FOR TWO-AND-A-HALF DECADES NOW, one company has participated in at least one of four big decisions in a person’s life: deciding on higher education, finding or changing a job, getting married, and buying a house. Founded by Sanjeev Bikhchandani in 1995, Info Edge (India) is the low-key parent of famous offspring such as job site Naukri, matrimonial portal Jeevansathi, education website Shiksha, and real estate listings portal 99acres.
One of India’s earliest Internet firms, Info Edge has come a long way from taking classifieds from newspapers and pasting them online in the late-’90s to make about ₹10 lakh-₹15 lakh a year. In fact, not even Bikhchandani had envisioned it would be valued at more than $4 billion one day. “I would love to say I had a vision, but it is completely untrue,” he tells Fortune India.
After all, the firm’s first site Naukri was only a job listing portal; it did not even have a résumé database till one of its competitors (JobsAhead, later acquired by Monster) launched a database product in 2002. Today, the résumé database accounts for more than 60% of Naukri’s revenue.
“We thought if we can get to a place where we have 1,000 companies every month paying us ₹500 each we will do ₹5 lakh a month and that will be ₹60 lakh sales in a year,” he recalls. Three years of that, and the company would have grown fivefold, he says. “And that would be success... it was a nifty, small idea.” The numbers were beyond expectations. “Right place, right time, work hard, and [we] got lucky.”
But it wasn’t just luck. Bikhchandani had seen potential in a classifieds website when there were just around 14,000 Internet accounts in the country and a few thousand users, he says, comparing that to the around 500 million users in India now, second only to China’s more than 800 million.
It became the definitive early mover in the Internet economy, taking other essentials such as matrimony (Jeevansathi, 1998), real estate (99acres, 2005), and education (Shiksha, 2008) online as India’s population started discovering the joys of a virtually connected world.
As the breadth of business has grown, so has the company’s fortunes. This year, Info Edge jumped to No. 51 on the Fortune India Next 500 list, from No. 124 a year ago. Shiksha, 99acres, and Jeevansathi are leading players in their respective segments, while Naukri is the clear No.1 in jobs, with about 66 million résumés and 5.3 million job listings, ahead of competitors Monster India, TimesJobs, and Shine. The jobs solutions business (including Naukri, Naukrigulf, Firstnaukri), as it stands, accounts for 70% of Info Edge’s overall revenue of ₹1,887.82 crore.
Sudheer Guntupalli, vice president and institutional research analyst-technology, staffing and exchanges at Motilal Oswal Financial Services, calls Naukri “a classic example of a networking effect playing out… as you have more recruiters on the platform, more applicants will be willing to put their résumé on it”, and so the cycle continues.
But as an early mover, Bikhchandani knows the downside of the treadmill. He is aware of the need to ride the wave of innovation and newer technologies that are disrupting a range of old industries. For that, Info Edge will leverage its advantage of two decades’ worth data, using artificial intelligence, data analytics, and machine learning to drive informed change through improved user experiences and new products. Also, Info Edge will continue its 12-year-long practice of investing in ideas with the ₹100-crore Info Edge Venture Fund, launched in January, to fund early-stage startups across categories.
This may be the first fund by Info Edge, but, as of June 2019, the company has invested ₹1,037 crore in 16 startups, including the likes of Zomato and PolicyBazaar. In fact, one of its most successful bets has been restaurant aggregator and food delivery platform Zomato. Bikhchandani, a foodie, had been using Foodiebay (rebranded Zomato only in 2010) with his son to try out new menus and restaurants. A subsequent conversation with founder Deepinder Goyal set the tone for a business association, and Bikhchandani made an initial investment of ₹4.5 crore. (Its investment till date is ₹152 crore, with about 22.7% stake.)
“I think it is important to look for early signs of natural traction. Zomato was getting traffic without advertising; that was a clear sign of natural traction,” Bikhchandani points out. In 2008, its investment in PolicyBazaar was also a buy-in into the idea by Bikhchandani. He was introduced to co-founder Yashish Dahiya by Info Edge CEO Hitesh Oberoi (the two were classmates at IIT Delhi and IIM Bangalore). The site hadn’t been launched yet, but a presentation by Dahiya was enough to convince Bikhchandani.
THE FOUR PILLARS OF INFO EDGE
1. CHAMPION: NAUKRI
STATS: The country’s largest employment website boasts about 67 million résumés and currently has 500,000 job listings on its platform; more than 60% of its revenue comes from fees it charges for access to its huge résumé database.
2. CHAMPION: 99ACRES
ARENA: REAL ESTATE
STATS: Founded in 2005, 99acres is also a leader in its category. As of December 31, 2019, the site had total listings of 1,004,378 properties. It competes with Magicbricks, Commonfloor, and Housing.
3. CHAMPION: JEEVANSATHI
STATS: The third-largest matrimonial site in India, after Bharat Matrimony and Shaadi. Online spends on the business,the firm says, are likely to grow to ₹1,100 crore-₹1,200 crore by FY23 from ₹700 crore-₹800 crore in FY20.
4. CHAMPION: SHIKSHA
STATS: The portal provides information on careers, examinations, colleges, and courses. It has information on 23,000 domestic colleges and more than 175,000 courses. It also lists1,844 colleges from 51 countries and 19,715 courses.
Besides the natural traction of the business, he considers the commitment, capability and integrity of founders, and good governance while deciding to invest in startups. The new fund, he says, will continue that practice. “We clearly look at how competitive the space is, how early are you in the space; if you are early... then there is a chance of success,” he says. The fund has already made investments in multi-channel broadcast network Qyuki Digital Media and Dot, a digital transformation platform for offline to online commerce.
INFO EDGE IS ONE OF SEVERAL organised backers of early-stage innovation in India. Recently, Wipro announced the closure of the $150-million Fund II, its second investment fund that will back early- to mid-stage enterprise software firms. Infosys had also launched an innovation fund a few years ago. “In the tech/Internet space, given the fluidity of business models, companies and promoters should be prepared to foresee disruption by small startups... you need to be prepared to spot any disruptive business model and to invest in those,” says Guntupalli.
Of course, some of the newer business models ask for cash burn to gain market share which is not how Bikhchandani—whose advice to startups is always to get customer money before investor money—“runs a business”, he says. “But when we invest in other companies we have got to live with that. It is not a preferred option for us, but there are all the other investors coming in alongside us who have larger pools of capital… it is not all going from our balance sheet,” the St. Stephen’s and IIM Ahmedabad grad says.
WITH ITS EXISTING PLATFORMS, Info Edge is hoping its focus on improving customer experience and innovation will help create new products and revenue streams. Take Naukri, for example. They had received customer complaints about the relevance of résumés that were getting matched to recruiters, as well as the jobs being matched to seekers, says Oberoi. This was because the company had a basic keyword matching feature. “Now, thanks to the advances in machine learning, data engineering, and data science, we are able to do a much better job on our algorithms,” he says.
Data will, in that sense, be a key driver across its platforms. Naukri Insights, still in its beta phase, will use data analytics to help recruiters with all such insights. “If a company is looking to start a new development centre, where should you open it? We can give the companies insight into availability of talent, skills, salary, educational institutes,” says Pawan Goyal, chief business officer of Naukri and Naukrigulf.com. Similarly, data from Shiksha will offer insights into where students are getting placed after graduating from college; 99acres, which has 10 years of data on the real estate market, will equip users with perspective for better decision-making and stronger negotiation powers.
“We are sitting on a gold mine in all verticals, and we have to figure out how to present this data in the right way to audiences, both on the enterprise side and on the seeker side,” says Oberoi. The one factor that can temper the buoyancy in the company is the current economic slowdown, especially since two of its big businesses—Naukri and 99acres—are based on sectors (jobs and real estate, respectively) that are most affected. But Oberoi stays optimistic and says they will keep investing in their businesses.
“There is a secular trend from offline to online, the number of Internet users is growing, mobile penetration is growing, the mobile economy is booming, and we don’t think a slowdown should last more than three to four quarters in India,” he says. In fact, the company still expects to grow at 10%-15%, a figure that might have touched 30% in a good economy. But Info Edge will take the wins as they come.
This story was published in the March 15-June14 special edition of the magazine.