Wow! This edition is the Answer to the Ultimate Question of Life, the Universe, and Everything (#42 for y’all who don’t know Douglas Adams). Kinda impressed I’ve made it this far and appreciate all the support.
Today I uncovered an interesting story about a startup possibly going public and SIBDI’s startup assistance scheme:
➡️ This is honestly kinda big news, Reliance plans to take JioSaavn public and has invested an additional $10M into the company.
➡️ So JioSaavn came about when Reliance’s Jio Music & Saavn merged in 2018, and the combined entity had a valuation fo $1B!!
➡️ The combined entity now has over 100M Monthly Active Users and is probably the second biggest music streaming service in the world behind Spotify, but only a very small subset of these users pay for the premium subscription.
➡️ Over the last two years the revenue from subscriptions has been growing (2x from FY18 → FY19) while the only other source of income is advertisements on the platform.
➡️ I would assume the company wants to push the subscription as much as it can to get a sizable chunk of total users to be paid subscribers, but it is yet to be seen if mainstream India will pay for an audio subscription when they can stream for free on JioSaavn & YouTube.
➡️ But this would be one of the few public exits of a “startup” (I guess it’s not like other companies because Reliance already owns a big portion), but still we haven’t seen many venture-backed companies go public in India so this would be one of the few.
➡️ So startups have been going through a lot (as are Indian SMEs who probably have much much worse) during this time period- layoffs, pay cuts, impacted operations, harder to sign new customers.
➡️ As a result SIDBI announced a scheme for startups to get access to working capital loans but only to growth stage startups. And this comes with several caveats.
➡️ The loans are capped at ₹2 Cr (~$260k) and is only available to startups with 50+ employees & a turnover of ₹10 Cr - ₹60 Cr with “positive unit economics” and those who have taken measures “for ensuring business continuity during the COVID-19 period”
➡️ It seems to me that most startups, even venture-backed ones, won’t qualify for the loans. And to those who do qualify for the loans, the amount of capital probably won’t really make a meaningful impact for the company.
➡️ Meanwhile doesn’t seem like there are any working capital loans for small businesses who have been impacted significantly as well. This seems more like PR than an actual useful measure.
Feedback & ❤️ always appreciated
More tomorrow :) BONUS (Tweet of the day): https://twitter.com/MohapatraHemant/status/1247236445649002497