VAS Start-Up Vegam Raises Seed Capital From Altruist
Altruist's discussions with Vegam began in April this year when Ingersol Jayakumar, who was previously heading the value added services business for Tata Indicom decided to start up, and the deal was closed earlier this week.
The deal involves a fixed sum in cash, a commitment to fund the company at a later stage, as well as technology aid. Although the stake involved has not been frozen yet, Altruist India founder Dheeraj Aggarwal confirmed that it would be a minority stake.
The funds will be used to establish a centre in Bangalore, product development, deployment and for hiring. Currently, Vegam has three people on board in Mumbai, which will remain the company headquarters.
Vegam has developed VAS in the areas of voice-based games (or audio games), VAS retailing and regional content-based SMS services.
"We are helping Vegam with the technology fees and the IVR backbone. The company will develop its product and deploy the same through our infrastructure," said Aggarwal. Incidentally, the Altruist Group operates two companies â€“ Altruist Technologies Pvt Ltd and Mobile2Win India Pvt Ltd. Aggarwal further clarified that Altruist and Mobile2Win would let the start-up leverage their size and scale in terms of the platform, but would not get into distribution for Vegam.
Speaking to Techcircle.in, Ingersol said that 60 per cent of mobile users today use IVR services such as contests and infotainment services. And this is the customer base that the start-up is targeting. It is also focused on users of low-end handsets. Games like car racing, snake and ladder and card games like 'Teen Patti' will be on offer, and these will be delivered in English, Hindi and three other Indian languages over IVR.
Vegam has already signed on Tata Indicom and Tata DoCoMo, as well as a couple of other operators. The IVR games will be launched within two to three weeks on the Tata networks. This audio gaming service will be up against Dialify, another Mumbai-based start-up. "There is scope for simple, casual gaming on your mobile. So far, these have not been monetised well and there are possibilities for growing the ecosystem," said Aggarwal.
Rajiv Hiranandani, Executive director, Altruist, "Mobile VAS is a dynamic industry and the objective of this investment is also to get more entrepreneurs into the fold thereby keeping up the pace of innovation and new ideas."
Vegam's next project is a retail initiative to sell VAS through all operators. "We will have the entire collection of VAS and customers can get any service through us without having to remember the right code for, say, a caller tune. We will connect the service to the operator and make it easier for users," said Ingersoll. While there are VAS cards for caller ringback tones and other specific services in the market, Vegam will offer the entire gamut of content-based services, music and subscriptions through a single window. It will be available both online and as an IVR service.
Altruist Plans More Investments
Altruist plans to invest in more Indian start-ups. "We've been looking at investing in start-ups and we are keen to proceed with more such deals, going by the model of investments in entrepreneurs at the seed stage. But out of the 20 products developed, two may be successful and VAS companies typically have just one blockbuster," said Aggarwal.
Meanwhile, the group continues to close in on a larger acquisition. In February this year, the company had told Techcircle.in that it had set aside $25 million to acquire a global VAS company. Aggarwal said the acquisition is still in progress.
A new entrant in the VAS space is ZTE, which announced that its Indian arm would start offering value-added services. It has also partnered with Vodafone Essar to offer an MMS newspaper service. One97 Communications has invested in LeapSky Wireless, a Singapore-based mobile data services provider.