R-ADAG in talks to buy out Seventymm

R-ADAG in talks to buy out Seventymm
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First Published: Tue, Sep 11 2007. 12 46 AM IST
Updated: Tue, Sep 11 2007. 12 46 AM IST
Mumbai: In its bid to expand its footprint in the entertainment business, Anil Ambani-controlled Anil Dhirubhai Ambani Group (ADAG) is negotiating a buyout of India’s largest online movie rental company Seventymm Services Pvt. Ltd, which delivers video compact discs and digital video discs to homes of around 25,000 customers.
Reliance Entertainment Pvt. Ltd, part of ADAG, is already into movie rentals under the brand of Big Flix.
Seventymm chief operating officer Subhankar Sarkar denied buyout talks, but two senior ADAG and Seventymm executives, both of whom did not want to be identified, said negotiations were at an advanced stage. Terms of the potential acquisition were not immediately available. An ADAG spokesman said in an email that the group does not comment on speculation.
An executive at venture fund Matrix Partners India, a local arm of US-based firm Matrix Partners, which is one of the key investors in Seventymm with a $7 million (Rs28.7 crore) investment, too declined comment. Other backers of Seventymm include venture capital firms such as Draper Fisher Jurvetson and ePlanet Ventures.
Bangalore-based Seventymm is the largest online movie rental service in India, offering access to more than 15,000 titles across multiple languages including English, Hindi, Tamil, Telugu, Malayalam, Kannada, Bengali, Gujarati, Marathi, Assamese, Oriya, Bhojpuri, Rajasthani and Punjabi.
“This deal assumes significance as Seventymm claims 25,000 customers in six cities including Chandigarh, Bangalore, Chennai, Hyderabad, Delhi and Mumbai. Reliance ADAG could smoothly launch online movie rental business as other majors are planning to getting into this space,” a senior executive of a rival online movie rental company, who does not want to be named, said.
He added that the market is set to grow significantly with the entry of firms such as Nimbus Communications and Moser Baer. The players in the online movie rental space today include Catchflix, Friday Box Office, Cinesprite and Clix Flix.
Seventymm, promoted by entrepreneur Raghav Kher, recently acquired New Delhi-based Madhouse, which was the first Indian company to offer movie DVD rental service through the Internet, phone and text messaging services, for an undisclosed amount.
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First Published: Tue, Sep 11 2007. 12 46 AM IST