Right after Asia Pacific’s leading media ad-technology firm Komli Media launched a separate company RevX to focus on mobile advertising, it sold its India business to Gurgaon-based SVG Media for an undisclosed amount. The transaction is expected to be an all-cash deal, giving an exit to Komli’s existing investors. The acquisition of Komli’s India operations comes close on the heels of its Asia-Pacific business being sold to Malyasian group Axiata for $11.5M.
Komli founded in 2006 by Amar Goel and Akshay Garg, will function independently alongside the existing businesses of SVG Media — Tyroo Technologies, DGM and SeventyNine. About 100 employees will join SVG as part of the deal and the acquisition will give SVG Media a reach of over 150 million Indian Internet users across screens, the company claimed, including a combined share of 60% of the digital marketing-network spends in India.
As a combined entity, the new SVG Media group’s consolidated India revenues stand at over US $50 million. Only Google and Facebook have more India revenues and reach than SVG Media, after this announcement.
Speaking to Medianama, Komli co-founder Amar Goel informed that he will be involved with the transition as an advisor. On the way Komli’s business has been split, Goel rationalized that RevX is the ad-tech business that they were looking to take global, and the ad network business is different from the ad-tech business, and South East Asia businesses is a market that differs from India, so they decided to do different things.
“Manish (Vij) has built SVG, they’re larger than us, and we thought it might be great to team up, and have a dominant market share.”
The talks that were on for the last five months, termed crucial to SVG as it was missing social. “Social was a very important piece for us as commerce today happens through mobile. Komli had the social piece, and so we acquired it,” said CEO Manish Vij of SVG to ET.
Today marketers are investing ad dollars on mobile. According to a latest report by IAB, global mobile advertising revenue hit $31.9 Billion (€23.9 Billion) in 2014. On individual region growth, North America generated $14.3 billion in mobile ad revenue followed by Asia-Pacific region. With a growth rate of 76%, North America accounted for the highest year-over-year growth of all five regions and owned the largest share of revenue, at 44.9%.
The latest APAC state of mobile advertising revealed by Opera Mediaworks informed that much of the growth and adoption of mobile advertising has been fueled by the strength of the mobile ad market in Japan, Korea and China.
Classic example has been Facebook’s growth and revenues which is being driven by mobile. In its last quarter the social networking giant posted advertising revenue amounting to $3.82 billion, out of which 76 percent of total ad revenue came from mobile, which was up from 62 percent a year ago. Clearly mobile has been driving the user and revenue growth for Facebook.
In fact, Indian mobile advertising industry is expected to be valued at $3 billion by 2020. The right time for SVG to have a strong foot in the entire APAC, at a time when 75% of its business currently comes from mobile advertising. “As per our estimate, SVG is now three times larger than its nearest competing mobile marketing platform in India,” said Harish Bahl, founder of Smile Group, a business start-up incubator for digital media and technology.
In fact SVG had been looking at the markets in Dubai, Indonesia, Singapore and South Korea and was looking to grow both organically, and by acquiring smaller ad tech start-ups.
Similarly, Komli which has a strong foothold in the APAC region was eyeing expansion in international markets majorly in US. According to Mukesh Agarwal, vice-president of Komli Media, all the while the firm has been focusing on programmatic advertising as 60% of media buying and placement is transacted via programmatic advertising in the US.
While the merger gives Komli a greater share to generate revenues from US, for SVG it clearly wants to have a larger pie of the mobile advertising that is influencing commerce in the country. “65% of India Internet traffic is dominated by Mobile and 41% of total eCommerce sales was driven by mobile in 2014,” said the influential annual assessment of the Internet economy by Mary Meeker.