Rajiv Hiranandani, Co-Founder, Mobile2Win
Mobile2Win (India) today announced a merger with Altruist, a relatively new entrant in the Mobile VAS space. We spoke to Rajiv Hiranandani, co-founder of Mobile2Win on why they chose to go with Altruist, and the timing of the deal:
Why Altruist?
The deal has been in the works for a while now: Mobile2Win has been looking to beef up products, and Altruist has a voice business, while we have a strong presence in SMS, Mobile Marketing and WAP.
Why not one of the larger players in the voice space, then?
In the voice space, key players are OnMobile, Cellebrum and One97 – all of these companies are fairly large, and we thought it was good to partner with a company that is relatively new in the space and is hungry for business. They have three operator partners, and we bring in the other operator relationships. We don’t have voice, and they do not have SMS and WAP offerings, so we complement each other. Voice companies are bigger due to their width and the transactional nature of the business.
What about the timing of the deal – in the midst of a downturn…How much was the valuation?
I can’t comment on valuation, but we’ve been looking at the voice platform for ages. I don’t think the timing of the deal is intentional. The valuations may be lower than expected, but who knows how long this downturn is going to last – if one doesn’t grab the opportunity know, it may not arise again. There’s no cash deal here – we defined a share swap ratio and the investors and founders of Mobile2Win have received a corresponding stake in Altruist in exchange. As a combined entity, we will end this fiscal with revenues of around Rs. 200 crores.
What are your plans – any new products or services?
Several of our existing verticals are becoming crowded. We segment our businesses as Mobile Marketing and Advertising, which is in its infancy, and Media (Services) and Telecom Operator (subscription services), which are driving growth and margins. We will offer voice services to our client base – Brands, Marketers, Media companies and telcos – along with our SMS and WAP offerings. We also plan to introduce location based services on SMS, Voice and WAP.
Any plans for “employee rationalization”? How many employees does each company have?
Mobile2Win has around 80-85 employees, while Altruist has around 300-350 employees. Since there is little overlap, there are no significant plans to rationalize the employee base.
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5 Comments until now.
Is the Rs 200 crore revenue at the consumer price level (operator topline) or pegged at the actual share these companies get (usually around 20%). If we take it as operator topline, the number makes sense (revenue of Rs 40 cr). This also gives a more realistic number of Rs 10-15 lacs/employee for VAS companies net of content costs.
Hi Amit, you're right – just confirmed from Dheeraj from Altruist: the Rs. 200 crore is inclusive of operator share and media payout. Thanks.
in that case hungama should have revenues at 10L*500 = 50crores? I think they pay double that amount to the largest music company
I did not know about Altruist before this but reporting operator's earning as your revenue figure speaks lot of quality of people involved in the deal.
If one comment about Altruist being a sleaze chat line provider is true, this merger is a true statement of ambition. Now they can be a VAS company from being just a (**x?) chat provider.
Opportunity is there for both companies to make most of each other.
Best Wishes
I heard that M2W investor (read nexus/ sandeep singhal) onwed more than 50% of the company and had decided not to invest any more money because they were not going anywhere. They have been making the rounds of investors for a while now. I got to know from a friend that they talked to Yahoo India for an acquisition but could not convince the Yahoo team on what M2W is about.
M2W topline is around 4-5cr and that too was not growing much. From the mobile marketing perspective, they don't much. They do have some SMS play which obviously is dying. I also got to know from some insiders of M2W that Rajiv did not really got along with Rajat & Tushar who came together as a team from Disney (which is an altogether a different discussion on why would someone hire Rajat with a media background to run M2W – what were you thinking Sandeep?). Guess such a thing is bound to happen when the founder is kicked down to handle the petty pieces of the company and no one notices his existence.