Message Delivered

How Beerud Sheth made Gupshup a profitable unicorn after one pivot, two near-death experiences and 15 years of slogging

- RAJIV SINGH

In 2010, Beerud Sheth found the going exhilarating. “Oh my God! Look at the growth,” exclaimed the second-time entrepreneur towards the end of the year. The pace of the growth at SMS Gupshup—a Twitter-like community site that enabled users to join groups of their interests and get updates through SMS (short message service) on mobile— was astounding: 70 million users in over three years since its launch in April 2007. “It was the largest social network in India by a huge margin,” claims Sheth, who managed to raise $10 million in 2008. The timing of the funding—barely a few days before a global financial meltdown—was perfect. Getting on board big backers such as Helion Venture Partners and Charles River Ventures at a challenging was the initial thrill.

Then, in 2010, SMS Gupshup raised another $10 million. The bigger thrill at that time for Sheth and his co-founder Rakesh Mathur was that their baby had massively outpaced Facebook, which then reportedly had over 8 million users in India. Even when combined with Twitter, it was no match for SMS Gupshup. “When a person would send a message, SMS Gupshup would send it to all their followers—even if they were 10,000,” says Sheth, explaining how the network worked. The service was free and the company, he lets on, would pay the telecom operator for sending all messages. The focus, Sheth underlines, was on getting users. “A big community could be monetized later,” Sheth believed. The hard part, he was convinced, was building a large pool of consumers. “SMS Gupshup was turning into an extremely successful product,” he adds. A year later, the company managed to raise another $10 million.