For us, staying profitable is by default… what’s the point in running a business if you don’t make money?: Aaditya Sharda, co-founder, Infra.market
Image: Neha Mithbawkar for Forbes India

February 2019. The early morning, no-frills flight from Mumbai to Bengaluru was jam-packed. It was 5 am on a Friday, and groggy passengers dozed off minutes after the smooth take off. Aaditya Sharda and Souvik Sengupta, though, displayed ample signs of nerves, much like first-time flyers. The moment the seat-belt sign was switched off, the duo hurriedly opened the overhead bin, pulled out a voluminous file, and anxiously started flipping through the pages.

Sharda looked tense. “Are you sure you have properly rehearsed your part?” he asked his friend. Sengupta, too, felt twitchy. “Let’s do it again,” he replied. Both started reading aloud. The sound was loud enough to disturb a few heavy-eyed flyers. Over the next hour and 40 minutes, the duo kept parroting their dialogues, and an irritated flight attendant kept reminding them to lower their pitch. “This was our only chance,” recalls Sharda, who along with his friend started Infra.Market in 2016.

For three years, the Mumbai-based B2B online venture for sourcing construction material had stayed bootstrapped. After a few failed attempts to get venture capital (VC), the co-founders sniffed their first realistic chance of getting funded to expand the business. The desperation to hang on to this opportunity was palpable. “We just had an hour to press our case,” recounts Sharda.

The pitch meeting was set to start at 9 am at ITC Gardenia, Bengaluru. Prashant Prakash, however, was running late. The young co-founders panicked. It was rare. Widely known for his punctuality, the founding partner at Accel reached at 9.45 am. The friends just had 15 minutes to present the pitch as the VC had to catch a flight at 11 am.

The duo did something out of the box. The pitch deck was dumped, Sharda switched into T20 mode, and made an emotional plea. “For three years, we have been profitable and scaled our business from ₹12 crore to ₹60 crore,” he stressed, clearing his throat. “But nobody is looking at us. What is our fault? Does one need to be in losses to get funded?”

Sharda knew he lacked sophistication. The abridged pitch sounded more like an outburst triggered by a spate of rejections in the past rather than the business plan of a venture which then revolved around aggregate, fly ash, cement, steel and other core materials used in construction. “We are hardcore guys and are into a hardcore business,” Sharda tells Forbes India . “We are not the suited-booted types. We don’t pretend.”

The spur-of-the-moment pitch worked, with Accel coming on board as Infra.Market’s first institutional investor. But there was plenty of drama before the term sheet was signed. We’ll get to that later, but for now, fast forward to February 2021.

Sharda and Sengupta had a call with Scott Shleifer, partner at Tiger Global, the American hedge fund giant. The mobile rang at 7 am. “What are you guys up to?” asked a stern voice, alluding to a lot of chatter around the Infra.Market co-founders exploring a Series C round of funding.

Big VC and PE (private equity) players were wooing the founders, valuing the startup at over $600 million. “How much can you grow?” Shleifer asked. “Can you deliver the numbers that I want from you in three months? The co-founders found the target challenging but accepted it. “Take a billion-dollar valuation and show me the result,” came the offer. The call ended in 10 minutes, At 7.12 am, a term sheet for $100 million was in the inbox. Tiger was the only investor in the round. “It just took 12 minutes,” recalls Sharda. “That’s the speed at which Tiger works.”

The pace of funding was matched by the jump in valuation of Infra.Market, which pole-vaulted from $180 million to $1 billion. The unicorn co-founders, on their part, delivered on their promise. The sales target was met in two months!

Five months later, they were again on a call with Shleifer. The context was the same. A new set of investors was chasing Infra.Market for yet another round of funding. This time, the bait was a valuation of $1.5 to $1.8 billion. Shleifer’s response was on similar lines. “Stop talking. Just focus on growing the business,” he advised, throwing another stiff revenue challenge at the co-founders. In August, Tiger again led the solo round and pumped in $125 million at a valuation of $2.5 billion.

In five rounds of funding, […]

source Investors call it the ‘Amazon of Construction’. Meet the builders of Infra.Market, the now $2.5 billion behemoth

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