Recruitment Startup Aasaanjobs Raises Seed Round Of Funding Of $1.5m From Inventus Capital & IDG Ventures

Aasaanjobs.com, a recruitment portal for blue collared and entry level white collared workers in India announced that it has raised $1.5M in its seed round, from venture capital funds, IDG Ventures India and Inventus Capital Partners. The investment received will be utilized to expand its existing offerings, hire management and tech professionals and to ramp up technology and product development.

Dinesh Goel, Founder and CEO, Aasaanjobs said, “We are trying to mobilize a large unorganized section of contributors to the Indian economy which is a tough operational challenge. I am happy about the timing of this funding round as we can now ramp up and mobilize even more people, not just in Mumbai.”

Aasaanjobs was set up in late 2013 by IIT Bombay alumni who quit their jobs at The Boston Consulting Group, Deutche Bank and the likes to pursue their goal of improving the lives of blue collared workers in India. Based out of Powai, it is among the many startups founded by IIT graduates to have emerged recently from the region.

Rutvik Doshi, Director, Inventus Capital, said, “I am impressed with aasaanjobs vision and the team they have in place. It’s an exciting idea with a capable core team. I am really looking forward to what these guys will create. Going forward, every year over 1 million workers will enter India’s workforce – and enabling these workers to find the right jobs matching their skills is imperative. This is where aasaanjobs.com fits in.

Ranjith Menon, Senior Vice President, IDG Ventures India, said, “India is at an exciting point in its development journey. Job creation and enhancing employability is what the country really needs right now and this team aspires to help solve this problem – and we want to be a part of it. They are bringing technology into an extremely underpenetrated supply side of the workforce which brings to the table very exciting possibilities.

Aasaanjobs envisions creating a consumer solution where long-term and short-term hiring should be as convenient as ordering products online and this funding is a step towards realizing that vision.

About Aasaanjobs

Aasaanjobs.com is a recruitment company for entry level and mid-level jobs in the country. We are in the process of creating a digital identity for the millions who play such a crucial role in the ever expanding service industry of the country. The platform went live in August 2014. The company is focused on disrupting the extremely frictional recruitment industry by making the process quick, convenient and smooth for all the collaborators. The playfield is a multi-billion dollar domestic market and an even bigger international market which is looking for meaningful consolidation. Such a consolidation would ensure that people are not haggling with sub-standard products but are being offered a delightful one.

To learn more about the company and its offerings, please visit http://www.aasaanjobs.com/

About Inventus Capital Partners

Inventus Capital Partners is a US-India venture firm managed by successful entrepreneurs and industry operating veterans who have backed over 100 entrepreneurs with operations in India and/or Silicon Valley. Inventus backs entrepreneurs first and foremost. The companies financed by Inventus include TELiBrahma, Insta Health, redBus, FundsIndia, Vizury, Sokrati, Cbazaar, Savaari, Power2SME, Policybazaar, eDreams, Unbxd, Avaz and Peel-Works. Inventus is currently investing out of its Fund-II. More information about Inventus is available at www.inventuscap.com

About IDG Ventures India

IDG Ventures India is a leading technology venture capital fund in India. The fund is part of IDG Ventures, a global network of technology venture funds with over $5.5 billion under management with over 220 investee companies and 10 offices across Asia and North America. By combining the IDG platform — an unparalleled combination of global publishing, market research (IDC), and conferences and exhibition resources — with years of hands-on experience in early-stage company building, IDG Ventures India helps its investee companies understand their markets better and achieve leadership position ahead of competition. IDG Ventures has been an early investor in digital consumer companies such as Ctrip, Tencent, Baidu, Netscape, BabyCenter, Sohu, Vancl and VinaGame. In India, IDG Ventures has invested in companies such as Flipkart, Yatra, Newgen, Brainbees (FirstCry.com) Vserv, Manthan Software, Valyoo (Lenskart.com), Ozone Media and Actoserba (Zivame.com). More information about IDG Ventures is available at www.idgvcindia.com

As VC cash pours into India, buyout firms head for exits

Naspers Ltd., the South African internet services firm, had just acquired Manu Rekhi’s India bus ticketing serviceredBus.in, in a $120 million transaction that, amid a din of billion-dollar deals in India over the past 24 months, might have gone unnoticed on this side of the world.

Rekhi, partner at Inventus Capital Partners, the venture capital firm that backed redbus, however, was looking at a problem: $20 million of the exit capital set to come his way was being placed into escrow. Such are the regulations surrounding finance in M&A in India, and, in part thanks to the re-election of Narendra Modi, the nation’s popular prime minister, they are likely to be abolished, reduced to a single-digit escrow percentage more commonplace in American deals. If Modi doesn’t do away with it soon, Rekhi said he’ll impress his point upon the PM himself, when he and other investors meet with government officials to talk about India’s tax code (he said he’ll be joined by the U.S. Bar Association, as well as American VCs).

It is perplexing to listen to Rekhi describe India’s regulatory approach to business — “a top-down nanny state” — and his outlook: “the best is yet to come.”

Still, Rekhi, and a great deal of other VC investors appear to share a similar sentiment, and it comes as Indian markets are soaring, fueled by Modi’s commitment to draw more global capital into his emerging economy, and sparked again by plummeting fuel costs as of late.

Modi’s prolific Twitter account serves as a testament to his dedication to his country — it is far more active, and conveys more emotion than the standard PR-office driven accounts of U.S. politicians. He regularly singles out countrymen (and women) for business and academic achievement, aims to console those affected by national tragedies, calls for Indian infrastructure development — even posts photographs with Internet luminaries likeFacebook Inc.CEO Mark Zuckerberg. And, similar to the U.S. initial public offerings market, India’s economy appears to celebrate youth at a time when startups and relatively young companies are seeing valuations soar.

But even as Modi’s ascension to power appears to invite overseas funds into the country, private equity firms are pulling back. After years of leveraged buyout shops putting more capital to work in India, some are turning to exits, having helped beef up emerging markets companies across a variety of sectors over recent years. While some of the reasons stem from peculiarities of the country’s markets, others are just plain business judgments.

ONE AREA private equity firms have been particularly active is on the healthcare front — although, at a time when more companies are being prepped for exits, these assets are often being readied for an IPO.

HealthCare Global Enterprises Ltd., the Indian cancer care company generating around $200 million in annual revenue, is expected to hire bankers and debut on public markets there in 2015, The Deal previously reported. Backers includeTemasek Holdings Pte. Ltd.

In October,Warburg Pincus LLC, a regular investor in India, invested inLaurus Labs Ltd., which develops drugs and nutraceuticals, Before that,Kohlberg Kravis Roberts & Co. LP took on a minority stake in Gland Pharma Ltd., valued at about $200 million and at the time billed as the biggest PE deal in India’s healthcare space. The sponsor did not respond to requests for comment.

A common characteristic of India’s pre-IPO healthcare deals is an abundance of minority stakeholders, a characteristic that turns off many sponsors, especially in a market half a world away.

At a time when buyout targets are scarce, India’s current regulations make it cumbersome for foreign LBO shops to do little more than pick up minority stakes — which likely accounts for some sponsors’ reluctance to dive into the region as they have in some other emerging markets, like China, according to one person familiar with the industry.

“The unwillingness of most promoters in privately held firms in India to sell controlling stakes in their companies, coupled with the fact that the majority of companies in India are family-owned, has left private equity investors in a crowded space with very few deals to deploy their cash at very expensive valuations,” said Venkat Pasupuleti, co-manager of the Dalton India Fund at Dalton Investments LLC.

And PE investors seeking digital assets run up against strategic competitors looking to make investments, and able to wield famous brands before awed entrepreneurs.

In late November,Rupert Murdoch‘s News Corp. — which owns Dow Jones, the Wall Street Journal and recently acquired Realtor.com operator Move Inc. — put $30 million intoElara Holdings Inc., operator of property portal PropTiger.com. News Corp.’s online deal in the U.S. set it back $950 million by comparison — and even though the company holds only a minority position, it amounts to a 25% stake, which is a lot more than $30 million will buy your company that processed $1 billion in transactions in the frothy U.S. venture market.

Amazon.com Inc., which has bought into everything from daily deals to robot warehouse workers in the U.S., is also taking a gamble on Indian startups. The company is nearing a deal to buy Rocket Internet GmbH-backed retailer Jabong.com in a deal that could surpass $1 billion in valuation, Indian website VCcircle.com reported last month, and, in October, bought QwikCilver Solutions, a gift card company based in India.

Then there’sMoody’s Corp.which was allowed in 2013 to take a stake in a ratings agency. Several sources described India’s debt markets as developing, but increasingly attractive to foreign investors.

ONE U.S. PRIVATE EQUITY firm with plans to develop its role as a lender and asset manager is KKR, which earlier this year revealed plans to provide lending to companies in India at a conference in Mumbai.KKR’s method — reflecting its strategy in the U.S., where it has also provided debt for big LBOs — could become more popular with other sponsors.

Still, 2014 isn’t going to be a banner year for PE investment in India — then again, it comes in the wake of years of a plunging rupee, and slower-than-expected GDP growth that has locked some LBO shops into their portfolio companies longer than they would ordinarily anticipate. So perhaps it’s no wonder that PE is heading for the exits.

The Wall Street Journal recently noted that PE firms, including3i Group plc,Providence Equity Partners LLC,General Atlantic LLCand others are lining up or completing profitable stake sales.

Add Carlyle Group LP to that list. The firm has made several successful exits, includingTirumala Milk Products Ltd.— reportedly producing a 3 times cash multiple on the $85 million the PE firm invested in 2010 — network security firmCyberoam Technologies Pvt. Ltd., andRepco Home Finance Ltd.Those deals were all in 2014, although the sponsor declined to answer questions about its ongoing commitment to the region. Since 2000, according to a source, the private equity firm has spent more than $1 billion on India deals. No different than other U.S. PE firms looking to put capital to work in the healthcare sector, Carlyle found an opportunity — in India, of course, not America — in 2013, taking a stake in hospital Global Health.

Carlyle isn’t the only U.S. shop looking to reap exits in a rising market: according to a recent Reuters report, Bain Capital LLC‘s planned sale of a piece of Hero MotoCorp Ltd., India’s leading scooter and motorcycle maker, attracted enough interest that it unloaded most of its stock, bagging $400 million in the process.

“For three years, private equity investing in India continued and increased,” said Arun Gore, president and CEO of Gray Ghost Ventures, a regular investor in India. “The market is very richly valued at this time.”

That could be part of the reason private equity is having such a time trying to put money to work. Another similarity between India’s deal scene and the U.S.’ is the regularity with which sponsors, for a variety of reasons tethered to a lower Ebitda multiple threshold for M&A, are having a difficult time investing in a market now besieged with strategic investors.

Where PE isn’t getting elbowed aside by the corporate players ranging from Amazon to Moody’s they’re running into hedge funds.Tiger Global Management LLC teamed with Warburg Pincus and VC backers to fund Indian auto sales website CarTrade.com in October. The month prior, Tiger backedQuikR, a classifieds service in India, with $60 million, and the month before that, Hike, a mobile messaging service, with $65 million.

IN GENERAL, BALLOONING valuations are making U.S. venture investors look downright stingy. And the market is likely to heat up even more in the coming years. India’s online economy could one day — soon, some say — dwarf that of America’s.

“Think China, 20 years ago,” said Vivek Wadhwa, a prominent Silicon Valley academic and regular blogger on tech. “That is where India is today. India is about to add half a billion Internet users over the next three to five years as smartphones become cheap as cellphones.”

Digital startups — freed of the shackles of fuddy-duddy family ownership and complex capital structures — will reap the benefits of a burgeoning online economy. It’s starting already. About a year ago, Flipkart Online Services Pvt. Ltd., the Indian online delivery service, was valued at a seemingly paltry $1.6 billion. A year later, it would raise far more than that, shocking industry onlookers.

That was when the company took on about $500 million in funding, across the balance of 2013, a batch of cash only reserved for Silicon Valley’s “honor roll.”

In 2014, Flipkart, has raised more money than even Uber Inc., or at least that’s the case as of Dec. 1 (Uber is reportedly currently in the midst of a mind-boggling convertible debt fundraising, and, simultaneously, a separate equity round). Packing on more than $1.8 billion in capital as its valuation has soared to the $10 billion mark, Flipkart’s cash haul for the year makes the $1.2 billion Uber raised across the first 11 months of the year look like a weak poker raise.

Taking Wadhwa’s comments into account, along with India’s population of 1.25 billion, one might understand how the “next Amazon” might not be found on this side of the world. Of course, it isn’t necessarily Flipkart, and India’s premier business family is making a bet on a different company — albeit, at a very high valuation.

Tata Sons Ltd.chairman emeritus Ratan Tata took a stake of less than 1% inSnapdeal.com, another Indian e-commerce site, in a deal reported in November. The septuagenarian billionaire’s stake in the company is worth just a few million dollars, but it valuesSnapdeal, which has raised hundreds of millions in private funding — at up to $2 billion.

INVESTORS HAVE BEEN burned here in the past. Modi’s challenge, for now, is putting a prettier face on a country with a reputation for rulebooks as difficult to navigate as its roads. Looking at China’s astronomical development over the past decade, it is almost hard to fathom that in 2007, before India’s currency plummeted against the dollar, the pace of PE investment outpaced that of even China. A KPMG LLPreport put PE dollars spent in India at more than $17 billion in 2007; China, just $11.5 billion. A separate Bain & Co. report, from April of this year, highlights another point of pain for LBO shops; the $6.8 billion in exits expected for PE firms in 2013 wasn’t much of an increase and more than half the capital put to work in 2005 was not fully exited. Until PE gets the returns it needs, it may not have the justification to spend more with its limited partners.

In the time since, of course, China’s markets have attracted billions more in foreign capital, headlines and prestige. If India is indeed going to produce an equivalent of Jack Ma’sAlibaba.com Corp., that company hasn’t come to light yet — or, at least, its valuation is in a downright-reasonable single-digit-billions range. So while LBO shops are readying offerings and selling high, VCs feel India’s second go-round could be shaping up just now, with Modi’s re-election. They both can’t be right.

“Investors got all fired up a decade ago,” said Michael Jackson, a partner withMangrove Capital Partners, another regular VC investor in the region, “and then were disillusioned by slow progress.”

LEAN VC: WHY SMALL IS BEAUTIFUL IN VENTURE CAPITAL

The Kaufmann Foundation recently noted in a controversial review in the Wall Street Journal that, of its past 20 years of investing in nearly 100 venture funds, “Only four of thirty venture capital funds with committed capital of more than $400 million delivered returns better than those available from a publicly traded small cap common stock index.”

Further damning evidence cited is that fully two-thirds of compensation for general partners comes from fees, not performance (carry). These results reflect the severe challenges of scaling venture’s long-standing “hits business” in an all too elusive “grand-slam business” that a larger fund requires.

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