Category Archives: VC

Venture Capital in India

Pixazza Advertising to Monetize Photo Inventory – Microsoft Owns Patent ?

Silicon Valley startup company Pixazza has raised cash from Google selling its Product of monetizing Photo Inventory by Advertisements. Late 2005 and early 2006 seeing the Google Stock hitting a new peak I decided to innovate a competing product for Text based Google’s AdSense.

Influenced by the Software King in the King County, I went into Think Day mode in Jan-06 [he goes out on Think Week]. A mentor in King County who provided me Free accommodation always said that Innovation / Killer products always comes in different form and thus I was always thinking for a different and something original. I stumbled upon an idea [ Shopping on Rich Media as Web 2.0 Apps were moving in that direction] and came across this – Embedding URI in Rich Media. [Proof of concept 13-Jan-2006] However, my joy was short lived as my patent search lead to Microsoft filing for almost similar Patent and my chances of securing the patent weakened. Subsequently, I found out that the Software Czars Research Labs was already developing as an SDK for the same and I totally gave up on that 🙂

Now, the unanswered questions on my mind is what is that is screwing up Microsoft so badly that they are always late to reach the Web 2.0 ? Pixazza was founded in 2008 and wondering if they have already licensed the technology or how will they fight Microsoft as Redmond Giant may outright refuse to license their patent for obvious reason 🙂

India Comparison Shopping Sites- Where is Innovation ?

Over the past few days I did some research to know how good Indian Startups really are. I chose the Comparison Shopping vertical since we expect a boom in e-Commerce [hopefully]. I found around 8 websites competing in this vertical and its disappointing to see none offering an innovative consumer shopping experience

  • Bechna.Com, ShopMania.in – I don’t quiet understand the necessary of hosting classifieds
  • CompareIndia.Com – Banking on wide network of sites for cross marketing. Finally after few years, their Web Designers have done an acceptable job
  • OxyShopping.Com – replica of pricebragger or dealtime for India
  • Naaptol, TolMol – Combination of Review and comparison shopping
  • productsearch.rediff.com – Still struggling to make a difference with a Killer Web Service / e-Commerce product
  • Chintee – A forthcoming launch from Reliance, another commoditization of service

None of them even attempted to do things differently. You shouldn’t be surprised if VCs / PE funds refuse to fund these startups. They may have a business case, but being a tech startup, they have Zero innovation.

Compare this to how Comparison Shopping is evolving in the US. Two Grad Students from UC Berkeley – Arlo and Shankar  have come up with an innovative idea of Visual Based Comparison 🙂  Check it out Modista.com. I communicated with them. They have already filed for Two Patents and this what they had to say about their technology,

Our algorithms rely entirely on the images themselves. We don’t actually need any other metadata to compute similarity. However, if metadata is available, we can use it as well to improve the results.

They further added,

We focus more on the user experience.  Many sites are happy to push you off to a retailer as fast as possible, but we try to keep all the relevant information at a user’s fingertips on Modista itself: sizes, product details, multiple views, etc. This aids in the exploration and discovery process.

Why do I call this a cool product ? Modista managed to bring a new shopping experience to consumers all together. Additionally, they can port this as a FaceBook Application and expand their reach.

The problem of Zero Innovation is not just restricted to Comparison Shopping but to many other Web based Startups. IMHO, the problem is with our ecosystem [peers, mentors, media, work culture, etc]. Why Indian Engineers innovate in the valley or elsewhere and not here ?

Directi’s Skenzo raises funding from Ashmore Group

Skenzo – a leading provider of technology, in the traffic monetization business, has raised undisclosed significant funding parting a very small stake. Skenzo is Directi Business Unit / Subsidiary.

Skenzo was the fastest growing domain parking company worldwide for 2006 & 2007. They also claim that they are globally number one in domain parking. [I am not quiet sure of this claim] Divyank Turakhia, Co-Founder of Skenzo said,

We are very bullish about the Direct Navigation Industry. We plan to deploy sizeable resources for building unparalleled technology products in the direct navigation, online traffic monetization and advertising spaces.

J. Michale Lind of Ashmore group said,

In a short span of time Skenzo has become one of the strongest players in the traffic monetization industry. We believe the Skenzo team has done a terrific job. We are very excited about this investment and are looking forward to working in close partnership with Skenzo to help further accelerate its growth and strengthen its leadership position.

Directi is doing brisk business in the domain name industry and have always offered value to customer. However, they had a glitch in their system last evening at 5:30PM which restrained customers from grabbing .asia domain names. I paid a 80% premium and bought Convergence.Asia through GoDaddy.

IDEA Cellular IPO subscribed 50 times

Idea cellular which had been constantly dumping stake to Private Equity and VCs, late last night completed its IPO in India. From the subscription figures obtained from Ventura Securities, their is a terrific demand for Indian Equities. The Idea IPO was of $500 Million and received bids for $25 Billion. Last April, Birla’s bought 48% Idea Cellular stake from Tata’s at $ 1 Billion.

All the brokerage houses were bullish on the prospects of IDEA cellular except, First Global’s Shankar Sharma, who felt it was expensive. A Broker with Ventura said, 

After the Vodafone – Hutch deal, valuations of other Indian telcos are also likely to rise. However, Idea is likely to trade at a discount to Bharti Airtel.

The immediate challenge for Indian telcos is the falling ARPU / Month without any alternative source of revenue such as 3G services or Broadband. ARPU / Month which were at Rs 450 levels are likely to be between Rs350 – Rs400 for Bharti Airtel and Vodafone India; While for Reliance Communications it is likely to be in the range of Rs300 to Rs325 in the coming quarters.

Tags: , , ,

HFCL – Business of Ripping Investors.

Kamla has a report on Himachal Futuristic Communications Ltd’s group company HFCL Infotel talking to, New Enterprise Associates, a valley based PE firm to buy 50% stake in the company at around Rs 350 crores [$78 Million]. All said and done about Triple Play in India, Kamla probably forgot to write about the colorful background Mahendra Nahata has. So you all wonder how the bust follows the boom ? NEA’s investment in HFCL Infotel is a possible example going by the track record of HFCL’s promoters, Mahendra Nahata.

Every 5 years, Mahendra Nahata finds some way to make money. In 1995, he had Mr Sukh Ram, then Telecom Minister of India in his confidence and HFCL was the highest bidder for most telecom licenses. Read about it here. Come 2000-01 Dot Com Boom, HFCL was the darling of speculators on Dalal Street. Then big bull, a scamster now, Ketan Parekh made most of his locked fortunes in HFCL. From 2001-2005, Nahata taught Australian media barrons, Keery and James Packer how to lose $275 Million 🙂

Come 2007, Nahata has played his cards again. I utter caution to the fund managers at NEA looking after this investment proposal. If NEA finds HFCL so appealing, then they should buy out Nahata instead of partnering with him.

Tags: , , ,

Madhouse partners with Netkode – gets angel funding

Madhouse Media, one of the early entrants in Online Media [Movies / Games/ Books] has entered into partnership with Bangalore based Netkode Solutions which will power their Product and Technology needs. Netkode has provided solutions to leading Online Business, ISVs and Enterprises. Netkode provides the end to end technology solution to Hollywoodclicks.com, Singapore’s largest online DVD rental service.

In another development, Madhouse received funding of $228,000 from Band of Angels, Delhi. Madhouse is the second investment for BoA Delhi, as well for the group of investors at BoA Mumbai. Madhouse is the only movie rental company in the country which has an online and offline presence.

Stay tuned for more updates on Madhouse this week.