I have recently invested in Kaagaz, one of the Indian companies in the current YC W22 batch. Here is the deal memo I have written for Kaagaz. For confidentiality reasons, I have left out certain parts of the memo.
Kaagaz from YC W22 (Kaagaz means paper in Hindi language) is a documents & productivity super app for India.
Problem & Solution:
Most of India never had access to computers. India went from never using a computer to having a supercomputer in every pocket in the last 5 years. In India, day to day interactions with business, individuals, banks, governments (local, state & central) require lots of paperwork. And the processes require documents to be edited, shared, signed and reshared all the time.
Scanning, storing and sharing documents using mobile is a foundational pain point for an average Indian consumer.
Kaagaz created a mobile app to solve this problem. Started as an app that is mainly used to Scan documents to easily share and reuse. Today the app is evolving to become a super app that allows consumers to scan, edit, store, share & sign documents in a mobile first dominated world.
Here are some of the latest stats: (Some stats are redacted)
- App Downloads - 10M+
- App Rating - 4.8 (150,795 Ratings)
- With the traction and the customer love that we are seeing, it is fair to say the company is close, if not already found product-market fit.
- They were able to achieve this with a previous fund raise of $550k and a small team of 6.
- The current fundraise along with the demo day raise, will be used to focus on the growth of the product.
- Even though there are multiple large players in the productivity space including MS Office, G Suite and Adobe. The products they offer are not designed for the use cases of Indian and other emerging economy consumers.
They are not mobile first and do not focus on localized use cases. There are no product teams in either of these companies addressing how an individual living in India uses his/her Aadhar Card (National ID Card). Making Kaagaz a unique app, filling the gap in the space.
Why Invest in Kaagaz?
Foundational or Not: This is a key criteria I evaluate when investing in Indian companies, are the ideas and thereby the products are serving a foundational use case that can span national audiences (in the order of 100M+ users) either directly or indirectly.
Ideas are still gold: It’s easy to think that ideas are cheap and execution is hard, which is true. Ideas are direction while teams are fuel to compound the speed in which you travel. There are still great ideas that are unique and have strategic advantages and are just better than other ideas in the market. If you are pursuing early stage investments at seed/pre-seed Ideas that are new/unique are powerful forces. So I often look for unique ideas that have great teams. Kaagaz is uniquely Indian and the traction shows that the team can execute. No other app in India attempted to make an individual mobile first productivity suite before, and for sure it didn’t start with scanning one page at a time.
Fortune favors the bold: When Kaagaz was started there was a simple market need to scan and organize documents, today after 1.5yrs they evolved to store, share, organize and edit those documents. The future for the company and product scales will be about creating products & features that help the consumers be more productive in a mobile first way. Give the power of productive software to solopreneurs to average consumers. The ability to provide productive software at scale for a large consumer population hasn’t been done by an Indian company yet, but that’s the value of early stage investing, to back ideas that haven’t been done yet.
Bottom up Flywheel: Sarah Tavel in her famous Hierarchy of Engagement presentation, talks about what it takes to build a $1B Company.