Here’s a gripping account by Dinesh Agarwal, Founder and CEO, IndiaMART, of how digitalization has changed MSMEs and how much more still needs to be done to adopt the technology.
My journey began back in my graduation days in the late 80s when working in the US was seen as the ultimate success for an Indian techie. After working for CMC and C-Dot, I joined HCL technologies and moved to the US in 1992. However, the day India announced the launch of the Internet on August 15, 1995, I decided to quit my job with HCL Technologies and move back home to build something of my own.
Upon returning to India, I started my entrepreneurial journey from my house in Patparganj, Delhi. My intention back then was not to create a large IPO-led business but start a small business of website making. When I started in 1996, the turnover was Rs 6 lakh in the first year and Rs 24 lakh in the following year. The website business was growing rapidly in 1998, following which we moved from proprietorship to a limited company in 1999.
Staying the Course
By 1999, we grew at a very rapid pace. However, with the dot-com bust and 9/11 attacks in America, our business revenue fell by nearly 40 per cent but we overcame the slump. We knew that we would have to add more value to the already existing website creation business, and hence we decided to create a searchable online directory of exporters from India that would replace the print magazines that were the only source of information till then. This proved beneficial for us.
From 2002-08, we grew big in business, generating a revenue of Rs 50 crore along with making good profits. The major turn in the business came in 2008 when China began to dominate the international trade which directly impacted the Indian exports and the rupee-dollar exchange rate fluctuated from Rs 38 to 54. Meanwhile, Indian domestic consumption started to grow, so we decided to pivot our focus on domestic markets. With $10 million in funding from Intel Capital, we re-launched IndiaMART as a domestic B2B marketplace in 2008, keeping its mission intact to “make doing business easy”.
In 2008, the economic crisis delayed our IPO plans. It was only Naukri.com that was able to do an internet IPO back in those days. It made its IPO cap with Rs 800 crore at that time, which today has a market cap of Rs 30,000 crore. It took them 15 years to achieve this.
By the end of 2011, we expanded aggressively and just when we were about to sign a new term sheet of about $100 million, an investor walked out. We were burning a lot of cash at that point in time and were witnessing high employee attrition and high customer churn. Over the next few years, we consolidated our business by focusing on customer experience and became profitable again.
Currently, we have 93 million registered buyers and 5.7mn suppliers who display about 63 million products. Every month, we do around 41 million business matchmaking on IndiaMART. One in every 15th Indian is already using IndiaMART. Today, I’m humbled to see ourselves as a listed entity. Going for an IPO not only takes your time but also your lifetime.
(This article was first published in the December 2019 issue of Entrepreneur Magazine. To subscribe, click here)