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Founded in 2003 by Vishwadeep Bajaj, a strong industry veteran, ValueFirst is one of the pioneers in the CPaaS space in India (total addressable market of INR 10,000+ Cr and growing) with consolidated revenues of ~950 Cr and has been one of the top players in this space for more than 20 years. It offers enterprises the ability to connect with their customers globally across multiple communication channels, serving 1000+ enterprises. ValueFirst has remained focused with 80%+ of their business from long standing customers with 3+ years of relationships. They have also built a sizable international business in Saudi, UAE, and Indonesia.

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By joining forces with ValueFirst, Tanla further solidifies its leadership in the Indian CPaaS market and can embark on an impactful global journey with a compelling proposition, a clear purpose, and a complementary product suite. This strategic move reaffirms our commitment to deliver innovative communication services to empower customers and enable companies.

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Acquisition of ValueFirst will further strengthen our market leadership in India. We only believe in purposeful acquisitions and have had an incredible track record with Karix acquisition, which has seen 20x EBITDA growth over the last 5 years. I am confident we will embark on a similar journey with ValueFirst to unlock massive value.

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Uday Reddy, Founder Chairman & CEO, Tanla Platforms Limited.

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Tanla + ValueFirst India + ValueFirst Middle East FZC : bigger, better, and stronger!

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Consolidation of India Market leadership

• Growth in CPaaS revenue making Tanla the market leader in India with 35%+ share. In SMS, which constitutes about 70% of the CPaaS industry, Tanla will further strengthen its revenue market share to ~45%. In addition, this acquisition will help scale other key channels like WhatsApp with a sizable ~15% share.
• Acquisition of a highly complementary customer footprint i.e., ~40% of ValueFirst revenue comes from customers that are net new to Tanla. Tanla has ~50% share in large enterprise segment which will now be strengthened by another 20% share in the mid-market enterprise segment.

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Acceleration of international expansion

• Augmentation of strong momentum in UAE market to hit critical mass of 10%+ market share.
• Penetration of key priority international markets, notably Saudi Arabia and Indonesia; these markets along with UAE have a TAM of INR 20,000 Cr.

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Pioneering industry innovation

• Pioneer Industry ideation through multiple innovations across the digital interactions landscape solving for communication, engagement, protection, and experience. E.g., Solving data privacy, data security as well as preventing spam and scam under protection.
• Harnessing the potential of ValueFirst solutions like Surbo (an NLP-driven chatbot platform for messaging channels) to drive targeted cross-selling initiatives in specific amenable sectors such as e-commerce, BFSI, and Telecom.
  

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Access to Best-in-class talent pool

• Ensure retention of the top talent; acqui-hiring of C-suite level talent with deep industry expertise.

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Questions & Answers

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Can you tell us a bit more about Value first and the acquisition details ?

• Founded by Vishwadeep Bajaj, ValueFirst is one of pioneers in the CPaaS space in India and have been a leading player for more than 20 years
• 80%+ of ValueFirst's business comes from long standing customers with 3+ years of relationships, showcasing their immense orientation towards customer satisfaction
• ValueFirst has built a sizable international business in Saudi, UAE and Indonesia
• In 2021, Twilio acquired ValueFirst India and now Tanla is acquiring ValueFirst India from Twilio
• The acquisition from Twilio is for a purchase price of USD 42 mn subject to upward closing adjustments in the range of USD 2.5-3.5 mn, as agreed in transaction documents, expected to close by July 2023
• Tanla, as the undisputed market leader in India is incredibly proud to acquire this business from the global leader. True testament to our stature in the global arena.

How do you intend on creating value with this acquisition?

• Tanla has been very purposeful with its acquisitions and have a solid track record
• Case in point: Karix was acquired from Blackstone in 2019. In the last 5 years, Karix EBITDA has grown 20 times
• The current stage of ValueFirst closely resembles where Karix was in 2019. Together, we embark on a similar journey to unlock substantial value through three key pillars:
• Revenue acceleration in international markets: Our focus lies on leveraging ValueFirst's presence in key priority markets such as Saudi Arabia, UAE, and Indonesia, which represent a market size of INR ~20,000 crores. With combined strength, we will achieve a critical mass of 10% market share in UAE
• Introducing ValueFirst to Tanla's extensive customer base: We have a unique opportunity to showcase ValueFirst and its solutions to Tanla's existing customer portfolio, which includes 80% of the top 100 enterprises in India
• Cost synergies due to consolidation: By leveraging our combined scale, we can achieve substantial cost synergies in areas such as sourcing costs and indirect expenses
• Like Karix, ValueFirst can operate at higher EBITDA margins, up from its current recurring 5-6% EBITDA margins.

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What are the channels / medium of communication that the combined entity will offer post-merger?

• ValueFirst a tuck-in acquisition for Tanla, fitting seamlessly in the existing business - the combined entity will offer a comprehensive suite of communications solutions spanning ready-to-use APIs to business-user-oriented customer engagement tools delivered as user interfaces
• The deal will help strengthen Tanla's undisputed market leadership in India, with a revenue market share of 35% in CPaaS market, with about 45% in messaging market
• Additionally, post-acquisition Tanla and ValueFirst will together offer strong propositions in alternate channels such as WhatsApp, Voice, Email, RCS, Instagram, Truecaller for Business Messaging and Chatbot.
  

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What is your integration plan?

• wo phase integration plan, Phase 1 are the first 90 days and Phase 2 are next 180 days
• Phase 1: Our initial focus will be on establishing the combined organization and achieving swift synergy wins e.g., optimizing sourcing costs
• Phase 2: Building upon our foundation, we will actively pursue revenue synergies and drive international expansion
• Brand Retention - We will keep the two brands and keep the GTM team separate and do only a light integration of the support functions.
  

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What are the implications of the acquisition for ValueFirst customers? Will sales or support contacts change?

• Under the deal, ValueFirst will operate as an independent subsidiary and will continue to serve its existing customers. There is no change in sales and support - all contact details for sales and support will remain the same to ensure seamless service to all of Tanla's and ValueFirst's valued customers.
  

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Will vendor or partner relationships change?

• There is no change. Each brand will continue to operate as standalone BU's.

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