"EDITION 203"

Published: 11/24/2020

Good morning, it's Tuesday and boy has there been a bunch of news in the last 24 hours. A court hearing, another lawsuit, Cashfree announcing their Series B (Entrackr scooped this a while ago and I covered it then), Country Delight raising a Series C and a possible acquisition in India for Google- we're covering the last 2 today.

  • https://bit.ly/3pWq7Jy: Country Delight raises a $25M Series C led by Elevation Capital
  • ➡️ Direct to Consumer Dairy Country Delight has raised $25M in a Series C round led by Elevation Capital (prev. SAIF Partners) with participation from existing investors Matrix Partners (led the B) & Orios Venture Partners (led the Seed).

    ➡️ This year hasn't been particularly good to the milk delivery startups as a lot of them have been acquired or have shut shop- the one exception being Milkbasket which has been able to stick around. Country Delight took a completely different approach to their business working with farmers directly instead of delivering milk from large FMCG brands.

    ➡️ As a result, Country Delight has been able to control a larger part of the stack instead of just being responsible for warehousing and delivery. The company had also started with milk but delivers other milk products as well now including milk, bread, ghee, and paneer and plans to expand even further into fruits and vegetables, cold-pressed edible oils, wheat, batters, pulses, spices, pickles, and jams in 6 - 9 months.

    ➡️ The company has already grown to 800 employees and a fleet of 3000 to fulfill orders within 24-36 hours. It currently works with ~500 farmers within a 200km radius to serve its 1.5M customers and 3M monthly orders. And on top of all of that, it has a subscription for the more affluent consumers. A major downside to the milk delivery business is the razor thin margins for selling milk, and going deeper into the stack certainly helps improve margins which might be the reason why Country Delight has been able to raise capital while most of the others have been acquired.

    2. https://bit.ly/3mdgLH7: Google is in talks to buy ShareChat

    ➡️ Another story that broke yesterday was that Google is allegedly in talks to buy ShareChat in a deal that would value the company at $1.03B. I'm going to take this news with a pinch of salt- in August ET also reported that ShareChat was also in talks to raise $150-$200M in a new round which hasn't materialized yet.

    ➡️ ShareChat has certainly been one of the companies that has benefitted greatly from the TikTok ban. While I can't really comment on retention numbers (since I don't have any access to them), it has certainly gotten a lot of downloads.

    ➡️ The company's business is certainly very capital intensive and it hasn't been able to generate meaningful revenues yet so it might be a while before this plays out for Google (if this does go through)- in theory I could kind of see this making sense with Google talking about investing $10B in the country, leveraging ShareChat's userbase for their ad network and ShareChat recently becoming a GCP customer.

    ➡️ The deal would also mean that all existing investors would exit the company while the founders might retain a small stake. The biggest winners here are Elevation Capital & Lightspeed (each owning around 15% of the company), along with the likes of Shunwei, Xiaomi & Twitter (who all own >5%)

    ➡️ The other large winner in the deal would be India Quotient which backed the company very early on in their seed round in 2015. The firm invested through their $16M Fund 2 and currently owns >7% (through their Fund 2 & through an investment vehicle registered in Singapore), which would mean it would definitely return a multiple on their second fund, which will certainly make their LPs very happy. I still don't know if the deal will actually go through, but it certainly will be really good for the ecosystem if it does.

    Feedback & ❤️ always appreciated BONUS (Tweet of the day): https://twitter.com/_sinhaakash/status/1330904176252002315

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