Manu Balachandran is a writer for Forbes India, based in Bengaluru. At Forbes India, Manu writes on automobiles, aviation, pharmaceuticals, banking, infrastructure, economy and long profiles among many others. He also moderates many of Forbes India's CEO and CXO events and hosts Capital Ideas, a podcast on the most riveting success stories from the business world. He has previously worked with Quartz, The Economic Times and Business Standard in Mumbai and New Delhi. Manu has a master's degree in journalism from Cardiff University and a degree in economics from the Loyola College. When not chasing stories, he is most likely obsessing over Formula 1 (Read: Lewis Hamilton), historical events and people, or planning long weekend drives from Bengaluru
Jay Vijayan's cloud technology company Tekion Corp achieved unicorn status last week.
If it wasn’t for his politician father, Jay Vijayan could have been dabbling in Tamil Nadu’s political arena today. Instead, the 48-year-old has built one of the world’s newest unicorns, the California-headquartered Tekion Corp.
In the 1990s, Jay’s father, K Vijayan, a long-time leader of the Indian National Congress in Tamil Nadu, tore away his son’s candidature form for the local councillor elections to goad him into taking a salaried job. “I was young… we wanted to change things and everybody told me that I will win by default since my father was a leader. But he pushed me to pursue a regular job," Jay tells Forbes India over a Zoom call from California.
Today, he looks back at his father’s decision with gratitude. “He certainly did the right thing,” he says.
Only last week, Tekion became a unicorn after it raised $150 million in a Series C financing round. A cloud technology company that Jay founded in 2016, Tekion offers a software as a service (SaaS) platform for the automotive industry that helps connect customers, car manufacturers and dealers on its cloud-based platform, helping create seamless experiences from buying a car to managing its inventory and spare parts.
“There is a trust issue in the industry,” says Jay. “Customers don’t trust dealerships. Dealerships don’t trust the original equipment manufacturer (OEM). And OEMs don’t trust dealers. If the OEM and the dealer can provide transparency to the customer and the best experience, then it’s a win-win situation. That’s what we are solving with Tekion.”
The cloud-based subscription service is currently used by 17 car manufacturers. The platform uses machine learning and artificial intelligence to suggest everything from purchase options for car buyers, availability of spare parts and service schedules, and also provides market intelligence to dealerships. At the centre of it all are the dealers who can use the platform to streamline operations. The company’s investors include General Motors, BMW, the Renault Nissan Mitsubishi alliance and Airbus Ventures.
“Today, manufacturers, dealers and consumers all operate in silos even though they are connected,” Jay explains. The company had earlier raised $65 million in its Series B funding round from Exor, General Motors and Alliance Ventures, among others. Next year, the company plans to make its foray into India—where a significant portion of its workforce is.
“I would say he is ahead of his times,” says Vinay Piparsania, former consulting director for automotive at Counterpoint Research. “Tekion can connect the two ends of the vehicle purchase journey, from pre-ownership to post ownership. And Jay has built a scalable model, which companies can look to adopt. Many of the global automakers are struggling with legacy issues, and haven’t been able to move to make full use of the cloud.”
Chennai to California
While Tekion has found itself in a rather covetable league in a short span of four years, Jay’s journey hasn’t been an easy one. In fact, he had to shut down a family-run business for lack of funds.
Born and brought up in a middle-class Indian family, Jay studied in Chennai where he went to schools that offered matriculation syllabus. His father ran a training institute for radio and television in the city, while also dabbling in politics. “He was doing alright,” says Jay. “But, he was always busy in politics and didn't spend too much time in expanding the business. But we got by.”
After schooling, Jay joined the illustrious Presidency College in Chennai, which counts Nobel laureate CV Raman and former chief minister and lawyer C Rajagoplachari among its notable alumni. Jay went on to study geology. “It was a time when there was no internet,” says Jay. “There wasn’t much guidance. But I always wanted to be unique.” It also helped that a degree in geology could land him in a job in the lucrative sectors of oil and gas and mining. Subsequently, he also earned a postgraduate degree in geology.
Around the same time, Jay began dabbling in computer science and enrolled in diploma courses at NIIT. “I wanted to learn computers,” he says. “But I couldn’t do my masters in computers after geology. So I began to do a diploma at the same time.” Soon, he realised he didn’t want to pursue a career in geology, and turned towards computers. Around the same time, his father set up a computer science training and coaching institute in Chennai on a property that the family had owned. The funds for running that institute were raised by mortgaging that property.
“I worked there as a programmer, and did numerous roles,” Jay says about the family business. By 1995, he stepped into the job full time, and also brought along his friends to scale up the business. “But we couldn’t expand any further. We had hit a brick wall,” Jay recalls. “We needed more money and we had already borrowed enough.” With the interest rate on the principal growing, he knew that the business had to wind up. “I was too young and didn’t have the right level of connection to raise capital,” he says.
A look at Jay Vijayan's CV highlights. Graphic: Mansvini Kaushik
A few months into the closure, Jay found a job with the then-Chennai-headquartered Bahwan CyberTek. The company sent him on a project to Oman. “People told me that I shouldn’t pay back the loan,” recalls Jay. “But I was clear. I needed to pay up. It was about integrity.”
The job in Oman soon led him to Singapore-based City Developments Limited, a global real estate company. “I spent another year in Singapore and also had permanent residency,” he says. “But even then, more than half my salary went in paying my old loan. I was having sleepless nights.”
In the meantime, he began learning certification programs in Oracle database and other tools for Oracle. “I was among the few people in Asia who had the latest and greatest certification in the database in Oracle tools,” says Jay. “Soon, Oracle reached out, for a role in the US. While he was hesitant to move to the US, primarily because of Singapore’s proximity to India, he decided to give it a try for a short while. Jay joined as a programmer before becoming the lead, and then a senior manager. “The loan was finally repaid in 2006,” he says.
Oracle, meanwhile, also opened up Jay’s understanding of the complex world of business applications, including Enterprise Resource Planning (ERP). “The seed of my idea started from there,” says Jay. “My thought process was: ‘Why should these applications be so complex?’ Large companies spent billions on building ERP. If I got a chance, there was a way to do it better.”
By 2007, Vijayan left Oracle for California-based VMware, a cloud computing and virtualisation software and services company, where he grew to be a senior director.
It was there that a recruiter from Tesla approached Jay to join them. “She reached out multiple times through LinkedIn and left messages on my phone,” says Jay. “In fact, I didn’t even bother responding.” But she kept following up, before Jay agreed to go for an interview with the team that was then launching their Initial Public Offer (IPO).
“I spoke to Elon [Musk, co-founder and lead, Tesla],” recalls Jay. “Back then, nobody knew Tesla. He’s not a man of too many words. He speaks little, but speaks to the point. We had a good conversation. I was intrigued by his vision and thought process…even if 25 percent of what he says could be implemented, it was going to be great.”
But Tesla couldn’t match his salary. “The offer wasn’t attractive enough for me to join,” explains Jay. “VMware was doing great. I was sitting on a stock of $2 million. It was a big deal for me to leave. I had loans for a long time and money was something I felt was important.” So, he ended up saying no to Musk and Tesla. A year later, however, Tesla reached out again.
“Elon told me he wanted me to join them yesterday,” says Jay. “We talked about building the central nervous system of Tesla. I felt this is a great responsibility and a phenomenal opportunity to build a platform.” He agreed to a pay cut, but negotiated more in stocks. “I thought, if I am taking a risk, let it be worth it,” he says. “It looks like my calculation worked out multiple times more than I thought.”
Jay Vijayan joined Tesla back when nobody really knew Elon Musk, and was impressed with his ideas. Photo: Justin Sullivan/Getty Images
Joining Tesla gave Jay a deep understanding of the problems within the automobile industry. Tesla had specialised in building its own direct sales model, choosing not to go after the existing franchise model. Much of that was also because of Musk’s belief that franchise dealers had a conflict of interest between selling gasoline cars and electric cars “My task was to replace SAP and build our platform, internally,” says Jay, who rose to become the company's Chief Information Officer (CIO). “The idea behind this is having a seamless vertical integration between all the departments with the closed feedback loop to the customers.”
Over the next four years, Vijayan saw first-hand the troubles within the industry when it came to vehicle retail.
“There are three aspects of the consumer journey when it comes to a vehicle,” explains Jay. “It is perhaps the second biggest purchase after a house. There is sales, servicing and customer engagement. But there was a huge amount of friction between the customer, dealer and manufacturer. It would often take up to eight hours once you step into a dealership to finish buying your car.”
Much of that is because many manufacturers and dealers depended on outdated technology. Dealers also used numerous software to run their operations, which often delayed the customer experience. “Today’s consumers receive outstanding personalised retail experiences from companies like Amazon, Apple, Google and Disney,” says Jay. “They are bringing the easiest experience to the customer. But in automotive, the experience is decades old. This is when I thought of an opportunity to change the experience.”
Soon enough, he took a break from Tesla, and with his personal savings, decided to work on a prototype. “The first two years were the toughest for the company,” says Jay. “After that, it started turning around because we put in the right steps.” In late 2019, the company launched its flagship Automotive Retail Cloud platform, which it claims is the first end-to-end dealer management system on the cloud. Today, the platform helps integrate functions, including sales, finance, inventory management and customer service for dealers. The company follows a subscription-based revenue model, with dealers being allowed to choose from additional services.
“If you are a customer, what the platform does is,” explains Jay, “if you want to buy a particular model in a particular colour and it isn’t available, chances are that the sales team will never give you a correct answer about its availability. They could push you to take another colour. With Tekion, you get transparency. The platform will be able to tell when the vehicle leaves the manufacturing facility, alerts the customer once it leaves, and makes it seamless.” The same goes for a spare part or servicing. “You can monitor how the service is being done and offer customised tools to the customer.”
For now, Jay is busy scaling up his business in the US and is looking to enter the Indian market in early 2021. The company has its Asia-Pacific headquarters in Bengaluru and of its 450-people-strong workforce, 300 are in its technology centres in Bengaluru and Chennai.
“From our studies, we realised that automotive customer journeys even today are quite bumpy and fragmented as opposed to, let’s say, an ecommerce, airline or hotel experience,” Harshvardhan Sharma, head of automotive retail practice at Nomura Research Institute Consulting & Solutions India, says. “Auto OEMs need to realise that the car customer is interacting with many brands and is now conditioned to a smooth and seamless digital experience, and auto buying experience has to be at least similar, if not better. If Tekion can solve this problem and scale well, I am sure it will meet huge market success.”
Meanwhile, the global pandemic has only accelerated the thinking among dealers and manufacturers to move towards more cloud-based technology, says Jay. “Covid-19 has accelerated the process,” he adds. “There is a demand for contactless practices.” For now, Jay is keeping his head low despite the recent success. “We don't spend money like crazy,” he explains. “We spend on the right thing and our burn rate is low. Revenues are increasing month-to-month, and we are in a great position to scale the business using that capital.”
Where does Tekion go from here with the latest round of funding? “We want to grow to $1 billion in sales in the next three to five years,” says Jay. “Think of the valuation we can achieve then.”