This Is How You Could Get Funded By Askme Group

Lower funding will help real businesses to emerge.

learn more about Sneha Banerjee

By Sneha Banerjee

Entrepreneur India

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Piyush Pankaj, VP Corporate Finance and M&A at Askme Group, told Entrepreneur about what are the key checklist that the company considers before investing in a company.

Askme, majorly owned by Malaysia's Astro Holdings, invested a whooping $20 million in Indian online market place Mebelkart last year, in turn for a stake in the company. The company also acquired online grocery marketplace for $10 million in 2015.

The key factors checked before a partnership or funding

Piyush said that the two main criteria that the group seeks are the synergy opportunities the startup has with the Askme Group and entrepreneurial skills of the team or the founder. Once these two main requisites are checked, then the Askme looks for other qualities like market opportunity and others.

When a startup begins operations, they have very limited resources. So the first thing we do is to keep the resources so that they can rapidly grow. We focus on how the company can further grow using the Askme ecosystem and how Askme's gross users can generate revenue for the startup.

One of the challenges that we face is to integrate Askme's philosophy and culture in the startup and at the same time create an environment where the startup continues to develop and innovate fresh ideas with complete freedom.

When a founder approaches us they should keep in mind whether they will be able to create any synergies with the Askme Group. We have the ability to incubate in our area -- the online ecommerce, hyperlocal and penetration into the SMEs and bigger markets. So whoever comes with their idea, they should keep in mind if the idea matches our ecosystem and of possible synergies. The founders should have a clear idea as to how they can help grow our business or how they themselves could grow their startup using our platform.

What made you invest in Mebelkart?

The idea of Mebelkart really appealed to us, as the concept of online furniture business has a lot of growth opportunities in India. The online business mostly caters to the metro cities. What Askme can provide to them is penetration into tier 2 and 3 cities.

Our main idea was to help Mebelkart rapidly grow using the Askme ecosystem. We also looked at the promoters, who come from a good IIT background, and have successfully created a sound technology platform which is very scalable. We have also seen a great amount of hunger in their team for success which made this decision come easy.

When Mebelkart approached us they had done their research on how we can help them and what are the opportunities that we could provide.

Ecommerce space can benefit from Chinese investments

The whole ecommerce industry is still at a nascent stage and penetration into the smaller cities is not up to the mark. The ecommerce industry still requires a lot of investment to help it penetrate into smaller cities. So with the Chinese investments coming and the new FDI norms, it is going to help the ecommerce industry, especially the startups.

Currently the whole ecommerce space is led by mobile and apparel categories, all other categories continue to remain at a very nascent stage. So wherever there are more hyperlocal businesses coming to the play, those startups are going to get benefitted because the market is moving towards these new distribution models. Right now in the grocery domain, a lot of categories can penetrate into the hyperlocal model. The closer one gets to the consumer the better it is.

Lower funding in 2016 should improve quality

Money is drying up because everyone today is looking for profitability. On an industry basis, I think it's good for the overall space as people will now stop giving several of those discounts, which the government also has tried to control via FDI rules. This will make a semblance for every player as it will make it a levelled play for everyone rather than giving the upper hand to those who were funded previously. It will help clear off the euphoria and let real businesses to emerge. People will focus on quality rather than quantity.

Sneha Banerjee

Entrepreneur Staff

Former Staff, Entrepreneur India

She used to write for Entrepreneur India from Bangalore and other cities in South India. 

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