Google-backed VerSe Innovation, which has raised more than $2 billion from marquee global investors since its inception, is planning to launch an initial public offering (IPO) before March 2027. This has been communicated to its major institutional investors, according to sources.
The Bengaluru-based firm operates vernacular news and content platform Dailyhunt, global digital news-stand Magzter, and short-video-app Josh. In April 2022, VerSe had raised $805 million at a $5-billion valuation.
An email sent to VerSe was not answered.
Strong backer profile
The firm’s diverse backers include technology giants such as Google and Microsoft, private equity major Carlyle Group and Siguler Guff, investment management giant Baillie Gifford, Chinese internet-giant ByteDance, investment bank Goldman Sachs, large global pension funds CPP Investments and Ontario Teachers’ Pension as well as hedge fund Luxor Group and Qatar Investment Authority (QIA).
Audit concerns and turnaround plan
In FY23, auditor Deloitte had identified issues on VerSe’s revenue recognition and internal controls. Media reports had also cited potential ‘round-tripping’ transactions with Builder.ai, a UK-based AI startup and revenue inflation through reciprocal billing for services not provided.
Post this, the firm adjusted total income from Rs 1,809 crore to Rs 1,356 crore for FY23. In a statement, it also assured commitment to financial discipline and operational efficiency. The firm also said it is expecting to break-even in second-half of 2025.
A senior corporate lawyer in Mumbai, who has earlier worked with VerSe, said it had emerged stronger since. Avendus Capital could be its pick for IPO adviser, he added.
Neeraj Shrimali, executive director, digital and technology investment banking at Avendus Capital was instrumental in several of the large funding rounds. Avendus also advised the firm on its acquisition of New York-based Magster in April 2024.
Matrix Partners India, Sequoia Capital India, Falcon Edge Capital and Goldman Sachs are among the earlier investors of VerSe.
Virendra Gupta, founder, and Umang Bedi, co-founder, had said in a statement that with strategic focus on video content, it saw “explosive growth” emerging from “the next billion users coming out of regional India”. In 2015, Gupta renamed Newshunt, which he had acquired, as Dailyhunt.
In its largest funding round, VerSe had raised $805 million from CPP, Ontario Teachers’ Pension, Luxor Capital and Sumeru Ventures. Previous investors include Sofina Group and Baille Gifford. This was after a $650-million investment in 2021 from investors, including Google, Microsoft, QIA, Siguler Guff, Carlyle Group, Baillie Gifford, Falcon Edge Capital and Glade Brook Capital.