Hi Everyone,

Thanks for being a part of Teardowns thus far. We’ve really enjoyed pulling these together.

Over the past few weeks, we’ve tried several different formats and we’re excited to make some key changes based on the feedback we’ve received. In a nutshell, here’s what to expect:

• Fewer Teardowns – Rather than 2 per weekday, we’ll now be publishing ~3 per week. Expect these to come on Tuesdays, Thursdays, and Sundays starting with one tomorrow.

• Deeper Dives – Each Teardown will feature aggregated competitive intel and operational insights on the company.

• Single-Vertical Focus: Instead of publishing across a number of sectors, we’ll primarily be focusing on the fastest growing eCommerce and Retail companies globally. We’ll look at launching additional areas as dedicated newsletters in the future.

• A new name (!): Finally, given the vertical-focus we’ll be sharing Teardowns under a different name: The CommerceTech Newsletter. You’ll receive Teardowns from the new publication going forward so be sure to keep an eye out for it.

As always, we appreciate any and all feedback. Just reply to this email if you have any!

Ali

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Razor Group – Acquirer of merchants selling on Amazon

  • Founded: 2020. Funds Raised: $550M+. Revenue: $400M+.

• CarDekho – Auto-marketplace in India for new and used car sales

  • Founded: 2008. Funds Raised: $490M+. Revenue: $100M+.

Recent Teardowns

• Crehana – EdTech platform in LatAm offering over 800 courses

  • Founded: 2015. Funds Raised: $95M. Users: 5M.

• Aleph – A holding company with a suite of marketing solutions for advertising on digital platforms in emerging markets

  • Founded: 2005. Funds Raised: $470M. Revenue: $150M+.

• Bolt – Offering digital merchants streamlined online checkout experiences

  • Founded: 2014. Funds Raised: $950M+. Valuation: $11B.

• Acko Insurance – One of India’s largest digitally-native insurers

  • Founded: 2016. Funds Raised: $450M+. Valuation: $1.1B.

• ShareChat – Indian social media network with over 180 million users

  • Founded: 2015. Funds Raised: $1.2B. Valuation: $3.7B.

• Apna.co – A professional networking platform leveraged by over 22 million users and 200k employers

  • Founded: 2019. Funds Raised: $193M. Valuation: $1.1B.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

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These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2008, Rajasthan-headquartered CarDekho is a search and e-commerce platform that allows users to review, compare, buy and sell new and pre-owned cars. 

In 2021, the company became Rajasthan’s 1st unicorn after raising $250M, $200M in equity, and $50M in debt in a Series E funding round and is now valued at $1.2B. The company is backed by notable investors like Hillhouse Capital, Tybourne Capital, Sequoia Capital, HDFC Bank, Ratan Tata, Trifecta, and Times Internet.

It offers a catalog of more than 3,000 certified pre-owned cars from 4,000 used car dealers, traders, and entrepreneurs. In 2021, CarDekho announced its plans of going public in the next 18 months and expanding to 12 more tier-2 and tier-3 cities of India. 

On the Web: Website, Linkedin

Business Overview & Products

CarDekho’s website and app offer automotive content to its users which includes, pictures and videos of the extensive range of car brands and models available in India, Detailed specs and prices of these cars, expert reviews as well as a detailed comparison of cars. Offerings on the website include options for:

• New Car

• Used car

• Sell car

• Compare cars

• News and reviews

• Car loan

• EMI calculator

Besides functioning as a marketplace for cars, CarDekho has other ventures that support their primary venture of being a marketplace for all types of cars. 

• CarDekho Gaadi store: An offline showroom for cars. 

• Car Insurance

• Health Insurance

• Term life insurance

• Loan against cars

• Car tires

CarDekho operates in India, Indonesia, and the Philippines and its products are used in more than 30 countries globally. 

How It Works

Customers can browse through numerous lists in the new car’s option. They can also see options for service centers and different schemes that offer them discounts & deals. 

For the used car option, customers can browse through offerings, find dealerships that offer used cars, offer loans and valuations on used cars amongst other options. The platform offers both the option to buy cars as well as sell cars.

Additional features include a car comparison feature, road test videos, user reviews, EMI calculator as well as car loans to ensure that it’s a one-stop-shop platform for car dealings. 

Business Model & Pricing

CarDekho has multiple revenue streams, the most important one being lead generation for dealers. Customers after choosing a car of their choice, are given multiple options of car dealers nearest to their location. The customers can then select and contact a dealer of their choice. The company charges dealers money for generating leads for them and also provides lead management solutions by following up on the leads themselves and helping them close the deal. 

Moreover, it also collects money from car manufacturers in return for running its product advertisements on its website and applications. TrustMark certification, a used car certification, and warranty program act as a major source of revenue for the company, so do commissions that it earns by its partnerships with car loans and insurance providers. 

Traction

In 2020, the company reported a 25% growth in revenues, from $92M in 2020 to $114M in 2021. In 2021, it had a $100M revenue run rate and became the first unicorn of Rajasthan and 3rd unicorn in the used car retailing space by raising $250M, $200M in equity, and $50M in debt in a Series E funding round. The company was reported to have 51 million unique users as of September 2020 and its app had been downloaded more than 10 million times.

Founder(s) & Team

Amit Jain: CEO and Co-Founder at CarDekho. Amit, an IIT graduate previously co-founded GirnarSoft, a business value-based IT solutions, and services company. He also worked as Product Manager at Trilogy and as Software Engineer at Tata Consultancy Services. 

Anurag Jain: COO and Co-Founder at CarDekho. Anurag, an IITian previously co-founded GirnarSoft. He also worked as Senior Systems Consultant at i2 Technologies and as Seniors Operations Research Analyst at Sabre Holdings. 

History & Evolution

• Two graduates from the Indian Institute of Technology (IIT), Anurag Jain and Amit Jain, launched an IT outsourcing company called GirnarSoft after leaving their jobs and coming back to their hometown. They started emailing and calling billions of clients to get them on board. Once they started gaining traction, they hired a team, accumulated funds, and started CarDekho.

• CarDekho, a car search platform was launched in 2008 to digitize the auto ecosystem. Its main goal was to assist buyers of new cars and used cars to make informed buying decisions. It did so by offering a variety of support such as research tools, expert reviews, user reviews, on-road prices, pictures and dealers to help make the decision.

• In 2010, Comscore, the world leader in online audience measurement, ranked CarDekho as the No.1 Auto portal with 745,000 unique visitors for the month of June. 

• In 2014, CarDekho acquired Gaadi.com, one of India’s leading auto portals, and became the market leader of the automobile industry and helped them evolve in the pre-owned car market. That year it had a collective volume of 15 million visitors monthly. The company ventured into the world of television advertisements and as a result, its revenue grew 3x and unique visitors on site doubled as well.

• In 2015, CarDekho acquired ZigWheels, an automotive and motorcycling website, and BuyingIQ.com, an intelligent shopping engine. The company also launched CarBay.my in Malaysia and Thailand, both websites feature the products that established clear leadership for CarDekho.com in India. 

• In 2016, CarDekho acquired Help On Wheels, a roadside assistance firm. 

• In 2017, CarDekho partnered with Hero FinCorp to provide financing options to its used car buyers. It also created an in-house VR app that provided customers with virtual guided tours of commercial vehicles, test drives, and access to a lifelike experience like that in a showroom. 

• In 2018, CarDekho acqui-hired used cars platform Carbiqi and ventured into the auction model. 

• In 2019, CarDekho expanded its global footprint by acquiring an online car classifieds site, Carmudi Philippines. It also reported a revenue of $35M, a 62% increase from the previous fiscal year.

• In 2020, CarDekho witnessed a surge in customer traffic on both its website and apps. The brand moved from 13 million unique users to 15 million unique users within the span of one month. This was courtesy of their pandemic strategies, like providing health insurance to dealers and introducing home inspections to limit customers’ visits to the store.

• In 2021, CarDekho became Rajhastan’s first and India’s third unicorn in the used-cars auto space after raising $250M in a Series E funding round, raising its total valuation to $1.2B. It also moved towards a home inspection model, where the company will purchase cars only after a home inspection keeping in mind the coronavirus crisis. 

From archive.org 

Market Snapshot

• In 2020, India was the 5th largest auto market and it is expected to grow more than 2.3x to $512B by 2026. In 2021, the industry was valued at $222B.

• The industry received $30.51B worth of Foreign Direct Investment (FDI) between 2000 to 2021.

Additional Learnings

CarDekho’s unique features are what make it stand out from its competitors. The company’s website allows users to search cars by price, manufacturer name, and the model number of features. It also lets them compare four cars side by side, giving consumers a clear idea of the pros and cons of each car. Users can see how a car looks from inside and outside with the help of videos, snapshots, and a 360-degree mode where you can zoom in for a closer look. One user favorite feature is also the TrustMark certification for used cars that pass the 217-point inspection by CarDekho’s technical team. These checkpoints include the car’s steering, transmission, interiors, tires, suspension, and engine. The platform empowers users to buy used cars without the fear of being scammed. 

Suggested starting points to dive deeper

• How CarDekho is zooming ahead amid Covid2019 pandemic (Dolly Mahayan, Indian Television, Nov ‘21)

• CarDekho is eyeing a public listing in the next 18 months: CEO Jain (Tarush Bhalla, Live Mint, Oct ‘21)

• Exclusive: CarDekho shuts down over 20 stores amid move to home inspection model (Soumyarendra Barik, EN Tracker, Sept ‘21)

• Amit Jain, 40, Anurag Jain, 38, Co-Founders, Cardekho - Open The Magazine (Amita Shah, Open The Magazine, Oct ‘17)

• Making sustainable automobile classifieds product from Jaipur: CarDekho's story (Jai Vardhan, Your Story, Dec ‘15)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in August 2020, Razor Group is a consumer holding company that partners with ecommerce brands to acquire their Amazon FBA businesses. It then scales these brands by using growth capital and in-house ecommerce expertise. The company focuses on specific product categories and aims to enhance value in the long-term while maintaining customer satisfaction. 

Based out of Berlin, Germany, Razor Group also has operations in Austin, Hangzhou, London and New Delhi. To date, it has raised a total of $559.8M in funding over 8 rounds. In November 2021, the company was valued at $1B+.

About Razor Group: Website, LinkedIn

Business Overview and Products

Razor Group acquires businesses it deems worthy from 3rd party sellers on Amazon and scales them up. The targeted brands are typically generating between $1M and $15M in annual revenues. A 3-step process is followed for acquiring the business. 

Once a potential brand has been identified, the first step involves Razor having a call with the seller to learn more about their business to assess whether it would be a good match to bring onboard with the ‘Razor Ecosystem’. The process moves forward if both parties are willing.

Next, Razor deep-dives into the business. It quickly evaluates the important aspects of the brand (at no cost) by looking into the key financial data, P&L and operations of the business. This enables Razor to have a fair evaluation of the business. A deal structure is agreed upon and a Letter of Intent is signed where both parties agree on a purchase price and move further in the process. 

The final step is closing and integration. A Due Diligence process takes place where the target business’s commercial, financial and legal history is checked by Razor’s Due Diligence team, financial advisors and lawyers. Razor transfers the payment within the next week. The total process spans roughly 6 weeks – from the valuation of the Amazon FBA business to getting all the documents cleared and finally transferring the seller’s money to their bank account.

How It Works

Razor identifies FBA businesses that have the potential to grow and then acquires them from 3rd party sellers. The technology they use performs massive due diligence and rapidly evaluates the businesses’ performance to shortlist those for acquisition. Some of the criteria used for evaluation includes checking product quality, customer ratings, product complexity and growth potential. They bypass any reliance on brokers for these acquisitions due to the efficiency of their own algorithms which leads to better pricing.

In such a quick process, the group aims to reach these lucrative businesses faster so they are able to build strong relationships with the sellers without any time pressure. After screening, shortlisting and acquiring new brands according to the criteria, Razor proceeds to streamline and scale operations for these brands through its proprietary tech stack. This includes technologies such as DoubleClick Conversion, Google Analytics, Google Global Site Tag and more. It also diversifies sales channels, turning the brand into a multichannel business and eventually reducing its dependency on Amazon.

Razor’s data processing then provides insights to grow these businesses and figure out viable options to sell them on platforms other than Amazon. 

Business Model and Pricing

Razor Group’s business model is based on integrating select merchants into a wider operations framework run by the company. This is called the ‘FBA Rollup’ model, whereby businesses that have been built on the platform provided by Amazon are consolidated. 

In terms of pricing, Razor’s valuations are flexible to accommodate a seller’s preference. For example, some sellers prefer upfront payment, others prefer participating in the growth journey through profit sharing or to stay onboard post-acquisition. The baseline deal structure that Razor offers has two components:

• A base purchase price, paid to sellers immediately upon acquisition 

• A profit sharing scheme, an opportunity for sellers to continue to share profits after acquisition. Generally, 20%–50% of additional profits reaped in the first 2 years of acquisition are shared with the seller.

As explained by founder Jonas Diezun, Razor’s valuations generally range from a multiple of 2.5x–6x on net profits. This includes both base purchase price as well as profit share.

Traction

In May 2021, founder Tushar Ahluwalia stated that the group was on track to cross $120M in sales from the 30 brands it had acquired. The company also predicted crossing $480M in sales in the following 12-15 months. In November 2021, Razor Group shared that it is on track to having 80+ merchants onboard by the end of 2021 and is aiming to pass $1B in sales in 2022. The company had analyzed roughly 1.5M Amazon merchants and shortlisted about 80K of them so far. 

Moreover, the company was overall profitable in 2021, and earned $400M in revenues for the year. According to CEO Tushar Aliawala, 70% of Razor’s revenues were reaped from the US, and 12% of revenues were generated from platforms other than Amazon. The company aims to increase that share to 20% in the next 3 quarters. 

Founder(s)

Tushar Ahluwalia: Co-founder and CEO. He spent the last decade building market-leading consumer tech companies like StalkBuyLove, a D2C fast-fashion private label company.

Jonas Diezun: Co-founder and CCO. Recently he founded two direct-to-consumer businesses, Franksmile and Radice. Prior to his founder's experience Jonas was CMO at Konux.

Christoph Felix Gamon: Co-founder and VP Acquisitions. Prior to Razor he was Venture Director at Rocket Internet for several years and TMT investment banker at UBS.

Oliver Dlugosch: Co-founder and VP Operations. Prior to Razor he worked at McKinsey & Company as a consultant for several years while completing his PhD in Economic Sciences. 

Shrestha Chowdhury: Co-founder and VP Tech/Analytics. Prior to Razor, she was the Chief Product Officer at StalkBuyLove, where she led the Technology and Digital Marketing functions. 

History and Evolution

Note: Currencies have been converted from Euro to Dollar based on a currency converter.

In an article by founder Jonas Diezun, he explains that amidst the coronavirus pandemic, the e-commerce sector was provided a catalyst to grow. In particular the online presence of the retail sector grew significantly, and the pandemic brought forth new online shopping behaviors. Sellers on Amazon were (and still are) bringing amazing businesses through the platform. These factors were taken into account by the founders as they established Razor Group.

The Razor Group was founded in 2020 and has been doing quite well in its short operating history. Based out of Berlin, Razor quickly began partnering with e-commerce merchants to acquire and scale their brands. Its goal since inception was to focus on specific product categories and growing long-term value. 

According to Techcrunch, by May 2021 the company grew to 107 employees across 4 offices. It also acquired a mixture of debt and equity funding. The equity was meant to be invested in the startup itself and the debt was to be used for acquisitions. Considering $375M of the total $400M was debt funding, it highlighted Razor Group’s ambitious goals for acquisitions. 

In November 2021, Razor Group closed a $125M Series B funding round. According to the founders, the company plans on using these funds to continue to expand its business reach and diversify its portfolio. Today, it has a diversified portfolio of FBA brands across Europe and the US operating in multiple categories.

Despite the existence of several other companies following the same business model as Razor Group, it believes that its particular point of differentiation is the technology it uses in the process of identifying and buying brands, and then growing them. Through its specific technology, the focus also lies in the quick response to the market, which includes snapping up businesses that have potential faster than their competitors. For example, the ‘M&A 2.0’ Platform that Razor uses evaluates about 1 million companies each week as they perform on platforms like Amazon. 

Additional Learnings

• The May 2021 funding round of $400M had the involvement of FJ Labs and Global Founders Capital, the VC firm co-founded by the Samwer Brothers who are well-known for their e-commerce incubator Rocket Internet. Two of Razor’s co-founders, Ahluwalia and Gamon, are Rocket Internet alums, which may or may not have played a role in securing the support of the VC firm.

• Two of Razor’s co-founders, Ahluwalia and Chowdhury, had also previously worked on an e-commerce business in India called Stalkbuylove. However, the business ran out of cash and shut down.

• Startups that have been founded on an opposite business model are also cropping up. For example, an e-commerce company called Jungle Scout provides tools to these 3rd party sellers that helps them stay independent and grow. They also help them become more valuable for acquisitions by firms such as Razor Group. 

• By November 2021, 12% of Razor’s revenue comes from platforms other than Amazon and the company aims to reach 20%.

Market Snapshot

• In 2019 alone, 2.5 million merchants sold goods worth R €200B globally via Amazon. The US is the largest country on Amazon’s marketplace and Germany is the second largest.

• By May 2021, it was estimated that there were about 5 million 3rd party sellers on Amazon, whereby more than 1 million sellers had joined the platform in 2020 alone.

• Of the startups following this model, Razor’s numbers indicate it is one of the biggest startups in Europe as of November 2021 and more than 70% of its revenue comes from the US.

Suggested Next Reads 

• Selling your Amazon Business with Razor (Medium, April ‘21)

• Berlin’s Razor Group raises $400M to buy and scale Amazon Marketplace merchants (TechCrunch, May ‘21)

• Berlin’s Razor Group raises $125M at a $1B+ valuation for a platform to buy and scale third-party Amazon merchants (TechCrunch, November ‘21)

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Crehana – EdTech platform in LatAm offering over 800 courses

  • Founded: 2015. Funds Raised: $95M. Users: 5M.

• Aleph – A holding company with a suite of marketing solutions for advertising on digital platforms in emerging markets

  • Founded: 2005. Funds Raised: $470M. Revenue: $150M+.

Teardowns from earlier this week

• Bolt – Offering digital merchants streamlined online checkout experiences

  • Founded: 2014. Funds Raised: $950M+. Valuation: $11B.

• Acko Insurance – One of India’s largest digitally-native insurers

  • Founded: 2016. Funds Raised: $450M+. Valuation: $1.1B.

• ShareChat – Indian social media network with over 180 million users

  • Founded: 2015. Funds Raised: $1.2B. Valuation: $3.7B.

• Apna.co – A professional networking platform leveraged by over 22 million users and 200k employers

  • Founded: 2019. Funds Raised: $193M. Valuation: $1.1B.

• Optoro – Offering a reverse logistics solution to brands and retailers in the U.S.

  • Founded: 2010. Funds Raised: $252.8M. Good Process: $100M+.

• Digit Insurance – One of India’s largest digital insurance brokers

  • Founded: 2016. Funds Raised: $500M+. Valuation: $3.5B.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

Changing Email Preferences

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These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Aleph is a leading global enabler of digital advertising. It connects the largest digital platforms with thousands of advertisers and billions of consumers in emerging and underserved countries. It has commercial and exclusive agreements with over 25 digital platforms including Twitter, Meta, LinkedIn, Snapchat, TikTok, Spotify and Twitch. Aleph also utilizes its global footprint and end-to-end digital advertising solution to enable advertisers in 72 countries to maximize their digital advertising potential. 

It is headquartered in Miami, Florida, and has managed to raise $470M in a single private equity round. It was last valued at $2B.

About Aleph Holding: Website, LinkedIn

Business Overview and Products

Aleph works with leading digital platforms such as Facebook, Twitter, LinkedIn, Snapchat, Spotify and 15 others. It represents them across 50+ markets in Latin America, Europe and APAC. It helps advertisers maximize the value of their investment through a combination of innovative proprietary technology, digital expertise and local market knowledge. 

The teams at Aleph help brands master the leading digital platforms, bringing them closer to their customers. These services are delivered through Aleph’s portfolio of digital media service brands, which include IMS; Httpool; WISE.BLUE; and Social Snack. 

How It Works

Aleph is a holding company that owns a suite of digital media service companies through which it enables advertising on digital platforms across geographies. The primary focus is on advertising in under-served markets. This suite of companies includes internet media services such as IMS, which focuses on Latin America; and Httpool which focuses on Europe and Asia. It also has Social Snack, a content and creative development agency; and WISE.BLUE, the largest performance tech-API platform for Twitter. Aleph also helps advertisers maximize the value of their investments through partnerships.

Business Model and Pricing

The Aleph business model works with a unique combination of innovative technology, local market knowledge, and trusted relationships with advertisers. Aleph generates revenue by helping corporations and social media companies work with each other in regions mainly outside the US and Europe. According to Aleph’sfounder Gaston Taratuta, roughly 90% of Aleph’s revenue is generated from outside the US. 

Traction

In 2020, Aleph achieved $475M in sales. According to Aleph executives, the company has been on track to double its annual revenue in 2021 to roughly $150M and grow its gross advertising sales to be $1B. It has also catered to more than 20 partners and over 5,000 clients across the US, Latin America, Europe and Asia. It has now also entered the MENA region and increased its presence to over 90 markets in the world.

In 2021, Aleph grew revenues from its top digital platform partners by 190%. Moreover, its list of new clients has grown 26%, serving over 10,000 advertisers globally.

Founder(s)

Gaston Taratuta: Founder and CEO at Aleph. Gaston has 20 years of experience in the digital marketing industry. He founded IMS in 2005 and now oversees all IMS sales teams and manages the company’s strategic direction. 

Aljoša Jenko: Partner and CEO at Aleph. He has extensive international experience as entrepreneur, CEO and digital advertising specialist. He co-founded several advertising, media, software and technology companies across Europe, Asia and the US. 

Ignacio Vidaguren: Partner and COO at Aleph. Ignacio joined IMS as the new COO, responsible for expanding IMS products and services, developing new revenue opportunities and overseeing the company’s day-to-day business operations. 

Mariano Roman: Partner and CTO at Aleph. He has 26 years of experience in leading media agencies such as Universal McCann, Agulla & Baccetti and MediaCom, where he was the CEO for Latin America. 

History and Evolution

Aleph was originally founded as IMS (Internet Media Services) by Gaston Taratuta in 2005 in Miami. However, in 2015 the company sold a 51% stake to Sony Pictures Television for roughly $100M. Some of this stake was repurchased by Gaston and his fellow co-founders in 2019 and the name Aleph was coined. Sony continued as a minority shareholder. 

In July 2021, Aleph Holding reportedly sold a stake to private-equity firm CVC Capital Partners for $470M, which valued the company at $2B. This fundraising will allow existing employees and shareholders, including founder Gastón Taratuta, to sell stock. It is also rumored that the company is preparing for an initial public offering as soon as early 2022. However, before the IPO takes place, Aleph hopes to continue expanding its offerings in developing countries through acquisitions.

Additional Learnings

• Just after the $470M fundraising round, Aleph announced the acquisition of an 86% stake in Egyptian advertising platform Connect Ads, in a deal comprising cash and stock.

• In January 2022, Aleph announced that twitter had made a minority investment in the company. The investment will help support Aleph’s educational efforts worldwide. These include building a proprietary educational tech platform, digital advertising training and certification to over 50,000 digital professionals in 90 countries across 5 continents, and efforts to create new digital jobs in underserved markets. Aleph is currently an exclusive advertising partner for Twitter.

• In August 2021, Latin American Fintech company MercadoLibre agreed to acquire a $25M stake in Aleph and will (in collaboration) monetize advertising space on MercadoLibre’s digital properties in countries where MercadoLibre does not have local sales operations.  

Market Snapshot

• With the explosive growth of digital advertising, many brands across the world have been able to reach their customers faster and more accurately than ever. According to eMarketer, global digital advertising spending is expected to reach $455B in 2021.

• While Facebook and Youtube have been most popular in terms of user base and ad spending, other platforms have become just as useful for advertising companies to use for their benefit. For example, in 2021, TikTok had 732 million active users and Snapchat had 514 million, making these apps the 7th and 11th most popular social media platforms in the world.

• According to a study by Hinge Research Institute, brands that embrace digital marketing can grow as much as 4x faster and be 2x more profitable than brands that stick to traditional marketing methods.

Suggested Next Reads

• A new unicorn on the digital advertising market: Aleph Group, owner of Httpool in Romania, receives a CVC investment (Business Review, July ‘21)

• Aleph Holding, Aiming for 2022 IPO, Sells Stake to CVC (The Wall Street Journal, July ‘21)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2015, Peru-headquartered Crehana is an online education platform that aims to provide over 800 courses in 16 categories. It caters to companies and individuals looking to close the reskilling and upskilling gap in Latin America. The platform consists of more than 400 Spanish-speaking professionals and instructors who help users develop and refine digital and creative skills. 

Crehana has managed to cover the entire value chain from discovering and analyzing the skill gap, to offering courses to help upskill individuals as well as providing the feature to track their progress. As a result, users on the platform are able to master new tools of the trade as well as stay updated with the constantly changing industry demands. 

The company’s latest funding was in October 2021, where it raised $70M in a Series B funding round led by General Atlantic. This was by far the largest Series B funding round in Latin America for an edtech company. It experienced triple-digit growth in 2020 and is supported by marquee investors like General Atlantic, Mountain Nazca, Salesforce Ventures, Rethink Education, ALIVE Ventures, IFC, and Dila Capital, among others.

On the Web: Website, Linkedin

Business Overview & Products

Crehana offers project-based courses in Spanish in the following categories:

• Digital Marketing 

• Digital Illustration

• Leadership

• Soft Skills

• Graphic Design 

• Drawing and Painting

• Digital Transformation and Innovation

• Data and Analytics 

• Sales

• Design of Products 

• Photography

• Video

• Productivity and Software 

• Entrepreneurship and Business

• Lifestyle

• Crafts and Cooking

• Web Development and Technology 

• 3D Modeling and Animation

• 2D Animation

• Administration and Finance

• Service and Customer Service

• Digital Architecture 

While the company’s headquarters are in Lima, Crehana has footprints in Latin American locations like Mexico, Argentina, Colombia and Spain.

How It Works

As an education platform, Crehana provides highly curated Spanish online courses to individuals and companies with an aim to revolutionize education for creatives. Companies use this platform to develop their enterprise’s talent by upskilling them and in the long run, increasing the performance of their teams. 

It offers project-based courses that are spread across 16 categories like digital marketing, graphic design, animation, leadership and craft courses. These courses are between 3-8 hours so that students find it easier. The short video classes are proven to generate 22% greater recall as compared to traditional education methods. Users are also provided reports measuring their progress so they can plan their study sessions accordingly.   

Users that sign up for Crehana’s premium membership get access to a personalized and specialized mentor who accompanies them throughout the course. Moreover, users can also schedule personalized sessions with mentors to resolve any academic queries that they may have about their project. For urgent questions, they have access to a chatbox from Monday to Friday where these instructors are available to communicate with them. 

At the end of each course, students are assigned personalized projects to ensure they have successfully mastered the skill they were taught. After the mentors review projects, they provide feedback to users on whether or not additional skill development is needed. 

Once the course is complete, users receive certificates signed by educational partners of the platform. These certificates can be shared on social media platforms or uploaded on the Crehana website to validate the user’s course completion journey. 

Instructors and professionals share their knowledge by teaching online courses while Crehana handles their fees payment and marketing expenses. The platform also has a profile page for each teacher, so before selecting a course, students have the option to review the profile page of their teachers and evaluate their portfolio, degree, and work experience. 

Crehana Careers is launched for digital professionals who are looking to either enhance their skills or increase their employment opportunities. These new courses are aimed at developing in-demand creative skills and focus on topics like digital illustration, 3D modeling, motion graphics and more. 

To simplify the learning process, these courses are designed in a way that students can finish them quickly. Each career has five modules with 2-3 courses of 3 hours duration. If a user spends 8 hours per week for four months on Crehana, they are able to learn skills that help them score better jobs. 

Business Model & Pricing

Crehana has a B2B2C model where it caters to both individuals and businesses through its online education platform. In order to target business owners, the company launched Crehana for Business which provides a cloud-based learning ecosystem along with numerous learning modules that can be priced and adjusted according to the needs of users. 

The platform has a subscription-based model where users that buy the premium model get special privileges like exclusive online specializations, access to all courses, mentoring services, academic advising, personalized chat support, access for multiple users, exclusive call support, etc. Individuals can get a subscription for $69/ per annum, whereas duos or families have to pay a higher price of over $100. 

Crehana earns revenue from the subscription fee it charges customers that sign up for a premium membership. The company claims that 50% of its revenue comes from Crehana for Business, which targets businesses looking to upskill their staff. 

Traction

Crehana experienced triple digit growth in 2020 as the world went online due to the pandemic. It also claimed 4x year over year growth during 2019 and 2020. Amidst so many businesses shutting down, people moved towards online education platforms where they could learn new skills that open up employment opportunities for them. This is why the company experienced massive growth during the coronavirus lockdown. 

Crehana prides itself on helping learners double their income after taking courses on the platform. According to a recent analysis, 60% of professionals who spend 3-4 hours/week on the platform are able to quickly find new jobs either permanent or freelance. Whereas 80% of active users get twice the amount of offers every month. 

According to statistics on the website:

• The company has more than 400 experts on board

• It offers more than 800 courses in 22 categories

• These courses teach 100,000+ techniques and competencies

The company was reported to have 5 million users in 2020 and the app was downloaded more than 500,000 times. 

Founder(s)

Diego Olcese Diaz: Ceo and Co-founder of Crehana. Previously co-founded Flikn, an online education marketplace that enables users to learn and share skills

Rodolfo Dañino Ruiz: COO and Co-founder of Crehana. Previously co-founded Flikn, an online education marketplace, and served as a cohort member at Emerge Education, a leading ed-tech seed-stage investor. 

History & Evolution

• In 2013, Diego Olcese, a young graduate became infatuated with the idea of technology changing workplaces after visiting corporations like Google and Coursera. That combined with his fascination for the internet facilitating access to education, motivated Diego to create a virtual space where users could find helpful content to improve their career trajectory. 

• In 2015, Diego and Rodolfo Dañino founded Crehana, an educational platform that provides short courses to help customers develop technical skills. These are for particular projects like how to use social media to boost business, graphic design for advertising, interpret sales projection data and more. 

• In 2018, the company launched its IOS and Android apps in a bid to make its platform more accessible to students. Courtesy of the app, users can learn both online and offline wherever and whenever they want. They can also download videos and material for times when they do not have access to the internet.  

• That year the company also launched career courses to educate students in creative skills. The aim was to help learners who wanted to enhance their digital skills or increase employment opportunities by engaging them in short practical courses. 

• Along with the launch of new courses and apps, the company also expanded to Spain to maximize its reach globally. 

• The company experienced tremendous growth during the coronavirus pandemic with a 48% increase in browsing time with tablets and a 36% increase in mobile phone traffic. Crehana partnered with Peru’s University of Engineering and Technology (UTEC) to offer specialist courses to its users to meet their ever-growing demand. As a result, the platform exceeded 3.5 million users in the midst of the coronavirus pandemic. 

• In 2021, with Crehana’s recent Series B funding, it planned to use the funds to launch operations in Brazil. 

From archive.org 

Market Snapshot

The edtech market in Latin America is the 4th largest edtech market in the world. By 2023, it is estimated to earn a revenue of more than $3B growing at a CAGR of more than 4% from 2018 to 2023.

The largest users of self-paced learning in the Latin American market are countries such as the Dominican Republic, Honduras, El Salvador, Peru, Bolivia, Ecuador, Guatemala, Colombia, Brazil, and Chile. Brazil is the largest player in the edtech market of Latin America.

Additional Learnings

• Crehana has experts like Dore Hernandez, the Head of Small Business Sales at Google, Francis Serbia, Senior Product Manager at Amazon, Michael Castuera, Coach and HR Executive at Uber, Melissa Lucero, Head of Ecommerce and CRM at Loreal on board so that students on the platform can directly learn from industry experts. 

• Marcus Dantus, businessman and investor shark of the Sony Channel program Shark Tank Mexico partnered with Crehana to introduce a new course called ‘Attract and convince investors with Marcu Dantus’ with an aim to develop skills of entrepreneurs so they can synthesize and pitch an idea to investors in a company.  

• The majority of the students are from Mexico, Colombia, Peru, Spain and Argentina. 

Suggested starting points to dive deeper

• Latin Entrepreneurs: Diego Olcese, founder of Crehana (The Latin Way, January ‘22)

• As edtech evolves, LatAm reskilling platforms raise millions to bring outcomes into the mix | TechCrunch (Natasha Mascarenhas, TeChcrunch, August‘ 21)

• Can you be taught how to be creative? This Peru startup thinks so (Sam Brake Guia, Peru Reports, May‘18)

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Bolt – Offering digital merchants streamlined online checkout experiences

  • Founded: 2014. Funds Raised: $950M+. Valuation: $11B.

• Acko Insurance – One of India’s largest digitally-native insurers

  • Founded: 2016. Funds Raised: $450M+. Valuation: $1.1B.

Teardowns from earlier this week

• ShareChat – Indian social media network with over 180 million users

  • Founded: 2015. Funds Raised: $1.2B. Valuation: $3.7B.

• Apna.co – A professional networking platform leveraged by over 22 million users and 200k employers

  • Founded: 2019. Funds Raised: $193M. Valuation: $1.1B.

• Optoro – Offering a reverse logistics solution to brands and retailers in the U.S.

  • Founded: 2010. Funds Raised: $252.8M. Good Process: $100M+.

• Digit Insurance – One of India’s largest digital insurance brokers

  • Founded: 2016. Funds Raised: $500M+. Valuation: $3.5B.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

Changing Email Preferences

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Manage Subscription

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2016, Karnataka-headquartered Acko Insurance is India’s leading Insur-Tech company that offers insurance policies through its digital platform. Alongside policies, it also provides bite-sized innovative products to consumers by partnering with tech companies. 

Acko Insurance has revolutionized the insurance industry by digitalizing it with zero paperwork hassle. The company claims to be the fastest-growing insurance company in India by serving over 70 million customers and clocking $175M in premiums annually. 

In 2021, the company entered the unicorn club after raising $255M in a Series D funding round led by General Atlantic, bringing its total valuation to $1.1B. It is backed by notable investors like Amazon, Accel, Catamaran Ventures, SAIF Partners, and Swiss Re Transamerica Ventures. Moreover, to launch its innovative products, it has partnered with leading brands like Ola Cabs, Zomato, Amazon, redbus, Rapido Bike Taxi, and OYO. 

On the Web: Website, Linkedin

Business Overview & Products

Acko General Insurance provides insurance products in the following categories: 

• Car & Taxi

• Bike

• Health

• Electronics 

The company operates digitally across India but has no physical location.

How It Works

Acko Insurance is a digital platform that provides insurance policies for cars, taxis, bikes, health, and electronics. Moreover, the company also develops innovative bite-sized products by partnering with online commerce platforms. These products include driver protection, ticket cancellation insurance, and rider protection. For instance, the company partnered with Amazon Pay to provide customers with car and bike insurance with zero paperwork. The buying process is seamless as the policy can be purchased within a few minutes and also includes a one-hour pick and three-day assured claims servicing for vehicles.   

The platform has also partnered with Ola Cab to provide customers cover for loss of baggage, emergency hotel requirements, missed flights and loss of a laptop, etc. These policies of INR 5 lakh ($6,610) can be availed for INR 1 ($0.013). The collaboration also allows users to opt for an in-trip insurance cover while booking an Ola ride.  

The platform offers customers a seamless and convenient platform with no offline hassle. Without the paperwork, everything from purchase to claims and renewals is done digitally. With an online insurance model, the company is able to carry out better data-backed underwriting and process claims quicker. All of this leads to a low cost of acquisition as well as sales. 

The company also customizes pricing by leveraging the vast amount of industry data available from organizations such as the Insurance Information Bureau. These sources provide national-level data on cohorts, cars, location, region, historical claims ratio, and more. For instance, bike owners who have a history of fraud claims are offered higher prices, while lower prices are quoted to customers with good driving history. 

Business Model & Pricing

Acko insurance has a direct-to-consumer approach where it offers insurance policies to consumers via its online platform. Moreover, it provides bite-sized insurance products like ticket cancellation, mobile protection, and rider insurance by partnering with major tech companies. 

The company’s digital model does not involve any third-party agents and as a result, Acko Insurance incurs less expense and passes on the savings to consumers in the form of low premiums. The company earns money through its insurance schemes.

Traction

Acko Insurance witnessed a 120% growth in sales of insurance policies for automobiles in the first quarter of 2021 as compared to 2020. It also posted $10M in Gross Written Premium in the first quarter of FY22, which is a 1.16% growth from the same quarter of FY21.

The company reported 3X growth in annual revenue to $26M in 2020 from $8M in 2019. In 2020 they also witnessed 688% increase in claims, from 1,95,695 in 2020 to 24,831 in 2019. Moreover, new customer growth increased by 2.5x in metro cities and by 3.5x in non-metro cities. 

To date, the company has provided 800 million insurance policies to over 62 million unique customers and their app has been downloaded more than 1 million times. The website was reported to have over 4 million monthly users and reported a consistent increase in traffic by 161% in the April to June quarter of FY22.

Founder(s)

Varun Dua  (LinkedIn): CEO and Co-Founder at Acko Insurance. Prior to launching Acko Insurance, Varun also founded GlitterBug Technologies and Coverfox Insurance. He also worked as Marketing Manager at Franklin Templeton Investments and Tata AIG Life Insurance.  

Ruchi Deepak (LinkedIn): Co-Founder at Acko Insurance. Ruchi has also served as a Board Member at Pitstop, a platform that offers general repair and maintenance services for cars through its doorstep service.

History & Evolution

• In 2016, Acko Insurance was founded by Varun and Ruchi claiming to be the first digital insurance service provider in India.

• In 2017, the company received its license from the Insurance Regulatory and Development Authority of India (IRDAI).

• In 2018, Acko Insurance partnered with Ola Cabs to provide in-trip insurance to their customers in more than 110 cities in India.

• In 2019, the company received the ‘Golden Peacock Innovative Product Award’ for its bit-sized insurance product, Ola Ride Insurance.

• In 2020, Acko Insurance partnered with Amazon Pay to provide auto insurance policies to their customers. The company also partnered with HDB Financial Services to offer microinsurance on HDB Aabhar Cards (EMI cards). 

• In 2021, Acko Insurance concluded its first Employee Stock Ownership Plan (ESOP) liquidity program. It was valued at $2M for 40 employees who have served long-term at the organization. 

From archive.org 

Market Snapshot

According to a report by TechSci Research, the Indian digital insurance industry is estimated to reach $165.02B by 2024 at a CAGR of over 13% from 2019 to 2024.

In India, the digital influence on insurance sales is 13% for life insurance, 15% for health insurance, 9% for motor insurance, and 21% for travel insurance. Roughly, $1B of new insurance sales are digitally influenced.

Additional Learnings

Acko Insurance mainly stands out from its competitors because of its digital direct-to-consumer model. The company claims to be the first fully digital insurance provider in India that deals directly with customers, without involving a middleman or agent. This in turn makes its operations cheaper than other rivals and the company is able to provide 30-40% discounts on premiums. 

For IPL 2022, Acko Insurance has signed 5 teams including Delhi Capitals, Mumbai Indians, Sunrisers Hyderabad, Kolkata Knight Riders, and Gujarat Titans as its sponsor. 

Suggested Next Reads

• Can Digital Insurance Startup Acko Disrupt The Complex Sector? (Rajiv Singh, Forbes India, Dec ‘20)

• Digital adoption helps ACKO auto insurance business grow 120 percent over one years (Business Standard, July ‘21)

• Acko – A Silent Storm Disrupting The Insurance Market (Sourav, Next Big Brand, July ‘19)

• Why Amazon has invested $12 million in Indian startup Acko (Business Today India, May ‘18)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2014, Bolt offers online checkout technology to retailers. It streamlines online shopping and payment methods, which are otherwise fragmented, into a seamless experience. This enables people to have more options when shopping online. Bolt now has millions of shoppers and top brands within its network.

Bolt strives to help merchants of all sizes sell more, grow faster and be more competitive against giants like Amazon. It takes on the checkout-related challenges of a retailer, and also provides solutions such as superior fraud detection services.

Bolt is headquartered in San Francisco, California with offices in Salt Lake City, Toronto, and New York City. It has managed to raise a total of $963.1M via 11 funding rounds. Bolt was last valued at $11B and has experienced 2 more funding rounds since.

About Bolt: Website, LinkedIn

Business Overview and Products

Customers often abandon their shopping carts because the lengthy checkout process requires them to log in and add their information when they order from a company for the first time. As a solution, Bolt’s software lets shoppers buy across different online sellers’ sites without being prompted to log in every time they want to make a purchase. This is called the one-click checkout and it solves an essential problem for e-commerce firms.

Bolt’s core offerings include the Bolt Network, which connects retailers with shoppers. Other offerings include the One-Click Checkout. Here, shoppers save their basic information during their first purchase within the network, so they never have to enter personal or payment data againing the core offering. Bolt Commerce is another service where valuable first-party data and unique shopper insights can be leveraged to turn one-time shoppers into life-long customers. Bolt Payments makes collecting payments very easy. Lastly, Fraud Protection protects retailers from many things including fraudulent chargebacks and false positives. 

Bolt CheckoutOS is the engine that powers identity accounts, one-click checkout, fraud prevention and payments for the Bolt Network. It enables retailers to create a tailored, localized buying experience for their customers and maintain a connection to them. This system results in many positive changes such as decreased number of abandoned carts, higher checkout conversions, and a way to build lifetime relationships with customers worldwide.

How It Works

Joining the Bolt Network means a retailer can offer shoppers a one-click checkout with no passwords, forms or payment details even if they have not visited the site before.  Other issues that Bolt takes care of include the complicated technological challenges involved in the checkout, fraud detection and digital wallets.

From the first moment retailers go live with Bolt, they can offer their shoppers a one-click checkout experience with a 63% higher conversion rate than guest checkout. More than 90% of Bolt retailers have benefitted from this network effect by serving customers that have already made purchases with Bolt at another retailer. The rate of cross-retailer activity is growing rapidly, up 25x since the beginning of the year.

For each user, Bolt creates a persistent shopper identity across all retailers in the Bolt Network. Shoppers receive a unified checkout experience, and retailers can treat the millions of in-network shoppers like returning customers. 

Bolt solves 3 challenges for a retailer:

1. Integration: Retailers can outsource the checkout stack to Bolt along with all of the related integrations, and therefore merchants and platforms save considerable resources.

2. Conversion: Retailers can leverage Bolt’s highly optimized frontend, which consistently outperforms the retailers’ existing checkout.

3. Fraud: Bolt mitigates risk for retailers by using behavioral data collected throughout the checkout experience to inform our fraud decisioning. This is done by collecting 4x the real-time data signals, understanding the shopper to maximize order approval and conversion, and personalizing outdated checkout forms that require unnecessary fields to validate a shopper.        

Business Model and Pricing

Bolt uses a hybrid payments-and-software model. The company makes money off of payments, along with charging for the other services like fraud protection that it offers. It charges these services on a SaaS basis.  

When customers shop with retailers that have partnered with Bolt, their addresses and credit card information are saved. This allows them to place subsequent orders with Bolt-powered retailers without having to put in their personal information again. 

Bolt then charges retailers when customers, who have already saved their information with Bolt, make new purchases. To be specific, Bolt makes money by charging merchants a 2% fee on purchases made through it.

Traction

Bolt has overall achieved tremendous growth in the past, especially in 2020. That year, Bolt processed over $1B in retail transactions and experienced a 10x increase in the size of its Bolt One Click shopper network. It was adding more than 250,000 shoppers every month. Bolt also experienced a 3.5x higher GMV since 2019 (which had an implied $286M GMV). The company had predicted a 3x higher GMV in 2021, translating to roughly $3B. 

Furthermore, according to a 2020 report, Bolt had achieved the following milestones:

• 4.5 million Bolt Account shopper network

• 2.2 million shoppers added just in the past 6 months

• 50 million more shoppers lined up through the reach of all ABG brands

As of July 2021, Bolt had gathered 6M registered users and was expecting 50M people to be using its one-click checkout service by 2022. More than 300 merchants now use the service and Bolt caters to online retailers that make $10M to more than $100M in annual sales. Founder Ryan Breslow wrote on his blog,” Bolt expects 11% of US shoppers to be a part of its network by the end of 2021. By the end of 2022, it expects one-third of all US shoppers to be on its platform, and by the end of 2024, that share will grow to two-thirds. By 2025, Bolt is projected to interact with eight out of every ten shoppers in the United States.”  

Another source reveals that by October 2021, Bolt had partnered with hundreds of retailers and gathered 10M registered users.

Founder(s)

Ryan Breslow: Co-founder and CEO at Bolt. Previously, Ryan has co-founded the Beam currency and Eco, a crypto digital wallet startup. He also started the original Stanford Bitcoin Group and is a former Co-Founder and CEO at Sites by Hand.

Eric Feldman: Co-founder at Bolt. Feldman has also co-founded Eco with Breslow. He was a creator of various startups from 2007 to 2011, with a focus in education, enterprise software and microlending. 

History and Evolution

Founder Ryan had a lot of experience with online checkout systems prior to the founding of Bolt. In high school, he started to build ecommerce websites for businesses of all sizes. These were great learning experiences for him as this is where he began discovering the shortcomings of online commerce space which would eventually lead him to establishing Bolt.

In 2014, Bolt was founded with a vision to set a new standard for ecommerce. It started with a small team of 10 people that worked tirelessly for 2 years to create the first version of Bolt’s checkout solution. Bolt then officially launched its first merchant with just the payment step in mid-2016. 

From 2016 to 2020, the company’s product and team grew exponentially. $215M were raised in funding and the team grew by over 200 members. About 250+ retailers had come onboard. 

In July 2021, Bolt led a Series D funding round which resulted in a valuation of $4B. According to some sources, this valuation was nearly 5 times the valuation Bolt had in December 2020. The company intended to use the funds to accelerate its product innovation, which would include tools that enable shoppers to checkout on any page. Bolt also planned on expanding to more customers nationally and internationally.

In January 2022, Bolt reached a valuation of $11B after a $355M funding round. According to a blog post by Founder Ryan, Bolt’s general hyper-growth can be attributed to a simple way it differentiates itself from its competitors’ offerings such as Amazon and Shopify’s one-click checkout. While these companies have an extensive reach, it is limited to their platforms. Bolt on the other hand offers flexibility and control to other retailers that don't have access to good insights on their customers. This solves a key problem for both customers and retailers. Customers prefer having a single identity through which they can shop anywhere, while retailers get to offer their customers consistent shopping experiences.   

Additional Learnings

• Bolt’s initial business model revolved around digital currency in online checkouts, but after around 12 months of experimenting, Ryan and Eric decided to shift focus to the ecommerce model.

• Bolt claims its checkout page is up to 10 times faster than that of its competitors due to a special preprocessing technique. Here, the customers are not required to enter a billing address and it adopts a post-checkout (as opposed to pre-checkout) registration model. 

• To reduce fraud, Bolt’s machine learning algorithms analyze over 200 variables on each transaction, and a vigilant team reviews every declined transaction. Any flagged customers can provide additional information to get their orders approved.

• After its October 2021 funding round, Bolt reached a $4B valuation which was 18 times its valuation in 18 months.

Market Snapshot

• Ecommerce firms in the market commonly face one similar problem - customers abandoning their shopping carts due to lengthy checkout procedures.

• A December 2020 article highlights how the checkout space is a hotspot for growth in the market right now. A lot of cash is being injected into the market just to solve the customer pain point of lengthy checkout processes, resulting in several companies like Bolt raising funding rounds one after another. For example, competitor Fast had raised $20M while Checkout.com, an English competitor, raised $150M in 2020.

• By July 2021, financial technology startups had raised over $23B in funding rounds in the US alone. Bolt’s close competitor Fast had raised $100M in January 2021.

Next Suggested Reads

• Bolt raises $68 million to simplify ecommerce (Venture Beat, July ‘19)

• Bolt adds $75M to its Series C, as the battle to rule online checkout continues (TechCrunch, December ‘20)

• Bolt announces $393 million in new funding to fuel commerce’s first federated checkout network (Bolt, October ‘21)

• Online checkout firm Bolt valued at $11 bln after funding round - source (Reuters, January ‘22)

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• ShareChat – Indian social media network with over 180 million users

  • Founded: 2015. Funds Raised: $1.2B. Valuation: $3.7B.

• Apna.co – A professional networking platform leveraged by over 22 million users and 200k employers

  • Founded: 2019. Funds Raised: $193M. Valuation: $1.1B.

Teardowns from earlier this week

• Optoro – Offering a reverse logistics solution to brands and retailers in the U.S.

  • Founded: 2010. Funds Raised: $252.8M. Good Process: $100M+.

• Digit Insurance – One of India’s largest digital insurance brokers

  • Founded: 2016. Funds Raised: $500M+. Valuation: $3.5B.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

Changing Email Preferences

You are currently subscribed to the daily digest. You can toggle your preferences below if you’d like to switch to the weekly digest.

Manage Subscription

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2015, Karnataka-headquartered ShareChat is India’s leading social networking platform that operates exclusively in Indian languages. The platform allows users to discover and share content in categories like sports, news, tabloid gossip, jokes, good morning messages, fashion, and more. 

In 2021, ShareChat became India’s first social media unicorn after raising $502M in a Series E funding round led by Tiger Global. The company is now valued at $3.7B after raising $266M in its last Series F financing round.

ShareChat is backed by notable investors like Twitter, Snapchat, LightSpeed Venture, Tiger Global, Temasek, Elevation, and Mirae Asset. In 2022, the company currently has 180 million monthly active users that share 2.5 billion content pieces per month, followed by a creator community of over 32 million generating more than 75 million content pieces per month.

On the Web: Website, Linkedin

Business Overview & Products

Sharechat has content available in 14 different regional Indian languages to cater to a diverse audience. This content includes messages, poems, memes, videos, and more. The company operates across India and offers content in Assamese, Bengali, Bhojpuri, Gujarati, Haryanvi, Hindi, Kannada, Malayalam, Marathi, Odia, Punjabi, Rajasthani, Tamil, and Telugu. 

How It Works

When the user first logs in, they have the option to pick one of 15 regional languages. Upon selecting a language, the user’s home feed fills with trending posts from a wide variety of topics such as news, tabloid gossip, sports, fashion, good-morning messages, and more. The user is then free to share these posts on ShareChat or other social media platforms like Whatsapp. 

The platform also encourages users to create content of their own and share it with their followers. It has an ‘open tagging’ feature that allows users to create tags and post relevant content under those user-generated tags. The most engaging and trending tags are visible in the ‘explore’ section of the platform. 

Like other social media platforms, ShareChat also allows users to interact with one another via private messages. Those with similar interests can also join groups to discuss their opinions and ideas about said topics. 

ShareChat also offers the option of public chat rooms where users can jump in and start conversing with complete strangers, a common interest perk that new Indian internet users find fascinating. To serve this behavior, the app also has a feature called ‘Shake-N-Chat’ that helps connect two strangers with similar interests over personal chat. 

Business Model & Pricing

Sharechat is a  user-generated content network, where users can both share content, as well as create it themselves. This makes it an attractive platform for newfound content creators who are looking to expand their viewer base, especially after the TikTok ban across India in 2020. 

Content creators earn money through the app by generating unique content which in turn increases their followers as well as chances of landing paid promotions from well-known brands. The company does not earn money by charging users, instead its major source of revenue is advertisements followed by sponsored campaigns. 

Traction

ShareChat reported an operational revenue of $1.26 in 2020. The company’s EBITDA also improved from -2167% in 2019 to 1759.77% in 2020.

In 2021, ShareChat entered the unicorn club after raising $502M in a Series E funding round. The company last raised $266M in a Series F funding round after which its total valuation increased to $3.7B.

The company is reported to have over 180 million monthly active users and its app has been downloaded more than 100 million times.

Founder(s) & Team

Ankush Sachdeva: CEOand Co-Founder at ShareChat. Ankush, an IIT graduate previously interned at Microsoft, a leading vendor of computer software and hardware, mobile and gaming systems, and cloud services.

Bhanu Pratap Singh: CTO and Co-Founder at ShareChat. Bhanu, an IITian previously worked as a Software Development Intern at Purplle.com, a beauty and grooming platform.

Farid Ahsan: COO and Co-Founder at ShareChat. Farid, an IIT graduate previously worked as an Analyst at Deutsche Bank, a German multinational investment bank and financial services company.

History & Evolution

In 2012, Ankush Sachdeva, Bhanu Pratap Singh, and Farid Ahsan met at a Yahoo Hackube hackathon, and since then were trying their luck with tech offerings. After 14 back-to-back failures, Ankush had his eureka moment. 

In 2014, he came across a Facebook post that asked users to share their phone numbers so they could be added to a Whatsapp group dedicated to Indian cricketer Sachin Tendulkar. Seeing 50,000 responses, Ankush sprang into action and made a similar post on Facebook, after which he created multiple groups on Whatsapp. That is when he realized that while the groups were buzzing with hundreds of messages, none of them were in English which meant there was a large non-English speaking audience whose content needs were not being met. Keeping that gap in mind, the idea of ShareChat came into existence.

In 2015, ShareChat, a vernacular content sharing platform with the flavor of a social network was launched. The platform allowed users to discover and share content like videos, jokes, GIFs, audio songs, and humorous images in 4 regional languages – Hindi, Telugu, Malayalam, and Marathi. Initially, the platform offered content in English as well but soon removed the option after witnessing low user preference. 

In 2016, ShareChat launched the option for users to generate their own content and added 2 more languages to the platform – Gujarati, and Punjabi. That year the app climbed to the 7th spot in the ‘social’ category on Google Play Store and clocked over 3.5 million downloads with roughly 2 million active users sharing one million content pieces every day.

In 2018 Sharechat launched 3 new features: 'Private Messaging', 'Shake-N-Chat', and 'Open Tagging' to its app. The company also added Bhojpuri, Haryanvi, Assamese to its platform bringing its total sum of languages offered to 14. 

In 2019, ShareChat acquired Clip App, a short video sharing platform, and launched 3 new features to its platform, ‘Create your own stickers’, ‘Repost’ and ‘Post search’. That year it won six awards in the following categories: ‘Best Emerging Brand’,‘Best use of Social Media Marketing campaign’, ‘Best Mobile App in Social Networking’, ‘Best Use of Social Media Campaign’, ‘Best Use of Social Media in Marketing’ and ‘Innovative Launch Campaign of the Year’.

In 2020, ShareChat launched Moj, a short video app within 30 hours of the TikTok ban in India. It also went on an acquiring spree and acquired an online fashion marketplace called Elanic,  hyperlocal information platform Circle Internet, a video production company specializing in digital content known as HPF Films, and meme discovery and sharing platform Memer. That year the company opened ShareChat Labs, a Centre of Excellence (CoE) in Palo Alto, as its first establishment outside India. It witnessed a hike in content creation and absorption during the lockdown with over 160 million monthly users, 24 billion Whatsapp shares, and 28 million content creators generating 750 million pieces of content that year.

In 2021 ShareChat entered the unicorn club after raising $502M in a Series E funding round. That year it earmarked $19.1M for ESOP buyback and signed a multi-year licensing deal with T-Series.

In 2022, ShareChat and MX Player announced a strategic merger of their short video apps, Moj and MX TakaTak. The size of the deal is estimated to be $900M and it is a combination of both cash and equity. This merger will allow ShareChat to control both Moj and TakaTak. 

From archive.org 

Market Snapshot

The number of social media users in India stood at 518 million in 2020. While in 2021, the number of internet users in the country were estimated to be 658 million in 2021 which roughly makes up for 47% of the total population.

According to Statista, total revenue in the social networking segment of India is estimated to reach $295M in 2022 and is expected to grow at a CAGR of 10.18%, bringing its total market volume to $434M by 2026.

Additional Learnings

What sets ShareChat apart from its competitors is its no-English option which is a first for social media in India. The platform offers content in regional languages catering to a large audience in small towns and rural areas. This is a major reason why Western tech giants like Twitter are taking notice of the startup. 

In 2022, the company had to take down more than 4 million pieces of content due to 19 requests from law enforcement agencies and 61,88,644 complaints from users. 

Suggested starting points to dive deeper

• How ShareChat’s focus on AI, ML is helping the social networking site grow (Simantika Choudhury, Your Story, Oct ‘21)

• ShareChat creates Clubhouse-like monetised audio platform (Exchange 4 Media, June ‘21)

• ShareChat: The Social Solution For A Multilingual Nation (Komal Mor, Dutch Uncles, June ‘21)

• [Product roadmap] The role tech played in the journey of Bharat-focused social media startup ShareChat (Sindhu Kashyaap, Your Story, April ‘21)

• An introduction to ShareChat: Personalising content for Next Billion Users — ShareChat (Ankur Shrivastava, Sharechat, Jan ‘19)

• ShareChat: India's homegrown rival to WhatsApp (Soutik Biswas, BBC News, Nov ‘18)

• ShareChat: The no-English social media app that Indian politicians are flocking to (Aria Thaker, Scroll.in, Oct ‘18)

• How Sharechat is going from a Good Morning message factory to a content powerhouse (Jayadevan PK, Factor Daily, Aug ‘18)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2019, Bengaluru-headquartered Apna.co is India’s leading professional networking and job opportunities platform for blue and grey collar employees. The platform helps first-time internet users access professional opportunities, gain new skills, collaborate with others, and create communities that can help motivate them.

Apna.co is used by more than 200,000 leading companies like Zomato, Flipkart, Unacademy, Licious, Burger King, Bharti-AXA, Byju’s Delhivery, G4S Global, Shadowfax, Dunzo, Teamlease, and more. It has also collaborated with governmental and private institutions like UNICEF YuWaah, The National Skill Development Corporation, and the Ministry of Minority Affairs to help applicants gain new skills. 

In just 21 months, the platform became one of India’s fastest unicorns with Tiger Global’s $100M investment and is now valued at $1.1B.  With marquee investors like Insight Partners, Tiger Global, LightspeedIndia, Sequoia Capital India, Rocketship.VC and Greenoaks Capital, the company has managed to raise $193.5M in funds until now. 

On the Web: Website, Linkedin

Business Overview & Products

At the moment, Apna.co has three areas of focus. There is a marketplace for jobs, a professional social networking platform, and an upskilling business. The company offers the following services: 

• Hiring: Employers can browse through hundreds of candidates to find the right one for their required job.

• Job Board: Jobseeker can create a profile online, search for local job openings in the city, apply for jobs, schedule interviews and keep track of job applications.

• Learning new skills: A platform to learn English, improve and gain new skills, and prepare for interviews. 

• Business group: A group for entrepreneurs, where they share information on government grants, loans, and benefits available for businesses and how to apply for them. 

• Government Exam Preparation: A group for government exam aspirants, where they share, practice, & solve questions and test papers for various government exams to prepare for government jobs.

The company operates in 28 cities and is accessible in 11 languages. It has plans of expanding to the US, Middle East, Southeast Asia, and Africa in 2022. 

How It Works

Apna.co aims to connect people with opportunities and workers with employees. The company’s app which is accessible in 11 languages has over 70 communities for specialized professions like carpenters, beauticians, field sales representatives, painters, etc. 

On the app, workers looking for jobs enter their personal information like talents, education, and experience, which is then automatically converted into virtual business cards. These cards are passed on to potential employers based on the workers’ skill sets and preferences. After finding an opportunity they like, job seekers phone the company directly, schedule an interview, and get hired. The company claims that the hiring process only takes 48 hours.

As soon as the applicant applies for a job, the platform makes him take a basic test, after which the recruiter snaps up the applicant in a few hours. However, if the applicant fails the interview, the platform prompts him to learn new skills that will make him eligible for the job. Within 24 hours, the applicant is upskilled, ready to apply for the job again. The app provides courses such as conversational English and acing a job interview and has categorized 4,000 skills, which are either taught by partners or developed in-house. 

The app is also used by applicants to connect with other job seekers, sharing leads and suggestions with them to make their job hunt easier. Often just interacting with other users and listening to their tips and tricks helps an applicant land a job.

Recruiters use the app to reach out to applicants all around the world. They then advertise job openings, interact with prospects, arrange interviews, and recruit employees. A quick look at the candidate’s digital persona tells the recruiter whether the candidate has the necessary abilities for the position as well as whether he’ll be able to fit in or not. 

Business Model & Pricing

Apna.co has a B2B2C business model where it connects candidates on a hunt for jobs to employers looking to recruit employees. The app is completely free for applicants looking to get hired and that is one of the main reasons why it’s so popular amongst the masses. Currently, the company is focused on creating value and is not capitalizing on its educational products like courses that help upskills candidates, prepare them for job interviews and as a result, increase their chances of getting a job. However, it does charge recruiters for the technical services provided to them which makes up for their entire revenue. 

In the future, the premium version of the app would only charge job seekers that need extra help to gain new skills. However, the company has no plans to pollute the app with advertisements, missing out on a major revenue stream. 

Traction

Apna.co is India’s largest professional networking platform as well as the country’s fastest unicorn. Even though it’s still in its pre-revenue stage, it has managed to earn $2.2M operating revenue in 2021 which is a 3.24x increase from its $690K revenue in 2020. The company has grown north of 125x over the last year and the rate is only increasing every month. Apna.co claims to have a presence in over 50 cities, including major ones like Mumbai, Delhi, Pune, etc and has over 5 million active jobs on its platform. In 2022 the platform claimed to have served over 200,000 employers by conducting more than 170 million interviews as well as enabling 200 million peer-to-peer conversations. 

The company is reported to have over 22 million users and has a 95 percent retention rate on its platform. Moreover, during the pandemic, it saw a 430% increase in its female users, with a 12x increase in women interviewing on the platform in 2021 as compared to 2020. According to The State of Mobile 2022 report, Apna.co is the most downloaded app globally in the business category after Whatsapp Business. 

In 2022, it plans to cover all of India and expand its footprints to the US, Southeast Asia, the Middle East, and Africa. It also plans on developing Master-class style skilling courses, result or job-based skilling, and peer-to-peer learning. It also includes career counseling and a resume-building function to its platform.

Founder & Team

Nirmit Parikh: CEO and Co-Founder at Apna.co.co. Nirmit, a Stanford graduate previously founded Cruxbot and Incone Technologies. He also worked as Product and Strategy Officer at Apple and as Director of New Products / Data Analytics at Intel Corporation. 

History & Evolution

In his early 20s, Nirmit Parikh founded his first startup, Incone Technologies, an automatic dam control system. A few years later he merged the startup with his family business and focused on solving the problems of floods, using artificial Intelligence-based control systems.

After three years, Nirmit founded Cruxbot – a platform that summarized websites – which was acquired by Kno and then Intel. He then moved to Silicon Valley and started working at Apple. During this time, he frequently visited India to look after his family’s business. It was during one of these trips while hiring workers for the business he realized how inefficient the hiring system was and the extent of unemployment in India. To get a deeper understanding of the problem, Nirmit went undercover as a blue-collar worker as an electrician, foreman, and shop floor guy. This experience helped him realize that while most workers had the skills to obtain a good job, they did not have a platform where they could connect with an employer looking for that exact skill set. Around that same time, Nirmit watched the Bollywood film ‘Gully Boy’ and it inspired him thoroughly, all of this lead to him starting his venture called Apna.co, inspired by the film’s song “Apna Time Ayega”.

In 2019, Apna.co – a professional networking and job opportunities platform – was founded. Initially, Nimrit used to visit slums and personally converse with blue-collar workers, trying to gain their insights to make the platform better. In that same year, they raised $3M in a Seed funding round.

In 2021, Apna.co raised $100M in a Series C funding round and became the fastest unicorn of India. During the coronavirus pandemic, Apna.co amplified its efforts to provide hospitals, e-pharmacies, and delivery companies’ workforce with critical and essential roles. It catered to over 2500 organizations directly or indirectly allied to healthcare. It also offered over 50,000 openings for the roles that ranged from nurses (General), nurses (COVID-19 Duty), ward boys, medical staff, lab technicians, pharmacists, blood bank technicians, patient caretakers among others. 

From archive.org 

Additional Learnings

In 2022, Apna.co signed a Memorandum of Understanding (MoU)  with the Tourism & Hospitality Skill Council in an attempt to connect aspiring youths with the numerous job opportunities available in the tourism and hospitality sector. The collaboration will provide easy access to local opportunities, upskilling courses, training sessions, and re-skilling courses to the workers in this sector. 

Market Snapshot

Online recruitment in India grew 8% in 2021 as compared to 2020, according to data extracted from the Monster Employment Index.

Moreover, In 2021, the industry witnessed an overall monthly growth of 4% in hiring. Industries that witnessed significant growth in hiring include Telecom/ISP, IT-Hardware, Software and Logistics, Courier/Freight Transportation.

Suggested Next Reads

• Nirmit Parikh, Founder & CEO - Apna.co on Building the Future of India's Rising Working Class (Indian Silicon Valley, Oct ‘21)

• How Apna.co Became One Of India's Fastest Unicorns With Almost Zero Annual Revenue (Manu Balachandran, Forbes India, Sep ‘21)

• Apna.co. co sees a 40% jump in female users in Q2 2021 (Prachi Verma, The Economic Times, Aug ‘21)

• ASDC, Apna.co.co to provide career counseling and job opportunities for the automobile sector (Autocar Pro News, June ‘21)

• Apna.co Time Ayega! Know-How This Entrepreneur Is Building Job Network For Blue-Collar Labor (Debarghya Sil, Entrepreneur Europe, April ‘21)

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Optoro – Offering a reverse logistics solution to brands and retailers in the U.S.

  • Founded: 2010. Funds Raised: $252.8M. Good Process: $100M+.

• Digit Insurance – One of India’s largest digital insurance brokers

  • Founded: 2016. Funds Raised: $500M+. Valuation: $3.5B.

Teardowns from last week

• Faire – Online wholesale marketplace connecting small retailers with suppliers from across the globe.

  • Founded: 2017. Valuation: $12B+. Suppliers: 40K+.

• BharatPe – Offering a suite of online & offline payments solutions to merchants in India.

  • Founded: 2018. Valuation: $2.85B. Revenue: $93M.

• Wave.tv – Building a sports media network on top of digital platforms like Instagram, Facebook, TikTok, Youtube, and more.

  • Founded: 2017. Funds Raised: $65M. Followers: 100M+.

• TopTal – Online talent marketplace for freelancers.

  • Founded: 2010. Funds Raised: $1.4M. Revenue: $200M+.

• Cider – Direct-to-consumer fashion brand that scaled to a unicorn in under 18 months

  • Founded: 2020. Funds Raised: $140M. Countries Served: 100+.

• Gupshup – Messaging API for businesses to build text-based conversational experiences across platforms.

  • Founded: 2004. Valuation: $1.4B. Revenue Run Rate: $150M.

• Jellysmack – Building a digital media company that powers its own content and those of other creators across digital platforms

  • Founded: 2016. Valuation: $1B+. Monthly Views: 10B+.

• Pilot – Bookkeeping, Tax, and CFO services for businesses

  • Founded: 2016. Funds Raised: $155M+. Valuation: $1.2B.

• Newstore – Providing a suite of omni-channel software for retail merchants. Started by the founder of DemandWare.

  • Founded: 2015. Funds Raised: $150M+. Countries Served: 40+.

• FirstCry – Indian eCommerce company focused on selling baby and kids products.

  • Founded: 2010. Valuation: ~$2B. Revenue (‘20): $120M.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

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These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2016, Karnataka-headquartered Digit Insurance is a tech-driven insurance and financial services platform that aims to simplify insurance for common people. It provides motor, health, travel, property and other insurance schemes and is the first insurance company to be fully clouded. 

In 2021, Digit Insurance became India’s first unicorn of the year after raising $18M from existing investors like A91 Partners, Faering Capital, and TVS Capital, bringing its total valuation to $1.9B. In the beginning of 2022, the company raised $70M in a venture funding round and is currently valued at $3.5B. 

The company is owned by Fairfax and its subsidiary Digit Infoworks. It is also backed by notable investors like TVS Capital Funds, Sequoia Capital India, A91 Partners, Faering Capital, India cricket captain Virat Kohli and the employees of Digit.

On the Web: Website, Linkedin

Business Overview & Products

Digit Insurance provides the following products and services through its website and app: 

Motor Insurance:

• Car Insurance

• Bike Insurance

• Commercial Vehicle Insurance 

• Taxi/Cab Insurance

• Auto Rickshaw Insurance

• Truck Insurance

Health Insurance 

• Normal Insurance

• Super top-up insurance 

• OPD Health Insurance

• Arogya Sanjeevni policy 

• Personal accident insurance

• Corporate health insurance

Other

• International Travel insurance

• Flight Delay insurance

• Shop Insurance

• Home Insurance

The company operates across 7 states in India – Karnataka, Gujrat, Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Bihar. 

How It Works

Digit Insurance has an all-digital model that is supported by analytical and other technologies to fasten the insurance process in various ways. 

The pre-inspection app reduces turn-around time for claims. As soon as a customer comes to the portal, the app determines whether there is a gap in their insurance or not. An SMS-based link is then generated and sent to the user which gives them instructions to carry out the pre-inspection. The app allows users to take 8-10 pictures which are automatically loaded into the system through the link. Particularly for bikes, AI recognizes basic checks like registration number, color, etc. This fastens the process of pre-inspection cases to below 2 hours. 

In-house-built apps help claim settlement faster. For example, travel delay claims are 100% automatic, as soon as a customer’s flight is delayed, they receive an SMS to send their boarding pass and bank details. Once the immediate claim registration and approval are done, money is transferred to the customer’s account. 

The self-inspection app is a smartphone-based solution that uses customers’ cameras to complete the process making it a hassle-free experience for users. The app reduced inspection time from days to just 10 minutes and has led to motor claims being approved in 24 hours. 

Moreover, there’s also an audio claim feature available for users who do not wish to fill out long applications. In order to file a claim, users can simply call to register one. This call is taped and then used to extract and store important details for processing the claim.   

Digit Insurance has an application programming interface (API) integration for all partners including Policy Bazaar, Flipkart, Clear Trip, and Amazon India, to cancel or make amendments to their policies. It also incorporates machine learning which helps with a faster reconciliation, float management, fraud management, and claims settlement. The analytical tools used by Digit Insurance are Python, BI tools such as IBM Cognos, visualization tools such as Power BI, databases such as Postgres, and Data Lakes such as Hortonworks. 

Business Model & Pricing

Digit Insurance has a cloud-based business model which has lowered the company’s operational and infrastructure costs. It creates beneficial partnerships with companies that it can integrate with to provide insurance alongside products. It has implemented this strategy with 1500 companies including international e-commerce powerhouses Amazon and Flipkart. 

The company earns revenue through its various insurance plans but mostly through premiums. These premiums start at a low cost making it an attractive option for users belonging to all kinds of financial backgrounds. For example, the two-wheeler insurance premium starts from only INR 786 ($10.82)

Traction

In 2021, Digit Insurance reported an operational revenue of $252M which showed a 56% growth bringing their consolidated revenue to $304M.  In the first half of 2021, sales crossed $292M and premium income grew 44% to $430M. The company also reported a profit of $16M. 

In 2021, it became India’s first unicorn of the year after raising $18.5M from existing investors and is now valued at $3.5B. Its valuation has grown almost five times in the past 5 years, it has processed more than 400,000 claims and has a claim settlement ratio of 96%.

The company has served over 20 million customers and its app has been downloaded over 100,000 times.

Founder(s)

Kamesh Goyal: Chairman and Co-Founder at Digit Insurance. Kamesh always held a fascination for the finance world. Initially, he started his career by working at The New India Assurance Co.Ltd. Later he worked at KPMG India as their Manager and as Head Of Asset Management and US Life Insurance at Allianz Asset Management. 

History & Evolution

In 2016, Kamesh Goyal had been working at Allianz for 16 years. He found himself yearning for a venture of his own where he could put his experience of 33 years in the insurance industry to good use. It was only after he failed to explain the basics of insurance to his teenage son that he decided to take a good look at the jargon-heavy industry and its complex operations. This is what motivated Goyal to start a business that would provide simplified and customized products and ensure fast and easy settlements. Go Digit Infoworks Services, an IT development, and consultancy firm was launched as a joint venture with Oben Ventures and Fairfax Financial Holdings. 

In 2016, a subsidiary of Go Digit Infoworks called Go Digit General Insurance was launched. At first, the company was named Oben but was later changed to Digit Insurance. 

In 2017, Digit Insurance received its license from IRDA and launched its first product, travel insurance. That same year Fairfax Group bought a 45% stake in the company for $52M making it the highest amount received by a startup in the insurance sector.

In 2018, Digit Insurance acquired ITI Reinsurance, an organization that helps insurers in their efforts to provide stable and affordable risk transfer solutions to their policyholders. That year it also partnered with Flipkart to offer mobile insurance. 

In 2019, the company gained a 1% market share in India, insured more than 5 million customers, and settled more than 100,000 claims.

In 2020, the company expanded its business by 30%. Two major products helped the company drive growth, covid health insurance, and fire insurance. The covid-19 product, a fixed benefit cover, was able to reach out to over 2 million Indians through the Digit Group Illness Insurance product. Despite the pandemic, it exhibited a promising growth of 31.9% and earned a premium of $186M.

In 2021, Digit Insurance became India’s first unicorn of the year by raising $18M from existing investors. The company is now valued at $3.5B and was the only Indian insurance company to feature in the CB Insights Fintech 250 list of the year. 

From archive.org 

Market Snapshot:

• In India, the gross direct premium income for insurance in 2021 was $14.62B with an increase of 12.3% in Year on Year growth (YoY) due to 28.8% growth in the health segment and $84.7% growth in the personal accident segment. 

• The insurance industry in India consists of 57 insurance companies, with the market share of these private sector companies increasing to 48.03% in 2020.  

Additional Learnings

The biggest difference Digit Insurance provides is using technology to simplify claims processes. It is the only company in the insurance industry to be fully clouded. There are no hard copies required and most of the claims processes are smartphone-enabled. This shortens the time for claim processing and makes it user-friendly for its customer base. 

Suggested starting points to dive deeper

• Digit Insurance Startup Story by Startup Boy • A podcast on Anchor (Startup Boy)

• Never Been A More Exciting Time To Be In General Insurance, Says Digit Insurance's Goyal (Ishan Shah, Money Control, Oct ‘21)

• Will Digit Simplify Insurance to Pull in India? (A Junior VC, July ‘21)

• Digit Insurance eyes Rs 6,500 cr in premia sales by October 2022 (The Economic Times, Oct ‘21)

• Digit Insurance comes up with cover amid deadly coronavirus spreads (Business Standard, March ‘20)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Founded in 2010, Washington DC-headquartered Optoro is a reverse logistics technology company. It works with retailers and manufacturers to process, manage and then resell their returned and excess inventory. Its software platform enables customers to get great deals, reduces environmental waste, and maximizes recovery value. 

Optoro has been named one of the fastest-growing companies in the US. It has raised $252.8M from investors such as Revolution, UPS, Generation Investment Management, and Kleiner Perkins Caufield & Byers.  With a client list of top national brands like IKEA, Target, Home Depot, Best Buy, Staples, American Eagle, Groupon, Bed Bath & Beyond,  a growing team of 200+ employees, and a recent $25M Venture Fund in 2021, Optoro is gradually making its way to the top. 

On the Web: Website, Linkedin

Business Overview & Products

Optoro’s main offering is a SaaS called OptiTurn. It is used in retailers’ warehouses to process, sort, and resell inventory that is in excess or has been returned by clients. The software keeps track of inventory from the warehouse till it reaches customers. Products can be marked as new, open box, refurbished, or used as per their condition. This information is analyzed by OptiTurn along with other data points to make sure that these items are diverted to the channel that will get retailers most of their money back. 

The products are listed on online marketplaces under the brand name BLINQ. Products that are expected to net a higher recovery in bulk selling are resold on BULQ.com under the brand name of BULQ.  

How It Works

Returns Management Solution streamlines return processing and create operational efficiencies across the supply chain. Starting at receiving, the technology collects meaningful data that allows for smart returns routing and channel decisions. It also includes intuitive desktop tools designed for adaptability and seamless operations. Retailers can automate and accelerate vendor returns with  SmartRTV & Vendor Management to remove RTV cost and complexity. In addition, the holistic platform enables business agility with data-driven decisions, real-time insights, and unit-level visibility across the returns lifecycle.

Recommerce Solution maximizes recovery on returns, drives higher profits, and improves sustainability. It sells returned inventory through retailers’ own primary and secondary channels or on Optoro's proprietary B2B marketplace, BULQ, which is a one-stop-shop for retailers to utilize excess and returned inventory by putting them in the hands of retailers. BULQ appeals to resellers who are willing to pay a premium and move inventory at a fast pace, expanding their reach to more than 20 secondary marketplaces. Recommerce also ensures circularity by making sure that the leftover inventory ends up with happy customers or at charities instead of landfills.   

Returns Experience Solution helps improve customer experience and loyalty during the returns cycle. For starters, to make the process seamless for first-time customers, they offer a Returns Portal for self-service returns initiation which also includes digital experiences like one-click exchanges. Moreover, to decrease refunds and drive repurchases, in case of a return, Instant Credit delivers customers the right product even before they return the wrong one. When it comes to delivery, Express Returns offers convenient drop-offs by not just providing convenience and speed but also offering label-free and box-free returns at numerous store locations throughout the country.  

Optoro has access to a huge inventory of returned/unsold products because it handles reverse logistics. Each return that Optoro processes are entered into its ‘re-commerce’ system, which evaluates the item's condition and assesses value based on current market prices. Optoro then assigns a condition – Brand New, Like New/Open Box, Factory Refurbished, Used-Very Good – that is indicated on the item for resale so customers know exactly what they are getting. The item is then sent back to the retailer, manufacturer, or Optoro’s retail arm BLINQ to "recover the most value." where new or like-new items are sold at deep discounts. 

Business Model & Pricing

Optoro has a B2B business model that helps both offline and online retailers sell returned or excess inventory more easily.  Optoro has several channels for collecting revenue. For starters, customers who use the software are liable to pay a monthly licensing fee. Moreover, when the company sells goods on Blinq and Bulq, it takes between 15-50% of the amount it recovers for its clients, which ranges from $20 cents to $70 cents on the retailers’ part. 

Traction

Optoro’s revenue was last estimated by Forbes in 2017 at more than $50M. With a growing staff of 220 in its Washington, DC headquarters, and its contract deal with more than 100 workers in its rented Tennessee warehouse, Optoro’s overhead is substantial. In addition, the company spends its investment capital on growth.

In 2020, 13,400 resellers bought and resold inventory from BULQ.com due to their newfound partnership with eBay. Despite the coronavirus pandemic, the company processed more than $100M of goods a month through its platform with the number growing at a quick pace. From its partnership with Staples and eBay, Optoro was able to divert 3.2M lbs from landfills. The company also sent over $3M of goods to charities in need by partnering up with IKEA. The technology used helped retail clients keep 96% of returned and excess inventory out of landfills. It also prevented 4.68M lbs carbon emissions by reducing transportation and increasing efficiency in the reverse supply chain. Optoro has access to more than $500M customers and their app has over 100k downloads.

Founder(s)

Tobin Moore (LinkedIn): CEO and Co-Founder at Optoro. Tobin, a graduate of Brown University previously co-founded eSpot, Optoro’s predecessor. He was also recognized as Ernst & Young Entrepreneur of the Year and was featured in Washington Business Journal’s 40 under 40 list. 

Adam Vitarello (LinkedIn): President and Co-Founder at Optoro. Adam, a Brown University graduate has previously worked as CTO and CEO at eSpot, Optoro’s predecessor. He also worked at Fojol Brother, a traveling culinary carnival. 

History & Evolution

The origin of Optoro dates back to 2004 when Tobin Moore, a student of Brown University watched his father struggle to sell an item on eBay. At the time, eBay was the main e-commerce destination available online, but still tedious and difficult to use. As a first-time user, with no buyer feedback, Tobin’s father could not find any buyers, and neither could he decide on a fair price per item. That is when it hit Tobin: there was an opportunity available to disrupt the used goods retail market. 

So in 2004, Tobin started eSpot, Optoro's precursor out of his Brown University dorm room. The initial idea was to help sellers list used goods on eBay. eSpot would price items, take photos and write up a listing, in addition to managing the eBay auction for its clients. To help with operations, Tobin brought on board his childhood friend, Justin Lesher, who operated out of his dorm room at Penn.

After graduating, Tobin and Justin ran the business out of an attic above the garage and went without paychecks for two years. However, soon they opened a 1200 square foot eBay drop-off store in Georgetown and roped in another Brown graduate, Adam Vitarello to help run the business.

They borrowed $350,000 on 37 zero-interest credit cards for funding. The revenue model, with eBay as their vehicle, was based upon a 30% commission on sales up to $500 and 20 percent on sales above that. They got positive local press coverage and scored some big sales such as a 1965 Mustang and a $100,000 Rolex. Outlets like The Washington Post profiled eSpot on multiple occasions, allowing the three entrepreneurs to network and meet others in the city’s business scene. Soon, neighborhood retailers started using eSpot to sell returns and excess inventory. Catering to small retailers made them realize that big-box retailers must have the same problems and that there was a huge market gap to be filled. 

In 2008, they opened an office and warehouse in Lanham, Maryland, where they processed goods from retailers. But that same year, the financial crisis hit, and banks hiked the rates on eSpot's zero-interest cards to 30%. Facing bankruptcy, Tobin worked up an elevator pitch and started trying to raise money. He struck out at more than 100 investor meetings in the DC area before he landed his first angel, Nigel Morris, the co-founder of Capital One Financial Services, who pledged $1M through his investment firm, QED, in Virginia.

To up their game, the trio hired three developers, who spent nearly two years coming up with a scanner and software system, and in 2010 they launched the new business as Optoro. That same year they launched BLINQ, a retailer specializing in surplus and returned goods such as electronics, furniture, small appliances, apparel, and more. Using reverse logistics, BLINQ’s main goal was to help divert closeout, overstock, and returned products from landfills to customers looking for bargains, and at the same time, reduce waste and carbon emissions.

After launching Optoro, Tobin and Adam were joined by CTO Jessica Szmajda as Justin left the company. In 2012, the company's proprietary, cloud-based software platform OptiTurn was launched. It uses proprietary pricing algorithms and predictive analytics to drive the highest financial recovery possible for returned and excess inventory. The same year, after incessantly pitching Optoro at RLA’s annual conference in Las Vegas, Tobin signed his first big retail client, BJ’S Wholesale Club, which sells discount goods to members through its network of warehouses in the US. The contract helped the company raise more funds.

In 2013, the company opened a corporate office in the vibrant Chinatown neighborhood of Washington DC, while maintaining a thriving operations headquarters just outside the city in Maryland.

In 2014, the company partnered with Groupon to handle excess inventory for Groupon Goods, the Chicago-based retailer’s popular product deals website. Optoro kicked off the partnership by rolling out its proprietary software on-site at Groupon’s fulfillment center in Hebron, Kentucky.

In 2015, Optoro launched BULQ, its B2B wholesale marketplace, which offers resellers and recyclers an easy and reliable way to source discount inventory and parts in bulk directly from retailers. These include overstock, returned, refurbished, and excess inventory. The company also started a dedicated sustainability team. It measures the transportation and waste impacts of the returns industry and the effects that Optoro's solution has on retailers' carbon footprints.

In 2016, Optoro formed a strategic alliance with UPS. The companies’ joint reverse logistics solutions combined the operational and logistics expertise of UPS with Optoro’s software platform. It helped maximize recovery value and reduced environmental waste. That same year the company moved to a larger office space located in the Metro Center neighborhood of Washington holding around 160 people.

In 2019, Optoro partnered with IKEA to reduce waste from returns. Optoro’s technology was implemented in 10 IKEA distribution centers, 50 retail stores, and the Customer Support Center in the U.S.

In 2020, eBay and Optoro announced an exclusive partnership. The two companies leveraged their respective proprietary technologies to make sourcing and reselling on eBay faster and more seamless for sellers, thus accelerating the pace of resale. It also partnered with Staples – the office supply giant that would accept unboxed returns from other retailers that would be processed by Optoro. The program, called Express Returns, would provide safe contactless return options so customers at all the 1,000 locations can spend more time at home with their families in the holiday season. The company also announced a strategic partnership with Returnly, the leader in digital return experiences and post-purchase payments. Optoro would integrate Returnly’s customer-facing eCommerce returns technology into its broader returns platform to offer the first end-to-end returns solution for retailers and brands.

In 2021, Optoro became the winner of a Gold Stevie Award in the Business-to-Business category for its BULQ on eBay partnership integration. It also shut down its direct-to-consumer eCommerce website BLINQ. To date, it has helped retailers achieve: 600,000 backlogs cleared within 2 weeks; 150% increase in net recovery; 91% of returns resold; and 55% reduction in returns exceptions.

From archive.org 

Market Snapshot

• According to Statista, the IT services market in the USA is estimated to increase to $409.60B in 2022 at a CAGR of $7.31%. 

• The market volume is expected to grow to $543.10B by 2026 and the largest segment of the market is IT outsourcing. 

Suggested Next Reads

• Optoro's Sustainable Reverse Logistics Platform (Supply Chain 247, April ‘15)

• Optoro Appoints Fumbi Chima and Julia Taxin to Board (City Biz List, April ‘21)

• Optoro Creates Environmental Impact Model (SJF Ventures)

• Forbes says Optoro is one of the 'Next Billion-Dollar Startups' (Technically, Sep ‘17)

Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Faire – Online wholesale marketplace connecting small retailers with suppliers from across the globe.

  • Founded: 2017. Valuation: $12B+. Suppliers: 40K+.

• BharatPe – Offering a suite of online & offline payments solutions to merchants in India.

  • Founded: 2018. Valuation: $2.85B. Revenue: $93M.

Teardowns from earlier this week

• Wave.tv – Building a sports media network on top of digital platforms like Instagram, Facebook, TikTok, Youtube, and more.

  • Founded: 2017. Funds Raised: $65M. Followers: 100M+.

• TopTal – Online talent marketplace for freelancers.

  • Founded: 2010. Funds Raised: $1.4M. Revenue: $200M+.

• Cider – Direct-to-consumer fashion brand that scaled to a unicorn in under 18 months

  • Founded: 2020. Funds Raised: $140M. Countries Served: 100+.

• Gupshup – Messaging API for businesses to build text-based conversational experiences across platforms.

  • Founded: 2004. Valuation: $1.4B. Revenue Run Rate: $150M.

• Jellysmack – Building a digital media company that powers its own content and those of other creators across digital platforms

  • Founded: 2016. Valuation: $1B+. Monthly Views: 10B+.

• Pilot – Bookkeeping, Tax, and CFO services for businesses

  • Founded: 2016. Funds Raised: $155M+. Valuation: $1.2B.

• Newstore – Providing a suite of omni-channel software for retail merchants. Started by the founder of DemandWare.

  • Founded: 2015. Funds Raised: $150M+. Countries Served: 40+.

• FirstCry – Indian eCommerce company focused on selling baby and kids products.

  • Founded: 2010. Valuation: ~$2B. Revenue (‘20): $120M.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

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Snapshot

Founded in 2018, New Delhi-headquartered BharatPe is a one-stop shop for digital payments. It offers a portfolio of products to help merchants accept digital payments through QR codes that support government-backed UPI payments infrastructure. The company also helps merchants and shopkeepers across cities acquire a loan to facilitate their working capital needs and lend money to fellow merchants and traders who are in need of cash. 

In 2021, BharatPe entered the unicorn club after raising $370M in a Series E funding round bringing its total valuation to $2.85, a three-fold jump within 6 months. The company is among the top 5 most valued Fintech startups in India with over 7 million merchants on board and collaborations with more than 150 UPI apps like PayTm, PhonePe, Google Pay, BHIM, and more.

The company is backed by notable investors like Beenext, Sequoia Growth, Insight Partners, Steadview Capital Management, Ribbit Capital, Coatue Management, and Amplo. 

On the Web: Website, Linkedin

Business Overview & Products

Bharatpe is a payments app that provides end-to-end solutions for businesses. App features include:

• 1 QR code for all payment apps (Paytm, BHIM, and 150 others) 

• No setup or transaction fees for payments

• Loans up to INR 700,000 ($9.3k) without collateral and processing fee

• Credit Card cum debit card with up to INR 100,000 ($1.3k) credit limit

• Bill payments with numerous merchants added

• Points redeem option that ends with a grand prize to meet cricket stars

• Bharat Swipe: India’s first zero-fee card machine

The company operates across 100 cities in India and plans to expand to 300 by next year. 

How It Works

BharatPe has an artificial intelligence (AI) based algorithm which is extremely useful for shopkeepers as it gives them valuable insights into their business’s cash flow. The AI algorithm picks up signals like the kind of transactions a shopkeeper makes or the usage of other products on their platform and this information is then analyzed along with the merchant’s credit score and loan history to make a loan offer. Once the shopkeeper passes this screening process, the firm’s NBFC partner processes the loan and in a few days credits the amount in the merchant’s account. The loan can be paid back in daily installments with a low-interest rate and the entire process is digital and collateral-free which makes it an attractive option for users.

For merchants, in order to process digital payments, they have to put up a QR code in their shops. Customers can pay merchants digitally using a UPI-powered payment app. The app also allows merchants to track customers who owe them money and receive periodic reminders courtesy of a simplified dashboard on their phones. 

Business Model & Pricing

BharatPe’s business-to-business model is focused on creating products and services majorly targeting merchants. It not only provides a free digital payments platform but also grants merchants and shopkeepers instant loans with low-interest rates. The company does not charge any transaction or setup fees and has no hidden charges to speak of. It does not charge merchants commission for processing payment so that it becomes an integral part of their customer’s business and cash flow. 

To boost the revenue on its platform, Bharatpe relies on the interdependent recurring connection of credit and application usage. A huge chunk of the company’s revenue comes from the interest income it earns on the loans it issues to shopkeepers and merchants. These low-cost loans are provided at an interest rate of 2% while the time period varies from 3 to 12 months. Moreover, the company has also recently introduced Peer to Peer (P2P) lending at a 12% interest rate for both individual lenders as well as borrowers. 

Traction

In 2021, BharatPe disbursed loans worth $214M to 180,000 merchants which led to revenue of $93M, a 7x increase from last year’s $15M revenue. It also registered 106 million monthly UPI transactions which were worth $830M in March 2021. The company enjoys an 8.8% market share and has expanded its footprints from 30 to 100 cities in India.

In August 2021, it became India’s 19th unicorn of the year after raising $370M in a Series E funding round. The startup has raised $699.9M to date and is now valued at $2.85B. The company was reported to have over 7 million merchants and their app had been downloaded close to 10 million times

Founder(s) & Team

Shashvat Nakrani (LinkedIn) – Co-Founder at BharatPe.Shashvat, an IIT dropout is the youngest person to feature in the IIFL Wealth Hurun India Rich List. He was in his 3rd year at IIT-Delhi, pursuing a bachelor's degree in Textile Technology when he co-founded BharatPe after recognizing a business opportunity for a payment gateway. 

Bhavik Koladiya (LinkedIn) – Group Head and Co-Founder at BharatPe. Alongside working at BharatPe, Bhavik has also been an angel investor for many companies including Digifin, Pristyn Care, ProtectPay, Flatheads, Walrus, Vested Finance, CityMall, Vahan Inc and LenDenClub. 

Ashneer Grover (LinkedIn) – MD and Co-Founder at BharatPe. Ashneer, an IIT graduate has served as the Chief Financial Officer at Grofers and as Director of Corporate Development at American Express. Prior to co-founding Bharatpe, he also worked as Vice President at Kodak Investment Banking and Head of New Business at PC Jeweller Ltd, the second-largest Jewellery retailer in India.

History & Evolution

Towards the end of 2017, Shashvat Nakrani, an IITian was working on a startup when he identified a huge gap in the digital payment market. Merchants were hesitant about accepting online payments because no payment getaway or wallet charged less than 1.5% commission. That is when he decided to come up with a platform for merchants that would leverage Unified Payments Interface’s (UPI) star feature- interoperability, to remove all charges on payments. Merchants would need only one QR code that could be used by any payments app. However, Shashvat was unsure of how to commercialize the idea when Ashneer Grover, his 16 years senior at IIT entered the scene and gave direction to the idea courtesy of his vast experience in the finance industry. 

In 2018, BharatPe launched its merchant-focused QR code as a pilot in Nehru Place, a commercial hub in New Delhi. In August it commercially launched the QR code and was able to bring 1000 merchants on board In the first month, attracted by the zero transaction fees and interoperability feature. 

In 2019, BharatPe announced short-term credit options for merchants by partnering with Apollo Finvest to enable lending on its platform at an interest rate of 1.67% per month. That year it also launched India's first UPI Bahi Khata for merchants which allows merchants to record their cash/credit (Udhar) sales customer-wise, request accounts receivable from customers via SMS payment links, and keep track of accounts payable to suppliers.

In 2020, BharatPe launched two voice-based features during the pandemic. Paisa Bolega, a button introduced in the BharatPe App that converts the shopkeeper's smartphone into a loudspeaker, announcing the value of transaction received. BharatPe Balance provides a single snapshot of the shopkeeper's daily QR collections, balance in 12 percent interest a/c, and the loan limit. The startup also launched Bharat Swipe, a POS card machine for merchants with zero fees and a lifetime warranty. That year it claimed to be the third-largest player in the merchant UPI payment acceptance space and reached an all-time high of 5% market share by transaction value and 7 percent market share by transaction volume. 

In 2021, BharatPe acquired Payback India, a multi-brand loyalty program from American Express and ICICI Investments Strategic Fund. It also entered the Buy Now Pay Later (BNPL) category with the launch of Postpe, a shopping and payment platform that lets users shop now and pay next month. The company also forayed into p2p lending with ‘12% Club’ which allows individual investors to invest and borrow at 12% interest through the app. It entered the unicorn club after raising $370M in a Series E funding round and is now valued at $2.85B. The startup was also issued a Small Finance Bank (SFB) license by The Reserve Bank of India (RBI). 

From archive.org

Additional Learnings

What makes BharatPe stand out from its competitors is that they have chosen to target merchants, a market with immense untapped potential. It does not have to spend too much cash to maintain a base of customers, as the no fees policy is enough to attract customers. Moreover, the lending feature for merchants and shopkeepers also serves as a competitive advantage since they were the first company to make lending this easy and quick for merchants. 

In Feb 2022, the company terminated Ashneer Grover’s wife, Madhuri Jain who serves as Head of Controls at BharatPe on charges of financial irregularities and canceled her stock options. This has started a cold war between the investors and Grover as the founder filed an arbitration plea to stop this probe into alleged financial mismanagement in the company which was refused by the Singapore Arbitration Centre (SIAC). The whole scandal started when an audio clip of an abusive conversation between Ashneer and a Kotak Mahindra bank employee was leaked, where the former was abusing the bank employee for not getting him a stake in Nykaa IPO. Initially, Ashneer denied this claim and termed it as an attempt at extortion but later he deleted that tweet. 

Market Snapshot

• Digital payments in India are expected to touch $1Tr by 2026, after hitting a value of $300B in 2021, mostly propelled due to the government creating a favorable environment for the same. 

• Driven by cheap internet, high smartphone penetration and government initiatives, India outpaced the world by registering 25.5B+ digital payment transactions in 2020. 

Suggested starting points to dive deeper

• Inside story of how Centrum and BharatPe ‘unified’ for their banking dream. But challenges start now. (The Economic Times)

• BharatPe Redefined India's Payment Ecosystem. The Unicorn Now Wants To Challenge India's Banks (Manu Balachandran, Forbes India, Sep ‘21)

• Why BharatPe offered payments free of charge? (Nevin John, Fortune India, Oct ‘21)

• Centrum And BharatPe's Plans For INR 40,000 Cr Small Finance Bank (Sethu Pradeep, Inc42, Oct ‘21)

• BharatPe rolls out BMW bikes to new joinees; extends offer to product mangers (Business Today India, July ‘21)

• [Product Roadmap] How BharatPe built a robust, easy-to-use tech product for 50 million SMEs (Sindhu Kashyaap, Your Story, Oct ‘20)

These briefs are produced by leveraging publicly available data sources and information. If you notice a mistake or see an area for improvement, please let us know through this typeform or via email (team@sandhill.io).

Snapshot

Faire is an online wholesale marketplace connecting independent small retailers and brands around the world. Founded in 2017, the company enables small businesses to compete on a more level playing field with the likes of Walmart and Amazon. It benefits and connects both retailers and wholesalers to the vast pool of up-and-coming products across the world.

The company has successfully raised $1.1 Billion in its first 4 years of operations and has offices in Amsterdam, Atlanta, London, Los Angeles, New York, Salt Lake City, San Francisco, São Paulo, Toronto and Waterloo.

About Faire: Website, LinkedIn

Business Overview and Products

Faire offers an online wholesale marketplace that connects small business owners and independent brands to buy and sell wholesale online. For retailers looking to purchase wholesale products on the platform, the marketplace offers convenient financial terms and logistics such as its famed Net 60 terms. These terms, while previously being offered by other businesses, were mostly only available to large retail chains once.

For its brands, Faire’s platform offers powerful sales, marketing, and analytics tools to the sellers. These tools can excessively simplify the operations and business for these sellers.

How It Works

Through its online marketplace, Faire connects retailers seeking brands and wholesalers seeking to sell those products. Once wholesalers join the platform and display their products, retailers can buy from them based on their requirements. 

After a retailer purchases merchandise from Faire, they can sell it online or in a brick-and-mortar shop. However, retailers must refrain from selling these purchased products on giant platforms like Amazon, eBay, Etsy and Poshmark, because it goes against Faire’s basic policy. This is due to its ultimate goal to support small businesses, which is why this prohibition is in place. 

Technology plays a big part in Faire’s success. The platform leverages machine learning to automatically match local retailers with the most relevant makers for their stores. It has also developed in-house algorithms which aim to improve product recommendations, ranking, search, logistics, and more.

Business Model and Pricing

Faire’s business model depends on joining its online marketplace for free, according to an article in Capitalism.com. Interested wholesalers first have to fill out an online application before they can begin selling on the site. Then Faire makes money through commissions. Wholesalers only pay a commission on new business they obtain from the site. Hence Faire takes this commission whenever a retailer places an order on the site. Commission percentages vary from 25% for first-time orders down to 15% on reorders.

The retailers benefit from Faire’s model through Net 60 payment terms, which let retailers test products completely risk-free. Retailers can buy merchandise they like, stock it on shelves, and then gauge customer response. After 60 days, they can return any unsold merchandise without any obligations. They can even get free returns on any merchandise they send back.

Traction

Faire had a successful response from the get-go. The Capitalism article discusses how within 3 months of the launch of Faire’s net 60 payment terms, it went from doing $100,000 to $1M per month in gross merchandise value by the end of 2017. However, the journey was not entirely easy. In 2018, retailers returned a staggering amount of merchandise and many of them who failed to return the merchandise did not pay up. A rigorous analysis revealed that the issues were stemming from the Net 60 payment terms, and so the terms were updated. Credit limits were imposed and a ranking system was created for wholesalers and products. Within 6 months, return rates dropped by 75%.

When the coronavirus pandemic began, the retailer landscape drastically changed. Trade shows, which were a norm, had to shut down and their virtual counterparts could not keep up. Brick and mortar shops began closing overnight and retailers and wholesalers desperately sought a solution, which Faire presented. However, the company did impressive business in 2020. It tripled its revenues and sold over $75M products to small businesses that year. It must be noted that Faire took clever measures to cater to the issues some of its retailers were struggling with. The pandemic initially forced many of the company’s retailers to the brink of shutting down their businesses, sending their inventory orders plunging by more than 60%. In response, Faire offered extensions on its payment terms for purchased inventory and waived the fees it charges brands to get paid for orders right away.

Today, Faire boasts the following statistics (as listed on its website). There are:

• 300,000 retailers buying on Faire

• 15,000 cities with Faire retailers

• 40,000 brands selling on Faire

• 2 million connections introduced on Faire

Founder(s)

Max Rhodes: Co-founder & CEO at Faire. Before Faire, Rhodes was the first product manager for many initiatives at Square, including Square Capital and Square Cash. He came up with the idea for Faire while introducing the Blunt Umbrella in the US.

Daniele Perito: Co-Founder and CDO at Faire. Prior to starting Faire, Daniele led Risk and Security for Square Cash, where he designed and implemented the anti-abuse and anti-fraud systems that have made Cash possible. 

Jeffrey Kolovson: Co-Founder and COO at Faire. Prior to Faire, he was at Square where led Caviar, Square’s food delivery service.

 Marcelo Cortes: Co-founder & CTO at Faire. Prior to the founding of Faire, Marcelo worked as a Staff Software Engineer at Square.

History and Evolution

Before Faire came into existence, the wholesale model was extremely outdated in the sense that small retailers could only discover and purchase new merchandise in-person, through emails, or via telephone. Hence, they were limited in the range of wholesalers they could reach and struggled to keep up and were often subjected to unfair pricing.

In 2017, a group of colleagues working together at a mobile payment platform called Square had an idea. Perito, Kolovson, Cortes and Rhodes all worked in different departments at Square but had a common revelation for the antiquated wholesale model in place. With their different backgrounds, each could bring a variety of skills to the table and so with this idea in hand, Faire was founded in 2017. It was built on the understanding that the old wholesale model needed a revolutionary change. Their mission was to connect small retailers, including mom-and-pop shops, with the right products, so the solution they came up with was an entirely online wholesale marketplace. 

In the words of co-founder Rhodes, “We just happened to land on the right idea from day one. The result was that we started growing pretty fast, pretty quickly.” The idea worked out as small business owners also responded well to the online hassle-free model. It ended up benefiting both wholesalers and retailers, as wholesalers could now be connected to up-and-coming brands across the world, while retailers could bid competitively for the latest products without even having to leave their shops. This model would also enable them to compete against giant retailers. 

Additional Learnings

• The June 2021 funding round coincided with Faire’s decision to expand across continental Europe. Its European market outpaced the US by 230% after only 30 days of launching.

• Faire has reported 300% YoY growth after expanding to the largest markets across Europe.

• Retail clients who use the payment processing system Square can link their Square account with Faire to get data on how products are selling, and which items are likely to sell out.

• Faire uses advanced AI Technology to power its platform which consists of predictive software that features Faire’s own in-house AI-powered image recognition software.

• Faire was originally named Indigo Fair.

Market Snapshot

• According to the National Retail Federation, the US has close to 3 million small retailers with fewer than 10 employees, accounting for 91% of the retail businesses in this country.

• There are millions of thriving small businesses in North America and Europe alone, and it is estimated they collectively represent a $2T market.

• Wholesale trade in the US grew 4% from 2020 and has reached a $8.5T market size by mid-2021.

Suggested Next Reads

• About Faire (Faire, 2021)

• From $0 to $7B in 4 Years - Here’s How the Founders Did It (Capitalism.com, August ‘21)

• Faire Nearly Triples its Valuation to $7B With $260M Series F Funding Round Led by Sequoia (Business Wire, June ‘21)

• Faire Wholesale Reviews and Makes Tips (Wholesale in a Box, February ‘21)

• Review of Faire – The Wholesale Marketplace Platform (Lucky Break Consulting, ‘19)

Competitive Intelligence & Analysis

Click through to dive into the competitive intelligence on the company, including website and mobile analytics, review information on the product and organization, and more.

View Competitive Intelligence

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Hi Everyone 👋,

Welcome to Teardowns. We’re excited to have you join us for this experiment as we dive into the fastest-growing companies across different industries and geographies.

As we kick-off, we’re going to be playing around with different formats for this newsletter to figure out what works best for sharing the latest teardowns. We’d love to get feedback from you on any ideas as you receive these – everything from cadence of the emails to how we package things.

You can reach me at any time by just replying to this email or messaging our team at team@sandhill.io. Our hope is to build something we can all benefit from and so we’d love to involve as many collaborators as we can.

Ali

Today’s Teardowns

• Wave.tv – Building a sports media network on top of digital platforms like Instagram, Facebook, TikTok, Youtube, and more.

  • Founded: 2017. Funds Raised: $65M. Followers: 100M+.

• TopTal – Online talent marketplace for freelancers.

  • Founded: 2010. Funds Raised: $1.4M. Revenue: $200M+.

Teardowns from earlier this week

• Cider – Direct-to-consumer fashion brand that scaled to a unicorn in under 18 months

  • Founded: 2020. Funds Raised: $140M. Countries Served: 100+.

• Gupshup – Messaging API for businesses to build text-based conversational experiences across platforms.

  • Founded: 2004. Valuation: $1.4B. Revenue Run Rate: $150M.

• Jellysmack – Building a digital media company that powers its own content and those of other creators across digital platforms

  • Founded: 2016. Valuation: $1B+. Monthly Views: 10B+.

• Pilot – Bookkeeping, Tax, and CFO services for businesses

  • Founded: 2016. Funds Raised: $155M+. Valuation: $1.2B.

• Newstore – Providing a suite of omni-channel software for retail merchants. Started by the founder of DemandWare.

  • Founded: 2015. Funds Raised: $150M+. Countries Served: 40+.

• FirstCry – Indian eCommerce company focused on selling baby and kids products.

  • Founded: 2010. Valuation: ~$2B. Revenue (‘20): $120M.

Feedback or Suggestions?

These teardowns are very much an experiment in public beta. We’ll be modifying our templates and processes – please do share any feedback or suggestions through our typeform or via email (team@sandhill.io)!

Changing Email Preferences

You are currently subscribed to the daily digest. You can toggle your preferences below if you’d like to switch to the weekly digest.

Manage Subscription