How Vdopia is challenging dominance of Google and Facebook, within five years of starting up
An Indian startup is taking giant strides in the world of mobile and video advertising - Vdopia. Started by two friends, Srikanth Kakani and Chhavi Upadhyay, the third co-founder in the Vdopia team is Saurabh Bhatia. All the three co-founders are IIT alumni, and Chhavi and Srikanth have also done Masters from Stanford.
Vdopia has created a proprietary platform that helps serve video advertising in a cost effective and seamless manner to online publishers as well as on the mobile. The client bouquet includes Coca-Cola, McDonald’s & P&G among others. And recently the startup was rated the No.1 video ad network in India by comScore. Vdopia stands at No. 4 spot in the said comScore report -- behind Google, Facebook and Yahoo! in India.
YourStory goes behind the scenes of this startup’s journey.
The beginning
Srikanth, CEO and Chhavi, COO met at Stanford and decided they wanted to take the entrepreneurial route. While, Saurabh and Chhavi knew each other from before college. “This was around 2005, when Youtube had just been acquired by Google and platforms like Hulu and Netflix had started gaining popularity in the US, by doing video streaming,” reminisces Srikanth. The thought was very simple -- that if they were consuming so much TV content online, there must be many others who did the same and therefore it was an opportunity to develop a technology that could make video consumption a seamless experience.
They started building a private video sharing website and started thinking of a way to monetize the platform, which also meant they needed some funding to help it grow. “We figured out two things, that it takes a lot of money to run these video websites. The cost of delivering video was 20 times higher than it is now. Just to make sure that your website is running, you would have to make sure you had half a million to million dollars -- which was a huge investment. So we started to figure out, how can we do it without running into negative,” says Srikanth.
So as to not run into negative, they decided to develop an ad platform, which they could use for advertising and make money for the videos they we were running. Along the way, they also figured out, that it was difficult to break even and had to have high volume of advertising if they had to break even. This made them look at media companies – the obvious choice for advertising -- and with whom they could negotiate better deals. This was one of the earliest pivots Vdopia did – when they launched an app for Indian media companies to run ads on. “The reason why we did it in India was because we had been discussing this for a year and we realized it is a model that could run positively,” says Srikanth.
The app was launched in March 2008 and luckily for them, by the end of the same year, Nexus got interested in their business and gave them $500,000. It was after this investment that Vdopia actually got incorporated and hired employees, reveals Srikanth. One reason why Nexus got interested in Vdopia was, by the time they joined hands, Vdopia had already managed to convince Indian online publishers and almost 95% of them were being served ads using the Vdopia platform.
Next came, the US market launch of video advertising for Vdopia, which happened in March 2009. “We started working on mobile and that was when we came to the US. Whether funded or not, we decided we will be the top company in whatever area we choose. And in 2011, we actually became the largest mobile advertising network in US as well,” says Srikanth very proudly.
Another great satisfaction for Srikanth, was the fact that what they had managed to achieve was done at a fraction of investment, compared to companies similar to them, who were working on achieving something similar at 10 times the cost. “In 2011, we were competing with people who were funded with about $40 million and we were funded with $2 million. That pushes us a lot, the whole challenge forces us to think differently and build newer models,” says Srikanth.
How are they different?
Worldwide mobile advertising revenue is forecast to reach $11.4 billion in 2013, up from $9.6 billion in 2012, according to Gartner, Inc., while the worldwide revenues will reach $24.5 billion in 2016. Mobile advertising revenue will create new opportunities for app developers, ad networks, mobile platform providers, specialty agencies and even communications service providers in certain regions. And Vdopia is making sure they are at the forefront to reap the rewards. Vdopia is a big believer in training and has invested a great deal in training its team extremely well. One of the main area of focus for the startup is to develop the best technology. And much before they put together their team, Srikanth and Chhavi wrote most of the code for the Vdopia platform.
In 2011, they launched a new technology which helped Indian clients do live streaming of advertising in the online space. “We are the only company who has the technology to serve live clients in the India market. So we have focused a lot of building technology and can do it faster than other people,” claims Srikanth. Vdopia has a proprietary tool that can go between the ad publisher and the ad agency. “We have a piece of technology that goes between the publisher and the agency that makes ads more valuable and relevant to the users. This helps make the ad very customized and agencies are willing to pay a premium for this,” explains Srikanth.
Vdopia works closely with all advertising agencies. Advertising agencies would approach the startup if they can offer suitable inventory to run their mobile video campaigns and Vdopia helps plan the inventory for each campaign. The Vdopia team also has an in house creative team that develops the custom rich media creatives for its clients.
Vdopia’s proprietary algorithms mine through heaps for customer data to make sure that the ad being served to a viewer is a relevant one. Therefore, customer A who has an income of Rs 50 lakhs p.a. would see a LED TV ad during a cricket match break, versus a mobile phone ad, that will be served to customer B who makes Rs 5 lakhs p.a. during the same ad break in the cricket match. “Therefore it is only relevant that customer A watches the LED TV ad, because only he has the buying capacity. Whereas serving that ad to customer B would be not useful, as he doesn’t have the purchasing power,” explains Srikanth. The Vdopia platform helps publishers make this smart decision based on its algorithms.
Vdopia says they have relations with many data providers, but always makes sure they never know the individual. So the data they mine would be in the form of the tablet you own or the laptop you use, says Srikanth. “We have to be neutral about not knowing you and work only on non-personal identifiable information when we run an algorithm,” he says.
The world at their feet
From serving 95% customer base in India, to being the leading mobile advertising platform in the US, Vdopia has grown leaps and bounds since being incorporated in 2008. Asia is the next market that they are expanding into.
The startup has todate received $8.9 million from Nexus in funding and Srikanth says they continue to grow aggressively and are already profitable. Vdopia is headquartered in Silicon Valley, with sales and development offices in New York, Chicago, Los Angeles, Mumbai and Gurgaon. Their team strength is about 200 people and today they work with over 50 clients.
The comScore report, places Vdopia right behind international giants Google, Facebook and Yahoo! and if Srikanth is to be believed then this is just the beginning.
Read an earlier interview we did with Saurabh here
