VC windfall beneath city start-up wings
Tygr, an app-based transport provider, has bagged funding that many start-ups from the city have long dreamt of.
The amount? Venture Capital (VC) funding of $3 million from lead investor Franchise India Holding Ltd and a consortium of seven fellow investors.
Behind the black-and-yellow Tygr logo are two techies, one of whom came back from the US and the other from Singapore four years ago. Both had a dream to bring some order to the transport jungle of their hometown, which was then reeling from back-to-back strikes by yellow cabs.
Tygr decided not to play the "aggregation" game, the mantra for app-based solution providers. Rather, they believe in the "doctrine of strategic alignment", which helps them leverage the existing ecosystem and reach out to riders, drivers, transporters and service providers in the remotest corner of the country.
"We had started as an app cab provider in the city with taxis, autos and bike taxis on our platform. Today, we have grown to operate in four verticals - passengers, delivery, logistics and speciality," said Dipanjan Purkayastha, founder & managing director of Tygr.
In a city that is lagging behind light years in terms of having a viable ecosystem for start-ups, Purkayastha and business partner Aditya Poddar seem to have pulled off nothing short of a coup.
Calcutta has a total investment of only $6 million in start-ups and Tygr has bagged a $3 million funding. "When we were looking for funds, Roopen Roy of Deloitte had told us to go for 'strategic alignment'. You invest in something that is similar to you, he had said," recounted Purkayastha.
Roy, on the advisory board of Tygr, said: "Tygr receiving $3 million funding augurs well for start-ups in India and also for Calcutta. Their franchise models enables them to remain an asset-light and hassle-free company."
So, if you want a truckload of veggies to be delivered to a sabzi mandi in Surat from Calcutta, you can tap the Tygr app. Or, if the wedding cards had to be delivered yesterday, it's Tygr who would do it for you pronto.
From packing and moving your goods inter-state to providing an ambulance to the hospital, Tygr aims to be the one-stop solution. And all this it does without owning or aggregating a single vehicle.
Unlike Uber or Ola, Tygr does not "incentivise drivers to bring them onboard" and "bleeds itself white". Rather, it lets the local franchises do that for them.
"We onboard local franchises in the transport sector to help expand our operations. We do not have operations teams in different cities as that only adds to the capital expenditure and incurs low efficiency. Instead, we onboard a regional franchise who in turn will have a cluster of local franchises to get in touch with the local vehicle owners and onboard them," said Purkayastha, explaining the duo's business model.
In return, they allow them to use the Tygr app and charge the franchises a licencing fee. The vehicle owners are e-wallet enabled and provided with smartphones and credit card swiping machines.
The revenues the drivers of taxis, autos and bikes make are their own but in the logistics and speciality verticals, revenues are shared. "We take a cut of 2-4 per cent of the deal made," said Purkayastha.
With the business model in place, Purkayastha and Poddar, founder & CEO of Tygr, went on a hunt for franchises that were so vital to scale their operations across India.
"We asked Subway and McDonald's and all other such franchise-based businesses and all of them came up with one name, Franchise India. So, we went to them and met Gaurav Marya, the chairman of Franchise India Holding Ltd," said Poddar, whose family runs a logistics business out of Singapore.
"They not only provided us with franchises to tie up with but got interested in our model and agreed to give us Series A funding," said Purkayastha.
"Tygr's business is unique in the sense that it is bound by technology, driven by diversity and enabled by entrepreneurship," said Marya.
It also helped that the start-up was selected for Innotrek 2016, a Nasscom and government of India programme where 30 start-ups from across the country are chosen and taken to Silicon Valley for mentoring.
"We were taken to the top investors and start-ups, we did the rounds of the campuses of Facebook, Google, Microsoft and Amazon. We learned things from the horses' mouths, so to say," said Poddar.
The duo want to expand their frachise-based model to Southeast Asia, European Union and Canada. "We are in advanced discussions with a franchise type in Singapore, we are also talking to European Logistics Association for launch in Greece and EU. We are in touch with London Taxi Association for an entry into London and Cardiff," said Purkayastha, adding that Tygr is running pilots for its limousine services in Canada.