Manoj Adithya’s inspiring journey through the maze of acquisitions offers a treasure trove of insights for aspiring and seasoned entrepreneurs alike. From ethical decision-making and stress management to the strategic importance of rebranding and the power of mentorship, his experiences provide a robust guide to navigating the turbulent waters of business exits. Tune into “The Big Exit Show” for a deeper dive into Manoj’s story and valuable lessons from his path to success.
This is what we discuss during this episode:
- Moral Compass in Business Description: Manoj emphasized the importance of ethical decisions, rejecting deals that compromise integrity or side-line investors🎯.
- Handling Acquisition Uncertainty Description: The episode highlights the unpredictable nature of business acquisitions and the need for resilience and backup plans📈.
- Investor Relationship Management Description: Maintaining open communication and strong relationships with investors can provide crucial support through tumultuous times 💸.
As always – hosted by Peak’s very own co-founder and managing partner Johan van Mil and Anke Huiskes founder & managing partner of NP-Hard Ventures 🕺🏻🕺🏼
You can find the episode on your favourite podcast platform, linked below. And, if you are truly interested in listening to the big exit of specific founders – reach out to us so we can invite them for the next episode!
Spotify Podcasts
Apple Podcasts
Youtube
You can find the transcribed version of the episode below:
Johan:
Starting a company is easy, growing a company is harder. But selling your company, that’s a whole different story. In the big exit show, we lift the curtain of secrecy around selling businesses by learning from ambitious and successful founders who have been on this roller coaster. Our hosts, venture capital investors. Johan van Mil, the founding and manager partner of Peak, and Anke Huiskes, the founding and managing partner of NP Hard, will help you on this exciting journey.
Anke:
So Johan, we just got off the call with Manoj who told us his incredible story about how his company kind of like died a few times, got different acquisition offers on the table that fell through or didn’t happen for other reasons. And then in the end he brought his team home a great deal. For his investors, the whole scenario could have been differently, I think, if they had made different decisions based on different values. It’s very interesting, I think also this story. What were your key takeaways?
Johan:
Yeah, indeed. Because it happened with him, I think three times that the deal fell through almost last minute. Right. And you see it happen a lot, right? I see it also in funding grounds, but I see it also in exits happening that there’s a Dutch saying, right? I like the pronunciation also it is postbinne or I mean if you have money on the bank, then you really have closed the deal. And until then it’s very, very insecure. And I think this case, how Manoj handled that proves that. I think that’s one. And secondly, what I liked a lot that he had, let’s say an offer on the table where the investor pulled back and they made a very strange offer to him where he would really rule out the investors.
Johan:
And then his mobile compass guided him not to take that offer. And I think that also shows indeed that at the end there will be a great solution. And he, he promised that also to his founders and he realized it. Right. So I think a great case also that a moral compass, I mean money is of course important, but a moral compass I think is even more important and he proves to do that. So I think a great episode for our listeners to learn on how to deal an exit and also how to run the process because he gives massive insights also on that.
Anke:
Yeah. And for like almost like a two year journey. So all these listeners tune in and enjoy the show.
Johan:
Enjoy.
Anke:
And today we’ve got in the hot seat Manoj, Manoj Adithya, who’s living in Amsterdam. And he’s very open to share his story of the company that he sold last December, if I’m correct. So let’s kick it off. Thank you, Manoj, for joining us today.
Manoj Aditya:
Well.
Anke:
Let’S get started, I guess with how you started the company Rome and I think when you started it even had a different name. So very curious about the beginnings.
Johan:
The start.
Manoj:
Right. Well, thank you so much for inviting me on the show. I’m really excited to talk about my journey just to get started. I haven’t really spoke about my journey or the acquisition that much. I guess it’s going to be interesting for me to even relive the moment. So I think it’s going to be a fun conversation. So how this company started Roam AI I think we started this company as Holo, which was a location based master messaging app which we built as a social app where we could leave messages for different people or friends and family in different locations and when they get there, they get notified about that problem. So that was the original idea that we started with and at the peak of that company we had like, I don’t think around 20,000 users.
Manoj:
And the only problem was we couldn’t figure out a way how we could monetize that app. And that’s when we were almost going to shut down. We got an invitation from Rockstart, they’re an accelerator based in Amsterdam. So they had a one month AI launch track program. And I was like, okay, fine, let me just go to Amsterdam for a month and just showcase my product. And then I ended up in Amsterdam a week later and I was like, okay, this is my app, this is what we’re building. Clearly understood that the product that we were building was completely useless and no one really wanted it. And that’s when we realized.
Manoj:
But the technology that we built, which was location tracking aspect, where we ensured that the battery drain was so low because we were trying to solve that problem of always tracking a location. So that was more useful compared to the app itself. So we took the technology out of the app, we put it in the SDK in a couple of, I think in almost a week. And then we rebranded ourselves as GeoSpark during that one month program and we started pitching that as our new company. So we pivoted very, very quickly as GeoSpark. And that was the beginning of us building a developer focus platform for enterprise applications. So that’s how we got started into this market.
Anke:
And after you moved, so you’re, you said like you saw the implication of Rockstar, like that’s a pretty big step I guess from coming from abroad and like taking that shot.
Manoj:
So I was, yeah, I was based in Bangalore, India at that Time. And that was right after I left my previous company. So it was. So I think that, I think right before that I was actually a bet in the US as well. And that’s kind of how I moved to Amsterdam. Actually. It was a pretty big job.
Johan:
You mentioned also, I mean, the company when you sold it was Roam.ai, before it was GeoSpark and before it was Hotline. Right. What was for you the reason to rebrand your company every time? Because you don’t see that really often, right?
Manoj:
Yeah. So I think the reason why we rebranded Holo to GeoSpark was because Holo was not really a great name. And then we went to GeoSpark because it was Geo’s location locations part was getting locations accurately and fast. There’s actually a name that came was coined by our cto. So I think that’s why it sounds like a technical name. And I said, okay, fine, we need a new name, let’s just go with it. And then we just went with it. We never really thought that it was going to become like a company.
Manoj:
We never knew it was going to go into the next step. So we said, let’s just go with the next best name we had. And we also didn’t want to use Holo because we also had that app active and we didn’t want to shut that app down immediately. So we kept that app still alive and we just wanted to use the new name for the technology itself and that’s kind of why we had to rebrand ourselves.
Johan:
Okay. And second question for me is indeed, on your move to Amsterdam to join Rockstar, what’s your experience in joining an accelerator like that? Right. Especially in the pivotal phase of the company coming India from another country. What’s your experience on that?
Manoj:
Yeah, so it was not really an accelerator initially. It was a one month launch track programs. But I think it was a great experience for me. I think I made the best use of it. I met a lot of interesting people, a lot of exciting mentors, and I made the best out of it. So when people ask me the question, okay, what do you think of accelerators? I always tell them, accelerators are great, but it’s about you, how you make use of it. If you’re not going to make use of it with the people, the connections, the resources, then you’re going to be missing out. So I would say I made the best out of it.
Manoj:
So that’s what I would say.
Anke:
And then I have a question about how you position the product, because previously it was an enterprise or a consumer.
Manoj:
Product, the Holo, it was a consumer product, it was a social app.
Anke:
Yeah. And from there you turn it into developer product.
Manoj:
Exactly.
Anke:
And that’s like a different market that you sell to. Whole different. Same product, different market as well. Which is brave, I guess. And it was the smart thing to do. Did you go about it in that process?
Manoj:
I mean, if I think about it, I think it was more about customer interviews. So we started talking to a lot of people. I think with being in Rockstart, we had access to a lot of mentors, a lot of extended networks. So we spoke to, I think Mark Platz, people from Mark Platz. We spoke to a couple of other big companies, even booking. And then we started really talking about our app and then the technology itself. And then we decided, okay, fine, you know, a lot of people are resonating with the same thing that they want a location SDK. They can track location, but with almost no battery drain.
Manoj:
When they heard that, they were like, this is amazing. And we want this and we just want the technology aspect and we don’t want anything else. And I think that was our validation. And the more we started speaking to different people and developers and businesses, they all said the same thing. So it was our biggest validation saying, okay, I think we’re onto something. And that’s why we decided, okay, fine, let’s do this.
Johan:
You raised capital, right? I think you raised, let’s say something with Rockstar, Right. Typically, let’s say for the programs like that, if I’m not mistaken.
Manoj:
So after the one month program, I think we were also the best startup out of the program and we got a free pass into the six month accelerator program of Rockstar and that’s how we got into the accelerator as well. So I had no intentions of being in the Netherlands after one month. But then everything just happened. We came here, we did the one month program, and then we were pushed into the six month program. And I think right after we got into six month program, it’s started becoming real. It started becoming a real company and we got I think €20,000 in cash. And that was what I think Rune always keeps saying that it’s called pizza money. Yeah, exactly.
Manoj:
In startup world. And we used that money to actually build a great product. And yeah, we just made the best out of the program. And even during the program, I think I was a bit rebellious because our mentors were telling me to focus on building an enterprise. Only focused Sol. But then I wanted to build an open developer platform where any developer can sign up to our dashboard. Get an API key, download the SDK and get started immediately. And even there was even a point where I think we were even going to get kicked out of the program because we were not listening to our mentors.
Manoj:
And that’s basically what was almost like pivotal for us. And we said, okay, we’re just going to go with our gut because we feel like this is working. In Feb of 2018, 2018, we actually launched our, launched our platform openly to the world. I think we’d launched on Product Hunt and a few other places. It was actually one month before our demo day and that was a huge success for us. We had signups or signups, I think at the peak of it, we had almost like 5,6000 signups in the end of the first month. I think, I think that was very, very good for us. And immediately we were able to prove our mentors and everyone wrong, that okay, we were onto the right thing.
Manoj:
And they all started saying, okay, you guys did, you guys did the right thing. So it was actually, it helped us a lot.
Johan:
And this helped you also to attract funding, right? I think after that the average invested in you, but I think also you raised 1 million afterwards also, right? Also that we met, right, because we also looked knew each other from that time. But what especially also for founders, right? What can you tell them? What suggestions and tips would you give to them to raise funding? Right. Especially in these days because as we all know, it’s harder these days. Right? So what are your suggestions for founders? How to raise funding?
Manoj:
Yeah, for me, my personal experience with raising funding was we met Volta Ventures initially at the end of our launch track program and then we went and asked them money. Of course, I was young and stupid, so I was like, oh, here’s my product, can you give me some money? They were like, no, you still have a long way to go. There’s a lot of things you still have to do. And what we did, right was we were updating our, updating our prospective investors regularly every month or every couple of weeks about our progress that behave. We got into the program, we updated this, we launched this, we have X amount of customers. We constantly kept in touch for six months or five to six months to give them an update. And once we launched and once we started seeing early traction, I think that’s when most of the investors actually came aboard. So we had, we had a term sheet from Volta Ventures and then we had some interest from incaf and we also got a call, Johan from Peak as well.
Manoj:
They also. And then we also had A couple meetings with quite a few number of investors. We also had airbridge Equity partners reach out to us after our demo day. And I think we almost had like four or five different parties, you know, battling it out at the same time. It was a very exciting time. I was, I would say it’s too good to be true. I wish I’m in that same position in the future. It was a very good position to be in.
Manoj:
But the thing that we did right was we were constantly keeping our investors updated about everything, and we made sure that everyone knew about all the conversations we were having. Sometimes people do tell us that when you’re talking to investors, don’t tell other investors. But then we just told. And I think the rockstar community was so small that everyone spoke about everything and everyone knew what was going on with GeoSpark at that time. So we got a couple of term sheets and we ended up working with airbridge because we got the best terms and it was just easy for us to make it work. So end of the day, we decided to go ahead and work with average for our first seed round. I think we raised half a million. That was exactly on April 5th.
Manoj:
So we had our demo day, I think the first week of March. I think a month into our demo day, we had money in the bank.
Anke:
Congrats on that. It’s a good position to be in, I guess the choice with that money, what were the biggest drivers, I guess, in the business that you could realize to basically get to the next inflection point, right?
Manoj:
The minute we got the funding, we were really happy about the whole idea. Like, hey, we made it, we got the money. But we didn’t realize that that’s when the biggest problem actually started because we had to start making money and we had to make it into a real business. So what we started seeing after we raised funding was we started seeing a huge amount of churn from our. From the developer things. People started leaving, and the biggest reasons were because they wanted more than just location tracking. They wanted it to solve multiple problems. And we didn’t realize that because we just thought, okay, this is the one thing that’s solving a problem.
Manoj:
People got excited, but then when they started integrating and working with it, they just needed other things to make it work better. And that’s when we started scratching our heads and we were like, oh my God, this is a bigger problem. So we took some time, we started rebuilding the platform. We did. We went back to the drawing board, started talking to customers again, started understanding what they actually need. And then we started rebuilding it. I think if we didn’t have that money at that point, we wouldn’t be able to rebuild the whole platform. And we were able to launch a really, really good version of GeoSpark at that time, I think, in early 2019.
Manoj:
And then we were able to sign some good customers in 2019. I think that’s basically what happened with the funding we raised.
Johan:
How did your investors at that time respond? Right, because I can imagine that they jumped in, you had a promising result, right, from the product, etc. Then they stepped in and as you mentioned, a lot of companies or uses also insurance, and you had to rebuild your product. Right. What was a relationship with your investors at that time?
Manoj:
I think we had a very good investor. I think Rick from airbridge was very optimistic all along, and he’s also very supportive. I think there was not a single point where they were disappointed about anything. They were always excited and they always tried to just keep us going. And they just reacted positively. They were like, okay, fine, at least you see the problem. You’re looking at it. You’re making the right steps.
Manoj:
And they were supportive is what I would say.
Johan:
Yeah, good to hear. Because we also see sometimes founders. Right. We just keep on growing and ignoring each other. So I think it’s good that you.
Manoj:
Okay, good to hear the growth phase.
Anke:
And basically from there on, when you got the money, you figured out basically the product market feed, like, who to sell to people that are willing to pay from like 2019 and then like speeding it up a little bit, like to 2023. What were for you, the biggest highlights and maybe also like lowlights that happened in that period.
Manoj Aditya:
Right. I think in the end of 2019 is when we started bringing enterprise salespeople to our team. And it was. We spent a lot of money. We extended our budgets to make sure we can hire the right people to ensure we make a lot of revenue. And I think right when we were supposed to close some major deals, enterprise deals, in early end of 2019, early 2020 is when Covid happened. And I think Covid really put a knife into the company where we lost a lot of these big deals, indefinitely delayed. And that actually really affected us a lot, at least for the first year.
Manoj:
And surviving that first year was actually a very, very big challenge for us. And after that, after that, I think we decided, okay, fine, we needed to rebrand because of some reasons. We were like, we got a trademark lawsuit for the name GeoSpark. I think a company called GeoSpock sent us a letter saying that we cannot use our trademark anymore because it’s affecting them. I think that was the reason why we decided to go after and rebrand. And then we rebranded as a roam AI. I think early 2021, I think that was actually the best decision we ever made because I think right after our rebranding, people started looking at the company differently. I don’t know why.
Manoj:
Maybe it’s the name, it was the position. And we started getting a lot of. A lot more serious customers, a lot more serious interest in the product. So that’s when we started working with some of a big insurance company here in the Netherlands. We started working with the Dutch government. We started working with a lot of enterprise transportation companies, companies behind the New York Metro, the Hong Kong Metro, powering the technology there. So we definitely got a lot of interest from a lot of big companies. And then at some point we decided, what is the direction we want to go in? Do we want to raise more money or do we want to, you know, exit, or do we want to sell our company or join a bigger company and do it? So we decided to go in both routes.
Manoj:
But then I was more keen on exploring the path of, you know, getting acquired and working with a bigger company because we needed more than just money at that point to actually work with these big clients. Because this large transportation company, the ARR on that deal was around 1.5 million to, I think 1.5 to 1.8 million in ARR. And to close that deal, we could do it, but then to continue supporting them in the long term, we didn’t have the expertise and we needed, you know, different kind of expertise within the company to manage these deals. Because these are very political deals. You need a lot of, you know, it’s not. They move very slow. So I think that was one of the key decisions why we basically decided to sell rom.
Anke:
When was this? Where are we now in the timeline?
Manoj:
So I think this big contract, I think was more like 2022. Ish. I think mostly end of 2021, early 2022 is when all of this was.
Anke:
Going on and when you had that like light bulb moment, like if you want to go in this direction, we need more support, more resources, maybe like partnering up from there on. Like, how did you go about it? Was it you. Did you involved the team? Did you tell the team? Did you reach out to journals? Like, how did that process work for you?
Manoj
So we actually had a potential customer reach out to us and saying, hey, I want to have an open conversation with You. And I was like, sure, let’s have a chat. And he actually said, we might be interested in buying your company. And then he said, okay. I said, fine. And then I said, okay, go ahead and make an offer and I’ll send this to our investors. I think that was the initial point where we said, okay, fine, this would be an option. So we got an offer from this company and we sent it to our investors.
Manoj:
It was too good to be true. In the end, it turned out to be too good to be true. And then we basically had a couple of conversations. And then we ended up reaching a point that, okay, this is not going to work for both parties because it’s. A lot of things are not aligning. So we decided to lead that route. And then we officially decided to make a list of companies to reach out to. And we made a list of, I think like 10, 15 companies.
Manoj:
And we reached out to them saying, hey, this is our company. We’re looking to get acquired. Would you guys be interested. That’s a cold messaging. And I think we got, we got a very serious interest from I think a couple of companies.
Anke:
Sorry, before you make it sound very easy, but like, were you the one sending them a cold message via LinkedIn or did you get like warm introduction so at least you got their email address that you like, have somebody else do it. Maybe you’re like an external banker, although it was like early. How can you double click a little bit on it to give us a bit more detail?
Manoj:
Right. So when we discussed this with our investors, they actually suggested us to work with a corporate finance, like a investment banker. So we worked with corporate finance based here in Amsterdam, and they helped us draft our im and then they helped us reach out to the first 20 companies.
Anke:
Gotcha. The CEOs of the companies or who did they reach out to and did they make.
Manoj:
I think they reached out to the CEOs mostly. Yeah, mostly CEOs or managing directors or the lead in the board, the chairman of the board, depending on the size of the company.
Johan:
Manoj. And the deal, you know, the client who wanted to buy you. There was a deal too good to be true, as mentioned. Took some time to find it out. Can you elaborate, elaborate a little bit on that? Because we see that frequently happening. Right. That’s one buyer. And it turns out to be good to be true.
Johan:
Can you, let’s say, dive a little bit more in that? What happened there and also what your learning was and without of course, revealing too much details, probably. But let me understand what happened There.
Manoj:
Yeah, I’m not sure how much I can reveal. But the honest story of that is. So he asked me, what do you want for the company? That’s. That was his question. And as a joke, I said, I mean, if you, if you guys can give me 55 million, I would sell the company today. And he actually sent me a term sheet for 55 million.
Johan:
Okay.
Manoj:
So that was what happened. And I sent this to our investors and Rick, they were flabbergasted when they saw. They were like, this is not true. This is, this cannot be true. I said, I don’t believe this either. This sounds like a joke. But then we, then our investors had a conversation with them and they were, they were very serious. I mean, they said, yeah, we want to do it.
Manoj:
And they, they said they had the backing because they sold one of their previous companies by 800 million. So he had some kind of background. And I think our investors, before we wanted to move ahead with anything. We wanted to, wanted them to give us proof of funds. And I think Rick was asking for proof of funds because we really, we weren’t sure if this was true. And before we want to share our technical know how or before we want to share, before we let them do a technical due diligence on us. So that’s basically what happened. And they couldn’t send us a proof of funds.
Manoj:
We couldn’t send them our technical know how because we didn’t want to start a technical due diligence without any kind of proof. So we just ended our conversation there and we just said, okay, this is not going to happen.
Johan:
And then, and then you reach our further in the process. So then you aligned with your investors as mentioned, and you decided to go for the company. I can imagine. Also that’s also for your personal moment, right. When you have the option to sell your company. And in this case it looked like 55 million. But I can understand also there’s something happening also in your head, right. As a founder, because you’re running a company fund, it go down, let’s say also a growth path and then you have to change directions.
Johan:
What happened with you on the personal side on that end. Right. Making that decision.
Manoj:
Yeah, I think was a huge distraction. I would say that I wish I avoided that and just focused on building my company, but then I didn’t. But I think things like this constantly keep happening and it kind of distracts you and puts you off your path and just makes you think like, oh my God, this is going to change your life. And it distracts you from actually going after your goals. It distracts you from the actual business itself. In my biggest learning from that would be is to always keep things in balance, always spread out your time. If you’re spending time on acquisitions, don’t get too ahead of yourself, which is a lot of founders make this mistake. And I feel like at that time I got a bit too ahead of myself, making too many plans into the future when it was never going to happen.
Manoj:
So I think that was the biggest mistake I made.
Johan:
Okay, but you didn’t order a new car yet or a new watch or whatever, right? Because sometimes I see that founders doing that in that space. No, it’s more, let’s say the perspective than let’s say that. Yeah. Okay, cool.
Manoj:
Yeah, I mean, I still haven’t ordered my new car yet, so.
Anke:
And from the moment that you reach out to the like long list of let’s say 50 to 20 potential acquirers, how did that filter down to, at least in the end the one party that got you acquired from France, but how did that process go? And also the timeline?
Manoj Aditya:
Yeah, so I think the process started somewhere in I think March of 2020, in 2022 actually. And we started having conversations and I think majority of them said, not interested, not interested, not interested. I think four companies said, yes, we’re interested. And I think we had four conversations. In the first lead list. I think one of the companies that actually made a serious offer was a company based out of Singapore and they were a startup with I think like 30 to 40 million in funding, backed by some big VCs. And they were building a mapping platform and we had a couple of conversations with them and then they moved ahead with having a term sheet. They sent us a term sheet with some good terms.
Manoj:
We presented it to our investors and then we started having a conversation and then we decided to go visit them. Actually. We actually had a, we had a couple of in person meetings and then I think what happened was we just had one term sheet. We didn’t have any other term sheet from any other companies. And the rest of the companies just said it was not a fit or we couldn’t make it work. Except for this one company. And I think around the, it was almost like end of the year. It took almost like six months for this whole process to narrow down.
Manoj:
It didn’t happen overnight. I think it was multiple conversations, multiple emails, a lot of due diligence, a lot of preps for due diligence and everything checked out. And I think we were almost a week into signing something like signing an official agreement. And the company decided to pull out from the acquisition. It was, I think, almost in November of 2022. So we were almost done. I think we were already setting things up and they were already getting our team integrated with their team. We’re already having, like, a connected slack.
Manoj:
We’re always having these conversations. And what went down was, I think there was some kind of conflict between our investors and them. So our investors were asking for some fair questions and they were trying to negotiate into making sure the terms are correct. And these guys, young entrepreneurs, they got pissed off and they just sent an email saying, hey, your investors are too rude. We cannot work with them. And we just want to pull out. It just happened, like, in a fraction of a second. Like, everything was going good until just one email and then everything just fell off the rails.
Johan:
Communicated it also internally. Right. So everybody was already working together at some, et cetera, correctly. Right. And then they pulled out. Wow.
Manoj:
Yeah. So the team knew it. Everyone was ready for this. And we were already, like, starting to work with them, planning on, okay, what are we going to build together? It was already, like, set. And I think when they pulled out, it was insane. It was like we didn’t know what was going on. I was like, I even called them and I’m like, hey, guys, what went wrong? And they were like, no, we don’t want to work with your team. And they started proposing terms that was under the table terms.
Manoj:
After that conversation, they were like, oh, we don’t work with the investors. But if you want to come join our team, you can come join our team. We will pay you what we were supposed to pay your investors. We will pay that to you, and you guys can split the amount between you guys and you don’t have to tell your investors. And I thought this was not going to work. I actually called up our investors and I told them that this is exactly what happened. And I told them, you know what? I know this is a great deal. I could make a lot of money, but I don’t think I want to do this because ethically it’s completely wrong.
Manoj:
And we decided to walk away from this. Although in the team, some people did say, why don’t you even think about this option? I said, you know what? I know this is a bad decision I’m making right now for myself, but in the long run, this is the best decision we are ever going to make. And I had no clue what’s going to happen next. We didn’t know what we were going to do with the funding aspect. We didn’t know a lot of open questions, but then we just decided, okay, fine, let’s do the right thing and let’s see what’s going to happen. And my cto, he was actually very upset that this was happening. All I told him, give me six months, I will bring you another deal. Just hold on for it.
Manoj:
Because he had an offer from Google and he wanted to move on as well. And that’s because he also got married recently and he needed to get a pay rise. And we were not paying our CTO Google salaries. And I think a lot of different things were happening at the same moment. And I think it was my job was to ensure, to keep the investors on board, keep our team on board, make sure everyone’s in line. And emotionally, I think it was a very, very stressful point for me. But then I don’t know how I managed to, but I somehow managed to keep everyone together and keep them motivated to keep going for the next six months.
Johan:
How do you deal, indeed, with this kind of stress? Right. Because a few times you went through this stressful situation, right? Pivoting your company fundraising, but especially also with the exit process. Right. Having a very generous offer on the table, which is pulled back now, having a buyer on the table, which also pulled back after discussion with investors. So there’s a lot of tension with you as a founder, also dealing with investors, the team, the buy, et cetera. How do you deal with this kind of stress situation? What way of working there? How do you, let’s say, get rid of this stress? How do you talk to people? How do you. How do you deal with that?
Manoj:
Yeah, so the first thing I do is actually I have a few very trusted mentors who I talk to. I openly have a conversation with them on how I’m feeling. And every time I have a very stressful moment, I actually go out for a walk. I just go to Bundle park or I go to a park near inside. I just keep going for walks. And every time I go for a walk, it helps me really think and actually not think for an hour. Just like, don’t think about anything and just, just take it easy. Because every decision we make, the bad decisions we make is usually using emotions when you’re emotionally, when you’re emotional.
Manoj:
So when you’re emotionally in a stressful state and emotions are all over the place, that’s when you make these wrong decisions. And I always told myself that no matter what’s happening, just calm down, don’t react. But Try to respond. I think that was usually my strategy. And it kind of helped, though at that moment, it was very painful. If I think about it now, I would say kudos to me. Like, I handled it pretty well, and I didn’t react. I definitely responded to people.
Anke:
And I think what is interesting to me that you. You did the right thing. Right? Your moral class told you for the long term. And also, I guess, like, who you are as a person, this is the right thing to do.
Manoj:
Yeah.
Anke:
But also within Curie, you’re telling your co founder, give me six months and I’ll make this work. Not knowing, obviously, you can’t look in the future. You think you, like, was there so much internal conviction, like, it’s gonna work, or are you also, like, bluffing to yourself?
Manoj Aditya:
Like, please, I was bluffing to myself. Yeah, definitely. I was bluffing to myself. Because when I was saying that to people, give me six months. I had no idea what I was gonna do, but I just believed, like, okay, I’m gonna make it work, but I don’t know how. So I just told them, like, just give us a couple more months. And I think, yeah, they just believed me. And I think my CTO has this ability to trust me on things.
Manoj:
When I tell him, like, hey, just give me a couple of months. We’ll make it work. And I think past record shows that I somehow make it work, though it would not be the perfect solution. Something will just come out. I think that’s how it’s been for the last six, seven years.
Anke:
Incredible story. So then six months later.
Manoj:
Yeah, what happened? So then we had to work with the investors to get an extension on our funding to make sure, okay, we need a couple more months to keep us going. And then I told, I don’t want to work with the investment banker because I feel like that loses a personal connection. It just makes it too corporate. And I also didn’t like the way they were communicating. It was too dry. So I wanted to build this founder connection. So I reached out to five companies in China of 2023. And I said, hey, we are in the midst of a process.
Manoj:
We have a couple of ongoing conversations. Would you guys be interested? We think you’d be a great fit for Roam. And we had a couple of conversations with a couple of companies. One was Placer Placer AI. Another one was Echo Analytics. I think two. Very solid conversation. I think we.
Manoj:
We sent the IM to Echo Analytics. We had a couple of conversations, though. They were saying, we look into it, but we don’t know if this is going to work or not. And every couple of months we were just keeping in conversation. Finally, I think we met one of the co founders of Echo in, in Rotterdam. They were here for some kind of conference and I think that meeting really, really helped. And we then they decided, okay, fine, you send us your technical due diligence, we’ll go through the technical aspects of it, we’ll do a bit of legal due diligence before we make a, before we make an official offer. And on the thing, on May 29th of 2023, we got the first term sheet from them, which was a pretty solid term sheet.
Manoj:
And then we had to work with them to ensure the term sheet was in the right format for investors to accept it. So we worked with our buying company, so we had a very good relationship with them, like friendly founder relationship. So we helped them craft the term sheet in the right format that our investors would accept. And we ended up sending that to our investors. And then we had the conversation with our investors. Our investors were surprised, like, okay, fine, finally got it. And my co founder was like, I don’t know how you did it, but you managed to get this term sheet. And we then started having conversations with our investors and then the investors negotiated with them on terms that would be more in favor for them.
Manoj:
So of course, the first term sheet is never the right one. So then we changed the formats of the agreements and then we ended up doing quite a bit of due diligence. I think the due diligence took almost like three to four months. We had a legal due diligence, we had a technical due diligence, we had a privacy due diligence. And I think the biggest thing that I never realized was the amount of documents I had to prepare for this due diligence. And I had to go back to, for finances for so many years to get everything in order, making sure all the finances are clear, working with our accountant, and also making sure all the versions of our previous technical diagrams, everything, just to show them history and how the technology evolved. So we had to get all the old documents, put them in right formats, and making sure that they have a full visibility of everything. So we made sure that even if there are flaws in the system, we wanted to be transparent about it.
Manoj:
Even if there were mistakes in the finances, we wanted to be transparent about it. So we gave them everything and we just said, okay, this is us and this is all you can get from us. And we didn’t hide anything, we just gave them everything. Though there were some Issues there.
Johan:
And was this the first acquisition for them?
Manoj:
Yeah, it was the first acquisition for them.
Anke:
Yeah.
Johan:
Because it sounds that way, right? How they also ran into the process and how they did it. So that’s also learning what I think what we have also in the podcast here, right. If you have a coding, who does the first acquisition, you really have to help them also through the process. Right. I mean, you drafted a term sheet, if I understand correctly. Of course, you had two great examples, right. From previous talks that you had. You probably used that.
Manoj Aditya:
Exactly.
Johan:
Hey, and how did you deal? Because you said, I got rid of the investment bank in this case. Sorry, I decided to run my own process. Yeah.
Manoj:
What.
Johan:
What made you realize to do that?
Manoj:
Right.
Johan:
And especially how did you handle that, let’s say in the last trajectory, did you have somebody helping you back, especially on the corporate finance side and on the discussions on the terms, etc. Right. Or did you, let’s say, fully do it yourself with the investors?
Manoj Aditya:
Yeah, I think we did it completely ourselves, everything in the end, because we already had experience in the previous acquisitions and how this whole process is done. So that was really helpful for us. And we worked with our investors and our investors had already had internal lawyers and everything, and we trusted them really well. So we just used the same lawyer that they had for our side of the discussion as well. So it was. It’s pretty straightforward, if you ask me. There’s nothing too crazy. And they didn’t ask for anything that you don’t have or anything you don’t need.
Manoj Aditya:
So it was very easy.
Johan:
Evaluation.
Anke:
Interesting thing about this podcast is that we’re then like figuring out like what was the price that the company got sold for. So we asked one of Elon’s colleagues to give us a good guesstimate based on some variables that we could find online. I know, I think you signed an NDA, so you cannot really tell us like the right amount, but I would love to get your first response, give my estimation.
Tim:
Hi everyone, this is Tim from Devaluation Corner. So, to be frank and upfront, it wasn’t that easy to find any information about the deal volume, potential revenues at the point of acquisition of Roam AI. So I have to make some assumptions here and let me try to state the facts first. Echo analytics, which is a geospatial data company that is based in Paris, announced the acquisition of Roam AI in December last year. And Echo analytics from the outside, seems to be a bootstrapped startup themselves, being founded about six years ago and generate around $14 million annually, according to platforms like Grojo or Traxon who estimate these kind of revenues. And they provide a data solution. So serving retail and advertising industries, Roam AI, on the other hand, had raised around 1.5 million from investors before the acquisition. And although the deal amount wasn’t disclosed, we can estimate the price based on Equus revenue and typical acquisition patterns that we see in the SaaS space.
Tim:
Bootstrap companies like Echo typically like to spend more conservatively, often paying between 1x to 2x of acquisition revenues for strategic acquisitions. Given Echo’s revenue level and roam AI’s more niche technology, I think it’s likely that the acquisition price was around 3 to 4 million US dollars. So in my opinion, the deal makes a lot of sense for Echo’s portfolio, combining Rome’s location tracking with Echo’s data expertise to offer a more comprehensive location intelligence platform. And now I’m curious to hear what is your view on my estimation?
Manoj:
Okay, so they’re from pretty fair estimations and fair guesses. Just to give some clarity. We actually raised a little over two and a half million in funding overall, though some of those were not announced because it was all internal funding. And in terms of valuation, it was not 1 or 2x. It was, I think we got a deal for 5.54 times our ARR. And that was basically the valuation multiplier we got for the acquisition. And in terms of price, again, I’m not really in the. I can’t really mention it, but I could say that it was somewhere.
Manoj:
There is what I would say in terms of what the structure looked like.
Johan:
Okay.
Manoj:
I’m sorry. Yeah. To also give you some idea on the acquisition structure itself, it was for maybe for the listeners to understand that it was not a full acquisition, it was a majority acquisition of the investors. So all the investors were purchased out and they got a deal where they got a cash offer upfront where they were paid in cash and the rest was an earn out. So they were going to get 33% of Rome’s revenue for the next 36 months after the acquisition. So they, they get an upside on the future revenue. And as far as founders, we got a call option in our agreement call and put option in our agreements where we would get 5.54 times the ARR at a future date. So that’s how our overall deal was structured.
Manoj:
So we definitely got a very good deal for ourselves because Echo is working really hard on there on the sales side and we were supporting them for most of it. But we get the future Value of what they might create in the future. So that’s basically how the deal was structured.
Johan:
Yeah. I think it’s a good deal for.
Manoj:
Everybody on the table.
Johan:
Right. Also for your investment, but also for you to be committed and also to succeed. Integration, of course, with Echo and Business Forward. Right, that’s also good. Yeah. You see it a lot with bootstrap companies that are more, let’s say, creative deals on the table. Right. I mean, it’s not all cash up front and not all at once.
Johan:
I think it’s more about securing, keeping the revenue in, but also aligning with the founders on the long term. So good leader.
Manoj:
Exactly.
Anke:
And now we’re like 10, 11 months after paperwork is signed and money has been wired, like, maybe it’s fresh. But looking back, if you could tell yourself in the process one or two things, so the process has been smoother or the outcome has been better, or maybe you’re, like, extremely content and you wouldn’t have changed anything. But is there something that in hindsight you would have done differently, maybe?
Manoj:
Right. Maybe just to add a bit of detail, this deal with Echo also fell through in the end of the process. So they decided to say, hey, we’re going to pull out, if you guys can accept this. So then they pulled out officially, and then we had to work with our investors, and then we had to work with Echo, and then we had to bring both of them together. And then at some point, our investors said they don’t want to be part of this deal anymore as well. So I had to call them and convince them that, okay, fine, you know, this is going to work. And then eventually, at some point, we brought it together and then the deal was signed. But it was a rollercoaster to even get that deal through.
Manoj:
It was not an easy journey. But I would say as an acquisition, as an overall, I think it was definitely a good decision for the team. I think the team is really grateful for this acquisition. Everyone’s in a very good place. I think a few employees are also getting transferred from India to Paris. Some of the employees moved already from Amsterdam to Paris as well. So overall, I think it’s definitely a very, very good acquisition. And I think personally for me, I think it was definitely a great acquisition, but I would have definitely changed some things in the overall negotiation of how my role was going to be structured or how my contributions are going to make an impact.
Manoj:
I think that’s one of the things that I would definitely would love to say is post acquisition, it’s also very important to Set expectations, ensuring that, okay, what you’re going to do in after acquisition, what your roles, what your KPIs are, and never let that, you know, just be on the limbo. Just make sure having that clearly defined from day one is very important. Otherwise it’s just going to create unnecessary, you know, conflicts in the end of the process. I think that’s basically what I would say.
Johan:
And regarding the process, Manoj, because you have been in a few, let’s say, different, let’s say exit processes.
Manoj:
Yeah.
Johan:
Which I think is fascinating to hear about running process.
Manoj:
Right.
Johan:
What learnings can you share on that end to our listeners?
Manoj:
Right. I think it’s very important to stay prepared. Like make sure you have everything, all the, all the documents, everything that you need. And make sure you have a clear image, like an information memorandum, which gives you a clear overview for all companies. And when you reach out to these companies, ensure you’re reaching out to them after doing some research about the company itself. You know, do they have the necessary funding to pay you? Do they have the necessary resources? Are they in a position of, you know, acquiring a company? And sometimes you also have to pitch, okay, how this, how this potential partnership could work, even though it comes from, from their side. You also need to showcase that we also see great synergies between the two of you and, you know, just reaffirming that these synerg energies will help is something that, is something that you always have to be mindful. And also you’re going to get a lot of no’s.
Manoj:
And more than no’s, you’re also going to, at any point this process can fall through. It could be like a couple of days before signing. I would say don’t count your eggs before they hatch, I mean, before they put it there. So yeah, just be mindful, be content. Just don’t get too excited about everything. Everything can change overnight over a phone call.
Anke:
And also what I’m learning from your story is that if it wasn’t for you, like for multiple times, like things seem to be like falling out, like falling through. And it was like you getting the band back together. It’s a lot of stakeholder management, like very clean. I think, like, obviously it’s a different story if you’ve got like a massive company with ten thousands of people, 100,000 of people. You’ve got like a whole C suite CFO versus like this phase where it’s all on your shoulders. But you always had to be like sharp and driving this process otherwise nothing would have happened. Not for your team, not for you, not for your investors, I guess. So it’s, yeah, remarkable, I think, to listen to your story and then learn about the outcome.
Anke:
So congrats on that.
Manoj:
Cool. Thank you so much. And yeah, I think it was not just me, it was definitely the team because even though I was trying to put them together, I think it would have been possible without our investors, you know, saying, okay, let’s keep this going, or even my co founders saying, okay, I’m going to stick up to it and I’m going to be there with the next six months. I think even though I was trying to help people go in the right direction, I think it’s a team effort. I wouldn’t have been able to do this by myself. Definitely not going to take all the credit for it.
Anke:
And what’s next? Like you started a podcast. You’re interviewing people about their journeys. Are you working on a new company again? Are you taking time off? Like, very curious about what you can tell us about phase two, basically, or phase three. This is your third.
Manoj:
I think I’m thinking about starting another company and I’m already in the process of it. And at the same time, I actually enjoy doing my podcast as well. And it’s a great place for you to learn from people’s journeys and really, you know, have great conversations. And I think the next big step is I really want to focus on building the podcast into something valuable. So we are working on it. We’re hiring a team around it, and we’re going to make that a bigger studio. So we’re also renting our own space. We’re going to also help other podcasts film their podcasts in our.
Manoj:
In our studio. At the same time, I’m also going to be working on another tech startup. I’m not in a rush, but because I think it’s very important to solve a problem a massive number of people are having. So I just don’t want to build another product where it’s not solving a big problem or if people don’t want it, then I’m not going to build it.
Johan:
Cool. And what’s the podcast? Manoj, how can our listeners find your podcast? What’s the name?
Manoj:
Right. The podcast is called Unravel with Manoj Aditya. And the podcast actually dives into entrepreneur journeys and how people got got to where they are today. And we also have an episode with Johan as well. So very exciting episode. I think one of the best episodes. A lot of people always watch it and tell me that was a great episode. And love the energy as well.
Manoj:
So if you guys are listening, curious about entrepreneur journeys, just look up Unravel with Manoja and you’ll find a couple of interesting episodes. Thanks Manoja.
Johan:
Also the same for this episode, right? Great energy and I think it’s great story which you bring to the table. What a roller coaster. And really great how you handled all the stress as a founder with investors with bias. Well done.
Manoj:
Yeah. Thank you so much.
Anke:
Before we turn it off, is there one thing that we didn’t ask that you wanted to share or one thing that you want to leave the business with in terms of like words of wisdom or. We’ve said it all.
Manoj:
I think one thing I want to leave with is don’t think too much, Just do it.
Anke:
Cool.
Johan:
Thanks a lot.
Manoj:
Thank you so much. Have a nice day everyone. Bye.
Johan:
Bye. Bye. Great, Manoj. Great. Really great.
Johan:
Thank you so much for listening to this episode of the big Exit show. We hope you enjoyed today. If so, please subscribe to our show on Spotify or your favorite podcast platform. If you have feedback or suggestions for guests that you want to see on the show, please send us a message to Podcasteak Capital. Thanks again for listening and hope you join us for the next episode.