Taking the slow and steady route
By Sharmila Ganapathy August 2, 2018
- LotaData is CEO Apurva Kumar’s fourth startup
- The focus is on Southeast Asia for the rest of 2018
WITH many startups, the trend is to raise plenty of money, get valued at millions (or even billions) of dollars and then make an exit. However, American geolocation firm LotaData has chosen a more conservative route.
LotaData chief executive officer Apurva Kumar says that the company is his fourth startup and the first where he’s been a CEO. The company prior to this was Bluestacks (a US-based company that is behind the BlueStacks App Player and other cloud-based cross-platform products).
“We raised US$30 million (RM121.68 million) and we raised it from some top names in the venture capitalist (VC) world. I’ve seen how that world works when you raise large amounts early on with very large valuations and the pressure builds up to get very large revenues very quickly,” he recalls.
“So, this time we decided to do things differently; we took the slow and conservative route. We raised money from people who could really help us, not just people who wanted to invest in hot-money startups. We asked them if they could open doors for us and if the answers were yes, we would take money from them.”
The company, which raised a seed round of US$600,000 (RM2.4 million) in March this year, has raised a total of US$2.1 million (RM8.52 million) to date from angel and strategic investors, VC firm SOSV, VCs from India, Dubai and the US. Apurva adds that they have also telcos from the Asian region invested in the company and that the company is running projects with these telcos.
“When we raised our seed round recently in March this year, we raised it from SOSV which is one of the largest accelerators and probably the largest early-stage VC fund globally now. From them we also raised the angel round last year,” Apurva says.
He adds that they were in Asia last year with an accelerator called MOX, split between Taipei, Shanghai and Singapore. “I was here in Asia for three months with MOX,” he says. (SOSV runs MOX, which brands itself as a ‘mobile-only accelerator’.)
A lucky exit and new beginning
According to Apurva, the first company, where he was part of the core team, was a comparison-shopping engine called mySimon, which pre-dates Google. It eventually ended up getting acquired by CNET.com for US$700 million (RM2.8 billion).
“It was dumb luck, because we got acquired a month before the dotcom bubble burst. That’s the only way to describe it. From then I went on to Hewlett Packard Labs and after four years, moved into the business unit of HP. After I left HP, I eventually ended up at Bluestacks, where I was part of the founding team. Bluestacks owns the largest non-mobile gaming platform in the world and is used extensively in Asia,” he explains.
He left Bluestacks in 2015 to start LotaData. When asked what inspired him to start a geolocation firm, he explains that one of the things that started happening very quickly at Bluestacks is, as they started getting more consumers on the platform, advertisers came to them.
“And that exposed me very quickly to the world of mobile advertising. I discovered that there are lots of gaps in the way brands engage with consumers.
“Simple things like where you are in the real world are not taken into consideration. The fact that you may be visiting Starbucks five times a week is not considered, but if you walk by The Coffee Bean and Tea Leaf they may shove ads to your phone. Just because I walk past your store, doesn’t mean I am interested in your wares. So, a lot of things that are related to location are ignored in advertising.”
He saw it as an immediate opportunity, and the chance to collect massive quantities of data and help businesses understand what’s happening in the real world.
“So, if you’re a retail brand, or a hospitality brand, shopping mall, movie theatre -- you want to know how people move around in the real world and their behaviour. And this can be done safely because all you want to know is how many people have been to the mall, what the footfall patterns are, what time of day and what parts of the mall are getting a lot of traffic and what parts need help,” he explains.
How LotaData works
It wasn’t long before Apurva saw this trend turning into a very broad-based data analytics and insights play. “So that was the early thinking and we called it ‘people intelligence’ and that led to the formation of LotaData.”
He and his team did face some early challenges. “Every VC and investor will say: ‘focus on one area and then knock it out of the park’. The thing about geospatial is you can’t focus on one area or city, this is such a broad space. So, when we started we had to cover the US and very quickly Southeast Asia. We had to very quickly learn how to scale globally with very limited resources and funding.”
“We figured out how to take an angel-funded startup and grow it in the US and in Asia in a very cost-effective manner and were very unusual in the unicorn space where startups start taking in hundreds of millions of dollars and getting to billions in valuation overnight.”
He adds that taking the more conservative path has been a challenge because it is not easy to scale when you are intentionally limiting your budget and resources. “That was a challenge we set for ourselves and I think we’ve done quite well,” says.
As time went by, Apurva and his team realised that the platform they were building was very easily extensible to beyond traditional marketing and digital marketing.
“For example, smart cities and governments. You can take the same logic and apply it to city governments. And governments allocate massive budgets to infrastructure, public safety and recreation, such as parks, community centres -- all of these are expense items.
“How do you know the usage of these facilities? How do you know people are tracking and engaging with these places? There are expensive ways of doing it, such as placing sensors, which can get creepy. We can go to city governments and tell them how many people have been to their parks.”
Next page: Global from the get-go