For some four decades now, the legendary Mark Mobius has placed his bets on emerging markets—and won big.
The latest investment by the executive chairman at Templeton Emerging Markets Group, which manages over $40 billion (pdf) in emerging market assets, is in a little known startup that traces its roots to a business school hostel room in central India.
Earlier this month, Mobius invested an undisclosed amount of money in Entropy Innovation, a startup that claims to have built India’s first automatic motorcycle washing machine. The funding was routed through Mumbai-based venture capital firm ah! Ventures.
Entropy Innovation began after three bikers—Niraj Taksande, Jigar Vora, and R Bhushan Karn—decided that manually washing their beloved Royal Enfield and Yamaha bikes was simply too tedious. And since there really wasn’t any other option, the trio began conjuring up their own solution sometime in 2012.
“The concept started from my hostel room at IIM (Indian Institute of Management), Indore, where we initially brainstormed over possible ideas,” said Niraj Taksande, who graduated from the business school in 2014. Vora and Karn—who studied electrical engineering from the Indian Institute of Technology (IIT), Bombay—had just quit their jobs at JP Morgan and Asus, respectively.
By 2013, the trio set up a small workshop in Mumbai to build the prototype.
Much of the initial funding came from the founders themselves. “All three of us had pooled an initial amount of Rs12 lakh from personal savings and some came from an idea stage investor, Shyam Babu,” said Taksande. Babu is a senior of Vora and Karn from IIT Bombay.
“The idea too was new for India,” Taksande explained in an email interview. “We founders, being avid motorcyclists, felt there was a gap in wash services, the quality and its availability. To address this, we conceptualised several ideas of which the mechanised washing appeared executable to us.”
After eight months of research and development, Entropy finally unveiled its machine at Goa’s India Bike Week in January 2014. The system is seemingly simple: Once a bike is parked in the machine and the doors are closed, the wash cycle starts at the press of a button. It doesn’t need a skilled hand to operate the machine, and Entropy claims that the wash can be completed in two minutes.
In November 2014, the company—which now has 25 employees—rolled out its first store, in the parking lot of a mall in Mulund, a Mumbai suburb. Since then, it has added three more stores—and plans to open a staggering 800 stores by 2018, mostly through the franchisee route. “A large number of requests are coming in from India’s Tier II and Tier III cities,” said Taksande. “Thats where we plan to scale up operations.”
India’s smaller cities are central to the country’s motorcycle market, with strong growth in even high-end bike sales lately.
The company charges between Rs50 and Rs150 for its quick wash, which is in the same range as the rates charged by service stations that use manual labour.
“If a motorcycle has to be washed, it has to be done in our machines. This is what we aim,” Taksande said. “In order to do this, we wish to empower every wash centre, service centre, petrol pumps, parking lots, and housing societies with our machines.” It costs about Rs13 lakh to build a prototype of one of these machines, according to industry sources, although it could be cheaper when manufactured in larger numbers commercially.
All this may seem wildly ambitious, but India is the world’s second-largest market for two-wheelers. In 2014, as many as 14 million two-wheelers were sold in the country, according to the Society of Indian Automobile Manufacturers.
That’s a lot of dirty motorcycles waiting for a good scrub.