InShorts' FY23: A Mixed Bag of Growth and Losses

I personally use InShorts App everyday and that is what I use to start my day for the news updates.

So, this article is going to be an interesting read because like me there will be really many others who generally use InShorts on a day to day basis. So, without wasting time anymore let's start!

In the world of digital news, the story of InShorts in FY23 is a tale of both growth and struggle. The company, known for its succinct summaries of news stories, has managed to grow its revenue by a modest 9% to Rs 181 crore. However, the company's losses have worsened by more than 36%, resulting in a loss of Rs 310 crore. This is a significant increase from the Rs 232 crore loss in FY22.

InShorts' primary source of revenue is advertising, which brought in Rs 147 crore, a 4.3% increase from the previous year. However, the company's total expenditure in FY23 was Rs 492 crore, a substantial increase from Rs 399 crore in FY22. This expense rise was largely due to higher content costs, employee benefits, and other operational costs.

The company's investment in its location-based social network app, Public, seems to have contributed to its financial strain. Public, launched in late 2019, has achieved nearly 220 million downloads. However, InShorts has not disclosed the specific revenue generated from this app.

The company's overall expenditure, including content and employee benefits costs, rose significantly, indicating a strategic focus on growing the Public app. The increased expenditure on employee benefits and content creation suggests a strategic push towards enhancing the Public app.

InShorts' closest competitor, DailyHunt, which has raised around $1.8 billion in funding, registered a 57% jump in its revenue to Rs 1,809 crore in FY23 from Rs 1,151 crore in FY22. DailyHunt managed to control its losses but still, it stood at Rs 1,900 crore in FY23.

The travails of InShorts present a very interesting conundrum. Operating in one of the world’s toughest media sales markets, the figure of Rs 150 odd crores in ad sales will put them among the top tier of digital news firms in India, outside of Google and Facebook of course. However, this is a category where growth has been tough for everyone, and will likely remain so. That makes a very strong case for InShorts to seek to replicate its model outside India using technology more smartly. At its existing costs, it is frankly unconscionable that it has to spend so much to get so far.

After ‘dumbing down’ news is not something unique to the English and Hindi speaking markets in India, but a worldwide phenomenon. Pushing out strategically into more languages and niches seems a more viable proposition considering the high burn rates it has in India. Without that, we really can’t see how investors will continue to bankroll this firm after some time.