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Startup Newsletter - Jun'21

Updated: Feb 7

In this issue:

 

Bharat-pe takes over pmc

In Sep’19 PMC Bank had to seize operations and disallow depositors from withdrawing cash in the wake of a bank fraud. 73% of their loan book had suddenly been declared bad. After 635 long nights, the depositors finally got a ray of hope as RBI gave an ‘in-principle’ nod to BharatPe and Centrum Financial Services to come together and form a Small Finance Bank which will take over PMC Bank’s assets. The parties are required to invest a little over INR 2,200 Cr over the next 2 years.

 

startup ipo frenzy

Did you notice that there's a sudden wave of Indian Startups going for an IPO this year? There's Zomato, Paytm, Flipkart, Policybazaar and Delhivery, to name a few. Well, we noticed it too and you know how we are...we started wondering why now? Why are these Startups suddenly lining up to go public one after the other? Is it because of the excess liquidity in the market? or is it to take advantage of the red-hot IPO market?

We did our brainstorming and then cross checked it with the internet's experts. Turned out, we made sense. The next step was to create a full-blown article, sugar-coat it with some infographics and then present it in a fancy way, probably with a picture of a man looking amazed. Then we thought, what the hell! Let's just screenshot our group chat and connect with you at a cool Whatsapp level. So just read through our conversation and enjoy a quick session of candid brainstorming

 

decoding amazon

You’ve heard about that Amazon-Reliance-Future Group tussle right? Yes… the one where Reliance is on the verge of buying 1500+ stores of Future Group and Amazon has complained to the Supreme Court to prevent it… But have you wondered why Amazon has been so possessive about it?

Well one obvious reason is that Amazon holds a contract with Future according to which Reliance Retail’s proposed transaction with Future Retail is probably illegal. But why is the biggest E-Commerce giant of the west so interested to own offline stores like Big Bazaar in the first place?

We dug deeper and tested Amazon’s DNA. We took a trip to the west and found out that Amazon runs close to 600 offline stores in the USA. We made a list of M&As that Amazon has had in India so far. And we took a humble attempt at decoding Amazon’s strategy by connecting the dots. And now…it all makes perfect sense. Amazon has a LOT to gain out of Future Group! But you need to find it out for yourself HERE.

 

WHAT ELSE IS BUZZING?
  • Raining Unicorns - BrowserStack becomes the seventh SaaS company to enter the Unicorn club at a valuation of $4B.

  • Done deal! IPO bound Zomato invested $120M in Grofers at a valuation of $1B. And you thought Zomato is done with making the headlines, eh?

  • BYJU’S at the top - The Edtech unicorn has surpassed fintech major Paytm to become India's most valuable startup after its latest round of funding, at a valuation of $16.5B. BYJU’S is also the most valuable Edtech Startup in the entire world, having acquired 9 companies in the education space over 10 years of its existence, to achieve this feat. 

  • Paytm is not falling behind - It seems the fintech Startup will not settle for the second place, as in a recent board meeting, the Startup decided to raise about $3B through an IPO, scheduled for later this year. That’ll make it the biggest Indian IPO ever.

  • In a first of its kind, Health-tech Startup PharmEasy acquired a 25-year-old listed company Thyrocare. This follows other major brick-and-mortar acquisitions made by other Indian Startups like  BYJU’S acquisition of Aakash, BharatPe-PMC Bank deal and the Groww acquisition of the IndiaBulls AMC business.

  • The Enforcement Directorate issued a show-cause notice to the country's largest cryptocurrency exchange - WazirX,      for undertaking transactions worth over ₹2,790 crore in alleged violation of the Foreign Exchange Management Act.

  • In Startups vs Covid this month, Paytm launched vaccine appointment booking feature on it’s app. Swiggy has launched ‘Swiggy Suraksha’, a special care package that prioritizes the health and safety of its delivery partners and their families. Meanwhile, PhonePe announced a relief package of ₹2 lakh as a COVID-19 allowance for employees who need emergency medical fund. The sum is not required to be repaid.

 

AROUND THE WORLD IN A BLINK

On one hand we have 21st century products like Bitcoin that makes an annual carbon emission of over 20 Million metric tons. And on the other hand we have innovative Startups that are addressing the need of the hour by contributing to the global ESG narrative.

One such Startup is Pachama, based out of California, US. It has two offerings:

  1. A Carbon Credits Marketplace that matches buyers and sellers of offsets. So in simple words, if a large corporation is emitting ‘x’ amount of carbon which must be offset by activities that absorb carbon, like planting more trees, the Startup helps them spend on forest projects that will offset their carbon emission.

  2. An AI solution to map trees and measure carbon absorption. It says it can help buyers keep a “remote eye” on the woodland generating offsets by using artificial intelligence, combined with satellite and lidar, which uses a laser light pulse for measurement, to estimate forest cover and carbon absorption rates.


At the back of such innovative offerings, it recently raised $15 Million in a funding round led by Breakthrough Energy Ventures, the investment group founded by Bill Gates.

Though it may sound very unreal but turns out we have other ventures equally engaged and paced:

  • Swedish forest data company Katam raised $1.2 Million, and

  • NCX, which uses remote sensing to identify woodland that could generate offsets raised $20 Million from investors including Microsoft’s Climate Innovation Fund.

  • Similarly, other start-ups, like Treeconomy and Dendra, are developing systems to better estimate the volumes of carbon being absorbed by trees and plant seeds at scale using drones.

 

LEARNING FROM THE BEST
Just like Apple, try advertising your offerings by starting with WHY

In his book Start With Why, Simon Sinek points out that when most of the organisations or people think, act or communicate, they do so from OUTSIDE-IN, i.e. from WHAT 🡪 HOW 🡪 WHY. And they do so because they want to go from the clearest thing to the fuzziest thing. But, the inspired companies and inspired leaders think, act and communicate from the INSIDE-OUT i.e. from WHY 🡪 HOW 🡪 WHAT.


He goes on to give the example of Apple - how a consistent pursuit of WHY it does what it does, worked wonders for the company. The company uses the concept of ‘start with why’ to market it’s products, allowing it to garner loyalty of its customers that resulted in a cult like following of the brand and its offerings. He says that Apple's WHY, is to challenge the status quo and to empower the individual. This is a pattern in that it repeats in all they say and do. It comes to life in their iPod and even more so in iTunes, a service that challenged the status quo of the music industry's distribution model and was better suited to how individuals consumed music. 


The music industry was organized to sell albums because of which music was largely consumed at home. Sony changed that in 1979 with the introduction of the Walkman. But even the Walkman necessitated carrying many cassette tapes or CDs in addition to the device. However, the development of the mp3 music format changed all that. This led to the invention of a handheld music player, by Creative Technology Ltd., a Singapore-based technology company. Apple’s iPod was released 22 months later, and yet it is Apple that is credited with transforming the industry. The reason? Apple introduced their iPod by offering us “1,000 songs in your pocket.” Whereas, Creative technologies advertised their product as a "5GB mp3 player”. It is exactly the same message as Apple's "1,000 songs in your pocket”. The difference is Creative told us WHAT their product was and Apple told us WHY we needed it. Their advertising didn't offer exhaustive descriptions of product details; it wasn't about them it was about us. And we understood WHY we wanted it. Only later, once we decided we had to have an iPod, did the WHAT matter-and we chose the 5GB version, 10GB version, and so on, the tangible details that proved we could get the 1,000 songs in our pocket. Our decision started with WHY, and so did Apple’s offering.

 

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