B2B to C: How InMobi is transforming itself into a consumer tech company

The firm has 400 million phones/customers across the world who have Glance

Forty-seven-year-old Naveen Tewari has been jet-setting between the swanky India headquarters of InMobi in Bengaluru and his office in San Francisco, where he has hired a team of 200 top-notch artificial intelligence (AI) engineers with the mandate to leverage the disruptive technology to transform his company’s digital business.

He is also scouting around to tie up with a global AI partner so that his company can integrate its technology with InMobi’s digital platforms. That is akin to what Apple Inc has done with Microsoft recently for its devices.   

The reason is simple. Tewari, co-founder and CEO of InMobi, India’s first ever unicorn — a startup valued at more than $1 billion — is making a fundamental shift in his business strategy. He is now leveraging InMobi’s global mobile advertising platform, which is a business-to-business, or B2B, play to transform the group into a consumer tech player by getting into a range of consumer-facing businesses such as ecommerce (though Roposo), content across segments (through Glance, which offers smart lock-screen experience), gaming (through Nostra), and weather platform 1 Weather, which is popular in the United States for offering interactive information. All these are powered by advanced regenerative AI.

“We are making a fundamental transformation in our business model from being only a B2B player in mobile advertising to a consumer tech company, but with the cornerstone of being AI-enabled, which will be the game-changer.”

Pushing the pedal

Last month the group took a step forward by expanding the Glance platform from only the lock screen of mobile phones now on to television sets, which is expected to roll out soon. It is already testing it out with a leading telco and also a television manufacturer. An initial public offer (IPO) is under discussion for 2025 in India for InMobi after the shelving of a plan to list in the United States in 2020, after the markets there tanked.   

Tewari is pushing the pedal for this transformation. He says that by 2024 the consumer tech (business to consumer, or B2C) business will be half the size of its ad business in revenues, but by 2025 he projects it will match up and be equal. By financial year 2026-27 (FY27), his target is that the consumer business should be one to 1.5 times bigger than its B2b advertising revenues.     

That looks ambitious. Yet, InMobi is not rewriting the rules of the digital game. Tewari is just taking a leaf out of what Big Tech companies have done, though at a smaller scale. InMobi entered the business with an ad engine which is now being integrated with all its consumer tech platforms. Big Tech firms, such as Google and Meta, have done just the opposite: They built their consumer tech platforms first and then the ad engine.

To put things into perspective, Tewari, an alumnus of Harvard Business School, set up InMobi in 2007. It became the country’s first unicorn in 2011, Softbank of Japan invested $200 million in the digital mobile advertising platform. By 2016, the company started making profits.

But its revenue growth is slowing down. In FY19, it hit $364 million, those being pre-pandemic times, a number which it has not been able to surpass till now. According to its filings in Singapore, InMobi’s revenues fell in FY20 to nearly half, but recovered to $282 million in FY23, growing by only 2 per cent over the previous year. Even its net profit has fallen between these two years by 16 per cent.   

Up against Big Tech

It is not an easy business. Globally, 60-65 per cent of the $200 billion per annum mobile advertising business is controlled by the three Big Tech companies — Google, Meta, and Microsoft — leaving more than 20 other global and regional players jostling for a share of the remaining pie. But, Tewari says, InMobi is now amongst the top 10-12 with around $3 billion to $4 billion annual value of ads going through their platforms. With regulations across the world poised to cap the Big Tech’s share in advertising, he does not see this ratio going up, giving enough headroom for all to play.

Company executives however say that in FY 24, revenues — these numbers have not been declared yet — could touch more than $350 million. But analysts say the growth of the pie will get slower. By building its own consumer tech platform with its own customer base, instead of being a B2B ad platform for third party advertisers, InMobi can funnel more ads through its platform.

That is the game Glance is playing. The app will soon use AI generative technology to provide mobile consumers with customised content according to their preference on the lock screen, ranging from news, entertainment, and sports to travel and food. It is now also replicating the same model for the first time on TV lock screen (screen saver) to expand its customer reach beyond just mobile phones.

The strategy has won many takers. The company is already valued at $ 1.7 billion, with big backers such as Reliance Jio, Google, and others which have invested more than $345 million in it. Plans are afoot for another funding round to fuel expansion.  

Of course, Glance will generate the bulk of its revenues from advertising in various languages as well as customised offerings to consumers enabled through its own advertising platform. Tewari says that through tie-ups with phone manufacturers or telcos, Glance now is available on more than 400 million phones (read consumers) across India, US, Brazil, Japan, Malaysia, Thailand, Vietnam, and other countries. Two thirds of its consumers are active users.  In three years, he is pushing for the total number to rise to 1 billion worldwide.   

Similarly, InMobi Glance expects to reach 100 million TV homes across India and US in the next two years, where it plans to launch initially. With 220 million households and most TV sales now being smart TVs in India, that could be a large market to tap for advertisers. And, of course, for InMobi as well.

Ecom with a difference

The results are showing. Glance has more than doubled its revenues in FY24 to more than $100 million, mostly through advertising, from $39.2 million the previous year. In FY23, the company had posted losses of $150 million, in FY24 it is expected to be lower than $100 million, though final numbers have still not come. 

Tewari is clear that overdependence on advertising is not the best bet. That is why it is playing in the ecommerce game through Roposo, but with a difference. Says Tiwari: “We are working on changing the existing search based ecommerce model by using AI, where the machine will tell you what looks good on you based on information. Shopping will be more fun and engaging than just searching for products.”

He has another advantage. Integrating the ecommerce platform with Glance means it will have access to its large consumer base, apart from the 80 million app users on the lifestyle and entertainment shopping app Roposo. And he claims that it has already emerged as one of the top five ecommerce players in the country with a GMV of $350 million and 250,000 transactions per day, in which it will get a share of the revenue.

Tewari is doing the same with the gaming platform Nostra, which is like a play store for gamers, by integrating it with users of Glance. It makes money from gaming companies on usage through a revenue share basis.

All told, for Tewari it is still a work in progress. The question is whether this gambit for an integrated play across consumer platforms will work on top of an ad engine and make InMobi a force to reckon with. 

The InMobi Play

> Has 400 million phones/customers across the world who have Glance

> The target is 1 billion in three years

>Two-thirds of Glance customers are active on the platform

> Will use AI to provide customised content for each subscriber

> Hopes to reach 100 million TV sets with Glance in India and US in two years

>Integrating its ecommerce platform, Roposo, with Glance and expanding its customer base

> The same is being done with its gaming offering

> Using AI to change the model from customers searching for products to AI helping them to find what suits them best