Africa Archives - Inc42 Media

From flunking 12th grade to dropping out of MBA to becoming a millionaire at just 24, Rishabh Lawania’s extraordinary story is undoubtedly fit for the big screen. Coming from a non-tech background, Rishabh, inspired by the greats like Steve Jobs and Bill Gates, launched his first startup at the tender age of 17. Since then, he has gone on to launch two more startups, one of which i.e. Xeler8 got acquired last year by Chinese accelerator and venture fund ZDreams Ventures. Today, Lawania is a prolific investor with connections spanning across India, China, Japan and the US. For his latest venture, WeeTracker, he has set his eyes on Africa, the land of untapped opportunities. Leveraging his expansive network across some of the world’s most developed tech economies, Rishabh Lawania is now looking to help up-and-coming African startups to build sustainable businesses that have the potential to scale up. During a candid interaction with Inc42, Rishabh Lawania shared interesting anecdotes from his unusual journey as a serial entrepreneur and investor. As part of our hour-long conversation, he also offered some valuable insights into the lessons learned from the failure of his second entrepreneurial venture as well as his plans for the future. The Formative Years: Failing 12th Grade Exams, Starting A Company At 17 While everyone around him was dreaming about qualifying engineering entrance exams, Rishabh knew he wanted to do something beyond the usual i.e. start a business. However, the major hurdle was not having any guiding hands, since he came from a non-business family. “So, nobody expected that I would start a business, much less a technology startup because I have no technical background whatsoever,” he uttered. Undeterred by this obstacle, Lawania started his first venture the year after he flunked the 12th grade. In fact, during the gap year immediately after his 12th board exams, he launched Red Carpets Events. Conceived in 2010, the event management company helped organised/co-organised 70+ promotional, corporate events across Delhi-NCR and Jaipur. Although not a technology startup per se, the venture taught Rishabh Lawania the power of networking. “The inspiration to launch a tech startup came to me during my early years as an independent event organiser. During this phase of my life, I understood the power of networking. At the time, my focus was on connecting with as many entrepreneurs, VCs and investors as I could and understanding from them how to start a business,” he explained. Unlike most entrepreneurs who are driven by the allure of starting and owning billion dollar companies, Rishabh Lawania has been a realist through most of his career. Instead of focussing on building companies of the same scale as Apple or Microsoft, he wanted to create something that was profitable, while also offering an easy exit to its founders. From JusGetIT To Xeler8: A Failed Attempt To An Remarkable Exit From this desire was born JusGetIT, a last mile logistics startup that specialised in doorstep delivery of groceries, in 2013. The startup, according to Lawania, was operational for around six to seven months, during which it had partnered with 30+ vendors and shopkeepers. Additionally, it helped maximise the revenues of offlines kirana stores by offering its tech solutions to them. The venture, however, failed to take off the way Rishabh had envisioned. He believes that the main reason behind the startup’s untimely shutdown was the lack of right understanding of the market. Although JusGetIT was one of the early movers in the space, it failed to raise sufficient funding. “That was the time when the entire hyperlocal thing was just starting up in India. Back in 2013-14, Grofers and Bigbasket were at a pretty nascent stage. We figured out that we did not have a cost-effective model,” Lawania added. Given that the B2C business was not cost-effective, the team at JusGetIT needed to scale the technology into a very asset-light model. He went on to state, “Although funding was available to Indian startups at the time, we were not able to figure out the right way to do it. However, we learned a lot. We had reached out to a lot of investors and through that, eventually, learned how to raise funding.” Remarkably, the failure of JusGetIT didn’t stop Rishabh Lawania and this time, he focussed on creating a sustainable B2B tech platform that was at the same time scalable. In 2015, when he was in the US, Rishabh teamed up with techie Keshu Dubey to launch Xeler8, his most successful venture to date. A deal-sourcing and research platform, Xeler8 offered a modernised approach to prospecting, tracking and analysing startups with an initial focus on Indian startups. As stated by Rishabh Lawania, the idea behind Xeler8 came to him when, as an entrepreneur, he tried to learn more about his competitors. He said, “Back then, there was Bloomberg and similar platforms, which had databases of big corporate companies. However, there were not many platforms that focussed on startups. Even the ones that existed back then did not have good coverage when it came to startups. This was pretty much a good product-market fit.” Essentially, Xeler8 offered a database of Indian startups, covering about 47 industries. The data were singularly curated information of the startup’s business model, funding, founder details and more. The startup tracker also acted as a lead generation platform for corporates and a market research tool. Convinced of the product’s marketability, the Xeler8 team in the US started building a beta product and launched it exclusively for certain invite-only angel investors, startups and VCs. Within four months, the company was ready with its first product, following which it was launched officially in India. In addition to basic details such as the name of the startup, founders and investors, the platform had metrics to predict how likely it was for a particular investor to back the startup. Rishabh Lawania added, “And we also provided an estimated valuation of the company. This was a very tricky part because you don’t really know how the startup will be valued in the future. Although this was kind of tricky, we backed everything with data.” The process was largely dependent on machine learning crawlers that were built in-house. Additionally, Xeler8 hired a separate team of analysts. According to Rishabh, the entire process of evaluation was based on around 16 to 17 parameters. Just over a year after it commenced operations, Xeler8 was acquired by ZDream Ventures for an undisclosed amount, while the product was still at the development stage. ZDream Ventures is a Chinese accelerator and venture fund with a startup incubator in Gurugram. As claimed by Rishabh Lawania, Xeler8 had been in talks with a number of Chinese companies for a potential acquisition. In the end, the platform was incorporated into ZDream and is currently used internally to evaluate the valuation of Indian startups. At the time of acquisition, the tech startup had around 35 to 38 paying clients, including corporates, VCs and angel investors. Additionally, it had a lot of premium customers such as micro-VC firms and big startups that wanted to have access to the Xeler8 database. Overall, the company’s client base stood at somewhere between 65 and 70. On the decision to sell the business and exit the venture, Rishabh averred, “With Xeler8, I was a third-time entrepreneur. It should be noted that the startup was bootstrapped since its launch. From the very beginning, we knew that we had to face the reality that Xeler8 was never going to be a $100 Mn company. We knew the upper cap that we could go to. But, I was aware that I needed to exit from it at the right time.” “Building a B2B product is especially difficult because you need to keep pivoting. There was not a lot of people in my team. At the time of acquisition, we had around 13 to 14 people in our team. More difficult than building the tech product was to actually sell it,” he added. From Entrepreneur To Investor At ZDream Ventures Following the acquisition of Xeler8, founder Rishabh Lawania joined ZDream Ventures as the Chief Operating Officer and Head of Investments. This marked the start of his journey as an investor. During his one-year stint at ZDream, he led a number of Indian investments at Seed and Pre-Series A stages, geared towards propelling the growth of the firm’s portfolio as well as portfolio companies. As part of his responsibilities, Lawania also helped incubate POC (Proof of Concept) and pre-revenue stage media, entertainment and consumer-focused businesses. It was during his role as the COO of ZDream Ventures that Rishabh gained a strong understanding of startup ecosystems across India, China, Japan and the US, including their specific challenges and opportunities. This, in turn, enabled him to widen his network of connections; something that has since come in handy for his latest African venture, WeeTracker. Inside Rishabh’s Latest Venture In Africa As a serial entrepreneur who is constantly chasing the high of starting his own business, Lawania stepped down from his coveted job as a VC within one year to dive into another venture with long-time partner Keshu Dubey and Nayantara Jha; this time in the emerging tech landscape of Africa. Launched earlier this year, WeeTracker is a global tech media dedicated to the African tech ecosystem. It aims to nurture startups in the continent in a three-way holistic fashion: inform, educate and invest. To attain this feat, the company will focus on providing data-backed digital media and information, skill development as well as investments in promising African startups. In line with this vision, the startup will serve as a platform that strives to bridge the gap that currently exists between emerging markets like Africa and developed ecosystems across the world. According to Lawania, WeeTracker is actually his first step to having a virtual presence in Africa and creating a well-connected network of indigenous startups, entrepreneurs and investors. Ultimately, the aim is to connect startups in fledgling ecosystems like Africa with key players and enablers in the same vertical in developed economies. As part of the skill development programme, Lawania and his partners are planning to take a group of African entrepreneurs to China and another batch to India in June of this year. Most of these startups operate in the fintech, agritech, cleantech and water tech segments. Shedding light on WeeTrack’s plans for the near future, Rishabh added, “At present, I have a list of 25 to 30 Pre-Series A andSeries A African entrepreneurs who are interested in coming to India to learn from established entrepreneurs here. We are trying to build a network of mentors, entrepreneurs and product managers across India, China, the US and Japan. So if someone in Africa is trying to build a B2B platform, we can just connect them to the relevant product managers across these economies.” So far, the platform has already onboarded up to 75 entrepreneurs, mentors and product managers across diverse sectors such as hyperlocal, fintech and ecommerce. As an added boost, Lawania said that WeeTracker would be investing in a number of African investments at Seed and accelerate stages. Essentially, the trio is looking to back startups that are post-proof of concept and are trying to solve a local problem with immediate social impact. With the average ticket size ranging from $50,000 to $100K, the company is looking to disburse capital in approximately 60 to 70 startups through a sector-agnostic fund over the next two years. WeeTracker is currently said to be in the process of raising a $20 Mn fund. At the time of its launch, WeeTracker also published a detailed funding report on the African entrepreneurial ecosystem. Additionally, in the third week of January, it announced the acquisition of Cape Town-based Startup Safari, an ecosystem immersion programme intended for entrepreneurs in emerging economies. Commenting on the development, Rishabh Lawania said in an official statement, “This represents a strategic value addition to our mission of bridging the World Emerging Economies, giving us an opportunity to physically connect the entrepreneurs to the ecosystems, apart from doing so virtually. It also helps us kickstart our plans to scale to multiple economies very soon.” As per the official release, Startup Safari is a platform that facilitates cross-border investment, technology transfer and joint ventures, with the goal of driving economic growth and strengthening fledgling startup ecosystems. Speaking of the acquisition, Startup Safari founder and Curator Apoorv Bamba stated, “The acquisition journey with WeeTracker just felt like the automatic next step to move closer to our bigger vision and bring further scale to the African ecosystem through media, research, and insights. With WeeTracker and Startup Safari, we aim to become the African window to the world and enabling emerging market opportunities and growth for both sides of the table.” In addition to investing in African startups and connecting them with enablers in other more developed ecosystems, the Rishabh Lawania founded the company is also looking to help launch a few Indian startups in Africa through the Startup Safari programme. Why Africa, You Must Be Wondering As a cool and calculated investor, Lawania’s recent shift in attention to Africa is backed as much by data as it is by the desire to usher in a social change in a region where a large section of the population still struggles with poverty, malnourishment, drought and inadequate access to clean water. He told me, “Having worked very closely with Indian, American and Chinese startup ecosystems, I wanted to do something that would really create some value. So, my team and I did an extensive comparative analysis of the major tech economies: India, China, US, Japan and South Korea.” Africa, according to Rishabh, is undergoing a tech revolution, similar to the kind that happened in the US in the late 1990s or in India in the early 2000s. Because the ecosystem is still very nascent, it also holds a lot of untapped opportunities. Despite the lack of proper government support, digital penetration in some African countries – including South Africa, Kenya, Nigeria, and Ghana – has reached a record high in recent times. In the last two to three years, there has been a discernible boom of startups that are leveraging advanced technologies to solve some of the local problems. For instance, Cape Town is currently going through the worst drought in history. Combating this issue is a group of emerging startups that are working to make clean water more available to the masses. Other sectors that are booming in Africa include fintech, agritech, and cleantech, among others. Within fintech, Lawania claimed that mobile wallets, remittance startups, and B2B companies are rapidly gaining traction. To support these startups, a network of angel investors, VCs, and ecosystem enablers have also cropped up recently. According to a report by WeeTracker, in 2017 alone, African startups raised more than $167.7 Mn in funding across 201 deals, which was a significant 28% jump from the year before that. Echoing this increased interest in Africa-based startups, Lawania said, “During my earlier trips to China, Japan and the US, I noticed that there was a lot of interest in the African ecosystem. However, most people are still hesitant about investing in African startups.” Through WeeTracker, Rishabh Lawania and his partners are aiming to bring a change in the continent’s still-nascent startup culture. By offering funding support as well as access to mentors, the company is hoping to help create sustainable businesses that can, in turn, drive Africa’s economic growth. Road Ahead As An Angel Investor In his eventful career, Rishabh Lawania has donned many hats, from entrepreneur, enabler, VC, mentor to an angel investor. During his seven month stint at Xeler8, he claims to have invested in a small portfolio of Indian companies. Despite moving out of the Indian startup scene, Lawania has remained active as an angel investor in the country. He said, “I have invested in six startups in the last five months. I am now looking to back five to six startups by the end of this year.” As far as the stage of funding is concerned, he will be investing in startups at bridge and seed stages. Lawania is essentially looking at startups that not only need capital but are also looking to access his network to launch their operations outside India. Among the startups that he has backed in his personal capacity are marketing automation platform Wigzo Technologies, Cha-Chi, to name a few. According to Rishabh Lawania, the Indian startup ecosystem has developed tremendously in the last few years, as a result of which it now has a strong community of angel investors that are aggressively trying to back promising tech startups. While a few years back, most Indian investors were looking at Chinese and American counterparts to determine which startups to invest in, Rishabh believes that a majority of them are now making sound investment decisions, which only comes as the ecosystem matures. On the much-debated topic of angel tax, the WeeTracker and Xeler8 founder added, “The government should definitely do something about the angel tax fiasco because the market has only just started to boom. In recent times, more and more angel investors are coming from non-tech backgrounds and are investing in tech startups. The government should try to promote this, while also becoming more vigilant when it comes to curbing black money.” Editor’s Note Constituted by 54 nations, Africa is the world’s second-largest and second most populous continent, home to more than 1.2 Bn people. Rich in diversity, resources and history, this land mass is almost synonymous with resilience amidst extreme adversities. Colonised for the most part of its modern history, many countries in Africa still struggles with poverty, malnourishment, diseases, drought and inadequate to proper resources. As stated by Rishabh, in a way, there are a lot of similarities between the economies of India and Africa. Despite the lack of proper government support, countries like South Africa, Kenya, Nigeria and Ghana are leading Africa’s ongoing tech revolutions. Consequently, digital penetration has improved remarkably in the last two to three years. Riding this wave is a crop of new startups that are leveraging technology to create a positive social impact, be it in fintech, agritech, healthtech, cleantech and water tech. With the Indian startup ecosystem, currently, the third largest in the world, reaching a point of saturation, entrepreneur and investor Rishabh Lawania’s latest venture WeeTracker aims to tap into the largely untouched African market. Here’s to hoping a new day will dawn on Africa soon!

Africa

From Flunking 12th Grade To A Millionaire At 24: After India, Rishabh Lawania Is Now Aiming To Tap Into The African Startup Ecosystem

From Flunking 12th Grade To A Millionaire At 24: After India, Rishabh ...

Featured Stories

Why Singapore Is A Promising Market For Indian Startups

Mapping The Market: India’s Online Music Streaming Landscape

#StartupsVsCovid19: Urban Company Resumes Service; Launches Fund To Support Part...

Reliance Invests $10 Mn In JioSaavn As It Plans To Go Public

Covid19 Impacts Indian Startup Funding, Growth Stage Worst Hit In Q1 2020

Exclusive: Swiggy Arms Itself For Grocery Battle With Funding From Tencent

Turbo-Charging EV Adoption: The Keys To Success In Indian Market

How Electric Vehicles Will Impact Electricity Demand, India’s Grid Capacity...

No Time To Pause: The Dark Side Of The Attention Economy