Josh, a short-form video platform run by VerSe Innovations, should reach an annual revenue run rate (ARR) of $50-$100 million by March and break-even at the operating profit level within the next 18 months, Umang Bedi, co-founder and CEO told FE. Meanwhile, VerSe, which aims to go public in about two-three years, is on track to end FY23 at an ARR of $300 million, Bedi said.

Josh is relying on advertisements and commerce — such as virtual gifting — for profits. The platform now has 184 million users, of which 83 million use it every day; 60% are male and 40% female. On average, a user spends about 25-30 minutes on the platform.

Bedi told FE Josh’s revenues are growing five times faster than those of Dailyhunt. “The short-form video market has seen explosive growth. Across Dailyhunt and Josh, a large part of our audience comprises those with handsets costing more than Rs 12,000. It is a very solid audience base and more monetisable,” he said.

About 75% of the audience is in Tier 2 cities. “We’re largely on a cusp of moving from out of Tier 1 and being present in Tier 2 cities, unlike other competitors who have penetrated deep into Tier 3/Tier 4 regions, which is a difficult market to monetise,” Bedi said.

Also Read: Dailyhunt, Josh’s parent co sees loss surge to Rs 2,563 cr in FY22

He said most local language platforms have failed to demonstrate revenues on a big scale and are not profitable. “In the local language space, the real test is profitable monetisation at scale. If they don’t have a monetisable audience, a business model like short-form videos will quickly fall off a cliff,” he said.

The company has let go of 5% of the employees following the annual performance review. “Recently, all our staff voluntarily took a 11% pay cut, possibly because historically, we have given an average raise of about 15% and did not lay off a single employee during Covid,” he said.

Also Read: Josh joins hands with D-ID to bring new feature to the platform

VerSe Innovations has taken measures over the past few months to reduce its cash burn. Marketing spends have been reduced by over 70% and it has let go of about 150 employees, or 5% of its 3,000-member team as part of a regular performance cycle.

Dailyhunt, VerSe’s biggest product, will close FY23 at an ARR of about $250 million. It has broken even, with an Ebitda of 8% in March and is generating cash; it has a cash runway for over 36 months.

VerSe — which was valued at around $5 billion after it raised a staggering $805 million in a single round in April — saw its losses skyrocket to Rs 2,563 crore in FY22 from Rs 808 crore in FY21 on the back of promotional costs and employee benefit expenses. The Google-backed company’s operating revenue, however, jumped 45% to Rs 965 crore from Rs 666 crore in FY21.