Home Automation Deal: End-to-End Research Leading to a Pass

Yash took on this research at Cumulative Capital when the team was evaluating a very early-stage home automation startup and needed a clear view on whether the market and the company warranted investment.

He started with the industry landscape. He found that no large Indian company had scaled meaningfully in home automation, and the two players with any revenue were both loss-making, running revenues of 30 to 40 crore rupees against losses of 10 to 20 crore rupees. That pattern raised an immediate question: was the white space an opportunity, or was it a signal that the market had structural problems?

To answer that, he ran primary research by speaking directly with potential buyers. The key friction he uncovered was the retrofit problem: people who already owned homes were unwilling to spend 5 to 7 lakh rupees rewiring an existing property, while new homebuyers showed genuine willingness to pay. This segmented the addressable market significantly.

He also mapped the competitive landscape against global players like Google Home and Alexa, and flagged a supply-side risk: Chinese chip manufacturers had raised prices, compressing unit economics further.

He presented the full findings to the founder of Cumulative Capital, covering industry structure, competitive dynamics, user research, and unit economics. The team decided not to invest, concluding that the market size was limited, adoption timelines were long, and capital could be deployed more effectively elsewhere.