#5 Strategies This Refurbishing Goods Startup Followed to Raise Funds
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The Indian repair and refurbishment market, as of now, is unorganized and extremely underdeveloped. But, it has evoked mixed reactions from businessmen. While some entrepreneurs call it a dull market, others would like to perceive it as a market with opportunities that are yet to be trapped.
Carpediem Capital, who claims to be one the leading investors in India that majorly focuses on small and medium-sized companies, has twice funded a repair and refurbishment start-up called Yaantra in one year. Early in 2016, the company raised USD 6 million from the venture capital fund along with Duane Park. Again, earlier this month, Yaantra raised another round of USD 3.1million from them.
The Private Equity’s move clearly means Carpedieum falls in the second category and is very optimistic about the market. In fact, according to its website, the PE’s investments are centered around two broad consumption aspects — companies that are creating consumer brands or are providing organized services to segments that have been traditionally unorganized and fragmented. Yaantra fits the second category.
But why did the traditional investor choose to invest in Yaantra over other any other repair and refurbishment company? Yaantra’s Co-founder Jayanth Jha, in a tête-à-tête with Entrepreneur India, discussed five things that helped the start-up raise funds from one of the largest institutional investors in India.
In April 2013, when Jha started Yaantra along with his roommates Ankit Saraf and Anmol Gupta, the idea was to offer doorstep repair services for multi-brand smartphones.
The company saw refurbish industry as an opportunity but did not venture out without a litmus test. So in early 2015, based on Yaantra’s in-house repair capabilities, the company started experimenting in the refurbishment space, recalled Jha.
“The pilot programs run by the company performed exceedingly well. Based on the results, the company decided to get into the refurbish business,” he added.
According to the Co-founder, Yaantra’s business has witnessed explosive growth, driven by strong execution of a sound strategy by the management team and efficient utilization of capital.
“We are now in our growing phase and yet, we are a profitable start-up, steadily growing by 25% month-on-month basis. This gives confidence to the investors about our intention and goal and our method of chasing it,” he pointed out.
A lot of customers from the e-commerce space return unboxed smartphones due to multiple reasons —they don’t like the feel of it or there are technical glitches. These phones are then serviced and sold as refurbished products either through third parties like Yaantra or directly by the particular e-commerce company.
And hence, Yaantra has been working on building its relationship with its e-commerce partners, which are major suppliers of refurbishing phones, said Jha, but refrained from naming its partners.
Prior to raising its previous round, Yaantra was mostly a local business, based out of the Delhi NCR (National Capital Region).
But after raising USD 6m, the company focused mainly on expanding its geographical presence in cities like Bangalore, Mumbai, Pune, Chennai, Hyderabad, and Ahmedabad, Jha shares.
Additionally, the company also focused on building its e-commerce platform Yaantra.com for consumers and Yaantra-Retail, an invite-only platform where verified retailers can buy smartphones from the platform and further sell the company certified phones to consumers.
“Funds from the fresh round will be utilized to increase the retail base of Yaantra-Retail. Presently, the company has a retail base of 15,000 partners and we are anticipating to reach 30,000 by the end of this year,” he added.