Raising money online to fund smart business ideas
4 min read . Updated: 23 Jul 2014, 05:14 PM IST
PremiumMint identifies three small firms that adopted the crowdfunding route to raise money
Crowdfunding, the art of raising small amounts of money from a large number of people over the internet, is fast gaining popularity. Most of the money thus raised is being use for small films, social causes and micro-finance. Almost 200 such projects have raised about 160 crore in the last one year, according to data from Catapooolt—a crowdfunding platform. Experts say the Securities and Exchange Board of India’s new framework for equity-based crowdfunding will encourage more such projects in India. Mint identifies three small firms that adopted this route.
Making your car smarter
Entrepreneurs: Sagar Apte and Deepak Thomas
Company: CarIQ Technologies Pvt. Ltd
Set up in: August 2012
CarIQ Technologies Pvt. Ltd was founded in August 2012 by car enthusiasts Sagar Apte and Deepak Thomas, who left their jobs at US-based PubMatic, a technology firm that builds software products around advertising, to pursue their passion.
They wanted to make Indian cars smart, similar to the intelligent features found in some foreign luxury cars. “Everybody was talking about taking things to the cloud, and we thought about how to take the entire car to the cloud," said Apte, founder and chief executive officer of Pune-based CarIQ.
The company provides an online platform for car owners to monitor their cars’ statistics and interact with service providers who can analyse and assess these parameters.
The solution comprises a USB-like device, plugged into a port under the steering wheel, that helps connect to the Internet. It tracks parameters like coolant temperature, service alerts, engine load, etc., while continuously giving feedback to the driver. “Once the platform detects that there is a parameter in critical condition, it starts sending out emails to nearby workshops and mechanics saying ‘This looks bad can we fix it?’" said Apte.
CarIQ currently has more than 200 customers using the platform in India. Each device along with a two-year subscription package costs around ₹ 6,000.
The company initially raised money from multiple angels in October 2013. But when the founders wanted to go to the US to raise more funds, Satish Kataria, managing director of Catapooolt, convinced them to giving crowdfunding a shot.
CarIQ currently has an ongoing campaign on India’s first crowdfunding platform, Catapooolt (Starting Blocks Media Ventures Pvt. Ltd), where it hopes to raise around ₹ 1.2 crore over the three months duration of the campaign to expand the business.
Mobile accessory that senses motion
Entrepreneurs: Bahubali Shete, Kiran Kumar, Rajeev M. and S. Varadarajan
Company: Connovate Technology Pvt. Ltd
Set up in: January 2013
“I wanted to build products that could be used as little utility things to make a difference to the quality of life," said Shete, chief executive and co-founder, Connovate Technology Pvt. Ltd, who founded a start-up in the same space in 2013 along with three friends—Kiran Kumar, Rajeev M. and S. Varadarajan. Gecko, the core product of this Bangalore-based company, is a Bluetooth-enabled low-energy smartphone accessory that can sense motion, take pictures and communicate with a mobile phone through a pre-programmed application that sounds a specific ringtone for this interaction.
It runs on a single coin cell battery for more than two years. “There are many use cases for this device. Our customers sometimes tell us how differently they used it," said Shete.
There are different products designed for specific uses: it can sense how many times pills have been taken from the pill box; it can sound an alert if someone touches stuff that are off-limit; it rings an alarm if you leave your keys behind; it can be used to click photos by just waving an arm; and it can also control your music player.
Gecko currently has more than 5,000 customers across over 70 countries. Each device currently costs $35, and is available on Amazon.com and the Gecko website.
When Connovate needed additional working capital, it looked at crowdfunding as an option and ran a one-month campaign on the international crowdfunding platform, Indiegogo (Indiegogo Inc.), aiming to raise about $50,000.
Half way through the campaign, in September 2013, the founders realized that the demand was very high; so they extended the campaign by 15 days. They eventually raised over $135,000.
Printing instagram pictures at home
Entrepreneurs: Sohil Patel, Kishan Thobani and Jayneil Dalal
Company: Jayso Labs Pvt. Ltd
Set up in: November 2013
“Kishan had worked on front-end development projects for US-based Instagram pictures printing start-ups, and we wondered why there was nothing like this in India. We decided to take it up and spread some joy," said Patel, chief executive and founder of Jayso Labs Pvt. Ltd.
The solution: Printajoy, a software that lets customers download Instagram photos, print them, and deliver them to their doorstep. It was developed in November 2013. Patel and Thobani also have an integrated payment gateway that lets consumers purchase the order online. The photos are usually delivered within 4-5 days from the date of purchase.
“We started with only Instagram photos, but now we do any square polaroid photos," said Patel.
This Ahmedabad-based start-up gets around 80-90 orders per month, and charges around ₹ 200-300 to print a set of 10 to 20 photos.
The founders were aware of crowdfunding and its potential to also give tangible products as gifts to contributors.
“We wanted to experiment with crowdfunding because, more than the money, it is a marketing platform where a lot of information can go viral," said Patel, who needed to raise working capital for the project.
Printajoy ran a one-month campaign in December 2013 on the Indian platform Wishberry (Random Motion Advertising Pvt. Ltd) with the goal of raising ₹ 1 lakh. The founders met their target with ease and managed to raise ₹ 102,075 from around 160 people in under a month.
Beryl Menezes in Mumbai contributed to this story.
