Aiming for unicorn status, building SaaS ecosystem in Coimbatore, says Kovai.co : Tech News

Kovai.co founder Saravana Kumar said the company intends to reach

status soon and wants to make Coimbatore a hub of Software as a Service (SaaS) companies, much like Chennai. In an interview with ET’s Dia Rekhi, Kumar said Freshworks’ Nasdaq listing had fuelled his ambitions to take his own company public, while outlining a roadmap for
the winner in the Bootstrap Champ category at the Economic Times Startup Awards 2021. Edited excerpts:

Was it a conscious decision to remain bootstrapped?

There was no necessity to get funding because the original product was an enterprise product, and the ticket size was high. So, the cash flow was always there. We were able to scale the company using funds received from customers. It really depends on the product. Some of the new products that we’re building, like the general-purpose one, Document 360, has a marketing and sales velocity that is completely different. We’re spending a lot of money now. Luckily, we accumulated a lot of cash flow through all our products in the last 10 years.

How has your company’s ambitions evolved with time?

Until 2019, we were very optimistic, very frugal, and were only a 60-people company. Around the end of 2019, we thought about what we can achieve in Coimbatore that could have a bigger impact on the city. That’s when we put a plan for 2030. We realised there was a bigger opportunity with what’s happening around the SaaS and the general product space worldwide and that we can execute it from Coimbatore and build a unicorn out of the city. Zoho and Freshworks have done it in Chennai, and we saw an opportunity to replicate it in Coimbatore.

What made Coimbatore the perfect home for .co?

Coimbatore is an entrepreneurial city. There are a lot of textile industries and other manufacturing industries, but when it comes to software, nothing much has been done, and we see that as an opportunity. We could be a frontrunner to take that spot and do something by creating an ecosystem. That’s exactly what’s happening. A lot of our people are also moving to other companies, and we see a lot of new startups coming up. So, the two goals are to make it bigger and get to unicorn status and build an ecosystem in Coimbatore so that there are a lot of future startups.

With the Freshworks’ IPO, are there a lot of investor queries?

We receive at least a couple of new investor queries every week. Sometimes, even acquisition requests as well, but we just want to be very focused and don’t want to deviate. We take cash only if there is a requirement because it adds more complexity and unnecessary deviation from what we are doing. There’s a lot of interest now and clearly there is a lot of money in the market, but we will try to stay bootstrapped and take money only if there is a clear necessity.

What is your larger vision for SaaS in Coimbatore?

We want to create a model and prove that world-class products can be built from cities like Coimbatore. We are going to focus on Coimbatore for at least a year or 18 months and establish this model. Then, there’s an opportunity to replicate that model in other tier two cities. But probably we don’t even need to do that because even at Coimbatore level there’s so much talent pool available, it is just about taking them and making them industry ready, then deploying them and creating awesome products. Once we figure out a model, that can become a playbook for a lot of other companies to execute in other cities like Trichy, Salem and Madurai.

Has the Freshworks listing given you IPO aspirations too?

After Freshworks’ IPO, we are thinking that we could be the first SaaS company to go public from Coimbatore as well, because what Girish (Mathrubootham, founder of Freshworks) has done is proven that anybody can do an IPO. Now, we are looking at how we can do that from Coimbatore. In another five to six years, the possibility is there, and we look at Freshworks and Zoho as our role models.

The Covid-19 pandemic has been a busy time for SaaS companies. How has hiring and growth been for you?

On average, we have been hiring eight to 10 people month on month since March 2020. That is how we went all the way from 60 people to a nearly 240-plus company in the last 18 months. In terms of customers as well, month on month we have seen continuous growth and we are still hitting the target. Being a bootstrapped company, we are not relying on external investors. The revenue we generate is what is helping us to keep pushing and scaling the company.

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