By July 2015, almost two years into launch, Inshorts had achieved a milestone of 1M Android App Installs with a 4.5-star rating on Google Play Store, but the company was still not fretting over monetizing the product.
Azhar Iqbal, CEO of Inshorts laid out the company’s strategy at a panel discussion in FICCI Frames 2016, “Inshorts currently does not make any money. We’re right now working only of venture capital money. There’s no particular revenue model. Right now, our main focus is trying to get eyeballs on Inshorts and make sure people read our summaries as they don’t have time.”
So then how did Inshorts go from making no money until April 2016 to operationally profitable by the last quarter of 2017, in a span of only 1.5 years? Before we discuss how Inshorts monetized their product, let’s look into the founding story to establish some context.
What were the founders thinking when they started Inshorts?
By the end of their second year in IIT, the three founders of Inshorts were dealing with a problem many engineers go through during engineering — they were completely and totally bored. And like many other bored engineers, they got enamoured by the then-booming Indian Startup ecosystem.
After some soul searching, they realized they weren’t as aware of the regular news affairs as they should be ideally. But they weren’t alone in this. Most of their peers were also unaware of what was going on in the world, leaving apart the technology sector.
When they dug into why this was the case, they realized there were two major reasons for this: one was that all major news websites were cluttered with an overwhelming amount of information for anyone who was not into the news; the second was that with the young generation going mobile — reading long-form content was no longer as comfortable an experience as it used to be on desktops or laptops.
With devices becoming smaller & the attention spans getting shorter, the founders of Inshorts sensed the need for short-form news updates. To validate their hypothesis, the 3 Not-So-Idiots From IIT didn’t launch a product straightaway. They started with a minimum viable Facebook Page.
Within a short period of time, the Facebook page reached 1 lakh fans. The initial traction came from their peers at IIT-Delhi & IIT Kharagpur, which then attracted more friends of friends. The quick success of the Facebook page might come as a surprise now, but the Inshorts founders used it to spread the word about Inshorts way back in 2013 before Facebook killed organic reach.
Once the idea was validated, the founders dropped out of IIT, following up the Facebook Page with a Mobile App. Post the App launch, the Inshorts team got accepted in TLABS — a startup accelerator operated by the media giant Times Internet. With a seed investment of 10 lakhs in exchange for a 10% stake, Inshorts forayed into the media market.
Along with other entrepreneurs like Gaurav Bhatnagar, Ankush Nijhawan and Manish Dhingra, Flipkart co-founders Sachin and Binny Bansal also participated in the seed funding round. Back then, Sachin Bansal had said, “I am a user of the product and it saves a lot of my time every day. News in Shorts has the opportunity to redefine the future of news consumption via mobile.” In hindsight, we can attest his prediction was spot on. Inshorts even raised a Series A round of Rs 25 Crore from Tiger Global in February 2015, which was followed up by a series B round raise of $20 Million in July 2015.
All this while, Inshorts ignored monetization, focussing solely on the product — trying to build a great user experience, using the pile of investor money they were sitting on. Inshorts started making money, in the latter half of 2016 by showing Custom In-App ads. Below, we discuss the advertising-based revenue strategy in detail to better understand Inshort’s business model.
How Inshorts generates revenue using Custom In-App ads
As a news service, Inshorts is free but it monetizes the product by partnering with corporate giants like Vodafone, Oneplus, Mercedes, and Myntra, etc, charging them based on impressions and engagement driven by the Inshorts ads.
In Feb 2018, Yourstory had reported that Inshorts was working with 100 such big advertisers and claimed to be adding 10 new ones every month.
Inshorts CEO, Azhar Iqbal, explained why Inshorts has become a sought after advertising avenue for brands in an interview with the business world,
“Our product is a hit among the busy millennials, who are short on time and are always hooked on their screens for socializing, consuming news, paying bills or for entertainment. Therefore, for marketers, this has always posed as a huge opportunity since India leapfrogged ahead into the digital era via mobile. Given the current situation, Inshorts advertising solutions are always sought out for by the advertisers because of its premium user base and innovative offerings.”
What differentiates Inshorts from other apps monetizing their apps is that Inshorts has developed custom ad formats that drive higher ad engagement and ROI for advertisers. As per an interview of the Inshorts CMO with Exchange4Media in March 2019, the company was offering six innovative ad formats to advertisers. With time, one can expect Inshorts to keep coming up with innovative ad formats aided by feedback from their advertising clients.
While Inshorts also drives traffic to popular long-form news websites like Techcrunch, Times Now & Hindustan Times to name a few, the app does not charge money for sending traffic to these publishers. Inshorts’ end of the bargain is that it gets to aggregate content from these publishers, citing the original source. Even though the long-form articles open within the Inshorts app, third-party websites benefit by showing ads on those pages. Around the beginning of 2018, Inshorts was working with a group of 65 to 70 such partners.
Inshorts Revenue & Valuation
Being a private company, Inshorts is not obliged to disclose financials, so publicly available revenue information might not be accurate. That said, Exchange4Media has reported Inshorts had a turnover of Rs 81.74 crore for the fiscal ended 31st March 2020, up from Rs 48.72 crore in FY19. After it last raised funding of $60 million in July 2021, Inshorts was valued at about $550 million.
Inshorts Expands Beyond its Primary Offering by Launching Public
In 2019, Inshorts launched a new app, Public, a location-based social network that allows people to record and share happenings around them through short videos. Six months into launch, the app had registered 10 million users and become the No.1 app on Play Store in the category, witnessing growth mostly from Tier 2 and 3 cities. By June 2021, Public was being used by more than 60 million monthly active users. As far as the revenue model for Public is concerned, we can expect to see Inshort’s advertisement playbook being implemented all over again but with a local twist to account for a different demographic user base.
What are Inshorts’ future plans?
As far as the future is concerned for Inshorts short-form news offering, the company plans to expand their news offering to other regional languages. At the time of writing this article, Inshorts only supports news in the Hindi language other than English. The more languages Inshorts incorporates; the more user eyeballs it can aggregate, the more ad revenue it can generate. Apart from adding regional news, Inshorts might also look to expand internationally in the future. At the same time, Inshorts’ will be looking to grow Public’s user base.
Thank you for taking the time to read the full case study. If you liked my piece on Inshorts, you might also like my article covering How Tesla Disrupted the Car Industry.