A business idea born in the dorms of Indian Institutes of Technology at Delhi and Kharagpur in March 2013 is drawing substantial investor interest. The initiative, a mobile application platform for news on the go, was pioneered by Deepit Purkayastha, Azhar Iqubal and Anunay Arunav.
"We observed many of our peers didn't read news. Most found it too lengthy, boring and overwhelming," says Purkayastha. The three friends' 10-month old start-up, News in Shorts, offers smartphone users news in crisp and easy-to-digest 60 words. This year, the venture raised seed funding of Rs 1.5 crore from Times Internet and a clutch of angel investors, including Sachin and Binny Bansal of Flipkart. "Sachin Bansal was a user of our service. He readily agreed to invest," says Purkayastha.
Now, News in Shorts plans to ramp up its user base of about 35,000 and invest in its technology platform.
Riding on the increasing number of smartphone users in India and the countrywide roll-out of 3G- and 4G-compatible mobile telecom networks, independent digital news portals are catching the attention of investors. Last week, scroll.in, a seven-month-old digital daily, said Omidyar Network, an impact investment firm floated by eBay founder Pierre Omidyar, had invested in the start-up. Late last year, Omidyar had announced a $500,000 grant for IndiaSpend, a data journalism initiative by television and print journalist Govindraj Ethiraj.
In February this year, former television journalist Dhanya Rajendran teamed up with ace investigative reporter Chitra Subramaniam to bootstrap thenewsminute.com, a news portal focused on southern states. Rajendran says within a month, the company will take the crowd-sourcing route to fund reportage on environment, law and justice and social empowerment.
For nascent genres such as data journalism, philanthropy is the only business model, says Ethiraj.
Samir Patil, founder and chief executive of Scroll Network, feels new-age digital media companies are the next wave of news portals. "There is not enough content for mobile. And, social media makes it possible to identify who your target users are," says Patil, an entrepreneur and a former McKinsey consultant.
The business model of digital media start-ups is closely associated with the growth of the e-commerce market segment in India. "As people get used to buying and selling products and services through mobiles, they will also start consuming content that way," says Patil. Right from the beginning, Scroll's content was designed for mobile users. Patil now plans to increase the headcount of the editorial and technology teams and develop technology algorithms to cater to mobile users and advertisers.
C V Madhukar, who heads Omidyar Network India Advisors' 'government transparency' investment segment, says, "We aren't after financial returns alone. Our strategy is to invest, engage and learn as the digital media space evolves." Last year, Pierre Omidyar had announced the $250-million First Look Media initiative to launch a series of digital magazines.
What is also attracting investors, advertisers and independent content creators to this space is the increasing smartphone user base and the growth in digital advertising spends. A recent study by telecom equipment maker Ericsson estimates India's smartphone user base rise from 90 million in 2013 to about 520 million by 2020. Advertising major GroupM says digital advertising spend in India is set to touch Rs 3,400 crore this year, 35 per cent growth compared to last year.
In the last quarter of this year, global digital media major The Huffington Post is slated to launch its India edition, HuffPost India, in association with a local media partner. "India is a very interesting and ripe market for a number of reasons," Koda Wang, general manager of HuffPost International, said in an email response. "India has the third-highest number of internet users globally. It has about 120 million smartphone users; its mobile usage is growing about 40 per cent year-on-year and digital ad spend is growing at double digits year-on-year," he says. And, with 75 per cent of internet users aged less than 35, the demographics are "very favourable", he adds.
"HuffPost has always innovated in premium types of advertising, including native advertising, brand pages, and social impact programmes, all of which we'll be bringing to HuffPost India."
Clearly, the digital news media segment is set to hot up, with several publishing houses and veteran media entrepreneurs such as Raghav Bahl slated to enter this field in a big way. For new-age mediapreneurs such as Purkayastha of newsinshorts.com and Patil of scroll.in, the timing couldn't have been better.