Money via messaging

HOW A SOCIAL NETWORK BUILT AROUND SMS TURNED INTO AN AI UNICORN

- S SHANTHI

IN THE EARLY 2000s, mobile communication started picking up pace in emerging markets like India and SMS (short messaging service) became the primary channel for interaction. Beerud Sheth, along with his friends from IIT Mumbai — Rakesh Mathur and Milind Agarwal — wanted to tap into this opportunity. They launched Gupshup as a social network in 2007, built around SMS. The goal was to create a platform where people could join interest-based groups and share updates via text.

"The early days were exhilarating. By 2010, we had 70 million users, and it became the largest social network in India. I thought we had something big on our hands," Sheth says. However, to their surprise, the business model, which was based on subsidising SMS costs for users, quickly became unsustainable as costs skyrocketed, and it was no longer easy to monetise because of regulatory restrictions on advertising.

But 54-year-old Sheth, co-founder and CEO, Gupshup, didn't give up and decided to pivot to a B2B platform that offered messaging solutions for businesses, in 2011. This model enabled businesses to send transaction-based communications like OTPs, payment confirmations, and customer support messages. In no time, Gupshup began to see traction with businesses that needed a reliable way to engage with customers. "We didn't start with a 100-slide deck. We started with a hunch, a prototype, a live product — and let the market steer us." Over time, Gupshup expanded from just SMS to a full-stack conversational messaging platform across WhatsApp, Instagram, voice, chatbots, and more.