Five Questions With: Rahul Rajguru

Rahul Rajguru is co-founder and CEO of LocusPlay, a Providence-based startup provides a secure platform for small and mid-size lottery operators in developing countries to transform their traditional, paper-based lotteries into modern mobile- or cloud-based lotteries.

Rajguru and co-founder Chirag Bodar, LocusPlay’s chief marketing officer, relocated the company headquarters to Providence from Bangalore, India, after participating in Betaspring’s winter 2013 session, which ended in May.

Rajguru spoke with Providence Business News about the potential of lotteries in emerging markets and where his company is headed next.

PBN: You and your co-founder, Chirag Bodar brought LocusPlay to Providence all the way from Bangalore, India. Why Providence instead of one of the larger entrepreneurial hubs like Boston or San Francisco?
RAJGURU:
There are multiple reasons for this decision. Providence has a vast pool of experts associated with lottery industry and technology, which is not the case with Boston or San Francisco even though these cities dominate the presence of technology entrepreneurs. We were not only looking to move closer to the industry but also wanted to channelize the move in such a manner that we get the right platform to scale and scale faster. We discovered this in form of Betaspring in Providence and the first three months that we spent in the program were truly amazing and beyond our expectations. Last but not the least, we fell in love with this city and are recipient of great support from the people of Rhode Island.

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PBN: How do lotteries in an emerging market – such as the Caribbean or Africa, where LocusPlay currently does business – differ from lotteries Americans might be familiar with in the United States?
RAJGURU:
Lotteries in the emerging economies are completely different than what we see in the U.S., in terms of everything that one can think upon. A substantially large portion of lottery is still being sold on the streets of these countries, mainly on paper without the use of proper technology. People in these countries are quite fluent with mobile commerce and that too without a smartphone, because they skipped the broadband era and have directly jumped to the cellular technology. Mobile payment systems for purchasing goods and services are extremely popular in these countries and that too with majority of them do not own a smartphone. There is a huge potential for offering lottery over the mobile phones whether through the street vendors or directly to the players.

PBN: How much do your clients need to invest to get access to LocusPlay’s cloud-based mobile lottery system?
RAJGURU:
It is definitely not into millions of dollars, which has been usually the scenario for past many years. Some of the biggest reasons LocusPlay is getting popular in emerging markets are low capital investment both in software and in hardware. Our technology works on majority of the off-the-shelf hardware and POS terminals, which are widely available in the market and costs less than $500 per unit including the printer and barcode scanner. Our technology works mainly over the cellular network which is the best in all the emerging countries and is quite cheap compared to the developed countries. It also connects each and every part of the country, and that’s the real beauty. Our technology does not run on a proprietary hardware or does not require lottery to pay huge license fees for servers, database, operating system, etc. If you take into effect all these factors it is not difficult to calculate that lottery’s investment into technology is significantly low. With all these, we do not compromise on the critical aspects of data and transaction security.

PBN: How large is the potential market that LocusPlay is looking to tap into, and what are the primary challenges you face reaching new clients?
RAJGURU:
The emerging market lottery is estimated to be worth more than 100 billion dollars per year and is growing at 15 percent; that is much more than the growth rate in developed countries. A large portion of this segment of lottery still runs either on paper or without the proper technology. Identifying and reaching new lotteries in this segment is neither very difficult nor too easy. The crux lies in us finding the right person or the decision-maker within the lottery. I would say this is the real challenge.

PBN: What’s next for LocusPlay? Do you have any plans to expand your team in the near future?
RAJGURU:
Currently we are putting in place our strategies to enter into South American market, which has a huge potential for the kind of technology that we offer. We do have plans to expand our team in the near future right here in Providence.

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