“Ideally, we should have at least one collection center in each city. For now we’ve set ourselves the target of between 20 and 50, in the medium term,” says Rohan Gupta, in a telephonic conversation with StartupCentral. The company currently operates in 150-odd cities, including in the remote North Eastern states, but primarily works directly with enterprise customers.

Some of the impetus to go direct-to-consumer comes from a recent government directive that now makes it illegal to dump electronic products as garbage or sell them to the scrap dealer down the street. Under the guidelines of the Electronic Waste (Management & Handling) Rules 2011, consumers are now required to send their old mobile phones, laptop computers and other electronic items either to the original manufacturer or to an authorized ewaste recycler.

Nice move but tough to implement

This is easier said than done. “You need to have a vast network of collection depots for this to work effectively. It is not clear yet who will bear that cost. It is also not clear whether OEMs (original equipment manufacturers) will incentivize consumers to send old products back for recycling,” says Gupta. The government directive makes it mandatory for OEMs to accept products returned by consumers. However, it does not specify targets for OEMs, in terms of the quantum of obsolete products that they must collect within a specific period.

As a consumer, if a OEM refuses to collect your old laptop or mobile phone, you can complain to the Pollution Control Board. Non-compliance on the OEM’s part will result in fines or imprisonment. The government additionally lists 73 authorized ewaste recyclers across the country, Attero included, that can be contacted by consumers. However, as Gupta puts it, “There are probably only five or six good quality recyclers on that list.”

By good quality Gupta implies the process that a recycler employs to dispose off waste. At its 100,000 square feet factory (image below) in Roorkee, Uttaranchal, Attero puts the ewaste through a process that extracts iron, non-ferrous metals and plastic. Precious metals such as copper, nickel, zinc and lead are further separated and recycled. The left over waste is disposed off in government-approved landfill sites. Apart from Attero, only a handful of companies, including Mumbai-based Eco Recycling and Global E-Waste Management and Services in Chennai, follow similar end-to-end processes.

That limits the options available to even the small population of consumers who are willing to recycle responsibly. The 73 authorized recyclers combined would be ill-equipped to deal with the country’s current ewaste volumes — 800,000 tonne in 2012, by government estimates. According to some industry estimates about 70 per cent is generated by businesses, while the balance comes from individual consumers. But, these estimates only take into account televisions, laptop computers, mobile phones and other such items and not white goods such as refrigerators and air conditioners, says Gupta. The actual volumes generated by individual consumers, he reckons, are probably much higher.

Big challenges, bigger opportunities

While the challenges are huge, primary among those being the existence of a large and tenacious unorganized market, Attero also see an opportunity to take ewaste recycling mainstream. “The government directive opens up new ground for us on the consumer front,” he says.

In fact, Attero started working towards going direct-to-consumer much before the ewaste regulations came into force. Last July, the company launched a service called Atterobay, an online platform where consumers can sign up to recycle their mobile phones. Attero buys the phones from consumers at real-time exchange rates, picks them up from consumers’ homes and dispatches payments via cheques or vouchers. The response to the new service has been fairly decent. Since its launch, the site has already collected about 20,000 phones and Gupta plans to introduce a scheme for laptops soon.

The 20 or 50 physical collection centers that the company plans to set up over the next few months will make Atterobay more easily accessible to consumers. The initiative though comes at a fairly significant cost. Apart from the collection centers, it involves setting up warehouses, a robust information technology backbone to manage logistics and people to man the operations. The company expects to end up investing a little under $1 million in setting up the backend infrastructure to manage the operation. Part of the investment will be recovered from refurbishing and re-selling a portion of the mobile phones that it collects through Atterobay.

Despite the costs involved, it is important for Attero to break into the consumer market. Though its revenue mainstay (numbers were not disclosed) is the corporate sector, the volumes are still not meaningful relative to the potential opportunity. “Corporate organizations have begun to realize the benefits of recycling but they still have a long way to go. Even multinationals here behave differently than they would in Europe or the US when it comes to recycling ewaste,” says Gupta.

The numbers speak for themselves — in the last financial year, the company processed 4,000 tonne of ewaste. About 70 per cent of the company’s revenues currently come from private sector companies. The government sector accounts for another 20 per cent and the rest comes from the banking and financial services sector. Gupta says that the company broke even in the last financial year.

Fortunately, funds are not an issue for the company at this stage. So far, it has raised $14.6 million in venture capital over multiple rounds. It raised $6.3 million as its Series A round of funding from IndoUS Venture Partners and Draper Fisher Jurvetson in 2008. This was followed by a $8.3 million Series B round from International Finance Corporation, Granite Hill and existing investors in 2010. The seed capital for the venture came from the founders’ personal resources. “We’ve also applied for carbon credits. Cash flows are healthy at this stage,” says Gupta and adds that the company is not looking to raise fresh capital in the medium term.

Meanwhile, we decided to check out Atterobay. Our query for the exchange price of a Nokia e72 resulted in a quote of Rs 5,240, if payment is by voucher, or Rs 4,192 in cash. It matches what the local mobile phone vendor down the street had offered two weeks ago. The process is super-smooth and convenient. We’ll take the offer.

Images Courtesy: Attero Recycling

For Mumbai-based Quikr, which was spun out of online auctions company eBay India in June 2008, this constitutes its fifth round of funding, taking the total amount raised so far to over $50 million. After being spun out of eBay, the company raised an undisclosed amount as series A funding from Matrix and eBay. This was followed by a $4.47 million series B round in 2009 from Omidyar Network and Matrix. In 2010, it raised a $6 million series C round from Norwest, Omidyar, Matrix and eBay. Last May, it raised its series D round at $8 million from Nokia Growth Partners, Norwest and eBay.

The company offers classifieds both online and on mobile and currently serves 17 million unique individual and enterprise users per month. “The current round (of funding), which is our largest to date, will enable us to diversify our offerings across both online and mobile platforms, intensify product development and strengthen marketing,” Quikr co-founder and CEO Pranay Chulet said in the press release. The company generates revenues primarily from premium listing services and advertisements on its site.

For Warburg, Quikr is the private equity investor’s second announced deal this year. Earlier in March, it invested $50 million in Jaipur-based asset finance company Au Financiers. The firm has invested nearly $3 billion here over the last two decades and its most well-known investment till date remains Bharti Tele-Ventures, from which it earned a record profit of $1.6 billion on a cumulative investment of $292 million.

Does Warburg’s entry into Quikr indicate that a public listing is in the offing? With private market valuations of Internet companies in India currently on a high, the Warburg investment could be the first step in that direction.

Image Courtesy: Quikr

Moritz will continue at Sequoia as chairman and be involved with nurturing fresh investments, the letter says. His realigned role will also involve him working closely with some of the younger members at the firm and overseeing existing funds. Read the full text of the letter here.

Starting out as a reporter for Time magazine, Moritz became a venture capitalist with Sequoia in 1986 and went on to write Silicon Valley history with investments in Internet startups such as Google, Yahoo, PayPal and Apple Computer. He ranks among Silicon Valley venture capitalist royalty, alongside Kleiner Perkins Caulfield & Byers’ John Doer and Khosla Ventures’ Vinod Khosla. He has also authored the book Little Kingdom: The Private Story of Apple Computer.

In India, Moritz steered Sequoia’s entry into this market with the 2006 merger of Bangalore-based WestBridge Capital Partners (the merger was dissolved last year). Since it entry here, the firm has invested in over 50 companies and raised India-dedicated funds worth $1.4 billion so far. Globally, Sequoia is currently investing from a $1.3 billion fund, raised in 2010. Moritz sits on the boards of companies such as LinkedIn, Gamefly and Sugar.

Image Courtesy: Sequoia Capital

TaxiForSure started operations in June last year and currently operates only in Bangalore and plans to launch services in Mumbai and Delhi soon. It works with various taxi fleet operators and enables them with technology to ensure that customers get reliable services, said the release.

The company’s founders, Aprameya Radhakrishna and Raghunandan G, are alumni of IIM Ahmedabad and earlier worked at Jones Lang LaSalle India and Feedback Ventures respectively. Post-funding, Anand Daniel from Accel Partners and Ritesh Banglani from Helion have joined the company’s board.

Since four deals do make a trend, we decided to pitch TaxiForSure against Bangalore-based peers Savaari and YourCabs, who also recently got funded. The route we chose was a pick-up-and-drop from Bangalore airport to St. Marks Hotel on St. Marks Road. The car we chose was an airconditioned Tata Indica. Here are the results:

• Savaari: Charges Rs 1,196, including taxes. The rate charged is for 8 hours or 80 kilometers. You can either pay the whole amount upfront or Rs 1,000 as advance.
• YourCabs: Costs Rs 740, including taxes. Covers 52 kilometers. Doesn’t seem to require any advance payment.
• TaxiForSure: Charges Rs 650, out of which Rs 50 needs to be paid upfront. You can also get a name placard at the airport for an additional Rs 100.

Savaari raised under $1 million in Series A funding from Inventus Capital in early April, while YourCabs raised an undisclosed amount in angel funding from Sprism Investment, an investment advisory firm. Mumbai-based Olacabs raised an undisclosed amount in Series A funding from Tiger Global the same month.

Image Courtesy: TaxiForSure

HLC was founded in June 2010 as a separate business under Hippocampus, a education services venture started by Bangalore Labs co-founder Umesh Malhotra in 2004. Hippocampus also runs a non-profit called Hippocampus Reading Foundation which sets up active libraries in government schools and community centers in collaboration with government and other non-government organizations.

“The academic year of 2011 was our (HLC) first, full-fledged year of operation. During this period, we worked in 39 villages with 50 teachers and 700 students across two districts in rural Karnataka,” Malhotra told StartupCentral via email responses to queries. The company is currently on a recruitment and set-up drive and aims to start the current academic year with more than 250 teachers who will reach out to over 5,000 students, he said.

Under the HLC model, local teachers, usually women, are employed and trained to coach students between the ages of 3 and 12 at the pre-school and primary levels. It employs an in-house curriculum developed in collaboration with veteran educationists, which is designed to allow children of various age groups to learn at their own pace. Students who attend the center are charged between Rs 60 and Rs 100 per month. The centers are usually located inside the homes of the women who run them or community spaces such as schools or rented premises. HLC pays its kindergarten teachers a salary of Rs 2,000 per month and after-school teachers are paid Rs 1,500 per month. “Teachers are a big priority for us. We recruit less than 20 per cent of applications received. Every teacher goes through a four-round selection process,” said Malhotra. Training follows recruitment and each teacher attends a 10-day training programme. In addition, 12 days of follow-on training are spread through the year.

For Lok Capital and Acumen, the investment in HLC represents their first in the education sector. Delhi-based Lok, a bottom-of-the-pyramid focused investor that is backed by the Rockefeller Foundation, recently raised a $65 million second, India-focused fund. The launch of the new fund has also seen the venture capital investor refocus from its earlier preference for microfinance companies to broader sectors such as education, healthcare and employment services. Read our earlier post on Lok Capital’s realigned investment strategy.

Image Courtesy: Hippocampus

“We have a freemium model. The number of paid users at present is about 25-plus. Conversions (from free to paid) have been picking up since the alpha launch of Version 3.0,” co-founder and CEO Anand Agarwal told StartupCentral. The company is targeting more than 1,000 paid customers by March next year. It expects to achieve revenues of $1.4 million by March 2014 and $6 million the following year, said Agarwal, who spent over a decade at Mumbai-based software firm Geometric before co-founding Sensible Softwares.

The company was founded in late 2009 by Agarwal, Nitin Bhide and Vishwajeet Singh, who also earlier worked at Geometric. The founders have nearly thirty years of experience between them working in the software industry in the areas of product lifecycle management and software development. The idea for BootStrapToday was born out of the founders’ own experiences of working with disparate tools for managing project lifecycles. “Normally, for each project you need a different set of tools, which makes managing the project cumbersome. In fact, while in Geometric we proposed a single integrated solution, based on open source, that would ease the process. Initially, this was met with a lot of resistance but was eventually adopted. It got us thinking that we could create a similar solution for small companies based on the SaaS model,” says Agarwal.

The company raised an angel funding round of $250,000 in January 2011 from a group of undisclosed individuals based in Pune. “We are well capitalized for the next 5-6 months. But we will need additional funding to scale our marketing activities,” said Agarwal. The company currently employs 12 people, which includes a team of about eight developers.

BootStrapToday is aimed at small and medium-sized enterprises that would find a SaaS-based, pay-per-use solutions more affordable to manage their internal software application project management needs. It also offers an on-premise solution for larger companies. Apart from the free version, the company offers five different packages for the SaaS model. The entry-level bronze package is priced at $9 per month and allows up to five users, five projects and 1 GB of storage. The gold package costs $49 per month. Out of its 25-plus paid sign-ups so far, the bronze package accounts for 55 per cent of sign-ups, while the silver and gold packages account for 25 per cent and 20 per cent respectively, said Agarwal.

Image Courtesy: Sensible Softwares

Clarity is yet to emerge on what kind of entities would qualify as the proposed notified class of investors. But, Mukherjee’s move to establish a notified class sets the stage for a formal, self-regulated industry association of angel investors, on the lines of Kansas-based Angel Capital Association (ACA). The ACA is the nodal North American trade association of angel groups and private investors that invest in high-growth, early-stage companies. Importantly, it serves as the public policy voice for the professional angel community in the US.

The creation of an ACA-type of body in India will serve two important purposes. One, it will help identify and organize legitimate angel investors on a formal platform. The driving factor behind the Budget’s proposal to tax capital raised from angel investors was to prevent black money from being channeled into startups. Currently, as in the US, there are three kinds of angel investors active in the Indian market:

1. Formal angel networks such as Hyderabad Angels, Indian Angel Network and Mumbai Angels pool the resources of high networth individuals and invest in startups. However, while such networks represent fairly significant amounts of capital, the actual scale of their investments is still quite small. For example, last year, Indian Angel Network, the largest angel network in the country with 200-odd registered members, invested just over $8 million.
2. Professional angel investors, typically small businessmen, serial entrepreneurs and former entrepreneurs who are sitting on capital after successfully selling their own businesses, invest on their own, independent of any formal network. This group also includes professionals who often channel gains from investments in stock markets or real estate to startups. Again, this group is also relatively small in terms of scale of investments.
3. Family and friends, a largely faceless group, constitute the bulk of angel investing activity in India. Given the nascent nature of professional angel investing here, most Indian startups end up raising the first Rs 20 lakh or Rs 50 lakh from these sources. It would not be incorrect to assume that more than 90 per cent of the angel money currently raised by startups comes from this group.

An organized, legally defined platform, that includes all three classes of investors, would go a long way in growing the angel investor ecosystem that is sorely lacking today. It would also, importantly, give startups access to a larger and transparent pool of investors.

The second critical purpose that an ACA-type of platform would serve is that, in future, it can work more effectively with the government on fostering angel investing rather than choke it. For instance, in 2010, the ACA, along with other industry associations, was particularly successful in thwarting proposed amendments in a financial reforms bill that would have potentially hurt angel investments. The amendments proposed to increase the asset requirements of accredited angel investors from $1 million to $2.3 million and require startups raising funding to register with the Securities and Exchange Commission (and wait 120 says for the markets regulator to review their filing).

Of course, a platform for angel investors could be created under the aegis of the Indian Venture Capital Association (IVCA), which is the nodal trade association for private equity and venture capital investors. But given the very unique nature of such investors  – angels invest their own money, much smaller amounts, and roll up their sleeves to work alongside startup teams — and the IVCA’s preponderance with bigger issues, a separate body may serve the angel community better.

This is not the first time that the need for a comprehensive platform that aggregates angel investors has been felt or articulated. Back in 2009, SAIF Partners’ Mukul Singhal, then a part of the Canaan Partners India team, explored the idea of setting up of a platform, under the Canaan umbrella, to help entrepreneurs get in touch with angels more effectively. Singhal’s view was that the angel community was much larger than the already known pool of serial entrepreneurs, big corporate honchos and other high networth individuals. But most of these people never got into the system because either they didn’t know how to didn’t want to join an angel investor group.

We don’t know what happened to that particular initiative. But now is a good time as any to revive it, though as an independent platform. Mukherjee has inadvertently made the first move. Will the angel community take the lead?

Image Courtesy: digitalart / FreeDigitalPhotos.net

Bangalore-based Ujjivan, founded by former Citibank executive Samit Ghosh, provides micro loans to women in urban and semi-urban areas. It proposes to use the funds raised from IFC to finance expansion and execute strategic and operational changes in its business to cope with the changed regulatory and business environment for MFIs in India and meet its capital adequacy requirements for the next 3-5 years. The company raised a $25.5 million fifth round of equity funding from Wolfensohn India Advisors, Dutch developmental finance institution FMO and existing investors earlier this year. The other investors in the company include Bellwhether Microfinance Fund, Unitus Corporation, Michael and Susan Dell Foundation, Sequoia Capital, Lok Capital and Indian Financial Inclusion Fund.

As on 31st January 2012, the company had disbursed over Rs 29,227 million (about $548 million) to more than 1,091,366 customers at 302 branches in 20 states including 49 under-banked districts across India. The proposed IFC funds will be used to enable the company to increase access to finance in low-income stated, including the northern and eastern regions of the country.

Equitas Holdings, founded in 2007 by former Development Credit Bank executive PN Vasudevan, is headquartered in Chennai and currently has a borrower base of 1.2 million spread across five states, including Rajasthan and Madhya Pradesh. The company has recently diversified in affordable housing loans, through Equitas Housing Finance, and user commercial vehicles financing through Equitas Finance. It plans to use the funds raised from IFC to finance its geographical expansion, scale up new businesses and meet its capital adequacy requirements for the next 3-5 years.

In 2010, Delhi-based Canaan Partners invested about $9 million while CLSA Capital Partners invested $24 million in the company. The Canaan investment, in September that year, created a partial exit for Mumbai-based venture capital investor Aavishkaar, whose Aavishkaar Goodwell I fund was the first institutional investor in Equitas in 2008, investing $1.5 million at the time. The other investors in Equitas include Sequoia Capital, SIDBI, Bellwether Microfinance Fund, India Financial Inclusion Fund, Aquarius and Helion Venture Partners.

The proposed investment from IFC comes at a time when the overall MFI sector is anticipating a respite from its recent troubles with the passing of the Micro Finance Institutions (Development and Regulation) Bill, 2012, in the current session of Parliament. The draft bill proposes to make it compulsory for all micro finance institutions to be registered with the Reserve Bank of India, which would be in charge of governing the sector. Importantly, it is designed to bring MFIs under a central law, which the industry hopes will override state laws such as the Andhra Pradesh Microfinance (Regulation of Moneylending) Act, which dragged the industry into a crisis beginning October 2010.

Already the proposed bill has run into fresh roadblocks following reservations expressed by rural development minster Jairam Ramesh — read details here. The current session of Parliament ends around the third week of May.

Image Courtesy: Equitas

The accelerator is also in talks with three early stage venture capital firms to partner the initiative, of which two have already confirmed their participation, Apoorv Ranjan Sharma, executive vice president at Venture Nursery, told StartupCentral.

Out of the 120 applications, about 47 per cent have come in from the Mumbai and Pune region, while Bangalore and Delhi accounted for about 15 per cent each, said Sharma. The majority of applications, approximately 40 per cent, came through social media channels, while references accounted for about 25 per cent.

In terms of sector diversity, about 40 per cent of applications are from the retail sector, of which ecommerce startups constitute about 16 per cent. The other sectors include consumer technology, media and entertainment and education. “The typical profile of applicants is professionals who have professional experience of between four years and 10 years, though we also have a couple of applicants with more than 20 years of experience,” he said. Another interesting statistic is that 29 per cent of the total applicants have been involved in at least one startup in the past.

In addition to applications for the 13-week bootcamp, the accelerator has also received two dozen applications for its parallel track programme, which is designed for startups who are at a relatively advanced stage and may not need the 13-week programme.

The accelerator’s aim is to conduct a minimum of two bootcamps in a year in Mumbai with a target to accommodate up to eight start-ups in each program. At the end of each boot camp, successfully graduating start-ups will be evaluated for investment by a group of committed angel investors. VentureNursery will pick up sweat equity in the startups that participate in the bootcamp and Kiran and Shroff are also committed to investing in up to three startups that graduate from the programme.

Shroff founded and led Mumbai-based multiplex player Fame Cinemas, which was acquired by Inox Leisure in early 2010. Kiran led Starcom MediaVest Group’s South East Asia and South Asia operations as CEO and is a co-founder of Mumbai-based growth advisory firm Friends of Ambition. Both are also active angel investors through Mumbai Angels and Indian Angel Network and have made 18 investments between them.

Image Courtesy: VentureNursery

Forus was founded about two years ago by BITS Pilani alumni KC Chandrasekhar about two years ago. Chandrasekhar earlier spent 20 years leading business development, strategy and operations in companies such as NXP Semiconductors, Philips and Alliance Semiconductors. The company’s flagship product 3nethra is a portable, low-cost, non-invasive pre-screening ophthalmology solution that can detect diseases such as cataract, glaucoma, diabetic retina and cornea problems. Such diseases contribute to 90 per cent of preventable blindness in India.

Each unit of 3nethra retails at between Rs 5 lakh and Rs 6 lakh and the company has sold 30 units till date, said a company spokesperson in an email responding to queries from StartupCentral. “This is one sixth of the total cost if one has to buy all the equipment with  individual functionalities,” said the spokesperson. Forus’ closest competitors are ophthalmology devices such as Topcon, Zeiuss. “In a sense, 3nethra is addressing the pre-screening space and not diagnostic s and we don’t have a direct competition for the same at present,” said the spokesperson. The company has also filed for four patents for 3nethra, which are currently pending approval. Typical buyers of the device include ophthalmology hospitals, clinics, diabetic centers and general practitioners. For its manufacturing needs the company uses contract manufacturers .