ValueFirst Acquires 160by2 and Way2SMS

Free SMS services are quite popular in India. There have been a few services that have sprouted up, offering a much-needed link betwen Internet and the age-old SMS system. 160by2 and Way2SMS are two big names. Right when the market is heating up, Way2SMS has acquired 160by2. Now ValueFirst has acquired both Way2SMS and 160by2 for a reported Rs. 200 crores (US$ 35.613 million).

The Way2SMS acquisition makes ValueFirst the largest digital media company in the country, in terms of revenues, as per Pluggd.in. Just how big is this? 50 million registered users, 40,000 new registrations every day and Rs. 250 crore (US$ 44.512 million) in revenue per year.

This is by far one of the bigger deals in the Indian Internet space. From the hindsight it looks like a grand plan to bring the free SMS services under one roof. Is this the case, and is this part of a grand plan? We might never know, but this is a trend which could be easily applicable to other areas, as well.

Take the taxi services for example. There are services that cater to particular cities. Two years down the line, these services will expand, and are likely to make a name for themselves. That would be the time for someone big with deep pockets to step in and try to consolidate them all under the same umbrella. eCommerce companies are still vulnerable to these kinds of arrangements, as there are way too many operating, with new ones coming up every other day.

Group buying sites, online recharge sites, EduTech startups and many others could follow the same trend.

Startup, compete, scale up, get funded and look for synergies. This is the simple cycle many a startups are following, especially the one’s operating in the Internet space.

Flipkart buying LetsBuy is another similar example. More than the synergy of the combined services, it looks like investors’ synergies are being given more weight. It all sounds boring, now that we have connected the dots.

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