SMS GupShup receives $10 mn funding from Tenaya Capital





SMS GupShup, India’s largest social network and group messaging provider, received $10 million funding from Tenaya Capital. With this announcement, SMS GupShup’s total fund raising stands at $47 million, which will be used for three main areas, namely R&D, sales and marketing and for international expansion. Tenaya Capital, with its five percent stake in the company, joins existing investors Globespan Capital Partners, Helion Ventures and Charles River Ventures in the Series E round, who have also contributed to the company’s fund raising.






SMS GupShup has cemented itself as the dominant social network in India, demonstrating that the company truly understands the Indian consumer and their needs. We are also very excited about the company’s opportunity to leverage its innovative product offerings to expand beyond India into other high growth emerging markets,” said Brian Paul, MD, Tenaya Capital.






With a total of 84 million internet users in India, out of which only 46 million are mobile internet users, SMS is the most ubiquitous medium used across industries. SMS GupShup that provides group-messaging facility, based on communities of seven people for small groups, and 40 people for large groups, has five million such communities, and buys network capacity from operators for the same. Sending out a total of four billion SMSes per month and 150,000 messages per minute, the company holds a 25 percent market share in the Indian mobile marketing space.








For the small groups messaging facility, SMS GupShup has partnered with all mobile operators in India, and this service will go live in next two months, with familiar features of -cc and reply all’ that will now be available on the SMS platform for the first time in India. We aim to turn SMS into a two-way messaging system. Some of our product innovation in this regard are chat features, and voice-enabled SMS – which is good for illiterate people in India, and also crosses language barrier as well, being accessible to much wider number of people. This voice feature will be widely available in October-November in India. Besides, we also have a top-management team from Silicon Valley to put global practices into effect in India,” said Vishwanath Ramachandran, co-founder and CTO, SMS GupShup.








While SMS GupShup believes that it will break-even and also become profitable in the next nine months, it is looking at a revenue turnover of Rs 100 crore from India this year. The company is also looking at launching smartphone capabilities in the next 4-6 weeks with smartphone features like address book integration, threading, alerts, graphics, and more, which will differ from the SMS GupShup platform on other handsets. However, SMS GupShup’s main features will work on all handsets – allowing it to remain an ubiquitous platform. So far, SMS GupShup has tied up with three main operators in the Philippines, two top mobile operators in Sri Lanka and five operators in India. The company is also looking to expand to Indonesia.






SMS is a more addressable community than online medium, and our network is used across the country from government offices and public utilities, to various communities, celebrities, small tribes from rural areas scattered across the world, education institutions, large business houses and individuals. Each person can set up their own mobile network, which is similar to a Twitter or Facebook. They can create a brand and engage with customers or friends, and spread alerts. While the large group messaging facility is an ad-funded model, with ads being placed inside the community, the small group community has no ads,” said Beerud Sheth, co-founder and chief executive, SMS GupShup.






SMS GupShup has also added Ravi Sundararajan as VP of Marketing and Samir Parekh as VP of Human Resource to its senior management team. In India, Facebook has also tied up with SMS GupShup for the SMS updates platform. Some of their other known brands include Nokia Ovi Life Tools, and consumer brands like Kellogs, Pepsi, Sony, ICICI and Lifestyle.  






When asked how Do Not Call Registry, which DoT has implemented in India is effecting their business, Sundararajan said that SMS GupShup has complied with the rules of the National Consumer Preference (NCP), and if it is a valuable service, people do not mind ads which are relevant and targeted. Besides, SMS GupShup is an opt-in model based on opting-in for messages from a community, where one also has the option to leave the community at any point of time, and thereby immediately stop receiving SMSes. This is the key differentiating factor between ours, and other bulk messaging platforms, and we also ensure that no more than two SMSes per day are sent out. While on that note, I strongly believe that communities are key to mobile marketing,” he added.






The SMSes from the SMS GupShup platform are charged more than regular peer-to-peer messaging, but at a lower-priced group messaging peer-to-peer rate, as compared to the regular SMS rates. The company also has a revenue-sharing model with mobile operators for this service.






By Beryl M
[email protected]