Believe it or not, nearly 90 per cent of mobile users in the world are on a pre-paid mobile plan. But, for many of them, access to Internet data is burdensome because it simply is too costly for them.
India is no different. Here, a common man earning US$0.20 an hour needs to work three hours to buy an hour of Internet. Internet service providers (ISPs) and telcos are in no mood to reduce tariffs, despite the fact that both smartphone penetration and app proliferation are on the rise.
Enter Adstuck Consulting. A startup that wants to find a remedy to this perennial problem by giving users free data in return for using their favourite apps.
Based in the Indian city of Gurgaon, Adstuck is basically a data-back app (similar to cashback apps) that makes sure you get up to 500 MB of free data every month.
“We are a techno-social company striving to make Internet affordable to people in emerging markets. We have partnered with different brands across the world to provide free data. For each app downloaded and used, the user gets free Internet,” says Abhishek Shankar, Co-founder of Adstuck.
The venture was incorporated in January 2012 by Shankar (IIT alumnus) and Kundan Kumar (Delhi College of Engineering).
According to Shankar, Adstuck was started as a technology company and at that time, its flagship product was an augmented reality browser named Alive. The AR technology was a joint venture with Times Group. The app was later acquired by the group in 2014.
After the exit, Adstuck moved on to what Shankar says was the real motive behind his company — to solve the problem of Internet affordability, and hence launched ReverseData.
“I always worked on social issues right from my school days. I was founding member of Teach India Bus in IIT Madras which went and roamed in Tamil Nadu (South India) for improving Internet knowledge,” he says.
“As knowledge and experience prevailed, I could see the economic comfort of people who could access education [as compared with] those who could not. We at Adstuck had seen the growth of the Alive app and its limitations. We realised that for mobile revolution to really happen, Internet must be affordable,” he explains.
ReverseData, as the name indicates, is essentially a reverse-data product that creates a three-way bridge of solving a supply-side issue. In the process, it creates a channel for brands to enter the unstructured territory of the third world markets.
Brands pay Adstuck a service charge. For every 10 MB consumed by one user in an application like Facebook Lite, Adstuck will be paid 13 MB. It then passes 11.5 MB to the users.
The company has partnered with 548 ISPs in 100 countries and 30-35 fixed brands across the world to make this happen. The app comes pre-installed in 29 mobile phone brands.
Indeed, Adstuck is not the only company providing free or affordable Internet to emerging markets. A few months ago, i2e1, an Indian startup providing low-cost/free Internet to consumers and actionable analytics to service providers, bagged US$500,000 in seed funding led by Delhi-based early-stage investment growX ventures.
Then there is Jana, which has a very similar working model. “We give users data on continuous basis if they keep certain apps and use them, whereas Jana is more of a customer acquisition platform and gives data for trying (installing and opening) the apps,” says Shankar.
Adstuck’s armour browser — which comes with reverse data and pre-installed in mobile phones — enables users to control ads, track their browser, and earn from ads they view. Users can either chose to block the ads completely or get paid for clicking them.
Currently, Adstuck has operations in 20 emerging and under-developed markets, including India, the Philippines, Indonesia, Thailand, Brazil and Mexico. As of today, Adstuck has clocked 3.8 million downloads (including around a million on Android), and has 1.75 million monthly active users, according to Shankar.
The firm also claims that close to 18,000 users are added to its platform each day.
It generated US$1 million in revenues for the year 2015-16, claims Shankar.
What are the opportunities?
In India alone, the number of rural Internet subscribers is 109 million. Almost 52 per cent of rural users access Internet for entertainment, 39 per cent for social networking, 37 per cent for communication and only 1 per cent for online shopping. Consumption is nearly 400 MB per user per month, which will go up to 700 MB by 2017.
“Even for the urban subscribers, which is just 209 million currently, only 10 per cent are post-paid and still 70 per cent can’t afford the high cost of Internet. This is where we fit in,” he adds.
Brands also gain from a partnership with Adstuck. “The money spent by Indian brands on user acquisition is INR 200-500 crore (US$30-75 million) a year per brand. At the same time, if they rely on reverse data, the money required to spend to retain and acquire the same number of users with better metrics is just INR 50-60 crore (US$7.5-9 million),” he goes on.
Adstuck has partnered with 30-35 fixed brands who continuously give free data to their users. It also has agreements with other brands that give data less often — usually in alternate months.
Globally, the company has around 900 clients.
The startup currently employs 32 people across its offices in Singapore and Gurgaon. It will soon open resident offices in Silicon Valley and Frankfurt.
In 2013, Adstuck raised US$60,000 from Project Guerilla, which went into building infrastructure and hiring good technical people. The firm is currently in the process of closing US$10 million Series A funding at US$50 million pre-money valuation.
The Internet reach and usage impact the GDP of lots of countries According to Shankar, 10 per cent of increased penetration of Internet leads to 1.36 per cent of increase in GDP. So, governments across the world are taking all possible measures to provide easy Internet access to their people. This presents huge opportunities to companies like Adstuck, which is not just boosting the Internet economy, but also helps brands to reach more people. This is at a time when Facebook attempts to launch Free Basics in emerging markets, which, according to experts, will defeat the very purpose.