(Corrects gender of speaker in fifteenth paragraph)
Indian parents’ anxiety to find their children suitable spouses is a constant in a country that spends $37 billion annually on weddings.
Matrimony.com Pvt., whose website has brokered more than 2 million marriages, is banking on that desire to woo investors for a potential share sale.
The company, whose private equity funders include Bessemer Venture Partners (PEF2883) and Canaan Partners, is expanding a wedding empire that includes websites to help parents arrange marriage by caste, complexion (dark to fair) and family values (orthodox to liberal). It is now preparing to ramp up growth by selling products for the less affluent -- such as lists of 10 potential suitors for 1,000 rupees ($18).
“Marriages within the community is still very much the norm and I don’t see that changing,” said Chief Executive Officer and founder Murugavel Janakiraman, who met his own wife on the site. “This is a market that will keep growing for a very long time so the demand is strong.”
Parents often arrange marriages and weddings are among the largest consumer expenditures in India, where researcher Global Demographics estimates 72 percent of the population is below 40 years old. Indian matrimonial websites, whose users range from anxious mothers in Chennai to immigrant engineers in Silicon Valley, have attracted global investor interest in the past.
Matrimony.com got its first round of funding in 2006 with Canaan Partners and Yahoo! Inc. (YHOO) investing $8.65 million. Private equity firms Mayfield Fund and Bessemer invested $11.75 million in 2008, with Yahoo pulling out in 2011.
A potential listing for Matrimony.com would be attractive to investors because it’s a growing business generating “significant” profits, said Alok Mittal, managing director at Canaan. He declined to comment on the timing and details of an offering.
The company’s main website, Bharatmatrimony.com, has had 20 million customers to date and about 10 percent have found their partners through the site, according to Janakiraman.
Marriage is big business in India. The country accounted for 30 percent of global gold jewelery demand in the third quarter last year, according to the World Gold Council. Much is bought for weddings where brides are often covered with ornaments.
Netscribes in 2011 estimated that India’s wedding industry would be worth 2 trillion rupees ($37 billion) in 2012 after expanding 25 percent in each of the previous two years.
Business of Marriage
That boom has helped boost sales at companies from luxury sellers to food makers. Jubilant Foodworks Ltd (JUBI)., which runs the Domino’s Pizza Inc. (DPZ:US) franchise in India, began supplying pizzas to weddings in North India three years ago, and demand is growing about 30 percent a year, said Harneet Singh Rajpal, vice president for marketing.
“In India, people spend their lives just collecting money to spend on their weddings,” said Neha Gupta, senior research analyst at Gartner Inc. in New Delhi.
To get a bigger slice of that business, Janakiraman’s company last year started a directory that lists wedding service-providers, such as printers of invitation cards, caterers and florists.
Bharatmatrimony.com operates much like Match.com, allowing users to post their profiles. The key differences: marriage is the stated goal, many posts are managed by parents, and customers get directed to one of 350 regional websites focused on community or caste.
It’s only parents who visit Atul Narania, who runs an in- person matchmaking service for the company at an outlet in Chennai, Southern India, that’s aimed at low-income customers who choose not to use the Internet or can’t afford it. “The bride or groom don’t ever come,” he said.
Indians traditionally relied on family members or friends to set up matches. As communities have scattered or traveled abroad, many are turning to websites. Even younger Indians posting their own profiles on matrimonial sites typically search within home regions and castes.
“No matter who you are, you can get married here happily,” promises a poster at the Chennai outlet with pictures of maids, construction workers, carpenters and hairdressers. A steel cabinet to the rear held nearly a dozen binders with about 7,000 profiles of single men and women.
Customers can come in, chat with sales people and buy a set of 10 profiles for 1,000 rupees there. Earlier this month, a mother, who appeared to be in her 50s, pored over the folders looking for a match for her 35-year-old electrician son.
“We have been searching for a match at temples and brokers for the past three years,” she said. “One of these salespeople saw our ad in the newspaper and called us here, and we hope we can find a girl.”
Janakiraman, 42, started the bharatmatrimony website in 2000 as he held down a day job as a software consultant for Lucent Technologies in Edison, New Jersey.
The entrepreneur sports a mustache and wore a pink and white T-Shirt on a recent Friday at his sea-facing office in Chennai. His father made a living as a worker loading sacks of grain and cargo at the city’s harbor.
Janakiraman’s company is in discussions with investment banks to raise $125 million through an initial public offering, the Times of India reported Jan. 23, citing people familiar with the discussions. The listing could value the company at between $350 million to $450 million, it said.
“We are a PE funded company, so at the right time we have to go public,” Janakiraman said. “I can’t say when, but eventually it is going to happen.” His company turned profitable based on earnings before interest, taxes depreciation and amortization, or Ebitda, three years ago, he said.
Info Edge India Ltd. (INFOE), which runs jobs portal naukri.com and in 2006 became the first Internet company in the country to list on the Bombay Stock Exchange, trades at about 37 times expected earnings. Info Edge has gained 4.3 percent this year.
Companies have raised $1.2 billion in India through initial public offerings in the past year, according to data compiled by Bloomberg. Bharti Infratel (BHIN) Ltd., the largest of those listings, has lost 12 percent this year.
Janakiraman faces competition from websites including Facebook Inc (FB). that are growing in popularity with young Indians looking to make social connections, said Gupta of Gartner.
“Though it’s one of the largest online channels that caters to this market, it’s mostly the parents who are going to this site rather than the young generation,” she said of the matrimonial website.
Hard to Gauge
Rival matrimonial website Shaadi.com, also privately held, is another competitor. Anupam Mittal, chief executive officer of People Interactive Pvt. which runs Shaadi.com, did not respond to a call to his office and an e-mail.
There are no companies listed in the online matchmaking sector in India so it may not be easy to for local investors to value one, said Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd. (GLBS) in New Delhi.
India 30-member benchmark S&P BSE Sensex has fallen 3.7 percent this year.
Even with the competition, Janakiraman says he’s still signing up about 200,000 new customers per month.
The idea is to sell marriage as broadly as possible to “anybody looking for matchmaking,” Janakiraman said. “Whether its bottom of the pyramid, top of the pyramid, online, offline, the idea is that, we need to help them find a suitable life partner.”
To contact the reporter on this story: Adi Narayan in Mumbai at email@example.com
To contact the editor responsible for this story: Anjali Cordeiro at firstname.lastname@example.org