Little Eye had multiple buyout offers from global firms before signing the deal with Facebook
VenturEast Tenet Fund- and GSF Accelerator-backed Little Eye Software Labs Pvt Ltd, an app performance solutions firm, is the first Indian company to be snapped by social networking giant Facebook. As per media reports VenturEast and GSF, which had invested a total of $400,000 in the company about nine months ago, got multi-bagger exits with the overall deal valued at around $15 million.
In a chat with Techcircle.in, Sateesh Andra, managing partner of VenturEast, and Rajesh Sawhney, founder, GSF, talk about Little Eye and the deal.
What attracted you to invest in Little Eye?
Sateesh Andra: I think that Little Eye did a fabulous job by building a world-class product targeted at the multi-billion-dollar mobile app market. Moreover, Little Eye team has been focused since day one, and the founders never took their eyes off the ball, which I feel is very important. To top it all, they successfully created awareness among various developer communities about the importance of deploying their app performance tools. The Little Eye team is also very passionate about its product. I remember having a board meeting with the team a few months ago. The meeting got delayed by about 15 minutes. As we reached the venue, Little Eye co-founder Kumar Rangarajan was still seen writing codes for the product.
Rajesh Sawhney: This is a team of seasoned developers with a clear vision of what they want to build. We liked the quality of the founding team and also their product thesis. We are a great believer of mobile in general and 'mobile analytics' in particulars as the big thesis of startup investments.
While it's a great exit for you as an investor and good deal for the founders, why did the firm sell out within two years of starting up? Were there other buyout offers too?
Sateesh Andra: No comments.
Rajesh Sawhney: The founders believed that they have a good home and a platform on Facebook for their product to reach millions of developers. We were willing to back them, should they have chosen not to exit and build the company further. Yes, there were other offers but we cannot comment any more.
How will this acquisition help Facebook? What will happen to Little Eye post acquisition?
Andra: As per estimates, there are roughly 3 million mobile apps and 6 million downloads happening daily. So, Little Eye's products have a global value proposition, and enterprises and individual developers can use the app to monitor and enhance the performance of their apps. It is very important that an app should not crash while in use and developers need to provide a better user experience to customers. I think Little Eye's technology will help Facebook improve and monitor its apps.
Sawhney: Post acquisition, Little Eye will become part of Facebook's mobile team.
What are some issues to be plugged by entrepreneurs?
Andra: The key thing is how you build a product company that can go global. It does not mean that Indian companies should not target the domestic market. In fact, there are some fabulous startups that are doing a great job in this regard. Now, the time has come that these companies innovate for domestic as well as international markets. One of the biggest issues is how you take the product to market. It is a very expensive process. Companies need to raise money to fund this process, and it will be hard for you if you don't get it.
Given all this, there were some gaps on the entrepreneurial side and investor side. There are incredible entrepreneurial themes. If you look at some players which are growing big and going global—for instance, Dhruva, Eka and Seclore—they have built world class products, and these guys are taking their companies to the next level.
There was one missing link in India that many companies did not know how to market their product. Also, entrepreneurs did not know what their customers required or how their product was different from other similar products. The engineers didn't know the market or consumers in foreign countries like the US or the UK. How could one design a product for consumers in the US without actually knowing the people? But that has changed now. In this connected world, entrepreneurs can design a product for the US market sitting here in India.
Which are some of the hot companies in India that foreign conglomerates can look at for potential M&As?
Andra: While I can't point out some companies in India that can be looked at for potential acquisitions, we will see exits in the healthcare devices, enterprise cloud and semiconductor spaces in the coming years. When it comes to enterprise mobility, the penetration in Europe and the US compared with the Asian market is pretty much the same. So that is another fast-growing space that can see a lot of M&A activities. Pharma biotech and wearable devices industries are also hot.
(Edited by Joby Puthuparampil Johnson)