How This Fundraising Rockstar Mechanical Engineer Raised US$43 Million To Date
When Pranoti Nagarkar-Israni and her husband Rishi Israni embarked on bringing their dream to life, little did they know that ten years down the track, they would raise US$ 43 million in funding and be at the helm of an over hundred employee strong organisation.
It was one life-changing invention that brought the Isranis’ company, Zimplistic, to where it is now.
“I approach any situation with the mindset of “think solution first.” I did whatever it took to get a solution. In most industries, people follow norms. You need a disruptor to come in and change things!”
Learning that an Indian family could make up to 35 rotis a day, Pranoti went to the drawing board and cooked up a plan. She wanted to make the lives of thousands of families easier by using tech to automate the tiring and mundane, albeit necessary process of making roti.
So, the Rotimatic was born – a revolutionary fully automatic flatbread making robot.
Yes, it is as amazingly cool as it sounds! The Rotimatic can magically transform flour, water and a myriad of ingredients into the softest, thinnest, most delicious flatbread or roti.
The wonder invention years in the making
To a mechanical engineer like Pranoti, it’s no magic at all. It means having ten motors, fifteen sensors, and many moving parts that enable the precision required to make a one-millimetre thin roti.
Pranoti says that making rotis is a very complicated process. As humans, we have all the tactile senses along with a smart brain. Roti making requires movement because there are many steps: you need to get the right dough, the right shape, and then you need to get it to puff.
“Our challenge is to sell a US$ 1,000 product without having a touch and feel store. It is not a competitive industry. It’s our own competition against time and meeting the investor requirements that challenge us.”
On top of that, getting an exact round shape and the right consistency of dough requires a lot of intelligence and sensor technology, along with algorithms that are running parallel to achieve roti perfection.
Pranoti invested eight years in the research and development stage of the product.
As Pranoti’s forte was hardware engineering, in the beginning, she did everything related to the architecture, mechanism, and industrial design. Her husband Rishi, being a software engineer, handled artificial intelligence and the designing of algorithms.
To date, he also works on bringing in capabilities like Internet Of Things (IoT) to the Rotimatic. “It is a marriage between hardware and software, and both are equally important,” Pranoti explains.
Pranoti informs that there’s a significant amount of art involved in the designing of the Rotimatic, and to bring all that into a machine they created 37 patents. The Rotimatic spent a further two years in the manufacturing phase before hitting the market in 2016.
Off to market it goes!
Since going into the market, 35,000 Rotimatics have been sold so far. That’s a lot, considering the price point of US$ 1,000 per unit. Pranoti reveals that the primary target market for the Rotimatic consists of Indian expats around the world, with their biggest market being the USA.
She says that given the sheer number of people that eat roti on a daily basis, she always had an inkling that the Rotimatic would do well.
“When your product goes to market is when you face the reality of all the effort you have put in. For us, the good news is that people love the product, and having it in their homes is actually life changing”
The IoT and Artificial Intelligence (AI) enabled device not only allows its users to eat at home more often, but it also helps them control the ingredients they put in. Because of IoT, users can download new recipes as they go.
Pranoti adds that although it’s the same machine, it keeps getting better over time; the hardware remains the same while new software can be downloaded off the website.
Therefore it isn’t surprising (yet super fascinating!) that the folks at Zimplistic can track every single roti made. In fact, every single roti made is celebrated through a digital notice board that sits at the entrance of the office.
In case you’re wondering, since its launch, more than 24 million rotis have been made so far!
Although the Rotimatic is yet to be launched in India, Pranoti explains that there is a massive amount of interest. They are working on building operational stability to enter the Indian market next year– Pranoti feels they will be able to give customers good service at the current price point.
With the massive success the Rotimatic has seen, it is clear that Pranoti’s invention is a genius idea. However, having a brilliant idea alone cannot make a design a success.
“Up until 2014, we still had only 10 employees. We grew quite rapidly in the next few years. Now we have over 100 employees with the majority being engineers.”
These days, although Pranoti isn’t immersed in mechanical engineering, she oversees food development, product management, sales and marketing.
She is also very actively involved in fundraising, and given the sum of money she has raised, it is evident that she is doing something right. We know that no invention, however genius it is, can see the light of day if not for adequate funding.
Here, we give you a 101 on how funding works for a startup, based on Pranoti’s experience. She also shares some other mad skills she has picked up during her fundraising journey.
The basics of fundraising according to Pranoti Nagarkar-Israni
1. Begin with bootstrapping
Most small businesses start with bootstrapping when they don’t want to be inundated with massive loans. Simply put, bootstrapping means gathering funds from your personal savings accounts, or using your credit cards.
Pranoti started with bootstrapping as well. The idea for the Rotimatic was born through necessity when Pranoti and Rishi were newlyweds. “I was quite idealistic and wanted to make food at home. I started cooking and tried making rotis from scratch for six months and realised the whole process took more than 40 minutes,” Pranoti recalls.
“Since I couldn’t get good rotis [in the market], this became a problem I wanted to fix. My husband and I did some research into this and realised that there wasn’t any solution to this,” she continues.
“Focus on the problem at hand and find a solution. When faced with a problem, I am like a lone warrior with a vision and a mission. I move past whoever comes in my way.”
Using her knowledge as a mechanical engineer at NUS and her experience building a prototype for an autonomous vacuum cleaner when she worked as an engineering consultant assigned to Philips from Amtek, Pranoti got working on her idea.
For the first two years, while working on the prototype, Pranoti discussed that she didn’t have any money coming in and it was her savings of S$20,000 that helped them through those years.
However, the immense excitement of realising that she was on the cusp of doing something that has never been done before kept Pranoti motivated and focussed. “It was the possibility of a great opportunity. Also, it would be a dream come true for someone who makes rotis every day,” she shares excitedly.
2. Approach friends and family for funding
Turning to family or personal connections is the natural second step before going to outsiders for funding. After Pranoti used her savings to build the first prototype, in 2009 the Rotimatic won S$40,000 at the Start-Up Singapore Business Plan competition.
“We also got another grant of S$50,000 apart from getting some more money from well-wishers and friends.” Pranoti continues, “Five gentlemen in our community who are high net-worth individuals gave us S$500,000 in 2010.
We needed money for the actual engineering of the product and patent filing, which also costs quite a bit. They believed in our idea!”
3. As your startup grows, try other avenues such as crowdfunding and angel investors
Moving up a notch from family and friends, next in line for a startup is crowdfunding. Jargon decoded, crowdfunding means you find a crowd of people who will collectively fund your project.
“Women are breaking boundaries! Even in mechanical engineering, the glass ceiling is broken in many places and I don’t think there is a barrier to entry for women. CAD modelling is no more a male/female thing. If your brain is wired to think like that, you can do it.”
Although Pranoti didn’t use the crowdfunding approach to get funding for the Rotimatic, there are many websites such as FundingSocieties.com, FundedHere.com, GoGetFunding.com and Kickstarter.com that help with this.
As a startup grows, you may then look to angel investors for funding. They are either individuals or organisations that lend money to established startups with certain expectations such as equity in the company.
4. Ready to take your business to the next level? You will need Venture Capitalists
When your business matures, you will realise that you need vast sums of money to fund your expansion plans. For instance, you may need to hire more employees, invest in research and development, or support the company’s long-term growth.
At this time, you will need more significant loans and the help of Venture Capitalists (VCs).
What you need to know is that VCs will want to get a return of at least three to ten times their initial investment within a stipulated period. So although you will receive large amounts of funding, usually in the millions, VCs always need collateral.
Therefore it is essential to have a solid business plan in place when approaching VCs.
“I grew up with very strong women. My mum rode a motorbike, played cricket and never set boundaries that to be a woman, you needed to be a certain way. I was always treated equally.”
In July 2015 in their Series B funding round, Zimplistic raised USD 11.5 million from VCs NSI Ventures and RBVC. The funding was used to enhance Zimplistic’s engineering capabilities, product qualification, mass production capabilities and other business operations setup.
More recently in April 2018, in their Series C funding round, Pranoti and Rishi were successful in raising a further USD 30 million led by the investment arm of the Economic Development Board of Singapore, Credence Partners and EDBI.
Sharpen your technical knowledge and soft-skills
Pranoti learned early on that apart from knowing the basics about fundraising, having some critical soft-skills helped her get investors to show her the “big bucks.”
“Fundraising surprised me as I had to face intimidating high-net-worth individuals. I remember being so emotionally passionate about the Rotimatic, that when I was asked a practical question, I answered with so much emotion that I even teared up,” reminisces Pranoti.
She explained that since then, she has learned to think and react more practically and display more poise when facing her investors. In addition to her presentation skills, she also fine-tuned her negotiation skills.
Apart from impressing her investors, Pranoti’s negotiation skills impressed her suppliers as well. “I was equally surprised how I managed to negotiate with suppliers. I didn’t know I could negotiate so well!” exclaims Pranoti.
During the early days, Pranoti would ride her motorbike to meet suppliers, a tactic she used as a conversation starter, later becoming a statement that she meant business.
“I rode a Honda Phantom for four years. Although I started riding it because it was more convenient, I really showed it off when I went to meet suppliers to try and build an image that I was a strong woman. It was also a good conversation starter as they would be intrigued when I carried my helmet.”
“I was quite aware of it and used it to my advantage,” says Pranoti, explaining that vendors and the supply chain are usually male-dominated areas and she wanted to break the perception they had of a woman mechanical engineer.
However, Pranoti is quick to stress, “Ultimately your work will speak for itself through your knowledge of that subject. What I did with the motorcycle will take you only so far, you need to know your stuff!”
“So for me, because I loved what I was doing and loved this subject, I had a firm grip over it. So I could stand any challenge or answer any question,” Pranoti says.
Apart from launching in India in 2019, there are plans for some new features on the Rotimatic. “We have just released a pizza base recipe. Coming up next, we have a remote control feature which is to be released in the next two months. We also have tortilla wraps and gluten-free rotis coming up. It is not just plain rotis anymore! You can do much more,” she boasts.
“There are a lot of fellow founder women who are all doing something different and sticking through. To stick to your idea and beliefs and see it through requires consistent courage. Roshni Mahtani is one such woman I admire.”
Indeed, these are exciting times for the Isranis. However, Pranoti can’t help but feel tremendously blessed. “I feel like we’ve got this huge opportunity with Rotimatic,” she shares.
“We touch so many lives with as many as 35,000 families using the Rotimatic. It’s also a huge opportunity to build an organisation filled with people and their aspirations, inspirations and stories. I feel an organisation is a great opportunity to spread happiness!” Pranoti adds pensively.
Drawing our discussion to a close, we ask Pranoti what her proudest achievement to date is. With a smile, she declares, “It is that we stuck to what our dream was… and it has turned out to be very, very close to what we imagined starting out!”
What do you think about Pranoti Nagarkar-Israni’s entrepreneurial journey?
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