“EDITION 22”

Published: 6/5/2020

“EDITION 22”

Back to regularly scheduled programming today. The Indian startup industry seems to be a bit quiet recently, but we had some very interesting news surrounding Sequoia & their ex-portfolio company Finix (more on that below). Plus could a Brex in India really work?

  • https://tcrn.ch/38IPIfe (TechCrunch): Sequoia walks away from Finix
  • Sequoia did something today that they never done before: parted ways with a company it funded quite recently.
  • Finix is a Payment Infrastructure company and lets companies become their own payment facilitator to increase their take rates on transactions, while Finix charges the companies a monthly software fees + sliding fees depending on the # of transactions.
  • And while Sequoia had previously believed the company was not a competitor to one of it’s most successful companies Stripe, it has recently come to the conclusion that Finix is, in fact, a direct competitor of Stripe.
  • As a result Sequoia has handed back its board seat, its information rights, its shares while letting Finix keep its capital.
  • I had heard that the Finix deal was highly competitive and it seems like Sequoia might have moved too fast and did not do proper due diligence to recognize that Stripe & Finix overlap and might do so more in the future.
  • http://bit.ly/2wMp1so (Inc42): Karbon Cards raises $2M
  • Karbon Cards, a corporate credit card company for startups, has raised $2M from Kunal Shah, Amrish Rau & Jitendra Gupta.
  • The company extends a credit line, corporate cards & other services & credits (incl. Segment, AWS, Freshworks) for companies who have raised ₹25L or more.
  • This is very similar to Brex who started out as a Corporate Card for startups & now offers business banking as well to over 10,000 customers.
  • The slight hesitation I have with a company like Karbom Cards is that I’m not sure if the Indian market is large enough for a product like this. According to Bain Indian VC report, there were only 6400 companies from (2010-2019) who raised some amount of funding.
  • Indian companies also raise less (& therefore spend less) than their American counterparts with the average seed capital being raised is $1.2M (India) & $5.6M (US).
  • The Indian landscape will also be pretty competitive in this space with the likes of Razorpay & Open also currently offering corporate card products.
  • Is there enough money to be made in the corporate card space for Karbon or would they likely just get acquried by a larger Indian Fintech?
  • Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/dkhare/status/1154666704217075713