Industry News

SPACs as Alternative Investment: A Critical Review

by Sandeep Kumar


The present SPAC ecosystem

Why are companies getting involved in the SPAC craze?

         Data Souse: SPACInsider

Downsides of going Public via SPAC

         Data Souse: SPACInsider

What Impact Do SPACs have on Private Equity?

Future Outlook

Will the SPAC boom stay?



Flourishing ESOPs in Indian Startups: How can employees make the best of this opportunity

by Sandeep Kumar

Growing Potential of Employee Stock Options in Indian Startup Landscape

This year has proved to be a great year for Indian startups and their employees. With growing valuations and better performance, a large number of companies are opting for ESOPs which has now formed an integral part of the startup compensation system. As a result, many employees were able to earn a fortune overnight.

Employee Stock Ownership Plan (ESOP) is an employee benefit plan that offers employees an option to gain an ownership interest in the company in the form of company shares that are offered to the employees at a pre-determined discounted price. ESOPs convert employees to owners by giving them an opportunity to participate in the future growth of the company by owning a part of it, but also are a great tool to motivate and retain talent.

According to KPMG’s ESOP Survey Report (2021), about 68% of the total respondents have either already implemented an ESOP plan or a similar employee benefits program or are contemplating having one. Of these companies, 72% are private companies. In India, the majority of companies offering the ESOP option to their employees belong to the software and startup sectors. As tech companies have started to realise the growth potential and benefits of the ESOP market, other industries such as Financial Services, Consumer Goods, Automobile sector, etc. have also started adopting ESOP programs for their employees.

Source: KPMG India’s ESOP Survey Report (2021)

Indian Startups on ESOP rush

Investing early on in ESOP options of start-ups can offer great returns to the employees. As of November estimates, ten leading start-ups that have been now either listed or preparing to list soon, have generated over $5 Bn returns for their employees through ESOPs.

Indian startup employees have created a fortune through their ESOP plans as the company’s valuation surged. Freshworks, an Indian SaaS startup, turned 500 of its employees into millionaires overnight as it got listed in NASDAQ this year. Almost 76% of the company’s employees own Freshwork’s shares. Looking at the fashion e-commerce brand Nykaa’s successful IPO launch, the top six employees of the company are estimated to have unlocked way more than the expected $115 Mn of value through their shareholdings and vested options. Even food delivery app, Zomato which had an ESOP pool of $745 Mn at the time of its IPO has now more than doubled in value to $1.5 Bn.

Following the trail, many Indian tech startups are now expanding their ESOP pool to retain the interests of their workers.

Recently, Meesho announced MeeSOP, an ESOP-for-all programme, that would allow all its permanent employees to have a stake in the company’s shareholding, irrespective of their position or tenure in the company. With this, the company aims to break the traditional hierarchy to make every employee an owner. This will allow all its employees to realise their personal and financial goals along with organisational goals, as employees will be able to cash in on the company’s frequent ESOP liquidation drives. Meesho is a high-growth startup, whose valuation is only expected to grow in the future. Hence, the company’s workers will be able to enjoy high gains in the future, given they exercise their vested options.

According to some sources, it is estimated that 80% of employees of the hotel aggregator platform, OYO have been granted the company’s ESOPs. As of September 2021, OYO has an ESOP pool of about 470 million shares of which 11,739 options are exercised. With its IPO coming up and an estimated post-IPO valuation of $10 Bn, it will create a total wealth of $688 Mn for its employee shareholders. Another IPO-bound company, Snapdeal has also expanded its ESOP pool by 151%, offering a total of 5,000,000 ESOP options.

While these are only some of the examples, many more startups are adopting the method to retain top talent — including PhonePe, Licious, Udaan, ShareChat, OfBusiness, Urban Company, to name a few. It is estimated that from January 2020 — July 2021, Indian startups have added $700 Mn worth of stocks. During H1 of 2021, nine companies expanded the pool to more than $170 Mn and the number is expected to have been doubled in the H2 of 2021. Looking at the fortune created by employees of companies like Freshworks and Nykaa, other startup employees also hold a chance to become Crorepatis. However, some hurdles set back workers from exercising their options.

Source: Entrackr

Problems faced by ESOP holders in exercising their ESOPs

As fascinating as they sound, exercising ESOPs is not a straightforward task. Not many employees are even aware or care about how to exercise or when to exercise ESOPs. Read more about the correct time to exercise ESOPs and tax obligations in other articles published on the same channel. As per our estimates, between 70% — 80% of vested ESOPs in unicorn and soonicorn companies go unexercised every year due to the problems faced by employees. This leads to billions of dollars of lost value for them.

Lack of understanding, delay in approvals, and lack of transparent communication from their companies are some of the reasons which hold back employees from exercising their options. Apart from this, heavy tax obligations are a major problem. While exercising ESOPs can provide massive gains to the employees, a major proportion is lost in paying the taxes. As a result, many ESOP holders across companies do not exercise their options as they do not want to pay the capital gains tax. Financing an ESOP can be a costly affair, even for the financially affluent workers.

ESOP Taxation in India

Let us understand what will be the tax implications on ESOPs for an Indian employee.

One may be liable to pay ESOPs tax on two occasions as an employee.

  • First, when the shares are allotted as a result of exercising vested options (taxed as salary income)
  • Second, when the shares are sold as a result of exercising the vested options (taxed as salary income) (taxed as capital gains).

Now let’s look at how ESOP taxation will work:

The first level of taxation (when the option is exercised):

ESOPs would be taxed as a requirement, with the value given as:

The perquisite value of an ESOP will be included in X’s salary and will be taxable in the year in which the shares are allotted. On such an amount, the employer is required to deduct TDS.

The second level of taxation (when ESOPs are sold):

When Mr. X sells the stock, he will be subject to capital gain tax, which will be calculated as follows:

Because X has held the shares for less than a year (counting from the date of allotment), the gains will be categorized as short-term capital gains and will be taxed at the standard slab rates applicable to X.

How Can ESOP Holders Grab the Opportunity?

Due to lack of clarity and huge costs involved, we have seen more than 2,000 shareholders in the past 12 months who are paper rich and cash poor and have made several wrong decisions when it comes to their private shares’ ownership. We aim to make employees aware of these opportunities and help them grab the vested opportunities. As a result, Torre Capital helps ESOP holders with funds required to exercise the stock options and pay tax obligations, with no recurring monthly interest payments, unlike a traditional loan. It is advisable to exercise stock options early so that one can reduce their tax burden and also exercise price in certain cases.

In case of a company’s liquidation event, if the firm has a successful exit (such as an IPO), you repay the principal along with a certain percentage of upside (ranging between 30% to 70%, depending upon the stage of the growth startup) back to your investors. On the flip side, we bear all risks related to performance issues with the investee company, delays in IPO/other liquidation events, or closure/bankruptcy scenarios. Your other personal assets are never at risk because it is non-recourse finance.

So, if you are an employee looking forward to exercising your ESOP options, Torre Capital can provide you with the best and the most convenient exercise and financing journey. Reach out to us at [email protected] in case you wish to know more and seek further assistance.

. . .

This article has been co-authored by Tamanna Kapur and Sayan Mitra, who is in the Research and Insights team of Torre Capital.

For exclusive information about additional research and insights by our Analysts, kindly subscribe to Torre Capital’s Blog.

If you are an investor or shareholder and want more advice about the Pre-IPO secondary markets, please feel free to reach out at [email protected] for investment advice, or register for an account at Torre Capital.

Upcoming Indian Unicorns: E-Commerce Startups with a Potential for Billion Dollar Valuation

by Sandeep Kumar

In India, around 48 startups have already made it to the unicorn club, as per CB Insights data. Well over $38.4 Bn has been raised till December 4th this year, with several of the rounds producing Indian unicorns in 2021. India will manage to get more than 100 unicorns by 2022, much earlier than the previewed estimation of 2023 reports in the past. The pace with which these companies are gaining valuations is truly remarkable. India’s pace of unicorn growth has surpassed that of China. The Indian economy is capitalizing on a host of international and national factors that are expected to create many more such companies.

We aim to identify and bring out such companies at an early stage so that the secondary’s investors can churn out greater returns. In this edition of Indian Soonicorns, we bring out some companies in the E-Commerce space that have complete potential to reach the billion-dollar mark in the future.

The Indian e-commerce industry has been on an upward growth trajectory

Let us now have a look at potential soonicorns that are likely to give high returns to their investors in the longer run.

1. Pepperfry

Rationale: Pepperfry is an online furniture and home décor shopping store. Pepperfry’s platform has expanded into both online and offline business. The company expects to be in the unicorn club soon in terms of valuation before IPO hits the market for 12 months. The total revenue increased by 27% to $33 Mn in FY20 as the brand has reached close to profitability last year, company’s focus has shifted from achieving profitability to becoming a high-growth company. Despite the intense rivalry it has experienced among all the other platforms researching this area, the online e-commerce company has managed to create a key position in the future industry’s market.

2. Freshtohome

Rationale: Freshtohome is a leader in leveraging AI-based technology and business innovation to bring a superior value proposition to customers and suppliers in a large market. The start-up, which clocked an annual recurring revenue of $85 Mn in FY20, aimed to hit $200 Mn in FY21. Freshtohome manages to sell nearly 10K tones of produce per year and has close to selling 95% qualified cohort retention and doubling every year. It has 12 lakh registered users. The pandemic helped accelerate the online purchase of meat products as consumers took to branded packaged items.

3. Trell

Rationale: Trell is a social-commerce platform for discovering lifestyles through videos in Indian Languages. It enables people to create visual collections of their lifestyle experiences. The social commerce platform has more than 100 Mn downloads and over 50 Mn monthly active users on its app. The start-up is in talks to raise $100 Mn funding, which could value the company between $600 and $800 Mn. A huge majority of people are unable to discover relevant material in their native language. Trell enters the picture at this point.

4. Magicpin

Rationale: Magicpin drives discovery to local retailers across various industries such as fashion, food & beverage, and grocery establishments. The company had a decent financial performance as it recorded a 2.6X jump in its turnover with a revenue of $28 Mn in FY20. It claims to be making $1 Bn in annual sales for its clients of 15 lakh merchants. The company haS a user base of more than 5 Mn and has expanded its footprints to around 200 cities in India. Magicpin also runs a SaaS product where it helps merchants to go online in a few minutes. The product also provides logistic support through third-party logistics companies.

5. DealShare

Rationale: DealShare is an inventory-led platform that manages the supply chain and logistics in bigger cities. The start-up is in talks with new and existing investors to raise a fresh round at over $1.7 Bn valuation, which will be a more than 2.5X jump in the company’s valuation. DealShare has recorded a seven times growth YoY as its current GMV run rate is $40 Mn per annum, and is expecting top to reach $928 Mn by the year 2024. Currently, it operates in 40 cities of five states and has 20 warehouses. It will increase its footprints to 100 cities and 10 states and also build 200 warehouses by end of this year.

6. Mamaearth

Rationale: Gurugram-based startup Mamaearth is one of the most valued new-age D2C personal care brands that began with a focus on baby-care products, but has pivoted to become a personal care brand. The startup has expanded its product line by introducing 12 products at the beginning of 2020, which led to a 3.7X jump in the company’s total sales of around $66 Mn in FY21 as compared to the previous year’s $14 Mn, and is planning to double the sales by 100% this year. Its current revenue rate is around $100 Mn and is expected to have clock revenue of $265 Mn over the next three years.

India’s Potential to be a Game Changer in the E-Commerce Sector

If you are an investor interested in getting access to these and similar opportunities. Please reach out to us for understanding the investment process better. If you are a shareholder or an ESOP holder of such a company and are looking for liquidity solutions, feel free to connect with us as well. Our platform will provide you with seamless financing and investment journey. Follow us for more such updates.

. . . 

This article has been co-authored Vivek Kumar who is in the Research and Insights team of Torre Capital.

For exclusive information about additional research and insights by our Analysts, kindly subscribe to Torre Capital’s Blog.

If you are an investor or shareholder and want more advice about the Pre-IPO secondary markets, please feel free to reach out at [email protected] for investment advice, or register for an account at Torre Capital.

Keep up to date with the latest research

SPACs as Alternative Investment: A Critical Review

by Sandeep Kumar


The present SPAC ecosystem

Why are companies getting involved in the SPAC craze?

         Data Souse: SPACInsider

Downsides of going Public via SPAC

         Data Souse: SPACInsider

What Impact Do SPACs have on Private Equity?

Future Outlook

Will the SPAC boom stay?



Upcoming Indian Unicorns: Logistics Startups Driving Towards Growth

by Sandeep Kumar

In India, over 72 startups have gained unicorn status as of November 2021. The count of these billion-dollar companies is expected to reach a total of 76, by the end of the year 2021. Unicorns in the country are currently valued at $168 Bn approximately. The pace with which these companies are gaining valuations is truly remarkable. India’s pace of unicorn growth has surpassed that of China. The Indian economy is capitalizing on a host of international and national factors that are expected to create many more such companies.

We aim to identify and bring out such companies at an early stage so that the secondary’s investors can churn out greater returns. In this edition of Indian Soonicorns, we bring out some companies in the logistics space that have complete potential to reach the billion-dollar mark in the future.

A Hope for Growth in a Highly Fragmented Logistics Market

The size of the Indian logistics industry is estimated to be about $215 Bn, growing at a CAGR of 10.5%. Even though the market is highly fragmented with a large number of organized players, companies are working to make a mark in the industry through the adoption of technology such as Artificial Intelligence, Internet of Things, automation, cloud computing, blockchain, etc. In 2020, the Indian logistics tech market secured over $460 Mn investments, despite the pandemic. Delhivery is one of the successful logistics startups that is looking forward to go public through an IPO this year.

Let us have a look at potential soonicorns that are likely to give high returns to their investors in the longer run.

1. FarEye

Rationale: FarEye, an Indian SaaS start-up that helps firms globally optimize their supply chain and logistics operations and process over 100 Mn transactions each month. The start-up works with over 150 e-commerce and delivery companies globally, including popular names such as Walmart, UPS, DHL, Domino’s, and Amway. The company clocked 280% growth for the FY21 compared to the previous year and 78% of the revenue comes from the market outside India. FarEye has raised a new financing round, it’s third since the pandemic broke last year. The new capital will be used to expand its software platform capabilities, drive expansion in Europe and North America, and explore inorganic growth opportunities.


Rationale: Locus is an intelligent decision-making and automation platform for logistics. It uses deep ML and proprietary algorithms to offer supply-chain solutions. The start-up operates in North America, South Asia, Europe, and the Indian subcontinent, says it has helped its customers save over $150 Mn in logistics costs. The platform is popular among GMGC, retail, and e-commerce firms as well as distribution partners. The company is aiming for a revenue potential of $3–5 Bn between 2023 to 2025 and will be focusing to improve its geographic reach and build its R&D team to expand its product line.

3. Xpressbees

Rationale: They are the fastest-growing express logistics service provider in India catering to end-to-end supply chain solutions. Their logistic solutions across B2B, BTC, Cross-border, and the third party comes with an edge of speed, accuracy, and scalability. It has grown 4X in the last three financial years, from FY18 to FY21. Xpressbees presently has over 100 hubs across India, a storage capacity of 10 lakh sqft, and 52 cargo airports. Fully automated, technology-driven workflows and material movement procedures are used in 75% of Xpressbees’ operations. The team is now working on AI/ML technologies to develop the next generation of smart and intelligent systems.

4. ElasticRun

Rationale: The Pune-based ElasticRun develops an online system that improves the reception of orders from customers and the dispatch of delivery drivers. According to The Economic Times, its current revenue rate is around $350 Mn and is expected to cross $1 Bn over the next 6 months. The company’s focus on using deep technology to address the need for commerce marketplaces has helped them scale rapidly, delivery much broader distribution for consumer product brands, while also creating a level playing field for Kirana stores, given them parity with competing e-commerce players in terms of reach and product selection.

5. Porter

Rationale: Porter offers an end-to-end logistics platform that helps businesses with last mile and first mile deliveries. It helps its customers save on logistics costs and provides support services such as on-demand transportation, real-time visibility, supply chain management. It is said to be one of the only logistics models that is 100% asset-light. The intra-city logistics company that saw a 5x valuation growth in its last funding round, is looking forward to expand its operation to enter the top 35 cities of India by 2023.

6. LEAP India

Rationale: LEAP India provides integrated, end-to-end customized pooling solutions to its customers. The company’s consolidated revenue in FY20 was marked at about $23 Mn and has been estimated to be grown at a CAGR of 47% during FY17 — FY20. According to India Ratings and Research, the company has a fairly stable investment outlook with a rating of ‘IND BBB+’. With only a few players in the palletisation sector, LEAP India is already a leader in the country, having a market share of over 70%.

Logistics Gaining Investors Interest to Seek Higher Valuation

The initial months of the pandemic did slow down the sector, however, it has started to gain momentum. The large but fragmented logistics sector is emerging as a trustable opportunity for investors. The digital transformation that has come up recently is reviving the $200 Bn logistics industry in India, and more so as these startups are keen on using technology to bring down the logistics costs in the country. With greater government support on infrastructure and an expected rise in the B2C and B2B trade in the coming years, logistics companies are set to grow. The third-party logistics segment alone is expected to experience growth by $10.74 Bn during 2021–2024. With investors’ money, the logistics space will become more robust in the near future. We try to spot some startups in this space that are soon expected to join the likes of Delhivery, Rivigo, and Blackbuck.

If you are an investor interested in getting access to these and similar opportunities, please reach out to us for understanding the investment process better. If you are a shareholder or an ESOP holder of any such company and are looking for liquidity solutions, feel free to connect with us as well. Our platform will provide you with seamless financing and investment journey. Follow us for more such updates.

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This article has been co-authored Tamanna Kapur and Vivek Kumar who is in the Research and Insights team of Torre Capital.

Reinvention of Sharing Economy Companies — Changing Perspective to Thrive through Covid Crisis

by Sandeep Kumar

How has Covid impacted various sectors

Due to the COVID-19 pandemic, activities in the sharing economy (SE) were in jeopardy. Even though SE is regarded as a disruptive phenomenon, particularly in the lodging and transportation industries, the pandemic raised concerns about its long-term sustainability. Before the outbreak, SE was estimated at a faster rate. SE was expected to be worth $335 Bn by 2025, according to estimates.

Source: Sharing or paring? Growth of the sharing economy, PwC

Because many sectors, such as healthcare, tourism, and restaurants, were closely linked to the SE, the importance of sharing grew in the pandemic era. Activities such as lodging, eating out, hosting in-person conferences, and cruising, as well as the role of travel agencies and tour operators in organizing such activities, ground to a standstill.

However, because various nations were put under lockdown as a result of the COVID-19, the use of online shopping and food delivery services soared. The need for freelance work soared as workplaces closed. As a result of the closing of movie theatres, video streaming services have become the primary source of entertainment. Preventive measures have impacted all sectors of SE, increasing the need for some services while slashing demand for others.

Sharing Economy Model

By the second half of the 2000s, consumer behavior had shifted dramatically, and an increasing number of individuals were beginning to see that their current purchasing patterns would not be sustainable in the future. Companies arose in this atmosphere to provide a new type of answer to the evolving customer needs. A sharing economy is a form of the new economic model that focuses on the peer-to-peer exchange of goods and services to increase the efficiency of underutilized resources. The phrase “sharing economy” began to be used to refer exclusively to enterprises of this sort. Couchsurfing, Airbnb, Uber, and its peers, which are developing as a result of significant shifts in consumer habits, have overturned whole industries with their so-called “creative disruption” in the span of only a few years.

There is an opportunity for the sharing economy to thrive in the post-pandemic period. The sharing economy has revolutionized the way people travel, dress, and stay as a result of technological evolution. It has posed a challenge to traditional marketing strategies, but it has also given the business model a new direction and a brighter future, with many organizations taking use of technology advancements. According to industry estimates, sharing will increase from $13.75 billion to $19.25 billion over the next five years, with half of the contribution coming from people under the age of 30.

People were more interested in taking advantage of free and reduced services before the pandemic. However, they are now more cautious about the implementation of safety and preventative measures. In post-pandemic circumstances, we’re witnessing the positive side of the sharing economy and how it’s affecting service providers and platforms.

Traditional businesses must examine which of their service sectors are vulnerable to the advent of a sharing economy player; then, once these areas have been identified, businesses must determine how they will be able to stay up with the trend.

Companies following sharing economy model to reinvent themselves

The pandemic had imposed several forms of restrictions on the way people interact with each other. As a result, a lot of sharing companies had to reinvent their business models to suit the current scenario in order to sustain themselves. This has been the need of the time as most of these companies were on the verge of scaling their businesses and a crisis like this would have sabotaged their growth. Spending huge amounts of money and giving great discounts to keep hold of the market would be unlikely for these growing startups as they take a hard look at unit economics in these challenging times. We look at how different companies across various industries have reinvented themselves to overcome the economic drop due to the pandemic.

· Mobility — Shared commuting was growing popular before the pandemic. However, the market was bound to witness a decline due to the safe commute preferences of consumers. Cab services like Uber and Ola focussed on selling their self-driving car services, instead of shared rides. Some have even expanded their operations to the delivery of essentials, packaging, and moving services.

· Co-Working — Co-working spaces had just started to gain the attention of firms when suddenly people were forced to work from home. In response, startups in the space took the support of AI to access controls like contactless cards and facial recognition. Smartworks even increased the area per employee to 120–140 square feet from 70–80 sq feet per employee, keeping in mind the social distancing norms.

· Accommodation — Accommodation companies, like Airbnb, were at great risk of facing the brunt of the pandemic. Airbnb in particular shifted its focus by introducing short-term rentals and opening up its spaces for frontline warriors. The platform largely encouraged domestic travels over global travel, owing to the travel restrictions due to Covid. Co-living rents were cut down and annual hikes were deferred. Globe — a platform that offers hourly rentals, on the other hand, had performed substantially well as it identified the new market among those who need to work-from-home or need a change of atmosphere.

· Others — While some sharing companies have suffered due to the pandemic, there has been minimal impact on companies, such as those engaged in furniture and appliance rentals. Furlenco, Rentomojo, etc. have not suffered much as these affordable products never go out of demand. Unlike other sharing economy companies, their products are used by customers over longer time durations.

Future Outlook — Will the sharing economy lead to a boom?

Due to its several advantages to consumers as well as businesses, sharing economy companies are on a rise. The trend is visible not only in B2C companies where the concept has already garnered reliability, but it is also on the rise in the B2B sector. Some companies that have served individual customers in the past, now look forward to grabbing onto the institutional customers as the demand from the former declines.

Technology has played an essential role in preparing innovative business models which have helped growing startups to reduce their expenses without compromising on the scale during such turbulent times, thus leading to the reinvention of the sharing economy companies. With the conscious efforts among customers as well as businesses to achieve sustainability, we see the continued rise of sharing economy companies.

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This article has been co-authored Vivek Kumar and Tamanna Kapur who is in the Research and Insights team of Torre Capital.

Upcoming Indian Unicorns: Healthcare Startups that are Showing Potential to Achieve Greater Valuation

by Sandeep Kumar

Keep up to date with the latest research

India has been emerging as the startup hub all across the world. From a time when India produced one unicorn per year during the period 2011–2014, the country has produced 34 unicorns in 2021 alone! The count is highest ever for the country and shows no sign of stopping. The growing trend of unicorns is indicative of growing interest and faith of global VCs and investors in the Indian startups. The most recent startup to gain the unicorn status is the insurtech company, Acko, which witnessed its valuation increasing from $400 Mn to $1.1 Bn in its recent funding round.

Early identification of such unicorns can increase the investors’ returns manifold. Through this article we fetch out the potential soonicorns in the healthcare sector that are expected to soon enter the unicorn club and provide great returns as their valuations would soar high in the future.

Growth of Healthcare Sector Post Pandemic

The Covid-19 pandemic has caused a havoc across the world. In times like these people have realised the importance of health. As a result of the pandemic, the healthcare sector in India has witnessed a boost, especially in its digital transformation. Indian healthcare startups have attracted more funding than ever, over the last year. Compared to total of $316 Mn raised by the sector in the year 2020, this year healthcare startups have raised $1.3 Bn over 69 deals as of 6 August 2021. It is estimated that the HealthTech market in India will reach $5 Bn by 2023, growing at a CAGR of 39%. Digital shift, use of better technology, and favourable government policies are facilitating the growth of the market.

Earlier this year, Pharmeasy became a unicorn, bagging a valuation close to$1.5 Bn. Now the online pharmacy is planning to go public soon, eyeing a valuation of about $7 Bn through its IPO. We analyse more such healthcare startups that have the potential to achieve unicorn status in the future, and can earn high valuations in the long run.

1. Pristyn Care

Rationale: Pristyn differentiates itself from hospital chains by offering end-to-end services including diagnostic assistance, health insurance claim processing, hospital paperwork, cab pick-up and drop-off for surgery, prescription delivery at home, and a free post-surgery consultation. After the pandemic and subsequent lockdowns wreaked havoc on the healthcare industry, Pristyn turned to telemedicine and online consultations to restore its surgery division. The startup is in talks to raise $90-$110 million from investors such as Sequoia Capital US and others, valuing the company at $1.2-$1.4 Bn. They wanted to make an ecosystem that can organise the world of daycare procedures by utilising technology and a set of basic yet powerful processes and activities.


Rationale: is a health and fitness company offering digital and offline experiences across fitness, nutrition, and mental well-being. The start-up which has made 6 acquisitions so far, has spun off its health food vertical —, as an independent entity to cater to growing consumer demand from the cloud kitchen delivery sector. is targeting to have 10 lakhs subscribers on its platform by Dec 2021. Partnership with Tata Digital will significantly accelerate CureFit’s growth as a fitness & wellness leader and will open up access to a large set of new consumers.

3. HealthifyMe

Rationale: HealthifyMe was developed and launched by a team of doctors, nutritionists, and fitness trainers in 2012. HealthifyMe uses a combination of software, wearable devices, and fitness trainer to help people reach their fitness goals. It claims to be used by over 25 Mn users and has 1,500 coaches across India and Southeast Asia. They are slated to cross $50 Mn in their annualized run rate revenue by this coming January and are on track to touch the $400 Mn revenue run rate by the end of 2025. The COVID-19 pandemic has helped people realise the importance of staying fit and maintaining a healthy lifestyle.

4. La Renon

Rationale: Ahmedabad-based La Renon is a global healthcare company. It is founded and managed by a group of professionals of varied domains of the healthcare industry itself who have got vast experience with unmatched expertise. The new-age pharma company has been attracting private equity interest. La Renon become one of the top 40 pharmaceutical companies in India. It has been ranked 34th in the market with a promising growth rate with a CAGR of 70%. The company is planning to expand the business into other chronic segments and in the manufacturing of critical Active Pharmaceutical Ingredients. Despite the presence of global peers, the opportunity in the segment is huge.

5. Practo

Rationale: Practo has evolved from a SaaS website to one that charts a patient’s whole path, from scheduling an appointment to locating a lab, having a second opinion, prescription reminders, and finally bringing medicine to the patient’s door. It is now available in 20 countries. Every year, 18 Cr patients use the app, which has over one lakh doctors on board and 70 K clinics and hospitals as partners. Practo plans to introduce surgery support to diversify its revenue and create new moats. Though telemedicine usage has been small thus far, India has seen some recent development due to the pandemic, Practo being a lead in the field.

6. Stelis Biopharma

Rationale: Stelis Biopharma is a fully integrated biopharmaceutical contract development and manufacturing company. Given the health crisis around the world due to the pandemic, the company is experiencing strong customer traction and is working to ramp up its CDMO business and enhance its process development and other capabilities. Stelis Biopharma is looking forward to produce upto 800 million doses of vaccines annually, including Covid-19 vaccines. With some really important contract, like the one for Sputnik V, Stelis Biopharma has entered into its growth stage.

7. MFine

Rationale: MFine provides an AI-powered healthtech platform for on-demand, virtual consultations with doctor. It also offers services such as booking routine lab tests, medicine delivery, and comprehensive wealth packages. The company has served over 3 million users since its inception, and monthly transactions crossing over 300,000. Apart from individual users, MFine also partners with over 500 corporates. Despite significant growth in revenue in the recent years, the company’s expenses have increased which shall be used to enhance its technology and services. With its plan to introduce insurance service, MFine is working to all health related needs under one platform.

Growing Market and High Future Returns

Since the pandemic and series of lockdown, a large number of people have been dependent on some of these healthcare platforms. Its growing market very well explains the growing valuations of such healthcare startups. An early identification, can help investors to reap great returns as these companies reach the later stage of its operations.

The growth of the unicorns in India has just started, and it is heartening to see such growth as it creates an environment for others to innovate and perform better. We will continue to bring forward such potential startups to your notice. If you are a shareholder or an ESOP holder of any such company, looking for liquidity solutions, feel free to connect with Torre Capital. Our platform will provide you with seamless financing and investment journey. Follow us for more such updates.

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This article has been co-authored Tamanna Kapur and Vivek Kumar who is in the Research and Insights team of Torre Capital.

Why are High-Growth Companies Staying Private for Longer?

by Sandeep Kumar


 Pre-IPO And Secondary Market Trading

In the recent times, the pre-IPO market has emerged as an attractive alternative class for investors as they allow them to reap out the maximum benefits before the company goes public. While the pre-IPO market is considered to be a good opportunity for providing early access to huge potential gains, it may have some liquidity constraint. However, the pre-IPO secondary market allows the founders, early employees, and investors to receive liquidity much sooner in a company’s life cycle. The secondary market balances the need for liquidity and allows founders to stay motivated and focussed on building the company, while staying private for longer durations.

Secondaries trading platform like Torre Capital are committed to democratizing the Pre-IPO market, by making it secure and accessible to all. With a large number of companies achieving the unicorn status and having a great IPO exit, the pre-IPO space is booming more than ever. We shall look upon the various factors that have motivated the companies to stay private for longer and delayed their exit.

Pre-IPO Secondaries Volume Growth

Secondary market trading are stock transactions in which an existing stockholder sells their stock for cash to third parties or back to the company itself before the company undergoes a merger, acquisition, or initial public offering. While the secondaries market was impacted in the early 2020, due to the pandemic, it has rebounded and witnessed continued growth since then. With over $50 Bn secondary deals completed in the first half of 2021, the transaction is projected to reach $100 Bn by the end of the year. It is estimated that over the next five years, the annual secondary volume could reach $250 Bn as limited partners manage their portfolios more actively.

Growth of Secondaries (in $Bn)

The high amounts of funding rounds in the recent time period, along with optimistic valuations in the future, will continue to give a positive indication about the growth in secondaries activity.

Why are more companies opting to remain private?

Companies that go public gain an instant infusion of money by selling all or part of their firm in a public offering. While this may appeal to certain businesses, others recognise that public ownership has a cost. They avoid having to report to a big group of shareholders and can keep their company strategies and finances confidential by opting to remain private.

Source: McKinsey&Co

It can be seen that from the late 1990s to 2016, the number of publicly traded firms decreased by 52%. Despite this steep decrease, the entrepreneurial spirit has never been greater everywhere on the planet. The United States is ranked first in the world in the Global Entrepreneurship Index.

People are eager to establish their businesses. They just don’t want to share them with the rest of the world. The additional restrictions needed of publicly listed firms are one of the reasons companies don’t want to cope with the inconveniences of becoming public. The Securities and Exchange Commission is enacting increasingly harsh restrictions, which most firms would want to avoid.

This is especially true in situations when a large number of employees are also stockholders. Employees are free to focus on their tasks rather than the statistics since they don’t have to worry about what the stock is doing and what that could entail for their money.

Another reason a business could prefer to remain private is to have more control over its operations. A firm can remain in the hands of a few select people or families by remaining private. In addition, private firms are not subject to the whims of stockholders.

Private equity firms alone spent $130.9 Bn in biotech and tech start-ups in 2018. IPOs, on the other hand, took in $50.3 Bn. It should come as no surprise that, with so much money at risk and considerably fewer headaches, more private firms are opting for private equity.

There are several motivating factors for a company to go public. However, such access comes at a hefty cost in the form of SEC and shareholder scrutiny. As a result, many private firms opt to remain private and seek funding from other sources. Traditional lending institutions offer secured loans and shares that may be used as personal money or sold to employees to raise funds. This implies that while investing in private firms is feasible, it generally necessitates intimate links to the company.

How Has The Decision Benefited Tech Companies

The decision about whether to go public or stay private varies from company to company. Having a successful IPO may be important for a company, however it comes with several hassles, in terms of regulation level and the time involved. The dynamic of software firms within the IPO space is such that they do not wish to take the hassle and risk involved in secondary market trading or pre-IPO placements. With IPOs definitely a lot of risk is involved in not being able to match up to the investment that has been made and generating enough profits. Going public does help raise capital but it is an expensive endeavour for the company itself.

Software firms are approaching private equity firms instead for capital as that opportunity comes with less risk involved and fewer drawbacks. This is due to the sheer amount of capital in private equity that gives a strong standing to the firm. Technology corporations have raised successful funds in the private rounds that have made them achieve the decacorn status while staying private. On the other hand, entering into a public market through IPO may also possess the risk of downside. Astudy by Battery Ventures estimated that over 40% of the unicorns that have gone public since 2011 have underperformed their final private-market valuations. From company’s average age of 4 years to go public, in 1999, to the 2014 average age of 11 years, we see a change in preference of the companies in the decision to stay private.

Late Stage Investors Enjoy Higher Returns

As mentioned before the growing scale of fundraise rounds lead to inflated valuation of startups. While high valuation may be good for the company, overvaluation may pose a risk of downside. As a result investors, especially late stage investors avoid counting on IPOs to make money. On the contrary, early stage investors remain unaffected with the downside risk as they invest early enough to gain positive returns.

As early employees and investors seek liquidity, the private market activity steps up in such a scenario. A delayed IPO would give the late stage investors more time to reap the benefits of the growing valuation and greater returns.

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This article has been co-authored Tamanna Kapur and Vivek Kumar who is in the Research and Insights team of Torre Capital.


Reinventing meat and cultivated proteins: Gauging the investor’s interest through sustainable investment products

by Sandeep Kumar

Keep up to date with the latest research

Overview and Evolution

The popularity of alternative meat products from Beyond Meat (NASDAQ: BYND) and others, as well as early regulatory permission for some cultured meat products, has sparked a flurry of investment in this nascent business.

Despite this enthusiasm, the business is still in its early stages and is mostly pre-revenue, with a number of growth obstacles ahead, including the need for clear legal frameworks, more economically viable products, and scalable technologies. As the traditional cattle industry tries to defend its market share from produced protein sources, providers will almost certainly encounter greater lobbying attempts.

Even while widespread adoption may be several years away, improving consumer sentiment, together with increased demand for more sustainable food choices, will undoubtedly boost investment in grown protein products.

The key industry drivers for alternative meat products industry

· Antibiotics and hormones-free: Industrial farming conditions can be unsanitary, resulting in sick animals who are frequently treated with antibiotics. Hormone injections can also help to promote muscular growth or, in the case of dairy, milk production. These therapies may have an impact on human health, such as the transmission of animal hormones to people or the development of antibiotic-resistant bacterium strains. Cultivated proteins are made in sterile conditions without the use of antibiotics or hormone therapies.

· Free of zoonotic diseases: Zoonotic diseases, such as COVID-19, can be transferred to humans through animal meat intake. Because it is produced in a controlled, sterile setting, cultivated beef is deemed safe from this risk.

· Ability to design and change nutrient profiles: Cultured meat manufacturers can change inputs to generate products with better nutritional value, such as proteins, amino acid composition, vitamins, and minerals.

· Food security: Cultivated proteins offer a potentially large new food source that isn’t constrained by livestock’s significant land, water, and food requirements. This is especially essential in light of expected worldwide population growth and corresponding food demand.

· Environmental advantages: Some people believe that produced protein is a better option for the environment than conventional animal production. According to a 2011 study conducted by the University of Oxford and the University of Amsterdam, cultured meat may be produced with only 4% of the greenhouse gas emissions (GHGs) and 2% of the area required for conventional meat production, while requiring 45 percent less energy. 16 Critics have noted, however, that the energy required to create grown meat may originate from fossil fuels, resulting in worse environmental repercussions than animal agriculture in some ways.

 Ethical ramifications: Some consumers, such as vegans, avoid eating meat because of animal welfare concerns. Because no animals are injured in the manufacturing of cultivated meat, it is considered an ethical advance.

The environmental and ethical advantages of cultivated meat are based on a one-to-one substitution for traditional meat. On the other hand, a single cow can provide hundreds of distinct products. For example, if cultured beef totally replaced conventional ground beef, demand for steak, leather, gelatin, and steric acid would remain unchanged, meaning that cattle demand would remain steady, albeit ground beef demand might shift to new markets.

Competitive Landscape and Market Mapping

Source: PitchBook

Investors’ Trust Growing with Market

Compared to the initial years when alternative meat was first introduced to recent years, the market has witnessed steady growth in VC funding from a single $25 Mn deal in 2012 to a total of $303 Mn invested across over 30 deals in 2020. While the annual deal count has nearly tripled in 2018, the average deal size decreased. However, it is expected that the fundings will increase in tandem with the growth in the industry. The first five months of 2021 have seen a surge in investment with over $772 Mn recorded. With this pace, it is expected that the funding activity will triple this year, as compared to 2020.

Source: Pitchbook

Investment trends suggest that the cultivated protein providers have received the largest share of VC funding. Those among the top recipients include UPSIDE Foods, Eat Just, and Modern Meadow. Each of them have received more than $100 Mn funding, individually. Besides receiving funds from VCs, cultivated meat producers have also started to gain trust of investors like impact investors such as AiiM Partners, impact angel investors including Richard Branson, and even large corporations such as Cargill, Tyson, etc. These large companies have started to realise the importance of the alternative meat and are engaging through strategic investments.

How are Incumbents Reacting to the New Alternative Meat Market?

Combining the benefits of plant-based proteins along with cultivated proteins have proven to have cost and scale efficiencies, without leaving a significant impact on nature. Apart from health benefits like low cholesterol and with a taste similar to real meat, the alternative meat sales reached over $1.4 Bn in 2020. This growth in demand justifies why the existing food companies are venturing into this domain.

Based on location, Singapore is emerging as a hub for cultivated meat and is attracting many companies primarily due to ease of access to funds and required talent, attractive regulatory environment and significant market opportunities in South-East Asia. Companies like Avant Meats, Shiok Meats, Aleph Farms, etc. are considering to set up production units in Singapore.

Challenges Faced by the Culture Protein Production

The alternative meat market is yet to realise its full potential. Despite its wide range of benefits, there are certain roadblocks that are restricting the fast growth of the market. The Cultured protein market has three stages of production — developmental scale, pilot sale, and commercial scale. Most companies are yet to access the commercial scale. Once it is able to attain commercialization scale, plant-based meat will be available at a cheaper price compared to traditional options. It is estimated that cultured protein would be 5x cheaper by the start of next decade.

Currently, these options are not widely available to the customers and still require further advances in R&D processes to ensure the growth of the sector. Food Tech startups are continuously evolving to generate cost-efficient alternative meat. It requires huge amounts of investments and specialised workforce to experiment with different techniques from the use of AI, to bioprocessing and 3D bioprinting. This can be taken care of through greater funding from investors. The median funding for early stage VC rounds in cultivated meat startups have gone up from $4 Mn to $9.5 Mn in the last three years. Companies are trying their best to make the alternative meat very close to the traditional meat in taste and texture so that they are able to fully replace the animal meat in the coming years.

A Nascent Industry with Great Potential

Environmental concerns with the regular meat industry, change in food preferences, health benefits, cost efficiencies are some reasons that are facilitating the growth of the alternative meat market. It is estimated that the market for cultivated food, including meat, seafood, dairy, eggs, etc., would reach close to $18 Bn by the year 2035, with a consumption of about 6 million metric tons. While this may be just 1% of the total protein consumption in the future, the market may witness high growth.

Currently, a huge part of the alternative protein production goes into research and development. However, as the market enters commercialisation scale, costs will come down. Studies suggest that by 2035, cell-based and plant-based meat alternatives will be 10x cheaper than the traditional animal products, and will allow families to save over $1200 in food costs. It is also expected that by next decade, companies’ revenue will also increase 100x for plant-based meat.

Although the overall consumption of plant-based meat is currently very less, the market shows no sign of slowing down. The sector is still in its nascent stage and companies can gain from grabbing the opportunities early, which would be possible only through sufficient funding support from investors.

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This article has been co-authored by Sargam Palod and Tamanna Kapur, who is in the Research and Insights team of Torre Capital.

The Fault in our Doge

by Sandeep Kumar

Keep up to date with the latest research

– And why it won’t go to the stars; or the moon; or practically anywhere for its sake

Among the deluge of cryptocurrencies popping up every day, Dogecoin has had the most gala ride in the past few months. The cryptocurrency, which features the ‘Shiba Inus’ dog as its mascot, gained its market cap from $1 Bn in early January to $80 Bn in May. January and May, of the same year! That is insane!

So a basic primer first for all those who don’t know what Dogecoin is.

Dogecoin: Something that started as just a meme.

Dogecoin is basically like Bitcoin (it actually is a fork of Litecoin, which is heavily adopted from Bitcoin) and like most cryptocurrencies, it enables peer-to-peer transactions on a decentralized network. The difference between the two? Bitcoin was a revolutionary technology, the original proof of work concept, based on a blockchain. Many called it the ‘disruptor of the internet’, some considered it a challenge to the global financial system, yet others considered it to be a shift of power from evil global forces to the next-door Joe and6 Jane. Bitcoin was the money of the future.

Dogecoin is just dogecoin, a digital coin, with the picture of a dog on it!

The Dogecoin has been around for much much longer than most think. It was started in 2013 by two engineers, Billy Markus from IBM and Jackson Palmer from Adobe. In their meeting they decided to combine the two phenomena that had taken the world by storm: Bitcoin and Doge, and out came the Dogecoin. Because this is what the guys do when they meet, they build random, open-source, meme-based, cryptocurrency.

The Initial Claim to Fame

The idea was to make an alternative to Bitcoin due to the massive profiteers that had gotten into mining it. Bitcoin, launched in 2008, had failed to achieve what it set out to venture. Dogecoin was expected to change that.


Well, Bitcoin was limited in number, only around 21 million of those can be mined ever. Dogecoin, on the other hand, 10,000 of them can be mined every minute.

The Dogecoin was a hit amongst the crypto geeks. It was mostly used to tip online content creators due to the high speed of transactions, nominal denominations, and low cost of transaction compared to other cryptos like Bitcoin. It was dubbed as a ‘tipcoin’. It is claimed that the trading volume even surpassed the heavyweight Bitcoin for a brief period. In 2017, it crossed the $2 Bn market cap figure, after raising 50,000, USD for a Jamaican bobsled team, raising 30,000, USD for clean water in Kenya, and sponsoring a Nascar. All of this before crashing.

The Dogecoin went unnoticed for years, the original subreddit that had catapulted it to fame silenced, the founders of the coin left, and the code wasn’t even updated.

It was in March 2020 when the Doge had its moment. Serial entrepreneur and influencer Elon Musk threw his support behind Dogecoin and the community, claiming it was ‘inevitable’ and could be ‘the currency at Mars’. He was joined by several others such as Carole Baskin, a big cat rights activist, singer Gene Simmons, bodybuilder Kai Greene, former adult star Mia Khalifa, American rap star Snoop Dogg, etc.

Even with all the love and support that Dogecoin has been getting, let us walk you through the potential faults that hinder its acceptance as a currency of any form.

Founder’s Exit

The Dogecoin is a meme coin, not meant to be taken seriously. Even its founders didn’t. So much so that they abandoned the project long ago. Today merely three part-time developers manage the codebase. This has led to absolutely no tech development taking place in the Dogecoin code base since 2015.

While some view this in the ‘do not take it seriously’ vein, a poorly maintained codebase makes the Dogecoin susceptible to be dislodged by more up-to-date and modern coins. The Dogecoin may be left behind and simply replaced by some other memecoin that catches people’s fancy.

Cyber Attacks, Security Breaches, and Frauds

Due to very little codebase maintenance, Dogecoin has been hacked previously. The Doge Vault was infiltrated and close to 280 million Dogecoin, worth $55k then ($196 Mn today) were stolen along with the credit card information of hundreds of users. While the community almost immediately pooled resources to recover the stolen Doge under the banner, the official statement read this:

“It is believed the attacker gained access to the node on which Doge Vault’s virtual machines were stored, providing them with full access to our systems. It is likely our database was also exposed containing user account information; passwords were stored using a strong one-way hashing algorithm. All private keys for addresses are presumed compromised; please do not transfer any funds to Doge Vault addresses.

If you like to use Dogecoin, you should change your online account passwords and make sure to check your credit card statements frequently for fraudulent or unauthorized purchases. But let’s be serious here; we kind of hope you aren’t investing serious capital into this pseudo-currency. (emphasis added)

That is the official statement.

In 2014 a crypto exchange called Moolah was set up in the UK to handle Dogecoin by Alex Green. Many new doge holders jumped the wagon, while Green continued using the ‘tipcoin’ to make hefty tips. He even sold shares of the exchange as Dogecoins. It wasn’t long before Moolah was shut down, and Green disappeared with the money, who was later found to be Ryan Kennedy, a serial scammer, and rapist.

And not just dogecoin, but even with other cryptocurrencies, several unregulated exchanges spring up one day and take off the next, leaving investors high and dry.

Pump and Dump

Cryptocurrencies aren’t really of any use except mindless trading. The volumes are meager and regulators are absent. This makes them a ripe target for pump and dumps by pumping rings which have existed since the very inception of cryptos.

When the Reddit user /r/wallstreetbets successfully managed to pump the Gamestop stock, the crypto pump rings saw this as the moment that they had been waiting for for years. They saw a gullible audience, that didn’t really know what it was doing, to follow them thinking that they would make a blow against the big guys and have fun doing so.

Needless to say, most stories ended on a bitter note, with several of these gullible traders buying at the peaks when the pump rings sold.

This is what took place on January 28, when a Reddit user decided Dogecoin be the next asset to pump. He was joined by Elon Musk, an obsessive Twitter user. The price of the Dogecoin rocketed up and crashed the next day.

Not just the Dogecoin, but several other cryptocurrencies, all are susceptible to such hostile market manipulation.

Too Volatile to be a global currency

All cryptocurrencies have seen massive volatility. In the image below, bitcoin and ETH are found to be more volatile than the S&P 500 itself. Even as the S&P volatility dies down, the crypto volatility keeps rising.

These are not the characteristics of a stable, fiat currency. What is expected of the currency is to hold its purchasing power stable even over long periods of time, not jump up or down 10% by the time one goes from home to the grocery store.

Poor Hedge Against Inflation

As 0% interest rates or even negative interest rates seem a possibility, bitcoin, among others, is touted as a hedge against inflation. Limited supply cryptos like Bitcoin are positioned as a hedge against this inflationary scenario. Why? Because of its 21 million limits, Bitcoin’s demand vs supply is expected to cause an increase in price as supply decreases.

Even the short history of Bitcoin is not enough to cement its position as a hedge against inflation. Gold on the other hand has had millennia of history of tracking inflation and yet it was susceptible to shocks, manias, and crashes over the shorter term. Bitcoin is no different.

Even in the recent weeks as concerns of inflation pushed the 10 year US treasury yield from 1.34% to 1.62%, bitcoin suffered its worst drop in months. Unlike other inflation hedges, cryptocurrencies’ value is based entirely on other people’s willingness to hold on to it, not on some underlying asset like oil or real estate.

It is fully possible that increasing inflation may lead to an overall recession. The real test of cryptocurrencies will be when investors pull their money from riskier assets like bitcoin or pour more into it.

The infinite supply of Dogecoins

While a few cryptocurrencies do have at least the “limited number” argument in their favor, Dogecoin does not even have that. 10,000 dogecoins can be printed every minute. This rather infinite supply of the dogecoin makes it very hard for it to gain in value.

However, in spite of this structural anomaly in Dogecoin, the prices have soared considerably over the past months.


So much for being Decentralised

According to a Wall Street Journal report, the largest holder of Dogecoin owns 28% of the currency! The position is worth at least $2.5 Bn today! The top 10 largest addresses combined hold 43% of the total Dogecoin supply. The idea behind Dogecoin being decentralized simply bites the dust when just 10 wallet holders own 43% of the currency. One major sell-off and the prices crash.

Will the party continue for Dogecoin?

Bears believe that the bubble could burst anytime soon. A game that has a definitive end in the near future. On the other hand, some enthusiasts feel the recent crash is just a minor setback. They still think that it has the potential to grow further in the future.

Can Dogecoin place itself as a reliable money system not limited to any particular state and government? Or will the influencers of crypto just have fun with it for a while and then forget about it for another eternity? Or will Dogecoin ever reach the $1 mark? Probably, Probably Not!

So the final question – whether to invest in this joke or not? Well, be clear about your investment goals first. It’s always a good idea to have a diverse set of investments for your portfolio which are harmless to your risk appetite. So ask yourself this – why do you want to invest in Dogecoin? To make instant money or a fortune that you see forthcoming?

Or maybe launch a crypto coin of your own. That is the sure-shot way to make some quick bucks.

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This article has been co-authored by Khubaib Abdullah and Yogesh Lakhotia, who are in the Research and Insights team of Torre Capital. 

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