Friday, June 6, 2008

Info Edge to invest in Internet start-ups - June 6, 2008

Info Edge India, the provider of online recruitment, matrimonial and real estate classifieds that operates popular job site naukri.com, is looking to invest in domestic internet companies, an official told DNA Money on Thursday.

The company hopes to grow at 45-50% per annum despite slowdown in information technology and financial services, the two big hirers.

Info Edge chief operating officer Hitesh Oberoi said that the company is expected to close two deals in the next three months. "We will invest $1.5-5 million for minority stakes in these companies," he said.

The two deals nearing completion are in addition to one with education portal studyplaces.com. Info Edge invested in this portal along with venture capital (VC) firms KPCB and Sherpalo Ventures.

In the next one year, Info Edge would close three-four deals as the sole investor, Oberoi said. "We are not venture capitalists and we invest out of our own reserves, which currently stand at $35 million. We will invest in areas we understand and which would add value to the ventures," he added.

Last month, Info Edge launched an education portal shiksha.com that competes with studyplaces.com. KPCB and Sherpalo Ventures are invested in Info Edge too. Does this mean a merger of studyplaces.com and shiksha.com is on the cards for increased market share?

"There is no such plan. We are only a minority shareholder in studyplaces.com with no management control. As things stand, both the companies are stated to run independently," Oberoi said.

He said Info Edge's flagship property naukri.com is unlikely to face any pressures due to the slowdown in IT and financial services sectors, two if its largest industry verticals.

"Till two years ago, we were under-penetrated in non-IT sectors. Today, non-IT accounts for 48% of naukri.com's revenues and there are five to seven sectors within it, such as retail, insurance, telecom, and infrastructure that are showing healthy demand. We also believe that IT would recover by the second half of this fiscal," the chairman added. Naukri.com is planning to expand to areas such as senior and entry level placements.

Info Edge also operates matrimony site jeevansaathi.com, property site 99acres.com and a lesser known professional networking site bridge.com. While the company is not aggressively marketing bridge.com, the other two are expected to break even this fiscal.

Oberoi felt that education, matrimony, and property markets are bigger than the recruitment market and in three to five years, these sites could overtake naukri.com's revenues. Shiksha.com may remain in the investment mode for a while longer. Over the next three years, Info Edge will invest $5-10 million into this venture

Its matrimony site Jeevansaathi is venturing out of the virtual world with the launch of 25-30 company-owned stores over the next six months. Each store will see an investment of Rs 6-8 lakh and is expected to break even in 9-12 months.

With three of its five online properties becoming profitable this fiscal, Info Edge's operating margins are seen improving.

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