If you’ve been tracking our Facebook page, Twitter stream or updates to the mGaadi apps, you wouldn’t be blamed for wondering whether we had gone into a state of suspended animation.
The first half of 2015 was characterised by a fusillade of pitches to all manners (and sizes) of investors. The meetings would invariably end the same way “just tell us what you are doing that Uber and Ola WON’T be doing in the next 12 months.”
We got the message. Eventually.
A pivot was obviously the need of the hour.
Doomsday warnings notwithstanding, there were large swaths of the global transportation market seemingly outside the 24-month priority list of Uber, Ola, and GrabTaxi.
Frontier markets beckoned to us through a combination of push and pull. We had received several partnership inquiries from Africa and South Asia but it was the East African countries that captured our imagination. Kampala (capital of Uganda) had popularised the use of motorcycles as an inexpensive and efficient transportation option. Boda bodas (the local moniker for bike taxis) had also spread to Tanzania, Kenya, and other parts of East Africa. The only cities with respectable taxi numbers (and Uber presence) were Lagos, Nairobi and a few in South Africa. Tuk tuks and boda bodas comprised a lion’s share of transportation in East and North Africa and the numbers were staggering. There were only three venture backed transportation startups (all pre-Series A) in the region.
Our pivot had crystallised: Destination Frontier Markets!
Back in Bangalore, Ola Auto continued to bribe auto drivers to the tune of Rs. 30 to Rs. 50 per trip with little signs of letting up (and let’s not even talk about the commuter incentives!) Our partnership with Bangalore Police to power prefixed auto stands ostensibly gave us leverage to upsell commuters and keep the auto drivers interested with an upcoming end-to-end cashless product.
Unitus Seed Fund, our institutional investor in the Seed round, reposed their trust in “pulling off the pivot” and led our second (“Seed Plus”) round in June 2015. Three bold and beautiful angels also signed up. We nearly added a new institutional investor but Uber’s Delhi auto rickshaw pilot (what would turn out to be a ‘red herring’) came at just the wrong time and spooked them away.
I had no idea how “plugged in” I was to Africa. Thanks to LinkedIn (God bless you Reid Hoffman!) I was able to reach out to every Level 1 connection in East Africa. And I exaggerate only slightly.
Fast forward three months and we found ourselves in a strange situation.
Three frontier city partners and three regional investors were on the verge of closing but there was a catch with every one of them. There had to be, right?
Our earliest confirmed partner was pushing hard for Mombasa (Kenya) as the first city launch but we needed additional regional investors. The Dhaka partner was fully committed on both the investment and field partner responsibilities but the deteriorating rule of law concerned us greatly. Over a span of three weeks (as we were finalising deal terms), three foreign nationals were gunned down by ISIS sympathisers.
A common bone of contention across all the partners was SaaS vs. JV (former was our preferred model while the partners preferred the latter). A JV meant creating an entity in Singapore or Mauritius, which entailed all manners of complexities, costs and non-trivial delays. A paucity of upfront licensing revenue along with a delayed start in city operations and factoring in a timeline of 3-4 months of operational stabilisation meant that we would have little time remaining for Series A fundraising.
Gosh! we were looking at another cul-de-sac!
But we still had plenty of money from the Seed Plus round and we were not ready to throw in the towel.
Enter Vikram Chachra.
Vikram, a prolific seed investor in the Indian tech scene, was introduced by a dear friend’s husband. Vikram passed on our Seed Plus round but helped enormously in our Frontier Markets El Dorado push. He introduced us to strong regional investor partners in Asia, broadened our business and partner model thinking and opened many doors.
He would open one more door for us.
One late evening (sometime after the cul-de-sac sighting), he called and exhorted us to take another hard look at the taxi landscape. Sure – Uber and Ola ruled the on-demand point-to-point roost in India but Vikram’s thesis was that somewhere in the taxi ecosystem (between the inter-city market, the corporate market, the hourly package market, and the various fleets that served them) was a space that we could occupy. And he wasn’t talking about India alone.
One thing led to another. A meeting with a large corporate-focused fleet owner went exceedingly well – casual pitch turning into a signed contract within 2 weeks. The pitch to fleets was to help them optimise their vehicle inventory. The fleets in turn would introduce us to their corporate customers for a broader Employee Transportation solution. Three weeks later, we had a working demo for Employee Transportation and Cartr was born.
Unlike mGaadi, Cartr was not a pioneer but a fast-follower play. We were aiming to be the smarter and nimbler player with more flexibility and more features. On the driver side, our solution worked with both Android GPS devices and vehicle-mounted GPS trackers. Associated with the latter use case, we built a Smart Logger capability that caught the interest of companies using buses for employee transportation. Our ongoing partnership with BMTC enabled us to support companies with BMTC leased buses in their vehicle mix. We built an industry leading multi-channel SOS Response platform (for police and medical emergencies) integrating Police Control Room and leading hospitals in Bangalore. The SOS platform along with our positioning around hub-level aggregation started resonating with several companies.
Pitches were happening. Betas were starting. Contracts were being signed.
However, we had a velocity problem. We soon learnt that enterprise sales cycles were unpredictable. Large the company, higher the unpredictability and that was only part of the story. The sales pipeline was strong but we didn’t have the luxury to hire (and unleash) a crack sales team.
(Rewind to a conversation with a seasoned entrepreneur in late December after I described our final pivot)
He: Well, you do realise that there’s a Mahabharata war in progress in global transportation.
Me: Of course. Uber vs. Didi for world domination. But they will be focused on the on-demand space for a long long time.
He: Granted that Employee Transportation/ETS/Corporate is not where the battle is currently raging. But it is very much in the war zone. You don’t know when exactly Ola and Uber will open up the ETS battle front. Will you be ready when that happens?
Me: Well, yes. The point of this final pivot is to sign up as many corporate customers as possible and maximise the chances of Series A.
He: There’s no doubt that you increase your fundability with this pivot but keep in mind that the capital markets are spooked. And you’ll have to compete with entrenched B2B players as well.
Me: Yeah yeah. I know. I know.
The seasoned entrepreneur’s words would turn out to be prescient as early as March. We started running into customers seriously evaluating Ola Shuttle (as an alternative for their employees) and IT parks running pilots with Ola. An Ecospace-based company started looking at a bold policy to jettison company shuttles completely and give employees complete flexibility in choosing Uber or Ola for their daily commuting needs.
We missed our March-end sales target and it triggered our end game. We did the final round of “right sizing” and the search for exit opportunities began in full earnest.
In mid-May, after a series of exciting conversations and meetings with Yatra CXOs, the terms of the acquisition were finalised.
On Jun 10, we signed a definitive agreement to be acquired by Yatra.
A yatra that started with organising auto rickshaws and meandered through East Africa and Dhaka before sinking our teeth into the employee transportation and safety market has reached an uppercase destination – Yatra.
We are very excited about Yatra’s ambitions around ground transportation. Cartr and related mGaadi technologies will of course be integrated into Yatra’s products but that’s just the tip of the proverbial iceberg. We are thrilled to be joining the Yatra family and strive to make a serious dent in the travel universe.
There’s so much more to share about our 42 month journey. We’ll likely share those stories on a different blog. Stay tuned! And thanks a ton for ALL your support.