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August 14, 2009

Will the "New July" deliver?

Forbes India has an article on Rajesh Reddy co-founded mobile technology firm July Systems' latest business model - to partner with media firms and reach content directly to consumers directly, thereby cutting out (July's former customers) the mobile operators.
Keeping the mobile industry as the only constant, he started looking for other customers for July’s solutions. The search led him to American media companies, many of which wanted to harness the mobile phone to reach more customers. “They were treated like chipmunks by mobile operators and made to sell wallpapers, games and ringtones. They did so grudgingly. Because their business was running direct-to-consumer channels, not selling wallpapers,” says Reddy.

...Today, Reddy claims July reaches 25 million users through its clients worldwide and generates over 1.7 billion page views (up from 350 million in 2008). Reddy also claims July Systems has, for the first time, started generating cash profits from the current quarter. Though he refuses to reveal his current revenues, he says July will be “in double-digit million dollar recurring revenues” from 2010 from its existing customers alone.

On record, his new investors say July Systems should be considered an 18-month-old company, and therefore its exit horizon is three to five years away. But in reality, there will be pressure to prove to the world that they can create a successful exit like an IPO at the end of that horizon. “My goal is to complete a karmic cycle of sorts,” says Reddy. “A lot of people have made bets on me. If I can build a successful business and ensure everybody gets good returns, the cycle will complete and validate me psychologically.”

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in