Fabogo rides on Dubai success to spread wings

When Pasenjeet Roy was heading restaurant finder Zomato’s team in Dubai, wife Anuradha Sanyal found it difficult to find a salon online. If she visited one, she would come back and discuss the packages. Roy would visit restaurants in Dubai and found a couple of salons on every street but discovered less than five per cent of these were online.

This convinced Roy to start Fabogo, an aggregator for salons and spas, in 2015. After establishing it in Dubai, it entered Mumbai and Pune, where it is based. Last week, Fabogo raised $2.5 million from Dubai-based early-stage investor Dunamis Ventures, which had also invested $500,000 in May 2015 and $1 million in January 2016. 

The start-up claims about 330,000 customers come on its website every month or 10,000 visits every day, half of them from Dubai. It claims operations have turned profitable in Dubai, where an average customer spends around Rs 5,000 per visit. Fabogo now offers monthly packages that bundle a host of services and are economical for users. 

Fazil Sayed, managing director, Dunamis Ventures, says Fabogo has done well with its search and discovery model and has emerged as the leading beauty and wellness platform in the UAE. It has grown its revenues at over 18 per cent month on month. ‘‘This team is dedicated and can go a lot further, if given the support,'' he says.

The beauty and wellness market in India was estimated at $3 billion in 2013, It is now pegged at $7 billion and likely to be $12 billion by 2018. These include products and services sold through salons, spas, fitness centres and cosmetic clinics. The market includes aggregators like Fabogo, Zooty, Purple, Just Dial, Nearby, Little, Quikr, horizontals like Housejoy, and Urban Clap, home services providers like MyGlam, Vymo and Vanity Cube, which was acquired by fitness major VLCC. Vymo was acquired by Naturals, a South India-based beauty chain.

Sayed says the glam-tech industry offers a huge opportunity. It is highly unorganised and fragmented; at the same time, it is growing rapidly in emerging markets like the UAE and India. ‘‘Fabogo has a very passionate and talented core team, with a proven record in scaling internet businesses in the past,” he says. 

Fabogo makes money through hyper-local advertising, connecting local merchants with consumers who come looking for these services. Salons and spas advertise to gain visibility, to be listed higher on search. The company would soon enable transactions through its website and charge merchants 20 per cent commission on the business it books for them. This would be Fabogo's second stream of revenue. To enable transactions, it bought Bazinga Labs, a mobile development firm.

Roy says the long-term game is in transactions. ‘‘Consumers are no longer only looking for a phone number. They are saying you need to take me there and ensure I get a great experience,” he explains.

Interestingly, 90 per cent of people who avail of salons are women, while 70 per cent of customers in spas are men. This year, it plans to consolidate on Mumbai and Pune, and then plan to enter Bengaluru.

The market is highly fragmented; yet, players like MyGlam, Vanity Cube and Ziffy did well. The key challenge is to educate the merchants -- 60 per cent of them don't respond to an online booking within three minutes, forcing companies to call them to confirm.