MulazamatTV Acquired by a foreign firm for more than Rs.2M – well done guys!

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Chalk one up for startups (against the MNC bunch) – MulazamatTV is announcing that their little startup that they launched just some months ago was just acquired by a foreign firm. This team has had a good month, where this acquisition comes just after their other venture, DevNext was acquired by Nuvica a little while ago.
I dont have the exact figure but I hear that the exit valuation was well above Rs.2 million. This is a pretty good valuation for a few months of hard work, and a particularly good exit I assume for two guys out of FAST with a dream.

This example certainly does show that ultimately good ideas win – I’m sure if you compare the Mulazamat guys with all of their friends and peers from FAST who drove over each other to join MNCs, the startup route is beginning to look pretty good.

And think about this for a second – now they have SEED money to work on even bolder and better ideas next without giving away any part of their next company to investors. Hmm… maybe this should be some sort of best-practice model for serial entrepreneurs.

Congratulations guys – I’m very happy for your success.

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38 Comments

  • interesting.. i wonder which firm acquired them..

  • congratulations !!!

  • Congratulation…:)

  • That’s a great news. I hope it’ll inspire other good minds in our country to go for entrepreneurship and do their own startups.

  • Thats a great news. I hope it will encourage other capable people.

    Great going guys…i would love to see another venture from them…

  • Khawaja Bilal Sohaib

    congratz :)
    two thumbs up to you guys …

  • Congratulations,,It will encourage others to try…The opportunity is there for all ..even the underprivileged…
    I agree with Adil Saleem .more ! Ideas beget ideas….
    One question needs answering .”What could Pakistan be noted for” ?
    ian

  • Congrats!

    But being a close friend of Ali Raza, I know the potential of their idea and work they have done so far. I don’t think 2-3 millions rupees is the amount Mulazamat.com is really worth of. It deserved much more than that. But considering the pace these guys were working with, this deal seems reasonable.

    As now, after selling Mulazamat and getting acquired by Nuvica, they have enough resources to start working on their other ideas. And I’m very hopeful about it.

    Good luck guys!

  • Congrats! I agree with Munir. Ali is a talented guy and I am expecting much more such ideas from him.

  • this was a bad move,
    mulazamat is a new venture and the owners should have controled it for atleast another year which would have increased its value even more and then sold it, they could have got more then 10 million like that, who ever bought it has hit the jackpot and got a gift.

    even if they want to sell it, he sould have just sold a stake in it and kept some of the company.

    the good news however is that this shows forign firms are interested in pakistans IT market.

  • Great new Congrats! Ali

  • great work shaikhoo and TT.

  • would anyone like to share who acquired mulazamat? is it rozee or some other company?

  • @Obaid – :)

    @Younas , Tayyab , Arsalam – Thanks

    @Sharjeel – Yes, you are right. We need to motivate other young grads, there is a lot of potential in Pakistan. We just need to guide them.

    @Adil – Thanks, more good news are coming up soon :). I hope people will like the next idea we already working on.

    @Khawaja – Thanks

    @ian – Thanks! Don’t worry, Pakistan will soon be noted for many good startups. More and more ideas are pouring in, we are motivating others to start their own ventures. Sometime soon, you will see pakistani startups recognized on International Forum. How can we forget about iScrybe Guys, these guys are already rocking…..

  • @Munir – Hey Buddy! Nice to see you here, I remember all those nights we spent at Sea View discussing many things 😛 and you already know what we are coming up with :) Thanks!

    @Qasim – Thanks & Thanks

    @Suhaib – You pointed the same thing as mentioned by Mohtashim on ITTazee and I think this thing require a separate post that I will write on my blog today. Do check the response there. As far as the good news is considered, as said earlier, there is a great potential in Pakistan and foreign firms are continuously looking to acquire startups working on good ideas.

    @Sumair – Thanks

    @Fida – Nice to see many classmates showing up here :)

    @Younas – You are one of the many persons I heard asking “Is it Rozee?” :)

  • My honest opinion on the story. Apologies for anyone who may get offended …

    MulazammatTV acquired…hmmm…

    When you go to the site it shows the message:

    “This site is currently unavailable.

    If you are the owner of this site, please contact us at 1-480-505-8855 at your earliest convenience.”

    From http://sites.godaddy.com/sites.html.

    So Mr. Ali, I see that whoever has acquired Mulazammat for 2M has decided to shut it down? Apparently unable to pay for hosting fee? Excuse my comments, but we all love GreenWhite and we would want it to promote the startups that deserve to be promoted and not the wannabes. Also Green&White has an international following and when someone reads a story such as this, and try to dig a little deeper only to find out that this particular service is down for good, i guess it does affect the credibility of the post as well as the product.

    By the way, if you think spreading acquisition news helps you in your reputation; let me tell you that it would help a lot more if you could have a following like Scrybe and then raise some funding/get acquired. That’s when you sound credible and you get the respect that you are looking for. But I guess that requires sheer persistent hardwork as in the case of Scrybe or for that matter, Green&White which is not so evident on Mulazammat.

    Some other thoughts:
    a. does Mulazammat have a following? Alexa traffic rank for last three months: 3,124,987= one visitor per day!

    b. how long does it take to create something like mulazamat & how long does it take to market it?

    Development costs from a local firm: Rs. 500,000.

    Hire a team of two editors @ Rs. 50,000/month. Costs for a year: Rs 1, 200,000.

    Rent a small office @ Rs 20,000. Costs for a year: Rs 240,000.

    Other costs per month Rs 50,000, for a year: 600,000 (includes travelling/billing etc.).

    Marketing budget @ 50,000/month, for a year: Rs 600,000

    Total costs: Rs 3, 140, 000.

    Saving from acquiring Mulazammat Rs, 1,140,000.

    Worth it? Don’t think so. Think of two dedicated editors working for a year @ 50k! Think of 50,000/month marketing budget?

    This acquisition, if it actually happened, was a VERY bad business decision (unless there is some underground popularity of mulazammat that I don’t know about).

  • @Ammar – Here are my honest answers to your honest opinion, One thing I should clear, there is no need to apologize, we need such kind of open discussion and I am thankful that you take out some time to decide that this deal is bad as per your calculations.

    1. When you go to the site it shows the message: “This site is currently unavailable.”

    Yes, we have to take the hosting down as the new owners will launch it over other servers. If you were following the Blog, it was mentioned there that the website will go down and Mulazamat domain will redirect the visitors to the blog.

    2. So Mr. Ali, I see that whoever has acquired Mulazamat for 2M has decided to shut it down? Apparently unable to pay for hosting fee?

    Yes, because they will launch it under a new name as a new service for foreign clients. Mulazamat is a local name, a local identity.

    3. Excuse my comments, but we all love GreenWhite and we would want it to promote the startups that deserve to be promoted and not the wannabes . . . . . .

    So, Mulazamat don’t deserve to be promoted? I think Osama can better comment on this.

    4. Green&White has an international following and when someone reads a story such as this, and try to dig a little deeper only to find out that this particular service is down for good, i guess it does affect the credibility of the post as well as the product……

    Where were you when Mulazamat was in operations for 4 months? As far as spreading the news is considered, If we did something good, then its our right to spread out the news and motivate others.

    Now some personal thoughts, criticism started on the very first day when Osama posted about MulazamatTV back in September. I believe everyone know about the potential of Mulazamat at that time. One thing I should mention, we are not Scrybe, we are not Rozee . . . . . so stop comparing us to them. We have our own identity and we feel proud of what we are doing. If you think Mulazamat acquisition was a bad thing, that’s your problem . . . . just keep an eye on our progress then you guys will get all the answers you wanted to know.

    Based on your calculations total cost is of Rs 3, 140, 000 / year, so that makes Rs 104666 for four months (This is the total period when idea was thought, implemented and promoted). Even though you don’t know the actual amount of acquisition. So, if Rs 104666 is our total cost of operating in 4 months, then I think you are clever enough to estimate the profit we gained.

    You were not happy with DevNext news, you are not happy with the Mulazamat news . . . . . . . . So, I think you are still wondering “How a single-room startup is doing all these stuff”, do check out my blog today, I have some more interesting news for you (I hope that will make you happy).

    Picture abhi baki hai meray doost :)

  • Thanks Ali :) I am being cynical here.

    Regarding the calculations, Rs. 3.1 M, is actually Rs 261,666.7/month of expense per month. Regardless I wasn’t saying that. What I was saying was that if the investor would go ahead with his own development, that would be much more value for money. So the figures I gave were based on my assumed “business plan” (Khudee, anyone?:)) …

    I hire a local team and develop a full fledge portal for Rs 500,000. More advanced than what your portal was.

    Then I hire two brilliant editors at Rs 50k per month which is by any standard a good salary.

    I start putting in some money into branding and marketing and create a brand out of the product.

    At the end of the year, I’ll have a following; a proper product that can be ‘rebranded’ for other markets or even monetized locally (but that’s not our topic right now :)).

    So what to put it rather bluntly (and may be rudely – which is why I apologize) – I DOUBT this deal ever happened. Numbers just don’t match up. The lighter way of saying the same thing is “I think this was a BAD business decision” :)

    Coming back to your reply. Someone purchased Mulazammat and is going to ‘relaunch’ in a different market under a different name…hmmm.. in that case, he can do the same thing in MUCH lesser price with a proper company (there are numerous good firms out there) who would provide support and do a really good job and won’t be one-person company. So even that sounds a bit shaddy. Heck, the buyer could hire his own team:

    1 Team lead: Rs 50000
    3 Developers: Rs 35000
    1 Designer: Rs 45000

    Infrastructure: Rs 630,000

    Total for six months: Rs 830,000

    In six months, a team of five could potentially deliver a KICK ASS product (assuming they are ‘reasonably competent professionals’ which they should be if you are paying as much as mentioned above.

    If I can do this calculations, any business man can. So I doubt this deal was ever done.

    Looking forward to the rest of the picture dost … :)

  • “Total for six months: Rs 830,000

    In six months, a team of five could potentially deliver a KICK ASS product (assuming they are ‘reasonably competent professionals’ which they should be if you are paying as much as mentioned above.”

    And they are getting all already made in Rs. 2-3M. Not at all a bad deal for them, in my opinion.

    Also, you’re missing an important factor here i.e. a huge video content they are getting which will surely help them to start business quickly.

  • Ammar

    Your math is accurate but you are ignoring four elements.

    a) The first is time to market – the advantage of a product which is ready, tested and available.

    b) The second is that some times to get a great resource, the only option is to buy him out.

    c) Third, the gora’s are more comfortable with buying than building. It’s us Desi’s who prefer to build versus buy.

    d) Fourth, Ali doesn’t need to prove anything to you. If you are not willing to accept him at face value, there is not much sense in a conversation.

  • Munir,

    I was questioning the ‘buyer’ of the service and not the seller – seller is obviously happy.

    Jawwad,

    You are absolutely right. But if you look at the old site of Mulazammat there was NO worthwhile implementation. There was no market-value as such except probably a little hype on greenwhite. I don’t see how the buyer’s time-to-market could’ve been reduced by paying for such a service. That is why I am doubting the actual deal.

    You are right that it’s us desi who try to build rather than buy; I disagree a little. It depends on the business plan really. In this case, I am doubting the worth of Mulazammat – the idea was probably good but there was little or no implementation. A few videos cannot be worth 2 million.

    Regarding great resource, that would be acceptable; in case the company that acquired DevNext also acquired Mulazammat … hmmmm… :)

    Of course, Ali doesn’t need to prove anything to me. However, the news was posted on greenwhite and as a regular and loyal reader of greenwhite I think I can question anything that gets posted. I know Osama accepted the news on the face value – but the readers don’t have to accept the news if they see obvious problems. They can question and dissect a deal inside out; that’s the whole point of having a community, right?:)

  • Munir,

    Just missed one thing … “huge video content” – there were “a few” videos with not-so-good sound quality. The idea was nice but execution – not quite sure .. sorry :) Videos werent 1 lac each certainly.

  • So Ammar if I’m reading you correctly, you’re saying that a little hype on green & white goes a long way to make startup sellers happy? Cool.

    We dont take things on complete face value – If Warid announces selling a stake to Singtel I wont be calling up singapore but I will try to find out how credible the sources are.

    Remember, we broke the news of the acquisition before Ali and others confirmed it on their blog…. we’re not in the business of breaking false news.

  • “I was questioning the ‘buyer’ of the service and not the seller – seller is obviously happy.”

    Read my reply again. It was about buyer.

    “Just missed one thing … “huge video content” – there were “a few” videos with not-so-good sound quality. The idea was nice but execution – not quite sure .. sorry :) Videos werent 1 lac each certainly.”

    “But if you look at the old site of Mulazammat there was NO worthwhile implementation. There was no market-value as such except probably a little hype on greenwhite.”

    That’s what you’re missing. There is a lot more which was not publicly released. The version which was publicly available was just a preview of how things will work. I’ve already hinted that buyer is getting a huge video content with a portal, which is ready and tested as Jawwad mentioned.

  • Ammar

    You are right. The community is about discussion but sometimes the discussions goes around in circles :)

  • Okay since everyone seems to disagree with me then I must be wrong :)

    Also based on Osama’s comments, I believe that Osama got the news from some independent source so I admit that I am wrong here :)

    Munir, since I was only questioning things at the facevalue and I don’t know what’s going on behind the scenes so I guess I could be wrong about the ‘feature set’ too. And yeah you are right, you were talking about buyer and not the seller – my mistake :)

    In short, Ali congratulations to you and wish you more success in future. And I also hope we see similar success stories in future.

  • @Ammar – Ah, Calculations again …. It is nice to know that you can do this calculations, any business man can but I am afraid I am not so good at it :(, I hope I will learn this from experience.

    1. Regarding the calculations, Rs. 3.1 M, is actually Rs 261,666.7/month of expense per month?

    What I have written? 104666 for four months and as far as I think 261666.7 * 4 = 1104666

    2. Heck, the buyer could hire his own team:
    1 Team lead: Rs 50000
    3 Developers: Rs 35000
    1 Designer: Rs 45000
    Infrastructure: Rs 630,000
    Total for six months: Rs 830,000

    I think you forgot to multiply the salary for 6 months, if not please refer all those employees to work for me, I badly need them under Nuvica :)

    So, I think you have to do the calculations again, add the content cost (whatever you think that the buyer will give for bad-sound-quality videos) and post again, I will surely complete the picture . . .

  • Osama,

    you are right, when you report a startup you not only make the owners happy but you also send them a lot of traffic (as green and white becomes more popular, the amount of traffic will increase too – you never know we have something like green&white-traffic-spike someday).

    My questions were based on the assumption that you took the news at the face value because you want to promote the startups. So I thought I should question the deal, if nothing else, it could simulate other like minded cynics (apparently I am the only one here :)).

  • @Ali

    Regarding (1), you are right. I realized that after I had posted the comment but didn’t correct myself :)

    Regarding (2), you are right again. Six months would cost 1.4 M. Though I HIGHLY doubt, it would take six months. With the team mentioned above, you are going to have around 210 programming man-hours per month with you; and Mulazammat would be at max a 1500 hr job including design and testing so it wouldn’t take more than three months.

    Regarding content, in the do-it-yourself plan :) buyer would produce the videos himself or once the platform is made would reduce development team size and instead hire content producers :)

    So my hypothesis is that 2M is too much because:

    a. Mulazammat is discontinued. According to you, it will be launched for a different market under a differnt name. If that market is not Pakistan, then content is practically useless.

    b. Development costs are really low

    c. Content production cost isn’t too much either. I personally know producers from NCA who would take around Rs 50,000 per similar video production which would include shooting, post production editin and other stuff… but then again I dont exactly know Mulazammat business idea or I dont really understand it :)

    So purely looking at numbers, I think the deal was too good for the seller :) for buyer it was not so good.

    But again, congratulations, you can even get a CL-9 now :)

  • Ok ok everyone back off from Ammar :)

    Actually Ammar you’ve raised some good points. I’d love to think that all my sources are excellent and that I have a formal media fact-checking department but I dont.

    As such, I’ve been wrong about my stories as well. In fact if anyone knows more juicy details about this deal send them my way… maybe they could help clarify. Maybe a super-secret screenshot of the portal they didnt publically release would help.

    Here is what I do honestly think:

    1- I dont buy the “We have lots of content but just didnt release it” bit. If I had a lot of content that’d be the first thing I’d want to show people in the market to build momentum.

    2- I do, however, not think Ali and the team would want to risk announcing these things on their blog – staking their future reputation – if it weren’t true, or would’ve denied it on their blog if my sources were false.

    3- I think that this is still great for both parties. 4000% ROI for two guys in a garage who had put in 4 months of work into it. A bargain (even from these calculations) for the buyer who got a ready-to-go platform that has been market tested to show that these is demand.

    Cheers!

    Oh and Ammar, yes this is what community is – YOU guys fact-check me, so keep it up.

  • Sorry 400% or so… 40x returns.. ha

  • Osama,

    Regarding 3, I would agree. If there is a ready-to-go platform and good quality content; and both are done in just four months, then it’s indeed a great deal for both the parties. By the way, who’s the buyer?

    Regarding finding employees, Ali, you just need to post some job ads, offer good salaries, reasonable working environment, reasonably exciting work, reasonable growth and you will find good employees … best of luck :)

  • so do we know who bought them out? and where the heck is this idea now?

  • it was bought by nuvica and is currently under further development

  • Under further development by? local Nuvica team?

  • This previous comment wasnt by Ali Raza.

    I was led to believe that Bayt may have had some interest in mulazamat

  • Interesting.. i hope it comes back or someone else builds a platform similar to it.. :)

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