Good morning it's Wednesday and I just came across something interesting about the infamous Dukaan- a couple weeks ago the Karnataka HC ordered for their app to be removed from the Play Store until the next hearing and it seems like the company had a button on their website to download the APK instead, which has now been removed this morning. The next hearing is on the 19th so we might have an update then. In other news today, we have a company raising their Series A from Lightspeed & Indian companies with Chinese Investors are having a hard time raising capital.
➡️ Content marketplace company, Pepper Content, has announced a $4.2M Series A round led by Lightspeed India. This comes after the company raised their seed round from Titan Capital and several angels earlier this year in Feb.
➡️ The company helps businesses with all sorts of content marketing needs. With companies spending more time on different marketing mediums, content marketing has become quite popular. But hiring and managing a team of content creators can potentially be too cumbersome or expensive, which is where Pepper Content comes in.
➡️ And it seems like the company has gained some decent traction with their current offering of just text content, as it plans to use some of the new capital to expand into audio and video categories. Within 3 years, the company has onboarded over 30,000 creators and currently works with over 400 companies.
➡️ My favorite thing about this company is that they have already paid out over $400k to creators on the platform, and have generated just over $600k in revenue. That would put their margins at about 33%, which for a marketplace seems quite healthy.
➡️ I definitely see the use case for outsourcing one's content needs if a company can't take it on themselves. But I do wonder about the platform at scale- will they be able to continually keep clients as their business scales (build vs buy) and will they hit a limit of how many creators who can produce satisfactory content. Just because everyone can write doesn't mean everyone should.
2. https://bit.ly/3iW0js4: *Investors steer clear of young startups with Chinese capital*
➡️ Apparently it's getting increasingly hard for early-mid stage Indian companies with exposure to Chinese money to raise capital from global investors. This seems like a consequence of the heating of tensions between India & China.
➡️ What seemed like a situation that might blow over quickly certainly hasn't and companies who've raised capital from Chinese investors are in a slightly spot of trouble- with global investors being hesitant about committing capital, these companies are unable to raise additional capital from Chinese investors due the regulatory changes that the Indian government added recently.
➡️ A couple of companies have also started looking into ways to get discounted secondary exits for their Chinese investors in an attempt to distance themselves from China. Moreover, this also will also result in Chinese investors potentially staying away from India until the geopolitical issues are resolved.
➡️ Currently 100+ investment applications (primarily from Chinese investors) have been stuck in regulatory approvals, with the recent changes being looked at a ban more than an approval process. In the meantime, several Indian venture firms have raised record funds.
➡️ Historically Indian companies have looked to China and other global investors for growth capital, and the recent tensions would potentially keep Chinese capital away from the country for years. I have a feeling that while seed is extraordinary hot, Indian companies might face a cash crunch at the Series B/C level with the lack of capital being available. But we won't see that for another year or two so we'll have to wait and watch for that.
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