VerSe Cofounder Acknowledges Lapses, Urban Company’s INR 1,900 Cr IPO & More

Cracks In VerSe’s Controls? 

The media and entertainment giant VerSe, which operates DailyHunt and Josh and was last valued at $5 Bn in April 2022, is under fire after Deloitte flagged lapses in its internal financial control. 

Deloitte’s Findings: According to the auditor, VerSe lacked robust controls in the selection of vendors, approval of purchase orders, and payment processing. Deloitte highlighted that it could have potentially made way for wrong payments, overpayments, or even fraud.

The Red Flags:

• Poor controls over buying, selling, and managing virtual assets, which created risks of revenue misreporting or even asset theft
• VerSe’s method for recording expenses was weak, which could cause errors in reported costs
• The methodology for recording advertising revenues was not working effectively, with some campaigns not properly documented 
• Due to the complexity of VerSe’s business, acting as a publisher, ad platform, and aggregator across many partners, the company struggled with correctly applying revenue recognition rules under Indian accounting standards

Dailyhunt’s Clarifies: Soon after Deloitte flagged cracks, cofounder and CEO Umang Bedi admitted to the shortcomings pointed out by the auditor. However, he claimed that these gaps did not compromise the accuracy of the FY24 financial statements of Josh and Dailyhunt’s parent. 

VerSe’s Bold Projections: In FY24, it halved its net loss to INR 814.8 Cr while posting an operating revenue of INR 954.7 Cr. For FY25, it claims to have increased its operating revenue by 70% to around INR 1,622 Cr and further reduced its net loss to approximately INR 400 Cr. 

The company’s acquisitions of adtech firm Valueleaf Services for nearly $150 Mn and news subscription platform Magzter are likely to have significantly contributed to its revenue growth.

Amid all this, VerSe expects to break even by mid-FY26. This makes us wonder: How bold is its breakeven bet in the presence of concerns over internal control?

From The Editor’s Desk

Urban Company Files DRHP: The consumer services unicorn has filed its draft IPO papers with SEBI for an INR 1,900 Cr public issue. The Accel-backed startup’s IPO will comprise a fresh issue worth INR 429 Cr and an offer for sale component of INR 1,471 Cr.

Go Digit’s Q4 Profit Zooms: The insurtech company’s profits jumped 119% to INR 115.6 Cr in Q4 FY25 from INR 52.7 Cr in the year-ago quarter. It clocked a gross written premium of INR 2,576.4 Cr in the March quarter, up 10.3% YoY. 

Livspace’s $50 Mn Internal Infusion: The home decor startup has issued 1.85 Cr equity shares, at INR 230 apiece, on a rights issue basis to raise the funds from its Singapore-based parent entity. Livspace is planning to reverse flip to India to list on the bourses.

Ather IPO Day 1: Retail investors bid for 61.25  Lakh shares against 97.34 Lakh shares on offer, implying a subscription rate of 63%. Overall, Ather’s IPO was subscribed 16%, receiving 86.16 Lakh bids against 5.33 Cr shares on offer.

Rapido Tryst With Food Delivery: The ride-hailing platform is in talks with quick-service restaurants and cloud kitchens to commence food delivery services in Bengaluru. The move appears to be part of Rapido’s diversification strategy to create new revenue streams. 

Perfios’ Acquisition Spree: Marking its third acquisition this year, the fintech SaaS unicorn has acquired healthcare information exchange platform IHX for an undisclosed amount. The move will help Perfios reduce turnaround time in the healthcare space. 

Tesla Revs Up India Entry: The Elon Musk-led EV maker has leased a 30-seater office space near Mumbai’s Bandra-Kurla Complex on a monthly rental of INR 3 Lakh. The global EV maker plans to invest $2 Bn as part of its expansion to India. 

BluSmart Seeks Redemption: The troubled ride-hailing major is in talks with two climate and mobility-focussed distressed funds to revive operations. Last week, Eversource was in talks to acquire BluSmart for around INR 800 Cr to INR 1,000 Cr.

Inc42 Startup Spotlight

Inside Nabhdrishti’s Push To Develop Indigenous Micro Gas Turbines

India has long depended on foreign players for gas turbine technology, which is used in power generation and aircraft propulsion. While that dream is still far away, Bengaluru-based Nabhdrishti Aerospace is making big strides in this direction. 

The Indigenous Innovation: For industries that need smarter and more flexible power solutions, traditional combustion engines often fall short while big, imported gas turbines may not be an effective solution. Realising this critical gap, Nabhdrishti was founded in 2023 to build small gas turbines for hybrid urban air mobility, unmanned aerial vehicles, and decentralised power generation applications.

Made-In-India Engineering Turbines: The deeptech startup’s turbines are designed for industrial power generation and propulsion in UAVs, small aircraft, helicopters, and hybrid electric flights. Its flagship product is the ND-400 engine, a multipurpose gas turbine that can power industrial units and has use cases for applications in the aviation sector. 

The Growing India Opportunity: With India’s gas turbine market projected to reach $191 Mn by 2030, Nabhdrishti is looking to disrupt the space with its locally-manufactured solutions.

But, with deep-pocketed global giants like GE and Siemens on its tail, can Nabhdrishti carve a niche with its micro gas turbines?