[Startup Bharat] In a quest to spot fake news, these IITians started Lokal, a YC-backed hyperlocal content startup

English speaking users in India have access to internet products for almost everything.

Looking for a new job? One has the option to select from multiple established and new startups that provide job listings. No time to watch the 9 pm news-hour debate? News apps are here to keep you updated. House agreement about to expire? Shortlist a new house without having to step outside.

Name it, and you will have an application to help you out. 

However, beyond the metros, there is a dearth of quality internet products, besides the usual ones built for entertainment purposes. There are not enough apps to make the lives of the non-English speaking population of the country easier.

Having realised the abundance of products in the metros, and its limitations in rural India, Jani Pasha and Vipul Chaudhary founded the hyperlocal content startup Lokal during the summer of 2018. 

Headquartered in Bengaluru, Lokal provides local news, classifieds, matrimony advertisements, and job listings, besides other important information in Telugu and Tamil languages, to mobile users of Tier-II and III towns, and villages of Andhra Pradesh, Telangana, and Tamil Nadu.  

Lokal — a product of the parent company Behtar Technology — made a cut at Y Combinator’s Demo Day in 2019. It also raised $3 million in funding from a pool of investors — 3one4, Y Combinator, RB Investments, SOMA Capital, and India Quotient. Twitch Co-founder Kevin Lin, Xiaomi Indonesia Head Alvin Tse, Starling Ventures, US-based media-tech company XRM Media, and tech investment firm I2BF Global Ventures were also part of the funding round.

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Understanding problems, creating solutions 

Back in 2016, Jani, 27, was working as the Senior Product Manager at the pre-owned car marketplace Zoomo India. The IIT-Kharagpur alumnus had previously worked with Tata Steel.

IIT-Bombay graduate, Vipul, 28, was with Qualcomm as a Senior Engineer and was building an OBD diagnostic tool. He was trying to sell the product to Zoomo, and it was then, that the duo met each other through a common friend. While the project did not materialise, Jani and Vipul enjoyed working together, and eventually, decided to start-up. 

At that time, in the US, Donald Trump had won the Presidential elections, and echo chambers were the talk of the town. This inspired Jani and Vipul to work on building a news aggregator platform TheSoup.

“We thought fake news was a problem that needs to be solved and started building a platform that would provide news in the form of a timeline. We built the product for four to five months without even consulting with the users to understand what they wanted, how they consumed news, and where they got their news from,” Jani explains as what went wrong with The Soup. 

After TheSoup failed, the duo realised that most users in Tier II and III cities were still heavily relying on newspapers, as unlike news apps and television channels, newspapers carried a lot of local news, and relied on stringers to source these stories. However, they were limited to pages and were not timely. This is when the duo tried to build a platform that would address both these challenges while focussing on providing hyperlocal news. 

By February 2018, they started a WhatsApp group to distribute local news sourced from a stringer in Kodad, a village in Telangana. “That one WhatsApp group quickly became one of the many, as more people kept joining us,” Jani says.

In April 2018, Lokal was founded, and its Android app was released on May 24, 2018. 

Jani says Lokal is not going to have an iOS app since there isn’t much penetration of iOS among its target audience. Initially, the team faced challenges on scaling the business, but it has now iterated and developed a playbook that allows launching the platform in new districts within seven days-time. 

Today, the Lokal team has more than 100 employees, and its app has been downloaded six million times, with a user base of 4.5 million users from across 25-plus districts in the three states.

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How does it work? 

The hyperlocal startup works through a network of 250 on-ground reporters, stringers, and on-ground sales teams. These reporters gather information about local news, job openings, classifieds, and submit them on the app. Lokal also gets a regular inflow of user-generated content which is published on the app, once it makes its way through the moderation team. 

Thus, the startup provides hyperlocal news on topics ranging from agriculture, politics, to daily information on essentials like food and petrol prices. Additionally, it provides classifieds from local businesses and individual sellers, job openings that range from positions of delivery executives to government jobs, and various content around life-skills that include finance, education, farming, and health tips. 

While initially, Lokal garnered users through advertisements on different social media platforms, at present, most of its user acquisition is organic, and through word of mouth.  

The startup’s revenue stream depends on businesses, classifieds, matrimony, and job ads. “We provide opportunities to brands based out of metro cities, looking to venture into Tier II and III towns with their products and solutions. Besides, we also provide content-led branding,” Jani adds. 

Citing an example, the co-founder says that stories around Indian farmers on the Lokal app have helped a Germany-based client venture into regional India, and get the desired business goals in towns and villages across Telangana and Andhra Pradesh.

“Traditional clients, who have always advertised on newspapers as a medium, now have an opportunity to reach audiences faster, and understand their needs better through in-depth customer analysis, and create better offerings based on proprietary audience research,” he adds. 

Lokal has directly worked with clients, including Swiggy, Amazon, MedCords, and Groww, among others. It has carried ads for companies, including Kotak Bank, Axis Bank, and Zomato, via intermediaries such as Betterplace and BuyHatke. 

During the nationwide lockdown due to coronavirus, the startup ran offers with the DocsApp for providing telemedicine services at Re 1, and listed jobs compiled by Edgistify for Reliance Industries. 

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The local news business 

Startups focussing on providing content in regional languages beyond the Indian metro cities include the likes of ShareChat, TikTok, DailyHunt, and Vokal.

A BBC report suggests that India has only 125 million English-speaking users in a country with 1.3 billion population. Thus, the non-English speaking market size is huge, and there is an opportunity for players to co-exist.

In an earlier conversation with YourStory, Anurag Ramdasan, Head of Investment at 3one4 Capital, had said, 

“At a time when content consumption is seeing dramatic growth, and the platforms for consuming real-time information are still to be unified, Lokal has delivered high-quality contextual content to users. It has enabled the discovery of deeply relevant information via an adaptive multilingual interface." 

Jani recalls an incident where a news article published about the need for open-heart surgery on the app helped save the life of a four-month-old baby. Since the lockdown, Lokal has helped around 600 people across the three states, get access to food and water, by sharing the news on its app. 

“Lokal has massive reach in some districts where we have been able to reach close to 60 percent smartphone penetration,” Jani says. Going ahead, Lokal plans to expand its operations across India.