VerSe Innovation, India's content tech unicorn that owns local language news aggregator Dailyhunt, digital newsstand platform Magzter and short-video app Josh, has acquired digital marketing firm Valueleaf Group in a cash and equity deal. Valueleaf will help VerSe to bolster its presence in the Indian digital ad space and build a significant retargeting platform, countering the likes of Google, which also backs the startup, and local contenders including InMobi.

Digital ad spending in India is growing as consumption across online platforms expands in the world's most populous country. India is also the second-biggest smartphone market worldwide after China and has over 50% of its population actively using the internet. Digital advertising in the country will outpace traditional advertising by capturing a 60% share by the financial year 2028, according to market consultancy firm Redseer. The digital ad market globally is also moving toward programmatic performance marketing, as it allows better dollar value to advertisers.

However, India doesn't have many digital ad platforms to serve the growing demand. Google has so far been the first choice for many businesses; the search giant offers its digital ad exchange alongside consumer destinations, including Google Search and YouTube. Similarly, the market has InMobi as a significant player offering both ad exchange and consumer destinations, alongside a list of smaller companies that don't own consumer destinations but work as pipe players.

VerSe gets deeper into that market with Bengaluru-headquartered Valueleaf, which already serves customers in markets including India, the U.S. and UAE. The startup counts CPP Investments, Ontario Teachers Pension Plan, Qatar Investment Authority and Goldman Sachs among its storied investors.

Financial terms of the buyout were not disclosed. However, VerSe co-founder Umang Bedi told TechCrunch that the deal was done based on Valueleaf's forecast of hitting $100 million in revenue and 10% EBITDA this year.

"What we found with Valueleaf interestingly is that they were very strong in four core verticals: gaming, online commerce, banking and financial services and digital-native brands, which are largely the four verticals that spend 80% of all their ad dollar on performance marketing," he said. "That was an added benefit that came to the table."

The acquisition will help VerSe attract businesses looking to buy digital ads across different destinations. Valueleaf has targeted ads to more than 90% of Indian internet users: over 600 million people. It also has about 200 million to 300 million installers and downloaders and conversion data of about 60 million to 80 million online shoppers across categories, Bedi said.

The firm has also integrated with over 50,000 websites, 1,000-plus apps and all leading smartphone brands in the country. It offers vertical-specific solutions aimed at banking, financial services and insurance, as well as small and medium businesses.

Before Valueleaf, VerSe developed its in-house ad tech stack, which restricted serving ads specifically on its platforms, including Dailyhunt and Josh. It also introduced a brand-facing platform called NexVerse.ai in May to expand its ad tech platform to external brands. Valueleaf will help broaden that offering by adding thousands of supply-side integrations, Bedi said.

In 2013, Valueleaf was acquired by financial markets research company CapitalVia Global Research. Bedi did not share specific details on that deal but said the firm had never raised external capital.

In the financial year 2023, Valueleaf generated about $36 million (nearly 300 crores Indian rupees) in revenue at 5% EBITDA, Bedi told TechCrunch, adding that the firm is on its way to market a "very significant revenue growth" and EBITDA of about 6% this year. He also stated that Valueleaf exited its June month at an annual recurring revenue rate of $87 million (732 crores Indian rupees).

The latest acquisition comes just four months after VerSe acquired Apple News+ competitor Magzter .

VerSe's revenue grew by 57% to $130 million in the financial year 2023, with its burn reduced by 34% to $172 million from $261 million in 2022. Without disclosing the latest numbers, Bedi said the startup saw a "massive double-digit growth on the top line, and burn has come down more than half to triple-digit crores" last year.