#Headstart09 : Indian Technology Companies Don’t Get Funded

Note: If any VC would like to respond to this, whether publically or anonymously, do get in touch with me at nikhil@medianama.com or +919810310053 (SMS)

Where Venture Capitalists Are Failing In India - Sujai Karampuri, CEO of Sloka Telecom

Much spleen vented at Venture Capitalists by Sujai Karampuri, CEO of Sloka Telecom at Headstart.in, being held in Bangalore: 

“Venture Capital refers to taking risks, fund ideas coming from people who don’t have their own money, but are first or second generation entrepreneurs…and funding ideas that can disrupt, make things better through innovation and technology. If you look at the most VC investments in the last 2 years, they are staying away from technology companies, and funding Me-Too companies, replicas of Ebay, Netflix, Facebook, Amazon, Travelocity, Monster. 

It appears to have something to do with a safety factor. What happens to a technology company company? The usual reaction is “You Must Be Bluffing”? We have the worlds smallest and cheapest telecom base station. We’ve done this through technology, and yet for the last four years, we remain unfunded by Indian VCs.

Excel sheets do not capture technology. They’re the safety net. In five minutes or 10 minutes, I cannot explain the whole spectrum of the wireless industry to a VC, and then tell where I have the advantage. Tech entrepreneurs and VCs are different - Entrepreneurs have a higher risk appetite; they cannot remove all the risk.  A company is limited by the vision of their leaders. What happens when you meet VCs who want you to do small things, be careful. 

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Do-It-Yourself RFID Service Tikitag Launches In India; The Market, The Timing?

Tikitag, a service that enables the launching of online applications by touching a Radio Frequency Identification (RFID) or (NFC) device like a cellphone to an item tagged with an RFID Chip, has launched in India. The Belgian company is backed by Alcatel-Lucent Ventures, and is fairly unique in what they’re trying to do:

How it works
What’s interesting about Tikitag is that it is a do-it-yourself RFID kit: you don’t need a massive infrastructure deployment. The startup kit costs around $49.95 (we’re not sure if there will be a markup/import duty in case of India), and includes a reader which may be attached to a computer and 10 RFID tags to stick to devices. So you just need to swipe the tag over the reader (or the other way around) to launch one of the many applications like a GMail login, System Shut Down, Business Card (possibly competing with QR Codes at some level).

The Tikitag service is fairly new - the open beta was launched as recently as October 2008, and they probably are eying India because, well, of the mobile phone market that it is made out to be. Tikitag’s advantage lies if the fact that it is interoperable, and can be used (apparently) with any NFC or RFID reader. But that is where the problem lies:

The Market, The Timing
There just aren’t enough NFC/RFID readers in India, so the possiblities for Tikitag are limited until a handset manufacturer installs it, and a retail infrastructure is deployed. Adding an NFC chip to a handset increases the cost of the handset, so they haven’t been too kean on it.

Apart from this, the deployment of RFID chips at a consumer level is minimal, except perhaps the Delhi Metro travel card, and one cant use that to view content on the mobile phone. It will also be quite an issue to educate consumers about the possibilities of using Tikitag: one would need to be fairly tech savvy to buy something like this. At a $50 price point, the mass market just isn’t there. Tikitag has entered India at least 3 years too early…Near Field Communication in India doesn’t appear to be too near.

ValueFirst Raises Around $5 Million From New Enterprise Associates

Update: ValueFirst is listed in NEAs portfolio of companies, as a current investment. 

You’re reading it here first: MediaNama has learned from reliable sources that Mobile VAS company ValueFirst has raised around $5 Million from New Enterprise Associates (NEA). ValueFirst is primarily an enterprise mobility company which had entered the direct-to-consumer space earlier this year with the launch of SMSMEON services via their subsidiary SpotOn Media. They’re best known for their SMS related enterprise services. 

ValueFirst sources have confirmed that NEA has invested in the company, but not the amount of investment. We’ve contacted CEO Vishwadeep Bajaj for more details.

In October, Bajaj had told MediaNama that the company was a couple of weeks from announcing a round of between $5-8 Million of investment. Bajaj claimed revenues of $10 million for Valuefirst last fiscal, and said the company has targets of $25 million this fiscal. He had mentioned that they intend to invest the money into internal processes and IT systems. ValueFirst has an international presense in the Middle East, UK, Nepal, Bhutan and Pakistan, and intends to expand into developing markets where Internet penetration is low, and mobile base is significant.

The investment comes at a time when Mobile has emerged as one of the segments that hasn’t been as badly affected by the economic downturn as others; whether Mobile VAS is equally robust, is anybodys guess. We’lll get indications from the third quarter results, due in January.

Interestingly, ValueFirst is the second company from Rajesh Jain’s Emergic Ecosystem to have raised money from NEA - the first was Novatium, a low cost computing company based in Chennai.

Film Based Content Portal Chakpak Raises Funding From Canaan Partners

Chakpak.com, a film based content portal has raised an undisclosed amount of money from VC firm Cannan Partners, according to Pluggd.in, a Yahoo employees blog. We contacted Alok Mittal of Canaan Partners about the investment, who, on being asked for a denial of the investment, said “I’m not confirming it.” Independent sources have confirmed the investment to MediaNama. We have not been able to ascertain the amount of investment.

Chakpak is essentially a content portal around films, covering Bollywood, Tamil and Telugu films., with movie timing, movie information, film reviews, a stars directory, video clips, wallpapers, film news etc. It has social features, but its focus appears to be more on content, though there are social features as well.

Chakpak will compete with the likes of Bollywood Hungama (formerly IndiaFM), Buzz18, ZoomTV, E24Bollywood, MyPopKorn, and 45 million other many other Bollywood and celebrity focused sites. Remember, the ABC of Indian content - Astrology, Bollywood and Cricket - are all rather crowded domains. Among the monetization opportunities that Chakpak has, is a tie-up with a ticketing service. 

For Canaan’s sake, I hope Chakpak has a miracle (or a dozen) up its sleeve. On a brighter note, based on this deal, and the one in VDOPIA that we reported last week, it appears that investments haven’t completely dried up.

Disclosure: I own an inconsequential number of shares of Network18; Buzz18 is a Network18 property 

An Inspired Launch: Guruji Finance Search; Is News Next?

I quite like Guruji.com’s Finance Search: the search is predictive, the search results page is uncluttered, the interface is smooth (AJAX) and they’ve got additional information like the company’s financial statements. inputs on recent block deals, related companies (competitors), a breakup of major shareholders, company specific news etc. It looks similar to Google Finance, which doesn’t have as much information on Indian companies yet, though they’re now covering more companies than they used to 4-5 months ago. Guruji, at present, has more information.

Guruji has also incorporated a company comparison service, much like Rediff’s MoneyWiz, currently lacks a share price comparison chart (for trends). The next step for Guruji would be to launch a portfolio tracking service…like Google Finance has.

Alongwith the financial information, Guruji is also aggregating news stories related to the company…and if they’re already aggregating company specific news, I wonder why they haven’t launched a news search yet. Of course, having a search is one thing…people using it is quite another.

Note to Guruji: Tata Teleservices (Maharashtra) Ltd isn’t being aggreagted. Compare this with this.

PayMate Powers PayBill Mobile Payments Services In Nepal; Why Not Direct?

Paymate, the Mayfield Fund, KPCB and Sherpalo ventures funded mobile payments company has announced the launch of its mobile payment services in Nepal through a local representative PayBill. Paymate appears to be providing the technology solution to PayBill, to enable consumers to pay for mobile recharge, pay utility bills, buy tickets, P2P money transfer, etc. PayBill has partnered with Nepals largest private bank Everest Bank and Nepal Telecom, the countrys largest telco.

Three months ago, when Paymate had announced plans to launch in Nepal, there was no mention of PayBill. According to Manish Kumar Subba, Founder and CEO of PayBill Pvt. Ltd, the project has been in the works for over 14 months.

Outside of India, Paymate has a presence in Sri Lanka, where it has a tie-up with Bank of Ceylon. Ajay Adiseshann, MD of Paymate had told Mint in September that the company expects overseas to contribute 12-15 percent of revenues by March. Their tie-up in Sri Lanka is a 50-50 JV, focused primarily on remittances.

State run Nepal Telecom has 2.2 million subscribers, and operates both GSM and CDMA services. PayBills services, like Paymates in India, are SMS based, though the PIN authentication for Giftmate (which I’ve used) is IVRS based. I do think there’s an issue with the number of PINs one needs to remember now - a separate PIN for the ATM, for Internet Banking and mobile banking. If the account is the same, shouldn’t the PIN be independent of the mode of access?

Update: Probir Roy, Founder of Paymate told MediaNama that Paybill brings to them the local relationships and infrastructure - Paybill is a bill payment gateway, much like Billdesk in India. Paymate hasn’t set up their own infrastructure in Nepal, and the service is being launched as PayBill, powered by Paymate.

Note: Do take a look at our list of Digital Payment companies in India, covering mobile payment, cash card companies, payment gateways etc. It’s still a work in progress, so in case we’ve missed any, leave a message, or write to nikhil@ medianama .com.

Sequoia Capital MD Sumir Chadha On The Guruji Investment

We’ve just received a response from Sumir Chadha, MD, Sequoia Capital India, about the prospects of their investment in Guruji.com - Guruji co-founder Gaurav Mishra has left the company and there was word that Sequoia had written off the investment, which Chadha has denied. In an emailed response to MediaNama, he writes:

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“We are very positive on Guruji and invested again in the company in the series B financing round led by Sandstone. If you check out Alexa, you will see that Indian internet users agree with our assessment - traffic for Guruji has been growing very nicely over the past six months — on the back of their launch of India’s first music search product. The company has also seen nice revenue growth in the past few months, and has spent very little of the $8mm series B we raised at the beginning of this year. Their monthly expenses are very modest, and they have built a crack engineering team with lots of IIT Computer Science guys.

We are very optimistic about Guruji’s prospects.”

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Guruji has been searching for the right search to make it big with - they have a web search in 8 languages (7 Indic), City Search, Movie timing search, Music search, and a recently launched Image search. VCCircle had written about a probable investment in Guruji from Sandstone and Sequoia investment last year; in a sense, this confirms it. Any idea of what “nice revenue” means?

Update: Chadha on Guruji revenues - “We don’t disclose revenues for any of our private companies, but I can share with you that they have signed up a lot of top advertisers in India, which you will see in the sponsored links of their search results, and revenues are growing very fast.”

Our earlier story on Guruji here.