Times Internet Ltd, the digital arm of The Times of India Group, has made a 'seven figure' investment in New York-based e-commerce company Fab.com, which is already backed by a string of VC firms and top Silicon Valley investors such as Andreessen Horowitz. The company has also invested an undisclosed amount in Bangalore-based mobile marketing and communications startup ZipDial Mobile Solutions Pvt Ltd.
The investment in Fab.com was disclosed by Jason Goldberg, co-founder and CEO of the US-based firm, in a personal blog on Tuesday. Although he has not specified the deal amount, it means Times Internet has invested anywhere between $1 million and $10 million. "As part of this investment, Fab will be working with Times Internet to explore and execute on our India market strategy in the coming years," stated Goldberg.
He added that the investment was fostered by Times Internet chief Satyan Gajwani.
"I have been working with Satyan for several months now and he has been super impressive with his approach to innovating and growing technology businesses in India. I'm excited to work with him and his team as Fab explores the India market further," said Goldberg.
Fab claims that more than 10 million people across 26 countries turn to it to discover everyday design products, to connect with international designers and to share their favourite design inspirations.
Goldberg co-founded Fab, along with Bradford Shellhammer and the husband-wife duo of Nishith and Deepa Shah. Before co-founding Fab, Goldberg and Shellhammer had collaborated for an unsuccessful venture called Fabulis, a social network for the gay community. Goldberg had also collaborated with the Shah couple to start Socialmedian.
Besides selling designer products online, Fab.com happens to be a platform for independent designers as well. Here, people can browse through a wide range of products across various categories and share those across social media platforms. It is expected to be hitting $150 million in transactions this year.
Last month, Fab acquired Pune-based technology startup True Sparrow Systems Pvt Ltd for an undisclosed amount. True Sparrow was the technology backend of Fab.com since its inception and was co-founded by the Nishith and Deepa Shah in 2007.
Prior to the investment by Times Internet, Fab raised around $169 million in four rounds, starting with an angel round that had seen participation from actor-cum-investor Ashton Kutcher. Fab also raised funding from Andreessen Horowitz, Atomico, Menlo Ventures and Mayfield Fund, among others. The firm is valued at over $600 million.
The Times Group is not the only media house backing Fab, which counts among its investors The Washington Post Company.
In another deal, Times Internet also made an undisclosed investment into ZipDial. The news was first published in The Economic Times, a business daily of the Times Group.
Set up in 2010 by Valerie R. Wagoner (CEO), Sanjay Swamy (chairman) and Amiya Pathak (COO), the startup offers a marketing communication tool based on the 'missed call' concept. In April 2011, it raised Rs 3.5 crore, led by Mumbai Angels. That maiden round also saw participation from Blume Ventures and the partners at AngelPrime who invested in their personal capacity. Earlier this month, the company raised less than $500,000 from Silicon Valley-based incubator-cum-seed fund 500 Startups. Times Internet co-invested in the firm, along with 500 Startups, but has disclosed the investment only now.
For Times Internet, the investments are part of the string of significant moves made by Gajwani since taking over the reins of the firm early this year and the Fab deal is, perhaps, the boldest yet. He has pulled the plug on the long-running free e-mail service of the group, Indiatimes email, acquired a lifestyle content portal MensXP and changed the operating model for its deals business.
Speaking at Techcircle Startup 2012 earlier this month, Gajwani said that the firm is shifting its focus from being too content-centric to a product and technology-focused company.
He had also mentioned the firm is not looking at pure play financial investments, which means the group may look at business synergies with firms in which it invests. This is in tune with its plans to support Fab in India and the previous investments, such as the logistics firm Delhivery, which can support its e-commerce business.
However, these investments are separate from the group's Brand Capital unit's activity, which essentially strikes ad-for-equity deals with companies leveraging its media publications.
In a new blog post, Gajwani has also disclosed other investments (old and new) including grocery e-tailer ZopNow. We had written about it here, but now it appears that the deal was part of Times Internet and not Brand Capital. The company co-invested in a Series A round, alongside Accel and Qualcomm.
Instamedia: Led by Ankit Maheshwari, Instamedia is a content network firm. Gajwani acknowledged: "Despite a great team, a number of macro factors worked against us, namely Google's increased shift away from new publishers. As a result, the model didn't scale the way we hoped and the business has scaled back from its initial goals."
Affle: Anuj Kumar and team led what was one of the first mobile advertising and marketing companies in India. Times Internet had invested in it way back and the firm raised further capital from Microsoft and most recently from Japan's D2 Communications.
Net Carrots: Another old investment by Times Internet, Net Carrots originally focused on digital loyalty solutions. But now, the business model has shifted towards B2B marketing and events-oriented business.
According to Gajwani, the company has also invested into a few funds that invest into digital companies in India and abroad. In addition, Times Internet also runs T-Labs, an incubator supporting 5-10 businesses every year, where it picks small equity stakes.
Here are some other key points related to the investment strategy of Times Internet:
- It does not have a defined fund size or specific parameters regarding the size of its investments (so far, its investments have been in the range of $100,000-$10 million). However, the company is willing to sign larger cheques for its investments and terms the strategy as 'opportunistic with opportunities.'
- Open to looking at all sorts of companies, but currently focusing on businesses in areas such as mobile, gaming, digital content, communication, personal finance, marketplaces, education, etc.
- Existing investments are in companies which are doing something different from what Times Internet does, but somewhat related to the business verticals of the company.