The Finance & Investment Cell, HINDU COLLEGE

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DECRYPT 15 CASE STUDY

RULES
1. Submit the solution to the case study by Saturday October 17 11:59 PM to
fichindu@gmail.com and your relationship managers mail id.
2. Rename the solution as Participant1_Participant 2.pdf
3. Use of any management framework such as SWOT, PEST etc is allowed. Use of graphic
methods will be appreciated.
4. Use of Internet is permitted.
5. State your assumptions and sources of data (if any) clearly
6. Show your calculations.
7. Failure to send us a screenshot of the app download or skipping the crossword process
will lead to immediate disqualification.
CASE STUDY
Congratulations on making it this far! You are Mr.Rajat Verma who has proved his worth to be
hired as a Senior Associate at Axcel Partners. The partners have placed immense trust in you
and offered you a portfolio fund to start off with to invest in the growing startup market in
India. Hopefully, at the end of this submission you will be made a partner at Axcel.
The various partners at Axcel have distinct goals, thus making Axcel the most successful and
diverse VC firm and a leader in the industry. Axcel funds companies from inception through the
growth stage. Founded in 1983, Axcel brings more than three decades of experience building
and supporting hundreds of companies across the globe. Axcel s vision for entrepreneurship
and business enable it to identify and invest in the companies that will be responsible for the
growth of next-generation industries. Key focus of Axcel remains early stage funding and they
wish to continue to be unique for their prospective partner companies.
The goals of the partners are listed below. While there may be specific goals from each startup,
these broad goals must not be sacrificed.
1. Naveen
a. Innovation
b. Growth Projections
2. Jeetu
a. Feasibility
b. Logical Consistency

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3. Mandal
a. Accountability of All Factors
b. Presentation
4. Yogi
a. Risk Undertaken
b. Returns Projected
Please identify Core Competencies and Core Problems for each selected firm.
The following aspects must necessarily covered:
1. Industry Justification
2. Firm Justification
3. Growth Projections
a. Future Cash Flows (simple guesstimate method)
b. Customer/Brand Value growth
4. Risk and Return Projections
a. Profitability
b. Sustainability
5. Change in Method of Doing Business after investing
(For example, changes made by VCs in Flipkarts Supply Chain Management)
Note: You can invest in only ONE start-up, but remember to do justice to each of
the goals. There are no monetary restrictions on the amount available for investment,
but investing in the most highly valued start-up does not guarantee success. Fulfillment
of the above-mentioned criteria and partner goals in the best possible way is of
paramount importance.
You have 6 startups that have been shortlisted by the team at your disposal, out of
which you need to choose one to invest in.
Try and make your case study as comprehensive as possible.
All the best!

Startups Available:
1.
2.
3.
4.
5.
6.

Grocers
Melu Cabs
Ozo Rooms
MobiQuick
UrbanSlap
Truly Sadly
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Grocers
Industry Type

Hyperlocal

Valuation (At last funding date)- $400 million

Funding Received
$
45.5M in 3 Rounds from 5 Investors
Most Recent Funding
$
35M Series B on April 14, 2015
Also in talks with SoftBank to raise $120 million for 20-30% stake. . Valued by them at $400 million.

Description
On-demand, hyper-local deliveries from local merchants to consumers. Everything from groceries to
cakes! Grocers currently operates in a total of 26 cities across India: Agra, Ahmedabad, Bengaluru,
Bhopal, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Delhi NCR, Hyderabad, Indore, Jaipur,
Kanpur, Kochi, Kolkata, Lucknow, Ludhiana, Mumbai, Mysuru, Nagpur, Nashik, Pune, Rajkot, Surat,
Vadodara and Visakhapatnam.
Axcel goals
30% stake for $100 million by valuing Grocers at $380 million. Along with this, 2 persons are to put
on the list of board of directors, which will include one active director.
Revenues and Profitability
Business model is based on charging commission from merchants. Grocers makes revenue via
commission from retailers. Grocery gives 7-8% margin while bakery offers over 20% margin as MRP
issue doesnt exist in the vertical. The company incurs loss in fruit and vegetable category given the
basketsize is small when compared to the above two verticals. At present the company processes
400-500 orders (Feb-March) through the mobile app (through consumer facing platform, not for
third party merchants) on a daily basis with an average basketsize of Rs. 800. GMV(Gross
Merchandise Value) on a daily basis-Rs.6 lakhs in April, 2015.
Competition
LocalBanya, BigBasket and Peppertap.

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Melu Cabs
Industry type Radio Taxi
Industry information Market Size And Market Growth Rate
Indias current taxi market comprises 600,000 cabs with combined yearly revenue of Rs 11,000 crore . According to
the Association of Radio Taxi India, the taxi business in the country is growing at 20-25% a year. The organised taxi
sector accounts for just 4-5% of the industry and totals $800 million. It is expected to grow to $7 billion by 2020.
Market Share:
Melu: 12% (dropped from 14% last year)
Ola+ TaxiForSure: 80%
Uber: 4%
Others: 4%
Funding Received till date: $120 Million Last Round Received: $50 Millions
Valuation: $400 Million
Description
Melu Cabs currently operates in 18 cities in the country including Delhi, Mumbai, Hyderabad, Bangalore, Jaipur,
Ahmedabad, Chennai, Vadodara, Surat, Pune, Kolkata, Chandigarh, Visakhapatnam, Bhubaneswar, Mysore,
Jodhpur, Udaipur and Indore and aims to expand to 25 cities by the end of this year.
Revenue Model
Unlike aggregators Ola and Uber, Melu has a dual operating model- it is both a taxi aggregator as well as a car
leaser. Melu owns around 50% out of its fleet of 20,000 cars. The driver takes care of the maintenance himself and
is a given a specially Made For Melu Car for which Melu has collaborated with Maruti Suzuki, Toyota and
Mahindra.
Melu now offers commuters a mobile app for bookings and nearly 60% of its bookings are being routed through its
mobile app. It has also introduced differential pricing on fares. While its regular service, Melu, which offers
commuters sedans, charges Rs 20 per km, Melu Genie, where one can opt for a hatchback, charges Rs 14 per km.
And because Melu has a radio taxi operator licence, it has no regulatory challenges.
The company which started back in 2007, reported its first profit in 2013-14, of Rs 3.6 crore. In 2012-13, it had a
loss of Rs 31.1 crore. As of March 2014, the accumulated loss was Rs 215 crore.
Axcel Goals

$100 million investment on guarantees of market leadership and exponential growth and sustainability
while making the most out of existing network and preventing losing drivers to competition aggregators.
Raise $100 million for expanding services and launching its ambitious Car Pool Service. A large part of it
would be used to acquire small to medium-size taxi service provider brands across India. The $100
million will be used for acquisition, expansion and development of our network. Consolidation at this
point in time is good for the industry.
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OZO Rooms
Industry Type Online Hospitality Industry (Budget Accommodation)
Funding Received: $125.65 Million Most Recent Funding: $ 100 Million Series B Funding (SoftBank)
Valuation: $300 Million
Industry Information Market Size and Market Growth
As per industry estimates, the budget accommodation space has nearly 1,00,000 accommodations and a
market size of 1 million room nights per day. Online hotel booking is set to become a $1.8 billion
industry in 2016. While only 29% of the users book hotels online at present, 83% of users who research
for hotels online are comfortable transacting online and do an online transaction once a month. Budget
accommodation has emerged as the most popular option for travelers in India with 49% users choosing
them. According to Google, 32% users book economy hotels and 19% users book luxury hotels. OZO
operates right there in the Budget and Economy Hotel Sub-sector.
Market Share
In the budget and economy segment, Yatra has the largest market share of about 22%, as per a study
conducted by AC Nielsen. OZO Rooms on the other hand is Indias largest network of technologyenabled budget hotels. Ozos founder, Ritesh, claims that OZO has about 90% share in the room
aggregator segment. OZO Rooms has 4,000 rooms in more than 350 hotels under its brand and over
100,000 loyal customer base. OZOs closest competitor, Zo Rooms, an initiative by Zostel (another very
popular young Indian startup) was founded only last year, and has quickly expanded to 35 cities. OZO
currently caters to over 15,000 rooms in 90 cities. With the fresh investment, the company is gunning
for 50,000 rooms across 100 cities by the current year-end.
BUSINESS MODEL:
You can call OZO an aggregator for budget hotels, just like Uber and Ola are for taxis.
It 'adopts' hotels in its fold, gets them to follow certain standards of services, features, staff, pricing,
security etc. and then sells their rooms under its own brand, for a certain cut. Currently, the company is
under the invest-and-expand mode, and has attracted two rounds of PE funding already.
OZO's traction and market coverage has swiftly increased because of being listed with travel aggregators
like MakeMyTrip, ClearTrip and Hotels.com. The Hospitality industry segment targeting small business
travelers and budget tourists is eminently swift-cash, and that works in favor of OZO because revenues,
too, get realized quicker.
From a single city in 2013 to five cities in December 2014 & from 20 cities in May 2015 to adding 43
more cities in July 2015, the company hit the 90 city mark in August 2015. Founded by Ritesh Aggarwal,
a Thiel Fellow when he was a college dropout at the age of 17, OZO has a similar model to the global
pioneer in bed and breakfast providers- AirBnb
Axcel Goals
$100+ million to increase profitability,add revenue streams and increase network.
While stake numbers remain negotiable around the 30% mark, becoming a
controlling stakeholder puts heavy risk on Axcel.
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MobiQuick
Industry : E Wallets
Funding Received
$
30.25M in 3 Rounds from 6 Investors
Most Recent Funding
$
25M Series B on April 8, 2015
Valuation
MobiQuick was valued at over $200 million on the last funding date. Today, it is valued at over $410
million as it boasts of a 17 million user base, adding over a million users every month. It lacks way
behind Paytm, which is valued at $4 billion in October. Paytm was valued at $1.5 Billion in January.
Started in 2009, MobiQuick is a digital wallet service with a turnover of close to $40 Million. MobiQuick
is the fastest way to recharge mobiles, pay bills and shop across merchants in India. The wallet powers
all transactions on the MobiQuick platform. Adding money to the wallet allows users to buy products
and services in one click across various channels Apps, Website, Mobile website, SMS or through a
phone call. MobiQuick powers bill payments for prepaid and post-paid mobiles, television, data cards,
broadband, landline phones, electricity, gas, insurance, etc.
Axcels Goals
Own a 8-10% stake in MobiQuick with a funding of $45 million. This money would help the desperate
MobiQuick to recover lost ground to Paytm which is now virtually seen as the sole market player. Not
only this, MobiQuick faces severe competition from Oxigen Wallet, Pay U money in the e-wallet
segment and Freecharge, Rechargeforyou in the top-up segment
Business Model
A user has to add money once to MobiQuick wallet and can then use it multiple times across functions,
services, and service providers. Storing money in MobiQuick wallet reduces the risk of exposing card
details or bank account details to multiple merchants when shopping online.
MobiQuick is one of the 40 odd applicants to apply for Payment Bank License which, once they receive
it, will turn their wallet into a savings account. It will enable users to earn interest on their wallet deposit
as well as allow them to make withdrawal from the ATMs. This will revolutionize the wallet service in
India.
Currently, every start-up in this foray is looking to burn their funding to draw customers and have a
sizeable user base. MobiQuick has around 60% active users, while the leader Paytm has around 75%.

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UrbanSlap
Industry Local Listings
Funding Received
$

11.6M in 2 Rounds from 6 Investors

Most Recent Funding

$

10M Series A on June 29, 2015

UrbanSlap helps you find the right service professionals for activities important to you. Whether you are looking to
decorate your home, get candid pictures of your wedding, get your doorbell repaired, plan your kids birthday or
get healthier, they are a sure shot destination for your service needs.
Their vision is to use technology and smart processes to structure the highly unorganized services market in India
and emerging markets. UrbanSlap aspires to make hiring a service professional as easy and straightforward as
eCommerce companies have made buying products.
Valuation
The startup is in advanced talks with Bessemer Venture Partners, an early backer of Skype and Pinterest, according
to two people aware of the developments. The deal is likely to give the company a pre-money valuation of $75
million
Revenue Model
UrbanSlap works on two simple models. For standardized, blue collared services like electricians or home cleaning,
where you just want the job done, you can directly book and pay for the service on their app. For white collared
services, which are the larger part of the business, like photographers, interior designers or yoga instructors,
UrbanSlap makes the effort to understand exactly what you need, and helps you hire the right professional, in your
budget, most suited to meet that need. This is done through an automated match-making algorithm, which the
team is investing heavily to continue perfecting. Currently serving 1500+ customer requests each day. Additionally,
they have a strong, engaged base of 5000+ suppliers, connected to our merchant app. With the new funding, they
plan to grow 10 times on every metric in the quarter. They are not looking at revenues and the sole focus of the
company is on creating value for our professionals and customers at the moment.
The business model is to charge professionals for the business UrbanSlap would generate for them but in a very
unique model tightly linked to the performance of the platform.
Competition
It competes with LocalOye, Taskbob, Housejoy and GoodService. An increasing number of services, startups are
aggregating handymen such as electricians and plumbers as well as caterers and tutors, stitching together a highly
fragmented market pegged at close to $100 billion.
Axcels Goals
Valuing UrbanSlap at $64 million with plans to lend $20 million for the same stake as proposed by Bessemer
Venture partners, no additional member will be appointed on the board as the board already has 4 Axcel
incubators.

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Truly Sadly
Industry Social and Dating platform for India & SE Asia
Funding Received
$
5.7M in 1 Round from 2 Investors
Most Recent Funding
$
5.7M Series A on March 3, 2015
TrulySadly is a new, modern way to find true, mad love. A platform that brings singles together based on
common interests and psychological matching.
Verified profiles - Think of it as a set up by friends. They wouldnt introduce you to random strangers on
the street, right? Nor do they. From authenticating ID proofs to social profiles and employment records,
theyll find you a really real match.
True compatibility - Its not about introducing two single people. Its about introducing the two right
single people. You tell us your what you like, what makes you laugh, angry and emotional. Once done,
theyll match you with someone who is made for you.
Safe and Discreet - Theyre like those friends who know how keep all information you share,
private.Your profile can only be viewed by the ones they sort out for you. And you can only be messaged
by those you have liked. No casual surfing, no spamming, no peeping tom business.
Valuation
Raised Rs. 35 crore in their first round of funding (Series A) from Helion Venture Partners and Kae
Capital at a valuation not disclosed on 3rd March, 2015. Sources said the firm was valued at $15 million
and stake given to VC firms was 10% and 25% respectively. Nothing official released by TrulySadly or the
VC partners. Truly Sadly had 200,000 Play store downloads when they received their last funding. The
startup claims that its app is growing 100 per cent month-on-month in terms of downloads, with 35 per
cent of its users being women. Currently, they have over 500,000 Google Play Store downloads.
Axcel Goals
Series B funding of $2.1 million with a 4% stake valuing the firm at $24 million. This will also
include one board of director who will be active.
Revenues and Profits
No discrete business model. TrulySadly plans of expanding and getting a healthy customer base.
The team is planning on building a freemium model where extra money will give you more
matches and extra added features. It also plans to earn via some smart product placement on
their app.
Competition
Tinder, Woo, Thrill, Desi Crush
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