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The winner takes it all

| SUDESHNA BANERJEE
Published : Nov 4, 2016, 7:15 pm IST
Updated : Nov 4, 2016, 7:15 pm IST

At an age when most of us were addicted to video games and spend most of our time and money on it, they created one.

Bhavin Turakhia (left) and younger brother Divyank Turakhia cheering the success after their Media.net deal
 Bhavin Turakhia (left) and younger brother Divyank Turakhia cheering the success after their Media.net deal

At an age when most of us were addicted to video games and spend most of our time and money on it, they created one. While in primary school, the Turakhia brothers — Bhavin, now 36, and Divyank Turakhia, 34 — created serious computer games for others to play.

The brothers made their debut in Forbes India’s rich list of neo-billionaires, after a successful exit from a six-year-old advertising technology firm Media.net to a consortium of Chinese investors in August, for a whopping $900 million. The deal was negotiated and successfully sealed by Bhavin in Beijing, while Media.net was Divyank’s brainchild. Together, they are now worth $1.4 billion.

As Divyank was busy running the company, Bhavin ensured all legalities to seal the deal. They were never beginners in the race but, together, have always won.

They both love to take risks and live on the edge. The Turakhias indulge in adventure sports that help them see through the limits and beyond. Bhavin loves wakesurfing and snowboarding and flying his own private jet, while Divyank loves airplane wing walking, aerobatic flying, ballooning, skydiving, scuba diving, paragliding, sailing, quad biking, trekking and rock climbing.

As kids, they have had an enriched, yet, unusual childhood. Hailing from suburban Andheri, from fourth and sixth grades, they were hooked on to computers. “It was love at first sight”, recalls Bhavin. “We used to spend hours in the computer room in school”, he remembers.

A lot of credit goes to their father. A chartered accountant by profession who runs his own business, he ensured his children read up on computers.

They began by using the computer lab at Mumbai’s Arya Vidya Mandir School in Bandra during lunch breaks and free time after school when other kids would play sports.

Playing computer games could be child’s play but creating one while still in primary school is surely not one. Bhavin remembers it was more of a challenge thrown to them by their father when they were still in primary school: “He bought us books on how to create games.”

“It was my love for computers since I was 10 years old that led to who I am today. In those days, there was no Internet, no hard drives,” remembers Bhavin.

During school and college days, the brothers were consulting and writing software.

“I was 15 and Divyank was 13. He had a computer project at school and we spent an entire year developing a business-simulation game written in GWBasic. Creating a computer game was quite an experience”, he recalls.

The game, Bhavin explains, begins with an animation sequence about starting from a scratch after being deceived by a business partner. A very complex yet interesting game, albeit unusual for kids at that age.

The brothers created the first three games as part of a school project and soon became very popular among kids.

They started holding after-school sessions to teach advanced GWBasic to other students and teachers. Generally, college education teaches what the Turakhia brothers learnt and taught, while in school.

These were pre-Internet days. Computer networks were yet to become buzzword. “We started a fledgling bulletin board system (BBS) using the RemoteAccess BBS software and a 2,400 baud modem. We already knew more about the Internet and networking before it was launched in 1995,” he recalls.

Soon, they started freelancing on Internet consulting for large corporates. This would fetch them quick moolah. They became richer than the richest kids on the block.

“Our focus was to help companies set up websites, Internet gateways, intranets, corporate emails, managing internal and intra-office network security policies, and setting up and configuring any technology related product or software that the company couldn’t do by itself”, recalls Bhavin.

The challenge with running any technology-based services business is that one can manage only a limited number of projects. “We decided to play in volumes and, hence, growth. We started our first product line and sold hosting packages directly to customers. That’s how Directi was formed,” recalls Bhavin.

Borrowing Rs 25,000 from their father who was running his own business, the brothers started Directi. “In those days it was quite a sum. We paid the money back within the first quarter. We had 40 customers. Within the first year, we made Rs 4 lakh.”

They made their first million when they were barely adults. Today Directi makes revenue of over $250 million. “Within the first few months, we were hosting the who’s-who of the Indian market — Nasscom, Centre for Monitoring Indian Economy, Congress Party, et al.”

Soon, Turakhia’s big opportunity in domains opened up. The monopoly of Network Solutions (NSI) in the domain name registration business came to an end. Domain names were the stepping-stone for selling all web-based services. “We made a substantial amount of money by selling domains,” says Bhavin.

The brothers pursued degrees in commerce purely to satisfy their mother — a law school graduate who is into social service. They quickly moved on to web services and payments business, which they were good at.

In 2000, they started a new business unit within the Directi Group — Transecute — India’s first payment gateway service.

The idea came to them after they wanted to start collecting money via credit cards for domain registration and hosting.

There was no solution available in India. While they needed to build a payment mode for themselves, they decided to sell the product.

They soon became India’s top 10 domain registration company. “When we sold part of Directi to Nasdaq-listed Endurance International Holdings in 2014, it was worth $160 million. We were the fourth largest player in that business,” says Bhavin.

Divyank, the younger of the two, is based in the US, where he runs online advertising business Media.net. Bhavin runs Directi in India, shuttling mainly between Mumbai and Dubai, which both brothers call home.

Bhavin says that things are more fun and exciting when the two work together. “Div and I handle non-overlapping areas,” he explains. When it comes to funding, money and ownership, they have a loose sharing arrangement.

Directi is kept as a brand linking various companies.

Bhavin started another company in Dubai in 2012 – Radix, which owns top-level domains like .online, .tech and more.

Ringo, which is into Internet telephony, is however facing problems in India. Telcos are reluctant to give interconnect for Internet telephony. The company is in limbo for over six months due to discriminatory interconnection agreement.

“They have been saying they will provide interconnection only for fixed line connections and are asking us to stay away from Internet telephony. We have approached TRAI,” Bhavin says.

The telcos fear Internet telephony will lead to cost war and more competition.

Doing business in India is often cumbersome and making outbound investments as an Indian company has too many roadblocks, feels Bhavin, which is a big reason why the brothers have chosen to operate from Dubai and the US, despite being Mumbaikars at heart.

Until 2005, the Turakhia brothers ran the businesses together but they soon figured out how they could double their reach individually.

That helped them see the future together after Divyank started a company, Skenzo, licensing an online ad technology. But after initial success, it nose-dived amid shifts in the sector.

They then started Media.net in 2010. In those days Google, with its monopoly, ruled the online ad space. It had been there since early 2000 in the space. “We were not starters but we found a significantly large untapped market in the US in that space. Media.net soon became a big business”, explains Bhavin.

Divyank and Bhavin Turakhia entered the billionaires club of India after Media.net merged with Beijing Miteno Communication Technology (BMCT). Zhiyong Zhang, who is the chairman of BMCT, led the Chinese consortium.

While Divyank was busy with ad tech, Bhavin was floating other startups that may yield future deals.

“I handled the entire transaction process. I was involved in end-to-end transaction, managing Chinese legal requirements. We had Merrill Lynch in the US and CV Capital in China helping us with the negotiation as bankers,” he quips.

While doing serious negotiation, pricking a funny bone often adds spice. Despite having no knowledge, Bhavin managed a few with his stunts in Mandarin.

“One of the early days of the deal, when we had gone out for dinner, I randomly started speaking in Chinese which I picked up during my flight. I left them at wit’s end with my impeccable pronunciation. They quickly started finding out if I really understood all that they spoke. Finally, they realised I was trying to impress them”, he chuckles.

But what does the deal mean to the brothers or even to the employees “Nothing has really changed since the Media.net deal. We are the same. We both work more than 15 hours a day. Div still continues to operate the company,” says Bhavin.