 "Vinish Kathuria, IAN")
Carpooling has emerged as popular business opportunity not only in India but also worldwide. A recent study by Regus revealed that 67% of respondents drive to work using their car, indicating the potential to carpool. The market is extremely unorganised, making it conducive to disruption. There are 25-30 million cars on Indian roads daily. Even if 10-15% of them use carpooling, it will have a tangible impact on road traffic, pollution and quality of our lives. Triggered as a popular choice amongst commuters due to environmental concerns, carpooling has emerged as a scalable business model for investors. IAN invested Rs 3.5 crore in Orahi to help enhance the product and its functionality, grow the team, enhance its proposition as a carpooling venture, and grow the customer base.
Attractive sector
In line with Peter Thiel's philosophy, we like to invest in businesses that are 10x better than today's solutions, not just incrementally better. In some cases, it does require a change in consumer behaviour for a segment to scale up further. We have seen behavioural changes as people moved from landline to mobiles, video & audio consumption getting centred around the phone, on-demand cabs and other segments showing that people are willing to change, as long as they find a tangible benefit in the new offering. For an entrepreneur and an early stage investor, it's the passion and excitement of driving that change that eventually gets translated to a financial benefit.
Studies show that people will like to carpool if it's convenient and they can trust the co-riders. Plus, there is an issue of paying the car owner -- in a cashless manner so the car owner gets compensated for his/her assets and the effort, and the passengers are not left with a feeling of obligation. Orahi is a ready platform for car commuters to leverage 'shared infrastructure' for a clean and less polluted city. Traffic decongestant and impact on pollution are clear benefits of carpooling besides more money in consumers' pockets, and Orahi is doing just that.
The Orahi platform is built on hyper local community in a seamless way. Starting from a focus on one residential neighbourhood to one office complex area in Gurgaon, Orahi has grown dramatically -- with over 60,000 rides and over 1.6 million km shared to date, reducing 320 tonne of carbon emissions in the capital. Their corporate connect programme Connects 500 companies in Delhi/NCR to enable carpooling amongst their employees. This aligns with the philosophy that founders started with - every individual contributes towards traffic reduction to provide a pollution-free environment.
Orahi was deemed an attractive opportunity by members of IAN for several reasons. The market is expanding and we saw immense potential in the idea and the founding team, who have the right vision and approach to run a business. I personally look for investment opportunities around three areas:
- Ability to make meaningful impact on millions of people
- Have a technology-led proposition that allows for enhanced user experience
- Scalability and repeatability in the model with respect to customer acquisition, operations and technology
Key focus area: Customer confidence
One of the key differentiators of Orahi is its focus on winning customers. Considering the unfortunate incident that involved one of the taxi aggregators, it takes a lot to convince customers to use the service and stick to them. Orahi is well-poised with its safe-to-use, convenient, and cost-effective platform. Orahi goes beyond simple carpooling because it is an open and non-restrictive system that features flexible timings, choice of co-travellers, cashless payments, women-only groups for travel, mobile alerts, fully verified members, zero entry/exit fee, compulsion-free service and up to 100% savings on fuel costs. 'Safety' is extremely important and Orahi has built a three-tier verification system for all commuters. The commuters today are increasingly looking for easy affordable conveyance to reach office, home or other places rather quick now. All, let's not undermine the potential social interaction and community angle that starts developing when people commute together -- from acquaintances they move to becoming friends, share stories and life's happenings, and also from sharing samosas and cake to helping others. We have already seen early examples of Orahi facilitating a community on the move.
Team
Another very compelling part and reason for our investment was the clear thought of founders - Sameer and Arun. They have a very strong vision and objective to create a platform where every individual could contribute conveniently towards traffic reduction. The team has a hunger for solving a big problem. To further scale up, the company needs to reach a critical mass in Delhi NCR, tweak its model across the value chain of marketing, customer acquisition, retention, operations, and technology, and then replicate it across different cities of India.
We believe in the space, we believe in the team and we will mentor them to grow further and reach new heights.
IAN believes in making investments in new-age, innovative, and scalable business models across sectors, including technology, gaming, social, digital, manufacturing, biotech, education and healthcare. Our investments cover 16 different sectors and we have had some great returns from some marquee companies in both tech and non tech alike. This provides not only the best possible hedging of risks for investors but also a great comprehensive platform for budding entrepreneurs across all the burgeoning sectors in India. The IAN network comprises 400 business angels, who are not blind sighted by the flavour of the day but by the potential and relevance of a venture on a global scale. We believe in the team that we invest in and Orahi is a classic example of that. It is the giving back aspect of angel investment that becomes the main reason why IAN remains so vibrant and favoured by would-be entrepreneurs as the place to approach for funding.
I believe technology-driven businesses that create a strong ecosystem and empower a community of people have a better chance of succeeding in India than the ones that focus on pure price advantage. We at IAN look forward to support and mentor many more such ventures in the future.
The author Vinish Kathuria is an IAN investor who has led the angel round of investment in Orahi.
