September 21, 2020 turned out to be a red-letter day for brothers Rajdipkumar and Sandipkumar Gupta. That day, Route Mobile, which they co-founded in 2004, made a stellar debut on the bourses. More importantly, it was the culmination of a plan they put in motion some 15 years ago: raising money through an IPO (initial public offer). But more on that later.

Route Mobile’s ₹600-crore IPO was oversubscribed nearly 75 times, according to stock exchange data. The stock listed on the bourses at an 86% premium over its offer price of ₹350. Since then, the stock has run up sharply, closing at ₹1,594 on the BSE on February 12, with a market capitalisation of ₹9,140 crore. This has proved to be a windfall for employees who received ESOPs. That’s quite something when you consider that at the heart of the company’s business is the humble text message, or SMS.

Here’s how. From banking transactions, to deliveries, to authenticating e-mail and social media accounts, one needs a one-time password (OTP). The OTP is generated by the enterprise, while the SMS is delivered by the operator. Route Mobile—which ranks at No.269 on the 2021 Fortune India Next 500 list—provides the interface between the enterprise and operator, via its application programming interface (API). All this happens seamlessly.

“We are a platform which enables enterprises to select any mode of communication API within our platform and to communicate better with their end users,” says Rajdipkumar, 45, managing director and group CEO, Route Mobile. He points out that his firm is a global communications platform as a service (CPaaS) player, directly competing with peers such as Sinch, Infobip, and Twilio. He cites the example of Emirates, where messages from the airline are delivered to 180 countries via their platform. The company caters to the banking, financial services, and insurance (BFSI) sector, over-the-top (OTT) players, and mobile network operators (MNOs), among others. OTT players are its largest customer base currently, followed by the BFSI segment, and e-commerce firms.

Image : Graphics by Rahul Sharma

CPaaS providers enable brands and advertisers to communicate with clients through “multiple outbound online and mobile channels via a singular centralised platform,” says a recent ICICI Direct report. “There are a number of services that can be considered part of [a] CPaaS platform, including messaging technologies such as SMS, rich communication services (RCS), and OTT messaging applications. Also offered are push notifications, voice services, and e-mail.”

Route Mobile provides a front-end which gives enterprises an interface to integrate with, and a back-end that is directly integrated with more than 240 MNOs and provides access to more than 800 MNOs across the globe, according to data as of June 30, 2020. According to a research report by HDFC Securities, these frontend related tasks have enabled the company “to leverage their SMS and voice channels for digital communication”. ICICI Direct says Route Mobile’s cloud-based delivery platform enables it to build and manage applications without having to create and maintain the underlying infrastructure for each client. This kind of flexibility enables the company to provide enterprises with solutions to operate applications but without having to purchase, configure, or manage the extra hardware and software. As of September 2020, Route Mobile operated at a throughput capacity of over 10,000 messages per second and had six strategically located data centres which give it the resilience required to meet the requirements of the clients.

Image : Graphics by Rahul Sharma

Today, the company boasts of a client list that includes Google, Facebook, Emirates, Samsung India, State Bank of India, ICICI Bank, Paytm, Allahabad Bank, and Flipkart, among others. That’s quite an achievement for a venture which was set up with ₹1 lakh, and no external funding.

The year was 2003 and the times were tough. The dot-com bubble had burst; funding was hard to come by; and giving up a well-paying job in the U.K. was difficult. Yet, Rajdipkumar decided to do just that. Armed with savings of ₹1 lakh, the Physics graduate from Mumbai with a diploma in software engineering came home to work on his idea. “From Day One, I always had that conviction that something which I’m building will work for sure,” he tells Fortune India.

Coming from a middle-class joint family, he had to ensure that finances weren’t a problem. That’s when his elder brother Sandipkumar stepped in. A chartered accountant who worked with PwC then, Sandipkumar said he would provide for the family while Rajdipkumar set up the business. All that Rajdipkumar needed then was a PC, which he acquired as barter in lieu of a consulting gig for a friend. Setting up the second-hand PC in his bedroom at his family home in Kandivali, Mumbai, Rajdipkumar started coding the core of the platform, single-handedly.

It took a year, and finally the brothers launched their bootstrapped venture, then called Routesms Solutions, in 2004. While the office was in India, their clients were in the Middle East market because the cost per transaction there was higher, as were the margins. This ensured that the company was profitable from Day One.

For the first year of its operations, “Rajdip used to work for 18 hours, and I used to work for six,” while holding a regular job, says Sandipkumar, 47, who is chairman of the company. “For the first year, we did sales of ₹1.6 crore, and we made a profit of approximately ₹20 lakh,” says Sandipkumar. With business booming, Sandipkumar joined the company full-time in 2005.

Early on, the brothers decided on two things: They capped their salary at ₹12,000 a month each for the first 10 years or so; and two, in the mid-2000s, they decided that when they needed to raise funds, they would do so only through a public offer.

Sandipkumar explains the thinking behind capping their salaries: The idea was to not take any capital out of the company, so that they had the funds to grow it to the next level. “We will build this company, [and when] the time comes, we will get rewarded for that,” he recalls thinking at the time. Rajdipkumar adds that this frugality helped them build everything with their own internal accruals. And by not taking external funding, they had the freedom to scale the company to the next level. As for the IPO, Rajdipkumar says once they had made the decision, they started working “very, very aggressively” to ensure they had everything in place to get listed.

The company has also been banking on acquisitions for growth. Between 2014 and 2017, the duo bought a slew of companies, such as 365squared, Call2Connect, and a few others. Alongside, they also onboarded some big clients.

Image : Graphics by Rahul Sharma

Call2Connect offered voice, nonvoice, and consulting BPO services to some of the largest enterprises in India. And the acquisition of the Malta-based 365squared allowed Route Mobile to offer firewall-based solutions such as SMS filtering, analytics, and monetisation for MNOs. This was important as the firewall helps block unauthorised application-to-person SMS traffic.

Last year, the firm acquired the telecom operator-related business from TeleDNA, an acquisition that would allow it to provide SaaS (software as a service) solutions to MNOs.

Route Mobile is gearing up for another acquisition soon. Rajdipkumar says this acquisition will enable the company to offer customer experience and customer grievance solutions. “We will provide the entire product portfolio to the customer or enterprise. So, once he’s onboarded in my platform, there is an end-to-end solution within the platform,” he says. According to him, the company plans to change from CPaaS to SaaS, where they would have licence-based offerings.

However, that might not be easy. “Maintaining an end-to-end service for customers is quite difficult as customers have changing preferences for communication channels. Also, contextual communication is missing across various websites, contact centre platforms or mobile apps,” says Yash Jethani, research manager, Telco & IoT, IDC Asia/Pacific.

Some brokerage reports also point to the fact that Route Mobile is dependent on a limited number of clients for a substantial portion of its revenues. But Sandipkumar doesn’t agree with the assessment. While conceding that “a substantial number” comes from a large client, he also argues that this needs to be qualified further. “If I have a client, and if I’m serving this client at different geographies or different markets, you consider them as different clients for each geography and each market.”

Another risk which some analysts have cited is of their acquisitions not working out. But Sandipkumar doesn’t concur. He points out that Route Mobile is a company with rigorous SOPs. “Whenever we acquire, we implement those SOPs, and it becomes very seamless for us,” he says.

Route Mobile, meanwhile, is gearing up for the next level of growth. And to that end, they have started building a team. There have been two recent senior-level recruitments: Milind Pathak, who has had stints at Paytm and Comviva, came on board as chief business officer in December; and Vikram Shanbhag, a Covansys and Comviva veteran, was appointed executive vice president-Americas in February.

While it is gearing up for diversification and expansion, one thing unlikely to change—at least in the next five years—is the popularity of text messages. “SMS technology appeals highly as a communication channel due to its ubiquity on smartphones. It is expected to be the case over the next five years,” says ICICI Direct. Agrees Rajdipkumar. “There is no way the SMS can be replaced by anything. But yes, SMS will have a new avatar, something like RCS, which belongs to the mobile ecosystem.”

For now though, text messages are keeping Route Mobile quite busy, and investors very happy.

(The story originally appeared in Fortune India's March 2021 issue).

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