How Dinesh Agarwal built a Rs 200-crore firm IndiaMart from a seed capital for Rs 40,000

Dinesh Agarwal built a Rs 200-crore firm IndiaMart
The Economic Times,
I come from a family of businessmen, but I had no plans of becoming one. So, after acquiring a B.Tech degree in computer science from the Harcourt Butler Technological Institute, Kanpur, I took up a job as systems analyst at HCL Technologies. For five years, I worked with other firms in India and then moved to the US, where I worked for three years with CDOT. I was drawing a good salary and leading a very comfortable life, but I could not picture myself doing the same job all my life. I felt like starting my own venture. As all my relatives and friends were based in India, I decided to return in 1996.

Since I was a computer analyst and among the early Internet users, I thought of starting something in software services. I settled on building a platform for businesses to display their products via dedicated Web pages. I named the venture, IndiaMart InterMesh. The idea was to help the small and medium enterprises in the country market their products and services. I had purchased a flat in Delhi while I was working and set up my office in the flat in 1996.

I had a saving of Rs 40,000 and it was invested in the business. I faced several challenges. The computers were costly and few businesses used them. So, convincing customers to first buy computers, which, in turn, would help in the promotion of their business was quite a task. Besides, the Internet speed was very slow in those days. Uploading and downloading small files would take several hours. Still, we managed to get fast-food chain, Nirulas, as our first client. The deal was to develop and manage their website for an annual fee of Rs 32,000.

I employed a few marketing and sales personnel to help generate business. We came up with an innovative way of marketing. We began holding exhibitions at Pragati Maidan, in New Delhi, to showcase our services, with the staffers wearing T-shirts highlighting our brand. We offered businesses free listings on our platform. Once their company profile was on the Web, it would start generating business queries from potential customers from across the globe. We would monitor the response and our sales personnel would apprise the company about the interest it was creating on the Internet.

Having proved the value of Web presence to the companies, we would then offer them a customised, full service to enable them to draw even bigger numbers for their businesses. This strategy helped us bag several clients. By the end of the first year (1996-97), we had a staff of nine and the firm recorded a turnover of around Rs 6 lakh.

As our business started growing, we had to deal with several issues and the most irksome among these was looking for bigger office space. This is the reason that between 1996 and 1999, we changed four offices. Besides, for every employee who was hired, we had to invest nearly Rs 50,000 since it involved the purchase of a new computer and relevant accessories, which proved rather expensive. Though most of the queries related to our clients’ businesses would come to us via emails, very few clients had the e-mail facility. So we had to save the query, take a printout and fax it to the respective client. It was quite cumbersome, but we managed.

In 1998, we opened our second office in Mumbai. By 1999, we had added around 1,000 clients to our list. The firm had a staff of nearly 100. One of the things that has helped our business grow is the dedication of our employees. Several of the staffers who had joined us at the launch of the company are still with us. After the US terror attack on 11 September 2001, our business revenue fell by nearly 40 per cent. It was tough to pay salaries, but none of our employees quit and we overcame the slump together. Now, we have 50 offices in 20 cities in the country and a staff of 2,500. Of these, 800 employees work at our head office in Noida, Uttar Pradesh.

In 2007, we invested Rs 7 crore to purchase a two acre plot in Noida and build a new office. We have around 1 crore products and almost 15 lakh suppliers. As many as 1 crore buyers visit the company’s platform every month. Building on the platform for suppliers, we also created a buyer-dedicated forum in 2011. A buyer can post his requirement on the platform and our search technology can help him find the right supplier. We see a huge potential in this venture.

In 2013-14, the company generated a turnover of around Rs 200 crore. We are growing at an year-on-year average of 30 per cent and are hopeful of maintaining this growth momentum.

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