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!