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Home / Companies / News /  Dailyhunt parent raises $805 mn at a valuation of $5 bn

MUMBAI/NEW DELHI' : VerSe Innovation Pvt. Ltd, the operator of news aggregator Dailyhunt and short video app Josh, on Tuesday said it raised $805 million as part of a Series J funding round.

The amount was raised at a valuation of around $5 billion, a 1.5 times increase in less than three months, co-founders Umang Bedi and Virendra Gupta said in an interview. VerSe Innovation was valued at $3.1 billion in January, according to regulatory filings, when it raised $28 million as part of its Series I funding round from Canada Pension Plan Investment Board (CPP Investments).

CPP Investments also led the latest round with $425 million. In addition, new investors, including Ontario Teachers‘ Pension Plan Board, Luxor Capital, Sumeru Ventures and existing investors Sofina Group and Baillie Gifford, also joined the round.

“We believe the team is just getting started creating an IPO-scale institution and look forward to the next phase of this journey," said Vikram Vaidyanathan, managing director, Matrix India.

The fundraising did not include a secondary component and existing investors, including Matrix Partners, the second-largest external shareholder in the company after CPPIB with around 9% stake, remain invested. Matrix Partners invested in VerSe Innovation as early as 2009, according to VCCEdge, the intelligence platform of VCCircle.

VerSe Innovation will use the fresh capital to deepen and broaden its artificial intelligence (AI), machine learning (ML) and data science capabilities, the company said in a statement.

The funding round comes at a time stocks of recently listed new-age tech firms have taken a severe beating, and heavily funded startups may be looking at down-rounds or even losing their unicorn status due to concerns triggered by the uncertain geopolitical climate. Unicorns are private companies that are valued at over $1 billion. Last month, VCCircle reported that Blinkit is set to merge with online food aggregator and delivery platform Zomato, resulting in the quick commerce firm losing its unicorn tag.

“In the light of such a bleak economic environment, to have a large quantum and highest quality of capital coming in is a huge booster and validation for the business that we have built at VerSe Innovation, which is really built on fiscal discipline on cracking that three-prong board of user growth, engagement, and most importantly, monetization of the local language ecosystem," Bedi said.

The company is also looking to build newer monetization models through influencers, e-commerce and live streaming, as it aims to achieve profitability on a corporate level in the next two to three years, the co-founders said.

The company is making forays into Web3 by providing experiences across its local language creator base of over 50 million creators and its local language content ecosystem. The company claims over 80 billion video plays per month. Bedi and Gupta also said that VerSe Innovation is looking to launch its products internationally, without naming any specific countries, but added that the company would be making the announcements in the next two weeks.

VerSe Innovation operates three major digital platforms—Dailyhunt, Josh and PublicVibe. But the company generates revenue only from Dailyhunt as of now, Bedi said. The company had recently conducted a pilot for the monetization of Josh and expects it to start contributing to the company’s revenue from FY23.

“We have started the Josh monetization pilot in the last two months, and have conducted over 200 campaigns with partners and advertisers, but we have taken all that revenue and passed it to the influencers, and we didn’t recognize that," said Bedi.

The company expects Dailyhunt’s business to grow steadily at 40-60%, and its other businesses to witness exponential growth because they’re coming off a low base, Bedi added.

VerSe Innovation clocked a revenue of $128 million in FY22, Bedi said. According to its regulatory filings with the corporate affairs ministry, it had a consolidated revenue of $105 million in FY21.

Both founders said they want revenue to grow further and its monetization plans to work before going public.

“We do not want to do it prematurely. While that’s a very exciting option, I think IPOs have taught us that you have to have a real business generating cash or your costs are coming down significantly," Bedi added.

Avendus Capital was the exclusive financial adviser to VerSe Innovation on the transaction.

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