Media tech unicorn Amagi aims to IPO in India: Co-founder Baskar Subramanian

Media-tech software-as-a-service (SaaS) startup Amagi aims to IPO in India whenever it plans to make its public market debut, says cofounder Baskar Subramanian.

"India's become a very robust economy. I'm sure all of us have seen the IPOs and hopefully, this downturn comes back eventually. But we think there's a lot more understanding of these business models that's starting to happen," Subramanian said in an episode of CNN-News18's Bits to Billions.

"The sophistication of the retail investors as well as the availability of FIIs (Foreign institutional investors) from across the globe in India right now is as good as NASDAQ to an extent. So we see that the robustness of the market exists here to go for a public listing in India itself," he said.

This remark comes at a time when several Indian startups, especially those in the SaaS industry, are flipping to the United States with an ambition to eventually list in the United States. Flipping refers to domestic startups transferring their intellectual properties (IP) and other assets to an overseas entity and relegating its local entity into a subsidiary.

For most of the startups, this is a matter of convenience, since the United States tends to be their primary market and most of their investors are also based in the same region, making it easier for future fundraises. However, this also means a huge loss in IP and overall wealth creation for investors in India as well as loss of tax to the government.

Over the past year, India has also seen a wave of domestic public market debuts from tech unicorns including Zomato, Nykaa, Delhivery, and Paytm among others.

While the United States is the biggest market for Amagi, accounting for about 74 percent of its revenues and the company is also headquartered in New York, Subramanian says the domicile of the company is an India-based entity and every other overseas entity is a subsidiary of the Indian company as of today.

Read: India is 18 months away from fundamental change in online video advertising: Amagi co-founder

Amagi, which enables content owners to launch, distribute and monetise live linear channels on free-ad-supported television and video services platforms through a suite of solutions, entered the startup unicorn club with a $95 million fundraise led by Accel in March 2022. Unicorns are companies with a valuation of $1 billion or more.

'Profitability is an addictive phenomenon'

The Bengaluru-based startup, which was founded by Subramanian, Srinivasan KA and Srividhya Srinivasan in 2008, is among the few unicorns which is profitable while clocking a significant revenue growth in the past year, driven by a 59% surge in new customers in 2021.

Amagi saw its revenue from operations grow more than two-fold to Rs 219.3 crore during FY21 from Rs 96.1 crore in FY20. It posted a net profit of Rs 20.7 crore for FY21.

"Profitability is an addictive phenomenon. Once you become profitable, you want to be profitable because that gives a lot of freedom from an entrepreneur standpoint, you don't need to be worried about other people's money and how you use them" Subramanian said.

He also mentioned that innovation actually happens when one is frugal in a lot of cases. "I think that helped us a lot. Maybe, we are one of the few startups that have raised the least amount of money we've raised in terms of the overall money that we've raised and what we spent from a company standpoint. Even today, all the money that we have raised is in the bank, we're not spending the money, because the company is profitable and we don't have burn in the company" Subramanian said.

The company plans to use the funds raised largely for the potential acquisitions it intends to do in the future.

"We were starting to disrupt the market about five, six years back in this business, I'm sure there's yet another 24 year old sitting somewhere else figuring out the next best thing to happen. So our paranoia is somebody's going to disrupt us" Subramanian said.

"How do we kind of get to acquire and get to learn from new entrepreneurs coming on board and be able to be part of this whole equation, and then build it together because we are trying to build something sustainably for a 25-30 year period. So for that reason, we are actually raising money largely to acquire talent, new thought processes, innovations, and new gaps that we cannot accomplish" he added.