October 17, 2007
Business Today's fourth annual listing of 10 companies that are hip and happening. What made each of them stand up and be counted? Read on.
The real-time hype
So how are Cellcast’s shows different from other game shows? For starters, viewers can participate realtime and also see the results get flashed instantly. Bid2Win is an interactive reverse auction that allows viewers to purchase high-value items such as LCD TVs, iPods, and home theatre systems at a nominal amount by submitting the lowest unique bid via SMS, IVR (interactive voice response), WAP (wireless application protocol), online or even through the landline.
The bids pop up on screen via a graphical interface and the lowest bid gets to win. Another of Cellcast’s shows, Gold Safe, involves puzzles and quizzes and the winners are announced on a daily basis and are given prizes in both cash and kind. “We are doing totally different things for the Indian market, where we are trying to introduce new content and in some cases modifying some of the global content to suit the audience here,” says Thakar, 44, who worked with HCL and a Silicon Valley start-up earlier.
Cellcast, whose parent company is owned by Canaan Partners (39 per cent), UK-based Cellcast Plc (37 per cent), and the management team (24 per cent), buys telecast slots from channels and is now negotiating with others such as Zee, Nimbus and some news channels. It is also in the process of launching a show called Sona Le Ja Re on Sahara that is similar to Gold Safe (on Zee), besides sport shows such as virtual soccer and cricket.
Putting the click on flicks
“There are more than 25 million non-resident Indians (NRIs) but they do not have enough choices for Bollywood content,” says Barjatya. “A broadband entertainment portal was the answer.”
Thus was born Rajshri.com, which started off in November 2006 by releasing online Barjatya-produced Hindi movie Vivah, followed by Hattrick, Life in a Metro and Blue Umbrella, among others. Today, the portal boasts of more than 6,000 hours of video content, including 250 short and full-length films and over 5,000 entertainment properties. It logs 1.5 million unique visitors per month and has served in excess of 15 million video streams per month and reaches 60 countries.
What is unique about Rajshri.com is its business model. The portal has free streaming for older content that is supported by advertising. The second model is that of downloads, of which there are two kinds: downloads to own and downloads to rent. Download to own is without DRM (Digital Rights Management) to support interoperability of content and new content is downloads with DRM for 72 hours. “I want the content to be used right across multiple devices, which is not possible through the DRM route,” says Barjatya.
Paid downloads cost anywhere between $0.99 and $9.99. Older Rajshri movies cost $4.99 to download or are free in streaming video, but new releases cost $9.99 with no free streaming. Barjatya has been able to convince content owners such as UTV, STAR and Mukta Arts to provide him with content on a revenue-sharing basis. His next steps: create original content and tap consumers in India.
Radio’s cool cat
A year-and-a-half ago when Anil Srivatsa came up with the concept of a just-for-women FM radio that would have chat show hosts instead of radio jockeys, there weren’t too many takers for it. But India Today Group’s Aroon Purie (Business Today is published by his group) liked the idea and asked the USbased Srivatsa to relocate to India and get the radio channel going.
Christened Meow, the FM channel has been on air for a little over five months now (it was launched on May 1) and by all accounts, it’s found a unique niche. “Going by certain industry yardsticks, we estimate we reach out to some 2.7 million listeners,” says Srivatsa, COO of Radio Today, which owns Meow. There is no independent verification of Srivatsa’s claim, but media buyers seem happy with Meow’s differentiation in a market that’s choc-a-block with identical radio stations.
Radio advertising accounts for Rs 505 crore (2006), but it grew at a scorching pace of 58 per cent from around Rs 317 crore in 2005. Says Satyajit Sen, Executive VP, Zenith Optimedia, a media services group: “The channel has a unique women-centric positioning and it will make sense for categories with a strong gender skew to drive engagements on the platform.”
Today, Meow offers a host of shows that deal with women’s issues in different ways. India’s bestknown woman cop, Kiran Bedi, hosts “Top Cat”, “Mama Meow” discusses issues related to motherhood, and Srivatsa himself hosts a popular show “Meow Between the Sheets” that deals with sex and relationships. Meow already has a presence in Kolkata, will launch in Mumbai later this month, and plans to hit Amritsar, Patiala, Shimla and Jodhpur before yearend. The verdict is still out on Meow, but there’s no doubt that it has got women talking.
The Unlikely VCs
But guess what? That’s not the reason why APIDCVC—managed by Sarath Naru, Chandra Shekhar Reddy Kundur, Aditya Kapil, Ramesh Alur, Raghuveer Mendu, Venkatadri Bobba and Siddhartha Das—is on our Cool list this year. Rather, the Hyderabad-based firm is on the list because, despite being a public-private partnership (until last year, the Andhra government owned 49 per cent of the firm, but its stake is down to a token 1 per cent; the rest is owned by Ventureast promoted by the management team), it thinks very differently as a VC. “Our model,” explains Naru, “is very much based on the businesses and technologies that are relevant to India and on having multiple funds with a pioneering focus in each.”
As a result, APIDCVC, which will soon call itself Ventureast, has been the first to launch an incubation fund, the first biotech fund, and the first micro-equity fund. With funds of Rs 1,200 crore ($300 million) under management, APIDCVC may not be the biggest VC firm around. But with investments in small and relatively unknown organisations such as Naturol Bioenergy, Ocean Sparkle, Cecelia Healthcare and Sapala Organics, it bravely goes where most other VCs fear to tread.
-E. Kumar Sharma
“We have grown by breaking new ground,” says the man. RSGB, which has a corn crushing capacity of 1,500 tonnes per day compared to 425 tonnes per day of its closest rival, has grown through acquisitions. In 1996, it acquired Glaxo India’s G. Gluco Biols and in 2005, it bought Hindustan Unilever’s biopolymer division in Pondicherry.
Now, it is setting up its fourth manufacturing unit in Uttarakhand. With that, the company’s market share is expected to jump from 17 per cent to 25 per cent in next two years. By then, it expects to have revenues of Rs 600 crore (versus Rs 365 crore at present). “Name any big company in the food, pharma, textile and paper industries and we would be their vendor,” he says with some pride. The business of starch may be uncool, but not Chowdhary’s winning strategies.
In the new millennium, it has got into photovoltaic, besides changing the pricing equation in the VCD/DVD movie market by using its heft in manufacturing to sell home movies at rock bottom prices (Rs 35 apiece). “Last year, an estimated 15 million pre-recorded discs were sold, this year the number will easily be over 10 times that,” says Ratul Puri, Executive Director, Moser Baer.
What excites Puri even more is Moser Baer’s foray into the global photovoltaic market, which he says could be worth $1-trillion within the next five years. With a Thin-Film Photovoltaic (TFPV) plant in operation in Greater Noida near Delhi, Puri believes Moser Baer’s innovations can make solar energy available at “less-than grid-parity” prices. “You see the boom then,” he says. That means, Moser Baer’s two new babies could become bigger than its core business of optical media.
Coming soon: SMS Ver. 2.0
Launched simultaneously out of India, Singapore and the UK (that probably makes it an MNC start-up!), Affle has spent over 50,000 man hours on developing the application. “The SMS is the single most valuable real estate on the phone when it comes to the amount people look at the screen,” reasons Anuj Kumar, Executive Director (South Asia), Affle. The start-up successfully piloted a trial with Airtel in Delhi earlier this year, involving 15,000 mobile subscribers, and is looking forward to a nationwide roll-out in a couple of months.
The application, which works on around 50 handsets at present (and Khanna says another 50 are in the pipeline), is required to be installed on your phone. “Strange as it might seem, developing an SMS application is quite a challenge,” Khanna laughs. It is a user-oriented service, where the user chooses what sort of news feeds he wants, and the entire thing, and this is the good part, is free. Even better, SMS 2.0 keeps the standard 160-character limit on your device, but if you send text messages from one user to another, you get access to colours and swanker emoticons.
But what is the revenue model then? “Well, while 80-90 per cent of the time users will see content according to what they selected when they installed the service, we will sometimes send advertising, or rather sponsors for the free content. Plus, we also sometimes send contextual stuff around the content we serve that users can download, like ringtones and wallpapers,” Kumar explains. “While the user needs to have a GPRS/EDGE capable device for this, they will not pay for data charges, and we share the revenue with the operator.”
Besides India, Khanna says talks are on to start services in Thailand and the Philippines shortly.
Continued on the next page...
Short code pioneers
One, the mobile phone population was projected to touch 300 million by 2010, making it a medium with the biggest consumer reach; two, there was a need for ‘aggregator’ companies that were operator agnostic and, hence, capable of delivering services to all mobile subscribers; and, three, mobile operators would need vendors to develop value-added services to boost revenues and build subscriber loyalty. Thus, Active Media became the first company to establish an independent SMS short code across mobile operators. “We were the first to show brands the power and effectiveness of the SMS response mechanic,” says Singh, who heads Business Development & Operations at Active Media.
Five years on and several blue-chip clients (including Procter & Gamble, Maruti, and GE Money, besides cellular operators) later, Active Media has a presence in both VAS mobile marketing and content, and is set to clock $4 million (about Rs 16 crore) in revenues in 2007-08. “We want to expand in MCouponing and mobile marketing applications,” says Singh, who’s also talking to VCs to raise $2-4 million in equity. The 36-year-old plans to list the company once the turnover touches the $30-million mark— something he hopes to achieve in another 3-4 years, given its 100 per cent year-on-year growth.
The business of asking
mosimageRohit Agarwal had been back in India for all of two months when, one night, the idea for his fourth start-up popped up in his head. As he told his friends and wouldbe co-promoters back in Silicon Valley, “there’s a problem here with professionals connecting and collaborating that needs to be solved—are you guys up for a new company?” As it turned, out they were.
In September last year, the 37-year-old Agarwal, his friends Alfred Vieira, Sean Pudney, Bethany Chaney, and Chris Tembreull launched techTribe, which today boasts of 200,000 members. The idea, apparently, is working. Avinash Agarwal, co-founder routeguru.com, is said to have found his team on techTribe.
“People here do not share and talk enough, unlike in the Silicon Valley, where people are willing to listen and spend time giving ideas—for free. They all know that what goes around, comes around,” says techTribe’s Agarwal, 37. In July this year, Canaan Partners announced a joint investment with The Entrepreneur’s Funds and Miven Venture Partners in techTribe. Agarwal’s immediate target: rack up USD 1 million in revenues by March 2008.
Retailer of rural art
mosimageBusiness ideas often have the strangest places and times of creeping up on people, and in the case of Solomon J.P., Director of Bangalorebased Maya Organic, it was in the extreme heat, humidity and dust of Bijapur, in northern Karnataka, that his eureka moment occurred. As part of an NGO team visiting Lambani tribals in the region in the late 90s, Solomon discovered that much of the art and culture among rural artisans and the unorganised community was dismissed as low-quality and unmarketable, depriving them of a proper livelihood.
“At least 80 per cent of the India’s workforce is in the unorganised sector, but yet, there is no means for them to showcase their skills,” he explains. Four years (and countless discussions) after this, he finally got an opportunity to give vent to his plans when he started Maya Organic (with products under the MO brand), to provide a platform for hundreds of rural artisans to market their products and a place for them to work on improving their quality and productivity. “Any micro enterprise, especially in rural areas, is associated with poor quality and low productivity. We wanted to change its perception,” Solomon, 43, says.
So, 15 years after he started Maya as an NGO (much to his family’s chagrin), Solomon took his next entrepreneurial bet when he started Maya Organic in 2002 to act as a vital link between micro enterprises and the mass market. Maya Organic today works with three different labour clusters around the country, sourcing everything from beds to children’s toys for the urban market. For every piece sold in the open market (through exclusive outlets as well as franchisees and dealers), it gets a 10-15 per cent commission.
“We are also targeting the export market and we already get over 70 per cent of our sales from there,” he adds. To add impetus to its plans, Maya Organic has lined up $3 million in funding from Nadathur Holdings (and some more imminently from Aavishkar Capital) to bolster its marketing front-end and the back-end design and manufacturing capability. “Everything is about scale in this market; India has made over $700 million in handicraft sales from sub-standard products, so there’s a massive market waiting to be tapped if we tweak our quality,” says Solomon.
Are they still cool?
Here’s taking stock of the 10 cool companies of last year.