Why Twitter zip 'dialed' a loss making Bengaluru start-up

Five years after creating a unique advertising delivery platform on mobile, Bengaluru-headquartered ZipDial  was recently acquired by Twitter , for an estimated value between $30 million and $40 million. Since the inception of Zipdial, the phone hasn't stopped ringing and the acquisition seems to have only accelerated the calls.

For ZipDial CEO Valerie R. Wagoner, a California native who moved to India to start a company along with her Indian partners Amiya Pathak and Sanjay Swamy, the acquisition by Twitter is a vindication of a desire to solve developing markets' problems by using a unique business model. Wagoner spoke to Venkatesha Babu of Business Today on what the acquisition meant and future plans. Edited Excerpts:

Q. Zipdial built a business model around missed calls. In hindsight while this looks like a good idea, how tough was it initially?

A. Most people especially in the developed markets would not understand how this entire thing works. I had seen the power of missed calls in the Indian context. We started this company in 2010 and I remember initially when we ran this campaign when a major cricket tournament was happening, where anybody could give a missed call to a number and the latest score would be sent to that number. We were expecting a few tens of calls and it turned out to be several thousands in just a few hours. We immediately knew we were on to something.

However, it took some time for investors to initially recognise this. Today we have 500 customers including some of the biggest names like (Facebook, Disney, Unilever, Pepsi, Nestle and Coca-cola), 60 million users, 1 billion calls and we have run 10,000 campaigns.

Q. How much have existing investors put in before the acquisition by Twitter and how much do the promoters own?

A. Over the past five years, we have raised money from Mumbai Angels, Jungle Venture, Blume Venture, Unilazer, 500 Startups and Times Internet. We have not disclosed how much each of them has invested or what stakes where held by whom. However I can confidently say that each one of the investors has exited with a substantial profit after this acquisition. We are now proud to be part of the Twitter family.

Q. Will the advent of increasingly affordable smartphones, impact the growth of the business?

A. In fact we welcome the growth of smartphones, it is good for our business. Look, habits of Indians will not dramatically change and they will not become American cellphone users. For example, an average cellphone user in the US consumed 1.38 GB of data in a month compared to 60 MB in India. While the data consumption might go up it will not reach US levels.

Q. What happens to Zipdial's team now? Also your international operations?

A. We have 60 people in the company today in Bengaluru, Mumbai and Delhi. All of them will be integrated into Twitter India. I am very excited to be a part of the Twitter family as it would provide us with greater reach and resource to achieve our goals faster.

While majority of our operations were in India, it is true we have a presence in Bangladesh, Philippines, Sri Lanka and some parts of Africa. For the present we will get out of them and just focus on India. However, we intend to expand substantially into Brazil and Indonesia once everything (integration) is settled. Twitter has such valuable content and our efforts will be to make it more accessible.

Q. Zipdial's revenue has been estimated at $10 million and that you were not making profits yet…

A. So, even Twitter doesn't make profits (laughs)… We don't comment on revenue except that we have been doubling every year for the last four years. What attracted Twitter was our growth and our technology platform, which could help them reach previously untapped markets.