Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Friday, folks. Hope life is good.

Today we’re diving into -
- Slice’s merger with a small finance bank,
- KKR private equity’s jump into Gurgaon,
- And Krafton’s plan with India’s ecosystem.

Our read time today is 4 minutes and 48 seconds - faster than New Zealand got revenge for 2019… 🏏

Let's dive in. 👇

Market Vibe Check

Fintech unicorn Slice marries a small-finance bank. 💍

TLDR -
- Slice merged with a bank worth a fraction of itself.
- RBI finished Slice’s credit card business, and the bank had a massive surge in NPAs.
- Both are working together since Slice has the fintech expertise, while the bank has the distribution and lending sorted.

A friend in need is a friend indeed…

Normally, big banks acquire fintechs. Yesterday, the opposite happened.

Both Slice (a credit card startup worth $1.5bn) and North East Small Finance Bank (a bank worth $65mn) have been having issues of late.

RBI passed a few rules on prepaid instruments that virtually killed Slice’s business, and NE’s main target market is Assam - which had crazy floods and sent loan defaults surging.

Slice tried to bounce back, launching a prepaid wallet and short-term unsecured loans.

But to make a model like this work, you need access to cheap credit.

That is PRECISELY what Slice is going for with this acquisition.

They are now technically a fully regulated business, with a solid balance sheet and a team that can handle things like distribution and lending.

Slice’s revenues last year soared 8X to $35mn…

Pretty killer. 💳

Krafton India sets up a local gaming incubator. 🎮

TLDR -
- South Korean gaming giant Krafton is investing $150mn into India thru a gaming incubator.
- Their flagship game BGMI only just got reinstated and they’ve come back with tons of dry powder.
- India’s gaming sector is rather cold - not too much investment and excitement of late.

A boon for India’s gaming ecosystem - BGMI maker Krafton is all-set to invest $150 million more into startups.

BGMI is basically a jazzier version of PUBG, and it’s easy mobile compatibility has helped it swarm the Indian market.

The game actually got banned from India a year back, but was just reinstated - which is probably why Krafton’s got this fund ready.

This $150mn is gonna go into homegrown gaming startups, because the sector is SUPER thanda atm.

They’ve spent $140mn over the last 2 years on Indian businesses with investments into Kuku FM, Loco, Pratilipi, and Nodwin Gaming.

Pretty small, and very gaming-centric.

To each his own…

KKR Private Equity comes to India. 💸

Direct from Upper West Side to Uttam Nagar…

KKR’s a private equity business - which means they’re always chasing yield.

Their next hunting ground? Gurgaon.

They’re setting up a pretty big office in Cyber City with 150+ employees and a lot of tech backend.

India has a massive finance talent pool, and KKR can play the exchange rate arbitrage by buying rupee-denominated assets in USD and earn 2-3X the yield they would otherwise.

KKR already has a few big stakes in Indian companies - including a $1bn investment in Reliance and quite a few startup bets.

Big money.

In other news… ☕

FIVE Holdings (Dubai party hotel) gets ready for an IPO (BBG)

Twitter crosses the 500mn posts per day mark (TC)

SBF defends himself by saying that America made him a “cartoon villain” (FT)

Vedanta hunts for a $3bn deal to stave off default fears (Mint)

Frontrow goes from $17mn → absolute ZERO (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