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Dynamic NFT Enablers

Posted on by Kae Team

The last few months have seen a rapid rise in all things metaverse and blockchain gaming across the globe. It may be tempting to brush this aside as a fad, but the adoption numbers tell an interesting story – the number of Daily Unique Wallets interacting with Gaming Smart Contracts has grown from 28k in 2020 to 1.3 Mn in 2021.

According to reports, even monetization trends have been strong ~ Blockchain Gaming Quarterly Revenue for Q3 FY22 alone was $ 2.32 Bn vs $ 320 Mn in the whole year of 2020 – which is an 8x growth. At the heart of it, metaverses are interactive ecosystems which use game-level graphics (can also use AR/VR elements) and game engine interactions to solve for user engagement through the game. These ecosystems use a blockchain ledger to build out X2E economies (X – can be “Play”, “Learn”, “Contribute”, etc.) – where a supply of tokens (which run the economy) is released into the ecosystem as more and more users come in. P2E economies have become the most prominent paradigm in blockchain gaming – usual suspects include games like Axie.

Dynamic NFTs (NFTs whose metadata can be updated) form a core piece of the Web3 metaverse and gaming economies. To understand the complexity of such ecosystems – imagine a Pokemon game (read: an Axie-like game) where you start off with 3 pokemon -> A, B, C. Assuming there are approximately 200 players who will want to start with A, 300 with B and 400 with C – we effectively have 900 NFTs (each NFT will have a unique address and unique metadata values at a particular “state” – the metadata here can be experience points or XP/levels, movesets, graphics, etc.). The updated rules can be coded into the smart contract, i.e. if my Pokemon crosses 100 XP (note: here the parameter XP is predefined in the NFT), it will evolve or if the NFT interacts with an external signal – like a sports news feed – it can trigger the update of the NFT, or if you enter a certain zone in the Metaverse, etc.

As the games scale up, i.e. go from sub 500 DAUs, to 10,000 DAUs, there are different elements of the backend which will need to be productized in order to enable deployment of dynamic NFTs at scale across different NFT use cases like upgrading, minting, renting, leasing, fractionalizing, etc.

We have seen challenges with the synchronization of on-chain and off-chain databases – Games/Metaverse often work with both on-chain and off-chain databases. On-chain databases will be used to store the addresses/ownership data. For example, if there’s a fighting game where one can pick up different weapons/items, if one picks up a knife NFT, the ownership vector will now point to that person. Similarly, for the off-chain data, a character’s graphics will get stored on a centralized/off-chain database. As games/metaverses scale, there is a potential to provide a platform for the synchronization, batching of blockchain update requests and updating of various data points in the ecosystem – which games currently build in-house using ineffective alternatives like cron jobs. Companies like Chainlink have been working on this problem.

Currently, no dashboards exist to see the status of active NFTs, and no good tools exist to edit smart contract updating rules. At any given point in time, game developers do not have visibility of the game rules and conditions in one place – for example, if one has 400 unique pokemon – each corresponds to a unique smart contract which determines the rules of NFT updates. With newer games and mechanisms – the NFT ecosystem becomes more complex, for example, of the 400 NFTs, you have 200 NFTs which need to further interact with external stimuli to trigger a smart contract auto-updating/metadata updating. The vision can be to build a no-code dashboard to drag and drop game functionality/game economy functionality – where one can drag a box which changes the game economy rules (eg. changing the prize for a pokemon battle from 1 point to 2 points, etc.)

We have also come across challenges with serum-based NFT updating mechanisms (however, they don’t allow for the preservation of the previously held NFTs). We believe that the TAM will become large enough in the coming few years as Web3 metaverse and gaming companies might share $0.5-$1 per user (approximately $15-20 ARPU), making this an interesting but nascent space to look at.

The NFT ecosystem is rapidly evolving with many exciting new opportunities and challenges – we feel we have just scratched the surface, and there is a lot more yet to come.

Unravelling the Portfolio: Traya Health

Posted on by Kae Team

Brief about Traya
A one-product approach never works on hair loss or any other chronic condition. Traya combines the best of Ayurveda, Allopathy and Nutrition containing proven results to identify the type of hair loss, stage and the root cause behind it. Based on this, each person gets a doctor-prescribed treatment plan and a hair coach who guides the customer and tracks their progress.

Vision and Mission
Traya was started with just one goal in mind- to deliver visible hair growth results. We did everything from product and process to tech, keeping in mind the efficacy of the treatment. Back in 2019, Traya was sold to the first 55 customers through a basic landing page and they took the proprietary formulations (all-natural herbs + dermatologist prescribed + diet). They were closely observed for 4 months and a good 90% of them started seeing visible results. That is when we decided to launch a brand and seek investment. We knew we had hit a gold mine.

Genesis
Traya is an outcome of the cofounders’ personal journey as a couple. About 3 years ago, co-founder Altaf struggled with a number of health issues including uncontrollable thyroid levels accompanied by accelerated hair loss (he faces genetic male pattern hair loss) and weight gain, which was compounded by his hectic lifestyle. He went from doctor to doctor and couldn’t do much about his situation. We researched more and explored ayurveda and naturopathy diets. The three together changed our lives. Altaf’s hair regrew and his thyroid came under control. Even his endocrinologist was surprised. Even then the cofounders had no intention of starting a company. Almost a year later, by helping a lot of friends and family with chronic health issues including hair loss, they decided to take this space seriously. They realised that both of them were extremely passionate about solving chronic health issues that a millennial faces. On further research, hair loss was chosen as a disease line to begin. It was the most crowded but also the most corrupt. As they researched more on the diseases, its types, they realised nothing out in the market can ever work. The issue is considered cosmetic but it is internal. Thus, they took up the challenge to change the way the hair loss industry works.

Market Opportunity

The current hair fall market in India is broken. Many have a product-centric approach which is clearly not effective in delivering the results. Hair fall is a problem that needs to be addressed holistically and requires customization as per every individual’s root cause of hair fall. Out of the entire serviceable market, 125 million adults in India directly benefit from Traya’s offering and have the ability to afford it. The $12.5 Billion hair loss solutions market is up for grabs and Traya is aggressively growing to capture the entirety of the market while also changing the way a hair fall solution is approached and the results speak for themselves. In addition to the direct solutions to hair fall, Traya is also targeting the next line of products including anti-dandruff and cuticle damage.

5-year plan

We want to be synonymous with the terms hair fall and hair health and be known for our efficacy and honesty. On the product side, we are in research for no side effects and high-efficacy solutions for other hair concerns.

Portfolio Fundraise Update: Foxtale raises $4M in a pre-series A round

Posted on by Kae Team


Indian D2C skincare brand, Foxtale, has raised $4M in its pre-Series A funding round led by Matrix Partners India with participation from existing investor Kae Capital and some notable angel investors.

The Mumbai-based startup raised its seed round in August last year. The startup launched in December 2021, and found an early product-market fit and a repeat rate of more than 50%, which led to a quick pre-Series A round.

This round of funding will be used in expanding the product range, hiring senior vertical heads and in scaling the business across multiple touch points.

The culture of self-care is still very nascent in India. While skincare brands have existed for a long time, they either fall in the category of herbal and ayurvedic, ineffective yet massy or luxury and expensive. Foxtale wants to bridge this gap between efficacy and affordability, making skincare, and by extension, self-care, accessible to all. To understand what the modern Indian woman is looking for in skincare, the Founder and CEO, Romita Mazumdar conducted interviews with more than 3000 women. From all those insights and the expertise of a team of brilliant chemists and formulators, Foxtale was born.

The brand’s decision to launch with 4 basic products, a cleanser, vitamin C serum, moisturizer and sunscreen, was a bold move, as most other brands rely on starting with a wide range of SKUs. However, Foxtale’s approach to skincare is guided by what its consumers need. It’s these 4 product categories that people use the most and need better formulations for. After perfecting this 4-step routine, Foxtale is now ready to launch more targeted solutions to the users’ skincare issues.

Efficacy is one of the biggest selling points of Foxtale. This is ensured by their formulation team, headed by one of the most lauded names in Indian cosmetics and personal care products, Dr. Ramesh Surianarayanan. He has pioneered many acclaimed products in his previous stints at Himalaya and Unilever and he now extends his expertise to Foxtale. The product development engine at Foxtale keeps its user community at the centre. From identifying which products they should launch, testing them, and finalising the packaging, Foxtale tries to include feedback from their users every step of the way and they only launch products in the market once 97% of their community approves of their efficacy.

Speaking of the funding, Romita Mazumdar, Founder & CEO, Foxtale, said, “A big issue in the Indian skincare industry has been the low customer repeat rates. It was clear that efficacy was a big problem for skincare enthusiasts in India and we had to solve it. Our focus on understanding our customer’s needs & product innovation has enabled us to establish a strong early product-market fit and drive industry-leading repeat rates and customer NPS scores; however, there is still a long way to go. I am very excited to find partners like Matrix and Kae in this journey and looking forward to building Foxtale with them.”

“The beauty and personal care market in India is growing fast and is expected to reach $28B by 2025. We are privileged to partner with Romita and the Foxtale team as they aim to disrupt this market through innovative products and differentiated go-to-market strategies. At Matrix, we continue to be excited about backing new-age consumer brands and Foxtale is our tenth investment in the sector.” commented Rajat Agarwal, Managing Director, Matrix India.

“Foxtale is different from other skincare brands. Its focus on high efficacy and the vigorous testing they conduct before launching a product is unlike any other. Foxtale sources 80% of its ingredients from premiere labs across the globe. We are excited to continue to partner with Foxtale as they build out India’s foremost skincare DTC brand.” commented Sunitha Viswanathan, Partner, Kae Capital.

On the road ahead, Romita said, “Our vision is one – to build a consumer-first brand where growth and product have equal importance. I want to change the perception that self-care should be a luxury restricted to women who have the privilege of time and money while proving that a profitable business can be built with consumers at the centre of the story.”

Unravelling the Portfolio: Hatica

Posted on by Kae Team

Brief about Hatica
Hatica is a Software Engineering Analytics platform that helps managers and leaders build productive and happy engineering teams.

Vision and Mission
The severe lack of visibility for Engineering managers in a world of distributed teams working across dozens of tools has made the job of engineering management harder than ever before. This naturally results in declining developer productivity and experience.

Hatica’s mission is to equip managers with a comprehensive Engineering management platform to provide them the much-needed visibility and insights into development work activity, processes, and quality to help them drive team productivity while ensuring well-being.

 

Genesis
The idea came from the founders’ experience of having worked remotely even before the pandemic and having worked through developer productivity challenges before. Followed by countless zoom interviews with engineering leaders, managers, and developers across regions and industries, Naomi and Haritabh completed and launched the first version of Hatica in early to mid-2021.


Market Opportunity
The trend of SaaS sprawl, combined with remote work becoming mainstream, has made engineering management even harder and the problem of developer productivity ubiquitous. This coupled with every organization requiring to be technology-first, driving demand for engineers, has provided us a tremendous pull from the customers with a sizable TAM.

5-year Plan
Go from a sharp Engineering analytics tool to an Engineering Management Platform, empowering every engineering manager and leader out there to drive engineering excellence and wellbeing.

Unravelling the Portfolio: Foxtale

Posted on by Kae Team

Brief about Foxtale
Foxtale is a community-first skincare brand. Foxtale is building a D2C Brand focused on creating scientifically backed skin care products for women. Foxtale aspires to give a product which is reasonably and affordably priced, while solving for efficacy of the product.

Vision and Mission

The vision is to create a range of products for Indian women of all skin types, belonging to places with diverse climatic conditions, and ensuring that it remains their partner at every stage of life. The mission is to create an INR 1000cr brand that solves skin problems in a scientific manner.

Genesis

After spending years in the Venture capital and finance spaces, I realised that there is a big gap in the skincare market in India. It is heavily dominated by traditional players such as Fair and Lovely, Ponds, etc. and the new-age players have been unable to grab a market share, due to a lack of consistent results. Another problem with skin care for women in India is the changing needs of women every week, based on their biological cycle, their area of residence and the climatic conditions of that specific time. Hence, there was a strong need to have products which can solve for the varying needs of women and at the same time, provide long-lasting results consistently.

Market Opportunity

The total market size of skincare products in India in 2020 – $2 Bn and is projected to reach ~ $3 Bn by 2025. In India, there is a need for players who can deliver consistent results at affordable prices.

5-year plan

The 5-year plan for the company is to expand distribution across India and to command a high repeat rate of 70%-80%. We are building a company that accelerates every year to a revenue of 1000cr in the next 5 years. The company prides itself in understanding women and while our core expertise is skincare, we hope to be every Indian woman’s companion through her self-care journey.

A Guide to Improve and Maximise Developer Productivity: Metrics, Tools, and more

Posted on by Veenu Choudhary

 

The global application development software market is anticipated to reach $733.5 Bn by 2028

Developers in India are paid INR 410 per hour, on average. It can even touch INR 2000 per hour on the higher side. Despite that, the median code time per developer was found as 52 minutes per day, or four hours and 21 minutes of code time per week

Thus, there is a need for organisations to invest in platforms that help boost developer productivity

Developers have become the biggest ask for tech companies at this point in time. You may be seeing a lot of job openings now, but developers have had the privilege of constant job openings, with or without pandemic woes. The global application development software market is anticipated to reach $733.5 Bn by 2028, expanding at a CAGR of 24.3% from 2021 to 2028, as per Grand View Research, Inc. But while there seem to be so many opportunities for developers, their time presently is not being optimised well. If you want to know how to maximise your developer’s productivity, read ahead!

India’s app developer base is one of the highest in the world with 1.6 Mn jobs in the sector. The resultant websites and apps coming from the sector generated a revenue of $581.9 Bn in 2020.

Inefficient Utilisation Of Developers

The job of a software developer requires them to interact with multiple tools on a regular basis. But the time cost of context switching between tools, collaboration, documentation, version control, and duct taping the issues is quite high. This ends up eating into the employee’s development time.

According to Software’s Code Time Report, the median code time per developer globally was found as 52 minutes per day, or four hours and 21 minutes of code time per week. It was also found that developers spend an additional 41 minutes per day on other types of work such as reading code, reviewing pull requests, and browsing documentation. Thus, there’s a major developer experience gap.

Most companies are ineffectively deploying their developers, throwing various distractions their way. This is supplemented by further disruptions and meetings, as well as system inefficiencies, such as slow reviews, slow builds and bad tools. In order to ensure optimal utilisation of developers, strong dev tools are required. This can bridge the developer experience gap and improve a developer’s experience across the entire workflow.

Importance Of Dev Tools

Dev tools are a range of products focused on developers to help them build, deploy and collaborate on a daily basis. Global companies such as Github, Slack, JIRA, Browserstack, Snowflake, Postman and Datadog have created tools that are used by almost all developers. The dev tools market has made massive strides in the last few years. There are more than 73 Mn developers on Github, with over 16 Mn developers added in 2021 alone.

Snowflake reported stronger than expected Q4 2021 results, with revenue rising by about 117% to $107 Mn. There has been a steady shift from a ‘Build and Buy’ to a ‘Buy and Build’ decision-making mentality. Organisations have become more cognizant of these tools and the value they bring to the table. They are more than willing to invest in platforms that help boost developer productivity. This begs the question, what really caused this perception change?

Impact Of The Pandemic

This slow but steady shift got catapulted by the pandemic. The dev tools market has experienced tailwinds from this increased digital adoption. The pandemic forced teams to work remotely, which deepened the already existing problem of collaboration and communication. Many SaaS tools are being built for the future of work, to make this transition easier. These tools act as a supplement to the present working conditions, thus enhancing productivity.

To get a better understanding of why there’s a need to invest heavily in developers, we need to recognise that while developers have become a staple for tech companies, they are an expensive resource at the same time. On average, developers in India get paid INR 5.2 Lakh per year. This excludes bonuses, profit sharing and commission which are all big components for developers. Calculated on an hourly basis, it comes to INR 410, and even touches INR 2,000 on the higher side. This alone underpins the importance of optimising the developers’ time and helping them.

Thus, there’s a need to back developers and engineers with the right tools. At the same time, there’s a need to have visibility into DevOps. This, when backed by solid numeric data, can give a clear picture of the inefficiencies arising and help in optimising for these specific issues. At the end of the day, high-performing engineering teams are essential for the success of companies as they can release products to market faster.

There is a need for tools that can empower them to manage their daily tasks — context switching, collaboration, etc. in an efficient way. The developer productivity tools market is fast emerging to solve this problem. This would be key to look out for as we go deeper into cross-vertical functions and remote working.

Multi-chain, Cross-chain Interoperability and Composability Explained

Posted on by Kae Team
Interoperability implies the seamless transfer of assets (fungible or non-fungible) and messages, while composability essentially implies shared infrastructure/effective cloning of dApps.

The Web3 ecosystem has taken off over the last two years. What started off as a whitepaper by the pseudonymous Satoshi Nakamoto back in 2008 has evolved from the first L1 – BTC (a prototype of sorts), to the arrival of the now dominant ETH (Ethereum), which drew the imagination of developers from across the globe with its smart contract functionality.

Now with other L1s like Solana and Avalanche, L2s like Arbitrum and Optimism, and even multi-chain ecosystems like Polkadot, the Web3 space has become massive.

The top 15 blockchains store  $10 billion  in value each, with ETH and BTC together contributing almost $2 trillion.

But these ecosystems are growing in silos –

Ethereum, the largest ecosystem, has the best developer pools. Most programmers are comfortable with ETH UX/UI, languages, and smart contracts but with the current PoW (Proof of Work: requires miners to solve a cryptographic equation by trial and error) mechanism, the chain is suffering from poor scalability due to gas fees.

This is despite having the best security. It is said that ETH 2 with PoS (Proof of Stake: requires miners to stake all or a portion of their coins in order to validate transactions) will be much faster and cheaper.

Solana, which is currently the most prominent Proof of History based (sequence of computations that can provide a way to cryptographically verify the passage of time between two events), non-sharded chain, has high transactions per second (TPS). However, developers are still getting used to Rust, and with the core use cases being built around gaming, it’s becoming another siloed ecosystem

Terra, which aims to become “DeFi Central”, and seems to be doubling down on DeFi use cases with its array of stablecoins and innovative DeFi protocols, is also becoming another fascinating silo.

blockchain

What encompasses interoperability and composability

Interoperability implies the seamless transfer of assets (fungible or non-fungible) and messages, while composability essentially implies shared infrastructure/effective cloning of dApps, meaning one should be able to deploy any dApp on any chain with minimum friction and time.

Each ecosystem has its core strength, core use cases, core set of developer pools and liquidity pools. Just like economies benefit from trade – blockchains benefit from trading functionality, assets, liquidity pools, etc.

The vision is to enable developers to deploy dApps from any chain, onto any other chain in an almost no code format at scale.

This entails the seamless sharing of ecosystem strengths through smart contract calls or even on tools abstracted one layer above the smart contracts themselves.

For example –

  • Computation (think logic and calculations, like those required in gaming) on SOL/AVAX smart contracts (depending on the kind of use cases)
  • Transactions (meaning buying or selling, but not settlement) happening on SOL
  • Finally, settlement occurring on ETH (eg. when someone pays using VISA or Mastercard – that is not a settlement. Settlement comes weeks after that.)

However, interoperability and composability today are broken. The future is not cross-chain vs multi-chain, but cross-chain AND multi-chain, we will need both –

The mode of connecting ecosystems today is cross-chain bridges. This is where we enter murky waters – i.e. the cross-chain vs multi-chain debate, which is at the heart of it all.

With bridge security mechanisms becoming a core piece of debate (bridge hacks leading to stolen tokens – like the Wormhole hack), a large chunk of the population believes cross-chain is not the future. Ethereum founder Vitalik has explained (here) why it is always possible to override consensus on bridges, making them a losing proposition.

This leads us to multichain ecosystems, with the core idea being shared security. For example,  the Polkadot ecosystem is an “internet of blockchains” with shared security, shared virtual machines (think computations, logic) with the concept of creating new chains called parachains.

So not only can the chains communicate with each other seamlessly and transfer assets, the security risk is much lower.

However, even with two  “Internet of Blockchain” ecosystems coming up with their individual shared securities,  they will still need to communicate with each other! Hence, bridges cannot be taken out of the picture altogether unless there is a completely new mechanism to substitute them.

Overall, we want to make bets on infrastructure plays, which will enable a multichain interoperable, composable future. This can include Tooling/Infra or Ether plays on Polkadot (think governance, no code plays, etc.).

This also brings in Protocol based interoperability standards (think cross-chain smart contract enablers, messaging layers, function call layers, interoperability standards, etc.), also containing DAO tooling which allows for multi-chain functioning, etc.

Investment in Hatica: Engineering Analytics to Boost Developer Productivity

Posted on by Veenu Choudhary

The demand for software developers is ever-increasing! Digitisation, cloud adoption and software stack globally are driving this demand, amongst other things, but there is not enough supply. According to the State of the Developer Nation report, in 2021 there were 26.8Mn active software developers in the world and they predict it to reach 45Mn by 2030. This makes it a very large and growing market.

Software developers use multiple tools for their daily work and a lot of precious development time is lost in low-value work of context switching between tools, collaboration, documentation, version control, duct taping the issues etc. There is a developer experience gap. Strong dev tools can bridge this developer experience gap and improve a developer’s experience across the entire workflow.

Dev tools are an array of products focused on developers to help them build, deploy and collaborate on a daily basis. Some of the global leaders in this market are Github, Slack, JIRA, Browserstack, Snowflake, Postman and Datadog. Dev tools have seen massive growth in the last few years. There are more than 73Mn developers on Github, with 16Mn+ developers added in 2021 alone. Snowflake reported stronger than expected Q4 2021, with revenue rising by ~117% to $107Mn. A shift has been witnessed, from a ‘Build and Buy’ decision-making mentality to a ‘Buy and Build’ approach. Developers are now open to buying platforms which can help them decrease the time of development.

This shift is further fueled by remote working. The Dev tools market has experienced tailwinds from this increased digital adoption. The pandemic forced teams to shift remotely, which has further aggravated the problem of collaboration and communication. Many SaaS tools are building for the future of work to make this transition easier, without affecting the productivity of teams. Developers are one of the most expensive resources of a tech startup, and any reduction in productivity is a big loss in terms of money and timeline of projects. According to U.S. News, the median annual salary for a software developer is $101,790, which will bring the cost of the average developer minute to ~$0.81. Therefore, every wasted minute of developers potentially impacts the company’s cost structure and profitability. Companies are now becoming more receptive to dev tools to ensure that most of the developers’ time is spent on actual development.

High-performing engineering teams are essential for the success of companies as they can release products to market faster. There is a need for tools which can empower them to manage their daily tasks- context switching, collaboration, etc. in an efficient way. Developer productivity tools is a massive emerging market to solve this problem.

We are happy to back Hatica, as it aligns well with our thesis on developer productivity and the future of work. Hatica has been cofounded by a couple of experienced techies, building a global SaaS tool to provide an engineering analytics platform to boost developer productivity. Embedding the culture of remote work internally, they have built a powerful product to improve engineering efficiency and optimize dev workflows. Hatica has early customers from US, Europe and India. We are thrilled to be part of this journey and believe it has the potential to become one of the top engineering analytics platforms globally.

Alt Protein: The Next Big Thing

Posted on by Sonia Abraham

The post-COVID era has changed the way people think of health, nutrition and the environment. With this, a small but promising community of startups have begun India’s chapter of the Alt Protein landscape in the last few years. Over 3Bn USD has been poured into the Alt Protein category in 2020, around the globe. In India, we are at a nascent stage, perhaps right before it reaches the inflexion point. 

How large is the market?

In India, this nascent but promising market of plant-based meat is estimated to be around 200-500Mn USD by 2022 (GFI). The plant-based dairy industry is expected to reach 68Mn USD by 2024 (GFI). However, if adoption ramps up, it has the potential to reach $4Bn in the next 5-7 years. Adoption rates will become clear once commercial production starts for many of the players in the Indian market, who are currently market-testing their products or are in the R&D stage. An observable trend is an increase in the consumption of meat as a by-product of nations transitioning from developing to developed countries. Naturally, as disposable incomes increase, more people are likely to spend on meat consumption which is otherwise seen as a luxury. 

Why is plant-based food important for India?

Contrary to popular belief, we are not a vegetarian nation. Over 70% of consumers in India identify as non-vegetarians, but unlike the West, our frequency of consumption of meat-based products is relatively low. At present, Indian diets are predominantly cereal-based, and 60% of protein is derived from cereals that have poor digestibility and quality. 80% of India is protein deficient.

India is also facing a double burden of malnutrition and an increasing share of global Greenhouse gas (GHG) emissions (6.55%), making it the third-largest contributor to anthropogenic GHG emissions, a lot of which comes from the animal slaughter industry. Analyses of the environmental impact of plant-based meat showed that plant-based meat production uses 72-99% less water and 47-99% less land. Furthermore, it causes 51-91% less water pollution and emits 30-90% less greenhouse gas emissions. 

Process of developing Plant Based food

Recognising that any plant-based food company is a food science tech player first, and then a consumer brand is important. Being a brand is a long-term possibility but should not be the focus in the initial days when consumer adoption is unclear. There is a technical process involved in developing plant-based protein, and getting it to its final form.

Why is Plant-based food expensive?

Protein isolates are available to all players in the market. The basic material, in this case, protein isolate, is available at cheap prices to all, but it’s the additional flavouring, additives and preservatives which go into the final product that makes plant-based food expensive. These additional products are called ingredients and having control over the ingredient formulation is a strong way to have price parity in the long run. For a few players, high prices are also due to the cost of extrusion machines in the supply chain.

The price per kg comparison of the majority of the products across plant-based meat, dairy, and seafood are nearly 2-3x more expensive than their conventional counterparts. There is a significant scope for this to come down in the next 5 years as infrastructure improves.

Challenges and opportunities in this market

Lack of awareness: While Indians are massive consumers of raw plant products like lentils and pulses, processed product awareness and acceptance is prominent among urban consumers only. It is slowly picking up in smaller cities with the support of government campaigns.

Infrastructure challenges: India’s cold chain storage and transportation capacity is still ill-equipped to handle its fresh produce volumes, despite recent government efforts, making intra-state transportation challenging and costly.

Constrained R&D Ecosystem: India’s overall R&D spending as a percentage of GDP is lowest even among BRICS nations. Government institutions are restrained by funding challenges.

Low meat eating: Even people who eat meat in India are primarily vegetarians, who consume meat once or twice a week, whereas in the West, meat eaters consume meat three times a day.

Price elasticity is very high: When it comes to chicken consumption, the prices of Plant-based meat are 2-3x compared to the incumbents

Availability of Talent: Another more fundamental issue with this space is the lack of quality senior-level talent in the industry. The IT sector boom was facilitated by a lot of Indian overseas talent returning, if this happens for this sector as well, we could see faster growth. 

Despite its challenges, the market continues to grow and provides a lucrative opportunity for many players to build for this. In the next 6-12 months, a lot more activity especially on the commercialisation of these products will take place, adding another layer of insights about this space. 

Kae Capital is looking forward to connecting with more startups that are building for this category. 

 

Rise of New Creator Economy, Powered by Blockchain

Posted on by Sarthak Biswas and Veenu Choudhary

India is one of the youngest countries globally and has the second most internet users after China. Post COVID-19, the average time spent on the internet has increased significantly and a large proportion of this time is being spent on social media. The quantum of content created and consumed has grown manifold over the last five years – signalling the advent of a massive creator economy.

The creator economy is built on the back of creators/ influencers monetizing their online content. Online creators are emerging in multiple categories: artists, fashion bloggers, musicians, writers, live game streamers, stock market traders, educators, and business bloggers. There are more than 50Mn creators globally spread across platforms like YouTube and Instagram. There are ~ 10 Mn Instagram accounts in India with over 10k followers and we estimate that approximately ~5 Mn are active/semi-active creators.

This number is rapidly growing year on year with a large number of young Indians entering the fray incentivized by aspirations to be recognised for their passions/hobbies while also getting an opportunity to generate parallel income or in some cases primary income streams. This is a particularly interesting phenomenon given that the revenue streams are still fairly restricted in the Web 2.0 paradigm.

The creator-consumer relationship is one which involves creators sharing content on YT, Instagram which the users can view (images, GIFs), watch (clips, movies) or hear audio where monetization is often restricted to ad-based revenue, or brand contracts where the payment from brands is unpredictable, the terms are often black boxed. Additionally, there is no guarantee on subsequent contracts. The creator economy, both in India and abroad is highly skewed from an earnings perspective – for example in the US – 80% of the earnings come from 20% of the creators.

Within the Indian market – creators earn primarily from Youtube and brand partnerships. Globally, there are 3-4 more sources of earning like Patreon, Onlyfans, etc. But their participation is largely restricted to Western economies. Our internal market sizing (for India) would skew the Indian creator economy significantly towards the top segment of the creators as well.

The creator economy in India is currently constrained by skew, lower ticket sizes and disproportionate bullet payments and manual/unscalable operations. In order to enable creators to drive engagement and retention, some founders have built vertically focused platforms so that UIs and workflows are tailored to specific categories, for eg. Discord started its platform with gaming.

Despite this, the existing platforms are very centralized. In Web 2.0, central social media platforms like YouTube and Instagram decide how much a creator can make based on the views. These platforms own your content and decide the monetization terms and as a result, a major chunk of money is flowing to the top creators and the platform itself.

With existing revenue streams putting a cap on the TAM, we believe Web 3.0 will solve both the earning capacity of creators while also driving higher engagement with the fans – significantly driving up the market size in the coming few years.

Through blockchain and Web 3.0, the earning power goes back into the hands of the creator. Web 3.0 inherently decentralizes value. It is disintermediating these central platforms, allowing creators to have ownership of their work and allowing them to decide the best value for their art. A critical piece of this decentralization is NFTs or non-fungible tokens.

NFT capabilities allow creators to earn in perpetuity through every transaction of their creation. Tools have emerged to convert different content formats into NFTs. Globally, creators are making thousands/ millions of dollars in NFTs. CryptoPunks is one of the earliest NFTs launched and has more than $2.2Bn in total trading volume (https://dappradar.com/nft). Few weeks ago a CryptoPunks NFT was sold for over $500Mn.

NFT marketplaces have received tremendous traction. OpenSea, which is the largest NFT marketplace, has passed a total trading volume of $10Bn in Oct’21. Rally is another platform where creators and communities build their own social tokens. NBA TopShot, where you can own top NBA moments, has facilitated more than $737Mn of total trading volume (https://dappradar.com/nft)

Axie Infinity is an NFT-based game that has grown exponentially and has made more than $3 Bn in total sales since its launch in Mar’18. Its play-to-earn model has created a new category of games. On Axie Infinity, players acquire unique digital pets (Axies) and battle to win in-game currency, which can be traded on exchanges. Even Indian celebrities like Amitabh Bachchan and Salman Khan are also jumping on the NFT bandwagon making it popular in India.

BitClout has enabled creators to form a platform to enable content consumers to share opinions, with each opinion generating a fraction of the Bitcoins which are provided as income to the creators. Creators now have the option of creating their own storefronts – reward point mechanisms and workflows have been developed to incentivize creators and fans alike.

Companies across the globe are planning to build on Web 3.0. Facebook’s (now Meta) decision to move to Metaverse increases confidence in Web 3.0 and encourages more people/ companies to move to Web 3.0. Web 3.0 is redefining the digital world. The creator economy as a whole has a lot to gain from the arrival of the Web 3.0 paradigm.