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  • How fit-and-proper is Sachin Bansal to run a bank?T Surendar
    How fit-and-proper is Sachin Bansal to run a bank?In September 2019, the co-founder of India’s star e-commerce, Sachin Bansal, was not the first suitor of an insurance business that was on the block. Beleaguered home finance company DHFL’s parent WGC was selling its stake in its general insurance unit to bring down its liabilities and wanted to exit quickly. Another tech entrepreneur, Paytm’s Vijay Shekhar Sharma, was already at the door offering more money, but wouldn’t sign the dotted line until December. But WGC could not wait and decided to exclusively deal with Bansal as he seemed a surer suitor. The due diligence prolonged and it was not until January that the deal was done for Rs 220 crore (most papers reported the deal was worth only Rs 100 crore). At the last minute, there was a serious hitch. Authorities at the Insurance Regulatory and Development Authority of India realized that Bansal’s company Navi Technologies could not be cleared “fit-and-proper” as its earlier application to be a non-banking financial company, or NBFC, was pending before the Reserve Bank of India. IRDA did not want to pre-empt the RBI. In two years, Bansal had gone from a no-name in the financial services industry to be an applicant for a full-fledged banking licence—a notoriously difficult permit to obtain from RBI. For a tech entrepreneur with no banking experience to even apply would have been a ridiculous thought even five years earlier. The question remains, what are the odds of Bansal getting through?
  • Decoding PayU’s $300 mn+ lending playPranav S.
    Decoding PayU’s $300 mn+ lending play PayU is on a roll. The digital payments company, owned by South African media and tech conglomerate Naspers, has spent in the vicinity of $500 million on fintech acquisitions and investments globally in just the past two years. To cap it all off, two weeks ago, PayU announced it was buying PaySense, a tiny Mumbai-based startup which runs an app offering quick personal loans in one of India’s biggest ever fintech deals. PaySense—which recorded revenue of about Rs 18 crore ($2.5 million) in the year ended 31 March 2019—was valued at $185 million. PayU, which already held about 19% in the company, raised its stake to around 80%, Entrackr reported; PayU didn’t specify exactly how much it paid, but it would be north of $100 million at least. The deal highlights PayU's ambitions to build out a credit business, and eventually a broader financial services play. However, the PaySense deal also comes at a time when PayU has just finished big changes in senior leadership, competition continues to be fierce and investors and founders are slowly coming to the realization that selling loans, especially to individuals, is actually not at all easy.
  • The pandemic will redefine fintech lendingVardhan Koshal
    The pandemic will redefine fintech lending The transfer of money from me to you and you to me is what greases the wheels of the modern economic machine. We earn, we spend, and then, most importantly, we borrow to spend some more right now, betting on earning more later. Salaries and profits fuel deposits and capital, which get routed into credit, which drives consumption, resulting in the vital rotation of money. Over the past five years or so, India has seen a flurry of startups emerge promising to usher in a new wave of technology- and data-led lending. Venture capital tracking platform Traxcn lists 484 “alternative lending” startups in India, thanks to the easy availability of liquidity and rising consumption across segments. App after app proffered credit at a tap, each targeting a niche of an increasingly internet-connected population; many built large loan books in a short period of time on the back of aggressive segmentation and acquisition strategies. But in the aftermath of the COVID-19 pandemic and India’s lockdown, producers, makers, sellers and consumers are stuck across the economy. The holy flow of cash and credit is suffering heavily, resulting in one of the deepest economic impacts in the history of nations.
  • The untold story of Sourceeasy’s disastrous endAshish K. Mishra
    The untold story of Sourceeasy’s disastrous endHyderabadIf it is still raw, bruised and hurting from picking at it like a gash which wouldn’t heal, Chirag Chamoli hides his pain well. On the morning of 16 November 2017, seconds after parking his car, in the basement of his office in Banjara Hills, an upscale neighbourhood in Hyderabad, he noticed a few men running towards him. He didn’t know what to expect. So, he got out of the vehicle, slamming the door shut. The men, now close, knocked him down. Someone pulled him up, holding his hands behind him. “Where’s the money?” the man said. “What money, I don’t have any money,” answered Chirag, shocked. Another man snatched his bag and his two mobile phones. “Give us our money,” he screamed. A few other men had by then arrived at the scene. They looked like law enforcement officers, dressed in plainclothes, white shirts and khaki trousers. “Get in the van,” said one of the men dressed in plainclothes. Together, they dragged him into the back seat of the van. “Call Pranay,” one man said, handing Chirag his phone. “Ask him to give the money.” It was late in San Francisco, but Chirag made the call.
  • China is looking grim for OYOFrankie Huang
    China is looking grim for OYOShanghaiIn the era of Uber, WeWork and Ofo, we have become weary of fast-growing startups propelled by venture capital money, led by young men long on ambition and short on experience. OYO, India’s embattled hospitality chain, founded by CEO Ritesh Agarwal in 2013 when he was just 19 years old, seems to teeter on the edge of fulfilling that familiar boom-to-bust arc. In the last month, OYO has made sizeable job cuts in offices across the world and exited 200 cities in the name of restructuring, amid backlash from investors and partners all over. In China, OYO’s second largest market, after India, things are looking grim. The COVID-19 outbreak is wreaking havoc across the entire sector, Shi Zhenkang, the only OYO China top executive with hotel experience has parted ways with the company, and formidable local competitors are encroaching on the same market OYO staked when it first blazed into China.
  • The bittersweet relevance of Snapdeal 2.0Saif Iqbal
    The bittersweet relevance of Snapdeal 2.0Who doesn’t like a good comeback? There is an almost magical quality to it, captivating audiences, cheering for the down-and-out underdog, thus briefly inverting the survival of the fittest world. The recent Ashes Test victory of England over Australia qualifies as a once-in-a-generation comeback, unfolding in a matter of days. Some, like the boxing legend Muhammad Ali’s three world heavyweight titles, come with multiple highs and lows stretched over decades. However, there is a reason that comebacks are usually restricted to the sporting arena—in businesses, a “comeback” betrays an unwanted and maybe an unwarranted failure. Also, a comeback of what? Of your good old self? Or of your present shrivelled existence, mixed with the fondness for what used to be? “Comeback” is a term transposed from sports by management and promoters to signal barely surviving. Not a surprise then that Snapdeal is being sold as a comeback story. With the validation seemingly coming from the recent “Comeback Kid” award from The Economic Times to its co-founders, Kunal Bahl and Rohit Bansal. Snapdeal’s early investor Vani Kola (managing director at Kalaari Capital) won the “Midas Touch” award from the same publication just four years ago. Snapdeal was flying high at the time—snapping at the heels of its larger rival, Flipkart, and comfortably ahead of Amazon’s Indian arm in sales. Its leadership and business model seemingly validated by becoming the beneficiary and poster child of Softbank’s first significant investment in India, raising $627 million.
  • A watershed year for women-led startups in IndiaHarveen Ahluwalia
    A watershed year for women-led startups in IndiaSo far, 2019 has been a standout year for women-led startups in India. Of the top 150 startups by funding in the first six months of the year, an unprecedented 17.3% had women as founders or co-founders. To put that in perspective, the same figure was about 10% for the full year of 2018, and had largely remained stagnant earlier, at 12% in 2016 and 2017, according to data from […]
  • The gig economy’s tyranny of targetsPradip K. Saha
    The gig economy’s tyranny of targetsdelhi11.15 a.m. The sun is exceptionally unforgiving on this muggy August morning in Delhi after a couple of days of rain. Pankaj, who asked to be identified only by his first name, is driving around in his Toyota, yawning. The car’s air conditioning is off and windows rolled down. He splashes water on his face to fight sleep. It’s been a 14-hour shift, the last 30 minutes without a passenger. Pankaj needs one more ride to complete his weekly target and get a cash incentive, which he missed last week. He had driven around Delhi in loops; around the railway stations, the airport, even Noida—one of the multiple contiguous cities that make up the National Capital Region—in the middle of the night without any luck. "I had only heard stories from other drivers of wasting a whole night in search of that elusive one ride to complete the target," he says. "Then last week, it happened with me. It was extremely frustrating." Target-based cash incentives are what the drivers for cab aggregators—driver-partners in taxi app parlance—get over and above their share from the rides that they complete. For aggregators, it is the tool to ensure drivers are out on the road long enough that there is no supply glut. For driver-partners, it is the bait.
  • Less SoftBank, more venture buildersKabeer Chawla
    Less SoftBank, more venture builders In the last few months, enough words have been spent on SoftBank and the several ills of its kind. WeWork, Uber, Lyft, Peloton. It’s not a great time for venture capital. Investors around the world are (hopefully) rethinking how they value tech and what you would call tech-enabled startups. Venture capital models, especially late-stage VC, definitely need review, but today I’d like to talk about a different form of startup investing, one that doesn’t get as much screen time—venture builders. Almost an antithesis of the classic VC approach.
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