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Acquisitions will drive further growth: Valuefirst

02-February-2011
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Acquisitions will drive further growth: Valuefirst

Mobile messaging and media company ValueFirst has announced that the company has raised Rs 700 million in funding from a wholly-owned subsidiary of the Headland Asian Ventures Fund 3. The funds will be used by the company to mobilise large scale inorganic growth through acquisitions, in preparation for an IPO in 2012 or early 2013.

ValueFirst COO Apurva Kumar spoke to exchange4media and shared the company’s plans for the next year and how the acquisitions had given them a role beyond mobile enterprise solutions to mobile media and m-commerce. Kumar said, “With the new funding, we have now Rs 1 billion in funds to fuel our expansion plans. We’re going to focus on expansion through acquisition in India and overseas, through SMS, voice, WAP, media and apps. We are looking at acquisitions to increase revenues in some cases, but also to add depth to our services and some of our acquisitions. Our investments in m-commerce are about long term planning, looking at things which are not growing very rapidly right now, but could be extremely relevant in the future.”

For revenue, the company wants to look at organisations overseas that are making revenues, but suffering from high costs and are looking to improve efficiencies by shifting processes to India where costs of operation are lower. More than that though, the company is looking at acquisitions to round out their bouquet of services.

Kumar said, “We’re mainly an enterprise communications company working in SMS, voice and WAP. We’re lacking in email, and so we’re going to look at companies that really understand email marketing, have that as a core competency and can complete our communications loop.” The company also plans to make acquisitions in mobile and Kumar feels there is a tremendous growth space available.

Kumar also spoke on the subject of spam, an issue that ValueFirst had always seen as very serious. “Customers do not want spam. Unless you sign up for a service, you aren’t going to expect or welcome messages. To that end, ValueFirst has always stuck to the guidelines that the regulator is bringing in. Some people are right when they say that customers might get cut off from some of the messages that they actually want to receive because the transactional category is too narrow. And that is correct, but the regulator has made a very well thought out decision to first handle spam and then the categories can be reconsidered and widened, depending on what the consumers want.”

“As of now, people see the ‘do not call’ list as eyewash, which means nothing. The regulator has to ensure that the ‘do not call’ register is effective. If people still want some messages which aren’t in the transactional category right now, but are listed as promotional messages, then they can remove themselves from the register for now. But for the most part, this will help not just consumers, but also companies like ValueFirst, because marketers will want to stick to a reputed company which isn’t doing anything that is illegal,” he added.

ValueFirst has been taking some steps in VAS as well as m-commerce, but Kumar admits that it is a miniscule part of the company and something which is more important as a long term investment. On the other hand, he is very positive about 3G as a means of building an SMS business.

He said, “If you look at the US market, the size of SMS has bloomed after rich media services took off. Every new rich media service will send you links to music or videos and they give it through SMS. Rich media services and 3G services and all these new developments will only contribute to improving the SMS space.”
 

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