Investment Memos

Investing in Rigi

Enabling Knowledge Creators to build their Communities

25th January 2023

The world will forever be indebted to the internet for truly democratizing access to knowledge - no matter how niche, nerdy or idiosyncratic the topic. As recently as even 15 years ago, the thought of gaining expertise in a subject conjured images of poring over dusty encyclopedias in stuffy libraries. Today however, this process has fundamentally changed. Want to manage & invest your money better? Watch a Youtube video on your way to work. Want to understand the fundamentals of food to change to a healthier lifestyle? There are zillions of podcasts you can listen to while working out. Not only has access to knowledge become easy & ubiquitous but it is available across formats so a user can pick what works best for them.

But who are the key drivers of this knowledge economy? Just like entertainment has been democratized by the content creators (think short video apps such as Moj in India or Tik Tok globally), the knowledge economy is being driven by a special kind of content creator - the knowledge creator. Several individuals are now sharing their expertise on social platforms in various formats and have been able to build large & loyal following. Despites the strides made, we believe that we are only at the beginning of this evolutionary journey - that much can be (and needs to be) done to unlock value for creators and consequently their followers.

Today, a typical knowledge creator does not have great tools to own their audience on social platforms. They are at the mercy of the discovery algorithms of social platforms, which are designed to promote content that engages a very large number of users and creators that produce this content frequently. Therefore, despite adding a lot of value to their audience, they are unable to deeply engage with their communities and subsequently monetise them.

We have been conscious of these pain points for some time now and had voiced these sentiments in our paper on the evolution of the creator economy published a few months back. While we talked about the pain-points in categories such as education, fitness etc, the Rigi team, which had earlier founded a fantasy sports platform, was seeing the knowledge economy brewing up even within that space. When the team shared the behaviors they were seeing with us, it intrigued us even more, and on digging deeper, we found this behavior to be omnipresent across a bunch of other categories (think: astrology, business & personality development coaching, arts etc.). That gave us conviction on the true expanse of this space.

The other big realization for us was that at a very fundamental level, most existing players in this space - both globally and in India - have taken the ‘Amazon approach’ to the problem by building destinations for the end-users to discover knowledge content and creators. Companies such as Udemy and Masterclass have also created large businesses by taking this approach. But, given the strong affinity between creators and their audiences, ease of discovering creators already solved for by the large social platforms and the sheer number of categories possible in this space, could a Shopify approach be even more powerful?

You can imagine a world where creators build their top of the funnel audience on platforms such as YouTube, Twitter, Instagram etc., and then funnel this audience to their paid communities (on their own apps, 3rd party apps such as Rigi, or even platforms such as WhatsApp / Telegram). In high trust categories, even with hundreds of people, mid/small sized creators can run highly engaged communities and build a sustainable business, since the $ / MAU is significantly higher than advertisement driven businesses and the service they offer has a very high gross margin.

This is Rigi’s core insight and the company is on a mission to enable creators to grow, manage and monetize their communities better. Using the Rigi app, creators can create and manage their paid communities (hosted on Rigi app / platforms such as WhatsApp & Telegram), manage renewals, integrate with social platforms and create new paid products - locked messages, webinars, courses etc. Rigi ensures that these services are then available to end users through a robust and integrated tech infrastructure which enhances customer experience and therefore improves end-user retention for the creators.

In our conversations with creators in the knowledge economy, we realized that several creators have tried monetising their audience through paid communities & products in the past. However, they gave up quite early, since the process of managing the entire process was completely broken. Without an integrated tech product powering the process, there are several manual steps involved, which create operational overheads and therefore take the creators’ time and lead to low customer NPS. Several creators had even attempted to create their own apps / websites to streamline operations but struggled in getting access to the right tech capabilities.

Once creators start using Rigi, not only do their operational overheads go away, they are also introduced to new avenues of engaging and monetising their audience, which they had otherwise not thought of. As a consequence, most creators on Rigi have seen their revenues & engagement grow 3-4X in just 2-3 months of starting to use the platform.

Having invested in companies such as Meesho and Citymall in the past, we knew that this approach works. When platforms of this kind scale, they not only create delight for existing entrepreneurs in the space, but also enable the creation of several new businesses / micro-entrepreneurs, which is what makes them truly special. We could see the same pattern playing out in our conversations with the Rigi team & creators.

Both Swapnil Saurav and Ananya Singhal, who are the founders of Rigi, are deeply customer obsessed and have exceptional product-first thinking. The team has always listened closely to their customers and rapidly iterated in this journey, to create and test out several new offerings on a weekly basis. Because of this DNA, the business continues to see exponential growth. Rigi now operates in 2 markets (India & Indonesia), has onboarded more than 10K creators, who in turn have been able to serve over 1.4 Mn end-users. All of this has happened in less than 15 months since their launch, and they have achieved this while maintaining high creator and user satisfaction & retention - a clear indication of their product market fit. We are thrilled to partner with Rigi by leading their $12 Mn Series A round. Rigi has proven the opportunity that lies in the knowledge economy and has developed a scalable playbook for growth while continuing to build new products to address further creator pain points. Creator earnings have grown 40x on Rigi over the last 12 months, but we are even more excited by the opportunity that lies ahead. There is a potential to create a truly global company out of India, and together we can usher in the next generation of knowledge democratization.

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