Good morning, it's Tuesday and this is Vedica with the updates today. We had a long weekend here in the US for Labour Day. I always find it ironic that it's a public holiday in the US, since this country doesn't really seem to care much about labour. Now more than ever, though, is an important time to recognize that it really is the essential workers in economies all over the world who keep our lives ticking. In the news today employee management app PagarBook looks likely to raise funds from Sequoia, and Raghuram Rajan says India's GDP numbers should alarm us.
➡️ Employee management app PagarBook is allegedly in talks to raise $7 million from Sequoia Capital in what would be the second funding round for the Bengaluru-based company.
➡️ PagarBook lets small companies maintain attendance, salaries, advance payments, payroll management. Its mobile app is available across 12 languages including Hindi, Hinglish, Gujarati, Punjabi, Bengali and Tamil. The app also allows businesses to generate salary slips, send notifications and generate invoices.
➡️ The company has ~700K active business customers using the app and manages payroll of over 3M+ employees and has grown massively in just 5 months. The company has been solving a big pain for small businesses who can’t afford expensive software for managing employees’ payroll and attendance. The round is supposedly being led by Sequoia, which is an existing investor in PagarBook via its Surge program.
➡️ In addition to Surge, Kunal Shah’s QED Innovation is also an investor in the company. The company is the second venture of founders Adarsh Kumar and Rupesh Kumar Mishra, who had earlier built GyanApp a vernacular social media platform for quality knowledge sharing, which shut down in October 2019.
2. https://bit.ly/35eNMgd: India's GDP contraction should alarm everyone says Raghuram Rajan
➡️ In keeping with my bid to cover the the broader state of the economy (bad) because start-ups don't operate in a vacuum, I wanted to cover former RBI Governor, Raghuram Rajan's LinkedIn post which raises real concerns about the dire state of the economy, and some steps that could be taken to contain the damage. Highly recommend reading the whole thing.
➡️ Rajan notes that the 23.9 percent contraction in India outstrips the 12.4 percent in Italy and 9.5 percent in the United States, two of the most Covid-affected advanced countries. Given the scale of India's informal economy, the real picture is likely to be worse.
➡️ In particular, Rajan is extremely critical of the government's reluctance to adopt more offensive fiscal measures. "Government-provided relief ... has been meager. The government’s reluctance to do more today seems partly because it wants to conserve resources for a possible future stimulus. This strategy is self-defeating."
➡️ Key steps that Rajan argues the government should undertake: step up expenditure, both on relief and on new investment, particularly in infrastructure; borrow more without scaring the bond market (one way to do this would be through a credible path to lower debt-to-GDP ratio over the medium term); sell stakes and assets in public firms; prepare institutional mechanisms to resolve debt stress that will surface once moratoria are over, etc.
➡️ On the private sector side, Rajan argues that the private sector has more capital on hand and bigger companies can and should help smaller companies back on their feet. Walmart, Amazon, Reliance could be incentivised to invest in the small firms they source from, especially since it benefits the overall supply chain. They could also be incentivised to export much more from India’s small and medium sector.
Feedback & ❤️ always appreciated BONUS (Tweet of the day):https://twitter.com/anmolm_/status/1302851467628310528
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