This is the third post of a series about Talend’s recent Round C Fundraising.
Previous Post: Fundraising in September – Face Time
As the financial crisis accelerated, we continued our Roadshow all over the world. Our news was good. We closed a very interesting Q3 in terms of results and in terms of growth. And our news flow was excellent in terms of the press, analysts’ white papers, and quarterly results; all this validated our pitch to the VCs.
In October, all the VCs were evaluating the impact of the economic situation on their existing portfolios. Sequoia Capital and Kleiner Perkins, the two biggest names in venture capital, were both on track to fund less than half the number of companies that they did in Q3.
At this point, every single one of the VCs we were talking to had a new question: how does your value proposition address the new reality of a tanking market. For the first time we had to prove that our market space and strategic position had a delineable future. In September, nice-to-have was sufficient. Just one month later you couldn’t raise money with nice-to-have. The perception of value had moved to another level.
We were able to address this very quickly by actually leveraging the market downturn. We never changed our pitch, but we positioned it against the gathering storm. Frankly, if we weren’t open source we wouldn’t have raised a dime.
The downward spiral continued. October 6th launched the worst week for the American stock market in 75 years. The Dow Jones lost 22.1%, its worst week on record. Standard & Poor’s 500 Index – down 42.5% from its own high in October 2007 – also had its worst week since 1933. The economy continued to shrink and the word “Recession” became more prevalent.
Bertrand
Next post: Fundraising in November – Inking the Deal
Congratulations Bertrand,
I am sure you must be a proud to have raised the Round C funds esecially in these trying times.
After you have secured the funds, now you must be wanting to take the initiative of expanding into new countries/markets , specially which are uniquely positioned to embrace Open source technologies.
I am India based Business Development Executive with 25 years experience in computer software arena. I have, in the past set up and run successfully, few businesses for software companies from the west. The markets were India, Middle East and South East Asia. I was one of the early guys who went into India market to sell the concept of Linux and opensource hence can relate to the challanges encountered.
I would like to take the opportunity here to mention that India is the market, Talend should be seriously looking at focussing and expanding, in these trying times to justify the funds raised, and for the growth in top and bottom lines. And also to be amongst the leader to enter into India thereby ensuring that you stay ahead of the competition & meet up with your corporate mission of registering growth through expansion.
Please find mentioned below few points to establish my above views, which will highlight my point of view:
Indian IT Market snapshot:
• The global ICT market intelligence firm, IDC India predicts that the domestic Indian IT/ITeS market will grow at 13.4% in 2009 from US$52 Billion in 2008!
• India to be the Fastest growing IT market in the APAC.
• Second largest wireless market in the world with 400 Million Mobiles.
• Experimentation with the Cloud Computing & SaaS will increase.
Indian Software Product Market (Present and Future) Snapshot:
• The software product revenue in India in 2008 was US$ 2.3 Billion. It has been growing at 33% or 2.3times as compared to any other country in the globe.
• Software product industry in India is at an inflexion point and has the potential to grow to US$9.5 billion to $12 billion by 2015
• According to Springboard Research, Indian SaaS market will grow at a compound annual growth rate (CAGR) of 77% from 2006 to 2010, to reach US$165 million by 2010.
• In SMB segment, package software market in India is growing more than 25% CEGR, say AMI-Partners at around US$ 770 Million.
• Security software business in India US$.153 Million in 2008 and is growing at 25% despite of the slowdown.
• The major software product categories expected to grow at a rate higher than the industry average include Collaborative Applications (23%), Storage Software (19%), System and Network Management Software (19%) & security (25%)
Key Business Drivers & Opportunities in India:
• Buoyant Indian economy.
• Rising domestic consumption and exports.
• Expanding broadband infrastructure, mobile and increased Internet penetration among Small and Medium Businesses (SMBs) apart from the enterprises would be a big boost for a newer segment.
• According to a report by Springboard Research, Indian SaaS market will grow at a compound annual growth rate (CAGR) of 77% from 2006 to 2010, to reach $165 million by 2010. Springboard believes that a buoyant Indian economy, driven by rising domestic consumption and exports, expanding broadband infrastructure, and increased internet penetration among small and medium businesses (SMBs), will make India a significant market for SaaS applications. SaaS also has great potential and room to grow in India due to low penetration of software applications among Indian enterprises, especially the SMB segment.
India has 6.6 Million SMBs which make a great opportunity along with the Top 1000 corporates for any software product player.
Open Source and Linux Market and Opportunities:
• Linux market in India is around US$80 Million in 2008
• Open source is becoming more mainstream in the Indian economy. India has a diverse range of interest groups promoting the adoption of open source software. Major motivators for these groups include politics and special interests, government programs, outsourcing service requirements, and education as well as skills training.
• Open source and Linux deployment in India is happening in four key markets in India – government, BFSI, telecom and education.
Hope the above facts and figures will interest you and if interested further, I can provide you with more insight as well.
And moreover, getting the geographical coverage in the most cost-effective way is easy if you identify the right guy who could front-end your business in here. Hope you do that. And if I can be of any help, do let me know.
Thanks & Cheers,
Mohan.