VerSe Buys Valueleaf to Boost Digital Marketing

VerSe Innovation, India’s leading content technology company and owner of Dailyhunt, Magzter, and Josh, has acquired digital marketing firm Valueleaf Group through a cash and equity transaction

Valueleaf will assist VerSe in establishing a substantial retargeting platform and enhancing its presence in the Indian digital ad space, thereby competing with local competitors such as InMobi and Google, which also support the startup.

Expanding consumption across online platforms in the world’s most populous country is driving an increase in digital ad expenditure in India. Additionally, India is the second-largest smartphone market in the world, following China, and more than half of its population is online.

According to Redseer, a market consultancy firm, digital advertising in the country will surpass traditional advertising by acquiring a 60% market share by the fiscal year 2028.

Additionally, the global digital advertising market is transitioning to programmatic performance marketing, which provides advertisers with superior dollar value.

On the other hand, India lacks sufficient digital advertising platforms to meet the increasing demand. Google has been the preferred choice of numerous businesses thus far; the search engine behemoth provides its digital ad exchange in addition to consumer destinations such as YouTube and Google Search.

In the same vein, InMobi is a substantial participant in the market, providing both ad exchange and consumer destinations. Additionally, there is a list of smaller companies operating as pipe players but not owning consumer destinations.

VerSe expands its presence in the market by partnering with Valueleaf, a company headquartered in Bengaluru. Valueleaf currently provides services to clients in the United States, the United Kingdom, and the United Arab Emirates.

Goldman Sachs, Ontario Teachers Pension Plan, Qatar Investment Authority, and CPP Investments comprise the startup’s distinguished investors.

The buyout’s financial parameters were not disclosed. Nevertheless, Umang Bedi, the co-founder of VerSe, informed TechCrunch that the agreement was reached by Valueleaf’s projection of achieving $100 million in revenue and 10% EBITDA this year.

“What we discovered with Valueleaf was that they were solid in four core verticals: gaming, online commerce, banking and financial services, and digital-native brands.

These verticals are primarily the four that allocate 80% of their advertising budget to performance marketing,” he stated. “That was an additional benefit that was introduced.”

The acquisition will assist VerSe in attracting businesses interested in purchasing digital advertising across various destinations. Valueleaf has targeted advertisements to over 600 million individuals, more than 90% of the Indian internet user population.

Bedi also stated that it has approximately 200 million to 300 million installers and downloaders and conversion data for approximately 60 million to 80 million online consumers across various categories.

The company has also incorporated over 50,000 websites, 1,000-plus applications, and the country’s top smartphone brands. It provides vertical-specific solutions designed for small and medium enterprises and banking, financial services, and insurance.

VerSe’s in-house ad tech stack, developed before Valueleaf, was designed to limit the serving of ads on its platforms, such as Josh and Dailyhunt.

In May, it also launched NexVerse.ai, a brand-facing platform, to broaden its advertising technology platform to include external brands. Bedi stated that Valueleaf will contribute to expanding that offering by incorporating thousands of supply-side integrations.

CapitalVia Global Research acquired Valueleaf in 2013. Bedi declined to disclose the specifics of the transaction; however, he stated that the organization had never solicited external capital.

Bedi informed TechCrunch that Valueleaf generated approximately $36 million in revenue (equivalent to nearly 300 crores in Indian rupees) during the 2023 fiscal year, with an EBITDA of 5%.

He also stated that the company is on track to achieve “very significant revenue growth” and an EBITDA of approximately 6% this year. Additionally, he disclosed that Valueleaf concluded its June month with an annual recurrent revenue rate of $87 million (732 crores Indian rupees).

The most recent acquisition is a mere four months after VerSe acquired Magzter, a competitor of Apple News+.

In the fiscal year 2023, VerSe’s revenue increased by 57% to $130 million, while its waste decreased by 34% to $172 million from $261 million in 2022.

Bedi stated that the startup experienced “massive double-digit growth on the top line” last year and that waste has decreased by over half to triple-digit crores. However, he did not disclose the most recent figures.