This is a guest post by Arjun Malhotra, founding partner at Investopad and an early investor in HyperTrack. There are really no aspects of the business that we do not lean on Rohan and Arjun for. In this post, they share their thought process about the journey so far and where we are headed.
In January 2016, we invested in HyperTrack, which provides simple APIs for developers to build dynamic location features such as tracking, metering, trip replays, and live ETAs.
The team led by Kashyap and Tapan has since come a long way.
HyperTrack has added several top-tier entrepreneurs and investors over the past year. We were also able to use our network to bring in top-tier global investors like Social Capital (GP fund) and Vy Capital in the seed.
Here I tell the early story of how we learnt about the industry met the founders and in some more detail the thinking that shaped our investment decision.
The wild miss
We were introduced to Kashyap while looking at a 2-week old startup in the “last-mile logistics” space — let’s call it Jaldicart (name changed).
Side note: “Last-mile (of) Logistics” is to the Indian startup ecosystem what Lord Voldemort was to the Harry Potter universe — thus it must not be called by name.
Going forward we shall refer to it as “LoL” for short.
In the heady days of mid-2015 Jaldicart was a highly-contested deal that made it’s way to us. Rohan 3 other potential co-investors and I stayed back till midnight with the founder to dive deep into the opportunity. We liked the sound of things and set a time to meet the next morning.
However as the sun rose unsubstantiated rumors were abound that a venture firm had laid down a $10m investment in another fresh-faced competitor.
Sniffing an opportunity a large and benevolent VC swooped in to offer Jaldicart a far greater sum at a far more generous valuation.
Jaldicart’s founder sent us a curt message at 9 am to let us know that his Ola was being diverted from “destination: Investopad” to “destination: benevolent-VC-hq” at which point we bowed out (not that anyone noticed anymore).
Ah the good old days of capital abound!
Kashyap fortuitously did not get the message and promptly arrived at Investopad ready to dissect the opportunity. That is when we met for the first time.
What followed in this and many subsequent conversations over months was a meandering existential debate on the state of Indian venture capital and a deepening kinship.
Side note — he even wrote a book about that.
Gathering data points
In what I thought was a distraction one of our potential co-investors in Jaldicart were our friends at Dominos (India) — running one of the largest food delivery operations in the country — and kept highlighting a seemingly minor opportunity:
“Users now expect the same experience as Uber. I need to give them an experience where they can accurately track their food and see it as it’s coming to them.”
It was interesting but seemed like a trivial problem to me at the time.
As an increasing number of LoL companies got heavily funded we realized that we were left with little chance at getting behind a winner. At the time it was something I was deeply ambivalent about — sure we were missing a big wave but we really weren’t confident enough to make an investment.
What followed was an immersive study of the landscape which persuaded me that there was an opportunity for a company to build dashboards that could be used by LoL companies to unify technologies/services and manage their fleets.
However most startups building such systems and features felt too early-to-market at the time. Development debt of on-demand and LoL companies was so high that an unsustainable burden was being put from customers onto these SaaS vendors. At the same time customers had raised capital not to be fleet-operators but technology-companies so clearly this outsourcing would not sustain as product scopes narrowed and customers looked to move product innovation in-house.
Meanwhile Kashyap and Tapan had been independently conducting their own study of the opportunity…
A new perspective
Excitedly I prodded him “Ok tracking. And then…?”
“No” he replied firmly. “That’s it for now. I’m focused on doing just this one thing and doing it well.”
“Right. I get that but isn’t tracking a fairly small problem?”
My notion of building dashboard features was opportunistic but Kashyap had been thinking about the problem on a longer horizon with a more evolved sensibility.
The road to investing
As our interest in the problem deepened we brought in a few relevant players to provide input and be strategically relevant. They went on to co-invest alongside us.
Here were some of the factors that drove our decision-making:
The demand for dynamic location is across industries…
As people consume products and services in an increasingly mobile world understanding the context within which these should be served and delivered becomes important.
Consequently apps across the board use location-based services provided by iOS and Android. However this current stack falls short when developers want to build features involving continuous location streams (i.e. dynamic location).
Uber was the first to push the envelope on location-based services — so naturally the first evolved implementations of dynamic location have been in “Uber-for-X” plays a.k.a. the on-demand economy.
However the phenomenon is much larger than this. Every industry that involves people or things on the move — transport logistics sales teams service fleets social networks etc. — wants to use dynamic location.
… and the “location stack” is a primary building block in these larger macro trends
Large companies across verticals such as Google Apple Amazon Tesla Uber all have location as part of their core stack — and it is more dynamic today than ever before. This re-calibration of product offerings where context is driven by location provides direction to the broader technology industry.
The systemic shift is amplified by a wave of enterprises taking processes from pen-and-paper and “clunky old devices” (think custom devices built by FedEx UPS before there were smartphones) and migrating them to smartphones. Dynamic location is the natural next step.
The use cases that we’re seeing developers build using HyperTrack are far beyond what we initially imagined. We believe dynamic location will prove to be a general-purpose building block across industries.
By automating infrastructure and analytics developers can focus on features and insights
By handling dynamic location infrastructure HyperTrack is able to give developers access to an insane amount of data. Think about it as MixPanel for location. Armed with these insights developers are free to focus on building value that directly drives their revenue rather than getting distracted by building and managing infrastructure.
The bar for user experience is rising fast
On the user side this argument still stands. Many consumer companies we spoke to validated the idea that users want more information and control for their order when it is on the way.
In today’s consumer world the bar for user experience is high and in order to compete companies must give customers a simple beautiful and reliable product experience.
We’re big believers in B2D (API-based) SaaS
The global SaaS market is huge and while there have been some spectacular exceptions it often remains hard-to-access for companies based in India. However the characteristics of selling to developers rather than business managers fundamentally changes go-to-market:
- Marketing is driven by developer evangelism. Sales teams become less important.
- Decision-maker and deployment are the same unit: technology. You’re selling technology benefits once the business benefits are already acknowledged.
- Not coming through the business unit means the drop-off from customer interest to deployment is substantially reduced.
- Developer relations naturally put your product team at the center of the sales process thus creating faster and higher fidelity feedback loops.
- Your value proposition is not just price but product value and reduced development overhead.
- By building API-based solutions well customer fully controls the build and the provider need not get distracted by customizations.
Oh and the team
Typically our investment decisions are made by layering a founder’s strategy & execution on a market helping wherever we can — and observing how these evolve over a period of time.
In HyperTrack’s case it’s been heartening to see seasoned founders Kashyap and Tapan migrate (lock stock and barrel!) senior talent from places like San Francisco, Seattle, Budapest and Mumbai (sometimes farther than the rest) to New Delhi.
The early days of HyperTrack were a real pleasure to watch as their steady experience and delicate critical thinking on execution shone through — this is echoed in their culture and the way they build.
The early team is really one of the best we have had the pleasure to partner with — and they’re growing fast so reach them here and ask for equity!