Sethi manages a $150 million early-stage technology-focused venture fund backed by IDG, the world’s largest IT-related media firm
By Nandita Datta
Connectm Technology Solutions was a result of many Sundays spent at Crossword discussing “everything under the sun”. It was at one of these meetings between close friends Rajiv Mody, Chief Executive Officer of Sasken, and IDG Ventures’ Sudhir Sethi that the idea of working together was born.
But formalising the agreement, with lawyers from both sides, took longer. “I think the only reason the talks did not fall through was because Rajiv and I were convinced,” recalls Sethi. Finally, in November 2006, a deal was inked. Sasken and IDG agreed to build companies together.
However, it took nine months more for the new venture to be born. For two months after the MoU, there were huddles with the Sasken and IDG teams to identify the first spin-off. After discussing business ideas, the two teams decided to build a business in remote management of capital assets based on machine-to-machine (or M2M) communications.
M2M is all about machines connecting seamlessly to offer smarter services. By using these M2M solutions, clients could remotely monitor their machines, diagnose problems and take preventive action. Industries for such M2M applications were aerospace, automotive, transportation and telecom infrastructure.
On paper, this seemed a great idea. More machines are being connected to each other (the number is expected to reach a billion in two years) and these machines need to be managed intelligently. But, when the business plan was presented to the Sasken board, they sent it back, asking for more details, including validation by potential customers. Sasken’s G Venkatesh and IDG’s Sethi did the rounds of potential customers and returned with positive feedback.
The board gave the go-ahead and ConnectM was incorporated in June 2007 with a $6-million investment from IDG Ventures and Sasken. Sethi says ConnectM meets all his three investment criteria: a sound team, a differentiated business and a domestic market focus.
ConnectM, which specialises in telecom tower, energy and industrial equipment management, has already surpassed its 2010 revenue target of $1 million. “The way the order book is filling up, we should do $8-12 million in 2011,” says Sethi. It’s interesting the way Sethi refers to ConnectM as ‘we’ rather than ‘they’, which shows his involvement.
Even after the company was launched, he helped recruit the core team and handle customer contacts. “Now that ConnectM is on its feet, my involvement is more strategic.” For Sethi, the biggest kick out of this journey has been that ConnectM was born out of nothing. “It was the result of a group chat session. Can there be a better high?”