Arré acquires OTT firm Apalya


Details

Rebecca Hawkes

| 23 December 2015




Nascent digital media firm Arré has bought Hyderabad-based over-the-top (OTT) video delivery company Apalya Technologies, in a cash deal.



Arré, which has been floated by Indian entrepreneur Ronnie Screwvala and former media executives B Saikumar and Ajay Chacko, is reported to have paid between INR200 million (just under US$3.02 million) and INR250 million ($3.77 million) for the OTT platform developer.

All existing investors in Apalya – including IDG ventures, Cisco, and Kalaari Capital – have now exited the company. Following the acquisition, Apalya’s co-founders Vamshi Reddy and Shiva Bayyapunedi will get 2% equity in UDigital, the parent company of Arré.

Reddy, who heads the company as CEO, and Bayyapunedi, who is the chief technology officer, will also join the founding team of Arré with immediate effect.

The buy-out of Apalya allows Arré to deliver its digital video streaming service, planned for launch in February 2016. Aimed at the 16-30 age group, the company is initially launching with seven programmes: India’s first digital reality show based on the international format Re-Gender, podcasts, and some investigative documentaries.

“With this acquisition, we not only get one of the best over-the-top platforms in business but also inherit long standing relationships with telcos — in India and also some global geographies,” said B Saikumar, MD and co-founder of Arré.

Apalya has already established relationships with ten mobile operators in four countries. It reaches ten million subscribers annually and currently earns INR400 million in revenue with positive EBITDA margins. It is planning to expand into parts of the Middle East, Africa and Southeast Asia in the coming six months.

“The OTT space is throwing up massive opportunities that brings together the twin forces of scale and creativity. We’ve already seen this space take off in the US and in other mature markets and we will partner with many and work closely with some on co-creating the next level of digital content. We are a digital-first and digital-only company and our focus is and will remain creating original content in all forms and these will differentiate us and yet allow us to be complimentary to many of our peers,” said Ronnie Screwvala, co-founder of Arré.

Apalya’s Vamshi Reddy added: “Arré and its founders represents the next wave of digital innovation and disruption in Asia and with all our expertise of the past decade we are happy to join in on this vision and work together to create a true blue digital content and platform company, a strong consumer base and at scale.”