MobME Raises Funds through Angel investors, keeps IPO Option Open

TechnoparkToday.com>> February 28, 2014: MobME Wireless Solutions Ltd, a Kerala-based mobile and Internet company, is keeping its option open to raise funds through the IPO route even though it has garnered over Rs 16 crore through private angel investors to keep its growth plans on track.

MobME’s plan to raise Rs 25 crore through IPO was approved by the National Stock Exchange (NSE) in April last year, and the company was give a timeframe of one year to launch public issue of equity shares. The proposed IPO was assigned a grading of 3/5 by CRISIL — a recognition of its good fundamentals.

“We have successfully raised funds worth more than Rs 16 crore from private angel investors to keep growth plans on track. Agnus Capital and a few individual investors, including T S Anantharaman, Director, Catholic Syrian Bank and Vice-Chairman, Leo Pharma Group, invested around $3 million in the company last year,” said MobME CEO Sanjay Vijayakumkar.

“Technically, MobME can still go ahead with the IPO by filing the red herring. As shown in our Draft Red Herring, we had planned to use the funds to pilot our Digital Signature Business. As we have enough capital for the pilot, we will wait till the results are out to gauge the fund requirements for scaling up,” he pointed out.

Mr. Vijayakumar said the company, set up in 2006, had been deploying the cash into the Mobile Digital Signature pilot and roped in some senior executives from banking and telecom sectors. “The Digital Identity Space is currently very hot globally, and it ranks among the six biggest trends in enterprise mobile strategy. It gives us tremendous opportunities to scale up our operations,” he added.

MobME has always bootstrapped, and it will raise funds when there is a real need for deployment like scaling up the pilot project to commercial stage, he said, adding: “We expect this to happen within the next 6 to 9 months.”

Making a strong case for simpler models for providing funds to startup companies, he said, “The SME Exchange procedure requires approval not from SEBI but from the exchange. We need to have kickstarter and Indiegogo models of crowd funding platforms for startups to remove obstacles, especially the liquidity crunch at the threshold level.”

In the original IPO model, the promoters of companies used to go to public, tell their story and request for funds to do business. Now IPOs are mostly for early investors to exit, which is OK, but it does not help startups to raise cash, he observed.

“If we have simpler models – which are now coming from SEBI after the announcements in the Union Budget 2013-14 — it would be of great help to the startup community overall. At Startup Village, we are working with regulators to make the necessary changes,” said the MobME CEO, who is also chairman of the Board of Governors, Startup Village.

About Agnus Capital, which is the lead investor in MobME, Mr. Vijayakumar said, “We look forward to learning from their experience in transforming MobME into a world class professional startup over the next six years.”

MobME, India’s first campus startup in the telecom segment, will leverage the expertise of Agnus and existing investors who have proven track record of building significant wealth for shareholders and learn from the best practices they have employed to decide on future course of fund raising through equity from Angels/Venture Capital/IPO or Debt, he informed.

MobME caters to top telecom clients such as Vodafone, Bharti Airtel and Aircel in its value-added services (VAS) and network solutions businesses. It has executed several projects in enterprise solutions and M-governance (mobile governance) segments for state governments (Kerala, Nagaland and Goa) and is expanding to Banking Space with Innovative Mobile Banking Products like Fedbook, a Mobile Passbook for Federal Bank, which won awards from Indian Banks Association.

Significantly, the company has bagged the exclusive technology rights in India to roll out PKI based mobile digital signatures for secure log-ins and transactions. It has partnered with Gemalto from the Netherlands and Valimo Wireless OY of Finland to ensure secure and fraud-proof transactions via cell phones for the first time in India.