India's SMS GupShup Raises $12 Million For Twitter-Like Social Network

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SMS GupShup, a Twitter-like service in India that is primarily accessed via SMS, has raised $12 million in funding led by Globespan Capital Partners with existing investors Charles River Ventures and Helion Venture Partners participating in the round.

The latest capital injection brings SMS GupShup’s total funding to $37 million.

Launched in April 2007, SMS GupShup (spawned from Webaroo) serves 26 million users across India. The startup has seen rapid growth in users primarily due to the immense popularity of mobile devices in India. According to the startup, there are 550 million mobile phone users in the country and only 50 million web users. With a 10 to 1 mobile-to-PC ratio and SMS serving as the most popular communications platform, the market is ripe for SMS GupShup to take off. SMS GupShup currently processes over 480 million messages a month and accounts for 5 percent of all texts sent within India. The new funding will be used for expand into other markets such as the Philippines and Indonesia, for product development and to hire new staff in engineering, advertising and marketing.

In fact, the mobile social network has even attracted the attention of leaders in the space, like Facebook. Last year, Facebook partnered with SMS GupShup to powere and deliver its users’ status updates via text messages. And besides partnerships, SMS GupShup also has an advertising strategy. Over 100 advertisers currently run on the network including local insurance provider ICICI Lombard and international brands like Puma, Microsoft and Cadbury.

India is a huge market for social networks, with Facebook, Orkut and even Twitter vying for a share of the growing number of web users who are increasingly flocking to social networks in their day-to-day routines. But clearly, SMS GupShup has tapped into the mobile side of social networks and is seeing success from this in India. It should be interesting to see how SMS GupShup will fare in other countries. It seems that in developing countries where mobile phone usage is much highers than web-usage the service is sure to take off. But the question remains if the service could ever take off in Europe or the U.S., which seems to be Twitter territory.

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