Published: 6/5/2020

And we're on to Thursday morning! Forgot to mention one last piece of Facebook news, they have apparently spun up a new subsidiary for their Jio investment and it's called Jaadhu (I can't tell if they mean magic or a broom but both seem quite unusual). In some other global-desi news, honey is now available in India (and I think it might do decently well)- https://twitter.com/r0h1n/status/1267849486480674817

Coming to the day's news, Paytm seems to be in trouble & CarTrade raises a late stage round.

  • https://tcrn.ch/3cv7FzH: Paytm is struggling, WhatsApp Pay still hasn't launched
  • ➡️ As UPI transaction volumes and amount return to normalcy, it seems some companies are doing much better than others.

    ➡️ In May, over 75M users transacted on Google Pay, 60M on PhonePe while only 30M on Paytm (with WhatsApp Pay still being a minority player due to regulation hurdles). Paytm is still the most popular company when it comes to merchants, but Google is slowly catching up there as well.

    ➡️ Paytm seems to be going through a tough time from all fronts: i) it's inability to retain users; ii) its adjacent products not seeming to do too well; and iii) losing execs and key people at the company. And as one VC puts it very well: "Paytm is probably the world's largest pool of capital searching for PMF".

    ➡️ Paytm gained early prominence in India when it tied up with Uber to power transactions through the app and also saw a huge upsurge in usage beginning from demonitization in the country. Unfortunately it also seems like the company initially resisted integrating UPI (and probably rightly so for them) which has put them in a position where they are now trailing their competitors who have an endless amount of capital from Google and Walmart respectively.

    ➡️ I have long been confused about what Paytm's new end goal and plan is. With WhatsApp Pay's impending launch, payment companies will be on their toes but it might impact Paytm the most and its up to the company to generate some sort of internal Demonitization moment to turn the ship around.

    2. https://bit.ly/2BnIjGX: CarTrade raises a $42M Series H

    ➡️ CarTrade is set to raise a ~$42M Series H round from existing investors Temasek, Warburg Pincus and March Capital Partners, which will value the company at $525M.

    ➡️ Warburg Pincus, the American PE firm, will now own 34% of the company while the lone founder, Vinay Sanghi, will see his stake reduced to 5.7%

    ➡️ As their name suggests, CarTrade is in the used cars business and focusses on a couple of key products: auctioning cars for dealers from banks, NBFCs and insurance companies and lead generation for new car business (via Carwale)

    ➡️ Car marketplaces have been the source of a lot of venture and PE funding in India historically with companies like Cars24, Droom, CarDekho & Spinny raising several tens of millions of dollars.

    ➡️ Financially, CarTrade seems to have done pretty well in FY20 and expected to close the year with

    ₹425 Cr in revenue and ₹125 Cr in profit with $3B in GMV. The company had also planned on IPOing in the next 18-24 months from a report in March, but its unclear how COVID might have impacted that decision.

    Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/tam_arund/status/1268199271846694913