These ventures, not necessarily based in the founders’ hometowns, are targeting a market familiar to the entrepreneurs and their founding teams. They are aiming to connect with the next billion users, touted as the battleground for new-age Indian internet firms.
By Shephali Bhatt
MUMBAI: A growing breed of startups founded by technology entrepreneurs from small-town India — such as Blackboard Radio, Bakbuck, Pratilipi, Purplle and DealShare — is catering to consumers in non-metros, or Bharat, and has managed to net investors, too.
These ventures, not necessarily based in the founders’ hometowns, are targeting a market familiar to the entrepreneurs and their founding teams.
By leveraging their own life experiences, insights and backgrounds, they are aiming to connect with the next billion users, touted as the battleground for new-age Indian internet firms, and in the process, managing to get more than a look-in from investors.
In August, Blackboard Radio raised $100,000 in a seed round from social enterprise incubator Villgro, among others. Bakbuck, founded in 2018, has so far picked up $250,000 in funding from Nazara Technologies and a few others. Pratilipi has raised $20.5 million across multiple rounds of funding. And, last week, Purplle netted $30 million in Series C funding, led by US-based investment bank Goldman Sachs and some existing investors.
Blackboard Radio is a voice-based interactive app that is trying to solve the age-old problem of English-speaking among students in small-town India. It has been inspired by cofounder Shubham Gupta’s own experiences from the time the 27-year-old moved on from a Hindi-medium school in his hometown Matili, a village on the border of Rajasthan and Punjab, to pursue his bachelor’s degree at IIT Delhi.
Abhinay Jain, 32, co-founded Bakbuck, a regional language social gaming and assisted shopping platform that targets housewives in tier 2 cities and beyond. The Mumbai-based entrepreneur draws insights from his mother and aunts in Bhilai who have access to the internet on their mobiles but nothing worthwhile to do on their short breaks from domestic chores.
Online self-publishing and storytelling platform Pratilipi is based on the premise that people from small towns love to read and write stories but can only do so in their mother tongue. Its cofounder, Ranjeet Pratap Singh, grew up in Fatehpur in Uttar Pradesh. He preferred reading authors like Suryakant Tripathi (Nirala) and Premchand in his mother tongue. Pratilipi, with content in 10 Indian languages, claims to have over 8.5 million monthly active users at present, with 70% of writers from non-metros.
Besides these, there is the beauty products marketplace, Purplle. Founded by non-metro techies, it gets 75% of its 10,000-12,000 daily orders from tier 2 cities and beyond. “We create about 1,000 branded content videos for TikTok and YouTube every month, with 995 of those in 8 vernacular languages,” says Manish Taneja, the company’s co-founder.
Building businesses for non-metro users comes with its own set of unique challenges. It is tough to get consumers from tier 2 and beyond to pay up, all the founders say.
“Cash on delivery is a norm and so is their tendency to return goods because there’s no monetary commitment,” says Taneja of Purplle, whose return rate is as high as 15-18%.
Pratilipi has only begun monetising by buying intellectual property rights to some of the content on its platform, with plans to later convert it into games and physical books et al. Bakbuck banks on content marketing and B2C FMCG commerce, but user retention is a struggle.
“When you are building a business for Bharat, even funding is a lot tougher to get than when you’re building apps for the metros,” says Jain of Bakbuck. Vaibhav Agarwal, partner at VC fund Lightspeed agrees.
“You have to straddle towards tier 1 to raise money. While the founders are excited about the opportunity outside tier 1, they often fail to get the investors to feel the same excitement,” he says.
Some of these founding teams struggle to get their first investor, hire their first data scientist, product designer, and so on, he adds.
“It helps if the founders come from diverse backgrounds to tackle this issue,” says Sourjyendu Medda, co-founder of Dealshare, an app for local grocery and household goods commerce targeted at small-town India.
“For us, the struggle is to get people from that market to opt for ecommerce. 80% of our first-time customers had either never bought anything online until then or had their relatives buy them mobiles through ecommerce portals,” says Medda.
Despite the challenges, founders remain bullish on the opportunities in building businesses for tier 2 and beyond.
“The way we see it, a tier 1success story can at best be multiplied 6 times. A tier 2 success story can be multiplied 20 to 30 times,” says Sumit Ghorawat, co-founder of Shopkirana, an Indore-based B2B ecommerce platform.
“Ultimately, what distinguishes these founders from any other individual in Mountain View, Hong Kong, Beijing, or even Bengaluru, is that they are motivated by the problems and insights they have seen around them growing up. That’s what they draw their strength from,” says Agarwal of Lightspeed.
(Disclosure: Times Internet Accelerator, a part of The Times Group which also publishes The Economic Times, is one of the investors in Pratilipi)