On Sundays, Rohith Bhat takes his daughter for a ride on a red Hero scooter through the temple town of Udupi. On other days, he is busy running a company that makes some of the best-selling Apple iOS apps from a traditional town known for its Krishna temple and a distinctive vegetarian cuisine.
“You don’t need to be in Bengaluru or Delhi to develop world-class products,” said Mr. Bhat, 43, the founder of Robosoft Technologies, the company behind popular apps such as Camera Plus. The app, used to enhance phone camera functions, has until now been downloaded 27 million times. “We could be in Udupi, and the rest of the world can discover and consume our products,” said Mr. Bhat, who hired local talent in the town to build the app’s technology.
Nearly 1,900 kilometres north of Udupi, in Jaipur, Nishant Patni’s start-up CultureAlley has till date helped 30 lakh users, mostly Indians, learn English through their mother tongue. Vadodara, the third largest city in neighbouring Gujarat, is home to Indusface, a small company in the business of protecting large customers such as Bharat Petroleum and the National Stock Exchange of India from cyberattacks and hacking.
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Even as many new-generation start-ups sprout up in India’s metros, especially Bengaluru, Mumbai, Delhi, Chennai and Hyderabad, the likes of Robosoft, CultureAlley and Indusface, among the hundreds of start-ups that exist today in the small towns and cities, are showing how ideas can be incubated and developed anywhere. These companies not only build products and services for a global audience, but their employees experience a far better quality of life compared to their metro counterparts. This is because cost of living is low, retention of talent is high, and there are hardly any traffic bottlenecks. “They are making their home in small towns because there is less competition for talent and it is much cheaper to operate,” says Sasha Mirchandani, managing director at Kae Capital, a venture capital firm that has backed CultureAlley. “Also, many people just want to work from their hometowns.”
At a later stage, though, when these companies grow and mature, they might find the small city environment challenging. That’s when they need access to more senior managers and also talent in large numbers. “They will have to move to metros like Bengaluru when they have to scale up their business and hire talent in large numbers,” said Rajan Anandan, Google India managing director and a top angel investor.
Thiruvananthapuram: Senzit
Bhopal: Appointy
Mr. Singh, who is from Uttar Pradesh, went to Bhopal to pursue mechanical engineering. When he couldn’t get a job, he started to bid and work on outsourced projects, and formed a team with other unemployed engineers: one of Mr. Singh’s engineers actually sold socks and vegetables on the roadside before joining Appointy. But the value of outsourced projects went down and the company went bankrupt after its major paying customer in Poland shut shop. While building websites, Mr. Singh had identified a big gap of scheduling appointments in industries such as healthcare and wellness and had already developed a product called Appointy. “But we didn’t know how to monetise it,” he says. He commercialised Appointy in 2011 and the company started earning Rs. 6.3 lakh per month. Appointy will facilitate total online transactions worth Rs. 2,856 crore this year. The bootstrapped company expects to cross revenues of Rs. 150 crore by 2018.
Appointy is betting on the business of scheduling appointments for salons, spas, dance and yoga classes, and even hot air balloon rides. Over 70 per cent of Appointy’s customers are in the U.S., but no one from Appointy has ever set foot there.
Hubbali: LabInApp
Four engineering graduates decided to create virtual science laboratories after they found that students in rural India didn’t have access to the same. Their startup, LabInApp, has designed a three-dimensional, interactive virtual laboratory tool that allows teachers and students to perform science experiments on computers or mobile. “Now we have virtual models in physics and biology for pre-university students. We will also start working on virtual labs for high school students,” says Girish Shirigannavar, co-founder and chief technology officer.
An alumnus of BVB College of Engineering and Technology in Hubballi, Mr. Shirigannavar co-founded the company along with college mates Pavan Shinde, Pramod Ramdurg and Vinayak Hulabutti. This month, LabInApp raised funds of Rs 63 lakh from Unitus Seed Fund, which is backed by marquee investors such as Vinod Khosla and billionaire Ranjan Pai.
LabInApp has already tied up with about 50 institutions based in Hubbali-Dharwad and will use the funds to expand in Karnataka and into Maharashtra.
Tiruchirappalli: Dextrasys
Udupi: Robosoft
Rohith Bhat, an alumnus of NMAM Institute of Technology in Udupi, founded Robosoft about two decades ago. What worked for him was that Robosoft was one of the few tech companies that created products for Apple’s Mac operating system from the start. Mr. Bhat worked closely with Apple officials, who, in turn, referred the company to their partners. When Apple launched the iPhone in the U.S., and then its app store, it opened up opportunities for Mr. Bhat to build his own products. Robosoft has tasted big success with apps such as Star Chef, a cooking and restaurant management game, which has got over 2 million downloads on Apple’s mobile operating system iOS. In May, it released an application that enables a user to control a computer using an iPhone.
“To be successful you don’t have to make many apps. Build a few, but they need to be really good,” Mr. Bhat said. Robosoft grew its business through bootstrapping, and gained investor interest only two years ago when its products came into the spotlight. In April, private equity firm Ascent Capital invested about Rs. 74 crore in Robosoft. Kalaari Capital, its existing investor, also participated in this round of funding. “When we were doing due diligence, everyone told us that they (Robosoft) are not the cheapest,” says Deepak Gowda, partner at Ascent Capital. “But they are the best in business for meeting customer expectations, especially in design.” He expects the company to cross revenues of over Rs. 635 crore in three years.
Raja Kumar, managing director of Ascent Capital, says, “Robosoft has successfully demonstrated that an Indian company can create globally acclaimed mobile applications and games.” Mr. Bhat’s company is now gearing up to build delivery capabilities near markets such as the U.S., Europe and West Asia.
Coimbatore: Ampere
It hasn’t been an easy ride, though, for the alumnus of the Government College of Technology, Coimbatore, and Royal Melbourne Institute of Technology. While setting up the core team was a challenge, she had to face bigger challenges with customs while importing certain key parts for research and development. She didn’t give up. “I came into manufacturing consciously as the scale potential is huge, unlike ecommerce and the Internet where only few companies can succeed,” said Ms. Annamalai.
Ampere’s focus is on rural markets — these electric bikes are used by farmers to transport chicken feed, eggs and grains. Annamalai believes personal mobility is a basic need on par with food, clothing and shelter that defines the dignity of an individual. Two years ago, it received funding from private equity firms Forum Synergies India and Spain’s IMI Investments.
And in July this year, Ratan Tata chipped in with an investment. She got Mr. Tata’s attention by sending a simple email with three concluding remarks: “If China can consume 32 million electric vehicles every year, why can’t India? Why should not the auto industry, dominated by a few large petrol players, be democratised by capital-light but technology-intensive electric vehicle industry? Why can’t we bring manufacturing to villages through electric cycles?”
She said, “I explained the impact that it can create for rural and semi-urban markets and then he (Mr.Tata) quickly told me the Tata Nano story.”
Jaipur: CultureAlley
Mr. Patni says the Indian market is huge — only 100 million of 1.2 billion Indians speak English. Marquee investors such as Google India managing director Rajan Anandan and Kae Capital founder Sasha Mirchandani have taken note of CultureAlley’s rapid growth and have invested in it. In March, it closed a funding round of Rs 39 crore from New York-based investment firm Tiger Global, Kae Capital and U.S.-based seed accelerator 500 Startups. “There is not only good talent available in Jaipur, but it is liveable,” says Mr. Patni, 30, who married Ms. Bhandari after co-founding the company. CultureAlley now has 17 employees.
Kochi: Sayabot Systems
Belagavi: SenseGiz
Founded by college friends Abhishek Latthe and Apurva Shetty two years ago, SenseGiz has bagged customers in the U.S., Japan, Europe and West Asia just eight months after it began selling its products. “The Internet has created a level playing field for us,” says Mr. Latthe, 27, chief executive of the company which competes globally with Fitbit, a maker of fitness tracking wristbands. It sells its products in the range of Rs. 1,500 and Rs. 6,000. Mr. Latthe likes the fact that he has family support in Belagavi but misses out on the networking that happens in metros.
Vadodara: Indusface
( With inputs from Girish Pattanashetti)