🔥 IPO streak

17-11-2021 | 8:00 AM

Hi everyone, and welcome new subscribers.

My name is Jay Desai and I wish you a very good morning with this freshly baked newsletter.

Let's start with,

“Paytm me for that”... India's largest payments service, Paytm, is going public in India through its parent company, One97 Communications. The app lets you send money online, buy coffee via a QR code, and even purchase a new car. It has a whopping 330M customers (the size of the US), and represents 40% of India’s payment market.

• Big money: Paytm aims to raise $2.5B in an offering that ends today. The IPO’s expected to give Paytm a $20B valuation, making it one of India’s most valuable tech companies.

• Big backers: Massive Chinese fintech Ant Group, Japanese investment firm SoftBank, and Warren Buffett’s Berkshire Hathaway together own a third of Paytm.

E-cash is king… In 2016, India banned the most widely circulated currency notes to combat money laundering, wiping out 86% of the country’s cash overnight. That crushed businesses and family savings, but accelerated India’s move toward a cashless economy. Since then, mobile payments in India have skyrocketed, accounting for 26B transactions last year. Fintechs like Paytm benefited from the boom, which accelerated during the pandemic.

That’s partly why:

• Walmart dropped $16B on Indian ecomm company Flipkart in 2018, while Amazon is investing $5B to expand its India operations.

• Walmart-backed PhonePe has 300M mobile payments users in India, while Google Pay has 70M users in the country.

India’s e-opportunity is huge… and growing. India is the second most populous country after China, but roughly half of its 1.3B population have yet to get online. While China’s mobile market is saturated and regulators are cracking down on tech, India’s e-market is growing fast: India’s IPOs have raised a record $9.7B this year. And while the web economy accounts for only a tenth of its GDP, the internet ecosystem could add up to $400B in market-cap creation for India in five years.

Moving on,

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See you next week with more amazing things that will make you wiser.

Until then...

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