Cloud telephony startup Exotel seeks SEA expansion

• Can handle any type of voice communication to any endpoint
• Taking its lessons from India and applying them to the region

 
DESPITE all the various technological advances we have seen, voice communications is unlikely to go away anytime soon.
 
What is changing however is the number of alternative platforms for voice, from Voice over Internet Protocol (VoIP) to GSM.
 
Bringing them all together is Indian cloud telephony startup Exotel, which is now eyeing the South-East Asian market, according to cofounder and chief executive officer Shivakumar Ganesan (pic above).
 
“The endpoint can be a cellphone, a laptop, or a smartphone app, it does not matter – we work to connect to all those endpoints,” he says, in a recent conversation with Digital News Asia (DNA) in Singapore.
 
“One of Exotel’s core differentiators is that other companies are very VoIP-focused, but we have built our platform in such a manner that is widely varied.
 
“And we expect South-East Asia to be similar to India – the fact that we cover so many endpoints will be useful to the markets here,” he adds.
 
Exotel, which provides APIs (application programming interfaces) and SDKs (software development kits) that allow developers to integrate voice communication into their applications, is keen on South-East Asia, having launched in Singapore earlier this month.
 
“We have been talking to customers – very soon all of you [in Singapore] will be using Exotel in some form or fashion,” Shivakumar confidently declares.
 
“We do 90% of all the taxi hailing communications in India – any call that happens between a taxi driver and a customer happens on Exotel,” he claims.
 
Next stop South-East Asia
 

 
South-East Asia is on the company’s radar for a variety of factors, including its large population.
 
“There are several markets in South-East Asia that are similar to India, like Indonesia and Thailand for example, where they tend to communicate a lot more [via voice] –  whereas in the United States, people don’t call as often,” says Shivakumar.
 
“The type of startup ecosystem and tech-enabled companies, and the evolution of the startup ecosystem in parts of South-East Asia, are all very similar to that of India.
 
“We understand aggregation, e-commerce, marketplaces, and how they all work – those are the places Exotel plugs into really nicely,” he adds.
 
Having launched in Singapore, the next two markets the startup is immediately looking at are Indonesia and Malaysia. These three countries will form its core markets for the next six to 12 months, after which it intends to expand into other regional markets.
 
“We like to dominate a particular market before moving on, to prevent spreading ourselves too thin,” says Shivakumar. “There is no hurry, we will take our time and figure this out.”
 
The company acquired Singapore-based social media startup Croak.it in February 2015, and Shivakumar believes that the Singapore market alone is worth over S$50 million (US$ 37.4 million).
 
But there are challenges as well, he acknowledges, including the varied regulations the company will to navigate in the different countries.
 
“The need to work with the authorities is important, and we are still trying to figure out who we should talk to,” he says.
 
“For example in Indonesia, the ability to set up data centres and servers is a challenge – calls can’t have lag, they need to be instantaneous, and we don’t want to add latency by sending the call out of the country and back again,” he adds.
 
Already profitable
 
Financially, Exotel is well placed too: It was profitable within three years of being founded in 2011, despite having raised funds only once: US$500,000 in the year it was founded.
 
“We have been breaking even – it is very important you put as much money back into the business so that it will be able to grow faster,” says Shivakumar (pic).
 
“If you are able to do it on your own terms and with your own money … there’s nothing more satisfying than that.
 
“Unfortunately many great ideas and entrepreneurs are killed because there’s somebody breathing down their necks asking for unsustainable growth, which is bad for the ecosystem,” he adds.
 
The telephony startup earns revenue by charging companies for its technology and phone calls on its platform.
 
“It is a Software-as-a Service (SaaS), it is pay as you use – people are welcome to scale up or down as they like,” says Shivakumar.
 
Fellow startups get special treatment too: Exotel is considering offering some of these features for free to startups, he says.
 
“It is good for the ecosystem that these startups grow – we are hoping to make money from them at a later point in time; right now, we want to help them grow,” he adds.
 
The company is looking into raising another round of funds, which would make it only the second time since it was founded.
 
Shivakumar however declines to elaborate on this, for the moment.
 
“We are currently capitalised very well, and one of the things that is unusual is that we have raised very little money, but we have been able to build a fast growth and profitable startup which we are proud of.
 
“We have been able to show the world that raising funds is a means to an end and not an event in itself,” he adds.
 
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