Mumbai-based mobile application and distribution firm Onward Mobility has raised Rs 18 crore from IndoUS Venture Partners and Qualcomm’s venture capital investment arm, Qualcomm Ventures. Mumbai-based investment bank Consort Capital was the advisor for the deal.

The funds will be utilised to expand product offerings, retail distribution reach and for hiring key employees.

This is the series A round of funding for the firm, which had raised over $1 million in 2010 from the network of angel investors Mumbai Angels.

Vani Kola from IndoUS Venture Partners and Rajiv Dadlani from Mumbai Angels have joined the company’s board as directors while Karthee Madasamy from Qualcomm Ventures will take an observer’s seat.

Incidentally, Mumbai Angels made a partial exit in this round. Rajiv Dadlani of Mumbai Angels said, “Onward Mobility has a superior and unique offline, direct-to-consumer distribution model, which is definitely much more suited to the Indian market, as compared to other models, which are mostly online or executed through telcos/operators. Moreover, with more than 200 million mobile phones being sold every year in India, its potential to scale very rapidly is tremendous.”

“Qualcomm has made a strategic investment in Onward Mobility, in keeping with our objective to support the growth of 3G applications and services ecosystem,” said Karthee Madasamy, senior director of India investments for Qualcomm Ventures. “We believe that Onward’s innovative business model has the potential to impact the wireless value chain, in addition to a distinct competitive advantage that is led by a passionate team.”

Onward’s business model includes selling and distributing its own and third party products through retail counters in eight Indian states. The company has products such as MobiCop, MobiRecord, MobiSecret. It will now roll out apps by its partners through the offline distribution channel. Most of these apps are related to games, entertainment, music and education

Vani Kola, Managing Partner of IndoUS Venture Partners, said, “This offline retail distribution model solves most of the pain points and gaps that currently exist in other online and telco/operator distribution models like payment (very low balances prevailing on pre-paid), discovery (getting lost among 200,000-plus apps on app stores), support (only e-mail/chat exists whereas Onward has a dedicated call centre with toll free number) and many others. In the Onward team, we have truly noticed a spirit of action, technology focus and a creative cheer that we feel are the special ingredients for success.”

“We are better off, selling mobile apps through an offline route than online,” said Ajay Menon, director of Onward Mobility. “Online app stores are too cluttered; so apps do not get sufficient visibility. Further, not many consumers buy apps through credit card payments.”

Arun Menon, CEO, Onward Mobility, said, “The investment by IndoUS Venture Partners and Qualcomm is a true endorsement of our product vision, distribution capability, execution talents and the market potential. Their strategic input and value adds in terms of their extensive network of key relationships have already started benefiting us and helped in enhancing value.”

The mobile applications market is expected to grow to $25 billion by 2013, as per Juniper Research. The overall market for mobility software and applications in Asia-Pacific alone is expected to grow at a CAGR of 35 per cent from 2011 to 2015.