Chinese internet giant Tencent is in talks with news aggregator startup NewsDog to lead a $35-40 million funding round, according to people close with the matter. If the deal materializes, it will be one of the largest deals in the Indian news content space.
Tencent, which has already invested in some of the high profile Indian startups like Flipkart and Ola, has reportedly zeroed on news aggregator space as its latest investment bet. However, the growth of online content and news aggregation space is hindered by revenue concerns, since the online ad space is dominated by big boys like Google and Facebook. Experts believe that for a new entrant like NewsDog to challenge biggies like Google and Facebook will be almost akin to hitting well above the belt.
But NewsDog’s CEO Mr. Yukun has downplayed these concerns, claiming that the startup will work closely with Google and Facebook to create a win-win situation for everyone. He also claimed that the company will introduce new data-based services for advertisers in a bid to increase monetization.
NewsDog and Tencent have so far refused to comment on this news report.
NewsDog is not an INDIAN Startup per say
Although NewsDog is a big player in Indian news aggregation space and has so far garnered millions of subscribers across the country, its roots are ingrained in Hong Kong. The company is owned by Hong Kong based Hacker Interstellar and was incorporated in the beginning of 2016 by two Chinese entrepreneurs. It offers breaking and important news to its readers through a mobile application.
India is the main focus market for this Hong Kong based company, since it wants to capitalize on the berserk growth of mobile and internet penetration across the country. The company also has a office in India, where it has employed 20 – 30 employees.
The NewsDog app, though, is not very popular in the Indian urban cities. The main reason for that being is company’s exclusive focus on readers living across India’s second-tier cities. It curates news and stories according to the taste and preferences of readers residing in the non-metropolitan cities.
Another crucial factor that has facilitated the growth of news apps like NewsDog is that it belongs to new generation of apps that have been solely created to work well on low-cost smartphones, which makes for the majority of smartphone sales across India.