Friday, 17 December 2021

Building the future of Customer Experience, together

Harshita and I have been building Cogno AI together for over 3 years now. In FY2021, we hit revenue of ~$1M. We have been growing fast, doubling year-on-year since FY2020, acquiring some of the large names like Kotak Group, ICICI Group, State Bank Group, HDFC Group, Aditya Birla Group, Bajaj Group, as our clients.

Recently, Cogno AI had entered into an acquisition agreement with Exotel for an undisclosed amount. In this post, I wanted to talk about why this acquisition makes sense, and how will it benefit the Customers and the Team Members of Cogno.

Let’s first understand what Exotel does and then we will dive deeper into synergies of working together. Exotel by itself is primarily a Cloud-based Telephony solution. Basically, Exotel helps you set up a call center in no time. In the last decade, India saw a bunch of startups coming up. All of these startups needed to set up a 1-8-0-0 (or whatever you call it) number. Exotel helped several of these startups set this up in no time.

These startups include some of the well-known brands like Ola, Ixigo, Swiggy, Oyo, Vedantu, Flipkart, Delhivery, etc. When you call the customer support of one of these companies, it is very likely that you are using Exotel’s telephony solution.

Exotel has been doing really well, being almost 11 years into the market. Being led by Shivku and Ishwar, the business is growing quite fast, both within and outside India.

Recently, Exotel acquired Ameyo, a leading provider of Contact Center solutions. Ameyo works with a lot of leading global brands like Cars24, Motilal Oswal, Swiggy, Myntra, Indiabulls, Bankbazaar, Fortis, etc. Ameyo helps companies manage their Contact Center Agents easily.

With Ameyo’s acquisition, Exotel now has access to a lot of good things:

  1. A fantastic Team under the leadership of Sachin Bhatia. Sachin is one of the co-founders of Ameyo and has been running it for over 18 years now, taking it to several millions of dollars of revenue.
  2. A large customer base particularly focused on the large enterprise segment. While Exotel is well-known in startups, Ameyo works with a mix of large traditional enterprises as well as high-growth startups.
  3. Complimentary set of products. While Exotel specializes in Telephony, Ameyo provides the Contact Center Software that consumes this telephony.

As you can see, there are huge synergies between Exotel and Ameyo.

Now, let’s come to the Cogno story - how did we end up getting acquired by Exotel and why did it make sense?

4 years ago in 2017 when I started Cogno, I was actively involved in the Entrepreneurship department. Adit, who was one of the faculty members at IIT Bombay Entrepreneurship Department, was also a part of Blume Ventures. Blume was an early investor in Exotel and that’s how Adit knew Shivku and Ishwar quite well.

When we started Cogno, Adit wanted to help us get connected with the right people who can provide guidance in building our team and product. He connected us with Shivku and Ishwar over email. At that time, Soham was my Co-founder and he was the one who interacted with Adit.

At that time, we were building a solution related to voice-IVR and Adit thought that it would be good for us to connect with Shivku and Ishwar. We were so naive that we didn’t know what to talk to them. We in fact were worried that our idea would be “stolen” :). Remember this is back in 2017 when we were about to complete our 4th year of college.

Needless to say, the thread died out and nothing happened.

In 2019, after Soham had quit the company, I tried to connect with Shivku and Ishwar once again. However, it was a bad time because it was year-end and they were busy with their annual planning exercise.

Nothing happened and I got busy with other things and so, I missed connecting with them in April. April was actually a good month for us - we did our first Sales hire because I was short of bandwidth. It’s actually a good problem we had!

Fast forward to August 2019, the IIT Bombay Incubation Center called SINE had organized an event called “SINE Advisory Board Meeting”. In the meeting, I met one of the SINE Advisors, Mr. Abhay Pandey. A colleague had told me that he was one of the former Managing Directors of Sequoia India, currently running A91 Partners. I thought it was worthwhile meeting him. We met and exchanged cards and I chased him for another meeting at their Worli office. This happened somewhere around September 2019.

There I met Mr. Abhay and also met Kaushik who is also a Partner at A91. Kaushik and Abhay politely explained to me that they invest in relatively mid-stage companies and we were a bit early for them at that time. We exchanged cards and decided to stay in touch.

Almost a year later in November 2020, Kaushik dropped me an email for a general catch-up to understand how the business was progressing. Because of COVID, Software demand shot up and a lot of SaaS companies were doing well. Needless to say, we were one of them. Kaushik and I ended up discussing Cogno’s business and growth plans ahead. It was a great conversation.

In December 2020, Exotel announced a round of funding from A91 Partners. Kaushik saw the synergies between Exotel and Cogno and accordingly, introduced me to Shivku once again. Shivku and I interacted over a Video Call to understand each other and the business better. Meanwhile, I read more about Exotel online, and I was quite amazed by their journey and the client base. Moreover, in the first conversation, Shivku seemed to be a fantastic person to learn from.

We kept on interacting in January and February 2021. Later, COVID 2nd wave struck India and our conversations paused for a while. Both of us got into business-as-usual mode. Later in June 2021, Exotel again raised a round from A91 Partners. In July, Kaushik and I ended up chatting once again. Kaushik expressed the intent of a deeper partnership between Cogno and Exotel. Harshita and I felt that it would be a great idea to be a part of a larger ecosystem because of multiple reasons:

  1. For our Clients: Exotel, Ameyo, and Cogno together create a fantastic full stack of all the Customer Experience products that a business needs. Telephony, SMS, Contact Center Software, Chat, ChatBots, Video Calling, Cobrowsing - you name it, we together have it!
  2. For Cogno Team members: We realized that our team members will get a larger brand tag which will help them grow faster in their careers. Not just that, Exotel offers hundreds of experienced team members who can guide our young team and learn faster.
  3. For Harshita and me as Founders: We had a deep respect for Shivku, Ishwar, and Sachin and we felt that it would be a great learning experience for Harshita, Cogno Team, and me.
  4. For Harshita and me as Employees: Remember, a Founder is also an employee. We realized that a lot of Harshita and my time goes into routine non-core activities like Admin, Finance, HR-Operations, etc (the “employee” part of Founder). While these activities are important for a business, we felt that it would be best if a larger player like Exotel handles them, rather than us reinventing the whole wheel.

Overall, we thought that it would be a win-win for all the stakeholders - Clients, Team, and Founders. And hence, the acquisition proposition made sense for all.

Post my conversation with Kaushik, Shivku, and Ishwar, they extended us a term sheet which eventually led to the formal Agreement early in November 2021.

During the last few months, we have interacted with a lot of team members from Exotel and Ameyo and also the A91 Team. What we like about them is that they are all fantastic and humble people, always willing to help us. Everyone is excited about building a great business from India and for India. I am glad that with this partnership, we have a better offering to provide to our customers as well as our team members.

All of us at Cogno, are very excited for our next phase of growth with the Exotel “Group”. Personally, I feel quite proud to be able to build Cogno to a stage that has led to this fantastic milestone. We feel that this is just a small beginning and we have many more milestones to achieve. Harshita and I would like to thank each of our Customers, Team Members, Mentors, Advisors, and our parents who have guided us throughout this journey. People have trusted us and we will do our best to maintain this trust.

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