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The Big Idea
It is easy to mistake MobStac for a mobile application. But it is, in fact, a software solution that allows users to convert their websites into a customised, mobile-friendly format. "We were convinced that mobile phones will be the primary screen for accessing the Internet going forward," says Potharaju, who quit his investment banking job at Merrill Lynch in New York to start the company. Pratap, who serves as the company's chief technology officer, also moved back from Washington, where he had been working in the software products group of a technology startup called Hillcrest Labs.
The two founders seeded the company from their own resources and then raised a round of angel capital in 2009 from IIT Madras batchmates and alumni. So far, they have invested about Rs 35 lakh in building the company.
|EASY ACCESS: The MobStac software converts websites to the mobile format|
MobStac is available to users in three versions. The basic free version allows website publishers to give their site a mobile-friendly version. It also provides search engine optimisation, video support and integration with ad networks, among other features. This April, the company rolled out the MobStac Pro, whereby users are charged about Rs 800 per month ($19). It supports up to 250,000 page views, allows users to manage up to three sites on one account and supports custom ads. The company also offers a version for larger companies, called MobStac Enterprise. It is compatible with almost any smartphone operating system and browser, and offers unlimited page views. In both these premium versions, the publisher does not have to share ad revenues with MobStac, unlike in the free version. Part of the company's revenues also comes from a share of advertising revenues from mobile sites used by customers of the free version.
The Business Model
For a company that is barely a year old, MobileMotion's revenue targets for the current financial year are ambitious. It is looking to take in Rs 5.4 crore in revenues by March 2012.
At the moment, the company is in the pre-revenue stage. But with the launch of MobStac Pro and enterprise sales kicking in, the founders think that their projections are reasonable. For fiscal 2013-14, their revenue expectation exceeds Rs 60 crore.
In terms of market traction, the company has been able to bag a few high-profile publishers such as The Hindu, The New York Times and The Guardian as part of its enterprise portfolio. The free version is used primarily by bloggers, who currently number about 700. The customer base spans 32 countries and, according to the company's estimates, the end-user base would span 112 countries. The top three countries in which MobStac-enabled mobile sites are used are Indonesia, the US and India.
|Rank: 1 (Category B)|
|Name: MobileMotion Technologies|
Sector: Mobile software solutions
Founders: Sharat Potharaju,Ravi Pratap M.
Year of inception: 2010
Capital invested: Rs 35 lakh
Investors: Angel investors
Key customers: The Hindu, The New YorkTimes, The Guardian
Key competitors: No direct competitors
The company estimates the market at Rs 5,000 crore annually. It claims that there are no specific competitors for its solutions at present.
In the immediate term, the company is in the market to raise a sizeable round of venture capital to fund its next phase of expansion. Recent media reports suggest that it may be close to raising venture capital from Bangalore-based Accel Partners. These, however, are unconfirmed reports.
The capital to be raised will be used to enhance the product and make it compatible with more mobile devices. It will also need resources to expand its presence to markets in South East Asia, North America and South Africa, in addition to India. The focus would be on markets that have a sizeable mobile Internet penetration and a mature mobile advertising market. It also intends to extend the solution to tablet computers over the next 18 months.
The founders see scaling quickly to keep pace with the rapid growth of mobile Internet as their main challenge. The availability of capital at the right time will be a key factor. Software product companies have seen limited success in India and few venture capitalists focus on such companies. The inability to raise capital fast enough to fuel the growth rate that MobStac anticipates could become a serious challenge.
(This story was published in Businessworld Issue Dated 06-06-2011)