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Updated: ZipDial Raises Funds From 500 Startups, Times Internet Ltd

Update (December 19th 2012): It appears that Times Internet has invested in Zipdial as well: an undisclosed sum for a minority stake in an all cash deal. ZipDial informs that Times has been its customer for over 15 months and that it has run campaigns related to the Lokpal Bill, and Times Food Awards, among others, for the company.

On the importance of the Times Internet funding, Wagoner has this to say: “The Times deal is significant as our first strategic investment. We have seen other companies in our space (not in India) leverage strategic investor relationships with key clients very well. This is our first foray into that approach. Given the proven positive relationship we have had with Times for nearly a year and a half, we were convinced that this would only prove to strengthen that relationship.”

Update (December 4th 2012): Speaking with MediaNama, Valerie Rozycki Wagoner, Founder and CEO ZipDial, has confirmed that they plan to use the funds raised to expand their operations in South Asia with Bangladesh launch in January 2013 and Indonesia, The Philippines, and Nigeria later that year. The company provides cross volume fees package for large and small customers. For large customers, it charges anywhere from $10,000 per month and also has packages for small customers starting from Rs 1000 per month.

As mentioned earlier, the business model is easy to replicate and there are companies in the market that offer verification of mobile number as a consolidated package. ZipDial claims that it’s an engagement platform where users do not need to download an app for engaging. Businesses and advertisers get analytics via ZipDial Analytics on how consumers engage through the platform.

ZipDial Mobile Services, has raised an undisclosed amount of funding from 500 startups. While the amount of funding has not been disclosed, a report in The Economic Times puts the number at somewhere between $250,000-$500,000 or Rs 1.3-2.7 crore. Founded in 2010, ZipDial is a pull based service, wherein people call a particular number, are immediately disconnected from it, and are sent an SMS as a response. This disrupts the traditional SMS based business, wherein users send an SMS to a short code, sometimes paying premium rates, for either voting on something or pulling some information (like Cricket scores).

Zipdial also uses this method for verification of mobile numbers. It’s not immediately clear as to how the company plans to use the funds, but says it plans to expand its operations in Bangladesh, Indonesia, the Philippines and Nigeria by next year. Last year in April, the company had raised  Rs 3.5 crore in its first round of funding from a consortium led by Mumbai Angels and Blume Ventures with participation from AngelPrime. 500 Startups will probably help the company expand to other geographies, given its international reach.

ZipDial has been deployed on e-commerce portals Flipkart and Myntra, and education portal TutorVista. It also tied-up with LG during the world cup to offer Cricket scores on missed calls. Apart from that, Hindustan Unilever, Puma, Disney and P&G are also among its clients.

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Challenges (Nikhil adds)

– It will be difficult for Zipdial to break into the broadcast market for voting on shows, or for feedback, since TV Channels have often used this model for monetization, especially in case of high traffic shows like Kaun Banega Crorepati.
– Service differentiation will be key here. While Zipdial was (as far as I know) the first to come up with the idea of using missed calls for verification, this is something which can be easily replicated by VAS companies. ZipDial stands out because this is their core business, but enterprise VAS companies can provision the same service as a part of their consolidated offering to clients.

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