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Ullu IPO: Raising More Than Eyebrows 🤯

Updated: Mar 13

2015 - a year of great remorse for India since it marked the incessant banning of “adult content” across the nation, with close to 1,000 websites being unavailable for viewing as of this year.

Yet, for a country that stands among the top 3 consumers of adult content in the world, a legal avenue was the need of the hour. In response to this, a UP-based businessman decided to launch an OTT platform that gained immense popularity, and has just filed for its IPO!

Yes, India’s largest adult content website Ullu has made a splash in the markets by filing for a Rs. 150 crore IPO, making this the largest SME IPO in Indian history!

Yet, apart from just being an absurd headline, this company might have some interesting insights - so we undertook some “research” (relax, we read the DRHP).

1. Consumer Urges 💦

Post its launch in December 2018, the platform didn’t gain instantaneous popularity, being restricted to a predominantly male audience that hailed from a rural geography, equipped with high-speed internet and an initial pricing of under Rs. 200 for the whole year!

It was the pandemic, and the ever-so-obvious result of being chronically online that led to the Ullu app being discovered - resulting in a 3x in its user base within a few months of the lockdown, although on a low base of under 1 million users at the time.

These numbers might assist in showcasing Ullu among a myriad of other OTT platforms!

number of paid ott subscribers
  • Ullu has a 60% conversion rate from downloads to subscriptions, while the others are around the 40% range

  • While other OTT sites are significantly larger, keep in mind that Ullu is the only pure-play adult content website at this scale, which makes its 3 million fanbase a big deal too.

  • When compared to direct peers like HotxVIP and Nueflix (yes, these actually exist), Ullu is easily 10x larger!

With a Hindi-speaking audience in their 20s and 30s (65-35 split between men and women) from Uttar Pradesh, Maharashtra and Rajasthan making up almost 90% of its subscriber base, the company has tapped into a formalised market that didn’t exist earlier!

No wonder the Ullu app is ranked almost equivalent to Netflix and Prime Video as per reviews and ratings on Google Playstore (wink wink).

With this industry expected to be a consistent grower in the 21-25% YoY range due to the ever-expanding youth population with higher incomes to spend on stuff like this, Ullu will see at least that much growth in its subscriptions sold, if not more!

To add to the excitement of this platform’s success and how random it has been, just take the example of an actress named Anveshi Jain who started her career on Ullu with a mere Rs. 70,000 in her bank account. Her net worth 5 years later? Rs. 7 crore and the status of being one of the most googled women in the country.

2. Surprising Numbers 🫢

When the DRHP was released, the expectations were minimal because of the assumption of “how much could a glorified porn site even make?” - and these numbers definitely put us in our place:

ullu ipo financials

The company, under Vibhu Agarwal, has managed to grow in multiples in just 2 years, with margins and profitability surpassing Alt Balaji, a company that is still struggling to be EBITDA positive!

This could be owed to its industry-low production value. While a single original movie on other OTT platforms costs over Rs. 5 crore, Ullu caps that cost under Rs. 1 crore!

With Ullu’s price point and “sticky” customer base, it is able to extract more from its users, and is in fact in talks with launching a premium version of Ullu as well, which could see these numbers growing further into a more urban audience that is into classier content.

3. Why IPO? 🤔

With the need to expand, both quality and diversity of content, and perhaps explore international boundaries, the company made history by filing for its Rs. 150 crore IPO last week - but what do they intend to do with the money?

ullu ipo proceeds

To elaborate on the content spend further, Vibhu Agarwal has suggested that he intends to 2-3x the current budget at which shows and movies are being made at Ullu so as to break out of the supposed “edgy” and “sasta” reputation that it has received.

This will bring in a newer clientele and provide incentive for existing subscribers to stick around! All in all, the “night owl” scrollers and the Ullu creators are in a win-win situation!

This IPO has opened a completely new avenue into what we thought was an investible universe, and this company’s spotless track record as of now does incline us to believe that it just might be one to watch out for when it hits the markets.

In yet another example as to how Indian businesses find a “jugaad” to meet consumer needs, the Ullu app run by the husband-wife duo is certainly raising more than eyebrows and funds!


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