Bootstrap First, Raise Money Later from Udupi, Karnataka: Rohith Bhat’s Exhilarating Journey with Robosoft (Part 6)

Sramana Mitra: Fantastic. That’s your big hit from the product company. You’ve built about $18 million worth of revenue across these three businesses. I believe you have raised some financing. Can you tell me a bit about the financing history about the company?

Rohith Bhat: We raised our first round in 2013 from Kalaari Capital. That was a $4 million round.

Sramana Mitra: What was the thinking behind raising money at that point? You were already revenue-

generating. By this point, you already had $5 million from your services business. You could have bootstrapped the whole product business with your services revenues but you chose to raise money. Why?

Rohith Bhat: In those days, the solutions business was feeding the product business. As it grew, the amount of capital that Robosoft was generating was not enough to sustain. We had to raise capital because we wanted to grow the product business faster. That was the thinking when we went out and raised the financing. We didn’t want to block the capital that Robosoft was generating.

Sramana Mitra: When you raised money from Kalaari, was this game already out?

Rohith Bhat: No.

Sramana Mitra: The funding you raised was for the combined entity. It was not specifically for the product business.

Rohith Bhat: Yes. Robosoft still owned the two companies. In late 2015, we did our next round of financing from Ascent Capital.

Sramana Mitra: What were the metrics at that point?

Rohith Bhat: When we raised that round, Star Chef was growing as a business. We were generating around $60,000 monthly revenue. It has been close to two years now since we raised our last round of funding. We split the three companies. We made them independent companies. The money from that round came to each of these companies separately. We have three different cap tables. There are no cross-holding. We wanted to raise capital in each of them separately.

Sramana Mitra: Yes, and exit them separately. You run the three of them?

Rohith Bhat: I run all three of them. Two weeks ago, I hired our first full-time CEO for Robosoft.

Sramana Mitra: You are running the gaming company?

Rohith Bhat: Yes.

Sramana Mitra: Who’s running the app company?

Rohith Bhat: Still me. We are looking for a full-time CEO to run it.

Sramana Mitra: Are you still based in Udupi?

Rohith Bhat: I’m based in Udupi but I travel a lot.

Sramana Mitra: Anything else you want to add?

Rohith Bhat: We had a philosophy that we would always focus on a niche. That is one thing that has helped us get to a new market.

Sramana Mitra: It’s an awesome story. I’m thrilled to hear your story. Thank you for your time.

This segment is part 6 in the series : Bootstrap First, Raise Money Later from Udupi, Karnataka: Rohith Bhat’s Exhilarating Journey with Robosoft
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