The AdPushup Story: From Fighting To Survive To A $70 Mn Acquisition

Everyone loves a good underdog story. And the journey of Ankit Oberoi and AdPushup – from the brink of a shutdown to survival, followed by its rebranding to Zelto, and then a $70 Mn acquisition last week – is every bit the story of fighting the odds.

It’s not often that startups survive the so-called ‘valley of death’ to emerge as a success story. While it’s been known to happen, what makes the AdPushup (now Zelto) story inspirational is how the company did it with a focus on sustainable and slow-burn growth, while avoiding heavy reliance on venture capital.

Founded in 2013 by Ankit Oberoi and Atul Agarwal, AdPushup enables digital publishers to integrate with ad networks, such as Google AdSense, to optimise ad placements and visibility, thereby increasing ad revenue without compromising on the user experience.

Soon after launching its maiden product in 2014, the company fell on the radar of investors. In fact, it was one of the first startups discovered by Inc42, as part of our StartupDash initiative in June 2014. The momentum was with Adpushup at that time.

But this is the story of how the situation turned sour after that initial optimism. Things were at a low for the company, as it strove to get the product-market fit in the initial few years. As a result, it lost many of its key employees to a wave of attrition and then resorted to a slow growth strategy until it perfected the kind of products its customers wanted.

In many ways, this does not align with the blitzscaling that startups typically turn to in a bid to break out of a revenue rut. The contrarian, almost cockroach-like approach has paid off for AdPushup, now called Zelto.

As it went from a $1 Mn ARR in 2017 to $10 Mn by 2019 and then $59 Mn in 2021, it attracted a lot of attention from the market. While Oberoi and the company turned away VCs that lined up with capital, there were also plenty of acquisition offers over the past couple of years.

“We have had numerous acquisition offers in the last three years. In 2020, we had two offers, and then at the end of 2021, there were three options. In fact, there were three parties who participated in the current M&A process,” Oberoi told Inc42.

So, this is the story of how AdPushup and Zelto went from near-shutdown to getting more than half a dozen acquisition offers. And how it managed to pull this off during one of the most tumultuous times for Indian tech and startups.

The Early AdPushup Years 

“The first couple of years were the long gestation period. We started the company as a weekend project and we saw what opportunities (Google) AdSense would unlock.”

The startup built and scaled up the initial versions of its products after raising close to $650K in its first round in October 2014, which saw founders from CouponDunia, Wingify, and Slideshare backing the venture.

That fundraise allowed Adpushup to make a big play in the market, and soon it had attracted the eye of Japanese adtech company Geniee, part of the SoftBank Group. Geniee invested in the Series A round in 2016, but as seen often in the startup ecosystem, that was not a guarantee of success, even though this coincided with the emergence of Reliance Jio and all its network effects on India’s internet economy.

“We focussed on optimising ads for publishers as the segment was growing rapidly. But it was almost two years before we started making any revenue,” Oberoi said days after the announcement of the Geniee acquisition deal.

The problem was that AdPushup was not able to find the product-market fit even after spending a lot of money and raising the Series A round. As is often seen in the case of new products, the initial sales trickled in as the novelty of the SaaS product won out, but customers started dropping out as they did not see a big return on their investment.

It’s this time that the founder counts as one of the most challenging moments in the Adpushup journey. Owing to typical SaaS churn issues, Oberoi revealed that Adpushup had trouble supporting its cash flows, and was just about to run out of money around 2016-17, before it raised Series A.

“In the beta stage in 2015, a lot of publishers were using our product and content creators were also using it, but then after two or three months, they just stopped subscribing. We thought we would be revenue-generating in 3-6 months, but it took us more than two years to actually start billing revenue and then three and a half years to find the product market fit where the revenue grew,” Oberoi added.

Surviving The Churn 

“We planned for the worst-case scenarios at that time. It was a very stressful time.” — Adpushup (Zelto) founder Ankit Oberoi.

It was around the end of 2016 and the beginning of 2017 that Adpushup went through a churn internally too. Half of its 30-member team quit for other opportunities as revenue growth was not as rapid as expected.

In hindsight, Oberoi believes that this attrition was a blessing in disguise. It meant that it had to only support the salaries of the few employees who were aligned with the mission and vision of the company.

“One good thing for us was that we were not super dependent on investors, but rather we turned to our customers. We didn’t worry about the funding environment, instead we focussed on getting the product-market fit right, which was built around customers and the competition at the time.”

Oberoi counts himself lucky that the 15 employees in the company around 2017 were able to drive this culture and put the business first rather than bend to the whims and fancies of investors.

“It’s simple, right? If the company has more customers and more revenue, then investors will be happy. If we had done 10 extra things to put in pitch decks, it would not have moved the needle as much as our clear focus on retaining and adding customers did,” he added.

The founder admitted that the thinking was that the startup would have to go for slower growth and become more focussed on the customers that it did have to break free from this jam. This is easier said than done, of course, but it was possible because of a very clear understanding of the fundamentals, Oberoi believes.

The key question to answer was who was driving the business. “It was not the investors in our case. That’s a mistake that many founders make in my opinion. In our culture code, we clearly defined that the customer comes first, and with the people that we had, we knew this message would get through.”

The Slowburn Comeback 

“The whole idea of optimising the return on our investments to gain revenue was only possible when we started seeing a concrete product-market fit. Till then, any ROI is just hypothetical because you don’t even know if the product will have enough value that somebody will pay for it.”

The sharp focus on solving customer problems through the product was largely because the company did not have the capital to burn and acquire users after its last funding round in 2016.

As Oberoi puts it, as long as one has a ‘leaky revenue bucket’ there can be no question of optimisation of ROI. But the internet revolution in India gradually boosted AdPushup’s business, especially as more and more publishers looked to tap the ad boom in the wake of the entry of Reliance Jio and other cheap 4G data plans.

With business slowly picking up by 2018, the focus for AdPushup turned towards optimising its sales and customer acquisition processes.

“Initially, we invested a lot more in inbound marketing, which works great for SMBs but not mid-market companies. Then we started doing account-based marketing, which does better for mid-market customers, but was not working for SMBs, who are more unorganised. We started seeing which was enabling the right unit economics. And then we pressed the pedal to the floor wherever there was higher ROI.”

The comeback journey for AdPushup includes going from $1 Mn in annual revenue in 2016 to over $10 Mn ARR by 2019, and $59 Mn in actual revenue by the end of 2021. By this time, the company was also profitable.

The company claims to be optimising billions of ad impressions every month for 300+ websites globally, including customers such as CNET, SPIN, NDTV, PCMag, Mashable, and GSMArena, amongst others. It claims to have added 80 clients in 2022 alone.

AdPushup To Zelto & Life After Acquisition

The discipline in ROI held the company in good stead through the pandemic, during which the company remained profitable despite some slowdown in marketing and ad spending.

“Now that we’re a larger company, sometimes what happens is people question internally about why we are so actively focussing on ROI. Like in 2021, when we didn’t necessarily need to optimise the costs so heavily, because we had record profits. We were still doing those optimisations because it’s our DNA,” Oberoi claimed, adding that this is why the company remained profitable even in January 2023, when the ad spends were at their lowest volume.

A lot of startups lived through the funding boom of 2021 with unbridled optimism. They hired rampantly and entered into new verticals. As many have pointed out, the attitude was akin to throwing money at the problem. “That was a test for us,” Oberoi said and added that many startups were tempted to partake in activities where they created artificial growth for people and then started laying them off.

With the $70 Mn acquisition by Geniee, the company has been able to generate wealth for some of its key employees who have stuck through the rough years. Oberoi said some employees received close to INR 10 Cr for their stock options, which is far more money than they would have made by jumping around companies, which was the predominant trend in 2021.

With this deal, Zelto joins the league of Indian SaaS companies that attracted global buyouts. In the past we have seen mega deals in this space such as Divyank Turakhia’s Media.net acquisition by a Chinese consortium for close to $900 Mn in 2016.

Besides this, we have seen M&As such as Jyoti Bansal’s AppDynamics which was acquired for a whopping $3.7 Bn by networking giant Cisco and Pallav Nadhani’s FusionCharts which went from a bootstrapped startup to being acquired by enterprise tech major Idera in 2020.

Of course, it’s one thing to stay back for the ESOPs when things are going well. How did AdPushup manage to retain employees through the tough years? “We’re very transparent about the business metrics. We share the problems in the company as equally as we share the progress and the updates in terms of our growth. So I think people are able to actually see the growth and they’re able to see the story”

In April 2022, AdPushup rechristened itself to Zelto, which is a play on the Finnish-origin word zelt or gold. This was one way for the company to widen its horizons and capture the larger opportunity around marketing and adtech products.

The acquisition by Geniee is a step in this direction. Zelto will continue to operate independently under the Japanese company.

“I think nothing changes for us as Zelto as an organisation. The brand was created to go outside the publisher space, and that’s perfectly aligned with Geniee because they focus on different verticals, not just publishers. For instance, they offer CRM  and a marketing automation tool. And I think it’s the perfect alignment in terms of philosophy.”