 "We have a long way to go to talk about an acquisition: Raghunandan G")
In his first interaction since reports appeared of his venture being acquired by OlaCabs, TaxiForSure's co-founder and chief executive Raghunandan G tells Itika Sharma Punit and Bibhu Ranjan Mishra multiple options are on the table. Excerpts:
Are you in talks for an acquisition by OlaCabs or any other competitor?
We have been engaging with OlaCabs and Uber for finding solutions to the regulatory issues all of us are facing. When three people get together, there are lots of discussions. All I can say right now is that there is nothing concrete. We are in the middle of fund-raising, and there are multiple options. We have not finalised one. Our conversation with OlaCabs and Uber is about regulatory issues and not necessarily about consolidation in the industry. I think in a month or so we will have clarity.
I was in the US and then in China, but my partner (Co-Founder and Director Aprameya Radhakrishna) was here. I was focusing on other things while he took care of this issue. I was in the US because we are looking at raising funds and then in China I was meeting several taxi app companies for technology collaboration.
Earlier this week, you shifted your office close to OlaCabs'...
If we were moving to a new office to have proximity with OlaCabs' office, we should have move into their office. We could not get a big enough space closer to our existing office and so we moved there. We needed a bigger place because we have expanded rapidly in the last year. In January 2014, we were 300 employees; now we are 1,500.
What is your view about consolidation in the Indian app-based taxi aggregation business?
There is space for multiple players. The US, China and Singapore have multiple players; Israel, Australia and Germany have single players. In India, market penetration is still minuscule. We still have a long way to go to probably talk about an acquisition.
What makes more sense, raising funds or an acquisition?
As long as there is money on the table, we will continue to work. Also, we need to see what cost are we paying? All the three large players-OlaCabs, Uber and us - are bleeding a lot of money, and it's a tightrope walk. We also need to keep in mind the philosophy behind starting TaxiForSure. It was to solve a consumer pain point. It's not about money alone. We want to solve customer pain and that will decide everything else.
There is also a rumour that Uber was also in the race to acquire TaxiForSure…
Uber has not done such an acquisition anywhere in the world. Why would they do it here in India, when the other markets are much bigger? We were talking to them about the regulatory issues and there are a lot of ideas that were discussed. If someone wants to write about it, you can't help it.
TaxiForSure raised three rounds of funds in 2014, and you have said the company is adequately funded. Why are you looking at raising more money now?
Fund-raising for a growing start-up is more like a continuous activity. When a company reaches a scale, investors get interested. Once things start moving fast, you don't hold back. People are interested in talking to us, so we talk to them. I think we are in a euphoria now and everything is at the right place, at the right time. There are a lot interested in getting into this segment.
Who will be the investors in the next round?
We are in talks with multiple people. Most of my travel to the US and China was related to that. But communicating anything now, when the deal is not closed, will be too early. Existing investors will be participating and new ones will come in.
How have investors reacted to the regulatory issues?
Interest has increased significantly because of the traction we have seen in the last few months. There are regulatory issues because we are a new sector. But the government is willing to listen and adapt, and that is giving investors confidence. It will take time, because regulations cannot be changed overnight, but I think it's just a matter of some time.
Are you in talks for an acquisition by OlaCabs or any other competitor?
We have been engaging with OlaCabs and Uber for finding solutions to the regulatory issues all of us are facing. When three people get together, there are lots of discussions. All I can say right now is that there is nothing concrete. We are in the middle of fund-raising, and there are multiple options. We have not finalised one. Our conversation with OlaCabs and Uber is about regulatory issues and not necessarily about consolidation in the industry. I think in a month or so we will have clarity.
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You were not in India when the regulatory issues were unfolding. That triggered rumours you were closing a deal...
I was in the US and then in China, but my partner (Co-Founder and Director Aprameya Radhakrishna) was here. I was focusing on other things while he took care of this issue. I was in the US because we are looking at raising funds and then in China I was meeting several taxi app companies for technology collaboration.
Earlier this week, you shifted your office close to OlaCabs'...
If we were moving to a new office to have proximity with OlaCabs' office, we should have move into their office. We could not get a big enough space closer to our existing office and so we moved there. We needed a bigger place because we have expanded rapidly in the last year. In January 2014, we were 300 employees; now we are 1,500.
What is your view about consolidation in the Indian app-based taxi aggregation business?
There is space for multiple players. The US, China and Singapore have multiple players; Israel, Australia and Germany have single players. In India, market penetration is still minuscule. We still have a long way to go to probably talk about an acquisition.
What makes more sense, raising funds or an acquisition?
As long as there is money on the table, we will continue to work. Also, we need to see what cost are we paying? All the three large players-OlaCabs, Uber and us - are bleeding a lot of money, and it's a tightrope walk. We also need to keep in mind the philosophy behind starting TaxiForSure. It was to solve a consumer pain point. It's not about money alone. We want to solve customer pain and that will decide everything else.
There is also a rumour that Uber was also in the race to acquire TaxiForSure…
Uber has not done such an acquisition anywhere in the world. Why would they do it here in India, when the other markets are much bigger? We were talking to them about the regulatory issues and there are a lot of ideas that were discussed. If someone wants to write about it, you can't help it.
TaxiForSure raised three rounds of funds in 2014, and you have said the company is adequately funded. Why are you looking at raising more money now?
Fund-raising for a growing start-up is more like a continuous activity. When a company reaches a scale, investors get interested. Once things start moving fast, you don't hold back. People are interested in talking to us, so we talk to them. I think we are in a euphoria now and everything is at the right place, at the right time. There are a lot interested in getting into this segment.
Who will be the investors in the next round?
We are in talks with multiple people. Most of my travel to the US and China was related to that. But communicating anything now, when the deal is not closed, will be too early. Existing investors will be participating and new ones will come in.
How have investors reacted to the regulatory issues?
Interest has increased significantly because of the traction we have seen in the last few months. There are regulatory issues because we are a new sector. But the government is willing to listen and adapt, and that is giving investors confidence. It will take time, because regulations cannot be changed overnight, but I think it's just a matter of some time.