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Indian VCs Not Too Keen To Fund Risky Ventures: Jay Meattle, Founder & CEO, Shareaholic

Content sharing site Shareaholic, run by Boston and New Delhi-based Shareaholic, Inc., claims to have around 270 million unique users a month from all over the globe. And nearly two million people have downloaded Shareaholic’s browser plug-in, which enables content-sharing via Facebook, Pinterest, Twitter, Google+, Tumblr or even the traditional e-mail. More than 200,000 websites use Shareaholic tools and all these statistics make it one of the largest networks of long-tail site owners. The company raised $2 million in a seed round funding from a group of investors, including General Catalyst Partners, NextView Ventures, Dave McClure of 500 Startups, Nicole Stata of Boston Seed Capital, Edward Roberts of MIT, Dharmesh Shah of HubSpot and others.

Jay Meattle, the founder and CEO of Shareaholic, speaks to Techcircle.in on the business of sharing and what’s hot in this space. He also comments on the recent Instagram acquisition and why India doesn’t give the world a Pinterest, a Facebook or any such innovation. Meattle has also co-founded POPSignal, a platform designed to enable communities to highlight and celebrate local area technology startups, entrepreneurs and professionals – both offline and online. Here are the interview excerpts.

Please tell us more about Shareaholic. How did you start it and what was the response?

We are basically a traffic intersection point between publishers, advertisers and social networking sites and that is why it makes sense for them to integrate us. I started Shareaholic back in 2008 as a side project and soon it became really big. Of course, I had a full-time job at that time. But when it became really popular, I gathered my people and we pondered on the idea whether we could make an independent company out of it. And when we actually crossed the 100 million-users mark, I committed myself full time to the project.

How much capital did you put in initially?

Well, initially all I put in was my time but it started burgeoning. At the time we crossed the 100 million mark, we raised some angel funding from a few people we knew. It was around $355,000 and those investors are still with us.

You have recently raised a second round of funding. How has it been utilised? And when would you start looking for fresh funds again?

Well, we have raised around $2 million from a slew of investors and the capital is mostly used for product development. But we are not looking for the next round of funding right now. We have never planned our fundraising beforehand and we are not doing it now either.

What’s the market for Shareaholic in India?

Well, these are early days for sure but even then, 10 per cent of our users are from India. It’s a nascent market though, due to the Internet usage habits and patterns. So it will take some time to grow here. But we are very optimistic. As more and more people come online, sharing will become popular as it is an essential part of online activities.

What are the current trends in terms of online sharing?

Well, anything worth sharing gets shared and it’s bound to continue! These days, people are also sharing a large number of videos. In India, e-mail sharing is still very popular apart from Facebook.

So what will be new from Shareaholic for the Indian market? Do you have any plan to go mobile?

We have a user base of 270 million worldwide and our product is out there for anyone to use. I don’t think we will do any customisation for the Indian market. But yes, we do want to spread our reach here. Our site is already mobile-optimised, so that mobile users can easily access it. As for smartphone apps, we might launch one in the next 12 months or so.

What do you think of Facebook’s acquisition of Instagram? Would Shareaholic tread the same path?

In my opinion, Facebook needed it. It has always been weak in the mobile domain and the acquisition of the photo-sharing app makes sense for the company. As for Instagram, maybe it’s the best for them as well.

At any point of time, Shareaholic will also do whatever is best for our investors. But one can’t plan these things. In Instagram also, they got the acquisition offer just a week after their funding. So you see that they didn’t plan for it.

How do you plan to market your product?

We have never spent a single rupee on marketing. All our popularity comes from word-of-mouth publicity. In fact, Google, Firefox and Microsoft have been very generous in popularising our product, which is only because they are happy with us. There was a time when Microsoft manufactured millions of computers with Shareaholic pre-installed in those. In India, we plan to push our product and integrate with more publishers and websites. We also want to expand our 4-member India team.

If the latest buzz is Instagram or Pinterest (it can be even Shareaholic) – why doesn’t it happen in India?

I am not following the Indian community that closely but I feel that Indian VCs are not very open to the idea of funding risky ventures or ventures which have not come up with a guaranteed revenue model. In the USA, an entrepreneur is initially asked about the users and the market. How money will be made out of that venture is discussed later. But here, they want everything in place beforehand – the business model, customers, revenue, etc. That is the basic difference and once it is taken care of, same things will start happening in India. I am quite sure that there are a lot many innovators here; they only need proper handholding from investors to make it big.

8 Comments

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dave mcclure April 14, 2012 9:56

hopefully things are changing… seems like at least a few Indian VCs are ready to take more risk, and the talent is certainly there. it would be a shame if Indian founders don’t get backing from their own community.

let’s make it happen! Indian VCs go for it!!!

DMC

Jeet Palavwala April 14, 2012 10:47

Amazing article. I am so happy to an Indian diamond getting sparkle in Boston.
Keep going on.
Jeet

Anon April 14, 2012 12:42

“At any point of time, Shareahloic will also do whatever is best for our investors”
Perhaps there is more to this statement but the way it is presented it shows that this company cares more about investor interests than the users – without whom there would be no company and no success to speak of.
Any other discussion on views presented in this interview dont compare to what this attitude reveals about their motivations.

Vivek Sinha April 14, 2012 13:13

A good chunk of VCs and early stage investors in India are actually part of global VC firms. Is it true that even they turn risk averse in India?

Jay Meattle April 14, 2012 13:28

@anon was misquoted in the article, and sometimes easy to do so when taken out of context  –  reality is that – we *always* do what is best for our *stakeholders*.  Stakeholders, in order of how we prioritize at Shareaholic are first and foremost our users, then employees, then investors. That said I really dont think we would be where we are today in terms of growth without maniacal focus and prioritization of our users and our 100% organic growth is probably a good reflection of that.  Hope this clarifies!

Nikunj Bubna April 14, 2012 17:02

Congrats Jay, will cheer you along the way. And completely agree with you and empathise that it would be great if even Indian investors think global, think big and get past this ‘Ramgad’ syndrome. Just imagine a guy born and brought up in Ramgad village tries to be well-read, challenge his circumstances and indigeneously develops an excellent product/ service (at the right price point) targeted for larger metro markets like Mumbai.. His fellow villagers will continue seeing him with great skepticism even if that guy manages to see initial traction in 1 metro. On the contrary, even bozos from Mumbai selling average product to Ramgad residents will have halo effect surrounding them and those villagers will be absolutely sure about the wide-spread success of that product.

Same thing seems to be happening with India as ‘Ramgad’ equivalent and U.S. as ‘Mumbai’. We don’t seem to have faith on our own innovation capability, but only believe its really innovative if its trickling down from the west. Vivek: same mindset is the case with Indian counterparts of global investors. Snapdeal = Groupon, Flipkart = Amazon, Seventymm = Netflix, etc. etc. etc. (sure they all have last-mile customization for India). But, seriously speaking in a country of a billion plus people, how many original ideas which can be MNCs like Facebook, Groupon, Google, Linkedin, etc. have got investor support??

Nandu April 15, 2012 1:11

Jay – thanks for the clarification! That was the only part of the article that didn’t make sense until you made your comment above. I wish more startups in India prioritized the user experience above short term revenue. Great job and best of luck.

Pankaj April 17, 2012 15:05

I’m with Dave on this. The Indian VC mindset is changing, partly due to increased competition in getting into good deals but also due to the fact that entrepreneurial talent has evolved rather quickly in India. The raw talent is here. Investors are [slowly] changing their way of doing deals and who they will do deals with by taking on additional risk. We also have started funding and accelerating idea stage teams, though, our process will evolve.

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