Liz Gannes

Recent Posts by Liz Gannes

India’s SMS GupShup Raises $10 Million

Users of the Indian social network SMS GupShup send four billion messages per month, accounting for about 10 percent of India’s texting traffic.

That volume is impressive, but it’s also expensive. Four-year-old SMS GupShup was forced to figure out a business model for mobile social networking before its global peers — like Twitter, and more recently, GroupMe — because it had to pay its ever-growing bills, CEO Beerud Sheth said in an interview on Tuesday.

Sheth said SMS GupShup has a run rate of $20 million, which is three to four times more than last year. The company expects to become profitable in the next year, even as it expands into other Asian countries, such as the Philippines and Indonesia.

Now the company has raised $10 million in Series E funding — to spend on network capacity and other product costs — from Tenaya Capital, Globespan Capital Partners, Helion Ventures and Charles River Ventures, bringing its total funding to $47 million.

SMS GupShup’s business model is targeted advertising. The Mumbai police, for example, have an account for sending out traffic alerts, which might be sponsored by Michelin tires or an insurance company. SMS GupShup has also played a role in organizing recent anti-corruption protests. The company’s 50 million registered members have created five million user communities.

Key to SMS GupShup’s success has been its reliance on the widely accessible and interoperable medium of text messaging, but the company will soon be launching its own mobile clients, too, Sheth said.

See our previous coverage: Indian Start-up Turns Text Into Dollars

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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google