MRL Posnet founder didn't buy growth in return for equity
For Kishore Kothapalli, an avowedly old-school entrepreneur discomfited by the mere thought of diluting his equity to get cash for operations, profitability ranked up there with technology and scalability as the cornerstones of his business. In his book, “bootstrapped“ does not mean making do with available resources. It meant a conscious choice to disallow financiers to buy him growth in return for equity .
“I am a 56-year-old man. When I see the cash dwindling in the bank, I think something has gone wrong. What I have done is to take old-school business ingenuity and applied it in a new-age space like digital payments,“ he says from his Chennai office, where the buzz of the ` . 681 crore ($105-million) buyout deal lingers.
Till he sold his payment services startup MRL Posnet in an all-cash agreement to French payments major WorldLine, he had not raised a single dollar from investors, running the show with just 140 employees and avoiding equity dilution and preferring bank debt for growth. When the WorldLine deal offered him a foothold in the global markets and the headroom to explore technology for setting up his own switching terminal the company currently gets it from a group company of Korean business group Hitachi Kothapalli decided to sell.
Kothapalli, hailing from an entrepreneurial family in Hyderabad, began his entrepreneurial journey by selling low-cost roofs under the brand name-Modern Roofs. The abbreviation MRL was later carried forward to the payments firm. He later branched off to dealing in ATM real estate space that took him closer to the retail sector. It eventually led him to payment facilitation for merchants after an NRI friend Prathap Pingale suggested the idea after witnessing its wide adoption in the West.MRL Posnet has no field engineers to set up a Point-of-Sale machine.The company couriers the instrument across to merchants, who can set it up on their own through simple configuration processes.Software upgrades, like in the case of the Unified Payment Interface recently , is done remotely by sending Cloud-supported software patches. Out of the 140 employees in Posnet, 90% are code writers and testers. The company now runs 1.5 lakh merchant accounts, spread across 4,000 retail sites.
The big wave came with demonetisation, sending demand soaring for card-payment machines.From 35,000 accounts, MRL Posnet was serving 1.23 lakh accounts within a short time. Annual revenues jumped from ` . 41 crore in March 2016 to `. 125 crore this year.In the September quarter this fiscal, the revenue touched ` . 85 crore with earnings before deductions . 33 crore.at ` Kothapalli says his business was bought as a “steady-state“ venture, meaning the rationale for the investment rested on historical numbers and not future projections. However, a fifth of the promised offer depends on a few milestones such as technological integration and so on.
MRL Posnet would now attempt to tap the growing market for digital payments that can accommodate 25 lakh accounts. Kothapalli gets to keep his top brass and tech talent as he works on providing omni-channel payment solutions like plastic cards, digital cards, mobile phones and QR Code-enabled transactions. “In the next ten years, I see all shops wanting just one machine for all kinds of non-cash payment. This convergence of interfaces will be the future,“ said Kothapall.
Industry counterparts finds Kothapalli low-key just like business he set up. Nagaraj Mylandla, who runs FSS-Financial Software and Systems, said: “He is very lowkey . Like many of us in the digital payments space, demonetisation helped raise volumes, and eventually the company's valuations.For us, internet-payments have jumped 50%. I guess his company benefited from the currency move, too“.
For Kishore Kothapalli, an avowedly old-school entrepreneur discomfited by the mere thought of diluting his equity to get cash for operations, profitability ranked up there with technology and scalability as the cornerstones of his business. In his book, “bootstrapped“ does not mean making do with available resources. It meant a conscious choice to disallow financiers to buy him growth in return for equity .
“I am a 56-year-old man. When I see the cash dwindling in the bank, I think something has gone wrong. What I have done is to take old-school business ingenuity and applied it in a new-age space like digital payments,“ he says from his Chennai office, where the buzz of the ` . 681 crore ($105-million) buyout deal lingers.
Till he sold his payment services startup MRL Posnet in an all-cash agreement to French payments major WorldLine, he had not raised a single dollar from investors, running the show with just 140 employees and avoiding equity dilution and preferring bank debt for growth. When the WorldLine deal offered him a foothold in the global markets and the headroom to explore technology for setting up his own switching terminal the company currently gets it from a group company of Korean business group Hitachi Kothapalli decided to sell.
Kothapalli, hailing from an entrepreneurial family in Hyderabad, began his entrepreneurial journey by selling low-cost roofs under the brand name-Modern Roofs. The abbreviation MRL was later carried forward to the payments firm. He later branched off to dealing in ATM real estate space that took him closer to the retail sector. It eventually led him to payment facilitation for merchants after an NRI friend Prathap Pingale suggested the idea after witnessing its wide adoption in the West.MRL Posnet has no field engineers to set up a Point-of-Sale machine.The company couriers the instrument across to merchants, who can set it up on their own through simple configuration processes.Software upgrades, like in the case of the Unified Payment Interface recently , is done remotely by sending Cloud-supported software patches. Out of the 140 employees in Posnet, 90% are code writers and testers. The company now runs 1.5 lakh merchant accounts, spread across 4,000 retail sites.
The big wave came with demonetisation, sending demand soaring for card-payment machines.From 35,000 accounts, MRL Posnet was serving 1.23 lakh accounts within a short time. Annual revenues jumped from ` . 41 crore in March 2016 to `. 125 crore this year.In the September quarter this fiscal, the revenue touched ` . 85 crore with earnings before deductions . 33 crore.at ` Kothapalli says his business was bought as a “steady-state“ venture, meaning the rationale for the investment rested on historical numbers and not future projections. However, a fifth of the promised offer depends on a few milestones such as technological integration and so on.
MRL Posnet would now attempt to tap the growing market for digital payments that can accommodate 25 lakh accounts. Kothapalli gets to keep his top brass and tech talent as he works on providing omni-channel payment solutions like plastic cards, digital cards, mobile phones and QR Code-enabled transactions. “In the next ten years, I see all shops wanting just one machine for all kinds of non-cash payment. This convergence of interfaces will be the future,“ said Kothapall.
Industry counterparts finds Kothapalli low-key just like business he set up. Nagaraj Mylandla, who runs FSS-Financial Software and Systems, said: “He is very lowkey . Like many of us in the digital payments space, demonetisation helped raise volumes, and eventually the company's valuations.For us, internet-payments have jumped 50%. I guess his company benefited from the currency move, too“.
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