Indore-based B2B IT service aggregator company EngineerBabu has raised an undisclosed amount in a Seed round of funding led by Scale Ventures.
The raised funds will be infused in expanding its client base in US, China, Japan and other potential countries.
This is Scale Ventures’ first investment. Founded by the ex-CEO of Indianroots, Rahul Narvekar and Rathi scion, Nilesh Rathi – Scale Ventures was announced last week. The fund has also acquired the portfolio of Delhi-based Guerrilla Ventures.
EngineerBabu was launched in 2014 by Mayank Pratap and Aditi Chaurasia. Avdhesh Pratap Solanki was later roped in as the third co-founder. The founders call themselves as Alibaba for IT services and aims to bridge the prevalent demand and supply gaps in the IT service industry. Initially, started as a product oriented company, EngineerBabu later shifted its focus on delivering services to clients. It offers services such as web development, mobile app development, web designing, logo designing, and digital marketing services.
As explained by Aditi further, “Indian IT industry is currently valued at $143 Bn. Although millions of projects are outsourced to India on a daily basis, the majority of leads go unconverted. Reason – the companies are able to reach only a few major IT service providing companies and the startups even with an excellent domain expertise lag behind. EngineerBabu aims to bridge this gap.”
From A Facebook Page To A 60 People Team: The Story Behind EngineerBabu
The foundation of EngineerBabu was laid on the existing job placement mechanism that prevails in the country. What prompted Mayank to launch EngineerBabu was his experience while working for a coaching institute which got shut suddenly, leaving 23 students in a bizarre situation.
“As a few of them were from a low financial background, I decided to teach them for free until they got the jobs. I also made a Facebook page (being highly inspired by the movie: Three Idiots) to help them get jobs with the name EngineerBabu – as I was the only engineering graduate from my hometown and everyone used to call me ‘engineer babu (engineer sir) ’ – which now has more than two lakh members,” he added.
Image Credit: Quora
After three to four months, a majority of these students were placed in decent companies. This is where Mayank decided to launch ‘EngineerBabu’ as a full-fledged platform. Aditi, who had earlier worked with Mayank in previous startup initiatives, was roped in later and is credited for handling internal management issues and building a great work culture at the company.
“Being labelled as a ‘small town’ girl, I worked silently to tell everyone and make them see that a woman can also start a venture and scale it to a 60 member team,” said Aditi.
Current Status, Challenges And Targets For The Year
The startup has been in beta stage from the last two-three months and claims to be profitable right from day one. They are currently serving clients from the US, UK, and Saudi Arabia. So far, they have served more than 750 clients, and is currently working with a team size of 60. Also, they have 250+ IT partners associated with the platform on the basis of domain expertise. “We are providing them curated business on a subscription based model, at the same time helping new startups to grow fast,” said Mayank.
To date they have developed apps related to travel & tourism, file sharing, chatting, dating, ecommerce, payment gateway, business app and location-based app. Minimal design, certified developers, customer-centric solution, startup-friendly prices, are a few of the features adding differentiation to the venture.
The recent names added to its work portfolio are Samsung Tizen, Thrillophilia, AHA Taxis and more. As mentioned on the website, they recently completed $80K Project and got client feedback verified by Clutch.io – a US verification company for app developer reviews.
The team is further targetting to increase its client base 10 fold in the next 12 months. Also, there are plans to launch the concept of virtual teams. “I believe in happy faces around me be it client or employee, And we will surely work hard towards this goal,” said Mayank.
Talking about challenges, Aditi said, “One major challenge is to verify the profile of service companies and analyse them thoroughly. This help us to take the deal in one shot, also it helps to shorten the app development cycle.”
The usual app development cycle is considered to be between 3-6 months. As mentioned on the website, the majority of projects are completed on EngineerBabu in a time frame of 2.5 to 4 months.
Present State Of Indian IT Service Industry
According to a report by India Brand Equity Foundation, India is the world’s largest sourcing destination for the information technology (IT) industry, accounting for approximately 67% of the $ 124-130 Bn market. The Indian IT and ITeS industry is divided into four major segments – IT services, Business Process Management (BPM), software products and engineering services, and hardware.
The industry employs about 10 million and is expected to grow at a rate of 12-14 percent for FY2016-17 in constant currency terms. The sector is also expected to triple its current annual revenue to reach $350 Bn by FY 2025.
As said by Gartner VP Partha Iyengar in a recent statement to The Hindu, “In the current digital business front, the sourcing model is changing. Clients are looking at IT services firms as partners with whom they can work and can do more co-discovery, co-sourcing, and co-innovation.” It also predicted that of the total IT spend of about $ 3.54 Tn in 2016, IT services is expected to be about $929 Bn, fuelled by digital technologies.
However, factors such as dropping deal sizes, increasing focus on reskilling workforce and a shift towards in-house sourcing of technology operations – has put a question mark on the scope for outsourcing of IT services globally.
Disclosure: Guerrilla Ventures, whose portfolio has been acquired by Scale Ventures, is an investor in Inc42.