Raj Singh, MD India for ActiveMedia Technologies, which announced yesterday that it has been acquired by AIM listed 2ergo, told MediaNama that the acquisition is essentially about scale, and the opportunity to offer more services, and expand to multiple geographies. Read the payout details here. Excerpts from the interview:
What is the rationale behind the sale to 2ergo?
“We’ve been around for a couple of years in the Indian market – and there’s a change coming in the industry, in terms of how customers are working and our competition is moving. We have to scale up, and have the ability to service multinational operators in multiple territories,” Singh said adding that this was among the biggest drivers for the company.
“The second was to find a partner with strength – financial strength and International presence, and the aspiration to grow their business,” Singh said. “The other piece is the ability to offer a wider portfolio of services in India – particularly mobile Internet services, on device applications, iPhone and Android applications as well. We’ve been very SMS focused as a company, and moving to WAP and device applications was a benefit. We wanted to be able to invest in the Indian market more aggressively.”
Will you be getting into the platform services space? 2ergo has a platform that integrates voice, data, text, email, video etc.?
One segment that we haven’t gone after so far in India has been the IVR (Voice) space of the business, which will be on our mandate. It is a very CAPEX heavy area to go into, and historically, we’ve stated away from it for that reason. From here, we can build products that can be distributed to other markets as well.
We do run a bunch of managed services for telecom operators, including content subscription, apart from the mobile marketing business. But the key is that the business model is going to go through a transition – from end user fees to a significant compontent of services being subsidised by brands. We recognise this is not going to happen overnight. If you go back a few years, and where people expected the market to be, it’s nowhere near that. It’s taking long to happen, but it will definitely will happen. The players who invest now and remain patient, will see it through.
What about the synergy with Broca? Would you be looking at secure mobile payments as well?
Yes, absolutely. Broca has a patented technology for secure SMS based transactions and we are evaluating what to roll out. We’re pretty keen on mobile payments, on the platform side with campaign management, and mobile Internet as well.
Was your Indian business profitable?
We’ve never raised the single dollar of capital, and put in limited capital. We’ve been profitable for over 3 years, both in the UK and India. In terms of a split, the split at a profit level was roughtly equal.
Will you be hiring in India?
India employed 40 persons, while 10 were in the UK. The main operations are in Noida, and there’s an office in Mumbai. We will, on the back of this, look to expand the team. Ramesh Krishnan (COO, India) has joined the business, and is extremy experienced. We haven’t made any firm decisions yet in terms of hiring.
Singh said that investment from 2ergo in India will be business case driven. In addition, 2ergo is looking to expand to other territories as well: “They don’t have a presense in the Asian region and Middle East, Africa, South East Asia, and there is support for ActiveMedia business to expand to those territories as well. For the time being, the ActiveMedia brand will remain, while 2ergo is a new brand here. At some point in the future, it will make sense to rebrand.”