Reliance set to Enter EV space with Tesla partnership? | Roundup #148 | The Startup Operator

[00:00:00] Hey, quick question, why did the chicken cross the road?

[00:00:05] To leave the RCB match.

[00:00:07] This is a match, RCB match today right?

[00:00:09] Yeah we are playing the Sunrises man, I mean we lose to bad teams so, I mean, I'm just...

[00:00:17] But you know who to bet your money on now.

[00:00:19] Who was playing against RCB basically.

[00:00:22] Alright folks anyway, hello and welcome to another edition of The Startup Operator.

[00:00:27] Roundup, did you miss us?

[00:00:30] Did you miss me?

[00:00:32] Well it's been a while, I'm Roshan Karyapa.

[00:00:35] We're going to run you through the news and events in the Indian startup ecosystem.

[00:00:38] Sorry Gunjan, I just told your line but why don't you tell us what we're going to talk about.

[00:00:43] You're so kind, you do my work yourself.

[00:00:46] And mine, what I have to do.

[00:00:48] Alright guys, so this week we'll be talking about Ola's stream landing and operations

[00:00:52] by stopping the business in UK, New Zealand and Australia as the company seeks to

[00:00:56] increase the profitability ahead of the IPO.

[00:00:59] Elon Musk will be visiting India to meet Prime Minister Modi

[00:01:02] and they're also in talks with Reliance for setting up a joint venture to manufacture EV units in India.

[00:01:09] Talking about manufacturing in India, Apple is now producing one in seven iPhones

[00:01:14] and the output has hit a total of $14 billion.

[00:01:19] I think this is a great start since the started manufacturing.

[00:01:22] Again, continue with manufacturing news, Shridhar Wembo has started a new company of power tools called Kauravi.

[00:01:29] The sleep company has rolled out its second tranche of eSOP buybacks worth 2.4 crore rupees for its employees

[00:01:36] and we have some other fund raises from the weeks.

[00:01:38] If you're a regular listener of the startup operator podcast, please consider sharing this video

[00:01:42] and hitting a review on your favourite podcast platform.

[00:01:44] And if you're a first-time listener, please subscribe for exciting content from the Indian startup ecosystem.

[00:01:50] Let's get started.

[00:01:59] Roshan, it's been some time.

[00:02:01] Yeah, it's been a week.

[00:02:02] What have you been up to?

[00:02:03] Well, did you watch Prime Minister Modi's interaction with the gamers?

[00:02:07] Oh yeah.

[00:02:10] Someone's aging backwards.

[00:02:12] So the biggest influencer in India met gaming influencers.

[00:02:17] They even dubbed them Namo OP.

[00:02:21] So fun interaction really.

[00:02:22] It's awesome to see that someone in his 70s still has that vibe and can relate with people 50, 60 years younger than him.

[00:02:32] Great to see that.

[00:02:33] I mean, certainly we've not had the best news from the gaming industry over the last year or so

[00:02:38] with all of these GST complications, the retrospective taxes, game of skill, game of chance, all of those things.

[00:02:45] But hopefully this is a positive signal.

[00:02:47] So maybe if you're a founder or an investor in the gaming industry, you would have had something to smile after all.

[00:02:54] Yeah, absolutely.

[00:02:55] Prime Minister Modi also announced the launch of AI Chatbot in the Namo app.

[00:03:02] And I think it's good.

[00:03:03] This chatbot gives you information about all the central government schemes, welfare schemes and stuff.

[00:03:09] So I guess this is by far the most technologically active Prime Minister we have seen.

[00:03:14] Yeah, it'll be interesting if there is some kind of a vernacular interface or a voice or a chat interface

[00:03:22] for people to sort of engage with the app.

[00:03:26] And they get to ask questions around schemes and so on and so forth.

[00:03:31] Almost as simple as, let's say a WhatsApp, right?

[00:03:34] Yeah, that would be awesome.

[00:03:35] Folks building in the generative space, guess where you got this idea from?

[00:03:39] Yeah, that's a low hanging fruit I think.

[00:03:41] Don't forget to thank us.

[00:03:43] All right, let's get down to business.

[00:03:46] Ola Cabs has made a strategic decision to shut down its international operations in countries including UK, Australia and New Zealand.

[00:03:54] This is due to increasing competition in the international market and the growing pressure across countries to transition into electric vehicles.

[00:04:02] The company's focus will now be on expanding its fleet within India, where of course there's a lot of opportunities.

[00:04:08] E-Vis is on the rise and India itself serves as a big market.

[00:04:12] Internationally as well, the push towards electric vehicle is gaining a lot of momentum and for a company like Ola,

[00:04:18] they would need to invest significantly to catch up with competition and convert its existing fleet into electronic electric vehicles,

[00:04:27] especially in Australia and UK.

[00:04:29] But one has to ask this question is that Ola started expanding internationally I think 2-3 years back

[00:04:36] and these international expansions of course needed a huge investment.

[00:04:40] But now rolling back on it, IPO plans on the horizon, what does this signal?

[00:04:46] They're just trying to trim down all of the excess fat.

[00:04:49] I mean look, the expansion was at a time when Ola was still trying to play the valuation game on the right sharing business.

[00:04:58] What we've realized over the last couple of years with Uber listing and everything that's happened afterwards, it's an execution game right now.

[00:05:05] So you have to consolidate profits, you have to make real margins on the business

[00:05:11] and that's not going to come from some of these experimental things like the international business or Ola foods and whatnot.

[00:05:18] So I think it's a step in the right direction, they're trying to focus on their core business.

[00:05:23] I do feel that with EVs and with the right price points, right sharing can be absolutely profitable as well.

[00:05:32] I mean the platform in itself has become somewhat of a utility at this point.

[00:05:36] So yeah it's good that Ola is kind of not in that whole network, scale sort of more and more in the consolidate and profit kind of more.

[00:05:49] So we have also been hearing chatter about Indian origin brands making it big right?

[00:05:57] And Ola is one of the most well-known startups in the country. Zomato is one of the most well-known startups in the country.

[00:06:03] These companies also expanded rapidly on international markets.

[00:06:07] But while the internal commentary within the ecosystem has been about scaling Indian brands abroad, we are now seeing that consolidation is happening where brands are returning back to India.

[00:06:17] What do you make of that?

[00:06:19] It's a good point for sure right?

[00:06:20] And maybe it's just a question of where they are in their journey right now.

[00:06:24] I won't rule out Ola maybe expanding internationally at some point in the future.

[00:06:29] Likewise with Zomato, I mean they were in Middle East and Africa but they also kind of rolled back.

[00:06:34] I guess it is a function of having to be in the public markets with Zomato.

[00:06:41] I mean they already listed with Ola, they're looking to list and so on.

[00:06:45] So I guess it is probably that.

[00:06:48] So I won't rule out some of these brands expanding internationally for sure right?

[00:06:53] Because one thing is that look I mean the kind of constraints that we have if you learn to execute here right?

[00:07:00] Executing outside should not be that much of an issue right?

[00:07:04] I mean obviously it will have its own nuances and own sort of a cultural mix in the equation for sure right?

[00:07:11] I mean I'm not saying that it's going to be like easy but certainly I mean I think if you execute hard in India

[00:07:19] I think you're battle hardened to sort of take on more structured, more streamlined demographics

[00:07:26] and societies in the West I would say.

[00:07:29] Okay so I guess then it's just a matter of time?

[00:07:32] Yeah I suppose like everything else.

[00:07:36] So while we are waiting for homegrown brands to expand internationally, international brands are looking to set up shop in India

[00:07:42] and turn India as a hub for the Southeast Asia and global markets.

[00:07:46] Tesla is exploring such a partnership with Reliance Industries Limited to establish an EV manufacturing unit in India.

[00:07:53] These discussions are still in initial stages and have been ongoing for over a month

[00:07:58] but yes it is important to note that these are you know not reliance entry to the EV market

[00:08:04] but rather to build a capacity to manufacture EVs in India.

[00:08:08] The exact role that Reliance Industries will play in this venture is not yet fully defined.

[00:08:12] Elon Musk and you know his team of senior officials will be in the country sometime this month

[00:08:16] to talk with Prime Minister Modi, figure out the litigatives of this partnership.

[00:08:21] Another aspect of this visit is going to be identify a location for the plant

[00:08:25] and I think the top contender is Gujarat and that's specially because of his close connectivity

[00:08:30] with the Mumbai port and of course upcoming ports in Gujarat itself.

[00:08:34] What do you make of that? Do you think India will become the next China?

[00:08:38] Well I mean maybe not the next China but see if you look at Tesla right over the last couple of years or so

[00:08:44] they have started you know moving beyond China for its manufacturing capabilities and capacity right.

[00:08:50] I mean they have a plant in I think Berlin in Germany, they are looking at a plant in Mexico

[00:08:56] where else are you going to go right? I mean you can't ignore India right.

[00:09:00] The size scale and demographics of the country is such that you can't ignore it

[00:09:05] and we have played it kind of smart with Tesla over the last two or three years right

[00:09:11] because there was huge pressure to sort of reduce the taxes

[00:09:15] and make Tesla's more affordable in India and so on and so forth

[00:09:18] but Mr. Nitin Gadkari said nothing doing right

[00:09:22] and you know we're looking at sort of leveraging the market that India has right

[00:09:29] and the capabilities that India has right and rightly so I think.

[00:09:32] So what we've said is look I mean please do come here right

[00:09:37] but set up some infrastructure here, build the skill base here

[00:09:41] contribute to the ecosystem here and you are absolutely welcome right

[00:09:44] and you know since then you know they've reconsidered the taxes as well right.

[00:09:48] So yeah my bet is that the plant will be in Gujarat right for sure

[00:09:54] I think Maharashtra and even Bengal as well was in contention I think right

[00:10:00] but yeah it's probably going to go to Gujarat I think.

[00:10:03] I hope Bhamta did not start protesting again like.

[00:10:06] So even if not to feed the end in domestic market

[00:10:10] I think a manufacturing hub in India also will really help Tesla

[00:10:15] sell to the Southeast Asian markets as well as a growing appetite.

[00:10:19] For sure and if you look at how the Asian economies have performed right

[00:10:22] I mean they've been fairly insulated not to the you know not completely

[00:10:26] but I mean relatively sort of insulated given how topsy-turvy the western economies have been right.

[00:10:33] So yeah I mean you can't ignore Asia for sure.

[00:10:36] Yeah I mean Samsung right has now become the world's number one mobile phone manufacturer

[00:10:42] they just dethroned Apple.

[00:10:44] Is it? I think it's like a number one number two situation for quite a while right yeah.

[00:10:48] Samsung and Apple have like I don't know God knows how many lawsuits against each other.

[00:10:53] They're probably fueling an entire niche industry.

[00:10:57] Yeah Samsung contributes something like maybe about 30% of Korea's GDP or something right.

[00:11:03] Yeah crazy.

[00:11:04] 19.4.

[00:11:06] Huh?

[00:11:07] Oh the producer says it's 19.4 and not 30.

[00:11:10] You let us know in the comments.

[00:11:12] Do let us know what you think in the comments.

[00:11:14] Yeah okay talking about iPhones now one in every seven iPhones is manufactured in India

[00:11:21] and output has hit a whopping $14 billion in fiscal year 2024.

[00:11:26] Absolutely fantastic.

[00:11:27] This translates to almost 14% of Apple's flagship devices being assembled in India.

[00:11:31] Foxconn and Pegatron which are two of the major Taiwanese manufacturers

[00:11:35] have played significant roles in boosting Apple's production in India.

[00:11:39] Foxconn assembled nearly 67 of the India made iPhones while Pegatron contribute about 17%.

[00:11:45] The remaining portion was produced by Winston Corp plant in Karnataka.

[00:11:49] In recent developments Pegatron is also in advanced discussions to transfer control of its only iPhone manufacturing facility

[00:11:58] which is located near Chennai in Tamil Nadu to the Tata Group.

[00:12:01] Additionally Tata Group is also constructing another plant in Hosur

[00:12:05] where Pegatron is expected to become joint partners

[00:12:08] and apart from this I think last week Tata Group signed a deal with Tesla as well

[00:12:13] to produce semiconductors in the country.

[00:12:16] So have you invested in Tata stocks?

[00:12:19] Are you going to invest in Tata stocks?

[00:12:21] Hey this is not a FinFlancer show okay I mean come on we don't recommend any stocks.

[00:12:26] Mostly because we suck at it but yeah I mean see this is one of those things

[00:12:35] I'll tell you I mean when initially these iPhones were being considered here right

[00:12:41] I mean there was some hype and also there was some criticism that hey this is going to be very low-skill work

[00:12:46] we're just assembling, we're not you know designing stuff and we're not doing any high-end manufacturing and everything

[00:12:52] and I kept saying guys look you have to crawl before you walk

[00:12:57] and you have to walk before you run right that's literally how things have played out even with China as well right

[00:13:03] and then you have to race back to the early 90s and how you know during the Clinton era and onwards

[00:13:08] how they grew as well right I mean you don't first attract the high-end work

[00:13:14] when you don't even have an ecosystem of sorts right so look at you know our auto-anslaries industry

[00:13:21] for instance of the last 30 or 40 years right and how that has grown for instance

[00:13:26] so this is fantastic news I think there's another plant that's going to come up in Karnataka itself

[00:13:32] it's a Vistron plant or something right so we're definitely going to ramp on capacity

[00:13:37] and you know I was talking to someone who works in manufacturing

[00:13:41] and they were saying that you know the demand for both skilled and non-skilled workers right

[00:13:47] is really really rising right they're not able to service their demand you know

[00:13:53] and so this will mean that you know people I really feel that you know private institutes

[00:14:00] that teach certain of these manufacturing skills and what not will evolve right

[00:14:06] if you look at how you know we have something like you know 3000 or 4000 maybe more right

[00:14:12] engineering colleges in India probably more yeah produce a quick check please

[00:14:17] yeah I know that we have about 500 ish in Karnataka itself right

[00:14:22] if you think about how these colleges have evolved I mean it's simply to like services apply right

[00:14:28] I mean service or demand rather sorry so I mean similarly like your you know 6000 ish

[00:14:36] which is yeah I mean just about off by about 100% but yeah

[00:14:43] you know so I do feel that these institutes will come up so I think that you know if you are

[00:14:49] you know if you're an entrepreneur I think one of those ideas we're giving the second idea on this podcast

[00:14:56] just note that down accelerator yeah start an incubator accelerator you know fun maybe yeah

[00:15:03] but if you are I mean it's an interesting business idea to explore right because these folks

[00:15:08] definitely need skilled workers and if you're gonna be teaching some of these manufacturing skills

[00:15:13] I mean there's a captive demand for it for sure yeah also last week we we spoke about the appointment of

[00:15:20] you know like so Shreedhar Vambo and yeah to the UGC council I think also the entire education program

[00:15:26] at least the high level education programs in India has been pending for a haul yeah right

[00:15:32] and now that as you mentioned as demand is growing I think the education policies also somehow

[00:15:38] augment itself to cater to that yeah I mean look I think even in the U.S. right they have these schools

[00:15:44] I forget what they call them right I mean you graduate from them and you can be something of a

[00:15:50] late operator or some other kind of machine operator and so on right and they make reasonably good

[00:15:55] amount of money right and they're not burdened by all of that ridiculous student debt that's there in the U.S. also

[00:16:02] right and in India itself you know I mean we had this ITIs right technical institutes of God knows

[00:16:10] how long back right 50 60 years back I know people who have sort of graduated from there and they

[00:16:16] have had a reasonably good career right so I definitely see a need for it for sure.

[00:16:22] Keeping up with the manufacturing trend Shreedhar Vambo who is the co-founder and CEO of Zoho if you don't already know that

[00:16:30] he has started an exciting new adventure Zoho which is known for making great software products as now taking

[00:16:37] a path to make manufacturing power tools in India. The company is going to be called Karovi

[00:16:43] which carries a touch of Tamil heritage it translates to instrument or a tool which is a fitting

[00:16:49] moniker for a venture that aims to create practical tools for everyday use. So this factor is being set up in

[00:16:55] Tengkasi right and I think rural areas by itself provides a huge opportunity to set up for employment opportunities

[00:17:01] and I think there's a great step you know by Vambo sir. Yeah so he has said this on record that

[00:17:08] you know Zoho had had to reinvent itself from a networking company in the early days to a SaaS company

[00:17:15] and that you know there is another reinvention that is underway right now and that Zoho will be

[00:17:20] unrecognizable after this reinvention right and it will be more on the R&D engineering infrastructure side of things

[00:17:28] right so man I trust Zoho engineering to kind of come up with this kind of stuff right I mean they've shipped

[00:17:34] I don't know 50 plus products over the last 25 years competing with the likes of Google, Oracle, Microsoft, Salesforce etc

[00:17:43] and yeah this is absolutely amazing I think the story is that there was a client in the midlies that they were

[00:17:52] kind of you know servicing and that person had this idea that you know we should develop something of this sort

[00:17:58] and he gifted a power tool set. Yeah but it's pretty awesome right I mean look I think if you're a large company

[00:18:06] and you have you know good amount of cash you should definitely invest in these kind of things right I mean something

[00:18:13] that's you know out there which is what Zoho is kind of doing right now yeah and it helps that they're private

[00:18:22] and they don't have to answer to you know investors on where they're headed, what's the future like and so on.

[00:18:29] You know with Wembo sir entering the hardware side of things another testament towards how cool hardware startups are becoming in the country.

[00:18:38] Yeah I mean I think so what he said is they will start like manufacturing chips also yeah.

[00:18:45] By chips I mean semiconductor chips not your anyway terrible.

[00:18:52] So for next topic we have some ESOP buyback news so folks if anyone of you are from or know anyone from sleep company please get in touch with us.

[00:19:01] From which company?

[00:19:05] The sleep company has announced a second tranche of its employees stock ownership plan buyback for employees.

[00:19:11] This will benefit a total of 105 employees and something to note here is that many of these beneficiaries almost 50% of them are women employees.

[00:19:22] The first ESOP buyback by the company took place in 2023 and was worth around 83.5 lakh rupees.

[00:19:29] Indian startups are huge surge in ESOP liquidity events in 2021.

[00:19:34] There were buybacks worth around 440 million dollars companies like Flipkart and Oyo rewarded quite generously allowing employees to

[00:19:42] invest in the vested shares and now these are like multi-billion dollar companies and I think after a long hiatus we see some ESOP buyback news.

[00:19:52] Yeah it's very positive for sure right I mean see look one very lucrative aspect of working in a startup is the fact that you know you have ESOPs

[00:20:01] and hopefully you will see liquidity at the end of you know whatever eventual journey that is right.

[00:20:08] I mean usually these ESOPs are a pipe dream for like 90% of people out there right doesn't amount to much and it's paper money basically something you can look at and feel happy about.

[00:20:20] So these kind of things make it real you know and so even if it's only two and a half crores and not two and a half million right it's amazing you know I mean even if someone got 5 or 10 lakhs or even a couple of lakhs which is fantastic really

[00:20:37] you know I remember a friend of mine who joined Free Charge and you know just two months after she joined or three months after she joined Free Charge got acquired right and she got an instant bonus of like 10 lakhs or something like that right.

[00:20:52] I mean talk about timing right pretty awesome so yeah good for the sleep company yeah I mean I see ads of the sleep company and Wakefit in Kormangala right and I'm not able to say which is which actually.

[00:21:06] Right I mean they seem like sister brands.

[00:21:08] But we got ads of Frito.

[00:21:10] What?

[00:21:11] Frito.

[00:21:12] What is Frito?

[00:21:13] Frito is this you know ergonomic mattress pillow manufacturing company man my Instagram is filled with them I don't know like how like why am I being targeted I have no idea.

[00:21:24] Considering that my phone is like you know 12 inches away I think I'm gonna get some Frito ads as well right so thanks for that.

[00:21:35] Alright so the first two weeks of April has not seen much action when the fund raises space but in this past two weeks AI startup NASA raised around 20 million dollars from Matrix Partners India Nexus Venture Partners Menlo Park and California based NTT VC.

[00:21:52] Another company that raised funding of around 13 million dollars 110 crore rupees is Climate Tech startup Recycle and they raised fund from the category two scheme led by 361 asset management limited.

[00:22:04] I've been hearing some chatter on this entire circular economy right you have any thoughts on that.

[00:22:10] What's that?

[00:22:11] Circle economy is like manufacturing something and at the end of the product life cycle the entire thing gets recycled and is reintroduced into the market.

[00:22:20] Sounds interesting but I haven't really read up on it.

[00:22:22] I think we should have someone from the circular economy space on the podcast.

[00:22:26] Yeah so if you are in the circular economy then you know please let us know and we'll reach out to you for sure or if you know someone that is or you could suggest someone yeah all of the above.

[00:22:39] So last week Vinod Kosla tweeted that exactly 20 years ago Kosla Ventures was founded.

[00:22:46] He's talks about betting on some kickass people like Jack Ma, Sam Altman and Patrick Collison building new categories like impossible foods, quantum scapegoat and rocket lab.

[00:22:56] And you know he's betting big for on the next 20 years on spaces like AI doctors, tutors, Mark 5 flights and 1 billion programmers and so much more.

[00:23:09] So a big congratulations to the Kosla Ventures team can't wait to see the wonderful things you guys will be doing.

[00:23:15] So Mr Kosla is the OGS of OGs I would say right. I mean he is invested in some truly phenomenal people founders and companies and look I mean the guy has a very unique and you know very bold perspective on things and he doesn't hold back right.

[00:23:34] I mean he's on record saying many scandalous things right and you know including the fact that he says you know literature grads are useless or something to that effect right.

[00:23:45] We saw the whole Twitter fight between him and Elon as well recently so yeah I mean the reason I think he's successful is also because he takes these bold bets.

[00:23:55] He's not afraid to you know afraid to sort of polarize as such right I mean look at impossible foods you know I mean people thought he was legitimately nuts for thinking about alternate meats and so on and so forth you know 5 or 6 or 7 years back right.

[00:24:13] But today I mean that space is so hot right again climate tech is something he's been investing in for you know more than a decade I would say right and today you know climate is again really hot right.

[00:24:28] No pun intended.

[00:24:30] But yeah I mean that's what it takes I guess to be successful in VC right I mean because otherwise if you otherwise you're going to you're always going to be lagging the market right.

[00:24:42] So truly phenomenal person absolutely an inspiration for anyone who strives for excellence you know in this world so yeah I'm really you know looking forward to the next 20 years of Koslav Ventures absolutely killing it.

[00:24:58] Awesome. All right so I guess that was it for this week's roundup we hope you had some interesting insights to take back with you.

[00:25:06] If you enjoyed let us know by liking this video and sharing it with your network please do leave us a review on your fear podcast platform as that really helps more folks like you to discover our content.

[00:25:17] We keep receiving wonderful messages from you that you guys are doing great but not seeing the scale so help us achieve that scale.

[00:25:25] Also I mean to the person who said that you know we should like produce Hindi podcast we are hoping that you know some AI widget will kind of help us do that for us right so we'll just wait for AI to catch up and yeah.

[00:25:41] Meanwhile Roshan maybe we should brush up your Hindi.

[00:25:43] Yeah I was really impressed with Hindi but let's stop it at that.

[00:25:50] But yeah a few fantastic episodes lined up folks I mean phenomenal entrepreneurs like really good insights for you guys installed so don't forget to subscribe follow all of that stuff and yeah we'll see you soon.

[00:26:05] Take care.

[00:26:13] .