Sulekha plans IPO in 2009
I’ve been procastinating to write this post for a long time now. However, when I read about Sulekha’s IPO plans for 2009, I knew there just wouldnt be a better time.
As per a BS story, Sulekha plans to launch an IPO in 2009 targetting revenues of $ 30 million. The company is also planning to expand services to 40 new Tier II & Tier III cities in India. They currently serve 8 Indian cities, 14 cities in the US and one in Canada.
Wow !! From its fluke, humble beginnings to an impending IPO. Sulekha has definitely come a long way in a short span of time. As a regular Sulekha user, I’ve personally witnessed the transitions it has gone through over the past few years and wanted to chime in.
Sulekha was founded in 2001, during the post-bubble era. It originated as a place for people to post short stories and showcase their creative writing skills. With time, the popularity, usage and traffic to the site grew. The site soon developed a strong, loyal user base who spent a large amount of their online time on Sulekha, generating what is, one of the biggest user generated online Indian content repositories.
Soon, Sulekha launched classifieds, which was a huge hit with the US based NRI population. There was a pressing need for such a service, with a nation wide reach, amongst the burgeoning Indian population in the US. At its peak, Sulekha classifieds served 32 + cities across US and Canada. The company transitioned from a pure content focussed site into a city portal covering city specific classifieds, events and even ticket bookings for events.
Over the years, Sulekha has evolved extensively and has continously tried to enter into new business areas and capitalize upon the huge user base it has built over the years. Along the way, there were several hits and several misses:
Hits:
- Several new initiatives like blogs, movies, travel have become quite popular
- Published books with Penguin, using the user generated content on the site
- Online petitions for issues affecting the wider Indian population in the US
- Mobile initiatives launched by the company have become popular in India
Misses:
- Sections like matrimony, real estate, petitions, e-cards etc. were scrapped
- In an effort to serve the most profitable cities, the number of US cities was dropped from 32 + to about 14
- Sulekha launched classifieds via an offline, print channel in Indian grocery stores. Based on my research, this model doesnt seem to have clicked
Challenges for Sulekha going forward:
Historically, Sulekha has tried to experiment, evolve and enter new markets. Often times, it has been at the cost of alienating the very same loyal user base that helped build the site. At one time, ads were so prevalent and obtrusive on the site that Sulekha could have given Rediff a run for its money. Usability was put on the backburner and it ended up hurting the site’s reputation.
After capturing the Indian market in the US, they expanded to cover other international cities, which have a considerable Indian population. They also expanded into the Indian market, hoping to replicate their succcess in the US, in the Indian market. However, in a way, the site became a victim of its own rabid growth. It appeared as if they’d taken a bite bigger than what they could chew. The international expansion plan was quickly dropped. The number of US-Canandian cities was dropped from 32+ to 14. In the context of the Indian market, the Sulekha brand has a big obstacle - as Rajiv@WATBlog points out, Sulekha is still perceived as a “NRI portal”. This doesnt bode well at all if they’re hoping for success in the Indian market.
In the midst of all this experimentation, Sulekha has morphed itself into this hodgepodge of semi-social networking wannabe, local classifieds, yellow pages, UGC based portal hoping to “Connect Indians” in the true sense. In a way, it seems as if they’ve lost their identity and are confused about what actually is their biggest asset. If you were to ask me, they should spin off the various sections into different entities - user generated content like short stories, blogs etc into one, local classifieds into another, yellow pages in yet another. And finally, get real and get rid of the shitty ’social network’ concept - you’re not Facebook or LinkedIn for that matter.
Recent traffic details indicate a not-so-rosy picture. As per Compete, Y-o-Y traffic to Sulekha dipped by about 25%.
Lets see how the IPO plans pan out for Sulekha - after all, a lot will be guided by how well the market is doing as well.
March 25th, 2008 at 8:19 am
Sulekha is well known for creating mirror blogs in their network and profiting from others work. Example: http://jupiterjuice.blogspot.com/2006/05/leave-me-alone.html
See the comments in this post.
Also they sell some blog posts of their bloggers to news papers with out the consent of authors.
March 31st, 2008 at 11:51 am
with such things, they’re shooting themselves in their foot - not to mention tarnishing their reputation as well.