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New Delhi: VerSe Innovation Pvt. Ltd, which raised $805 million in April, has marked its overseas foray with the launch of its main news and content aggregator business Dailyhunt in the Middle East, said a top executive.

This comes at a time when the Dailyhunt business achieved break-even at the earnings before interest, taxes, depreciation and amortization (Ebitda) level in the past three months. Umang Bedi, co-founder, VerSe Innovation, said Dailyhunt recorded 3-4% Ebitda in the last three months in line with its stated goal to achieve profitability at the parent level in the next two to three years.

In the Middle East, Dailyhunt will be available in the United Arab Emirates (UAE), Saudi Arabia, Bahrain, Oman, Qatar and Kuwait to begin with in English and Arabic languages. It gradually plans to add local languages such as Farsi and Hebrew.

“Our strength is local languages and just like in India wherein local languages are a dominant part of the internet across content and other consumption behaviours, we see a similar trend here," said Bedi.

He explained that one of the reasons for choosing the Middle East for the international foray was because of the size of the population. The Gulf Cooperation Council or GCC region comprising Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman is home to around 60 million people and the Middle East and North Africa (MENA) region has a population of over 300 million, said Bedi. Besides, rising internet penetration, especially in the GCC which is already at 98%, high news consumption among the public and growth potential of the advertising market were the other factors for it to target this region.

Dailyhunt’s Middle East operations, which will be headquartered in Dubai, will be spearheaded by Shekhar Iyer, who has been appointed as director and general manager. The company has already partnered with over 5,000 content partners catering to the UAE market. The local language content platform will soon be partnering with news publishers such as MENA Newswire, Al Khaleej, The Brew, Chalk Media, Brandknew, KKompany, Mudgal Kreations, Buzzing, Gulf Today, among others, it said in a statement separately.

Meanwhile, Bedi said the company is well-capitalized for now and does not need to raise additional funds for its overseas growth.

VerSe Innovation, which also runs short video editor Josh and hyperlocal community news platform PublicVibe, raised $805 million at a valuation of about $5 billion in April in a funding round led by CPP Investments.

Bedi, however, said that there is currently no plan to take Josh overseas.

He also pointed out that while the company has a runway for more than a couple of years and the recently-raised $805 million remains untouched, it is not insulated from the current downturn that has forced some heavily-backed venture capital startups to layoff staff in recent weeks.

Bedi said Dailyhunt has three big areas of costs led by IT and tech, or technology costs. This is followed by discretionary expenses around digital marketing and digital audience acquisition, and the programmes it creates to fuel the content ecosystem.

People cost is smaller compared to these three costs and hence it does not plan to do mass layoffs, he said.

Bedi said that the company is reining its technology costs by getting code more efficient and rationalizing the cost with cloud players.

“When you serve millions of users, your cloud cost explode," he pointed out. Some of the ways it is trying to address this is by ensuring that the engineers are disciplined enough and working on the right algorithms and not having thousands of experiments running; optimizing the encoding architecture of video such that it uses lesser bandwidth and negotiating better on the per unit rate with cloud players.

Bedi also said that he doubts that Dailyhunt will ever venture into creating its own content. “Those are capex intensive business and our whole aim is to be asset light," he noted.

 

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