India’s VerSe Acquires Valueleaf to Enhance Its Digital Marketing Capabilities

VerSe Innovation, the behemoth behind the regional language content aggregator Dailyhunt, the digital periodical hub Magzter, and the viral clip platform Josh, is charting new territory in digital advertising to rival giants such as Google and InMobi. The company has embarked on this journey by acquiring Valueleaf Group, a towering figure in the domain of Indian digital marketing, boasting an outreach to nearly 500 million mobile devices.

While the financial specifics of the acquisition remain undisclosed, it was made known as a transaction involving both cash and shares. The particulars regarding the seller and whether this move represents a complete takeover or a majority acquisition are yet to be clarified.

Originally acquired by CapitalVia, a market research entity, in 2013 as documented here, Valueleaf’s ownership details have been scant since then. Umang Bedi, a co-founder of VerSe, has been tight-lipped about these details, noting only that Valueleaf had not engaged in raising funds externally.

Efforts are ongoing to gather more insights from the firm, and updates will be shared in due course.

VerSe enjoys support from a distinguished roster of backers, including CPP Investments, Ontario Teachers’ Pension Plan, Qatar Investment Authority, and Goldman Sachs, with its valuation in 2022 hitting around $5 billion. Both companies call Bengaluru their home.

This acquisition marks a pivotal move for VerSe, placing it squarely in competition with Google and InMobi.

India stands as a digital frontier, with over half its populace online and the second-largest base of smartphone users globally, after China. The growth of digital advertising is on an upward trajectory as more users engage with online content. By the fiscal year 2028, digital ad spending is expected to dominate with a 60% market share, outstripping traditional media, as per a projection by Redseer. The global digital advertising landscape is also trending towards more programmatic performance marketing for its cost-effectiveness for advertisers.

Google has traditionally been the go-to for many corporations with its ad exchange and popular platforms like Google Search and YouTube. Likewise, InMobi, a significant player from within the country, provides similar services. Meanwhile, a plethora of smaller entities operate without consumer platforms, leveraging third-party platforms instead.

VerSe, owning content platforms, is now delving deeper into the advertising sphere, aiming to retain more ad revenue by circumventing third-party services and extending its reach across more diverse advertising arenas.

According to Umang Bedi, Valueleaf’s expertise across the gaming, e-commerce, banking, financial services, and digital-native brand sectors signifies a strategic advantage. These sectors, he remarks, are major advertisers in performance marketing. Valueleaf also has a presence in the U.S. and UAE markets.

With a claim of reaching over 90% of India’s online population, translating to more than half a billion individuals, and insights on 60 to 80 million online shoppers, Valueleaf has shown significant prowess in ad targeting. The company, according to Bedi, has completed between 200 to 300 million app installation ads.

Valueleaf’s integration spans over 50,000 websites, 1,000 apps, and leading smartphone brands within India, specializing in solutions for the banking, financial, and insurance sectors, as well as SMBs.

Prior to the Valueleaf acquisition, VerSe had developed an internal ad tech framework, limiting ad placements to its platforms like Dailyhunt and Josh. A recent initiative, NexVerse.ai, was launched in May to extend its ad tech capacity to external brands. Valueleaf’s acquisition will further augment this capability through thousands of supply-side integrations, Bedi elaborated. (The stance on partnerships with entities like Google remains to be clarified.)

In the fiscal year 2023, Valueleaf reported revenue of about $36 million with an EBITDA of 5%, and according to Bedi, it is poised for significant growth. He highlighted an impressive annual recurring revenue rate of $87 million as of June.

This transaction follows VerSe’s acquisition of the Apple News+ rival, Magzter, just four months prior.

For the fiscal year 2023, VerSe recorded a 57% revenue hike to $130 million, alongside a reduction in burn rate by 34%, down from $261 million in 2022. Bedi hinted at substantial top-line growth and a significant drop in burn rate over the past year, although specific figures were not divulged.