Venture Intelligence featured an interview with Vijay Shekhar Sharma, Founder & Managing Director of One97 Communications as part of the July issue of the US-IVCA / Venture Intelligence India VC report. One97 is one of the pioneering start-ups in the Indian Mobile VAS space and recently raised its first round of funding led by SAIF Partners.
Some extracts from the interview:
VI: How were you funding the company until now?
VSS: We were the first company to put a revenue sharing model in place with operators. That gave us recurring revenue and made the company cash positive.
VI: What were your challenges in fund raising?
VSS: Two challenges: first, deciding on the network the fund could provide and second, the kind of size commitment they can make for future investments. A third factor was the comfort with the VC: what kind of team it was, the chemistry between team members, the kind of person who will come onto our board. The VC on the board becomes your everyday business partner.
VI: How does One97 compare with VAS providers in advanced markets?
VSS: The good part about being in India is that we are at curve of extreme innovation. There are all ranges of audience to serve - very high tech users to ultra low tech users. So our organisational DNA is built around serving such extreme requirements.
I am sure – similar to IT services – the “skilled Indian manpower” story applies to the VAS / mobile applications as well. Applications with high R&D and high efficiency requirement applications are definitely going to come out of India. Given (SAIF’s) support and general business guidance, we can come out with universal applications from India too.
VI: Can you talk about your expansion into China?
VSS: The mobile customer base in China is significantly large - four times more than what we have here (in India) today. We will be able to do long tail services…and we can have a scalable model. This along with our partner’s (SAIF) networks and capabilities, make China a preferred destination for us.
VI: How would you differentiate your firm vis-à-vis your competitors?
VSS: In the short to medium term, our investment in technology is our differentiating advantage. In the long term, our strength will be operational efficiency and lead-time/new use cases of technology and features in our application development.
VI: What do you think will be the key drivers impacting your sector over the next 3-5 years?
VSS: Right now, entertainment seems to be the primary area of VAS. In the future, utility services and every day applications will be the key drivers. SMS is already an integral part of life. This in turn opens up possibilities for applications in areas like microfinance and other parts of the value chain. Customer growth will be a driver too.
VI: When do you anticipate your next funding event?
VSS: There are two parts to it. One, we are specifically looking at taking over a small to medium sized firm for growth. That can happen tomorrow or next month, but whenever that happens that would call for a round of funding. Secondly, for funding our linear scalable growth.
VI: How did you become an entrepreneur?
VSS: In 1997, while still at college, we raised funding from a VC in the US for an India-focused search site Indiasite.net. It was ranked number one in 1996-97 at various places on web. We later sold the site to India Today and the company to Lotus Management LLC.
I then turned to telecom because the Internet was already being perceived as a “bubble” and was getting crowded. Also, there was money in telecom even for three lines of content, while in the Internet space, there was a monetization gap.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.