Does CAC and RoI really matter when the opportunity is big? - Build to last and Build to kill (Competition)

Does CAC and RoI really matter when the opportunity is big?

Reliance Jio, which its commercial launch on September 5, 2016, disrupted the Indian telecom industry with its ‘Welcome’ and ‘Happy New Year’ offer, with its free voice and data services along with access to its digital content ecosystem for 15 months. It could thus add a whopping 100 mn subscribers in a matter of 170 days.

What about competition watchdog CCI? In fact, CCI rejected Airtel's plea of "predatory pricing" by Jio and said that in a competitive market scenario, where there are already big players operating in the market, it would not be “anti-competitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes.”

Such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation, CCI said.

With the free-mium model, Reliance Jio achieved two things - Captured major share of market within no-time and forced competitors to bleed by forcing them to slash tariffs.

So, now you know how to build a big startup not only to last but also to kill (competition).

Credit focused fintech startup Upgrade raises $40 mn after reaching $100 mn run rate

Upgrade, Inc., a credit-focused fintech startup, announced that it has raised a $40 million Series D round that the company says gives it a $1 billion valuation. The company is a fintech startup with a credit-focus today, though it intends to add more neobank-like tooling in Q3.

Key takeaways:-

1. Upgrade, Inc. has a different philosophy than some credit card providers, in the view of its founder and CEO, Renaud Laplanche. “Banks have an incentive to keep customers in debt as long as possible,” he said during an interview with TechCrunch. Upgrade, Inc., in contrast, offers lower rates — cards starting at 6.9%, under what the CEO described as a market-normal entry rate of 12% to 13% — and set repayment periods for debts so that customers don’t wind up in a credit cycle that never ends, sapping them of financial health.

2. One constant in the fintech world is the offering of more services to existing customers, helping drive up their lifetime value (LTV) and thus making their cost to acquire (CAC) more palatable.

Read on

Credit-focused fintech startup Upgrade raises $40M after reaching $100M run rate

This morning Upgrade, a credit-focused fintech startup, announced that it has raised a $40 million Series D round that the company says gives it a $1 billion valuation. The Upgrade round slots neatly into a few trends TechCrunch has noted in recent quarters, including fintech startups raising at ne...