Having been at death’s doorstep numerous times, in early 2017, Bhise decided to raise venture capital to give the company “a cash flow cushion”. This would allow them to play for the long-term without being curtailed by whatever monthly revenue came in from current clients.
For the year that ended March 2017, Mobisy declared Rs 10.22 crore ($1.5 million) as revenue, up over 150% from a year ago. Its revenue this year is Rs 19.80 crore ($2.9 million), although it is yet to file it online. Bhise expects next year’s revenue to be in the “Rs 30-50 crore ($4.4-7.3 million) range”.
Expanding all over the world
Bizom has also slowly expanded outside India, with Nepal, Bangladesh, Tanzania and Nigeria now accounting for 10% of its users. It’s considering expanding into Vietnam, Indonesia, and the Philippines this year.
Mobisy has also launched Distiman, a separate product targeted at small retailers that allows them to take control of their inventory by being in direct touch with brands and distributors. In contrast, Bizom is targeted strictly at brands. With this Mobisy was trying to bridge both ends of the retail supply chain—brands and retailers. And in the process, turn the data residing in its systems into a “virtual distributor” that could match supply and demand faster than anyone else.
But it’s a crowded space. Dozens of venture-funded startups are chasing every available Kirana store, retailer or brand. Some of the well-known startups in this space are Jumbotail, Shotang, ShopX, and Udaan.
But VCs still wasn’t convinced about Mobisy’s two-product pitch.
“Why are you profitable? Why don’t you invest in growth? Don’t you know growth is more important than either business model or profits?” asked one VC.
Focusing on things
“You are schizophrenic,” said another. “How can you focus on both a SaaS-based model to brands and an e-commerce marketplace for retailers?”
But Bhise says he doesn’t see Bizom and Distiman as separate at all. “They are both part of our stack for insights,” he says.
A partner with a venture capital firm that had examined (and passed on) Mobisy’s funding pitch was still skeptical about its long-term potential.
“They are a vertical play, not a horizontal one. In my analysis, sales force automation has started plateauing. And big brands will always want to do their own analytics. So how will they scale? How many brands can they sell? Perhaps a maximum of 100. There just aren’t enough large retail brands around.,” he said, preferring anonymity.
“I was told Rs 40 lakhs was the limit for MRR (monthly recurring revenue) in India because that’s what Capillary had hit the limit domestically. We crossed that. Then I was told the limit was Rs 1 crore. Meanwhile, HUL gave a $600 million contract to Accenture to migrate its on-premise software to the cloud,” counters Bhise. (Update: Bhise says he was referring to the 2012-13 period when he first encountered these objections.
Making things clear
Furthermore, Capillary’s CEO Aneesh Reddy clarified that its current monthly run rate from India is close to Rs 8 crore. Both these points only validate Bhise’s point of view that VCs tend to underestimate the size of markets at times.)
He says his estimates point to an $800 million market in India for just automating “feet on the street” for consumer packaged goods brands. “India has 10 million retailers, 1 million distributors and 800,000 feet on the street.”
There’s also the threat of your best customers growing so fast that they desire bigger, flashier things. iD Fresh’s Musthafa says he wishes he could have all his company’s sales data within his SAP ERP system. Instead of having to import data from Bizom into SAP every day.
Bhise smilingly alludes to the “Mercedes syndrome” among SMEs. “It’s “Let’s use SAP because we can afford to”. But remember, iD Fresh still pays us more than they SAP.”