US Premium SMS service specialists SendMe Mobile raised another $12m (bringing the total to $35m) in order to fund their further expansion into the - what they call nascent - Premium SMS space. New boys Triangle Peak Ventures joined return investors True Ventures, Amicus Capital, Spark Capital and Grand Banks Ventures for the round (note to self: VCs need to get more creative in finding names for their firms). SendMe wants to use the cash for 3 purposes, namely a) working capital, b) acquisitions and c) "unforeseen challenges" of the economy. Unforeseen, huh?
Be it as it may be but there are a couple of points remarkable on this (though not that remarkable if you know Russ Klein, their CEO, who is a really bright cookie!):
- Premium SMS is considered nascent in the US (when it really is a fairly old hat in old Europe). Is simplicity saving the day? Should European firms maybe looking to repositioning this beautifully simple monetization tool rather than turning to more complex matters such as micro-billing, etc?
- Raising that amount of money in this day and age is respectable in itself. It does keep you wondering though where they are running with their cap table: on $35m total, their valuation must be somewhere in the region of $50-100m. That is big considering that the likes of Glu trade at 0.2x revenues or so.
- The aforementioned report mentions that reverse auctions ("SoLo") had a "break-out year" for SendMe in 2008. This would arguably fly even higher in a full-blown recession ("darling, I just got ourselves an iPod for $1.34"), so might well have been the angle that made for convincing forecasts.
Big shout to Russ & team: you guys rock!
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