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limeroadbookThis morning, LimeRoad announced $15M in new financing to further their mission of building a social discovery and buying platform in the lifestyle vertical.  This is a significant raise for a young company and provides additional validation of their differentiated approach to addressing the large and growing online buying opportunity in India. For those that aren’t familiar with the company, LimeRoad aggregates lifestyle products from a network of brands and stores and provides its community of users tools to create and curate lifestyle content as well as to easily discover and buy unique and delightful products.

Here are some brief thoughts on why we originally invested in Limeroad and have continued to support the company in subsequent financings:

  1. A truly exceptional team that refuses to take short-cuts and instead focuses on finding scalable, long-term solutions to difficult problems.  Suchi and Prashant have been deeply involved in architecting and building consumer products of significant scale at companies like Skype, eBay and Facebook and bring similar aspirations to LimeRoad, along with an understanding of what it takes.  Every time there is a choice between an ‘easy fix’ or finding a less obvious, long-term solution to a core challenge, they choose the latter, even though that inevitably means stepping into the unknown and facing a higher probability of (short-term) failure.  It takes guts to choose the path less traveled, but we believe that this path maximizes the likelihood of substantial value creation.
  2. An early and intense focus on achieving product market fit. Here are some charts on user growth, supply growth, community activity (scrapbook creation) and marketing expense. We like it when growth and engagement charts are up and to the right while marketing is flat.  It tells us that something is working without significant external stimulation (or discounting). (Footnote 1)
    limeroad
  3. A belief that differentiation will be increasingly driven by front-end experience.  Fast shipping, real-time visibility into inventory and responsive customer service are now table-stakes, not a strategy to differentiate.  Pricing-led ‘differentiation’ (heavy discounting) is a questionable long-term strategy and can become a dangerous addiction for management teams who ignore quality of growth.  Instead, we believe that visual and social experiences that enable discovery and delight (especially relevant in the lifestyle category) will define the next wave of market-leading online companies.
  4. Visual and social experiences are perfect for mobile.  We all know what’s happening on mobile but the question is which types of businesses will benefit more than others.  We believe that products that are inherently social and visual will benefit disproportionately from smartphone growth.  LimeRoad sits squarely in this category.
  5. A large profit pool. At the end of the day, valuable companies must all have attractive economic characteristics and the margin pool in the online lifestyle category is perhaps the most attractive in Indian online commerce.

There is a lot more work to be done – and problems to be solved – but the LimeRoad team has already disproved many accepted notions in the world of Indian e-commerce – for example that it is not possible to grow without offering heavy discounts or that Indian users aren’t savvy enough to embrace deeper social activities like scrapbooking, curating collections or sharing.  We expect them to disprove many more and wish them all the best in the next phase of their journey.

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Footnote 1: In order to preserve confidentiality of company data, absolute scale is not provided in the graphs above. Base scale is sufficiently large that the above data is a representative indication of product-market fit, in our opinion.

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The technology world has become a little bit flatter over the last ten years; the US monopoly on producing technology startups with impact outcomes has been broken.  We have all seen impact product companies coming out of Europe, Israel, and China over the past decade.

These startups are leveraging new platforms and customer behaviors that were non-existent ten years ago, including platforms such as app stores, SaaS app marketplaces, smartphones, tablets, content marketing channels, social media, and embedded payment options; and new user behaviors such as self-service on-boarding, bottoms-up technology adoption in SMBs/enterprises, use of open source technologies, and search as a primary way to find new applications/technologies.

We believe it is now the right time for Indian product startups to step up to the global plate, especially in mobile applications, developer tools/enabling technologies, and SaaS for SMBs.  There are already several examples of such companies, including Browserstack, Freshdesk, Helpshift, InMobi, Kayako, Nimbuzz, Simplify360, Webengage, Wingify and Zoho.

Investing with this theme, we are excited to partner with Chandan and Vaibhav at Phone Warrior to take mobile communications to the next level.  What Wikipedia did to encylopedias and Waze did to radio road traffic reports and paper maps, namely disrupting existing businesses with community, real-time and mobile, Phone Warrior is doing to plain old phone calls and messaging.  Phone Warrior’s user growth, retention and engagement in countries around the world over the past six months gives us confidence that they are well on their way to finding product-market fit.

Phone Warrior (incubated at 91Springboard) is building a globally-relevant cloud-based platform to crowd-source mobile phone numbers and turbo-charge the value of this data through big data techniques, graph search and machine learning.  Through this platform, Phone Warrior powers an essential set of services that has grown rapidly over the past year and could get onto every mobile device in the world across all forms of communication including phone calls, text messaging and over-the-top IP-based messaging.  Their product is currently visible on mobile devices through services such as caller-ID, spam blocking and call-blocking.

There is much more to come that leverages this core platform.  We look forward to exciting times ahead with the Phone Warrior team.

Post Authors: @dkhare and @anshoo

Here’s Ashish Thusoo, CEO & founder of big-data-as-a-service company Qubole, speaking with GigaOm:

Meena Ganesh, founder of Lightspeed-backed TutorVista spoke at the 2012 Grace Hopper Celebration of Women in Computing India. Here’s the video!

Mr Venkat R Chary, IAS (Retd), Chairman of Lightspeed-backed Indian Energy Exchange Ltd delivered a speech at the CII Southern Regional Power Conference in December 2012.  Here’s the video!

oneassist_logo timthumbLightspeed India MD Bejul Somaia was interviewed by Paramita Chatterjee of the Economic Times newspaper about Lightspeed India’s experience with incubating both OneAssist and LimeRoad.  Here’s the link to the article.

We are actively looking to incubate companies in these spaces, as well as back established companies and startups in these areas.

Our experience has been very positive:

“We were involved in incubating two companies in the last 12 months – OneAssist and LimeRoad – and have been very pleased with the results so far. Being able to work closely with teams during the incubation period really helps set the right foundation and strategy for the business. The incubation approach is very time-intensive, with no certainty of a successful outcome. But we will build on our positive experience by catalysing new companies in an organised manner.”

What sectors are Lightspeed looking to invest in?

“Education technology, financial technology, healthcare services, internet, mobile, software and software-as-a-service.”

 

Suchi Mukherjee, founder & CEO of Lightspeed-backed LimeRoad, spoke at the Women’s Forum on stepping into entrepreneurship. Here’s the video:

Gagan Maini and Subrat Pani, founders of Lightspeed-backed OneAssist, as well as Lightspeed’s Bejul Somaia, were interviewed on CNBC’s Awaaz Entrepreneur program in September 2012.  Here’s the video!

Lightspeed-backed Dhingana‘s Swapnil Shinde participated in a panel on mobile entertainment organized by VCCircle in July 2012, along with Salman Hussain of Vuclip, B Vamshi Reddy of Apalya and Vivek Paul of Sony Music. Here’s the video!

Dhingana founder & COO Swapnil Shinde was interviewed by VCCircle in July 2012. Here’s the video!

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