While retail traders is a small community, retail investors are an even smaller tribe. According to a 2017 survey by the Securities and Exchange Board of India, only about 8% of households invest inequities. One of the reasons for that, Bandyopadhyay says, is that we have not had a consistently good market. “Usually, when good IPOs hit the market, you see the creation of more retail investors. But we have not had that kind of stellar IPOs,” says he.

Today, only one million Indians actively invest. Even though equities, as an asset class has yielded returns that are 5-10 percentage points,* higher, according to Deepak Shenoy, CEO of Capitalmind, a financial market analytics company, its risky nature pegged to market conditions make it a choice few prefer.

Enhancement of the rates

This tepid interest has dented even the existing brokerages. Bandyopadhyay says brokerages’ incomes have fallen in the last five years as rates have been slashed, thanks to the likes of Zerodha.

And Zerodha’s stellar growth was from eating market share from the incumbents.

Kamath says it has been growing at 100% year on year since the start and is now among the top 10 brokerages in the country. It accounts for about 3% of the Rs 100,000 crore turnover on the National Stock Exchange (NSE) every day. And it has 300,000 customers, of whom 180,000 are active.

The largest in the business is ICICI Direct, which offers a suite of services from insurance to mutual funds and it has four million customers. The company spokesperson said she cannot disclose the number of active customers or the volume traded by them on NSE.

So in a small pond, Kamath says Zerodha has become the biggest fish. And that moment became very obvious in 2015.

“When we launched the zero brokerage, people said our initiative became viral. Usually viral means millions of views, but it was just 25,000 hits to our website. That is how limited this market is.”

One might say it has only a 3% market share in terms of the turnover traded and there is more headroom to grow. But this is where the catch lies.

In a highly regulated trade like futures and options, no brokerage can account for over 15% of the overall derivatives market.

“The exchange gets very uncomfortable if one brokerage accounts for 15% of all volumes traded because if something goes wrong, one brokerage will have too much liability on its head, says Kamath.

The only way Zerodha can continue to keep growing is if the size of this very unyielding market grows.

Growth pangs

Kamath is 37, a poker enthusiast and he has been trading since he was 17 when some of his Marwari friends introduced him to it. He even lost all his money once. But joined a call center to rake up the capital he would need to earn the money he lost.

Being a seasoned trader, he knew exactly where the system was broken and set up a business to fix it. Even though people around him advised him to go get a real job, he did one better and roped in his younger brother Nikhil Kamath into the business.

Today, the company has 650 people and the brothers know the risks behind trading and believe in taking calculated risks. But this one, they did not see coming.

Its first task now is to get its existing customers to spend more on its platform.

So it launched Coin, a mutual fund platform in 2016. Its customers could directly buy mutual funds without paying any commission.

But experts feel this is not a big value add.

“Unlike stocks, the mutual fund industry is easy for a customer to figure out. If you are knowledgeable, you don’t need Zerodha,” says Shenoy of Capitalmind. One can go to mutual fund websites and buy from them directly, he says.

Bahl says there was roughly an “eight-year advantage” between the launches of leading US media sites like Buzzfeed and the time when traditional print players like The New York Times and The Economist woke up to the potential of digital and started putting serious resources behind it (around 2014-15). But that won’t be available in India as traditional groups like the Times of India, NDTV and Bhaskar are all “going digital with a vengeance.”

Role of the powerful strategy

“I know that Quint will not be VC fundable for a while, but I see that as an opportunity. To build significant strategic positions in properties. We came from a situation where we said we could fund ourselves for 5-7 years,” says Bahl.

All of this means media entrepreneurs have all the more reasons to look for angel investors that have built their own businesses. “I would look at someone who has built and run a business as an entrepreneur and isn’t just an investor. I would be wary of someone who’s understanding is purely financial.”

Paytm’s founder Vijay Shekhar Sharma is perhaps one of the most prolific investors in media startups, having invested in The Ken, Factor Daily and The Print.

“I don’t know how much I’ve invested in media startups. In fact, I don’t know my startup [investment] portfolio. Because my intention is to not look at them as an investment class,” says Sharma.

Despite his seemingly blasé attitude towards startup investments, Sharma claims to have a simple thesis of judging new investments: a founding team with “history and pedigree” that will publish news stories that are “real, trustworthy and will inform people.”

The reason this is needed, says Sharma, is because digital has removed all barriers for publishing, allowing anyone to publish articles that range from poor quality to being complete untruths.

“Shekhar is someone I have valued for his journalistic honesty and his unique style of reportage both in print and on TV. When you have the likes of Nandan (Nilekani), Uday Kotak and Ratan Tata, I guess you can understand that we belong to the same ilk who want the fourth estate with integrity,” said Kiran Mazumdar-Shaw, founder and CEO of Biocon and one of the anchor investors in The Print.

Sanjay Anandaram, a long-time venture capitalist and investor was one of the first to put money into Swarajya, the self-avowed right-of-center news site. He says his motive was to support an independent media source that would help Indians rebel against “entrenched socialist mindsets and bureaucratic structures”.

“I’m a strong believer that India needs to get out of the economic development model of the last seven decades and provide freedom to individuals and enterprises to build things. We also needed to get the government out of our lives by minimizing its role,” says Anandaram.

Feel-good access

While some media investments may be strategic and some altruistic most might simply be about having a direct line to newer media sources that will end up shaping many discourses to come.

“Apart from a handful of investors who come from the media industry, like say Haresh Chawla or Raghav Bahl, primarily everybody else is making sure their profile is raised with these investments. Access to media has always been correlated with power and people believe that being an investor gives them access to editorial and narratives,” says Kunal Walia, founder of boutique investment bank Khetal Partners.

Bahl himself admits that this is definitely a factor. “Whenever a wealthy individual not from the news industry takes a stake in a news company, there is definitely a ‘feel-good’ factor, because there’s no question that news done well is a noble profession.

But there is also the inevitable feeling that they can have an influence in a very subtle manner. Most of these new investors are all honorable people, so what they might seek are not blunt control but collateral influence and a voice. Or an intelligent input into the narrative.”

“We need to meet 800 people to shortlist 100. So we would need about 1,000 profiles to be able to supply 100 to a company,” says he. “And if a candidate doesn’t show up, it offers a replacement.”

Companies pay Quess for every successful hire. The company claims it has about 1.2 million people in its database and places about 7,000 people every month. And even though it spends close to Rs 1,500 to find a candidate, it earns close to Rs 3000 to Rs 5000 per candidate.

This model of guaranteed hires was something even Babajob tried, but it had to suspend it, as it was not scalable using a marketplace model.

And, problems never stop

That was not the only problem with technology. A second source says that the algorithms designed to match, say, a driver with an employer are not entirely reliable.

“There are numerous attributes that are needed to make a match,” he says. “What is one employer’s preference is not necessarily the other’s. So it is difficult to capture those exact attributes the employer is looking for to make that match,” says he.

And if the matchmaking is inaccurate, Babajob loses that employer as a repeat customer.

The company, in fact, launched two apps in 2016, one for job seekers and one for employers. But it had poor offtake. Less than 10% of the employers used the app, says the first source.

The founders were aware that tech was not the only solution. “If you see what models are working certainly the tech and human models are still the ones that are working at scale in India,” writes Kashyap. “Naukri still has a very large field sales force in order to achieve the revenue that it currently has. Many employers still prefer to deal with a consultant who will do most of the calling on their behalf,” he adds.

In the middle of all this, Babajob still had one hope. LinkedIn showed interest in acquiring it. It would have been a dream exit for Blagsvedt and Kashyap. “We were all hoping it would happen. But we believe LinkedIn felt it was too early to get into this market,” adds the second source.

With no funding coming it’s way, QuikrJobs was the only out for Babajob.

A new home

Quikr, for whom the jobs vertical brings about three-fourth of its revenue, became profitable at a vertical level earlier this year, writes a spokesperson on email. As Ken wrote previously, QuikrJobs focused on getting the white-collar job market, with its acquisition of Hiree. Now with Babajob, it has a consolidated position in both these businesses.

Ideally, a combination of the two is good to have because as Guruprasad of Quess says, white-collar jobs add to the bottom-line and blue-collar, to the top line.

With Babajob out of the way, QuikrJobs can now price its service the way it wants, boosting revenue. It was earlier pricing itself at one-fourth of what Babajob did. Moreover, 16 million job seekers is a nice vanity metric to have. Quikr and Babajob each claim to have a database of 8 million, each.

But it may not dissolve the Babajob brand immediately as it still is 10 times more popular than QuikrJobs.

However, the obvious problems around the blue-collar employment market are not something Quikr is in a unique position to solve now, just because it will have Babajob in its fold. If anything, this acquisition is more proof of Quikr’s predilection to buy overbuild.

To really have a shot at solving this problem, Gayatri Vasudevan, founder of LabourNet, a social enterprise that trains and employs blue-collared employees, says these companies need to have an extensive physical presence besides a portal. She also says that they need to collect richer information.

First, even for B2B startups, profitability is not a singular event—it is merely a milestone and reaching that point doesn’t necessarily mean that you have wedded yourself to it. Once you reach profitability, you can choose to go back into the red and invest aggressively into growth. Reddy cites the examples of GreyTip, Threadsol, and GreyOrange as being representative of such startups.

The other point that Reddy makes is that “profitability increases the chances of another round of funding”.

Struggles Ahead

However, this is not readily borne out from Blume’s portfolio itself. Apart from the three startups named above who got profitable and got funded, there are at least three other startups who got profitable but haven’t raised a follow-on round of funding. While it is moot if these three startups—Exotel, E2E, and WebEngage—haven’t raised a follow-on round simply because they chose not to, a closer look at their numbers is illuminating.

Take WebEngage for example. In FY 2015, the company had an operating income of Rs 6 crore and EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 1 crore. In FY 2016, the topline grew handsomely to Rs 10 crore but the company had a loss of Rs 4 crore loss. If the company hadn’t raised a bridge round of a matching sum of Rs 4 crore in the form of a compulsorily convertible debenture, it might have struggled to stay afloat. Thus, the startup now faces the challenge of having to raise a follow-on round or temper its ambitions and sacrifice growth to remain profitable.

Similarly let’s take a look at Exotel, a cloud telephony startup. In FY 2015, Exotel had an operating income of Rs 10.6 crore and a healthy EBITDA of Rs 2 crore. In FY 2016, the topline seemingly surged to Rs 27.7 crore but this figure includes a pass-through revenue of Rs 17 crore that went to their telecom service providers for telephony and data transmission charges. If you exclude this, Exotel’s effective net revenue is a more modest Rs 10.7 crore and more importantly, it saw a loss of Rs 3 crore for the year.

While the startup didn’t raise any additional capital, it seems to have financed this loss by dipping into its reserves (RoC filings show the company’s net worth at a negative Rs 800,000 currently). So, like in the case of WebEngage, Exotel has reached a meaningful topline exceeding Rs 10 crore but has slipped into the red to reach this figure. It is therefore almost inevitable that the company has to now raise more money or risk going under.

So it would be fair to say that reaching profitability doesn’t seem to have helped either Exotel or WebEngage to attract the next round of funding, at least until this time. And the fact that these companies have since digressed back into losses implies that they face hard choices in the road ahead in the event that they don’t raise a follow-on round sooner rather than later.

Analyzing the dimensions

Of course, one dimension that shouldn’t be disregarded for these companies is that they have largely raised a seed round and not necessarily a full Series A funding round. How does this profitability imperative play out for companies that have raised larger Series A rounds?

To answer this question, we spoke to Parag Dhol of Inventus Capital Partners.

These were the figures that Dhol shared from his portfolio.

Starting from its first investment in September 2008, Inventus has invested in 21 companies in India.

9 of those companies reached profitability (at the profit before tax level).

4 of those achieved it while growing significantly/having access to subsequent rounds.

5 became profitable because of the lack of alternatives – Series B/C not being available.

Dhol points out that “profitability did not lead to (funding) nirvana for any of them, yet!”. That said, Dhol doesn’t feel that profitability and growth are binary choices and instead sees the growth-profitability dynamic as a spectrum.

How significant is the online ticketing business for Paytm?

The answer: Very.

An online ticket booking system to make life easy

Some parts of this will be the primary investment in Insider. Some part secondary, for OML Entertainment, the parent of Insider. The deal is still in the works. What is Insider.in? It is an online ticket booking platform for events. It is a distant number two compared to BookMyShow, the market leader in online ticketing for both movies and events.

While Rs 35 crore is good money for Insider, let that not distract you. And sure, we’ll get to Insider in a while. But first, let’s address the elephant in the room. What has got Paytm, last valued at $7 billion, so interested in the online ticketing business?

It will be fair to say that the company has been warming up to this business for about a year now. It started in March 2016, similar to how Paytm barges into any business; throw money at a problem. Flat discounts, 100% cashback, 50% cashback, Rs 100 off, 1+1 offers. Surely, by now you must be familiar with the aggressive customer acquisition routine of most online players. So, Paytm did that.

Got some distance. Burnt quite some money. (Hey, each free ticket or discount you got, the cost of that has come from Paytm’s pocket. Movie theatres don’t discount) And, just a year into it, Paytm is now pouring more money through Insider.

The company, of course, has an answer to what it is doing. It is a mouthful of scale, growth and corporate mumbo jumbo thrown in, which is best stated the way it is. In an emailed reply to a set of questions, a Paytm spokesperson said: “Vast majority of Indians haven’t bought their movie tickets online.

Given Paytm’s massive footprint, we see this as a big opportunity to bring more and more users and theatres online.” She further added: “Paytm movies has emerged as the country’s fastest-growing online movie ticketing platform within a year of launch. Today, we facilitate bookings across 550 Indian cities and we are now regularly ticketing more than 20% of the total box office for all major releases.”

Simply put, Paytm is saying that online movie ticketing is an underserved market and Paytm is going after it. What the company isn’t saying is, why exactly?

Asses on seats

To understand this, it is important for us to understand the fundamentals of the online ticketing business. Let’s take a moment to cover that. The numbers below have been culled from a FICCI-KPMG study, research reports and conversations with industry experts.

By all estimates, the total box office collection in India is around $2 billion.

On the ground, the movie theatre business has been shrinking over the years. Industry estimates suggest that just in the last five years, the number of theatres in the country has dwindled from about 12,000 to about 9500. About 2300 multiplex screens and around 7200 single screens. While single-screen theatres have been shutting shop, multiplexes like PVR Cinemas and INOX are adding more screens.

Two billion: The total tickets sold, online and offline.

Needless to say, a significant percentage of them are sold offline. Most industry players like to suggest that online accounts for anywhere between 10-15%. BookMyShow said that it sold about 100 million tickets in 2016. For the same period, Paytm claimed that it sold 25 million tickets.

Let’s account for smaller, regional players and peg that number to about 25 million or thereabouts. If that be the case then the total online penetration is about 150 million or under 10%. Of course, both BookMyShow and Paytm says that the addressable market is about 500 million tickets per annum. Both players also say that in 2017, they will double the number of tickets they sold in 2016.

Swiggy tried the second in December 2016 and then again in February 2017. And there were strikes, say, employees. A few videos were uploaded on YouTube. That idea was quickly scratched. The company did not want any more PR disasters.

Swiggy striving to expand itself

Now that it couldn’t shave off what it paid the delivery agents, Swiggy tried to squeeze more out of the restaurants.

“The best luxury restaurants have margins of just about 35-40%. They already give half of that away to Swiggy. There is very little give there,” says one of the restaurateurs quoted above.

This leaves Swiggy in a precarious position. It needs its cloud kitchen to give it a higher margin, which will improve its bottom line numbers. For context, in FY16, Swiggy made a loss of Rs 137 crore against a revenue of Rs 23.5 crore.

Swiggy has another plan but it depends on Zomato being able to execute a shell kitchen. The NCR-based company calls it Zomato Infrastructure Services (ZIS), and it was launched in March this year. It started with its pilot project in Dwarka, a suburb in Delhi NCR.

Ken wrote to Zomato with a set of questions. The company did not respond.

Deepinder Goyal, co-founder, and CEO of Zomato, however, described the concept elegantly on his blog.

He wrote, “Think of these infrastructure services as delivery only food courts in locations slightly off the premium locations (think much lower rentals, but accessible); we will not have take-out or dine-in at these locations. Each location that we create for ZIS will have 4 or more restaurant brands co-located with each other, leading to shared (and thus lower) costs; each restaurant brand will have its own space of roughly 300 sq ft. These restaurants can choose to have owned/shared/outsourced delivery personnel – thus increasing delivery efficiencies.”

It means, Zomato provides a shell of a kitchen. Restaurants walk in and start using it. Zomato drives lead generation and for that, it takes about 15-19% in commission. Typically, the Sequoia-backed company draws a commission between 5-12% for listing. Zomato argues that there is no downside for the restaurants as they don’t have fixed costs, which leads to higher margins and they can part with more in terms of commission.

Cutting down the costs

The extra 10% is what Zomato is eyeing. In this model, it also helps restaurants design and prune their menus. It’s one of the most important parts of the food business. Reducing inventory costs. Zomato’s ordering machine will understand what kinds of orders peak and when, which will help the restaurants in supply chain management. “If Zomato can start being the point of contact for sourcing inventory, it can take a margin from the supplier as well and add to its bottom line,” says the entrepreneur quoted above.

For Zomato, there’s one potential downside. A restaurant may not work. Its food may not pass muster or customers may just not take to it. But if a restaurant starts drawing orders, Zomato needs to pay off just the fixed cost (the price of leasing real estate and redoing the kitchen) to break even.

The company will also offer a full suite of services to these restaurants at slightly reduced prices. This increases the margins it draws from the restaurants. So, these restaurants are not only paying for the kitchen but also advertising and point-of-sale services. This means that Zomato has created a new partner where there was none.

According to people who are aware of the ordering pattern, the Dwarka kitchen, in total, receives about 1,000-1,100 orders a week at an average cost of Rs 200-250.

Let’s do a very basic back-of-the-envelope calculation for Zomato. If everything stays the same, ZIS, in monthly sales, will draw Rs 10 lakh across the four brands. If Zomato takes away 20% with all the services combined, it will make about Rs 2 lakh.

Worst-case scenario, it may be enough to just pay off the real-estate lease. There’s break-even at this early stage. Employees at Zomato expect each restaurant to start hitting Swiggy’s numbers in another six months. The company is said to be setting up two more of these shell kitchens in Delhi NCR. At scale, Zomato seems more likely to succeed.

Right across, inside the conference room, Mehta is deep in thought. Bespectacled, dressed in a blue tee, denim and sneakers, he has a boyish look about him. “We went with a very classic startup approach,” he says. “Like how it is so cool to not have systems and processes; super cool, that’s how we will be. My co-founder actually kept telling me, we need to have a lot of tight systems. We have to make a full vehicle. We need to have a program team cracking timelines with everybody. And I was like come on, timelines I can do myself.”

Needless to say, things got palpably chaotic. For building something that has as many as 1,000 parts going into it, Ather’s organization structure and process flows resembled that of a college project. The company’s team grew from 15 in 2013 to 100 people by 2016.

How frustrating it was for the management?

When it was a small team, all of them came to Mehta and Jain to taking any decision. And when that expanded to 100, all of them still came to Mehta and Jain for weighing in all decisions. It became a management nightmare. The result of this structure or the lack of it was felt in the process flow. Of its employees, 90% were engineers building components. And most of it from scratch. But there was little coordination among the different teams.

This resulted in a cascading delay. Let’s take a chain to understand this better. For instance, there’s one person heading the battery management system (BMS). He needs components to assemble the BMS, so on a particular day, say, Wednesday, he calls up the customs guy to check on the status of the part.

The customs guy says, there’s a delay and the component will only arrive on Friday. In a team size of 15-20 people, everybody is in the loop. But with 200 engineers, a delay in the BMS hurts the battery pack, which cannot go into testing, which in turn affects the vehicle because it cannot go out on the road, which in turn affects the testing schedule of the battery pack. This means that the industrial design team is sitting, twiddling thumbs.

“People were getting frustrated,” says Mehta. “They would work seven days for 15 hours, and two weeks later you have to move five steps backward. One small change affects nearly everything else as the vehicle is highly integrated.”

To fix that, Ather went through a complete structural overhaul. It set up one central SWAT team called a Product team whose main job was to have a spec-by-spec plan for the entire vehicle and develop a logical development plan.

Testing the parameters

And a separate team called the Program team was set up to track the timelines of engineering groups for hardware, software, battery, and vehicle intelligence and other operations to ensure no one in the chain is surprised. “Earlier we didn’t have anyone tracking timeliness,” says Mehta.

“It was basically me going around with an Excel sheet convincing everyone that they should be building it faster, but with no sense of how. We woke up to this in April 2016. Project management was a big gap. When we are taking 10 decisions every day, it was chaotic because people would be like, let me speak to Tarun or a Swapnil.”

Even as all this was happening, it became amply clear that the timeline to get the vehicle on the road was completely out of whack. Launch first, tweak later was not an option. Here’s why.

One thing that has not changed in the last decade that electric vehicles have been around in India is the lackluster response towards it. Remember Electrotherm? It was one of the first to launch a battery-run scooter called YoBikes in 2007. And soon every two-wheeler manufacturer from TVS to Hero Group had one.

If the Indian made vehicles cost around Rs 35,000 the Chinese made ones were even cheaper. Anywhere between Rs 18,000 and upwards.

We’ve been played. That’s the simplest, surest way to put it.

Marketing services

Moneybags was equally excited.

Where is the primary focus?

“IDG Ventures India helps entrepreneurs build category-leading companies in India and globally. We believe Valyoo’s (Lenskart) focus on creating category leaders in product segments that offer disintermediation opportunities by leveraging supply chain inefficiencies and bring value to the customers is a big differentiator.”

And so they went together, hand-in-hand in pursuit of the dream. For a good three years, Lenskart toyed with every possible innovation to sell eyewear online; it toiled and spent money but its dream remained unrealized. So, in 2014, it threw in the towel.

Enough. Let’s do what our customer wants, it said. Let’s open a physical shop and go to the customer if the customer doesn’t want to come to us. Stroke of genius. The fortune Gods smiled. And today, Lenskart has grown to more than 200 retail outlets across India. Online took a backseat. Offline became the driver.

Now, even as all this was happening, other e-commerce players were watching.

What started as a whisper in the corridors of the search for a sustainable, scalable and profitable business model, took on a voice. Now, in 2017, it has become a rapturous cacophony. Everybody is on it. Flipkart. Myntra. Urban Ladder. Pepperfry. Yepme. Nykaa. Lenskart. Their chorus goes something like this: Being online is not enough. Touch and feel are extremely important to customers in India.

Mazel tov.

Urban Ladder is a good case in point.

When this Bengaluru-based company raised its first round of funding, its founders, Ashish Goel and Rajiv Srivatsa, spoke in effusive terms about their new venture. “We have an elegant and simple digital storefront, with deep product information.

The category suffers from a lack of standardization in product specs and insufficient information availability, leading to core issues in the consumer purchase process and post-purchase dissonance. We are striving to deliver a much better, informed buying experience to our customers,” explained Srivatsa, COO of Urban Ladder.

Now, fast forward five years, Urban Ladder seems to have realized its online dream wasn’t all that it was thought to be.

“In September last year, it became clear that we were going to be a brand,” says Srivatsa. “So as a brand we needed to distribute where the customer is. And the customer today is both on marketplaces and offline. And 99% of the customers are offline. Even in five years that 99% can probably be only 95%.”

It took Urban Ladder five years, many pivots and millions of dollars in funding to get here.

“There have been many others who have tried to build what Unicommerce has but no has been able to succeed at it,” says a former Snapdeal employee with knowledge of the company. He asked not to be quoted in exchange for being candid. He added that Flipkart could do with a strong business-to-business product such as Unicommerce. But is the Bengaluru-based company even interested in the purchase of Unicommerce? No. It has for some reason kept its distance and prefers its own internal solution instead.

FreeCharge

Late in May and June, Paytm took a serious, close look at FreeCharge. The company spent quite a few weeks in due diligence. According to a senior Paytm official, The Ken spoke with, it then made an offer of Rs 65 crore for FreeCharge.

That’s just under $10 million. What was the asking price? $65 million. Now, take a step back and think about this. Just about two years ago, Snapdeal acquired FreeCharge for $400 million, cash and stock. In the garage sale, the ticket price for FreeCharge was put up at $65-70 million. The offer from a suitor; $10 million. Only fair to say that Snapdeal wasn’t too happy about this.

“We only wanted to acquire FreeCharge because we didn’t want it to go to Flipkart,” says the Paytm official mentioned above. He requested not to be named because he is not authorized to speak to the media. “But during the due diligence, we learned a lot of things. Like its offline business is small. It does about 6,000 transactions every day. That’s really small. And its online business is mostly recharged. That’s how we arrived at our final offer number.”

As things stand today, the Paytm FreeCharge deal is in cold storage. Snapdeal has widened the search.

That includes a range of suitors from Axis Bank and most recently Amazon. At least, that’s the talk. Interestingly, all its suitors have a wallet license or have applied for one, so the buyer is most definitely not for its wallet business. Of all its suitors, Axis Bank could be the best home for it given FreeCharge’s recharge demography.

The majority of FreeCharge’s users are in the 18-24 age group. A group that would make sense for Axis Bank for whom attracting newer and younger users is the biggest challenge. Additionally, for Axis Bank, it is a chance to drive other payment systems like the Unified Payments Interface (UPI) through FreeCharge. Even though FreeCharge said it would tie-up with Axis Bank to allow the UPI as an option in 2016, Axis Bank saw muted adoption. Moreover, the price at which it is being sold makes it an attractive buy.

Axis Bank, which is in its silent period, didn’t want to comment on the potential purchase. The silent period is the time before a company announces its annual results and does not interact with the media.

FreeCharge is also a grim reminder of what it could have been. It was a small but plucky company that enabled recharges and gave coupons that made for four million transactions a month and 250 employees before Snapdeal acquired it for $400 million. With Snapdeal, it turned into a payments company doing 10 million transactions a month at its peak, had 30 million users and 850 employees. And, today, it is a mere shadow of itself, with two million transactions and 400 employees.

Role of the Vulcan Express

It was supposed to be an important part of the Snapdeal portfolio. Snapdeal would be where customers shopped, Unicommerce helped sellers, Freecharge offered a payments ecosystem and Vulcan delivered. The order would never leave Snapdeal’s extensive network. To bulk up Vulcan, Snapdeal leased out nine warehouses across the country, got robots to stack and developed an internal sorting system, which would reduce delivery times.

“That sorting system is useful. Anything that decreases delivery times is worth its weight in gold in this business,” says one of the former executives quoted above. While this may add to its allure, the rest doesn’t. “Currently, Ekart (Flipkart’s logistics arm) is functioning at 60-63% capacity.

It won’t need more,” he adds. The need for additional logistics capacity comes up during the sale season in October. “But planning for that is already done. And there is no immediate need for Vulcan,” the former employee adds.

Kejriwal is a dropout. He dropped out of the family business which made socks. An MTV promo says his grandfather invented eggs Kejriwal. We don’t know what to believe. Maybe that’s a joke. Maybe, just like the pilot. And maybe, no truly, maybe, a lot of this show is exaggerating BS.

Asking Only The Business Questions

Not Kejriwal though, in flesh and bone. He is the only one who seemingly asks actual business questions. These questions don’t go deep. But nothing in this show skims anything more than the surface. But Rodinhood tries. Fights a valiant fight. A fight, which disintegrates into Roadies asking the contestant questions about her depression but it started right. And here is Rodinhood talking business.

Kejriwal: “You are an MBA in finance and banking. And you started a business for yourself. And you started selling your sister’s paintings on Snapdeal and Flipkart.”

Woman: “I got this idea when I was traveling on the train and I saw this woman selling jewelry on the internet. So, I told my father, ‘Let’s try something. We are always the buyer. Let’s be the seller’.”

Kejriwal: “Second question. What is the size of the Indian art market?”

(The woman shakes her head.)

Kejriwal: “You started a project of this magnitude. Whatever we do, we must do it 100%. You seem to be a 100% kind of person.”

The woman nods.

Kejriwal: “I don’t understand this. Your education, your experience. Where did that disappear when you started selling these things on these websites?”

See that? Kejriwal is calling her idea half-baked. Which it is. He is asking her simple questions, for which she doesn’t have answers. He is sitting there not as a judge but as an angel investor. He does a decent job of it. But this show is not about doing decent jobs. It is about tamasha. It is about appealing to the lowest common denominator, which finds joy in cheap thrills.

For some reason, this show wants to encourage young men and women who want to be to entrepreneurs believe these outliers they read about in the papers are the real thing. And the dream to be a successful businessperson is through a TV show and not the 14 hours spent hunched over a desk trying to find that one answer to the question, which will help you sleep that night.

I reached out to Kashyap Deorah, author of the book, The Golden Tap and co-founder of HyperTrack. Dude, did you see this? Now, Kashyap is a believer, one who likes to see the good in people. So he started watching intently. “I wanted to feel good about a show that brings the idea of entrepreneurship to the mainstream,” he said. “A social proof for the masses that taking risks and being different is now an option that will get you on TV. And then I watched the rest of it, what with the Droom ads in between.”

Excessive Human Factor Concerned

“There is emotion, there is drama, there is a heavy dose of the human factor as much as there is a spice in an Indian curry. In the end, it all tastes the same, regardless of what meat is cooked in it. This is a reality show. It seeks to extract viewership from the up and the coming phenomenon of startups in our country, and probably will. There are fireworks, background music, bald men, suits, tattoos, earthy slang and a lingering feeling of anticipation that will change someone’s life. But is this an authentic reflection of entrepreneurship amongst youngsters that is sweeping the country, I think not.”

To be honest, just like Deorah, I’m a promising, seeing-the-good-in-people kind of person myself. When this thing was launching, I really went for it. And there’s one exchange from the press conference that has stuck with me.

I’ll leave you with a little something that a certain other bald, wise man once said: “You are here because you know something. What you know you can’t explain, but you feel it. You’ve felt this your entire life that there’s something wrong with this world. You don’t know what it is, but it is there, like a splinter in your mind, driving you mad.”