Exclusive: For Foxconn-backed MoMagic, 2016 is about transition and plans to enter Africa

Arun Gupta, Founder and CEO, MoMagic Technologies

Noida-based MoMagic Technologies, a mobile Internet company backed by Foxconn and MediaTek, is in the process of diversifying its business and entering new geographies.

“2016 is like a transition year for us, where the focus is not only on our core business but also our new businesses. Linear growth with comes from our core basin, which the exponential growth we expect from our planned new businesses,” MoMagic’s founder and CEO Arun Gupta said in a chat with DEALSTREETASIA.

As a part of the transition this year, MoMagic is set to launch its own data analytics platform, by investing around Rs 3-5 crore ($450,000-$750,000) in an undisclosed startup.

The deal, under which Gupta is likely to assume the role of co-founder, will be announced in the next few weeks.

“We want to provide analytical solutions to all these application companies who we are working with. So we are investing like a seed investor and joining as a cofounder,” said Gupta.

The deal will mark MoMagic’s third investment since May, the company had recently invested in around $750,000 in mobile entertainment app mChamp along with a $1 million investment in education services firm EduAce.

“We don’t only do financial investment, we do strategic investment, and become a part of their team and we work with them,” Gupta said adding that usually the firm picks up at least in the range of 25 per cent stake.

The Noida-based company,which started out as a value added services player in 2011, works across all widely used mobile platforms, offering marketing solutions to enterprises, startups and ecommerce players as well as better reach and service to customers.

“While distributing other content, we felt that we could also conceive some of our own ideas or we should invest in some ideas which we feel can be nurtured on our own network which we are creating and that is the broad concept on which we are working on,” said Gupta.

Last year, Taiwan’s Foxconn Group, through its subsidiary FIH Mobile Ltd (FIH), invested an undisclosed amount for a 10 per cent stake in MoMagic.

MoMagic is in talks to bring in another strategic investor. Gupta said the talks were at an initial stage.

“We are talking to some people but not because we need their money but because we need their business. If the condition to give us business along with the investment is there then only we will accept it otherwise we will not accept it,” he said.

International Expansion

Already present in five markets in South East Asia including China, Bangladesh, Indonesia and Sri Lanka, MoMagic now has its eyes set on Africa to expand its footprint.

“Another market which we feel will be very attractive to us, is the Africa market. We are trying to seek a tie up with some local partners to explore ways of leveraging our Indian knowledge,” said Gupta. The African foray and local partners are likely to be finalised by September.

MoMagic had previously tried to expand in operations to Indonesia without local partnership, and that foray did not end well. “Africa will be the biggest that we will be focussed on right now. We tried entering into Indonesia, but we could not expand as per our expectations. That is when the realisation became even more strong that we need a local partner.”

In Bangladesh, where is operates through a joint venture with Symphony Mobiles, MoMagic is adopting a different approach, by entering into a new business. It soon plans to launch its e-commerce operations by next month, the details of which Gupta declined to elaborate.

“The potential that was in the Indian market five years ago, the same is in Bangladesh now. So we can get into Bangladesh and get a first movers advantage,” said Gupta.

With the revenue growth expected to slow down to around 30 per cent this year, as compared to 50 per cent a year ago in its core business, the diversification strategy is likely to provide a platform for the future.

Also Read:

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