Nitin G.

#Take2 Why the Market May Be Overestimating Quick Commerce's Future Despite Damodaran's Optimism As a genuine admirer of #AswathDamodaran and his insightful #valuation frameworks, it's fascinating to see how his evaluations cut to the core of a business's #financial #health. However, with #quickcommerce, it’s possible that the broader market has overestimated the long-term potential of these businesses. Quick commerce is undeniably enticing in terms of #growth and #marketshare grabs, but as Damodaran himself has noted, the sector faces headwinds like narrow #margins and dependency on high-frequency, low-value transactions. Quick commerce relies heavily on the temporary advantage of local #logistics and #labor #arbitrage, but as cities become more congested and labor markets tighten, these operational “advantages” could quickly erode. Furthermore, the political landscape may not always be welcoming, especially given the impact on local #kirana stores, which are integral to India’s #retail fabric. While Damodaran’s framework rightly emphasizes lifecycle positioning, it may not fully capture the #political and #inflationary risks that quick commerce facilitates and faces as it scales. This could mean that valuations, even if optimistic now, might not reflect the long-term stability or profitability the street expects. One critical factor that quick commerce models often overlook is India's regional #diversity —it's anything but a #homogenous market. Local preferences, purchasing behaviors, and infrastructure vary widely from city to city. Quick commerce platforms will need to adapt to these variations, constantly refining and expanding their product categories to cater to local demands. This could mean shifting beyond the basic groceries and essentials model and embracing more regional product mixes, which further adds to complexity and costs. The sector's reliance on ultra-fast delivery and inventory optimization only intensifies these challenges, as what works in a metro city like Delhi or Mumbai may fail in smaller towns where consumer habits and logistical networks differ significantly. This makes scaling in India particularly #complex, and could limit the profitability of the "one-size-fits-all" model that quick commerce often tries to implement. All things considered, I’m confident that these companies have the talent needed to evolve. Just look at how Zomato transformed from its early days to what it is now. The real question is: what will they evolve into, and will that future model justify the premium they currently command? For now, I’ll take advantage of my exclusive offer on Coke Zero from quick commerce and enjoy it while it lasts.

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Online shopping of jewelry is growing at a CAGR of 28% & offers $77B market opportunity. Enter Eternz Fashion Private Limited - A one stop shop for all your jewelry needs, TDV Partners latest investment and portfolio company. It is an Omnichannel curated marketplace for Jewelry focusing on millennials & GenZs with focus on personalization & customization from a variety of brands from not just India but globally. Jewelry market’s online shopping penetration globally is around 8% with developed markets like US having 12% contribution to the total sales. India hardly has 2% online penetration currently. The no. of jewelry brands out there is increasing by leaps and bounds. You might have seen a bunch of jewelry startups in the season 3 of Shark Tank India already. With this trend increasing further, the need of a platform, one stop shop kinds for all the jewelry needs is evident and Eternz Fashion Private Limited is the answer to that. Excited to back Arthi Ramalingam in building Eternz along side Kae Capital, IIMA Ventures, Gemba Capital & Venture Labs #Eternz #jewelry #marketplaces #portfolio #investment https://lnkd.in/g-ggyiFS

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Excited to partner with Zepto for the third time, and thrilled to announce that this marks avra 's first significant investment. Why does 10-minute delivery work in India? India is a retail anomaly with over 90% of trade being unorganized retail. Consumers often prefer shopping for groceries at their local stores, which are conveniently located just a few minutes' walk from home. Why Zepto? At first glance, Zepto may seem like just a 10-minute delivery company, but they offer so much more. We believe they are building the Walmart of India—providing the same local store convenience (10 minutes) but at affordable prices by aggregating the purchase of supplies across their 300+ dark stores. Unlike many other quick commerce companies, Zepto started with some of the toughest categories—fresh fruits and vegetables, dairy, meat, and more. Today, they run one of the largest fruits and vegetable supply chains in the country. Aadit Palicha , Kaivalya V. and the exceptional team at Zepto operate at the lowest level of detail. They maximize efficiency at every layer of the supply chain. The result: 75% of their dark stores are fully profitable even as they have scaled to $1.2B of sales in 33 months. It's Day 1, and Zepto is just getting started.

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"We bought a 13-acre piece of land in a village called Sikra in Kutch which is enough for us to reach a revenue of 500 crores." 🔥 Ep#08 of The India Opportunity Podcast with Aditya Aagare from Thermoflyde is out now! 🔥 Watch here: https://lnkd.in/g6JjrGq6 We talk about: > The market opportunity in the refractory space - north of $30 Billion USD globally > How Thermoflyde is aggressively growing its market share by taking on RHI Magnestia (a $3 Billion revenue-generating, publicly listed business) and has grown 100% year-on-year in terms of REVENUE > How starting up in college taught Aditya lessons about entrepreneurship the hard way > Focusing on customer service as a competitive advantage > Building an IPO-able, cash-flow-positive business > 500 Crores revenue in sight with current capacity and potential to grow much bigger > Aditya's goal of positively impacting 1000+ lives > How traditional manufacturing businesses can be multi-baggers over decades in the public markets > How kindness from angels helped them survive in the first 2 years Great episode for founders looking to build IPO-able businesses, with key insights into how to prepare your business at the earliest stages if IPO is an outcome you're working towards. Thermoflyde Industries Private Limited is destined to be a big success story emerging in the traditional manufacturing space and we're early backers via Swadharma Source Ventures - SSV. Thrilled to share Aditya's story with the world. #india #manufacturing #makeinindia #rhimagnestia #refractory #steelplants #ipo

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Here's one more theme that has played out over the past decade in India SaaS: SaaS companies that sell into India/Asia (non-China/Japan). There's been a reasonably large set of investors in India who have been default no in this category, based on perception of limited TAM and GTM challenges. However, there is reason to be optimistic for this theme (we are!). A reasonable set of companies in the ecosystem have scaled, such as MoEngage, Darwinbox, Capillary Technologies, Yellow.ai, Unicommerce , Gupshup, CRMNEXT, LeadSquared. Companies like Salesforce, SAP etc have reached multi-hundred million ARR in India. As a result, the potential scale from sales in India has grown from the $15-20mm that people used to talk about 5 years back to perhaps $50mm in India, overall $100mm-150mm in Asia. I think we'll see more companies continue to get funded here as IT demand in India/SEA deepens and local requirements (mobile, India Stack, regulations, languages) get addressed. Founders and investors will need to tune into this being a solid path to go but will take longer to get to impact than US/EU-focused companies. Some characteristics we see at India/SEA-facing software companies: * Many start out in SMB but then find scale & success selling into enterprises. India market has a ton of SMBs (10mm+), a relatively light mid-market and a significant set of large enterprises. * Products tend to have feature sprawl and design-deficit but this can be fixed. * Some large sectors that are pulling at enterprise level e.g. BFSI, multi-sector conglomerates. Early traction from digital native companies (but naturally capped market). * Natural to go to SEA & Gulf countries. Product could remain fairly similar but sales & marketing motion can be quite different. To get really large, feels like will have to end up going to US/EU markets eventually. * ~10 years to $100mm ARR, with market leadership in Asia * Gross margins start out perhaps 10-15 points lower than corresponding companies in the US/EU but trend up over time. * Most India-facing SaaS companies are starting as India Pvt. Ltd. today, compared to 5 years ago (versus US C-corp), with a view to going public in India at $50-100mm revenue level.

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Q-Commerce overtaking traditional e-commerce? Currently we are seeing a big boom in terms of the different SKUs being sold in Quick commerce apps like Zepto, Blinkit, etc. - Atomberg Technologies 's fans - Sony's PS5 - Samosa, Chai and what not - Digital Gold from Jar! Zepto is in talks to raise $300m for its broader ecommerce play. While Swiggy is preparing to file for an IPO this year, incumbent Flipkart is readying its entry into quick commerce. Zomato has invested $240 million in Blinkit over the last one year. Taking a step back, the lines between quick commerce and traditional e commerce have started to become increasingly blurred with QCom pretty much catering to every needs! Also, multiple reports suggest that QCommerce can potentially become bigger than traditional e commerce in India!  Case in point : According to Goldman Sachs, the valuation of Blinkit is greater than Zomato's core food delivery biz! Non-grocery boom in Q-Commerce: Categories including beauty, toys, health and electronics are witnessing robust sales growth on quick-commerce platforms overall. While the overall base for the new categories is still small, aggressive expansion by these players is starting to ensure a dominant presence for these categories. Plus AOV is higher which also comes with better margins, making it a win-win! Case in point: Zepto - 2x sales MoM in segments such as toys and electronics accessories - Beauty category expanded 3x QoQ - ~15% of Zepto’s $1.2bn annualised gross sales currently comes from non-grocery products (Source: Goldman Sachs) For several D2C quick commerce has become the fastest growth channel as well as the platform with highest customer engagement This is definitely a positive for the consumers and the Q-Commerce players, but is everything on the up and up?   As the demand for space on quick-commerce platforms skyrockets, niche D2C cos in segments like FMCG, beauty and personal care, and health and fitness are agreeing to pay a 30-45% commission on sales, besides shelling out on advertising and discounting on these Q-Com platforms. On top of the commissions, brands are also regularly spending around 20% of their total sales on ads on the platforms, and discounting their products by about 20-25% (totaling 60-70% revenue!). This is in stark contrast to the 10-20% commission that large FMCG cos pay these platforms reflecting the intense competition for visibility. The brand's scale and comparison with competitors are crucial considerations when it comes to new listings. On the positive side, smaller D2C brands have seen 40-60% total revenue coming from Q-Commerce compared to ~10-20% from traditional ecommerce, which is surprising! Essentially, Q-com currently has a BIIIG Bargaining power against new D2C brands and can essentially make or break their businesses! Is this sustainable on the long run? #ecommerce #quickcommerce #india #zepto #businessmodel #d2c #startups #LIPostingChallenge

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🚀 Swiggy Set to Make Waves with ₹11,300 Crore IPO: Key Details and Market Implications 🌐 Swiggy, India's food delivery giant, is set to go public with an IPO launching on November 6, 2024, aiming to raise around ₹11,327 crore (~$1.35B). Shares will be priced at ₹371-₹390 each (around $4.64), with trading expected to start on November 13, 2024. IPO Highlights: Price Range: ₹371-₹390 per share Funds Allocation: Expanding logistics and quick commerce operations This IPO is launching amidst rising tech-driven competition in India’s market. By securing capital, Swiggy plans to advance its quick commerce capabilities, aiming to gain a strategic edge over competitors like Zomato. Market Impact: Swiggy’s IPO offers a unique investment opportunity with strong growth potential, balancing between established dominance in food delivery and quick commerce expansion. Investor Insight: With a grey market premium around ₹25, sentiment is optimistic. As Swiggy steps into the public sphere, it's poised to redefine India's fast-paced delivery ecosystem. #IPO #SwiggyIPO #Investment https://lnkd.in/eyHRRPXh

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A uniquely Indian paradox: Even as the Indian consumer makes a move towards premiumization, and is increasingly willing to pay for quality across existing categories (health & wellness, home interiors) and new ones (gaming, pet care, astrology): As a consumer-facing company, you still have to invest in building an offline presence, call-centres and focus on building trust through physical and audio touch-points. A strong online presence and influencer marketing is not enough. Increasing incomes do not translate to increased trust.

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🚀 Deal Announcement: ICE.vc is excited to announce our investment in Dorje Teas as part of their ₹1.8 Cr seed fundraise! 🍵 India is a nation of tea lovers. Over 2/3 of us sip on chai 3 times a day. Yet, the chai market has been largely untapped and dominated by just 2 big players—Chaayos and Chai Sutta Bar. When I came across Dorje Teas, a brand with roots deep in the Darjeeling hills, I knew this wasn’t just another D2C play. Here’s why we’re excited about this investment: 1️. Indian premium tea segment remains largely underserved. 2️. Younger consumers are driving the demand for healthier, authentic products. 3️. With its 300% growth post-Shark Tank India, Dorje Teas is already on a high-growth trajectory. I’m thrilled to partner with founders Sparsh Agarwal and Ishaan Kanoria, as they introduce a new wave of tea culture to India and beyond 😇 What are your thoughts on India’s chai revolution? ☕ #tea #business #LinkedIn #investment #venturecapitalist

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Following up on my previous post about 'timidity' from investors, sharing a few more points. 1. At Artha, we've backed AgniKul Cosmos at seed. Did they have revenues? No! Did they come with solid experience in the field as well as letters-of-intent worth over $30 million? Absolutely. I would not back folks with no technical expertise or work experience in the field to build an actual rocket capable of reaching space. They were also supported by the amazing IIT Madras incubator, which does accept non-IIT founders provided they have strong technical aptitude. 2. Funding is NOT a right, or some sort of charity. VC comes under financial services, with a fiduciary duty towards Limited Partners (the folks who invest in VC). We don't have carte blanche in how we invest, we have to submit our thesis to our LPs to raise money from them, then stick to that thesis (our commitment). We can't just pick a nice company and decide to invest. We have to build research around it, submit it to our Investment Committee, which usually includes representatives from larger LPs, and justify why we recommend investing. The fact that we like the 'spark in the founder's eye', absent of any other reasoning, is a sure fire way to be removed as a fund manager. 3. If that's what you're looking for, your best bet are Angel Investors, who are investing 100% of their own money, therefore, have NO constraints on how to deploy this. 4. There's this utopian belief that American funds throw cash at Founders. This is untrue, you're welcome to try instead of messaging me or other local funds. American funds do take larger bets on pre-revenue SaaS companies, however their founder+product criterias are equally, if not more strict, than local funds. 5. Government grants. I've met several founders who've applied and received grants, that have helped them to build out their MVPs. This shows innovation, dedication and hard work, as opposed to pinging investors with an idea deck and hoping for money to pour from the sky. 6. Is the bar higher for non-obvious founders? Harsh truth is yes. Which is why I've committed to replying to every single founder who reaches out to me. I'm open to giving guidance, help, support (not introductions right off the bat) to get to a point where you can raise. 7. Not every business is a VC business. At this point, every person building a business seems to have forgotten that most businesses in this country were built by people who didn't just 'have connections' If you look at Infosys, HCL, Zoho, they've been built by people who worked and studied hard, built work experience then created lasting businesses. Today, everyone wants a shortcut to riches and success. #venturecapital #startups #funding #founders #india

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🚀 Breaking Ground with VC Grid: India's Venture Odyssey! 🚀 Thrilled to unveil VC Grid, a paradigm shift in venture syndication crafted exclusively for the visionary minds of family offices & UHNIs. With a formidable war chest of Rs 900 crore, VC Grid embarks on a mission to empower 100-120 startups over the next triennium, spanning diverse realms from agritech to financial frontiers, seeding each venture with an infusion ranging from INR 4-16 crore. Powered by the backing of esteemed Indian family offices, entrepreneurs, and UHNIs, VC Grid's helm is steered by Vansh Oberoi, a dynamic VC professional in early-stage investments with an illustrious six-year journey at Venture Catalysts alongside Sidhi Dalmia, former Goldman Sachs executive, captaining our venture towards new horizons. Already carving its mark, VC Grid has infused INR 40 crore into five trailblazing ventures, catalyzing an unprecedented INR 100 crore in follow-on funding. Notable among these are Autocracy Machinery Pvt Ltd, KisanKonnect Safe Foods and Ideal Insurance. But VC Grid isn't just about capital infusion; it's a beacon of collaborative innovation, fostering a nexus of expertise and domestic capital. Our mandate? Backing ventures grounded in research, profitability, and ESG principles, with an eye on delivering over 30% IRR. Join us on this exhilarating venture odyssey as we redefine the contours of India's startup landscape, one disruptive idea at a time! Venture Catalysts++ | India's 1st Multi-Stage VC, 9Unicorns, Anuj Golecha, Anil G Jain, Gaurav Jain, Vansh Oberoi, Sidhi Dalmia, Shreeyesh Chandgothia #VentureCatalysts #AngelInvestor #VC #IndianStartups #StartupFunding #SyndicateFund #FamilyOffices #IndianStartups #ESGInvesting https://lnkd.in/de65Wk9p

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Meituan Sells Over $200M Stake in Swiggy Ahead of IPO Chinese lifestyle e-commerce giant Meituan has sold over $200 million worth of its stake in Swiggy to a US-based investor through a secondary deal, according to sources. Meituan first invested in Swiggy in 2018, later increasing its stake in 2020. The recent sale, which occurred last week, valued Swiggy at around $10 billion, though the exact stake sold remains undisclosed. Currently, Meituan holds a 3.88% stake in Swiggy via Inspired Elite Investments, according to TheKredible. Other investors, including Elevation Capital and Norwest, are also offloading shares ahead of Swiggy’s anticipated IPO in the coming weeks. Swiggy plans to raise $450 million through a fresh issue of shares, alongside an undisclosed amount via an offer for sale. Swiggy reported a 36% revenue increase for FY24, reaching Rs 11,247 crore, while reducing net losses by 44% to Rs 2,350 crore. Its main competitor, Zomato, achieved profitability in FY24 and has seen its market capitalization nearly double to $27.3 billion since going public in 2021. #Leadership #Innovation #CareerGrowth #Entrepreneurship #BusinessInsights

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ElasticRun's business model succinctly explained in this short video --> The rural market distribution/penetration problem for FMCG companies and a potentially viable solution for both the rural Kirana store owners and the FMCG brands. https://lnkd.in/gjd2bK3i #FMCG #Distribution #Kirana #Retail #Rural #ElasticRun #Brands #Access #Transformation #Logistics #Transport #SupplyChain #Ecommerce

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Join us! With great power (capital, position, trust) comes great responsibility. Following the launch of Ortella Global Capital - OG Capital, India's only fund that co-builds companies, we are humbled by the overwhelming support and enthusiasm for our mission to empower the next generation of groundbreaking startups. As we embark on this exciting journey, we are reminded of the profound impact we can make through responsible and strategic investing and co-building. At Ortella Global Capital - OG Capital, India's only fund that co-builds companies, we firmly believe that with great power comes great responsibility. We are dedicated to upholding the highest standards for our investors, our co-builders, our founders and every individual whose lives we touch. As stewards of capital, we understand the importance of harnessing our resources for the greater good, not just for financial gain (yet focused on delivering 50%+ CAGR). As we grow, we are eager to expand our team with exceptional individuals who share our vision. We look forward to potentially working together to create the next hundred unicorns. Who is it for: a. If you had started a company ever and successfully exited, Reach out to us b. If you are a current founder who is passionate about building but for some reason, your business is not working out, Reach out to us c. If you had started out a few times before but for some or other reason it did not work out, Reach out to us And by the way, all our team members are ex-founders :) Additionally: - It does not matter whether you are 15 years old or 60, Reach out to us - It does not matter whether you are in Ahmedabad or Agartala, Reach out to us - It does not matter whether you are from IIT/IIM or a college drop out, Reach out to us --- because we have seen that success does not have a tag, you just need it to click once. And that's it! Please fill out the form in the comments :)

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It is fabulous to see the growing interest in Angel Investments in Startups.. The news of Mamaearth stocks and also those of Zomato, Policy Bazar etc doing so well and making many new millionaires is definitely helping the cause. Some of these angel investors are beneficiaries of exits and esops and hence believe in this asset class, while others are looking to build such breakout events in their lives. Yet there are others who thrive in the ecosystem and enjoy riding the wave while making profits or losses from it. Whatever is the motivation, this space needs to be tread with caution. As a lead investor of our syndicate VG Angels at VentureGarage and having over a decade of experience in this space, I often advice my fellow angel investors the following: 1. Angel Investment is probably the riskiest asset class and requires patience. If you want to be one, then invest in 7-8 cos in 3 years or so and then expect a breakout in the 4th year from one of them. 2. There are over 20000 startups registering in the country every year, it is almost impossible for you to source and then invest in one of the top 20 of those. Follow a syndicate lead investor or a curated angel network for the deal flow and evaluation. 3. Founders are not looking for your mentorship. Invest in them first and then maybe you can mentor them. Definitely do not invest in founders who need your active guidance. 4. Learn about the future opportunities and build your thesis around some sectors. Learning new stuff is one of the big requirements and motivators of angel investments after all. Invest in those sectors which you are bullish about. Happy investing! https://lnkd.in/g2xx3zBX

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Thanks Bismah and Inc42 Media for the insightful coverage and deep dive into the vital role of operator VCs! Bismah's thoughtful analysis underscores the growing need for operator VCs in today's startup landscape. As an operator VC , I've witnessed firsthand how founders increasingly value more than just capital. They seek partners who bring operational expertise, strategic guidance, and an extensive network to the table. These elements are crucial for driving sustainable growth and navigating the complexities of scaling a business. At GrowthCap Ventures , we understand the unique challenges faced by early-stage startups, which is why we prioritize offering not just funding, but also hands-on support and access to our extensive network. Together, we're empowering founders to realize their vision and build transformative businesses. #OperatorVC #StartupEcosystem #Gratitude

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My two cents on the E-Commerce M&A's in India article by Inc42 Media https://lnkd.in/gnG5nzXV I don’t see any consolidation or mergers happening amongst the large e-commerce players, but to gain market share in new categories, some of these larger companies will likely acquire smaller ones. Flipkart acquired Myntra, allowing them to at least compete with AJIO or Tata CLiQ. However, they let vertical category focussed companies like Nykaa and FirstCry, grow significantly. They probably wouldn't want to make that mistake again. If a new player emerges in a fast growing new category, then the larger e-commerce companies will likely try to acquire those businesses before they become a potential competition." Gemba Capital #ECommerce #ConsumerTech

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The deadline for dematerialisation for Indian unlisted startups is around the corner - 30th September 2024! So far no circulars on deadline extension have been officially released, so best to believe that these deadlines are still persistent. General behavior in the ecosystem we are seeing: - Many startups are now scrambling to get started (unfortunate, but expected). - Many had begun the process a few months ago (3-4 months back) and are unsure of the progress (haven't even gotten their ISINs created yet). - Those with ISINs issued are struggling to coordinate with their shareholders for Dematerialisation Request Form (DRF) submissions and share certificates. If you still haven't started the process so far or are struggling to collate the required information and documents, then reach out to us at www.myshareholding.com or drop me an email at - [email protected] With our automated and completely digital process, we will do all the required heavy lifting and give you the much-needed push.

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