From: Business Standard
Lycos Internet Limited, a Hyderabad-based digital marketing company, is looking at raising $100 million (approximately Rs 623 crore) from private equity firms to fuel its future expansion plans, according to two sources privy to the development.
“The company is said to have been planning to develop India-based products to crack the growing digital marketing space in the domestic market. Lycos is already receiving inbound calls from private equity firms and it is expected to complete the fund-raising exercise within the next one year,” they told Business Standard.
Lycos Internet has so far received close to $100 million from New York-based hedge fund Sansar Capital Management LLC, GE Asia-Pacific Capital, and Oak Investment Partners. While the three investors together hold 27% and 40% by the promoter group, 33% is the public holding in the company.
When contacted, Suresh Reddy, chairman and chief executive officer of Lycos Internet, said, “As a policy, we do not comment on market speculations.”
Reddy, however, said that the company was now focusing on the burgeoning digital marketing space in India and was in the process of developing a slew of products around Internet of Things (IoT).
Stating that the digital marketing industry is pegged at $140 billion globally, Reddy said it stood at close to Rs 3,000 crore in India with a year-on-year growth of 40%, primarily driven by IoT.
“IoT will change the whole paradigm. We have an entire strategy in place for IoT and we will be launching a consumer-connecting IoT product with key focus on India, sometime during the current financial year,” he said.
While the information technology division contributes 20% to Lycos Internet’s overall revenues, digital marketing accounts for the remaining. At present, the company garners 25% of its revenues from India.
Lycos reported a profit after tax of Rs 220 crore on revenues of Rs 1,700 crore in the last financial year. It expects a growth of over 30% this year, Reddy said. Lycos Internet Limited’s scrip is currently trading at Rs 29.50 on the BSE, up 0.34%, over the previous close of Rs 29.40 per share.