Prashasta Seth, the former CEO of IIFL Asset Management, formed Prudent Investment Managers, which has launched a fund of INR 500 Cr, or around $57.8 million, to invest in early-stage companies. Seth told a media outlet that the fund, which will be a Category II Alternative Investment Fund (AIF), has already obtained INR 250 Cr in pledges from several family offices and will close sometime in June of this year.
Prudent is currently submitting a CAT II licence application to SEBI. PE funds, real estate funds, and funds for distressed assets are all included in Category II AIF. According to Seth, despite not having a formal fund structure, Prudent has invested over INR 160 Cr in unlisted companies since its founding. Among its most recent startup investments are Snapmint and The Money Club. The business intends to strengthen its strategy of combining the investment philosophies of venture capital and private equity with the new fund.
According to Seth, pre-Series A and Series A firms with viable business plans and solid unit economics will be the main targets of funding. By assisting founders that value long-term viability over quick, unsustainable growth, the fund seeks to close the gap in early-stage investing.
A Methodical Investment Strategy
Prudent intends to use a focused investment strategy, providing early checks of INR 30 Cr to INR 50 Cr each to support 10 to 15 businesses. According to Seth, Prudent’s strategy places a strong emphasis on large bets and steady follow-on funding over several rounds, in contrast to standard VC companies that distribute investments across a wide portfolio.
The fund will concentrate on businesses with “sound unit economics” and will not be sector-specific. At the concept stage, we don’t compete. Rather, we concentrate on businesses that have solid unit economics, real revenue, and tested business concepts. “We want to minimise losses and provide consistent returns of 5X to 20X,” Seth continued.
Investors’ Profile
Speaking of investors, Seth stated that Prudent counts roughly 25 family offices as clients and has over INR 750 Cr in assets under management (AUM). This corresponds to an average cheque size of INR 20 Cr to INR 30 Cr, he stated. On the unlisted side, a large number of these clients have also invested in the business throughout all of the transactions the firm has completed.
Small family offices with portfolios ranging from INR 50 Cr to INR 200 Cr make up the majority of these, not the well-known ones. They will act as the brand’s anchor investors. After leaving IIFL Asset Management in 2020, Seth founded Prudent. It offers advising and portfolio management services. Seth says that during his time at IIFL Asset Management, the company’s AUM increased from INR 500 Cr to INR 25,000 Cr.
In the dynamic world of early-stage startups, data is more than just numbers—it’s a crucial asset that can drive growth, inspire innovation, and provide a competitive advantage.
In the world of startups, where every decision can make or break the future utilizing data can be the key to success. By harnessing data to identify new market opportunities, monitor competitor activities, and refine their products, startups can make informed decisions that help them stand out in crowded markets.
So let’s take a closer look at how startups can leverage data collection to identify market opportunities, track competitor activities, and refine their product offerings. Here you will find tips for efficient data management and tips for automatable extraction from online sources. Thanks to tools like web scraping API or separate extraction software, we can hit the ground running with a quick adaptation of data-driven decision-making. For more technical details on scraping API use, click here.
Identifying Market Opportunities
Before launching a startup, it’s crucial to start with market validation – a process that will determine if the demand for your product or service is legitimate. Just like with most cases in the age of information, data is the fuel for this process, helping you test assumptions and gather insights from potential customers. You can collect data through online surveys, customer interviews, prototype testing, and A/B testing of ads.
By analyzing quantitative data like survey results and ad metrics, you can spot trends and gauge market interest. Qualitative data from interviews and feedback provides a deeper understanding of customer needs and pain points. The combination of these insights gives you a well-rounded view of the market, revealing opportunities you might miss otherwise.
Data collection also helps identify market opportunities by uncovering consumer behavior and emerging trends. Social media and web analytics can show what’s trending and which products are gaining traction, helping you find gaps in the market. This allows you to develop offerings that meet unmet needs and position your startup strategically.
Combining validation methods with a customer-focused approach ensures a thorough understanding of market needs, allowing you to iterate on your findings and make informed decisions that help your startup succeed in competitive markets.
Tracking Competitor Activities
In addition to identifying market opportunities, data collection is crucial for tracking competitor activities. Understanding what competitors are doing can provide startups with a competitive edge, allowing them to anticipate market shifts and adjust their strategies accordingly.
Startups can use data to monitor competitors’ product launches, marketing campaigns, and customer feedback. Tools like web scraping and competitive analysis platforms can automate the collection of this information, providing startups with real-time insights into their competitors’ actions. By staying informed about the competitive landscape, startups can make strategic decisions that differentiate them from the competition and attract more customers.
Refining Product Offerings
Data-driven insights are also essential for refining product offerings. Startups can use data to understand how customers are interacting with their products and identify areas for improvement. This feedback loop is critical for developing products that resonate with customers and meet their needs.
For example, startups can analyze user data to identify which features are most popular and which are underutilized. Customer feedback, whether through surveys, social media, or platforms of your closest competitors, provides additional insights into what users like or dislike about a product. By incorporating this feedback into product development, startups can make iterative improvements that will enhance the user experience and help escape the unpredictable stages of early development. Thanks to modern online privacy tools and automated extractions with a web scraping API.
Efficient Data Management for Informed Decisions
Efficient data management is key to making informed decisions, especially for startups with limited resources. By organizing and analyzing data effectively, startups can extract meaningful insights that guide their strategic planning and decision-making processes.
Startups should invest in data management tools that streamline data collection, storage, and analysis. Cloud-based platforms offer scalable solutions that can grow with the business, enabling startups to centralize their data, and making it easier to access and analyze. Additionally, data visualization tools can help startups present their findings in a clear and actionable format, facilitating better communication and collaboration among team members.
Integrating Data-Driven Strategies for Growth
To accelerate growth and gain a competitive edge, startups must integrate data-driven strategies into their operations. Here are some actionable insights for doing so:
Conditional Automation: Use automation tools like Tableau, Microsoft Power BI, and a web scraping API of your choice to greatly simplify collection and analysis. This will save time and resources, allowing your team to focus on interpreting new insights.
Data-Driven Culture: Encourage a culture of data-driven decision-making within your organization. Ensure that all team members understand the value of fresh data, especially for an early-stage startup. Your employees should have skills and tools, backed by training from data science experts, to extract valuable information a lot faster, and combine it with conditional automation for effective and immediate leverage. If you’re new to data analytics, consider collaborating with experts or hiring data specialists. Their expertise can help you navigate complex data sets and extract valuable insights that drive growth.
Continuous Monitoring: The market is constantly evolving, so it’s important to continuously monitor data and adapt your strategies accordingly. Make sure to Regularly review your data insights and do not hesitate to shift previously established rules as market conditions shift, requiring new validation steps after some time. Stay attuned to emerging trends, customer preferences, and competitor moves. By maintaining a flexible mindset and data-driven culture, you’ll be far less likely to miss good opportunities and mitigate potential threats, that could kill the startup in its early stages.
Summary
Data analytics is essential for early-stage startups aiming for sustainable growth and success. By integrating data-driven strategies into every facet of your business—from product development to marketing and operations—you’ll unlock valuable insights that can drive your startup forward.
Keep in mind that the true power of data extends beyond informing decisions; it can fundamentally transform how you operate and innovate. So do not hesitate – adopt a data-driven culture for your early-stage startup and strive to become the most well-informed player in your respective market.
On 12 September 2024, build3, the premier ecosystem for the development of impact startups (startups that are both for-profit AND purpose), announced the launch of the 3rd Cohort of their flagship Impact Accelerator program.
The program is currently accepting applications from early-stage startups. Beginning in the first week of November, the third cohort will function as a virtual accelerator program. The cohort has opened applications for participation. Shortlisted businesses will receive financial support of INR 25 Lakhs after the 10-week program. With the potential for additional funding cycles through build3’s demo day initiatives.
Following the Success of 2nd Cohort, the 3rd Is Launched
On the heels of the Impact Accelerator’s successful second cohort, which attracted 27 startup founders, the current cohort has been announced. In addition, 19 startups were established during the second edition. Three of these popular startups, namely OnHire (curated freelancer marketplace), Bolofy (AI-powered voice assistant), and ReNewCred (carbon credits registry & ratings), each received a pre-seed investment of INR 25 Lakhs from build3.
The third cohort will endeavour to emulate the success of its predecessors, with applications closing on October 15. build3’s pan-sectoral investment strategy will prioritise early-stage companies that are in alignment with the Sustainable Development Goals (SDGs) as defined by the United Nations (UN), with an emphasis on Environmental, Social, and Governance (ESG).
The Evaluation Process to Be Accepted in the 3rd Cohort
Applicants who are accepted into the third cohort must submit a thorough application, which is followed by an online interaction with the candidates who have been shortlisted. Identifying capable founders who are committed to their respective ideas and in alignment with build3’s vision of constructing and scaling impact businesses is the primary goal of this process.
In order to enhance the skills of founders, the shortlisted candidates will participate in a 10-week programme that includes workshops and keynotes on market research, GTM, product/service development, storytelling, organisational behaviour structuring, fundraising, accounting, and compliance for startups.
In addition, the programme will provide mentorship from successful founders and domain experts, networking opportunities, access to SaaS tools, and free credits from AWS, GCP, Zoho, and over a dozen other providers. On top of that, the 300+ creators, mentors, and investors who comprise build3’s vibrant community will be incorporated with the shortlisted founders.
According to Varun Chawla, Co-Founder of build3, the cohort’s objective is to assist 100K impact founders in the development of enterprises that positively impact the mind, body, and environment over the next decade. This is a testament to the growing interest among individuals in India in establishing startups for profit AND purpose. Firm is eager to collaborate with more than 50 founders in its third cohort.
This article has been contributed by Sanjay Sehgal, Founder, Chairman, and CEO, MSys Technologies.
Your dream of launching a startup is not a dream anymore. You have successfully launched your business, developed it, and chalked out the next plan. But how about scaling up your business? Every year, hundreds of startups open their doors, but only a small percentage of them survive globally. Only one in 200 of them can successfully scale up their business. While 74% of startups fail because of premature scaling, the rest do not know when to scale, and they end up being small companies that eventually get shut down or go through a fire sale to another company.
Starting a business is not enough. Understanding when your business is ready for scale-up and how that will happen is quite crucial and is also heavily dependent on the availability of funds.
The Difference Between Growing a Startup and Scaling a Startup
Startup growth is about having a consistent customer base and a steady flow of resources. The company has a larger influx of money, which results in more production and increased hiring. Finally, the company starts using a more refined marketing budget.
But for startup scaling, it is different. In this case, the startup grows exponentially and makes more profit. However, the investment remains more or less the same. In this case, the business has already gone through the growth stage, and now it is ready to gain more customers and revenue without increasing expenses or needing more funds.
Let’s understand this with an example. You started a company that used to cater to a small locality of 1,000 people. Now, you have ensured growth to service a part of the city that will comprise 50,000 people. But now, you have to scale up your business, as you will have to be prepared to serve 10 lakh people residing in the city and then eventually expand to other cities and, who knows, other parts of the world. All this could create overwhelming demand that will paralyze your business.
When to Think About Scaling Up Your Business?
The idea of scaling up is tempting. But at the same time, you have to keep in mind that premature scaling will leave you bankrupt. So, to understand when you can accelerate growth for your business, you have to have some checkpoints.
A Reliable Customer Base
Having a large, referencable customer base will help your business grow exponentially and generate more revenue. It proves that you are actually solving the real problems of customers, which will give you market stability. Also, there is another thing that you will have to keep in mind. Having a loyal customer base means that your customers will repeat their purchases, and they will also be your endorsers, generating more indirect sales for you. Make sure you have the employees and inventory to manage the demand.
Achieving Previous Targets
When you started your business, you surely had some goals in mind. So, now that you are considering scaling your business, have you achieved those goals? If you have achieved them, then great. But if you have not, then before you think of growth, find the pain point and reflect on what stopped you before.
Positive Cash Flow
There is a difference between business profitability and cash flow. While profits prove that your business ideas are viable and in demand, your cash flow is required to stay afloat. A positive cash flow means that you are making more money than you need to sustain your business. To achieve this, you can take an advance from the customers, speed up your invoice system, and accelerate the process of cash conversion.
Valid Concept and Robust Infrastructure
Before you focus on the active growth process, you need to make sure that every part of your business is working like a well-oiled machine. The concept that you started your business with, is it a valid one and working in the market? Can you upgrade it for some sales and profit? Is the internal business structure adequate to support scaling? Ask yourself these questions to understand if this is the right time to scale.
Analyse scenarios to Minimize Risks
Scaling up your business will be risky. You will face many challenges. But this does not mean you cannot deal with these risks. You can analyze the risks first under various scenarios and then minimize them with the help of effective strategies.
How to Scale Up Your Startup
Now that you have already recognized how prepared you are for scaling up your business, let’s find out how you can do that.
Automate More
For scaling up, saving resources, reducing errors, and getting real-time activities are necessary. Automation is the best way to ensure all of these. Using chatbots can help you provide real-time customer support without much chance of error. On the other hand, automation can gather customer data and analyze it while taking care of payroll within the company. In fact, today, with the help of AI, you can reduce the necessity of using more resources for marketing too.
Know the Expectations of Your Customer
Unless you know what your customers expect from you, you won’t be able to manage them and cater to their needs. For that, you need to do the research. You need to use tools and resources to find out how your competitors are getting an edge in the market. For your MVP or the first batch of products, gather customer feedback and use that constructively to improvise.
Invest in Technology
Now that you know what your customers are looking for, it is time to invest in the right kind of technology. Use software systems that will help you increase production, increase efficiency, and reduce pain points. At the same time, ensuring the safety of the software systems is also a must. In this case, partnering with a SaaS company can be a good decision.
Plan Effective Marketing
How are people going to know about your product unless you make them see what you are offering? Hence, investing in marketing strategies is a must. From content marketing, SEO, PPC, and social media marketing to print and digital advertising, leave no stone unturned. Create the right brand persona and reinforce that with your strategies.
Funding and Steady Revenue
Yes, your goal is to scale your business while keeping the budget more or less the same. But let’s face it. When we are talking about a sustainable business model, having the right funding and a steady flow of revenue is important. Approach angel investors or VCs so that you can carry on and increase production, which will, in turn, bring you more revenue.
Conclusion
Now, while doing all of these, stay calm. Getting overwhelmed will result in making the wrong decisions or procrastinating. So, the go-to advice is to take a pause, reflect, and meditate. Get clarity on what you want to do with your business. Then tread forward.
Nitin Konde
