It’s not often a company that was started as an information technology (IT) services provider transforms into a global product company: The Indian IT services industry, pegged at about $70 billion, has seen many companies taking the product route and ending up in the services business. This is, however, not the case with Bangalore-based iCreate Software, which started operations in 2006 as a banking services provider. iCreate has a proprietary product offering for business intelligence and analytics, focused on the banking sector.
In 2006, Anoop Pai and his friend Naren N S formed iCreate to develop intelligent software that helped banks understand customers and conduct business in a better manner. The company launched its first analytics product suite, Banking Intellisense, in 2009. The product enables banks to transform unstructured data generated through various transactions into structured data and reports.
“We wanted to develop a global product from India. Starting the journey in 2006, we took the services route, as product development is capital-intensive. With our efforts and commitment, we were able to release our first proprietary product suite,” said Chief Executive Officer Vivek Subramanyam. However, the team had to overcome several hurdles, the primary one being the product model they were adopting. The company claims while installation of products by other service providers usually takes long, its product suite is easy to install.
After its product was ready, the company found it difficult to develop a go-to-market strategy, getting customers and selling the product. This is when Vivek Subramanyam joined the company from iGate. “We were facing initial challenges and there was a need for financial support and guidance. We decided to raise capital to fuel growth and this resulted in series-A funding. The company raised Rs 15 crore from IDG Ventures,” Subramanyam said.
In the big data and analytics market, companies typically adopt a platform-based approach, through which they create a solution on a platform. However, now, the domain-based product approach is likely to become a norm in the industry. “I feel similar companies with expertise in various domains will originate from India. iCreate’s model would soon become a template for many more companies in India. We will see companies and products specialising in the retail, automobile and telecom segments, emerging from India,” said Derick Jose, Director at Flutura Decision Sciences.
According to Frost & Sullivan, in 2011-2012, IT adoption in banking grew 14.2 per cent. In 2011, IT spends by Indian banks stood at about 20 per cent of their total expenditure.
With the initial funding, the company decided to take an innovative route to sell its product. Unlike many organisations, iCreate decided to skip developed markets such as the United States and the UK, choosing to tap the relatively less competitive markets of Africa, West Asia and Asia-Pacific first.
“Currently, we are focusing on emerging markets like Asia, Africa and West Asia. The primary reason for this is major banks in these regions are undergoing the first phase of technology adoption. We expect them to leapfrog in the adoption of technology. We want to be their partner from a very early stage of technology adoption,” Subramanyan said.
The company is also of the opinion that sales cycles in emerging markets are lower than in matured markets; it wants to build credibility before entering matured markets. To strengthen its presence, iCreate has recently opened a regional office in Vietnam. Apart from India, the company — whose customers include Gulf Investment Corporation, Societe Arabe Internationale De Banque, Bank Mandiri, HDFC Bank and IndusInd Bank — has already established presence in markets such as Egypt, Ghana, Indonesia and the Philippines.
Says Paul Abraham, chief operating officer, IndusInd Bank, India: “We were looking for a technology partner that could bring a banking-specific enterprise BI (business intelligence) solution to the table to manage informational needs of bank effectively, both on the business, as well as the compliance fronts. This tie-up would assist us in providing a single platform for all our enterprise BI requirements,”
According to a report by the National Association of Software and Services Companies and CRISIL, the global ‘big data’ and analytics market is estimated to grow 45 per cent a year and touch $25 billion by 2015. Currently, the market is worth about $8 billion. The report added the market in India was estimated to grow to about $1 billion by 2015. The huge demand for analysed data and intelligence by various industries has led to the growth of Indian start-ups focusing on the segment: MuSigma, Manthan System, Flutura Decision Sciences and Abiba Systems are such companies.
Since 2009, iCreate has launched five BI products; it plans to launch five more within a year. To enable this, Sequoia Capital and investor IDG had recently infused about Rs 50 crore in series-B funding into the company. With these funds, iCreate plans to expand its product portfolio and enter new regions, including North America.
Says Shailendra Singh, managing director, Sequoia Capital India: “We have a significant focus on companies in and around big data. We are actively looking for companies that provide platforms, software and services for enterprises to make better decision by leveraging the big data phenomenon. iCreate is focusing on banking segment and they have a compelling product and a good number of customers, which is very exciting.”
Says Derick Jose, co-founder and director (big data solutions), Flutura Decision Sciences, and former vice-president at MindTree: “The mix of a vertical-focused, specialised model-and-product model of iCreate is quite impressing. Being an Indian start-up, it is looking at a global market, and this is a good sign for Indian start-ups,”
iCreate, which started as a 25-member strong company, has grown into an organisation of 300 vibrant and energetic people, with a “5:50:250” vision — among the top five in BI for banking solutions, 50 strategic clients and Rs 250 crore in revenues by FY15.
EXPERT TAKE: Sharad Sharma
In the current situation, the only way to democratise business analytics is to offer these at low costs and carry out quick deployments. With its offerings, iCreate has cracked this formula for the banking industry. With its product-led model, which reduces costs and implementation time, it is disrupting the traditional system integrator (SI)-led model of implementation. In an SI-led model, any implementation would cost millions of dollars a year or more.
To iCreate’s credit, it has honed its product-and-business model in the ‘white space’ (a segment no one else is focusing on) markets of India, south-east Asia, West Asia and Africa, before targeting markets in the West. The team was patient in developing a solution. In the enterprise space, it takes four to five years to get the product, pricing, sales engine and market positioning right to ensure the business can enter a high-growth stage. Now, it is in a critical stage. It must convert its momentum into a leadership position within the banking space. The track record of Indian start-ups in accomplishing this transition is poor. Just a few years ago, Cranes, Subex and OnMobile were our hot enterprise start-ups. All these stumbled and fell. This was not because of market issues but due to internal capability gaps. As an industry, we hope iCreate would avoid hubris, learn from others’ experiences and break this jinx.
Sharad Sharma, Chair of Nasscom Product Forum and former CEO and senior vice-president (R&D) India at Yahoo!