Sramana: What is Naveen’s background?
Amit Gupta: Naveen and I went to IIT together. While I started pursuing my career in software, he decided to join McKinsey in India. He then went off to do his MBA and after his MBA, he joined some startups. When he was looking to move back to India, he maintained his passion for the startup culture. He was looking for a strong investor story. He came back to India for a vacation and we got together. He started talking about an idea and I found it so compelling that I decided to join him to create this company.
Sramana: Did you shut down your analytics company?
Amit Gupta: I did not shut it down, I just moved out. I had a co-founder there as well. That company continued on for another 4 years. It was a difficult business model to execute. It became a boutique outfit.
Sramana: When you and Naveen decided to found InMobi, what was the concept?
Amit Gupta: Our business was to tackle mobile search. Our first business model was around SMS as that was a major driver of consumption. We designed a feature that would let you send us a short code query and we would return the results. It shared some characteristics with Groupon. In Bombay, we had deals from 3,000 merchants. We had 70 people who would approach the merchants and get them to run an ad on mobile. It was a unique business model.
Our business model was to have the user send a keyword. We would then send that user 3 to 4 deals based on that keyword. We were definitely ahead of time. We had to train the people who were selling credit cards and personal loans to sell advertising.
Sramana: Your business model was based on advertising?
Amit Gupta: Our business model was an advertising model.
Sramana: When you and Naveen got together to start the company how did you capitalize it? Did you raise money or did you bootstrap?
Amit Gupta: We had another co-founder as well, Abhay Singhal. He was a longtime friend from our IIT days. We were all very excited about the India story as well as how prolific mobile use was. The three of us got together and got money from Mumbai Angels. We received our money in January of 2007.
Sramana: How many angels were involved in this deal?
Amit Gupta: We were essentially their first major investment and they were still figuring it out. We had close to 15 angels. There were people who put in as high as 70 lakh rupees. Others invested a low single digit number. That was a fairly unique experience for us.
Sramana: What was the composition of these angels?
Amit Gupta: We raised $500,000 dollars. Most of our investors were from Bombay. We had one investment banker in the deal and some people who ran software companies. Most of the investors were people who had already earned their money and were trying to help entrepreneurship grow. We were very lucky to have them because when we first started the business, their connections helped us out significantly.