Regional language news and content aggregator Dailyhunt is in talks to close a $25-million funding round led by Alpine Capital, a US-based private equity fund and a rare investor in Indian firms, sources said.
Dailyhunt has been in the market to raise $100 million for a year now, but is now settling for a smaller round after multiple discussions, including with the SoftBank Vision Fund, did not result in a deal. The fundraising is important for the startup ecosystem as well which has been hit hard by the coronavirus pandemic.
“Alpine issued the term sheet when India was just beginning the shutdown. It is certainly odd for a virtual first-time investor to come in during a time like this. But Dailyhunt stands to benefit from the virus pandemic and lockdown because more people are consuming their content sitting at home than ever before,” said one of the sources who didn’t wish to be identified.
Dailyhunt and Alpine did not respond to Moneycontrol's queries seeking comments.
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Dailyhunt, run by Verse Innovation Pvt. Ltd, aggregates news from newspapers and websites and caters to 13 languages, including Marathi, Gujarati, Tamil and Bhojpuri.
The Bengaluru-based company also offers original video content in Hindi and Telugu and a free live television streaming service in nine languages through strategic partnerships.
Dailyhunt is one of the earliest entrants in the regional content space. Previously known as Newshunt, Dailyhunt was founded by ex-Nokia employees Umesh Kulkarni and Chandrashekhar Sohoni in 2009.
Three years later, Virendra Gupta acquired the company and is now the chief executive. Former Facebook India head, Umang Bedi, joined the news aggregator in February 2018.
“The coronavirus has really helped Dailyhunt. They have been able to touch user numbers which they have been trying to reach for over a year now,” said another person close to the company. The lockdown was on April 14 extended to May 3.
While Moneycontrol could not ascertain their monthly active users (MAU) independently, Dailyhunt’s annualised revenue is about $60-70 million, said the sources cited above.
Like most mainstream content startups, Dailyhunt makes money via advertisements.
However, the coronavirus outbreak has tied up advertising budgets for most companies, whose business has dried up. To survive the unprecedented crisis, small and medium companies are looking at job cuts and even shutdowns.
So, even if Dailyhunt draws in record viewers in these months, it may not translate into a significant increase in revenue. Mint reported on March 21 that the pandemic may deal a Rs 5,000-crore blow to the advertising industry, with sports, movies, food and travel being among the worst hit.
Boston-based Alpine Capital is investing via its Alpine Opportunity Fund, a Cayman Islands-based private equity fund. This would be Alpine’s second Indian investment after it backed the student-lending platform KrazyBee in 2018.
Dailyhunt has also faced headwinds on the regulatory front. The Centre had announced that companies must restrict foreign direct investment in digital news media companies to 26%. Aggregators such as Dailyhunt and Tiger Global-backed InShorts were expected to be impacted by this but there has been no clarification since.
Dailyhunt’s investors are all foreign -- including venture capital firms Sequoia Capital, Goldman Sachs, Sofina and China’s ByteDance of the Tik Tok fame.
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