At a time when a number of startups are finding it difficult to raise capital, VerSe Innovation, the parent firm of news aggregator app Dailyhunt and short video app Josh, said on Wednesday it has raised $805 million.
The startup, which has built one of the largest adtech businesses in the country and is also driving commerce through its apps, is valued at nearly $5 billion in the new round, up from about $3 billion just eight months ago, its co-founders told TechCrunch in an interview.
The round — a Series J — was led by Canada Pension Plan Investment Board (CPP Investments), its largest investment to date in the region. Ontario Teachers’ Pension Plan Board (Ontario Teachers’), Luxor Capital and Sumeru Ventures as well as existing backers Sofina Group and Baillie Gifford also participated in the round.
The new round — the largest in the Indian startup ecosystem this year (beating Byju’s $800 million) — brings VerSe Innovation’s all-time raise to about $2 billion (some through secondary transactions). The startup says it raised capital after receiving a plethora of inbound offers and that the new capital, along with its existing reserves, gives it runway for “several years.”
VerSe Innovation, which counts Google and Microsoft among its backers, currently operates three popular apps that have made deep inroads in smaller Indian cities and towns, long considered to be nonmonetizable, with their snackable and informative content and have reimagined the way one can entertain those customers while finding a business model to support such endeavour.
Its short video app, Josh, has amassed over 150 million users, 50 million of whom create and publish content. The app, which has partnered with 15 music labels, clocks over 80 billion plays on its app each month, the startup said.
Thanks to these stats, Josh has emerged as what the startup claims to be a clear market leader. It competes with a handful of apps including YouTube, Instagram, InMobi Group unit Glance, and the merged entity of ShareChat and MX Player’s video apps.
India’s ban on TikTok in mid-2020 prompted several Indian startups to launch their own short video apps. But most of them have either shut down or pivoted.
VerSe Innovation co-founders Umang Bedi and Virendra Gupta. Bedi was the head of Facebook India prior to joining Dailyhunt. Image Credits: VerSe Innovation
News aggregator app Dailyhunt, which operates in 15 languages and has a creator ecosystem of over 100,000 content partners, has over 350 million users, whereas the startup’s recently launched app PublicVibe now serves over 5 million monthly active users.
Catering to users outside of urban Indian cities is a feat of its own. Umang Bedi, co-founder of VerSe Innovation, told TechCrunch in an interview that the startup had to build its own adtech business to make more economic sense for all its stakeholders including the company’s growing universe of creators.
“A data point that I can share with you is that there are 400 advertisers in India with whom we have full-funnel integration with their third-party mobile measurement platforms,” he said.
“That’s how we reconcile first-party billing and third-party billing data to really drive performance campaigns. We are not dependent on certain advertisers. 50% of our advertisers are enterprises and rest are small businesses across tier 2, 3, and 4 India,” said Bedi, who previously served as the India head of Facebook.
Another monetization bet that is working for Josh is influencers-led commerce. Scores of creators on its platform are selling items from popular brands — and sometimes their own private labels — on the platform.
“We have an influencer who is a homemaker who is selling a variety of spices on the app. She is really popular in Mumbai,” he said.
“We are doing curated lives, which are targeted shopping feeds, and also making existing videos contextually shoppable. Having the ability to use tech to prove the e-commerce piece, it just shows that we can play a meaningful role in the social-commerce and India’s broader e-commerce outlook because we already have engaged consumers,” he added.
The startup is now also exploring ways to embrace web3 to widen its monetization capabilities, he said. Bedi declined to reveal specifics about how VerSe plans to tackle the world of tokens and NFTs, or identity the blockchain it will be using, but said the startup’s efforts will be apparent in a few months.
VerSe plans to continue to focus on serving users in the home market of India, saying there’s an ample opportunity left in the country, and deploy the new capital to broaden its AI and ML capabilities to make its apps more engaging to users, Virendra Gupta, co-founder of VerSe, said.
It’s also working on a number of new apps, he added.
“Our family of apps will certainly grow, but I can’t give you a number just yet,” Bedi quipped.
“India’s digital content is experiencing phenomenal growth, and VerSe Innovation is well positioned to be one of the leaders in the fast-growing short video and local language content space,” said Frank Su, managing director and head of Private Equity Asia at CPP Investments, in a statement.
“This investment aligns with our approach of providing strategic capital to industry leaders in India’s technology sector. We look forward to supporting the next phase of VerSe Innovation’s growth journey, which we believe will deliver strong risk-adjusted returns for the CPP Fund.”