Sulekha.com plans IPO next year

Local commerce portal Sulekha.com is preparing to enter the capital market sometime in 2009, the time frame when the company is expecting to clock revenues of $30 million (about Rs 120 crore).

The company which started its operation in 2001, just a year after the infamous dot.com bust, is putting in place a solid business model to entice the small and medium businesses by providing local classified and yellow pages services in any part of India.

Satya Prabhakar, the president and CEO of the company, said the company will soon establish city-specific services across 40 tier-II, III types of cities including Mysore, Coimbatore, Trichy, Chandigarh, Indore, Surat and Vijayawada.

Presently, Sulekha.com offers city-specific services in eight cities in India, apart from 14 cities in the US and one city in Canada.

“This will be financed from the $10 million funding the company had received from Norwest Venture Partners in October 2006. So far the company has gone in for two round of fundings, the first one being $4 million it raised in 2001 from Indigo Monsoon Group.

The online local Internet advertising market in India is estimated to be about Rs 450 crore at present.

The local Internet market has seen a spurt during the last couple of years with the emergence of a host of local portals like asklaila.com, Guruji.com, JustDial and tolmolbol.com among others, with primary aim of harnessing the opportunities in the local advertising market.

Realising the importance of local advertising, even global players like Google and Yahoo are planning to launch city-specific local search services.

However, Prabhakar feels that local commerce is not an easy game to play even if a company is financially stronger. “It is very difficult to exercise. You need to create a nation-wide sales infrastructure; you need to reach the people who use your service,” he remarks.

Sulekha, which drives its revenues primarily from businesses, instead of the end consumers, is working out plans to rope in more channel partners who will drive online traffic to the websites.

The company has already tied up with companies like Vodafone, AirTel, Reliance Communications and Sify to drive the traffic as its channel partners. According to Prabhakar, at any given point of time, the company is talking to about 10-15 companies, to select them as channel partners.

The company which recently launched its assured advertising solution for small business, aims to attract about 50,000 businesses to advertise in the portal by the end of the year.

The company is giving advertisers the guarantee to succeed, and if an advertiser feel that his target of getting a certain number of responses has not been met, Sulekha.com is assuring to run the same advertisement till they met the business demand.