Amazon is one of the most influential economic and cultural forces in the world, as well as one of the most valuable brands. It focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Beyond that, it has permeated our lives deeply, especially in the last couple of years. It is the American multinational technology company, Amazon.com, Inc. Amazon founder Jeff Bezos is, currently, one of the most recognizable names on the planet.
He founded the company on 5th July 1994 from his garage in Bellevue, Washington. It was, initially, an online marketplace for books. Amazon quickly expanded into a multitude of product categories earning the moniker ‘The Everything Store. Initially named Cadabra, Inc. Bezos renamed it to Amazon as he wanted the company to be as ‘exotic and different’. In his initial days, Bezos reportedly told a journalist – “There’s nothing about our model that can’t be copied over time. But you know, McDonald’s got copied. And it’s still built a huge, multibillion-dollar company. A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world.”
As a new start-up Amazon only sold books online because of its worldwide demand, low unit price, and large number of titles available in print. Within the first couple of months, the business grew to sell its books to all 50 states and over 45 countries. In October 1995, the company announced its intention to issue an Initial Public Offering (IPO). Within the next three years, Amazon was sued first by Barnes & Nobles in 1997 for claiming itself as the world’s largest bookstore and then by Walmart in 1998 for allegedly stealing trade secrets by hiring Walmart executives. Eventually, both lawsuits were settled out of court and Amazon implemented stricter internal policies and restrictions.
Initially, Amazon’s growth and profit were nominal leaving stockholders wary of investing or even the company’s survival prospects. When the dot-com bubble burst in 2001, Amazon not only survived the bloodbath but went on to post a modest profit in the fourth quarter of that year. This was a boost of confidence that eased the investors. From that point on, the unconventional business model of Jeff Bezos has not stopped growing till today. In 2020, Amazon generated sales worth USD 386 billion which were 38% higher than its sales in 2019 in the US alone. Amazon’s Marketplace sales represent an increasingly dominant portion of its e-commerce business.
Amazon Acquisitions
Within the time span of the last two decades, the tech behemoth has acquired or invested in at least 128 companies across the world. These companies belong to a wide plethora of industries from healthcare to entertainment, helping diversify their core revenue. It has also provided Amazon with inroads into better understanding their customer’s likes, dislikes, and preferences. The top ten Amazon Acquisitions by value are –
Company Name
Acquired On
Acquired For
Whole Foods Market
Jun 16, 2017
$13.7 billion
Metro-Goldwyn-Mayer
May 26, 2021
$8.5 billion
Zoox
Jun 26, 2020
$1.2 billion
Zappos
Jul 22, 2009
$1.2 billion
Ring
Feb 27, 2018
$1 billion
PillPack
Jun 28, 2018
$753 million
Twitch
Aug 25, 2014
$970 million
Kiva Systems
Mar 19, 2012
$775 million
Souq
Mar 27, 2017
$580 million
Quidsi
Nov 8, 2010
$545 million
Whole Foods
Revolutionizing the domain of grocery shopping, Whole Foods is an American multinational supermarket chain. Amazon acquired Whole Foods in 2017 for $13.7 billion. The acquisition added 400 physical stores to the set of e-commerce stores that Amazon already had. Additionally, the acquisition gave a huge impetus to the tech giant in the domain of grocery shopping, which was further used by Amazon to push people to purchase their Prime membership in return for the wonderful offers given.
MGM Studios
Founded in 1924, MGM Studios, or Metro-Goldwyn-Mayer, is a California-based studio that has produced many popular films, many of which have won academy awards as well. Some of their popular films include the James Bond franchise, the Rocky series, Robocops, Fargo, Silence of the Lambs, etc. In 2021, Amazon acquired MGM Studios for $8.5 billion. The deal was completed in March 2022.
Zoox
Zoox is a startup that develops self-driving technology with the aim of proving a full-stack solution for ride-hailing. In order to provide automatic self-driving capabilities, they use their own software and artificial intelligence, which has become a unique innovation in the arena of self-driving vehicles. They specifically focus on custom vehicle design, which they believe will be able to overcome the problems posed by self-driving vehicles. Amazon acquired the startup in 2020 for $1.2 billion.
Zappos
Zappos was founded by Tony Hsieh in 1999 as an online shoe seller after identifying the difficulties with which customers grappled due to the unavailability of the right size and desirable models. In 2009, Amazon bought Zappos for $1.2 billion.
Ring
Ring is a video doorbell and security camera maker that is worth more than $1 billion. They sell their products in the US, UK, and Europe. After establishing themselves as a reputable company in their area, they headed in the direction of the Internet of Things and in-home delivery spaces. In a deal that was valued at more than $1 billion, Amazon acquired Ring in 2018.
PillPack
It is an American pharmaceutical company that was founded in 2013 by TJ Parker and Elliot Cohen. By integrating novel technology into the midst of the business, the company saw tremendous growth over a short span of time. They were a step ahead of their fellow companies by demarcating their customers’ medications by dose and delivering them to their doorstep. In 2018, Amazon acquired PillPack for $753 million, and the company changed its branding from “PillPack, an Amazon company,” to “PillPack by Amazon Pharmacy.”
Twitch
It is a platform that allows users to stream their games to their followers so that they can watch them play the game. It was launched in 2011, focusing on live video gamers. In 2014, Amazon acquired the company for $970 million. Amazon’s purchase was a very prudent decision, foreseeing the pathbreaking interventions that the gaming industry and metaverse can have on humanity. With a vision to think differently, Jeff Bezos said that they were looking forward to offering better services for the gaming community.
Kiva Systems
It is a Massachusetts-based company that manufactures mobile robotic fulfillment systems. They innovated novel approaches in the distribution chain with the help of database systems and automated guided vehicles, which are also called bots. In 2012, Amazon acquired Kiva Systems for $775 million. Today, Kiva Systems is known as Amazon Robotics. This change came into effect in August 2015.
Souq
Launched in 2005 in Dubai, Souq was the largest e-commerce platform in the UAE. In 2017, Amazon acquired it for nearly $580 million. This acquisition gave Amazon tremendous anchoring in the Arab world through Souq’s 45 million visitors every month. By integrating Souq’s customer base and Amazon’s technical backing, customers can enjoy a wide range of product selections and seamless delivery.
Quidsi
Quidsy is an e-commerce company that was founded by Marc Lore, Vinit Bharara, and Wei Yan in 2005. This US-based firm aimed at revolutionizing the online shopping experience by improving every aspect of it, including 1-2 day delivery, the novel e-commerce experience, and excellent customer service. In 2010, Amazon acquired Quidsi for $545 million.
Other notable Amazon acquisitions since 1998 include IMDb, Alexa Internet, Twitch Interactive, etc. Some of the companies that Amazon has acquired over the years are now defunct.
Very recently, Amazon acquired iRobot for approximately USD 1.7 billion. iRobot is the company that makes Roomba vacuums. With this acquisition, Amazon has increased its footprint in individual households and deepened its penetration in the market.
Reasons for Acquisitions
Over the years, Amazon has grown from strength to strength and now is a global presence with deep market penetration. Its popularity has grown during the pandemic and the name has become synonymous with retail shopping.
There are various reasons why a company like Amazon acquires or invests in different companies.
Economies of Scale
‘Bigger is better is the ideology behind an acquisition for economies of scale. Larger companies enjoy better cost savings and competitive advantages than their smaller counterparts.
Market Share
This is the most common motive for an acquisition. Apart from reducing the competition, it also gives the company an immediate increase in market share and also a boost to its sales.
Acquire New Expertise / Technology
Over time, newer technologies get introduced introducing newer ways to work. Therefore, it becomes necessary for companies to also evolve and embrace the changes. One way to do it is to acquire companies that provide this technology and expertise.
Similar Synergies – Creating Value
Many times, the logic of acquiring a new company makes more sense than the numbers. This is clearly visible in Amazon acquiring Whole foods and trying to bring the power of ecommerce to traditional food retail.
Geographical Diversification
This is a huge value driver in acquisitions. Acquisitions are the much-preferred way to expand geographically as the company can acquire a ready cash-generating entity with a ready business platform. It is also financially beneficial to the higher costs of setting up a new operation from scratch.
Vertical Integration
This type of acquisition creates a new addition to the value chain of a company. It reduces dependency on third party suppliers and vendors.
Conclusion
Over the years, Amazon has successfully integrated various products into its portfolio by acquiring several companies for one or more reasons as mentioned above. Amazon’s sprawling eCommerce empire is a result of far-sightedness, a futuristic approach, and an adaptable business model.
With the world shifting to the online retail platform, Amazon shows no signs of slowing down. It has, in fact, expanded its operations and offers a wide network of services.
FAQs
What is Amazon’s largest acquisition?
The acquisition of Whole Foods Market by Amazon in 2017 is the biggest company take-over by Bezos’s corporation to date, with a whopping tag price of 13.7 billion U.S. dollars.
What companies are related to Amazon?
Among its 12 subsidiaries, Amazon has AbeBooks.com, Audible, CamiXology, Fabric.com, IMDb, PillPack, Shopbop, Souq.com, Twitch, Whole Foods Market, Woot!, and Zappos.
Did Amazon have any mergers?
Amazon has made 98 acquisitions and 95 investments. The company has spent over $ 46.19B on the acquisitions.
Who is Amazon’s biggest competition?
Its biggest retail competitors are Alibaba, eBay, Walmart, JD, Flipkart, and Rakuten.
What is Amazon’s net worth in 2022?
Amazon’s net worth as of November 25, 2022, is $952.94B.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Amagi.
Amagi is a next-generation media technology company. It provides end-to-end cloud-managed live and on-demand video infrastructure to content owners, broadcast and cable TV networks, and OTT platforms. Its core expertise lies in broadcast-grade 24×7 linear channel creation, channel distribution to Free Ad-Supported Streaming TV platforms, live orchestration for sports and news, OTT server-side ad insertion, and analytics for monetization, cost-effective disaster recovery, among others.
Amagi supports 500+ content brands, 800+ playout chains, and over 2000 channel deliveries on its platform in over 40 countries. The company generated approximately 2 billion ad opportunities every month supporting OTT ad-insertion for 1000+ channels. Its clientele includes ABS-CBN, Fox Networks, Fremantle, NBCUniversal, Tastemade, Tegna, USA Today, and Warner Media, among others.
StartupTalky interviewed Mr. Baskar Subramanian (Co-founder & CEO, Amagi) to get insights into the startup story and roadmap of the organization. In this article you’ll discover how Amagi company was conceptualized, its business model, customer acquisition strategies, Amagi competitors, Amagi technologies revenue, Amagi logo, future plans, and more.
Amagi – Company Highlights
Startup Name
Amagi
Founders
Baskar Subramanian (CEO), Srividhya Srinivasan, Srinivasan KA
Amagi is a next-generation media technology company. It provides end-to-end cloud-managed live and on-demand video infrastructure to content owners, broadcast and cable TV networks, and OTT platforms.
Amagi’s core expertise lies in broadcast-grade 24×7 linear channel creation, channel distribution to Free Ad-Supported Streaming TV platforms, live orchestration for sports and news, OTT server-side ad insertion, and analytics for monetization, cost-effective disaster recovery, among others.
Amagi’s clients include top-tier broadcast TV networks, digital-first networks, content owners, Free Ad-Supported Streaming TV (FAST), and OTT platforms in the Americas, EMEA, and APAC regions. The company has grown 100 percent over the last two years and is profitable. Amagi has a presence in New York, Los Angeles, Toronto, London, Paris, and Singapore, broadcast operations in New Delhi, and an innovation center in Bangalore. Amagi has 350+ employees and continues to hire and expand operations across all regions.
Amagi Live
Vision
Amagi’s long-term vision is to transform the media and entertainment industry by virtualizing the whole broadcasting operation. The flexibility of cloud-built solutions for broadcasting outpaces the capabilities of traditional hardware-intensive operating systems. Its goal is to be the global leader in cloud-based SaaS technology for broadcast and connected TV.
The startup is currently amidst a global ‘cord-cutting phase with more and more viewers choosing streaming TV over traditional Pay TV services. And within streaming, Free Ad-Supported Streaming TV or FAST (the streaming version of the free TV network) is becoming immensely popular among viewers keen to revisit the simplicity of linear TV-like experience.
Amagi is playing an instrumental role in the transformation taking place in the streaming industry. In fact, it is at the front and center of it. Amagi had already established early leadership in the domain, enabling content brands to spin up linear channels on the go, distribute them to leading FAST platforms and generate ad revenues for themselves.
300+ content brands have so far chosen to engage Amagi’s services to amplify their distribution across FAST. Its short-term goal is to be able to emerge as the undisputed leader in providing the complete technology stack in streaming distribution, especially in the FAST space.
Amagi’s core belief is that technology has the power to transform an industry, making it more nimble and more competitive, and providing options to both service providers as well as end-users.
Take the Media and Entertainment industry for example. For several years, the industry had not undergone any major transformations until Cloud came into the picture. Cloud-led technology solutions challenged the status quo in the industry, creating radical changes in content consumption patterns (the OTT boom is a prime example). Due to the technology disruption, users have more choices and more flexibility and control over what they want to watch. Content creators, likewise, have the option of scaling their business on the cloud at lower opex compared to traditional broadcasting models.
As the front runners of next-gen media tech solutions for broadcasting, Amagi takes pride in having played an instrumental role in this transformation. Amagi has successfully introduced a flexible ‘pay-as-you-go’ model for launching and operating 24/7 linear channels by eliminating the need for traditional, hardware-driven, large expensive physical operations. The company essentially put the entire broadcast operations on the cloud.
Rise of connected TV: In the fourth quarter of 2020, CTV devices accounted for 49% of the time people spent streaming video globally
Smart TVs’ viewership time increased by 157% in the quarter to represent 17% of overall viewership time
Global audience for FAST TV: 200 million and still growing
The connected TV market is currently generating $250 billion in ad revenues
Amagi’s Market Share:
Overall, Amagi has 500+ content brands, 800+ playout chains, and over 2000 channel deliveries on its platform in over 40 countries. Amagi has already established early leadership in the FAST domain, with 50+ FAST platforms and 100 other platform partnerships globally. 300+ content brands chose to engage Amagi’s services to amplify their distribution across FAST. This includes Fremantle, beIN Sports, Yahoo! Finance, Tastemade, Qwest TV, Shout! Factory, Cinedigm, USA TODAY, VICE UK, and more.
Industry growth in the next 5 years:
The team at Amagi believes that streaming is the future of TV with millions of viewers around the world making it their favored entertainment destination. In 2020 alone, nearly 68 million US homes had made the switch from cable to OTT, and around 300 streaming players were vying for their attention in the market. In India too, studies predict that the OTT content market is at an inflection point and is likely to reach $5 bn in size by the end of 2022.
There are shifts taking place within the OTT ecosystem too. While subscription-based streaming giants such as Netflix and Amazon Prime continue to be popular among viewers, the sheer volume of options in the Subscription-Video-On-Demand space has caused ‘decision fatigue’, giving rise to a new phenomenon – Free Ad-Supported Streaming TV (FAST), a subset of Advertising Video-On-Demand (AVOD).
With FAST, viewers can go back to the simplicity of linear TV-like experience, with ad breaks that are shorter and tailored to their interest, without having to incur any Pay TV expenses. The rise of FAST in the US and other markets such as Europe, LatAm, and Asia is opening new vistas for content brands for channel creation, distribution, and monetization. The growing demand for connected TVs and the popularity of linear TV-like experiences imply that good quality content is going to become freely available to viewers, and monetization of content will be largely through advertising.
Amagi was founded in 2008 by Baskar Subramanian, Srividhya Srinivasan, and Srinivasan KA to pioneer cloud-based broadcast and advertising technology solutions. The company originally started in India providing targeted TV advertising solutions.
The founders often tell a story of how they were approached by a young palmist offering to predict their future as they were sitting in a park and brainstorming ideas for their next entrepreneurial venture, on a Monday morning in early 2008. The palmist, rightly assuming that the founders were currently in between ventures, chose to target them as they seemed the likeliest candidates for needing their futures told. This ‘targeting’ on the part of the palmist put them in mind of ‘targeting’ as a solution. They chose ‘targeted advertising’ on traditional TV as a business model, as there was a real need for technology intervention in this area, to democratize TV advertising and make it accessible to small-time advertisers.
As part of their research into the viability of this technology, the founders went to the United States and other countries to examine what was already available in this space. They found that the tech that existed was very expensive and not scalable. For it to be a success in India, the tech had to be low cost and easy to scale.
They decided to build this technology from scratch and scale it to 3000 cities at a time, which was the start of Amagi.
In the late 2000s, billions of dollars worth of advertising money were being spent by large corporations on national TV– a luxury that small-time regional advertisers could not afford. Amagi’s founders took ad democratization as their problem statement. They believed that targeted advertising technologies could have a transformational impact in this area.
They wanted to see if they could build a network of local advertisers and offer them geo-targeted advertising on traditional TV (narrow the target down to a street, if needed) as a solution to their visibility requirements on TV. They decided to build targeted advertising infrastructure in the country by splitting the satellite signals at specific locations and inserting new ads.
Advertisers loved the idea. They could now choose to target multiple locations (individually), and yet, end up spending less than a national TV ad slot (the cost of the sum of the individual locations was less than the whole national ad spot), thus gaining more visibility, at a fraction of the cost.
That was the genesis of Amagi’s foray into the TV advertising arena, which eventually led to bigger innovations at larger scales.
The company quickly pivoted from targeted advertising to lead cloud adoption and evangelize cloud technologies for broadcast.
Baskar Subramanian, Srividhya Srinivasan, and Srinivasan KA are the founders of Amagi.
Baskar, Srini, and Vidhya met and befriended one another during their graduate years at Government College of Technology, Coimbatore. They are software engineers who co-founded the company in 2008 after their previous entrepreneurial venture, Impulsesoft, was acquired by Nasdaq listed SiRF.
About the founders –
Baskar Subramanian | Co-founder & CEO, Amagi
Baskar Subramanian – Co-founder, Amagi
Baskar is a serial entrepreneur with many patents to his name. As CEO, Baskar drives Amagi’s vision, growth strategy, and execution, enabling the transformation of the global media and entertainment industry through technology innovation. Baskar has been instrumental in developing several of Amagi’s path-defining technologies on cloud broadcast and frame-accurate ad splicing for both TV and OTT. Under Baskar’s leadership, Amagi has demonstrated strong growth, becoming an industry leader in SaaS-based solutions for broadcast.
Prior to Amagi, Baskar co-founded ImpulseSoft, a wireless technology company, which was later acquired by NASDAQ-listed SiRF. He started his career as a software engineer at Texas Instruments before embarking on his entrepreneurial journey. To foster a culture of entrepreneurship in society, Baskar regularly shares his insights and expertise with startups and small businesses. He is a well-known speaker at technology and industry events, evangelizing the use of the cloud for broadcast industry transformation. He holds a bachelor’s degree in Technology from the Government College of Technology (GCT), Coimbatore, India.
KA Srinivasan (Srini) | Co-founder & Chief Revenue Officer, Amagi
KA Srinivasan – Co-founder, Amagi
Srini is a technology entrepreneur with 23+ years of experience in establishing and successfully scaling businesses. Srini co-founded Amagi in 2008 and established it as a global leader in SaaS for broadcast and streaming TV on the cloud. As Chief Revenue Officer, Srini is responsible for revenue growth inclusive of sales & marketing.
Before Amagi, Srini co-founded the wireless audio company, ImpulseSoft, which went on to become a market leader and was later acquired by the American semiconductor company, SiRF. Earlier, he started his career at Texas Instruments as a software engineer. He holds a Bachelor’s degree in Computer Science from the Government College of Technology (GCT), Coimbatore, India. Srini regularly speaks at global industry events, evangelizing the use of the cloud for channel creation and monetization. In his free time, Srini loves to travel and read, and play arbitrator for his kids in their friendly sibling conquests.
Srividhya is one of the few women entrepreneurs in the broadcast technology industry to have successfully conceptualized and introduced pioneering products for global markets. She loves to create innovative product solutions to tackle complex engineering problems. At Amagi, Srividhya plays the critical role of advising global clients on suitable cloud deployment architecture, designing custom solutions, and ensuring that clients transition to cloud broadcast models smoothly.
Srividhya started her career as a software engineer at Texas Instruments. She spent most of her 23 years of professional experience as a technology entrepreneur. Before Amagi, she had co-founded ImpulseSoft, a wireless audio technology company that was later acquired by NASDAQ-listed SiRF.
She graduated from the Government College of Technology, Coimbatore, India. Engineering is her first love, and she firmly believes that engineering is her reason to be.
Founders’ Task
Task divided among founders: Baskar Subramanian is the CEO of the company. He leads technology innovation, business strategy, and overall execution at Amagi. Srinivasan KA is the Chief Revenue Officer. He is responsible for revenue growth inclusive of sales and marketing. Srividhya is the Chief Customer Success Officer. She plays the critical role of advising global clients on suitable cloud deployment architecture, designing custom solutions, and ensuring that clients transition to cloud broadcast models smoothly.
Company Size & Hiring funda
The company has 400+ employees at present and is growing rapidly. Over the past two years, the company has expanded to more locations, including Latin America, Canada, and different parts of Europe. The founders are looking to onboard premium tech talent across Engineering, Product Management, and Global Sales roles in India and its international locations.
Work Culture
Amagi is a company that prides itself on being outrageously ambitious. The founders encourage their employees to think like ‘there’s no box at all.’ By asking employees to bring never-thought-before ideas to the table, they deliver breakthrough results, driving exceptional outcomes for their customers.
Amagi’s early products and solutions were conceptualized and built with the purpose of offering advertisers greater freedom through technology. Amagi in Sumerian means “freedom” and the name seemed a fitting choice for what the company intended to do – which was to offer local advertisers the freedom to do more and achieve more despite having limited resources.
Amagi Logo
The company’s logo has undergone several changes over the years. The first version of the logo had a small TV screen as a brand mnemonic to clearly demonstrate the company’s core market and expertise. As the company grew and became more international in its operations, the logo was likewise upgraded to have a global appeal. Amagi’s logo is font-based and minimalistic. It is easily replicable across all formats and surfaces.
Amagi – Business model & Revenue model
Amagi offers three business models for customers to choose from –
Software-as-a-Service (SaaS)
‘Bring your own license’, and
Fully Managed Service
It also offers a revenue share model with content owners and platforms based on ad insertions enabled.
Amagi Cloudport UI
Amagi – Launch & Customer Acquisition Strategy
In the Indian ad business as well as the global cloud broadcast business, Amagi engages with customers both on-demand and supply side. Demonstrating the value-add its solutions could give them was a crucial part of the startup’s customer acquisition strategy.
In the ad business, it had to convince broadcasters to support localization of ads on their national channels, and local/regional advertisers to buy targeted ad spots on these channels. Oftentimes, the team had to buy ad inventories at its expense on a premium and then sell them to local advertisers at a fraction of the cost, to convince them that its solution worked. Amagi’s business model was that it could sell the same ad spot through as many regional advertisers as possible with the view that the sum of the parts will eventually be greater than the whole. Based on the success of this approach, Amagi was able to sell a million ad seconds per month.
In the cloud broadcast business too, Amagi was working with forward-thinking customers who were willing to place their bets on cloud technologies, which is a low-cost, low risk, pay-as-you-go infrastructure model. As these companies discovered the inherent advantages of the cloud and were willing to future-proof their business using cloud solutions, Amagi’s business saw the momentum and its list of customers grew steadily.
The OTT revolution, lockdown-imposed restrictions, and the growth of Free Ad-Supported Streaming TV were other factors that led to the increased adoption of cloud-based solutions as the de-facto infrastructure for broadcasting. From 2018 onward, Amagi’s business momentum was on a rapid incline. By 2021, it had 500+ content brands, 2000+ channel deliveries, 50+ FAST platforms, and 100 other OTT platforms in its customer portfolio.
The comprehensiveness of Amagi’s solutions: The breadth and depth of services it offers its customers are exhaustive. From broadcast-grade 24/7 linear channel creation to distribution across satellite, cable, and IP, to OTT server-side ad insertion and analytics for monetization, it provides end-to-end infrastructure for broadcast operations on the cloud.
The flexibility of the working model: Amagi’s customers can manage hundreds of channel feeds and scale up at will from any remote corner of the world using its solutions.
Comprehensive distribution network: Amagi enables its customers to distribute their content across satellite, cable, and IP. Its strongest value proposition to its customers is the FAST platform distribution network. With 50+ FAST platform partnerships globally, content owners can share their content across any platform in any part of the world.
Amagi has been able to provide tremendous value to its customers with the immense capability and agility of its solutions, which has, in turn, giving the startup a high customer retention rate (127% net retention as of July 2021).
To kickstart its targeted advertising business, Amagi had to collaborate with cable operators from around the country, from big cities to tier 2 cities. There were around 20,000 cable operators in the country at the time.
One of the earliest challenges it faced was in collaborating with the operators who had a limited understanding of the technologies that they were building. Making them aware of its potential and bringing them on board was a herculean task.
The second challenge it experienced was in convincing channels to let it insert ads in between their content. From a technology provider standpoint, Amagi was unaware of the ad content and could not give channels the reassurance that it would be inoffensive to its viewers. Having never done local advertising before, they were also unsure of the business model and unwilling to experiment with it. To counter this challenge, Amagi had to build an in-house ad sales team, buy ad inventories and then sell it to local advertisers, at considerable risk to itself. Amagi also built an in-house ad creative team to tackle the challenge of ad content ambiguity.
It started off as a tech provider and pivoted to add multiple other capabilities into its service offerings to meet the demands of the customers. Furthermore, another challenging task that Amagi successfully pulled off was when the company pivoted to a Saas-based monetisation platform for TV networks and content owners. Amagi, which started off strictly as an advertising solution provider to offer advertising solution to local businesses TV channels dropped the same model and began afresh with a Saas-based approach in 2018. This pivot was painful indeed when the company had to bid adieu to around half of the workforce it had. However, Amagi made it out strong. The successful story of Amagi’s growth had not been discovered until the company revealed that it skyrocketed its revenues, which neared the Rs 200 crore mark along with churning significant profit in the fiscal that ended in March 2021
Amagi – Funding and Investors
Amagi has been successful in raising $240.2 million in over 6 funding rounds that it has seen to date. The last funding round for Amagi came in on March 16, 2022, where the company was successful in raising $95 million worth of funds in a funding round led by Accel, and eventually joined in by other existing investors including Norwest Ventures, Avataar Ventures, and more. This funding round helped the company gain a unicorn valuation, thereby making it the 12th Indian startup to join the unicorn club of companies in 2022.
Amagi earlier raised $100 million last in September 2021, from a bunch of investors. The lead investors of Amai include Emerald Media, Mayfield Fund, and more.
Funding Date
Name of the Funding Round
Amount
Lead Investors
March 16, 2022
Private Equity Round
$95 mn
Accel, Norwest Venture, Avataar Ventures
September 10, 2021
Private Equity Round
$100 mn
–
December 15, 2016
Series D
$35 mn
Emerald Media
January 19, 2015
Series C
–
Premji Invest
June 1, 2014
Series B
$4.7 mn
–
June 17, 2013
Series A
$5.5 mn
Mayfield Fund
Amagi has recently organized a buyback of shares worth $12 mn from its founding team and employees. The Amagi board has approved a buyback of 76,533 equity shares at Rs 11,998.63 per share, which would amount to $12 million (Rs 91.8 crore), as per the regulatory filings of the company. As a result of the buyback, only two of the company’s co-founders, Baskar Subramanian and Srividhya Srinivasan, could offload their shares that were worth $8 million (Rs 61.2 crore).
Amagi – Growth and Revenue
Amagi supports 650+ content brands, 800+ playout chains, and over 2000 channel deliveries on its platform in over 40 countries. The company generated approximately 2 billion ad opportunities every month supporting OTT ad-insertion for 1000+ channels. Furthermore, the total audience of Amagi is calculated at somewhere around 2 bn+ and is growing each quarter. The company currently has a valuation of $1 bn+ and is hailed as one of the highest valued mediatech companies worldwide.
Amagi has a presence in New York, Los Angeles, Toronto, London, Paris, Singapore, broadcast operations in New Delhi, and an innovation center in Bangalore.
Amagi clients include ABS-CBN, A+E Networks UK, beIN Sports, CuriosityStream, Discovery Networks, Fox Networks, Fremantle, NBCUniversal, Tastemade, Tegna, USA Today, Vice Media, and Warner Media, among others.
Amagi is a profitable company. In the fiscal year ending March 2021, Amagi announced a 136% increase in annual revenue and a sequential growth of 18% in revenue in the quarter ending June 2021.
Looking at the Amagi revenue, the company has seen quite a growth (2.3X) in its revenues from operations, which stood at Rs 96.1 cr in FY20 and became Rs 219.3 cr in FY21. The total revenue it earned from the US ballooned 3.3X YoY to become Rs 143.7 cr during FY21 and making up for 65.5% of the total company’s revenues. Furthermore, the revenue earned by Amagi from the rest of the world also increased by 99.4% to become Rs 31.5 cr.
Amagi Financials
Amagi Financials
FY21
FY20
Operating Revenue
Rs 219.30 cr
Rs 96.1 cr
Total Expenses
Rs 197.94 cr
Rs 115.15 cr
Profit/Loss
Profit of Rs 20.71 cr
Loss of Rs 18.70 cr
EBITDA Margin
12.7%
-11.7%
Amagi Expenses Breakdown
Amagi expenses were recorded at Rs 115.2 cr in FY20, which increased by 72% to stand at Rs 198 during FY21. Cloud hosting and other expenses associated with the server and the hosting shot up 2.4X YoY and is deemed to be the largest expense for Amagi in FY21, making up for 38.1% of the total annual costs of the company. The second largest expense for Amagi was the employee benefit expenses. Here’s a quick look at all the expenses of Amagi in FY21 and a comparison with the previous year’s expense verticals.
Amagi Expense Verticals
FY21
FY20
Server Hosting Expenses
Rs 75.50 cr
Rs 31.60 cr
Employee Benefit Expenses
Rs 66.93 cr
Rs 45.80 cr
Other Operating and Admin Expenses
Rs 26.19 cr
Rs 25.44
Broadcasting Charges
Rs 8.70 cr
Rs 3.10 cr
Subscription Membership Fees
Rs 10.17 cr
Rs 5.41 cr
Legal Professional Charges
Rs 10.45 cr
Rs 3.80 cr
Coming to the unit economics, Amagi had to spend Rs 0.9 to earn a single rupee of revenue. The company focused on growth this year after its pivot and has managed to grow by 2.4X.
Amagi – ESOPs
Amagi rolled out an employee stock ownership plan (ESOP) scheme and a stock appreciation rights scheme (SARs IV), which would cumulatively be worth $24 mn.
Amagi – Competitors
Amagi has a whole bunch of rivals that are competing in the same industry. Here are some of the prominent Amagi competitors:
Front & Sullivan’s Global Product Innovation Award 2018 for Amagi CLOUDPORT
IBC Innovation Awards Winner 2015
CNBC 10 Hottest Startups in India
Deloitte 2nd Fastest-Growing Tech Firm in India, 2012
Stevie Gold Award for Medium-Sized Company of the Year (Media & Entertainment)
Stevie Bronze Award for Cloud Application / Service of the Year
Amagi – Future Plans
In the fiscal year ending March 2021, Amagi hit a revenue milestone of 136% and a sequential growth of 18% in the quarter ending June 2021. Its plan is to keep this business momentum going by offering newer cloud-innovated product capabilities and services to support new-age content providers and platforms in their growth journey.
Amagi plans to offer its customers a self-service portal – a single platform – on which they can access all its products. The platform will enable customers to leverage the benefits of all the products in its technology stack – its channel playout solution, Amagi CLOUDPORT, its server-side ad insertion solution, Amagi THUNDERSTORM, its live orchestration, and lightweight content scheduling platform, Amagi LIVE and AMAGI PLANNER, and more – on a single browser window.
The streaming TV revolution has created more opportunities for content owners to create, distribute and monetize channels. While viewers enjoy having more choices, they also expect the content to be of broadcast-grade quality standards. Amagi is offering low-cost playout options to smaller, new-age content owners to help them create compelling viewing experiences for their audiences, thereby, placing them on a level playing field with large deep-pocketed broadcasters.
FAQs
What is Amagi company?
Amagi is a next-generation media technology company. It provides end-to-end cloud-managed live and on-demand video infrastructure to content owners, broadcast and cable TV networks, and OTT platforms.
Who founded Amagi?
If you are wondering about the Amagi founders, then Baskar Subramanian, Srividhya Srinivasan, and Srinivasan KA are the persons behind the foundation of the profitable advertising solution turned SaaS-based monetisation platform for TV networks and content owners, Amagi.
How much is the Amagi technologies revenue?
Amagi Technologies marked its revenue from operations at Rs 96.1 cr in FY20. This grew by 2.3X to become Rs 219.3 cr in FY21.
Is Amagi an Indian company?
Yes. Amagi’s headquarters is situated in Bangalore, Karnataka, India. The company is also having its headquarters abroad in New York, USA.
What does Amagi’s client base look like?
Amagi clients include Fox Networks, Fremantle, NBCUniversal, Tastemade, Tegna, Vice Media, and Warner Media, among others. Amagi supports 500+ content brands, 800+ playout chains, and over 2000 channel deliveries on its platform in over 40 countries.
What is the meaning of the word ‘Amagi’?
Amagi in Sumerian means “freedom” and the name seemed a fitting choice for what the company intended to do – which was to offer local advertisers the freedom to do more and achieve more despite having limited resources.
