Exclusive: Unilazer’s investments for 2016 done, Ronnie Screwvala aims to make UpGrad 10x of UTV

Ronnie Screwvala is former head of UTV. Photo: S. Kumar/Mint

Media mogul to prolific investor to sports and education entrepreneur, Rohinton Soli “Ronnie” Screwvala, has earned the reputation of having the Midas touch. Now in the second innings of his career after having sold his stake in UTV Software Communications to Walt Disney for an estimated $120-150 million, and exited the company in January 2014, Screwvala turned a private investor through his family office Unilazer Ventures.

Founded in 2012, Unilazer has invested in around 15 companies so far including online optical products retailer Lenskart, online lingerie platform Zivame, artificial intelligence company Niki.ai and food tech company Yumist to name a few. He is also focused to build his next set of grounds-up businesses in high growth and impact sectors. These include Usports focused on Kabaddi, motor sports and football; U Education under the recently launched brand UpGrad that focuses on higher studies through post-graduation and specialization courses; and the yet-to-be launched digital media venture U Digital under the brand Arre, which recently acquired Apalya Technologies.

In a candid interview with DEALSTREETASIA, at the LetsIgnite conference organised by LetsVenture in Bangalore, Screwvala says 2016 will be about UpGrad while Unilazer is unlikely to make any fresh investments in 2016. He said the aim is to make UpGrad 10 times the size of UTV and that he would be deeply disappointed if the venture’s revenues don’t touch Rs 1,000 crore in the next three-four years. Edited excerpts.

From heading a successful media company to entrepreneurship, how has the transition been for you?

There’s not much of a transition when it comes to entrepreneurship. In the least 2-3 years its been quite an exciting change to look at completely new sectors, and to look at combination of a lot of things.

Having learnt from being an entrepreneur one brings a different level of skill set to the table having operated companies, being a little more empathic to the entrepreneur and taking a much more longer term view.

Second, I think my value adds in companies would be to think about scale, brand building, value creation, culture and understanding the consumer. I think my 20 years of working in media has taught me a lot about understanding the consumer and understanding the pre-empting trends, so that was interesting to me, I think about a year back I realised that I couldn’t spend the rest of my life just being an investor and I wanted to be an entrepreneur first, which is how we started UpGrad.

For UpGrad, my goal is to make it 10x of what UTV was and that’s what we’re setting up to do, primarily because the education space is massive, its right for disruption. The higher education space and specialisation is something where there’s so much work to be done.

When did you launch this, and how many enrolments do you have? What is your vision for UpGrad in 2016?

We launched in November and in our entrepreneurship course we got about 400 enrolments paying Rs 50,000 each (around $750), which is not a small thing. I think our goal in the first year is to have about 4,500-5,000 students and grow exponentially, there’s no upper capacity in that sense. We want to launch 15 different courses over five broad segments.

We launched in November and in the next three months we’ll launch five new courses including data analytics, digital marketing, and product management.

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Your investments through Unilazer have not been media related, was it a conscious decision?

It was a very conscious decision that if I want to do something I might as well do something that is completely new, that’s the fun of life. I don’t think media is ever going to be a place that I will invest in. If I want to do something in the media space I’ll do it on my own, but no immediate plans as of now.

What are the sectors that interest you?

B2C and sectors that can scale and where brand plays an important part. It also has to be very customer engaging because that’s where I think I can add value. If two-three people get it right in a sector then they will create tremendous value.

What is your average size of investment in startups?

I do early stage but not so much angel, because that’s a stage where one can impact the company at some level and you can get a company at  a right value. Our mission is that we want to come in at a stage where we can own 25-40 per cent in a company.

In terms of size of the investment, our lowest has been Rs 5 crore and highest has been Rs 100 crore. So it could have been a Rs 30 crore investment to start with, which went up to Rs 100 crore in follow-on rounds.

Are you in for big-ticket investments as well, if you see value in them?

Big-ticket is a subjective word, in Lenskart and Zivame, we’ve done follow up rounds.

Are there any sectors that you think are untapped for you?

We just invested in online insurance. So though there has been one dominant player in PolicyBazaar, but that space has not grown past that one player. There is clearly place for more than one player, that is why we invested in EasyPolicy. The home services segment needs some consolidation, so we’ve taken a 40% stake in TimeSaverz.

Is there a particular fund that you have in place?

There’s no fund. This is me and a colleague of mine who heads this full time. So there’s no fund, no structure, no external funding that we are looking at.

Do you think that with the scale that you are looking at you would require external funding?

I’m very focussed on building from-the-ground businesses like UpGrad and USports, along with Swades Foundation. Right now I’m enjoying the fact that I can decide at a particular level and go for it, and I think that when you take other people’s money its much more onerous. I’ve done that for 20 years in media, I don’t want to do it again.

What is your vision for Unilazer? All your angel investments would also be done through Unilazer?

Unilazer is a holding company so I don’t have a vision for Unilazer, I do have a vision for myself. Unilazer is the brand for investments, Swades is our brand for non-profit and outside those the brands that we want to build up are UpGrad and Sports.

You’ve placed your bets on three businesses, which one do you think will be the biggest revenue generator for you?

UpGrad. Sports will take time, its a longer term investment, because we are training and investing in talent. In football we are taking a 10-year bet.

What kind of revenues are you looking at for UpGrad?

We’re a private company so we don’t want to share numbers, but we’ll be deeply disappointed if we weren’t a Rs 1,000 crore company in the next  three to four years.

Is there something in the media space that could attract you back?

I’m curious about the digital space, but the models are not very formed right now, so I’ll see how that goes. However, the content space in media really fascinates me because I think it creates an impact on the younger generation. Even with the movies we have done from a Jodha Akbar to a Rajneeti, to a Barfi and Rang de Basanti, there was a sense of impact and direction. In some ways that’s an unfinished business for me and at some stage we will look at it.

What is your view on the current investment environment?

I think the same people who madly invested are now saying, ‘wait a minute I need to sanely invest’, so that’s no big deal. Most of these ecosystems it’s the bankers and investors to blame, so they better take the responsibility. Unfortunately the entrepreneur gets squeezed in the middle. I urge entrepreneurs to build companies as per their own vision. Otherwise, the investor might be putting in money for your vision, but you are trying to second-guess their vision. If it works you are going to get the credit, but if it doesn’t then you’re going to get the flak for it. So you might as well back your vision, that’s why they have put in money in your company. That part isn’t working too well for a lot of people. But today I”m glad that in some sense the complete madness in investment in certain sectors only happened and now its settling.

Are there a lot of me-toos and lack of original ideas in the market right now?

Some of these businesses need to turn profitable, otherwise what are we building. I am quite skeptical of some of the role models that we are looking at here. I don’t think raising money is a medal of honour. Of course it’s difficult, but then when success begets success and everyone see this as a rat race where they don’t want to get left out. Building a business is a very tough thing to do. And if you’re not seeing profitability in businesses, and if you’re going to buy customers that are way beyond their life time potential, then we’re not really building companies and businesses. And I think we draw parallels to say that Amazon has not made any money, but they were profitable and were reinvesting. Microsoft didn’t declare a dividend for 35 years, but look at what they built, and they didn’t build it around discounting. I think the discounting model is a really big problem and the herd mentality is the other big problem.

What do you look for in an investment opportunity, is it the entrepreneur, the idea, the market?

I think it’s the entrepreneur. I think the clarity in the vision and conviction in himself or herself make a lot of difference. Those don’t come from one or two meetings they come from multiple meetings, when you figure out that when the going gets tough, how is this person going to react. Then there’s the sector, if you pick up an entrepreneur in some boutique sector, nothing is going to happen.

Are there any sectors that you think are untapped and would like to invest in?

There are a lot of sectors I think, conventional sectors like waste management and many other sectors that are not so “sexy” in their perception today. I would love to go into those sectors, we’ve invested in a micro-housing finance company, which would have some scale. We’ve invested in an agriculture aggregator that does pomegranate and bananas and we want to build that to scale.

What about exit strategy for you?

As an entrepreneur I know you can’t have an exit strategy in a sense that as an entrepreneur he has to build a valuable business enough that liquidating investments will be easier for investors when they want to exit. If everyone has got an exit strategy then the business will not work, that I don’t think is a differentiation that people make today.

For 2016, is there a number you have in mind about the kind of investments that you Unilazer will make?

Actually none, all my resources, time and effort are going into UpGrad, USports and Swades. 2016, we just finished some interesting investments including an AI firm Niki. So for 2016, I think we’re done. I think by 2017 there will be some new interesting sectors, but we keep meeting entrepreneurs, so its a reservoir that you build and we might look at topping up some investment.

Also Read: Former UTV head Ronnie Screwvala decodes India’s digital media landscape

Insurance policy aggregator Easypolicy raises $2.2m from Unilazer Ventures, others

India: DailyObjects raises $1.4m from Unilazer, Peyush Bansal & Phanindra Sama

India: Ronnie Screwvala-led digital media company Arre acquires Apalya Technologies

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.