Sequoia Capital India Q3 Newsletter

Last week a company in our portfolio sent us an eye-popping flash report. Monthly transactions had skyrocketed by 68% in Q3 over the previous quarter, and annualized revenue grew by 89% during the same period. What’s even more notable is that they’re not alone. Many of the startups in Sequoia Capital India’s portfolio, across India and Southeast Asia, reported record growth and solid profitability metrics for the third quarter.

COVID-19 has caused an unprecedented acceleration in technology adoption across our region. The kind of change you’d expect to see in two to three years has been condensed into six months.

The shift to online shopping, e-grocery, digital education and remote work mark a permanent change in how consumers in India and SEA work and live. Fintech, food tech and B2B commerce are also riding these tailwinds, and demand in other sectors, including online gaming, HeathTech and SaaS, are at an all-time high.

The pandemic is still spreading in many countries in our region, including India and Indonesia, which face a rocky road ahead. Still, there’s a strong sense of optimism in the future of the region’s internet economy. Public market investors remain bullish, particularly in the tech sector. While many startups in our region are working hard to navigate the new normal, many more are charting a new trajectory in markets and sectors that suddenly have more depth.

Sequoia India is incredibly excited to launch The Guild - a program and community designed with, and for, the founding CEOs of some of the most successful growth stage startups from our portfolio.

We feel fortunate to have assembled 16 of the most visionary and successful founders in the Consumer Internet and Mobile space as founding members of The Guild, which kicked off on October 10. We look forward to inviting portfolio founders from SaaS, Fintech, B2B, Consumer and other categories to join subsequent cohorts.

GV Ravishankar shares five mantras to keep yourself future proof distilled from TiE Delhi-NCR #iDay2020’s panel on “Building Talent for the New Digital First Economy”.

Ashish Agarwal writes about how the impact of COVID-19 may provide a stronger opportunity for fintech startups in the long term.

Sakshi Chopra writes about how online-first brands that connect with millennial Bharat outside India’s Tier One cities are redefining the future of retail, in this column for Forbes.

Rajan Anandan shares stories from the trenches in episode three of “Raising A Seed Round”, a four-part webinar series created in partnership with Startup India. In episode four of the series, Sequoia India's Ashwani Verma and Sandeep Kher walk early-stage founders through terms sheets, due diligence and more.

And Ishaan Mittal talks with Salesforce India CEO Arundhati Bhattacharya in this webinar on the impact of technology on the Indian economy, the evolution of the financial services industry and leadership lessons from her stellar career.

For more videos and insights for early-stage startups, please visit the Surge blog at www.surgeahead.com.

Companies in Sequoia Capital India’s portfolio, across India and Southeast Asia, raised over $1.5 billion from a variety of funds and investors in Q3 2020. Highlights include:

BYJU’s, which has over 64 million registered students and 4.2 million annual paid subscriptions, raised over $500 million from a group of investors, reflecting the surge in interest in remote and online learning amid the lockdown.

Zomato raised a $160 million round in September, and announced plans to file for an initial public offering in the first half of 2021.

Unacademy, which has 30 million registered users and has amassed more than 350,000 paying subscribers, announced it raised a $150 million Series F at a $1.45 billion valuation.

Eruditus, which works with top universities in over 80 countries to offer more than 100 executive-level courses, raised a $113 million Series D financing round.

Singapore-based Biofourmis raised a $100 million series C funding round - the largest healthtech fundraising within Southeast Asia to date - to accelerate global expansion and advance its digital therapeutics pipeline.

Mobile Premier League (MPL) raised a $90 million Series C round to expand it’s fast-growing e-sports and mobile gaming platform in India and Southeast Asia.

Carousell, which is now present across eight markets in Asia and has over 250 million listings on its classifieds app, has inched closer to becoming a unicorn with a fresh $80 million fundraise from a consortium of companies.

Marketing SaaS startup Insider, which operates in 24 countries across Europe, Asia and the Middle East, raised a $32 million Series C to fuel expansion to the U.S.

Groww raised $30 million in a Series C financing round to further the company’s mission of making investing in mutual funds and stocks simple and transparent for millions of investors in India.

Zetwerk, a B2B marketplace for manufacturing items, raised a $21 million round to scale its operations in India and help local businesses find customers overseas.

Capital markets infrastructure startup Smallcase, which works with brokerages and investment advisers to offer portfolios of stocks or exchange-traded funds, raised a $14 million Series B round to expand its investment tech offering.

Pune-based FPL Technologies, which has launched a mobile-first credit card for India, raised a $10 million Series A round to scale up its engineering and product teams.

Apna.co, a professional network for grey and blue-collar workers in India that facilitated more than 1 million job interviews in August, up 3x over the month before, raised $8 million in a Series A round to expand to more verticals and more cities.

Homelane raised an $8 million round to expand into non-metro cities and to enhance their tech technology offering.

Personalised e-commerce platform Foxy raised a $5.4 million Series A1 round to expand to Abu Dhabi and to build out its data science, product management and engineering teams.

Meanwhile, several Surge startups - including Hippo Video (Surge 01 2019), Hevo (Surge 02 2019) and Trell (Surge 02 2019) - also raised Series A rounds during Q3.

Many of our partner startups continued to launch new products and drive fresh growth throughout the third quarter. Here’s just a few highlights from our portfolio.

Skillmatics (Surge 01 2019) attained the No. 1 Rank across the entire Toys & Games category on Amazon USA in July.

Fave announced a strategic partnership and investment from fellow Sequoia India portfolio company, Pine Labs, that will integrate Fave’s QR code with Pine Lab’s terminals, enabling a single and seamless platform for digital payments and loyalty solutions in Southeast Asia.

In another cross-portfolio collaboration, social commerce platform Meesho announced its partnership with fintech startup Klub (Surge 02 2019) to provide financing options for MSMEs to enable domestic sourcing and manufacturing in the current COVID-19 economy.

BYJU's, acquired coding edtech startup Whitehat Jr. for $300 million. With coding fast emerging as a key skill for the future, this integration will also accelerate BYJU’S international expansion plans.

Dailyhunt launched a new short video app called Josh in August that crossed 50 million downloads, with over 23 million DAU and over a billion daily video plays, in just 45 days.

Unacademy acquired Prepladder, which offers courses aimed at medical students, to expand on their mission of making quality education accessible to all.

Demand for online fitness coaching has spiked as the pandemic wears on, providing additional tailwinds for Fittr (Surge 03 2020) which has seen 30% revenue growth, MoM, in the April-August 2020 period, an 80% revenue retention rate over a 24 month period - and has achieved all this profitability with zero CAC.

University of Indonesia research published last month showed that Gojek contributed $7.1 billion to Indonesia’s economy in 2019. Since the pandemic broke out in March 2020, Gojek has helped thousands of new MSMEs - many of them first-time entrepreneurs - digitize their business and remain resilient in unprecedented circumstances.

Singapore’s Ministry of Health, meanwhile, has deployed Biofourmis’ AI-powered Biovitals Sentinel platform to remotely monitor COVID-19-positive patients in community care facilities.

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