I don’t trust their methodology and their research reports


Sources The Ken spoke with were more forthcoming. They, however, requested not to be named because the world of internet startups in India is small, and at some point, everybody must work with everybody; you never know. “I think the story simply is that Lee would use them to do his work for his board meetings at Flipkart,” says an early-stage venture capital investor, who is part of a $50+ million fund.

“So Lee would say, go do this. Find this out. So RedSeer would have access to Flipkart’s database and they would do the research, and Lee would use that to make his points in Flipkart board meetings.” A co-founder of a startup, valued at more than $100 million, said that it is an open secret that RedSeer got to where it is because of Tiger Global. “Wherever Lee would want to invest, he would put them there,” says the co-founder.

“That’s how RedSeer got access to the data sets and the database that it uses for its research. Tiger is one of their biggest clients. In fact, Shreya Gupta, the research & analysis manager at Tiger, is a former RedSeer employee.”

Standing for the company

Kumar says RedSeer’s work speaks for the company and not any of the market rumors or stories. In India, people attach too much importance to gossip like this.

He says that at the time RedSeer broke into doing research for internet companies, nobody in India was doing primary research. Worse, there was no secondary data because no company of any significant importance was listed on the stock exchange.

“Everybody was shooting in the dark,” says Kumar. “We came in and we said we will do primary research. Collect all the data that is needed and that became the foundation of RedSeer. Ashish, I can say this with confidence. Most times in the consumer internet business, eight out of ten times, when a client has asked for RedSeer, then they have decided to work with RedSeer. Very few cases where we would be competing with someone.”

It would be fair to say this is not because other consulting firms fear RedSeer. Nope. Price is one factor. RedSeer undercuts several blue-blooded, top dollar consulting firms on price. So if a McKinsey asks Rs 100 ($1.5) for a valuation report of a company, RedSeer would do it for much less; sources The Ken spoke with said RedSeer is at least 30% cheaper, if not more.

Factors affecting the process

The second factor is the data. The way consumer internet businesses are structured in India, there is very little of it. Since most of the businesses are private, anything flies in the name of data. A startup can claim that, in a given month, it sold 100,000 chow mien in a box in Haryana and nobody would bat an eyelid.

Feedback on RedSeer reports is a mixed bag. Quite a few like it. Some hate it. Many believe it is better to have something instead of nothing. For instance, e-commerce company Amazon India has had a problem. Every year, RedSeer puts out the market share report of the September-October sales. The popular term is Big Billion Sale, but the word billion is just Indian exaggeration.

RedSeer puts everything in this study though. The whole organization rallies behind it, and at the end of the sales event, the firm sends out the report to all its clients. And a snapshot of the company’s many “press friends”. Needless to say, RedSeer’s snapshot makes headlines across pink papers, as to who sold the most, what’s the growth been like, what are consumers buying, yada, yada.

Kumar says the effort is worth it because the media coverage is just insane. In the 2018 festival sale report, RedSeer said that Flipkart had an edge over Amazon. Not a big surprise then that Amazon came down strongly.