Micromax plans to raise Rs 510-680 cr in next 12 to 18 months

The handset maker had set up a corpus of Rs 2,700 cr in 2014 and has since invested in 10 firms

Indian handset maker Micromax Informatics has said it is planning to raise and invest an amount of Rs 510-680 crore ($75-100 million) in the next 12 to 18 months. 

While the firm is primarily into procuring and marketing mobile handsets and consumer durables, it had invested in a few companies earlier on its own, unlike the proposed initiative where it will raise funds and lead the project.

According to Rahul Sharma, co-founder, Micromax, some of its past investments have provided huge returns (where the internal rate of return had been in “triple digits”) and thus it is willing to expand the “horizon”. Micromax had set up a corpus of Rs 2,700 crore ($400 million) in 2014 and has since invested in 10 firms. Here are some of them:

Transerv: Micromax Informatics had tied up with Transerv, a Mumbai-headquartered digital payment solution company, in early 2016 to offer mobile payment service to its consumers. According to crunchbase.com, a website that detail on various investments made by unlisted firms, Micromax had led an investment of Rs 102 crore ($15 million) into the firm on April 26, 2016. The other investors were IDFC Spice Fund, Faering Capital and Nirvana Ventures Advisors. How much stake Micromax or other investors had picked up, however, is not clear.

The two also came up with a pre-paid card linked with the mobile wallet account of individuals, for payments at brick-and-mortar outlets in the country. This allowed Micromax smartphone owners to use wallet money at 1.2 million retail outlets across the country. The service had backend partnership with Visa, RuPay and commercial banks in the country. 

MiMedia: A cloud-based online backup service provider, MiMedia was launched in 2010 by technology start-up firm MiMedia LLC, which is headquartered in Post Chester, New York. In January 2016, the firm had raised approximately Rs 100 ($15 million)  in a Series C funding from a number of global firms, including Micromax.

Gaana.com: Launched in April 2010, Gaana.com is primarily owned by Times Internet Ltd, the online media management company from the Times Group or Bennett Coleman & Co, the publisher of The Times of India and The Economic Times. In October 2015, Micromax led an investment of undisclosed amount in Gaana in exchange for equity, according to Crunchbase. An online music website, Gaana currently offers over 10 million songs in more than 21 languages and is considered to be the repository of one of the largest music databases in India.

HealthifyMe: Bengaluru-based start-up HealthifyMe was roped in by Micromax in May 2015. Apart from picking up a stake in the firm, Micromax also aimed at using its content and services for its smartphone users. Later in June that year, the mobile application-based weight loss solution provider raised a second round of funding from angel investors such as Gopal Srinivasan (TVS Capital), Sashi Reddi (AppLabs), Amit Gupta (InMobi), Pallav Nadhani (FusionCharts) and Roopa Nath among others.

Zapr: Red Brick Lane Marketing Solutions, which runs Bengaluru-based media-tech start-up Zapr, raised an undisclosed amount of funding led by e-commerce giant Flipkart in January last year. Online music site Saavan and Micromax were among the investors. Zapr primarily measures mobile and TV viewing habits of consumers.

While Micromax had also invested in five other companies including online price comparison site Scandid during the past two years, data shows that it had raised a significant amount from investors as well. According to data available at Crunchbase, the firm had raised at least Rs 600 crore from four major investors – Squioa Capital, TA Associates, Madison India Capital and Sandstone Capital - during the period.

During the same time, Micromax’s revenue has dropped to Rs 9,825 crore in 2015-16 from Rs 10,450 crore in 2014-15. According to analyst firm Counterpoint Research, its share in the smartphones market has also plunged below 8 per cent in December quarter, 2016, from some 18 per cent in mid-2015 and slipped beyond top five brands from number two.