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founderLightspeed is excited to announce that the firm has led the first venture round in Vee – a mobile application designed to help people discover like-minded partners and build relationships.
At Lightspeed, one of the themes we are investing behind is network-driven businesses that leverage the growing smartphone base in India. When such businesses succeed in driving high engagement and high frequency use within their customer base, they have the potential to become very valuable. Our investments in Snapchat, WhisperPhonewarrior and now Vee reflect this approach and thinking.

‘People discovery’ is a potentially high frequency use-case that is yet to be disrupted in India. We believe that Indian youth is becoming increasingly independent and open to new experiences and saw this reflected in early user data from Vee, where over 40% of monthly active users use the app daily, engaging in more than 10 sessions a day. While early, we believe that this level of user engagement is world-class and it cemented our belief that Vee has the potential to become an ‘everyday’ app in India helping people make new personal connections.

Traditionally, young Indian women and men have struggled to meet new and like-minded people owing to various socio-cultural constructs. Consequently, most social interactions are limited to friends and family. Online dating, while promising, could not solve this problem. Fake profiles, in-appropriate behavior, cumbersome matching process, low internet penetration were some of the key challenges that prevented online platforms to flourish.

Things have changed now. Facebook has crossed 100M users in India and offers a profile authentication platform. Increasing smartphone penetration has resulted in a large addressable market. Mobile, location enablement, fluid browsing interfaces and other innovative feature sets has made it possible to offer a delightful and frictionless product experience.

Vee leverages the power of mobile along with a product approach that is entirely focused on women. Through features such as anonymous browsing, male loyalty enforcement (limited simultaneous connections), abuse reporting – Vee places the power in the hands of women with an aim to become a trustworthy platform for them. In addition, mobile based hyper-local elements enable instant and relevant matching.

Vee is created by Nitin Gupta – a serial entrepreneur who successfully exited his previous venture – Coinjoos (a book swapping platform) to Homeshop18. Nitin is the brain behind the product and constantly keeps evolving Vee based on feedback from its women users.

Through Snapchat and Whisper, Lightspeed has had the unique opportunity to partner in creation of the world’s most significant and fastest growing mobile phone start-ups. We feel excited to start this journey again with Nitin and his team at Vee.

Go ahead. Give Vee at try at the Google Playstore (Vee-Android) or at the Apple iTunes store (Vee-iOS)

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I think there is a lot of potential and hope, especially now, for founders to start online (only) services businesses. Indian consumers seem to be opening up to paying for online B2C services, where purchase and most fulfillment is online. This trend is a natural outcome of India’s increasing online population (>125M now) and familiarity with online as a channel (20M bought online in last 12 months, 7M of which were non-travel). Barring a few exceptions noted below, this space has historically been challenging but I hope to see that changing in future.

Successful examples of existing online services in India include matrimony (Shaadi and Bharat Matrimony) and also aggregators across categories like travel (rail, air, bus), movies and mobile phone recharge. While the aggregator segment has been more successful because of direct linkage to offline services, it is relatively less interesting (and more capital intensive) because of low absolute margin per transaction and dependence on offline delivery for scaling versus a service which is purely digital in nature.

Subject to a large potential paying consumer base being available, pure online services are fundamentally very attractive to entrepreneurs and investors because of:

  • High capital efficiency (high gross margins).
  • Become disproportionately valuable (given B2C/branded nature).
  • Ability to grow quickly, since they are not constrained by offline buildout (not applicable everywhere).

Here are a few examples below in categories where we are anecdotaly seeing early growth in new online consumer services:

  • Financial Services: Previously, the web was used primarily for lead generation.  Now, certain types of insurance (Auto, Life, Travel) that are delivered end-to-end online are gaining traction.

It is still early days for these trends – but I hope that the growth continues. If you know of other online categories or businesses which are getting traction, I would love to learn about them – please add to the comments section below.

PS: While mobile operator value-added services (MVAS) is a great example of online services, in my opinion, these services have not really been B2C.  As a result, I am not including MVAS in the list above.  My list also does not include businesses which collect revenue from offline vendors (e.g. Zomato) or have large offline delivery responsibility (e.g. goods ecommerce).

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