Its customers include Unilever , Samsung and other giants. It has raised venture capital totalling more than $215 million in four rounds. And, in the world of bleeding startups, it is profitable already, with annual revenues kissing $500 million (Rs 3,250 crore).
But what makes InMobi special is the audacity of its ambition. It counts only Google and Facebook as its rivals and last week, to an audience that comprised industry leaders, venture capitalists and partners, unveiled in its hometown Bengaluru its new product whose ambitions remind you of Microsoft and Intel in the 1980s.
This could be India’s most courageous software venture yet if it takes off and goes public as planned with a “Made In India” product story to match from its founders – all of whom are IITans from Uttar Pradesh’s small towns.
Miip, a teddy bear-like mascot launched in the Silicon Valley last month and due in China later this month, is amiable outside but aggressive inside – and if the company’s plans go well, could be to the exploding world of mobile advertising what “Intel Inside” microchips or the Windows platform were to desktop PCs.
“Google created the intent graph. Facebook created the social graph. We are creating the emotional graph,” says Naveen Tewari, the 37-year-old CEO of InMobi, explaining Miip’s logic in mobile commerce. “We are (already) the number three after Google and Facebook. The fight is between us. Even if we are third, we will take a big share.”
We are sitting on pastel-purple sofas inside a room named “Puzzle Board” amid other conference rooms named after games – like “Bad Piggies”and “Angry Birds”. Elsewhere , the office is festooned with ethnic Indian handicraft. The cafeteria sports dhaba-like charpoys. From here, MacBook-toting engineers created a platform for what InMobi calls “Discovery commerce” -- or D-commerce.
Tewari says 80% of sales are said to happen by people stumbling upon stuff they like rather than wilful intent. Google’s searches typically reveal the intent of the users that led to matching ads. Facebook thrives on users disclosing information about themselves.
Google’s ad revenues grew from $1.4 billion in 2003 to $59 billion in 2014. Facebook’s ad revenues zoomed from $153 million in 2007 to $1.5 billion in 2014.
Founded in 2007 – with 24 offices in 17 countries already -- InMobi is eyeing similar growth as it bets on hundreds of millions of Internet-enabled smartphones powered up witth tens of thousands of apps boost usage in India and elsewhere. Revenue growth has averaged 75% in the past 5 years.
Asia, Europe and North America now contribute equally to InMobi’s revenues. Asian growth is expected to zoom as India joins China as a boom market – powered by Miip, which is taking InMobi from ads that carry brand messages based on what clients want to to virtual shopping windows that pull stuff they are more interested in seeing and buying.
Think of Miip as a friendly little snoop pushed to handsets from the fuzzy Internet cloud, powered by humongous profiling software that maps user behaviour. What it does is to egg you on to share your likes, dislikes and expressions as it tracks your surfing patterns on the mobile, and bring you relevant, focused sales offers for instant shopping nirvana.
Facebook already does that but only for its own use and still is a lot about ads. What InMobi is planning is to use Miip as a pervasive platform that will bring to tens of thousands of independent game, news , entertainment and other developers the kind of targeting power that the world’s most powerful social network has. Think of it for advertising the way Uber has networked private taxis.
“Advertising has always been about creating awareness. We started to question that logic,” Tewari says. “Discovery-led consumption is where we are headed. We are bringing window shopping to the mobile platform.”
“Ïnternally, we call this the Advertising OS,” he says of Miip, likening it to an Android or Windows.
Miip – a play on meep, meaning an all-purpose exclamation mark in urban argot,-- hides the power of big data analytics. The product has been developed by engineers at InMobi in suburban Bengaluru, with data scientists in its smaller offices in the Silicon Valley and UK chipping in. The company has made four acquisitions so far aided by funds from Softbank Capital and Kleiner, Perkins, Caufield and Byers, which have helped create companies like China’s Alibaba and Silicon Valley’s Google.
“They are nice guys, and they are real,”says former Infosys CEO Nandan Nilekani, while his board colleague Mohandas Pai calls InMobi as “”one of the smart next generation companies which will be a leader.”
InMobi officials say an estimated 250 million apps installations are expected worldwide in 2015. As smartphones across the world, especially Asia, this is expected to multiply.
Facebook is a “walled garden” where other apps cannot really go, and InMobi, in the words of its officials, is out to form a grand coalition of developers worldwide in a “wild garden” with help from Miip.
InMobi’s user base now covers about 350 million users in Europe, 200 million in the US and 350 million Asia. The company is betting on the fact that the current mobile ad culture is broken – and Miip-aided shop windows, with catalogues at the back-end and mapped to user preferences, could show the way out.
“We have a user data platform where there is a Chitragupta sitting” says co-founder Amit Gupta, invoking Hindu mythology’s account-keeper who tracks of people’s lives as they play different roles. “And we try to create a directory of avatars.”
Consumers typically spend 180 hours per week on mobiles but revenue shares are not matching up in advertising. What InMobi is looking for a “buy button for every app” , says Abhay Singhal, co-founder and chief revenue officer.
Over the next three months, an estimated 1.2 billion users are expected to experience the Miip platform.
Google’s AdMob network is also evolving to help the search giant’s Android-platform-driven strategy to tap mobile commerce revenues. But Tewari says AdMob nework is two to three years behind InMobi. Earlier this year, InMobi turned down an offer to be acquired by Google – and market estimates put the valuation at $1 billion. InMobi insists it will go public.
“We are clear it will be an IPO. Maybe we will do it two or three years later. What is the hurry? It is a 250-billion-dollar market and we are already making profit,” he says with a boyish smile. In his estimate, Miip can contribute as much as 50% of emerging mobile transactions as users click impulsively on small screen shop windows.
A parallel boom in mobile money may aid the process as smartphone users who have no access to credit cards may use mobile wallets.
Tewari, who studied at IIT, Kanpur, proudly informs that both his grandmother and father were professors at the same college. But he chucked his family’s fetish to do PhDs and chose instead to study at Harvard Business School and later work at consulting giant McKinsey’s on an entrepreneurial path.
InMobi’s revenue has multiplied but headcount has remained constant at 1,000 for the past two years or so, indicating the productivity gains of product-driven growth. The average age of the staff is only 27.
Nearly 600 of the staff sit in Bangalore, but InMobi has active staff in the US, mainly for advanced data science, and in China, where it has to adapt to the local language and culture. InMobi has about 15 PhDs on its staff, most of them from a UK-based data science company.
“When we are fighting Google and Facebook, the war starts with people,”says co-founder Amit Gupta, 37, a batchmate of Tewari at IIT Kanpur, who is now based in California.
All said, the new game has just begun, and a lot will depend on how InMobi’s universe of developer partners, who number more than 40,000 now, grow and gain. They now get 60% of InMobi’s revenues. InMobi is yet to spell out how it will share revenues with developers in the emerging environment, and that remains a question.
Challenges may also loom in privacy and data security issues as a lot of the user research that InMobi does comes close to snooping. Mohit Saxena, co-founder and chief technology officer, says InMobi’s London-based legal head is a hawk who can use European standards to veto others as the company is keen not to violate stringent privacy laws.
But CEO Tewari is happy about his big bet from India in building a complex product with a deceptively cute front-end – which will use artificial intelligence to probe deeper into user behaviour.
“In this (products) you have to imagine everything yourself. IT services was about doing what others told you” says Tewari. “This can bomb on my face but I have enough confidence to say this is the new world order.”