Hyderabad-based hyperlocal news platform Way2News has raised $14 million in a Series B funding round, led by WestBridge Capital, with participation from venture capitalist Sashi Reddi. Both investors had previously participated in the startup’s Series A round, which raised $16.75 million in 2022.
With this fresh infusion of capital, Way2News aims to deepen its presence in Telugu and Tamil-speaking communities and expand its reach across South India, focusing on Kannada and Malayalam in the coming quarters.
“This investment is a step towards expanding our footprint into every household in South India, ensuring that all citizens can access timely and relevant news in their language,” said Raju Vanapala, Founder and CEO of Way2News, in a statement to YourStory.
Founded in 2015, Way2News delivers short news stories in eight Indian languages, including Telugu, Tamil, Kannada, Malayalam, Gujarati, Marathi, Bengali, and Hindi. While the platform has been most active in the Telugu and Tamil markets, its presence in other language regions has so far been limited to pilot runs.
According to Vanapala, Way2News’ district-based approach is key to its growth strategy. “We focus on building businesses across various districts. The number of districts you are present in, along with your DAU (daily active users) and MAU (monthly active users) in each district, is how we assess the business,” he explained.
“India is a diverse country with many languages and dialects, so consumption patterns vary significantly. That is why we approach things on a district-by-district basis. We have found that retention rates can differ from one district to another, and generalising based on language alone isn’t effective,” Vanapala added.
Currently, Way2News operates across 100 districts in South India, including 26 districts in Andhra Pradesh, 33 in Telangana, and 39 in Tamil Nadu. Over the past two years, the platform has seen nearly 3x growth in these markets, reaching approximately 15 million monthly active users (MAUs).
“Over the last few years, Way2News has made remarkable strides in democratising access to local news across South India, effectively addressing a crucial gap in the market. Their rapid growth in the Telugu and Tamil markets is a testament to their vision and the strength of their model,” said Rishit Desai, Partner at WestBridge.
Way2News plans to use the new funds to scale its operations, invest in technology, and expand its AI capabilities. The platform, which processes around 13,000 to 14,000 news items daily, uses an AI-powered model to manage content with efficiency. Although a team of only 20-21 individuals manages daily snippets, 85% of the content is published automatically, with just 15% requiring manual handling.
With the latest funding, the platform intends to grow its AI team from 12 members to nearly 50 and enhance AI-led research to further improve its processes.
In FY23, Way2News reported revenues of Rs 28.99 crore, slightly up from Rs 27.36 crore in FY22, but the company experienced a loss of Rs 15.43 crore compared to a profit of Rs 4.79 crore in the previous fiscal year. However, Vanapala is optimistic about the future, stating that the company’s top line has grown by 40% in FY24, with plans to achieve profitability in the near future.