It has been an exciting week for mobile value-added services (VAS) companies. First, OnMobile Global Ltd, the Bangalore-based company that started life as an Infosys Technologies Ltd incubation project in 2000, went public. Despite a choppy market environment, the firm’s initial public offering, which closed on 29 January, was oversubscribed about 11 times read our 1 February story, ‘OnMobile fixes share offer price at Rs440’ at ( www.livemint.com/mobileipo.htm). This is the first public listing by a mobile VAS start-up and it clears the decks for those to follow, notably Cellebrum.com Pvt. Ltd and Bharti Telesoft Ltd.
Then, three Indian start-ups travel to Barcelona next week, after making it to the list of finalists last week, to compete with peers from across the world at the MobileMonday Peer Awards Barcelona 2008. This is a unique event organized by the mobile VAS community itself to recognize top innovations in the space. The Indian companies nominated are Bangalore-based Ziva Software Pvt. Ltd and Mobisy and Chennai-based Mobile-worx Inc. Their presence at the event endorses the world-class nature of product/innovation that Indian start-ups, in this field, are beginning to churn out.
Mobile VAS remains one of the highest-funded segments by venture capitalists—in the last two years, investors put in an estimated $150 million (Rs591 crore). The current year should see similar momentum, say most venture capitalists looking at the space. There has already been one deal—Bangalore-based NEA-IndoUS Ventures invested $2.5 million in Chennai-based Bay Talkitec (P) Ltd at the end of last month.
However, even as investors back their pet sectors, early-stage investing is broadening its scope to some interesting niches. One of those niches is online education. Bangalore-based Helion Venture Partners, for instance, is actively looking at this space though it is yet to close a deal. But, says a partner at the firm, there is a growing population of promising start-ups in the space and the firm finds itself evaluating three-five business plans a week. Others have already closed deals—Kleiner Perkins Caulfield and Byers teamed up with its Indian partner Sherpalo Ventures and Infoedge (India) Ltd (owners of Naukri.com) to invest $3 million in StudyPlaces Inc. The company, based in Gurgaon, was started a year ago by Amitabh Nagpal, best remembered as a co-founder of US-based Cymbal Corp., which was bought by Mumbai’s Patni Computer Systems Ltd in 2004.
Of course, even online education falls within the ambit of Internet-led businesses and it would not be incorrect to conclude that for the next couple of years, at least, mobile and Internet businesses will continue to command top mind-share with investors. But, as a bunch of deals in the later half of 2007 going into 2008 indicate, even non-technology niches are becoming popular with investors. Take for instance, the Myntra Designs deal last October. This company makes customized gifts and merchandise for retail consumers and raised money from seed investor Erasmic Ventures and other angel investors. Look out for more such deals in the future asgrass roots entrepreneurship really begins to take off in the country.