Mxit goes it alone

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 28 Nov 2006

Instant messaging (IM) service provider Mxit will not court outside investors as the company is becoming financially stable, MD and founder Herman Heunis says.

Mxit, established less than two years ago, has about 2.4 million people using its mobile IM service. In January this year, it had 360 038 users and Heunis says new registrations are occurring at a rate of between 8 000 and 12 000 per day.

"Earlier this year, we were quite keen to get some outside investment into the company to help fund our infrastructure expansion such as getting more servers and hiring more people. However, for the first time, we broke even last month and this month (November) is looking really promising, so we have decided to self-fund our expansion plans," Heunis says.

Heunis's comments counter speculation that some large market players had been eyeing the Stellenbosch company to either buy it outright or to take a large stake.

Adverting space

Heunis says Mxit's revenue streams were increasing with some being highly profitable, while others were in need of some "tweaking". Mxit makes its revenue largely from selling advertising space on its IM service.

"The spam SMS phenomenon did a lot of damage to us, because big brand names equated our service to that and did not want to be associated with it. However, they are coming around to the idea that it is not the same thing," he says.

Last month, Mxit launched version five of its service and Heunis says that another 35 enhancements are being planned for introduction next year. Among these will be e-mail integration and other services such as checking share prices.

"We have a good grip on the young segment of the market and now we are aiming at attracting more of the higher end," Heunis says.

Mxit's latest figures show that the 12 to 18 age group accounts for 44% of the user base, with the 19 to 25 age group making up 33%. Users over 25 make up 20% of the community and those under 12 only 3%.