Mukesh Ambani
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Reliance’s Jio Platforms says it will roll out 5G in second half of 2021
Reliance’s Jio Platforms, the largest telecom operator in India, plans to roll out a 5G network in the country in the second half of 2021, top executive Mukesh Ambani announced on Tuesday.
“India is today among the best digitally connected nations in the world. In order to maintain this lead, policy steps are needed to accelerate early rollout of 5G, and to make it affordable and available everywhere. I assure you that Jio will pioneer the 5G revolution in India in the second half of 2021,” said Ambani, who controls Jio Platforms’ parent firm Reliance Industries, at a trade conference.
The announcement comes as a surprise as India has yet to grant spectrum for 5G network to telecom networks in the country. At this moment, it is also unclear when India will begin auctioning the 5G spectrum.
Ambani, who is India’s richest man, said he was hopeful that the rollout of 5G network in India will enable the world’s second-largest internet market to lead what he termed as the fourth industrial revolution. “Jio Platforms, with its family of over 20 startup partners, has built world-class capabilities in artificial intelligence, cloud computing, big data, machine learning, internet of things, blockchain, etc.,” he said.
The telecom operator, which has raised over $20 billion this year from a roster of high-profile investors, including Facebook and Google, said the company is also hopeful that its bouquet of services in education, healthcare, financial services and new commerce categories “once proven in India, will be offered to the rest of the world to address global challenges.”
Gopal Vittal, the chief executive of Airtel (India’s second-largest telecom operator), said the company was hopeful that India would have established a nationwide 5G network in two to three years. He, however, did not share a timeline for when the rollout of 5G on his network would begin. (In a recent earnings call, Vittal had warned that the proposed price of the spectrum of 5G was “very, very expensive” — something that won’t support any kind of business model.)
During his speech, Ambani also urged industry players to rely on locally produced hardware and components. “As the digitalisation of the Indian economy and Indian society picks up speed, the demand for digital hardware will grow enormously. We cannot rely on large-scale imports in this area of critical national need.”
Airtel has previously said that it is open to the idea of collaborating with global firms for components. “Huawei, over the last 10 or 12 years, has become extremely good with their products to a point where I can safely today say their products at least in 3G, 4G that we have experienced is significantly superior to Ericsson and Nokia without a doubt. And I use all three of them,” said Sunil Mittal, the founder of Airtel, at a conference earlier this year. In the same panel, U.S. commerce secretary Wilbur Ross had urged India and other allies of the U.S. to avoid Huawei.
Vittal today also urged that India should adopt the global 5G standard. “There is sometimes talks that India must have its own 5G standard. This is an existential thread which could lock India out of the global ecosystem and slow down the pace of innovation. We could let down our citizens if you allow that to happen.”
On today’s panel, which was attended by Mittal as well as Indian Prime Minister Narendra Modi, Ambani said stakeholders also need to think about ways to serve nearly 300 million people who are still on 2G networks in India. “Urgent policy steps are needed to ensure that these underprivileged people have an affordable smartphone, so that they too can benefit from Direct Benefit Transfer into their bank accounts, and actively participate in the Digital Economy,” he added.
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How Reliance Jio Platforms became India’s biggest telecom network
It’s raised $5.7 billion from Facebook. It’s taken $1.5 billion from KKR, another $1.5 billion from Vista Equity Partners, $1.5 billion from Saudi Arabia’s Public Investment Fund, $1.35 billion from Silver Lake, $1.2 billion from Mubadala, $870 million from General Atlantic, $750 million from Abu Dhabi Investment Authority, $600 million from TPG, and $250 million from L Catterton.
And it’s done all that in just nine weeks.
India’s Reliance Jio Platforms is the world’s most ambitious tech company. Founder Mukesh Ambani has made it his dream to provide every Indian with access to affordable and comprehensive telecommunications services, and Jio has so far proven successful, attracting nearly 400 million subscribers in just a few years.
The unparalleled growth of Reliance Jio Platforms, a subsidiary of India’s most-valued firm (Reliance Industries), has shocked rivals and spooked foreign tech companies such as Google and Amazon, both of which are now reportedly eyeing a slice of one of the world’s largest telecom markets.
What can we learn from Reliance Jio Platforms’s growth? What does the future hold for Jio and for India’s tech startup ecosystem in general?
Through a series of reports, Extra Crunch is going to investigate those questions. We previously profiled Mukesh Ambani himself, and in today’s installment, we are going to look at how Reliance Jio went from a telco upstart to the dominant tech company in four years.
The birth of a new empire
Months after India’s richest man, Mukesh Ambani, launched his telecom network Reliance Jio, Sunil Mittal of Airtel — his chief rival — was struggling in public to contain his frustration.
That Ambani would try to win over subscribers by offering them free voice calling wasn’t a surprise, Mittal said at the World Economic Forum in January 2017. But making voice calls and the bulk of 4G mobile data completely free for seven months clearly “meant that they have not gotten the attention they wanted,” he said, hopeful the local regulator would soon intervene.
This wasn’t the first time Ambani and Mittal were competing directly against each other: in 2002, Ambani had launched a telecommunications company and sought to win the market by distributing free handsets.
In India, carrier lock-in is not popular as people prefer pay-as-you-go voice and data plans. But luckily for Mittal in their first go around, Ambani’s journey was cut short due to a family feud with his brother — read more about that here.
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India’s richest man built a telecom operator everyone wants a piece of
As investors’ appetites sour in the midst of a pandemic, a three-and-a-half-year-old Indian firm has secured $10.3 billion in a month from Facebook and four U.S.-headquartered private equity firms.
The major deals for Reliance Jio Platforms have sparked a sudden interest among analysts, executives and readers at a time when many are skeptical of similar big check sizes that some investors wrote to several young startups, many of which are today struggling to make sense of their finances.
Prominent investors across the globe, including in India, have in recent weeks cautioned startups that they should be prepared for the “worst time” as new checks become elusive.
Elsewhere in India, the world’s second-largest internet market and where all startups together raised a record $14.5 billion last year, firms are witnessing down rounds (where their valuations are slashed). Miten Sampat, an angel investor, said last week that startups should expect a 40%-50% haircut in their valuations if they do get an investment offer.
Facebook’s $5.7 billion investment valued the company at $57 billion. But U.S. private equity firms Silver Lake, Vista, General Atlantic, and KKR — all the other deals announced in the past five weeks — are paying a 12.5% premium for their stake in Jio Platforms, valuing it at $65 billion.
How did an Indian firm become so valuable? What exactly does it do? Is it just as unprofitable as Uber? What does its future look like? Why is it raising so much money? And why is it making so many announcements instead of one.
It’s a long story.
Run up to the launch of Jio
Billionaire Mukesh Ambani gave a rundown of his gigantic Indian empire at a gathering in December 2015 packed with 35,000 people including hundreds of Bollywood celebrities and industry titans.
“Reliance Industries has the second-largest polyester business in the world. We produce one and a half million tons of polyester for fabrics a year, which is enough to give every Indian 5 meters of fabric every year, year-on-year,” said Ambani, who is Asia’s richest man.
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Tencent leads $111M investment in India’s video streaming service MX Player
MX Player, a popular video app that offers both local playback and streaming services, said on Wednesday that it has raised $110.8 million in a new financing round led by Chinese internet giant Tencent as the video app looks to expand its business in India and other international markets.
Times Internet, which acquired a majority stake in MX Player in late 2017 for $140 million, also participated in the Series A financing round. The post-money valuation of MX Player was $500 million, a person familiar with the matter told TechCrunch.
The addition of Tencent — which has invested in a handful of Indian startups including Times Internet-owned Gaana, ride-hailing giant Ola, ed tech startup Byju’s, B2B e-commerce startup Udaan and a bookkeeping service for merchants, Khatabook — “is a great sign of confidence,” said Satyan Gajwani, vice chairman of Times Internet. “Tencent is a leading global force in music and video, and there’s a lot for us to learn and leverage from their capabilities,” he added.
Karan Bedi, CEO of MX Player, said in an interview that the video app will use the fresh capital to double down on producing original TV shows and broadening its catalog of licensed content. The firm, which has so far added 15 original shows to its platform, has already commissioned production of another 20 by year-end, he said.
The Singapore-headquartered firm’s push into original shows and licensed content underscores one of the strangest evolution for a video app. MX Player originated in Korea as an app that could run video files in a wide-range of formats locally stored on a phone.
The app did all of this while consuming little resources, an ability that helped it win tens of millions of users with low-cost Android smartphones in emerging markets such as India. In fact, India is MX Player’s largest market, with 175 million monthly active users, Bedi said. Globally, the app has amassed more than 280 million users.
MX Player is ad-supported and does not charge users any monthly subscription fee. The service, which introduced movies and shows streaming in mid-2018, today also offers access to about 200 TV channels, their current and back catalog of shows, and a music streaming feature through an integration with Gaana.
Bedi said the company has tied up with all-web show producers such as HoiChoi in India and three of the top five TV local cable networks, including Sony and Sun. Missing from the list is Star India, the largest TV network in the country.
Thanks to the acquisition of 21st Century Fox, Disney now owns Star India. Star India has emerged as one of the gems in Disney’s new portfolio. The firm, which runs dozens of TV channels in India, operates Hotstar, the market-leading video streaming service.
Hotstar reported 300 million monthly active users and 100 million daily active users during the ICC Cricket World Cup tournament. The service has cashed in on the popularity of cricket to boost its numbers.
Bedi said MX Player is working on building new entertainment experiences, but sports content is not something it is exploring. The reason is simple: Cricket drives most of the sports streaming in India and Star India has secured rights to most of such content. (Facebook recently grabbed a slice of it, too.)
But cricket alone can’t help a streaming service win and sustain customers. Even Hotstar’s monthly user base plummets below 60 million in the months following the cricketing season, people familiar with Hotstar’s internal figures have told TechCrunch.
Figuring out what exactly resonates with the users in India, the world’s second largest internet market, is the billion-dollar question. The video streaming market in India is on track to be worth $1.7 billion in the next four years, according to PricewaterhouseCoopers.
Bedi, who spearheaded Eros Now’s India business before joining MX Player, said users are increasingly enjoying the original shows. Most of the shows that MX Player has produced so far, such as “Hey Prabhu,” “Thinkistan” and “Immature,” are largely targeted at college students and those who have just joined the work force. But the company is slowly populating the platform with shows such as “Queen” that appeal “universally,” he said.
MX Player today competes with more than three dozen local and international players, nearly all of which offer their services at dirt-cheap prices in India. Even Netflix, which launched in India with a $8 plan in 2016, this year introduced a $2.8 monthly tier. In recent months, several more firms including e-commerce giant Flipkart and food delivery startup Zomato have launched their video streaming services in the country.
Tencent-rival Alibaba announced earlier this year that it would invest $100 million to expand social video app Vmate in India.
Once cautious about each megabyte they spent consuming internet services, Indians are now spending about 10GB of data on their smartphones each month as data prices crash in the country, according to an Ericsson report. Indian billionaire Mukesh Ambani disrupted the local telecom market in 2016 when he launched Reliance Jio. The 4G-only carrier undercut the market by first offering bulk of mobile data at no cost, and then charging very little fee.
An analyst TechCrunch spoke with said it’s only a matter of time before India’s video market begins to see some consolidation and pull back. “You have to offer something appealing that none of your rivals have,” he said, requesting anonymity as he advises many of these businesses.
For MX Player, its odd evolution story may be its biggest advantage. The app’s local video playback feature continues to draw many to it, and keeps the app among the top rated in Google’s Play Store. Bedi said the startup, which today employs about 300 people, maintains a large team that continues to improve the tech stacks to improve video playback support.
Moving forward, MX Player will also look into expanding to some international markets. It recently started beta testing the video streaming service in the U.S., Canada, Australia and New Zealand. Eventually, the startup hopes to make original shows for these markets that are relevant to the local audience there.
MX Player maintains a premium app on Google Play Store that strips ads for $5. But the app continues to mostly rely on revenue it generates from ads. Times Internet’s Gajwani said that at some point in the future, the video service will expand monetization beyond pure advertising. “That said, MX is consumed daily as much as the leading TV channel in India, so there’s significant headroom to capture larger advertising spends as well,” he added.
Paytm, a leading financial services firm in India, was also in talks with MX Player to invest in this financial round. It may invest in the video streaming services app at a later stage, a person familiar with the talks said.
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India to spend $6 billion to revive telecom operators BSNL and MTNL
India said on Wednesday it plans to spend nearly $6 billion to revive loss-making state-funded telecom operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL).
In a press conference, telecom minister Ravi Shankar Prasad said today the Narendra Modi government has given its in-principle approval to the merger of BSNL and MTNL and infuse billions of dollars in capital, though he did not specify a time frame.
BSNL offers telecom services across the nation, while MTNL serves people in New Delhi and Mumbai. Both the firms have been bleeding money for years as competition from private players intensified in recent years after the arrival of India’s richest man Mukesh Ambani’s aggressive firm Reliance Jio. BSNL and MTNL have debt of about $5.65 billion.
The arrival of Reliance Jio, which undercut the market with its 4G-only telecom network, free voice calls and incredibly low-cost data prices, saw incumbents Vodafone and Airtel lower their prices and expand their 4G networks across the country.
MTNL, which is a listed company, will become a subsidiary of BSNL until the merger is completed, Prasad told journalists. “Neither BSNL nor MTNL are being closed, nor are they being disinvested or being hived off to third party,” he said, refuting weeks-long speculation that the government wanted to shut the carriers that serve about 120 million subscribers.
The revival plan includes a capital infusion of $2.8 billion to enable BSNL to purchase 4G spectrum, and write off of $520 million worth of taxes these purchases would incur. The network operators will additionally raise about $2.1 billion of long-term bonds that the New Delhi government will back and monetize $5.3 billion worth of assets over the next four years, the minister said.
“We want to make BSNL and MTNL competitive, and bring in professionalism,” Shankar said. The government is hopeful that BSNL would become operationally profitable in the next two years, he said.
The existence of BSNL, which alone serves more than 116 million subscribers, is in the strategic interest of the nation, Prasad said in a conference last week. “Whenever we have flood or cyclone, BSNL is the first one to offer services for free,” he said.
BSNL, which uses about 75% of its revenue to pay its roughly 176,000 employees, was unable to process their salaries last month. The government said today that it will soon address this and also offer various “attractive voluntary retirement packages” to employees aged 50 or more. In a press release, the government said it would spend about $2.4 billion on the employee retirement packages.
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Khatabook raises $25M to help businesses in India record financial transactions digitally and accept online payments
Even as tens of millions of Indians have come online for the first time in recent years, most businesses in the nation remain offline. They continue to rely on long notebooks to keep a log of their financial transactions. A nine-month old startup which is digitizing the bookkeeping and allowing merchants to accept online payments just raised a significant amount of capital.
Khatabook, a Bangalore-based startup, said on Tuesday it has raised $25 million in a new financing round. The Series A round for the startup was funded by GGV Capital, Partners of DST Global, RTP Ventures, Sequoia India, Tencent, and Y Combinator. A clutch of high-profile angel investors including Amrish Rau, Anand Chandrasekharan, Deep Nishar, Gokul Rajaram, Jitendra Gupta, Kunal Bahl, and Kunal Shah also participated in the round. The startup has raised $29 million to date.
Khatabook operates an eponymous Android app that allows small and medium businesses to keep a log of their financial transactions and accept payments online. The app, which was launched on Google Play Store in December last year, has amassed 5 million merchants from more than 3,000 cities, towns, and villages in India, Ravish Naresh, cofounder and CEO of Khatabook told TechCrunch in an interview this week.
The app, which remains free of charge, was used to process transactions worth more than $3 billion in August, said Naresh. Most merchants in developing markets are not online currently. They continue to rely on logging their financial transactions — credit, for instance — on notebooks. As you can imagine, this methodology is not structured.
Even has Reliance Jio, a telecom operator launched by India’s richest man Mukesh Ambani, upended the Indian market and brought tens of millions of Indians online for the first time in last three years, most businesses in the country are still carrying out their operations without the use of any technology, said Naresh. “Could we build an app that makes it very easy for merchants to digitize their bookkeeping?” he said.
“As soon as we launched the app, we instantly started to go viral,” he said. For several months now, the startup is seeing 20% growth each month, he said. In six months, the app has helped businesses recover $5 billion in previously unpaid credits, Naresh claimed. Without any marketing, the app has also gained a significant number of users in Nepal, Pakistan, and Bangladesh, said Naresh.
“At Khatabook, we have taken early but significant steps towards leveraging this trend to digitize India’s shopkeepers. For most of our merchants, we are the first business software they’ve used in their entire life. And we will continue to build more India-first innovations to further enable the growth of what is still a largely untapped sector,” he said.
In a statement, Hans Tung, Managing Partner of GGV Capital, said, “as a global investor, we seek out founders who understand the local market and respond to growth opportunities with speed and agility – we certainly see this with the Khatabook team.”
Naresh, a cofounder of property startup Housing, said the startup will use the capital to build new features to serve merchants. In next 12 months, Khatabook will aim to add 25 million businesses, he said.
A growing number of startups in India are attempting to help businesses. OkCredit, which raised $67 million last month, serves 5 million merchants. IndiaMART, a 23-year-old B2B firm that went public this year, led a round in a startup called Vyapar last month that is addressing similar problems.
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Reliance Jio partners with Facebook to launch literacy program for first time internet users in India
Mukesh Ambani, India’s richest man, has enabled tens of millions of people — if not more — to come online for the first time with his disruptive telecom network. He has changed how many Indians, once thrifty about each megabyte they spent browsing the internet, consume mobile data today.
But many of these first-time internet users are increasingly struggling with grasping the nuances of the internet — often ending up trusting everything they see online and, in extreme cases, causing major chaos in the nation. Ambani now wants to help these people understand the ins and outs of the digital world.
His telecom network Reliance Jio announced today a literacy program called “Digital Udaan” for first-time internet users in India. The two-and-a-half-year-old telecom network, which has amassed more than 300 million subscribers, said it has partnered with Facebook to create “the largest ever digital literacy program” that will offer audio-visual training in 10 regional languages.
As part of the Digital Udaan program, Reliance Jio will hold training sessions to help its users learn about internet safety, and how they should engage with popular services and its devices. The operator said it will hold these sessions each Saturday and also provide training videos and information brochures to users.
Reliance Jio said Facebook helped it build and curate modules that are relevant for people in cities and small towns in India. In the first phase of the program, Jio will conduct these training sessions in about 200 different locations across 13 states. It will then expand to more than 7,000 locations, where “millions of JioPhone users and other first-time internet users” live.
“Facebook is an ally in this mission, and we are delighted to partner with Jio in attracting new Internet users and creating mechanisms for them to unleash the power of that access,” Ajit Mohan, VP and MD of Facebook India, said in a statement. Facebook and WhatsApp count India, where they reach about 350 million users, as their largest and fastest growing market. There are more than 500 million internet users in India.
Akash Ambani, director of Reliance Jio, said he hopes to “help eradicate barriers of information asymmetry and provide accessibility in real time. It is a program for inclusive information, education and entertainment, where no Indian will be left out of this digital drive. Jio envisions to take this to every town and village of India, achieving 100% digital literacy in the country.”
Reliance Jio, through its free voice calls and low-data prices, has significantly helped accelerate the growth of India’s internet and smartphone ecosystem. The platform has brought the nation, now the world’s second largest internet and smartphone market, to a point that many thought would have taken more than five years to reach.
But this growth has also accompanied new sets of challenges. WhatsApp, which is the most popular app in India, continues to grapple with the spread of false information in the nation, for instance. Other social media services are facing similar challenges as well. Last year, WhatsApp began to air TV commercials in India to help users become more cautious about the messages they share on its service. It also partnered with Reliance Jio to pay for teams of performers to travel across India to hold roadshows to help people better understand the rampant rise of fake news.
Prabhakar Kumar, co-ordinator of CMS Medialab, an organization that monitors media trends in India, told TechCrunch in an earlier interview that the level of literacy among the users who are coming onboard now is much lower than those who came online before them.
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Anti-spam service Truecaller adds free voice calling feature
Truecaller, an app best known for helping users screen calls from strangers and spammers, is adding yet another feature to its service as it bolsters its super app status. The Stockholm-based firm said today that its app can now be used to place free VoIP-powered voice calls.
The company told TechCrunch on Tuesday that it has started to roll out the free voice calling feature to its Android users. It expects the rollout to reach all Android users in the coming days. The feature, which currently only supports calls between two users, will arrive on its iOS app soon.
In emerging markets such as India, where 100 million of Truecaller’s 140 million users live, free voice calls has been a long-sought after feature. Until late 2016, voice calls were fairly expensive in India, with telecom operators counting revenue from traditional calls as their biggest profit generator.
But in last two and a half years, things have changed dramatically for hundreds of millions of people in India after Reliance Jio, a telecom operator owned by India’s richest man Mukesh Ambani, launched its network with free voice calls and low-priced data services. Reliance Jio has already amassed over 300 million users to become one of the top three telcos in the nation.
Yet, the quality of network still leaves much to be desired in India as traditional calls drop abruptly and run into quality issues more often than one would like. Truecaller said that its voice calls rely on data services — mobile data and Wi-Fi — and claimed that they can work swiftly even on patchy network.
The addition of voice calling functionality comes as Truecaller aggressively looks to expand its business. The service, which offers both ad-support free tier and subscription bundle, has added messaging, mobile payments, and call recording features in recent years. Earlier this year, it also added a crediting option, allowing users in India to borrow a few hundred dollars.
A representative with the company said Truecaller began exploring the free voice calling feature a few months ago. It began testing the new functionality with alpha and beta test group users four weeks ago. It now plans to introduce group voice calling support soon, the company said.
With the new feature, Truecaller now competes even more closely with WhatsApp . The Facebook-owned app has become ubiquitous in India with more than three-quarters of India’s smartphone base using the app. WhatsApp added voice calling feature to its app in 2015. Last year, Facebook said users around the world were spending 2 billion minutes per day on WhatsApp video and audio calls.
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India’s most popular services are becoming super apps
Truecaller, an app that helps users screen strangers and robocallers, will soon allow users in India, its largest market, to borrow up to a few hundred dollars.
The crediting option will be the fourth feature the nine-year-old app adds to its service in the last two years. So far it has added to the service the ability to text, record phone calls and mobile payment features, some of which are only available to users in India. Of the 140 million daily active users of Truecaller, 100 million live in India.
The story of the ever-growing ambition of Truecaller illustrates an interesting phase in India’s internet market that is seeing a number of companies mold their single-functioning app into multi-functioning so-called super apps.
Inspired by China
This may sound familiar. Truecaller and others are trying to replicate Tencent’s playbook. The Chinese tech giant’s WeChat, an app that began life as a messaging service, has become a one-stop solution for a range of features — gaming, payments, social commerce and publishing platform — in recent years.
WeChat has become such a dominant player in the Chinese internet ecosystem that it is effectively serving as an operating system and getting away with it. The service maintains its own “app store” that hosts mini apps. This has put it at odds with Apple, though the iPhone-maker has little choice but to make peace with it.
For all its dominance in China, WeChat has struggled to gain traction in India and elsewhere. But its model today is prominently on display in other markets. Grab and Go-Jek in Southeast Asian markets are best known for their ride-hailing services, but have begun to offer a range of other features, including food delivery, entertainment, digital payments, financial services and healthcare.
The proliferation of low-cost smartphones and mobile data in India, thanks in part to Google and Facebook, has helped tens of millions of Indians come online in recent years, with mobile the dominant platform. The number of internet users has already exceeded 500 million in India, up from some 350 million in mid-2015. According to some estimates, India may have north of 625 million users by year-end.
This has fueled the global image of India, which is both the fastest growing internet and smartphone market. Naturally, local apps in India, and those from international firms that operate here, are beginning to replicate WeChat’s model.
Founder and chief executive officer (CEO) of Paytm Vijay Shekhar Sharma speaks during the launch of Paytm payments Bank at a function in New Delhi on November 28, 2017 (AFP PHOTO / SAJJAD HUSSAIN)
Leading that pack is Paytm, the popular homegrown mobile wallet service that’s valued at $18 billion and has been heavily backed by Alibaba, the e-commerce giant that rivals Tencent and crucially missed the mobile messaging wave in China.
Commanding attention
In recent years, the Paytm app has taken a leaf from China with additions that include the ability to text merchants; book movie, flight and train tickets; and buy shoes, books and just about anything from its e-commerce arm Paytm Mall . It also has added a number of mini games to the app. The company said earlier this month that more than 30 million users are engaging with its games.
Why bother with diversifying your app’s offering? Well, for Vijay Shekhar Sharma, founder and CEO of Paytm, the question is why shouldn’t you? If your app serves a certain number of transactions (or engagements) in a day, you have a good shot at disrupting many businesses that generate fewer transactions, he told TechCrunch in an interview.
At the end of the day, companies want to garner as much attention of a user as they can, said Jayanth Kolla, founder and partner of research and advisory firm Convergence Catalyst.
“This is similar to how cable networks such as Fox and Star have built various channels with a wide range of programming to create enough hooks for users to stick around,” Kolla said.
“The agenda for these apps is to hold people’s attention and monopolize a user’s activities on their mobile devices,” he added, explaining that higher engagement in an app translates to higher revenue from advertising.
Paytm’s Sharma agrees. “Payment is the moat. You can offer a range of things including content, entertainment, lifestyle, commerce and financial services around it,” he told TechCrunch. “Now that’s a business model… payment itself can’t make you money.”
Big companies follow suit
Other businesses have taken note. Flipkart -owned payment app PhonePe, which claims to have 150 million active users, today hosts a number of mini apps. Some of those include services for ride-hailing service Ola, hotel booking service Oyo and travel booking service MakeMyTrip.
Paytm (the first two images from left) and PhonePe offer a range of services that are integrated into their payments apps
What works for PhonePe is that its core business — payments — has amassed enough users, Himanshu Gupta, former associate director of marketing and growth for WeChat in India, told TechCrunch. He added that unlike e-commerce giant Snapdeal, which attempted to offer similar offerings back in the day, PhonePe has tighter integration with other services, and is built using modern architecture that gives users almost native app experiences inside mini apps.
When you talk about strategy for Flipkart, the homegrown e-commerce giant acquired by Walmart last year for a cool $16 billion, chances are arch rival Amazon is also hatching similar plans, and that’s indeed the case for super apps.
In India, Amazon offers its customers a range of payment features such as the ability to pay phone bills and cable subscription through its Amazon Pay service. The company last year acquired Indian startup Tapzo, an app that offers integration with popular services such as Uber, Ola, Swiggy and Zomato, to boost Pay’s business in the nation.
Another U.S. giant, Microsoft, is also aboard the super train. The Redmond-based company has added a slew of new features to SMS Organizer, an app born out of its Microsoft Garage initiative in India. What began as a texting app that can screen spam messages and help users keep track of important SMSs recently partnered with education board CBSE in India to deliver exam results of 10th and 12th grade students.
This year, the SMS Organizer app added an option to track live train schedules through a partnership with Indian Railways, and there’s support for speech-to-text. It also offers personalized discount coupons from a range of companies, giving users an incentive to check the app more often.
Like in other markets, Google and Facebook hold a dominant position in India. More than 95% of smartphones sold in India run the Android operating system. There is no viable local — or otherwise — alternative to Search, Gmail and YouTube, which counts India as its fastest growing market. But Google hasn’t necessarily made any push to significantly expand the scope of any of its offerings in India.
India is the biggest market for WhatsApp, and Facebook’s marquee app too has more than 250 million users in the nation. WhatsApp launched a pilot payments program in India in early 2018, but is yet to get clearance from the government for a nationwide rollout. (It isn’t happening for at least another two months, a person familiar with the matter said.) In the meanwhile, Facebook appears to be hatching a WeChatization of Messenger, albeit that app is not so big in India.
Ride-hailing service Ola too, like Grab and Go-Jek, plans to add financial services such as credit to the platform this year, a source familiar with the company’s plans told TechCrunch.
“We have an abundance of data about our users. We know how much money they spend on rides, how often they frequent the city and how often they order from restaurants. It makes perfect sense to give them these valued-added features,” the person said. Ola has already branched out of transport after it acquired food delivery startup Foodpanda in late 2017, but it hasn’t yet made major waves in financial services despite giving its Ola Money service its own dedicated app.
The company positioned Ola Money as a super app, expanded its features through acquisition and tie ups with other players and offered discounts and cashbacks. But it remains behind Paytm, PhonePe and Google Pay, all of which are also offering discounts to customers.
Integrated entertainment
Super apps indeed come in all shapes and sizes, beyond core services like payment and transportation — the strategy is showing up in apps and services that entertain India’s internet population.
MX Player, a video playback app with more than 175 million users in India that was acquired by Times Internet for some $140 million last year, has big ambitions. Last year, it introduced a video streaming service to bolster its app to grow beyond merely being a repository. It has already commissioned the production of several original shows.
In recent months, it has also integrated Gaana, the largest local music streaming app that is also owned by Times Internet. Now its parent company, which rivals Google and Facebook on some fronts, is planning to add mini games to MX Player, a person familiar with the matter said, to give it additional reach and appeal.
Some of these apps, especially those that have amassed tens of millions of users, have a real shot at diversifying their offerings, analyst Kolla said. There is a bar of entry, though. A huge user base that engages with a product on a daily basis is a must for any company if it is to explore chasing the super app status, he added.
Indeed, there are examples of companies that had the vision to see the benefits of super apps but simply couldn’t muster the requisite user base. As mentioned, Snapdeal tried and failed at expanding its app’s offerings. Messaging service Hike, which was valued at more than $1 billion two years ago and includes WeChat parent Tencent among its investors, added games and other features to its app, but ultimately saw poor engagement. Its new strategy is the reverse: to break its app into multiple pieces.
“In 2019, we continue to double down on both social and content but we’re going to do it with an evolved approach. We’re going to do it across multiple apps. That means, in 2019 we’re going to go from building a super app that encompasses everything, to Multiple Apps solving one thing really well. Yes, we’re unbundling Hike,” Kavin Mittal, founder and CEO of Hike, wrote in an update published earlier this year.
It remains unclear how users are responding to the new features on their favorite apps. Some signs suggest, however, that at least some users are embracing the additional features. Truecaller said it is seeing tens of thousands of users try the payment feature for the first time each day. It’s also being used to send 3 billion texts a month.
And Reliance Jio, of course
Regardless, the race is still on, and there are big horses waiting to enter to add further competition.
Reliance Jio, a subsidiary of conglomerate Reliance Industry that is owned by India’s richest man, Mukesh Ambani, is planning to introduce a super app that will host more than 100 features, according to a person familiar with the matter. Local media first reported the development.
It will be fascinating to see how that works out. Reliance Jio, which almost single-handedly disrupted the telecom industry in India with its low-cost data plans and free voice calls, has amassed tens of millions of users on the bouquet of apps that it offers at no additional cost to Jio subscribers.
Beyond that diverse selection of homespun apps, Reliance has also taken an M&A-based approach to assemble the pieces of its super app strategy.
It bought music streaming service Saavn last year and quickly integrated it with its own music app JioMusic. Last month, it acquired Haptik, a startup that develops “conversational” platforms and virtual assistants, in a deal worth more than $100 million. It already has the user bases required. JioTV, an app that offers access to over 500 TV channels; and JioNews, an app that additionally offers hundreds of magazines and newspapers, routinely appear among the top apps in Google Play Store.
India’s super app revolution is in its early days, but the trend is surely one to keep an eye on as the country moves into its next chapter of internet usage.
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India’s edtech startup CollegeDekho raises $8 million to connect students with colleges
Indian edtech startup CollegeDekho, which helps students connect with prospective colleges and keep track of exams, has raised $8 million in a Series B round.
The new financing round for the four-year-old Gurgaon-based startup was led by its parent company GirnarSoft Education and London-based private equity investor Man Capital, which also participated in the startup’s Series A round last year.
Ruchir Arora, founder and CEO of CollegeDekho, told TechCrunch in an interview that the startup will use the capital to expand its presence in more schools and also begin connecting students with international educational institutions. The startup, which has raised $13 million to date, will also ramp up its research and development efforts.
CollegeDekho, Hindi for search for college, maintains a website that helps students identify the right career choices for them. The website has a chatbot that answers some of the questions students have while logging their responses, and other activities such as the kind of colleges they are searching for, their preferred location and budget.
Arora said the startup, which also has about 3,000 call center representatives and counselors, builds profiles of students to make college recommendations. He said each month the site observes more than five million sessions from students. Last year, more than 8,000 students used CollegeDekho to take admission in a college.
Parents in India, a country of 1.3 billion people with not the best literacy record, see education as an upward mobility for their children. Each year, more than six to seven million students go to a college. But because of a range of factors that can include cultural stigma, many students end up choosing the wrong path and thus don’t excel in college. Indeed, many students ultimately don’t pursue the subject they are best suited for, Arora said, and that’s where CollegeDekho aims to make an impact.
Most high school students in India often gravitate toward engineering or medical college, as a result of which, each year India produces many engineers and doctors who struggle for years to find a job. Arora said his startup looks at more than 2,000 career paths a student could pursue.
What works in favor of Arora is that the country will continue to turn out millions of students each year who will be looking to go to a college soon. It also helps that CollegeDekho is operationally profitable, Arora said, adding that it generates about $3.2 million in revenue in a year. Any additional cash the startup raises will go into its expansion, he said.
CollegeDekho charges a nominal fee from students, and also takes a cut when they join a college. More than 36,000 educational institutes are listed on CollegeDekho. The startup also works with more than 400 colleges to conduct an exam for direct admission, and there too it earns a cut.
India’s education market, estimated to grow to $5.7 billion by next year, has emerged as a lucrative opportunity for startups and VCs alike. Bangalore-based Byju’s, which helps millions of students in India prepare for competitive exams, raised $540 million from Naspers and others late last year. Unacademy, which like Byju’s offers online tutoring to students, has raised more than $38.5 million to date.
A legion of other education startups today are vying for the attention of students in the nation. Noida-based AskIITians, not too far from the offices of CollegeDekho, aims to help school-going students prepare for medical and engineering exams. Extramarks, also based in Noida, operates in the same space as AskIITians. Reliance Industries, owned and controlled by India’s richest man, Mukesh Ambani, bought a 38.5% stake in the startup three years ago.
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