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Cool Companies
[August 14, 2006]

Cool Companies


(Business Today (India) Via Thomson Dialog NewsEdge) For a four-letter slang, cool is notoriously hard to get a handle on. There are myriad definitions of the word, but none that captures its meaning in its entirety. But here's the thing: When something's cool, you just know it. Finding cool companies, however, is a slightly more complicated task. For, cool isn't about, say, having a zanily done up office cafeteria, mischievously named conference rooms, or unconventional designations. Cool, when applied to businesses, boils down to two things: What you do, and how you do it. It doesn't matter whether you are big or small, old or new, listed or privately-held, profitable or loss-making. What does is that you must be onto something cool-and, for this listing, be Indian-owned. To compile this year's list of Cool Companies, BT spoke with venture capitalists, analysts, industry experts and seasoned managers. The final compilation is as interesting as it is varied. In the pages that follow, you will find a health-meal firm launched by an IIT-IIM alumnus in response to his own quest for calorie-counted meals; a former MIT fellow and acknowledged innovator passionate about electronics, pushing the boundaries in digital signal processing; a three-month-old start-up coming up with a simple, but innovative solution to make mobile commerce work; and a 74-year-old home-grown fitness brand gearing up to give its global competitor a run for its money.



Needless to say, there were many other nominees that bt considered. But when put through our test for innovativeness and spunk, only 10 held up without any effort. Take a look:

Bringing Web to Life


Interactive marketing on the net gets interesting, thanks to this young firm.

Seven years ago, when Sidharth Rao and Sudesh Samaria teamed up to launch Webchutney Studio, they had two computers, a basement office and a rough idea of networking ("we just about connected the two PCs to share files"). Today, the Delhi-based Webchutney employs more than 50 people (most in their early 20s), counts HSBC, Microsoft and ICICI Bank among its customers, and claims to be the only independent "total solutions" web advertising firm, offering everything from interactive marketing to web analytics.

Webchutney has at least two things going for it. As an early bird in the internet space, it has a headstart over competitors, most of whom are divisions within big agencies. Secondly, since internet advertising in India is a relatively small Rs 200 crore-a-year market, the bigger agencies aren't as serious about it. But that's not the reason why clients pick Webchutney. "Webchutney is very innovative in online marketing," says ICICI Bank's Deputy General Manager, Naren Chandra. It is a creative hotshop in its own right. At this year's Abby Awards, for instance, Webchutney bagged both gold and silver for a viral marketing campaign it developed for makemytrip.com. Sure, none of the nine top agencies entered the awards this year, but ask people at the travel portal and they will tell you that the four-part viral campaign (two of them based on the Ramayana) more than deserved the awards. "The campaign was seen by at least 55,000 people," says Sachin Bhatia, Co-founder, makemytrip.com. Such good work has kept Webchutney humming at 200 per cent growth year-on-year. Is that cool or what?

-Aman Malik

The Gold's Gym Wannabe

It is India's only fitness chain, with ambitions of becoming a national player.

Question: how old do you think is the man in the picture? 50, 55, 60, 65? Even if you picked 65, you are eight years off the mark. For, Madhukar Talwalkar, Chairman of the Mumbai-based Talwalkars Better Value Private Ltd, is just a year younger than the fitness chain his father founded way back in 1932. So, that's the first cool thing about Talwalkars. The other cool thing, and the reason why it figures on this list, is that it is India's only fitness chain, with Rs 50 crore in annual revenues. In other words, it is India's answer to Gold's Gym, the iconic fitness brand in the US, made popular by the Arnold Schwarzenegger-starrer, Pumping Iron. (Incidentally, Gold's Gym has also entered India and has 10 centres in seven cities, including Mumbai and Bangalore.)

Since 1992, which was when it first expanded out of Mumbai, Talwalkars has opened 38 gyms across 13 cities, but has plans of operating at least 100 by 2010. In addition to that, the fitness chain has a tie-up with Kishore Biyani's Future Group to operate gyms out of malls. "We might also have a different brand, we are still planning how to exactly go about it," says Talwalkar, who studied to be a textile engineer, but ended up running the family business.

Even with 100 gyms, Talwalkars wouldn't have scratched the surface of the fitness market. In cities such as Delhi and Mumbai, only 5 per cent of the population engages in any sort of fitness activity. Also, unlike malls, gyms need to be located within a radius of two-to-three km. So, there's plenty of room for Talwalkars to grow. "People are slowly realising that to stay healthy and live longer, they need to work out. And that's where we fit in," says Talwalkar. No pun intended.

-Kushan Mitra

Cellular Banker

A mobile payment solution that works.

It's less than three months old and makes almost no money. So why is Mumbai-based Paymate on this list at all? Simply because it has come up with a mobile payment solution that actually works. "Paymate is a consumer wireless brand," quips Managing Director Ajay Adiseshann, who spun out the company from CoruscantTec, a similar company he and Probir Roy co-founded in 2003, to facilitate investment by Ram Shriram's Sherpalo Ventures and KPCB (Kleiner Perkins Caufield & Byers), a top Silicon Valley-based tech venture firm.

How does Paymate's mobile commerce solution work? It's fairly uncomplicated. To start with, the mobile phone subscriber needs to register with a bank (currently only Citibank), and then get a personal identification number (pin) provided by EuroNext, a global financial transaction services company. To make a payment for an online purchase (at present this facility is limited to a handful of websites, including Rediff, Naukri and Cleartrip), the user needs to send an SMS to 7333 with the amount and pin. After verification of the pin, the transaction is approved and a confirmation message is sent to the subscriber. And voila, mobile commerce is enabled at the cost of one premium SMS, or Rs 2. "We want to be the Visa and MasterCard of the mobile world," says Adiseshann, adding that the plan is to facilitate mobile payments at physical outlets and also mobile-to-mobile fund transfers. "I first heard of what Ajay and Probir were doing in March, and I decided to check it out. It did not take us too long to decide to put money in them," says Sandeep Murthy, Partner, Sherpalo and India representative of KPCB, both of which have put a total of $5 million (Rs 23.5 crore) in Paymate. Adiseshann, though, is under no illusion. He admits it will take at least three years to get people to transact via their mobile phones. But he's equally clear that it's the future. We agree.

-Kushan Mitra

Innovators Inc.

At Signion, R&D is all about cutting-edge innovations.

In an industrial estate dotted with chemical and pharma units, it sticks out for its sheer oddity. But truth be told, the windmill towering over the Hyderabad-based Signion Systems' one-acre campus is more a symbol of the company's innovative spirit than the source of its power supply. Founded in 1987 by Sriram Jayasimha soon after he returned from the US, Signion's core strengths are in digital signal processing, algorithms and software. Over the years, Signion has delivered a wide range of products, or applications as Jayasimha calls them, such as energy meters, satellite modems, and mpeg video codec to customers as varied as Analog Devices, c-dot and Azonix Corporation. In fact, six of Jayasimha's inventions have got us patents.

How does 16-engineer Signion go about identifying its R&D projects? It largely emanates from perceived needs of industry. For example, the company did not have customer orders when it built the energy meters, but had no trouble licensing them to Analog Devices since there was a clear need. "The key differentiator in our case is that the decision-maker and the financier is the same," quips Jayasimha, an electrical engineer from IIT Madras and former fellow of the Massachusetts Institute of Technology. The flipside to Signion's focus on high-end R&D is that its revenues tend to be lumpy. In 2005, it clocked Rs 2 crore-the most it has ever made. But Jayasimha, who's authored more than 35 papers on electronics, isn't worried about the financials. "There is an excitement that comes with encapsulating a technology in a physical device," he says. It may be a romantic notion, but so what?

-E. Kumar Sharma

Blue Pencil and More

A design and editing shop that believes in content transformation.

In the $400-million (Rs 1,880-crore) Indian market for outsourced content design and editing, Eon PreMedia is a minnow, but an ambitious minnow. Set up in 2003 by former Himalayan Water CEO, Suveen Sahib, with a seed capital of $250,000 (Rs 1.18 crore then) and a staff of five, Eon already boasts customers such as the Pearson Group, Naylor and Publicis. Its current revenues are relatively small (it will touch $1.5 million, or Rs 7 crore by March 2007), but it has plans of touching $50 million (Rs 235 crore) by 2010. By then the overall market should have expanded to $1 billion (Rs 4,700 crore). "The company aims to evolve into a content transformation specialist with ability to bring down production costs for customers by 30-40 per cent, while structuring and delivering content seamlessly across print, web and cellular interfaces," says Sahib.

The company, which claims to be the only end-to-end production house in the country, has a production facility in NOIDA and marketing offices in the US and London. Although Sahib, an alumnus of Indian Institute of Foreign Trade, comes from an FMCG industry (prior to Himalayan, he was with Danone Waters, South Asia), he has put together a top-notch team from the IT/BPO industry. For instance, Karan Puri, Director, was the Head (Global Delivery) at igate before joining Eon, and Rita Kaul, Vice President (Operations), was the workflow and quality manager at another major production house, Techbooks, in the US. Although Sahib wouldn't tell, the buzz is Eon is planning to tie up with a global advertising conglomerate for greater access to the European and us publishing markets. It is also in talks to acquire a high-end media services company in the US. If Sahib's plans pan out, he may have big venture investors making a beeline to his NOIDA office.

-Pallavi Srivastava

Virtual Tutor

When American kids have a math problem, they call up India.

At around 5 o'clock every evening, Lalitha Venkatesan, a 60-something grandmother in Bangalore with 25 years of teaching experience, takes a break from her daily chores to begin her tuitions. However, unlike those of other tutors, her pupils are nowhere to be seen. Instead, Venkatesan logs on to the internet and gets set to take a virtual class in mathematics or English for her American students thousands of miles away. Welcome to the future of tutoring in the US. And creating this future is K. Ganesh, CEO of TutorVista. "American children require extra tutoring, but since it costs $40-60 (Rs 1,880-2,820) an hour, many of them are unable to get it," says Ganesh, a serial entrepreneur who sold his BPO company CustomerAsset to ICICI OneSource in May 2002 for $19.3 million (Rs 94.57 crore then).

TutorVista's business model is simple. It offers its clients (ranging from school kids to middle-aged executives) a one-time $100 (Rs 4,700) subscription package for unlimited tutorials. And its 'faculty', like Venkatesan, is scattered around the country, from Visakhapatnam to Varanasi, and each works from his or her home or a cyber cafe, accessing a secure online e-learning module to teach the students. (A couple of tutors are even located overseas.) That means, except its 25-person software centre, TutorVista, which raised $2 million (Rs 9.4 crore) from Sequoia Capital India earlier this year, has no overheads. In the months to come, Ganesh wants to both expand his geographical reach to the Far East and offer more subjects such as Mandarin and Spanish. "We believe that TutorVista will usher in the next b2c (business-to-consumer) wave in this industry," says Ganesh. At this point, it seems hard to disagree with him.

-Rahul Sachitanand

Meals by the Count

When good food turns better.

How are cool ideas born? Somewhat like this: It's any other day at work, and you are on your lunch break, cursing the unhealthy food you are eating. Then you think, 'what if someone could supply a clean and healthy calorie-counted meal?' Then you think again: 'Why can't that someone be me?' That's precisely how Cyrus Driver, an alumnus of IIT Bombay and IIM Ahmedabad, came up with the concept of Calorie Care. That was two years ago. Today, his year-old firm, set up with Driver's savings of under a crore of rupees accumulated during his stint with Chase Manhattan in Singapore, serves more than 200 customers a day, including D-street executives, small business owners, housewives and gym-goers. "The idea was to make it convenient, fun and easy for the urban Indian to be healthy," says Driver, who was only 28 when the idea struck him.

At Rs 3,500 a month for a vegetarian lunch and two snacks, the cost of Calorie Care's food is almost 70 per cent more than that of local vendors of Mumbai, but customers aren't complaining. When someone calls Calorie Care, they are first put in touch with the dieticians to work out a plan that is suitable and enjoyable. Nutritionist Lisa John (the Indian cricket team consults her too) has put together about 150 recipes of Indian, Chinese and Continental cuisines with permutations of calorie intake in both vegetarian and non-vegetarian combinations for different diet objectives. "What reaches the client is food that is weighed to the gram, counted to the calorie, with details of protein, fibre and carbs intake, in microwavable containers," says Driver, a good five kg down since he started eating the meals cooked by Calorie Care. The good news: Driver plans to hit Delhi and Bangalore next.

-Shivani Lath

The Game Gets Bigger

India's oldest games publisher still gets it.

It was a chance encounter at an Intel Developers Conference that led a multimedia company towards video games. But since that fateful day in 1997, K. Rajesh Rao's Dhruva Interactive has emerged as India's biggest and best-known games publisher. In the last four years alone, Dhruva has contributed to 10 blockbuster games, including Mission Impossible, Terminator 3: Rise of the Machines, and the toca Pro Race Driver series. But what's cool about the Bangalore-based Dhruva is that instead of putting all its energies into chasing the intensively competitive global market (they do work for it, to be sure), it is tapping opportunities in the burgeoning Indian market. While the 100-person Dhruva develops games across devices (PCs, consoles and mobile phones), it picks its markets carefully. A key part of Rao's strategy is to look beyond conventional gamers to the bottom of the gaming pyramid, especially those who are just finding their feet on the internet. "There is a huge market out there that is looking for 10 minutes of (mobile) entertainment between meetings or at lunch," says Rao.

-Rahul Sachitanand

Seeds of Prosperity

Crop technology firm for Indian farmers.

There are some 600 million people in India who depend on agriculture for their livelihood, and yet there are just half-a-dozen large organised seed companies (but dozens of smaller ones). The problem: Global seed technology companies such as Monsanto only focus on crops that have a global market. But a Bangalore-based agri-biotech start-up, Metahelix, plans to change the scenario. "We feel there is a latent market in India itself and modified seeds are a potent technology option to break the productivity and quality barriers in crops such as rice, cotton and tomato," says CEO K. K. Narayanan, who in his previous avatar was a senior scientist with Monsanto India.

Metahelix started off with $1.5 million (Rs 7.05 crore then) angel funding from (former Infosys Vice Chairman) N.S. Raghavan, and initially focussed on contract research. It was only recently that it moved to develop its own strains of rice and cotton. "We had to first generate funds to back our research," says Narayanan, who did his post-doctoral work at Stanford on a Rockefeller fellowship. Currently, Metahelix is conducting field tests in 18 locations for its own strain variant of Bt Cotton. That apart, it has its own seed marketing company, Dhaanya, for reaching geneticaly modified (GM) seeds to farmers.

The track record of gm seeds such as Bt cotton has been mixed, but Narayanan believes that with world population growing faster than crop productivity, genetic engineering is the way to go. "We are trying to tilt the scales in favour of the farmers," says Narayanan. At least, that is the hope.

-Rahul Sachitanand

People Business

Cross-culture training for global Indian.

Before tech companies ship out their young executives for stints abroad, they usually send them over to Ranjini Manian's. As a cross-culture trainer of 11 years, Manian runs Chennai-based Global Adjustments, which trains people in the ways and etiquettes of people elsewhere. Similarly, when an expat lands in Chennai, he's more likely to rope in Manian as his guide to the local milieu. Over the last three years, though, Manian has been getting a large number of Indians, working in India. Why? As more and more foreign companies set up shop in the country, they find that cultural differences often lead to misunderstanding. For instance, when a German manager says, notes Manian, 'I didn't like what you said', he does not mean that he doesn't like you. Similarly, an American manager briefing his Indian colleagues may be shocked to find out later that although they had doubts, no one asked him questions out of respect. "The global Indian has until 2010 to get familiar with the ways of the world outside," says Manian, "because China is training its people at a war footing." Manian should know. China's also tapping her for such training.

-Nitya Varadarajan

ARE THEY STILL COOL?

Here's taking stock of the 10 cool companies of last year.

Astra Microwave Products

The company continued to build on its defence and space capabilities in the supply of components and sub-systems for wireless communication in the microwave frequency range. Its revenues increased from Rs 65 crore in 2004-05 to Rs 102 crore in 2005-06, and net profits rose to Rs 37 crore from Rs 17 crore.

Encore Software

This Bangalore-based innovator of low-cost computing continued to make losses, but not as much as the year before (Rs 4.7 crore versus Rs 5.4 crore in 2004-05). But the topline surged an impressive 76 per cent to Rs 6.3 crore. Happily for the Simputer company, its handheld computers are beginning to find more buyers. The Delhi Police plans to order 100 Simputers.

Hidesign

India's best-known leather goods company continued to grow-from 28 stores locally to 35, and from eight to 11 abroad, with plans of increasing the count to 42 and 17, respectively. Hidesign's retail sales, estimated at Rs 320 crore, are expected to grow 25 per cent in 2006-07. Meanwhile, the Bangalore-headquartered firm has launched an Alberto Ciaschini-designed luxury line called Hidesign Couture.

Phat Phish Productions

After a personal setback last year that resulted in no work for nearly seven months, Anand Surapur, Founder of Phat Phish Productions, is back with a bang. This year, his focus is on releasing four films: A Fakir in Venice, Love is Blind, Quick Gun Murugan and Maut ka Kuan. On the music front, the company is set to launch seven new artists this year.

Pinstorm

The Mahesh Murthy-promoted search engine-driven marketing firm closed 2005-06 with revenues of Rs 4.4 crore. "We should be closing the current financial year with a five-fold increase in revenues to about Rs 22 crore," says Murthy, adding that last year was like "riding a thunderstorm". Pinstorm's future could just be as exciting.

ReaMetrix

Last month, Bala Manian's biotech contract research firm struck a deal with the us-based Illumina Inc. to co-develop molecular diagnostic panels for a range of disease areas. The pact gives ReaMetrix non-exclusive rights to market the resulting panels to companies in India. The three-year-old company has a stated goal of becoming the leading provider of easy-to-use assay solutions.

Reva Electric Car Company

India's only electric car manufacturer retained its distinction, and managed to sell 1,500 cars in India and 550 in London alone last year. Over the last six months, Reva has forayed into newer markets such as Norway, Spain, Greece, Italy and Cyprus. Coming up: A four-seater and a hard-top convertible for the Indian roads.

SatNav Technologies

Its SatGuide, an in-vehicle navigation device, which last year was launched in three cities (Hyderabad, Delhi and Mumbai), has now been taken to three others: Pune, Chennai and Bangalore. Earlier, the goal was to extend to 10 cities. "Instead of just adding cities, we opted to focus on higher coverage within each city," says CEO Amit Kishore Prasad. Revenues are up from Rs 66 lakh to Rs 2.08 crore.

Sula Wines

Against its own practice of launching one new brand a year, Sula Wines launched three this year-the country's first dessert wine Late Harvest Chenin Blanc, a red wine Sula Red Zinfandel and the Indian Dindori. With revenues of Rs 20.25 crore, the company also launched the first of the promised wine bars across the country, Tasting Room, in Mumbai.

TeamLease

TeamLease not only managed to double its revenues to Rs 250 crore last year, but hopes to top Rs 500 crore in 2006-07. The firm, which provides temporary staff to companies, has nearly 50,000 employees on its payrolls and plans to continue the hiring spree until it reaches a figure of 90,000 by March 2007-the largest of any private sector employer.

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