Pluggd.in is NOW NextBigWhat.com!!

We have rebranded and what a day to do that! Well, Happy Diwali to all of you.

Here is a quick note regarding the rebranding part – more details will follow.

On behalf of Team Pluggd.in NextBigWhat, I’d like to thank you for all the support/love and feedback shared over the last few years.

We look forward to a continuous support in the next phase of our super exciting journey!
Over the next few days, we will move the entire experience to a new design/brand experience we are working on – but request you to update your bookmarks and yeah, share the same with your friends!!

-Ashish, on behalf of Team NextBigWhat.

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Homeshop18 files for confidential IPO at Nasdaq [Game changing move to raise $ 100 million]

In a move that could change the game for Indian e-commerce, Homeshop18, the e-commerce & television shopping arm of India’s Network18 group has filed for a “confidential” Initial Public Offering (IPO) at the Nasdaq, according to a source with knowledge of the development.

The company is planning to raise $ 100 million by the end of the year from the stock exchange, it was reported earlier. If the IPO is a success it will be a major shot in the arm for India’s $ 10 billion e-commerce industry which is constantly in need of fresh capital.

An e-mail sent to Network18′s Chief Financial Officer RDS Bawa earlier did not elicit any response. In an e-mail response, Mr. Sundeep Malhotra, Founder & CEO, HomeShop18.com said:

TV18 Home Shopping Network Holdings is a growing business and is continually assessing financing alternatives and the needs of its operations.  We do not make these assessments public.

A confidential IPO is a new mode of raising capital at the US Stock Exchanges. Under this, the company does not have to disclose that it is raising money ahead of its IPO roadshow (more on this below).

E-commerce companies need large amounts of cash to sustain operations in the Indian consumer market which is slated to grow to $ 3.6 trillion in 2020. With the Indian government saying that e-commerce companies backed by foreign direct investment are not permissible, foreign Venture Capitalists and Private Equity players are also in a wait and watch mode.

The e-commerce industry in India, is about $ 10 billion in size and is growing rapidly with many fledgeling companies. High burn rate forces many to shut shop or merge with larger competitors in mid stride.

In April this year, news agency Reuters reported that the Homeshop 18 is in talks with institutional investors, including private equity firms for pre-IPO placement. Its Chief Executive Officer, Sundeep Malhotra told the agency

“We have ambitions to get listed and are open to it but it is premature to talk about it now. We cannot give any timeframe on that at the moment.”

Homeshop 18 is owned by BSE listed Network 18 group headed by Raghav Bahl. They had raised Rs 100 crore ($18.6 million) from existing investors including SAIF partners in July last year. South Korean company- GS Home Shopping, had invested $ 18.5 million along with $ 5 million from Network 18 in the previous round in 2009.

Financials

For the year ending 31 March 2012, the company is targeting a revenue of over Rs 160 crore. In the first quarter of FY13, Homeshop 18′s revenues grew 85 % compared the the same quarter last year. It also said that orders went up by over 80 % year on year. During the quarter, it ventured into mobile commerce as well. In 2011-12, Homeshop18′s revenue was at Rs 89.6 crore, up 25.5 % from the previous year.

Source: Network18, Annual Report 2012

For the year 2011-12, the Rs 1943 crore Network18′s digital content and e-commerce business (Homeshop18 is part of this) clocked revenues of Rs 233.8 crore, up 18 % from the previous year. The group’s digital content and e-commerce business made a loss of 126.3 crore in 2011-12. The division clocked an operating loss of Rs 32.2 crore in the first quarter of 2013.

Confidential IPO

The new mode of filing for an IPO without having to publicly disclose the fact that a company is doing so, is the in thing in the US since the Jumpstart Our Business Startups (JOBS) Act  was passed by President Barack Obama in April 2012. According to the act, companies with less than $ 1 billion revenues, do not have to make public the IPO plans until 21 days before its roadshow begins. The number of Public IPOs since the JOBS act have come down while “secret” or “confidential” IPOs have been on the rise.

These companies are categorized as emerging or growth companies and require less paperwork. Pointing out the advantages of such an IPO, the Inc. says

This allows companies with less than $1 billion in revenue to test the waters for an IPO by getting feedback from the SEC and certain investors; it also makes it easier for a company to quietly back away from an IPO if the response isn’t sunny.

There has been a lot of criticism about this practice as well. Besides bringing down the accuracy of financial analysis, the secrecy around the IPO puts small and retail investors at a disadvantage, is one of the main criticism.

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With frugality and deep data analysis, ShopClues claims to become profitable in 2013 [first for an ecommerce company?]

While early evangelizers of ecommerce space in India are still wary to project the turnaround time for real profitability and seems continue to be in red (negative profit), 10 months old ShopClues.com claims confidently to attain profitability by Q4-CY2013, and importantly the company also promises to show operating margin positive. As far as traction is concerned, over the past 10 months ShopClues has grown 50x and 100x respectively in Alexa Ranking and Facebook community Size.

The company backed by international investors claims to make positive gross margin in every transaction and attributes frugality and data analysis for achieving more from less money.

Unlike other ecommerce players, ShopClues hardly spends money on Google “as it does not offer the kind of ROI ShopClues looks for.” However, Sandeep Aggarwal, CEO & co- founder believes that social media offers tremendous and compelling ROI and plans to increase its budgets for social media for future growth and continues to limit spend with Google.

In an interview with NextBigWhat.com, Aggarwal spoke on various aspects ranging from secret sauce to become profitable, how to attain 22% traffic conversion from Facebook, problem of inventory led ecommerce business model and outlook of ecommerce in India in 2013. Edited excerpts:

NBW: During an earlier interaction with Pluggd.in, you have said that Shopclues would become the first ecommerce company in India to turn profitable. Please elaborate and corroborate facts behind this claim and how could you contemplate so confidently?

SA: The inventory led E-Commerce companies that is most of the India E-Commerce are spending 55% in Cost of Goods Sold (COGS) plus Opex to make 25% in gross margin and that is not changing until 2015-16.   And most of the time these inventory led E-Commerce companies  have negative gross margin.

But ShopClues makes positive gross margin in every transaction and beyond that combination of our business model and culture of frugality  & data driven  result into us achieving more from less money.    By Q4-CY2013, we will be not only contribution margin positive but also operating margin positive. Unlike other E-Commerce companies, we also have multiple revenue sources and they all are sizing up. As of today, we are not profitable but we think we incur the least amount of negative margins.

NBW: Share the growth pattern of Shopclues since its inception and how fast the company has grown over the past 6 months in terms of traffic, revenue, orders, number of store registrations.

SA: We do not disclose our revenue or orders but in our view, we are among the top 6-7 E-Commerce companies in India on both of those parameters. What is more important is that we have reached among the top 6-7 E-Commerce companies in less than 10 months (vs. 3 years by our competition) and at much lower cost vs. our competitors.  In terms of traffic, Alex Ranking and Facebook community Size etc. we have seen 50x to 100x growth from January until now.

NBW: While ShopClues claim to have 22% traffic conversion from Facebook (which is 3x from standard (7-8%) conversion rate by other ecommerce players), some say it’s not a right number as 22% conversion rate from Facebook is too lofty. So, how come ShopClues manages to get such traffic conversion from Facebook?

SA: I am not going to comment on what other feel but after direct traffic, the single biggest source of traffic for us is social media.  We hardly spend money on Google as it does not offer the kind of ROI we are looking for and Google allows competitors to bid for our brand names etc.  For us social media offers great ROI and compelling ROI. We plan to increase our budgets for social media for future growth and continue to limit spend with Google.  In terms of offline, we do very limited ad spend there.

NBW: As an analyst – how do you see the outlook of ecommerce in India in 2013?

SA: E-Commerce in 2012 remains among the fastest growing industries globally and I do not see that changing in 2013 either.   Overall ecosystem is strengthening and everyone in the ecosystem understands their role more responsibly.  Given that retail footprint in India has its own structural constraint, I believe E-Commerce remains the most exciting industry in India for next several years to come. In terms of evolution of market, I truly believe that someone offering large catalog and low prices will win combined with great service.

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OneAssist wants to help you when you lose your wallet, mobile phone or are in trouble abroad

Launched in July 2011 by Gagan Maini and Subrat Pani, OneAssist Consumer Solutions Private Limited, the company which wants to help you when you have lost your wallet, mobile phone or important documents has landed a contract with HDFC Bank and has plans to reach 1 lakh paid customers in 12 months. The Sequoia backed company says that it will break-even in 3-4 years. In an interview with NextBigWhat, OneAssist’s co-founder Gagan Maini shares more.

Why should one use OneAssist. Blocking a lost debit card or backing up mobile phone data is something everyone can do?

There is only that much one can do in one’s day today life. Dependence on some elements like debit cards that help us carry on with life is so high. If any of it goes missing, it causes a huge amount of disruption. The areas we focus on are where there is too much disruption if you lose any of it. In times ahead, we will look at other products and other areas. Its convenient and everything works with one call.

Currently we have four offerings. They are WalletAssist, MobileAssist, EverydayAssist and TripAssist. These help you to deal with loss of your wallet, mobile phones and documents in India or abroad.

How does it work?

Today, your phone is like your second brain. You first put info on to the phone which has become an important element. While you can have apps that can backup data, you are worried about someone else getting hold of the phone which has personal data. And thats where we come in. We provide 24/7 access from around the world. We would be taking care of your anxieties and worries. Within the country, we can get you a temporary handphone with all your data. Our apps work on Android, Blackberry and Symbian which takes care of a large chunk of the smartphone market. We can protect you against misuse.

If you lose your wallet, we help you block all cards, give you cover up to Rs 1 lakh against card fraud, get you a free replacement of PAN card and Driving License, settle your hotel bills in case of emergency, help you with tickets, and provide cash assistance.

With Docusafe, you can store all your important documents online.

What about Everyday Assist and TripAssist?

With everyday assist, we will help customers in case they lose their wallet, smartphone or even passport. We will help them connect with the Indian consulate if they are traveling abroad and will guide them in between. If required, we will even arrange a foreign language interpreter. TripAssist is for travelers, domestic and international.

What has been the traction so far?

Our core way to get to customers is through partnership. We prefer a B2B2C model. We are tying up with various partners who we could market these. They are in turn offering these services to their customers. We have tied up with HDFC bank and are in the procecss of talking to a couple of other banks as well. We are working with Spice retail to sell our mobile assist product as well everyday assist product. We will also have  some other partners. There are also people who have bought our products online. We haven’t done any marketing as yet. Its just about to take shape so I’ll not be able to put numbers at this time.

Will Indians buy it?

If I go back a few years, to the evolution of card market, or mobile phones it was early days. Now there are 280- 300 mn debit cards in the country. Mobile phones are everywhere. What better way to safeguard it? These are relatively new products, in due course of time the relevance of these products will only increase because they are useful. For instance, when you buy a mobile phone, you will buy a screen guard and a cover for it at a cost. That is only protecting its exteriors. What’s inside is far more important and it makes sense to protect that.

What is your revenue model?

The products work on principle of annuity. Memberships are renewed every year. Because the benefits are there, they haven’t been priced too high. Its just Rs 3-4 per day for the services.

What will be your strategy to achieve 1 lakh users?

In 2013, that’s our target. Partners will be our core channels. Our business will come largely through partners and some through retail. We will continue to invest in customer acquisition and as a business, we’d like to break even in 3-4 years. We raised about $3.5 million from Sequoia.

Since you deal with private information and data, how do you make sure that everything is secure?

Data security is of prime importance to us. Our entire system has been designed with security in mind. We plan to get ISO27001 certified and PCI DSS security for card payments. The data that customer shares is data is that does not compromise security. For example, if we take credit cards, we only take 16 digits and not the entire cvv number and expiry date. We work in a paperless environment and as soon as data hits the system, its all masked. For instance, out of the 16 digits, only 4 are displayed.

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India climbs to #2 position in Google Transparency Report [Big Brother]

Google released its sixth transparency report covering Jan-June 2012 and India has climbed to #2 position in terms of  government requests to remove/block content.

From January to June 2012, Indian government made a total of 2,319 user data requests and 3,467 user account requests and Google complied with 64% of data requests.

In the first half of 2012, there were 20,938 inquiries from government entities around the world. Those requests were for information about 34,614 accounts.

• Blogger received max number of requests, followed by Search, YouTube and Orkut.
• Privacy and Security reasons top the list followed by defamation and religious offense.

Big Brother

Indian government has been trying to gain control over the online chatter/social media tools and earlier is also muling over state-level social media control policies in the country.

Recommended Report:

• Report: India ranks 39 on Internet freedom scale 
• Big Brother tools that government employs.

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Startup Musicfellas brings 360 degree experience to melomaniacs [DRM free Indie music]

The end result of the amalgamation with the perfect composition of entrepreneurial spirit and music loving is what we now know as Musicfellas, a music discovery platform which provides a 360 degree listening experience to the melomaniacs.

The inspiration for Musicfellas was a music blog which the founder Mayank Jain used to write after his full time job. The blog focused on the latest music gigs, events and new talent. Taking cue from fun he had writing the blog and his own passion for indie music, Mayank founded Musicfellas and launched it formally early this year.

Musicfellas: More than a digital store.
At first glance it is quite easy to mistake Musicfellas just as digital music store for indie music. Far from it, the focus as Mayank emphasizes is on providing an experience.

The core emphasis is on providing a meaningful conversation to the music creators and listeners. The platform provides an excellent engagement product, where the user can follow fellow listeners, share their playlists and bands, favorite and comment on songs. The idea is to create a tribe of music lovers. The simple reason that this could not be done over existing social networks is that we share our music tastes with very few people and in a community of music lovers, serendipity always helps discover new talent and content.

The artists can have their content on the platform as a paid or a free download. Bands like Parikrama are already offering their album for free while music from bands like Indian Ocean is available for free steaming. A number of indie bands and artists like Punkh and Kunal Datta are offering their music as an album or individual tracks.

The prices are fully decided by the artists for their content and they provide the content DRM-free for the listeners to enjoy platform agnostic. Musicfellas takes a share of 30% on the music sale which acts as its revenue stream.

The platform is an exciting approach to engage with fellow music lovers by creating a virtual identity based on their music tastes. The fact that all the music can be streamed for free either by creating a playlist or via the online radio is definitely a plus for the users.
Listeners can always buy a song they like and add items to cart for a single checkout or add money to the wallet for future transactions.

The service works flawlessly and the interface is clean and clutter free. The only issue we faced were things like being unable to see the entire collection at once (Right now the user can only see the top albums/artists curated by the team or make a search) or that rare confusing UI. The service works well on a desktop environment but on a mobile device where most of our content consumption takes place, the service works but is not optimized for it.

The Indie scene in India is fast shaping up and no wonder Musicfellas would play a major role in that. The focus for the team right now would be on launching the new interface along with removing those caveats and getting a number of new and interesting talent and content for the people to enjoy.

Musicfellas is operating under beta phase right now, but our readers can enter the code ‘nextbigwhat’ and try it out for themselves and share their experience.

Also see: Born from a tweet, OKListen is fast changing the Indie music in India |Startup IndianRaga wants to democratize Indian performing arts space

Interview: Meet Raghu Dixit – Scientist Turned Rock Artist [His Entrepreneurial Story]

Analysis: Online music industry in India : Past, Present and Future.

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Balloon, Bow & Arrow App by Indian App Developer gatecrashes into the top 10 slot in Android Play Store

Apps democratizes the dev world and while the top slots are mostly taken by WhatsApp and AngryBirds of the world, an app (Balloon, Bow & Arrow) by Mumbai based app developer, Manas Gajare has made it to the top slot:

1. # 1 in top free casual games category.

2. #10 in ‘Top Free’ Apps in the Play store.

Balloon, Bow & Arrow App

- You have got a bow and 25 arrows. Shoot as many balloons as you can.
- Different types of balloons originate from the ground and fly into the sky. Hit them with arrows.
- You get different score depending on the size of balloon you shoot (make a hat-trick and you gain 2 arrows

Launched on October 14th, the app boasts of 250000 downloads (170000 active installs) with zero marketing $$s spent in app promotion.

This isn’t the first time that India based app developer has gatecrashed into the top slot – earlier Games2Win’s Parking Frenzy app made it to top 10 within a few days of the launch and expect India app developers to now crash into the paid category as well (now that Google has extended its paid-app support to Indian app developers).

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