From rejection to the bourses: How Jaspreet Singh is readying his SaaS startup Druva for an IPO

Sunny SenDec 30, 2019 12:33:56 IST

It took Druva — the software-as-a-services (SaaS) company — more than a decade to enter the coveted unicorn club or startups valued at over a billion dollars. Its co-founder and CEO, Jaspreet Singh, who barely enjoyed his company’s unicorn status, is readying Druva for an initial public offer (IPO), most likely in the US.

Singh, a man who likes things to be simple and straightforward, doesn’t let the unicorn status get to his head, though he does agree that it’s a good validation of the efforts that go into building a business. “(Unicorn) is an overhyped term,” says Singh, as he sips his Masala Tea in the Capital Kitchen restaurant at Taj Palace in Delhi. “The customer doesn’t care, the shareholders don’t care. The two people who matter don’t care…Customers care about value and shareholders on the outcome.”

Then why this euphoria among startups to become unicorns. “The Bay area is the Hollywood for geeks. They are competing for press (coverage) and the press enjoys it,” said Singh, who shifted to the Silicon Valley in 2012.

Large funding rounds and high valuations do make prominent headlines, but then there are fiascos too. Internet darlings, thriving on high valuations with lots of funding, run by maverick founders haven’t always been successful at the time of their IPOs. Take the most recent example of WeWork. Underwriters valued the company at less than half of its pre-IPO funding round valuation of $47 billion in January.

But Singh doesn’t want any of that happening to Druva. This year and in 2020, he will spend time preparing for the IPO — be it revenue and consistency of business. “Timing is not in our hands. The market dictates it. We need to have consistency and predictability in revenue,” he stated.

There are other areas too where Druva needs attention. “We need markets that are accessible to us and not limited. Also, your products need to be successful in markets you want to be in,” he said.
Singh is sure that he will be able to deliver what he sought out to deliver this year — but listing Druva will depend on the market. “If you are surfing in the ocean, you need to ride the wave when it comes, but you can’t really time the wave. You can be ready. That’s what we are doing,” Singh added.

Jaspreet Singh, co-founder Druva

Druva has surpassed $100 million in annual recurring revenue, tripling its revenue in three years. In June, it raised $130 million — taking its total funding to $328 million — most of which will go into business expansion. Druva is a business-to-business SaaS company, which manages and protects data for companies who have partially or fully migrated to the cloud. It already counts large corporations like Pfizer, Flex, Marriott, Hitachi and NASA as its clients.

For Singh, there are a lot of opportunities ahead. A thought backed by Gartner, which expects 80 percent of enterprises to migrate entirely to cloud by 2025 and close their on-premises data centres.

Simplicity is genius

Druva, started in 2008 by Milind Borate, Ramani Kothandaraman and Singh, was born out of the need of managing data simply and in a very cost-efficient manner.

“Sophistication of complexity is competent, but simplicity is genius. It opens up new doors and new markets,” said Singh, who drives a Tesla. “It doesn’t have the frills of a luxury sedan, but over the past three years, my car has become more efficient than the one I bought. Tesla cars, like smartphones, upgrade with every software change, which makes the car more efficient,” he explained.

Druva doesn’t promise its clients revenue on Day 1, but it does promise its clients to manage their data extremely simply and in a straightforward manner — how much data to retain, how to retain the data, and how to drive value out of it?

Historically, managing data was very complex and very hard. “When I was in Veritas, I couldn’t install the software the company wrote. It was too complex. There was nothing elegant and simple,” explained Singh. “In the cloud, you need things to be extremely simple, and all complexity needs to be hidden.”

There are customers, Singh said, who have deployed Druva’s solutions within 48 hours of testing. But, it wasn’t an easy journey.

Druva Cloud Platform. Image: Druva

Rejection, pivot and future

In the first 18 months, no one wanted to buy from an Indian company the stuff that Druva was building. “We were building a very high-end disaster recovery solution for banks, and they did not want to buy it from an Indian company,” said Singh. “Nobody wants to buy a car made in Argentina.”

One of the first things Singh learnt as an entrepreneur is that the first answer one gets is mostly a wrong answer. He then built a backup or disaster recovery solution for remote data sets. People started buying it, the revenue was good, and Singh moved to the Valley. There he realised the real right answer was to move the entire tech work to the public cloud. In 2013, Druva pivoted into data management and protection. “For the first five years, we build something, which we don’t sell anymore today,” he said.

Now, the focus is on data science and machine learning (ML). Singh said the trend is catching up faster than he had anticipated, and it is being driven by cost more than anything else. “Going forward, every company will be using AI (artificial intelligence),” he added.

Singh has zeroed in on two things that will help Druva: first, how to radically simplify things further by applying ML to security, cost and deployment. The other is to check if Druva can give the data back to companies in a form factor, which will aid its clients’ ML experiments.

All these will help Druva make more revenue, create stickiness with clients, and enter areas where Singh wants the company to be in. And, it is not a valuation game of becoming a unicorn. “The ultimate metric of value is revenue. Efficiency is important, and not profitability,” said Singh. He means profits should be generated to earn more cash, which can be ploughed back into the business.

Druva, Singh said, is a growth company. “People won’t buy Druva stock for dividends. For that, they can go to anybody else. They would buy Druva because we are a growth company.”

But, he doesn’t want to burn cash to generate revenue. “Efficiency is a big focus. The business has to produce cash to fuel growth for many years to come, so it has to produce cash to put it back into growth,” Singh said.

Druva with $100 million of revenue is being valued at 10 times. That’s conservative according to Singh. “We will benefit as a higher-multiplier than public stocks,” he stated.