Jaskaran Sachdeva

📊 Is pricing the answer to fragmenting the UPI App market? 📊 📈💡NPCI has extended the 30% market cap deadline because the top 3 UPI apps have ~92% market share. Phonepe, Paytm & Gpay capitalized on the early mover advantage. New apps don’t have incentives to compete for UPI volumes because it is a “free product.” And while this was why it grew, it has now also hindered entry of new players ✅ Global real time payment (RTP) equivalents are usually free for the customer while merchants are charged. Ex: 🇧🇷 Pix: Merchant: 0.22 - 0.3% / txn, free for user 🇨🇭 Twint: Merchant:1.3% / txn, free for user 🇵🇱 Blik: Merchant: $0.1 - $0.75 / txn, free for user 🇸🇪 Swish: Merchant: $0.09 / txn, free for user 🇸🇬 PayNow: Merchant: 1.3% / txn, free for user 📈💡 If we want to keep RTP free for the end user, the constraint is free P2P payments. Only P2M can be charged. Is that feasible? Let’s look at the data: 📌 UPI Value (in Cr): From April ‘23 to ‘24, grew by 39.6%. P2P grew from 10L Cr to 14L Cr, at ~32% growth YoY. And P2M grew from 3.2 L Cr to 5.3 L Cr, at~65% YoY. 📌 UPI Volume (in B txn): From April ‘23 to April ‘24 UPI volume grew by 62%. P2P grew from 3.8B to 4.9B, at YoY 29%. P2M grew from 5B to 8.3B at YoY 65%. And proportionally: 📌 April ‘24 Value: Total: INR 19L Cr, P2P: 72.97%, P2M: 27.03% 📌 April ‘24 Volume: Total: 13.3B, P2P: 37.5%, P2M: 62.5% ✅ The constraint of only being able to price P2M transactions is not a blocker, P2M seems to have significant volumes. But that’s the overall P2M market: There is a big segment that falls within P2PM (unorganized merchants), that NPCI will not charge 📈💡Let’s assume that P2PM majorly consists of low value transactions of AoV less than Rs 2000. If we look at AoV > 2000 bucket of P2M transactions, this constitutes for 4.50% of txn numbers, and 68.36% of P2M txn value. ✅ So even excluding P2PM this still leaves a significant~68% of P2M monthly value or 4.5% of P2M txns that can be monetized So what’s the ideal pricing model? ❗Well, the cost of a UPI transaction is ~Rs 0.4. At 13.3B UPI txns that is a monthly cost of Rs 532 Cr. Which is Rs 6384 Cr per annum to maintain the UPI ecosystem! The pricing needs to generate atleast this much❗ 1️⃣ Option 1: Fixed fee / txn: If only AoV > Rs 2000 txns are charged, then to break-even, the fee per txn needs to be Rs 15, which is high. If ALL the P2M txns are charged, then a per txn cost of Rs 0.67 would be enough to break-even. But the P2PM merchant would be impacted 2️⃣ Option 2: % of txn value: If only AoV > Rs 2000 txns are charged, then the break-even fee is 0.15%. If the total P2M value is charged, the fee needs to be 0.10%. Seems to make more sense But even if pricing comes, while it incentivizes new apps it also incentivizes incumbents to keep their market share. Enter: the 30% UPI market share cap To read the full article and other pieces like this, click here: https://lnkd.in/gSPm49aq #fintech #UPI #NPCI

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Country Delight is one of the fastest & fewest Indian D2C brands to >2x valuation every ~1-2 years. How? Country Delight (CD) in 2024 raised ~₹160 Cr in Series E. It initially had a successful PMF, growing bootstrapped for its first 4 years without funding • Valuation jump - Series C Nov'21 : ~$94 MM Series D Mar'22 : ~$428 MM Series E Jan'24 : ~$790 MM . How? » By turning into a Free #Cashflow Machine (-ve WC biz). Somewhat like the retail-tech behemoth Apple! • In the last 8 years - 1.) Average cash collection time from customers has fallen from ~66 days, to just <10 days (mostly pay in advance) 2.) How long do they pay suppliers in? From >10 days in 2017, to ~25-30 days today. 3.) Average cash conversion cycle has gone from >45 days in 2015, to less than ~1 day today. ✓Result? Operating Cashflows >>> Profits » Cash on the books explodes - From ~₹12 Lakhs in FY'17, To over ~₹484 Crores in FY'24! World's "Highest Customer Retention" within D2C? ✓ Dairy category. Almost ~70% of all CD customers acquired ~3-4 years ago give nearly the SAME revenue, EVERY month consistently even till today. New customers add on to these, as CDs marketing spends in last couple of years grew ~5x, simultaneously exploding the free cashflows flywheel. In addition, Cross sell & Up-sell of "high gross margin" newly added products (~60% success rate) like ghee, paneer, vegetables, essentials, etc. In this model "owning customers long-term" gives - ✓ Highest LTV, Lowest CAC, Highest ROCE. Amidst giant peer brands like Amul and Mother Dairy that handle close to ~45M litres / day.. • Country Delight carved its "premium niche" from scratch - Growing ~1.5-2x YoY - From ₹0 to ~₹1380 Crores revenue in last ~8-9 years! - More than 15M deliveries per month - Network of 10,000+ Indian farmers, lakhs of cattle. One of my favourite quote, by the Founder - » Animals are the best non-depreciable assets because they only multiply ;) #india #business #startups #technology #consumer

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🚨Swiggy IPO gets oversubscribed led by QIB bids Swiggy’s IPO was oversubscribed 1.07 times by the third day, driven largely by QIBs, who oversubscribed their portion 1.52 times. Retail investors subscribed to 97% of their portion, while Non-Institutional Investors (NIIs) made bids for 22% of their allocation. Swiggy's employee quota also saw strong demand, with a subscription rate of 1.38 times. Swiggy raised around Rs 5,085 crore (approx. $605 million) from anchor investors like HDFC, ICICI, SBI, and global players including Fidelity and BlackRock. by Akshita Toshniwal | #SwiggyIPO #IPO #QIB #RetailInvestors #Foodtech Read more 👇 https://lnkd.in/ggm_piMt

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Who exactly is losing market share in the hotly contest grocery commerce? I thought it must be the now-not-so modern retail, but I'm not so sure. Zepto raised $665 Mn at a valuation of $3.6 Bn, and is in talks to raise $250 Mn more. And their cofounder and CEO Aadit Palicha recently commented that they can beat DMart - Avenue Supermarts Ltd on GMV in the next 12-18 months. Swiggy Instamart also is growing, and Blinkit is likely to be more valuable than their owner Zomato itself - so they are all doing well, even if Dunzo isn't. Sure, no idea what JioMart Digital is doing, but deep pockets. Same with Tata Digital and their weird assortment forced to converge on Neu. bigbasket.com is trying to unlearn and relearn, and it just might. And Flipkart Grocery and Amazon Fresh are also upping their game - launching faster deliveries, discounts, improved fill rates, and selection. So I wonder if it is the modern-trade players? The likes of More Retail Private Limited, Spencer's Retail, STAR BAZAR, and SPAR Retail that are suffering? The nearest Spencer's to me is definitely a sore sight, now reduced to a shell of it's former glory - I think they aren't even replenishing inventory now. And we all know what happened to Big Bazaar - Future Retail. But Dmart itself isn't doing half bad - with pareto presence in just 23 cities, and no presence in UP (except NCR), Bihar, and West Bengal, they have considerable headroom, still. And they haven't yet quite solved for ecommerce, so while The Ken says that they are lost, they may find their way, eventually? I also don't think that the real consumption is growing, if at all, it may even shrink with the K-growth. Thus, some one _is_ losing share. And if it is not modern trade, then is it the regional chains? The single kiranas? The corner-store? The hand-cart? I'm not entirely sure because this data is hard to organize, and get. Would you know? Image created by AI in Microsoft Bing Copilot.

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In a fascinating article, Pradip K. Saha from Morning Context explains why quick commerce (Zepto, Blinkit, Swiggy, Instamart, and soon Tata) is successful in India, whereas it has proven to be a challenge in developed markets. He notes that quick commerce has been a “game changer” for the leading FMCG players, like HUL, Dabur, ITC and Nestle. Saha also notes that Indian quick commerce works because the players have attained scale. This is underpinned and facilitated by a network of dark stores. Saha explains that “A typical dark store serves a 1-3 km radius. Blinkit, which dominates 40% of India’s quick-commerce market, added 152 such dark stores along with seven warehouses in the September quarter, taking the number of dark stores to 791. Zepto, with a market share of just under 30%, has around 400 stores, while Swiggy’s Instamart operates over 600 such stores. Together, the three companies account for nearly 90% of India’s quick-commerce segment. All three are raising funds to expand into newer cities and launch more dark stores.” Beyond scale, the business model allows for margins. “By eliminating distributors and wholesalers, these platforms can offer prices 10-15% below the maximum retail price (MRP) while maintaining 15% gross margins, according to a report by Goldman Sachs Equity Research. Some specialty direct-to-consumer brands offer commissions as high as 30-45% for listing on quick-commerce apps.” The quick-commerce players are also able to offer a broader range of products and SKUs. The quick-commerce players are also aggressively advertising. Finally, the quick-commerce companies “also benefit from the fact that a significant chunk of their offerings include perishables,” which capture higher margins. #india #quickcommerce #success #scale #margin #darkstores #distribution #reach #skus #fmcg #perishables #blinkit #zepto #instamart #zomato #swiggy Why quick commerce is working only in India From tea leaves to iPhones, the country’s quick-commerce platforms are reshaping urban retail while proving sceptics wrong about their viability.

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Buying gold / silver coins on the auspicious occasion of Akshaya Trithiya come under low frequency - low complexity purchase category. It is a seasonal product bought generally during specific occasions. Zepto Blinkit Swiggy lapped up this opportunity and started selling this with the benefit of quick delivery. No wonder the sales picked up quite well. I wonder how much would it have impacted the sales of larger eComm players. Sales trends from swiggy is already out. I am sure the trend will be similar for Zepto - Aadit Palicha and Blinkit - Albinder Dhindsa I detailed out this approach and more in my notes - https://lnkd.in/gBmvVKy2

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CLSA published a detailed research report on India quick commerce. Recommended reading. Who will be the first to create a $50-100Bn company in India internet? #Zepto #Zomato #IndiaInternet

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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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Zepto's strategic positioning in the quick-commerce sector is indeed impressive. Their revenue growth from ₹142.36 crore in FY22 to ₹2,024 crore in FY23, a 14-fold increase, demonstrates their effective execution and market understanding. ​​Achieving a 29% market share by January 2024, up from 15% in March 2022, highlights their rapid expansion and customer acquisition strategies. It will be interesting to see how Zepto sustains this momentum and continues to innovate in the competitive quick-commerce landscape.​​

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Meet Ankur Bansal, a Senior Product Consultant at BlueStacks, who is not just a community member but also a 1% Club Commando. He has seen his stock market portfolio rise by 67% in 4 years. In an interview with the team, Ankur shares some simple but interesting insights from his investing journey till now. Here’s his full story - https://lnkd.in/dwCn4z-c #stockmarket #investing #community #financialplanning

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Indian venture market has exploded. Someone reported that there are 800+ funds/networks/syndicates/ accelerators active in Indian venture market now. Not sure, if that number is correct but if you are an early stage tech founder on your fundraise journey, chances are, you would meet hundreds of people. While majority of the fund houses are doing incredible work and shaping the ecosystem. There are certain kinds of investors you need to identify & avoid to save time and stay focused: Sharing from my personal experience, top 5 such cohorts to avoid and the takeaways for the founders: 1. Data collectors: At early stage, you don't have historical data to present. Your projections are just that, Projections. I wasted one whole week discussing with a prospective angel investor on why the CLTV to CAC ratio is x, and not y. Takeaway: Discuss high level strategic numbers only without going into the details. None of the projections would be accurate anyway when rubber hits the road. 2. Document collectors: Met few folks, who would watch from the fences and ask for n number of documents, data rooms, statements without sharing the purpose of the ask or even revealing their investment intent. Takeaway: It is supposed to be a bi-directional conversation. Say 'no' often, till the time, an official relationship is established. 3. Valuer (! investor): At early stage, valuation is a function of multiple parameters, the opportunity itself, the team, or anything else except steady cash flows, because you don't have much. I wasted another week with a prospective investor trying to justify valuation, had to shut down that conversation, after both of us started quoting Aswath Damodaran and his valuation principles. Takeaway: Too much content on the internet for both parties anyway. Shouldn't be a bone of contention at early stages. 4. Facilitators posing as investors: Met numerous people, who would go to any lengths to pose themselves as serious investors, even buying paid media articles. Only to reveal at the last: The success fee. Takeaway: Avoid facilitators until Series A 5. Brokers posing as market makers: People posing as market makers sharing tons of gyaan on LinkedIn but are actually deal brokers looking to make quick %. Personal experience: Two rounds of conversation happened and then out of blue, they added a third party in the mail trail, someone who facilitates mergers & acquisitions. There wasn't even a single instance in the past conversations where we indicated any such intent. Takeaway: Avoid name & shame in public but at least share within founder communities. #venture #fundraise #startups #investing

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The Indian Gen AI prosumer, consumer landscape still remains early – Companies have hit power users but are subscale OR have low % of paying users  • Companies do not have enough cohort level data to indicate product love  • Most cos who have managed to cross few hundred thousand users (MAU) are building their US GTM machine  • They have a rudimentary hallucination check AND a rudimentary RLHF in place We at Chiratae ventures are keen to look at – 1) Vernacular AI assistants - Sarvam, Krutrim are foundational model (Sarvam – OpenHathi) based general intelligence assistants very similar to Anthromorphic or Poe, but contextualized to India. They have raised significant capital, but the space remains open still. 2) Vernacular AI search – We do not have a Perplexity, Liner for the Indian vernacular. This is a potential whitespace. We will look for a solid team, with a solid product roadmap. Product risk mitigation playbooks are being built out by investors as we speak  Some companies like Two.ai are building both assistants as well as AI enabled search platforms. 3) Co-pilots for Professional services with pre-existing spend pools which can be delivered digitally – AI generated influencers, AI based gaming, digital professionals/copilots - legal professionals, counsellors/therapists, accountants Please write in to [email protected] if you feel there is something you would like to discuss. If there are products or companies we should look at, please tag them in the chat below Chiratae Ventures Sudhir Sethi TCM Sundaram Ranjith Menon Venkatesh Peddi Anoop N Mandeep Julka, CFA Kailashnath M S, CFA Tanvi Dubey #GenerativeAI #Consumer #SaaS #Technology

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WeWork global filed for chapter 11 bankruptcy while WeWork India made ~ ₹1800 Crore revenue with solid profits last year. We sat down with India CEO to understand how the business model has evolved 👇 One core thing Karan (CEO, WeWork India) talks about is how the two models - Plain lease & Capex funded works & is core to this profitability path for WeWork India. The gross margin per location has a inverse co-relation to how much the brand is ready to be risk averse or not & it shows in their business model. The classic 2 models will evolve into a combination of revenue share plus operator deal structure in coming years. More on that in the video below. If you observe other players in India's flexible workspace market, we have the BHIVE Workspace, 91Springboard, OYO Workspaces, Regus & Awfis Space Solutions Limited who are still figuring the right model that maximises their rental yield per square feet of space. The biggest tailwind for all these players though is the GharWapsi after hangover of remote companies is over for most technology, internet companies which are major customers of these flexible workspace providers. There is a whole episode pinned in the link in comments. P.S. We are hosting our 20th edition of Demo Day on 28th July, Sunday. If you are a founder, PM, marketer or part of revenue teams - get to learn revenue growth (again, free pass link pinned in comments).

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Diwali Dampener? Market Volatility and IPO Updates As we gear up for Diwali, the market seems to be painting a mixed picture. IPO Update: Swiggy's IPO valuation has been reportedly revised downwards to $11.3 billion, as market volatility and the lacklustre debut of Hyundai India weighed on sentiment.   According to Reuters, BlackRock and Canada Pension Plan Investment Board (CPPIB) will invest in the $1.4 billion IPO—the country's second-biggest stock offering this year.   Market Sentiment: Just before Diwali, the Indian bourses entered the bear market amid weak global cues and rising volatility. The NSE Nifty 50 fell 2.7% last week and the BSE Sensex dropped 2.2%, logging losses for the fourth straight week.   In fact, October turned out to be the worst-ever month in terms of foreign fund outflows, with foreign investors pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities due to the elevated pricing of domestic equities.    Investors would be treading tricky waters next few weeks, for sure. Let's discuss: What are your thoughts on the current market scenario and its implications for the upcoming festive season? Share your insights and strategies to weather this volatility. #stockmarket #investing #IPO #Diwali #marketvolatility #India

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Product-market fit is hard. And it depends on multiple factors such as the external environment, other players, funding, the founding team, and more. But, can PMF be bought? Spoke to Mukesh Bansal about how Cult.Fit achieved PMF via Acquisition.

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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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How can start-ups effectively handle fraud? Fraud is a constant pain for many businesses, not only for fintechs but also for e-commerce platforms and even games. The challenge is dual-edged: fail to tackle fraud effectively, and you face significant losses; overzealously block transactions, and you risk turning away legitimate customers and missing out on genuine revenue. It's a delicate balance, and sadly, most businesses fail to keep it. Luckily, there's a strategic way to approach this, blending cost-efficiency with efficacy. Here's how you can tackle it by integrating three main pillars of fraud detection: 1. Data Enrichment: Even if you don't have all the pieces of the puzzle for each customer, you can still access critical additional details through third-party data providers using just the customer's email or phone number. This method is more budget-friendly than external fraud scoring solutions and invaluable in painting a fuller picture of a transaction. 2. Internal Start: Begin with an internal ML solution. While it might not catch every fraudulent attempt, it can effectively identify clear fraud patterns or legitimate activities, especially after getting enriched data. That helps deal with most transactions confidently, leaving only a minimal amount in a dubious 'grey area'. 3. Selective Scoring: Use third-party scoring for transactions in the 'grey area'. This targeted approach allows you to assess their risk without overspending. The gained insights can also be looped back to refine your internal tools, improving accuracy over time. Having all three pillars together is crucial: using only third-party data and models will be way too expensive, and relying solely on your data will not bring you good enough quality (especially if you are at the beginning of the path). By adopting this layered strategy, start-ups and scale-ups can manage fraud more effectively, remaining secure and welcoming to genuine customers.

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🚨Zepto's cash burn zooms to Rs 250 crore a month on rising capex, closes Rs 2,500 crore funding round Zepto founder Aadit Palicha confirmed the HNI round in a statement to Moneycontrol "Investors are confident with the mature store profitability proven and the forward indicators of EBITDA for new stores, which is why we have successfully raised the largest ever 100 percent domestic financing for a private startup in Indian history. We are raising this Indian capital as a first step to quickly becoming a fully Indian-owned company within the coming fiscal," The Zepto effect Digital marketing spends ⏫ Talent costs ⏫ Cost of Google keywords ⏫ While Zepto burnt Rs 250 crore (around $30 million) in September, the monthly cash burn went as high as Rs 300 crore (about $35 million) in October, two of the persons cited above said while adding that it is likely to stay in the Rs 300 crore range for November as well. But sources close to Zepto say this number is closer to 250 crore. with Tushar Goenka https://lnkd.in/gmkNyaMs

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Next steps in India Mobility are continuing to show progress - one of the top investments that continues to show IndiaFirst #ProudInvestor #ProudVC #IndiaFirst #BestLPs

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