Co-founded by brothers Kailash (CEO and CMD) and Sanjay Katkar (CTO and technical director) in 1991, Pune-based Quick Heal Technologies Pvt Ltd is riding high on a wave of success. Initially called CAT Computer Services Pvt Ltd, the company has transformed from being a computer maintenance firm to an IT security solutions provider. The company’s flagship product is an antivirus solution called Quick Heal (remember the tagline ‘Aapke computer me kaun rehta hai, virus ya Quick Heal?’), which has enabled it to become the largest antivirus provider in the country with 35 per cent market share (at least that is what it claims).
In a video interview with Techcircle.in, Kailash talks about his entrepreneurial journey, the Sequoia funding, revenues and more. Excerpts:
When you started off, did you envision your company to taste the kind of success it has today?
When I started the company, I never thought about developing a software product. It was just for bread and butter. The aspirations were never to make a global company, but I was always excited with the possibilities.
Why did you choose the antivirus category?
I used to think that if I will do anything common there will be a lot of competition and hence the margins will be lower. But if I managed to do something out of the box, the company would have a chance to generate more revenues from larger margins.
While we had a separate team for our computer maintenance business. A core team of five people (including my brother) started working on the antivirus software and the first product was launched in 1995.
With MNCs already present in the sector, how did you manage to make a name for your product?
While MNC antivirus software’s were present in the Indian market, they were developed keeping in mind customers in the US. Hence, Indian customers were facing some unique problems that were not getting catered by those products, so we focused on those problems. Then it was very tough to acquire customers initially since at that point in time, Indians were not very warm to the need/requirement of an antivirus software.
We had to first tell them about the need of the product and then offer it to them. This scenario changed around 1997-98 because of a few viruses that affected people on a mass scale. Most of the companies faced problems in tackling those viruses, but we brought out a product that affectively solved it, and in the process announced ourselves.
What will you attribute your success to?
As far as the product goes, we focus more on making products more affordable to the customer and value adding to them. People believe features are the most important aspect of a product but that is not true. Even if I come out with a revolutionary feature, within a few months the competitors will also add that and vice versa. It is all about understanding the customer. Apart from that, after sales support is very important and for the same. We have setup a very strong team to help the customers in using the products.
Secondly, we focus more on developing channel partners (basically shop owners that sell the product to customers) than directly dealing with the end customers. We have to make sure if a customer is going to a shop for purchasing an antivirus, there has to be a quick heal presence there. Initially, we focused only on computer selling companies (as channel partners) but as of now, we target computer maintaining companies, stationary companies and even mobile shops. As of now, we are also trying to get into partnerships with e-commerce sites for selling our product.
Why did you raise the funds from Sequoia? Tell us about your funding till date and what are your expansion plans?
We raised Rs 60 crore from venture capital firm Sequoia Capital India back in 2010 to take the company to the next level. We had already reached around 300 employees at the time but we wanted to take things to the next level by increasing our team.
I want to develop the same channel network (like in India) in other countries as well. And to a certain extent we have managed to do that for countries like Nepal and Bangladesh. Additionally, we have recently started an office in Japan and another one is being setup in the US. We will also look at the South America market. And while we have money in the bank, there is a chance we could also look at raising funds for the same.
How big is the team now?
The team has now grown to over 550 people. Currently we have around 23 offices across the country including six in Pune, one each in Mumbai, Kolhapur, Nagpur, Nasik, Aurangabad, Goa, Rajkot, Ahmadabad, Surat, etc.
What is the incentive structure, how much do you pay to the channel partners?
For stockists it’s around 10-15 per cent and for retailers it’s around 20-25 per cent. But most of the retailers and stockists cut down their margins and instead pass it on to the end customer.
Can you share some revenues numbers?
In 2001, our turnover was around Rs 20-25 lakh. We were not satisfied with the number so around 2002-03, we setup a team to formulate a marketing and after-sales strategy as a result of which, we did around Rs 50 crore in revenues in 2010. Last year, our we did Rs 187 crore in revenues. For this year, we are targeting Rs 260 crore in revenues and as of now, we are on track to reach that number.
Which are your most important markets in terms of revenues?
In terms of revenues, India is the most prominent market for us since it accounts for around 95 per cent of our total business. New Zealand, Australia, Middle East followed by most of the African countries account for the rest.
What is your market share in India?
According to a couple of research firms, we hold around 35 per cent of the market share in India, making us the biggest player in the country.
Where will the next level of growth come from?
Technology is changing and how it is being used is also changing. In the near future, most of us will have two mobiles- one for personal use and the other one for official use. Naturally companies will want to secure the one being used for official use and that is a big opportunity for us going forward. We see a lot of opportunity in mobile, so much so that we feel that our mobile solutions business can overtake the desktop and web solutions business in the next 3-5 years.
We have also developed a Unified Threat Management (UTM) solution for gateway protection. This is a big market opportunity for us since as of now only a handful antivirus companies are offering the solution (while a few other companies like Cisco do offer it).
How fair is the opinion that anti-virus companies develop their own viruses and then bring out a solution to fight the same?
Most of the people think that way but it is not actually true. There is an association of antivirus software companies and prominent operating system (OS) companies like Microsoft, etc. back that. If any antivirus company develops a virus, they will be thrown out of the association and blacklisted globally, since at the end of the day the virus is harmful to the end consumer and the OS is blamed for that.
(Edited by Prem Udayabhanu)