Building a Bootstrapped Unicorn from India: Rajesh Jain, Founder of Netcore Cloud (Part 5)

Sramana Mitra: So this is happening 2015 onwards?

Rajesh Jain: So 2015 onwards, we did the international story and the marketing automation stack. I think we made a mistake on the marketing automation side. Now when I look back in hindsight, I think we focused more on the web and missed out on the app revolution.

We focused a lot on journeys on the web, etc. The app stuff in India grew very rapidly, especially when Jio brought down the data tariffs dramatically, the market grew by almost 10x to 50x in two to three years. We had to play catch up on the app side of things from 2017-18 till about 2021-22. I think that’s probably the biggest mistake that we made.

Sramana Mitra: Who was doing product strategy for Netcore?

Rajesh Jain: So we had people internally and collective decisions were made. But when I look back, startups like CleverTap and MoEngage did a very good job focusing on apps. They also focused on digital native companies.

Early on, a lot of our customers were the BFSI – the banking, financial services, insurance companies or some of the traditional companies, which had the money to pay. But then, of course, venture capital also took off. So a lot of the digital native companies had the cash. So we had to play catch up out there.

At the same time, what was good was the SMS and email business we had established, especially email, had very good dominance in India. Email was a business with very good gross margins. That sort of kept powering our growth through the years.

Sramana Mitra: Did that do well in Southeast Asia, Middle East, and Africa as well?

Rajesh Jain: Yes. We did not take SMS outside India because where you don’t operate the relationships, you need to put money up front. So we didn’t do that, but email did very well. Then with email, we also started selling some parts of the automation stack.

Sramana Mitra: What was the scale of the email business, from zero to how far did the email business go?

Rajesh Jain: So if I give you current numbers – we are now doing 35 billion emails a month. We are probably among one of the largest independent providers because companies like SendGrid, SparkPost, Mailgun have been acquired by larger CPaaS players.

Sramana Mitra: Lookwise with Oracle.

Rajesh Jain: Those deals that happened in 2013-14. Some of these deals happened in the last three, four years.

SMS has grown. So if I look at today, Netcore now. So we’ll give a better perspective. So we have the channels – email, SMS. In many countries, especially India and Latin America, WhatsApp is now growing very rapidly. RCS from Google has also now started picking up traction. We had built out the full stack. So we had bridged the feature gap, but we were not able to bridge the perception gap, when it comes to the app side of things. So our marketing automation product is as good as any of the other competitors today in the market, but that perception is that we are more of an email company than a MarTech company.

Sramana Mitra: Is WhatsApp marketing part of that stack for you?

Rajesh Jain: Yes. WhatsApp is on the channel side. It comes under the CPaaS business. So our Communications Platform as a Service (CPaaS) business includes WhatsApp, SMS, and RCS.

We take email separately because email is a very important separate channel for us. There are no operators or intermediaries in email. So that works out very well for us for all email marketing providers.

Sramana Mitra: What is the dollar value of the email business? It sounds like email business is the core or the trunk of your company.

Rajesh Jain: In India, SMS also is quite large because the top line on SMS tends to be quite high. But all put together, today, we are close to $110 million ARR across all our business lines, essentially email, SMS, WhatsApp, and the automation platform.

We also did three acquisitions – two small and one large. On the marketing automation stack, we bought two companies – a company called Box.ai was for personalization and another company basically helped with nudges on the app side and also on the web. If you want to put a spotlight on something inside an app, we had a very nice platform called Hansel.io, which essentially helped marketers do this very quickly, rather than creating each nudge separately.

So these two were early stage companies where they had raised some capital. They had some market validation, but not too much. It’s more like acquihire, but a little more than that as they had a semi-finished product. 

Sramana Mitra: Yeah.

Rajesh Jain: Then two and a half years ago, we bought Unboxed, which was an India-based company selling search and product discovery, primarily for U.S. mid-market and large enterprises, e-commerce companies, and some customers in Europe and Australia. Now, Unboxed was a $100 million deal for us. Unboxed had a very good footprint in the developed markets.

We realized that as we wanted to expand in U.S. and Europe, trying to put it organically, one customer at a time would take us very long. The advantage with Unboxed was we got a complementary product and customer access. It was a good fit. Unboxed is one of the few companies out of India which has got a product which is ranked in the top sort of quadrant by both Forrester and Gartner. It was phenomenal.

Sramana Mitra: What kind of revenue level was Unboxed at when you bought them?

Rajesh Jain: Unboxed was at about $9 million in revenue.

This segment is part 5 in the series : Building a Bootstrapped Unicorn from India: Rajesh Jain, Founder of Netcore Cloud
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