Those of us with eyes glued to India’s tumultuous #startup field have been used to hearing bad news from India’s unicorns for some time now. That’s what makes InMobi’s announcement today of hitting profitability all the more sweeter. The ecosystem needed this dose of hope.
Here’re the key points of adtech unicorn InMobi’s announcement:
- InMobi was EBITDA (earnings before interest, tax, depreciation and amortization) profitable for the year ending December 2016.
- It was also net profitable – after taking taxes and interests in as well – in the last quarter of 2016.
- The drivers of growth are InMobi’s video ad platform and remarketing product.
- Video ad consumption in India tripled over last year. InMobi expects it to make up half of its revenue in 2017, up from around 25-30 percent in 2016.
- InMobi didn’t share the exact revenue figures.
“We took some courageous decisions to drop non-core areas and focus on existing bets which have held us in good stead,” CEO and co-founder of InMobi Naveen Tewari said, without elaborating on the decisions.
We took some courageous decisions to drop non-core areas and focus on existing bets.
InMobi is the second Indian unicorn to hit profitability. Data analytics startup Mu Sigma was the first. The company reported a 22 percent growth in net profits at INR 462.9 crore (US$71.25 million) on a revenue of INR 809.5 crore (US$1.2 billion) for 2015-16.
Of India’s ten unicorns – Flipkart, Snapdeal, Ola, Paytm, Mu Sigma, Quikr, Hike, ShopClues, Zomato, and InMobi – Mu Sigma has been the only one to clock consistent profits over the years. So InMobi joining the profitable club is cause for cheer.
InMobi’s path to profitability
One bet that definitely paid off for InMobi is its entry into China.
It launched operations in China back in 2011. It set up a team in Beijing and Shanghai of 60 local mobile advertising professionals, headed by Jessie Yang, senior vice president and general manager of InMobi Greater China, and built strong local partnerships. For instance, its partnership with TalkingData, the largest mobile big data company in China, helped InMobi improve the targeting of mobile ads in China and improve its advertising clients’ ROI (return on investment). InMobi’s partnership with Apus gave it access to 200 million additional users across the Apus portfolio of apps.
In the last three years, InMobi’s revenues in China grew 15 times. And in the last two years, InMobi doubled its investment in the China market as well. “China has now become InMobi’s second largest revenue market representing about 28 percent of overall revenues for InMobi,” the company stated today. It is planning to invest up to US$15 million in China to further accelerate growth and win market share.
In turn, InMobi is helping Chinese companies to play in India. “With InMobi, we believe we have the best partner who can help us win in this market,” Apus Group CEO and founder Li Tao says.
The biggest market for InMobi is still the US, which accounts for 30 percent of the company’s overall revenues. In Indonesia, InMobi claims to have reached about 70 million users, including 90 percent of smartphone users in the country. It has driven more than 50,000 transactions for mobile commerce players in the region during the major sale season in 2016, InMobi announced.
InMobi was SoftBank’s first big startup bet in India, with a US$200 million investment in 2011. The healthy bottom line of InMobi will bring a dose of cheer to the Japanese investor currently pushing for a sale of troubled Indian ecommerce site Snapdeal in which it pumped US$900 million.