How Did ChiSquare Achieve €1 Million Revenue in 4 Years?

Key takeaways

ChiSquare, founded in 2014, focuses on enabling data-driven decisions for global companies.
The startup began in a small flat with just three part-time employees and has grown significantly since.
ChiSquare has maintained profitability since its inception, showcasing its successful business model.
The company operates from a substantial office space in Hyderabad, reflecting its growth and stability.

While there has been a boom in data and analytics companies offering specialised services such as data analytics, customer analytics, web analytics, among others, in the country, ChiSquare stands out of the crowd in its approach. Founded in 2014, this Hyderabad-based startup has been enabling data-driven decisions for companies across the globe. Analytics India Magazine caught up with Mayank Pachauri, CEO of ChiSquare Consultants to get an insight into the making of this self-funded startup and how they have worked their way to stay profitable since their inception.

From An Idea To Reality

Recalling the early days of ChiSquare, Pachauri shares that it was founded in December 2014 when he decided to come back to India after spending 10 years in Europe. He returned to Hyderabad, where he helped a former boss build an entire reporting and analysis team for him. “We mutually agreed to deliver services for his organisation remotely. Hence, ChiSquare came into existence and since then there has been no turning around,” he said. What was once started as a small company in a two-bedroom flat, with three part-time colleagues, is today a well-established organisation in a 10,000 sq ft office with 42 full-time employees.

What Is ChiSquare?

ChiSquare takes the raw transactional data from businesses and works through its Key Value Drivers (value sensors), linking them to the Key Performance Indicators (KPIs) and generate actionable insights. Explaining the working, Pachauri explained that for an e-commerce business which has been operational for a few years, customer acquisition is critical for its growth and revenue maintenance. In such a scenario where almost 20 percent of its revenue comes from new acquisition, ChiSquare helps business in identifying:

The profitable source of acquisition and
Touchpoints which makes the customers stay for a longer period

“Our experience in e-commerce business data has been fundamental in providing decision making support to each level of organisation. We have off the shelf concepts on assessing the business health through ‘State of Play Assessment Framework’ where we dissect the business revenue model. Another concept in the application is ‘Customer Lifecycle Management’ covering customer acquisition-customer retention-customer experience triad,” said Pachauri. For instance, they try to answer questions such as which customers they want to retain? Which is the right customer segment to invest in? What percentage of customer churn comes from customer experience issues or from system generated friction? How customer responds to incentivisation program?. Their modular approach helps in delivering value through contextual storytelling within 21 days of getting data access. The ChiSquare team ensures these offerings with its three models of services, which are:

Business Intelligence Implementation: Developing data models, implementing data warehouse, building self-service reporting and data visualisation (where organisations do not have their BI in place or Bi is not fully developed).
Data Visualisation, Reporting And Analysis: Where organisations already have BI in place.
Storytelling Services And Actionable Insights: Using data science services (where organisation have BI and matured reporting systems).

He mentions that these services are not mutually exclusive as all of the above three are also offered as a package.

Success Stories With Clients

Pachauri shares that most of their clients are spread across Europe. “Online gaming being their area of expertise, we associate with top players across the globe. Fortune Entertainment Group and GVC Holding (the parent company to major brands like Bwin and PartyGaming), TIPICO based out of Germany, are among our top clients. We also have non-gaming clients like PayU Europe,” he said. Explaining the use case of GVC Holdings, Pachauri said that their research team analysed the marketing spend of 2017 for the company across their markets and channels. Following the post-impact analysis, they recommended the company to re-allocate and optimise the marketing spend (from regions not yielding profitable results), generating spend savings of more than € 15 million. For Fortune Entertainment Group, they built the entire business intelligence system from the scratch and established their whole analytics operations from India generating value for them. “We are key for their stellar growth in last 3 years”, he said. For PAYU Europe, the team built their first system performance report which PAYU executives used for system improvements for their B2B businesses.

The Team Driving Success

With a team of 42, comprising of full stack developers, data scientists, analysts, data visualisers, among others, they all come with rich academic and corporate backgrounds. They also have a strong team of engineers for BI development and a team for data visualisation and storytelling. For storytelling, they have people from business, commerce background who have mathematics, economics, statistics as one of their core subjects. “For data science, mathematics and programming is must. If you do both, plus you understand the business, you are a star for us,” he added.

The Road Ahead

Pachauri admits having faced many challenges being at the forefront of analytics, one of them is on the business front, where he shares that many of the businesses treat analytics as a cost centre and cannot see the value it can add. “Willingness to invest is still not fully there,” he said. Second is the lack of resources in this domain, which is usually required to be developed in-house and that takes time. Despite these challenges, ChiSquare has shown a tremendous growth over the years from signing its first deal in 2015 to the present where they have exceeded 1 million euros in annual revenue with leading names across the globe as their clients. And while the startup has been self-funded since the day one, they are now actively looking for funding as they move into the expansion stage and productisation of analytical services. Talking about the competition in the analytics space which is constantly expanding, Pachauri says that more than the competition, it is the pace of technology which is difficult to keep pace with. “For me what is important is the focus on your strength and capabilities. Real analytics requires domain expertise. For you to create stories from numbers, you have to know your client’s business thoroughly. Numbers by themselves cannot talk,” he said in the concluding.

Meet ChiSquare, A Data Analytics Startup That Exceeded €1 Million In Annual Revenue In Less Than 4 Years