What’s unusual about inMobi is the speed this Indian startup has gone global and claimed increasing market share against Google AdMop to become the world’s largest independent mobile ad network. inMobi is a good example of breakthrough startups that are emerging from India for the mobile Internet.
Founded in Bangalore by Harvard Business School graduate and ex-McKinsey consultant Naveen Tewari (see photo) in 2007, inMobi has leaped from India to international markets, deriving more than 95 percent of revenues from outside India.
This global footprint could come in handy if and when inMobi goes public. Since the company has an offshore holding structure, it can go public first outside India – which likely means a NASDAQ IPO.
The backdrop to inMobi’s rapid ramp-up is the ongoing mobile revolution. Worldwide sales of mobile phones climbed nearly 32 percent to 1.6 billion in 2010 while smartphone sales jumped 72 percent and accounted for 19 percent of the total, according to information technology research firm Gartner, Inc. Mobile application sales have taken off too, nearly tripling to hit $15.1 billion in 2011. Meanwhile, mobile advertising revenues are projected by Magna Global to triple to $6.6 billion in 2016. While that’s still a tiny fraction of overall advertising, the point is that mobile media is becoming mainstream.
It helps that the startup’s self-assured founder is among the best and brightest but isn’t scared off by entrepreneurial bootstrapping. Tewari graduated with a mechanical engineering degree from the prestigious Indian Institute of Technology Kanpur in 2000, then worked as a business analyst for McKinsey in Mumbai, where he had the opportunity to see Indian business magnate Mukesh Ambani launch Reliance Infocomm in 2002 and usher in a digital revolution in India.
As an MBA student at Harvard, he did a stint in Boston with Charles River Ventures and after graduating, spent a year in Silicon Valley working with colleagues on business ideas that ultimately didn’t pan out. On a month-long vacation to India in mid-2006, he started to work on his own business plan for SMS mobile search, and persuaded angel investors Sasha Mirchandani and Prashant Choksey to back him.
When that initial concept didn’t work out, Tewari shifted his business model to his next idea: a mobile advertising network. By mid-2008, he and his co-founders had 12 credit cards maxxed out, then got a lucky break. inMobi picked up $7 million in venture capital from two savvy investors: Ajit Nazre of Kleiner Perkins and technology industry insider Ram Shriram through his global investing firm, Sherpalo Ventures. Both joined his board.
The main task turned to staffing up, with the lure of stock options. By the end of 2008, inMobi had 50 people in four offices, most of them engineers and returnees to India. “We invested very heavily in our technology and hired the best engineers we could find at Google, Yahoo and MSN to be a part of the team,” says Tewari.
As with other mobile ad networks, inMobi technology helps advertisers reach specific consumers over mobile Internet sites run on hundreds of different handset models, and measure the results of ad campaigns by tracking the clicks.
Throughout 2009, inMobi was on the go internationally, expanding to Southeast Asia, then South Africa and to Europe. It turned a profit the same year. In early 2010, with 120 employees, inMobi did a soft launch in the U.S., then rolled out nationwide by midyear, in synch with an entry to Japan. In July 2010, Kleiner and Sherpalo put in another $8 million in the startup.
Today, inMobi reaches 194 million consumers worldwide and the number of ads viewed on its mobile network has grown to 31.5 billion monthly. About the only place inMobi isn’t yet is China, which is home to its own fast-growing mobile ad network Madhouse, founded in 2006 by Taiwanese native Joshua Ma, 43 and well-funded by Gobi Partners, TDF Capital, JAFCO, Docomo and Nokia Growth Partners.
inMobi may not win the turf war over mobile advertising against such powerful competitors as Google and Apple. But what’s truly significant about inMobi is its international reach. “We knew we had to think global and think big. Most companies that are emerging don’t do that,” says Tewari, pointing out that his startup took the untraditional route of “going east to west, not west to east.”
24 March 2011 Rebecca Fannin