Mumbai: Bigtree Entertainment Pvt. Ltd, which runs online ticketing service Bookmyshow.com, is planning to raise funds from venture capital (VC) and private equity (PE) investors for its expansion plans.
The company has mandated Mumbai-based investment bank Avendus Capital Pvt. Ltd, according to at least four people close to the development.
Network18 holds a majority stake in Bigtree Entertainment. In 2007, the Raghav Bahl-promoted Network18 bought a strategic stake in Bigtree Entertainment. The company was founded in 1999 and its ticketing service, Bookmyshow.com, was launched in 2007.
Bookmyshow.com is a website that allows buying tickets for movies theatres and other events such as concerts, sports events and plays across India. It also provides doorstep delivery, cash collection, warehousing and software for ticketing transactions.
“Once it (fund-raising) happens, the deal with be announced. However, these deals take a while to firm up,” said an official from the company, requesting anonymity as he is not authorized to divulge financial plans currently under way.
In an email response, Bigtree Entertainment’s founder and chief executive Ashish Hemrajani confirmed the development, saying: “We would like to confirm to you that we have mandated Avendus Capital as our financial advisers. In their role as our advisers, they would be evaluating the market and presenting their findings to us. We are not closing a funding deal in the immediate future.”
He added that Bookmyshow.com aims to present its clientele the most secured, end-to-end ticketing solutions. “As a leader in the space, we do have plans to build and expand the business further,” he added.
Bookmyshow.com has offices in New Zealand and Malaysia.
According to Bigtree Entertainment’s website, the company has a team of over 300 and has a 90% market share in the online entertainment ticketing space.
“It’s a growth equity round. There has been significant interest for the company and quite a few investors are looking at it. The company will issue fresh equity,” said another person directly involved with the plan, requesting anonymity. “The existing investors are not looking to exit through this funding round.”
A venture capitalist, who is considering the investment opportunity, said the funding could be $10-12 million.
He, however, refused to give more details. “All I can say is that it’s under discussion at the moment,” he said, refusing to be identified.
Revenue generated from Bookmyshow.com is accounted under Web18, the Internet and mobile arm of Network18. “Bookmyshow.com continued on a strong growth trajectory during the year and is now a profitable operation,” according to Network18’s 9 April earnings release.
For the financial year ended March 2012, Web18’s revenues grew 18.6% to Rs 100.7 crore from Rs 84.9 crore in the year earlier. However, for the fourth quarter ended 31 March, revenue was at Rs 25.9 crore, almost unchanged from the year before.
Consumer Internet has been one of the most sought after spaces by venture capital and growth investors in the past 18 months.
Over $500 million was invested in 67 e-commerce deals last year, according to estimates by VCCEdge, which tracks investment activity.
Last week, Internet and mobile-based classifieds company Quikr Mauritius Holding Pvt. Ltd, parent of Quikr India Pvt. Ltd, raised $32 million in its fifth and largest round of fund-raising.
There is a continuing investors’ interest in such companies as it’s a fundamentally fast-growing sector, said Deepak Srinath, director of Bangalore-based boutique investment bank Viedea Capital Advisors Pvt. Ltd.
The next decade is poised to present tremendous growth opportunities in the Internet sector in India, supported by a growing number of Internet users, increasing income levels and a young population.
According to Internet and Mobile Association of India, Internet users in the country have crossed the 100-million mark. The lobby group estimates that the number of such users will triple by 2014-15.
“Unlike last year, when there was a lot of hype about consumer Internet companies, investors have become more realistic now. Follow-on rounds will happen for leaders in their categories,” Srinath said.
According to Srinath, valuations are suppressed compared with last year as it is easy to see who is doing well on the basis of quarter-on-quarter comparisons.