Tik Tok ban | Business Upturn

Challenges in post-TikTok era: Why indian short-video apps face investor dwindle

Finance Desk — Sun, 28 Jan 2024 06:02:57 +0000

The ban on TikTok in 2020 birthed a slew of Indian short-video platforms like Trell, Roposo, Moj, Chingari, and Josh. Despite initial investor interest, none have successfully filled the void left by TikTok’s departure. High-profile venture capital firms injected $65.8 million during the peak funding period in 2021, followed by $29 million the next year. Unfortunately, these platforms struggle with rising costs, declining engagement, and user retention issues, leading to waning investor interest.

Trell and Roposo shifted toward a content-to-commerce model, while others, including Chingari and Moj, attempt to compete with major players like Meta’s Instagram in the short-video market. Challenges persist as Chingari reportedly laid off 50% of its workforce, and Moj’s parent company, Mohalla Tech, faced a 38% increase in losses to Rs 4,000 crore in FY23.

In 2023, short-video apps received zero funding, reflecting the broader trend of declining investor interest in sectors like web3, ed-tech, gaming, and cryptocurrency. Ed-tech funding plummeted nearly 90% from the previous year, reaching $297 million compared to $2.6 billion. The once-prominent sectors now face challenges such as market saturation, lack of profitability, uncertain demand, and intense competition.

Investors are cautious and now demand proof of product-market fit and sustainable unit economics before injecting more capital. Sectors that experienced tailwinds during the pandemic, like ed-tech and short-form video apps, attracted substantial capital, but investor enthusiasm waned post-Covid as they reevaluated market size and adoption pace.

In the post-pandemic landscape, direct-to-consumer (D2C) brands, once lauded for convenience and niche products, face skepticism. The over-crowded market and challenges in achieving profitable unit economics contribute to a cooling investor interest in these brands. The shifting dynamics emphasize the need for startups to demonstrate sustainability and align with market demands to secure continued investor support.

VerSe Innovations raised another 100 million through funding round

Sanah Shah — Mon, 08 Feb 2021 08:06:39 +0000

VerSe Innovation, a local language company based in India, announced on Monday 8th February 2021, that it raised over $100 million (about Rs728 crore) in a Series H funding round held by global investors Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, and Glade Brook Capital Partners.

According to a statement, Canaan Valley Capital and existing investor Sofina Group also participated in this round. Avendus Capital was the primary financial advisor to VerSe Innovation on the transaction.

This follows closely from December when VerSe had raised $100 million from Google, Microsoft, and AlphaWave (unit of Falcon Edge Capital) to become India’s first technology for local languages.

’Made-in-Bharat-for-Bharat-by-Bharat-in-12-Bhartiya-languages-hosted-in-Bharat’ short video platform ’Josh’ remains to be the main area of interest for the Bengaluru-based startup. It attempts to put the fresh funds in the ongoing efforts to scale up its local language content offerings, create a content creator network and to influence artificial intelligence (AI) to improve the app.

”This will include the augmentation of local language content offerings, the development of its content creator ecosystem, innovation in AI and ML and more importantly, creation of opportunity for India’s vast talent pool”, the statement said.

Josh began operations in September last year and is now one of the most rapidly growing short form video apps constituting of over 85 million monthly active users (MAU), 40 million daily active users and more than 1.5 billion video plays every day, according to the company. The only other local app with more users is Roposo which claims to have over 100 million MAUs. Among new apps which were launched after the TikTok ban, MX Taka Tak has over 70 million MAUs.

Local language support is one of the central features of Josh. It currently entertains 12 Indian languages and dialects such as Hindi, English, Tamil, Telugu, Kannada, Malayalam, Marathi, Gujarati, Bangla, Oriya, Punjabi and Bhojpuri.

In December, Roposo’s parent company Glance Digital Experience Pvt. Ltd. had raised $145 million (about Rs1,056 crore) funds from Google and Mithril Capital.

The ban on ByteDance’s TikTok in India in June last year left a void and led to the displacement of 200 million odd TikTok users in the country. The ban was made perpetual last month by the Indian government when they announced there is no hope of the platform making a comeback to India.

This may lead to more opportunities for brand endorsements to many of these homegrown short form video apps, which have observed huge growth in user base but are yet to achieve the same engagement levels as TikTok. As a result, many of the top brands have been doubtful about associating with them and their creators.

VerSe Innovation’s other property Dailyhunt is a local language news aggregator app with over 300 million users and content contributing in 14 Indian languages.

Tik Tok Employees plan to take Trump administration to court over unprecedented app ban

News Desk — Fri, 14 Aug 2020 09:33:25 +0000

After President Donald Trump announced a sweeping but vague ban on dealings with the Chinese owners of TikTok and messaging app WeChat, Tik Tok and its US employees are now planning to the Trump administration to court. The employees’ legal challenge to Trump’s executive order will be separate from a pending lawsuit from the company that owns the app, though both will argue that the order is unconstitutional, said Mike Godwin, an internet policy lawyer representing the employees.

Trump’s orders came in last week on the grounds that these apps are a threat to US national security, foreign policy, and the economy. The TikTok order would take effect in September, but it remains unclear what it will mean for the apps’ 100 million U.S. users, many of them teenagers or young adults who use it to post and watch short-form videos.

According to Godwin employees realise that their jobs are in danger as it is unclear if the order will make it illegal for TikTok to pay its roughly 1,500 workers in the U.S. The order would prohibit “any transaction by any person” with TikTok and its Chinese parent company ByteDance.

Tik Tok’s statement on Friday, 14 August expressed its shock over the executive order which was issued without any due process. The company spent nearly a year trying to engage in “good faith” with the U.S. government to address its concerns.

“What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses,” the company’s statement said.

Godwin said he was retained by Patrick Ryan, who joined TikTok from Google earlier this year as a technical program manager. Ryan posted a public fundraising pitch on GoFundMe this week to raise money for attorneys who can “fight this unconstitutional taking.” “This is unprecedented,” Ryan wrote.