0/ The @Paytm team filed to go public & the S1 is a good read on all things payments / India.

A few highlights:
-Paytm has a two-sided network with 333M consumers & 21M merchants (114M ATU's)
-800K payment devices
-They consider themselves a "payments-led super app"
1/ They talk up the macro India story:
-GDP of $2.7T (6th largest in the world); growing 7%/yr since '15
-Projected to grow 9%/yr from '20-'25 to hit $4.2T & by 2030 projected to be third largest economy in the world.
-745M working age people (vs 172M / 849M in the US / China)
2/ -Median age of 28 (vs. 38 in China & the US, 43 in West. Europe, & 48 in Japan)
-700M gen Z & millennials, largest in the world.
-450-500M urban population, expected to grow to 550M by the FY 2026.
-Indian middle class is 55-57% of the population (proj to be 65%+ in '30)
3/ -In the last decade India added 500M+ smartphone users
-Average cost <$150 USD
-Total smartphone users expected to reach 800-850M in '26 (55%+ of total population & 80% of internet users)
-650 - 700M internet users expected to increase to over 950M-1.0B by FY 2026
4/ In FY21, digital payments market size is ~$20T with 43B transactions during the year.
-B/w gov't initiatives, 5G, increasing reach & awareness, digital payments are expected to be $40-50T by FY 2026.
5/ UPI has led to a surge in mobile payments with mobile payments increasing ~16x from 1.6B in FY17 to 26B in FY21.
6/ @Paytm continues to have strong market share in the consumer to merchant & consumer to merchant wallet transactions
-In India, there are ~65M merchants of which 45M have access to internet.
-Digital payment at merchants include QR code, PoS machines & payment gateway.
7/ Compared to competitors (FlipKart, GooglePay, PhonePay) PayTm has the widest selection of payments, commerce & financial services
8/ They look at the macro opportunity across several sub-sectors including online gaming, travel ticketing, film ticketing, e-Tail, e-Grocery, Food Delivery & advertising as a $300B+ annual opportunity.
9/ In financial services they depict household debt as a % of GDP, credit card penetration, insurance premium & stock market participation versus the US & China.

Credit Card penetration is 4%, with just ~3% of people participating in the stock market.
10/ The country is incredibly underlevered with household debt as % of GDP of 11%, versus the UK, US & China at 84%, 75% & 55% respectively.
11/ Interestingly they highlight BNPL as a growth area. "Disbursals under BNPL models is expected to grow 5x from $15-20B in FY 2021 to $90-100B in FY26
12/ The insurance market is also underpenetrated
-Insurance penetration (premium as % of GDP) is at 3.8% vs the global average of 7.2%
-India’s life insurance market is expected to grow at 13% CAGR during FY 2021-2026 to reach $160-$180B by FY26
13/ On equity participation Indian equities have seen strong growth w/ major indices (e.g. NIFTY 50 & Sensex) generating a CAGR of ~10% b/w FY15-FY21.
-The number of demat accounts grew at a ~15% CAGR b/w FY15-FY21.
-COVID-19 accelerated the growth w/ ~14M new demat
accounts
14/ @Paytm started in '09 as "a “mobile-first” digital payments platform to enable cashless payments for
Indians, giving them the power to make payments from their mobile phones. Starting with bill payments and
mobile top-ups as the first use cases."
-They now offer consumers
15/ -multiple payment options including (i) Paytm Payment Instruments, (digital wallets, sub-wallets, bank accounts,
BNPL & wealth management accounts) and (ii) major third-party instruments, such as debit & credit cards & net banking
16/ They talk up the "Super-App" angle: "Our consumers can use the Paytm Superapp to conveniently manage multiple aspects of their daily lives, such as utility bill payments, mobile topups, money transfer, online & in-store payments, buy entertainment & travel tickets, play
17/ online games, access mini-apps across content, food delivery, e-commerce & ride hailing, and do other things."

This has resulted in impressive GMV growth by cohort, although it saw some notable headwinds from COVID in FY21
18/ There's a lot of misconception around UPI that it makes payments "free" and mitigates the value of a two-sided network such as @Paytm but they provide a full suite of services for both merchants & consumers.
19/ They highlight multiple flywheel effects inherent across their various business segments
20/ Switching to financials their FY ends in March. In FY21 USD they did:
-$52.5B of GMV
-$364M of revenue of which $274M was from financial services (a blended take rate of ~0.52%).
21/ They continue to iterate on product development across (i) Payments (ii) Fin Services & (iii) Commerce & Cloud Services
22/ Overall @Paytm will likely become the most important Indian company, a bellwether for India technology + GDP, a proxy for the growth of the Indian middle class & increased financialization.

It's a shame their won't be a US listing for @vijayshekhar & team.

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More from @JohnStCapital

20 Jul
0/ Ben Bernanke back on the road talking about all things inflation, monetary policy, the Fed's response from here, tightening, social responsibilities, crypto, CBDCs and more. Very similar sentiment to last week so highlighting a few nuances he expanded upon including...
1/ The 5.4% CPI print raised some eyebrows at both the White House & Fed, and it's a historically high #. He continued to reiterate we're not in the '90s anymore & the Fed is very much trying to overshoot its 2.0% target

But he still believes its transitory w/ some upside risks
2/ Re: transitory considerations he once again discussed base effects, the uneven opening resulting in bottlenecks & problems with supply chains (notably chips leading to auto inflation spilling into used cars) as well as commodity prices.
Read 21 tweets
20 Jul
0/ With $BTC fighting with $30K theres a lot of parallels being drawn to the $6K level from 2H18.

The theoretical cost basis from June-Nov '18 was $5,126 and BTC traded at an average ~27.4% premium over that time to that level.
1/ Comparing $BTC & $ETH, ETH tends to move later in the cycle and the market is notably worse at buying it.

The avg / median "premium" for $BTC holders is 79.1% / 65.6% with just ~15% of days "under water."

For $ETH the avg / median is 45.3% / 35.1% with ~31.1% under water
2/ So we know the market isn't good at buying $ETH and from June-Nov '18 it traded at a ~18% discount to the theoretical cost basis which didn't trough until April '20 at $212.89.

This should be even greater divergence the further out the crypto risk curve
Read 10 tweets
19 Jul
0/ Interesting InsurTech deal today with @kinsured going public via a merger w/ @mhiggins $OCA. Congrats to @seanharper & team.

The OCA team w/ Matt & @garyvee has deep DTC expertise helping to build the first brand for home insurance

$1.0B EV is 4.4x '22E GWP / 15.0x '22E GP Image
1/ Home insurance is a $105B/yr compelling end-market that has seen little technological disruption; the product is homogeneous, incumbents are inefficient from a cost perspective & it is a product people are required to buy, with long retention rates (8-9 years). Image
2/ InsurTech names have been under pressure YTD with $LMND $MILE $ROOT (30%)-(50%) & $RTPZ below trust.

These names were being valued at double digit multiples on GWP and 40-50x GP vs. incumbents trading on a multiple of book value often w/ worse fundamentals (but > growth). Image
Read 9 tweets
14 Jul
0/ Ben Bernanke spoke in a fireside chat on inflation, the real economy, monetary policy, etc... Re: inflation he notes Economists / Fed have revised their inflation forecast higher. "There is a very substantial transitory component, looking at base effects; used cars, airfares /
1/ hotel prices that dropped dramatically in '20 are coming up to more normal levels. There are bottleneck supply issues, chips not being able to produce cars, a commodity price jump that's not sustainable or won't continue to provide an inflationary shock, etc... Other pot'l
2/ transitory effects are the labor market. Including trend, Fed is still ~10M jobs short from pre-pandemic rate, yet participation rate hasn't moved since last summer, a lot of vacancies, there is a supply effect coming from labor market which is no doubt transitory. Parents
Read 32 tweets
14 Jul
0/ $BAC CEO Brian Mohynihan on spending: "We are halfway through the year & total payments are $1.8T or ~60% of last year's level (which was a record).

Total BAC consumer SMB payments set a 4th quarterly consecutive record, reaching $976B, +41% YoY & +23% over '19.
1/ "Spending accelerated as COVID vaccinations increase, business reopen & domestic travel increase. Combined spend at retailers & services comprises over 50% of debit & credit card spending, a portion of the total spend +27% vs 2Q19.
2/ As of mid-June, domestic airline purchases were +8% vs '19 while int'l airline purchase on their cards are still down ~40%, showing the difference of the progress in United States versus other places (relevant for $V).
Read 6 tweets
14 Jul
0/ A new report out of @PitchBook & NVCA on the venture ecosystem; 2021 is on track to be a record year with $150B raised YTD, or 90%+ of last year’s previous record total ($164.3B)
1/ Mega-deals of $100M+ have already hit a new high-water mark with 198 deals closing in 2Q, & YTD total of $85.5B across 385 deals, surpassing 2020's record.
2/ No surprise given all of the Tiger / Coatue / Altimeter headlines but crossover investor participation is at unprecedented levels with 1H21 seeing $63.5B invested across 524 deals (well on track to cross $100B this year).
Read 7 tweets

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