Seventymm Acquires Delhi-Based DVD Rental Firm Madhouse
Tue, 06/05/2007 - 17:01 — Sahad P VShakeout has begun in the online DVD rental business. Bangalore-based DVD rental firm Seventymm has acquired 100 per cent equity of the Delhi-based DVD rental company Madhouse, reports Business Standard. The financial details are undisclosed.
Madhouse, which recently got $228,000 funding from Band of Angels and Mumbai Angels, was the first mover in using digital media like web and SMS, besides phone and kiosks for DVD/VCD rental business. But Seventymm, which got a $7 million funding from Matrix Partners India and prior to that $2 million from Draper Fisher Jurvetson and ePlanet Ventures, has emerged stronger in the business as it had the money power to scale up nationally.
Madhouse is largely present only in Delhi. The exit has been a bit too early for Madhouse. "They should have probably raised a Series A before going in for a sell-out. Investors wouldn't have made much money," says an industry observer. Madhouse would have been running out of funds, and would have been left with limited choices.
DVD rental business is getting trickier with big boys like Anil Ambani's R-ADAG and Nimbus looking at this space. Moreover, Moser Baer has entered the scene with cheap DVDs priced at Rs 34. Now it's likely Seventymm would be bought out by one of these companies.
There are more online DVD rebtal companies like CathFlix and CineSprite. We can see some shakeout in the business.
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June 20, 2007
I think its interesting to see the developments in this space. Madhouse and SeventyMM have both followed netflix models AND RAISED FUNDING, seventymm more stringently so.. Madhouse migrated from pure online to drop boxes (retail/store model!?!). SeventyMM acquiring Madhouse (AND CONSEQUENTLY ADOPTING a BRICK & MORTAR MODEL) suggests that online dvd rental models are in trouble.. DO their VCs understand the market dynamics and more to the point that purely replicated models of the west may not necessarily work in India?