ValuePickr Forum

Route Mobile - Internet, Mobile & Telecom

Good to see marquee instt buying Route . Platform based business model
Asset light .sacalble .high Roce high Cagr. Little debt . Less employees mostly in sales n after sales roles. Good reputation of Co in mobile world. Valns may have run ahead sharply but when compared with Twillo n Sinch its OK. Good instt interest like GS KIA Nippon MF Abakkus Pinebridge n now Thelme. Opp size increasing due to increasing usage of SMS as 2nd level security world wide. Lets wait for next few qtrs results.Rajdeep has earned good reputation for himself over last 15 years with superb clients like FB Google Amazon Hdfc Bank. One can hv a 2-3 yr pov n buy some.

Thelme a hedge funds bought nearly 8 lacs shares today.
Discl invested

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Twilio and other SAAS companies are valued at 20-30 times sales only because they are growing at more than 70-80% sales year on year.
What is the outlook on Route? Is there any projection/ guidance given for the sales growth in the next couple of years?

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I was looking at facebook solution partners for what app chat and messaging solution. I couldn’t find route mobile.i could see Twilio and Gupshup. There are around 60 plus providers.

Here is the link https://www.facebook.com/business/partner-directory/search?platforms=whatsapp&solution_type=messaging

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Route Mobile is into A2P messaging which replaces SMS in some way. For FB and Google if you have enabled the Multifactor Authentication then you can receive OTP SMS on your mobile after entering your password. This OTP message is sent directly by the application and no human intervention is required. This OTP gets routed through Routemobile service.

Why FB, Google will use service like RouteMobile is they have tie-up with Service Providers across the globe to route the SMS across various countries and on top of that the message for OTP needs to be delivered in a short span of time say less than 10 seconds to be relevant. Companies like FB, Google can use this service from service providers like RouteMobile as they dont have to worry about maintaining the infrastructure.

OTP which adds extra security is getting in focus and B2C organizations which needs to deliver these messages will use these service providers. It is mainly useful in Banking/Finance applications and now days I am seeing this trend across multiple applications like BBdaily from Bigbasket for authentication instead of password.

Will not be able to comment on the growth aspects but there are certainly opportunities available for RouteMobile to grow as it is proposing their solutions to Global customers.

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I estimate Route Mobile can grow sales at a CAGR of 25%+ over FY20-23E. Let’s see if the company managers to deliver or not.

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https://www.thehindubusinessline.com/info-tech/airtel-rolls-out-cloud-based-communications-platform-for-biz-tunes-into-usd-1-billion-market/article32942317.ece?homepage=true

I think this is a direct challenge to Route Mobile from Airtel

**Company reported results 2Q sales growth + 78% YoY, EBITDA growth +113% and PAT growth +152%. ** 1HFY21 profits 597mn +128% YoY
PPT link https://www.bseindia.com/xml-data/corpfiling/AttachLive/957a15d6-c061-4554-a748-ad9b676582a6.pdf

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https://www.gartner.com/doc/reprints?id=1-24DS4OG8&ct=201016&st=sb

Good report to understand the Market Landscape, Competitors, Offerings, Market Direction etc. Route Mobile is the only player from Asia that’s featured I believe.

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Roue Mobile- Earnings Call Transcript- Q2 FY21

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Is that the only business of Route mobile or any other segments also?
Also, I am aware Microsoft Authenticator works in similar fashion of pushing either by means of OTP or an acknowldgement for sign in in case of multifactor authentication. When Microsoft can have their own Authenticator, what stops a Google have it as security is paramount and these giants will invest in security with ever increasing digital presence. Also, Microsoft Authentcator can be eventually used as a service by other companies as well when if in future they see it as a good business. Thoughts welcome…

You should spend some time and effort reading the entire thread. You question has been answered earlier:

I am still unable to understand the moat behind any of their technologies
There is no tech moat. The moat is the existing relationship with 240 telecom operators and 800 networks globally. Can someone else replicate it? Of course they can provided they put the time and effort to do the same.

Can a facebook, google, hdfc bank or hdfc life get the code written for this? Absolutely yes. But they chose not to do this so that they focus on their core business. They outsource this work to say a Route or a Gupshup or Twilio internationally because they dont have the enthusiasm to sit and haggle with multiple telecom operators globally what should be the cost that will be charged per SMS or call.

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Why do Microsoft do it then with their Microsoft Authenticator?

What I can see is Microsoft and Google Authenticators are software based and they do not send the SMS to the users for OTP(members can correct me if I am wrong). If the application needs to send OTP on SMS then a service from Route Mobile or other service providers will be required.

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Indeed, and something like an Okta gives you both option of either a push notification or a passcode, not sure about SMS with that either…but in all these what you call software based - the mobile number is involved when you register the verification APP or authenticator. My next question to understand this business would be what stops these software from ruling the verification game in future? It will stop the need for any intermediaries like mobile service providers/network operators etc. around which route has built their business.
Pls note I am not saying route is not a fine business. I am no one to suggest or conclude that. I am just trying to understand the nuances of this business and technologies prevalent in market today and future paths…

So much for microsoft authenticator.

When you are a new buyer of microsoft office software you are made to open an outlook account. You go through the same process of authenticating via SMS.

Here’s a good differentiation between an authenticator app vs an sms. Both have pros and cons. 2fa is but a small part of what can be accomplished when you have relationships with so many MNOs as Route does.

That relationship being turned into a platform is the moat. Hard to replicate for anyone new.

A2P itself has several other applications, a good place could be to look at the case studies posted on RMs website.

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Hi

This is a function of many things but mainly the company & the type of customers they are serving.

Let me give you an example of human psychology. For card txns a second factor authentication was introduced via OTP. People found it cumbersome. Then after a lot of work with the regulator txns below 2000 can happen without OTP now. Customer actually gets worried that OTP didn’t come. Habit gets built.

I am living currently in a developed market and the banker I bank with flipped from OTP deliveries to complete in app authentication. Not a single SMS comes other than those I have categorically asked for. We have virtual type of banks coming who will only work on data. The customer can easily adopt in this market.

For a market like India to do away from OTP is a long shot as we are heavily reliant on customer initiated SMSs such as OTPs. For instance even RBI calls out certain things to be mandatorily delivered to customers via SMS.

The article on the cons of Authenticator app is quite shallow imho.

Rgds

Disc: not invested

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Thanks, the article you shared had a link in it. Below is that link which states that NIST states that SMS based authentication is of the past. Well, I am not sure about the authenticity of this NIST etc. but indeed a food for thought, at least for me on the fast pace of this area of business.

Disc: Not invested in Route and have not evaluated it at all so not eligible for any comments on Route. Only commenting on the businesses area to understand the technological aspects. Thanks

Good growth forecasted & some acquisition also in offing.

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can this affect route mobile in the long run?