iAccelerator 2009 has announced its first startup for this season — Bangalore-based HashCube which develops online games for social networks such as Facebook and MySpace. I chatted briefly on the ‘phone this morning with co-founders Deepan Chakravarthy (black T-shirt) and Ramprasad Rajendran (white T-shirt) about their first two weeks at the incubator programme. So far, the programme has helped the founders address several basics — registering the company, assigning revenue and expense projections and polishing the business plan. Chakravarthy says 50% of the business plan has changed since then. Here’s more on them:
Deepan and Ram, as they are known, have been friends since school (Sainik School Amravathi in Tamil Nadu) and developing online games has always been a hobby. Before starting HashCube in January 2008, the two also toyed with web security solutions as a business. The hobby won. Games for social networks came after a brief experiment with general online games. “We deployed Sudoku and got some traction but revenues were slow. The general space is very crowded whereas the opportunity in social networks is just emerging,” says Chakravarthy. Their first Facebook game, Sudoku, was launched in March 2008.
At present, 100% of the company’s revenues come from advertising. It claims 150,000 visitors (users) per month, of which 99% are via Facebook. Its bouquet currently consists of three games — DotGame, Loop the Loop and Sudoku — which are available on Facebook, Orkut and recently, MySpace. The founders expect revenues in future to come primarily from the trading of virtual currency for real cash. The company’s current cash burn is low. “The only money we spend now is on servers, about $80 per month,” says Chakravarthy. Incidentally, 99% of its current user base is non-Indian, primarily in the US, Turkey and Latin America.
Has raised Rs 5 lakh in angel funding from iAccelerator, which the founders expect to sustain them for the next six months. They are also in talks to raise additional seed capital from other angels and are currently trying to work out innovative fundraising models. “Since they are a gaming company it is hard to use the regular equity or convertibles-based funding. They are exploring two methods. One is to get in ‘movie-style’ funding wherein the investor is like the producer of a set of games and HashCube is the director, etc. Once the game is launched, the producer and HashCube share the revenue,” says Pranay Gupta, joint CEO at CIIE and one of the experts involved in the selection of HashCube for iAccelerator 2009.
Photo Courtesy: iAccelerator
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