MediaNama had learned from reliable sources that Raj Rao, the business head of Astrolife.com has led a management buyout of the portal from the People Group (Shaadi). Astrolife is a website focused on Astrology, and offers both free and paid Astrology related services.
Raj Rao confirmed the development to MediaNama, saying that he had started the astrology business in People Interactive, being an astrologer himself, and as of May 1st 2009, had assumed management control of the company. According to Rao, it was a strategic decision: People Interactive were looking for a way to ensure that each business gets attention from the management, and it made sense for this relatively smaller business to be separated. People Interactive retains a minority stake in the new company – called Astrology India Pvt Ltd, but is yet to nominate a member to the board. Sequoia Capital does not own any direct stake in Astrolife, though it owns stake in People Interactive.
Cutting Costs, Raising Money
Rao says that he has since focused on reducing costs to make it more profitable – Astrolife couldn’t take the costs of a large corporate, and he is now in startup mode. He’s moved office from “Town” (South Bombay) and reduced real estate costs, taken a pay cut and reduced people costs. No external funding has been raised for the buyout, though Rao says he may look to raise money at the end of the next quarter, after he stabilizes the business. “But after cutting costs, maintenance is not a concern anymore,” he adds.
Revenues, Tie-Up With Astrology.com
Rao declined to comment on specific revenue figures for Astrolife, saying only that the company has been doing much better since October – particularly from January onwards. According to him, people are turning to Astrology for guidance during the downturn, and there has been a surge of requests for career guidance. They’ve also tied up with Astrology.com (a part of the iVillage Inc, owned by NBC Universal) for syndicating astrology content. Rao declined to share a split between Subscription, Syndication and Advertising revenues, saying that they’re more focused on subscription, and advertising revenues are too small to talk about.