“Just Dial IPO will definitely serve as a confidence booster for the Indian Internet industry as well as investors,” said Dr Ashish Gupta, senior MD, Helion Venture Partners. “A good exit for investors will go a long way in further establishing the credibility of investing in India and in the Internet.”

Just Dial, which runs the India-specific business listings site Jusdial.com, said it will sell nearly 17.5 million shares at a price band of Rs 470-Rs 543. The issue will solely comprise secondary sale of shares.

According to Gupta, Just Dial IPO sets a good precedence for investors for listing their portfolio companies in India, too. “It signals that the market is open to exits and hence more options will be welcome, especially because Just Dial is a company that is very good at what it does. So it sets a good precedent,” he said.

However, Ravi Adusumalli, general partner, SAIF Partners and one of the early backers of Just Dial sitting on expected returns of 10x-12x on its seven-year-old investment, believes that Just Dial story might not be a true representation of the Indian Internet story. “Though I believe that this IPO will increase confidence in the Indian Internet story, I don’t believe it will have a meaningful impact on investments in the space. Just Dial is undoubtedly a huge success, but the overall Internet ecosystem is still lagging behind expectations of most investors,” he said.

Adusumalli, who was also one of the early investors in MakeMyTrip, another Internet investment that ensured great returns for its investors, believes that listing on Indian bourses for Internet companies is still a challenge.
“I don’t believe that there will be another IPO in the Indian Internet sector at least for the next 12 months. The bar to go to public is quite high,” he said.

Citing MakeMyTrip IPO as an example, Adusumalli said, “India is still nascent. So, most of the demand for Just Dial, similar to MakeMyTrip IPO, will come from overseas investors and not from India. This will change, but will take a few more years.”

While India is still nascent as a market for listing Internet companies, veteran entrepreneurs believe that the market has changed and is beginning to appreciate good quality companies in the space. “Over the last six years since Info Edge listed, Indian investors have understood Internet companies well and this is reflected in the number of banks that do research on Info Edge,” said Sanjeev Bikhchandani, co-founder and vice chairman of Info Edge, the country’s first public-listed Internet firm.

Internet entrepreneur-turned investor Alok Mittal of Canaan Partners said any successful listing (not just the IPO but aftermarket performance as well) amongst venture-backed companies will add proof-points to the success of venture model in India. “However, the impact of the Just Dial IPO will be relatively low. Moreover, one would not wait for a precedence to appear if one were ready to go down that path. Profitable Internet stories are definitely finding favour among investors. Given that global investors now play a significant role in Indian IPOs (both in regular allocation and also as anchors), some of that gap is getting bridged,”

“India is a nascent market for venture capital and every exit—be it through IPO or M&A—helps in the fashioning of a healthy ecosystem,” said Samir Kumar, MD, Inventus Capital Partners.

Ravi Gururaj

Ravi Gururaj, co-founder of Harvard Business Angels (India chapter) and a top executive at software firm Citrix Systems, has launched a startup incubator called Frictionless Ventures. But unlike other incubators, this one is an idea experimentation lab. Based in Bangalore, this incubator picks up and incubates concepts relevant to cloud computing, mobility and Big Data space, and accepts new ‘ideas’ from both domestic and overseas entrepreneurs.

“We follow a slightly different model at Frictionless Ventures. Unlike other incubators, we will put the money first in an idea and then incubate it. This is what we call a reverse angel investing. Once we invest in an idea, we will build a team around it, provide mentorship, develop the product and help it go to market,” Gururaj told Techcircle.in. The incubator will typically invest $50,000-$250,000 (Rs 27 lakh-Rs 1.3 crore) in a concept.

Gururaj, currently a vice-president (products and cloud platforms group) at Citrix, is leaving the company to focus on his new venture. As of now, he is also the India representative and mentor at Citrix startup accelerator, a corporate incubator chartered with investing in and developing early-stage entrepreneurs in the areas of desktop, mobile, cloud, empowering IT and collaboration. In 2006, Gururaj founded VMLogix, Inc., which was acquired by Citrix in 2010.

The new incubator has already picked up mobile app SyncUsUp for incubation. “The first idea to be incubated at Frictionless Ventures is SyncUsUp, a mobile contact management app. Once its incubation is over, we will pick up new ideas,” said Gururaj, who was recently appointed head of NASSCOM’s newly launched Product Council for early-stage companies. SyncUsUp was a finalist at the Harvard Business School – New Venture Contest, held in Boston in March this year.

“Also, there is no time-frame for incubation here. It can be anywhere between six months and one year or even longer. What we are trying to do here is a company-building approach around a concept,” explained Gururaj.

India has recently witnessed a spate of tech startup incubators and accelerators such as GSF Accelerator, Startup Village, Khsola Labs, eHealth TBI and GinServ TBI, as well as Microsoft Accelerator for Windows Azure. 500 Startups, a seed accelerator and investment fund set up by Dave McClure, has also spread its footprint in India.

(Edited by Sanghamitra Mandal)

After costly courtroom battles over technology patents, the two gadget giants are now going head-to-head over securing the best supply of parts as they jostle to rule the $253 billion smartphone market. The two took 100 percent of the industry’s profit in January-March, Canaccord Genuity data show.

Trampling on Apple’s supply patch could make life tough for the U.S. firm as it prepares for its next product line-up including a cheaper iPhone for emerging markets such as China. Having Samsung muscle in on its suppliers could drive up costs and lead to component bottlenecks, disrupting product launches.

Samsung’s huge in-house supply chain – providing parts from displays and powerful processors to memory chips and batteries – has been a core strength in its war for smartphone supremacy. As it now looks to widen its lead with products spanning both the high and cheap-and-cheerful ends of the market, Samsung’s supplies have become stretched, prompting it to hunt elsewhere to ensure it isn’t caught short.

“The next round of the post-patent battle for them will be over component supplies,” said Lee Sun-tae, an analyst at NH Investment & Securities. “Who wins access to the best performing components in class in large quantity – that’s the key … and explains why Samsung is shopping for components more than ever.”

Sharp and sour?

Samsung has made overtures to traditional Apple partners such as Japanese display maker Sharp Corp and South Korean chipmaker SK Hynix. Samsung, which buys most of its mobile screens from its Samsung Display unit, last year placed orders with Sharp for high-resolution LCD screens for its popular Galaxy range of products, though it later cancelled the order, said two people familiar with the matter, asking not to be named as the negotiations were confidential.

Sharp, in which Samsung bought a 3 percent stake earlier this year for $110 million, said this week it was seeking to boost sales to the Korean firm, potentially souring the Japanese company’s ties with Cupertino, California-based Apple.

Samsung is also using more chips made by Qualcomm, another major Apple supplier, in its flagship Galaxy S, which went on sale late last month.

Some other suppliers who provide parts to both Apple and Samsung include Toshiba Corp  in NAND memory chips, Sony Corp, in image sensors, and Corning Inc for its Gorilla Glass used in iPhones, iPads and Galaxy products, industry data show.

STMicroelectronics and Bosch ROBG.UL, the only mass producers of pressure sensors used in navigation features, supply those parts for the Galaxy range, and could be tapped by Apple for future products, according to research firm iSuppli.

Tiny overlap, big impact

For sure, Samsung still buys the majority of its components in-house, and the overlap with Apple on external suppliers is, so far, limited. BNP Paribas estimates that more than 80 percent of component profits generated by Galaxy S4 sales go to Samsung itself and its units.

But even a tiny overlap can be damaging as smartphones are constantly upgraded to more powerful computing and media devices – allowing users to take pictures, shoot video, play music, game online, watch TV and navigate – raising the need for more and smarter components.

“Any disruption in even small parts that you wouldn’t think are really core, say headphones, can affect product launches,” said Lee at NH Investment & Securities.

For example, Taiwan’s HTC Corp, which has slipped out of the top-10 smartphone makers, reported a record-low quarterly profit last month after delaying the full launch of its flagship model due to a shortage of cameras.

“Having a single supplier carries a lot of risk. Bearing that in mind, Samsung may even consider using LCD along with OLED in its signature Galaxy S range to reduce its total reliance on Samsung Display,” said Song Jong-ho, an analyst at KDB Daewoo Securities.

Samsung Display doesn’t produce LCDs for smartphones so as it boosts sales at the lower end of market it needs to outsource LCDs. The Korean firm uses the more expensive OLED display only on its high-end models.

Not so different

Outsourcing more components could mean Samsung will lose some of its hardware differentiation – a big selling point for the Galaxy range – and be seen as just selling generic phones, say some analysts.

The Exynos 5 Octa processor, which Samsung touted as having 8 brains designed to maximize energy efficiency while multi-tasking, is not used in the S4 models sold in the United States. Instead, Qualcomm’s Snapdragon chips will power the phone in that crucial market, with Exynos chips used in select markets such as South Korea and some European countries.

“Given that Qualcomm chips are also found in rival products, and the much-heralded launch of smartphones with flexible display appears to be delayed, I’m worried Samsung is losing its hardware differentiator,” said BNP Paribas analyst Peter Yu.

Samsung says both Qualcomm and its own chips have passed its rigorous quality standards and both will provide satisfactory user experience. “We’ll continue to resort to multi vendors to ensure smooth supply,” Kim Hyunjoon, vice president of Samsung’s mobile business, told analysts on a recent earnings call.

Samsung’s Exynos processors accounted for around 30 percent of the S3, but that is likely to fall to around 10 percent in the S4, analysts said.

“Qualcomm’s latest chips are getting good reviews from carriers, which I think forced Samsung to switch in favour of Qualcomm from Exynos in the S4,” said KDB Daewoo’s Song. “There’s even a possibility Apple may drop its own processor and go for Qualcomm chips in some future devices.”

Flexi-time?

Losing some of its hardware appeal and taking longer than expected to come up with innovative products such as flexible or wearable devices are additional challenges for Samsung, which is getting only mixed reviews for its efforts to improve software capability to integrate better with hardware.

In a recent review of the S4, Walt Mossberg, a gadget expert for the Wall Street Journal, said Samsung’s software was “often gimmicky, duplicative of standard Android apps, or, in some cases, only intermittently functional.

Despite the lukewarm reviews, consumers keep snapping up the S4, according to carriers. For the first time in at least three years, Samsung last year spent more on marketing than on research and development, seeking to pick up market share in the absence of new, competing models from Apple. And Samsung’s operating profit is seen topping Apple’s this quarter for the first time in years, J.P. Morgan analysts predict.

“There’s not much left in terms of what you can do to really differentiate your product as everybody’s thinking something similar – flexible or wearable,” said NH Investment & Securities’ Lee.

In late 2011, Samsung told analysts it planned to introduce flexible displays on handsets “some time in 2012, hopefully the earlier part than later”, but a year later it said the technology was still “under development.” It again demonstrated prototypes of flexible phones earlier this year, but executives now say they can’t disclose the timing of flexible smartphones.

Rivals are also moving fast. LG Electronics Inc, the third-biggest smartphone maker in January-March on strong sales of its high-end Optimus G model, said last month it planned to introduce an unbreakable smartphone by the year-end.

WeChat was launched in India in July last year in partnership with Ibibo as Tencent has minority stake in the company. It claims to have 300 million global users, of which just 40 million comes from outside China. Asked how the company is planning to replicate the huge popularity of this app in other geographies, Hau said that it would be focusing on user experience and localised features.

“WeChat has a very unique proposition in the market. We are not limiting ourselves to messaging alone. It is a social platform and our strategy is to give that platform to users for multi-way communication,” he said.

In a bid to grab the market in India, the Chinese internet giant has introduced various features in the app since its launch. In September last year, it introduced Hindi to its language bouquet and launched the app on the BlackBerry platform owing to its popularity with the young crowd in the country. Another feature, launched recently, is the official accounts where brands and companies can open their accounts for users to follow and interact with them. This new feature seems eerily familiar and reminds one of Twitter or Facebook fan pages. Hau also said that the company has opened its APIs for external developers to build on the existing ecosystem.

Clearing the air about rumours that the app is going paid, Hau assured that the “app will always be free for a consumer.”

Talking about possible monetisation routes, he said that WeChat is currently focusing on increasing user engagement in India. However, it will be looking at alternative monetisation routes. “Mobile games could be one of the potential monetisation models,” he added.

Considering that global users of the app is pretty skewed, compared to its total number of users, it has a lot of catching up to do in the global market. Interestingly, instant messaging has seen some huge traction lately. Be it the global leader WhatsApp or new, homegrown apps like Hike, the market is growing fast (more on that here).

Although no recent data is available, WhatsApp has around 100-500 million downloads on Android alone. As of Dec 31, 2012, it claims to have processed a total of 18 billion messages in one day (7 billion inbound messages and 11 billion outbound). But Hau declined to share similar numbers and added that WeChat doesn’t necessarily count number of messages as its only criterion of traction.

Can WeChat replicate its magic popularity in India? More importantly, can it convert WhatsApp users and bring them into the fold? Right now, it is involved in a lot branding and awareness-creation activities locally. But the outcome of the same is worth a wait.

(Edited by Sanghamitra Mandal)

With this acquisition, Aditi is looking to build up on its solutions for migrating and managing complex, cross-platform deployments on cloud. It will also add AWS (Amazon’s cloud computing services) and other cloud operations management capabilities to Aditi’s fast-growing cloud consulting portfolio. The company currently has a customer base of 150 and is a technology partner of Microsoft in the US.

This is Aditi’s second major cloud acquisition. Prior to this deal, it acquired cloud consulting firm Cumulux in 2011.

Get Cloud Ready was founded in January 2012 by Janakiram MSV (CTO), a former Microsoft and Amazon employee and a cloud expert with 15 years of experience. The startup provides a proprietary framework, which helps customers de-risk cloud adoption and manage cloud operations across platforms. The firm’s key clients include Microsoft, Intuit Inc, Tata Communications and VMware, among others. As part of the deal, the startup’s five-member team will also join Aditi.

“Janakiram and his team bring exceptional cloud infrastructure migration and management expertise. With Get Cloud Ready, we seek to provide our customers with granular visibility into rapidly migrating and managing applications across multiple cloud platforms with minimal effort,” said Pradeep Rathinam, CEO of Aditi Technologies.

“We are excited to join forces with Aditi’s global cloud consulting team,” said Janakiram, founder and CTO of Get Cloud Ready. “With the addition of Get Cloud Ready, Aditi now offers a complete portfolio of re-engineering, migration, performance optimisation and DevOps solutions, specifically designed to enable customers to use the development and deployment platforms of their choice,” he added.

The cloud space has recently seen quite a few acquisitions. The latest one includes 8KMiles Software Services Pvt Ltd, a California-headquartered cloud computing company founded by Indian-origin entrepreneurs, acquiring FuGen Solutions, Inc., a provider of hosted PaaS-based identity federation services, for $7.5 million.

(Edited by Sanghamitra Mandal)

This phenomenon is driving several segments such as retail, consumer products, healthcare, education and enterprise services, among others, in addition to creating new-age mobile infrastructure-related companies.

At the same time, there are innovation-led new businesses in the field of entertainment and various utility-based products and services connect the offline and the online world together.

Techcircle Mobile Forum, now in its 2nd edition, will be held on June 27 in New Delhi, bringing together India’s top mobile innovators, entrepreneurs and marketing heads across sectors, as well as venture capital investors and consultants, to discuss and debate these new-age mobile-based products and services, and also to discover how they are changing many areas of Indian consumption and traditional business channels.

The forum will cover areas such as what lies next for mobile commerce; how one masters the business and economics of mobile apps; innovation and traction in mobile-led entertainment products; mobile advertising; the next phase of mobile monetisation; mobile payments and mobile handsets, among others.

Join this initiative to identify what businesses can create as the mobile ecosystem fast becomes an integral part of India’s growth story.

For sponsorship, write to: vijay@vccircle.com
For registrations write to: kanika@vccircle.com or call 0120-4171111
For any agenda suggestion/speaker nomination, write to ben@vccircle.com

Unlike Silicon Valley, there is a dearth of late-stage venture investing for technology companies in India, believes Suvir Sujan, co-founder of Nexus Venture Partners, a home-grown early stage venture capital firm with $600 million in assets under management (AUM). While late-stage capital is available and there are enough private equity funds who could sign larger cheques, their business model is largely centred around investing in revenue generating companies with each of them delivering some returns or IRRs in the portfolio. “There is no concept in these private equity funds to invest in portfolio companies where there is a lot of alpha where some companies can make 20-30 times or some companies can go bust,” he says in an exclusive video interview with Techcircle.in. “We call this business model of investing in such late-stage companies where there is a lot of alpha, late-stage VC, which does not exist in this country,” he adds.

Sujan goes on to argue that had late-stage VC investing been prevalent in the country, a lot of the companies would not have resorted to raising money from abroad. “One of our portfolio companies PubMatic had to raise money from an investor in the US. For instance, InMobi raised money from SoftBank. I would bet that had there been enough late-stage VCs in the country, they would have invested in InMobi,” he argues. Last year, PubMatic, a digital ad platform for publishers and a Nexus Venture Capital portfolio company, raised a mega round of $45 million through mezzanine finance, led by US-based August Capital.

So, would Nexus be foraying into the late-stage venture space, having identified a gap here? “No, not really,” he says. “We actually are not sure if we are the best people to do that. It’s still a private equity type skill set with risks associated with it,” he reasons.

In terms of technology trends and white spaces that will drive growth, Sujan believes that, “a lot of legacy software is being replaced globally” which opens floodgates of opportunities for tech companies. He is also a firm believer that a dozen of billion dollar technology companies will come out of India going forward. Watch the video for the full interview.

We could not find more standalone bus ticketing apps in Google Play and the one that we found (Mybustickets.in) failed to function citing low Internet connectivity even on Wifi.

Here is a comparison of the two bus ticketing apps.

redBus

The oldest player and the market leader in the space had our hopes high and didn’t really disappoint us either. The homepage is simple and clutter-free; upon filling the requirements it takes ones to a neatly done list of buses available on the chosen route. We noticed that it didn’t show up any buses for some popular routes such as Delhi-Dehradun or Gurgaon-Agra or Gurgaon-Jaipur.

It seems its network is stronger in southern regions. User interface works fine without any lag. Commuters have an option to call the customer care at any step of booking the ticket. The listed buses can be sorted on the basis of timing, rating and fare. Seats and boarding points too can be selected without any flitch. Further a filter icon on the top right of the screen of bus listings allows users to sort options on the basis of AC, non-AC, sleeper, etc and select drop-off points as well. However, one may not even notice the icon initially; it could have been displayed more prominently. In terms of payment options, all popular modes—debit/credit card, net banking and cash on delivery—are available.

Overall the booking process is glitch-free and user interface is easy to use. It is a simple-to-use app and does its job well.
Final rating: 4/5 (we feel some routes need more listings and the sorting process could be bit easier)

Paytm

The new entrant has forayed into online bus ticketing in December last year and launched its mobile app just days ago. But we were pretty surprised with the app’s interface, to say the least—the user interface is much smoother and slicker. In this app commuters can sort the buses on filters such as timing, fare and other criteria such as AC, non-AC, sleeper, etc.

Users can also choose drop-off points along with boarding points. The filters are much more visible and prominent in this app. If you don’t have a Paytm account, you can just sync it with your Facebook account; this is quite a handy feature. All popular payment modes—except cash on delivery—are there. Also, whatever mode you choose from—credit/debit card and net banking—you can see all bank options to select from. It also has features such as recharge, bill payments, etc. All in all it’s a slick app. It is not much different in terms of usability from its counterpart but the whole experience is better and quicker.

Final rating: 5/5 (with this one, we couldn’t deduct any points)

Online bus ticketing is gaining traction steadily. It is much more popular in routes in southern and south-western states, due to better roads and more organised bus routes. While redBus is a leader in the sector, Paytm is slowly catching up.

Comparing the number of downloads for both the apps would be a little unfair as redBus has been in the market for quite some time. Also for Paytm’s app, the number of downloads doesn’t necessarily indicate the popularity of bus ticketing feature since it has many more features such as recharge of prepaid mobile, DTH, bill payments, etc. In terms of user-friendliness Paytm emerged the winner for this week’s App Tracker. We suggest you give both the apps a spin and let us know which one you found better.

We will be back with our next edition of App Tracker next week.

Although it is touted as Malaika’s online venture, The Closet Label is actually the brainchild of Preeta Sukhtankar, a Mumbai-based marketing professional who has worked for brands like Elle, MTV and Percept, among others.

Talking about the new brand, Sukhtankar told Techcircle.in that The Closet Label has already shipped 100 products since its launch on May 14. She also said that by September this year, Label Corp would connect more celebs with its new e-commerce brands in jewellery space and men’s apparel segment.

“Celebrities are not only endorsing the brands. They are also stakeholders here and will take part in all brand operations,” added Sukhtankar.

Sukhtankar launched The Label Corp in November 2012 and unveiled its first brand store called The Home Label, in association with Bollywood star Hrithik Roshan’s wife Suzanne Roshan. The Label Corp is an angel-funded company and it is also in advanced talks to raise Series A funding.

Closet Label specialises in private label, which means all its products are designed in-house under the guidance of Malaika Arora and curated in a lookbook kind of fashion for consumers. However, the new brand will have to compete with established lifestyle e-tailers like Jabong and Myntra and the going can get tough. Although Jabong is quietly experimenting with private labels, Myntra has already acquired Exclusively.in Inc., the company behind the private label brand Shersingh.com and the fashion site Exclusively.in., and that definitely gives it a cutting edge. Then there will be competition from pure play private label e-tailers like DoneByNone, Zovi, YepMe, Freecultr and Inkfruit. Given the crowded space, will the celebrity angle really work in favour of Closet Label?

(Edited by Sanghamitra Mandal)

International revenues shot up by 55.1 per cent to Rs 440.9 crore, driven by strong performances in Latin America (up 135.7%), Africa (up 105.3%) and Europe (up 48.4%), as a result of the company’s investments over the last three years, said a statement.

OnMobile reported considerable quarter-on-quarter revenue growth of 26.1 per cent from international markets in Q4FY13, which contributed nearly two-thirds of net sales during the period.

OnMobile’s revenues in India dipped by 19.6 per cent to Rs 284.5 crore for the financial year but showed stability in the last quarter with an increase of 5.9 per cent q-o-q to Rs 66.7 crore in the Q4FY13. In February 2013, Onmobile launched a mobile-based deals service called GreatBuyz to enable users to access deals and discounts via their handsets which is currently available only on BSNL and Idea Cellular platforms.

Overall, revenues for Q4FY13 saw a rise of 3.7% to Rs 184.1 crore while net profit decreased considerably by 47.6% q-o-q to Rs 10.8 crore. During the quarter, the firm also reported an EBITDA decline by 20% q-o-q and 15.3% y-o-y to Rs 35 crore.

In a separate development, the firm has announced that it has been selected by Telefonica to revamp value added services for the operator’s Movistar Emocion content service for customers in Spain.