Moneycontrol
May 09, 2017 07:41 PM IST | Source: Moneycontrol.com

Why Bangalore startup SpotPlay rejected a buyout offer from Ola Cabs

According to sources, Ola made an offer to acquire in-car entertainment hardware company SpotPlay, which was rejected by the young company

It takes a lot of courage to follow your dreams and build a global product. But Bangalore-based remote entertainment startup SpotPlay wouldn’t have it any other way.

The one-and-a-half-year-old startup has thwarted acquisition efforts by country’s biggest cab aggregator – Ola.

“Ola wanted to acquihire and merge SpotPlay with their Ola Play services. But if we accepted that we would have become employees of Ola and our brand would have been diluted,” Co-founder of SpotPlay Santosh Kumar told Moneycontrol, reasoning the rejection of Ola’s offer.

Kumar did not elaborate on the offer received from Ola, but a source in the cab aggregator’s mergers and acquisitions team revealed to Moneycontrol that the company had offered 500,000 to 1 million equity shares to the founding team, along with a possible cash infusion of Rs 40-50 lakh. However, SpotPlay which was incubated at IAMAI-sponsored Mobile10X Apps Hub rejected the offer.

The acquisition talks took place during November and December of 2016, the source said.

Industry sources in Bangalore aware of Ola’s offer to SpotPlay said that the company wanted to hire the talent and not the startup itself. “They are always on the lookout for talent. This offer was made when Ola was on course to launch its Ola Play feature,” the source said. An official e-mail sent to Ola did not solicit any response.

Founded by Kumar and Sai Krishna in 2016, SpotPlay provides WiFi hotspot solutions to commuters in buses and cabs for streaming movies, songs and short films.

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The company instead has opted to partner with Ola’s arch rival Uber to launch in-car entertainment services. The pilot project with Uber is expected to start in next two months.

An email to Uber did not elicit any response.

How SpotPlay became an attractive target

But why are two big cab aggregators looking at SpotPlay as a partner? The key lies in its technology.

SpotPlay’s low hardware and deployment cost of just about Rs 4,000, with over 80 MBPS speed, allows at least 12 people to log in at the same time on the device’s.

The company’s remote wi-fi system is browser and OS agnostic. It means that one can be on any OS – Apple, Android, or Windows – and will still be able to access the content on its WiFi network.

The hardware, size of a small jewellery box, is packed with a router and a server that brings down the cost and space need further.

Another big challenge for the team was to bring down costs of installation. “Our earlier model was to install servers separately in the vehicles, using the device only as a router. That would burn at least Rs 40,000 in installation alone,” says Kumar.

The startup later used an off-the-shelf device, built its own patented software and OS, and planted it on the device. “We cut all the fringe offerings. We did some research and found that users want just four simple things – Speed, video and sound quality, quick buffering, and low cost. We focussed on just these,” Krishna said.

SpotPlay founders are now looking at partnering with more transport aggregators and ed-tech companies taking the product to smaller towns where internet connectivity is a problem. It is also planning to licence its proprietary software to other developers and raise a million dollar angel round.

“Eventually, SpotPlay will be an open platform for developers to launch their content,” said Kumar, summarising his vision for the startup.

durba.ghosh@nw18@.com
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