Hypd's tech stack allows users to buy listed products on creators' social media storefronts in just three clicks
On May 2, the startup announced that it bagged $4 Mn as part Pre-Series A funding round led by Orios Venture Partners
Still in a beta phase, the startup claims to have zero customer acquisition cost and aims to target the larger influencer-led marketing ad D2C ecommerce space
The rising tide of the Indian digital economy can be attributed to the growing internet penetration on the back of cheap mobile data and the Covid-19-induced growth, which has fuelled the creator-led ecommerce ecosystem in the country.
While an average Indian spends 2.6 hours scrolling on social media platforms daily, the rise of social media platforms has spawned a new generation of content creators who want to effectively ‘monetise their influence’ and make moolah out of their followers.
But, monetisation continues to be elusive for Indian influencers, with just 0.2% of the total 8 Cr creators in India able to unlock the full monetary potential of their content. The problem compounds when the content creators curate short 30-second videos, catering to the short attention span of viewers.
According to the cofounder of creatortech platform HYPD, Ashwarya Garg, social media platforms, currently, are only designed to consume content and not facilitate purchases or make sales happen.
“But, human behaviour has changed today. Whatever we are buying or experiencing as a product or a service is largely a function of the content that we are watching. However, the process of watching the content and being able to buy the product alongside is broken and is a hindrance,” said Garg.
Realising that this was a major problem that the creator ecosystem was facing, Garg, along with Akshay Bhatnagar, founded HYPD in 2020. From operating an app-based content-to-commerce discovery platform, the startup pivoted to its current model in 2022.
Leveraging open APIs of social media giants such as Google and Meta, HYPD allows creators to build storefronts on top of their social media profiles, and sell products directly to users. It then deploys its end-to-end solution to coordinate everything from logistics to fulfilment.
Since its beta launch, the platform has onboarded 2,000+ content creators and has a waitlist of another 1 Lakh. Operating on an asset-light model, HYPD already partners with brands such as SUGAR Cosmetics, Bombay Shaving Company and is also in talks to onboard at least three big-ticket apparel brands, which form a sizeable chunk of the aspirational apparel brand market.
According to the founders, there are over 20 Mn creators, who have found a niche. Even though they have cracked the distribution code, they are lagging in consistent monetisation.
Creators, Brands, And The Commerce
Explaining the three-tier model on which HYPD is built, Garg said that the startup has built a tech stack, which allows users to buy listed products on creators’ social media profiles, in just three clicks, allowing viewers to go back to viewing their content.
Further, the startup allows creators to construct their digital storefronts on social media platforms, such as Instagram, YouTube, Facebook, and liaison directly with HYPD-partnered brands as per their content niche. The platform deploys native checkout to enable in-app purchases, ensuring users do not switch from the app they are browsing.
In addition to this, since all such transactions are routed through HYPD’s tech stack, the startup has a deeper insight into the creator funnel and has data regarding the conversion rates of each creator.
“HYPD enables brands to invest their influencer marketing budgets more effectively, based on data analytics and insights at scale, providing a return on investment beyond impressions and clicks. Since brands get direct orders from the customer, not only do they receive the customer details, but are also able to correctly attribute the conversion to the creator,” Garg said.
HYPD generates its revenues by charging a commission from the brand for each sale routed through creator storefronts. Hypd then passes a large share of those commissions earned directly to the attributed creator. It is not charging influencers any fee for the platform.
The startup claims that it has already helped creators earn close to $1 Mn since its inception and, with the top 10% of its creator cohort growing its income by nearly 25X. Garg said that 50% of their creators double their income every quarter.
HYPD aims to empower 1 Lakh creators (English, Hindi or vernacular) by 2025 with their own digital storefronts.
HYPD’s $4 Mn Funding To Chart The Next Phase
The cofounders bring to the table years of experience of working with consumer-facing startups such as hospitality player Zostel and Innov8 Coworking. Bhatnagar told Inc42 that their work largely involved areas that were driven by user-generated online content.
According to Garg, it was natural for them to gravitate towards the creatortech space. This was the primary reason why they zeroed in on the Indian digital ecosystem for their next new venture.
After much back and forth, the duo began working on building HYPD, which was based on the core philosophy of treating new-age creators just like MSMEs.
“A creator is the new-age MSME with an organic niche distribution model. With a low-entry barrier, these new-age digital retailers can set up a shop from the comfort of their homes. But, they need to be consistently rewarded for their efforts, which has largely been missing from the creator economy. So, the idea behind HYPD is how can we reduce their effort to earn maximum money,” Garg added.
The cofounders soon saw creators making a beeline for their product within a few months of the launch. As creators lined up for the startup’s waitlist, so did the investors.
The startup raised its first round of seed funding in January last year, raking up $1.5 Mn from institutional investors such as Better Capital and Joyance Partners as well popular content creators such as Bhuvan Bam, Tanmay Bhatt, Samay Raina, Suhani Shah, OML, and Barcode Entertainment, among others.
A year later, the startup earlier today (May 2) announced that it raised $4 Mn as part of a Pre-Series A funding round led by Orios Venture Partners. The round also saw participation from its existing investors Sauce VC and Better Capital, who doubled down on their investment.
HYPD plans to deploy the funding towards roping in more creators and branching out into more categories. The capital will also be deployed towards ramping up hiring and strengthening the product portfolio.
Talking about the investment, managing partner at Orios Venture Partners Anup Jain said, “…It is very difficult to identify, manage and track hundreds of creators and their ROI manually. This is our thesis behind our investment in Hypd, which enables creators and brands on their tech platform.The team’s vision, execution, and growth with both stakeholders in a short time have been remarkable.”
Targeted largely at the younger demographic, the startup currently employs a workforce of 100+ people and plans to increase this further. Competing with the likes of troubled startups such as Trell, Instamojo and Shopify, HYPD has seen its gross merchandise volume (GMV) surge 40X in the past 12 months.
Still in a beta phase, the startup claims to have zero customer acquisition cost currently and aims to target the larger influencer-led marketing ad D2C ecommerce space. On what gives it the competitive edge, Garg said that the company was well-poised to take on any new player, owing to its vibrant and scalable tech stack, which, it said, was better placed than any new incoming player.
While HYPD could face challenges, owing to growing regulation around social media influencers, the platform seems to be well-poised to scale across both D2C ecommerce and influencer marketing segments.
Operating at the intersection of the two domains, the startup aims to leverage its position to effectively clinch a bigger pie of the influencer marketing space, which was pegged at INR 1,275 Cr at the end of 2022. This number is projected to reach INR 2,800 Cr by 2026.
Along similar lines, the homegrown D2C ecommerce space is also slated for big growth. As per Inc42, the sector is expected to reach a market size of $400 Bn by 2030.