Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Monday, folks. Hope life is good.

Today we’re diving into -
- Cred’s latest financials,
- PocketFM’s hunt for big bucks,
- And Zomato’s super-healthy momentum.

Our read time today is 4 minutes and 55 seconds - faster than Australia caused 1.4 billion heart attacks… 🙈

Let's dive in. 👇

Market Vibe Check

Cred trims losses and races on. 🏃‍♂️

TLDR -
- Cred revenues 3.5Xed from last year to $170m, losses climbed just 5%.
- If you isolate ESOP costs, they actually cut losses by 10% - basically means that Cred is splurging heavy on top talent.
- Lending and bill payments still hold 70%+ share of revenues.

Beta… market down nahi hai 🙈

A much-needed big win for fintech startup Cred - their revenues surged 3.5X last year while losses only climbed 5%.

And if you take out ESOP costs (company shares that you give employees), losses actually came DOWN by 10%.

Plus, the market seems to have knocked some serious sense into their business -
- 80% drop in CAC (customer acquisition cost
- 27% cut in marketing spend
- 10-15% monthly growth in their lending business

Debt is what has fueled the rise + fall of humans since the start of time, and it’s a very lucrative business for all these new-age fintechs.

They’re all vying for the same multi-billion dollars’ worth of clients and Cred is leading the race with a 15k Cr loan book - just under $2 billion.

Plus, users of their lending products are increasing 15%+ per month.

Refreshing to see a little consumerism, but we can’t let it get out of hand as it did in the West.

Now I am become lender… distributor of loans. 💀

PocketFM hunts for a $750 million valuation. 📻

TLDR -
- PocketFM just hit the $25mn ARR mark and are gearing up for a $750mn fundraise.
- Over 70% of their users come from Western markets/USA.
- Their strategy is different, since they invest millions into high-quality content creation for a long-term competitive advantage.

Desi khoon, firangi shaunk…

It’s super difficult to sell the exact same product in both USA and India - but PocketFM is doing it and making millions.

They run a Spotify clone for podcasts/audiobooks, and it’s catching on like CRAZY in the West.

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 spends 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.

They’re raising money at a $750mn valuation (currently $25mn/ARR) to build this business - essentially a content creation company run like a tech startup.

Crazy impressive… 🚀

Zomato continues it’s RIP. 🍅

Most startups that made lofty claims last year never delivered on them.

Zomato was one of the handful that actually did, and markets are rewarding them.

Shares have 2X’ed and then some more in the last few months, and it’s all because of a few key improvements in the dhandha.

They’re growing their margins on the core food delivery business while blitzing the market with the quick-commerce arm.

Zomato has also managed to attract and retain their highest-ticket customers with their Gold membership - over 30% of all orders placed on the platform come from the 2-3% of Gold users.

Food margins will expand to 5% gradually, and volumes will slowly start ticking up in Tier2-3 cities.

Killer stuff.

In other news… ☕

Metro Bank looks for a 600m GBP cash injection to stay alive (FT)

Fast fashion startup “worth” $161mn shuts down (TC)

Adani cuts down on third-party reliance for it’s cement biz (Mint)

Vinfast sets up a $200mn EV unit in India (Inc42)

USA sends warships to Israel (BBG)

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