Marching Towards Growth, InMobi Becomes Second Indian Unicorn To Turn Profitable

Bengaluru-based mobile adtech firm InMobi claims that it has turned profitable in the last quarter of 2016. This makes InMobi the second Indian unicorn after data analytics firm Mu Sigma to become profitable.

As per the company, it has been generating cash every quarter starting April-June in the calendar year 2016 and is on course to post a net profit this year. This profit has come on the back of video ad delivery to smartphone users, helping clients increase the conversion rate for online shopping and a strong growth in China operations. The company, however, did not reveal exact numbers for the same.

Naveen Tewari, CEO and co-founder, InMobi stated, “We took some courageous decisions to drop non-core areas and focus on existing bets which have held us in good stead.”

While the US continues to be InMobi’s top territory, with over 30% of overall revenues coming from there, China has now become its second-largest revenue market, representing about 28% of overall revenues.

Interestingly, the absence of rivals Google and Facebook in China seems to have contributed to the spurt in InMobi’s growth there. Consequently, InMobi will also look to invest up to $15 Mn in China to accelerate its growth.

Additionally, it expects the video-ad platform category to be the biggest growth driver in 2017. The category registered an over four-fold increase in revenues in 2016. The company which turned 10 last year will also focus on emerging markets like India and Indonesia – both of which are burgeoning mobile-first markets.

InMobi’s profits come after a rather despondent 2016, which saw its discovery-led mobile commerce platform Miip failing to take off after it was launched in the US in 2015. As per its financial statements, the company made revenues of $262 Mn for the year ended 31 March 2015 and losses of $40 Mn. In August 2015, InMobi also took on $60 Mn in debt from a consortium of lenders led by Tennenbaum Capital Partners.

Miip’s failure had led to the loss of confidence in the company. A drying up of funds along with the relative downturn in the mobile ad market further compounded its woes. InMobi’s last fund-raising was in 2011 when it raised $200 Mn from SoftBank Group Corp. Since then, discussions with several investors over funding haven’t materialised. InMobi also laid off close to 100 employees last year. This was followed by several top level exits from the company, such as that of CFO Manish Dugar, and Director of Operations  Samuel John.

With its focus on emerging economies, InMobi will compete with Facebook and Google for a slice of the worldwide mobile internet ad spending pie which is expected to grow to around $200 Bn in 2019.