So how will/does Vakow make money? ‘We don’t make any money now,’ comes cofounder Rahul Gupta’s candid response, very quickly. But they hope to and advertising seems to be the chief revenue channel they have in mind. The two didn’t earn a salary from their business until 2-3 months ago, which is actually when the Rediff investment happened. Otherwise, cost of operations are pretty low though an exact break-up isn’t available. For Rediff this is an strategic investment ans Vakow may eventually be acquired by the Nasdaq-listed firm.

At 28 and 27 respectively, Gupta and co-founder Amit Upadhyay have been around quite a bit after graduating from IIT Bombay in 2003. “We wanted to be entrepreneurs from day one,” says Upadhyay. So back in 2001-2002 they started work on their first project — a smart landline phone. It didn’t go too far and after shutting down that project they joined Rakesh Mathur’s new Internet startup Webaroo. Gupta was senior product manager and Upadhyay was senior software engineer. The two quit last January and debuted their company at BarCamp Mumbai2 on October 9th.

What others are saying about the deal

• Rediff invests in SMS community service Vakow (Contentsutra)