With generative artificial intelligence (Gen AI) in the driver’s seat, content creation is expected to become a child’s play. While the emerging technology has offered a new avenue for users to build tailored content within a span of seconds, the same has opened the gates for non-meaningful content that has flooded the internet.
It is this problem that Pep aims to tackle with its approach led by curation, categorisation and credibility of content. With this in mind, the startup is building a social-first online marketplace for content enabling customers to explore, purchase, and monetise a diverse range of content and services.
Founded in early 2023 by IIT alumni Nav Agrawal and Swapnil Upadhyay, Pep offers a one-stop shop platform for users to avail live sessions, one-on-one consultations online, and buy PDFs, videos and audio.
It caters to a wide spectrum of user interests from cooking to DIY crafts and from fashion to health and fitness.
After being in stealth mode for many months, the platform has finally emerged out of the shadows and has raised $2.5 Mn as part of its seed funding from venture capital firm India Quotient. Alongside, marquee angel investors such as Meesho cofounders Vidit Aatrey and Sanjeev Barnwal, CRED’s Kunal Shah, and Farooq Adam from Fynd also participated in the round.
The fundraise also saw participation from names such as Parag Bhide (counsel, Trilegal), Sambhav Mehrotra and Sridhar Subramanian (founders, StartupMovers), Ravindra Yadav (data scientist), Sargun Gulati (crypto expert).
An Idea Is Born
For Nav Agrawal, this is not his first entrepreneurial rodeo. Having built two startups previously and exiting them successfully, he has had a taste of the vibrant startup ecosystem and how to navigate it. Incidentally, he conceived the idea of Pep during his stint at his previous startup, the short video platform Clip, which he eventually sold in parts to Meesho and ShareChat.
While Clip was taking off in the country around 2017 and 2019, Agrawal noticed an interesting pattern on the platform. Users were trying to sell their content to others by sharing their phone numbers on the app.
Basing this on the premise of curated community-driven content, a marketplace theme as well as ratings and reviews, Pep finally took off the ground early this year. However, life came full circle for Agrawal after his previous backers yet again came together to invest in his new startup, Pep.
Speaking with Inc42, Agrawal said that users are bombarded with content these days and, as such, content discovery has become a big pain point for customers online. He adds that the platform aims to address this issue by deploying personalised machine learning algorithms to enable the discovery of tailored content at the right prices.
“With our mobile-only approach, we enable people to sell content in a few clicks and directly monetise their knowledge, and reduce dependency on conventional ad-based income. Using personalised machine learning algorithms, our consumers discover and buy the right set of content at affordable prices with a no-regret mindset,” added Agrawal.
For him, Pep, as a marketplace, is built on three pillars — trust, discovery and pricing. Having already built two companies from scratch and selling them to big-ticket names, Agrawal is well-versed with the idea of how to build trust and grow at scale.
Agrawal is also expected to leverage his learnings in the content and social space, which he accumulated while building Clip, to come in handy as he builds another content-focussed startup from zero.
The founder’s stint at Meesho (Agrawal worked at the ecommerce unicorn after exiting Clip) has also complemented his knowledge base on how to build a horizontal marketplace at scale, which is what Pep essentially wants to do.
Overall, at the heart of Pep is user-generated content that is stitched around the premise of micro-courses and micro-payments. In response to a question about pricing options, Agrawal adds that the marketplace sells content anywhere from INR 29 all the way up to INR 2,000.
As Pep prepares for its next stage of growth and scale, the genesis of the startup curiously lay in Agrawal’s previous iteration as a cofounder.
Speaking on the investment in the startup, India Quotient’s Madhukar Sinha, added, “Very excited to back Nav and Swapnil again to build the Amazon of Digital Goods & Services. With the fast-paced digitisation of the world around us, we see a huge Total Addressable Market (TAM) waiting to be unlocked.”
The platform’s app is currently fully live only on the Google Play Store app with plans to unveil iOS app soon as well.
Eye On The Horizon
With the seed funding, the startup plans to focus on product development, shore up user growth, branding initiatives and hire more employees.
Speaking on the product market fit, Agrawal claimed that the customers are ‘loving’ the platform and are doing repeat transactions, without disclosing the traction or user count.
With regard to its monetisation model, the startup follows a pure-play commission model based on the category. These charges range anywhere between 20-50% depending on the category. The distinction is drawn for content that requires raw materials such as gourmet cooking and the quality of the expert.
Meanwhile, Pep has set its eye on scaling up the product and growing the platform manifold in the near future. Agrawal told Inc42 that he expects the platform to notch more than 10 Mn transacting users over the course of the next two to three years.
At the outset, the 11-member startup will largely be focussed on pitching the platform to its target audience with India at the centre of the operations. It further plans to undertake category expansion over the course of the next six to eight months as it looks to onboard users across multiple segments.
In the mid-term, Pep cofounders want to scale the platform beyond metro cities to Tier II and Tier III cities and pad up its bottom line. However, Agrawal, in the long term, tells Inc42 that he wants to build a global content marketplace that sells to customers worldwide, especially to the US and Indonesian markets.
On the perennial debate between scale and profitability, Agrawal believes that Pep, at the outset, would be focused on growth. He, however, added that while the company would not want to be immediately profitable, the economics of the company ought to make sense even at a smaller scale.
The Horizontal Marketplace Opportunity
Despite the tailwinds and more or less a first-mover advantage, there seems to be competition brewing underneath the space. While Pep operates a horizontal marketplace for content, many such vertical marketplaces already exist and are thriving globally.
A case in point has been OnlyFans which largely caters to adult content users while overseas platforms such as Skillshare and Domestika focus on skill-based content. Speaking on this, Agrawal said that Pep focusses on user generated content while other incumbents in the markets are largely dependent on professionally made content.
However, competition appears to be intensifying in this space. US-based content marketplace Whop recently bagged $17 Mn as part of its Series A round while digital goods-focussed Gumroads has been slowly making inroads in the space.
Another headwind could likely be social media juggernauts such as Instagram and Snapchat directly embedding the feature in their app and leverage their existing user base to scale the offering. On this, Pep CEO believes that their platform’s curation methodology and price standardisation work well in their favour. “Micro-courses at micro prices is our key USP,” adds Agrawal.
At the heart of Pep’s operations is the country’s 46.7 Cr internet-guzzling and content-craving users which have made India an attractive digital economy and a major social media market.
Fueling this growth has been around 8 Cr content creators which cater to different users. However, barely, 0.2% of the overall content creators in the country are able to monetise their content effectively, as per a report by Kalaari Capital.
It is this two-pronged lever of growth involving both users and creators that Pep wants to leverage and piggyback on to create its niche. But, while many have struggled in the space, it remains to be seen how Pep charts its path forward as serial founders helm its ship.
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