VCs use UPI autoPay to spot ‘dead users’ in startup metrics

Venture capitalists are increasingly using UPI autoPay data to distinguish genuinely active users from 'dead users' who continue paying for subscriptions they no longer use. NPCI data shows top 10 banks processed 1.8 billion UPI e-mandate transactions in July, more than triple the 585 million handled in July last year, pushing investors to look beyond raw payment figures.

Ashish Kumar of Fundamentum said the shift is a healthy sign as autopay becomes mainstream. Kushal Bhagia of All In Capital warned of a gap between user retention and payment retention, citing examples where users forget to cancel streaming or fitness app subscriptions. One investor reportedly backed out of a deal with a content company after finding most users were inactive on the app.

With consumer tech companies now processing at least Rs 2,500 crore in cumulative revenue through UPI autoPay, investors are scrutinizing retention metrics more closely. Manavdeep Singh Grover of Superliving noted that subscription companies have not reached IPO stage yet, and many could get exposed later if their revenue relies on inactive users who eventually churn.