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Startup Newsletter -Oct'21

Updated: Feb 20

In this issue:



Dear Reader,

We are often bent to believe that all it takes to make it large is that one great idea. So we draw inspiration from the organisations with the greatest ideas and then we set out in pursuit of our own eureka moment. What in fact makes ideas great are the people who give them life- the right people with the right tools.

We are often bent to believe that all it takes to make it large is that one great idea. So we draw inspiration from the organisations with the greatest ideas and then we set out in pursuit of our own eureka moment. What in fact makes ideas great are the people who give them life- the right people with the right tools.

Elon Musk co-founded a company called Zip2 in 1995 and sold it for $307 Mil in 1999. Then he co-founded PayPal (the global pioneer of online payments) and sold it for $1.5 Bil in 2002. At this stage you and I would definitely retire right? Not him! He went on to found SpaceX, world’s first company to reuse a rocket and now one of the leading companies in Aerospace, he spearheaded Tesla’s growth which is pioneering the global transformation to Electric Vehicles today, he’s working on projects like Starlink, Hyperloop and Neuralink, each of which can blow your mind in its own.

Elon Musk has disrupted businesses several times over and yet at age 50 today, if you ask him whether he’s found success, he’ll tell you that he’s just getting started. Great Ideas follow great people.

So, at Startup Indian, we want to glorify great visionaries, the people who sit at the helm of change- the kind who have the courage to shape our tomorrow.

From this point on, let's ask, “Who’s the one leading the change?”, “What makes a leader great?” and “What does it take to lead a change?”

This newsletter is our Step 1. Hope you’re tagging along. Happy reading!


looking beyond cred's valuation marvel

News Flash: Cred raised another $251 million in Oct'21 at a valuation of $4.01 Bil. Just 6 months back we reported in awe of its 3 times jump in valuation up to $2.2 Bil.

When you and I look at Cred, we can probably summarize what it does in one or two lines- it rewards people in myriad ways for paying their credit card bills on time. And it probably earns a commission from brands that list their offers and coupons as rewards. Right? So, what’s the big deal? It’s not really disrupting anything here! So why does it deserve all the hype from international investors? So much so that they come back in every 3-6 months to put more money in double/triple the last valuation!

Well, that’s where the miracle of Kunal Shah (founder and CEO of Cred) begins. So, when you’re looking at Cred’s latest valuation and scratching your head, we’re looking at Kunal Shah and sharing a smile. To understand why Cred deserves all the hype, you’ll need to know 2 things:

1. Why Kunal Shah deserves the hype?

  • Reason 1: Quick Glory

  • Reason 2: Kunal’s marriage with Sequoia Capital

  • Reason 3: Kunal’s obsession with Sharing Wealth

  • Reason 4: Kunal’s vision with Cred

2. What’s happening at Cred?



In this month’s Look another [Loss Making] Growing Tech Startup filed for an IPO! We have Oyo Rooms, the online aggregator of hotel rooms, floating its prospectus – thanks to ATH (all time high) capital markets, strong conviction among investors for startup funding and a COVID struck year which has helped such tech companies deploy their resources better (more on it later).

Here are some of the yellow (beware) flags that we see in Oyo’s IPO Run:

1. COVID’s Curse

While COVID-19 passed on the baton to new age technology companies to serve customers better through digital solutions, the main business of Oyo- travel and tourism, was hit to the core. Not only did it shrink the size of its business, but it also led to a massive downsizing by the company. Revenue dropped by 70% from 13,168 Cr to 3,961 Cr. Although it led to reduction of yearly net losses from 13,122 Cr to Rs 3,944 Cr, we see it's clearly because of reduction in business.

Did you notice? For every Rs 100 earned as revenue, it is making a loss of Rs 99.5! Read that again.

The only silver lining to its business is that it has improved its adjusted gross profit margin from 10% in FY20 to 33% in FY21. How, you ask? By rationalizing its global portfolio for better margins and by executing contracts with hotel partners requiring minimum guarantee commitment a.k.a. fixed payouts.

2. Business Downsizing

Even before the pandemic had wreaked havoc on the travel and tourism industry, Oyo had started trimming its manpower and churning out its unprofitable ventures. Covid-19 further induced a wave of massive employee layoffs and downsizing of business- leading to loss of expertise, customer relationship, employee morale, and business reputation. To portray the impact better, we considered 3 important metrics of the company: Number of hotel partners, number of employees and the valuation of the company.



Talks about the working conditions of Gig workers such as the likes of Swiggy/Zomato delivery partners and Uber/Ola driver partners have been all over social media. Side opposition has been raising voice on grounds of insecurity, anxiety, low wages, and high costs suffered by these workers. Whereas side proposition highlights the immense high paying job opportunity created by the tech companies amidst a slow economy.

What’s your take on this?

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





Facebook at Sixes & Sevens

In seemingly “the biggest crisis” in Facebook’s history, a whistleblower, who used to work there as a product manager, made shocking revelations about the Social Media Giant’s operations. The leaked documents were first shared with the Wall Street Journal and later with several other media houses from across the Globe, leading to myriad interpretations and fresh allegations. Some of the major revelations include:

  • Many celebrities and politicians had different rules, mostly favorable, governing what content they could post.

  • Facebook had adverse effects on countries outside of the US and deployed inadequate resources to address issues in those countries.

  • Detailed internal research conducted by Facebook revealed that Instagram is ‘toxic’ for teens, but the findings of the research were never disclosed.

The big picture: The most shocking revelations made by the whistleblower concerned Facebook’s biggest market: India, where it failed to adequately address harassment, mis- and disinformation, and incitements to violence fueling ethnic conflicts. Not much later, the Ministry of Electronics and Information Technology, Govt. of India, wrote to Facebook seeking information around the algorithms and processes used by the platform. Moreover, given the gravity of the situation and seriousness of the allegations made, the Apex court of the country might soon step-in and make Facebook’s ride bumpier.

While we’re here: Amidst all the flurry of allegations and fresh probes, Facebook recently announced that it’s changing its company name to ‘Meta’. According to Zuckerberg, the old name represented only a single facet of everything that the Company does today, and the new name more closely depicts what is going to be the company’s biggest bet in the future – “Metaverse”, which he is calling the “next chapter of the internet”.

The critics, however, have a completely different interpretation of the whole name change event, drawing parallels from Companies who have changed their names in the past amidst rising public pressure. But Facebook will have to do much more than a mere name change to save its tarnished public image, fading popularity amongst the youth and declining ad revenue.



  • Everyone wants in on Edtech: Larsen & Toubro, the engineering & construction major, launched its own app-based learning platform. Didn’t see that coming!

  • More M&As: The ride-hailing unicorn Ola acquired geo-analytics technology platform GeoSpoc, while the edtech unicorn Unacademy acquired live face to face tuition provider Swiflearn.

  • Another Used Car Unicorn?: Cars24 became the 3rd Startup in the used car segment after Droom and CarDekho, to enter the Unicorn club. Now, Spinny, which is also a used car selling platform, is in talks to raise a new round of funding at over $1 Billion valuation.

  • D2C is getting hotter: The famous US based Startup that acquires promising D2C brands to scale them up quickly, is setting up shop in India. In our previous issue we discussed how GlobalBees, an Indian Startup, replicated Thrasio’s model here in India.

  • Offence is the best Defense: Since 2018, PhonePe and BharatPe have been poking each other over the use of the postfix ‘Pe’ in their brand names. Now, BharatPe launched it’s BNPL product by the name of PostPe, leading PhonePe to approach Bombay High Court. Meanwhile, BharatPe filed a lawsuit in Delhi High Court, seeking cancellation of PhonePe’s trademarks.

  • Swiggy’s making a Bazaar: Swiggy has been making job postings for its new project – Swiggy Bazaar. The Bazaar will enable users to buy groceries as a group, taking advantage of bulk discounts. The idea is inspired from a similar concept that has recently witnessed an upsurge in China. In case you forgot, last month Zomato declared that it’s quitting its Grocery Delivery business. Speaking of Zomato, last month, the food-tech major tweaked its algorithm to increase the pick-up radius from 10km to 40km without informing its delivery partners, leading to huge uproar from them. The tweak was since restored.

  • Zoho behind the loudspeaker: The SaaS Unicorn, announced the launch of it’s biggest ever update – Zoho One, an Operating System for businesses. The Software offers 40+ integrated business apps ranging from finance to marketing to analytics and more.


Print version of this Newsletter:

Startup Newsletter_Oct'21
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