Analyze this: Tracxn helps VCs with startup discovery, gets discovered by SAIF Partners

Gartner, Forrester, IDC – analyst firms closely tracking large tech companies and their markets have been around for decades. The same can’t be said about tech startups. There is little research or readily usable data, despite the billions of dollars being invested now in startups.

Abhishek Goyal felt the lack of such a service when he was an associate at Accel Partners. That’s what prompted him to start Tracxn, along with Neha Singh, who was with Sequoia Capital. As Goyal recounts to Tech in Asia:

At Accel, I used to spend a disproportionate amount of time on discovering startups and would still miss out on a lot of interesting ones or meet them too late. And this was being re-invented across funds.

Goyal got talking about this with Neha Singh, who had also graduated from the Indian Institute of Technology, like himself. He had worked with Yahoo and Amazon before turning a VC, while she had been to Stanford and the Boston Consulting Group prior to Sequoia.

The two techies-turned-VCs felt it would be more efficient to do the startup discovery and market research centrally. They could give out analyst reports and advisories to various stakeholders in the ecosystem, akin to what Gartner does for the IT sector. “The idea grew on us and we realized that it can potentially become a very large opportunity,” says Goyal.

Want a deep dive into robotics?

Their Bangalore-based company Tracxn has 30 analysts tracking startups globally. And now, with US$3.5 million in series A funding from SAIF Partners, it aims to expand that team to 150 by the end of the year, analyzing new domains like smart homes, sharing economies, or robotics.

“Today if an investor has a thesis around robotics and wants to understand what plays exist in the market, which companies are innovating in each segment, none of the existing databases can solve this. We have a dedicated analyst tracking all companies coming up in that sector, identifying the segments companies are innovating in, and analyzing the trends in what entrepreneurs are doing within robotics. So now, an investor can get up to speed on a startup sector like robotics within a couple of hours,” explains Neha Singh.

“On top of this, we have thrown a lot of technology to track the digital footprint of companies – we have 100 plus servers running at any point of time,” adds Goyal.

One of the most useful aspects of sector-specific startup analysis is to see new business models in action. Goyal explains how it works:

One of our customers wanted to understand the wave of “Uber for X” and categories in which it’s being pursued by entrepreneurs in India right now. We did a deep dive and could find more than 20 categories where interesting startups are being created. This [approach] helps investors prioritize categories they want to go after first.