Translation Results Requested Through Conyac Made Public

After $10 Million Investment Round, Affle Eyes China and Japan

Singapore-based start-up, Affle has received $10 million in fresh funds from D2C several weeks ago. I sat down with Anuj Khanna Sohum, the founder and CEO of Affle, to find out more about his future plans and vision for the company. The chat was fun and Anuj is certainly one of the more experienced entrepreneurs in Singapore’s tech space who I have spoken to. But first, what exactly is Affle, and what does it do? Affle is a hybrid between a media owner and media exchange in the mobile space. It is a media owner as Affle builds and owns its own mobile applications, including messenger, mobile magazine, and mobile coupons. It is also a media exchange as it helps telcos and publishers across the region (including Aircel in India, Telkomsel in Indonesia, and ESPN) to manage their ad inventories. All in all, Affle’s business model is based on selling mobile ads. But Anuj argues that it isn’t at all a mobile ad network like InMobi or Buzz City. Rather Affle serves premium inventories at higher CPM and focuses on serving big name clients like P&G, CadBury, and Toyota. When all is said and done, the company description doesn’t matter so much as long as Affle is making money. And according to Anuj, it is doing just that. Two of the most crucial markets for Affle are India and Indonesia where the company has exclusive partnership with local telcos to manage their ad inventories. Anuj explains that these two countries are profitable as standalone offices. But as a group, which includes other offices in Singapore, Thailand, Vietnam, and Malaysia, Affle hasn’t quite broken even as it is going through a phase of aggressive expansion. Anuj also joked that he could just focus on India and Indonesia and lead a comfortable life, hinting at how well these two markets are doing. So how does Affle plan to invest the new funds it received? Anuj is crystal clear with his plan and didn’t hesitate to answer my question. First, Affle will continue to pour in resources to expand its existing markets, particularly in India and Indonesia. Second, the new fund will also invest in R&D where Affle will continue to create cutting-edge mobile products. Pinch, a mobile messenger developed by Affle, is one of his key products that we discussed at length. While apps like Whatsapp and 31SMS focus on the smartphone segment, Anuj explains that these smartphone-only apps might not work well in Asia. After all, most Asians are still feature phones users. So Pinch is created to work on both smartphone and feature phones. The app will allow messaging between feature and smartphone, feature and feature phone — what ever permutation you can imagine. Anuj also explains that it doesn’t matter whether feature phone users have GPRS, 3G, or nothing at all. Pinch will still work perfect as messages are sent through as SMS and received as “pinch messages” at the receiver’s end. Anuj’s third ambition interests me a lot. He said that Affle is on the lookout to break into China and Japan, two of the largest mobile nations in the world. When I ask how soon would Affle enter China, Anuj says that it could be tomorrow if they find a good opportunity to enter the market. Anuj plans to employ the same strategy in China: partner with local players in the market, like telcos and mobile-related companies. Anuj also says that there is a fair chance for them to acquire a local start-up if they ever find a company which has DNA similar to theirs. Everything looks to be in order as Anuj seems to have masterminded the entire road map for Affle. When asked why he decided to take up Japanese mobile ad agency, D2C’s investment offer, Anuj explained that the investment works more like a partnership than an investment. He said he could have gotten $10 million from other investors, but D2C’s investment cemented this partnership further as both companies found it fit their business model and market expertise.

With D2C’s expertise and wide network, Affle can easily grow in Japan. While D2C can also offer its clients ad inventories managed by Affle, particularly in India and Indonesia, thus, creating a win-win cross-selling opportunity. On a related note, Anuj revealed that all Affle’s fundings have been so far sourced from non-venture capital funds. Instead, the fundings are usually focused on strategic partnership where money is used as a means to cement the relationship. Affle, as he explained, is a long-term project which he and his team have committed to. When ask about exits, Anuj told me that he isn’t even thinking about it. If someone wants to buy Affle, he says that his “masterpiece” needs to be in safe hands before he would agree to let it go. He insists that any acquisition decision must be made for the company’s best interest and shouldn’t be purely for monetary gains. “The question is not whether Affle will grow. It is about how much Affle will grow,” he said confidently.