It took Ratan Tata, chairman of Tata Trusts, to convince entrepreneurial couple Neha Singh and Abhishek Goyal’s parents that their children can make a viable career from a startup. When Singh and Goyal ditched their high-paying jobs to set up data analytics startup Tracxn in 2013, their parents couldn’t understand why. “There was pressure from our parents to get into jobs versus pursuing an entrepreneurial goal,” says Singh, a 33-year-old former venture capital investor.

Nevertheless, the husband-and-wife duo managed to sell their startup idea to angel investors such as Flipkart founders Sachin Bansal and Binny Bansal and Delhivery co-founder Sahil Barua, and raised Rs 1 crore in initial funding. But their parents still weren’t convinced—until Ratan Tata invested an undisclosed amount in the startup in 2016. “Our parents failed to understand what we were doing until we had funding from Ratan Tata. After Mr Tata’s investment, they realised that we were doing something interesting and worthwhile. Mr Tata is a big validation for our parents. They stopped worrying about us after that,” says Goyal, a 37-year-old former VC investor.

And they’ve had no reason to worry since. The Bengaluru-based company, which began as a startup tracker selling in - formation and data on new companies to venture capital (VC) firms, has raised $15 million so far across four funding rounds. Apart from Tata, Tracxn has attracted a string of marquee angel investors such as Infosys co-founder Nandan Nilekani; Ma - nipal Global Education chairman T.V. Mo - handas Pai; Neeraj Arora, vice president, WhatsApp; and Girish Mathrubootham, founder and CEO, Freshworks. Tracxn’s list of venture capital investors is equally impressive too: Sequoia Capital India, Accel, and SAIF Partners, among others.

Amit Somani, managing partner, Prime Venture Partners, a venture capital firm fo - cussed on early-stage startups, says Tracxn is now seen as a Bloomberg for private companies. “They help you find information of any nature for unlisted companies. Like Bengaluru alone has close to 5,000 companies in the technology-product space. Pan India, it could be about 20,000. For discovering startups, we found Tracxn to be an amazing product,” says Somani, a Tracxn customer for over two years. He also invested an undisclosed amount in the startup in 2016.

 Amit Somani,managing partner of VC firm Prime Venture Partners, describes Tracxn as an “amazing product”.
Amit Somani,managing partner of VC firm Prime Venture Partners, describes Tracxn as an “amazing product”.

Five years down the road, Tracxn tracks over half a million private companies, covering more than 250 sectors globally, including emerging technologies such as blockchain, robotics, artificial intelligence, and the Internet of Things (IoT). Its client list stretches from VC firms such as U.S.-based Andreessen Horowitz, New Enterprise Associates (NEA), and Light - speed Venture Partners to large global corporations including Airbus, LG, Toyota, Amazon, Philips, Citi, and Boston Consulting Group. Tracxn’s clientele is spread across 30 countries, including the U.S., Japan, Britain, Sweden, Australia, and Singapore. The startup employs over 600 people, including a 120-member analyst team tracking various sectors globally. “In simple terms, we track innovation globally. We work with more than 50 Fortune 500 companies worldwide,” says Singh.

Venture capitalists feel that Tracxn is “way more” than a database for startups today. “It provides a holistic picture of an entire sector including companies in that space, their financials, funding details, competitors and market potential. It provides both discovery and in-depth sectoral research. It is a digital product for customers in any country who are interested to do business in any geography,” says Somani.

The idea of setting up a data analytics firm was born while the couple was still working with venture capital firms. In their earlier avatars, Goyal was a former associate with Accel Partners (now Accel), while Singh was an investment analyst with Sequoia Capital. Their experience as former VC investors helped them spot the potential early. “The whole idea of Tracxn germinated while I was in Sequoia. As a VC investor when you look at investment in private and unlisted companies, you always look out for data. It could be company-specific, sector, vertical or geography. Every venture capitalist puts in so much effort to discover startups and there are so many waiting to be discovered. I wanted to solve that problem,” says Singh.

It wasn’t just her plan to build a startup discovery platform for the investor community; her husband had a similar plan as well. Goyal, too, did the groundwork for Tracxn on the job. His background as a software programmer turned VC investor was a big boon to Tracxn during its formative days.

“Both Neha and I had coded our own versions of this platform. We thought that the business idea is big enough to be implemented globally as the pain point that we were trying to solve is not restrict - ed to a particular geography,” says Goyal.

The husband-and-wife duo has strong academic prowess and a willingness to use what they have learnt. Growing up in Mumbai’s Bhabha Atomic Research Centre (BARC) colony, where her father was a nuclear scientist with BARC, Singh had an academically inclined upbringing. She studied computer science at IIT Bombay and topped her class in 2008. In college, she developed a knack for coding and even made it to the finals of Google’s annual coding competition in 2006. Starting her career as an associate with Boston Consulting Group in Mumbai, Singh joined Sequoia Capital in 2010. After two years, she left the VC firm to pursue an MBA at Stanford Graduate School of Business. While doing her MBA degree, Singh bagged a fellowship with U.S.-based Lightspeed Venture Partners, an early-stage VC firm, to incubate her idea at the firm’s U.S. office.

Goyal, born and brought up in Rajasthan, was very academically focussed, too. He graduated from IIT Kanpur in 2002 with a degree in computer science. He worked for a few years as a software programmer with Yahoo and Amazon in India. In 2008, Goyal joined Accel and eventually left the VC firm in 2010 to start his own venture, an online beauty products and fashion store called Urban Touch. But he ran out of cash in two years and had to sell his first startup to online fashion portal FashionAndYou for an estimated $30 million.

The couple credit their understanding of business fundamentals and building a company with a sharp focus on customers to their learning stints with VC firms. “Today, if an auto company is planning to launch a smart car and wants to track all the startups and innovation in the machine learning space globally, we help them understand that through our research, data, and analysis. Similarly, we help a food company track innovation in the food business and understand the market dynamics,” says Singh.

But what about data accuracy? Goyal says they have stringent systems in place: “We have an internal multi-layered review process and checking method to scan all the data. We use human curation followed by technical checks to ensure that any error is not repeated. Our insights are not opinions, but based on facts.”

The U.S. is Tracxn’s largest market, accounting for about 50% of overall revenue while India makes up an estimated 25% of business. It works with more than 50 venture capital funds in India, besides companies such as Airtel and Dr Reddy’s Laboratories.

Tracxn uses a subscription-based revenue model. It typically charges an annual subscription fee of about $20,000 for a single account. “When we start working with a company, we end up selling about two-three accounts. Like LG’s South Korea office will be buying our service, simultaneously LG’s technology office in the Bay area would also subscribe to us separately,” says Goyal.

 Mukul Singhal, co-founder and partner, Pravega Ventures, is confident of the scalability of Tracxn’s business model.
Mukul Singhal, co-founder and partner, Pravega Ventures, is confident of the scalability of Tracxn’s business model.

At an enterprise level, Tracxn usually sells subscriptions at $50,000-$100,000 annually, and has 41,500 paid users, up from 7,000 two years ago. Singh says the subscription-based revenue model helps cut down cash burn. “On a monthly basis, our loss is pretty less. If we continue at the same pace, we can expect to be profitable by the end of 2019.” The startup, however, didn’t disclose its revenues.

Tracxn has managed to garner investor interest, but the extent of growth hinges on the scalability of the business model. Mukul Singhal, co-founder and partner, Pravega Ventures, an early-stage fund, is confident. “It can become a billion dollar business. New company creation is globally exploding. And unlike listed companies, there is no uniform structured way of putting private company data across countries. Tracxn has the opportunity to become a leader in this space,” says Singhal.

Singh and Goyal are aware of increasing competition: Tracxn competes with big names like New York-based data and analytics firm CB Insight and San Francisco-based Crunchbase. With a well-planned strategy and funding in place, the husband and-wife team is ready to take on the competition. “Our key focus is to strengthen the knowledge base and data points across sectors and companies and keep ramping up the business across geography. Distribution can scale up easily. That’s not a concern. But making our research and data more robust is key,” says Goyal.

Their customers and investors are convinced. And perhaps in the biggest win of all, their parents are convinced too.

(The article was originally published in 15 March-14 June special issue of the magazine.)

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