"WEEK 8"

July 26 - August 1

Hey folks! Vedica here with our weekly recap of the week's news and one in-depth story (from the paid newsletter). It's already August! How the hell did time fly so fast? That too under quarantine? Of course, the stream of start-up news continues unabated, so here's a wrap-up of what we covered this past week.


Weekly Recap

  1. NPCI wants MDR back for UPI: The National Payments Corporation of India (NPCI) said that the Merchant Discount Rate (MDR) is critical for servicing and spreading UPI in the country. This is important pushback since in December, the Finance Minister Nirmala Sitharaman had said there will be no MDR charges, which will be applicable, on RuPay and UPI platforms.

  2. Flipkart acquires Walmart’s India business; launches Flipkart Wholesale: Flipkart last week acquired a 100% interest in Walmart India, which operates the Best Price cash-and-carry business. Flipkart is, of course, majority owned by Walmart so there's some circularity here! The aim of the acquisition is to strengthen capabilities and improve Flipkart's B2B service offering.

  3. ZestMoney is the first lending platform on GooglePay: Google is really beefing up its Spot platform, and has now partnered with digital lending co ZestMoney to power loans directly on GooglePay. UPI apps seem to be vying to be the single place users go to do things related to finance, so having micro-loans on GooglePay makes sense.

  4. ShareChat raises $40M from existing investors: Social media platform ShareChat has allegedly raised $35 - $40M in an internal financing round from existing investors including Lightspeed India. The investment comes at a very opportune time for the homegrown social platform which has seen an increase in usage on it's core app and newly launched short-video app (Moj) with the recent ban on Chinese apps in the country.

  5. Toppr raises $47 M in a Series D round led by Foundation Holdings: The EdTech funding train continues to chug along, with Toppr raising $47M in a Series D round led by an investment firm called Foundations Holdings, with managing partner Aakash Sachdev joining the company's board.

  6. BulBul raises $8.7 Mn Series A round led by Info Edge: BulBul raised $8.7M in a Series A round led by Info Edge. The entity now owns 17.82% of the social commerce startup and invested $6.63M out of their new 100 Cr fund. Bulbul is a video and livestream led commerce platform that claims to make online shopping engaging and social.

  7. Hevo raises $8M in a Series A round led by Qualgro and Lachy Groom: Data pipeline company, Hevo, has announced a $8M Series A round led by Singapore based firm Qualgro & SF-based solo capitalist Lachy Groom (he was also a former executive at Stripe). The company had previously raised money from Sequoia Surge & Chiratae Ventures (both of whom also participated in the round) and the current round brings the total capital raised to $12M.

  8. Ritesh Agarwal floats Aroa Ventures to back startups: India's favorite millennial founder, Ritesh Agarwal (OYO) has started a new entity, Aroa Ventures, to invest in early-stage companies. Gaurav Gulati (ex-COO Innov8 which was acquired by OYO) will head Aroa Ventures. The firm will invest $500k - $5M in companies, especially in "businesses that have the ability to create disproportionate value through adjacencies".

  9. Focus on profitability, not growth: G.V. Ravishankar, Managing Director at Sequoia in an overview of the last couple of months said that start-ups have focused on surviving, adapting & building for the future Companies are reducing their burn and pivoting in order to survive while companies in some sectors are thriving because of the environment created by the pandemic.

  10. MobiKwik launches mpay.me: MobiKwik, the fintech co, just launched a new product that enables anyone to start collecting payments directly to their UPI-linked bank account. With mpay.me, it seems like company is delving deeper into the business side of things as the product will let merchants set up a link using their mobile number to start receiving money.


ZestMoney is the first lending platform on GooglePay

Fintech Startup ZestMoney Bags $20M Funding

Seems like Google is really beefing up their Spot platform, and have now partnered with digital lending co ZestMoney to power loans directly on GooglePay. To me it seems like the UPI apps seem to be vying to be the single place users go to do things related to finance, so having micro-loans on GooglePay makes sense.

Google also plans to onboard other loan providers so ZestMoney's first mover advantage might not hold too much weight. Users can register on Google Pay, complete KYC & check their eligibility for a credit line.

I have somewhat felt that by skipping the credit card revolution, a majority of India has not been able to access credit as a payment means for day-to-day purchases. I like the idea of these buy now, pay later services but it's not super easy to scale and access users.

But using GooglePay as a distribution layer to gain access to users might make sense (GooglePay has over 75M monthly transacting users), and ZestMoney has already received several thousands of new applications.

Users who are eligible for a credit line on ZestMoney will be able to use it across over 3000 merchants online & offline. But I think the holy grail of credit over GooglePay might look something like using some application to get a line of credit, and then use GooglePay to purchase any item from any merchant using that line of credit.


Reads of the Week:

  1. Shopify and Embedded Finance (Part I) by Ian Kar

  2. OCEN: The "UPI moment" for MSME Lending in India by Arun and PJ Paul (@Setu)

  3. The Next Generation of Fintech Infrastructure by Sebastian Garcia

  4. Software Plumbing by Aashay Sanghvi

  5. A tweet thread history of Nirma by Palak Zatakia

  6. Indian Matchmaking Exposes the Easy Acceptance of Caste by Yashica Dutt


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