 "Computers managing computers")
Named idea Device, this Bangalore-based information technology (IT) process automation company was conceived in 2009, over a cup of coffee at a roadside stall.
When a friend couldn't turn up to meet Saju Pillai and Aaditya Sood because he had to deliver work to clients, Pillai and Sood set out on a mission to ensure "computers manage computers".
Pillai, who firmly believes in Robert Heinlein's concept of "specialisation is for insects", says he hates the fact that people have to manage computers. "Both of us (Pillai and Sood) felt there was a gap in the way large organisations handled business-critical IT. They have scripts and ideas but these never come together. What they need is not to depend on people but have an automated way of doing things. They need to ensure human mistakes don't happen and things happen," says Pillai.
In June 2009, the two former Oracle employees set up idea Device. However, the first year turned out to be "really complex", as the two neither understood sales and marketing or have expertise in financial management.
Soon, they approached Indian Institute of Management-Bangalore (IIM-B), which incubated start-ups at its N S Raghavan Centre for Entrepreneurial Learning. However, they were refused entry, as they failed to explain their business plan to the selection panel. "We had never done it before and we didn't know whom to approach. We didn't even know who would be our customer, forget exploring the market," Pillai says. "But we kept on approaching it (IIM-B) until they granted us entry."
Subsequently, Pillai and Sood started developing the software, before approaching the toughest data centre in India. This "very, very large data centre of a Mumbai-based financial company" asked them to proof the concept. After six months, the client decided to shift to their platform completely.
The duo roped in their second client, the world's eighth-largest pharmaceuticals company, after a mere 15-minute demo, over an online meeting, says Pillai. He, however, jokes they might have secured the contract because they had "underpriced the product terribly". Nevertheless, the money they received from this client was significant for the start-up.
By the time they started generating revenue for their clients, Pillai and Sood had invested Rs 12 lakh from their savings in the company.
Funding
While their wives continued to support the two young entrepreneurs financially, their first breakthrough in funding and investment was in 2011, when idea Device won TechSparks, one of the biggest technology product start-up showcases in India. Pillai and Sood were invited by the senior Sequoia Capital management members, who were on the panel of TechSparks, and, in a couple of months, the company received seed funding of $600,000 from the American venture capital firm. In October 2013, idea Device raised $4 million (Rs 25 crore) in series-A funding from Sequoia.
"The good thing about Sequoia is it is a long-term investor. It has done this so often that it knows entrepreneurs understand their businesses. And, it is patient; its motto is 'more power to you'," Pillai says.
Sources said for 2012-13, idea Device's revenue stood at $2 million. Its clients included one of world's largest stock exchanges, as well as one of the largest banks in the world, they added. The website names large global players such as Microsoft and VMware as the company's partners.
With the rapid adoption of third-generation technology and broadband in India, several venture capital firms are bullish on investing in firms that help support the infrastructure required to increase internet reach. Intel Capital, the investment arm of US-based chip-maker Intel, says this year, it will look at firms in areas such as data centre software, internet of things and wearable devices. "When you look at the macrotrends, these are all positive. India is the second-fastest country in terms of adding online users and three quarters of the population is aged less than 35 years. So, it is a highly consumptive demographic," says Bhavanipratap Rana, director (India), Intel Capital. "All other trends such as rising smartphone reach and prices of second-generation technology plans dropping work well for us."
At present, idea Device has 15 clients and 30 employees. It is expanding abroad, for which it seeks to hire staff in the US. While the firm has recruited most of its staff through hearsay so far, it is carrying out a recruitment drive across India, Singapore and the US this year.
Pillai says on several occasions, the firm had approached break-even levels but had carried out investments at those times. It is likely idea Device will break even by December, he adds.
The firm plans to explore the cloud, an aspect Pillai says it hadn't considered before partnering Sequoia. In the US, it will sell a cloud variant of its product.
Pillai hopes in five-10 years, idea Device will be in the same league as Amazon. "That's all I want," he says.
FACT BOX
Area of business: IT process automation
Started operations: 2009
Gross revenue: Around $2 mn
Break-even: By December 2014
Funding: $2.6 million from Sequoia Capital
2011: $600,000 seed funding from Sequoia Capital
2013: $4 million in series-A funding from Sequoia Capital
When a friend couldn't turn up to meet Saju Pillai and Aaditya Sood because he had to deliver work to clients, Pillai and Sood set out on a mission to ensure "computers manage computers".
Pillai, who firmly believes in Robert Heinlein's concept of "specialisation is for insects", says he hates the fact that people have to manage computers. "Both of us (Pillai and Sood) felt there was a gap in the way large organisations handled business-critical IT. They have scripts and ideas but these never come together. What they need is not to depend on people but have an automated way of doing things. They need to ensure human mistakes don't happen and things happen," says Pillai.
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Early days
In June 2009, the two former Oracle employees set up idea Device. However, the first year turned out to be "really complex", as the two neither understood sales and marketing or have expertise in financial management.
Soon, they approached Indian Institute of Management-Bangalore (IIM-B), which incubated start-ups at its N S Raghavan Centre for Entrepreneurial Learning. However, they were refused entry, as they failed to explain their business plan to the selection panel. "We had never done it before and we didn't know whom to approach. We didn't even know who would be our customer, forget exploring the market," Pillai says. "But we kept on approaching it (IIM-B) until they granted us entry."
Subsequently, Pillai and Sood started developing the software, before approaching the toughest data centre in India. This "very, very large data centre of a Mumbai-based financial company" asked them to proof the concept. After six months, the client decided to shift to their platform completely.
The duo roped in their second client, the world's eighth-largest pharmaceuticals company, after a mere 15-minute demo, over an online meeting, says Pillai. He, however, jokes they might have secured the contract because they had "underpriced the product terribly". Nevertheless, the money they received from this client was significant for the start-up.
By the time they started generating revenue for their clients, Pillai and Sood had invested Rs 12 lakh from their savings in the company.
Funding
While their wives continued to support the two young entrepreneurs financially, their first breakthrough in funding and investment was in 2011, when idea Device won TechSparks, one of the biggest technology product start-up showcases in India. Pillai and Sood were invited by the senior Sequoia Capital management members, who were on the panel of TechSparks, and, in a couple of months, the company received seed funding of $600,000 from the American venture capital firm. In October 2013, idea Device raised $4 million (Rs 25 crore) in series-A funding from Sequoia.
"The good thing about Sequoia is it is a long-term investor. It has done this so often that it knows entrepreneurs understand their businesses. And, it is patient; its motto is 'more power to you'," Pillai says.
Sources said for 2012-13, idea Device's revenue stood at $2 million. Its clients included one of world's largest stock exchanges, as well as one of the largest banks in the world, they added. The website names large global players such as Microsoft and VMware as the company's partners.
With the rapid adoption of third-generation technology and broadband in India, several venture capital firms are bullish on investing in firms that help support the infrastructure required to increase internet reach. Intel Capital, the investment arm of US-based chip-maker Intel, says this year, it will look at firms in areas such as data centre software, internet of things and wearable devices. "When you look at the macrotrends, these are all positive. India is the second-fastest country in terms of adding online users and three quarters of the population is aged less than 35 years. So, it is a highly consumptive demographic," says Bhavanipratap Rana, director (India), Intel Capital. "All other trends such as rising smartphone reach and prices of second-generation technology plans dropping work well for us."
At present, idea Device has 15 clients and 30 employees. It is expanding abroad, for which it seeks to hire staff in the US. While the firm has recruited most of its staff through hearsay so far, it is carrying out a recruitment drive across India, Singapore and the US this year.
Pillai says on several occasions, the firm had approached break-even levels but had carried out investments at those times. It is likely idea Device will break even by December, he adds.
The firm plans to explore the cloud, an aspect Pillai says it hadn't considered before partnering Sequoia. In the US, it will sell a cloud variant of its product.
Pillai hopes in five-10 years, idea Device will be in the same league as Amazon. "That's all I want," he says.
FACT BOX
Area of business: IT process automation
Started operations: 2009
Gross revenue: Around $2 mn
Break-even: By December 2014
Funding: $2.6 million from Sequoia Capital
2011: $600,000 seed funding from Sequoia Capital
2013: $4 million in series-A funding from Sequoia Capital