Right Pivot at the Right Time: Secret to Amagi's Success The media SaaS Unicorn helps companies create, distribute and monetize streamed content
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Media Saas unicorn, Amagi, stands for what the word Amagi means, that is freedom. "Freedom is a core value for the company. In fact, we have set up our other beliefs and values around this whole theme of freedom, which is a fundamental right," Baskar Subramanian, CEO and co-founder, Amagi told Entrepreneur India.
Amagi is a cloud-based media Saas technology company that recently raised $95 million, in a funding round led by Accel. This investment brings Amagis's valuation to more than 1 billion dollars, making it a unicorn. However, for Subramanian and his co-founders Srividhya Srinivasan and Srinivasan KA, nothing much has changed since entering the unicorn club. "Except that there are more LinkedIn requests," he quips.
Subramanian believes that customer validations are much more important than company valuation. "For a company that has been growing and growing quite well, I'm really happy with 100 per cent growth that has been happening from a customer standpoint. Valuation is driven by market and needs of the market are very different. For us, the focus is on a billion-dollar revenue company, not a billion-dollar valuation. This is just a pit stop in the middle of all of this. So we don't see it as a major milestone," he said.
The Inception and Pivot
Amagi was founded in 2009 to offer geo-targeted TV ads for India's broadcasters. In 2015, it started building a cloud-based ad platform and today, Amagi's technology helps media companies create, distribute and monetize streamed content. "We wanted to be in the media business as we thought that media business was exciting. We started with the whole assumption that we would actually build something out of India, more for emotional reasons. We wanted to build a targeted advertising infrastructure, but one thing that we saw was that India or even the world was not ready for IP-driven targeted ads. At the time, very few companies or even very few consumers were consuming content through IP networks," he said.
This was almost 12 years ago and that is when the founders decided that they would build a geo-targeted advertising infrastructure for television, that is regular broadcast TV. The idea was to do different local advertising in different parts of the country. So, when two people in different cities are watching the same TV channel, both would be watching different sets of ads. That was the core genesis of Amagi.
Starting 2010, when this service was launched and up until 2015, it was a successful business. However, the fundamental challenge was the company was dependent on ad inventory availability from some of the largest TV networks. In India, the top four TV networks controlled almost 80 per cent plus of the ad revenue, the inventory that was needed for Amagi. The founders realized that with this model they were stuck with the large television channels designing the future of the company to a great extent, both in terms of the ability to make it more efficient and in terms of pricing.
So, the founders were clear that this would not be a scalable model. "That's when we had also already started talking about how broadcasting is changing worldwide and we could build software on the cloud. This was the next generation of investments we had already started making," he said.
In 2016, they shut down the whole India business and flipped to a completely international model for the virtualization of all of the media technologies and workflows. "So that is the big change that we did in 2018," he said.
The Rise of B2B
Amagi's customers increased by 59 per cent in 2021 and it is now present in over 40 countries. "The pandemic helped increase consumption. Moving to software as a model, virtualization and running it on the cloud has happened in other industries such as banking, and retail. In the media, it was waiting to happen and the pandemic made it happen. We always talk about disaster recovery in this business because broadcasting is about sustainability. So this was going to happen, but clearly what would have happened maybe in the next four years happened in the last few years," he said.
A few years ago, investors were interested in the B2C space. But today B2B is flourishing. "We never had large B2Bb companies evolving and because of the local market needs, the focus was on B2C. The SaaS model of delivery has changed the whole ecosystem. Now you can be a company globally sitting anywhere across the globe and be able to build things for the whole world," he said.
Talking about being a B2B player in the media business, he said, "Media was always a capital expenditure heavy business. So, the writing on the wall was that SaaS is the business model that you want to go after and actually change that. You always start small, unlike the hardware business. But in hardware, you are buying it once and using it for five years or so. Here you are paid on a monthly basis. So it looks small in the beginning, but it starts to really add up very quickly. And that's reason SaaS models are attractive for both investors and for the business itself," he said.
The startup believes that its USP of being a vertical B2B SaaS player is going to take it to further heights in the coming years. "When I say vertical, it means we have a laser-sharp focus on the media business. And, we offer a combination of deep tech and SaaS, which is a hard problem, to begin with. And, if our systems shut down, the media business goes down. Their monetization will go down. Their revenues will go down if we are caught up. That's why I wouldn't be worried about competition as much as we are worried about the execution and the cost for our customers. That's super important for the company," he said.The business is at about 100 per cent a year for the last three years and the founders continue to see that trend line going forward. The company plans to look at big acquisitions, which can help it accelerate some of the product roadmaps that the team is working on. The startup is also doubling down on its fundamentals such as research and development, quadrupling its sales and marketing teams and the newly infused capital is expected to help build those growth engines for the future.