When it comes to startups, is there such a thing as too much money? Can you be addicted to it? Speak to Rajiv Srivatsa and Ashish Goel, co-founders of furniture e-tailer Urban Ladder, first-hand survivors.

The two 38-year-old co-founders, one a Chennai boy, and other from Ghaziabad, who still tries to take the bus wherever he can, brought their frugal middle-class upbringing to the business too when they launched in 2012.

Growth for the company was steady for the first two and half years, growing at 1.8X a year. And then came the boom in 2014, the time when companies went giddy raising money. Urban Ladder, too, was one such that went from having a modest $6 million in the bank in November 2013 to a cash pile of $77 million in two rounds by the summer of 2015.

So what does so much cash do to a company?

Simple, you grow like you never did before.

Until 2014, the company was a team of 40 people operating out of a 6,000 sq ft bungalow making revenues of Rs 2.7 crore (as per Registrar of Companies filings) from selling an assortment of about 500 products on their platform in three cities.

But when you see competition raise money and see that the macro environment was upbeat (for funding), you start making bigger bets, says Srivatsa. Dressed in a pair of blue jeans and a black shirt with the company logo emblazoned on it, it’s evident he wears Urban Ladder on his sleeve.

So with two consecutive rounds of 20 million in July 2014 and 50 million in April 2015, Urban Ladder’s ambitions suddenly expanded into a 42,000-sq ft swanky office.  Everything assumed larger proportions in those 16 months–it had more than double the people, eight times more products were made available, expanded to 10 more cities and surely to keep them going four times more coffee was consumed.  

With this ramp up, the company was making close to Rs 19.2 crore in revenues by FY15, about six times more than what they did in the previous years.

And Urban Ladder was hooked to this.

“When you have more money, you start to think, we grew close to 1.8X earlier, so we thought let’s grow a bit more,” says Srivatsa confessing to the addictive nature of growth.

And that bit became 4X.

By now, the company also wanted to be seen as a big brand. So from 2015, it spent big bucks on running three different TV campaigns for nearly 15 months in prime time slots.  

Besides chasing growth, what came with the money was the restlessness to solve problems.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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