"WEEK 22"

Nov 1 - 7

Happy Sunday, folks! After almost an entire week of vote counting, we now know that Joe Biden is going to be the 46th President of the USA. Kamala Harris will be the first woman and person of colour VP. It's a big moment! I got out for a walk in SF today and was thrilled to hear folks playing YMCA - which Trump, in some real twist of irony, had chosen to close out his campaign rallies - to celebrate the Biden-Harris victory. It was great to see the celebration! There's a lot of election action in India too, with results of the Bihar assembly polls due Tuesday (exit polls are predicting a Janata Dal-BJP loss FWIW). Both Anmol and I have been caught up in political news this past week, so our regular updates during the week took a bit of a hit! Still, we had some interesting news to cover and our long story this week is Anmol's take on angel investors in India.

Weekly Recap:

  1. Netflix piloting new pricing strategies in India: Netflix plans to experiment with free access to users in India for a weekend as part of its plan to expand its reach in the country. Netflix has been conducting various pricing experiments in India and several parts of the world over the past year or so, in a bid to broaden its user base while retaining its premium offering

  2. UPI recorded 2B+ transactions in October: UPI has registered 2.07 billion transactions worth ~$50B crore in October, according to NPCI data. This is 15% and 17.3% month-on-month surge in volume and value, respectively. It took UPI three years to reach one billion transaction mark and only one year to cross 2 billion.

  3. Doubtnut’s acquisition talks with Byju’s fall through over valuation: Byju's insane growth and acquisition spree finally seems to have hit a bit of a roadblock. It has been in acquisition talks with edtech platform Doubtnut since June but these have apparently fallen through over valuation. Apparently Byju’s had agreed to acquire Doubtnut in the range of $130 million, but it reduced the valuation by $40 million to $80-90 million in the final offer after completing its due diligence.

  4. Flipkart acquires Gaming company Mech Mocha: Indian eCommerce giant Flipkart announced that it has acquired the IP of gaming company Mech Mocha. Mech Mocha runs the popular app "Hello Play" and develops and publishes freemium games like Ludo, Carrom & Cricket among other popular multiplayer games on its platform in several languages and largely targets users coming online for the first time from Tier 2 & 3 cities.

  5. AgriTech Eggoz raises a $1.5M Pre-Series A from Avaana & Rebright: Eggoz (not to be confused with the popular toaster waffles Eggo's) has announced a $1.5M Pre-Series A from Avaana Capital and Rebright Partners. Founded in 2017, the company aims to be the consumer-focused brand for eggs and wants to be the preferred brand for farmers and consumers alike. India consumers 100B eggs every year (WOW!) but the sector hasn't seen much innovation in product development.

  6. WhatsApp expands payment rollout in India: NPCI has finally given WhatsApp the green-light to roll out WhatsApp Pay from its initial small cohort to 20M users in a "graded manner". WhatsApp is working with 5 banks to roll out its UPI payments - ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank.

Angel investors in India

Angel investors are a very important part of the Indian ecosystem and have been from the start of India's startup story. Some of the early angel investors have now become VCs in the country. For example, Sanjay Nath and Karthik Reddy were a part of Mumbai Angels before founding Blume Ventures in 2010. The early successful founders (such as Flipkart founders amongst others) in the industry have turned into Angels re-investing their profits back into the ecosystem.

Amongst the earlier founders who started investing in upcoming Indian startups have been the Snapdeal founders Kunal Bahl and Rohit Bansal. They've certainly had a tumultuous path with Snapdeal and its multiple ups and downs but the focus and vision behind Snapdeal 2.0 seems be working for them. And being early trailblazers in the ecosystem, they have backed over 100 companies through Titan Capital in the country ranging from Razorpay to Ola and everything in between.

We also have Kunal Shah - the founder of CRED, who previously started and sold Freecharge (to Snapdeal coincidentally), who now invests in startups in his personal capacity including the likes of Khatabook, Unacademy and several well-known Indian startups, with a portfolio of over 40. We've seen the trend of solo-capitalists in the US, and I think we've been seeing a similar trend of the "super angel" in India for a while.

It's also interesting how Titan and Kunal run their operations quite differently. Kunal Bahl and Rohit Bansal have been backing companies for close to a decade now, and have now spun up a team to help them manage their investments. I'm not quite sure how Kunal manages his investments (he hasn't spoken about it much to my knowledge).

And while these angel investors have built impressive portfolios, I think it's still important to distinguish them from seed stage VCs. While Titan Capital does write $100k - $500k checks, I think it's harder for them to lead seed rounds (were companies are now raising millions). And similarly, I don't think Kunal Shah writes checks greater than a couple hundred thousand either. But I don't think they want to be full-time VCs either and move up the stack- all of them are very pre-occupied running their businesses. Plus they might not be the best equipped to help as many startups if they were full time investors alongside running their own businesses, there are only so many hours in a day.

But I think it's great to see founders reinvest their personal capital into the founders of tomorrow, it really helps the ecosystem more forward and grow faster as there is more capital for more founders to build their own businesses. I also think we're going to see a lot more of this especially with platforms like AngelList and LetsVenture helping manage some of the infrastructure of investing. In the last couple of years, we've seen a lot more ex & current founders ramp up their angel investments in the likes of Jitendra Gupta, Amrish Rau, Vaibhav Domkundwar and Anand Chandrasekaran (among so many others).

It does seem like this trend has been growing rapidly as well with some of the newer founders starting to angel invest through their network or in companies started by ex-employees earlier and earlier. We've seen a trend of huge party rounds in America with dozens of investors participating in a single round and as the democratization of Angel investing in India continues, I think we're going to see this explode within the next couple of years.

I'm not completely certain of the economics of angel investors with huge portfolios like Kunal Shah & Titan Capital, but just by looking at the paper valuation of some of their companies I'm certain they've made a pretty penny. Maybe they are even outperforming some seed funds on a similar amount of capital invested (not entirely an apples to apples comparison). I myself have dipped my toes in angel investing and can see why folks spend so much time and capital on it - watching people succeed and build cool shit is a lot of fun. So if you're currently building something and think I can help out in any way - hit me up :)

What we've read this week

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