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Will Scrabulous make India's first web 2.0 millionaires?

Chances are India may see first homegrown web 2.0 millionaires in form of Rajat and Jayant Agarwalla of Scrabulous, the hugely popular but controversial online game.

According to the Calcutta-based brothers, Scrabulous makes $25,000 a month or $300,000 a year in revenue. This puts their valuation anywhere between $3 million (10x multiple) to $6 million (20x multiple). However, according to reports, the Agarwalla bothers are holding out for valuations in tens of millions of dollars.

The Agarwalla bothers are faced in a legal tangle with four big companies - Electronic Arts, RealNetworks, Mattel, and Hasbro. Realnetworks in particular has shown interest in buying the brothers out.

It would not be hyperbole to suggest that Facebook made it possible. The Scrabulous site has been up since 2005. It had 20,000 registered users and then Facebook opened up its platform and the rest, as they say, is history. The Facebook Scrabulous application is one of the top 10 applications on Facebook, having been added to more 840,000 user pages and 500,000 daily users playing it.

If the Agarwalla brothers do manage to get a deal to their liking, an eventuality I would like to think is possible; they will be India's first totally homegrown web 2.0 millionaires.

Among previous millionaire, Indian entrepreneurs, we have Sabeer Bhatia leading the way, who sold Hotmail for hundreds of millions of dollars to Microsoft, and who was working in the United States at the time and even today he is treated like a favored son by the media around here. The other notable web 1.0 millionaire, Rajesh Jain, who sold Indiaworld to Satyam for about Rs. 500 crores ($13 million) continues to lead a quiet and productive life, compared to the entrepreneurial, always-managing-to- be-in-the-news Mr. Bhatia who has morphed into a serial entrepreneur of sorts.

The Agarwalla brothers' success will also put into perspective the millions of dollars US investors have put into me-too web 2.0 startups in India. On a personal note, I will be please, knowing that someone other than blog spammers is becoming a web 2.0 millionaire.

Update 12/3/2008:
Upon reading this post, a friend asked, "what about people who have received funding for their web ventures? Aren't they millionaires?"

Labels: controversey, enterprise web 2.0, india, scrabulous

posted by Pramit Singh @ 4:18 PM