ValueFirst Messaging, a Gurgaon-based enterprise mobility and communication services company, has acquired a majority stake in social media firm Tagg.in for an undisclosed sum. Tagg.in, a Mumbai-based company, runs web and SMS based microblogging site which allows users to build communities and blog via SMS.
The firm’s early investor Aurum Ventures still remains invested with a substantial minority in the company. Tagg.in is a two-year old company started by Vatsal Desai, and was later incubated by Aurum Ventures, which also has several other investments in telecom, automotive components and real estate space. The acquisition brings 14 professionals under ValueFirst’s fold.
This is the second acquisition of ValueFirst in the last 12 days, and third in seven months. Last month, it acquired Packet Shaper Technologies Pvt Ltd, a telecom software and product development company in Noida. The company has made an all-cash transaction for the deal.
Tagg.in is claimed to be a very popular site among the youth, and has a lot of traction on the media companies.
Speaking to VCCircle, Vishwadeep Bajaj, CEO, ValueFirst, says, the acquisition makes sense for two reasons as both ValueFirst and Tagg’s core business lie on SMS messaging. ValueFirst also has an SMS advertising subsidiary called SpotOn Media, and it plans to leverage the platform to monetise on Tagg.in’s inventory.
“Tagg is an excellent acquisition as it is an active community which provides us a good platform for monetisation through our mobile marketing subsidiary SpotOn Media. SpotOn can run advertising campaigns on the inventory created by Tagg for revenue creation through brands and agencies,” Bajaj explains.
He says, often companies in social media space are not making money, rather burning money. “Because we already have an SMS ad network, we will be able to sell the inventory which becomes available in Tagg.in and monetise on them,” Bajaj adds.
ValueFirst also plans to add m-commerce platform in Tagg.in to offer more value to the users. The merchandise could be in both tangible and non tangible category such as value added services and small ticket gifting items. “This will be an additional revenue stream to be created in Tagg,” says Bajaj.
ValueFirst currently has a mobile-based transaction platform called CellPay, which the company got from the acquisition of VAS company CellNext. Following this acquisition, it plans to integrate CellPay into Tagg.in.
Tagg.in currently has over 2 million subscribers and gets 50-60 million impressions a month. ValueFirst intends to grow the subscriber base to 15 million by March 2011, with around 300 million impressions per month. Bajaj believes Tagg.in will be profitable in this fiscal only.
Speaking about stiff competition coming in to social media space from big giants like Facebook, Orkut, and Twiter, Bajaj says that unlike Facebook and Orkut, which are primarily based on web, Tagg is largely mobile driven, though it has web elements attached to it, and that is the differentiator. “The real competition is with SMS GupShup in India for us, and not the Facebook,” he concluded.