Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. 🙏

Today we’re diving into -
- KukuFM’s $25 million Series C round,
- Nvidia’s trajectory change towards India,
- And WhatsApp’s latest e-commerce chamatkar.

Our read time today is 4 minutes and 33 seconds - faster than Bombay baarishein photos get plastered over your Insta stories. 🥟

Let's dive in. 👇

Market Vibe Check

Kuku FM’s investors go kuku with a $25mn Series C. 🦃

TLDR -
- KukuFM just picked up $25mn from IFC and Nandan Nilekani’s fund.
- They’ve done exceptionally well while carving out niche content for all of India’s niche communities.
- Currently at a $15mn run rate with 2.5mn+ PAYING subs.

Kuku FM is an audio content platform - think of it as an audio-only Netflix.

They’re a home-grown desi startup, and they just raised a bumper $25 million Series C round.

There are 2 big things to know here -

1 - India will pay for a subscription IF your product is killer.

KukuFM doesn’t run ads or let users have free trials.

They charge a flat fee.

100Rs/month, or 1,000Rs/year.

Despite this, they’ve hit a $15 million/year revenue run rate and have 2.5 million+ paying users.

2 - Niche content for niche communities pays more than you think.

One reason that KukuFM has done so well is that they service markets which no one is tapping.

It is super difficult to find high quality content in languages like Bhojpuri, Marwari, or Sindhi on the web - but KukuFM literally lets users search by language.

India has over 1,000 unique languages spoken everyday, so any platform that links all of these small communities at scale does REALLY well.

Crazy stuff.

Nvidia hedges it’s China bets with an India push. 🧑‍💻

TLDR -
- Nvidia CEO has called India “the next big AI market”
- They’re spending billions on local manufacturing and are supplying companies like Jio with contract orders in the 9-figure USD range.
- Governments are subsidising this too - electronics manufacturing is heating up.

Nvidia CEO Jensen Huang came to India last week.

He confessed that he was so busy that he survived on masala omelets and cold coffees 😂

It's all with good reason - because Nvidia wants to diversify away from China ASAP.

1 - Nascent AI market

Tech hubs like Bangalore have the vibe of 90s Silicon Valley - hungry and hardworking talent, lots of natural push toward hardware/software, and tons of tech bros setting up their Xth startup.

India is the only major market remaining that Nvidia doesn’t have a hand in - which is why it makes sense for them to put roots down.

2 - Nvidia + Jio’s AI infrastructure play

Jio wants to build their own LLM (large language model), and Nvidia will supply the tech backend to help them do so.

The cost for chips here is gonna run up a 300-350 million USD bill, with millions more of opex.

Pretty hefty incentive for Nvidia.

3 - Hardware manufacturing hubs

India has bade sapne and ambitions to boost electronics manufacturing.

Government has employed billions of USD in subsidies to attract both local and foreign companies to invest - which seems to be working.

The central government drops a 50% subsidy on fabrication plants, and state governments chip in anywhere from 10-25% depending on where you are.

This is a MASSIVE incentive for semiconductor companies, since the biggest costs are to setup the plants.

WhatsApp brings their cash cow to India. 💸

One of the biggest, best, and most untapped opportunities of this decade is the digitization of kirana stores.

WhatsApp is cutting directly to the chase - they will launch a host of UPI payment options native within the app.

This is a massive opportunity, and emerging markets are the right place to start.

Lots of these retail stores are unorganized and often take cash payments.

They don’t have the time and/or foresight to set up a digital store, but are happy to take digital payments.

And that’s the market that Meta wants to tap.

India is being used as a test bed for Meta, since Zuckerberg and co desperately need to diversify away from advertising.

It’s also WhatsApp’s biggest market globally, which means that it makes sense to launch in India, since most can get up and running in an instant.

Killer.

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