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Two By Two Fri, 15 Aug 25 |
An abridged, narrative version of the latest episode of Two by Two, The Ken’s premium weekly business podcast. |
Good Morning [%first_name |Dear Reader%],
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Welcome to a new edition of the Two by Two newsletter. This is from me, Rohin.
First, a very happy Independence Day to all our readers from India! The Ken won’t be publishing a longform story today on account of the public holiday.
Earlier this week, though, Praveen (my co-host on the Two by Two podcast) and I spoke with Siddharth Balwani, the second-generation CEO of pest control services company Pecopp, set up by Siddharth’s late father over 50 years ago.
Here’s our 2×2 for the episode:
I’d reached out to Siddharth in February to learn a bit more about the sector after wondering how (and perhaps why) the UK-headquartered Rentokil had gone on to acquire both the top players in the Indian market—PCI and Hicare. Hicare itself had passed through so many owners—Godrej, which incubated it before selling it to Danish ISS, which then sold it after a few years to PE fund True North (then called India Value Fund), which after running it for a decade finally sold it to Rentokil (which had already acquired a majority stake in the number one player, PCI).
Pest control services are fragmented, commoditised, and woefully underpenetrated in India. But India is a tropical country with lots of people that’s rapidly urbanising, which means the long-term prospects for pests—and by extension, pest control services—is rosy.
We had an animated discussion, and I realised why I always trust Praveen to provide the best left-of-field solutions.
Praveen Gopal Krishnan: Well, I’ve been fortunate that where I’ve lived—whether apartments or like in an independent house right now—I’ve just not had too many reasons to get in pest control for a very specific reason. And the very specific reason being, I have a cat. And a cat takes care of 95% of pest control. So, if you think that private equity (PE) is your competitor Siddharth, you are wrong. Cats are the biggest competitor out there.
I realised that India operates with generations-old pest control chemicals, because, of course, bureaucracy.
Siddharth Balwani: The answer is, in India, any new product takes a long time to get approval. So anything that I use in your house needs approval from a government body, which takes six years.
Rohin Dharmakumar: Wow, what? Six years?
Siddharth: Yeah, on average. So, no company wants to introduce the latest stuff in India, because they’re like, “Who’s going to take six years to get it?” And six years are a lot of… you can imagine the effort is beyond the time, money, everything in that space.
Rohin: So, what is this? Is this like an ISO?
Siddharth: It’s the Central Insecticide Board, if you want to spray any pesticide.
We figured why PE loves such a staid and “unsexy” sector so much—because it operates on a recurring revenue or annuity business model. Plus, customer retention is high for good service, making it a stable and attractive investment.
I also ended up ordaining termites as a gateway pest.
Rohin: The first experience or the first trigger for many people who’ve never considered pest control services is when you have a really “pesky pest” like termites, right? Which you can’t just get rid of. Then you’re like, “Got to bring in the professionals.” And once the professionals come in, they’re like, “Sir, would you like to get this done on an ongoing basis?” Then you’re like, “Sure, why not? Never again.”
So, it’s like come for the termites, stay for the cockroaches.
Have a go and listen?
You can find the episode here: Will Indians pay for pest control as a service?
Regards,
Rohin Dharmakumar
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Rohin is Co-founder and CEO at The Ken.
He hosts The Ken's leadership podcast, First Principles, and is the lead writer of the Sunday newsletter on mental models, careers and personal growth, also called First Principles. He is the co-host of the Two by Two and Zero Shot podcasts. He is also a columnist for The Ken's AI series, Zero Shot.
Rohin holds an MBA from the Indian Institute of Management, Calcutta and an engineering degree in Computer Sciences from the R.V.C.E., Bangalore.
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