Krishnan and Meena Ganesh, the Bangalore-based entrepreneurial couple, have bet big on a simple mantra: Do what the competition is doing, but do it perfectly. And that is the foundation of their company, GrowthStory, one of India’s largest startup platforms.
The next few months will be crucial as they plan to launch four new ventures and expand their two-month-old food services business—all under the GrowthStory umbrella. But their challenge lies in the first half of their mantra: Do what the competition is doing. By entering markets that are relatively crowded, the husband-and-wife team cannot afford any misstep.
They are developing app-driven startups that operate in areas such as technology education, home improvement and handyman services, food and catering and cloud-based software, all of which already have several players jostling for consumer attention. But they believe that they have what it takes to grab a large chunk of the market-share.
They are not only gearing up to take on local (and later national) competition with their food and on-demand home services businesses, but they are also setting the stage so that their three tech startups can compete with established international players in mature markets in the US and Australia. But GrowthStory, set up in 2011, can take comfort from the second half of the power couple’s mantra: Do it perfectly.
“We want to operate in a space where we will have an unfair advantage. Today, if you want to build a billion-dollar business, you need an unfair advantage,” Krishnan tells Forbes India. “We are trying to create each venture under GrowthStory as a billion-dollar company in the next five to seven years. And this requires rapid scaling up, capital, strong network and corporate governance. Each business should be able to bring disruption in the space it operates by using technology and the internet, which are our core competencies.”
Meena and Krishnan are aiming high, say those who have been tracking their business model. “He (Krishnan) is certainly pursuing a super-ambitious model of taking multiple concurrent bets and promising to work hard to accelerate his ventures, to connect them to talent, ramp up early customers, and raise good-sized doses of early funds at attractive valuations,” says Ravi Gururaj, chairman, Nasscom Product Council, and co-founder of HBS Alumni Angels (India chapter).
However, Gururaj feels that GrowthStory has all the elements of a new generation venture capital (VC) firm, including in-house seed cash, proven hands on entrepreneurial expertise, common operational capabilities and an inherent ‘to-go-big-fast’ approach. “It’s an audacious way of doing business, one which only the Ganeshes seem uniquely qualified to drive at hard,” he says.
The results of GrowthStory’s ambitious incubation plans will be visible only after three to four years. In the early stage investment segment, a portfolio is a mixed bag when it comes to the growth and sustenance of its firms. The rule of thumb is that a third of an early-stage portfolio is expected to fare very well, one-third is expected to be average-performing, and the remaining usually fail or die. “Incubation is a high-risk and high-reward game. In no portfolio can every firm become a $1 billion business,” says Mukul Singhal, vice president of SAIF Partners, a sector agnostic investment firm. “When I do a seed stage deal, I know that 75 percent firms will fail. It’s a law of nature that cannot be defied.”
But Krishnan and Meena aim to break this rule. They have considerable experience in the entrepreneurial space, having built and successfully exited three startups: Customer Asset (a call centre and offshoring services company) which they sold to ICICI Bank for $20 million in 2003, Marketics Technologies (a data analytics firm) acquired by BPO company WNS in 2007 for $63.5 million, and online education venture TutorVista. The couple made headlines in 2011 when they sold TutorVista to the UK-based Pearson Group for $213 million.
The year they sold TutorVista, they founded GrowthStory, which already promotes and runs five companies. The platform’s more notable successes include e-grocery BigBasket (valued at an estimated Rs 1,000 crore), online jewellery store BlueStone (with investments from Accel Partners, Ratan Tata, Saama Capital and Kalaari Capital, and valued at about Rs 600 crore), Portea Medical (Meena is founder-CEO of the Rs 600-crore home health care service firm, which raised $9 million in 2013 from investors such as Ventureast, Qualcomm Ventures and Accel Partners), and online education company Avagmah funded by Capital18. (Disclosure: Capital18 is part of Network18, which also publishes Forbes India.)
Now that these companies are up and running, Krishnan is focusing on the next wave of potential “billion-dollar businesses”. He’s undeterred by the fact that he’s yet to nurture a billion-dollar startup. Three of the four businesses to be launched, says Krishnan, are in “stealth mode”.
An Essential Diet
The couple’s immediate agenda is to scale up their recently launched Bangalore-based FreshMenu. It is a meal kit delivery service aimed at the busy urban individual who seeks nutritious food, but may not have the time or inclination to prepare one.
Experts that Forbes India spoke to acknowledged that while food services businesses are “promising”, driven by the ever-evolving urban consumer’s lifestyle, they come with their own set of challenges. Diversity of food (to create a menu that caters to a number of Indian requirements), meeting taste parameters of home-cooked food and maintaining consistent quality and hygiene across the supply chain are some of the key concerns.
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(This story appears in the 12 December, 2014 issue of Forbes India. To visit our Archives, click here.)
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