We've turned profitable, says InMobi

SoftBank-backed entity eyeing sustained growth from video ads

InMobi, the SoftBank-backed advertising technique entity, says it has turned profitable on the back of delivery of video ads to smartphone users and by helping clients increase the conversion rate for online shopping.

The Bengaluru-based company, claiming to be the third largest digital ad network after Google and Facebook, said it was profitable on Ebitda (earnings before interest, taxes, depreciation and amortisation) in calendar year 2016. In the last quarter, it said it was net-profitable, and expects the trend to carry over in 2017.

"We took some courageous decisions, to drop non-core areas and focus on existing bets, which have held us in good stead. We stand with the firm belief that mobiles will be the de facto advertising medium in the coming years," said Naveen Tewari, co-founder and chief executive.

In 2016, as InMobi came under pressure from its investors to show faster returns, it rationalised costs, dismissed people and focused on improving of efficiency, after its MiiP product failed in the market.

Since then, it has focused on a platform to deliver video ads as smartphone users globally began consuming video content. It also considered among the leading in-app advertisers outside Google, which controls the Android platform, and Facebook, which has 1.4 billion users on its app.

InMobi said revenues from video ads grew by over four times in 2016 and will be the biggest revenue driver in the current year. The US continued to be its largest market, 30 per cent of its revenue; China contributed 28 per cent.

India, the home market, continues to drive only a small share of its revenue. However, with the country becoming the fastest growing smartphone market globally and e-commerce companies shifting their focus to tap mobile users, InMobi says it is bullish on growing here.

"We believe inMobi's global footprint, compelling technology, and world class team, position them well to partner with advertisers to reach an increasingly mobile-centric audience," said Justin Wilson, operating partner for it at SoftBank.

InMobi says it will invest in growing its business in emerging markets, where customers are predominantly on the mobile telephone. The company sees itself as having an advantage over other ad networks because of its mobile-first approach.

InMobi has also built a remarketing platform that is being adopted by global clients such as Zalora in Southeast Asia, Nuomi in China and fashion retailer Myntra in India. Remarketing revenue has doubled every quarter since the first one in 2016 helping a wide range of performance advertisers in gaming, travel, entertainment and utility apps. Brands from mature markets like China and the US are using the remarketing platform to convert dormant users and enable them to purchase products online, it said.

The company claims to be dominant in Indonesia's mobile video advertising market, with 850 publishers on board. Currently, it has reached 90 per cent of smartphone users and about 70 million users in Indonesia.

In China, it has doubled its investment and has a substantial share of the advertisement market due to lack of competition from Google and Facebook. InMobi plans to invest a further $15 million in China to build technology and grow its market share.

InMobi has become the second Indian unicorn (the term for a start-up valued at over a billion dollars) to reach profitability after data analytics firm MuSigma. The ad-tech firm was valued at $2.5 billion when it previously raised equity funding in December 2015. The valuation was said to have dropped after it struggled to launch new products and tap new advertisers.