New Delhi: Before they set up Gurgaon-based LemonLearn Eservices, Rohit Chaudhary, Siddharth Bhatia and Samarth Goyal would often spend hours at Nehru Place, Delhi’s infamous market for software products and services, observing consumer behaviour. The exercise was part of an extended period of market research that eventually saw them launch online and doorstep technical support under the eTechies brand in September 2010. Since then, the startup has notched up 7,500 individuals and 300-odd home offices as customers and expects revenues in 12 months at anywhere between Rs 30 crore and Rs 50 crore.
“The opportunity or pain point that we address is essentially the post-warranty market, when consumers typically have to scramble to find reliable support,” says Chaudhary (photo), who quit as COO of the Technical Solutions Group at Gurgaon-based Quatrro Global Services to startup on his own. His co-founders also previously held senior roles at Quatrro. With their collective experience working in the business process outsourcing industry, setting up an outsourcing company was a no brainer. What they decided to do differently was to address the domestic Indian market.
Image Courtesy: eTechies
“We had done technical support for overseas customers all our life, so we knew how it worked. What we found missing was an organized and efficient player for the Indian market,” says Chaudhary, in a telephonic conversation with StartupCentral. The market size for technical support services, by his estimate, is about $10 billion. Most of this market is serviced by the unorganized sector. This means that after the warranty on your laptop or desktop computer runs out, your best bet is either to look up the yellow pages for a repair shop down the street or send your piece to the original equipment manufacturer’s (OEM) service center. The former is usually an unsafe and unreliable option while the latter is expensive. Most OEM warranties only last a year and even then don’t cover areas such as replacing batteries and software.
eTechies’ value proposition was compelling enough to attract an undisclosed angel round of funding from Google India chief Rajan Anandan in October 2010. That round went into scaling up a centralized call center in Gurgaon and reaching out to 20-odd cities. This January, Bangalore-based early stage venture capital investor Inventus Capital Partners came in with a $2 million-plus Series A round of funding. “We liked the idea of an Indian Geek Squad (a US-based technical support company). The company had scaled remarkably in the National Capital Region (NCR) on very little angel money,” says Parag Dhol, managing director at Inventus, who currently sits on the eTechies board. The due diligence on eTechies took about three months. Incidentally, Chaudhary and Dhol have known each other since childhood, growing up together in a small town in Uttarakhand.
In less than two years, eTechies has set up four service centers, one each in Bangalore and Mumbai and two in the NCR and processed over 30,000 service requests. Customers can access the services by either calling a toll-free number or signing up online. Customers can also sign up for an annual maintenance contract that costs about Rs 3,500, including taxes. The online and phone support services team works out of the Gurgaon center, which also functions as a hub for routing doorstep requests. The offline service centers too work on a centralized model, served by a network of field engineers.
Following the Inventus funding, the company has lined up aggressive growth plans. “We grew revenues 10X last year and are now investing in more service centers, technology and marketing,” says Chaudhary. The company, he says, is yet to break even. It will establish service centers in three more cities by October and add four additional cities by March next. Each service center has the capacity to service up to 10,000 laptops per month. The biggest, spread across 2,400 square feet in Delhi’s Okhla area, currently services 1,000 laptops per month. The Bangalore and Mumbai centers are fairly recent and about 90 per cent of the company’s customers at present are from NCR.
Chaudhary doesn’t expect to require a fresh infusion of capital for a few months. If he does need it, however, help will be at hand from Inventus. “In this business you keep reserves for supporting your performing companies. We have some for eTechies as well,” says Inventus’ Dhol. Like its other investments, the firm has a 4-6 year exit horizon for the company.
That’s enough time for eTechies to build value for its investors. However, while there are no other nationwide organized, end-to-end technical support players in the Indian market, the company doesn’t have an entirely open field. “Clearly, in-warranty support from OEMs could be a substitute. Out-of-warranty support from OEMs is available as well, but is typically outsourced or costly. The roadside computer mechanic is in the consideration set as well,” says Dhol. In the medium term though it may face bigger competition from players such as Canaan Partners-backed iYogi Technical Services and Zenith Infotech, promoted by the Mumbai-based Zenith Group. iYogi, which is also based in Gurgaon and started up in 2005, follows the same model but currently focuses on overseas markets. Recent media reports though suggest that the company may soon start offering services in India. Zenith addresses the Indian market but largely in the enterprise segment.
It may be a matter of time before both iYogi and Zenith decide to enter the growing and underserved Indian consumer market. eTechies’ founders will need to marshal all their experience to counter that imminent competition. The next 12 months will be crucial in consolidating the early lead.
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