Mumbai: China’s Alibaba group is in talks to buy a minority stake in Sequoia Capital-backed Dailyhunt, a news aggregator and e-bookstore, two people aware of the matter said.
According to one of the two persons, Alibaba has already proposed a valuation close to $500 million for Dailyhunt. “The talks are, however, not yet conclusive as Dailyhunt is also looking for other funding options apart from Alibaba,” this person added, on the condition of anonymity.
Both Alibaba and Dailyhunt declined to respond to Mint’s requests for a comment.
“The deal will be a minority stake sale in which Alibaba is looking to acquire anywhere between 10% to 12%, depending upon the final negotiations,” the second person said, also on the condition of anonymity.
In 2015, Goldman Sachs Group named Dailyhunt as one of the possible “billion-dollar babies” among India’s internet start-ups. Dailyhunt claims to be India’s largest news and local language content application with over 155 million app installs offering 100,000 news articles in 14 languages, licensed from over 800 publication partners everyday.
It claims to have more than 50 million users spending over 6 billion minutes on the service every month, with much of the traction coming from machine learning and deep learning technologies that enables smart curation of content by tracking user preferences.
The Dailyhunt app is available on Android, iOS and Windows platforms, and also on the mobile web.
Dailyhunt was originally started as Newshunt by former Nokia executives Umesh Kulkarni and Chandrashekhar Sohoni in 2009, and rebranded Dailyhunt in 2015.
Apart from Sequoia Capital, Dailyhunt’s investors include Matrix Partners India, Omidyar Network, Falcon Edge and ByteDance.
If the discussions are successful, Alibaba would be the second Chinese investor in the company. In October last year, Dailyhunt raised $25 million in Series D funding led by ByteDance, a Beijing-based content service provider that operates content platform Toutiao in China and TopBuzz in the US and Brazil.
Alibaba has been aggressively scaling up in India, betting on a number of e-commerce, entertainment and logistics companies, pumping in an estimated $2 billion so far. Last month, it led a $300 million funding round in BigBasket, India’s largest online grocery store, outmanoeuvring rival Amazon, which was also understood to be in the race.
In June last year, Alibaba Pictures, the movie and TV content business controlled by the Chinese e-commerce giant, bought a majority stake in Chennai-based Orbgen Technologies Pvt. Ltd, which operates ticket-booking platform TicketNew. Mint reported that the transaction was valued at around $35 million for a 70-75% equity stake in the company.
According to a recent report by The Boston Consulting Group (BCG), the Indian media and entertainment (M&E) industry is expected to nearly double its revenue to reach Rs7.5-8 trillion by 2022 from an estimated Rs4.5 trillion in 2017, with an average annual growth rate of 11-12% over the next four-five years.
This would be driven by technology adoption such as big data and analytics across multiple platforms, especially smartphones.livemint