Twitter’s acquisition of Zipdial: How YourNest’s Sunil Goyal struck gold from his first investment

ECONOMIC TIMES | January 21, 2015


In mid 2010, Bangalore-based startup Zipdial sent out a mail to prospective investors at Mumbai Angels to start the process of raising some funds. In the mail Zipdial described itself as a company that “provides a Twitter-esque opportunity to capture opinions of people and their social network.”

The fascination around Twitter finally culminated on Tuesday, when Zipdial announced it has been acquired by the microblogging site.

Sunil Goyal, who led the angel round five years back, says it was the first time they saw the startup mention Twitter in their description. “It was very clear that they had the likes of Twitter and Facebook in mind when they were developing their product,” says Goyal.

For Goyal who was on a sabbatical from Bharti Airtel in early 2010 and decided to become an investor, Zipdial was his first deal and his first exposure to the world on investing. Goyal joined Mumbai Angels and Indian Angel Network and that is when he heard about Zipdial.

“I was very inquisitive and eager to learn about the world of investing and I remember going for my first such meeting to Mumbai to learn more about a company called Zipdial. The startup was presenting to about 50 investors in the room and the moment I heard the story I knew it was a good idea. With my past experience in Bharti Airtel and telecom industry, with mobile seeing deep penetrations and miss calls already a way of communicating, I had a feeling the product would catch the market very soon,” says Goyal. What interested the investors was that Zipdial already had a pilot running in Trinidad & Tobago as a proof of concept where they had run a campaign for Pepsi to determine the effectiveness of various means of advertising.

Goyal was convinced about the idea and decided to lead the round because of his deep understanding of the business and sector. About 10 members of Mumbai Angels invested along with Goyal and they took about 7-8 months to negotiate the term sheet. In the round Goyal personally had about 4% equity in the startup.

“What I liked was the fact that the founding team was cross functional in nature. Valerie Wagoner, Amiya Pathak and Sanjay Swamy all bought different skill sets to the venture. They had already worked in a startup called mCheck, which gave me the confidence that they have already worked in a tough environment of B2B sales in the country,” says Goyal.

Zipdial’s tryst with Twitter came about two years ago when they ran a campaign around Shahrukh Khan. The engagement became deeper from there and finally culminated in the acquisition. “With a brand name like Twitter it is a delight for any investor to exit a startup they had invested in,” says Goyal.

Goyal says he is pleased that a company with the credentials like Twitter has acquired Zipdial as the idea or innovation out of India can now impact the entire world. “With Twitter acquiring the company, they would be rolling out the services in various emerging economies. The faith and the belief you had will now go global,” says Goyal.

Learnings:

The deal has given Goyal a stellar return on his investment, and is significant since it is the first deal he had made. “With such deals the confidence and conviction to be an angel investor multiplies but for me this is the first exit since I became an angel investor and the day we inked the deal with Twitter, I knew that I could do much more in the field of angel investing,” says Goyal. Goyal says the entire journey has left him wiser. “My involvement with the company meant I shared my knowledge and experience with them. From building the business to reaching potential customers, our discussions ranged over diverse topic. It is a two way process where I soaked up a lot of learnings,” says Goyal.

Goyal says there were numerous occasions when as an investor he needed to act conscientiously. “I remember Zipdial did not want to give a board seat to the investors and this was stumbling block for us. As an angel investor you are putting significant amount of money and you would want a board seat but in this case we were making no headway. That is when I proposed to incorporate a body under Board of Directors called Business Review Investment Committee (BRIC) – a business model we followed at Bharti Airtel. All decisions relating to investor protection and strategic matters had to be approved by BRIC before they go to board,” says Goyal.

According to him in the new scheme none of the investors were members of the board but all were members of BRIC, which worked perfectly. “None of us took the board seat but none of us felt the need as this system worked perfectly,” he adds.

Goyal says his experience with Zipdial was instrumental in enabling him to launch his own angel fund – YourNest. Goyal says he has made 8-9 investments in his personal capacity before he started YourNest, which was launched in March 2012.

http://economictimes.indiatimes.com/small-biz/startups/twitters-acquisition-of-zipdial-how-yournests-sunil-goyal-struck-gold-from-his-first-investment/articleshow/45963821.cms