Business

A Turnaround Classic Tale of InMobi

Ruma Batheja•

15 April 2017|

Updated on 6 March 2019

The remarkable story of InMobi's changing fortunes, and the causes behind it

An imminent turnaround of InMobi, a SoftBank backed advertising entity is in news these days by becoming operationally net profitable in the last quarter of 2016. As per last year’s figure, USA accounted for 30% and China contributed 28% of the total revenue of the company. The company intends to continue the trend of profitability in 2017 as well, and is expected to reach USD 40 million in profits and USD 425-475 million in revenue in the coming year.

Back in 2007, the company was founded as mKhoj to monetize on SMS-based business. The company realized the potential of mobile advertising and rebranded itself as InMobi in 2009. Between 2009 and 2011, the company expanded operations to Europe and USA, acquired multiple companies and raised investments as part of its growth strategy. It became the first Indian private tech startup to be valued over USD1 billion in 2011.

From 2014 onwards, the company reported a potential downfall which was evident from increasing attrition and depressed advertising-tech market. In 2015, the company launched Discovery Platform Miip, which failed miserably and resulted in devaluation of the company. The company also came under pressure from investors to show faster returns.

InMobi bounced back in 2016 with its new strategy; it rationalized costs, dismissed people and focused on improving overall efficiency to perform for its investors.

It re-aligned its strategy to focus on a platform to deliver video ads to growing smartphone users. The company was also recognized as one of the world’s innovative companies in 2016 for making ads that people actually want to see.

The success can be attributed to various factors:

30% Growth in Chinese operations – The overall revenue from Chinese market grew 15 times in last 3 years and 30% in 2016 itself. The company also plans to invest USD 15 million this year to further expand in the market.

Video ad platform – Revenue from advanced video ad platform grew 4.22 times year-on-year (YOY).

Hive off Non-core business – As a part of strategic decisions taken in 2015-16, the company dropped non-core areas and diverted all focus towards building the video ad platform.

Now, the company also has a strong market presence in Indonesia with 850 publishers on board and claims to have 70 million users in Indonesia i.e. 90% of smartphone users. InMobi currently holds the third position in digital ad network after Google, which controls the Android platform, and Facebook, which has over 1.4 billion users on its app.

It will be quite interesting to see how things unfold for InMobi in the years to come, as the company is planning to hire a new CFO and also planning to go public either themselves, or through some joint venture.

Author

Ruma Batheja