OnMobile to raise $100m

Posted on | April 21, 2006 |

ET reports that Bangalore-based Mobile VAS company OnMobile is looking to raise a second round funding of $100 million. CEO & founder, Arvind Rao confirmed that company is in the process of raising money but did not reveal details.

The estimated value of the company is $270 million. OnMobile is believed to have an annual revenue of about $50m, so the valuation is more than five times its revenue.

Infosys incubated the company 4-5 years ago and has around 12% stake in the company. Other investors include venture fund Argo Global Capital Partners, whose investors include France Telecom Deutsche Telecom, and Singapore Telecom.

Most of the $100m being sought will be used to fund the company’s future growth and expansion, while a small portion is expected to be used to purchase one of the existing investors. The identity of the seller could not be ascertained but sources said it is not Infosys.

OnMobile is a leader in voice based VAS platforms. Voice portals of most Indian operators are powered by OnMobile’s technology. The company is trying to make inroads in other delivery channels like WAP/GPRS and becoming a “end-to-end” VAS solution provider. Competitors include IMI Mobile, Cellebrum, Mauj.

$100 million is a lot of money. With this kind of moolah, OnMobile can not only strenghten its offerings but also buyout other players. Indian mobile VAS industry is hotting up with a spate of investments. Mauj received $10 million from WestBridge Capital Partners, Intel Capital and Sequoia Capital this year. Nazara, mPortal, Openera, ConvergeLabs have all received funding in the last year.

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