Mobile value added services company MobMe shelved plans to go public at the small and medium enterprises exchange. Instead, the company raised about $3 mn from angel investors.
The Kerala based company, had received an approval from the national stock exchange to raise $4.5 mn through an initial public offering at the SME exchange. “As we have enough capital for the pilot, we will wait till the results are out to gauge the fund requirements for scaling up,” said Sanjay Vijaykumar, the CEO & Founder of MobMe. Edited Excerpts.
You’ve already raised $3 mn. Will you put off the IPO?
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.
Was the IPO shelved due to delay in getting necessary approvals?
The SME Exchange Process doesn’t require Sebi Approval but approval from the exchange. In my opinion, we need to have kickstarter/ indiegogo models of crowd funding platforms created for startups. In the original IPO model, the promoters of companies used to go to public and tell their story and request for funds and raise it to do business. Now IPO’s, are mostly for early investors to exit which is OK, but doesn’t help startup raise cash.
If we have more simpler models, that are now coming from Sebi after budget announcements, it would be of great help to the startup community overall. At Startup Village, we are working with regulators to make necessary changes.
How have you deployed funds that were raised?
We have been silently deploying the cash into the Mobile Digital Signature Pilot and have few banks and telecom operators on board. We will give out more details once our pilots are completed. The Digital Identity Space is very HOT as you can see from this Gartner Article on the 6 biggest trends in Enterprise mobile strategy. Some very senior people from industry have also joined the team post the funding and we will announce the same shortly.
MobME has always bootstrapped so we will raise when we have a real need for deployment like scaling up pilot to commercial stage. We expect this to happen within the next 6 to 9 months.