Chandigarh-based mobile value added services provider Altruist Group is on course to acquire an international VAS company and has set aside $25 million for the acquisition.
Without disclosing the names of the acquisition targets, Altruist India founder and CEO Dheeraj Aggarwal said, "I have been focusing on inorganic growth for some time now and feel the timing is right - valuations are again at a reasonable level. We are looking at a company that has complimentary products and market reach." The acquisition will be completed by this fiscal year end - in the next 2 months.
The Altruist Group has 2 companies - Altruist Technologies Pvt Ltd and Mobile2Win India Pvt Ltd, which it acquired in February 2009. Mobile2Win India Pvt Ltd was backed by Nexus India, Norwest Venture Partners, Softbank China and Silicon Valley Bank. Investors and promoters of Mobile2Win received a 10% stake in Altruist.
The acquisition will differ from the Mobile2Win acquisition in that it will be all cash, according to Aggarwal. It will be funded through internal accruals and debt.
There are two companies in consideration, both international. One Indian firm was considered but is no longer in the race.
Altruist, which offers IT and BPO solutions besides mobile VAS, claims it will register net revenues after direct expenses of $20 million this fiscal.
The company has been voraciously expanding its global reach and the big thrust, as Aggarwal put it, is in S.E.Asia and Africa. It is in the process of setting up centres in Phillippines, Sri Lanka, Vietnam, Cambodia and Uganda. It already has an Indonesia office with 18 employees.
Altruist will hire 100 within the next year and is spending Rs 25-30 crore on the international roll outs.
On the product front, Altruist is focussing on upgrading to 3G in phases. "We will upgrade a part of our hardware infrastructure to 3G to begin with and gradually scale it," said Aggarwal.
Meanwhile, the subsidiary Mobile2Win, whose target audience has been the low-end handset user, will continue to look to rural India for growth. "We focus on the lowest common denominator of handset owners as a target user. These are typically people who buy Rs 1500- 3000 phones. There is a relative lack of social entertainment in rural India which will give rise to incremental opportunities which we will tap," said Rajiv Hiranandani, co-founder and executive Director, Mobile2Win India Pvt Ltd.
A large chunk of its revenues are driven by its white labeled voice chat application - (Airtel Friendz Chat), followed by its mobile career portal JobsonPhone.com and its subscription and content business. Besides WAP sites, SMS services and other m-entertainment services, it offers social networking, 15 minute edited movie capsules on mobiles (Airtel Talkies), celebrity blogs and mobile games. Hiranandani expects mobile video and ring back tones to be big plays in the next 1-2 years. Mobile2Win is currently testing video chat with various telcos and will launch the product globally.
Mobile marketing products are also growing in popularity among large brands. Mobile2Win's latest clients include tyre manufacturer CEAT and Bajaj Allianz. "Top brands have started looking at mobile as a medium for their campaigns more seriously now. At the end of the day, there is a huge population with no TV and no Internet and they can be reached only via the handset," said Aggarwal.
There are a slew of competitors including One97 Communications, Affle, ACL Wireless, IMI Mobile, Indiatimes Mobile, ValueFirst, Comviva, OnMobile and Spice Digital in this space. Gurgaon-based ValueFirst Messaging Pvt Ltd, just raised Rs 70 crore from Headland Capital Partners and existing investor New Enterprise Associates to fuel its inorganic growth strategy.