Hive, the Indian arm of Silicon Valley-based The Hive, which is part-owned by the Patnis, offers seed financing of up to Rs 13 crore as well as technology and business support for data analytic start-ups. Last year, Hive made its first investment in a Bangalore-based startup Flutura, which provides technology to oil and gas majors.
In an interview with Analytics India Magazine, Arihant Patni – Managing Director at Hive, talks about his plans and his thoughts on whole analytics ecosystem in India.
[dropcap size="2"]AIM[/dropcap]Analytics India Magazine: Please brief us about Hive and what are your plans ahead.
[dropcap size="2"]AP[/dropcap]Arihant Patni: We are very excited about Big Data space and we think that there are a lot of young, smart entrepreneurs within the Indian ecosystem, that have aspiration to build data driven applications for global markets. We want to find them, invest in them and help them get what they want to achieve. Not only by providing capital but using our ecosystem in Silicon Valley which consists of very experienced entrepreneurs, technologists and investors.
AIM: What made you particularly interested in analytics and Big Data industry?
AP: I came across Hive in Silicon Valley and they were very excited about their thesis on big data. My brother and I invested in the Hive fund over there and then we realized that this model can be replicated in India and that’s why we brought the platform over. That’s how we got introduced to the idea and got engaged with it.
But after this fact, when you research and you look at the entire business model around big data and the way it is changing the world is enormous. So you got technology which is now lot more sophisticated, which can store and analyze large data set, using distributed computing. And then you have companies/ enterprises that want to use the data that they collect and in far more intelligent fashion rather than just looking at BI and dashboards. They want to be able to use data to make decision on the way they operate their business. And finally you have consumers like you and me that have so much data about themselves.[quote]I think in all of this, there is immense opportunity to create valuable products, applications and ideas for services market, and that I think is very exciting.[/quote]
[pullquote]I think a very important aspect is the scale bit. Because we have a lot of entrepreneurs and young guys that can put together a business plan and can build a good proposition, but unless something achieves scale, realizing value out of it becomes difficult.[/pullquote]AIM: What are the capabilities and skillsets you typically look for while investing in an analytics firm?
AP: We do early stage investing. What we look for is that the business idea should be solid. We typically look at enterprise play rather than consumer because we understand the enterprise ecosystem. But most importantly it’s the management team, because if you look at early businesses it all about who is actually running the show. Whether it’s one person or a team of people, have they run businesses in the past, have they scaled businesses in the past?
I think a very important aspect is the scale bit. Because we have a lot of entrepreneurs and young guys that can put together a business plan and can build a good proposition, but unless something achieves scale, realizing value out of it becomes difficult.
So, we look for promoters that have done that, who have managed teams, run P&L. Infact our first investment is very similar, it’s a company called Flutura based out of Bangalore and they do M2M analytics, which is a very interesting space. But what attracted me is the three guys that run it, they are all ex-Mindtree guys, did very well there, they worked together in the past, they built scale.
And the last bit is that we should be able to provide value to these guys. There’s no point in me giving money to these guys and say go, run with it and give me a return. We are really looking to get engaged and invest only if we can contribute qualitatively to these folks.
AIM: Can you name few companies that are under your radar right now?
AP: I would not be able to name companies that we are considering just for confidentiality reasons. But we are very active in the market and meeting companies and we are doing that on a constant basis.
AIM: How do you see the analytics industry evolving in India today as a whole?
AP: I think analytics in India is just the tip of the iceberg. India is a fantastic market opportunity. I think we need to get people in terms of collecting data and having repository of good quality data to base their applications on. I think that should happen as time goes on.
Businesses are already using analytics on the data that they have, so I think the market is really poised to grow. And this is not just a short spurt, this is going to be a massive 10-20 years story where India will evolve very quickly into adapting these new age data platforms.
[pullquote align="right"]A lot of people just want to get on Big Data Bandwagon because they feel they should and sometimes folks don’t realize what they are achieving out of it. So folks would invest large amount of capital towards big data initiatives and not get anything out of it and realize its money wasted.[/pullquote]AIM: What do you think are some of the challenges the industry is facing right now?
AP: I think the challenge really is education in general. Today we all talk about Big Data as if we have all figured it out. With data we have explored very little and there is more that can be done. I think we all need to have our eyes open to that.
A lot of people just want to get on Big Data Bandwagon because they feel they should and sometimes folks don’t realize what they are achieving out of it. So folks would invest large amount of capital towards big data initiatives and not get anything out of it and realize its money wasted.
AIM: What do you suggest to the Indian startups coming up in the area of analytics?
AP: I suggest that don’t get carried away by the buzz of big data. I think it beautiful but what really matters is what your proposition is, what it means to your buyer and consumer and how you are really going to scale it. I would say dig deep, think big and try to demonstrate value because value will translate into revenue. Let us not think that we can do a quick thing - that never works. It’s about creating a valuable enterprise.
AIM: What can we expect to hear from Hive in the near future?
AP: Well, I think we will be able to talk to you about more companies that we have invested in. We as a platform are very excited about building a knowledge sharing ecosystem within big data. We will have events, whitepapers, and community workshop. So we are very excited about being an active participant, not just as an investor but also as a thought leader in the big data community.
AIM: Anything else you would like to add?
AP: We have just setup shop in Bangalore, Vinita Ananth has joined us. We are looking to build team and expertise. So I would love to hear from people who are big data enthusiasts and are looking to partner with platforms like ours, whether it’s for knowledge sharing or company building. We are very excited and engaged on this.[spoiler title="Profile of Arihant Patni" style="fancy" icon="plus-circle"]
Arihant Patni is an entrepreneur, financial advisor and venture capitalist with extensive experience in diverse areas such as IT services/infrastructure, business development/marketing and wealth management.
Arihant’s foray in the venture capital space came about when Patni Computer Systems was acquired in 2011 at a valuation of $1.5 billion which included a full exit for promoters and private equity investors. Currently, Arihant is the Managing Director of Patni Financial Advisors, a wealth management company, and Hive Technologies, a platform that invests in data analytics and data science (‘Big Data’) companies. He is also Co-Founder and on the Board of Directors of Nirvana Venture Advisors, a venture capital fund with focus on the internet space.
Arihant began his career at his family business, Patni Computer Systems, one of the leading Indian IT businesses of the time, where he had a broad exposure to the business of the company, including positions in the computer software and human resources departments, as well as being a business development and marketing executive. After graduate school, Arihant continued his career in the IT space as co-founder and CEO of Bodhi Global Services, a legal support services company. The company was set up in collaboration with AZB & Partners, which is one of India’s leading law firms.
Arihant received his Bachelor of Science Degree from the University of Pennsylvania in Chemical Engineering. He continued his education at Babson College, where he received his Masters of Business Administration (Magna Cum Laude), with a concentration in entrepreneurship. He then received a separate Masters Degree in Statistics from Columbia University.[/spoiler]
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Bhasker is a Data Science evangelist and practitioner with proven record of thought leadership and incubating analytics practices for various organizations. With over 16 years of experience in the area of Business Analytics, he is well recognized as an expert within the industry. Earlier, Bhasker worked as Vice President at Goldman Sachs. He is B.Tech from Indian Institute of Technology, Varanasi and MBA from Indian Institute of Management, Lucknow.