Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. Hope life is good.

Today we’re diving into -
- Udaan’s half-a-billion dollar revenue hit,
- InsuranceDekho raises $60mn in the unicorn race,
- And Mastercard drops some harsh truths on the UPI ecosystem.

Our read time today is 4 minutes and 55 seconds - faster than you can prep a 3am bread-bhujia-ketchup platter…

Let's dive in. 👇

Market Vibe Check

InsuranceDekho nabs a $60mn round to supercharge growth. ⚡

TLDR -
- InsurTech spin-out InsuranceDekho raised $60mn at a $600mn valuation.
- Indian insurance spend is at 5%/GDP, while lots of other EMs hover near the 7-1% mark.
- InsuranceDekho has sold $432m+ in policies this yr with a team of 150,000 part-time agents.

Spinning out from a unicorn… now quickly turning into a unicorn.

Insurance startup InsuranceDekho just picked up $60mn at a $600mn valuation, and it’s a massive bet on the future of insurance in India.

Currently, only 37% of Indians have health insurance, and a crazy 3% of Indians have life insurance.

Plus, total insurance spend hovers around 5% of GDP while countries like the US/China’s numbers hover around the 10-15% mark.

This is a crazy market - since there is a lot of room for low-cost, low-cover policies which are genuinely affordable to the masses.

India’s biggest insurance company LIC has seen shares up 30%+ since the start of the year, and investors want to get in on something new and exciting with lots of growth potential.

InsuranceDekho is on track to sell over $432mn in policies this year and relies on over 150,000 gig workers to sell their products.

Very interesting, very cool stuff. 🤔

Udaan takes a $514mn top-line hit. 😬

TLDR -
- Udaan cut losses by 1/3rd from $375mn →$250mn.
- Revenue took a major tank from $1.2bn → $680mn.
- They’ve spent lots of cash + time restructuring and growing profitable businesses from scratch… looks like it’s not paying off as quick as they’d like.

B2B commerce platform Udaan saw a pretty hefty revenue dip of $500+ million - from $1.2bn to $680mn (effectively half).

Their primary goal this year was to keep losses in check.

And they did precisely that (from $375mn in the red to $250mn in the red).

But all that cost-cutting meant that the core business started suffering quite a bit.

Udaan’s main businesses are in supplying produce, packaged food, and home-care items to retailers.

They’ve spent the last year restructuring, firing, and trimming down each arm to try and gain some profitability-led momentum.

There’s also a lot of debt on their head.

Interest payments of $25mn are due every year, with almost $500mn due by 2025.

Crazy stuff…

Mastercard throws some shade on the UPI ecosystem. 😅

India is envied by most countries because of how killer UPI is.

No cost, no cards, no stress - these points are exactly why it took off.

Merchants were incentivized to offer UPI payments over credit card payments since the government made it completely FREE for them.

And remember - since India is a super price-sensitive market, millions of brick-and-mortar retailers decided to hop on the UPI train to save the 2-4% that credit card companies charge them.

But someone has to foot those costs.

And this is the core of the UPI problem.

When you complete a UPI transaction (say I buy something from a grocery store), the grocery guy’s bank will pay an interchange fee to my bank.

This fee is gonna go toward maintaining the UPI ecosystem, but there’s a big problem here.

UPI transactions end up generating losses for banks - very small losses, but enough to cast doubts over how sustainable it is in the long-run.

Ka-ching… 💸

In other news… ☕

Tesla finally makes major headway on Cybertruck production (BBG)

Caroline Ellison admits to feeling “relieved” after FTX fraud (FT)

Google halves prices for their blockbuster cloud product (TC)

IRS demands over $30bn in taxes from Microsoft (FT)

BYJU’s lenders bring the consultants in to protect the company’s assets (Inc42)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it. Have a mauj-masti filled day.

Lots of ❤️,

Team Cutting Chai