Mydala profitable at five, eyes global mart

Info Edge-backed coupon provider may raise fresh funds, acquisitions and IPO on cards

It took five years for Anisha Singh and Arjun Basu to turn their venture, Mydala, profitable. The Info Edge-backed coupon provider, claiming to be the largest in India in the segment, saw a maiden profit after tax only in the year ended March 2014. It is likely to go for a fresh round of funding.

“Every Indian should come to us (mydala.com) before they do (buy) anything. That’s the vision we have and we are working towards that,” said Basu, co-founder and head of finance.

The next round of funding, yet to be initiated, will take Mydala’s valuations upwards of 10 times the sales, according to sectoral estimates. Mydala reported sales of Rs 75 crore in 2013-14, with a profit after tax of Rs 40 lakh, after the adjustments of an Employee Stock Ownership Plan (ESOP). By the time Mydala finalises its next round of funding, the valuation could cross Rs 1,000 crore, said an analyst tracking the e-commerce sector.

Brokerage firm Motilal Oswal Securities, in a report last year, had estimated Mydala would cross $40 million or Rs 250 crore by 2016-17.

The company had earlier considered entering foreign lands and had stalled its plans. It has now decided to spread wings outside India. “We will step into new geographies soon. We have been considering a few locations but are yet to decide the first one to tap outside India,” said Singh, founder and chief executive. Mydala is learnt to have set eyes on West Asian countries, South Asia and Africa.

Over the next few weeks, Singh said, there will be a couple of major announcements. Going by its areas of operation and market insights, Mydala will be focusing on the mobile audience and e-commerce, and might look into payment solutions as a related service vertical that could strengthen its revenue stream.

“We need to figure out the mobile generation faster. That’s the future. What we aim to do is to bring new features to the daily life of people, to make it better,” she added.

To do so more efficiently, Mydala hired about 50 people in the previous semester from the Indian Institutes of Technology and Indian Institutes of Management, in the areas of information technology and mobiles. The company has also entered the grocery and daily-use item categories.

It is, it appears, forming some alliances in the mobiles and e-commerce space. A couple of partnership announcements could come by month-end. Also, as part of its strategy to better tap the mobile generation, Mydala has been looking at possible acquisitions. “There has been a couple of active considerations,” said Singh.

It might make tuck-in acquisitions in the mobile applications and mobile technology space over the next one year. The company wouldn't say how much it could spend for acquisitions.

“It was pull-based. We need to make it push-based. Location-based service would be one of the drivers,” said Basu. He said Mydala would be present in a little over 200 cities, with about 300 million monthly users, of which 58 per cent are in the tier-II cities. Of 45 million unique visitors that Mydala gets, 35 million are on mobile.

Offline, with a 90-95 per cent share, is the biggest strength Mydala has, though it is accessed online, he added.

Info Edge, which invested Rs 27 crore, owns 44 per cent in Mydala. The founding partners own about 40 per cent, and the remaining equity is with others, including employees.

Mydala wants to grow by banking on people’s daily needs, and it would continue to focus on where “user adoption is happening”, while it prepares itself for the public listing. In another three years? Basu smiled, without denying anything.