With the emergence of e-commerce in the consumer segment, online channel has become a priority for the majority of SMEs in the past couple of years. While 2011-13 period in B2B was largely dominated by the likes of JustDial and Indiamart, NowFloats has been ruling the segment since then.
NowFloats began its journey in 2012 and used to enable websites for manufacturers through SMS. Six years down the lane, the Hyderabad-based company has come a long way in terms of scale, revenue and impact. Started as a horizontal platform, NowFloats has gradually been embracing vertical approach.
Besides manufacturing, it enables as well as manages SMEs in verticals such as hotels and education. It also equips doctors with website and apps.
Since its inception, NowFloats claims to give online wing to over 1,30,000 businesses. “About 35,000 merchants have paid us in the last six years,” says Jasminder Gulati, Co-Founder, and CEO NowFloats. It has brought about 17,000 business online alone in 2017.
Evolution of an idea of enabling online channel for SMEs
“We started with a purpose to bring SMEs online in a true sense,” explains Gulati. At the time when NowFloats started, online was not the need of the hour for SMEs. For B2B merchants, online activity was limited to mere listing on Indiamart and JustDial. Sensing a major gap, the company started selling website on the fly.
During that period, people compared us to the aforementioned companies. “Two years later, observers including media had drawn resemblance with Google, Facebook, and Capillary. The narrative around our product and comparison kept changing while we continue to find the pot of opportunities at bottom of the pyramid (SMEs),” adds Gulati.
When asked about what has changed as far as acceptance of technology amongst small merchants, Gulati explains, “First, the hunger for technology has taken a leap. With a spurt in usages of WhatsApp and Jio, merchants now understand various aspects of technology. Secondly, the whole narrative around tech has changed completely.”
Explaining the change in narrative, he outlines that merchants don’t consider having a website or app is all about tech. With younger generations taking over family-run businesses, understanding capabilities of technology has surged.
Initially, customer acquisition was a massive challenge for NowFloats. “However, over the past couple of years, the top challenges are distribution and maintaining growth momentum,” says Gulati.
More than half of NowFloats volume comes from non-Metros
About 56 per cent of the businesses come from tier II and III cities. Pointing out the trend, Gulati says, “Cities such as Baroda, Cochin, Coimbatore, Jaipur, and Indore contribute maximum business for us.”
Besides aforementioned verticals, NowFloats recently started education segment to tap coaching institutes. It has kicked-off the segment by setting up a base in Kota (mecca for engineering coaching institutes).
“We’re also planning to launch a separate vertical for jewellery,” he adds.
Presently, it has two subscription plans at price-point of Rs 25,000 and Rs 50,000. A large volume of revenue hail from manufacturing followed by hotels and clinics(Doctors).
Maintaining growth of 200% YoY
The Blume Ventures-backed company claims to have recorded growth of about 245 per cent in FY18 over the previous financial year.
“As per our internal projections, we will grow in the range of 170 to 190 per cent in the current fiscal,” emphasises Gulati. While he didn’t share any revenue figure for last FY, Gulati hints that the company is fast approaching to achieve Rs 10 crore Accounting Run Rate (ARR) on a monthly basis.
Unlike a majority of startups, NowFloats has a massive team of 900 people. When asked, how he manages such large team, Gulati gives all credit to Slack and WhatsApp. “Power of Slack and WhatsApp make people management effortless,” says Gulati.
Funding and future pipeline
Recently, NowFloats had raised about Rs 14.36 crore along with $10 million Series B round from Iron Pillar and IIFL (Seed Ventures Fund I & Cash Opportunities Fund), Omidyar and Blume Ventures.
“In future, we are focusing on 5 verticals including jewellery and education. Before making entry into any new vertical we analyse several factors such as possible scale and maturity of the segment,” concludes Gulati.