Justdial Case Study

How did Justdial Start?

Justdial was founded in the year 1994 with an initial investment of Rs. 50,000. The founder of the company VSS Mani hired a garage and borrowed some furniture as well as rented PCs to start the company along with 5-6 employees. The idea of starting Justdial crossed the mind of VSS Mani in 1989 when he founded Ask Me services in the same year. However, due to the lack of proper market as well as environment, he had to close the company. Although, he closed the company, he did not leave his idea and came with Justdial along with more planning and improvements compared to the last time. So, in a short period of time Justdial achieved quite good popularity and went on to become the most popular local search website in India.

Justdial Growth and Investment

The growing popularity and ever-increasing network of the Justdial made it possible for the company to raise investment from investors. Many large business started to see the benefits of local business indexing and at the same time start investing in the same. This made it quite easier for the Justdial to raise funds from various investors in a series of fundings. In this regard, here’s a list of some of the investors who have invested in Justdial along its journey :

  • Saif Partners
  • Sequoia Capital      
  • Tiger Global
  • EGCS
  • Sap Ventures

In the month of June 2012, Justdial raised a revenue to the tune of $57 Million from Sapphire Ventures and Sequoia Capital which were its major investors. The funds raised were utilized very efficiently for the purpose of promotional activities, advertisement and brand building. Given below are few of the objectives that Justdial achieved by utilizing the investor money.

  • Making stronger the Brand Value of the company
  • Improving the association of the brand With Sme’s.
  • Expanding the scope ofthe business operations to newer products andservices
  • Getting the licence to enhance the Geographical reach of the organization

Justdial Business and Revenue Model

Justdial operates by collecting and processes it to provide information to the users through internet, phone and SMS. The Revenue model of the organization is that of Premium membership or listing of classified ads as well as Analytical reports and selling of date to the buyers

The success story of the company essentially boils down to the model of the business on which it operates. This has helped the company many a times reporting the negative working capital higher revenues which made it sure that the company is practically running itself.

Business Model Explained in Detail

Let’s take a look as to how the company managed to achieve a significant outreach. The important thing is that, the founder of the company learned from his previous experience, and therefore he got an easy to remember and catchy phone number for the users. Due to the fact that Justdial initially started out by reaching to the yellow pages company, it was important for them to have a telephone number which is easy to remember. So, they simply acquired a phone number that has 10 times 8 along with the name Justdial.

Once the company established a brand name, the next target that it was supposed to overcome was to populate the database. For this purpose, the company approached local businesses door to door to make sure they are listed. The company continued the process for the duration until they had a significantly strong database.

Upon establishing a strong database of local businesses with sizeable volume, the next challenge that the company had to face was to bring users to utilize their research and database. Initially, it was very tough for the company to convince and generate audience for its platform since the company was running short of cash and revenue generated from different sources was way too little. Therefore, Justdial convinced their clients as well as their employees to use the services themselves to promote its services and offerings.

Another highly effective and productive tactic that Justdial followed that it didn’t just limit itself to big name brands. Rather, it primarily focussed on tying up with small and local businesses to strengthen its reach and business. This allowed Justdial to reach people searching for local businesses for daily utilities such as carpenters, electricians, painters, mobile shops and among others.

This method of business operation garnered a tremendous word of mouth publicity for the Justdial which ultimately helped it accelerate its business and skyrocket the numbers of users on its platform. Additionally, Justdial extended helping hand towards small and medium scale organizations which made it all the more popular in the market. Justdial came with special provisions offering value-added services, payment solutions, mobile site, customized website as well as mobile app which made it an attractive value addition for the companies having MSME registration.

How the Company Generates Revenue?

The company basically relies on its clients which invests in its listings for their purpose of getting their listings sponsored. The organization also generates revenue from the proportion of sales that takes place through its platform. Following is the model of revenue that Justdial follows:

  • The SMES registers with the Justdial
  • Justdial then simply checks the information and puts it on its platform
  • SMES are offered the facility of sponsored results for free
  • Sponsored results and prime services are promoted on priority basis to customers
  • Customers buys the product or service through sponsored link/client to facilitate trade