Alok Mittal, the successful first generation entrepreneur-turned venture capitalist, has returned back to the realms of entrepreneurship after almost a decade. He led the India operations of Canaan Partners for almost nine years before quitting to start his new tech startup, Indifi Technologies. He is also a founding member of Indian Angel Network and co-founded JobsAhead, a e-recruitment startup in 1999, which was acquired by Monster.com.
In an exclusive conversation with Inc42, Alok Mittal opens up about returning back to be an entrepreneur again, his new venture Indifi Technologies and his plans and vision for the company.
Here are the edited excerpts:
Inc42: What instigated you to start Indifi Technologies? How does it feel to be an entrepreneur again?
Alok: Small business financing represents a big gap in the market – quantified at around $380 Bn of MSME debt financing by IFC. We believe that this gap exists because of fundamental on-ground issues relating to cost and mechanisms of origination and underwriting. We also believe that there are underlying trends which offer an opportunity to provide a solution.
Feels great to be back hands-on and building something!
Inc42: From a venture capitalist to an entrepreneur; how different is your life now? Has your daily routine changed drastically?
Alok: My daily routine is similar – I start work early, so squeezing in 12 hours a day is not a challenge. Saturdays are now on my own business. I have significantly cut events and conference participation, because my current business does not call for it as much as the venture business did. Travel is lesser. All in all, no drastic changes!
Inc42: How did you feel when Canaan decided to exit India and sold its entire Indian portfolio to JP Morgan Asset Management?
Alok: The sale of Canaan portfolio to JPM was a well-thought out step, and something that I had championed within the firm. Given that Canaan would not have full-time personnel in India going forward, we believed that this was the best way we could continue to be supportive to our entrepreneurs, as well as manage the risk for our investors. I am glad the India story concluded on a profitable note for Canaan investors.
Inc42: How does Indifi work?
Alok: The fundamental approach we have taken at Indifi is to partner with companies which are solving the marketing pain for SMEs, and layer our financial offerings on top of that. We have also taken a segment specific approach, where the product design, the underwriting thesis, and new data streams we bring in, are all driven by careful analysis of business needs in that segment. We are betting on a partner-led model, with use of business data for credit underwriting purposes.
Inc42: Have Indifi officially started its operations?
Alok: Yes. We are currently live with three segments at pilot scale, and will continue to add new segments over next few weeks.
Inc42: What will Indifi add to this segment? Has it addressed any particular issue which other startups failed to deliver to the consumers?
Alok: We believe that our approach leverages the recent growth in partner landscape, improvement in payment infrastructure, and availability of electronic data relating to small businesses. We believe that this problem is so big that collaboration and not competition is the need of the hour. We have been fortunate to learn from other players in the market, and in building collaborative relationships with them.
Inc42: Have you gained some insights on the response from your target users? If yes, how has been the response?
Alok: Too early to say
Inc42: What is the business model for Indifi? What will be the streams for revenue generation?
Alok: We provide loan management services to lenders, and they pay us a fee for doing so. These services go much beyond origination and into data aggregation and analysis, on-ground support, payments management, and loan monitoring.
Inc42: What are your revenue projections for FY 2015-16?
Alok: Can’t disclose
Inc42: What is the funding scenario like for Indifi? Do you intend on raising funds in the future?
Alok: We have recently raised a round of financing, led by Accel and Elevar Equity. We also have support from angel investors who can help us build the business – they include Mr Pramod Bhasin, Gaurav Dalmia, Rajan Anandan, Arun Tadanki, Gagan Hasteer and Abhishek Goyal.
At this point, we do not have plans for further fundraises. We want to utilize the next 12-18 months to focus on execution, and prove out the basic assumptions on which our business model is built.
Inc42: Currently, how big is your team? What are your hiring plans for the future?
Alok: We are currently 10 people. We are actively hiring for engineering talent, as well as operations and business development roles.
Inc42: Have you partnered with other institutions and organizations to smoothen the operations of your venture?
Alok: Yes, our model is extremely partnership oriented. The key partnerships that we have included are:
- Partnerships with online platforms towards marketing and data support – as mentioned earlier, we are currently live in three segments, and each of them has a partner supporting it.
- Data partnerships with entities which have significant data regarding SMBs, and analytical tools for the same – we currently are active with three data partnerships.
- Lender partnerships – with banks and NBFCs who lend on our platform. We, currently, have two lenders lending through Indifi platform.
We will continue to expand on all three kinds of partnerships mentioned above to enrich and expand our suite of services.
Inc42: What are your expansion plans?
Alok: At this point, we are focused on activating different segments, and making them successful. Once we have sufficient feedback from the market in each of the segments, we will then be focusing on scaling up those segments.
Inc42: Any words of advice for people who wish to follow their hearts and live the entrepreneurial dream in their forties.
Alok: Follow your conviction. The decision to start a company cannot be justified by either economic considerations (all risk/rewards considered) or by lifestyle considerations; it can only arise out of an innate desire to solve problems, and an intense dissatisfaction with status quo.
Alok has been an angel investor in many other startups, and will continue to participate in (investment) rounds. Some of the noteworthy startups that he has funded include Delhi-based edutech startup Cue Learn; Mumbai-based Envoged, a social platform for buying and selling pre-owned luxury fashion product; Delhi based online meal-booking platform for train passengers TravelKhana; SaaS-based training and recruitment startup Capabiliti; car rental startup JustRide; and many others such as Bite Club, Globalthen, Taxspanner, Knowcross, Adda52, Supafoods, Autoflik, Cardback, Moneyview, Curofy, Wishberry, Qikwell among others.