How Deal Site Mydala Turned Profitable, Sold to Bharat & Figured out Jugaad [Interview]
Mydala, the deal site founded by Anisha Singh in 2009, turned profitable this quarter, is selling deals to smaller cities in India and has put off its International expansion plans. Edited Excerpts of an Interview.
While Groupon was trailblazing its way to a massive initial public offering in 2011 in the US, a tiny deal site in India was making headway into smaller cities and raising a small amount of capital. Mydala, the deal site founded by Anisha Singh in 2009, managed to raise Rs 18 cr (about $3 mn) in exchange of nearly half of the company’s shares. Four years hence, the company is leading the market and has turned profitable.
Meanwhile, many deal sites have died and heavyweights including Groupon & Times Group have entered the deals business in India. “In the deal space, we are the largest. I don’t know of any other company doing 120,000 vouchers a day,“Singh told NextBigWhat in an interview. The company has put off its International plans, figured out jugaad and is now looking to focus heavily on vernacular languages, says Singh. Edited Excerpts.
How far has Mydala come in its journey?
Two years ago, we realized that deals need to be real time and we bet heavily on mobile. We realized that we are a chota company and didn’t have millions of dollars to spend on customer acquisition. So we figured it would be good to partner with telecom operators. We power deals for Vodafone, Idea and Tata now. The deals were served based on location, balance of the caller and other analytics.
This meant that now merchants at smaller cities had a new way to market. We now showcase deals from 150 cities. We’ve also partnered with Samsung and launched deals in 9 vernacular languages.
How many deals are done on the platform currently?
We do about 120,000 vouchers every day. We have about 320 people working for us. A majority of them are in sales.
We saw fairly big entries in the deals and coupons space. How did you cope?
As far as couponing is concerned, we are the biggest. No one is doing a 120,000 coupons daily. Nobody has the footprint that we have. We reached about 22 million unique visitors on a monthly basis. Our reach is about 200 million because of the telcos.
What is your strategy on the mobile front?
We grossly underestimated the power of mobile. I will never make that mistake again. Two years ago, we realized that it is such a fascinating place. None of our competitors can do balance based deals or location based deals to the hyper density that we do. For us, tier 2 & tier 3 cities form a bulk of our traffic. None of the merchants in those markets have had the opportunity to market themselves before. The fact that you don’t have to use a credit card to buy a Mydala deal works for us. You can be billed on the phone.
How has your revenue grown?
I can’t disclose that now but we broke even in April. In this quarter, we are profitable.
You were making operating losses at the end of March 2013?
Until April, we were trying to garner growth wherever we could. It’s a very small loss compared to many other companies that are around. When you see this years results, we will be talking about positive operating margins. We were conservative with marketing. We figured the growth had to be on our coverage. No one is doing 152 cities. India is a big territory to conquer.
What happened to your international plans?
We toyed with the idea about 6 months ago. We were actually about to take the dive. But we consciously decided that we will take a step back and conquer India first because there is lot of growth in India. Imagine, we have merchants sitting in Dibrugarh. Right now, we have put international plans on hold.
We intend to grow the language side of it and user generated deals are picking up. We’ve got about 130,000 deals on Mydala. We are over 100,000 merchants now.
As a founder, what has the personal journey like?
Someone remarked that it is 4 years since we started. To me it feels like it was yesterday. There have been days when I’ve come in and said, “Man, I don’t want to deal with this rubbish anymore.” But if I was extracted from the company, I would be lost. The sun has not been always shining on our backs. That made it even better.
My founding team is still intact. When we started, we had issues. We had issues with funding and we made some wrong moves like any naive company would do. At the same time, our competitors managed a lot of funding. From all this, we learned to make a dime a dollar. And that’s inculcated in the company. We will be humble and figure out jugaad. My team has been like family. I wouldn’t change anything of the last 4 years.
Learning from all this?
Sometimes when you get funded, you lose your direction a bit. You get too trigger happy. And we did get caught up. But the learning was that you have to keep your eye on the ball. If your life time value of customers is not turning in a profit, then you are not doing something right. There is a great book on this, called the Dhando Investor. At the end of the day, dhandha is dhandha whether it is online or offline.