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Business News/ Companies / InMobi plans to increase debt, raise fresh funds
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InMobi plans to increase debt, raise fresh funds

The company is also in talks with lenders and venture debt providers to increase its working capital availability

InMobi CEO Naveen Tewari confirmed that the company is looking for fresh funds. Photo: Hemant Mishra/MintPremium
InMobi CEO Naveen Tewari confirmed that the company is looking for fresh funds. Photo: Hemant Mishra/Mint

Bengaluru: Mobile advertising technology firm InMobi Technologies Pvt. Ltd plans to raise $40-45 million of new debt for working capital and tap investors for a fresh round of funds as the company expands its ad product Miip and launches other products over the next year.

InMobi, which last raised $200 million from Japan’s SoftBank Group in 2011, is in early talks to raise its next round of money from new investors including Premji Invest, two people familiar with the matter said.

The company is also in talks with lenders and venture debt providers to increase its working capital availability to $80-90 million as it wants to avoid diluting the stake of existing investors too much and support its expansion at the same time, said the people, all of whom spoke on condition of anonymity.

InMobi chief executive officer (CEO) Naveen Tewari confirmed that the company is looking for fresh funds and also significantly increasing its working capital, but declined to comment on the amount.

“We already have massive credit lines and they continue to increase as our business scales and metrics improve. The only way you can increase your debt facility is if you’re doing good on all fronts. Like Miip, we have seven more innovations happening. They’ve been in the works for two years and over the next 12 months, we will launch one after another," Tewari said.

Tewari denied talks with Premji Invest, which didn’t respond to emailed queries seeking comment. Premji Invest is the private investment venture of Wipro Ltd chairman Azim Premji.

InMobi is one of the few survivors among ad tech companies that have operations in several countries. Many ad tech companies in markets such as the US and Asia have either been bought or are struggling to grow partly because of competition from the likes of Google Inc. and Facebook Inc.

Last month, InMobi launched a new product called Miip, betting its future on the discovery platform that it hopes will differentiate the company from the tech giants.

Miip, which takes the form of an animated monkey, will track users’ browsing habits across various mobile apps and show ads in the forms of bubbles and animations instead of traditional display ads.

Miip will use visuals within mobile apps, extract content from them, show ads based on user shopping patterns on the mobile and also allow shoppers to buy products through the payments service Stripe.

It will showcase products and services from three large categories: e-commerce companies and digital media firms such as Spotify; retailers, restaurants and other offline service providers; and, online-to-offline services. InMobi is launching Miip in the US, China and India this year and will expand it to the UK, Japan, South Korea and Australia in 2016.

“The ad tech business, for everyone, was based on helping drive app downloads. It was a relatively easier space. There are not many players who bet on the commerce play. We’re betting on commerce. The commerce business is 10-20 times bigger than the app downloads market. We have already signed on (25) big partners in the US. Right now, our focus is to sign on all the big players in the US, China and India," Tewari said.

Miip is InMobi’s attempt to counter nascent efforts by giants such as Google, Facebook and Twitter Inc., which are all trying to grab a piece of online and mobile commerce. All the three US-based companies, which together dominate digital advertising, have tested “buy" buttons that allow shoppers to buy things directly from ads on these companies’ platforms.

Rather than rudimentary “buy" buttons, InMobi has created a much fuller product—almost like an app—that it hopes will hook shoppers. As Google and others build their e-commerce offerings, InMobi is rushing to strike partnerships with the most popular mobile app brands in the US, China and India.

“In technology, the only barrier anyone has is speed to market. We have speed to market. We have a 12-24 month advantage over others. That’s a huge advantage in the mobile space. All these companies (Google, Facebook, Twitter) have also known that different business like messaging exist. But they haven’t dominated them. The pace of execution, (quality of) solution matters," Tewari said.

It’s too early to say whether InMobi’s approach will work, partly because no ad tech company in the past has moved to this extent toward offering a comprehensive, consumer-facing product.

Until now, ad tech has been a relatively commoditized business. Mobile ad tech companies currently generate a majority of their revenue from driving app downloads for brands and putting up display ads on various apps based on past browsing habits of shoppers.

“Miip is a definitely a bold move—make or break for InMobi," said a partner at a Bengaluru-based venture capital firm. “Not only Google and Facebook but other ad tech companies are also trying to enable commerce but no one has done the kind of product and marketing that InMobi has. But obviously, the commerce plays of Google and Facebook will improve soon. That will be the real test for InMobi," said the person, who spoke on condition of anonymity.

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Published: 26 Aug 2015, 12:26 AM IST
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