VerSe's Troubles, ED Books Actors, and LetsVenture Rebrands To LVX

In 2020, when TikTok was banned in India, the race to capture India’s short-video audience began. VerSe Innovation, the parent company of Dailyhunt and Josh, sprinted ahead. It wasn’t a new company. Founded over a decade earlier, VerSe had already built a news and content aggregator in Dailyhunt. But the opportunity to become India’s TikTok was too big to ignore.

Josh was launched within 45 days of the ban. And it scaled rapidly. By 2021, VerSe had become one of the most well funded Indian startups, raising over $1.2 billion from marquee investors like Qatar Investment Authority, Sofina, Google, and Microsoft. Its valuation soared to $5 billion. For a while, it looked like Josh could be India’s answer to TikTok, with Dailyhunt as the monetization engine and Josh as the user magnet.

But fast forward to 2025, and the picture isn’t so rosy anymore.

Josh’s monthly active users have stagnated. Monetization is proving to be difficult. Creator churn is increasing. And investors who once believed in the short video gold rush are now asking tougher questions.

VerSe operates in a business where revenue and engagement don't always move together. Unlike TikTok, which monetizes through massive ad spends and in-app commerce, VerSe is heavily reliant on brand ads and content partnerships - both of which are hard to scale in tier-2 and tier-3 markets where Josh is popular. Monetizing vernacular creators is not the same as urban influencers.

There’s also the issue of burn. Running two large platforms, Dailyhunt and Josh, takes a lot of cash. VerSe posted a loss of ₹1,151 crore in FY23, up from ₹845 crore in FY22. Josh, in particular, contributed heavily to this loss while generating little in return. While Dailyhunt contributed some revenue - ₹1,079 crore in FY23 - it is still not enough to subsidize Josh’s heavy burn.

VerSe is also facing serious scrutiny for its financial dealings with Builder.ai, a UK-based AI startup that recently collapsed after revelations that there was no 'AI' being used. A Bloomberg investigation alleged that Builder.ai engaged in a multi-year revenue inflation scheme, reportedly inflating its revenue by as much as 300% through “round-tripping” transactions with VerSe between 2021 and 2024. Nearly $60 million was exchanged between the two companies for non-existent services, including app development and marketing.

VerSe strongly denied these allegations, asserting that all transactions were for legitimate services and were independently verified. Still, the fact that both VerSe and Builder.ai share common investors - Microsoft, Goldman Sachs, and Peak XV - raised eyebrows about investor oversight. Builder.ai hasfiled for bankruptcy, and U.S. prosecutors have subpoenaed its financial records. Amid this controversy, VerSe’s Group CFO, Sandip Basu, exited the company. While VerSe attributed this to health reasons, the timing fueled further suspicion.

Deloitte, VerSe’s auditor, added to the concerns. In its FY24 audit, Deloitte flagged several material weaknesses in VerSe’s internal controls. These weaknesses included poor controls over supplier approvals, expense provisions, virtual asset inventory, and advertisement revenue recognition. A particularly notable red flag was an unsubstantiated ₹35 crore claim from a supplier, which VerSe did not acknowledge as payable. Deloitte also noted that eight subsidiaries, contributing 63% of revenue, were excluded from the consolidated audit. Adding to this cloud, VerSe retrospectively adjusted its FY23 revenue from ₹1,809 crore to ₹1,356 crore, and FY24 revenue further declined to ₹1,261 crore.

Internally, VerSe has seen a wave of senior-level exits. Multiple CXOs have left over the past 18 months. Over 150 employees were let go in 2023 and 2024 as part of cost-cutting efforts. This kind of churn, combined with tighter funding conditions, adds pressure on the leadership to find a viable path forward.

To make things even harder, competitors have started catching up. ShareChat’s Moj, YouTube Shorts, and Instagram Reels have all taken away chunks of the market VerSe once thought it had cornered. Reels, especially, has found massive adoption, even in vernacular regions, owing to Instagram’s superior creator economy and product quality.

Still, it’s not over for VerSe. The company has reach. It has a brand. And in markets like India, where language diversity matters, Josh still has loyal users. But the question now is: how long can they hold on?

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Waqt Rehte Sudhar Jaao”: ED Books Rana Daggubati, Vijay Deverakonda, 27 Others For Promoting Illegal Betting

Looks like the Enforcement Directorate just dealt a royal flush, 29 celebs including Rana Daggubati and Vijay Deverakonda have been booked for allegedly promoting illegal betting apps like Junglee Rummy and A23.

The case stems from FIRs across Andhra and Telangana, where the glamour of endorsements might've glossed over legality.

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“Aao Sunau Business Ki Ek Kahani”: LetsVenture Rebrands To LVX To Back Growth Stage Startups

LetsVenture just levelled up, say hello to LVX, its sleeker avatar aimed at backing not just early but also growth-stage startups.

With LVX Start, Grow, and School, the firm now wants to fund, scale, and school both founders and investors. Think of it as a startup MBA with actual money on the table.

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“Hindi Namibian Bhai Bhai”: NPCI Inks Pact With Namibian Central Bank For UPI Adoption

India’s UPI is going global, this time landing in Namibia, thanks to a fresh pact between NPCI and the Namibian central bank.

The goal is to build a real-time payments system à la UPI to fast-track digital finance in Africa. Meanwhile, back home, NPCI is working on UPI for smart devices.

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3. Clean Fanatics has secured $2M in seed funding led by Inflection Point Ventures to scale its premium home services platform. The funds will fuel team growth, tech upgrades, and expansion into construction and renovation.
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4. Enrission India Capital has invested undisclosed amount in Uravu Labs to back its mission of extracting water from air using renewable energy. The funding will help scale operations and push forward climate-resilient water solutions.
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