As appeared in The Hindu Business Line Jessu John
QwikCilver managed 500 crore transactions on gift cards across all retailers and partners in last fiscal. Well-thought-out ideas offer investors the incentive to fund at the seed stage. It is widely perceived that seed capital is hard to come by for entrepreneurs in India. We’ve also discussed here previously how product development and manufacturing receiving support and investment are going to be good for this economy. A good number of reports and books published on early-stage funding as well as conversations with various stakeholders reveal relatively mature ecosystems have more seed capital available than entrepreneurs here enjoy. In early February, we looked at how BrizzTV attracted interest and commitment from Ojas Venture Partners. The start-up had displayed deep thinking and had a sound plan for leveraging the power of the television platform in India. The core & beyond QwikCilver Solutions, a technology product platform company, is another enlightening case.
The company is in the business of providing end-to-end stored-value-card solutions to its retail and corporate customers. What QwikCilver seems to have addressed early on is the question of how it will go beyond developing a solution and actually grow its connect with end-consumers. According to Chief Marketing Officer Pratap TP, QwikCilver now services nearly 90 per cent of the retail sector, especially department stores such as Shoppers Stop, Lifestyle and Westside and also brands such as Flipkart, Yahoo! and PVR Cinemas. “The DNA of the organisation is technology, but we also took on the mantle of category creation and distribution for our clients. Our clients are actually our partner brands. From design, procurement and warehousing of cards to enabling digital gift cards, we’ve thought around all of it,” shares Pratap. Since kicking off operations in early 2009, QwikCilver has received three rounds of funding from Helion Venture Partners and Accel Partners. Prashant Prakash, Partner at Accel Partners, says: “What we like about QwikCilver is that their value-proposition was razor-sharp. They saw the large opportunity in gifting very early and over the last five years have grown to be the largest provider of gifting solutions in the retail and corporate space. QwikCilver is now a technology-cum-consumer business because they’ve built direct touch points with customers.” Keeping investors hooked QwikCilver’s Pratap admits that in spite of retail being perceived as a sunrise sector, the first two years were difficult just because of natural sales cycles in the beginning.
The company has seen 300 per cent growth year-on-year for the gift card category. Although the department stores give QwikCilver large returns, the growth in the e-commerce sector with Myntra, Flipkart and others has been sizeable. QwikCilver managed 500 crore transactions on gift cards across all retailers and partners in the last financial year. Four million cards across 300 cities and points of sale even in non-metros is the company’s latest count. As a next step, QwikCilver is keenly looking at the mobile platform. “With mobile platforms becoming open to gift cardholders and access to a variety of gifting instruments becoming possible, the gifting market will grow. “As investors, we tend to get in at the seed stage. So, with most of our investments, we go in early and stay for about 10 years,” says Accel India’s Prakash, indicating the firm is in no rush to exit QwikCilver. If anything, these stories show investors are not averse to seed investments. Some of them are even seen to be displaying commitment for the longer haul. It’s important that entrepreneurs think deeper about the strength of their ideas.