City’s newest billionaires say they initially had no intention of selling their ad-tech venture to a Chinese consortium
Mumbai-born entrepreneurs Divyank (34) and Bhavin Turakhia (36), founders of ad-tech pioneer Media.net are having a good few weeks. While others were unwinding and relaxing last weekend, they were busy closing a whopping $900 million deal in Dubai with a consortium of Chinese investors, propelling them into the much-coveted “three-comma club”: Entrepreneurs with a net worth of $1 billion and more.
Divyank and Bhavin Turakhia have made it to the “three comma club”
Beijing Miteno Communication Technology’s chairman Zhiyong Zhang led the consortium that acquired their ad-tech venture. It will eventually acquire media.net from the consortium in a two-phase deal.
An elated Divyank said, “Media.net has just completed the first phase of its journey and is now entering its second phase of growth. I will continue this exciting journey with my team and am excited about what’s on the horizon. I see incredible opportunities for growth and innovation.”
“The deal has been in the pipeline for the last five months, and was closed last weekend,” Bhavin Turakhia told mid-day. Both the brothers, who were ‘Bombay boys’ until a little while ago, have grown up in Juhu’s Janki Kutir and completed their schooling from Arya Vidya Mandir, Bandra.
“We’re not really Bombay boys anymore; Divyank is working out of San Francisco and Dubai, while I shuttle between San Francisco, Mumbai, and Dubai,” said Bhavin. “We’ve also bought a house in Vancouver recently, and spend some time there too.” Their parents, however, still live in Mumbai.
Currently, almost 97 per cent of Media.net’s total revenue comes from the US, yet, it is China that the duo have set their sights on. “After the US, China is the second largest advertising market in the world right now,” explains Bhavin. “When we started out the transaction process, it wasn’t because we wanted to sell, but rather because we received an inbound inquiry from a US-based company. At that point, we appointed bankers in China and US to see what other options were out there. We received four parties from China, and ended up going with one of them.”
According to Tech Crunch, there seems to be a trend of a couple other acquisitions by Chinese firms that have taken place this year, in spite of a downturn in the US ad-tech activity. In February, mobile ad-tech startup NativeX was taken over by Chinese ad-network Mobvista for $24.5 million. Four months later, Beijing-based Spearhead Integrated Marketing Communication Group paid $148 million for Smaato, another mobile advertising company.
The devil in the details
The deal will play out in two phases, with the Chinese consortium already having paid $436 million last weekend when the deal was closed. “The remaining $474 million will be paid over a period of time,” said Bhavin. He also pointed out that Media.net was not a part of Directi, a group of businesses owned and operated by the brothers, which they started during their teens. “Its ownership structure is completely different,” he said.