VerSe Innovation, the parent company of Dailyhunt and Josh, has acquired a majority stake in Valueleaf Group, a data-driven digital marketing solutions provider. This strategic move aims to bolster VerSe’s efforts in creating an ad exchange platform for advertisers seeking to reach Indian consumers, as per a Moneycontrol report.
As part of its broader strategy to diversify revenue streams beyond advertising, VerSe has been actively acquiring companies in the SaaS and digital subscription sectors, such as Magzter.
Valueleaf Group, founded in 2006 by Satish Saraf and Srikanth Bureddy, offers digital marketing solutions to help advertisers improve their customer acquisition. With over 15 years of experience, the Bengaluru-based firm has developed a performance data management platform that covers a significant portion of Indian internet users across various stages of the customer journey.
Beyond data-driven marketing solutions, Valueleaf Group brings a suite of additional offerings to the table. This includes a referral marketing app (Share & Earn), a fintech marketplace (Buddy Loan), a communication platform (Whistle Messaging), and a programmatic advertising solution (Whistle Feed).
VerSe Innovation’s Nexverse.ai, launched in July, further strengthens their ad tech stack. This platform connects advertisers, publishers, and technology providers, optimizing ad placements through AI for improved ROI. Nexverse.ai also provides targeting, optimization, and analytics tools for personalized ad campaigns.
The acquisition of Valueleaf signifies a strategic move for VerSe Innovation. By integrating Valueleaf’s data, integrations, and industry-specific solutions with their existing platform, VerSe aims to deliver superior Return On Ad Spends (ROAS) for advertisers. This will enhance retargeting capabilities, improve programmatic performance, and ultimately lead to revenue growth and increased advertiser wallet share.
VerSe Innovation co-founder Umang Bedi is optimistic about the combined potential of Nexverse.ai and Valueleaf. He projects this combined business to generate $100 million in revenue and achieve 10% EBITDA margins by FY25. Importantly, Bedi emphasizes the path to profitability. VerSe Innovation has already shown significant progress, with FY23 revenue growing 57% and burn rate decreasing by 34%. He projects a similar trend for FY24, and with the acquisitions, he anticipates doubling revenue in FY25 while further reducing burn rate. By the end of FY25, VerSe Innovation aims to be very close to breaking even.
Bedi said that its flagship news business, which includes the news aggregator Dailyhunt and currently generates the majority of its revenues, has been growing at over 25-30 percent every year for the past two years.
“It has been EBITDA positive, and for the last six months, have been higher double-digit EBITDA positive” Bedi said. Meanwhile, Magzter is currently at single-digit EBITDA positive, he added.
Bedi said Josh is currently the only business where the firm is not profitable. However, he expects that to improve in the future. “This year, about 30-35 percent of the revenues (for Josh) is coming through ads, while about 65-70 percent of the revenues is coming through commerce.”
Commerce revenues include revenues from the influencer marketplace VerSe Collab, where the firm provides influencers to brands and take a commission, live streaming where users gift and tip creators, and physical e-commerce business.
Bedi also mentioned that the company is acquisition-hungry, but its criteria are firms that are revenue-generating and are EBITDA-positive. “Our focus for all M&A is going to be revenue and profitability, as well as driving our monetisation efforts” Bedi said.
VerSe Innovation raised a massive $805 million in a funding round led by the Canada Pension Plan and Investment Board and the Ontario Teachers’ Pension Plan Board, at a valuation of around $5 billion in April 2022. To date, the company has raised over $2 billion in funding across multiple rounds.