"EDITION 97"

Published: 6/23/2020

Anmol here, and it's Tuesday! I had a great weekend and birthday (cracked open a bottle of Hibiki and it was fantastic). A bunch of news from the US today with Apple's WWDC keynote- new iOS, iPadOS and macOS and I'm hyped. On the other hand, Trump passed an executive order freezing the H1B visa program, and I think it's stupid. Immigrants have contributed a lot to America and it's economy, and while I have had the privilege to be born here my parents came to the country to study and were able to work and live in the country for over a decade because of the H1B program.

Coming to the day's news, Milkbasket raises some more money & Nestaway looks to acquire co-living companies:

  • https://bit.ly/2Z3JvYc: Milkbasket raises $5.5M
  • ➡️ Hyperlocal delivery service Milkbasket has raised $5.5M in fresh funding led by Inflection Point Venture and participation from existing investors including Blume Ventures, Kalaari Capital, Mayfield India, Unilever Ventures and BeeNext.

    ➡️ The company is in the daily milk & grocery delivery space and serves over 130k households and offers over 9000 products. The hyperlocal delivery space has gone through a bunch of consolidation over the last year with 3 major players remaining- Milkbasket, Bigbasket's BB Daily & Swiggy's Supr.

    ➡️ I also found it quite interesting that Inflection Point Ventures led the round as they don't usually participate post the seed stage and definitely not in a company's growth stage (Milkbasket has previously raised over $30M)

    ➡️ Milkbasket has also been linked with acquisition rumors in recent months, while the company plans for profitability in 2020 and beyond. The company's financials (from last year) look quite decent was well with losses of only ₹9 Cr while generating ~₹85 Cr of revenue.

    ➡️ I have long been a fan of the hyperlocal grocery space but it is yet to be seen if a standalone company can build a huge profitable business from it, or if it needs to be part of a larger grocery delivery, food delivery or logistics company.

    2. https://bit.ly/2YpueSB: Nestaway acquisition plans

    ➡️ Nestaway, the co-living company, has acquired StayAbode and plans to acquire 2-3 more companies as it plans expand capacity to 50k beds by March 2021.

    ➡️ It seems like the co-living space is going through a phase of consolidation with Nestaway planning to more than double the beds they have capacity for. The company's revenue stood at ₹40 Cr in the last financial year and is likely to jump to ₹140-150 Cr in the current financial year.

    ➡️ Founder & CEO Jitendra Jagadev has said the company is planning on acquiring 2-3 co-living operators with an enterprise value of ₹10 Cr or more in largely stock transactions (with a small cash component).

    ➡️ This also seems like a smart decision because a lot of co-living companies are sort of aggregators and don't own the underlying buildings and beds offered on their platforms so there isn't as much of capital expenses involved.

    ➡️ COVID has also impacted co-living quite significantly as students and young adults left bigger cities and education hubs like Kota to their houses, but at present occupancy levels have normalized around 65%.

    ➡️ The future of co-living looks to be consolidated around a couple of major players, and Nestaway seems poised to be leading the charge.

    Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/MohapatraHemant/status/1275247549914378240

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