VerSe Innovation, the Indian content tech unicorn that owns local language news aggregator Dailyhunt, digital newsstand platform Magzter and short video app Josh, has acquired digital marketing company Valueleaf Group in a cash and stock deal. Valueleaf will help VerSe expand its presence in the Indian digital advertising space and build a significant retargeting platform to take on local competitors like Google and InMobi, which are backing the startup.
In India, digital ad spending is increasing as consumption on online platforms expands in the world's most populous country. India is also the world's second largest smartphone market after China, with more than 50% of its citizens actively using the internet. According to market consultancy Redseer, digital advertising in India will capture a 60% share by 2028, surpassing traditional advertising. Globally, the digital advertising market is also shifting towards programmatic performance marketing, which brings higher revenue to advertisers.
However, India does not have many digital advertising platforms that can cater to the growing demand. To date, the first choice for many businesses has been Google. The search giant offers a digital advertising exchange alongside consumer-facing sites like Google Search and YouTube. Similarly, the market also has a significant player, InMobi, which offers both an ad exchange and a consumer-facing site, and several smaller players that do not own consumer-facing sites but act as conduit players.
VerSe will further expand into this market with Bengaluru-headquartered Valueleaf, which already serves clients in markets such as India, the US and the UAE. The startup's notable investors include CPP Investments, Ontario Teachers' Pension Plan, Qatar Investment Authority and Goldman Sachs.
Financial terms of the acquisition were not disclosed, but VerSe co-founder Umang Bedi told TechCrunch that the deal was made based on VerSe's expectations of achieving $100 million in revenue and 10% EBITDA growth this year.
“What's interesting with ValueLeaf is that they're very strong in four core verticals – gaming, online commerce, banking and financial services and digitally native brands – and those four verticals are primarily spending 80% of their ad spend on performance marketing,” he said. “That adds value.”
The acquisition will enable VerSe to attract businesses looking to buy digital ads across multiple locations. Valueleaf targets ads to more than 90% of India's internet users, or more than 600 million people. It also has conversion data of around 200-300 million installers and downloaders and around 60-80 million online shoppers across various categories, Bedi said.
The company also integrates with over 50,000 websites, 1,000+ apps and all major smartphone brands across the country, and offers vertical solutions across banking, financial services, insurance and small and medium enterprises.
Prior to ValueLeaf, Verse had developed its own ad tech stack and limited itself to serving ads only on its own platforms, including Daily Hunt and Josh. It also introduced a brand-facing platform called NexVerse.ai in May, expanding its ad tech platform to external brands. ValueLeaf will help broaden its offering by adding thousands of supply-side integrations, Bedi said.
In 2013, ValueLeaf was acquired by financial markets research firm CapitalVia Global Research. Bedi declined to disclose details of the deal but said the company had never raised outside funding.
Bedi told TechCrunch that in FY23, ValueLeaf generated revenue of about $36 million (roughly INR 3 billion) at an EBITDA of 5%, adding that the company is on track to achieve “very significant revenue growth” and an EBITDA of about 6% this year.
The acquisition comes just four months after VerSe acquired Magzter, an Apple News+ competitor.
VerSe reported annual recurring revenue of $87 million (INR 7.32 billion) in its June financial close. The startup's revenue grew more than 81% to $179 million from about $173 million, while its full-year losses narrowed 40% to $215 million after reporting revenue of $95 million to $107 million and a loss of $358 million about three years ago.