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Here Are the Mobile Startups That Could Gain From Facebook's Fumble in India

Three startups trying to crack the emerging market nut.

Daniel Berehulak | Getty Images

It was an exhausting week for Facebook in India.

And for other Internet companies, too. Because the source of Facebook’s struggles — its Free Basics mobile service — was the company’s chief tactic for addressing its most perplexing problem in India and other emerging markets: Mobile data costs are so high they are keeping people from using Facebook’s services.

After this week’s ruling, in which India banned Free Basics outright, that problem isn’t going away for Facebook. Nor is it for others like Google, Twitter and Alibaba, which have all experimented with models to reduce mobile data costs in the developing world. Google, in particular, has put some of its mobile plans on hiatus in India while waiting for Facebook’s drama to play out, according to multiple sources.

Both Google and Facebook are trying to tackle the problem from above, with high-tech experiments (planes, trains and balloons, to be precise). But these will take time and may face even higher regulatory hurdles than Free Basics.

In the interim, the Internet giants will keep hacking at routes to ensure that the next hundreds of millions coming online do so with those on their services, and stay there.

Which means that a few of the mobile startups working on this issue might see an indirect boost — or become acquisition targets.

Here are few to watch:

Jana

Born as a research firm in 2009, Jana swiveled into a model that connects advertisers eager to reach mobile consumers with mobile users eager for Internet. Its core product, an Android app called mCent, lets prepaid smartphone owners test out apps. Advertisers sponsor the sessions.

Jana, which has raised about $37 million, claims 30 million users, with the average one gobbling up around 56 megabytes per month. And Jana claims it is second in ad revenue in India after Google, surpassing Facebook in Jana’s first nine months in the market. (The company did not share how much that revenue figure is.) Also, Jana says that it avoids Facebook’s legal problem in India, chiefly because its service is open to any app.

“The recent regulations targeting Facebook is further support that we have taken the correct approach at Jana,” CEO Nathan Eagle wrote in an email. “Our position as the largest provider of free Internet in emerging markets will continue to strengthen because we offer something no one else can — unrestricted free Internet.”

Mavin

The Palo Alto, Calif., startup launched its central product in India last year and has a similar model to Jana — its platform, Gigato, doles out data to access popular apps for free. Rather than advertisers paying, the app developers do. It’s a model designed to build consumer loyalty with apps, which often suffer from consumer churn. Mavin says it has over 270 thousand users and refunds between 75 and 100 gigabytes a day.

Like Jana, Mavin says it is in the regulatory clear in India. Save the Internet, the main advocacy group opposed to Facebook’s effort, approved Mavin’s system. “We designed our service to be net neutral from the get-go,” said co-founder Raina Kumra.

LotusFlare

Formed in 2013, this startup builds tech that sits between the high-flying access strategies of Internet companies and mobile operators in emerging markets. It’s akin to the first two startups, in that it works to reduce the cost of data, but operates differently from those as well as Facebook’s service. LotusFlare is working in the Philippines and Sri Lanka with Google’s Project Loon Internet balloons, but isn’t in India.

In September, the company raised $6 million from marquee investors, including Social Capital and GV (formerly Google Ventures). Re/code wrote then:

LotusFlare also wants to make it clearer to consumers what they are getting for their money. Consumers who might be less than eager to buy a certain number of megabytes might be far more willing to pay for, say, unlimited Facebook and Clash of Clans and the associated data. LotusFlare is working with both app makers and mobile carriers to make that type of pricing a reality.

Sam Gadodia, the startup’s CEO, declined to comment.

This article originally appeared on Recode.net.

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