Innoz raises $3 million series A from Seedfund; creates exit for angel investors

Bangalore-based Innoz Technologies, developer of mobile search engine SMSGyan which has now been rebranded as 55444, has raised a Series A round of funding from Seedfund, an early stage venture capital investor based in Mumbai. While the size of the investment has not been disclosed in the press release issued by Seedfund, sources close to the firm said it has invested about $3 million (approximately Rs 16 crore). This, however, could not be independently confirmed with Seedfund. The Series A round has also created an exit for Innoz’s eight angel investors, who had invested a total of Rs 75 lakh in the company over multiple rounds of funding.

“We had finalized on the Seedfund investment nearly three months ago. However, the deal took time to close because the angel investors first had to be bought out,” Innoz co-founder and CEO Deepak Ravindran told StartupCentral over a telephonic interview. Ravindran said that the company had raised the Rs 75 lakh in angel capital across 2-3 rounds of funding since its inception. Seedfund is now the sole investor in Innoz and holds a significant minority stake in the company. Ravindran declined to comment on the size of the Seedfund investment.

Ravindran co-founded Innoz with college buddies Abhinav Sree, Ashwin Nath and Mohammed Hisamuddin in August 2008. The four friends came up with the idea for a mobile search engine while still students at the LBS College of Engineering at Kasargod, Kerala. The company started up as an incubatee at the Technopark Technology Business Incubator in Trivandrum and went on to raise angel funding from CIIE, the startup incubator at IIM Ahmedabad, Sanjay Vijayakumar, CEO of MobMe Wireless, and Satish Dharmaraj of Redpoint Ventures among others. The company closed the last financial year ended March 31, 2012, with revenues at Rs 6 crore and profit margins at 60 per cent, said Ravindran.

It initially launched its search engine under the brandname SMSGyan through a partnership with Bharti Airtel. Since then it has entered into similar partnerships with telecom operators such as Airtel, Vodafone, Aircel, Tata Docomo and IDEA.  The company currently sees a daily traffic of 1 million search queries and 80 per cent of its revenues come from telecom operators through revenue share agreements. While users can pay per search query, it also offers a subscription model and currently claims 3.5 million subscribers. Nearly 60 per cent its revenues come from Tier II and Tier II cities. Following the Seedfund investment, the company will invest in strengthening the 55444 brand, which Ravindran says is aimed at creating a stronger, operator-independent identity for its search engine especially in Tier II and III towns.

The company expects to see a 10X growth in its daily traffic by 2015 and targets Rs 50 crore in revenues by then. Apart from garnering revenues from search services, it aims to diversify revenue channels by generating sales leads for ecommerce companies and offering mobile customer analytics services. It has recently launched an API at 55444.in, which allows application developers to use the Innoz platform to create their own applications. The company also relocated its headquarters to Bangalore from Trinvandrum for easier access to engineering talent. “We shifted about three months ago. Bangalore is our headquarters and the hub for our development activities,” said Ravindran. Apart from Bangalore, the company also has operations in Mumbai and New Delhi. It currently employs 35 people and expects to ramp up to about 60 people by the end of the current fiscal.

Read Deepak Ravindran’s account at StartupCentral of the Innoz journey from a college project to a fast-track startup.

Image Courtesy: Innoz