Affle Raises Strategic Investment From Japan's Itochu Corp; Deployments

Update: Responding to our query, Anuj Kumar, ED (South Asia) at Affle, informs us that all investors, including the Times of India group, continue to stay invested in the company. “This investment from Itochu is for buying new shares, and the investment would be utilized to fund our growth plans in India and beyond.”

Earlier today: Japan’s Itochu Corporation has picked up an undisclosed minority stake in Affle Holdings, a Singapore based holding company for mobile marketing company Affle. Affle claims that this strategic investment from Itochu is at a significant premium to its last round a year ago, when Microsoft had picked up almost 20% stake in Affle. Lets just hope there aren’t areas of conflict between the strategic objectives of Itochu and Microsoft. In all, Affle’s capital stands at $19.18 million. The one piece of the puzzle still missing, is a strategic partnership with a handset manufacturer, which allows Affle to be pre-embedded as the host SMS application.

Affle is best known for its SMS 2.0 product, which replaces the core SMS functionality of a mobile handset, replacing it with a jazzier SMS service, which serves advertisements (using GPRS) after a message has been sent. Affle also has a couponing product called Coufon. At the time of the Microsoft acquisition, Affle had told us that the company was eying acquisitions in mobile Value Added Services in India. Nothing so far, by the looks of it.

Deployments

Affle was first deployed in India with Bharti Airtel, and grew in popularity primarily on the promotion support that Airtel initially provided it with. I don’t think any Indian operator has given this level of support to any other application deployment. Affle’s expansion over the recent year appears to have largely been international – it has operations in five Asian countries including Singapore, India, Indonesia, Thailand and Malaysia. The company claims that 10 mobile operator deployments: including Airtel, Idea Cellular, Reliance Mobile and Tata Docomo in India, AIS (Thailand), Maxis (Malaysia), M1 and Starhub (Singapore) and Telkomsel (Indonesia)

Performance

Anuj Kumar, ED (South Asia) for Affle claims that their existing markets have already started turning cash flow positive, and so much of the investment from Itochu will be used for new product development and growing key markets. Frankly, we’re not sure if a 200% growth over the last four quarters augurs well for the company: usually, the higher the percentile growth, the lower the base used for calculation. Still, growth is growth.

5 Comments

Bernardo March 3, 2010

No doubt Affle's been doing a great job. A very simple product but as again with a great utility. Perhaps when you want to understand what makes Affle click , take into account how the advertising spend happens in India and the metrics applied

Predominantly a majority of the media buy is done by the biggie agencies. They are staffed with a bunch of incompetent folks whose only aim in life is to keep the Brand Manager's egos inflated. Affle works great when you want to show a very high number of impressions. The agencies and Brand managers are content counting impressions.

And this is where Affle rides on the large amount of SMS traffic. I really doubt if they have any contextual targeting built into the product. So they have a crack sales team sucking the budgets out of media buyers. Trust me, I know some folks in Mobile teams in the agencies , who dont even know how would the difference between an A2P or a P2P SMS. One person didnt even know how a WAP site is different from an app.

And this is what will make Affle grow big and as it is important for any product. Create products which have a demand than something with some major jazz , but no takers

analyst March 3, 2010

Have been tracking these guys for sometime. They have created some decent success in getting the largest advertisers on mobile..so its not just fund raising I guess

Nikhil Pahwa March 2, 2010

Well, lets not forget Inmobi :)

Ravi Sinha March 2, 2010

Wow. Hats off to these guys for getting solid investor backing yet again. Possibly the only Mobile ad success which seems to be emerging from this part of the world. Do I smell another Admob brewing here ???

RevenueJunkie March 2, 2010

$19.18 M capital is too much for this product or business.

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