Read what the founders of two early stage investors, Eagle10 Ventures and Orios Venture Partners – have to say about their investment philosophy and reasons why they invested in their investee companies…
TEN TIMES with EAGLE10 VENTURES!
Eagle10 Ventures is an early stage technology startup focussed investment company. Founded by Pramod D’Souza, corporate product leader and Prashant Pansare, a serial entrepreneur, Eagle10 aims to bridge the gap between seasoned corporate leaders and startups by helping them raise the first external funds. The company has invested in companies like Matelabs, TravelSpice, Zeslt, PiBeam Labs and NetAnalytiks. “As the name suggests, Eagle stands for identifying right startup at a very early stage and 10 stands for starts up which have the potential to grow 10X in the next two to three years,” explains Pramod. He adds, “10x could be revenue, number of customers or any other parameter which is relevant for the startup.” In this tete-e-tete with Smart CEO, D’Souza and Pansare share Eagle10’s investment philosophy and their investments.
Share with us the reasons why you invested in:
TravelSpice – It an Opaque Booking Platform that allows users select the price of their preferred stay and book instantly. It allows customers to decide the price they want to pay for star rated hotel at any destination.
Its pricing model is very similar to US based priceline.com. However, it works on a reverse bidding margin where the customers can decide the price and hoteliers can bid for the customer. While a customer cannot select the hotel, he or she can select the category of the hotel, place and date, in their budget. The hoteliers will bid and the lowest bid will win the customer and the platform will connect the customer and the hotel. This model has the capability to go viral and grow exponentially with right marketing strategy.
“The excitement comes from talking to the founders. They are hardworking, super intellectual people who want to change something in the industry.”
In the other discount models available, it’s the platform that offers the discount and not the hotel.
For a hotel, room charges offer minimal profit while the higher margin comes from food and beverages and hence, they do not mind giving the discount for a family that chooses a vacation in their city. This apart, the average occupancy rate of a hotel is 62 per cent with 38 per cent inventory getting perished.
PiBeam Labs: It is an IIT Madras startup engaged in building sustainable and affordable electric vehicles for the micro mobility market. PiBeam is the first Indian electric vehicle company to offer pedal assisted solar and electric trikes for logistics and passenger movement.
We looked for something in the team other than technology expertise. And the fact that it is a completely different market that the company has entered caught our attention. They are disrupting and creating a new market category.
What is it about your role that excites you?
The excitement comes from talking to the founders. They are hardworking and intellectual people who want to change something in the industry. To make one successful investment, we have to talk to 50 to 100 entrepreneurs. The amount of knowledge we gain from this interaction is quite a lot.
We have a great startup ecosystem in Bengaluru, next to Bay Area. It’s not like we know everything, we learn by being a part of this ecosystem.
In technology space, if you are outdated, you are not relevant in the industry. How do you stay relevant? By getting involved with the founders and understanding what they do, by doing this you learn and add value.
We have the best people who have built large organisations and done something exciting in the technology space. When you are evaluating with them, the knowledge you gain from various perspectives and questioning is humongous.
CONTINOUS SUPPORT – ORIOS VENTURE PARTNERS
Orios Venture Partners, founded by Rehan Yar Khan, is a fund focused on India’s technology opportunity and identifies innovators who work in unchartered territories, on ideas that have the potential to disrupt the traditional ecosystem. It invests in startups in B2C, B2B and software sector which target India as a market. The team consists of a mix of entrepreneurs and those with consumer operating experience to help companies in scaling up operations, hiring, building a brand and so on. Incorporated in 2013, the company has PharmEasy, Boonbox, LetsMD, GoMechanic, to name a few, in its portfolio. “We invest early in these companies and continues to invest in the most promising ones and typically hold on to investment for close to 7 to 8 years,” says Khan. He talks to Smart CEO about three reasons why Orios chose its investee companies.
Can you share with us reasons why you invested in:
PharmEasy: PharmEasy is a leading player in the online pharmacy space. Our thesis was that the entire pharmacy space in India requires modernisation. Currently, the only way to get medicines is to visit a chemist. Also, there is no discounting model and sometimes there are issues of spurious products. This apart, there is no home delivery and subscription-based model. We believe that this space needs a lot of modernisation. And hence, invested in the next gen of pharmacy companies and next gen of pharmacies online and scanned the market and looked for best and found the best team in PharmEasy.
While we have made some good investments that have turned profitable, we have also missed many good companies. The big lesson here is that you have to bet on the person rather than the business model.
GoMechanic: This company is modernising the entire garage space in India. Currently, if you want your vehicle services or repaired you have two options: authorised service centres, who give a large bill or a local garage, which can be less expensive but with inconsistency in quality. The company is creating a set of modern reliable high quality garages at local garage prices. It acquires local garages and makes them into GoMechanic garages, modernises them, sets operating procedures in place and ensures a good spare parts availability.
Share with us some lessons that you have learnt from your journey as an investor?
We met the entrepreneurs, discussed with them and did not end up investing in them. The big lesson here is that you have to bet on the person rather than the business model. Business model can change but if you have an entrepreneur who is capable and is a visionary, then we should back then.