Seventymm believes that neighbourhood stores are bigger rivals in its business than the new entrants like Anil Ambani group promoted BigFlix.
NEW DELHI: Movie rental services provider Seventymm, which on Wednesday announced a Rs 50-crore venture capital funding to finance its expansion, believes that neighbourhood stores are bigger rivals in its business than the new entrants like Anil Ambani group promoted BigFlix.
The Bangalore-based company today said it has raised Rs 50 crore in funding from venture capital firm NEA-Indo US Ventures and plans to invest this capital in its expansion and marketing activities.
"This funding will be mainly utilised in the future expansion, marketing plans and building our brand," Seventymm CEO and founder Raghav Kher said, adding that "Seventymm plans to be in 40 cities by end of 2009."
Chalking out its five year roadmap, Kher said Seventymm is targeting a revenue of Rs 1,500 crore and plans to reach a landmark of four million members in the next five years.
Regarding competition from other organised sector players such as BigFlix of Anil Ambani group, Kher said the company is currently taking mom and pop stores more seriously than others.
Seventymm, which was launched in the country in 2006, should continue to get an early-mover advantage in this market, Kher said.
On the current low cost offering by compact discs maker Moser Baer, he said, "Moser Baer has helped in the expansion of the business. But one should note that Moser Baer offers DVDs in various price range, people might go for cheap DVDs but as far as costly DVDs are concerned they are more likely to rent it."
The company at present has 70,000 customers and operates across six cities including Bangalore, Chennai, Hyderabad, Mumbai, Delhi and Chandigarh. Seventymm boasts of over 18,000 movie titles in 14 languages, while BigFlix has over 15,000 titles to its credit.
Seventymm had earlier raised Rs 40 crore in funding from VC films including Matrix Partners India, Draper Fisher Jurvetson and ePlanet Ventures, who also participated in this round.
"Seventymm is the attractive investment proposition for us. Besides, the company is the market leader in organised movie rentals," Vani Kola, Managing Director NEA-Indo US Ventures, that has a fund base of 190 million dollar and a portfolio 15 companies, said.
The Rs 750 crore home video market is growing at a compound annual growth rate of 30 per cent. The market is projected to grow at a CAGR in excess of 70 per cent in the next five years.
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