GrowthStory, The ‘Promoter’ Of Startups like BigBasket And Freshmenu, Has Now Turned Its Gaze To B2B And Is Looking To Replicate The Success
In 2011, after Krishnan Ganesh, a seasoned entrepreneur, sold online tutoring platform TutorVista to leading British learning company Pearsons for $127 Mn, he did not want his next greenfield venture to be in the same model as his previous three ones. With decades of experience and success, he now wanted to do something different.
Ganesh wanted to shift from being a serial entrepreneur to parallel entrepreneurship, which meant that instead of working on one startup at a time, he would focus on multiple startups simultaneously. The result of this mind-shift was GrowthStory, an entrepreneurship platform that Krishnan Ganesh started along with his wife, Meena Ganesh, also a serial entrepreneur and a co-founder in all his previous ventures.
Bengaluru-based GrowthStory is unique in the way it operates. It’s neither a venture capital firm, nor an angel investor, nor an incubator.
Then what is it? GrowthStory, in Ganesh’s words, is a “promoter that co-creates the business.” It identifies areas of potential growth, seeks out entrepreneurs, and helps them with the research, strategy, and raising of funds. Naturally, for all this much work, it takes a hefty 50% stake in the startup.
“There is no selection process as we’re not an accelerator or an incubator. We don’t evaluate plans or proposals or choose from them. We are also not a fund that people can approach. We look at the next big potential opportunities within a 10-year horizon, where we can add some expertise and value, and then get the core co-founders together for specific ideas,” says Ganesh.
Growthstory is a promoter that co-creates the business.
The firm has seen big success with the likes of Freshmenu and BigBasket and, until recently, was focused on B2C ventures, but now that is changing. Ganesh has now turned his attention towards the B2B market as he looks at high growth areas that will present themselves in the next 5-10 years.
Krishnan Ganesh, a postgraduate from the prestigious Indian Institute of Management Calcutta, seems to have an inherent a knack of predicting trends and capitalising on them. GrowthStory is not his first venture. In 1990, he started IT&T, an IT support and services company, just when the Internet boom was about to encompass India and open the doors to outsourcing. In 2005, he started TutorVista, an online learning platform, three years before Byjus came along; six years later, he exited the company after selling it to Pearsons.
Ganesh, however, humbly disagrees with the conjecture that he has an ‘inherent knack’ for spotting potential successes. He says a lot of his success has resulted from sheer luck and serendipity. But the shrewd methodology with which GrowthStory operates and has reaped rewards doesn’t seem to have much to do with luck.
Next Stop For GrowthStory: B2B Startups
After B2C successes like FreshMenu and BigBasket, GrowthStory is now shifting its focus to the B2B space because, besides being a huge and largely unaddressed market, it is also a capital-efficient segment where it’s not the a-winner-takes-it-all situation.
Ganesh knows what he’s talking about. According to an IBEF report, India’s B2B ecommerce market alone is expected to reach a massive US$ 700 Bn by 2020. A NASSCOM-Zinnov report for 2017 showed that B2B’s share in the overall tech startup funding is over 30% while over 50% of startups added in 2017 were in the B2B segment, led by the fintech and healthtech sectors.
GrowthStory has promoted companies like Hungerbox, which does digital cafeteria management just for corporates, and Social Frontier, a SaaS company in social media marketing.
Elaborating on the rationale behind these ventures, Ganesh says when it came to Hungerbox, he observed that in corporates, food and transportation are two of the biggest areas of employee dissatisfaction.
“These are areas where even the best companies have very little standardisation, quality systems, control, and feedback,” says Ganesh.
Hungerbox today services 1.85 lakh orders a day and has some big clients like GE, Qualcomm, and ABB. The company recently closed $2.5 Mn in a pre-series A funding led by Lionrock Capital and Kris Gopalakrishnan, co-founder, Infosys. Sandipan Mitra, Co-Founder and CEO, HungerBox, expect the startup to exceed half-a-million daily orders by the end of this year.
Running a business and the dynamics of the food sector are something that both the co-founders of Hungerbox understand well. “Entrepreneurship was not a new cup of tea for us — both my co-founder, Uttam Kumar, and I have had experience in a couple of previous ventures. GrowthStory has a number of companies addressing interesting whitespace opportunities (space where needs haven’t been categorised, organised and serviced) and many of these companies have scaled rapidly and enjoyed significant success,” says Sandipan.
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He believes that there were synergies with GrowthStory that they could draw on when it came to positioning the startup in front of investors, customers, partners etc.
Commenting on Social Frontier, Ganesh says, “We saw a crying need among GrowthStory companies to optimise the social media spend across channels. No such platform was available and hence we took a bet on the space.” Today, the company counts clients such as Freshmenu, Bigbasket from GrowthStory’s portfolio along with Asianet, Zoomcar, and Grow Fit from outside.
For Growthstory so far the investments have been in the range of INR 5 Lakh to INR 6 Cr
The startup has already crossed the mark of $22,365 (INR 15 lakh) in monthly revenue and is looking to take the number to $149,100 (INR 1 Cr) per month within a year. “We are going full-fledged into the Indian market. Our vision is to target the US market as well, in a couple of months,” says Abdulla Basha, co-founder of Social Frontier.
How much does the platform typically invest in the startups? Krishnan Ganesh tells us that it depends on the company, but so far the investments have been in the range of INR 5 Lakh to INR 6 Cr.
“Because we are not a fund, we don’t have any pressure to ply capital or any time frame, which funds have,” he adds.
Ganesh Krishnan On How Does GrowthStory Lay Its Bets
How can one predict the future? Or, more realistically, be able to assess possible successful outcomes with reasonable accuracy. It’s something all of us wish we could do. There is a famous quote that says those who know what the future will be are called futurists and those who know when the future will happen are called billionaires. So basically, all of us want to be billionaires (duh!).
Easier said than done, we know. So, how does Krishnan Ganesh go about identifying his opportunities?
He breaks down the answer into three points — the market should not be niche, there shouldn’t be large and established players existing already, and there should be scope wherein he can use some of his strengths such as digital marketing and data analytics to disrupt the market. “You need to be solving a bigger problem. However, a lot of times, people have the solution and try to find a problem, which is the wrong approach,” Ganesh says.
“You need to be solving a bigger problem. However, a lot of times, people have the solution and try to find a problem, which is the wrong approach,” Ganesh says.
While talking to him, it is clear how intuitive and simple his business philosophy is. Basically, in a price sensitive country like India, can you provide a service that consumers will readily pay for?
“You need to follow the money. Just look at our portfolio, they are all very unsexy, non-glamourous businesses. At first glance, one may question what is the greatness in delivering bread, milk, and eggs to people’s houses Or, look at the example of Portea Medical (one of GrowthStory’s ventures), where we send a doctor or a nurse to people’s homes. We do this because people will pay for it… these are very strong, deep-rooted learnings,” says Ganesh.
Starting Together With ‘True Partners’
For a startup to part with a 50% is a lot to ask. We ask Ganesh whether entrepreneurs are open to the idea of giving away half their company right at inception. Ganesh believes that the success of the GrowthStory model is a testimony to the fact that they are.
“These are true partnerships — the coming together of GrowthStory and the founder/core team to create value,” says Ganesh, about why entrepreneurs see value in giving up half the stake in their startups.
The opportunity and services that the firm offers entrepreneurs negate any inhibitions that they might initially harbour about the share structure, he says, adding, “My house is the first registered office of the startup. There is no stake given, it’s a start together.”
“Both K Ganesh and Meena Ganesh have garnered myriad experiences and learnings over the years. This has given them unique insights into the startup arena in India, and a sense of what it takes to succeed in the sector,” says Basha.
So, how does GrowthStory go about finding these “true partners”?
“People are welcome to approach us. We get at least an application a day, but that’s not what we focus on. We think of the next 5-10 years in the context of areas where there is potential to create value. While doing research, we will also look for cofounders that fit the bill,” says Ganesh.
GrowthStory initially starts working with the entrepreneurs informally (they even can continue working in their existing jobs) and spends a considerable amount of time going over all the details; it also remunerates the entrepreneurs during this process.
When asked what he looks for in entrepreneurs, Ganesh replies, “Horses for courses.” This means a person who has the key skills and deep industry knowledge to pull off the idea. He believes any business requires two to three core strengths in the founding team upon which everything else can be built.
“When we were starting Bigbasket, we were very clear that it was not going to be just an ecommerce business but a grocery business as much as an ecommerce business. We needed someone who understood the grocery domain deeply, and that was the key to selecting the team. It took me three months to get the co-founders, but it all paid off,” says Ganesh.
What’s Next For GrowthStory?
Looking ahead, Krishnan Ganesh believes that the focus will be on business models that use technology to address the next 100 Mn population in India. He’s referring to sectors like agritech, e-governance, vernacular language-based solutions, use of Internet and analytics to support the B2B sector, the use of blockchain in B2B, etc.
“We think fintech will also see growth, though we are not in that space and don’t understand it well,” Ganesh adds candidly.
GrowthStory is also exploring areas such as AI, machine learning, curated marketplace models, and also themes like celebrity commerce (selling celebrity co-created personal labels).
With its sights firmly set on B2B for now, GrowthStory is looking to replicate the success it has seen in the B2C space, where it focused on emerging trends and the Internet to address and solve big pain points. “We were very bullish on the consumer space and on building brands for aspiring Indians leveraging smartphones, mobile Internet, and the emerging consumption theme,” explains Ganesh. This will remain his core strategy for the next step of growth in B2B as well.
GrowthStory is a player whose model is quite rare in the startup world — a fusion of an investor and a startup. It’s a tale which, till now, has been one of success. Now, GrowthStory is all set to embark on a new adventure with its B2B foray.