We had two investment term sheets when we decided to accept Boku's buyout offer: Ranjan Reddy of Qubecell
Mumbai-based Spunk Media Pvt Ltd, which runs the online mobile billing aggregator Qubecell was acquired by San Fransisco-based mobile payments company Boku earlier this month. The acquisition marked Boku's entry to India and its plans of expanding operations in the Middle East and Asia. `
In a chat with Techcircle.in, Ranjan Reddy, founder and CEO, Qubecell, talks about how the startup, which is a little more than a year old, got the offer from a global player and what made the firm to take up the offer and not opt for raising a larger round and growing organically.
Here are edited excerpts:
How did the offer for the deal come along?
We started not so long ago. The idea was that since India does not have any carrier billing aggregator this could be a big market opportunity. We knew that there is immense scope in emerging markets like India. We wanted to capture the market in India and then expand to other emerging markets. Now more than 40 merchants use our service. In India, we knew we had to do our own business development since merchants have just began to realise the potential for a service like this. But we had to get international aggregators as partners who would get merchants on board from outside India. That's when we started tying up with players like Fortumo who were using us as their Indian partner. Sometime in June this year Boku was integrating with us as a partner when the conversation moved to a possible merger. That time we were evaluating term sheets for Series A.
What made you take up the offer? Did investors support you for this?
Investors left the decision to us. At the time we had two term sheets worth $3 million on table. But investors were of the view that the kind of term sheets and valuation we were offered was taking the steam out. We had always thought of coming on the radar of companies like Boku which could be a potential suitor; this happened sooner than we had envisioned.
What next on the cards for Qubecell?
Over the next few weeks, Qubecell will become Boku India. All our employees will become employees of Boku India. We will be Boku's window for this part of the world. We are looking at expanding to Middle East and Asian countries. All new developments from the technology point of view for these markets will happen from India. I will lead operations for Boku in this part of the world.
What will be the next leg of expansion?
From our point of view, nothing changes. Had we raised funding, we would have enhanced our technology team, expanded in Middle East and Southeast Asia. Our immediate focus was to be in the Middle East and that is what will happen even now. Boku has provided us access to global merchants but we are looking at expanding that list. Operationally things don't change.
Can you share the financial details of the transaction?
We would not like to share that but I would say that it was a small transaction compared with what we hear in the market but we are happy with the deal.
Would you like to return to entrepreneurship?
Eventually I would like to go back to entrepreneurship. This is the next phase for Qubecell and I want to complete the next leg of journey of Boku India. Then of course I would like go back to start something again.
(Edited by Joby Puthuparampil Johnson)