Marketing for megabytes.
Jana is a Boston-based mobile Internet company that just raised $57 million in new venture capital funding led by Verizon Ventures VZ . However the 85-employee company does not have a single user in the U.S. Nor does it ever plan to.
Instead, Jana is focused exclusively on providing free connectivity to emerging markets, via a novel strategy through which smartphone owners “purchase” data by doing such things like agreeing to send a message via Tencent’s WeChat service. Or perhaps by watching a video from a multinational brand like Unilever.
To date, the company’s mCent product has over 30 million users in 93 developing countries and is integrated into 311 mobile carriers.
Jana is the brainchild of Nathan Eagle, who says the genesis came while on sabbatical from his faculty role at the MIT Media Lab.
“I took a Fulbright scholarship at the University of Nairobi, and built an SMS system that let rural Kenyan nursers text in blood type information to the centralized blood banks,” Eagle explains. “It went well the first week, but about half the nurses dropped out the second week and, by the end of the month, no nurses were using it. What I hadn’t realized was that the price of data represented a decent percentage of a rural nurse’s wage in Kenya. Basically, they couldn’t afford to send the text messages.”
After Eagle did some research on internal pricing for Kenyan mobile operations (thanks to some back-end access via MIT), he wrote around 20 lines of Python code that essentially repaid the nurses for their texts. Suddenly, the nurses reengaged. Moreover, the mobile operators realized that they could generate more revenue per user by charging the local health ministries than by charging the nurses.
Today Jana is much more than 20 lines of code, but the basic idea is the same: Find big organizations that will effectively subsidize mobile Internet access; marketing for megabytes.
“Facebook FB is talking about lasers from space and Google GOOG is talking about giant blimps, which is great, but the real way to impact the lives of billions of people in terms of mobile—particularly in rural areas—is to reduce their price per megabyte,” Eagle says. “For example, more than half of the smartphones in Brazil don’t have a data plan because it’s just too expensive … And even though the price of megabytes is projected to halve by 2020, typical consumption is expected to go up 6x.”
Jana does not currently spend any money on marketing, instead relying on word of mouth. But Eagle does realize a need to build out his company’s skeletal sales team, as well as open sales offices in large markets like Brazil and India (plus China, where Jana has signed three carrier agreements with plans to launch next quarter). That’s where a lot of the new capital will be directed.
For more on digital strategies in emerging markets, watch the following video:
It also is worth noting that once mCent users “buy” data, they also have access to the full web. This stands in contrast to Facebook’s stripped-down Free Basics program, which last week was effectively shut down in India as a violation of that country’s net neutrality policies.
Eagle, who says that many mCent users also access Free Basics (“we serve different purposes”), believes that there was a silver lining to the controversy: “I think something good that came of it is that the media and public at large are more cognizant of connectivity in these markets.”
As part of the Verizon-led Series C financing, AOL CEO Tim Armstrong will join Jana’s board of advisors. Returning investors include Spark Capital and Publicis Group.