Episode 3 - Swasth app, Amazon launches food delivery, COVID overview, Postman and Yulu

Links to listen to the episode: Spotify , Apple Podcast, Google Podcast, Saavn

Weeks of June 2 - June 23

In this episode, I cover the follow stories:

  1. Telemedicine app Swasth launches

  2. Swiggy integrates Scootsy

  3. Mini feature: COVID impact on ecosystem

  4. Amazon launches food delivery

  5. Unacademy acquired CodeChef

Funding news covered:

  1. Postman

  2. Healthplix

  3. Milkbasket

Company in focus - Yulu

You can email me at - rahool@techbuzzindia.in

My bio - https://www.linkedin.com/in/rahoolgadkari/

Full Transcript

Hi Folks, Welcome to Tech Buzz India, a podcast that helps you stay in touch with what's happening in the startup world in India. I'm your host Rahool Gadkari. I've spent the last six years building products, both in India and the US. I'm passionate about technology and India's tech ecosystem.

Thank you for tuning in. I'm sorry for the delay in getting this episode out, we’ll try and get back on track from the next episode. Ideally looking to release on the first and 16th of each month. Don’t worry, I don't want to be late again. Now onto some exciting news - I'd like to welcome Shubham Singhal onboard, the Tech Buzz India team. Shubham will be helping with research and analysis for our stories, company spotlights, and a few other initiatives we have planned downstream. He has a wealth of experience and is going to be a great addition to our team. Let's hear from him directly.

Shubham: Hey Rahool. Thank you for introducing me to the audience. I'm very excited to join you. Now to all the listeners, I'm Shubham Singhal, to give a brief background about myself. I'm currently working with an early stage FinTech startup called Rupeek. I'm based out of Bangalore before this I've spent around two years in a management consulting firm and I've experience of working across healthcare and financial services. As someone who is passionate about technology and the startup ecosystem in India, I look forward to working with Rahool and building this podcast.

Awesome. We have a lot to cover today. The launch of a new telemedicine service, some updates on Swiggy, Amazon's entry into food delivery and a mini feature on COVID. The startup and focus for this episode is Yulu.

Before we begin a few follow ups from the last episode, Jio has raised $5.5 billion on top of the 10 billion fund raise we talked about in the last episode, this makes Reliance a net debt free company, a pretty phenomenal effort, given that it's achieved all of this in under three months. Next story is about Amazon and Big Basket entering the alcohol delivery space, starting with West Bengal . If you remember, in the last episode, we talked about Zomato and Swiggy doing this in Jharkhand and West Bengal and I guess it was only a matter of time before other bigwigs , joined the party. Our final update is (that) Flipkart is soon likely to enter the hyperlocal delivery space, starting with Bangalore. This is going to make hyperlocal already dominated by the likes of Dunzo a super competitive space. Flipkard obviously wanted a share of the pie, which is likely to be huge, especially in the COVID world that we live in and we'll track the story post-launch. It's about a month away from launch, but they made their plans pretty clear. So it's going to be good for customers in Bangalore, but, it's going to be tough for companies operating in the segment.

Now onto the stories of the week. Our first story is about the launch of an app called Swasth. A number of leading hospitals, startups and investors have worked to launch this telemedicine app. Swasth’s partners include Manipal hospitals, Apollo hospitals, e-pharma and diagnostics startups, like MedLife and 1mg. New age medical and diagnostic exchange Care.Fit, which is a part of Cure.Fit, and e-commerce firms like Flipkart and Udaan amongst others. Free teleconsultation are going to be provided through a network of over 2000 certified and trained doctors. This is going to registered as a nonprofit and Swasth is going to evolve into something called the Bharat Health Stack (BHS), which is an open source and interoperable technology framework for healthcare built by industry, body iSPIRT, which you might know for AADHAAR and UPI.The app also offers discovery of medicines, diagnostics, and patient home care. It's expected that the BHS will be to healthcare what UPI was to payments. There is another service worth mentioning called StepOne, which is actually run by an ex colleague of mine, which also provides teleconsultation services, at a much larger scale. StepOne is not part of Swasth, but hopefully the two work together to provide a great service to end users. From a(n) end user benefit standpoint this is a step in that direction. Hopefully given that a lot of doctors aren't available to see patients and so the adoption of telemedicine becoming mainstream is only going to do the industry a lot of good and hopefully democratize healthcare in some sense

Now onto do second story. Swiggy is integrating its premium service platform Scootsy, which had acquired in 2018. Thus far Scootsy has been operating by itself and Scootsy really is a premium service to deliver pretty much everything from food to baked goods, to stationary and services, to getting groceries from stores like Foodhall. So why is Swiggy integrating this now . Swiggy is building a category of premium customers and this is a major milestone towards this move given that Scootsy’s customer base is typically on the more premium side. Customers in the category want hygiene, quality and this is obviously going to get more attention in the post COVID world. Swiggy has already added high end restaurants at hotels, such as ITC, Marriott over the last couple of months and integrated services into its main app. So what does it mean for Swiggy’s other products, Swiggy Stores, Swiggy Genie. I think, this is great because it's hopefully going to help Swiggy with its unit economics, because the average order value for the likes of Scootsy is significantly higher. Just to give you some numbers, Scootsy’s average order value was about 750-1000 rupees, whereas Swiggy’s was 300 to 350. So that's almost a 3X jump here. Expect service to attract more high end chains and stores across its food delivery and hyperlocal platforms. So of course, all of this is great for consumers and what it really means is that Swiggy is focusing a little more on profitability which makes a lot of sense given that last part of his business has been affected in the current lockdown.

Our next story is a mini feature on COVID. And it's been a while I figured we will do some coverage to talk about not so much what's happened in other governments dealing with it. That's of course not something that, I'm an expert on, but move from the standpoint of what's what looking at, from the tech industry or the startup ecosystem lens. Just some high level numbers, there's pretty large spread of infection throughout the country. We have about 4.4 lakh cases, but the recovery rate is over 56%, which is pretty good. But the cases are on the rise of course, there's legitimate reason to be concerned. Now while the nation's lockdown has flattened the curve, the peak is yet to come and is expected somewhere around mid November, as predicted by the Indian Council of Medical Research. So, please be careful, stay at home.

So now let's try and understand what's the landscape and what the winners and the losers in the COVID era. Companies have been forced to focus on cash burn, revenue, growth, and customer retention, all of these, driving unit economics and profitability, and deep discounting on an average has pretty much gone away. Customers are more comfortable paying delivery fees. It's estimated that only 70% of startups have cash reserves that will last for less than three months. So there is a need for companies to start making money. especially because the economy still is, is suppressed. Sectors such as EdTech, Digital health, which we just talked about earlier and a streaming media, software services that are generally doing well with people being home. There is a need to help teams work better together, there is a need to keep people engaged and entertained. So while there has been a significant impact to a lot more of the omnichannel traditional, offline based businesses, there have been some new models that have emerged out of tech. There's a couple of interesting adaptations that, we'd like to cover.

The first one is a company called Park+, which focuses on automated parking. Now of course with people not going to malls and restaurants as much, the company has pivoted from just parking to checking the entry of customers, tracking movements within malls, online payments, notifying (noting) the entry and departure from a specific store in the mall or in a shopping complex and the number of people in a zone to help maintain social distancing. So very interesting pivot actually. No one would have thought that they would do a pivot like this in a pre-COVID world, but this is actually super, helpful, and hopefully a step in the direction of keeping us safe.

A second company is one called Staqu, which is a(n) AI based video analytics platform. The company has added a new feature to check if safety, precautions and guidelines are being met by staff and assessing through AI, whether social distancing is being maintained, particularly from the context of live streaming of kitchen. So think of your delivery services, think of your, your cloud kitchens, think of your favorite restaurants. People are paranoid about safety, and hygiene. And so these guys help you ease some of those fears. We might do a more detailed, deep dive into COVID, but this gives you some sense of what are the kinds of pivots or what are the kinds of changes companies have had to make.

Our 4th story is about Amazon's soft launch of its food delivery business. Food delivery we've covered a few times, in the past couple of episodes is of course dominated by Zomato and Swiggy, but in the COVID era, they've had to adapt, given that people have not been eating out, people have not really been ordering in as much, compared to the pre-COVID time.

Now Amazon is likely to include food delivery as part of its Prime program. In addition, Amazon Pay would certainly play a key role in this exercise, but for now, Amazon has done a small launch across four zip codes in Bangalore. If you remember Amazon just last month launched its grocery delivery service, Amazon Fresh and Amazon Pantry, which is basically same day and monthly groceries.

Now, why is Amazon doing this? And then what happens to Swiggy and Zomato? So from a philosophical standpoint, Amazon always invest in the long term and this gives Amazon the opportunity to get into a business that on the whole is very high frequency. From Amazon's point of view, they want to entrench themselves in the minds of consumers as much as possible. It also wants to cross sell other services and products across this platform. And this food delivery service potentially gives them this high-frequency business and gives them a lot of data on what people want to buy. Amazon's really probably looking at this from a subsidizing, the prime and Amazon Pay program's perspective. So food delivery helps acquire consumers- they burn a little bit of money, but on the whole, the Prime and Pay programs are strengthened. Swiggy and Zomato, as I mentioned are struggling since the pandemic and Amazon will likely charge low commissions, some restaurants helping it steal supply from those two. So it's going to be a little tough. Finally Amazon is an established player in the logistics space and although it hasn't been successful at food delivery abroad, expected to come armed and ready for this fight, as it's keen to learn about this business, because there's a huge opportunity.

Our final story is about exam-prep startup Unacademy, which has acquired a company called CodeChef. CodeChef is an 11 year old platform that helps programmers get a foothold in the computer programming. Space through active participation via. contests the Mumbai based company claims to have grown to over 10 lakh programmers globally.

It was started by Bhavin Turakhia, who was also the founder of Directi, which had a billion dollar exit pretty much to a Chinese company called media.net, and currently runs a companies like Zeta and Flock. Unacademy has been expanding rapidly recording record revenue growth in April and May. This acquisition puts it in direct competition with companies like Whitehat Jr. and Camp K-12, which also offer coding programs for youngsters. Unacademy also likely to make a foray in the K-12 space in the near future. The expansion in such a competitive space might be well-timed since the company has been successful in creating a brand that stands out in the market and acquire customers. You would have seen the likes of Saurav Ganguly, Virat Kohli and a slew of other celebrities make gusta building on Academy. However the risk is that too many such moves might jeopardize the company's growth and make them a basket case for the ‘too much too soon problem’ that the startup ecosystem in India has seen once too often. So expect more product updates from Unacademy, but hopefully they maintain some level of focus as they execute towards a pretty bright future.

That's all for the stories. Let's cover some funding updates. it's been an exciting time , for Indian startups, even though the funding landscape is of course not what it was.

Our first funding story comes from Postman, which is a collaboration platform for managing, developing, and testing application programming , interfaces or APIs. An API is essentially tools that help , software programs talk to each other, and postman's raised $150 million series C round. That puts it at a $2 billion valuation, which is huge. And the reason for that is the company has actually seen great traction. It counts over 11 million developers as part of its platform, across or half a million organizations.It's valuation, pretty much stems from the fact that it's the largest player in the space. And there are very few really good competitors globally. It's also speculated that this was an inbound request. As the company had just raised $50 million last year and clocks a very healthy $40 million to $50 million revenue run rate.

Our next funding update is a company called Healthplix, which has raised $6 million in a Series B round led by JSW Ventures with existing investors Chiratae and Kalaari Capital also participating. Healthplix is a four year old company that assists with clinical decision support, generates e-prescriptions and digitally manages the entire operations of clinics. With the latest investment, the Bangalore based company is looking to explore collaborations with the state government to bring COVID-19 disease information on a single platform.

Our final update is in a space I'm super excited about, which is the delivery of everyday goods and a company called Milkbasket has bagged $5.5 million in funding led by Inflection Point Zventures. This was founded in 2015 and the startups acquired over 130,000 households in cities like NCR, Hyderabad, and Bangalore. They;ve raised about $38 million so far and expect to be profitable this year. The milk delivery space is very exciting because it's a high retention, a high growth segment. Everybody needs milk. There's also a very interesting company called CountryDelight, which is very much in the same space. Although they do brand their own milk so, maybe not exactly the same, but kind of related.

Our next section focuses on covering interesting startups that I think are on the path to having disproportionate impact in their respective sectors. In this episode, I covered a company called Yulu. Now Yulu is a company that I've been tracking for a while and this is for me, the most exciting company in focus of the three that I've done so far.

Yulu is a micro mobility startup founded in 2017 December by Amit Gupta, Naveen Dachuri, RK Misra and Hemant Gupta. The founders are seasoned entrepreneurs. Amit, its CEO, was the former co-founder of marketing platform InMobi and RK Mishra, head of ecosystem partnerships comes with years of mobility and urban planning experience. The team is mostly from my IIT Kanpur. Yulu offers over 10,000 shared vehicles, including bicycles and EVs or electric vehicles.

Its vision is to help reduce traffic congestion and air pollution in cities. Currently it operates out of Bangalore, Pune, Mumbai, and Delhi. You might've seen one of their hard to miss lightweight EVs in its distinctive light blue color zipping through one of these cities. Most of you will be familiar with the words, shared mobility, pioneered in the startup world by the likes of Ola and Uber. Micro mobility though is a subset of this specific to small, lightweight vehicles operating at low speeds and focussed on distances typically less than about 10 kilometers. Yulu is focused on the sub 5 kilometer segment, or even more sort of micro then than the space as a whole. Now shared mobility is a huge space in India, but of course comes with its challenges as evidence by the fact that Ola and Uber are burning a lot of money.

As per a Morgan Stanley report, India is set to leapfrog personal vehicle ownership, and unsurprisingly is going to be a leader in shared mobility with shared miles expected to reach 35% of all travel by the year 2030. What this really means is people are going to own fewer cars and probably adopt platforms like Uber, Ola, Yulu, Bounce Vogo, et cetera, and probably many more to come, downstream. Our young smartphone centric population makes us a good testing ground for such ideas. Further, the government has shown a lot of inclination over the past year to work with private companies to create a policy framework that's necessary to make these startups a success. Now Yulu is a super interesting company to me because it has taken a very different approach - one that's very urban planning centric, of the mobility space.Also, I believe that the founders are truly mission driven because they've all made their money, they're, entrepreneurs once, twice in some cases, And, and this is reflected even in their product philosophy that they've chosen to have a hundred percent, , sustainable electric vehicle, human power led fleet.

They have a good GTM model as well, targeting housing societies and tech parks, a channel that's used regular traffic each day. So, daily commuters. Their EV named Yulu Miracle lasts for 36 months and probably costs about 15 K (rupees), which is a lot less than scooters you see its competitors running. This gives them a significant advantage in terms of its unit economics giving me some confidence that if they can aggregate demand, there is a business to be made out of this. The product also does not require users to have a driving license further removing friction on the consumer side.

A macro trend that you lose capitalizing on is the rise of urban transit systems in India, such as the Delhi and Mumbai Metro. Yulu has partnered with city governments and Metro councils to provide Yulu bike stations at each of these Metro stations, a model that has worked in a city with one of the best plan transit systems in the world - Tokyo, where incidentally, RK Misra has spend a lot of time. So , they're solving for two key use cases - the first one is, is first and last mile connectivity to and fro from, urban transit centers and the second one being daily commutes. They’ve also drafted the country's first micro mobility policy, which was approved and implemented in Pune.

Yulu to me feels a bit like organic farming, good for the people consuming the product and good for the environment. Yulu is taking along with it cities, transit systems, residential societies and more. I'd love to see how they evolve post the lockdown when people are less likely to use mass transit and may gravitate to the likes of Yulu. We will keep following them and report back to you.

That's all for this episode. If you enjoyed it, please do share the podcast with your friends and family and leave a review on the podcasting platform of your choice. We're sorry once again, for the delay in releasing this episode. We'll do our best to stick to the 1st and 16th schedule from hereon. Do write to me with your feedback. We're also looking for someone to help it promotions, social media, partnerships, and distribution for this podcast. It's a great opportunity to learn more about the Indian startup ecosystem and podcasting. Please send me a message at rahool@techbuzzindia.in if you're interested or know someone who is. And I'd also love to know if you think this should be a weekly podcast. I'd like to once again, welcome Shubham to the team. Until we meet again, stay safe and thank you for tuning in.

Music credits

Opening /closing sequence: Jungle Juice by Wataboi, Creative Commons —

In-track: Twenties by Peyruis

Attribution 3.0 Unported — CC BY 3.0