Focusing on segments like manufacturing; precision engineering design; automotive and the construction sectors at present, the company plans to expand its services over the next 18 months. R.Narayan, founder and CEO, power2sme, speaking to SupportBiz, shared a glimpse about his company’s offering in the market.
Please elaborate about your platform- power2sme. What is the unique preposition that you offer to the SMEs?
As a buying club, we aggregate the demand of hundreds of SMEs that enables us to obtain the best possible pricing for the procurement need of our clients. Our business model empowers SMEs by eliminating the need to engage with multitude of vendors; doorstep delivery of the goods through reputed logistics providers; flexible payment options; placing orders online 24x7 and being the single destination for SME for managing purchase requirements across multiple locations.
Our business vision is to empower SMEs by helping reduce their purchase costs with the help of experienced and specialized professionals.
What is the key value addition you offer to the SMEs who opt to work with you?
Our clients or SMEs who select our platform for their procurement and sourcing needs have experienced a two to four percent growth in their net profit. Our objective is to expand our business with the ability to cater to SMEs across multiple sectors.
What is the status of your business from the perspective of revenues?
We started our operations in July 2012 and as on date we are doing transactions of Rs.5-6 crore on a monthly basis. We have already raised ‘series A’ funding and are aggressively working towards reaching out to the market.
What is the size of the funding and what are the key directions that you will be using your funds?
The new funds will be used to expand the business and enhance the product offering. We have an aggressive outlook on growth, where we expect to end our first year with annual sales of Rs.50 crore, growing to Rs 1,000 crore over three years.
What is the key operational differentiator you have for the market?
Our platform functions as a buyer’s club for SMEs and helps them benefit from the economies of scale through collective buying. The purchase platform is available free of charge through a simple registration process.
The services on offer go beyond being a platform. The company directly works with a large network of vendors (manufacturers), taking title of the goods and then selling it directly to the end consumer (SME). In addition to this, we take complete ownership of the entire order process for the SMEs which ensure quality of the raw material at the best price with door step delivery.
Suppliers and manufacturers benefit from our platform as it removes several layers from the existing distribution chain. Industrial products as a category are our key priority these days. The distribution model in the industrial products category is governed by the size and scale of the end customer, the geographical location and presence of distributors in markets. In several product categories there are no national distributors. Moreover, the supplier has limited knowledge of the end buyer as the market is driven by whole-sellers and distributors with very little data analytics being shared with the manufacturer. We address all these missing gaps and hence we enable the SMEs who opt to work with us.
What kind of companies gets registered with you?
Our SME clients have turnover ranging from Rs.5 crore to Rs.250 crore, while some of the suppliers include companies such as IOCL, Haldia Petrochemical, GAIL and SAIL.
What are your projections for the next six to 12 months?
We are a team of 80 people, at present, and we are expecting to touch 150 by March 2013. The company was formed with a seed capital of Rs.2 crore and received $2 million funding from Inventus Capital and is aiming for an operational break even in the 3rd quarter of FY 2013-14.