About Yatnesh Mittal

Yatnesh Mittal is an advisor and mentor to startups and a Corporate Development professional who has close to two decades of experience as a sell-side Investment Banker and Head of inorganic growth initiatives at multinational banks, having worked at American Express, Bank of America and marquee investment banks. With expertise in global payments, consumer lending, and multi-brand loyalty programs, he excels in crafting entry strategies and developing product roadmaps and technology partnerships. His efforts have been dedicated to enhancing customer engagement and driving revenue growth through innovative technology integrations. Yatnesh has played a pivotal role in transforming the financial services landscape by leveraging his extensive experience in building strategic alliances and implementing cutting-edge solutions.

What strategies have you employed to identify potential startup partners that align with your company’s vision and goals?

Having a structured process is integral to activating multiple touchpoints across the ecosystem at different times to bring in the right set of opportunities for evaluation. Maintaining a laser focus on the company’s vision and goals is the foundation of a successful strategy, one that maximizes output in terms of number of deals, transaction type, size, scale, and, most importantly, their impact on the overall goals 18-36 months down the line. Collaboration with internal business teams is vital, often overlooked, yet it has the greatest impact on the business and its eventual outcome. Building a strong deal pipeline involves active participation in industry body associations, VC’s, accelerators, direct engagement with young companies seeking business partnerships with your company, strategic outreach based on market intelligence, and professional networks – all come in handy.

How does a large organization assess potential startup acquisitions to ensure they align with their technological and business objectives?

Having a clear agenda and defining KPIs for the investment or acquisition is crucial for maintaining focus on a singular goal. This approach is especially beneficial during leadership transitions bringing in inevitable shift in the business priorities. A well-documented, pre-planned set of outputs and business outcomes keeps both parties engaged and aligned. Technological collaborations are best guided by a detailed tech roadmap, potentially overhauling key vendors and platforms post-merger. This ensures consistency, cost efficiency, reduced redundancy, and long-term homogenization benefits across the organisation’s core platforms.

What are the key factors you consider when investing in or acquiring a startup?

The golden rule is finding the right product-market fit and, to complement it, having a strong leadership team. These two factors account for the majority of dropouts from the funnel. Once these are established, large organizations must gauge cultural fit and team dynamics. Sometimes, a startup without a fully established product-market fit but with significant product differentiation or innovation warrants serious consideration. Such aspects can be tested and implemented at scale with the acquirer’s customers. I have done this in the past, and the pilot results were so promising that we acquired the startup within a few months of our Series A investment.

What are the most significant challenges when merging a startup’s culture and technology with an established corporation?

Large organizations are top-driven and process-oriented, contributing to their long-term success and maintaining their culture and product integrity. This involves building long-term strategies that provide clear direction for all colleagues and business units, ensuring alignment and maximizing value from investments. This contrasts with smaller startups, where rapid innovation and business unit-level experimentation are common and desirable. For large organizations, such decentralized experimentation can be detrimental, consuming significant management time and resources with minimal results, potentially leading to the slow demise of the product and the partnership.

How do you ensure a smooth transition for startup teams into a larger corporate environment?

A three-pronged strategy has proven effective in most transitions I have managed:

1. Leadership Support & Sponsorship: Assign senior leaders from the acquiring organization as sponsors or champions for the startup team. Their guidance and mentorship help the startup’s team navigate the organization and open doors to internal or external teams, resources, ideas, etc. that might otherwise seem inaccessible.
2. Alignment of Incentives and KPIs: Aligning incentives and KPIs is crucial for quick integration of teams and minimizing deviations from the company’s goals.
3. Open and Transparent Communication: Ensure the incoming team feels comfortable in voicing their opinions, ideas, and concerns. Maintaining their autonomy and fostering a blended culture that respects differences between teams significantly contributes to the acquisition’s success for all stakeholders.

Are there specific industries or technological areas where corporations in your industry are mainly focused on expanding through acquisitions?

Over the last decade, Banking and Financial Services industry has seen unprecedented growth, driven by innovation and competition from startups. Take, for example, most neobanks started around the year 2015 when the open banking regulation started taking shape in the EU, and with that, various industry segments have been transformed. In response, large players have actively partnered with and acquired companies to keep pace with the evolving landscape and customer expectations. Their key focus areas include automation (customer service, compliance, vendor management), Regtech, AI-based advisory services, blockchain, risk underwriting, predictive analytics, and fraud management. Cybersecurity and personal data protection remain top priorities for banks.

What advice would you give to startups looking to make themselves attractive partners for large organizations?

A successful product strategy should involve: simplicity, customer-centricity (especially for D2C organizations), and ensuring data and regulatory compliance across multiple geographies.. Additionally, ease of integration with target organisation’s technology platform and a seamless customer side workflow is crucial for widespread customer adoption and eventual success.

What advice would you give to startups making themselves acquisition targets for large companies?

Prioritize compliance. In the race to achieve scale, if overlooked, it can be a deal breaker for large organizations. Startups aiming to attract such organizations should prioritize being compliant at all costs. Understanding the target organization through discussions with current leaders or ex-employees can be invaluable. This approach helps startups build and scale their business to align with the common objective of an eventual sale.

Author: Daniel Rongo
Founder at Industry Gap
Connect with me on LinkedIn