Published: 7/24/2020

Good friday morning everyone! Sorry for the slightly late newsletter today (I got distracted with some work and lost track of time). Seems like Reliance just can't stay out of the news with reports of Amazon potentially acquiring a 9.9% stake in Reliance Retail (which would surely be very interesting). Coming to the day's news, we have WhatsApp piloting credit, insurance & pension products and some ex-VCs raise money a fintech company.

  • https://tcrn.ch/30GmnQu: WhatsApp pilots financial projects
  • ➡️ WhatsApp plans to offer credit, insurance and pension products to lower-income individuals and those in rural areas in India in an effort to help MSMEs in the country.

    ➡️ The platform has been working with ICICI, Kotak Mahindra and HDFC in an effort to bring financial services to it's roughly 400M userbase in the country. And now plans to work with other partners to bring more financial services (insurance, micro-pension and credit) to the informal economy over the next 18 months.

    ➡️The company will run several pilots to test these services and will co-invest & scale in projects based on the results. The largely legacy banks have faced challenges trying to sell financial services to individuals in smaller cities & towns, and WhatsApp reach can certainly help them every corner of the country.

    ➡️ The FB-owned product has also been waiting for regulatory approval to roll out WhatsApp Pay to all it's user, and has said it now complies with all of the requirements mandated by the central bank, so it could be released any day now (hopefully soon rather than later).

    ➡️ It seems like a lot of payment apps are launching several financial services & products so with WhatsApp reach & capital, it only makes sense that they enter the market as well.

    2. https://bit.ly/2ZVUZi5: Jodo raises a ₹28.5 Cr Seed round from Matrix and SAIF

    ➡️This combines two trends I've been seeing recently (large seed rounds & companies started by former VCs), but in a seed round Jodo has raised ₹28.5 Cr (~$3.81 M) by Matrix and SAIF along with a 15 angels including Amit Rajan, Nithin Kamath (Rainmatter Capital) and Kunal Shah.

    ➡️ Jodo is a full-stack financial service that currently lets parents pay school fees for their children in monthly payments instead of the regular 2-3 installments with 0% interest and auto-debit features. The company also plans to several other products in the future.

    ➡️ The company has 3 founders- Raghav Nagarajan, Atulya Bhat and Koustav Dey (all prior investors at Matrix) so it makes sense why Matrix co-led the round. I personally find the trend of ex-VCs becoming founders super interesting and we've seen a number of companies in the recent past going this way (FrontRow & Leap Finance to name a few).

    ➡️ Interestingly Jodo also plugs into billing for EdTech companies like Vedantu & Toppr and helps parents to pay a subscription fee (my question is why doesn't Vedantu & Toppr build their own subscription billing, especially with the recently launched UPI AutoPay functionality).

    ➡️ Jodo Pay is serving a very real need for parents in weaker socio-economic classes aka the lack of credit while paying school fees, and I'm excited to see what adjacent areas they expand into.

    Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/SuB8u/status/1286306435668692993

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