Skip to main content /BUSINESS

More startup blues for Hotmail's Bhatia

India's authorities have pulled the plug on Sabeer Bhatia's voice mail venture
India's authorities have pulled the plug on Sabeer Bhatia's voice mail venture  

By CNN's Kristie Lu Stout and reports

BANGALORE, India (CNN) -- A voice mail venture funded by Hotmail founder Sabeer Bhatia has been forced to shut down in India.

It is the second recent setback for Bhatia. His dotcom Arzoo folded earlier this month.

Bhatia is an investor and co-chairman of Navin Communications, a startup that was forced to stop its TeliVoice messaging services in India last week.

The venture was ordered to shut down by the Department of Telecom (DoT) for not having the license required to offer its services in India.

Regulatory technicalities

TeliVoice allows users to record send, receive and listen to messages worldwide via a PC equipped with speakers and microphone.

The service is also offered in the U.S., UK, Australia, Canada, Mexico, and the Philippines.

The venture was ordered to stop its Indian operations due to "regulatory technicalities."

"Due to circumstances entirely beyond our control, our TeliVoice service has been disrupted in India. The circumstances are entirely beyond our control," a NavinMail note to subscribers said.

"We are faced with some regulatory technicalities related to Internet based services in India. We are working extremely hard to resolve the issues and get our service restored as soon as possible."

American venture capitalists refused to invest in the company due to the murky Indian regulatory climate, according to the Economic Times.

The company, angel-funded by Cirrus Logic founder Suhas Patil, received money from Bhatia and the Chatterjee Group's Purnendu Chatterjee among others.

"If people like me and Sabeer (Bhatia) can face so much problem, then I wonder what will happen to others," Patil told Times Internet Network.

'Never give up'

Bhatia, now 32, and fellow founder Jack Smith sold Hotmail to Microsoft for $400 million in 1997.

The wildly popular Web-based service lets people send and receive email for free. Bhatia recently closed his nine-month-old venture, a site aimed to link corporate customers with freelance professionals.

A message from Bhatia that was posted on Arzoo's Web site said he regrets the collapse, which he blames on the U.S. economic slump.

Bhatia and Softbank invested a total of $12 million into Arzoo. In March, they said they were looking for another $10 million to $15 million in funding.

"A good entrepreneur never gives up," Bhatia said.

• Navin Communications

Note: Pages will open in a new browser window
External sites are not endorsed by CNN Interactive.


Back to the top