Ideas|Products|Startups|VCs

JustDial, India’s biggest local search engine has deferred its plan to go public and have gone ahead and raised Rs 327 Crore from SAP Ventures and existing investor Sequoia Capital which led this round with investment of Rs 305Cr, its largest investment in India.

Justdial promoters and employees owns 40% of equity in the company while rest 60% lies with investors which include Tiger Global, Saif partners

Founded in 1996 with an mere investment of Rs 50,000, Just Dial is India’s bestknown local search provider and considered as backbone in the SME segment.

Just Dial, which delivers services across the Web, phone and mobile Internet, has a database of about 7.8 million merchant listings, with over 12 million merchant ratings and reviews. Currently 60% of queries originate from internet and mobile, though it started as telephone based service.

Justdial plans to file a DRHP next month and is planning to go public in 2013 and primarily it will be a  liquidity event for their  investors. Just Dial had a total income of Rs. 189.9 crore in fiscal 2011, up 41% over the previous year while the company’s profit after tax rose 55.3% to Rs. 28.62 crore, according to the DRHP filing.

Lets look at their monthly web traction:-

Unique visitors	7.4M
Unique visitors	3.5M
Reach	0.2%
Page views	31M
Total visits	7.5M
Avg visits per cookie	1
Avg time on site	7:10

The local search/information engine space in India has generated strong interest among investors. Last month, Quikr raised $32 million in its fifth and largest round of fund raising.

-Hitesh, vcBytes.com

Start up killers are those said statements that may lose the funding for the entrepreneur. When pitching to investors about the new product and business proposition, there is some moment when you know that you have lost your listener. One misspoken comment and everyone wants to leave as soon as possible. Lets look at few turn offs

No Competition

There is always competition. In some way customers are fulfilling their needs today. Competition can be as simple as continuing to do things as they are doing them today. Never ever say there is no competition. Investors look for proven and tested market which is growing. Investors may not be keen to invest in saturated markets like OTAs in India because they often require too much capital to overcome the incumbents, not because they are not viable.

Being Conservative

Majority of the Indian entrepreneurs i have met seem to believe that VCs want to hear that their numbers and estimates are conservative.  As an entrepreneur you should know Investors know that backing a start up is a very risky business, and conservative isn’t what they are interested in, nor is it what they expect.  There are plenty of conservative, less risky investment vehicles like Post Office schemes, MF available to investors.

Missing the Detailing

If you are entering entering into a market and not understanding the nuances of the business will cause failure. Do your homework and establish a process to get all the details and nitty-gritty of an industry and customer that make a product successful. For instance if you want to start an e-commerce company make sure you have detailed out all of flows/vendor relationship involved in it. Investors want to know the startup has experience in the market.

Break Through Technology

Seriously! as an entrepreneur if you say to investor you have developed a break through technology, then be prepared to say immediately why. Most investors will not believe you and it is generally considered as Myth.

Negative Attitude

Remember Investors invests on Entrepreneur and not on idea, they would like to see, assess entrepreneur attitude. So appear coach able, Every time an investor asks a question, they are impacting valuable information.  Not listening or addressing their concerns is a start-up killer. Becoming defensive when they ask questions is negative as well.

Disregard for Investor Money

Having an apparent disregard for the investors money will often sink a deal or make investors wary of what is to come of the startup in the future.  Recently i came across a pitch where two co-founders presented to angel investors and when one investor asked what if the start up encountered problems and hit the roadblock, they immediately replied they would just go back to their old jobs.

-Hitesh, vcBytes.com