2016 has been an exciting year for SaaS-based web optimisation and marketing platform. May 2016 saw it raising $1.5 Mn in Seed funding from Accel Partners, Matrix Partners, and angel investors such as Girish Mathrubootham, CEO of Freshdesk. November saw it adding another $6 Mn to its coffers as part of its Series A funding led by Sequoia India. This was followed with a new office in February 2017.
However, amongst all these milestones, the founders have not lost sight of the journey, so far, and the hardships entailed in their bootstrapped phase. One of them was their struggle to buy licensed tools and softwares.
Zarget’s CEO and co-founder, Arvind Parthiban, remembers it all clearly,
“The initial days were tough for us and bootstrapping meant we had to cut corners to keep pushing on with the dream of building an all-in-one Conversion Rate Optimization (CRO) suite. We did not have access to paid tools and had to make compromises, which hurt productivity. With funding, things changed but memories of the early struggle are still afresh in our minds.”
It is with these memories in mind that they launched the #RespectStartups initiative to help startups that often struggle with funds to buy licensed software products. Under the initiative, companies can showcase offers for startups and they, in turn, can pick the ones that would make their journey easier through the RespectStartups platform. These could be anything – from offering trials, free access to services, products, office space or even coupons.
Arvind always wanted to do something of his own, and the idea of launching Zarget was sparked by his experience while working at Zoho. Arvind was involved with marketing for IT servers, and this is where he realised the need to find a right marketing automation solution – an optimisation tool which fulfilled the requirements of all sizes of businesses and not just the big few.
While the market did have many optimisation players, all of them were either providing A/B testing or heat maps or funnel analysis. So businesses ended up using multiple software products. It was this problem that Arvind, along with his ex-Zoho buddies Naveen Venkat and Santosh Kumar, decided to solve by developing Zarget (earlier Osmnez), a SaaS-based conversion rate optimisation company, in 2015.
Adds Arvind, “Just a few years ago, I was a marketer facing the same challenges affecting marketers today – desperate to improve my campaigns in real-time, but without the tools, IT skills, or budget to make it happen efficiently. With Zarget, we aim to make it easy and affordable for any person or business to access the solutions they need to increase engagement and drive revenue across their websites.”
Conversion Rate Optimisation(CRO) With A Chrome Plugin
For a business looking to increase conversion on their website, Zarget gives stats and analytics to help positively influence the buying behaviour of website visitors. It optimises beyond login pages and is ideal for improving checkout pages and various SaaS website tools, without any of the related security vulnerabilities.
They offer all the capabilities of the competing solutions and more – including A/B testing, dynamic heatmaps, funnel analysis, form analytics, user polls and feedback – but at 10% of the cost, and on a single platform. Additionally, businesses gain access to reportedly the industry’s first Chrome plugin that lets one make changes instantly from within the browser. Thus it eliminates the kind of complexity and costs that are typically only available for large enterprise teams, making it possible for SMBs also.
Starting as low as 50 cents per day, any small business owner or digital marketer can turn their website into a visualisation dashboard for marketing automation, optimisation and testing, and gather actionable insights needed to make critical improvements on the fly.
Counting 1.4K+ Clients, 30+ Countries
The Zarget platform is purposely built to empower ecommerce, marketing, and SaaS companies and intended for use by marketers, product managers, and web designers. Instead of employing three different tools, businesses can use a single tool to manage site content and performance. Additionally, compared to its competitors, the Zarget claims to be more affordable and suited for all types of small and medium-sized businesses. No wonder SMBs are the biggest chunk of its customers – a number that has grown to 1,450+ spread across 30+ countries. Over 250+ of these are paying customers including the likes of Buscape, Landesk, Carro, FreshDesk, Voonik.
As far as revenues are concerned, without disclosing actual figures, Arvind revealed that the plan is to hit $2 Mn in ARR by the end of this year. The team itself has now scaled to 85 members from 25 after raising $1.5 Mn in Seed funding from Accel Partners, Matrix Partners, and Girish Mathrubootham, CEO of Freshdesk, in May 2016.
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The Series A round followed in less than a year, with Sequoia India leading the $6 Mn round along with participation from previous investors Accel Partners and Matrix Partners in November last year. With this round, Zarget became the only company in India to have Sequoia, Accel, and Matrix as investors at the Series A stage. “This funding is more a validation of the team’s product building capability in the past. Having been with Zoho for 10 years and having worked with Girish Mathrubootham in his team helped us to grow a lot. When people came to know that Girish was going to invest in our seed round, we got a lot of offers from others as well. With this round, we are the only company in India to have Sequoia, Accel, and Matrix at Series A stage. And that’s only because of the Zoho brand value,” acknowledges Arvind.
VC Funding Is Like Rocket Fuel For A Startup
But what if this funding had not materialised?
“Having VC funding is like having rocket fuel for your startup. It makes you faster. I am not saying that bootstrapped companies can’t do it but it takes little more time for them. This funding helped us to grow faster.”
What has also helped is the fact that it counts top three VC funds in the country as its investors.
Says Arvind, “They all have their own strengths which helped us in a lot of ways. For instance, when we were in beta, I wanted to show my product to one of the best website companies in the world i.e. Zendesk. I wanted to talk to the marketing head to know her opinion on the product. Matrix Partners were able to help us connect with them in less than a day and we were able to demonstrate our product to them.”
Things like these are difficult to pull off for startups on their own. Additionally, with marquee investors, building a brand name was easier. Zarget never struggled to sell who they were and what they did.
But has funding also opened the door to more customers?
“No,” says Arvind.
He was very clear on one thing as were his mentors on getting product-market fit. “And one thing to get to right product-market fit was not to sell it to your friends or contacts of your VCs. It would never give you the right product-market fit. So, we never tried to sell the product to even the portfolio companies of our VCs. Our biggest customer today is the company called Buscape from Brazil who found us online, reached out to us, liked our product and paid $30K.”
It is landing of such customers, irrespective of where they are, which is driving Zarget’s efforts towards building new modules such as the personalisation module, in order to target enterprise customers. With an integrated platform, they will be competing with individual product silos such as heatmap marketing leaders, A/B testing market leaders, personalisation market leaders like Optimizely, Wingify’s Visual Website Optimizer, Five Second Test, and Convert among others.
But Arvind believes that introducing the industry-first Google Chrome plugin, which supported a dynamic heat map, was one thing that brought huge traction but also put the company in a different league against its competitors.
As per a Morgan Stanley report, by 2020 India’s ecommerce market is estimated to grow to $119 Bn. This also means that besides adding more consumers, the market will also see the addition of more and more businesses coming online. The same report also states that India is adding three Internet users every second. Hence, the scope for tools like Zarget, which will fuel call conversions, is immense. With a billion-dollar CRO market up for grabs, Arvind’s goal is clear. “The CRO market is evolving right now. People are building a lot of things in the personalisation space and we are also doing the same thing. We are also investing big in personalisation which is the next big thing in this market.”
SaaS And India
For Zarget and companies like it who are targeting SMBs, Arvind believes it is not a big problem to go global even if one is selling from India, provided one has a good quality, affordable product. But when it comes to large enterprises, that is where selling from India becomes a challenge.
“You need people around the globe, feet on the street to go and handhold your customers, and enterprises expect more because they pay more.” Thus, he candidly admits that once Zarget decides to go after large enterprises, a rework on the strategy would be required.
That being said, he admits that as a market for SaaS products, India will continue to be Zarget’s priority-along with the US, Brazil, Canada and China. Which is true for any other SaaS company build from India.
“In 2005, when we were working for Zoho, we specifically ignored India. People were using pirated products or downloading them. At that time, India was not a market to be taken seriously. Today, India is one of the top emerging markets even as a consumer of SaaS.”
Worry About Building A Reputable Business Model, Not Metrics
For SaaS founders looking to go global from India, Arvind’s first advice is to “build a reputable business model – where people search for you, see the value in your product, and should be able to buy your product and pay for it. “
“It’s a reputable business model which will allow you to sell from India. It’s not about one deal alone,” he asserts.
Next as an Indian company, one should play to their strengths – a vast engineering talent pool which allows for building products faster as compared to building products outside of India. Similarly, providing affordable and quick customer support from India is another advantage to be leveraged on.
Last, come the metrics. Arvind advises that, when it comes to metrics, one should not worry too much about pricing in the initial stage. Or for that matter metrics like ROI, churn etc. These can be fixed.
His secret mantra:“It’s not about how much money you make in the initial stage. It’s about how many people get to use your product. Worry about how to get your first 500 customers or reach $1 Mn figure in revenues. Getting the product market fit and the business model right is the first most important thing. The rest of the metrics can be fixed.”
[This article is part of Inc42’s SaaS series where we will be covering different aspects of SaaS in India and abroad.]