Who'd have thought there would be so much smart money in dumb phones?
A coterie of heavyweight investors including billionaire Google executive chairman Eric Schmidt and the co-founder of Seek.com.au, Paul Bassat, have just invested $2 million in biNu, an Australian mobile app platform targeting the four or five billion people who don't have smartphones.
These are the cheap devices that for Australians don't cost more than a few drinks at the pub and can do little more than make calls, compared to today's smartphones, which are essentially portable computers.
The billions who use these so-called "feature phones" in Asia, the Middle East and parts of Africa all want to access the same apps and web services as those in the developed world but to date have been limited by slow mobile networks and underpowered phones, said biNu co-founder Gour Lentell.
BiNu aims to bring iPhone-like experiences to low-end phones and so far four million active monthly users log on to access apps including Facebook, Google, Twitter, YouTube, books, health information, news, sports and weather. Lentell said it was getting close to 100,000 downloads a day.
"We do everything in the cloud to put as minimal processing demand on the phone as possible ... it's like you have a virtual smartphone in the cloud and you're actually just seeing on this screen everything that's been processed in the cloud," said Lentell.
He said feature phones outsold smartphones five to one globally in the last six months, and would continue to do so until smartphone manufacturers can crack the $50 mark.
"If everyone in Indonesia or India got a smartphone tomorrow the networks would absolutely die ... [and] the smartphone space is very crowded; do you want to be another one of the 500,000 apps on the app store? That's pretty tough."
Lentell is a dotcom veteran, and he and biNu co-founder Dave Turner worked together at OzEmail in the mid 1990s before launching one of the first internet ad-serving platforms in 1998.
The pair - "two men and a dog in a serviced office" - were riding the dotcom boom and soon attracted huge investment from Wall Street to expand their company, Sabela Media, into Britain and the US.
In December 1999, the day before they were about to secure $14 million in capital from US venture capitalists, they were sued for patent infringement by the industry's "800 pound gorilla", DoubleClick, which used it as a tactic to try to acquire the company.
The VC money dried up and they couldn't pay their wages that month so they "raised a quick half million from people like [OzEmail founder] Sean Howard and Malcolm Turnbull".
Sabela ended up selling to another Nasdaq company, 24/7 Media, for about $100 million in stock at the peak of the dotcom boom in January 2000. DoubleClick's offer was 50 per cent lower but offered shares at a fixed-dollar value, whereas 24/7 Media's was pure stock subject to volatility in the sharemarket.
But at that time they were, Lentell says, "part of the dotcom sheep herd" and thought 24/7 Media's share price would reach $US100 that year from $US48 at the time of acquisition. The day the acquisition was announced, AOL merged with Time Warner, destroying Lentell's "15 minutes of fame".
"In April 2000, when the dotcom bubble burst and over the course of the next year or two the 24/7 Media shares we were paid declined in value by 99 per cent ... the feeling in your stomach is like something you can only experience and not describe and eventually they bottomed at 10c," said Lentell.
He admits that when he walked away from the deal he was thinking "there's no way this company's worth $100m, this is stupid" - and the lure of the money meant he didn't do enough due diligence.
"There was a moment in a meeting with a whole table of lawyers and executives from 24/7 and I reckon it was about midnight on a Saturday night they said to us ... 'OK you can do some reverse due diligence, have you got any questions for us?' And I remember thinking why would I have any questions?,'" said Lentell.
In 2001 Lentell and Turner bought into Decide Interactive in Sydney's Neutral Bay and with the existing owners turned it into one of the first search engine marketing firms to use Google's AdWords.
In 2004, Decide Interactive was acquired by 24/7 Real Media - a new merged entity that emerged out of the dotcom bust - for about $40m.
24/7 Real Media's shares jumped 30 per cent on the day the acquisition was announced.
In 2007 24/7 Real Media was acquired by global ad giant WPP Group for $US649 million. DoubleClick was acquired by Google for $US3.1 billion in 2008.
The launch of the iPhone in January 2007 sparked the idea for biNu.
The iPhone made apps mainstream but no one was offering that experience on lower-end phones. That's a market of four or five billion people, the vast majority of whom don't even use the internet yet.
The biNu app can be downloaded from Getjar, Android or Nokia app stores (popular with users of feature phones) and from there users can access the various apps and services on the biNu platform. The platform's key advantage is the core technology that allows the services to run fast on cheaper phones with low bandwidth.
"On biNu itself there's over 100 apps ... last month we had four million active users and we've grown that from zero in 18 months and it's grown steadily over time," said Lentell.
The company has 15 staff, all in Sydney, but have set up a US subsidiary. Their top 10 markets are India, Nigeria, Indonesia, Bangladesh, Ethiopia, Zimbabwe, Pakistan, Mexico, Brazil and Saudi Arabia.
"The middle class in emerging-market countries is going to grow hugely over the next five years to a point where the number of so-called middle-class people in emerging developing countries will outnumber those in developed countries," said Lentell.
"So the economic growth that that implies is massive on all fronts and it's not just about cars and fridges and gadgets and electronics - for many of those people it's also about accessing information services that are available on the internet that we all take for granted but they've not had before.
"For a school kid somewhere in Africa or Asia to be able to easily search Wikipedia or Google or access information about learning or health easily and quickly from their mobile device is life-changing.
"That motivates us enormously."