Top Startups of the Week are Zepto, Purplle, Nykaa Read article

How many businesses are profitable in India startup 2021 list

India's startup ecosystem, we saw the aftermath of Nykaa's IPO, Delhivery filed their DRHP.

Top successful startup list 2021 in India:-

  1. Ola's ridehailing
  2. Nykaa's successful IPO
  3. Delhivery
  4. Unacademy
  5. Purplle
  6. Zepto raise $60 million
  7. Fi raise $50 million

Ola

But I wanted to start this episode by talking about Ola and specifically their ride-hailing business becoming operationally profitable for the first time in over a decade, so as we all know the pandemic hit Ola pretty hard specifically their ride-hailing business and pretty much anybody in the ride-hailing space suffered because of the pandemic many are still suffering, companies like Uber, companies like Didi Chuxing over in China but specifically when it comes to Ola, it actually ended up seeing a 95% reduction in their business during the peak of the pandemic, this was extremely painful for the company and they had to take measures to cut costs. They ended up laying off about 1400 employees and they did a couple of other things as well but they were able to reduce their costs to about 75% of what they had spent in 2020 in 2021


So in 2020, their losses were  Rs 2,683 crore and they were able to bring that number down to Rs.682 crore, that was a massive reduction and now because of this reduction they are actually able to be profitable.


so at first glance, this does seem like a similar situation to what happened over at zomato where during the peak of the pandemic their business was suffering, they were losing money, they weren't able to raise funds from investors because nobody was interested in the food-tech space at that point everybody was worried about this uncertain future created by the pandemic and so Zomato made the decision to, ok we are going to go to the public and we are going to raise these funds from them instead and so you can draw comparisons there, you can say this is similar, what's happening at Ola is very similar but the reality is Bhavish Aggarwal actually announced that Ola was going to go public in the next 24 months back in March of 2020.


and this was before the pandemic really started to become a serious thing, it was at the beginning of March so at that point the virus Covid-19 was sort of localized to China, it had started to spread to  some other countries but it wasn't something everyone was thinking it would impact our lives for a year, two years possibly three years, nobody saw that this was going to be a serious thing at that stage and so Ola had made that decision to go public and it wasn't out of desperation, it wasn't because they couldn't raise funds from investors, it was just something they felt was a good thing to do and they have been talking about it for a while and so now the end of that 24 month period March of 2022 is just around the corner and so it is likely that we will see Ola filing their DRHP ( Draft Red Herring Prospectus ) at some point in the near future and then we will be able to get more insights into what's going on at Ola and what we can expect from this IPO but for the time being, what we know and this might change, they are going to be raising between $1 and $1.5 billion dollars from this IPO and they are going to be doing it in India.


and that is great news because before Zomato went public in India the prevailing mentality amongst startup founders  and people in the startup ecosystem was that when you go public you gotta go public in a country like Singapore, a country like United States  don't go public in India but now it seems like that trend is changing, we are seeing Zomato going public in India, we have seen Nykaa now going public in India, Ola is planning to go public in India so this is a really great thing and I hope that this trend continues.


Nykaa Business model

All right next up in the news let's talk a little about Omnichannel beauty  retailer Nykaa's IPO this was one of the most successful IPO's in Indian startup history, it was oversubscribed 82 times  which is more than 2x of what we saw with Zomato their IPO was oversubscribed 38.25 times and that was a huge success but now we are seeing a doubling, a more than doubling of that success with Nykaa now just breaking things down really quickly qualified institutional investors made up the most oversubscribed category followed by HNI's and then eventually at the bottom retail investors people like you and me oversubscribed 12 times and in case you are wondering what oversubscription is if Nykaa is issuing a single share  then there are 82 people in this case that are actually interested in owning that share interested in buying that share.


only one of those people is gonna get the share but there are 82 people that are competing with each other to actually buy and own that share it means that there is lots of demand people are really excited and one of the reasons for that, in this case, is Nykaa is actually the first-ever profitable Indian startup unicorn to go public and so I think the public and qualified institutional investors and HNI's were also part of the public saw this and thought WOW! this is a profitable unicorn I wanna invest and own a piece of this company. It is the first time it is happening who knows if the next time it happens there will be this much enthusiasm but in case you were wondering why Nykaa's IPO was so successful that might be one of the reasons why.

How many businesses are profitable in India startup 2021 list

Delhivery

Next, up in the news Logistics unicorn Delhivery is going public, they filed their DRHP, they are going to be raising a billion dollars at a $6 billion dollar valuation and most of this money is going to be going into organic growth growing their logistics network  and also launching new lines of business but some of these funds will be allocated to inorganic growth to acquire companies that they are either competing with or companies that have products or services that are actually complimentary to what Delhivery is building Now I should note here that, unlike Nykaa , Delhivery is not a profitable startup they are a loss-making startup-like zomato and so just like Zomato, they are only going to be able to allocate 10% of this IPO to retail investors, people like you and me.


However I should also note Delhivery's been consistently growing their revenue ever since 2011 to the point now where they are actually bigger than Blue Dart this was a company that was founded in the 1980s and Delhivery now at this point even though they were just founded a decade ago in 2011,they are already bigger than Blue Dart but how has Delhivery been able to do this ,how they have been able to grow their revenue consistently ever since 2011.Well the biggest reason is internet penetration people are ordering things online even in tier 3 and 4,in these small town, small villages people are getting smartphones, they are getting feature phones, they are able to access e-commerce platforms and awareness about these platforms is also spreading as VC's put more and more money into this space so that these companies can advertise to consumers these people wouldn't have found out if it weren't for these platforms and ofcourse the platform has accelerated this all of a sudden people were at home they weren't able to go to the store or the market to buy things and so they were ordering things to their homes and of course thats where delhivery makes money because they are transporting these items from a e-commerce warehouse to the end consumer.


All right moving to some acquisition news edtech unicorn unacademy has made their fourth acquisition in 2021

Unacademy acquires Swiflearn

Swiflearn an online live face to face coaching platform for students between the grades 1 and 10 and they are doing this essentially to get into Byju's territory There is going to be some budding of heads here because up until this point unacademy has mainly been focused on tests and exam preparation while Byju's has been dominating the coaching space basically, tution for students between kindergarten and grade 12 but now with this acquisition of Swiflearn Unacademy is moving into that space and they are trying to get a piece of that pie. So Swiflearn is offering a personalized home tuition experience to their students, these are students on CBSE and ICSE boards .there is currently 1.2 lakh students using the platform and they are being taught by 1500 teachers, which might seem like a small number, unacademy has 60,000 educators on their platform teaching 60 million students but that's on the exams and test preparation category whereas Swiflearn is operating in a completely different space they are focusing on tuition and tutoring so this should be a pretty big asset for unacademy this is like ammunition basically for them to take on Byjus and I look forward to seeing what happens now that these two companies are competing more directly.

Purplle raises $75 million

All right moving on to some funding news online marketplace for beauty products Purplle has raised 75 million dollars in a funding round led by Kedaara Capital at a 630 million dollar valuation which is a 4x jump from their previous valuation in march of 2021. Now on this platform, you can buy more than 50,000 beauty and personal care products from more than 1000 brands but  I think it's worth noting that Purplle has a lot of in house brands as well and these brands make up more than 1/3rd of their  business, so they are taking a very similar approach to what Nykaa has done where they are offering an online marketplace where other companies can sell their products but eventually they come in with their own private label brands and they start making a lot of revenue from those products. this startup is growing 80% year on year and they are selling products worth more than Rs100 crore that's GMV(gross merchandise value) every single month, they are going to be using some of these funds for organic growth launching new brands, new products, and some of them they are going to be using for inorganic growth basically acquiring other companies in the beauty and personal care space. 

Zepto

All right next up in the funding news 10-minute grocery delivery startup Zepto has raised $60 million dollars in a funding round led by Glade Brook Capital at a $225 million dollar valuation which is significant because this startup was founded just 8 months ago by 2 Stanford dropouts who thought that they could do online grocery delivery better than the incumbency Companies like grofers, big basket ,swiggy instamart and Dunzo, the startup is currently growing at 200% every single month, They have got 40 dark stores, these are stores you cannot go physically but can order from online across cities like Delhi-NCR, Mumbai and Bengaluru

The startup is going to be using these funds to expand into 4 new cities in the next 30 days these are Hyderabad, Pune, Kolkata, and Chennai and by the end of the year, they are planning to have set up a100 dark stores. Now this startup has definitely generated quite a bit of conversation, quite a bit of debate partially because  the founders are very young and they are dropping out of Stanford which is not the normal profile that we see with Indian entrepreneurs that's more common in the united states where kids going to prestigious schools dropout to become entrepreneurs but in India typically they do finish their studies, they are IITians, there are students that went to BITS PILANI or students that went to IIT Bombay, that's a particularly hot place for entrepreneurs to originate but in this case, they have dropped out of Stanford and they are starting a company which is delivering things very quickly which is another thing a lot of people are debating is this a good thing for society, is it going to make us more impatient, more snappy, more upset when things don't go our way  when deliveries don't come within 10 minutes are we gonna get more angry are we gonna get more frustrated or is it making society more efficient, are things moving more quickly and that's gonna speed up the pace of life the speed of progress. Is Zepto making society a better place or not. 

Fi start-up

All right next up in the funding news neo banking startup Fi has raised 50 million dollars in a funding round led by B capital at a $315 million valuation. Now Fi, of course, is a Neobank, they are not a traditional bank, they are not really a bank as such, they have partnered with federal banks to allow their customers to open accounts through Fi making banking and financing easier for their customers through a smartphone app. You can create a rainy day fund using Fi You can do easy money transfers using this platform and you can build better savings habits through the app as well Fi's going to be using these fresh funds to build investment products for their customers both stock investments and mutual funds That is all the startup news I have for you guys this week, I hope you learned something from it.


yet again this week, I am going through a bit of life transition, don't worry everything is okay on my side but I just want to explain why things look a bit different and obviously, things are not ideal when it comes to my setup so I'm just sort of stacking things up, this is temporary but I don't have a tripod and I don't have any lights and that's not normal, usually I do have those things, I have had those things I think since we have started this news show.

Post a Comment

0 Comments