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S’pore-based start-up sold for rumoured S$255m

SINGAPORE — In what is said to be the biggest acquisition deal of a Singapore-based start-up, Japanese e-commerce giant Rakuten has inked an agreement to buy video-streaming site Viki for a rumoured US$200 million (S$255 million) — a deal which a Viki co-founder said proves that one does not have to be in Silicon Valley to “build a world-class team”.

The home page of Singapore-based video-streaming online service Viki.

The home page of Singapore-based video-streaming online service Viki.

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SINGAPORE — In what is said to be the biggest acquisition deal of a Singapore-based start-up, Japanese e-commerce giant Rakuten has inked an agreement to buy video-streaming site Viki for a rumoured US$200 million (S$255 million) — a deal which a Viki co-founder said proves that one does not have to be in Silicon Valley to “build a world-class team”.

News of the acquisition broke yesterday on technology blog All Things D. In an interview with TODAY, Viki Chief Executive Officer Razmig Hovaghimian — who hails from Egypt and has been raising a family here for the past four years — said he has found the technology community here “very helpful and supportive” since he incorporated the company here in 2010.

His free video site, which has about 22.9 million users monthly, operates on an advertising-supported, crowd-sourcing model where subtitles to streamed television shows and movies are added by users in the same collaborative manner as Wikipedia.

This allows, for instance, Korean shows, to break into the American consumer market, overcoming language barriers.

Rakuten Chief Executive Hiroshi Mikitani said in a statement: “Viki is a one-of-a-kind company with an entirely unique approach to video streaming that is truly global and truly engaging.”

Mr Hovaghimian, 38, was tightlipped on the size of the deal, only saying it was confidential. Analysts said the US$200 million figure was about right, based on the number of users and the nature of its offerings.

Viki hires 50 employees, one-third of whom are Singaporeans and permanent residents, Mr Hovaghimian said. Among the company’s leadership team, the head of products and the head of community products are Singaporean while the head of engineering is a PR, he said.

“This (the deal) really proves you don’t have to be in Silicon Valley to build a world-class team. I can, and did, hire a good team here,” he said.

He met many of his engineers and staff at Hackerspace, a physical space in Bussorah Street here where white-hat hackers — who specialise in non-malicious hacking, usually to detect system flaws — meet to network or work on projects.

Mr Hovaghimian was working for American media and entertainment giant NBC Universal when he was posted here in 2009. He later decided to base himself here after his children were born here.

“I also loved the fact that the government was very supportive (of start-ups) and it was close to Asian countries, a strong growth market,”said Mr Hovaghimian, whose wife is also working here. Singapore telco SingTel is among his local investors — the only company to have invested, with the rest being individuals. The start-up also received some government subsidies.

The idea for Viki was conceived as a “class project” when he was studying at Stanford University in the United States, and he worked on it even when he was working at NBC Universal.

The deal could give Rakuten, traditionally an e-commerce provider, a deeper foothold in the digital content market, which it wants to gain ground in.

Mr Hovaghimian said the deal came together after what was initially a discussion for partnership.

“We met like, 10 times, and clicked. We found that our vision aligned … they like the fact that we know mobile very well, and we like the fact that they know social very well. They are strong in community building, and e-commerce, an area we might be looking at in the future,” he said.

The site will primarily be free for users, but the company is considering some “phenomenal” paid content. Viki’s users come mostly from Asia and the US, with the rest split between Latin America and Europe.

Mr Ajay Sunder, Senior Director of Telecoms for the Asia-Pacific for research firm Frost & Sullivan, said the size of their user community justifies the rumoured price tag. “They have a good strategy, primary ad-driven, but also crowd-sourced which explains how they have grown so fast,” he said, adding the company is poised to grow as consumers become used to paying for content.

He also noted that more within the start-up-community are creating products for an audience beyond the Singapore market, which is something investors look for.

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