“EDITION 33”

Published: 6/5/2020

“EDITION 33”

Good afternoon (yes this was quite late) but we have some wild, and non-COVID (mostly), news today. But before that I’m “smolching” about Indian startups on Friday at 11 AM [https://twitter.com/CoachSmol/status/1242584039719985152]. Come thru to my Zoom and ask me anything about Indian startups (or my life in quarantine) for 30 minutes as I drink.haus. In actual news, Facebook is in talks to acquire a minority stake in Jio (yes this seems huge) and we had some more consolidation in the milk delivery space.

  • https://tcrn.ch/2JhqZE8 (TechCrunch): Facebook potentially acquiring a stake in Jio
  • So this news dropped on the Financial Times today, but apparently Facebook wants a piece of Jio (10%) which was last valued at over $60B! This would be absolutely huge in India. Imagine India’s largest telecom network + India’s most used application all under the same umbrella.
  • If this goes through, I would imagine there would be a lot more cross-promotion of each other’s products and services (Jio’s app portfolio might see a surge in user activity) and with the next wave of Indians coming online with Jio they might all then have WhatsApp because of this relationship.
  • This seems like a huge win for Facebook and a good way for Mukesh to get some other investors to take some of the capital intensive company’s weight off of himself.
  • If this ends up going the way it seems, and if the companies work somewhat closely enough I do think Jio+FB would end up owning the Indian superapp ecosystem like WeChat does in China. No other player, maybe Google, would stand a great stance to compete against them.
  • https://bit.ly/2WIsNy0 (Livemint): Bigbasket acquires DailyNinja
  • Up next, we have some more consolidation in the daily hyperlocal subscription commerce (I used to call this #MilkTech but twitterati got really offended) space with DailyNinja being acquired by Bigbasket who (I presume) will spin this into their BB Daily product which already does 160k daily deliveries (DailyNinja does about 110k daily deliveries).
  • Over the last year, we’ve seen a lot of companies in this space getting acquired with VC appetite for funding these businesses drying up. Just in the last year, Doodhwala shut down (FreshToHome took over the user base), and RainCan & MorningCart were acquired by BigBasket. It seems like we are now down to 3 main companies in the space: Milkbasket, Swiggy (Supr Daily), and BigBasket.
  • While Swiggy and BigBasket are very well capitalized Milkbasket might face some struggles especially with it being harder to raise capital in these troubling times. I am also quite unsure why Grofers hasn’t entered the space but it might be too late at this point.
  • With the entire industry being consolidated further, it wouldn’t surprise me if BigBasket or Swiggy or maybe even Zomato/Amazon snapped up Milkbasket since they do have a pretty significant userbase and well-oiled operations serving over 50k daily customers.
  • I can see the milk delivery space being reduced to two main competitors just like food delivery has become (Zomato vs Swiggy). Margins in milk are very low, and these companies need users to subscribe to other products often enough to sustain this model so a large online grocery company (BigBasket) or online food delivery platform (Swiggy) acquiring Milkbasket might make a lot of sense.
  • Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/ankitkr0/status/1242697123012853760