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For many companies in the start-up space, a robust business model is the only wind in their sails as they blossom into mid-size firms. A handful of them have never raised funds, nor have immediate plans to, and they chug along as revenues continue to pour in from operations.
A case in study is NeoNiche Integrated Solutions, an experimental marketing company founded in 2011. The Mumbai-based firm never raised funding to scale up and doesn’t plan to raise at least for the next three-four years.
“In the first year, our core team and co-founders were on-boarded and they weren’t paid salaries for first six months. The focus for the year was to make our services robust, then we offered a loyalty programme, competitive pricing and focused on servicing start-ups which back then no one was looking into,” Prateek N Kumar, Chief Executive Officer and Managing Director at NeoNiche told BusinessLine.
The company, which started with three employees, now has 110-112 personnel and a ₹50 crore turnover.
Asymmetrique, a company into online brand building, set up in 2008 is another firm that claims to be successful without playing the valuation game.Started with just 12 staff, the company went on to acquire another company in the same space, now has about 100 personnel with presence across four locations, including New Delhi.
“We needed growth capital from time to time to set up new offices and hire people, but the amount of growth capital we needed, we self-funded. Fundamentally, our philosophy is that self-funded businesses or businesses that can pay for itself, growing on the back your profitability, are the best kind of businesses,” Asymmetrique MD and CEO Nitin Gupta said.
“We were not building a business to sell, we were trying to build a genuine business and we didn’t want to give our stake to some external funding agencies such as private equity firms nor venture capital funds,” Gupta said, adding the company “might look” at funding in the next couple of years as it moves into product-based services.
Arrivae, a Mumbai-based online interior design solution start-up, was bootstrapped in 2017 with three employees and now has grown to 150.
“Not raising funds helps to maximise control on the functioning of the brand in the initial stage of its life. Also, it helps in experimenting with the brand, which may not be possible with investors onboard,” Yash Kela, Founder of Arrivae, said.
Yet another example is that of Rajasthan-based Saraf Furniture, an online furnishing and home decor start-up, set up in 2014 with 5 employees. The company now has 70 employees.
“We stayed away from fundraising in order to focus on the product and unit metrics from business and customer point of view and not just get consumed in marketing, thus shifting the focus,” said Raghunandan Saraf, CEO & Founder.
Most of the companies – being private – were reluctant to provide revenues, but disclosed headcount and geographical presence as testimonies of growth.