India’s content tech unicorn VerSe Innovation, which owns popular platforms like the local language news aggregator Dailyhunt, the digital newsstand Magzter, and the short-video app Josh, has acquired digital marketing firm Valueleaf Group. The deal, structured as a combination of cash and equity, aims to strengthen VerSe’s footprint in the Indian digital advertising landscape by building a robust retargeting platform. This move will position VerSe to better compete with established players like Google, which is also an investor in the startup, and local rivals such as InMobi.

As digital ad spending surges in India, driven by the increasing consumption of online content in the world’s most populous nation, the acquisition comes at a crucial time. India, the second-largest smartphone market globally after China, has over half of its population actively using the internet. According to market research firm Redseer, digital advertising in India is set to outpace traditional advertising, capturing a 60% share by the financial year 2028. Globally, the digital ad market is increasingly shifting towards programmatic performance marketing, which offers advertisers better value for their investment.

Despite the growing demand, India lacks a wide array of digital ad platforms. Google remains the go-to choice for many businesses, offering a comprehensive digital ad exchange alongside consumer platforms like Google Search and YouTube. InMobi is another major player in this space, providing both ad exchange services and consumer platforms, while smaller companies tend to operate as intermediaries without owning consumer destinations.

VerSe’s acquisition of Bengaluru-based Valueleaf marks a strategic entry into this competitive market. Valueleaf, which serves clients across India, the U.S., and the UAE, has an impressive track record, counting CPP Investments, Ontario Teachers Pension Plan, Qatar Investment Authority, and Goldman Sachs among its investors.

While financial details of the acquisition remain undisclosed, VerSe co-founder Umang Bedi highlighted that the deal was influenced by Valueleaf’s strong financial projections, including an expected revenue of $100 million and a 10% EBITDA this year. Bedi noted that Valueleaf’s expertise in core verticals such as gaming, online commerce, banking, financial services, and digital-native brands-which account for 80% of all ad spending on performance marketing-was a key factor in the acquisition.

Valueleaf’s extensive reach in India, with targeted ads reaching over 600 million internet users and conversion data for 60-80 million online shoppers, will significantly enhance VerSe’s capabilities. The company has also integrated with over 50,000 websites, more than 1,000 apps, and all leading smartphone brands in India, offering tailored solutions for sectors like banking, financial services, insurance, and small to medium-sized businesses.

This acquisition follows VerSe’s development of an in-house ad tech stack and the recent launch of its brand-facing platform NexVerse.ai. Valueleaf will expand VerSe’s ad tech offerings by adding thousands of supply-side integrations, further solidifying its presence in the digital ad space.

Valueleaf, which was previously acquired by CapitalVia Global Research in 2013, had not raised external capital before this deal. In the financial year 2023, Valueleaf generated approximately $36 million in revenue with a 5% EBITDA. As of June, the company was on track for significant revenue growth, with an annual recurring revenue rate of $87 million. Meanwhile, VerSe saw a 57% increase in revenue, reaching $130 million in 2023, while significantly reducing its burn rate.