What went wrong with Crypto Platform Vauld? – Indian Startup News 128

Vauld, an Indian cryptocurrency startup, is in 
the middle of a crisis. Welcome to Backstage   with Millionaires, I'm Caleb, your host, and if 
you haven't heard of Vauld already, they're kind   of like a neobank for crypto currencies, and 
like I said, it's an Indian startup but they   are headquartered in Singapore which is the case 
for a lot of Indian crypto startups because the   regulatory situation here in India tends to 
change rather quickly whereas in Singapore,   things are a little bit more stable. And, as of 
this week, they've stopped allowing their users   their customers to withdraw, trade, and deposit 
using their platform. So, here at Backstage with   Millionaires, we haven't really been covering the 
crypto crash or some would call it the bursting of   the crypto bubble – there was this boom for more 
than two years in the crypto space, and now all   of that is over – there's rising inflation around 
the world, you've also got this global economic   slowdown, and so people are taking their money out 
of cryptocurrency and they're putting it in safer   investment vehicles which has resulted in 
cryptocurrencies like stablecoin Terra UST,   and its sister cryptocurrency, Luna, crashing 
and wiping out more than $40 billion of investor   money.

You've also got Bitcoin losing 50% of its 
value since May and this is basically creating a   panic where people are just pulling their money 
out of cryptocurrency platforms like Vauld,   and in the case of Vauld, specifically in the 
last 20 days, customers have made withdrawals   in excess of $197.7 million, and this is why the 
company has stopped allowing these customers to   withdraw their money, and also the company's 
CEO, Darshan Bhatija, announced this news   via a blog post – "We have made the difficult 
decision to suspend all withdrawals, trading,   and deposits on the Vauld platform with 
immediate effect. We believe that this   will help to facilitate our exploration of the 
suitability of potential restructuring options,   together with our financial and legal advisors." 
So, there's a couple of potential paths forward   here for Vauld: one, would be for them to do 
the right thing and reverse this decision and   allow their users to withdraw the money that they 
trusted Vauld enough to put into the platform,   they should be honoring that trust but I don't 
think that's gonna happen as you could probably   tell.

I emphasize the word "our", here in their 
statement, it seems like they're very focused on   themselves, not so much on their customers which 
is very unfortunate. Another option is that they   could be acquired by another crypto lender and 
it seems like they've already settled on a buyer,   London-based, Nexo. So, Nexo has 
said that they would buy up to 100%   of Vauld and reorganize its future operations with 
the aim to accelerate its deeper presence in Asia.   Now, at this point, this is probably the best 
possible outcome for Vauld stakeholders being   acquired by another company means that they 
won't lose all of their equity in Vauld,   whereas if Vauld goes out of business and just 
ceases to exist, then they walk away with nothing.   This also points towards a larger trend in the 
crypto space right now which is a consolidation   of these crypto startups.

Now, another facet 
of this story that I wanted to talk about is   the impact that Vauld's crisis has had on social 
media influencers who promoted Vauld and now their   followers, a lot of their fans, are upset because 
they took these influencers advice and lost money   as a result. In fact, we, here at Backstage with 
Millionaires, actually covered Vauld in the video   that we made about India's top 10 cryptocurrency 
startups, and while that video wasn't sponsored   by Vauld, I think this crisis that Vauld has faced 
this week has really opened my eyes and I think   the eyes of a lot of social media content creators 
and influencers in India to the importance of   being completely honest and straightforward with 
promotions. We, as content creators, need to   clearly disclose when we're being paid to promote 
something and we also need to clearly state if   there are risks involved in using that product 
or service that we're promoting and these kinds   of rules exist in countries like The United States 
and China, possibly even in Canada where I'm from,   I'm not sure, I haven't looked it up, but so far, 
things are a bit more relaxed in India, and I,   personally as a consumer as well, think that 
that needs to change.

And, as a content creator,   there's a lot of pressure right now from brands 
and PR companies to not disclose an ad or a   sponsorship, to use ambiguous language, or to 
just not outright disclose it at all, and it   makes sense if I, Caleb, am recommending something 
to you personally, you're way more likely to buy   it than if I'm being paid to recommend it and 
you're aware of the fact that I'm being paid   and we, here Backstage with Millionaires, have 
actually faced this kind of pressure ourselves   where PR companies and brands will put pressure on 
us, and I think a lot of other content creators in   this ecosystem saying that they are not going to 
partner with us or they're going to pay us less   if we make the disclosure straightforward and 
clear, if we clearly state that we're being paid   to promote this product, if we clearly state that 
it's a sponsorship, and so I think that it's up   to us, the content creators, to take a stand here 
to put our feet down and say that no we actually   care about our audience, we want to be honest 
with them, we don't want to mislead them, and   of course, we're going to keep doing promotions, 
that's how we sustain ourselves financially but   we're going to do it voluntarily in an ethical way 
because some brands and PR companies are pushing   in the opposite direction, and so, we need to push 
back at least until the proper government laws and   regulations are put in place to make this standard 
practice.

Alright, next up, let's move on to our   Founder Spotlight now because this week I wanted 
to highlight the co-founder and CEO of Lenskart,   Peyush Bansal, and the reason I wanted to 
highlight Peyush today is that officially,   this week, Lenskart has become the largest 
eyewear brand in Asia. This happened after   they acquired a majority stake in Japanese eyewear 
brand, OWNDAYS, in a deal worth $400 million. So,   just a little bit of information on the state of 
Lenskart right now – they have over a thousand   stores in India and they're looking to open 400 
more with their latest fundraise of $200 million,   and this latest funding round also means 
that the company's valuation has almost   doubled since its last round from $2.5 billion in 
May of 2021 to $4.5 billion now. And, I think the   coolest part about all of this development is that 
under Peyush's leadership, the company is actually   profitable – they registered a profit of ?29 
crore in the financial year of 2021, we're   not sure yet about the financial year of 2022, 
hopefully they're still profitable.

But anyways,   for the next stage of growth, Peyush is now 
focusing on taking Lenskart global. For this,   he's formed a subsidiary company of Lenskart 
called Neso Brands which is gonna be focusing   on investing and acquiring eyewear companies 
around the world, and it's going to be kind of   like a House of Brands company which will be 
operating many D2C brands underneath it which   will be a part of their portfolio. In a recent 
interview with Business Today, Peyush said that,   "Globally, 2 billion people still don't have 
access to glasses, so if we want Lenskart to   be the Microsoft of eyewear, or Amazon of eyewear, 
we do have to have global aspirations and invest   in it for the long term." Now, what's really 
interesting to me about Lenskart going global   and something that I'm really excited to see is 
how they fare in a much bigger market. Currently,   they are a big fish in a small pond, a relatively 
small pond, here in India – they've conquered   the market but going global means that they're 
going to be up against much bigger fish like,   for example, Italy-based conglomerate, Luxottica, 
which is valued at more than $75 billion.   So, I'm really excited to see how they fare 
entering this massive massive global market   and I really hope that they do well because I love 
seeing Indian brands going global and succeeding   and becoming internationally recognized brands. 
Alright, next up, let's move into our Bird's Eye   Segment now and before we start, just one little 
note here, I'm filming this video on Wednesday,   normally I film it on Thursday.

So, there might 
be a one day gap in the information that you would   normally be getting about all of the funds that 
have been raised in India's startup ecosystem   this week, but if you want the most up-to-date 
information, we do send out a newsletter on   Sundays with all of the information about all of 
the funds that have been raised throughout the   entire week, it's fairly in-depth and detailed. 
So, make sure to sign up for that, you can find a   link to it in the pinned comment down below, just 
click that little link, and you can sign up to get   our newsletter sent to your inbox.

But anyways, 
this week 11 Indian startups have raised more   than $170 million. So, first of all, of course, 
we have the eyewear space and more specifically,   Lenskart raising 70% of all the funds this week, 
that's $120 million, and they raise these funds   at a $4.5 billion valuation. Then, we have fintech 
startups raising 13.2% of all the funds this week,   that's $22.5 million being raised by companies 
like Lendingkart which raised $10 million and   Marketwolf which also raised $10 million dollars. 
Then, we have edtech startups raising 6% of   all the funds this week, that's $9.8 million 
dollars being raised by companies like Antwalk   at $7.5 million dollars and Kreedo at $2.3 million 
dollars. And then finally, we have D2C startups,   and one startup in particular raising 4% of 
all the funds this week, that's $7 million   being raised by Acefour Accessories. Alright, next 
up in the news, just some quick little updates   for you guys. First of all, things at Ola are not 
going well, it looks like they're gonna be laying   off between 400 and 500 employees.

According to 
a source quoted by Moneycontrol, key managers   were asked to drop a list of people from their 
respective teams last week who can be let go. Now,   in other Ola news, Ola Electric is also struggling 
right now and they're going through a difficult   time because of the decline in their total vehicle 
registrations in the last three months. In April,   customers registered 12,703 units which fell by 
27% in May to 9,255 units and then another 36%   declined to 5,883 units in June, and this means 
that Ola Electric is also no longer the king   of India's electric two-wheeler space, the way 
that they used to be.

They lost that position to   Okinawa in May and then they dropped down another 
two spaces to Ampere Vehicles and Hero Electric,   and now they're in fourth place behind these 
three other companies. Oh, and one more piece of   bad news for Ola Electric is that Yashwant Kumar 
who was the Senior Director and Business Head for   Charging Networks of the company has decided 
to move on, he's quit the company. Alright,   next step in the news, the value of Chingari's 
crypto token, GARI, fell by 80% in 24 hours.

So,   the sequence of events here was that on Monday, 
July 4th at 9:37 PM, the token was trading at a   value of ?57, and then exactly one hour later, the 
GARI token was trading at ?10, and then shortly   before midnight, it had reached an all time low 
of ?7. Now, there were initial rumors that this   was because of a hack the cryptocurrency had 
been compromised, but this was later denied   by the company in an official statement and they 
said that the major reason behind this price drop   was that a major shareholder of the GARI token 
had sold $2 million worth of it resulting in a   shortage of liquidity.

Alright, next up in the 
news, Google is launching Startup School India   to help 10,000 Indian startups in Tier 2 and Tier 
3 cities. So, the Startup School is going to be a   nine week program where startup entrepreneurs can 
come together and chat with leaders at Google.   And Google, through a blog post said that, 
"90% of all startups fail within the first   five years of their journey – mostly for the same 
key reasons – unmanaged cash burn, flawed demand   assessment, ineffective feedback loops and lack of 
leadership." And so, through this program, Google   is aiming to bring together industry experts 
to share knowledge with young entrepreneurs and   help them learn, and the program is going to be 
featuring people like Rajan Anandan, who is the   Managing Director of Sequoia Capital, Varun Alagh, 
the co-founder of Mamaearth, Vivek Gupta, the   Founder of Licious, and many many more prominent 
people in India's startup ecosystem.

Alright, that   is all the startup news that I have for you guys 
this week, I really hope you enjoyed the video   and that you learned a lot from it. Big thanks 
now to all of our Backstage with Millionaires   members – our unicorns, our decacorns, and 
our hectacorns and, big thanks to you for   watching this video through to the end. 
Alright, I will see you in the next one.