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Disruption: Startups & Tech
China-based KR Space Raises $30 million
China-based co-working space startup KR Space (a spinoff from tech company 36KR) has raised $30 million
in a fresh round of funding. The invest-ment comes from Prometheus Capital and IDG Capital Partners.
PR Analytics Startup TrendKite Gets $16.3m
Texas-based PR analytics startup TrendKite has raised $16.3 million in a round of Se-ries-D funding. The invest-
ment comes from Adams Street Part-ners, Battery, Noro-Moseley and Mercury Fund.
Online Seafood Trader Gfresh Bags $20 million
China-based online market-place for trading and selling seafood, Gfresh has raised $20 million in a funding
round from Riverhill Fund and Legend Capital. The startup offers logistics and final delivery services.
High-tech Co Kuang-Chi Launches $250-m Fund
China-based high-tech com-pany Kuang-Chi has launched its second $250 million fund. This fund will target invest-
ments in startups across the globe in ro-botics, IoT, telecommunications, and health technology industries.
Global Roundup A brief look at what is
happening in the global technology and startup
space, giving you a bird’s eye view of deals,
investments and buys
One of the hottest startups in
Indonesia, Go-Jek trans-
formed itself from a small call
centre to being one of the largest players in ride
sharing, food, grocery and medical delivery in the
country. Backed by Sequoia Capital and Yuri Mil-
ner’s DST Global, Go-Jek is the first unicorn in
Indonesia. The Indonesian startup, which was
founded in 2010, has acquired 3 startups in India
since the beginning of 2015.
Go-Jek has plans to acquire more startups in the
devOps and mobile engineering space. In a free-
wheeling chat with ET’s Aritra Sarkhel, NadiemMakarim, founder of Go-Jek shared the company’s
founding and why India is critical for the company.
How did the idea of Go-Jek come into being?While I was working in McKinsey & Company, I
started Young Leaders for Indonesia, which gave
me loads of learning in entrepreneurship. While in
Indonesia, I navigated a lot on O Jeks (Indonesian
for motorcycle Taxi) and became friends with lots
of them. I trusted them in taking me around every-
where in Jakarta to buy food and stuffs like that.
The service had a lot of irregularities as they had
other passengers to cater to. The critical thing that I
realised was if we build trust with them, they were
ready to work beyond the normal working hours.
That’s when the idea of a call centre came into
being. I sat down with 7 to 10 drivers and briefed
them about the concept. Their willingness to work
more number of hours at better remunerations
gave birth to the idea of Go-Jek.
Transformation from a call centre to one of theIndonesia’s hottest startupsDuring the initial years, I worked for various
companies as I required more cash to run
the business. We had a small office with
six staff and had ten phones in the
office with 4 call centre agents taking
calls from friends and family. That
was how the first six months went
and then I put my savings into it.
Gradually, corporates started calling
us for courier services — so we
became sort of a B2B courier servi-
ce. But working with corporates did
not last long as there were a lot of
payment delays and customisations for
each vendor did not prove profitable. So
we decided to go straight to the consu-
mer with our services.
Your good friend Anthony Tan fromHarvard became a fierce business rival as
the owner of Grab Taxi’s owner. How did thisimpact your growth?The biggest role they ever played was to put us in
the survival mode. During initial days, we found out
that while apart from the cab business, they were
also planning to enter into the bike business and
had funding worth $250 million while we had only
$2 million. It’s amazing what survival instincts do to
you as a business.
What does your Indian centre mean for Go-Jek’sIndonesia plans?We have a mix of local and international talent in
Go-Jek who runs the tech operations. We have
made four acquisitions in Bengaluru to accelerate
and catapult our engineering capability. We do not
want to build a big engineering organisation. We
acquire organisations with certain skill sets to help
us grow here in Indonesia. The Indian guys are in
Jakarta and our Indonesian folks are in India most
of the time. It just happens to be located in two
different cities. Likewise, we had acquired Bengalu-
ru-based Pianta to boost our health
care services.
Go-Jek Books aLong Ride withIndian Startups
Q&A
First unicorn in Indonesia has already acquired fourstartups in Bengaluru and looks for more acquisitions
identified a total of about $5 million inpayments that may have been impro-per. The company said it recorded anout-of-period correction related to $3.1million of such payments and that $1.9million was still under investigation.The company also said there had beena problem with its controls and that
the investigation would continue. “Wedid not maintain an effective tone atthe top as certain members of seniormanagement may have participatedin or failed to take action to preventthe making of potentially improperpayments by either overriding or fai-ling to enforce the controls establis-
Mumbai: Industry body Confederation of In-dian Industry (CII) has taken a leaf out of cor-porates’ books and is backing startups by set-ting up its own platform. The ‘Startup Men-torship Circle’ will provide a common plat-form for captains of India Inc and startupentrepreneurs to share their experiences andresources.
CII aims at connecting startups to the globalmarketplace and their think-tanks to enablefirms to scale up and succeed in an exponentialway. The industry body will focus on startupswhich are past the idea stage and have been inoperation for 2-5 years; those that need supportfor the next stage in order to scale up. Sanjiv Ba-jaj, chairman of CII’s western region entrepre-neurship & startup sub-committee, says theidea is to tap into CII’s large network of corpo-rate India, which is willing to mentor startupsover the next three months to one year.
“The government has a lot of facilities forstartups but many don’t know how to accessthem. The nature of mentorship will be to assi-st startups in further fine-tuning their busi-ness plans, linking them to relevant membercompanies in the CII base, and help companiesfind relevant customers and strategic inves-tors,” Bajaj told ET.
But it is not just corporate India that startupscan tap. CII will also enable startups to get im-mediate and direct global exchange throughpartnerships with the Canadian and Israeli go-vernments where special facilities and taxsops will be provided to startups to begin jointventures with their global counterparts.
But in an atmosphere where funding exube-rance has paled, CII’s primary goal of mento-ring isn’t with the end result of getting star-tups funded.
“While funding may be slow in some sectors,overall, there is enough capital. So for CII, rat-her than being a fund, it is more important forcompanies to have a strategic interest in thestartup business and through that they mayprovide funding. Funding by itself is not ourmain criteria; mentoring is,” said Bajaj.
Early stage venture capital firms investing inthe space believe that corporate entry into thestartup ecosystem may not be a valuable pro-position since “corporates back a startup to es-sentially get a new line of business for themsel-ves,” said a venture fund manager.
But some angel funds such as IAN believe cor-porates backing startups has been long over-due in India. “HNIs who are part of the indust-ry are creating a high risk, high reward assetclass right at the top and (investing in startups)is going to give them the kicker in their portfo-lio. So I think it’s a brilliant idea (for corporatesto get in),” says Padmaja Ruparel, president atIndian Angel Network.
CII Opens Platform toBuild Bridges for Startups Industry body looks to
connect startups to the global
marketplace and their think
tanks to help them scale up
SANJIV BAJAJChairman, CII’s western region entrepreneurship & startup sub-committee
Govt has a lot of facilities forstartups but many don’t knowhow to access them. The natureof mentorship will be to assiststartups in further fine-tuningtheir business plans, linkingthem to relevant cos in CII base
ROAD AHEAD
$5 mPotential improper payments that co has identified
$13.47- 13.53 b
Co’s expect-ed revenue in FY16
Expected growth rate
$3.45 bCompany’s revenue in third quarter, up 2.5% sequentially
Expected revenue for FY16 earlier
8.5-9%
10-14%
Co says its probe had
identified $5 million
of potentially improper
payments
hed by the company relating to real es-tate and procurement, principally inconnection with permits for certainfacilities in India,” the company saidin its filing with the SEC. Cognizantadded that the senior managementwho may have participated or failed toprevent the improper payments areno longer with the company or in a se-nior position.
Cognizant had announced that itspresident Gordon Coburn had resig-ned and was being replaced by RajeevMehta at the same time as the investi-gation. The company did not specify areason for Coburn’s resignation.
Analysts said the new disclosuresabout the improper payments madethem seem immaterial.
“The previously disclosed improperpayments were identified to be about$5 million (seems very small to us),and immaterial to financial results(no restatement needed),” David Ko-ning, analyst with RW Baird said.
The Teaneck, New Jersey-headquar-tered firm said it expected FY16 reve-nue of between $13.47-13.53 billion, up8.5-9%, its slowest growth rate in overa decade. The company had initiallyexpected revenue to grow 10-14% inFY16, it then cut that to 10-12% growth.Last quarter it lowered the guidanceagain to 8.5-9.5% growth.
Mumbai: Cognizant trimmed the topend of its full-year guidance, the thirdtime this year that the IT firm has hadto pare growth expectations. The com-pany also said it had identified $5 mil-lion of potentially improper pay-ments and that certain members of se-nior management had been aware ofthe payments.
In September, the company had dis-closed that it was conducting an inter-nal investigation into whether certainpayments relating to its facilities inIndia violated the US Foreign CorruptPractices Act and that it had volunta-rily notified the US Department ofJustice and the US Securities and Ex-change Commission.
In a filing with the US Securities andExchange Commission on Monday,Cognizant said its investigation had
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Cognizant Cuts FY16 RevenueGuidance Third Time this Year
Founder of Go-Jek Nadiem Makarim
