Just Dial promoter VSS Mani's vision is far more ambitious than the voice search service his company has become synonymous with. Not only does he want to become an ecommerce player, he also wants to build a global 'local search' e-engine and is willing to take the risks attached to such goals
The 8888888888 number may have immediate recall among generations of Indians but the man behind it, VSS Mani, is reluctant to talk about the voice search service that has made the Justdial brand ubiquitous. He doesn’t even want to be photographed talking on a phone. The image—his image—needs to be carefully presented as one for the future. After a year of being the face of a publicly listed tech company, his caution is inevitable. As is the elevator pitch he has mastered. The 48-year-old first-generation entrepreneur doesn’t miss a chance to whip out his phone—yes, he’s okay to be clicked browsing—and use the Just Dial app to pull up the contact details of an obscure business in your hometown.
“Who is your family dentist? Look, with one click I can fix an appointment. Do you need new keys made? Here are your nearest key-makers, displayed on the map we’ve built. Want to watch a movie tonight? Three of your friends have already rated this one ‘five stars’—there, it’s booked! Want to test drive a new car? Done!”
After early failed attempts at raising private capital and getting listed publicly, Venkatachalam Sthanu Subramani Mani has earned this ebullience. Just Dial, a company he set up in a garage in Mumbai in 1996 and which now has investors such as Bollywood bigwig Amitabh Bachchan (who put in Rs 6.27 lakh in January 2011), had failed to get an institutional investor until a decade into operations. Mani has really been shown the big money only last year. Just Dial’s IPO in June 2013 created a splash, raising over Rs 900 crore and closing at a market cap of Rs 4,272 crore which, as of August 21, 2014, trebled to Rs 12,186 crore.
Along with his brother and wife, Mani’s promoter group holds 32.99 percent of the equity, currently valued at Rs 4,020 crore ($663 million).
Just Dial’s path to success has been one of persistence and nimbleness, of harnessing a changing Indian ecosystem to potential. Simply put, Mani kept up with the times. And this has been a period of validation for his strategy.
Just Dial began with voice service, reading local listings to callers, before it started its information service via SMS in 2004. In 2006, spurred by India’s growing broadband penetration, it took the “risky” move of going online. “We were known for accurate content and our competitors didn’t have that. If we had exposed our data on the internet, our competitors could have stolen it and used it as their own,” points out Mani. “The other risk was the cannibalisation of voice traffic.” But users had moved online and so did Just Dial.
The web gave Mani the platform to differentiate his listings from that of his competitors through photos, maps, ratings and reviews. As with TripAdvisor and Zomato, user ratings now play a big part in influencing other users. And Just Dial has 45 million of them, adding a million more each month.
It also emerged that many of Just Dial’s users—as was the case with millions of other Indians—were accessing the internet for the first time through their phones. For Mani, inspiration came from home when he saw his previously tech-shy wife using her smartphone more often. He then set about developing a mobile app which hit the market in 2011. The timing was optimal: Consider that in FY13, mobile searches constituted a sixth of internet searches and were less than voice/SMS searches. In FY14, mobile searches grew by 183 percent to a third of internet searches and far exceeded voice/SMS searches.
Just Dial has flourished because it has tracked the tech trend and gone where users are most comfortable—even if it meant stepping out of its comfort zone. This intrepid journey has created a public, profitable, 9,000-employee star. For VSS Mani, though, it’s still only the beginning.
Focus on Fundamentals
While he speaks English with a hint of an American twang, Mani’s Hindi belies his South Indian heritage. “I’m South Indian but I’ve never lived in South India,” he says. He speaks Tamil with his mother. His Bengali isn’t bad either given that he grew up in Kolkata. He then worked in Delhi for a decade before eventually moving to Mumbai in 1994.
By that time, the idea for starting a search and listings service had already germinated. This was while working with United Database India (UDI), essentially India’s Yellow Pages, in the 1980s. The communications infrastructure in pre-liberalised India was not ready for voice-based search when he founded Askme in 1989. “The telecom infrastructure was not in place to support a telephone-based service,” he says. Mani gave up on the venture in 1992.
After starting another business, a wedding planning consultancy, which wound up shortly thereafter, he put in Rs 50,000 from his savings to begin Just Dial—then a straightforward voice-based directory—in 1996, when the macroeconomic climate had become more conducive to his plans. In a few years, the investors started to take note.
In 2006, after two unsuccessful attempts, Just Dial finally got in private equity investment through SAIF Partners. The swiftness of the deal surprised Mani, who received the term-sheet for a Rs 50 crore investment over breakfast the next day. Then the floodgates opened. US hedge fund Tiger Global put in Rs 77 crore. The two firms had effectively bought the stake of internet entrepreneur Raj Koneru who had invested Rs 6.5 crore in 2000. “We haven’t used a single rupee of the money we raised in 2006-07,” says Mani. “Since then we’ve grown our top-line by around 14x.” In 2012, Just Dial raised a further Rs 327 crore from Sequoia and SAP Ventures before it went public in 2013 and its investors partially cashed out. According to VC Circle, at the time of the IPO, SAIF, Tiger and Sequoia sold stakes worth over Rs 700 crore, at multiples of 10x. Even so, Tiger Global still holds over 13 percent, with SAIF and Sequoia having over 9 percent each.
They have been impressed with the way Just Dial, over the last 17 years, has mirrored India’s telecom evolution by moving from a voice-based service to text messages, to online, to the app. The core business, however, has remained the same: Lead generation—the more you pay, the more potential customers we will send your way.
Mani, however, is optimistic about margins on higher-ticket items like electronics. For instance, Just Dial also allows users to buy mobile phones online, directly from vendors through its Search Plus model. “Through the app, you can buy a Samsung phone, get same-day delivery along with Just Dial’s guarantee and manufacturer warranty, pay by credit card and choose an EMI plan,” says Mani.
A Real Ambition
(This story appears in the 19 September, 2014 issue of Forbes India. To visit our Archives, click here.)