Mig33, a mobile social service boasting 34 million members, starting with its operations in the US shifting to Asia to bring Internet to mobile phones. The VOIP company is experiencing success in monetizing its user base through virtual gifts, avatars, and chat-based social gaming and is in competition with the likes of Tencent, the biggest mobile chat service in China, although Mig33 is aiming more for emerging markets.
Mig33, which raised $13.5 million in funding from Accel Partners, Redpoint Ventures and DCM, currently has 40 million registered users, including 4 million MAUs. Originally, the company made its money selling cheap voice minutes and decided to shift its strategy to acquiring more users, an area Skype is currently dominating.
Steven Goh, founder and CEO of Mig33, observed chatting and messaging to be the dominant activities. Over 1.5 million virtual gifts a month were exchanged in January of 2010, soaring to 3 million gifts by April. The conversion rate of paying users varies from 3-5% in some countries to 12% in others. The ARPU is close to $1 a month and over 15 billion messages are being delivered monthly, a surprising feat.
“There is massive disruption happening in mobile,” Goh said. “We are building out the mobile web.”
Goh has Tencent in sight and is looking to create an experience similar to the popular QQ, which last year generated close to $1.8 billion in revenue in China. Along with messaging and virtual gifts, Mig33 offers avatars, chartrooms and social gaming. In fast-growing teleconomies such as India and Indonesia, social gaming on the phones will become a prevalent form of entertainment and Mig33 hopes to capitalize.
Mig33 will continue to increase its customer base spread across 330 countries along with ARPPU (average revenue per paying user) and should be profitable by the end of this year. “Up until August of last year, we were trying a range of things to grow,” Goh said. “The team realized it wasn’t going to happen in the U.S. market. Now we’re hitting our goals in the international markets. “