Sunday, September 23, 2012

IIT Bombay-incubated firm gets Rs. 25 million from VCs

Covacsis, a three-year-old start-up, has secured venture capital funding of Rs. 2.5 crore (Rs. 25 million) from Blume Ventures, India Venture Partners (IVP) and a European fund. Incubated in the Indian Institute of Technology, Bombay (IIT-B), it helps manufacturing companies measure floor economics in real time. Tarun Mishra, founder and promoter, said, "The bridge financing will give wings to our international plans." With manufacturing changing and companies looking at new ways of managing it, Covacsis' technology helps companies convert operational data into real-time financial numbers, he added.

Blume Ventures provides seed funding to the range of $50K-$250K to early-stage tech-focused/tech-enabled ventures. “We fundamentally believe input cost efficiencies, whether it translates into energy or productivity, is the key for the next 10 years in the global markets. Covacsis has got everything to become a leader in the space of transforming microeconomics of production floor," said Karthik Reddy, founder, Blume.

According to IVP Chief Navneet Gosal, through its initial set of customers, Covacsis has generated traction via a proven use of its technology. "Covacsis has developed unique and interesting technology in the shop floor intelligence space. We believe the capital investment in Covacsis can help the business scale across manufacturing and production industries in India.”

Covacsis, which serves Sun Pharma, Ipca Labs, Cipla, Godrej Industries, Tata Chemicals, Welspun, Raymond and Ruby Mills in pharma, chemical and textile, plans to expand its bouquet of services to companies in the automobile, steel, oil and gas and FMCG segment too. “Covacsis' solution makes the operator and chief executive talk in the financial language,” said Pranay Godha, executive director, Ipca Labs.

Mishra, 38, started Covacsis with a seed capital of Rs. 2 million in 2003. He gave up his job as the business head of financial product of a Canadian company, after working for four years, to give shape to his entrepreneurial dreams.

Covacsis built a solution called ‘real time production measurement & diagnostics (RTPM), which helps organisations avoid inevitable changes on the production floor. While shop-floor managers may miss the intermittent breakdowns and millions of reprocessing and utilities cost fluctuations, etc, which affects the product quality and plant efficiency on the floor, Covacsis’ RTPD helps the management understand the impact of each and every incident on the top-line and bottom-line and respond to such incidents in the shortest possible time.

Mishra’s company has been incubating at IIT-B’s Society for Innovation and Entrepreneurship for the past three years. IIT-B takes a minority stake of four-five per cent in each of the firm that incubates on its campus. Once the company gets funding, IIT-B would liquidate part of its holding. Mishra now plans to buyback IIT-B's stake.

With a team of 33 executives, Covacsis aspires to become a Rs. 1-billion company in valuation in less than 36 months. Covacsis has aggressive non-linear growth strategy said Tarun. The company plans to go in for second round of funding next year to the tune of $5.5-6 million.

Source: Business Standard, September 23, 2012

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