Cab aggregator Ola is planning a UK foray by 2018, after having established its presence in Australia. Mobile payments platform Paytm is already present in Canada and South East Asia. Likewise, Zomato has been on an international juggernaut, with a presence in Turkey, Australia, Europe, the US and the Middle East.
Unicorns aside, a clutch of new-age start-ups are charting out global plans, as entrepreneurs believe it brings in a host of advantages.
We are aiming to be a global brand since the day of inception, says Leo Mavely, founder and CEO, Axio Biosolutions. He says overseas expansion helps a start-up to diversify assets and thus to protect themselves against unforeseen circumstances, “like offsetting a negative growth phase in one market by operating successfully in another.”
Moreover, an international presence also brings in more diversified revenues streams. “You might consider licensing your product or diversifying by selling complementary products or services based on the prevailing needs there. A possible partnership with an established partner can prove valuable, helping achieve growth,” says Ketan Patel, executive director and CEO, CASHe.
Entrepreneurs say as a start-up starts spreading its wings, it builds up a global brand identity and its success in different markets adds to its brand equity, both of which attract investments from top-notch fund houses.
“An international expansion exposes start-ups to lucrative investment opportunities and increases their network connections, which is important for growth and success,” says Mavely.
All of this ultimately plays a role helping a start-up attain unicorn status.
But overseas expansion is certainly not a cakewalk. Experts feel it is crucial for start-ups to figure out when to set foot overseas.
When you expand the business, you carry the impression built in the core market, says Adhil Shetty, co-founder and CEO, BankBazaar.com. “It is essential you build a solid foundation at home and ensure the business is stable before expanding abroad. You should also have a long-term financial plan to avoid pressurising your existing business to fund the new expansion.”
Start-ups often encounter multiple challenges while venturing abroad. Patel says the challenges start with acquiring regulatory approvals, understanding the tax codes and compliance issues in different economies, getting a feel of the data privacy rules in each country. Then, there are product/service related challenges such as localisation, creating new content, new data sources, trying to understand the local competition and marketing related expenses, says Patel.
PC Musthafa, founder and CEO, iD Fresh Food, says when they wanted to expand to the UAE, they needed to set up a manufacturing facility in that market since their products like dosa/idli batters have a short shelf life.
“It was not easy to establish a manufacturing facility as we needed to understand regulations and apply for approvals and certifications. This took time and investment and the project was delayed.” Musthafa says the company addressed the challenge by seeking local expertise and local advice.
According to Shetty, BankBazaar overcame its challenges by having an adaptable, scalable, automated business model that saved on time and costs. “We developed an adaptable modular platform that scales quickly, making integration with partner platforms simple, quick, hassle-free. This made expansion simpler and faster, as we were scaling up on a tried and tested infrastructure.”
BankBazaar, which embarked on its international expansion in 2016 through Singapore, is now present in Malaysia. “In FY18, Singapore and Malaysia contributed 10% of BankBazaar’s total revenues,” says Shetty, adding that international business will be crucial in their growth strategy, as they plan to expand into Philippines, UAE, Hong Kong and Australia.
For iD Fresh, 25% of total revenues are derived from their UAE operations. Musthafa says they will expand across the Middle East. The company also eyes Europe, South East Asia and the US for a trial run.
CASHe, meanwhile, is planning to enter Kenya, Brazil, Indonesia, and eventually the US. “We feel millennial demands are same regardless of the regions,” says Patel.
Axio Biosolutions has a presence in over 12 countries such as Indonesia, South Africa, UK and France. Mavely says there is a large market for their key product Axiostat, which is a first-aid dressing tool that stops bleeding at the interventional stage. “We will soon launch in the USA.”
BEYOND BORDERS
Unicorns aside, a clutch of new-age start-ups are charting out global plans, as entrepreneurs believe it brings in a host of advantages
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