VerSe bets on AI, cost cuts for a turnaround after a tough FY24. Will it work?

“The primary focus is to break even in the next few months,” Bedi said. “Although Dailyhunt broke even on a standalone basis two years ago, we were still burning money for other verticals. I think FY24 was pivotal in reducing our burn drastically despite flattish revenue growth.”

Read this | Gaja Capital set to become first Indian PE firm to go public with plan for ₹500 cr IPO

Bedi added that the company expects more than 75% revenue growth in FY25 and aims to reduce burn by 30-40%.

In FY24, VerSe’s revenue fell to ₹1,261 crore from ₹1,356 crore a year earlier. However, its EBITDA burn, which excludes non-cash expenses, improved by 51%, narrowing to ₹710 crore from ₹1,448 crore in FY23.

“This was driven by a reduction in our sales and marketing expenses and our cost of services,” Bedi said.

The company expects a sharp turnaround in revenue, fuelled by artificial intelligence (AI)-driven innovation, deeper monetization across platforms—including Dailyhunt, Josh, NextVerSe AI, and VerSe Collab—and a recovery in the advertising market. “Through these moves, we are setting the foundation to make the company IPO-worthy,” he added, without disclosing a timeline.

In FY24, VerSe cut its cost of services to ₹1,155 crore from ₹1,389 crore, while promotional expenses fell to ₹339 crore from ₹969 crore, according to company filings.

Bedi described FY24 as a reset year, where the company shifted focus from revenue growth to profitability amid a weak ad market, which has since rebounded.

AI and acquisition-led growth

Over the past two years, VerSe has aggressively cut marketing expenses while integrating acquisitions into its operations.

Among them, Valueleaf is expected to generate an additional $100 million in revenue in FY25 at a 10% Ebitda margin, while Magzter has helped Dailyhunt expand beyond an ad-driven model to include subscription-based revenue.

VerSe has also invested heavily in AI to drive engagement and monetization. It introduced Xpresso, an AI-powered newsfeed in local languages aimed at younger users. The company has signed licensing deals with over 100,000 content creators, including influencers and news portals, using a revenue-sharing model.

Meanwhile, Josh has integrated AI-driven programmatic ad tech to enhance ad efficiency and brand outcomes.

While acquisitions remain a core growth strategy, their contribution to profitability remains unclear. Valueleaf and Magzter were integrated in recent months, and their impact will be reflected in FY25 earnings.

Read this | India’s fledgling startups are ditching the growth-at-all-costs culture for an old favourite

Over the past five years, VerSe has acquired social media app GolBol, photo-video sharing platform Vebbler, AI solutions provider Cognirel, and online news platform Local Play. It has reportedly spent under $100 million on each of its previous acquisitions.

The company has historically funded acquisitions through cash reserves and still has significant dry powder.

VerSe last raised $805 million in April 2022 at a $5 billion valuation from investors including Goldman Sachs, Falcon Edge Capital, Sequoia Capital India, Omidyar Network India, and Matrix Partners.

Also read | Fast and furious: Early-stage startups tweak supply chain operations as they shift to quick commerce lane

In India’s short-video space, VerSe’s Josh competes with Mohalla Tech’s Moj and ShareChat, both of which gained traction after TikTok was banned in India in 2020. The effectiveness of VerSe’s AI-led monetization, particularly against these rivals, remains to be seen.