A startup’s journey from a garage in Chennai to acquisition in Atlanta

Once upon a time, not too long ago, two young lads decided to start a company in a garage. Equipped with the right weapons in their arsenal, they were ready. Their company soon grew too big for the garage. The growth continued, the team grew and profits soared. Multiple swanky offices later and with multimillion-dollar revenues, it was finally acquired by a major global corporation. It sounds like a Silicon Valley fairy tale. But neither is this a fairy tale nor did it happen in Silicon Valley. This is the growth story of a small Indian company called Unicel Technologies.

Unicel was founded in 2003 by Vinay Agrrawal and Sanjay Aggarwal. This two-member team started off Unicel in a garage outside Agrrawal’s apartment in Chennai and later moved its base to a garage in Bangalore. Unicel currently owns offices in Bangalore, Hyderabad, Chennai, Mumbai, and Delhi. Its present employee headcount is over 100 and the firm has a turnover of over INR 1 billion (US$18.5 million). It was recently acquired by mGage, a global mobile engagement company. All this, within the span of 12 years.

The idea behind Unicel was to build a telecom value-added service (VAS) company that helps brands communicate via SMS, MMS, voice, email, and something called unstructured supplementary service data (USSD). Banks that send SMS alerts to customers or online retailers that fire shipment or delivery messages to consumers – many use Unicel to make that happen. Other players in this enterprise space include Sms-GupShup, SMSJunction, and mGage.

“We were lucky enough to start our project in 2003 with Hutch – the predecessor of Vodafone India, in Chennai. However, post the first project, things didn’t turn out easy for us,” says Vinay Agrrawal, founder and MD of Unicel. “We realized the difficulty to transact with operators and also compete with established players like Nokia, Onmobile, and Comviva. We therefore quickly turned into an enterprise solution company, while retaining our competency with SS7-based solutions. This helped us reach our current position.”

Surviving regulations

Agrrawal recalls that back in 2003, there weren’t many accelerators, incubators, or co-working spaces in India. “When we started, we knew nothing about company laws, taxation, service tax, central excise and imports. We learnt about them the hard way and by doing it all by ourselves. We made mistakes, but we did learn a lot. It helped us build character.”

Dealing with regulations and taxes was always a major hurdle for Unicel. In 2010, when the Babri Masjid verdict was due, the Indian government banned the sending of bulk SMS and MMS. The seven-day ban hampered the startup’s business immensely. This prompted the team to diversify and rely less on bulk messaging.

Despite the challenges, both these founders worked as a well-oiled machine and delivered results. “I consider Sanjay as the Rahul Dravid [former Indian cricketer] of Unicel. I can depend on him with anything and everything. In Unicel, I was responsible for building solutions and engaging people, while Sanjay managed everything else,” he tells Tech in Asia.

Reminiscence, rumination, and optimism

“When I started Unicel, I ensured that the company’s vision aligned with my own.” Agrrawal reminisces. “The idea behind Unicel was not to make money. For me, it was about personal satisfaction, as I got to build something new and different. The other purpose was to positively touch the lives of as many people as possible, and make a difference in their lives. This is the reason behind our contented employees and satisfied resellers. When I look back today, I can proudly say that we have successfully been able to walk the path that we had set for ourselves.”

He admitted that being acquired by a global player was never the part of his plan for the company; he always enjoyed running Unicel. However, during the past few years, intense competition and falling margins led to a number of issues within the company. Firstly, in order to be viable, the focus was more inclined towards managing the present. The company invested less on innovation and research. Products were being rolled out to generate immediate revenues. Secondly, Unicel’s culture and work environment helped retain employees, but the company focused less on fresh hiring. Lastly, the once strong relationship with the resellers started turning sour due to monthly squabbling over prices.

All these factors made Agrrawal’s journey with Unicel less enjoyable.

However, with mGage, he sees an exciting opportunity and is optimistic about the future. “Our employees will get to do new things, gain global perspective, and deliver solutions globally. Our customers will also be immensely benefited as we start building on each other’s expertise,” he states.