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Startup Newsletter - April'22

Updated: Feb 20

In this issue:


online to offline -startup's mantra of success?

Did you know?

  • Lenskart operates over 900 physical stores across India

  • Ola owned and leased out 33,000 vehicles to Ola drivers as at the beginning of 2020; and

  • Byju’s took over Aakash Education for $One Bn last year, giving it access to 200 physical tutoring centers

Do you also sometimes stop sipping your coffee midway and stare blankly outside the window wondering why the world constantly tries to romanticize the idea of online-only models when all these tech companies end up getting into brick-and-mortar themselves? Well, we do… So, to stop this bizarre habit of insulting our coffee, we decided to bring some sanity to this thought. Come on let’s take a ride:

Why do Startups maintain an online-only model?

Online-only presence allows Startups to enjoy an asset-light model. By asset-light model we mean a biz. strategy where you convert almost all your fixed costs to variable cost structures such that if you, god forbid, made zero in sales tomorrow, you’d cut down majority of your operating costs also. Take Swiggy’s model for example- you place an order in their app online with a restaurant partner and then the company sends a delivery person to get the food delivered to you. Swiggy doesn’t own the restaurant or the delivery vehicles. It simply earns a commission for every delivery it makes. Now think of all the startups around you like Flipkart delivering you goods or Paytm giving you loans or Oyo bringing you hotel rooms or almost the entire B2C tech ecosystem and you’ll realize that all of them started off from the same place:

online-only models trying to excel in 2 main things: using tech to optimize supply chain and satisfy untapped consumer need.

Why do they do it? If you’re reading off a management book, it’s because this formula is the easiest way in:

  • You don’t require a LOT of capital to sign commission based and profit-sharing contracts.

  • You don’t need to spend months setting up your factory/warehouse/restaurant/hotel. You can just convince existing asset owners that your “partnership” will get them more money and they’ll give you the attention.

  • You can just start writing “we deliver globally” and then build on the capabilities as demand increases.

If you’re asking us, it’s because this formula is the easiest way out:

What if your idea doesn’t work? What if you don’t get enough buyers? What if it’s not lucrative enough? You can simply pull the plug on your app and tell your customers sorry! There are no factories/buildings/warehouses to sell off, just contracts to tear off and employees, albeit condemnable, to lay off.

This brings us to the next question…

  • Do these Startups always remain online-only?

  • All this is great but are they really doing it right?



If you’re a Startup founder and you’ve been wondering what’s the right number of ESOPs you should set aside for your employees, here’s our analysis that can help you to benchmark. We collated data of 50 Indian Unicorns to find out what’s the average percentage of shareholding that is usually set aside as ESOP pools:


no more free MONEY?

4 cards that sum up the current pulse of India’s Startup Ecosystem:

  1. Outcome of Russia-Ukraine war

  2. Poor performance of listed Indian new-age tech stocks

  3. Hike in interest rates across

  4. Plunge in funding by top VCs

  5. 0 Unicorn births in April'22



Will electric vehicles ever become the mainstream of mobility?

Simply click on one of the options below and your response will be automatically submitted…



"We make essential products from air, not oil”

Just when carbon offsetting was seeing the light of the day, Twelve, an award-winning Startup based out of US, has gone a step ahead claiming that its proprietary technology of ‘carbon transformation’ can eliminate carbon emissions, by transforming CO2 into chemicals, materials and fuels that are conventionally made from fossil fuels.

  • How do they do it?:

  • Why do we need it?

  • Result?





  • Turbulence ahead: The rising inflation concern has led to a global tech selloff, resulting in a loss of $18.6 Billion and $17 Billion for SoftBank and Tiger Global respectively, in Q1’22.

  • Another tech IPO: Speaking of SoftBank, after portfolio companies Paytm and Policy Bazaar’s failed IPOs, another Indian tech unicorn in its portfolio - Delhivery went live with its IPO, having been subscribed 1.63 times by the last day. But, as loss making tech IPOs continue, the big question is whether loss making startups are a fit for equity markets in India, or anywhere across the globe for that matter?

  • Not everything is in Red: 23 out of India’s 100 unicorns are profitable, as per data from Tracxn. We think it’s a great number.

  • Another Soonicorn: Ather Energy, the 2-wheeler EV manufacturer, which proudly announced that its vehicles don’t catch fire unlike its peers, raised $128 Million from long time investor Hero MotoCorp and NIIFL.

  • Enough is enough: Speaking of EV fires, the GOI is planning to come out with a battery policy to put in place quality controls for batteries used in EVs.

  • More benefits: Speaking of policies, the Delhi cabinet has approved a startup policy under which financial assistance will be given to set up new startups. MP govt. followed suit, announcing their own policy and online portal, offering many benefits.

  • Whatsapp gets a go ahead: Payments regulator NPCI allowed Whatsapp to roll out its UPI service to 60 Mn new users, taking the tally to 100 Mn users. This move comes as NPCI is closely monitoring the UPI transactions and wants no single player to obtain an advantage over others.

  • New rules of the game: Legacy players like Kotak Securities and Mirae Assets have come up with Zero Brokerage plans for intraday trades. While this move promotes equity investments and financial literacy in India, it is seemingly a big blow to discount brokerages like Zerodha, Upstox and Groww, who have been charging fees on intra-day trades.


Print version of this Newsletter:

Startup Newsletter_Apr'22
Download PDF • 4.57MB


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