Affle sets up $3.3M M2X Fund to invest in mobility startups

India- and Singapore-based digital media firm Affle, in partnership with Mobile Marketing Association (MMA), has launched M2X Fund, a $3.3 million (Rs 20 crore) corpus fund that will be used to invest in brands, publishers, app developers, agencies and startups in the mobile sector.

The entire capital has been put in by Affle and the company is planning to use the amount in a year, post which it will evaluate and decide whether to continue with more tranches of the fund or not. For brands and publishers, it will be a dollar-for-dollar, co-investment model wherein the fund will put 50 per cent of the capital and the party concerned will put an equal amount. On the other hand, in case of startups and entrepreneurs, the fund will put in the whole amount (as per the requirement), and in return acquire equity in the company.

Anuj Khanna Sohum, founder and chairman, Affle Group, said the company would also be providing mentoring and guidance to the startups, in addition to the capital. The fund is focused on emerging mobile markets with special focus on India, Indonesia, Vietnam, Thailand, Malaysia, Philippines and Singapore.

The proposals will be evaluated by an application process which formally begins on October 1, 2013. As part of MMA's involvement, applications from members of the association will be reviewed on a priority basis. In addition, non-members that meet the criteria for funding will automatically be eligible for regional MMA membership.

When asked if there is a set target to invest from the fund, Sohum said the firm is starting out on an experiential basis and will take it on a case to case basis. "While we are not starting out with a number in mind; we would like to exhaust the fund fully in a year." He said if required, it would also look at a co-investment model for startups wherein it can co-invest with a VC firm.

Affle Group's businesses include Affle Rich Media Business, Affle Media Lab and ad2c (a joint venture between Affle and D2C Inc.). It operates across multiple Asian markets and has D2C Inc. (JV between Dentsu and NTT DoCoMo), Microsoft Corporation, Itochu Corporation of Japan, Bennett Coleman Company Ltd (BCCL) and Centurion Private Equity as its investors.

A similar fund that invests in mobile startups is the One97 Mobility Fund, which is run by One97 Communications Pvt Ltd in partnership with SAIF Partners. One97 Mobility Fund has invested in startups like Dexetra, Mobiswipe, and Chhotu.in. On why Affle didn't choose to partner with a VC firm, Sohum said the firm is ready to for that kind of association since it depends on case to case basis—in some investments it may require a VC partner but in most it won't. Last year, Affle entered into a partnership with Yahoo India for mobile advertising in India. This has been renewed for a year more. Sohum said though Asia-Pacific is the strongest market for the firm, it is now seeing good growth from US as well. "But India and emerging markets will always be the focus for us," he said.

(Edited by Joby Puthuparampil Johnson)