Well funded start-ups should acquire other start-ups if doing so brings together best ideas and technical know-how to build more robust and valued services/products, says Jugnoo co-founder and CEO Samar Singla. That’s what led Chandigarh based on-demand delivery platform Jugnoo to buy mobile only peer-to-peer platform Yelo earlier this year.

Spell out what sort of business you want to acquire
We envisaged getting into content discovery, an emerging exciting concept in the Indian mobile app space. It would mean adding on-demand talent (to source any sort of content/product/service) services to our flagship on-demand auto-rickshaw hailing service. We figured acquiring an existing mobile-only personal assistance platform would take us closer to achieving this vision. Not to mention that it would also enable us to engage our customers better.

Identify the business you want to acquire
Yelo’s tag line is ‘Your local help.’ It seemed to fit our criteria for identifying innovative products to acquire. In particular, it would give us the expertise to break into the on-demand talent market. It would also help us scale fast and step closer to becoming a pan India player offering complementary services, by giving us access to a database of customers fitting the demographic profile we are targeting.

We and Yelo’s top management mutually decided that the acquisition would be a strategic move for both the companies.

Research well before sealing the deal
We had several concerns that needed to be investigated. Our key concerns were about the scalability of Yelo’s platform, Yelo’s current demographic presence, size of Yelo’s user base, acceptance of the idea by the masses, whether the technology behind Yelo’s platform can seamlessly integrate with ours, etc. Understanding these factors gave us clarity on the impact we could expect to make through the acquisition.

We also wanted to evaluate the synergy between the two companies. It’s important to ensure that the acquisition will not compromise the vision on both sides.

Then our finance and legal teams spent a considerable amount of time settling the value price and the deal structure. To arrive at a valuation for Yelo, they evaluated the financial synergies between the two products, the potential for marketing and growing acceptance for the merged product, the potential of onboarding Yelo’s users to Jugnoo, and Jugnoo’s users to Yelo, and the scalability of the combined product. Intense due diligence helps ensure the success of the acquisition.

Reach out to the new team
We, at Jugnoo, are forever on the look out for talent that adds value to our team. We warmly welcome employees who want to continue their journey with us. With all our acquisitions, we ensure that the cultures complement each other so that blending working styles is not an issue.