Mergers, or acquisitions for that matter, are very much like a typical arranged marriage. It takes months — sometimes years — before the deal is signed. It often falls through midway, if one or both parties fail to fulfil certain conditions. Sometimes, it begins to break after a few months.
But this particular deal was impressive. It did not take more than eight hours for the two parties to sign the deal after their fist meeting. And both parties have greatly benefitted from each other.
Anup Mohan and Srikanth Ch, Co-founders of wellness and beauty marketplace app Styl, reflect on their startup’s successful acqui-hire with Sequoia-funded women fashion portal Voonik — sharing their thoughts with e27 on the first anniversary of the deal-signing.
“Voonik was looking for a strong team, and they approached us through a common friend,” said Mohan. “Voonik liked what we were doing at Styl. And the entire deal was closed in just eight hours.”
“Just after coming out of Voonik’s office after signing the deal, we (co-founders) looked at each other and asked ‘Is this real?’ Without taking too long to find the answer, we decided to celebrate the moment — mostly, for the fear of waking up the next day to only realise it was a dream,” added Srikanth.
Styl was launched by Mohan and Srikanth Ch in mid-2015. The startup nabbed over US$110,000 in funding from four angel investors toward the end of the year. However, the going was tough, as India slipped into an investment crunch towards the end of that year. They failed to raise follow-on funding.
“There were many startups in the wellness and beauty segment at that time, and the competition was tough. So, we were thinking of pivoting our model. Meanwhile, we kept receiving offers from various companies. This was when Voonik came to us with the best possible offer. The entire deal took just eight hours to sign after our first meeting with Voonik,” Mohan said.
It was the product and a great team that drew Voonik’s attention towards Styl, added Mohan. “Voonik was on the hunt for a great team to develop its new product, Vilara, which would compete with the likes of Myntra. Vilara required a branded approach, a flawless design, and superior look. We had a terrific product with great design. Most importantly, they liked our team. Most of the team members of Styl have been sticking together for many years since our first startup. When our investors nodded in the affirmative, we proceeded with the deal with Voonik.”
The deal was inked in January last year. Post-acquisition, entire Styl team moved to build products at Voonik and halted the operations of Styl.
Srikanth says that working with the founders of Voonik has been a great learning curve for the team at Styl. The team basically learnt three important lessons:
#1: Say no to vanity metrics
“Startups are not about fancy offices and vanity metrics. Not chasing the vanity metrics helps in not only focussing on the right ones but also tying them to the team’s goals. Almost all of the teams at Voonik are measured by numbers.”
#2: Be nice and build a business
“Be empathetic towards employees for the risks they are taking along with yourself to build the startup. Be wary of their careers and family. Nurture and safeguard the careers of the employees for the trust they’ve put in the founder’s vision. Be frugal and nice with investors’ money — spend wisely, and correct the mistakes early on. Do update them on the progress or the lack of it. This is especially more important and true with angel investors.”
#3: Be transparent
“One of the first things, I’ve noticed when I entered Voonik’s office is a set of TVs displaying the daily metrics. This displays transparency and earns trust. Sharing the daily metrics with the whole of the company and (visitors) needs courage. It also sends an underlying message that the team isn’t timid of the bad days but shall acknowledge and work on it. Be it metrics or be it the route the company is taking for the future — It always helps to be transparent.”
What are the two key things to look for while getting acquired or acqui-hired? “Truly understand if you can build things along with the team for more than six months —talk to people about the company and founders. We did and we’re very glad that we made the right decision. Secondly, do take care of your employees and investors. It’s hard. But that’s the right thing to do,” concluded Srikanth.