We focused on creating value, not valuation: Bhavin Turakhia

Interview with Founder & CEO, Directi Group

Earlier this week, Mumbai-born Turakhia brothers, Bhavin and Divyank, became the poster boys of the start-up ecosystem when they sold off their adtech company, Media.net, to a consortium of Chinese investors for a whopping $900 million. Their entrepreneurial journey started in 1998 with Rs 25,000 borrowed from their chartered accountant father. Over the last 18 years, they spawned a diversified $300 million web technology-based business - all bootstrapped without any external debt or investment. Bhavin Turakhia, founder and chief executive officer, Directi Group, tells Sudipto Dey that the group now plans to ramp up its existing businesses, as Media.net, managed by his brother Divyank, builds a business grounds-up in China. Edited excerpts:
 

What does the deal mean for employees?
 

 

We are ramping up our headcount from 1,200 to 2,200 in the current calendar year. Around 50 per cent of the additional headcount will come to Media.net that will now expand to China. This will give employees new opportunities to grow substantially in a new market. China is the second-biggest adtech market in the world, after the US.  This deal will also benefit some key employees in the group who have stock options.  

Also Read: Why Telcos Are Crying Foul Over Ringo
 

Is this being financed from funds from the deal transaction?
 

This expansion plan was in place even before we did the current transaction. We had around $250 million of funds at our disposal. (Directi had sold four of its businesses for $160 million in January 2014). The corpus has now grown to around $600-700 million. We received the first tranche of the deal amount ($426 million). 

Also Read: World Economic Forum Names Bhavin Turakhia 'Young Global Leader 2011'
 

So, any plans to use the funds to enter new businesses?
 

Our hands are full. Divyank will focus on growing Media.net in new markets, especially China. Over 95 per cent of Media.net’s revenues come from the North American markets. China will become a new revenue source for us. I am handling four brands in the group – Flock (smart enterprise communication app), Zeta (a mobile app monitoring compensation and benefits), Ringo (an international and domestic calling app) and Radix (a leading registry for top-level domain extensions). Our focus will be to grow these existing businesses.

Also Read: Poster Boys Of Online Advertising
 

Any plans to enter the Indian adtech space?
 

India is too small a market. Our strategy has always been to leverage Indian talent to tap the global market. Though some of our products - Zeta, Flock and Ringo, for instance -  have a presence in India. 

Also Read: China Firm Buys Yahoo! Ad Partner Media.Net For $900 Mn
 

What has been your experience in bootstrapping a start-up business, when most prefer to grow through equity infusion?
 

We never had problems in bootstrapping our businesses. The focus has been on creating value, not valuation. Each business was bootstrapped from existing funds. There was no temptation to go out and raise funds. We allow each of the brands to grow and plough back the profits.