A proper acquisition is a rarity in India’s startup scene. Which is why it’s interesting when a US based company buys a startup from Kerala, the southern Indian state known more for its scenic beauty than its startup ecosystem.
Here’s the story: US based tech firm FullContact has acquired Kochi based Profoundis, a company which was founded four years ago by a team of engineers. “The deal is in the single digit millions,” said an industry source who requested anonymity.
The startup did not disclose how much money changed hands in this deal.
Though the deal size isn’t large, for Kerala’s fledgeling startup ecosystem, the acquisition is big. The last time a story like this made the headlines was when Twitter acquired Bengaluru based Zipdial in January 2015. A year before that, Facebook acqui-hired LittleEyeLabs.
“This will give confidence to other entrepreneurs and investors that the ecosystem can create valuable businesses as any other ecosystem in India,” Kris Gopalakrishnan, the co-founder of Infosys who has been an adviser to the company told FactorDaily. The company, had raised money from a clutch of high net worth individuals and all of them will cash out now.
Profoundis had launched three products earlier which didn’t work. Their fourth product, a solution which collects contact information about people across the internet is what caught the eye of the FullContact team, Jofin Joseph, the co-founder of Profoundis told FactorDaily.
The Kochi based startup has been providing services to FullContact for over a year now. Talks about a potential acquisition have been on since February this year. “Last week we closed the deal,” said Joseph, a former Infosys engineer. The company has three other founders– Arjun R Pillai, Anoop Thomas Mathew and Nithin Sam Oommen– all engineers from Kerala.
The company will now become a subsidiary of FullContact and add over 1000 employees to its roster in the next two years, said Joseph. “We’ll be a subsidiary, creating data for FullContact and selling their product. Our algorithms and systems will be used at FullContact,” he added. Currently it employs over 70 people.
“This generates a lot of positive vibe for the ecosystem,” Robin Alex Panicker, one of the investors in Profoundis told FactorDaily.
Earlier this month, FullContact raised $25 mn from Foundry Group, Baird Capital, Shea Ventures and Blue Ventures. The Denver, Colorado based company which has raised close to $44 mn in total funding, has over 40 billion contact records under management. It has also acquired 4 companies so far, the most recent being Conspire.