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There are 2 new posts in "WATBlog.com - Web, Advertising and Technology Blog in India" Helion Ventures Confirms Investment In SmsGupShup.com - A look at Strengths & Weaknesses of Each Player in this space..Attend the WATBlog Panel On "Digital Media in The Next Decade" on 16th October - Register Now! We had quoted Ashish Gupta saying that they had not funded SmsGupshup but its quite possible that at that time which was about three months back the deal would be in process and not confirmed for him to commit to the funding. But now Helion has made a confirmed announcement and a total of 11 million has been pumped into Smsgupshup. The other VC particpating in this round with Helion Ventures is Charles River Ventures. According to the release the funds will be utilised for business growth, product development and increased sales and marketing. Well as mentioned in our earlier post the money might well be going in the telecom operators pockets as at 10 million smses a day Smsgupshup could be paying Rs.5 lakh each day (@ 5 paise every msg) which totals upto 1.5 crore a month and keeping growth in sms stagnant it means 18 crores a year which is roughly 4 million dollars i.e. almost 40% of their funding. Now there is no word on the amount of equity taken but given the fact that VC’s dont take majority stakes I would peg the valuation of Smsgupshup anywhere between 35-50 million $’s. Now given that high a valuation at such a nascent stage it seems like that VC’s are betting this market to be atleast a 300-400 market in terms of advertising dollars. But the question that comes into the scene is who has advertiser access in today’s scene? After all advertiser access and NOT technology could be the key critical factor for turning the tide over on this cost heavy business of sending smses until and unless one of these guys can actually partner with operators to build the network and be a beneficiary of sending smses free of cost. Lets analyse the Strength’s and Weaknesses of the Players in this space with a focus on advertiser access (being critical factor) Strength’s Great tech expertise (probably the best in the space) Great traction (From the statistics they claim they are certainly the largest player) Product focus ( Given their product centric focus better features can be expected off them) VC Funded (Given they are the only player that has raised funding they have access to funds) Consumer facing - Their name smsgupshup describes their offering and hence they are by far the most consumer facing sms product i.e. smsgupshup as a name can be a household name vis a vis the other brand name i.e. Mytoday or Google Smschannels. The one to give smsgupshup a fight on th brand name front could be vakow a player which seems like an underdog at this stage. Also they are far more into ugc driven sms than any other player again except vakow. Weaknesses Advertiser access - Smsgupshup is a typical american style product focussed company (think the youtube of the sms space) and unlike the indian media companies like indiatimes and rediff which have more sales staff than tech staff Smsgupshup has little or no sales staff as of now. Their way of looking at things is that once they hit a critical mass which would be 30 million + essentially the size of the internet userbase advertisers would have no option but to sit up and take notice. Interesting approach though this is based on the premise that numbers are everything. Good Technology - Again a good tech team behind this one. Good Traction - Given the numbers claimed based on the userbase they are the second largest player in this space. Publisher centric model - Mytoday has lesser consumer centric focus and a more publisher driven model i.e. in many cases they are the publishers themsleves while users are passive subscribers. They do claim to send more smses (12 million vs smsgupshup’s 10 millon) than smsgupshup in a day and this could be because of quality of content. Weaknesses Advertiser Access - For Mytoday as well the problem of advertiser access remains and it is also very much in the same boat as smsgupshup. Google Sms Channels Strengths Its Google! - Need anything else be said?? Well google brings in technology, advertiser access, money, great people, and the ability to wait out or even acquire an existing player. Weaknesses Late Entrant - It is possibly the latest entrant in the market. Even the third largest player i.e. Vakow.com claims 1 million smses sent a day. Creating that kind of traction doesn’t happen online. Another Product Not a Brand - Sms channels is another product from google and cannot be a consumer brand which is the opportunity for both smsgupshup and vakow.com. Strengths Advertiser Access - Vakow is the ONLY player (besides for google) which can boast of an advertiser access courtesy its investors which is Rediff.com. Rediff.com which is possibly one of the largest players in the Indian online space and which has earned its bread, butter and nasdaq listing out of selling digital advertising to indian advertisers is the perfect advertiser access vehicle any business could ask for. Most people will agree that Rediff employees more sales people than tech people and that is the strength that Vakow could possibly leverage. In my recent discussion with Rahul Gupta of Vakow I came to know that there are just 3 team members at Vakow and that they dont plan to scale his team beyond 10-12 people. This comment made me believe that for sure rediff sales reach would be exploited for vakow and could very well have been part of the strategic investment. In the long run this relationship with rediff could be key in the way vakow scales. Weaknesses Third largest player in a market of Big Players - Vakow is the third largest players in a market of three very big players in Smsgupshup, Mytoday and Google.
Conclusion: I feel advertiser access whether acquired over time or acquired via the kind of investors you get on board is critical in this space. Also teh earler these players start knocking on the doors of advertisers and building advertisers centric products for monetization the faster they would scale. This space has become very interesting with the entry of google and given the numbers of mobile subscribers. It would be a hard fought battle among these players and I wont be surprised if google acquires one of them just incase smschannels doesn’t quite scale to their expectations. Related Posts Win An iPhone 3G at WATBlog Panel Discussion - Read On To Know How..Attend the WATBlog Panel On "Digital Media in The Next Decade" on 16th October - Register Now! Well yes you read it right! We are giving out an iPhone 3G to one lucky person at the Panel discussion on “Digital Media in the Next Decade” which is co-organized by WATblog and ECell IIT Bombay. We would like to thank AirMe for sponsoring the iPhone. AirMe which is a free, easy-to-use downloaded application that allows iPhone users to take photos and have them instantly tagged and sent to the user's Flickr or Facebook accounts. How can you be the lucky iphone winner? There are two stages to win the iPhone. 1) Qualification stage - Inorder to qualify to win the iphone you need to blog about the Panel dicussion and link back to this post about the iphone being given as a prize. Please do let us know about the link back by either emailing us at info at watblog dot com or using this form. There are 9 days before the event so you have ample time. Now some may ask what about those who aren’t bloggers? How can they get a fair chance? Well here is what you can do.. Get a twitter account (if you dont already have one) and start following WATBlog on twitter also mail us at info at watblog dot com with your twitter id so that we know you are participating. To qualify you need to tweet about this panel discussion (make sure you send the link) and Also during the event live tweet the panel discussion if possible. One can also use facebook, digg and delicious by sharing this post. In all cases please inform us that you are participating and await for a confirmation. 2) Winning stage - This is when you have to be present at the event (so register now!) or can participate virtually via twitter. We would be accepting these questions (only 1 question per participant) via mail i.e. info at watblog dot com or via twitter as well. We would pre screen these questions and ask the most interesting one’s to the panel. Then we shall let the panel decide in the end which question they found the best. The best question wins the iPhone! Once again we would like to thank our iPhone sponsors AirMe. Related PostsMore Recent Articles
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