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Connecting Fund Providers To Fund Seekers

Friday, May 06, 2016

Sanjay Kumar Nishank, Co-Founder, Director - Capital Market Integration & Special Initiatives, GREX Alternative Market

Sanjay Nishank, Co-Founder, Director - Capital Market Integration & Special Initiatives, GREX Alternative Market has over 15 years of cross-cultural experience in managing complex programs, business development and new business initiatives. Being involved in multiple industries including large software services, manufacturing organisations and startups, he has inherent expertise in varied functions including large program management, valuation and business growth/scalability aspects. Sanjay has done few angel investments in his personal capacity and has conducted sessions for the startups in areas such as valuation, credit rating/grading, business growth and scalability. Sanjay is one of the co-founders of GREX and he drives the institutional collaboration and process standardization efforts across capital market partners. In conversation with Dominic Rebello, he explains the dynamics of provisioning funding for new companies.

What drives you?
The sheer pleasure of interacting with new companies started by new age of entrepreneurs and talking about the problems they are trying to resolve and the solutions. Since I am an engineer, I always had an analytical mind, which means that I can always poke holes in someone’s logic of providing a solution to a problem. End of the day, the entrepreneurs have realized the existence of a problem and are trying to work out a scalable solution to that problem and with comparatively lesser cost and time. Apart from this, I believe that I have been born in a generation, which had the good luck of enjoying the fruits of Indian economic liberalization and hence I strongly feel, it’s incumbent upon us to contribute in terms of thoughts/ideas, time, and funds to the development of the Indian economic environment as a whole and entrepreneurial environment in particular.

How big is the potential for a business like yours?  Any statistics to compare with international standards?
The underlying theme of our business is to enable Information Exchange and Access to Funding for Unlisted Business!! The key words are “Access to Funding" and “Unlisted Business”. The funding can come in through any types of instruments and security categories, including equity, debt, hybrid and the unlisted businesses can be startups or SMEs or any company which already has market-validated business model and is looking to raise capital. Looked from this perspective, there is a huge canvas that we are attempting to play in and in fact, in our view, unless we look at the problem with this perspective, we can’t build a long-term scalable and transparent business which will truly solve the “Lack-Of-Funding” problem of the unlisted companies.

As a platform, we cater to two primary customer segments: Companies (Unlisted) - the Fund Seekers and Investors (both Individual and Institutional) - the Fund Providers. In the last 8 months of our operation, we have helped close the funding rounds of 3 high-growth companies, supported by investment from close to 35 individual high-net worth investors.
     
How do you plan to scale up; raise funds through seed or venture capital or simply grow the old fashioned way through rising turnovers?
As you can understand, the only way that we can make money for ourselves at GREX is when we have large number of fund-raising transactions happen at the platform and for that to happen, we need to keep building structures, processes and team for some time and later enjoy the fruits of that, once it stabilizes. Hence, we look forward to keep raising funds for running GREX for at least the next 2 years, at different intervals. The percentage of contribution of funds from external sources towards our cost of operation will come down over time and will almost be zero, in the 3rd year from now, when we will start generating enough money from our existing operations. In the last 2 years of our operation, we have already raised funds in 3 rounds, from individual angel investors, but from the next round onwards, we intend to raise funds from some of the institutions, which can bring visibility and certainty to our operations in the future.

Who would primarily be your consumer audience?
As I mentioned above, the primary audience for our platform are companies (the fund seekers) and investors (the fund providers). However, one can understand, as we are trying to build an ecosystem and not necessarily a connecting platform, GREX has a much larger consumer audience including banks, NBFCs, capital market entities like depositories, custodians, credit rating agencies, analyst agencies and Government departments like the department of MSME or industries.

Where do you see yourself five years down the road?
Over a 5-year time horizon, we believe that we will be able to support the fund-raising efforts of at least 8000 companies (startups and SMEs) and should be able to achieve a GTV (Gross Transaction Value) of USD 2.5 bn, via issue of equity and debt instruments.

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