Fortumo, an Estonia portal that offers free access for website-owners and small businesses to monetize their user base through Premium SMS messages, announced that they are expanding internationally the way rest of us only tell our investors we do with little hope of actually doing it.
Fortumo announced that they are expanding into 9 major markets in Western Europe, namely UK, Germany, Ireland, Spain, Portugal, France, Belgium, Netherlands and Switzerland. That’s right, 9 at once and we’re talking about a startup which needs to deal with notarious Telcos to do this. This means today Fortumo is providing its service in 26 different countries.
“We have deliberately focused so far more on emerging markets in Eastern Europe and Southeast Asia since we wanted to first cover the regions where it’s used to be more difficult to do SMS-payment or other SMS-services,” says the CEO of Fortumo Martin Koppel. Now, with the latest expansion, they enter the more developed markets.
Koppel also told us that so far people have created nearly 70 000 revenue generating SMS-services. Not a small figure in this context given every single one sends a revenue stream back home to Fortumo. I went on to ask more questions from their CEO Martin Koppel to see how far 70 000 service user base will take you in SMS business.
Ville How big year-on-year revenue and user growth are you currently experiencing?
Martin Fortumo is actually less than 2 years old, so it would be early to talk about year-on-year revenue, but revenue will grow in 2009 ~300% compared to 2008. Users numbers are growing at the moment approximately 15-25% a month. We expect this growth to be at least twice as big with these new countries.
Ville How big revenues are we currently talking about?
Martin Fortumo’s monthly revenue is at the moment ~180 000€
Ville You say at the moment people have created nearly 70 000 revenue generating SMS-services. How big margin do you take per each user/service?
Martin Fortumo is taking its margin from every message sent to the system, the margin is slightly different on every country (depends on competition and other aspects). In general Fortumo’s margin is around 5% from every transaction.
It’s good to see an Internet business (I know it’s really an SMS, but you get my drift) which has both, a working revenue model and a rapidly growing user base. Even though there’s nothing that amazing about Fortumo does it’s clear cut and makes money as any healthy business should do. And with a growth rate like theirs, it’s hardly a bad place to be.
