Cellnext was established in 2000 as part of Escorts Group owned telco Escotel Mobile Communications; Escotel was divested and sold to Idea Cellular in 2004 when the group decided to focus on its engineering businesses and disposed of all non-core businesses. Cellnext has clients including Tata Sky, LIC, Citi Financial, American Express, ICICI Bank, as well as operators such as BSNL, Airtel, Idea, Vodafone, MTNL, Reliance, Spice, BPL. It offers an m-commerce platform called cellPAY.
Escorts group apparently put Cellnext on the block last year, but no sale took place because of the prevailing market conditions and low valuations. There were rumours over the last two months that Mobile VAS companies were in talks with Cellnext, according to sources.
Separate Brand Identities: Why?
Valuefirst plans to maintain Cellnext as a separate entity and the brands will not be merged. This is usually done when the buyer does not want to alienate valuable clients of the other company, or because the brands are almost equally powerful. However, in this case the enterprise customer base for the two firms overlap, so will this move to retain separate brands really help in the long term?
Cellnext’s focus has been primarily B2B, with products such as cellPUSH, Cellexpress shortcode platform, cellDIAL, MMS platform cellPAPER, cellTRUST and Cellmonitor. It also has a m-payment platform cellPAY and pre-paid voucher system cellMONEY.
Valuefirst offers SMS services for enterprises, a direct-to-consumer push SMS service called Alertrix and the shortcode 56070 (Cellnext owns the shortcode 56677). Will it now shift its product focus entirely to B2C?
The acquisition of CellNext is a precursor to Valuefirst’s IPO plans; it will leverage the brand cultivated by Cellnext to enhance its offerings and target higher growth. In turn, it will leverage its own sales structure to build upon Cellnext’s domain knowledge and vertical specific product offerings.
Valuefirst is backed by VC firm New Enterprise Associates, which invested $6 million in the firm’s series-B round in February. Its first funding round saw an infusion of $0.25 million from Emergic Ventures by Netcore MD Rajesh Jain.