VerSe Innovation, the parent firm of news aggregator Dailyhunt and short video platform Josh, on April 18 said it is buying Magzter, a New York-headquartered cross-platform global digital newsstand with a library of over 8,500 premium magazines and newspapers.
This acquisition is part of the company's efforts to diversify Dailyhunt's revenue streams from a pure advertising-driven model to include digital subscriptions. It is the first global acquisition for the firm, although the deal size was not disclosed.
Following this deal, Dailyhunt is unveiling a subscription-based offering called Dailyhunt Premium that will provide users with access to premium content from international publishers across more than 40 categories in over 60 languages including English, French, Italian, Japanese, Russian, and Spanish among others.
Among the publications that will be available for subscribers include Time, Newsweek, Fortune, The Economist, Forbes, Reader’s Digest, Cosmopolitan, Vogue, Maxim, Elle, Vanity Fair, New Yorker, and Bazaar across their respective India and international editions.
Subscribers will also get access to an ad-free experience across the Dailyhunt application.
The subscription offering will be available through a separate tab within the Dailyhunt app in the next few months in India and the Middle East and North Africa (MENA) region, VerSe Innovation co-founder Umang Bedi told Moneycontrol. However, he did not disclose any specific information about how much the company plans to charge for the subscription.
Magzter currently offers a range of plans for its customers in India. This includes a Rs 399 monthly plan, Rs 3,999 yearly plan, Rs 6,999 for two years and Rs 9,999 for three years.
Read: My competition is with users’ time spent on mobile phones: DailyHunt founder Virendra Gupta
Attracting premium audiences
Through this acquisition, Dailyhunt also aims to attract users from India's elite and aspirational upper-middle-class demographic to its application, as part of the company's increasing focus on monetisable users.
Dailyhunt currently serves over 350 million monthly active users (MAUs) every month, of which 250 million are on the Dailyhunt app and the remaining 100 million on its website, Bedi said. People who use the app on a daily basis spend about 30 minutes each day, the company said.
"The one opportunity that we always felt important was serving the 10-20 million tier-one affluent English speaking audiences. Their user behavior mimics anybody that you see in the western countries and their content consumption needs are global" Bedi said.
With the goal of acquiring this audience, VerSe began talks with Magzter about a year ago to determine if the premium content could be a valuable offering for their customers. VerSe initially helped the startup with its audience strategy in India, especially in targeting and growing their user base in the country.
"Over the last year, we were able to convert 1.1 million active paid subscribers from India in a EBITDA positive manner... More than a third of these users bought the three-year packs. This gave us conviction that we can serve the premium audiences in the country with Dailyhunt Premium" Bedi said.
Bedi said that the acquisition will also boost the company's global presence, especially in mature markets such as the United States, and the United Kingdom. "It gives us the ability to take this (subscription) offering to serve global audiences in key markets...It helps us not only proliferate our user base but also convert them into a paying audience" he said.
Magzter will continue to be available as a standalone app, but will now be powered by Dailyhunt Premium. Co-founders Girish Ramdas and Vijayakumar Radhakrishnan will continue to run the company that will now be a subsidiary of VerSe Innovation, Bedi said.
"It will be a multi-app multi-geography strategy. For countries where the Dailyhunt is not present, we will take the Magzter app, powered by Dailyhunt Premium, and position that app to them (to meet their content needs)" Bedi said.
Started in 2011, Magzter claims to have garnered a user base of 87 million users across 175 countries. The New York-headquartered firm had raised a total funding of about $13 million from investors such as Singapore's leading media group Singapore Press Holdings and Kalaari Capital.
"This partnership opens up new avenues for delivering high-quality content experiences to users across India, further strengthening our goal of providing unparalleled digital reading experiences to our readers" Magzter co-founders Ramdas and Radhakrishnan said in a statement.
VerSe Innovation was founded by Virendra Gupta and Shailendra Sharma in 2007. Umang Bedi joined the firm in February 2018 and was elevated as its co-founder in 2020.
The Bengaluru-based firm raised $805 million in a funding round led by the Canada Pension Plan and Investment Board and the Ontario Teachers' Pension Plan Board, at a valuation of around $5 billion in April 2022. To date, VerSe Innovation has raised over $2 billion in funding across multiple rounds.
The company witnessed a 51 percent year-on-year increase in its operating revenue to Rs 1,456.5 crore in FY23. Losses narrowed by over 25 percent to Rs 1,900 crore.
Bedi said that Dailyhunt has been EBITDA positive for the past two years (April FY22 - March FY24) and has clocked double-digit EBITDA positive rate for the past year.
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