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Summary:

Kleiner Perkins Caufield Byers and Sherpalo Ventures (a venture vehicle of Google-backer, Ram Shriram) have decided that India is the next big market for mobile commerce–using the cellphone as a connected wallet to buy and sell stuff. With over 100 million Indian wireless subscribers—-more than double […]

Kleiner Perkins Caufield Byers and Sherpalo Ventures (a venture vehicle of Google-backer, Ram Shriram) have decided that India is the next big market for mobile commerce–using the cellphone as a connected wallet to buy and sell stuff.

With over 100 million Indian wireless subscribers—-more than double the number of the land phones in the country–they could be right. The two firms are investing over $5 million in Paymate, a mobile commerce company, a start-up backed created by the founders of Coruscant Tec, a Mumbai-based company that powers mobile content, commerce and other data applications that land on Indian phones. Update: Ajay Adiseshann, founder of both Coruscant Tec and Paymate, emailed me and wanted to reiterate that the companies Coruscant Tec and Paymate are seperate businesses.

Paymate might not have launched an application yet, but its site says the company is looking at “tele-merchant services”, “mobile wallet” and “person to person” payments services. Mobile commerce has been a distant dream for wireless carriers in the U.S., but in both advanced wireless markets like Japan, and fast-growing SMS-heavy markets like India, “m-commerce” is a real phenomenon. A recent report from eMarketer says that 43% of Japanese Internet users already use some form of mobile payment.

In India mobile infrastructure is starting to offer a cheaper, easier way to manage funds, especially in areas with limited banking systems. One likely mobile commerce strategy would be to marry m-commerce with SMS, since Indian mobile market is dominated by SMS and voice services. SMS-focused startup Air2Web’s has a growing business in India and the company says big Indian banks send out around 2,000 SMS messages to important clients per day for account managment. Coruscant Tec currently is trying to jump start demand for data services in the country, offering content apps like MTV’s Loveline for cell phones, a social dating service, as well as video, ringtones, and games and works with carriers like Airtel.

While wireless data is something new to the Indian market, wireless startups pushing mobile data are starting to hit it big in India. Canadian mobile chat company AirG works with Coruscant for its mobile chat application in India. Mobile marketing Enpocket recently launched a mobile advertising campaign with Airtel, and mobile games are going gangbusters in India, an example is Electronic Art’s partnership with India Games.

Mobile commerce will likely boom in India long before the U.S. despite recent attempts–Paypal Mobile launched this year, and startups like Obopay are pushing peer to peer payments. KCPB and Sherpalo are betting it does. The first apps will likely be peer to peer and direct buying and selling over a wireless broadband network. Maybe next will come swiping a mobile at the gates of a cricket stadium. Now that would be a big hit!

Photo via Flickr by Pidge

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  1. Yes indeed!

    It is good to see independent analysis of an investment!Instead of the Press release. Obviously Kleiner and ram Shriram have done their homework on Paymate and the Indian market else they would not be making a significant investment in a obviously zero revenue Co.

    There coulld be something unique about what the Co has, but perhaps has not articulated as yet.I saw a report that the commerce market was 6000 crores in India.Reliance has made such a statement.

    Good to see investment in new facets of mbile rather than content, ringtones ,games and wallpapers!

    Kudos to Kleiner and the new venture.

  2. Ravi Venkatraman Saturday, July 8, 2006

    I don’t think Ram had to do any due dilegence as most of the Board members of Coruscant Tec were co-founders of Junglee .

  3. Is Coruscant/Paymate an Indian Co, or is it in the valley?If the latter then obviously it is natural to draw from that ecosystem.

    SG

  4. I checked the parent Co.And the press release details which appeared in an India Financial daily.

    There are 2 Co-Founders Probir Roy and Ajay Adiseshan – both Indians (presumably), and based in Mumbai. They are not ‘junglees’ ! So, I guess that would make them concrete junglees!!

    You can check out their details at http://www.coruscant.co.in/aboutus

  5. I liked the comment about them being junglees! Amusing!

    There is nothing junglee about them, when I went to the link mentioned.Their Press Room is fairly enlightening as to the stuff they have been doing in the content space.(Couldnit find a word on their product/service,etc whatever they are planning to do have done!)

    The founders seem to be some well known guys in the industry (in Indian context) but nothing valleyish about them.

    As a VC I know there is nothing like following due process on diligence.Specially a brand like KPCB. The diligence can be a feat by itself and often give you the false sense of having achieved something! But you achieve something, when you put that money to work.

    So the verdict is still out on PayMate.

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