Namaste, Sat Sri Akaal, and Salaam. 🫡

Today we’re diving into -
- Purplle’s mammoth fundraise from Abu Dhabi’s fund,
- Google’s push to go ham on India manufacturing,
- and PocketFM’s blockbuster growth all-round.

Our read time today is 4 minutes and 54 seconds - faster than Bombay’s crowds let the ambulance through… 🙏

Let's dive in. 👇

Market Vibe Check

Purplle ramps up a $170mn fundraise. 💄

TLDR -
- Purplle just picked up $120mn, and might raise up to $170mn at a $1bn+ valuation.
- Some marquee investors are ADIA, Premji, InCred, and Creaegis.
- They’re killing it in T2/3 cities under the private la

Purplle is one of the few Indian startups that’s decided to slowly and carefully build their innings, instead of going all-out from the outset.

It looks like they’ve hit critical mass, and they’re now raising up to $170 million to drop gears and shift to the fast lane.

So far, they’ve already got around $120mn in the bank from some pretty high-quality investors like ADIA (Abu Dhabi’s sovereign fund), Premji Invest, and InCred.

The numbers are a little disappointing for a non-software unicorn, but they’re still relatively strong compared to what the market has been rewarding. Last year, they did about 500cr of top-line with a loss of 230cr, double what they did the year before.

Their entire strategy revolves around looking away from Tier-1 India, and instead going all-out on Tier-2/3 cities, which have lower mean incomes but are vastly underserved by ‘brands.’

For example, a middle class family in Delhi will have ample places to shop and spend their income, but a middle class family in a town like Nagpur or Vijaywada has only a handful of outlets they can visit.

The crazy amount of wealth creation that is happening outside of India’s T1 cities is giving an extra boost to any business that can marry aspiration with affordability - and Purplle is a clear winner here.

They have a strong focus on making sure their product is actually good quality and have invested heavily into R&D - which means that they have stickier customers than those of brands like Sugar Cosmetics, and other mass-premium retailers.

This is an exciting one…

Google hits market with ‘Made-In-India’ Pixel phones. 📱

TLDR -
- Google will be producing Pixel phones in India.
- Lots of big tech firms are opting to use India for it’s cheap subsidies, soaring local demand, and viability as an export base.
- India breaks even on their investments if companies drive over $350bn+ in revenue and hire 4.1 million locals.

Habibi, come to Tilak Nagar…

From 2024 onwards, Google will be selling it’s India-produced Pixel phones - another big boost to the manufacturing sector and a vote of confidence in India as an export base.

There are 3 big reasons why -

1/A need to move away from China

This is pretty self-explanatory - not many Western firms are happy with their Chinese production backbones of late.

They’re subject to the whims and fancies of a (rather volatile) government while also getting full scrutiny from their own regulators.

The mental cost + trust loss + shipping ends up outweighing the cheap production.

2/Hefty subsidies in India

Once again, pretty self-explanatory.

The Indian government has been pushing very, very hard on local manufacturing.

They’re handing out subsidies which get as crazy as 300-350% of cost.

So if you’re a producer of “large scale electronics” and invest $10 million into a factory, you get $35 million back in cash.

3/A large + quickly growing domestic market

Indian mass incomes are still 3rd world by any means, but they are growing very fast.

There is a very large chunk of “aspirational” middle class who is happy to spend decent amounts on big ticket purchases.

Plus, mean incomes are growing at the fastest rate out of all developing economies.

There’s also a growing local ecosystem - nine years back, there was no smartphone production. Today, almost $44 billion of mobiles are produced every year with $11 billion of that going to export markets.

Cheap production + killer domestic demand + tons of subsidies = a proposition that few sensible industrialists could ignore.

PocketFM gets ready to snag big bucks. 💸

TLDR -
- PocketFM has managed to 6-7X their revenue from $25m/year to over $160m/year.
- ADIA is looking to invest alongside an already-brewing $100mn round from Lightspeed Venture Partners.
- Pretty insane growth from their end - 7X growth in a foreign market in less than a year is no easy feat.

 PocketFM is making a killing by selling the exact same product in the USA and in India - something which is notoriously hard to do.

They run a ‘Spotify clone’ for things like audiobooks, podcasts, and lectures.

Less than 30% of their users come from India, despite their launch being desi and their headquarters being in Gurgaon.

A very underrated but crucial aspect to their business - they own the IP to the most interesting podcasts on their platform. PocketFM has been spending crores perfecting their in-house content strategy and A/B testing the hell out of small things to perfect the user’s experience.

The result?

Something like a Netflix Original’s movie that they own the rights to, but can still earn from by leasing it out to film houses/apps that want to stream it. Plus, the long-term content costs are FAR lower than if they had to pay a license fee every year.

With growth this good, it makes sense that they’re getting a decent few eyeballs on them. ADIA has been speaking to PocketFM for the last month to invest a pretty large amount alongside a ~$100mn cash injection from Lightspeed Venture Partners.

PocketFM is a content creation company which owns the entire tech stack - and when they were last in the market for funds, they were valued at $750mn with $25mn of ARR. As of last month, they’ve got an annual run-rate of over $160mn - which implies over a billion dollars in valuation.

It’s all numbers on paper, but still very impressive.

In other news… ☕

Jeff Bezos offloads $5bn more of Amazon stock (FT)

Fisker asks bankruptcy courts to sell their cars for $14k a pop (TC)

Liz Warren accuses JPow of giving bank CEOs too much influence (Mint)

Trump’s lead over Biden keeps growing in pre-election polling (BBG)

US reliance on Mexican avocados continues (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC