The founders of MarketRx, Jassi and Navi Chadda, are on their second innings in the analytics space with Axtria Analytics. This time, adopting key strategies from IT Services giants such as Cognizant and Infosys, they aim to touch revenues of US $1 billion within the next decade or so by offering high-end analytics services to Fortune 1000 companies.
Neither are Jaswinder Chadha (Jassi) and Navdeep Chadha (Navi) first-time entrepreneurs nor are they new to the data analytics know-how. In April 2000, they became one of the early movers in the data analytics space with the formation of marketRx, a data analytics firm operating in the life sciences space. Since, at that time, the technology bubble was yet to burst and analytics as a practice was still a distant reverie, the trials and errors in building the right team and products served as vital lessons for the duo and their team when founding their second venture. “We made a lot of mistakes at marketRx. But all that matters in the end is, if the success rate is higher than the failure rate, there is a good chance you will have an overall success,” opines Jassi.
In this story, he draws a parallel between the founding duo’s journey from marketRx to Axtria Analytics (Axtria) and articulates how at every stage they improved upon their previous venture, both in terms of strategy and growth. Jassi also admits being an ardent admirer of Cognizant Technology Solutions and draws several analogies from the IT services space and shares practices and models which were relevant and replicated at Axtria.
The early days
Axtria was founded in November 2009 (headquartered at New Jersey, U.S.) at a time when big data analytics was beginning to come to the fore. The experience of having built a company in the same space earlier helped the founders start ahead of the game. In other words, the founders were in a better position to understand the nuances of recruiting the right team, creating a relevant value proposition for customers and building a scalable model. “One of the key insights we gathered was whether we are building a software or a services company, it’s all about getting the right people on board,” says Jassi. Drawing from the big five IT companies in the country (such as Cognizant and Infosys) he points out that when these companies were built in India, a key strategy that led them to fare better than their competitors in the space was talent conversion. They excelled in taking raw talent, training them and making them productive. “This strategy bodes well in the data analytics space too. We have been able to get off ground and scale the company as we have leveraged a similar model,” he states.
Similar to Infosys Technology’s training institute at Mysore, one of the first steps that the founders took was to build Axtria Institute to train fresh recruits on-the-job. “We took the best managers and analysts from our team and told them to focus their 100 per cent in training new employees,” adds Jassi. Axtria focuses on developing three primary skills; technical skills such as knowledge of programming languages and developing the ability to formulate models and identify solutions, vertical and functional domain knowledge, project management and client communication skills. The company largely delivers analytics solutions in three domains; pharmaceuticals, banking and retail and on the functional front, it stresses on three aspects, sales management, marketing management and risk management. “For us, pharma was a natural choice since many of our team members were familiar with the industry and could understand the pain points of the customers. Apart from this, we identified other sectors based on companies which had large markets and already spent a significant amount in data and analytics,” he says candidly.
What we observed was that many data analytics companies are bringing raw horsepower into companies but are not really experts in a particular industry or domain and hence, they are not building software solutions. We, on the other hand, want to focus on building high-end analytics solutions such as generating insights and offering business consultations.
In building a multi-vertical model is where Axtria aims to differentiate itself from other companies such as MuSigma and Fractal Analytics. As Jassi says, “What we observed was that many data analytics companies are bringing raw horsepower into companies but are not really experts in a particular industry or domain and hence, they are not building software solutions. They focus on low-end analytics such as data crunching and reporting. We, on the other hand, want to focus on building high end analytics solutions such as generating insights and offering business consultations.” Accordingly, the company invests heavily in training its employees to become subject matter experts.
Incidentally, the company doesn’t follow a linear model to scale its business. Instead, it adopts a hybrid model which Jassi coins as a platform-enabled services business. “For instance, we have software which enables us to embed our analytics solutions into the customer’s CRM system. And, instead of a representative from a remote location sharing insights and presentations from time to time, the customers have a complete visibility of how the work stream is being organised and what the results are. This enables us to scale faster,” he explains. To demonstrate the success of this approach Jassi gets into some number crunching. “The benchmark for most Indian analytics companies is US $40,000 to US $50,000 average annual revenues per FTE (full-time employee). But for us, it stands at US $80,000 to US $100,000 per FTE because we deliver high-end analytics services.”
With respect to clinching client deals, the founders are clear that they will go after Fortune 1000 companies. “Through our track record, we have demonstrated our work to clients and they are more willing to come on board. And, we realised that one of the best ways to clinch the deal is to offer more operational analytics than just data crunching,” asserts Jassi.
Seeking growth capital
In July 2015, Axtria raised a Series C round of US $30 million led by Helion Venture Partners, with Sanjeev Aggarwal, its senior managing director and co-founder joining the board as a part of the deal. The other participants in the round included Boston-based entrepreneur and venture capitalist Gururaj ‘Desh’ Deshpande and existing investors Amar Sawhney, Rick Braddock and Fred Khosravi. Prior to this, the company had raised Series A of US $2.5 million from Sequoia Capital in 2010 and US $10 million in two tranches from undisclosed entrepreneurs and HNI investors. “Almost US $25 million out of the US $42.5 million we have raised is our own personal capital,” shares Jassi.
He admits that raising capital for Axtria has been easier as compared to at marketRx, not just because the founders have a track record of building a successful business but also because the industry is seeing a boom now. Most of the funds raised will be used towards software and product development, scaling operations and improving infrastructure.
Currently focused on the North American market (with plans to enter Europe shortly), the founders are looking to touch revenues of US $100 million in revenues in three years. “Once we reach this size, we would like to consider some small acquisitions that will enable us to accelerate our growth further,” points out Jassi.
As the discussion advances to the founders’ long-term vision for the company, Jassi quotes another analogy from Cognizant’s growth in the IT services industry. “Cognizant recently celebrated its 20th year anniversary and touched revenues of US $12 billion in this period. If not such a high target, if we are able to generate US $ 1 billion in revenues in seven to ten years, it will be a great outcome,” he concludes.
Foray into European markets and consider small acquisitions once the company has acquired critical mass
Touch revenues of US $100 million in revenues in three years
Grow to 1,200 employees on board and partner with 100 clients in the U.S. and European markets in three years