Breezy Briefings is pleased to present a brand new essay series by Abraham George titled CPaaS, Twilio, Blockchain and Tanla. Special thanks to Amit Mishra and Maneesh Jain for fact-checking and special inputs. Subscribe using the button above or Telegram to receive the latest updates as soon as it is published. This is the final installment - Part 6 - if you missed the previous parts, check out Part 1, Part 2, Part 3, Part 4 and Part 5.
Tanla Platforms is paramount in its space in India. Through its other two companies Karix and Gamooga, they are well-integrated to meet every challenge that you can conceive of in the CPaaS industry.
Now, they are going global. They have been working on this initiative for quite a long time. How are they going global? Glad you asked.
They have been collaborating with the world’s biggest company by market capitalization and technology dominance. This company needs no introduction. For the past 40 years, it has been on the top 10 global companies list consistently - the veritable numero uno. It is the only other company in the US that has a AAA debt rating apart from Johnson & Johnson. No other than, Microsoft.
Microsoft and Tanla Platforms have jointly developed a product called ‘Wisely’. It is the crown jewel of Tanla’s ‘one platform’ strategy. Microsoft has two major roles in this partnership. First, Microsoft is their technology partner. The Wisely platform is built and hosted on Azure, Microsoft’s cloud tech stack. Second, Microsoft is Wisely’s GTM (i.e. go-to-market) partner. As if that weren’t enough, the cherry on the cake is that Tanla does not have to share any revenue with Microsoft. And, Tanla owns the Wisely IP. There are three patents registered with US Patent and Trademark Office (USPTO), one patent with Intellectual Property India (IPI) while another one is pending IPI’s review/approval). Besides these patents, Tanla has registered Wisely Trademark with the UK, Singapore and Philippines, while continuing to work with a number of countries to receive IP protection ahead of its global launch in early 2022. Now, you have two cherries! Microsoft benefits from Azure’s usage and that in itself is going to be huge. Apparently, Microsoft Azure is desperate to catch up with Amazon AWS cloud. Given Azure scalability, it should not be an issue for Tanla. It is a win-win for both companies.
Tanla is also engaging a global strategy consultancy firm to bolster its strategic capabilities. While I’d like to speculate and take a punt on which firm that could be, I will nevertheless wait for an official announcement from Tanla. Also, there are two other partnership deals in the pipeline that Tanla has yet to announce.
I assume Wisely was created after seeing other CPaaS providers’ shortcomings in delivering a better customer experience. The platform has two facets: the Wisely Network and the Wisely Marketplace.
The Wisely Network is an enterprise-grade, edge-to-edge platform that simplifies integrating, communications into any enterprise application. With single-click deployment, you can download and configure the Wisely edge node either on the cloud or on-premise while the Twilio application needs some sort of basic programming I think. The cloud-native platform has high scalability and storage. The network comes integrated with global service providers for omnichannel communication - SMS, email, voice, RCS, OTT apps (e.g. WhatsApp and Meta Messenger). All this through a single API. Not to mention leveraging technologies including cryptography, blockchain, AI and ML.
The Marketplace is a modern digital commerce platform where businesses can discover and collaborate with global suppliers for their evolving communication requirements. With enterprises and suppliers verified on Wisely, it creates an ecosystem of trust using blockchain. The Wisely marketplace uses blockchain to generate zero dispute settlement reports for all stakeholders from a single source and reconciliation will never be challenged. This should introduce a new gold standard for security, privacy and trust. Wisely’s primary edge is undoubtedly disintermediation of the middleman which baked into its design. IIFL Securities compares Wisely as the Uber of CPaaS.
In my CPaaS discussions thus far, I have used Twilio as a benchmark or baseline for Tanla’s prospects in the international markets. But there is a big difference. Tanla is entering the international markets with zero debt. They even have adequate cash to burn for marketing spend. If required, they can even take on some debt. I hesitate to discuss Tanla’s forward-looking price projections. All I can hint at is Tanla’s current price is even lower than Twilio’s IPO price. Currently, Twilio is priced at 25x Tanla while Twilio’s revenues are 7x Tanla’s. If I recollect correctly, Twilio moved down from its all-time high of 51x on 18 Feb 2021 to 25x, due to Tanla appreciating substantially while Twilio was depreciating. The rest I leave to your imagination. Tanla needs to implement a very well-thought marketing strategy abroad. From everything that I have seen to date, Mr. Uday Reddy and his fabulous team are executing well.
Tanla (Yellow line) vs Twilio (Blue line) Share Price Performance
I would wish Tanla to maintain its Indianness ala Freshworks and project itself as one of the biggest companies that came out of India to rule the CPaaS universe. If you still have lingering doubts, let me emphasize the undeniable tailwind. The labour cost arbitrage advantage that India has cannot be bridged by any other comparable country for at least the next 10 years. Twilio's R&D and marketing spends are very very high - resulting in losses at operating levels. Being in India, Tanla has a cost advantage in R&D as well as general business overheads. Mr. Reddy understands this very well. Most of the CPaaS solutions are programmed in Java, Python and their ilk. Even if a skeptic were to argue with me that India may not have the schools that produce revolutionary technologists, the sheer breadth of the techie population sample size is good enough as they learn, iterate and level up their programming chops to international gold standards. This is India’s biggest asset. Mr. Reddy is investing heavily in innovation. Coupled with mega marketing plans on the international stage, this company is definitely going to be unstoppable.
So, what do you think of Tanla?
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund. Currently, he is setting up a hedge fund where foreign citizens can invest in Indian growth stocks like Tanla operating in hyper-growth markets like CPaaS.
Seems to me there are a lot of cpaas players across the world that are doing a lot of interesting things. Have you done any detailed peer analysis to know if Tanla has a right to win over others? Is it even possible to know that given the amount of M&A happening in this space?
Thoroughly enjoyed reading all posts on tanla. Great work!