"EDITION 138"

Published: 8/19/2020

Good morning, it's Wednesday and damn this week has had a lot of news. There's a bunch of M&A activity in the e-pharmacy space (Reliance acquiring Netmeds & PharmEasy merging with Medlife). But on to the news today, we have Lightspeed raising their 3rd India-focussed fund & Khatabook's new app. Oh also Dream11 won the bid to be IPL's new sponsor (I almost forgot to include this)

  • https://tcrn.ch/3aBs8U2: Lightspeed raises $275M fund for India
  • ➡️ Lightspeed India Partners announced that it had closed $275M from LPs for it's third India-specific fund, as the country continues to be an important focus area for the global venture firm.

    ➡️ This fund is notably bigger than their last two funds ($135M in 2015, $175M in 2018) and the company has been investing in India for over a decade and has deployed $750M into Indian companies.

    ➡️ The firm is also one of the few Indian firms that has seen a major exit in recent years, as secondary exits from OYO & BYJU's have delivered cash returns of $900M (The only other firms that I can recall that have seen similar/larger exits are Sequoia & Accel).

    ➡️ The company usually invests at the earlier stages of a company's lifecycle (Seed & Series A) but has also made pre-seed bets more recently. I think Lightspeed's biggest advantage is their close relation with the US/Global entity, as there have been several companies where Lightspeed's global firm has come into lead growth rounds for existing Lightspeed portfolio companies.

    ➡️ I also talked about this in my piece on venture firms in the Indian ecosystem last week about how firms who can offer multiple "products" to companies will have an edge, and it definitely seems like Lightspeed has an edge on some homegrown firms. And who knows, maybe by Fund 5 Lightspeed might even have an India-specific growth fund along with their venture fund (like Sequoia).

    2. https://bit.ly/2YdInlg: Khatabook launches Dukaan & expands into Indonesia

    ➡️ Khatabook has a new app for Indian kirana stores & SMEs and it's called Dukaan. Now if you spend any amount of time on Twitter and follows folks in the Indian ecosystem you might have already seen the multiple threads calling out Khatabook for plagiarism. As far as I can tell both entities are embroiled in a legal matter so I shall not comment on that.

    ➡️ What I will talk about is how I think the idea is genius & why I have a viewpoint (that might be somewhat contrarian) that copying isn't bad. So first off Dukaan is a mobile app that shopkeepers can download, add & publish their product catalog, and share the store with their customers on WhatsApp.

    ➡️ On the customer side of things, they visit the store's website, select what they'd like to purchase and create an order on the website. The store then fulfills the delivery themselves and collects the payment on delivery (cash/UPI).

    ➡️ While Khatabook doesn't power deliveries or online payment collection yet, I think it would not be terribly hard for them to do so, along with letting customers add the amount to their khata with the shopkeeper. I think this has a lot of potential to expand into Khatabook's platform for kirana & SMEs and I'm planning on writing more on this later.

    ➡️ Moreover, Khatabook is now taking their core product to Indonesia where it already has a couple of competitors- the YC backed BukuWarung & the Sequioa Surge backed BukuKas. Interestingly Khatabook themselves have been backed by both YC & Surge so maybe this points to a merger or consolidation down the line?

    Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/sumanthr/status/1295658421362888711

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