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April 7, 2004
It's a familiar startup tale: a young, talented but inexperienced
group scratch for funding to get their fledging company
off the ground.
When Rajiv Ranganath, Abhaya Shenoy, and Srijon Biswas
met while on scholarships at the National University of
Singapore, they had no idea that seven-plus years later
they would find themselves up to their eyeballs running
a young business.
Recounting the struggles of their early days, the founders
of Innvo marvel that their company even survived, let
alone prospered to the point that today they have customers
and revenues and are in the midst of raising a Series
B round of funding.
The computer science students, all from India, caught
the dot-com fever that swept this city-state in late 1999.
They started with a vague idea - Linux-based embedded
applications for information appliances - and zero in
the way of business experience. With little to go on other
than their programming skills and encouragement from a
mentor at the university, S.K. Guruprakash, they set up
Innvo in November of 2000.
Unfortunately for the twenty-somethings, their project
took shape just as the Internet bubble was about to burst
in Singapore, following a much shorter and sharper trajectory
than in the United States. Investors recoiled from anything
even vaguely related to high tech in the wake of the dot-com
crash. That combined with Innvo's youth and inexperience
made for a pretty lonely quest for funding to launch the
company.
" It was really tough when we tried
to raise money," says Mr. Ranganath. "We spoke
to almost every VC in Singapore."
To make things even more difficult, the money troubles
of those early days were exacerbated by the dearth of
entrepreneurs available to guide them as the company began
to take shape and evolve. This is Singapore, after all,
a small city-state of just over 4 million people where
traditionally the best and brightest leave university
to take lifelong jobs in government or with one of the
huge government-linked companies that dominate the economy.
Prior to the dot-com boom, you could count on one hand
the number of high-tech entrepreneurs here.
"In
Silicon Valley, you can go into any coffee shop and talk
to anyone and they have started a company, or many companies
- even if they are young," says Mr. Guruprakash,
Innvo's executive director and godfather figurehead who
is affectionately referred to as Guru, or teacher. "Here
in Singapore, these people are very rare."
Lucky for the Innvo team, a friend of Guru's and a professor
at National University of Singapore eventually introduced
them to one of these few. Chay Kwong Soon made his name,
and his fortune, as one of the three founders of homegrown
success story Creative Technology, makers of sound cards
and other peripherals. Mr. Chay had left Creative in 1996
and set up his own angel investing fund, Enspire. He liked
what he saw of Innvo, and helped them raise 1.4 million
Singapore dollars ($837,337) in Series A funding, bringing
in the government-linked TIF Ventures as co-investors
as well as grants from the Economic Development Board.
Innvo by this time had a prototype, and had a professional
services business going thanks to a lucky break with auto
parts maker Delphi (a spin-off of GM, which has a plant
in Singapore) to develop voice-based information systems
like GSP/navigation in cars. But they needed help.
"These were a bunch of applied researchers,
working in a university environment. They were engineers
with no industrial experience. Enspire funded them because
of our own R&D background. We don't expect VCs to
take that kind of risk," says Mr. Chay.
He stepped in at a critical moment in 2001, a year after
Innvo had started. Unfortunately, neither its embedded
Linux technology nor the information appliances market
proved to be the right choice.
"They needed
more resources, and they needed to refocus," recalls
Mr. Chay, who helped the team to shift from Linux- to
Java-based applications, and refocus their business model
from appliances to the mobile space. The mobile phone
market was booming and they figured they could adapt Java
technology to cell phones. Mr. Chay recalls, "They
had a services business but it wasn't scalable. Their
customers were looking for more." They developed
a WAP (wireless access protocol) browser and MMS (multimedia
messaging services) client.
Once Innvo had funding, it needed channels and partnerships.
They targeted Texas Instruments, which had 60 percent
of the market for chip sets for mobile phones, and IBM,
which was piqued by this little company in Singapore,
working on embedded IBM Java in a device for Delphi.
"It took us one-and-a-half years to get TI.
Now we have the key applications on TI chipsets,"
Mr. Ranganath says proudly. It's a long way from the dark
early years. "If not for angels like Mr. Chay, there
is no money out there. You need 1.5 to 2 million Singapore
dollars (about $900,000 to $1.2 million) just to make
mistakes," says Mr. Ranganath. They burned through
700,000 Singapore dollars ($418,717) before landing their
first customer.
Today Innvo has customers, products, and revenues: 1.5
to 2 million Singapore dollars this year, projecting three
to four times that amount in 2005. Its key market is China
(where there are more than two dozen handset OEMs), its
developers are in Bangalore, and its marketing business
operations are in Singapore. The staff of 20 is all Chinese
and Indian. The company is now raising 3.5 million Singapore
dollars ($2.1 million) in a Series B round, with big-time
players like Walden International Investment Group lining
up for a close look.
Next up? Gunning for China, like everyone else. Having
made it this far, the Innvo team is ready for the challenge.
As twenty-somethings, at least they're able to handle
the lack of sleep.
Innvo Systems Pte Ltd
Joyce Lim
Corporate Marketing Manager
Phone: +65 6779 9400 ext 401
Email:
joyce.lim@innvo.com |
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