Exotel, Ameyo & Cloud Nine

It was love at first sight, and everybody felt both were made for each other. The stars, though, didn’t align and the lovebirds — Exotel’s Shivku and Ameyo’s Bhatia — got separated in 2018. Call it divine providence, three years later, the love story culminated into a happy marriage. Find out how…

“Let’s do this together,” Shivku promptly proposed. “Why not? It makes perfect sense. Just think about it,” the ‘groom’ made a feverish pitch to woo his would-be ‘bride.’ A glass of wine in his hands, and a disarming smile across his face, Shivakumar Ganesan — widely known as Shivku — was at his charming best. Sachin Bhatia was taken aback by the intensity and the speed at which things were unfolding. “Shivku, both of us are too drunk to even talk about this,” he smiled back. “Let’s meet in the morning and talk.”

It was sometime in 2018. On one of the intoxicated evenings in Bengaluru, Shivku, the CEO and cofounder of Exotel, met his counterpart Bhatia — cofounder of Ameyo — at an industry event. Love was in the air, and both were able to strike a beautiful chemistry. And why not? There was a compelling reason for instant bonding. Shivku was coming out of a ‘break-up.’ A profitable cloud telephony company, Exotel had been growing at a 40% CAGR (compound annual growth rate) and managed to attract a bunch of unsolicited bids. One of them happened to be a listed company in the US. The term sheet was signed, due diligence was at the final stage, and the $30-million deal was about to get inked. Shivku and his team were in a celebratory mood.

The bride, though, developed cold feet. Shivku explains what went wrong. “The company cited some excuse to nix the deal” he says. For Exotel, the aborted marriage was coming on the back of two successive setbacks in raising funds. “It was quite demotivating for us,” recalls Shivku, who cofounded Exotel in 2011 and had laboured to build the company as one of the top cloud telephony firms and customer engagement platforms in the world.

Bhatia too had a rocky year ahead of his chanced encounter with Shivku. Ameyo had raised Rs 25 crore and the contact-centre platform had pressed on the global expansion pedal. “We just spent like crazy,” says Bhatia, who went to the US, briskly hired over 30 members and bloated his team in an attempt to morph Ameyo into a SaaS company. Next, the first-time founder made a bunch of interesting mistakes. Result was disastrous: in 2017, there was zero cash in the bank. With the option of raising more funds closed, Bhatia had to let go over 75 employees. “It was extremely tough to do so,” he says. The lessons were quickly learned. Bhatia decided to focus on emerging geographies enterprises and killed his US dream. Over the next twelve months, the company hit a purple patch, and the profitable firm managed to have a cushion of Rs 50 crore in the bank.

Money, interestingly, gave birth to a new problem. ‘What next’ was the big question for Bhatia and his team. While one of the cofounders suggested jumping into conversational AI, the second one wanted to revisit the ‘failed’ cloud experiment. Well, there was a third voice as well. “We should not experiment too much.” Bhatia was at a crossroad. Though his company had made rapid strides, the big giant leap was still elusive.

Against this background, Bhatia’s meeting with Shivku opened up the possibility of something massive. “Both of us realised that there was something missing in our stories,” he says. Joining of hands indeed made sense. “There are clear synergies,” says Bhatia. While Ameyo could move from on-premise to cloud, there would be a higher client retention for both the parties, and Exotel’s international foray would become a possibility because of the strong global presence of Ameyo. “Numbers were adding up. Maths was making sense,” he says.

Money for marriage, or was it…

Interestingly, the boards too were in sync. The merger talks — the magic potion — got underway. There was a hiccup, though. Bhatia’s investors wanted their pound of flesh. ‘Give us an exit and merge’ was the clear message. There was only one solution. Shivku and Bhatia took the merger story to the market to raise funds. The response was encouraging. “Everybody said it’s a fantastic idea, and would create a category leader,” says Bhatia. The prospective investors proposed putting in money after the merger.

Now, this was a catch-22 situation. “You need money to merge, but money would come after the merger,” he says. For over a year, both fervently tried to find a solution. Unfortunately, there was none. “Jokerpanti ho rahi hai (Looks like a circus). I told Shivku this is not going to happen,” says Bhatia. Both decided to drop the merger idea. The lovebirds continued with their solo flight.

Two years later, sometime in November 2020, Bhatia found a new ’groom.’ This time the suitor was a soon-to-be public company, with loads of money. The acquisition talks were in the penultimate stage, and Bhatia was all set to sign the papers. Call it destiny, Shivku popped up on the scene. “Can we make it happen now,” he proposed again, hoping against hope. Bhatia gave a realistic picture. “Dulhan saj chuki hai. Ab kuch nahin ho sakta dost (the bride is ready. Now nothing can happen my dear friend). Shivku was dejected. Bhatia was ready for his new home.

Then came another twist. Bhatia’s cofounder urged him to take Shivku’s proposal to the board. “We still have time to rethink,” he said. Meanwhile, Ameyo’s deal with the prospective suitor had stretched quite a bit. The frustrating delay even made Bhatia impatient. “I asked them to pause, and we took Shivku’s proposal to the board,” he says.

Meanwhile, Shivku entered into buyout talks with another company. Ironically, there was a circus going on. The target firm was also in talks with yet another company for selling out. Shivku was given a deadline of 24 hours to submit a definite bid amount and term sheet. “It was impossible,” says Shivku, who was now ruing a long list of his missed and failed chances. While his rivals were busy gobbling up smaller companies to beef up their play, Shivku still didn’t have partners. “I didn’t know what to do,” he says. Shivku wanted to try his luck again. “I decided to jack up Ameyo’s buyout offer by 75%,” he says.

Destiny, interestingly, inserted another sub-twist in the plot. The day Shivku was supposed to get in touch with Bhatia, he got a call from Ameyo’s investors. They wanted to rekindle the acquisition talks. Finally, the much-delayed merger happened in June last year, and it just took 30 days. “It took two-and-a-half years for us to make this work,” says Bhatia. Shivku tells us an unexpected marriage gift. “I saved quite a bit of money by not opening my mouth too soon,” laughs Shivku, who didn’t disclose his ‘75% more’ offer and ended up striking the deal at the old terms.

There was something new as well. The combined entity — Exotel and Ameyo — became a force to reckon with by morphing into the biggest full stack customer-engagement cloud platform across the emerging markets. The pace of growth only gathered momentum since then. While in November last year, Exotel acquired Cogno AI, the same month it raised $35 million to expand its cloud customer engagement platform.

Two months later, it raised another $40 million. With a long list of impressive backers — Blume Ventures, A91 Partners, Steadview Capital, IIFL AMC, Sistema Asia Fund, CX Partners, and Singularity Growth Opportunities Fund — Exotel claims to be profitable, boasts of over 6,000 clients across 60 countries, and generates an annualized recurring revenue of $50 million. The target is to touch the $200-million mark in four years.

Though 10 months into marriage, Bhatia and Shivku sharply delineated their roles from day one. In fact, all it took was just 15 seconds. “Who is going to be the CEO,” Shivku asked soon after the merger. “You don the hat of CEO, I will drive the growth engine,” said Bhatia, who gets lavishly complimented by his partner. “Sachin has never let his ego come in the middle of our relationship,” says Shivku. Bhatia gushes, telling us what drives his simplified thought process. “Noises will always be there in your head,” he says. But once the larger mission and vision is clear, one has to pick up the noise that matters. “Now it’s your choice to pick up the right ones and amplify,” he says.

Over-confidence, Oh shit, & the itch

Back in 2009, an ‘over-confident’ Shivku was trying to deal with a loud buzz inside his head. An alum of BITS Pilani, Shivku joined Yahoo as software engineer in June 2004, and after five years, the product manager was itching to do something of his own. In fact, the itch started just two years after joining Yahoo. Bubbling with excitement, the young engineer would take his colleagues out for a smoke or a coffee break and discuss business plans.

The sheer range of ideas were startling. From starting a TV channel to launching a website that would inform about the programmes playing on TV to developing an app for calculating the meter reading of an auto or even to manufacturing a GPS tracking mechanism for finding out the route of buses in Bengaluru, Shivku was always pregnant with ideas. To be fair, there were takers, but only for a few moments. “I would take people out for a mug of beer, they would hear my pitches, pay for the beer and would never call back,” he smiles.

Loads of rejections, though, never bothered the engineer. Reason was his successful stint at Yahoo. “Whatever I touched turned into gold, or so it seemed,” he says. The IT major kept on giving hikes and promotions to the man who was building Yahoo Maps. “I thought, boy, I must be really good. So let me do something even larger and bigger,” says Shivku, who quit Yahoo and decided to bring India’s first navigation device.

Soon Shivku realised his Yahoo moment was a thing of the past. His Midas touch, or so it seemed, lost its magic. He lists out his mistakes. “I got a bit arrogant with my stint at Yahoo,” he says. Overconfidence pushed the software man into the hardware business. “I got a bit too technical, and was all over the place,” he says. “Coming up with a device was a bad idea,” he adds.

There was another glitch. His cofounder quit after a few weeks to prepare for IAS exam. After a few months of ‘fooling around,’ Shivku bumped into Sachin Bansal of Flipkart, and joined the team. “They were actually making about a couple of crores a month on Google ads,” he says. Though Shivku’s head was at peace at Flipkart, it was the turn of his heart to remind him of his itch. “I didn’t quit Yahoo to join another company,’ he told himself. He quit Flipkart after a six- month stint.

Out of job, and just a few months into marriage, cool-headed Shivku started hunting for his aha moment. Hilariously, the idea was chilling inside his fridge, which stopped working. He tried best to scout for a second-hand fridge. Though there might be many, he couldn’t find one. Here was the business idea. Shivku decided to create a classifieds database to help people buy and sell things.

The plan was simple. People can send SMS and then they can get back search results as SMS. Roopit was born in February 2010, and a year later, Roopit morphed into Exotel in March 2011. The seed round of Rs 2.5 crore happened in 2012, the business soon scaled up to 30-member team, around 400 customers, and a monthly revenue of around Rs 40 lakh. “The first two years went picture perfect,” he says.

Cloudy skies and thunderstorm

Then came the fall. And it started with the idea of the cloud. Shivku explains. “I was going to build India’s first cloud contact centre and then scale it across the world,” he says. The intent was noble, but as they say, the road to hell is paved with good intention. This is exactly what happened. “The naivety on my part was that the regulations did not permit that,” he says. Shivku also erred in not buying a licence for Rs 25,000. “This was a mistake,” he says. Back then, the babus, though, perceived the mistake to be a blunder.

Next, all hell broke loose. The official machinery got hyper activated to ensure that the young entrepreneur paid a heavy price. And Shivku did. His cloud contact centre vision got blocked, the move to chase mid-market in India backfired because there was no mid-market in the country, and regulatory blues hampered and battered the operations. With a heavy cloud of uncertainty hanging over the business — and VCs treating him like a pariah — the situation became chaotic. “It was like a fish market,” he says.

There were suggestions — read Plan B if business shuts down — galore. While a few of Shivku’s team members came up with an idea of building a transparent pressure cooker, others let their imagination run wild by rooting for making India’s first alcohol breath analyser. With less than Rs 100 left in the bank, the writing on the wall was clear. “Actually that was the time when if we had to shut down, we should have shut down,” he says. The entrepreneur, many presumed, would soon disappear into oblivion as a poor software engineer.

Shivku, though, had different plans. He, along with his cofounders, fought bravely with the official machinery to rescue the company from the brink. “We ensured that customer lines were all up and running,” he says. The crisis was averted.

Back in 2008, Bhatia was trying to douse the impact of a global fire: financial meltdown. The world economy was in the midst of recession, which had hit the overseas operations of Ameyo. New sales dipped alarmingly, headcount was slashed, and one of the cofounders quit. Bhatia and his team braved the odds, and survived. The next testing time came in 2017, and we all know what happened after that. “There will be times when you will be tested,” he says. The problem could be on multiple fronts — capital, cofounders, customers, product-market fit, or scale of operations. But what helps tide over the crisis, Bhatia points out, is the grit. “It’s the belief, the team, and the fight,” he says. There would also be moments — and plenty of them for sure — when an entrepreneur slips into the self-doubt mode. “It’s okay. But don’t let it bog you down,” he says. “It’s just a thought, it’s only in your head,” he says.

Shivku tells us another interesting aspect about entrepreneurship. “There’s always a fine balance between being idiotic and being too smart,” he says. “And you want to be neither.” The magic lies in striking a balance: self-doubt is okay, but not too much of it; listening to your customers is good, but not always; speaking to VCs is good, but again no point talking all the time. His last advice is a priceless gem. “You should be confident, but not too much,” he says. If it feels great to be on cloud nine, then it is awesome to hunt for silver lining when the cloud turns dark.

In association with Silly Communications.