This is its first private equity placement in India
MUMBAI: Matrix Partners India has invested a sum of Rs 32 crore in the Bangalore-based online movies rental service company Seventymm.
It launched its $150 million fund in India in August 2006, “We launched this fund focusing primarily on the Indian consumer sector. The sectors we identified for equity participation included internet, mobile and online gaming besides media and entertainment, financial services and food and beverage. Seventymm gels well with our ideology and hence the deal,” said Matrix Partner’s Rishi Navani.
As part of the arrangement, Navani will join the board of directors of Seventymm.
A second round of funding for Seventymm, this is Matrix India’s first private equity placement in the country. As a start-up investment, one of the leading venture capital firms — Draper Fisher Jurvetson — has already invested Rs 10 crore in this company along with promoter’s funds.
The new round of funding will be directed towards charting new markets with the online movies rental service, starting with New Delhi followed by Mumbai launch in December this year.
DNA Money had earlier reported on Seventymm’s expansion plans and their intentions of taking the service on a pan-India level.
“The required infrastructure and logistics support is more or less in place. Mumbai and New Delhi markets will start getting serviced by 2006 end. In 2007, we will enter other markets like Chennai, Hyderabad and Kolkata,” said Raghav Kher, founder of Seventymm.
Targeting a membership base of over 10,000 by the year-end, the company currently has some 7,500 subscribers on their e-commerce network. “With our launch in New Delhi and Mumbai in addition to other cities next year, we expect the total subscriber base to reach over 1 million in the next five years. By then we expect to be present in 40 cities with revenues of around Rs 500 crore,” said Subhanker Sarker, chief operating officer of Seventymm.
Speaking of the market size and business potential for online movies rental service, Navani said that close to 50 million households have DVD/VCD players in their houses. “And this does not include the personal computer-based dvd/vcd players. And with home entertainment getting really big in the country, if we successfully manage to get 80% - 90% of the target market, the business potential is certainly humongous,” he said.
