Rohith Bhat

Yesterday, Udupi based mobile app development company Robosoft raised Rs 22 crore funding from Kalaari Capital.

Launched in 1996, this is the first funding round for Robosoft after bootstrapping for 16 years. The company develops apps across iOS, Android, Windows, BlackBerry and Mac platforms and claims to have developed more than 1000 applications which have clocked a cumulative download of more than 100 million.

Among its clientele include media companies like NDTV, IBNLive, Hindustan Times, Conde Nast, and Times Internet* and other companies like Vodafone, One97, Nokia, and Microsoft Game Studios among others. Robosoft also has two different subsidiaries – an app subsidiary Global Delight which offers iOS and Mac apps and a mobile gaming subsidiary 99Games, which offers mobile games for iPhone, iPad and Android.

Medianama spoke with Rohith Bhat, MD and CEO of Robosoft about what they plan to do with the funding and how the dynamics of the app business has changed. You can listen to our podcast (and subscribe at soundcloud.com/medianama) for the entire interview, or read excerpts from the interview below.

Medianama: Why did you choose to raise funds now?

Rohith Bhat: There are two parts to it – one is to augment our sales and strategy team for Robosoft and second is for products we are building at Global Delight and 99Games. We were earlier using the services revenue to incubate 99Games and Global Delight but we felt it was time to get funding and run these companies independently with their own vision and responsibilities.

Medianama: Why did you then raise funding in Robosoft instead of these two separate entities?

Rohith Bhat: We did try to raise funding separately in these two independent entities but we were looking at funding for all the three companies, so we thought it would be easier to raise the funding for the parent company, where we hold 100% equity in both Global Delight and 99Games.

Medianama: Where all are you placed in the world in terms of sales and what is going to be your approach to increasing sales?

Rohith Bhat: Robosoft is an mostly an inbound organization in terms of sales, where most of the sales happen because customers come to know of us and get in touch with us to build products. So we thought once we reach a particular stage, it is going to help us if we have a dedicated sales team that will go out and pitch proposals.

Right now, we are based in Udupi and have an office in Mumbai and Silicon Valley (US), which primarily supported delivery but we are going to augment our sales in Mumbai and Silicon Valley. We are also opening an office in Dubai and London in later part of this year.

Medianama: Can you tell us a bit about Global Delight?

Rohith Bhat: Global Delight is our app subsidiary where we build apps for iOS and Mac. Our core focus here is building apps for photo, video and audio space, since we have a lot of knowledge in these areas. When the App Store was opened, we thought of creating a group that does great IP (Intellectual Property) in these areas. One of the first products of Global Delight was a free app called Camera Plus, since the original iPhone lacked zoom or flash in its camera. As iPhone got more feature enabled, we started adding features like filters and live filters to these apps. We have over 23 million downloads of Camera Plus now. Following this, we launched Camera Plus Pro for $1.99 and we have sold a million copies of the paid version until now.

Medianama: I am assuming you are a profitable business and judging by the downloads that you have mentioned, I am just curious on why you would choose to raise funding instead of supporting it with internal accruals?

Rohith Bhat: We could’ve supported it but we thought there was a small window of opportunity, because of the new products we are building right now. Our last product was released a year ago and we knew that if we launch our products without enough marketing muscle, we might not be able to take those products to a stage where we want to. For instance, we did quite well on Camera Plus with 1 million downloads, but there was another competing product called Camera+ that was released about a year later, which has crossed 12 million downloads.

Medianama: But you can’t predict that. Can you?

Rohith Bhat: We can’t predict that but we think we have probably understood enough about the app store ecosystem to make balanced judgment & investment. We will not really buy installs just because we have funding but we think we can probably do a lot more with this funding.

Medianama: Is there a value in virtual goods on top of an existing app once you have an install base or is the ROI far lower than building a brand new app?

Rohith Bhat: I can relate to it in two different examples in our case. In Camera Plus Pro, we are still focusing on adding new features to the paid app, because of an active audience. Whenever we release an update, we always see a spike in terms of people updating their apps and also new users coming in to use the app.

In case of GameYourVideo, the app was available as a paid app for six months but then we made it free and started providing newer filters as in-app purchases. People are liking these filters and buying them. The concept of monetizing via paid apps is now going away and it has to be a freemium model going forward.

Medianama: How much of this is down to the developer relations side of the company? What is the difference between different teams as a developer?

Rohith Bhat: Its very important to get your products in front of the developer relations guys in all the companies, be it Apple, Amazon, Google or Microsoft. There is always a good chance of the products getting proper visibility. But I should note that, if Apple featured your product in 2010, you would get 100% return on the app in a week but now it is down to 10%-15% return in a week.

Medianama: Why is that?

Rohith Bhat: Earlier, App store featuring was the only way to know about an app being available. But now users are being approached through various means like ad networks and also the cost of production has increased dramatically in the last few years.

Medianama: What are your plans going forward?

Rohith Bhat: We have a team pretty much in place for Global Delight and 99Games. From product perspective, we have two major releases coming up for 99Games, one in November 2013 and another in January 2014. We are also working with an Indian media house for a game which should be released in the next week or two.

Medianama: Are you reducing the B2B part of your business and now looking more at B2C?

Rohith Bhat: Not at all. We believe that as long as we have independent teams looking after each of these businesses, it doesn’t really matter how many businesses you are into. We are going to grow both in our service business (Robosoft) and our product business (Global Delight & 99Games).

Medianama: Are you looking at any further funding?

Rohith Bhat: We will never say no to funding but we are careful about what we require and at what point we require it. We are looking for funding sometime next year because of various plans we have for our products. On the services side, we are building our sales team to ensure that we have a steady pipeline of work to keep us growing in those areas.

For the complete interview, you can listen to our podcast (and subscribe at soundcloud.com/medianama) above.

*Disclosure: Times Internet is an advertiser with Medianama