Why Is OYO’s Valuation Shrinking? | Roundup #156 | The Startup Operator

[00:00:00] Hello and welcome to another episode of The Startup Operator Roundup, I am Roshan Karepa, and I am Bungin Sahar and together we break down the biggest headlines of India's growing startup ecosystem.

[00:00:10] If this is the first time you are tuning into a channel then please consider subscribing to it for we talk everything start up and if you are regular listener then do like this video share it with your friends, do all the good stuff.

[00:00:21] Before jumping into the headlines from last week I guess there's only one headline which everyone is talking about which is India in India! Wow, what a match, what a match, what a match, what a match, what a match.

[00:00:38] So I think there were two turning points in the game, one was the acceptables batting and the catch wise guy. We took a baller's wicked man that catch was worthy of a final winning moment.

[00:00:49] Super, super. I mean if you look at the catch rate I mean it's going outside of him and he still judges it perfectly well and does all of those theatrics on the boundary line.

[00:01:01] Fantastic stuff, I don't think you can play any knock that is more important than that I feel right? So this friend of mine Ashish had pitted just off of the win right? The cricket is like that primary key to the relational database of your life, right?

[00:01:18] It's complicated but think about it, right? I mean you have these vivid memories of where you were at specific points in time, right? Like for example 2011, you know, Tony hitting that six or, you know, not West for example, right? UB and KF, right?

[00:01:37] Doing all of the fantastic stuff, I think we chased 300 plus which was a big deal the time. Right? And of course, I think we will remember Suriyokumari, others catch for ages, for ages, right? So yeah, a lot of nostalgia brings back coming in.

[00:01:51] Yeah I think this was a long time happening the previous work up on the ground. India was undefeated but we choked at the last week.

[00:01:58] We had the best Indian squad for about 10 years now that we haven't, like, and it's so sad that we haven't one more trophy then so on. And think about boomerah man, what are you guys?

[00:02:08] I think it's like easily the best match winner we've produced, maybe like one or two notches below such in the world. I think Zahir Khan, by himself is a legend but I think boomerah will soon be one for the ages.

[00:02:19] One for the ages. I think it's cross Zahir if I would say. Yeah, that's a claim. Yeah, yeah, we're starting with some scandalous stuff. Not so scandalous actually. Not scandalous. Look at the stats. You guys can correct us. Zahir or boomerah.

[00:02:33] Okay, so while you figure that out here's a quick rundown of everything that I've went on last week. Micro Max venture released data about their funds performance. And while this may sound new, it's not the first time. Blume Ventures earlier in 2013. I guess released their fund performances.

[00:02:51] Yeah, we'll be trying to take a look at that. Last week's fake model hosted fake mark, config conference and well, there was some really interesting. Take a stromet, not only if you are a graphic designer. Another launched restaurant service hub, AI is now writing keynote sessions for CEOs.

[00:03:10] We are seeing tremendous rise of regional content in India, especially in North India and OEO, which was once valued at $10 billion has withdrawn its IPO papers and is raising funds at a valuation of $2.5 billion.

[00:03:23] In South India, Foxconn is accused of discriminatory hiring practices and we have a roundup of some interesting tweets we came across on X. So stay tuned as you break this things down for you. Now, while it's common for public investment funds to disclose their financial performance,

[00:03:44] this is not something you see day-to-day in private companies or VC funds. But if you look about it, do you think there's much to gain or much to lose if they do it? Well, it's a positive for the ecosystem I'll tell you that.

[00:03:56] It's as you said, I mean, it's very unusual for funds to disclose their performance, especially because So few of them actually return money to their investors. I mean, India has not been a roaring success, VC-wise. We have not had a lot of exits.

[00:04:12] And so I'm invested in that whole cycle, I would say, right? But this was very refreshing to see for sure, right? And they've had a couple of those successes, they go through color, a few other interesting startups like Helda Famy and so on.

[00:04:27] So, yeah, I mean, I hope more of them follow and overall, I think the ecosystem gains from more of this knowledge being out there in the public domain. Right? People can kind of see things. And the VC business as a whole itself is such a weird one, right?

[00:04:45] I mean, it's like that very strict parameter rule where one or two hit it out of the park and then like seven-eighter, like really spectacular failures, right? And that's true for most funds I would say, right? I mean, that's just how the business is structured.

[00:05:00] And people get it wrong, like horribly wrong all the time, you know? I mean, you can think of Bill Gully who got it right more than a few times as a legend, right? He invested in Uber but the same guy invested in WebVan, right?

[00:05:14] WebVan was a relic of the dot com era, right? It was kind of like big basket, but like a very primitive big basket at that time, right? So, in fact there is this fun, Koura, Q&A with Bill Gully, right?

[00:05:30] I mean, someone asked why did someone invest in WebVan in those days and he has an answer to that. Very interesting stuff. I mean, we'll probably link to it in the description, but yeah, this is,

[00:05:42] it's a huge net positive for the ecosystem. So, again, Koura's to the bloom folks and also the Micro Max fund. Yeah. Well, another highlight of last week was Figma's config conflict.

[00:05:54] Wow, yeah. Right? I think that went much better than some of the other keynotes that we have seen. One of the best announcements that they made is that finally you can design presentation for Figma, right? And not only is it helpful for graphic designers, what the primary users,

[00:06:10] but now when marketers like yourself can start designing? Yeah. I mean, for sure, I'm really looking forward to like accessing flights as they call it, right? Figma slides.

[00:06:20] Look, I mean, so Microsoft PowerPoint has been like that one thing that hasn't ever been done away with for the last 25 30 years of office work, right? I mean, it's a constant.

[00:06:34] You know, and the people have tried, like there was a start called deck. And then, you know, I am probably missing like 25 other startups that try to disrupt this, right? And can of course. And so on and so forth, but it's just stayed, right?

[00:06:50] And I think Figma slides of slides could have a real shot, right? Because as real time collaboration, there is AI. And yeah, it just looks very, very usable, right? So I'm actually kicked about using it and props to Figma.

[00:07:06] I mean, there are massive companies at this point, but if you look at their product presentation and so on, I mean, they're shipping at a ferocious rate, right? And something to really benchmarked to, I would say, right?

[00:07:20] And phenomenal, phenomenal stuff. One thing which I thought was the entire event would go a bit south because of the whole Adobe Fiasco, the acquisition did not go through.

[00:07:30] Yeah. But yeah, as you said, for a company size of Figma having these timely updates and major updates, not just another. Look at that AI stuff as well, right? I mean, you can just like search for, you know, very specific context.

[00:07:42] And you have a fantastic first added to work with, you know? And for people who are like, you know, maybe like one fourth or one fourth or designer like me, right? This is, this is fantastic stuff, you know? It's really amazing. So I think,

[00:08:00] I think Figma is taking a few notches above the rest clearly. Okay. Talking about taking a few notches above the rest, segway. Alright. First, first segue for the round-up this time. Anyway, talking about taking it a notch above the rest,

[00:08:20] Zomato has been, has brought out a solution that should be helping a lot of its restaurant partners. That release, what it's called, the restaurant service hub. This is a comprehensive platform that imputes treatment various aspects of managing and operating a restaurant, right from

[00:08:36] scouting, suppliers, to sourcing and licensing, hiring and the delivery of quality services. The hub already has assisted over 3,200 restaurants in just six months. And Zomato through this is emphasizing an inclusivity. This platform is not just for people, for those partners who use Zomato,

[00:08:56] but for all restaurants across India. And I think that's a very great move. Yeah. I mean, I think the end game for Zomato is like they're probably turn everyone into a chef, right? I mean, you focus on the food, you cook whatever quantity you want.

[00:09:12] And then we will have all of the services enabled so that you can sell a meal or two. People have tried that before. I mean, I failed but at Zomato scale, I think they have a real shot.

[00:09:24] They're already enabling a lot of these restaurants with the boss and the ERP and the fresh foods supply and so on and so forth, right? I mean, they're doing all of that stuff. I think the service hub is like kind of bringing it everything

[00:09:38] together, like in one sort of a hub. So yeah, good soft man. Amazing. Okay. So one big question came up on Twitter last week. Will AI be writing future keynote sessions for CEOs? And the case in point here is that or Shopify. At the 2021 Shopify summit,

[00:09:56] Toby who is the CEO, Deliver, Satisfactory talk, people rated it 7 on 10. But the unique thing about this presentation was that Toby took to AI to create his speech instead of writing himself. He built a team of AI agents to complete this task. These AI agents had diverse specifications.

[00:10:17] They worked in a virtual office environment. They met periodically in water coolers and brainstormed and distributed tasks. They also conceived drafted research, wrote, edited and designed Toby's talk autonomously. So you think more and more CEOs will be taking this approach?

[00:10:36] Dude, what a guy man, this fellow. I mean, he runs a 100 billion dollar company. I don't know if that's still 100 billion or whatever. But he still codes. He did run a night. Pretty phenomenal. I'll tell you, for a CEO of a company that scale.

[00:10:52] But yeah, I mean it's getting a lot more real. I mean 7 on 10 is not bad, I would say. Yeah, if anything, I mean it will save as poor, hapless marketers from coming up with

[00:11:04] shitty first drafts of Keynotes and presentations and whatnot. I hope we kind of open sources this and a bunch of us get to try it out as well. You know, yes, there'll be agents who will be writing content for the podcast.

[00:11:18] Yeah, I think we should probably get an AI agent to host the roundup. No blow man. Okay, so we have been seeing a tremendous rise of regional content in the country. Uh, such it by who is with Bloom vences took to Twitter to congratulate stage.

[00:11:37] Uh, they have had an increase of 8x subscribers since 2022 when they did the series a funding and their revenue has grown around 20 times. If you talk about a hockey stick kind of a growth, I think the chart that you're seeing on the screen, that's what defines it.

[00:11:52] Uh, they also generated more free cash from her, and we content in March 2024 than the entire business did as a company in April 2023. I think the next target for them is to pump in more Rajasthanian content and make that into a profitable vertical as well.

[00:12:10] Yeah, first of all, I mean, there's a second piece of Bloom news we're talking about. Okay. So after, I think after Blinket probably Bloom has made it the roundup more number of times. So we're still topping the list to be by Jews.

[00:12:23] By Jews for infamous reasons, but yeah, in positive light. So I think Bloom folks, if you're listening to this, if you're watching this, we are open to sponsorships like buyers dinner sometime.

[00:12:35] You know? But yeah, I mean, this is awesome. We've hosted Venai on the podcast way back when I think maybe you're in half two years back with a fantastic conversation on building regional content and also Venai ran a business before this right?

[00:12:48] I mean, that got like massively screwed by Facebook and whatnot, and you know, there's a classic Phoenix kind of a story of rising from the ashes. And they've built like a large business. I mean, it's pretty phenomenal. The use of numbers, engagement and so on and so forth.

[00:13:05] And again, they're proving that Indians do pay for value. So yeah, I mean, I'm really, really wishing this stage team all the very best. I hope they find many more millions of users and they're able to get many more tens of not hundreds

[00:13:19] of millions of rupees and dollars in revenue. No, also I think the regional content rate has its own flair. Like after I moved to Bangalore from North India, I really started enjoying some of the Malayalam movies for you.

[00:13:34] Yeah, I mean, there might be more than one single Malayali connection here. But let's not, maybe let's not announce that. Let's talk about, oh, you withdrawing its IPO papers. That's more relevant. Oh, it was valued at $10 billion in 2019 and recently they clocked its first ever profitable

[00:13:56] year. Despite that, the withdrew its IPO and they're currently raising around at a 2.5 billion dollar valuation which is down 75%. But that's a very surprising thing for a company, right? You turn profitable yet you cut down valuations and withdraw IPO papers. Yeah, the markets have changed, right?

[00:14:13] Look, we've been talking about this and it's kind of an ongoing theme as well. Right? The markets are not whatever in 2021. They're not even at the 2020-2019 levels right before the pandemic. So yeah, I mean it's going to be tough raising those valuations for sure, right?

[00:14:30] But you know, props to OO again, you know, their counterpart Airbnb has done reasonably well in the US. Right? They still valued at about $900 billion. Right? And they're growing reasonably well. I mean, they're generating some billion dollars in free cash flow.

[00:14:48] Right? So there is a precedence to running a good profitable business at scale for OO, right? That they can kind of like benchmark to and also like sort of showcase to investors that, you know, there is some precedence for that.

[00:15:03] So yeah, but I think they've probably withdrawn it to stay private for a longer time and wait for maybe like a favorable time to get to the public markets, right? But I don't know.

[00:15:16] It's a weird thing, you know, because we've also made the point that the retail investors are starting for something tech, right? And OO is a travel tech, right? So I don't know. I don't know what.

[00:15:32] So I mean, back in 2015, six in like OO was the, if you're traveling to a new city, you have to book and OO, right? But then I think the entire meaning of OO changed. Thanks to the likes of Gunjan and his friends. Someone.

[00:15:48] But yeah, did you see that the new OO ad? Yeah, made by this friend of mine, they were. They were making a lot of ads. Yeah, but this OO ad, yeah, it's at the same thing that you sort of, for part two. Well, Indians, Jugar Marli, yeah.

[00:16:06] I think it won't be too far off. I mean, I think it's probably coming up in the next two to four years, I suppose, right? The OO IPO. Yeah. But if you want to understand more about what's going on with OO,

[00:16:20] would definitely recommend checking out an article by Finch-Hots. They really did a brilliant piece on it. Closer to South India, Foxconn is under the lens for alleged discriminatory hiring practices.

[00:16:32] There are some media reports that suggest Foxconn is not allowing married women to work at its latest Apple iPhone plant in Sri Perembudur Tamil Nadu. The Union Minister of Labor and Employment has sought a detailed report from the Tamil Nadu Labor Department.

[00:16:47] And although we do have a lot of law safeguarding these interests, it's very rarely that we see them enforced. No, no, they're enforced. They're obviously enforced and there's a lot of Babudam there.

[00:16:58] And as you mentioned, there's just a ton of laws and regulation and so on and so forth, including some really silly things in terms of how your candy should be. How many cupboards and doors it should have and so on and so forth? It's crazy.

[00:17:13] So right after the farm reforms, I think the government had mooted bringing labor reforms, making it easy for people to hire and fire folks and so on and so forth, but it's stuff in India. I mean, in India, I mean, any of these plants and whatnot heavily unionized,

[00:17:29] and all of these unions are pretty much politicized as well, right? I mean, the capture by the local political parties and so on. So it's hard, but yeah, if there's any kind of discriminatory practice that is absolutely bad,

[00:17:42] we should definitely reject those and I hope Foxconn does better. We'll Foxconn is also one of the poster-chalches of that manufacturing and supply chains are shifting to India. Do you think this is going to impact?

[00:17:56] No, I think they'll be used to this kind of stuff in plenty of places. I'm sure there's something of the sort happening in Mexico and wherever else they operate, right? I'm sure. So yeah, it's nothing too serious, I would say.

[00:18:10] Before we talk about some of the interesting tweets we came across, here is a quick roundup of the notable fundeezes from the week. A total of nine startups raised $150 million in growth stage deals, and leading the list was a grad that raised $35 million in debt funding.

[00:18:26] Rocket-Lane raised $24 million, smart works, $20.24 million, red habit, $8 million and repeat that raised $15 million. In the early stage, side of things, 15 startups raised you know, $16 million, and that included the likes of Ziot, cloud physician, sits firm, two brothers organic,

[00:18:46] mopping machines among others. These were the notable ones, anything stand out for you? Yeah, pretty interesting I should say. And Rocket-Lane had a very nice video on owns in their fundrais. I mean they seem to get better each time there is a round, props to Sri and team.

[00:19:03] The marketing folks are pretty awesome as well. And the raising this round at a time when there's all this doom and gloom about SaaS, and market downturn and whatnot. So good on them, I mean they built a fantastic customer onboarding experience platform,

[00:19:18] targeting professional services folks and Mr. Aniruth sitting here has been changed relentlessly by the HR team at Rocket-Lane. Hopefully after this fundraiser he will reconsider joining them. So yeah, fantastic stuff and we hosted a doceery founder on the podcast as well way back when.

[00:19:38] I mean this is two, two and a half years back, you know. I think you should track how many of the founders we hosted have raised like a follower on round, right? You know, there's some scope there. Soon as the fundrais announcement comes soon.

[00:19:50] Yeah. Literally nobody, literally nobody has given us anything. Think about it. The flip-cut, ESOB guys, the wake-fit guys, none of them. And I mean seriously, our subscribers. Really, we need to like level up on our subscribers.

[00:20:06] Really, guys throw some crumbs, come on. I mean, you know, we're open to sponsorships. Did I mention that already? So last week on Twitter, we came across this very interesting video by Chamath giving some E plus career advice. Take a look at it. Fantastic advice.

[00:20:25] You also had multiple chapters in your career. Yeah, all of us have, right? I mean, I think I've lived my life in four year intervals. I would say, right? I mean barely made it through college for four years.

[00:20:38] And then you know start up one for four years and then start up two for about four four issues. And so on, right? The third step has been longer than that almost twice the four year mark. But it's, it's useful to recognize that, you know.

[00:20:52] It's also useful to not get pigeonhole into one thing, right? I mean you are this or you are that or something else. Right? All of us, if we live long enough, right? We're going to have like a second third, fourth, fifth career.

[00:21:06] Right? And so we really have to embrace the fact that we're going to be many things. It's not going to be like a parent generation that you study to be an accountant. You work to be an accountant and you retired as an accountant, right?

[00:21:18] Yeah. So very sound advice. Reinventing yourself. Yeah. Yeah. Embrace change. Okay, another video that we came across was by the founder of Plexity, Irven's, Renewers. He explains, user is never long philosophy of Larry Page. Take a look at it.

[00:21:36] That's awesome. Yeah. Awesome. Awesome. I mean, see there's this age old philosophy that the customer is always right and that's absolutely true, right? Business building is not an intellectual exercise, right?

[00:21:49] It's as simple as finding out what, you know, the user or customer wants and giving it to them in the most easiest and most effective efficient way, right? In a way that you can make a book. Right? That's about as simple a framing of this as possible.

[00:22:05] Of course, I mean it's another matter that simple is not easy, right? And that's insanely hard to do. But this is exactly right. You know, so often when I talk to you know product folks and so on and so forth.

[00:22:19] Significant number of them feel like okay the user should do better. The user should you know behave differently and so on. But the really amazing ones just like build everything around the user, right?

[00:22:31] I mean they don't question the user because it's not our second question, so to speak, right? So yeah fantastic advice. We'll also look at the amount of time it took for Google to reach that state where it could auto complete search queries are understand the context.

[00:22:46] Yeah, so see and this whole auto complete as well right you bring up a good point. I mean it. It's not necessary for for Google to like optimize and shave micro seconds and milliseconds of search, right?

[00:23:00] I mean surely I mean we can wait longer but that's an eternal quest for Google, right? To shave off those milliseconds and micro seconds and get better and get more accurate and so on.

[00:23:11] Right? So again fantastic fantastic the heart of Google right was like peak innovation, peak innovation, which is why I mean I feel kind of bad that you know we dumb-con them so many times now. Well, careful they might just take us out of the podcast platform.

[00:23:27] Google podcast is no longer available by the way. Yeah they moved it to YouTube. Yeah YouTube, right? Alright folks thanks for staying with us right till the end. Do let us know in the comments what you thought of some of the topics that we discussed.

[00:23:40] We'll be back again with more exciting updates next week. Till then like this video share it with your friends and family subscribe to the channel and we'll be back again with more news next week. Take care, have a great week guys. Bye guys, see ya.