Bengaluru's InMobi wins over China, where Facebook, Google failed

SoftBank-backed mobile ad network derives 25% of its revenues from China; plans to set up large engineering team there

Global technology giants Google and Facebook may not have succeeded in penetrating the China market, but InMobi, a Bengaluru-based start-up which competes with these tech giants in the data-driven mobile advertising space, is betting big on the world’s most populous country, where it has seen huge success. 

The mobile ad network, which derives a quarter of its revenue from China alone, is also looking at leveraging the tech talent pool in the country by building a strong engineering team, to start with around 50 people. 

InMobi already has around 125 direct employees in China, all of whom are locals, while the company also has support from a few 100 people there working on a contract basis.

According to the company, much of InMobi’s growth in China is attributed to Jessie Yang, senior vice-president and managing director for China at InMobi, who helped the company build the business ground-up there. 

“The engineering capability is phenomenal there (China). Also, our maximum learning as a company has come from there,” said Naveen Tewari, co-founder and chief executive officer, InMobi. 

China is also the second-largest market for InMobi, accounting for 25 per cent of its overall revenues, next only to the US, which accounts for around 50 per cent. According to well-placed sources, the company, which reported revenues of around $500 million in 2018-19, is expected to cross the $1-billion mark in the next 18 months.

“It is a very fast growing business for us there (China). Our success there is very simple. I think we are very Chinese. If you ever go to China, you should visit our office; it is as Chinese as it gets,” added Tewari.

InMobi is backed by top investors, Masayoshi Son’s SoftBank, Kleiner Perkins (formerly Kleiner Perkins Caufield & Byers), and Google’s early investor Ram Shriram’s Sherpalo Ventures. The firm became India’s first unicorn back in 2011, when it received an investment of $200 million from SoftBank.

Experts such as Sanchit Vir Gogia, chief analyst and founder of Greyhound Research, are of the view that Facebook and Google were not successful in the Chinese market due to their focus on collecting data and the Chinese government has not appreciated that. 

“InMobi is not interested in taking your data away. It is providing a platform which allows the Chinese companies to keep their data locally,” said Gogia, adding, “InMobi also has solid local sales muscle, which has built relationships — both with the government as well as private firms.” 

Analysts also say that InMobi had an early-mover advantage as it tapped China for mobile advertising. This, at a time, when other firms were more interested in markets such as the US, the UK, Singapore, and Japan.

“Non-US-based companies like InMobi would have an advantage there (in China), as it has been difficult for Google and Facebook to tap China, given that they are based in the US (which has a rivalry with China),” said Benoy C S, director and head, digital transformation at research firm Frost & Sullivan.

Research firm Forrester forecasts that digital marketing spending would increase to $118 billion by 2021 — up from its original projection of $103 billion by 2019. InMobi, which is eyeing this market, has become a global provider of enterprise platforms for marketers (Unified Marketing Cloud), from being an independent mobile advertising platform. 

InMobi has set up Unified Marketing Cloud business unit, where it has developed its own software that it is selling to the enterprises and provides cloud-based intelligent mobile platforms for enterprise marketers. 

It has also set up two other separate business units — TruFactor and Glance — and is transitioning into a group structure. 

TruFactor, an independent business unit for telcos, aims to enable telcos to transform their digital assets into strategic knowledge. 

Glance provides a content discovery application and is essentially a pre-installed plug-in on smartphones that allows InMobi to show content on users’ locked screens.