Twitter’s acquisition of India-based mobile marketing startup ZipDial is not only a smart move to boost monetization of its international user base, but it highlights that there are innovative tech companies hiding in plain sight in emerging markets.
ZipDial began in response to the phenomenon of missed calls, which developed into an alert system of their own in India. With many phone owners on pre-pay tariffs and keen to avoid charges for mobile data or SMS/calling, drop-calling a friend when you get home from an evening out, for example, became a way to let them know you arrived safely without incurring costs.
ZipDial smartly tapped into that opportunity to give advertisers a convenient medium to reach consumers on any kind of mobile phone. That same model worked well for advertisers on Twitter and also Facebook, both of which had partnered with the Indian company. (Rumor has it Facebook was also bidding to buy it.)
What is most interesting about ZipDial is that its product is unique, it could only have been thought up in an emerging market. In that way it is not wholly dissimilar to WhatsApp — the red-hot messaging app that was unknown to many in Silicon Valley until Facebook bought it last year, despite having hundreds of millions of active users across the world. (Yes, WhatsApp was founded in the U.S. but CEO Jan Koum is not American and has a different mindset to the ‘Silicon Valley Set’.)
Twitter has paid much less than the $17 billion that Facebook forked out for WhatsApp — our sources suggest ZipDial may have been sold for $40-$50 million — but the deal highlights that emerging markets can’t be wholly dependent on Silicon Valley, even though it is the global home of startups that has birthed huge tech firms.
The increased internationalization of the world — ZipDial co-founder and CEO Valerie Wagoner is a U.S. expat — combined with a rise in developer talent overseas (thanks to increased access to information online) and the growth of VCs investing overseas, means most of the ingredients that drive Silicon Valley can be found all over the world.
When you consider that top programmers and thinkers are in emerging markets, with VC firms like 500 Startups (a ZipDial investor) providing money and knowhow, it stands to reason that this is just the beginning for emerging market innovation.
As for ZipDial and Twitter: the deal could turn out to be a relative bargain for the U.S. company. ZipDial had already begun its expansion to Southeast Asia, and the company has hinted that it has new products and services coming soon.
India is a vast market for social networks — Facebook has over 100 million active users there, for example — but it could be that the ZipDial platform is introduced in other parts of the world, such as Africa and Latin America. Regardless of whether it takes off in any of those places, $50 million is a shrewd investment to grow Twitter’s visibility in India and get an engineering office in the country.