India’s first unicorn startup emerged from a business idea that failed to attract enough customers. In 2007, entrepreneur Naveen Tewari and his co-founders launched mKhoj, an SMS-based service designed to help users find local information, services, deals and coupons. When the business struggled to gain traction, the team made a major strategic shift that eventually led to the creation of InMobi, a global mobile advertising company.
The journey highlights how a change in business model, combined with the right market opportunity and investor backing, helped turn an early setback into a landmark in India’s startup ecosystem.
The Early Struggles of mKhoj
Founded in 2007, mKhoj was built around the idea that mobile users could access local information through text messages, without needing smartphones or mobile internet. The founders expected the service to connect consumers with nearby businesses and generate revenue through commercial listings and deals.
However, demand did not grow as expected. In an interview with The Economic Times in October 2011, Tewari said the founders realised within six months that user traction was below their expectations. The company also faced financial pressure, forcing the team to reconsider its business model.
Instead of continuing to invest in a service that was not gaining sufficient adoption, the founders explored a different opportunity in the rapidly changing mobile market.
The Pivot That Created InMobi
The team shifted its focus from SMS-based local search to mobile advertising. Rather than serving individual consumers searching for local information, the business would help advertisers connect with audiences on mobile devices.
The company subsequently adopted the name InMobi and pursued a broader international strategy. The shift positioned it to benefit from the growing use of mobile internet and the increasing importance of advertising on mobile platforms.
The founding team comprised Naveen Tewari, Abhay Singhal, Amit Gupta and Mohit Saxena. Their decision to change direction became the defining moment in the company’s development.
SoftBank’s $200 Million Investment
In September 2011, InMobi secured a $200 million investment from Japan’s SoftBank, alongside backing from existing investors. The funding accelerated the company’s expansion and strengthened its position in the global mobile advertising market.
The investment marked a major milestone in Indian entrepreneurship. InMobi became widely recognised as India’s first unicorn, a privately held startup valued at $1 billion or more. Contemporary reports around the 2011 funding round placed its estimated valuation at approximately $900 million, while later accounts describe the company as crossing the $1 billion threshold that year.
From Indian Startup to Global AdTech Company
InMobi’s growth reflected the expansion of mobile internet and the increasing role of advertising in the digital economy. By moving beyond a local SMS service, the company built a business that could serve advertisers and publishers across multiple markets.
The company’s experience also demonstrated the importance of identifying a scalable market. While mKhoj depended on users adopting a specific behaviour—searching for local information by SMS—mobile advertising offered access to a much wider ecosystem of users, publishers and businesses.
Lessons for Indian Entrepreneurs
InMobi’s early journey illustrates how startups can respond when an initial business model fails to gain traction. The founders reassessed their assumptions, changed their product focus and pursued a market with broader growth potential.
The company’s rise also highlights the role of international investment in helping technology businesses scale beyond domestic markets. SoftBank’s funding provided capital at a crucial stage, supporting InMobi’s expansion and its emergence as a milestone company in India’s startup ecosystem.
From mKhoj’s early struggles to InMobi’s unicorn milestone, the story remains an example of how strategic pivots can reshape a startup’s future when the original idea does not deliver the expected results.
