RBI v/s PayTM saga: Busting Myths from Reality | Roundup #142 | The Startup Operator

[00:00:00] Hello and welcome to another episode of the Startup Operator Roundup. I am Roshan Karihapah

[00:00:05] and I'm Gunjan Sahar and together we break down the biggest headlines from India's growing

[00:00:09] starter peak system.

[00:00:11] If you're a regular listener of this channel then please consider sharing this video with

[00:00:14] your friends and if you're tuning into the starter pop leader for the first time, please

[00:00:18] subscribe to our channel for our fantastic conversations with founders, investors and other

[00:00:23] people from the starter peak system.

[00:00:25] In this week's roundup, of course, the first big item that we'll be discussing is the

[00:00:29] entire Fiasco between RBI and PTM.

[00:00:33] It has been a while and this has allowed us to separate the myth from the facts so we'll

[00:00:37] be able to give you a clear perspective on what's happening.

[00:00:40] Last week, Microsoft CEO Satya Nadeela also visited Mumbai and made some major announcements

[00:00:44] on the AI front.

[00:00:45] Country Delight which has been pioneering on the milk delivery space gave its investors,

[00:00:50] especially O'Rai's ventures, a 45X returns on their investment and this has been from

[00:00:55] a partial exit not even a complete exit.

[00:00:58] TV industry urges the Ministry of Information and Broadcasting to exclude online streaming

[00:01:03] players like Amazon and Netflix from the broadcasting bill.

[00:01:06] This is an interesting move and lastly, it's a good news for Kanataka people.

[00:01:13] The government has announced that there'll be uniform fees for taxis that includes the

[00:01:17] likes of Uber and Ola and there'll be no more search pricing so we'll see how that

[00:01:21] will impact the cab availability in Bangalore at least.

[00:01:25] So let's get started in this round up.

[00:01:34] But before that, this has also been a big week for India.

[00:01:37] The Bharat Ratna list has been announced.

[00:01:39] Roshan did you get a chance to look at that?

[00:01:42] Yeah, three very well deserving winners of the highest civilian award in Bharat.

[00:01:50] My favorite is of course a former Prime Minister of PV Nursam Rao.

[00:01:53] He's the first Prime Minister that I recognized.

[00:01:56] I was probably five or six years old when the 91 reforms happened and what people don't

[00:02:03] realize is the amount of political capital that was required to sort of push through, not

[00:02:09] just the economics and so on and so forth.

[00:02:12] And he was a fantastic man, a statesman and a scholar.

[00:02:15] He could speak about 12 or 15 languages.

[00:02:19] He had a very long career in politics in service of the nation I should say.

[00:02:25] Was not very well treated within his own party and in his own time, right?

[00:02:30] He was pretty, he was sideline and everything but this is a fitting honor I should say.

[00:02:35] And you know, very big hearted off Prime Minister Modi to sort of recognize someone from

[00:02:39] the other side, right?

[00:02:41] And this is what I think national politics should be, right?

[00:02:45] I mean, recognize irrespective of party lines and so on and so forth.

[00:02:49] So I'm very, very happy about that.

[00:02:51] I think more people should kind of read.

[00:02:55] Vinay Sita Pati is book half-line on PV Nursam Rao.

[00:02:59] I've just started on it and hopefully I'll gain a little more knowledge on PVNR but fantastic

[00:03:07] honor I should say.

[00:03:15] And also in a neighboring country, the elections are on.

[00:03:18] Are you following that?

[00:03:19] Well, I mean some chaotic news coming from there that the elections are rigged and so

[00:03:21] on and so forth.

[00:03:22] Really, I mean the country is kind of unraveling, right?

[00:03:24] I mentioned watching a podcast sometime back and funny as it sounds, it's actually pretty

[00:03:31] crazy.

[00:03:32] I mean, and there's a lot of despair in Pakistan and I really hope that they're able to fix

[00:03:38] their circumstances and get back to being a sane country at least if possible that is.

[00:03:45] Well, it'll be interesting to see what's happening in our neighborhood while very soon

[00:03:51] we'll be entering our elections period.

[00:03:53] But anyway, coming back home to some of the big news, the recent clash between RBI and

[00:03:59] the PTM has definitely garnered a lot of attention from the start-up ecosystem, from

[00:04:04] the media.

[00:04:05] And all of this began when RBI initially reached concerns about PTM's post-paid feature.

[00:04:11] This was PTM's 4A into BNPL and of course BNPL has not really fared out well in the

[00:04:16] country.

[00:04:17] The RBI has since the beginning has reached concerns over it.

[00:04:20] They are saying, RBI in its latest sanctions against PTM is saying that this is because of

[00:04:25] persistent non-compliance and continued material supervisory concerns in the bank.

[00:04:31] And the RBI did not specify further to it.

[00:04:33] PTM's payments bank is restricted from adding customers in March 2022 due to similar concerns,

[00:04:40] but they continue doing business with existing customers.

[00:04:43] Now RBI has told the company to wind on most of these businesses by the end of this month.

[00:04:49] Amazis Regulatory Tussle, PTM is facing setbacks from investors, its valuations is taking

[00:04:54] a dive, share prices are plunging and this of course raises a lot of questions over

[00:04:59] PTM's growth trajectory and the market reputation.

[00:05:02] But despite these setbacks, I really think PTM will always remain as a pioneer in India's

[00:05:07] fintech space.

[00:05:08] Hopefully all of these controversies and actions will settle down.

[00:05:14] But what are your thoughts on this RBI PTM showdown?

[00:05:18] Let me caveat my response with a few things.

[00:05:20] So first I absolutely admire VSS.

[00:05:25] A phenomenal entrepreneur, really a trailblazer I should say and he's been at it for 20 plus

[00:05:30] years.

[00:05:31] And I would say he's a model to aspire for any other builders out there.

[00:05:37] I remember the early days when they were doing some mobile vast services and so on and so

[00:05:42] forth and then the inflection point with demonetization and so on and so forth.

[00:05:49] So I absolutely admire and respect VSS.

[00:05:53] And I think PTM, you cannot discount the amount of change they've brought in.

[00:06:00] I mean especially post demonetization and so on.

[00:06:05] They've really pioneered the payments ecosystem in India and that's taken a lot of time,

[00:06:10] money, effort, innovation, what have you.

[00:06:12] Now with that out of the way, look, fintech business is extremely complex heavy.

[00:06:18] We've had more than a few fintech founders on the podcast and one of the questions I

[00:06:22] always ask them is what is it like working with these banks?

[00:06:25] What is it like working with the regulators?

[00:06:27] What are those compliance norms that you have to meet?

[00:06:29] What are you doing to enable your business for that and so on.

[00:06:35] And everyone kind of respects that because that is a necessary condition to operate in this

[00:06:40] fintech ecosystem.

[00:06:43] While it may seem unfair that you know, PTM has been asked to stop operations and they've

[00:06:49] clamped on pretty heavily from what reports have emerged.

[00:06:53] And we've heard from the RBI Governor as well that this was a long time coming.

[00:06:57] Right?

[00:06:58] I mean, they've been warned for dating back to almost two years and even up six months

[00:07:04] of continued warnings as well on the regulatory front and they were not heated.

[00:07:10] Now should the law apply differently to PTM because it's such an innovative company?

[00:07:15] I don't think so.

[00:07:18] If they have not operated under the legal purview, obviously need to face the consequences

[00:07:26] of that and which is what is happening.

[00:07:28] Now I am optimistic about PTM in the sense that I know that they can fix those things and

[00:07:33] get back to being the fantastic brand and company they are and I'm really rooting for them.

[00:07:39] But in terms of the action itself, well, the payments bank was banned from taking any

[00:07:44] more deposits and so on.

[00:07:47] And the major point of contention here is that you know, the KYC for the wallet was used

[00:07:53] to add these customers for the PTM bank, right?

[00:07:57] The payment bank itself.

[00:07:58] And that's it.

[00:07:59] Yeah, exactly.

[00:08:00] And that was a, that was a, that was a gray area, right?

[00:08:04] Because technically these two things had to be siloed, right?

[00:08:08] I mean the payments bank and the PTM had to be, PTM wallet business and merchant business

[00:08:12] had to be siloed.

[00:08:13] But that wasn't the case, right?

[00:08:16] And you know, RBI came down heavily on that and sort of banned them.

[00:08:21] Now every other UPI provider whether it is Google Pay or phone pay, etc has tied up with

[00:08:26] another bank, right?

[00:08:27] I mean, so for instance, I think Google Pay has tied up with HTFC and ICIC, I see a phone

[00:08:32] pay with yes bank and so on, right?

[00:08:34] So the UPI address itself will, you know, be OK, I see, I see, I see, I have OK HTFC

[00:08:39] or YBL or something or that sort.

[00:08:42] But in PTM's case, it was PTM bank itself, right?

[00:08:45] Now because PTM bank has been asked to seize operations, the whole UPI infrastructure is

[00:08:52] also affected, right?

[00:08:53] Now imagine going to all of these merchants and sort of changing the QR code.

[00:08:58] That's not a small task.

[00:09:00] Come in, you're talking about hundreds of crores of logistics expenses on that front,

[00:09:06] right?

[00:09:07] And that is if they agree to do that and if they are still with you, right?

[00:09:10] And not to forget that, you know, there are other players in the market who will be more

[00:09:14] than happy to kind of tap this business, right?

[00:09:17] And then now before that imagine having to tie up with another bank now, right?

[00:09:23] Whether an ICIC or whoever else.

[00:09:25] That whole process itself is three months.

[00:09:27] Now they have to crush it down to, you know, I think by February 29th, there have been

[00:09:31] given time to sort of do that.

[00:09:33] So they have to figure a way to do that, right?

[00:09:35] Tie up with that other bank.

[00:09:37] So it's a humongous challenge in front of them, you know?

[00:09:42] And it seems very, very difficult to sort of overcome, I would say.

[00:09:46] I said, you know, when the PTM shares tanked about your back or so that, you know, at

[00:09:52] the right valuation, PTM could be an amazing business for something like a Tata or a reliance

[00:09:57] to sort of pick up, right?

[00:10:00] For a couple of billion dollars and change.

[00:10:03] Now I mean the way geo financial shares have been rallying and you know with the supposed

[00:10:09] rumors of HTFC being interested and so on, I mean that may very well turn out to be

[00:10:14] the case, but everyone will want to find out, you know, what their loan book is like,

[00:10:18] right?

[00:10:19] And what is the amount of regulatory hurdles here and so on, right?

[00:10:23] And overall, I think the other aspect that people will be sort of very about is the Chinese

[00:10:29] investor thing, right?

[00:10:30] I mean, and financial loans, something like 10% in PTM.

[00:10:35] And you know, there were data concerns in terms of, you know, the Chinese government

[00:10:41] having access to Indian records and so on and so forth.

[00:10:44] Now what I hear is, PTM has done a lot to ask you to use these concerns, but those

[00:10:50] still sort of remain, right?

[00:10:53] So all of that put together.

[00:10:54] It seems like a very, very thawney situation for PTM to get out of.

[00:10:58] I'm really rooting for them.

[00:11:00] I am really hoping that they're able to come out of this clean and resume operations.

[00:11:06] But it's a very useful lesson to every entrepreneur out there, right?

[00:11:10] Whether you're operating in Fintech or otherwise.

[00:11:12] See, oftentimes businesses are founded in that gray area and you really, really have

[00:11:19] to go out of your way to be compliant, right?

[00:11:21] Because something like this, an externality which can kill your business, really is something

[00:11:27] that you don't want to have to factor in.

[00:11:32] So yeah, have you bought PTM shares?

[00:11:35] No, I have but I sold it maybe in the nick of time.

[00:11:41] Yeah, I mean, it's a brother, you know, catch of flying.

[00:11:45] What's interesting, catch of falling knife kind of a situation right now, you know?

[00:11:48] I mean, I've been considering of, you know, investing in the company given the share prices

[00:11:52] have tanked so much.

[00:11:54] But you're still waiting to see how this plays out.

[00:11:57] Yeah.

[00:11:58] But it's also interesting that the entire Fintech ecosystem has, you know, gotten together

[00:12:02] to support PTM, right?

[00:12:03] There was news that a group of founders have written a letter to the Prime Minister Modi,

[00:12:08] Finance Minister Nirmala Sitaraman and the Reserve Bank of India urging them to reconsider

[00:12:13] sanctions against PTM and engage in constructive dialogues with the Fintech ecosystem.

[00:12:18] Now, while the support of course is applaudable, but I don't know whether if you really want

[00:12:24] to, you know, dub off in the wrong way with the RBI.

[00:12:28] But keeping that aside, the RBI is also keeping, you know, the best interest of consumers

[00:12:34] in mind.

[00:12:35] They are meeting with NHAI, NPCI and other stakeholders who chart an alternate course for

[00:12:39] the migration of PTM users.

[00:12:41] They are convening a meeting to facilitate a smooth transition of users and they're taking

[00:12:46] proactive steps to ensure that minimal disruptions happen to users and, you know, strengthen

[00:12:52] the confidence that users have in the digital India story.

[00:12:55] It's a lot, right?

[00:12:56] I mean, I think they have what 35 million users or something of that sort may be more,

[00:13:00] or 350 million users, I think, right?

[00:13:02] Overall, and you know, PTM Fast Tag has found like very wide adoption, right?

[00:13:09] And the wallet is, you know, one of the, you know, most popular wallets as well.

[00:13:13] And the merchant base is one of the largest, largest merchant bases.

[00:13:16] So, you know, what we don't want from this situation is for people to get spooked about

[00:13:22] all of these digital payments and whatnot, right?

[00:13:24] So I really feel like I hope the regulators work out a solution for the broader ecosystem.

[00:13:33] Yeah.

[00:13:34] Moving on, Satyana Deela's recent visit to India has definitely got the startup community

[00:13:38] buzzing.

[00:13:40] And the Microsoft CEO made some major announcements on the AI front.

[00:13:44] First of all, he's urging the startup ecosystem to ride the digital wave and innovate like

[00:13:49] never before.

[00:13:50] And to support this, Microsoft will offer AI-skilling opportunities and training to individuals

[00:13:54] in tier two and tier three cities as well as in rural areas of the country.

[00:14:00] While basic and advanced AI training will be given to five lack students and job seekers,

[00:14:05] one of the one lack women will be trained in in depth AI technical skills training.

[00:14:11] The Microsoft CEO also urged both India and US authorities to build consensus and cooperate

[00:14:18] on framing norms to regulate the AI space.

[00:14:21] And quoting Satyana Deela from the event, he says India has the tools and policy to manage

[00:14:27] positive transition to AI.

[00:14:30] Now this thing has two facets, right?

[00:14:32] One, of course, multiple reports claim that Indian talent is the best suited to take the

[00:14:37] AI innovation forward.

[00:14:39] And second, the population that India has, right, serves as the bed to test out what AI

[00:14:46] can do for mankind.

[00:14:47] And this AI story is growing so fast that Sam Orkman is out there in the market raising

[00:14:54] funds to build AI chips and other hardware to support AI development.

[00:14:59] Guess how much he's out there today?

[00:15:02] Billions?

[00:15:03] No, that's too small.

[00:15:04] He's out there raising $7 trillion in the market just to give some perspective that's more

[00:15:10] than the combined market cap of Apple and Microsoft.

[00:15:15] Uraiz Ventures just code a 45X returns in a partial exit from country delight.

[00:15:21] Country delight success story is not just about the financials but they've disrupted a

[00:15:25] very traditional business in India.

[00:15:28] They focus on quality, freshness and customer centricity and they have redefined dairy buying

[00:15:33] experience in the country.

[00:15:35] They've not only focused on quality, freshness and customer centricity but they've redefined

[00:15:41] their dairy experience and set new standards for the entire industry.

[00:15:45] Now the timing for this news could not be any better.

[00:15:48] Uraiz Ventures exit injects a lot of momentum in the Indian starter ecosystem given the funding

[00:15:54] sentiments.

[00:15:55] But do you think this renews investor confidence in the India good story?

[00:15:58] Well, it's a fantastic story.

[00:16:00] No doubt and the past few weeks and months we were looking for a flip-cut guys so that

[00:16:06] they can give us a party after the reset by back but now we'll have to look for some

[00:16:10] Uraiz guys.

[00:16:12] But yeah, 45X returns.

[00:16:14] That's handsome, handsome return.

[00:16:17] Just today I was talking to someone about all these funding cycles and they were asking

[00:16:21] me about what are people funding right now?

[00:16:24] What sector seems to be hard and I feel like you're always going to be behind the curve

[00:16:31] that way.

[00:16:32] I mean, if you invest because of something, something is hard and so on because the most

[00:16:37] amount of value that can be gained is ahead of the curve.

[00:16:43] And it's also equally risky and whatnot but props to these folks man.

[00:16:47] Country delight has done phenomenally well and it's an old traditional business that

[00:16:52] has been disrupted and it requires a level of execution that needs to be like really proper

[00:17:01] because we're talking about businesses with pretty low margins on the logistics front at

[00:17:07] least and set behavioral patterns and so on.

[00:17:10] So you're not going to switch your daily routines that easily but I know more than a few

[00:17:16] people who swear by country delight, the milk and cheese and they deliver some papers

[00:17:22] and whatnot also I suppose right?

[00:17:25] So Vegetable goes traditionally.

[00:17:27] Yeah, so good stuff.

[00:17:29] Yeah excellent.

[00:17:30] Hey talking about dude, do you remember that iconic song

[00:17:32] I mean many iconica songs on the Dude.

[00:17:35] Ooooh, Ooo知 Everyday snaps one through three

[00:17:40] Walk thu puck you touch the glass of facil an

[00:17:41] Do you remember thatision also in 3 to 4

[00:17:45] times a day I think, phenomenal.

[00:17:47] I mean 90s were such an amazing, amazing time to grow up,

[00:17:51] pre-internet, such internal curve, bone-witter, yeah,

[00:17:56] great stuff.

[00:17:57] OK, back to your regular programming now.

[00:18:00] The Indian Broadcasting and Digital Foundation

[00:18:02] are the IBDF, which is an industry body of TV broadcasters

[00:18:06] want online streaming platforms to be removed

[00:18:09] from the scope of regulations of the contentious Broadcasting

[00:18:13] Services Regulations Bill of 2023.

[00:18:16] This was introduced by the Ministry of Information

[00:18:18] and Broadcasting in November of 2023.

[00:18:21] The rise of online streaming platforms

[00:18:23] has of course disrupted traditional television broadcasting

[00:18:26] models, challenging established players

[00:18:29] and reshaping consumer preferences.

[00:18:31] Excluding them from regulatory oversight

[00:18:33] could amplify this disruption and impact

[00:18:36] the industry dynamics.

[00:18:38] But on the same side, the IBDF argues that TV broadcasting

[00:18:42] and OTT platforms are distinct and should be regulated

[00:18:45] separately.

[00:18:47] The proposed bill aims to bring all OTT platforms

[00:18:50] under its purview and introduce a three-tier regulatory

[00:18:52] structure for content evaluation.

[00:18:55] The IBDF expresses concerns over potential content

[00:18:58] censorship and urged the protection of freedom

[00:19:00] of speech and expression.

[00:19:02] Now, I think this needs to be taken a bit seriously

[00:19:06] because a lot of external agencies and bodies

[00:19:09] have a use of media censorship and content censorship.

[00:19:14] So what are your thoughts on this development?

[00:19:17] Yeah, I mean, this is going to cause a lot of outrage,

[00:19:21] because so if we back up a little bit,

[00:19:24] the old bill or rather act is one that was drafted in the early 90s,

[00:19:30] some Indian cable television act or something of that sort.

[00:19:33] And clearly, the world has come a long way since then,

[00:19:37] since the last 30 years.

[00:19:39] And so the new broadcasting bill draft that was proposed

[00:19:43] plans to bring all kinds of media under its purview,

[00:19:46] and that includes digital mediums as well.

[00:19:48] So OTT and including YouTube, for instance,

[00:19:51] imagine our content being regulated.

[00:19:53] Man, that'll be the day.

[00:19:55] So what do you mean that'll be the day?

[00:19:59] Why would you want a content to be moderated?

[00:20:02] No, I'm saying, I mean, we can't moderate it ourselves.

[00:20:06] I mean, good luck to anyone else who can moderate this content.

[00:20:08] But yeah, so it'll bring all sorts of actors

[00:20:14] into the same purview, right?

[00:20:16] And anything that will be ruled by committee

[00:20:21] is going to have its limitations.

[00:20:23] So if a committee is going to decide what

[00:20:25] is quote unquote safe content and what

[00:20:27] is suitable for people and so on and so forth,

[00:20:31] it's going to have its challenges for sure.

[00:20:34] My only submission on this is to make it

[00:20:39] as general and wide as possible, right?

[00:20:42] And not be really specific and have a proper retracell

[00:20:46] mechanism in place, right?

[00:20:47] So that people can sort of contest some of these things.

[00:20:51] Right now, of course, I mean, we're

[00:20:52] being regulated by the large on YouTube and other platforms,

[00:20:56] right?

[00:20:56] And the retracell mechanisms, of course,

[00:20:59] are less than optimal, I should say, right?

[00:21:04] So should the government consider a bill and an act?

[00:21:07] Yes, they should for sure, right?

[00:21:09] Because there's a ton of content and media

[00:21:14] and content can influence nations, right?

[00:21:16] I mean, we're speaking on in the week

[00:21:20] that Tucker Carlson in the US has interviewed Vladimir Putin

[00:21:25] of Russia, right?

[00:21:27] And some people are alleging that this

[00:21:29] is in time for the US elections and whatnot, right?

[00:21:33] Be that as it may, right?

[00:21:35] I think it's right for the government to think of a new broadcast

[00:21:38] act for sure, right?

[00:21:41] In terms of the specifics on what they should regulate,

[00:21:44] how and so on, so forth, I will leave it to wiser minds

[00:21:47] to prevail on this.

[00:21:49] Let's see what happens.

[00:21:51] Yeah.

[00:21:52] All right.

[00:21:53] Now coming to some Bangalore or I should say,

[00:21:56] Kanataka News.

[00:21:57] This is some big development for the ride healing sector.

[00:22:00] Kanataka government announces uniform fare

[00:22:03] regulations for Ola and Uber.

[00:22:05] By capping search pricing, Kanataka

[00:22:07] wants to make rides more affordable and accessible

[00:22:09] for all, especially during peak traffic

[00:22:12] hours and high demand periods.

[00:22:13] These are efforts to standardize fare structures

[00:22:16] and prevent price manipulation by ride healing companies.

[00:22:19] Now, well, of course, this means cheaper rides

[00:22:21] for passengers.

[00:22:23] But you know, you really got to think

[00:22:25] about the driver partners as well, right?

[00:22:28] Because out of 100 rupees at the make,

[00:22:32] 30, 35 rupees goes to the ride healing company.

[00:22:35] On top of that, fuel prices are going up.

[00:22:38] And the amount of money they actually take back home

[00:22:41] is very highly dependent on these search pricing

[00:22:44] or high demand times.

[00:22:47] Now with the standardization of fare,

[00:22:49] I really think their incomes will get affected.

[00:22:54] Yeah, for sure.

[00:22:55] Look, I mean, I think long term,

[00:22:58] there needs to be some kind of an open platform

[00:23:00] for ride healing, right?

[00:23:01] Because all of us kind of agree that ride healing

[00:23:03] is a necessity in any city, right?

[00:23:06] We're not going to go back to the days

[00:23:07] of calling caps from directories and whatnot.

[00:23:10] That's not happening, right?

[00:23:12] We had, you know, Wimmel of Nama Yathri on the podcast.

[00:23:15] And, you know, what they are doing

[00:23:18] is a flat subscription fee.

[00:23:20] So maybe like a different sort of a payment system emerges

[00:23:24] and whatnot, right?

[00:23:25] Because mobility in the city and especially

[00:23:27] last-mile mobility is broken.

[00:23:29] And we definitely need these services

[00:23:32] to kind of help us out, for sure, right?

[00:23:35] Having said that, I think the government in Karnataka

[00:23:38] is acting a little bit like a Soviet style, you know,

[00:23:42] makeup, right?

[00:23:43] Because one is the like the amount of welfare

[00:23:46] that it's investing in, right?

[00:23:48] Which has really hit the balance sheet

[00:23:50] of the government for sure, right?

[00:23:51] And in fact, so much so that they're asking the center

[00:23:53] for help as well.

[00:23:55] That is one thing.

[00:23:55] The second is to regulate these things

[00:23:59] in terms of caps and whatnot.

[00:24:01] Now the driver demographic in Bangalore, especially, right?

[00:24:06] It's significant enough that it's a key voting constituency,

[00:24:10] right?

[00:24:11] I'm sure that there will be some outrage on this, right?

[00:24:15] In terms of like a curb on the prices and whatnot.

[00:24:20] To be honest, it's a difficult challenge, you know,

[00:24:22] I mean, we keep making the point on the podcast

[00:24:25] that any of these new innovations, regulating them,

[00:24:28] drafting policy and so on is really, really hard, right?

[00:24:33] Because there are some second order consequences to this

[00:24:37] that we just simply can't grapple with, right?

[00:24:40] So on the one hand, I feel like, yeah,

[00:24:42] I mean, outrageous search pricing or 4x and 5x

[00:24:45] is bad for me as a consumer, right?

[00:24:48] On the other hand, I feel like the market should take care

[00:24:50] of this, right?

[00:24:52] And bear in mind that, you know, the right-hailing folks

[00:24:54] are not making a profit, right?

[00:24:56] It's almost like a loss.

[00:24:58] Yeah, exactly.

[00:24:59] I mean, all of these folks are operating on a loss.

[00:25:00] So it's almost like a public service enterprise

[00:25:04] in some sense, right?

[00:25:06] So should they be allowed to make a profit, of course, right?

[00:25:10] And will that entail, you know, search pricing?

[00:25:13] Well, of course, right?

[00:25:14] I mean, they do have to figure out a way to do that.

[00:25:17] I think one perhaps leverage or lever could be,

[00:25:22] you know, investing in green caps, right?

[00:25:25] For example, Blue Smart has been doing that.

[00:25:28] So bring up the fuel efficiency and so on, right?

[00:25:32] I mean, just to create a little bit of margin

[00:25:34] on the rides and whatnot.

[00:25:36] But yeah, let's see what happens in the future,

[00:25:41] but because I'm sure that the drivers

[00:25:43] and platforms will outrage on this.

[00:25:45] For once, they'll be on the same side, right?

[00:25:48] So yeah.

[00:25:49] OK.

[00:25:50] All right, before we move on to the key fund

[00:25:52] reasons of the week, delivery has hit profitability.

[00:25:56] And this is a big milestone in its journey

[00:25:59] and a very crucial step for its long term sustainability.

[00:26:03] In India, we are seeing e-commerce booming

[00:26:06] and delivery's profitability also prompts

[00:26:09] its competition and to devalue it, their business strategies

[00:26:12] and how they are maintaining efficiencies

[00:26:14] across their value chain.

[00:26:16] So yeah, big moment for the delivery space in India.

[00:26:20] Delivery, of course, has been helping a bunch of small and medium

[00:26:23] businesses get their goods and services across the country.

[00:26:28] And it's a type of business that I

[00:26:32] wouldn't envy operating in that.

[00:26:34] The margins are raised at thin, right?

[00:26:36] And you have to clock precisely.

[00:26:39] I mean, your efficiency has to be near 100%.

[00:26:42] In order for you to make any money at all.

[00:26:44] So like Kudos to the management team

[00:26:47] and Kudos on their execution, phenomenal stuff.

[00:26:51] Now let's talk about the notable fund

[00:26:53] raises from last week.

[00:26:54] It has been a good week for the event

[00:26:56] industry in general.

[00:26:58] There's startup deliver that raised $40 million

[00:27:00] from Yamaha Motors, AI Futem, Automotive,

[00:27:03] Lower Carbon, Capital and Toyota Ventures.

[00:27:06] EV focused NBFC startup Mofen Green

[00:27:09] finance raised to 140 crore rupees

[00:27:10] or $16.8 million from a group of family offices.

[00:27:15] We have FinTech startup which is focused

[00:27:17] on the mobility segment called Auto Capital.

[00:27:20] They raised $10 million from GMO Ventures, Turbo Start,

[00:27:23] Prime Venture Partners, Matrix partners and others.

[00:27:26] Created a focus platform, wish link raised $7 million

[00:27:29] from Fundamentum and Elevation Capital.

[00:27:32] And last but not the least, Metaphyn which is a clean tech

[00:27:35] focused NBFC raised $5 million from Prime Venture Partners

[00:27:40] and Varianium Capital.

[00:27:42] But apart from this fund raises, there's also

[00:27:44] a big announcement on the acquisition front.

[00:27:47] CRED has reached an agreement to buy mutual fund

[00:27:49] and stock investment platform Kuvera

[00:27:51] as part of the expansion deal into wealth management.

[00:27:55] Now, CRED has been rapidly expanding.

[00:27:56] They I think a few months back they announced

[00:27:58] CRED garage to move into the auto-financing space

[00:28:03] and now they're moving into the wealth management space.

[00:28:05] So what do you think CRED is doing?

[00:28:07] Does it have a business model in place?

[00:28:09] Look, it's building for that this is an eternal question,

[00:28:13] and I'm sure that we've talked about this

[00:28:15] more than a few times on the podcast itself.

[00:28:18] Their thesis is to build for that top 1% or top 5%

[00:28:22] of spenders and owners in India, right?

[00:28:26] And so which is why I mean this sort of wealth management

[00:28:29] acquisition also makes sense for them in some sense, right?

[00:28:32] So yeah, they've acquired them for obviously the license

[00:28:39] which they've also applied for actually, right?

[00:28:42] And for any of these products that they can probably

[00:28:46] pitch to those customers, right?

[00:28:48] So yeah, I mean it's not as simple as just acquiring

[00:28:52] a bunch of products and selling it, right?

[00:28:54] I mean because look, the mutual fund industry is like what

[00:28:57] is it?

[00:28:58] It's at least 30 years old in India, right?

[00:29:00] And it has its own rules to play by.

[00:29:07] And one thing that we all learned from the whole PTM Fiasco

[00:29:11] is that you have to keep some of these things separate,

[00:29:16] right?

[00:29:18] Interestingly, zero that is starting their own fund

[00:29:20] house as well.

[00:29:21] So they'll be launching a bunch of low-cost index funds

[00:29:25] and so on and so forth.

[00:29:26] And we've launched quite a few actually index funds.

[00:29:28] Yeah.

[00:29:29] So again, I hope that they're heating all the checks

[00:29:34] and balances required to manage these different parts

[00:29:37] of their business, right?

[00:29:39] But interesting news, nevertheless.

[00:29:43] I don't know anyone who uses credit though

[00:29:44] and it could just be my circle.

[00:29:46] I don't know if I...

[00:29:47] I mean, I might be scantrous to say.

[00:29:49] I used to use credit but I just did not see any benefit

[00:29:53] from it.

[00:29:54] Yeah, I used to play my credit card bills

[00:29:55] and then after that I had like some full-acquins

[00:29:57] and...

[00:29:58] What to do with this coin?

[00:29:59] Bias Ticaros.

[00:30:01] I don't know.

[00:30:02] I don't know.

[00:30:03] Yeah.

[00:30:04] But I do know one person who swears by credit

[00:30:08] but that's because he makes ad films for credit.

[00:30:11] So we know we're talking about it.

[00:30:13] Yeah.

[00:30:15] All right, let's move on to the talk of the town section.

[00:30:18] Rajiv Manthri made a very interesting tweet giving

[00:30:22] an alternate view to a Bloomberg article that quotes,

[00:30:25] Modi's thriftness may end up short-changing India.

[00:30:29] But Rajiv says the main point

[00:30:31] to this article is missing is that India has made great gains

[00:30:35] on the efficiency side, especially in welfare distribution.

[00:30:38] He says that India has the best in class system powered

[00:30:41] by digital infrastructure that has no parallels or precedence.

[00:30:45] Every rupee of welfare spending goes much further than it did

[00:30:48] earlier which is a remarkable step.

[00:30:50] And if there was honesty and curiosity

[00:30:52] in the community of academic economists

[00:30:54] and public policy analysts, tombs would have been written

[00:30:57] by now on what India has achieved.

[00:31:00] Yet is a graph to show what it means.

[00:31:02] Roshan, can you simplify this for us?

[00:31:05] Well, we had the budget recently and one of the things

[00:31:10] that struck everyone, interestingly even folks

[00:31:14] in the opposition also was how little was budgeted

[00:31:17] for welfare and so on.

[00:31:18] And that too considering this is an election year.

[00:31:21] And so obviously I mean people who have to write against the government

[00:31:25] for one reason or the other found this

[00:31:28] as a contentious issue, the fact that the government

[00:31:31] is not spending enough which is usually the opposite.

[00:31:37] But Rajiv makes a fantastic point

[00:31:40] that the direct benefit transfer has

[00:31:42] improved the efficiency of delivery

[00:31:45] by such a remarkable difference

[00:31:49] that the government does not have to do

[00:31:52] the conventional big spends of earlier years and so on.

[00:31:56] Not to say that the government is not spending

[00:31:58] they have to but that is the central point.

[00:32:02] And in the 80s Rajiv Gandhi had a quote

[00:32:06] that's Raul Gandhi's father by the way, thanks.

[00:32:09] No, I mean I can't take anything for granted so yeah.

[00:32:14] So you had a quote that for every one rupee

[00:32:16] the central government spends about five paisa

[00:32:19] ultimately reaches the end user or the end beneficiary

[00:32:25] as such and today that's not the case.

[00:32:27] I mean if you look at credits to farmers accounts

[00:32:32] that is like completely like taken care

[00:32:35] with other UPI and so on.

[00:32:38] And other services as well, whether you look

[00:32:40] at your LPG or housing or any of the other stuff

[00:32:45] null page electricity, all of that stuff.

[00:32:49] In fact, I think we should do maybe a video

[00:32:53] on just the DVD schemes itself.

[00:32:54] There are plenty of these and the beneficiaries are immense.

[00:32:58] I mean like hundreds of millions of people

[00:33:01] that we're talking about right?

[00:33:02] I mean so massive scale.

[00:33:04] So yeah, fantastic.

[00:33:06] I mean I think definitely explore some of the links

[00:33:09] that you know Rajiv has tweeted right?

[00:33:13] It's a great thread and Rajiv is a great follower also.

[00:33:15] Awesome.

[00:33:16] So I guess then that's it for the 142nd episode

[00:33:19] of the startup opt-in roundup.

[00:33:20] We hope you enjoyed this conversation

[00:33:22] and if you're still watching this video,

[00:33:24] thank you so much for being with us right till the end.

[00:33:27] Next week we'll be back again with more exciting news

[00:33:29] from India's startup ecosystem.

[00:33:30] Wait, wait, wait.

[00:33:31] We have to tell them about the episodes upcoming.

[00:33:35] We have a conversation with Ranjit Mukundan

[00:33:38] who is the co-founder and CEO of Stellapse.

[00:33:41] So we spoke about country delight, you know

[00:33:43] about milk and the execution it takes

[00:33:47] to kind of deliver change behaviors and so on.

[00:33:50] Well, Stellapse is building dairy farm automation right?

[00:33:54] End to end.

[00:33:55] Again, really, really amazing business.

[00:33:58] IoT plus marketplace plus SaaS plus bunch of other services

[00:34:04] all bundled together.

[00:34:06] Yeah, I really enjoyed this conversation

[00:34:07] and I'm sure you will too.

[00:34:08] So stay tuned for that.

[00:34:11] And we're approaching the 150th episode

[00:34:14] on the roundup, right?

[00:34:17] So if you guys have some special requests,

[00:34:19] if you want, you know, Gunjan to take his top off or, you know,

[00:34:24] if you wanted to play a song or if you want our producer

[00:34:28] to do a little dance, all of those requests are koshered.

[00:34:31] So let us know in the comments.

[00:34:34] Yeah, be continue as we were.

[00:34:39] All right, folks, that's it.

[00:34:40] We'll see you again next week.

[00:34:42] Please remember to do all the good stuff,

[00:34:44] like, share, subscribe to the channel.

[00:34:47] Yeah, we'll be back again next week with more exciting updates.

[00:34:49] See you guys.