are the people who are who are the future of India, future of our nation and which are digitally literate people.
01:44:50
Speaker
you have the lowest data charges or that is going to be anywhere, anywhere in the world. I think it's going to be more or less like free. So a lot of things can be done using artificial intelligence, machine learning. We generate a lot of data. So I think a partnering, investing, acquisition, all of that will evolve over a period of time.
01:45:15
Speaker
We have done just two investments so far. One of the companies we have invested is called Vyapar. Vyapar is a mobile-based self-accounting software and they have grown leaps and bounds. We have taken 26% in them at some point of time. Another company we have invested is Bizom or Mobisi.
01:45:39
Speaker
They develop software for these sales force of dealer distributors of large brands. So I think we will continue to focus on providing solutions and softwares which make it easier to do business in the connected world of tomorrow. We will continue to make it easier to do transactions and to do
01:46:09
Speaker
So I think one side is the business automation and other side is the business generation and the third side is the finance and credit. So we'll continue to explore various opportunities and various things and hopefully every company finds a path which is very unique to its own.
Advice for Aspiring Founders
01:46:38
Speaker
So any final message that you want to leave for young aspiring founders? I mean, I'm no guru and no coach. But I think some of the learnings that I have had is it takes much longer than you think.
01:47:02
Speaker
You know, everybody thinks that things can be changed big time in three to five years. It probably takes more, you know, seven to 10 years to when you think that it is you are almost reaching to the first your goal. There are external factors with change.
01:47:22
Speaker
And as I said, told you, you know, in our case, many a times due to external or internal forces, we had to reset our goals and reimagine our offering and reimagine our thought process. So it is important that you don't think of it as a money lottery or anything.
01:47:47
Speaker
you do this because you love this. And you will probably continue to do this for the rest of your life. You may start up with a five year target. But I don't think it's a five year target. It's a lifelong journey. Because, you know, even if you started with the money in the mind, you will probably buy the
01:48:15
Speaker
you will not have any use of that. So that was Dinesh Agarwal sharing the amazing journey of IndiaMart full of ups and downs. Check out the marketplace at indiamart.com and if you're as inspired as I am then you can actually become a co-owner of IndiaMart by investing in the shares of the company.
01:48:36
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit the Bodham.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.