Outliers #008

Gigs for cents: the complicating economics of mobile data.

In this week’s issue of Outliers, we uncover what Alex Barrat believes to be the greatest business success of the last decade. Jio Internet brought 400m internet users online in India whilst also reducing the cost of data by 95%. We look into why internet prices vary so greatly around the world.

Plus, insight into India’s 4 financial systems supporting US$2.5tn in transfers a month, and the room for incredible market share capture in African financial services.

And of course, if you're enjoying this weekly read - please share our publication with anyone who might be interested: outliers.ten13.vc


The most interesting global Seed to Series A deals from outside the US this week:

  1. Dig Security - US$34m - Tel Aviv, Israel - Cyber Security
    Having raised US$45m in less than a year, Dig specialises in detecting and responding to cloud-based security attacks in less than a minute.
  2. Monta - US$30m - Copenhagen, Denmark - EV infrastructure
    Monta provides software that allows EV charging stations to connect with drivers while monitoring the facilities.
  3. Winn.ai - US$17m - Tel Aviv, Israel - Work Tools
    Winn.ai has built an AI assistant for sales teams, which provides real-time recommendations during sales calls.
  4. Kippa - US$8.4m - Lagos, Nigeria - Fintech
    Lightweight bookkeeping & payments platform has attracted over 500k businesses across Africa. TEN13 joined this round 🔥
  5. Respond.io - US$7m - Kuala Lumpur, Malaysia - API
    Centralised messaging platform to assist with marketing, sales, and support.

A VC's Insight

Gigs for cents

Perhaps no technology varies in price more greatly than internet data. While countries like India and Italy pay cents for access to the internet, places such as Korea, Chad, and Canada can pay 1,000x more. The economics of internet pricing is complicated. There is no clear correlation between price and measures like GDP or population. So what determines the cost of a gigabyte? And just how important is getting cheap internet to the masses?

Source: CityGlobe Tour

In short, there are two factors that largely determine internet cost: infrastructure and competition.

To start, internet can be served through a fixed line connection to a transmitter, or via satellite. Surprisingly, satellite-sourced data is far more expensive for consumers. Internet that relies on underground cables comes with a huge upfront cost but many countries rely on existing telecommunications infrastructure that has existed for decades.

The second factor is competition. Naturally, the more competition the better the outcome for consumers. Using Africa as an example, Quartz found that the cost per gigabyte fell by ~40% for every additional service provider in a country. In developed nations like Canada and Korea, a lack of competition keeps costs high despite well-established infrastructure. Rogers, Bell, and TELLUS command a 91% market share between them in Canada.

Other less important factors that play into cost including geographical size of a country and population density (less infrastructure needed to service a population). It’s also worth noting that the above data does not take quality or quantity of service provided into account.

Now, with the above in mind, I wanted to relay the story of Jio; what I deem to be the greatest business success of the last decade. While West coast tech may receive all the attention, I believe that Reliance Industry’s internet business, Jio, has meaningfully changed more lives and enabled more progress than any other company since 2016.

In the last 6 years, the internet has become the cheapest place to consume mobile data in the world. It’s largely thanks to Jio. No single company has ever brought so many people onto the internet in such a short amount of time. In late 2016, Jio launched its mobile data offering across India; initially offering 4GB per day for free. Data costs plummeted and internet adoption soared.

From 2016 to 2021, India added 400m internet users. While millions of people are being connected to the internet every month meaning data is almost instantly dated, roughly half of India’s population is online, a figure that is projected to hit 65% by 2025. The size of such a project can not be understated. Launching an internet business requires sophisticated hardware spread around the country. In fact, Jio has laid enough cables to wrap the world 27 times. It’s worth noting, it took India’s richest person, Mukesh Ambani, to set up the project.

As we seem to mention every week in Outliers, access to the internet is one of the greatest enablers of growth. The new range of jobs and businesses that are created are phenomenal. What does India owe to the internet revolution? Through a VC lens, India now has 107 unicorns, 100 of which were minted after 2016. Of course, I’m not attributing internet usage growth to the success of all these businesses but it certainly helped. Research found that the internet contributed 5.6% to Indian GDP in 2015, a figure that had grown to 16% by 2020.

This isn’t just interesting through an Indian investing lens, it’s also revealing just how important the internet is for progress. Studies from both the World Bank and McKinsey found that a 10% increase in internet usage can boost a developing country’s GDP by 1-1.5%. This can lead to incredible gains for countries.

Which countries stand out? I filtered the list by countries with currently “cheap” internet, larger populations (>20m people), and relatively low penetration - the following results came out. Perhaps no economies are poised to benefit from the internet revolution more than those below.

Macro lens

It’s hard to truly reshape a banking experience in places like the US, the UK, and Australia. In a well-functioning ecosystem, the opportunity to redefine the way people access financial products requires more innovation to gather uptake.

In countries across Africa, there are often fewer incumbents to compete with, which is why we see relatively high fintech penetration rates, as highlighted above. A successful fintech has the potential to capture market share like few places in the world. Kenya and the success of mPesa is the perfect example and is why the country leads the region in terms of fintech’s share of total financial services revenue. This is why we are excited by the opportunity, there is so much room to dominate in less established markets.

This data is part of a 47-page report on African fintech published by McKinsey. Fear not, our good friend Caleb Maru has distilled the report into a Twitter thread for you to enjoy here.


Anshul Gupta is the Co-Founder of venture-backed Wint Wealth, an Indian wealth management platform. In this incredibly insightful thread, Anshul breaks down the financial infrastructure used to transfer and settle any payment in India; from a P2P transfer to an interbank transaction. In August alone the 4 systems handled around 20 million Crore in transactions or US$2.5t. 1 CR is worth 10m Indian Rupees or ~US$125k.

Your author this week

Alex Barrat - New to the VC world, joining the TEN13 deal team, Alex spent his early career at VC-funded scale up Stake. As one of the first ten hires, he left the team of 130 almost 5 years later. All pitches welcome. Submit your deck here.