"EDITION 87"

Published: 6/9/2020

Good morning! I'm (@anmolm_) back but hope y'all liked Vedica's takeover yesterday. The Morning Context just dropped a pretty wild story about fraud at Paytm, with users losing ₹10 Cr in the last year alone, and shockingly the company has no fraud detection/risk management system. That is honestly a recipe for disaster- https://themorningcontext.com/plagued-by-frauds-paytm-sues-telecom-operators/

Coming to some more positive news for the day, we have a bus startup raising money and a new VC announcing the first close of their first fund:

  • https://bit.ly/3dY2t9b: Yolobus raises a $3.3M Series A
  • ➡️ Yolobus, an inter-city bus company, announced a new Series A round led by Nexus Venture Partners with participation from India Quotient as well. Nexus' Suvir Sujan & India Quotient's Anand Lunia (previously a partner at Seedfund who were one of redBus' early investors) will also join the company's board.

    ➡️ This news comes ~4 months after Yolobus' seed round where the company raised $800k, and it's quite impressive given the fact that the company was only started in August last year.

    ➡️ Yolobus' strategy seems to be a bit different from the likes of bus aggregators where they own the entire stack of the bussing operation (including the busses themselves). Doing so, they can maintain a high quality product for their users and their busses definitely sound more premium.

    ➡️ Their busses have Wi-Fi, bathrooms, food & beverages, and USB charging points. It somewhat reminds of this company based out of Los Angeles (https://www.ridecabin.com/) as Yolobus' wants to bring the experience & hospitality of flying to travel on the ground.

    ➡️ The company already had 50k customers by Jan with a fleet of 20, but planned to scale up to 250 vehicles by the end of December. COVID definitely impacted the company but there is also a very real pent-up demand for the product.

    ➡️ Currently every other seat is blocked off to maintain social distancing but Shailesh Gupta, cofounder, says that the demand should recover within the next 3 months.

    ➡️ As Suvir Sujan says there hasn't been much innovation in inter-city bus travel for a long period and the sector is ripe of disruption, which Yolobus is capitalizing on.

    2. https://bit.ly/3cLRYnZ: Arkam announces the first close of their maiden fund

    ➡️ New Venture Fund, Arkam Ventures (formerly known as Unitary Helion), has marked the first close of their maiden ₹700 Cr (<$100M) fund. The fund's first close amounts to ₹325 Cr and they are further targeting an additional ₹375 Cr by the end of this financial year.

    ➡️ The fund was founded in 2017 by Rahul Chandra (ex-Helion Venture Partners) & Bala Srinivasa (ex- Kalaari Capital), and their LPs include Small Industries Development Bank of India (SIDBI), Binny Bansal, Vijay Shekhar Sharma & a couple of family offices in the US & India.

    ➡️ The fund has a clear thesis of investing in 15-18 companies at the Series A & B stage largely across tech-enabled companies. The fund is largely targeting companies who are building for the Indian middle class (the 400M Indians who have an annual family income of 3.5L - 20L).

    ➡️ The thesis is probably driven by the rapid digitalization of the Indian consumer (2x growth in Aadhaar enrollments, 4.5x growth in Aadhaar linked bank accounts, 1.3B UPI txs & a 8x reduction in 4G data costs over the last 5 years) and the partners have had prior successes in the space with exits & IPOs in the form of Mettl, Spandana & Equitas as well as investing in Krazy Bee, RailYatri & Jumbotail (among others).

    ➡️ A bunch of new & existing firms have closed funds in the last year, and I'm super excited to see all the bets in the post-COVID India. Seems like VCs aren't wasting this pandemic to expand their dry powder & I'm sure we're going to see a lot of successful & game-changing companies born out of this crisis.

    Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Podcast of the day): https://www.youtube.com/watch?v=7mJo6ZReees