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Out of the box: India's coolest start-ups

By Goutam Das
Business Today's 2009 listing of the "Hottest Start-ups" (March 22) featured two bespectacled 26 year olds peering into the camera from behind a pile of books and cartons. Their company was then less than two years old, had 20 employees and annual revenues of around Rs 4 crore.

Today, Sachin Bansal and Binny Bansal's Flipkart has 2,500 people on its rolls and its monthly revenues are estimated at about Rs 200 crore now. By any measure, it is India's largest e-commerce company. And Business Today's listing too has undergone a name change, we now call it 'India's Coolest Start-ups'.

With more funding options available, the number of start-ups in the country is rising exponentially. It is difficult to estimate their exact number, but the pitches made to venture capitalists (VCs) every year can be an indication. The Indian Angel Network, for instance, evaluated 3,400 pitches in 2012, shortlisted 82, and ended up funding 13, says Sharad Sharma, one of its investors.

The year before, it had received just 2,000 pitches. Deal tracker Venture Intelligence says the number of early-stage VC investments have grown 71 per cent in 2012 against 2010 levels. The 15 start-ups featured this time straddle diverse sectors - retail, e-commerce, social media, technology, health-care and biotech. They were chosen - as always - after hours of brainstorming in the office, multiple conversations with VCs, the companies concerned, and their competitors. We used three main criteria: they should all have started after January 1, 2009, should have witnessed early revenue traction, and most important, should have a differentiated service or product. They should all have thought out of the box.

Is there a Flipkart in the making among them? Why not?

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Hector Beverages: Surfeit of Energy 

Shamni Pande

LOCATION: National Capital Region
BUSINESS: Functional Beverage
FOUNDED IN: October 2009
LED BY: Neeraj Kakkar, Suhas Misra, James Nuttall, Neeraj Biyani
COOL QUOTIENT: A great-tasting energy drink with a crazy name

Ask Bala Dutt Sharma what the favourite beverage of customers is at the canteen he runs at MDI (Management Development Institute), Gurgaon, and he replies: "Tzinga." He is not being facetious. The weird-sounding word is, indeed, the name of an energy drink made by a start-up whose own name is equally intriguing, Hector Beverages.

The company was the outcome of a meeting between Neeraj Kakkar and Suhas Misra in 2009. Both had previously worked with Coca-Cola India, Misra till 2006 and Kakkar till 2008.

"We connected well over our shared passion for beverages and started discussing how India lacked a good option in functional beverages," says Misra, now Hector Beverages' Chief Marketing Officer. "As the night ended, we were both sure of our next move."

They put in their own funds, and began scouting boutique research and development firms in Europe for a "magic" formula that would provide an affordable energy drink that "did not taste weird", as Misra puts it. "The trick was in getting the taste, price and packaging right," he adds. They finally settled on one such formula, adding their own touch to it with natural ingredients such as lemon and ginseng and choice fruit flavours - all three variants of Tzinga taste of different fruit. They also expanded their team.

Kakkar brought in James Nuttall, a batchmate at Wharton. Nuttall, who had worked on flexible packaging technologies at Dow Chemicals, joined as a co-founder, while Neeraj Biyani, another former Coca-Cola employee, became the fourth co-founder. Biyanitook one sip of Tzinga while it was still being tested and liked it so much that he, too, jumped in to the venture.

Another major source of support was Shripad Nadkarni, again formerly with Coke, and since then co-founder of MarketGate, a marketing consultancy, who helped with go-to-market strategies, apart from investing in the company in his personal capacity. While the co-founders together put in Rs 2 crore, they got another Rs 3.5 crore from angel investors and Rs 30 crore from venture capital funds Footprint and Catamaran.

Kakkar says energy drinks in India are projected as premium products and consumed mostly by athletes, gym enthusiasts and socialites - rarely by the average citizen. They are costly, primarily due to high import duties. Thus Red Bull, which controls almost four-fifths of India's energy drink market, costs Rs 95 for a 250 ml can. Tzinga, in comparison, produced locally, costs Rs 25.

Hector Beverages is now expanding, as demand for Tzinga rises. It is already the top-selling energy drink in Goa and the north-eastern states, and the founders plan to increase its presence in the country's top 30 cities. It has a manufacturing facility at Manesar, near Gurgaon, and will soon start another one close to Bangalore.

The Manesar plant can produce 170,000 cases of 12 packs each a month. The new one will be bigger, with a monthly capacity of 500,000 cases. The founders refuse to disclose revenue or profit numbers, but say Tzinga currently sells a million packs a month. Having relied so far only on word-of-mouth publicity, Tzinga will now also launch a television campaign, says Kakkar.

The founders are well aware that they are up against formidable odds. Their zany website itself states: "Hector Beverages is a foolish idea. A new entrant, in an unproven space, out to take on giants with the deepest of pockets." It adds that even the company name, Hector Beverages, reflects their situation - according to Greek mythology, Hector, the Trojan prince, was killed by the Greek warrior, Achilles.

But history need not repeat itself - Hector may well prove a winner in the 21st century. The energy market is already at Rs 500 crore and growing at 40 per cent a year. "We know that Achilles does not have the most powerful heels," says the website.

Reproduced From Business Today. © 2013. LMIL. All rights reserved.

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Emart Solutions India: Online Brand Managers 

G. Seetharaman

BUSINESS: Creating and managing e-commerce platforms for brands
FOUNDED IN: July 2009
LED BY: Aditya Bhamidipaty, Srikanth Chunduri
COOL QUOTIENT: Has found a niche in a cluttered e-commerce market

V.R. Kaundinya, Managing Director of Hyderabad-based seeds company Advanta India, had not given much thought to investing in start-ups until two years ago. That was when a lawyer-friend introduced him to Aditya Bhamidipaty and Srikanth Chunduri, founders of Emart Solutions India.

The duo set up Emart in July 2009 to create exclusive e-commerce platforms for brands and provide other web related services, such as managing loyalty programmes and product delivery. It did not take long for Kaundinya to be convinced about Emart'sprospects. He not only pumped money into the company himself but also got his friend K. Raghavendra Rao, Chairman and Managing Director, Orchid Chemicals & Pharmaceuticals, to do the same. Rao and Kaundinya are among the angel investors who have invested under $4 million in the company. "Management of loyalty programmes and customer databases will be crucial to e-commerce in India," says Kaundinya. "This was what attracted me."

Emart differs from regular e-commerce companies, such as Flipkart, in that it not only sells products through its domain GoVasool. com, but also builds e-commerce marketplaces for brands. This model is called 'white-labelled e-commerce'. Emart works with 250 brands, including Adidas, Fastrack, Nikon, Procter & Gamble, and Samsung.

"A multi-brand website is like a supermarket, while our e-commerce site for a brand is like an exclusive outlet." says Bhamidipaty, CEO of the company. Chief Operating Officer Chunduri points out the advantage of exclusivity. "What happens with portals that sell multiple brands by heavily discounting them is that brands are commoditised. We do not discount a company's products unless the company decides to," he says.

Asheesh Raina, Principal Research Analyst at Gartner, a technology research and advisory firm, says white-labelled e-commerce in India has great potential as more and more brick-and-mortar companies turn to the Internet to sell their products. "Everybody is trying to pick a niche in e-commerce and only the smart players will survive," he adds.

Chunduri and Bhamidipaty, both 32, go back a long way, having met in high school in Hyderabad in the mid-1990s. Chunduri attended the Indian Institute of Technology, Madras, and later Duke University in the United States. Bhamidipaty graduated fromJawaharlal Nehru Technological University, Hyderabad, before going on to the Indian Institute of Management, Ahmedabad. They kept in touch, and were keen on turning entrepreneurs. Both worked overseas, Chunduri in New York, as a management consultant, and Bhamidipaty in London, with a software company before moving back to India, to Bangalore in 2008.

Emart entered the online group buying segment the same year, but found it crowded and realised their model was not viable in the long run. But they made an important discovery: companies in India getting into e-commerce have to work with multiple vendors for technology, product delivery and customer care. What if they provided a one-stop shop for all such services? "We are beginning to work with e-commerce portals, too, but our focus remains brands," says Bhamidipaty.

To a large extent, Emart is modelled on companies such as GSI Commerce, the American e-commerce and interactive marketing services provider that eBay acquired in 2011 for $2.4 billion. It currently processes 8,000 orders a day, but remains tight-lipped about its financials. All Chunduri will say is that Emart has been more than doubling its revenue every year and will do so this fiscal year as well. Profit margins? It turned profitable for one quarter in the current fiscal year. "It was a question of whether we stick to our profitability or scale up," says Chunduri. "We chose to scale up."

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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Going the Distance, Cheaply 

Goutam Das

LOCATION: Bangalore
BUSINESS: Online distance learning infrastructure
FOUNDED IN: July 2010
LED BY: Piyush Agrawal 
COOL QUOTIENT: It charges far less than other such service providers, delivering online lectures remotely at super-low bandwidths

While studying for his Masters in Electrical Engineering at Stanford University in the United States in 2008, Piyush Agrawal took a close look at the institute's extensive online distance learning programme. He felt the programme could be run at a fraction of the cost it was incurring without compromising reach or quality. He told the authorities so, but Stanford was not interested in cutting costs - it was making enough money.

India was a different story. On his return, Agrawal, a Bhopal resident, found plenty of takers for low-cost online education at the Indian Institutes of Technology and other leading engineering colleges. He thus decided to start Aurus Network, initially in Bhopal in 2010, but shifted to Bangalore in mid-2012.

Aurus Network provides the tools for video creation, video management and video delivery. It does not create any content, but gives customers a 'proprietary box' programmed with its own software.

The software, compressing the feed from a high-definition camera and a microphone, sends it to servers in Singapore, Delhi and Hyderabad, from which it can be accessed by distance learners using their laptops. It already has around 25 customers, including theAcademy of Commerce in Delhi and tutorial institutes such as Career Launcher and Career Point. Institutes can deliver live lectures to as many as 70 centres from a single location. It charges just Rs 10 per end point per hour - if an institute delivers lectures to four locations, there are in all five end points and Aurus earns an hourly Rs 50.

"Our solution works on a superlow bandwidth. It is designed for bandwidths from 100 kilo bits per second onwards," says Agrawal. "We have designed the video compression algorithm in such a way that it compresses the video in a format where we are able to deliver good quality at low bandwidth."

Aurus also provides a course management system using which institutes can store class schedules, lectures and videos that students can download any time they want to. "People miss classes, do not understand things," says Agrawal.

"They would want to revise by watching videos or lectures again." He believes this, too, is a key differentiator for Aurus. "Most video streaming companies do not offer a way to manage the content. We offer an analytics module as well to help institutes measure which content is proving popular," he adds.

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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For Your Treatment Only 

Goutam Das


LOCATION: Bangalore
BUSINESS: Biotech/cancer research
FOUNDED IN December 2009
LED BY: Mallik Sundaram, Pradip K. Majumder
COOL QUOTIENT: The company's technology platform, Oncoprint, analyses multiple drugs to arrive at the best fit for a cancer patient in just seven days

Two Indian-origin scientists in the United States felt the world needed to rethink conventional drug therapies for cancer patients. Pradip K. Majumder, a professor of oncology at the Harvard Medical School, and Mallik Sundaram, a faculty member at the Massachusetts Institute of Technology, formed a company called Mitra Lifesciences in 2008, but the technology they envisioned needed to be tested on a large group of patients.

India called. They moved to Bangalore, dissolved Mitra Lifesciences and in 2009, incorporated a new entity in India, Mitra Biotech. The company has since stirred much debate in scientific circles with its technology platform, Oncoprint, which analyses - in just seven days - a range of drugs to arrive at the right fit for a cancer patient.

"Cancer is a genetic disease. Every cancer is different. There is a big mismatch today between the drug and the patient," says Majumder. He cites the example of HER2+ cancer, a type of breast cancer. All HER2+ patients are administered a drug calledHerceptin, which has a multi-billion dollar market. "The problem is that if we give the medicine to all HER2+ patients, only 30 to 40 per cent respond and are cured. Our technology accurately predicts which patients Herceptin will work on. Other patients can opt for other drugs," he adds. Such an approach is also cost effective, since anti-cancer drugs are all very expensive. Depending on the type of cancer, a patient could spend up to Rs 50 lakh a year.

Mitra Biotech's technology of arriving at a suitable drug is different from approaches of many other scientists and companies in the segment. Some companies are focusing on what is called a 'biomarker-based' approach to figure out the likelihood of response to a particular treatment. Biomarkers are substances found in the blood that help determine a disease. Biomarkers are better suited to find out which drugs may not work in a group of patients rather than trying to predict which ones may work best on a patient.

Some companies, such as US-based Champions Oncology, use the 'xenograft mouse-based' diagnostic model to determine personalised cancer treatment - the human tumour is transplanted in mice where it is allowed to grow and then tested with different drugs. The xenograft model, asserts Majumdar, has its limitations since it takes three to six months for the tumour to grow inside the mice and by then the similarity with the human tumour may be lost. And not all human tumours grow in mice.

Mitra's technology is based on a real-time experiment. The company cultures the cancer tumour in an incubator, giving it the same micro-environment on a laboratory plate it would have inside the body. Drugs are then introduced into the tumour and each of them tested for the response. An algorithm collates all the data, compares the drugs and ranks them based on the suitability for a particular patient.

Mitra's only customer so far has been HealthCare Global Enterprises (HCG), a cancer-care provider with a network of 25 centres across the c

ountry. Founder and Chairman Dr. B.S. Ajaikumar, a reputed radiation oncologist, believes Mitra is special. "The idea is very good. It could be path-breaking if it works out," he says.

The early response from patients has been encouraging, but the company still has a long way to go, adds Ajaikumar. "It is a study in progress and we are still collecting the data and doing comparative studies," he says. Mitra currently charges $600 (Rs 33,000) from a patient. HCG says using Mitra's approach is a voluntary offer made to patients. The company says it gets about 40 patients per quarter and expects to end 2012/13 with revenues of $100,000 to $120,000. Next year, it expects at least 500 patients inIndia.

The start-up is now eyeing the more lucrative US market as well. It is validating its technology with the Cancer Treatment Centre of America, a forprofi

t hospital chain. "The business delta is much higher outside India. For the same technology, we can bill patients at $4,000," Majumder says.

There are very few Indian biotech companies that have been able to make it big abroad. Mitra, whose tag line explains its name - "your friend in the fight against cancer" - may just reverse the trend.

Reproduced From Business Today. © 2013. LMIL. All rights reserved.

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Website designing for dummies 

Manasi Mithel

BUSINESS: Web designing, hosting and creating integrated e-commerce platforms, specifically for photographers
FOUNDED IN: February 2012
LED BY: Gurpreet Singh, Anuj Sharma
COOL QUOTIENT: Easy website design templates, social networking upgrades with no additional costs

When several photographer friends asked Gurpreet Singh to create their websites, the New Delhi-based digital designer decided to provide them models so that they could do it themselves. He along with Anuj Sharma, a web technology designer, developed Pixpa.com, a do-it-yourself web designing platform, using which creative professionals can showcase and sell their work online. "You don't need any favours with Pixpa. It's easy," says Singh, the company's CEO.

The company was first incorporated in the United States in January 2011 as Pixpa Inc. A year later, the company was incorporated in India and called Pixpa Digital Pvt. Ltd. All operations of both the companies are run out of its Okhla office in New Delhi. 

Pixpa Digital offers a range of design templates that enable people with little or no technical skills to easily create their own websites. Photgraphers, artists and videographers can use Pixpa to share their work online - photographs, videos, slideshows, blogs and social media links - using multimedia tools, all by making a one-time payment of Rs 8,000 to Rs 16,000. "Year-round multimedia and social networking upgrades are included in this with no additional charge for hosting," says Singh. The cost of getting a custom-designed website is more than Rs 20,000, apart from Rs 5,000 to Rs 8,000 paid to the website host.

Pixpa has an integrated e-commerece platform that aid photographers sell their work. It may be the new kid on the block, but the Rs 2.7-crore start-up already has 3,000 subscribers. Indians account for just 15 per cent of its subscriber base at the moment, but Singh says Pixpa has been growing at a rapid pace in India, too. The firm's initial funding of Rs 1 crore came from IdeazInc, a design and digital solutions firm headed by Singh. Barely a year after starting in India, it is making profits. "In just the last six months, we grew at 150-160 websites per month," says Singh.

Pixpa's first client was Mustafa Quraishi, a well-known photographer with little time to manage his massive portfolio. "The last two times I tried to set up my website through some freelance web designers, it took a year and the website still didn't go up. I got my current website up and running within two weeks," he says. It takes only a few hours now for a new subscriber to get a website up and running.

Though such platforms are common in Europe and the United States, Pixpa is one of the first of its kind in India. "Internationally, it is a billion-dollar market, but here in India we don't have any competition," says Singh.

Reproduced From Business Today. © 2013. LMIL. All rights reserved.

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Common Platform Ticket 

Goutam Das

LOCATION: Bangalore
BUSINESS: Software development automation and management platform
FOUNDED IN: September 2011
LED BY: Prasanna Raghavendra, Pradeep Prabhu
COOL QUOTIENT: Helping smaller IT companies deliver software faster, cheaper, better

Between the writing of a software code and its delivery to a customer, often falls a shadow - long delays. Developers write code, but it has to be then integrated, tested at multiple levels and validated by a product manager before it can be deemed ready. Often coders and testers cannot see each other's work simultaneously, leading to a time lag in communication and, in turn, in meeting customer needs.

While large information technology companies, such as Infosys, have designed in-house processes to overcome such delays, the majority of smaller software companies have not. CloudMunch has stepped up to help solve their problem. Founded in September 2011 by two former Infosys executives, Pradeep Prabhu and Prasanna Raghavendra, it has created a platform where developers, testers, web architects, programme managers, the operations team of the company, and even customers have access to a single dashboard that tracks the progress of a code being prepared in real time. "It is a collaboration, management and orchestration platform for software applications," says a T-shirt clad, youthful Prabhu, CEO of CloudMunch. "Running apps was in our DNA and we thought creating a way to develop and deliver software faster was a huge opportunity." In geek lingo, just as there are companies offering 'software-as-a-service' (SaaS), CloudMunch provides 'platform-as-a-service' (PaaS).

Housed in a peach coloured, single storey building in Bangalore's Jayanagar, employing 15 techies, CloudMunch has so far bagged around 20 customers. One of the earliest was Jamcracker, a firm providing cloud services brokerage solutions.

"For us, the time taken from conceptualising a code to making it production ready has reduced by about 20 per cent since we started using CloudMunch's solution," says Manish Jain, Managing Director of Jamcracker's India operations. "Its value lies in continuous integration." The term refers to the need for developers, every time they change a software code, to integrate it with other codes in the application, and run tests to catch bugs early. Jamcracker founder K.B. Chandrasekhar has funded CloudMunchthrough a venture capital fund he runs.

"Though the market is still nascent, a platform like CloudMunch should have a very strong value proposition," says Ranjith Menon, Vice President, IDG Ventures. But a global rat race may well be starting in this segment. US-based CloudForge, for instance, released a version of what it calls 'development Platform as a Service' in April 2012, while CloudBees, started in the US in 2010, even before CloudMunch, helps customers move their entire Java application lifecycle to the cloud. 

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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Eagle Eye 

Taslima Khan

BUSINESS: Indirect sales force management
FOUNDED IN: September 2010
LED BY: Sachin Chhabra
COOL QUOTIENT: Enables brands to track thousands of indirect salesmen engaged in last-mile sales

Till he set up peel-works, Sachin Chhabra, 39, had spent his entire career - from 1996 to 2010 - with fast-moving consumer goods (FMCG) giant Hindustan Unilever. That period saw a huge surge in the indirect sales force of FMCG companies.

Expertise levels required of sales staff also rose. Other industries, such as financial services, business process outsourcing and telecom, similarly employ thousands of people on the ground indirectly, and also need them to function effectively.

Sales are the outcome of competent sales staff spending an optimal amount of time with the consumer. "For a large company like Hindustan Unilever, which indirectly deals with over 6,000 salesmen, every single salesman is responsible for over Rs 1 crore of sales annually," says Chhabra. "Ninety per cent of these are employed, not by the company itself, but by its distributors, many of whom don't even bother to mark the attendance of the salespersons reporting to them."

Chhabra's firm, peel-works (it spells its name without capital letters), enables companies to keep tabs on people who close the sales cycle to check whether they are performing optimally. The start-up's cloud-based solution, called 9Yards, gives companies analytics data on nine parameters to measure the performance of sales staff.

This includes information about how much time sales people spend on the ground, how many distributors or salespersons are required in each given area, the top performers and the underperformers, how much they are paid by the distributor, and so forth. Much of this information comes from the distributors and staffing companies.

"That is rich predictive analytics for companies, enabling them to take the necessary steps required to boost their sales outcomes," says Sandeep Lakhina, Co-founder, peel-works, and former chief operating officer at Starcom MediaVest Group.

"Most large companies are not doing enough in terms of hiring and managing of their sales force," says Srikant Sastri, a member of the Indian Angel Network who along with others invested a total of Rs 3.25 crore in peelworks in November 2011. "More and more organisations are realising this. That is why peel-works's offering is compelling and scalable."

Chhabra's first client was his old employer Hindustan Unilever. Other big clients followed, including Tata Sky and Lakme Salon, all of which pay peel-works based on the number of sales staff managed by their distributors.

The start-up has a team of 35, and expects revenues of Rs 4 crore by March 2013. It is eyeing 15 to 20 large clients by the end of 2013, and is also working on a new version of its cloud-based product targeted at small and mediumsized companies.

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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Winning Arts and Minds 

Goutam Das

LOCATION: Bangalore
BUSINESS: Social platform for creative talent
FOUNDED IN: Summer of 2010 
LED BY: Shekhar Kapur, A.R. Rahman, Poonacha Machaiah
COOL QUOTIENT: Users can hope to collaborate, be mentored, noticed, and ultimately find a marketplace to monetise their creations

A few weeks ago, Gurupriya Atreya, a Bangalore-based radio jockey as well as playback singer for Tamil, Telugu and Kannada films, got an intriguing phone call. Madhav Ayachit, a guitarist working for Qyuki, a new social media site, wanted to know if she was willing to collaborate with other singers, lyricists and composers to record a song and cut a video. Atreya agreed without hesitation. The result was a number, Through My Eyes, which mixed the extremes - classical alaaps with rock.

While Atreya sang the classical section, the rock came from Akhil Unnikrishnan, a vocalist with a rock band Heretic. As for the video, it was shot by users handpicked from Qyuki's members. "Qyuki is a great platform to get noticed," says Atreya. "I would never have imagined I could do a song with both Hindustani classical and rock in it."

Facilitating and bankrolling collaboration between creative minds is just one of the things Qyuki does. Its primary objective is to provide a platform for singers, photographers, filmmakers, artists, graphic designers, writers and others to showcase their work to a worldwide audience. The company has star backers - it was founded in the summer of 2010 by filmmaker Shekhar Kapur and music composer A.R. Rahman. CEO Poonacha Machaiah brings in the technical expertise. "We love to watch movies, we love to sing.

Shekhar knew the movie part well, Rahman the music part. I got the technology play," says Machaiah. Together, they aim to make Qyuki a platform for performing arts and fine arts, as well as a marketplace for creative minds to earn money from their work.

"There is tons of talent in India but it never gets exposed because there is no platform," says Machaiah explaining the rationale behind Qyuki. "You can put up a lot of things on YouTube. But who is going to pick that up? Our goal is to find creative talent a market." Incidentally, the name Qyuki itself is open to interpretation. "Shekhar came up with the name and tweeted it before the launch. People in Japan said it means warrior. In India, some said it was a first sign of love. It could also mean because," saysMachaiah, who these days brings his one-month-old pup, Hera, to work.

The website was launched on December 5 last year with funding from Cisco. Qyuki has already started making revenues, quite rare for a social media site this young. Samsung and Dell are early advertisers. Machaiah expects to see strong revenue from four buckets: advertising, brand sponsorship, subscriptions (for those who want a higher level of service such as downloads) and a marketplace. The marketplace will be introduced in March, allowing users to sell their content. The company will keep an undisclosed percentage of every sale.

Right from the beginning, the attempt was to differentiate the site from other social networking sites, says Machaiah. The user interface is very different from Facebook, for instance. And unlike in Facebook, one cannot 'Like' a photograph. Instead, there are 'emographs' to express love, hope, joy, pride and so on.

The early traction has been encouraging. Since December 5, 2012, when the site was officially launched, more than 12,000 people have registered as members. The company claims it has clocked about 700,000 page views with an average engagement time of more than seven minutes. If it can sustain those numbers, indeed, improve on them, Qyuki will be a name to watch out for.

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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Ahead of the Game 

Taslima Khan

BUSINESS: Social and gamified learning platform for enterprises
FOUNDED IN: August 2011
LED BY: Deepak Diwakar, Mohit Garg, Krishna Depura, Nishant Mungali
COOL QUOTIENT: Creates online games which companies can use to make induction of newcomers and learning programmes for employees more fun

Poorvi Agarwal's first day at work was a lot of fun. The sales executive at travel website MakeMyTrip's Kolkata office spent most of her time quizzing on the computer with several others who had joined the company the same day. Were Agarwal and her colleagues goofing off at work? No, they were taking part in a unique induction programme that uses online games as an ice-breaker for new employees.

The games are the brainchild of Pune-based MindTickle, a year-and-a-half-old start-up that provides web-based "gamified" training and orientation products for companies. Started by four employees of online ad network company PubMatic, it uses its two products, Allboard and Hifli, for training and team-building programmes, so that new employees can settle in quickly.

"These products have proven to be great entry points into large companies," says Dinesh Katiyar, Partner at venture firm Accel Partners, who seed funded in the start-up in January 2012.

MindTickle began small, but has already carved a niche for itself. It has a string of 20 marquee clients, including Yahoo! India, mobile ad network InMobi, financial services firm Bajaj Finserv, online retailer Flipkart and software firm SAP. "One of our earliest clients was InMobi, which has completely replaced its offline induction training programmes with our solution," says Mohit Garg, Co-founder of MindTickle.

MindTickle's products are essentially targeted at companies in information technology, telecom and financial services, which recruit a large number of people every year. "The ITeS sector alone adds about 50,000 jobs annually. The market size of induction of new hires alone is over $100 million in India and over $1 billion globally," says Krishna Depura, another of the founders.

MindTickle is solving a fundamental problem organisations face after inducting new hires - that of delivering learning programmes effectively and creating team spirit between offices located in different places. "Sometimes the CEO is in the elevator with the new hire but neither recognises the other," says Garg. MindTickle's software solutions help companies engage with employees right after they receive their offer letters.

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For Genes that Fit

Taslima Khan

BUSINESS: Genetic diagnostics and research
FOUNDED IN: August 2012
LED BY: Rishi Dixit, Vrushali Joshi
COOL QUOTIENT: Screens babies to detect genetic defects early, so they can be effectively managed

The name sounds innocuous, but Maple Syrup Urine Disease is a deadly genetic disorder. It is inherited, and those affected cannot break down certain proteins.

Vrushali Joshi, Chief Technology Officer at genetic diagnostic firm Navigene Genetic Science, has personally seen 40 to 45 cases and says it is one of the most common high-risk diseases in Indian babies. "The urine of the baby smells sweet, like maple juice. It can cause mental retardation or even death within five to seven days of birth." About 50 per cent of the babies she saw with the disease died.

Other life-threatening disorders among newborns include Methylmalonic Acidemia, which can cause breathing problems, brain swelling, stroke and coma; and Biotinidase Deficiency, which can lead to developmental delays, hearing disorders and eczema.

While testing for genetic disorders to rule out inherited health problems is yet to catch on in India, in the United States, the government spends billions of dollars providing such screenings.

Bacteriologist and physician Robert Guthrie began it in the late 1960s. Today, private companies such as PerkinElmer also offer such screening of newborns. In India, Navigene is one of the early movers in genetic screening of babies. The company was cofounded by Joshi and Rishi Dixit, 33, last year. It collects urine samples of newborns from hospitals and paediatric clinics across six major cities and tests them at its lab in Thane, Maharashtra. The test results are released in 48 to 72 hours. The samples are tested for as many as 110 possible genetic disorders, which are medically known as Inborn Errors of Metabolism or IEM. "Genetic diagnostics for newborns is at the stage at which stem cell banking was five years ago," says Dixit, who tested 600 samples in November 2012 and is targeting 15,000 samples in 2013.

The potential market is huge, given the number of babies born in India, though the chances of tests revealing abnormalities is just about two per cent. "India produces over 51 babies per minute, the highest in the world," says Surojit Nandy, Co-founder at investment firm IncuCapital, which has invested in Navigene. "As awareness improves, the number of tests can go up to two million samples in a year from less than 30,000 currently."

Navigene is also counting on increasing affordability as a driver of growth. There are different testing packages, ranging from Rs 5,500 for screening for 110 disorders, to Rs 2,000, which checks out the eight most common disorders. If a sample tests positive,counselling is provided to parents after which paediatricians follow up with how to manage the problem through diet changes, among other things. "Genetic disorders can only be managed, not fully treated. But awareness at the earliest stage helps a lot," says Dixit.

He is targeting Rs 20 lakh in revenue by March 2013. But there are bottlenecks. "These tests are unlikely to become part of the medical protocol in India at least in the short run because of accuracy concerns," says Dr Balbir Singh, Chairman, Department of Cardiology, Medanta Medicity Hospital, Gurgaon. 

"Doctors are advising parents to opt for genetic screening of babies only when there is a high risk of the baby inheriting critical diseases because of the family history." One of the biggest challenges for Navigene will be to prove the accuracy of its tests.

Another challenge is the lack of experienced talent in the market, but that is also an opportunity. "Big hospital chains would prefer to outsource these tests to companies such as Navigene because of the lack of expertise and low volumes - few people currently opt for these tests," says Nandy.

Reproduced From Business Today. © 2013. LMIL. All rights reserved. 

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Gem of an Idea 

Goutam Das

LOCATION: Bangalore
BUSINESS: Online jewellery store
FOUNDED IN: August 2011
LED BY: Gaurav Singh Kushwaha
COOL QUOTIENT: Provides affordable jewellery with innovative designs over the Net

All that glitters is typically expensive, but it is still possible to make a fashionable purchase for less than Rs 10,000 if you do so at Bluestone, the online jewellery brand of New Age E Commerce Services.

The affordable jewellery it provides sets Bluestone apart from most other jewellery stores, whether brick-and-mortar or online. "We are not selling thick and heavy wedding jewellery," says Gaurav Singh Kushwaha. "We are more into everyday jewellery, which people generally gift one another and which is somewhere between a planned and an impulse purchase."

The company, co-founded by Vidya Nataraj and Kushwaha in August 2011, launched the site seven months later. Since then, the number of transactions has grown every month. About 40 per cent of them are with customers in Tier-II and Tier-III towns, where getting jewellery with modern designs is next to impossible. Nataraj is no longer part of the company.

Kushwaha is not a first-time entrepreneur. In 2006/07, he started Chakpak.com, a content site about Indian movies. It did not do well and some assets were sold to Flipkart in 2011. With Bluestone, he appears more confident. "The size of the Indian jewellerymarket is about $40 billion. It is a scalable category," he says.

But are consumers ready to buy jewellery without seeing the actual item, touching and feeling it? "The brand is way more important than touching and feeling the product," he says. "Lots of people buy an engagement ring because some celebrity wears it. They buy from a catalogue." One of the ways Bluestone is trying to instil confidence in potential customers is by offering to refund the amount paid if the product is returned within 30 days.

Although Bluestone sells jewellery items such as pendants that cost as little as Rs 3,000, the average selling price is around Rs 10,000. If that seems high, given Kushwaha's claim of providing 'affordable' products, it is because of the soaring price of the yellow metal lately - gold earrings worth Rs 10,000 today would have cost Rs 4,000 three years ago.

The company clocked revenues of more than Rs 1 crore in November and expects to close 2012/13 with about Rs 10 crore. It received Rs 20 crore in funding in August 2011 from venture capital firm Accel Partners and Meena Ganesh, CEO and Managing Director of Pearson Education Services. Bluestone is using the funds to set up a manufacturing facility, and to market products.

Ganesh is confident of her investment. She sees a huge demand for good quality but differentiated designs. "A majority of jewellery designs today are old fashioned. Traditionally, jewellery was bought and passed on by mothers to their children. It was not bought to be experienced," she says. "But now, a lot of women want to buy jewellery they like rather than what their mothers passed on."

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Making Dahi Hip

Shamni Pande

LOCATION: National Capital Region
BUSINESS: Frozen yoghurt
FOUNDED IN: February 2009
LED BY: G.S. Bhalla, Raja Inder Bhalla
COOL QUOTIENT: Turned traditional dahi into a trendy food

Entrepreneur G.S. Bhalla was casting about for a unique food-and-beverage business idea when it occurred to him that frozen yoghurt would go down well in the hot Indian summer. "I had tasted frozen yoghurt on my trips abroad," he says. That is howCocoberry was born.

The move was not just chance. "I am what you call a serial entrepreneur," he says. "Soon after graduating from Delhi University, I started dabbling in business." In 2000, he struck gold when he launched a knowledge process outsourcing company focused on health-care in the US. It now employs more than 1,000 people worldwide.

But he wanted to do even better and thus, along with his brother, Raja Inder Bhalla, started Cocoberry. Cocoberry Restaurants and Distributors, of which Bhalla is CEO and Managing Director, was the first to bring frozen yoghurt to India, opening its first store in February 2009 in Delhi's Defence Colony. Since then it has scaled up aggressively, its 50 outlets today scattered across Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi, Faridabad, Goa, Gurgaon, Jaipur, Mumbai and Noida.

It has also launched kiosks in hightraffic areas called Cocoberry2Go, and Cocoberry cafés, which offer coffee, tea and slushes besides the signature frozen yoghurt. Bhalla is even planning to open stores outside India.

Cocoberry was self-funded when Bhalla started. Later, Ajay Relan, Head of CX Partners, invested in it in his personal capacity. "Other investors include Westchester Advisors, a New York-based boutique investment fund," says Bhalla. He has roped in IIMAhmedabad alumnus Rahul Deans, formerly with Hindustan Unilever and Aditya Birla Retail, as President of his venture.

Bhalla delegates considerable authority to his employees who deal directly with customers. "These are the people who are most in contact with the consumer, and should be able to make on-the-spot decisions to deliver the best possible experience," he says. Deans notes that doing so has helped. "In all our stores, we display a sign prominently saying that if there is a problem you are free to call (the top management)," he says. "But we hardly get one call a fortnight, which shows our store people are quite capable of resolving things on their own."

Adds Bhalla: "Our tagline is '100 per cent sin, zero per cent guilt'. We have made the old-fashioned dahi cool and hip."

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Glocal Healthcare Systems: Nursing Bharat 

Anik Basu

BUSINESS: Health-care in rural, semi-urban areas
FOUNDED IN: July 2010
LED BY: Dr Sabahat Azim 
COOL QUOTIENT: Runs five hospitals providing low cost, high quality facilities

Ashish Majhi, 22, gropes for words when asked what his ailment is. He can only describe the way he is bleeding. His father, uncomfortable in the alien trappings of the modern hospital where his son has been admitted, also does not know. It is left to a male nurse to explain. "He has fistula," he says.

Doctors at the 72-bed Glocal Hospital in Bolpur in West Bengal's Birbhum district, about 150 km from Kolkata, say the Majhis typify over a quarter of their patients: poor folk from rural backgrounds. Treatment for them is completely free, thanks to a central government health insurance scheme. Glocal has tied up with the government to implement the scheme in all its five hospitals in West Bengal. The Bolpur one aims to tap the 550,000 rural insurance policyholders in Birbhum district. "People said this is a very good hospital," says Ashish Majhi's father. "They said I had the card (insurance policy), and so I wouldn't have to pay anything."

But even those who are not part of the insurance scheme get top quality treatment at affordable cost. Glocal Healthcare Systems, headquartered in Kolkata, but with all its hospitals based in rural or semi-rural areas of West Bengal, hopes to change the face of rural health-care in the state - and subsequently in other parts of the country. "We are not catering to the luxury market," says Dr Sabahat Azim, CEO, Glocal Healthcare. "We want to deliver the health-care that I would like for my family, but at an affordable cost." While a regular Caesarean operation in a small town, for instance, costs about Rs 15,000, excluding doctors' fees, and up to Rs 1 lakh in a metro, at Glocal the charge is Rs 12,000, which includes the obstetrician-gynaecologist's and paediatrician's fees and five days' stay in an air-conditioned room. For insurance card holders such as Majhi, it is cashless.

Dr Azim, 38, a former Indian Administrative Service officer with a medical degree, says he hated his desk job and quit in 2006 to co-promote an e-governance venture. He left that to start Glocal in 2010 with former SEBI chief M. Damodaran as Chairman. His medical technology team is led by division CEO Saurabh Bhattacharya, an MBA from Harvard, and supported by Chayan Chatterjee, a Wharton graduate. In striking contrast, Glocal Healthcare's Chief Operating Officer Asutosh Srivastava started as a newspaper hawker.

Glocal's business logic is simple: cut the frills and keep costs low to earn Rs 25 lakh per month per hospital. All five Glocal hospitals have broken even in six months. In such areas, land costs much lower than in metros. Capital outlay is also tightly controlled - for example, Glocal hospitals do not have intensive cardiac units which cost patients an average of Rs 10,000 per day, but make do with high dependency units, which have nearly the same facilities, but cost around Rs 1,500 a day.

Glocal Bolpur Business Head Sanjay Mahapatra says the company's rural marketing team trains village paramedics and sources qualified doctors from Burdwan Medical College, the only medical college in the vicinity. It has formed a subsidiary, Indigram, to train nursing assistants and emergency medical technicians. "We also hold camps in villages to spread the word about the health insurance scheme," Mahapatra adds.

Technology too, is used wisely and economically. The Bolpur unit, for instance, does not employ a radiologist, but all radiological images are sent to a central lab in Lucknow digitally, which sends back prompt reports. Its model has found favour with venture capital funds Sequoia Capital and Elevar Equity, which have put up Rs 14 crore of the Rs 33 crore Dr Azim needed for the five hospitals. There are talks on with the financiers to fund an ambitious 50 more hospitals in Uttar Pradesh, Bihar, Jharkhand, Orissa and Chhattisgarh. Each one, comprising 100 beds, is expected to cost Rs 8 crore.

Is rural health-care financially sustainable? Dr Azim says he is confident of 20 per cent net margins. "There are three major challenges in rural health-care - quality, scalability and retention of clinical experts," says Sandeep Sinha, Director of Health-care and Life Sciences Services, Frost & Sullivan. But Glocal's doctors wave away the challenges. "I was making tonnes of money back home in Jabalpur, I don't need money," says Glocal Bolpur's anaesthetist Inder Mohan, a former army doctor. "My work is here, with these people."

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Edutor Technologies: Bookless in the Classroom 

E. Kumar Sharma

LOCATION: Hyderabad
BUSINESS: Digital learning
FOUNDED IN: August 2009
LED BY: Ram Gollamudi, Co-founder and CEO 
COOL QUOTIENT: An interactive solution for school students and teachers using touchscreen devices

The mechanic works on motors, the accountant has his computer. Were a school student to work on a machine or device, what should it be called? Edutor, decided the group of engineers, all alumni of the Indian Institute of Technology (IIT), Madras, when they founded Edutor Technologies in August 2009.

The group wanted to enhance the learning experience in schools with an interactive digital medium that could be used within and outside the classroom. They created a solution that digitizes school textbooks and other learning material so that students no longer need to carry as many books to school and back as before, but can access study material on their touchscreen tablets. They can even take tests and submit them digitally using the same tablets, and the teachers in turn can download the tests using the company's cloud services.

"The teacher can act on the data rather than having to collect it," says Ram Gollamudi, 37, one of the cofounders of Edutor and its CEO. The company's annual subscription costs between Rs 1,500 and Rs 3,000 per student, depending on the grade she is studying at. Edutor's tablet costs Rs 6,500 for a seven-inch device and Rs 10,000 for a 10-inch one, but the data can be accessed using any other tablet as well.

How did it all begin? In 2009, Gollamudi was contemplating moving back to India from the United States, where he worked for a venture capital firm, investing in early-stage technology companies. He realised the power of touch-screen devices when hisfouryear-old son was attracted to the one he used. He also noticed that the children of his relatives and friends were keen on a digital learning medium, but their parents discouraged them fearing they would spend more time on social networking sites and online games if they had free access. Gollamudi then teamed up with three friends to build a digital learning platform. The start-up was incubated at their alma mater IIT Madras, and became operational in April 2010.

Edutor learning solution is currently in use in 20 schools and coaching institutions across Hyderabad, Bangalore and Delhi, teaching about 4,000 students. "We will get to 30,000 to 40,000 students by December 2013," says Gollamudi.

The potential is huge. "Every year, 20 million children enter schools. Spread over 10 classes, there are roughly 200 million children in schools in a year, hardly any of them use this medium," says Gollamudi. "Even if 10 per cent or 20 per cent of these children start doing so, it would mean 20 million to 40 million children overall," says Gollamudi. And if Edutor gets even 10 per cent of this market, it would mean two million users, he adds.

There are challenges as well. Broadband coverage in the country is still poor, there is also lack of awareness. "It is a new space. Though people know the use of this medium for entertainment, the challenge lies in conveying to them its great potential in education," says Gollamudi.

The company expects to close the financial year 2012/13 with a revenue of Rs 5 crore. It began with seed capital of just Rs 1.5 crore, getting an additional Rs 2 crore from Hyderabad Angels, a group of angel investors, in January last year. Half the amount came from Sashi Reddi, a serial entrepreneur and the founder of AppLabs, a software testing company acquired by Computer Sciences Corporation in September 2011. Reddi acknowledges the hurdles ahead. "This is a new market that will take time to evolve," he says.

What made him invest then? "I bet on the team," he says. "That was the strongest thing about this venture. It had a committed team of founders, who initially pitched in with their own resources." He intends to invest even more though he knows it could be a long wait - "up to five years or so," he says - for the company to acquire reasonable size.

Reproduced From Business Today. © 2013. LMIL. All rights reserved.