😮 A new crypto alternative?

Circle to offer USDC stablecoins, Aviation receives ECLGS boost, Jai Kisan raises Series A, and some more updates.

the mesha tribe

May 31, 2021

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Read Time: 965 words, 4:49 minutes.

There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

Sensex: 51,937.44 (+1.00%) ↑

Nifty 50: 15,582.80 (+0.95%) ↑

Dow Jones: 34,529.45 (+0.19%) ↑

Nasdaq 100: 13,686.51 (+0.21%) ↑

Bitcoin: $37,166.35

Top Stories 📰

1. Are stablecoins the future of crypto? 🤔

For fiscally conservative investors looking to invest in cryptocurrencies, Circle Internet Financial Ltd. has found a solution.

The company is one of the cryptocurrency firms that developed stablecoin called USDC pegged 1-to-1 to the US dollar. As per the company's marketing, USDC earns ten times more interest than the ultra-safe 1-year Treasury bill.

How does it work? Corporate treasurers will open a "digital-dollar account" that will convert fiat money into USDC. Returns will be generated by lending the digital dollar to institutional investors willing to pay an interest rate for accessing additional capital. Circle will offer a maturity period ranging from one month to a year, barring early withdrawals. The rates will update weekly depending on demand for USDC loans.

Circle is currently working on the project with Genesis Global Capital and plans to make the stablecoin firstly available to Switzerland and the US.

Proponents of Bitcoin, such as MicroStrategy CEO Michael Saylor, have urged companies to pour their reserves into the cryptocurrency as he believes that the dollar is degrading due to rising inflation. Meanwhile, critics of cryptocurrencies argue that corporate reserves shouldn't be parked into volatile assets like Bitcoin.

Why it matters? Given the growing volatility of cryptocurrencies in recent times, several firms have started issuing stablecoins to attract conservative investors. For instance, Gemini exchange, through its Gemini Earn program, offers investors as much as 7.4% yearly on Gemini dollars. In fact, we at North Loop offer 11.5% on USDC deposits!

2. Centre extends ECLGS to aviation sector ✈️

The Indian government has announced its decision to include the aviation industry under its Emergency Credit Line Guarantee Scheme (ECLGS) to offer some liquidity to the sector worst affected by the pandemic.

What is ECLGS? The scheme provides 100% guaranteed coverage to banks, NBFCs, and others to allow them to extend emergency credit to businesses that struggled to meet their working capital needs amid the COVID-19 pandemic.

Under the scheme, the government has removed the loan outstanding ceiling of Rs 500 crore on sectors, including civil aviation, travel and tourism, hospitality, leisure and sporting. However, they limited the maximum additional assistance under the scheme to 40% of loan outstanding or Rs 200 crore, whichever is lower.

The aviation sector positively responded to the inclusion, saying that it would help them bolster the much-needed liquidity amid low demand.

Since March 2020, India's aviation industry has struggled to cope with growing operational costs, excess capacity, and yield. But, increased private sector investments and massive domestic demand helped keep businesses afloat. Additionally, the pandemic also forced companies to implement 100% web check-ins, touch-free baggage drop, and ensured seamless movement through Digi-Yatra, thereby improving the sector's overall efficiency.

Why it matters? The aviation sector could play a prominent role in making India a $5 trillion economy by 2024 and promote the country's overall employment and economic growth. The industry currently contributes $72 billion to India's GDP.

3. Today's big deals 🎉

Rural fintech startup Jai Kisan raises Series A
Jai Kisan, a Mumbai-based fintech startup disrupting India's rural financing industry, has raised $30 million in debt-and-equity Series A round, led by Mirae Asset. Syngenta Ventures, Blume Ventures, Arkam Ventures, Nab Ventures (NABARD), Prophetic Ventures, among others, participated in the round. It also raised an unspecified amount in debt from Stride Ventures, Trifecta Capital, and Blacksoil. Through its Bharat Khata service, a system that provides cheap financing for agri-inputs and equipment to individuals and businesses, the startup captured over $380 million of annualized GTV (gross transaction value) run-rate across its 25,000 stores this year. Jai Kisan, which has so far relied on banks and financial institutions for credit, now expects to finance 20% of all loans. It currently operates in eight states in South India and is looking to expand operations throughout the country.
Delhivery fetches $277 million in pre-IPO round
India's e-commerce logistics startup Delhivery has raised $277 million in a new fundraising round ahead of its IPO this year. The round was led by Fidelity, with Abu Dhabi’s Chimera, Singapore’s sovereign wealth fund GIC, and UK’s Baillie Gifford participating in the fundraising. The latest, and final, fundraising round brings its total valuation to $3 billion. So far, Delhivery has raised $1.23 billion from investors such as Tiger Global Management, SoftBank Vision Fund, and The Carlyle Group. The Gurgaon-based startup began as a food delivery firm but later expanded its services to more than 2,300 cities and over 17,500 zip codes. It aims to remove inefficiencies in India's $160 billion logistics market by digitizing the demand and supply system via a freight exchange platform.