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Funding and acquisitions in Indian startups this week [06-11 May]

During the week, 24 Indian startups raised around $320 million in funding. These deals include 7 growth-stage deals and 13 early-stage deals. Meanwhile, four early-stage startups did not disclose the amount raised. Last week, about 28 early and growth-stage startups collectively raised around $340 million in capital. [Growth-stage deals] Among the growth-stage deals, 7 startups raised $287 million in funding this week. Data and AI governance company Atlan led the list with $105 million followed by dialysis chain NephroPlus which scooped $102 million in capital. Shared electric mobility startup GreenCell Mobility, Provider of full stack education, content, and technology services K12 Techno Services, and lending firm Lendingkart are next on the list with $36.7 million, $27 million, and $10 million, respectively. Further, the list counts deeptech AI startup Myelin Foundry and an agritech firm focused on drone-based hyperspectral remote sensing BharatRohan. [Early-stage deals] Subsequently, 13 early-stage startups scooped funding worth $33 million during the week. Direct-from-farm produce supply chain startup Superplum spearheaded the list followed by a platform for wholesale buying and selling Poshn, log analytics startup Parseable, fodder ecosystem to support dairy cattle farmers, Cornext, and re-engineered tyre startup Regrip. Moreover, ICON, Atomgrid, Eternz, Knit, Select Brands, 50Fin, and Treacle also raised funding during the period. The list of early-stage startups also includes four startups that kept the funding amount undisclosed: GyanLive, QUE, trackNOW, and Food Square. For more information, visit TheKredible. [City and segment-wise deals] In terms of the city-wise number of funding deals, Bengaluru-based startups led with 9 deals followed by Delhi-NCR, Mumbai, Hyderabad, Ahmedabad, Gandhinagar, Indore, and Kolkata. Segment-wise, e-commerce and SaaS startups grabbed the top spot with four deals each followed by agritech startups. The list further counts AI, edtech, fintech, and foodtech startups among others. [Series-wise deals] During the week, Seed funding deals led the list with 11 deals followed by 3 Pre-Series A deals while debt, Pre-Seed, Pre-Series A, and Series F are next on the list among others. [Week-on-week funding trend] On a weekly basis, startup funding remained somewhat stable with a marginal 6.5% drop to $320 million as compared to around $341.5 million raised during the previous week. The average funding in the last eight weeks stands at around $249 million with 27 deals per week. [Key hirings and departure] Bhavesh Gupta, the chief operating officer and president of Paytm, has resigned citing personal reasons, marking the fourth high-profile exit at the Paytm Group in the last month. Among key hirings, Ishan Preet Singh, Co-founder of the now-defunct edtech startup FrontRow, has returned to Lightspeed Venture Partners as an investor after taking a year-long career break following the closure of his previous venture. Fintech unicorn Slice appointed Kotak Mahindra Bank’s group president and chief risk officer Arvind Kathpalia as its chief risk advisor, shortly after receiving Competition Commission of India (CCI) approval for its merger with North East Small Finance Bank. Additionally, Adda247 appointed ex-NIIT president Bimaljeet Singh as CEO to lead its skilling and higher education verticals. [Fund launches] InCred Alternative Investments, the alternative asset management arm of InCred Capital, marked the first close of its inaugural private equity fund. Concurrently, Client Associates, a wealth management and investment banking firm, also announced the first close of its inaugural Category II alternative investment fund at Rs 300 crore or approximately $36 million. [Layoffs] Unacademy Group’s medical entrance test preparation platform, PrepLadder, laid off around 145 employees, approximately 25% of the startup’s total workforce of roughly 560 employees. Fintech startup Simpl also underwent a restructuring, resulting in the layoff of around 100 employees. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches] ▪️ Zomato launches real-time hyperlocal weather info network ▪️ Zeta rolled out a digital credit-as-a-service product for banks [Financial results this week] ▪️ Urban Company turns profitable with Rs 7 Cr PBT in April ▪️ Gramophone posts Rs 316 Cr gross revenue and Rs 58 Cr loss in FY23 ▪️ WoodenStreet revenue nears Rs 200 Cr in FY23; remains profitable ▪️ Tiger Global-backed GOAT Brand Labs scales over 8X in FY23 ▪️ FreshToHome earns Rs 25 Cr net commission from India in FY23 ▪ Magicpin scales up over 83% in FY23; controls losses [News flash this week] ▪️ Groww moves domicile to India from the US ▪️ Digit Insurance to open IPO on May 15 with reduced size ▪️ PhonePe dominates UPI ecosystem with 49% market share in April [Conclusion] The weekly funding remained stable with a marginal 6.5% drop to $320 million. The week saw two new fund launches by VC firms namely InCred and Client Associates. The week also witnessed two layoffs as PrepLadder and Simpl fired a part of their workforces. Zomato has introduced a new service called ‘Weather Union’ that offers hyperlocal real-time weather information including temperature, humidity, wind speed, and rainfall. Currently accessible in 45 cities, the service will expand to other Indian cities soon. The data is sourced from over 650 on-ground weather stations, installed at locations like Zomato employees’ premises. Interested individuals can also host these solar-powered weather stations by signing up on the company’s website. Full-stack financial services platform Groww has transitioned its domicile back to India from the US, following the footsteps of PhonePe, which also relocated its domicile to India from Singapore. This move aligns Groww with a trend seen among several fintech companies, including KreditBee, Pine Labs, Razorpay, Meesho, and Zepto, which have been working on reverse flips. In another development, Go Digit General Insurance announced that its IPO will be open for subscription from May 15 to May 17. The company’s IPO consists of a fresh issue of shares worth Rs 1,125 crore and an offer for sale (OFS) of 54,766,392 shares. It’s worth noting that the company has reduced its IPO size from the initial plan, which included a fresh issue worth Rs 1,250 crore and an OFS of 10.94 crore equity shares. Additionally, PhonePe has maintained its position as the leading player in the unified payments interface (UPI) ecosystem, holding a market share of nearly 49% in April 2024 for both P2M (person-to-merchant) and P2P (person-to-person) transactions.

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Sunil Shetty-backed Regrip raises $2 Mn in new round

Bollywood actor Suniel Shetty and IT ministry-backed startup Regrip has raised $2 million about Rs 16.7 crore, in a funding round co-led by Qatar-based venture capital Sirious One, Inflection Point Ventures, and Let’s Venture. The round also saw participation from a host of angel investors, including EaseMyTrip’s co-founder Rikant Pitti, TIE Angels chairman Mahavir Pratap Sharma and Shobitam’s co-founder Aparna Thyagarajan among others Regrip has also provided exit to seed investor IIMA Ventures. The proceeds will be used to fuel the expansion of this innovative technology deployment with tyre companies and further enhance Regrip’s collection network for discarded tyres. It plans to ramp up its impact on the environment by revitalizing discarded tyres, reducing waste, and maximizing their lifespan. Founded by Tushar Suhalka, Regrip is building a network of discarded tyre collection centres. The startup uses quality-grade rubber to make refurbished tyres through shearing and retreading processes.

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Urban Company turns profitable with Rs 7 Cr PBT in April

Urban Company has turned profitable at PBT level (profit before tax) on a consolidated basis in the last month, said two sources aware of the firm’s financial numbers. The development will potentially smoothen its public listing plan which is likely to happen in the second half of next year (2025). “Urban Company’s India business has been EBITDA profitable since October-November 2022,” said one of the people cited above requesting anonymity. “But on a consolidated basis, the firm posted a little over Rs 7 crore in profit before tax (PBT) in April 2024.” As for the firm’s India unit—which is more than 90% of its business—it recorded over Rs 11 crore PBT in April. “Urban Company has also achieved breakeven in the UAE but it is incurring losses in Singapore and Saudi region as these two markets are new,” said the person mentioned above. The profitability in April indicates that Urban Company has been able to cut losses by over two-third in FY24. “The company’s losses for the last fiscal stood under Rs 100 crore,” said another person who also requested anonymity. The 10-year-old company posted a loss of Rs 308 crore against revenue of Rs 637 crore in the fiscal year ending March 2023. According to the startup data intelligence platform TheKredible, Urban Company also reduced its losses by 40.1% in FY23 as compared to FY22. Queries sent to Urban Company didn’t elicit any response. Urban Company is a home services and beauty salon marketplace with a presence across over 30 cities in India along with operations in some foreign markets. The Gurugram-based company joined the unicorn club in June 2021 with a valuation of over $2 billion but the company hasn’t raised any primary money in the past three years. In December 2021, it bought back employee stocks (ESOPs) at a valuation of $2.8 billion. While plans for an IPO are usually a red flag when a sudden improvement in financials is observed, in Urban Company’s case, the improvement has been long in coming with a series of changes the firm has been making over the years. Be it white label or own label products, service contracts to ensure predictable cash flows, focus on repeat users and better management of partner relationships, the firm has been seen to be at work. Seen as a barometer for the state of blue collar gig economy in India, the firm will continue to find itself in the cross hairs of critics in case of any misstep, but credit has to be given for a long and sustained effort to thrash out a business out of it all. The international ventures remain a question, considering the widely different conditions and laws in each market, but in India at least, the numbers will just be the icing on the cake that seems ready for a taste test in the capital markets.

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Gramophone posts Rs 316 Cr gross revenue and Rs 58 Cr loss in FY23

Agritech startup Gramophone has been making its place in the agritech space with over 75% year-on-year growth during the fiscal year ended March 2023. At the same time, losses for the InfoEdge-backed company looked under control compared to other VC-backed agritech startups. Gramophone’s gross revenue grew 75.6% to Rs 316 crore in FY23 from Rs 180 crore in FY22, its consolidated financial statements filed with the Registrar of Companies show. Founded in 2016 by Nishant Mahatre and Tauseef Khan, Gramophone’s offerings include crop protection, crop nutrition, seeds, implements, and agri hardware. It also facilitates farmers to sell crops to vyapaaries (businessmen) directly through its Gram Vyapaar feature. The sale of products (agri inputs) is the sole source of revenue for Gramophone. For the agritech startup, the cost of procurement of inputs accounted for 81% of the overall expenditure. In the line of scale, this cost surged 76.2% to Rs 303 crore in FY23 from Rs 172 crore in FY22. Its employee benefits, information technology, advertising cum promotional, provisions for trade receivables, and other overheads catalyzed the overall expenditure up by 70% to Rs 374 crore in FY23 from Rs 220 crore in FY22. See TheKredible for the detailed expense breakup. Expenses Breakdown Total ₹ 220 Cr https://thekredible.com/company/gramophone/financials View Full Data To access complete data, visithttps://thekredible.com/company/gramophone/financials Total ₹ 374 Cr https://thekredible.com/company/gramophone/financials View Full Data To access complete data, visithttps://thekredible.com/company/gramophone/financials Cost of materials consumed Cost of materials consumed Employee benefit Employee benefit Information technology Information technology Advertising promotional Advertising promotional Provision for Trade Receivables Provision for Trade Receivables Others To check complete Expense Breakdown visit thekredible.com View full data Despite a decent scale, losses for the Gurugram-based company grew 48.7% to Rs 58 crore in FY23 from Rs 39 crore in FY22. Its ROCE and EBITDA stood at -119% and -17.4% respectively. FY22-FY23 FY22 FY23 EBITDA Margin -21% -17.4% Expense/₹ of Op Revenue ₹1.22 ₹1.18 ROCE -57% -119% On a unit level, it spent Rs 1.18 to earn a rupee in FY23. With procurement costs (Rs 303 crores) accounting for almost 95% share of revenues (Rs 316 crores), Gramophone has an obvious margin challenge to manage, the common issue for all agritechs, unless they provide services. With other costs being much less elastic by now, there is no way out but to increase margins or topline without addition to non-procurement costs. Past performance indicates that it is easier said than done, and to that extent Gramophone, despite proving its market case, will need to pull off some major surprises to move into the black. With the plethora of agritechs out there, it will hopefully not need to search out the right answer for too long. Gramophone has raised around $18 million to date including its $10 million Series B round led by Z3Partners. According to the startup data intelligence platform TheKredible, InfoEdge is the largest external stakeholder with 32.89% followed by Z3Partners and Siana Capital. Its co-founders Tauseef Ahmed Khan and Nishant Vats cumulatively hold 27.16% of the company.

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Venturi picks up over 5% stake in Peak XV-backed K12 Techno for $27 Mn

Venturi Partners has announced a purchase of a $27 million worth stake in K12 Techno Services from Navneet Learning LLP, subsidiary of Navneet Education Limited. This is the second secondary round in K12 Techno in the last eight months. In a stock exchange filing, Navneet Education Ltd disclosed that it will divest 5.12% stake in K12 Techno against $27 million. It will also retain a 14.35% stake in the firm after this transaction. This roughly valued the Bengaluru-based firm at around $540 million. Investing out of its $180 million maiden fund, Venturi will join K12 Techno’s existing shareholders such as Peak XV Partners, Kedaara Capital, Sofina Ventures, and Navneet Learning LLP, to support the management team led by Jai Decosta, CEO of K12 Techno. For the uninitiated, K12 Techno runs the chain of Orchids International Schools. The 14-year-old company provides full stack education, content, and technology services to more than 900 educational institutions across the country through a combination of its own brand and a curriculum and technology platform. The firm provides management services to ICSE and CBSE curriculum schools from kindergarten to X-XII, based in large metros like Bengaluru, Mumbai and Gurugram under the ‘Orchid’ brand. As per the company, its brand, content and technology has been used by over 300,000 students in the K-12 space in India. It also claimed to have grown at a CAGR of 40% over the last five years. In September, K12 Techno raised investment from Kedaara Capital against a significant minority stake in the company. It also provided a partial exit to Peak XV Partners (formerly known as Sequoia Capital India). Check startup data intelligence platform TheKredible for the complete shareholding pattern. With this, K12 Techno will join Venturi Partners’ portfolio of consumer-focused investments in India and Southeast Asia which includes Livspace, Country Delight, Believe, Pickup Coffee, and DALI. According to TheKredible, the company registered Rs 382 crore in revenue in FY23 with Rs 39 crore loss. The firm expected to close FY24 with Rs 450 crore with EBITDA of nearly Rs 100 crore.

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| 2d

Cybersecurity startup Treacle raises pre-seed round led by IPV

Cybersecurity startup Treacle has raised Rs 4 crore in its pre-seed round led by Inflection Point Ventures (IPV). The proceeds will be used to enhance technical and business development, marketing and office expenses, partnerships, and expansion in the Indian market. Led by co-founders Subhasis Mukhopadhyay, Subhajit Manna, and Partha Das, Treacle’s AI-based deception technology provides advanced protection by analyzing attacker behaviour, diverting them into mirage networks, and issuing early warnings to SOC analysts. Additionally, the implementation of an AI-based early warning system enhances its capability to identify threats proactively to stay ahead of evolving cyber threats. Since its inception, Treacle has secured grants such as the C3iHub grant and the SISFS grant, totalling Rs 26 lakhs, in 2021 and 2022, respectively. Additionally, the startup represented India under DPIIT and participated in a sponsored delegation trip to Dubai in 2022. According to startup data intelligence platform TheKredible, cybersecurity startups raised around $75 million across seven deals in 2023. This is the third funding in this space in 2024 including Silence Laboratories and Vijay Kedia-backed TAC Security. Earlier this year, artificial intelligence-driven cybersecurity platform SentinelOne acquired PingSafe in a cash and stock deal.

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WoodenStreet revenue nears Rs 200 Cr in FY23; remains profitable

Omnichannel custom furniture platform WoodenStreet has maintained its growth trajectory, achieving over 50% year-on-year sales growth in recent years. Despite the consistent scale, the Jaipur-based firm remained profitable for the past four years. WoodenStreet’s revenue from operations grew 48.1% to Rs 194 crore in FY23 from Rs 131 crore in FY22, its annual financial statements filed with the Registrar of Companies show. Founded in 2015, WoodenStreet offers home solutions including solid-wood and modular furniture, kitchen and wardrobe, home decor, lighting, and furnishings. It currently operates with over 90 stores and caters to more than thirty thousand furnishing products. The sale of furniture, furnishing, and decor items was the sole source of revenue for WoodenStreet. It also made Rs 3.54 crore from interest on deposits and investments, tallying the total revenue to Rs 198 crore during the fiscal year ended March 2023. For the custom furniture platform, the cost of procurement of furniture, furnishing, and decor items accounted for 62.7% of the overall expenditure. In step with scale, this cost grew 46.4% to Rs 123 crore in FY23. Its employee benefits, rent, advertising and promotion, bank charges, electricity, legal, and other overheads took the firm’s total expenditure up by 50.8% to Rs 196 crore in FY23 from Rs 130 crore in FY22. Check TheKredible for the detailed expense breakup. Expenses Breakdown Total ₹ 130 Cr https://thekredible.com/company/woodenstreet/financials View Full Data To access complete data, visithttps://thekredible.com/company/woodenstreet/financials Total ₹ 196 Cr https://thekredible.com/company/woodenstreet/financials View Full Data To access complete data, visithttps://thekredible.com/company/woodenstreet/financials Cost of materials consumed Cost of materials consumed Employee benefit Employee benefit Rent Rent Advertising promotional expenses Advertising promotional expenses Bank charges Bank charges Electricity Electricity Others To check complete Expense Breakdown visit thekredible.com View full data The consistent expansion and controlled cost mechanism have helped WoodenStreet to book profits for the past four fiscal years. Its ROCE and EBITDA margin stood at 1% and 3.4% respectively. On a unit level, it spent Rs 1.01 to earn a rupee in FY23. WoodenStreet has raised $34 million to date including its $30 million Series B round led by WestBridge. According to the startup data intelligence platform, TheKredible, Indian Angel Network (IAN) was the largest external stakeholder with 11.76% followed by Rajasthan Venture Capital Fund and WestBridge. FY22-FY23 FY22 FY23 EBITDA Margin 3% 3.4% Expense/₹ of Op Revenue ₹0.99 ₹1.01 ROCE 7% 1% As of March 2023, WoodenStreet had cureent assets of Rs 126 crore including cash and bank balances of Rs 45.2 crore. As per Fintrackr’s estimates, its enterprise value to revenue multiple stood at 6X, which is decent when compared to its other VC-backed consumer-facing internet firms. The furniture business is challenging at many levels. Be it sourcing, designs, managing inventory and product degradation, sellers have usually slipped up at one or many of these. WoodenStreet has built some good street cred by managing a profitable journey so far. The obvious challenge is to grow to the next level, which would be Rs 500 crore plus, without breaking the bank. With sales mostly in the NCR region for now, the online model comes with limitations, overcoming which, in the form of more warehouses, higher logistics costs, etc is expensive. All this, while carving out a niche that protects it from the looming presence of say, an Ikea, which will have a pan India presence by 2026 or thereabouts.

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| 3d

Atomgrid raises Rs 10 Cr in seed round led by Merak Ventures

Atomgrid, an R&D-first platform for contract development, manufacturing and sourcing of specialty chemicals, has raised Rs 10 crore (around $1.2 million) in its seed round led by Merak Ventures. The round also saw participation from Dexter Ventures, Upsparks, Point One Capital and UniCards’s founders Nitin Gupta and Prateek Jindal. The proceeds will be used to expand its in-house R&D infrastructure, increase global outreach, build a supply chain tech platform and hirings, the firm said in a press release. Founded by Lakshit Bansal, Siddharth Gupta and Pratik Chowdhury, Atomgrid is an R&D first platform for contract development, manufacturing and sourcing of specialty chemicals. The platform aims to empower Indian chemical manufacturers to establish a global footprint by solving critical challenges faced by them on R&D, global outreach, raw material sourcing and tech enablement. Atomgrid competes with 3one4 Capital-backd Scimplifi and Nexus-backed Covvalent. The investment in Atomgrid marks Merak’s third significant investment of the year. Previously, it invested in Farmtheory and Rupyz.

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| 3d

IRDA imposes Rs 1 Cr fine on Go Digit Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 1 crore on IPO-bound Go Digit General Insurance for inordinate delay in the filing the particulars of the joint venture agreement related to the change in the conversion ratio of compulsorily convertible preference shares (CCPS) issued by its parent company to FAL Corporation. In November, the regulator had issued a show cause notice to the firm in the matter. About 63,00,000 CCPS were issued by Go Digit’s parent company—Go Digit Info Works Services Pvt. Ltd. (GDISPL)— to Fairfax Group-owned FAL Corporation. During the time of the joint venture agreement in 2017, it was agreed upon that the conversion ratio was “1 CCPS for 2.324 equity shares”, which was changed by the company to “2.324 CCPS for 1 equity share.” Instead of 63,00,000 CCPS, a total of 78,00,000 were issued by GDISPL, the regulator noted in the order date of May 2, 2024. The company’s response further admits that “the specific non-submission of JV agreement to the authority was purely inadvertent and unintentional.” Digit Insurance has been facing issues from the regulator ever since it filed its DRHP in August 2022. Initially, SEBI did not provide the approval and sought additional information while it also returned Digit’s prospectus over employee stock plans. In April 2023, the company refiled its draft IPO papers. In November, the firm received show cause notice and multiple advisories from IRDAI for non-disclosure of change in the conversion ratio of compulsorily convertible preference shares (CCPS). However, Digit managed to get SEBI’s approval to raise funds through IPO in March this year. Digit is among a bunch of companies which had also faced friction from the regulators in the past. Last month, FirstCry had to refile its draft IPO papers after SEBI’s concern. Earlier, fintech firm MobiKwik and travel tech company TBO also refiled their draft papers with reduced IPO sizes.

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Medial Quiz

Which FAANG company started as a research project at Stanford University?

•   Amazon•   Google•   Netflix•   Apple
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| 3d

Tiger Global-backed GOAT Brand Labs scales over 8X in FY23

D2C brand aggregator GOAT Brand Labs secured $50 million in funding as part of its Series A round at the onset of FY23. The funding powered the company to an over eightfold growth during that period. GOAT Brand Labs’ revenue from operations surged 746% to Rs 139.6 crore in FY23 from Rs 16.5 crore in FY22, its annual financial statements filed by the group company in Singapore show. GOAT is a marketplace roll-up platform that acquires direct-to-consumer (D2C) brands and scales them with its expertise. The company has around 19 subsidiaries under its portfolio and has done a bunch of acquisitions since its inception, including Abhishti, Doggie Dabbas, Frangipani, Hipkoo The Label Life, Voylla, and Leafy Tales. The sale of products from its acquired brands is the primary source of revenue of GOAT Brand Labs. It also made Rs 17.98 crore from non-operating activities, taking the total income to SGD 25.5 million or Rs 157.6 crore in FY23. For the D2C brand aggregator, the cost of procurement of products formed 25% of the overall expenditure. This cost surged 6X to Rs 61 crore in FY23 from Rs 10 crore in FY22. Its employee benefits, selling and marketing, finance, legal/professional and other overheads catalyzed the overall expenditure by 395% to Rs 237.87 crore in FY23 from Rs 48 crore in FY22. See TheKredible for the detailed expenditure. Expense Breakdown Total ₹ 48.02 Cr https://thekredible.com/company/goat-brand-labs/financials View Full Data To access complete data, visithttps://thekredible.com/company/goat-brand-labs/financials Total ₹ 237.87 Cr https://thekredible.com/company/goat-brand-labs/financials View Full Data To access complete data, visithttps://thekredible.com/company/goat-brand-labs/financials Cost of sales Selling and marketing Finance cost Employee benefits Administrative & others To check complete Expense Breakdown visit thekredible.com View full data Notably, the company invested SGD 11.31 million (Rs 70 crore) including in the acquisition of the brand where it spent SGD 10.62 million (Rs 65.6 crore) during FY23, according to the cash flow statements filed by the group company in Singapore. The growth in marketing and employee benefits led to an increase in losses by 158% to Rs 80.28 crore in FY23 from Rs 31 crore in FY22. Its ROCE and EBITDA margins stood at -25% and -22%, respectively. FY22-FY23 FY22 FY23 EBITDA Margin -161% -22% Expense/₹ of Op Revenue ₹2.91 ₹1.70 ROCE -12% -25% On a unit level, it spent Rs 1.70 to earn one rupee in FY23. GOAT Brand Labs has raised over $87 million to date across rounds. According to the startup data intelligence platform TheKredible, Tiger Global is the largest external stakeholder followed by Flipkart and Mayfieled India. Head to TheKredible for the complete shareholding pattern. At a time when D2C brands face the prospect of showing a viable bottomline over topline, GOAT Brand Labs will also have to face up to the same challenge soon. While it has just about hit its growth straps, going ahead, it will be under pressure to show growth momentum can overtake momentum on expenses comfortably. Not doing so will not impact just valuations, but viability as well.

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TBO raises Rs 696 Cr from anchor investors

Online B2B travel distribution platform Travel Boutique Online (TBO) has offered Rs 696 crore worth of shares to anchor investors as part of its initial public offering. The board at TBO Tek has passed a resolution to offer 75,70,807 equity shares at an issue price of Rs 920 each to its anchor investors, its regulatory filing accessed from BSE (Bombay Stock Exchange) shows. ABU Dhabi Investment, ICICI Prudential, Kotak Mahindra Securities, Nippon Life, SBI Technology Opportunities, Axis Mutual Fund, Goldman Sachs, Aditya Birla, and Invesco India are some key anchor investors for the company. Out of the total allocation of 7,570,807 equity shares to the anchor investors, 3,155,236 equity shares were allocated to 14 domestic mutual funds through a total of 26 schemes, the filing further added. TBO has initiated its public offering from today (8th May-10th May) 2024 with a price band of Rs 875-920 with the minimum bid quantity of 16 shares. In the DRHP, the Gurugram-based firm had proposed to raise funds through the issue of equity shares of face value of Rs 1 each consisting of a fresh issue of equity shares aggregating up to Rs 400 crore and an offer for sale of up to 12,508,797 equity shares. As per the DRHP, Lap Travel controls the largest holding in the firm with a 25% stake followed by Augusta TBO which has a 24.32% stake in the company. Bhatnagar and Dhingra control 20% and 5.63% stake respectively. During the nine months (March 23- Dec 23) of FY24, TBO Tek recorded a consolidated revenue of Rs 1,023 crore with a profit of Rs 154 crore. Importantly, income from hotels and packages comprised 72% of its total revenue while collections from air ticketing contributed 25% of its revenue.

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Myelin Foundry raises $4 Mn led by SIDBI Venture Capital

Deep tech AI startup Myelin Foundry has raised $4 million in a new round from SIDBI Venture Capital Limited (SVCL). Other investors include Endiya Partners, Pratithi Investment Trust, and Subh Labh. Last year, the Bengaluru-based startup had raised $3 million in its Series A round led by Visteon Corporation and others. The proceeds will be used to strengthen Myelin’s AI platforms, support its expansion into international markets, and solidify its position as a leader in the edge AI space. Founded in January 2019 by Dr. Gopichand Katragadda and Ganesh Suryanarayanan, Myelin Foundry’s platforms deploy artificial intelligence in real-time at the edge to provide unparalleled video and audio experiences and outcomes. Its customer base includes leading global automotive and OTT (over-the-top) players eager to use AI’s power in their automotive and customer devices. The global artificial intelligence market size was estimated at $200 billion in 2023 and is projected to grow at a CAGR of 36.6% from 2024 to 2030. Myelin is positioned to be a key player in this space.

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FreshToHome earns Rs 25 Cr net commission from India in FY23

Online fresh meat and seafood ordering platform FreshToHome has been struggling to scale and this is evident from a marginal fall in its revenue during the fiscal year ending March 2023. However, the Bengaluru-based firm managed to cut losses by 22% in the same period. FreshToHome’s revenue from operations saw a mere decrease of 1.6% in FY23, its consolidated financial statements filed by the company’s ultimate holding entity in Singapore show. The sale of products (meat, seafood et al) was the primary source of FreshToHome gross merchandise value (GMV). Income from sales commission and royalties were other revenue drivers for the Singapore-incorporated company in FY23. See TheKredible for the detailed revenue breakdown. Notably, FreshtoHome worked through different business combinations in India and the UAE. The company booked only Rs 25 crore from net commission and royalty in India. According to its spokesperson, this was net income which roughly translates into Rs 800 crore of GMV in FY23. FreshToHome follows a cash-and-carry model in the UAE where it earned Rs 100 crore of gross sales during the fiscal year ended March 2023. FreshToHome spent Rs 323 crore on sales and marketing in FY23 which was 23.5% less when compared to FY22. The cost of procurement formed 17.3% of the overall cost which stood at Rs 93.5 crore in FY23. The firm’s burn on employee benefits, legal-professional, delivery charges, contract labor, packaging, and other overheads catalyzed its overall expenditure to Rs 539 crore in FY23 from Rs 655.5 crore in FY22. Head to TheKredible for the detailed expense breakup. Reduction in sales and marketing costs helped FreshToHome to contract its losses by 21.7% to Rs 409.4 crore in FY23 from Rs 522.9 crore in FY22. Its ROCE and EBITDA margins stood at -82% and -314% respectively. On a unit level, it spent Rs 4.88 to earn a rupee in FY23. FY22-FY23 FY22 FY23 EBITDA Margin -392% -314.1% Expense/₹ of Op Revenue ₹5.84 ₹4.88 ROCE -226% -82% FreshtoHome has raised over $290 million to date including its $104 million Series D round led by Amazon Sambhav Venture Fund in February last year. According to the startup data intelligence platform TheKredible, Iron Pillar is the largest external stakeholder followed by Raed Ventures. FreshToHome competes with Licious, Zappfresh, BBDaily, and Easymeat among a few others. During FY23, Licious’ gross income saw a modest 9.6% growth to Rs 747.7 crore from Rs 682.5 crore in FY22. The company’s losses remained flat at Rs 500 crore in FY23 against Rs 485 crore in FY22. The firm recently claimed that it has achieved an annual revenue run rate of $100 million, or around Rs 850 crore for FY24. Zappfresh ended FY23 with Rs 57 crore revenue and a nominal profit of Rs 3.5 crore. The problems being faced by FreshtoHome are not unique to it. Clearly, there are assumptions that have not held up about the Indian market, the most obvious being pricing of meat and related products. The market has simply refused to accept the kind of premium these firms demand, leading to failure to build long term relationships with customers. In the case of FreshtoHome, the ‘pivot’ to UAE is unlikely to be done at the same scale or using the same tactics, as the firm will probably not spend as much on market penetration. Cultivating relationships as a supplier with a core group of customers, thanks to higher average meat consumption and purchasing power means they have a far better chance of making it there, even as margins are unlikely to improve further due to local competition. The continuing high losses for these firms means that survival itself could become an issue if a health scare were to turn up, always a risk with meat products. While we won’t be looking out for a turnaround in FY24, we do believe that FY25 could be make or break for quite a few firms in the segment.

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Log analytics startup Parseable raises $2.75 Mn in seed round from Surge, others

Bengaluru-based log analytics startup Parseable has raised S$2.75 million in its Seed round led by Surge and NP-Hard Ventures. Funds raised will be used to accelerate Parseable’s innovation in managing the increasing amount of log data generated by today’s digital businesses, the company said in a press release. Parseable uses open formats such as Apache Parquet and Apache Arrow, which are crucial for breaking down the silos of data that typically exist within organizations. By adopting these open standards, Parseable ensures log data is not just accessible but also interoperable, making it easier to integrate with other tools and systems. With this unified data ecosystem, businesses can get insights from logs and other data sources together, enhancing overall business intelligence. Parseable is used across the globe by leading fintechs, cybersecurity firms, and healthcare, among others. Peak XV Partners’ Surge has included more than 330 founders and over 140 startups across 16 sectors in less than five years. To date, Surge startups have collectively raised over $2 billion in follow-on funding post the accelerator program.

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Agritech startup BharatRohan raises $2.3 Mn in pre-IPO round

BharatRohan, an agtech firm focused in drone-based hyperspectral remote sensing, has raised $2.3 million in pre-IPO round from Villgro Innovation Foundation, Caspian, RevX, and Venture Garage. The proceeds will be used on developing proprietary edge computing drones specifically for precise crop monitoring and variable pesticide application, the firm said in a press release. These drones will be made available to rural entrepreneurs through franchise-based models. Additionally, the company plans to design and develop compact hyperspectral and multispectral sensors for drones. Founded by Rishabh Choudhary and Amandeep Panwar in 2016, BharatRohan currently supports 50,000 farmers covering 2,00,000 acres in five states with its advanced drone-based decision support system (DSS) known as BharatRohan CropAssure. This system identifies diseases, pests, and nutritional deficiencies in the early stages, enabling integrated pest management (IPM) strategies for residue-free crop cultivation. BharatRohan plans to expand its operations and offerings in 15 Indian states, covering 10 lakh acres by 2025. It claims to have shown growth, increasing revenue 3x and profit by 200% from the last financial year.

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Fodder ecosystem builder Cornext raises $2.2 Mn from Omnivore

Cornext, which is building a fodder ecosystem to support dairy cattle farmers, has raised $2.2 million in a seed round from Omnivore. According to Cornext, the funds will be used to ramp up its yearly silage production to 1 million metric ton by 2026 and invest in R&D in baling technology. Founded in 2015 by Madhav Kshatriya and Feroz Ahmed, Cornext’s technology makes compact 50 kg silage bales, which are sold to dairy farmers through a network of village-level fodder entrepreneurs. So far, the startup has launched 400 fodder entrepreneurs across India and has begun exporting its silage baling machines across Asia, Africa, and Latin America. Hyderabad-based Cornext is serving as a member of the National Advisory Council of India’s Department of Animal Husbandry. In 2020, the startup received the national best startup award in agriculture-allied sectors from the government of India. Its institutional clientele to date includes AMUL, SUMUL, BANAS, MILMA, KMF, and many other large dairies and cooperatives.

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JIIF incubated Startup Select Brands raises 6.5 Cr in pre-Series A

Select Brands, incubated at JITO Incubation and Innovation Foundation (JIIF), has secured Rs 6.5 crore in its Pre-Series A funding round led by Agra Gwalior Pathways and Airen Holdings. Other marquee investors include We Founder Circle, Prataap Snacks, Apricot Foods, Workie, and IVY League Ventures. The funding will be utilised to expand its current operations and to explore new territories and broaden its reach through category expansion, the company said in a press release. Founded by brothers Agam Choudhary and Saksham Jain in 2022, Select Brands’ journey began with the launch of Kyari in April 2022, a D2C brand offering home-grown plants. With multiple plant varieties catering to different needs and spaces, Kyari quickly gained traction among plant enthusiasts. “Basically, we are entering multiple categories by launching new brands and focusing on the growth of existing ones. Approximately 70% of the capital will be invested in existing sub-brand growth, which is Kyari, while around 30% will be allocated to new sub-brands,” said Choudhary in a press release. Kyari claims to have sales of Rs 4 crore in its first fiscal year (FY23) and currently records monthly sales of approximately Rs 1.5 crore. JITO Incubation Centre is a structured program that helps with essential resources for startups, including vital components such as mentorship, a global network, technology, peripheral services (such as legal and financial assistance), and business connections, all under one roof.

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ICON raises $1.2 Mn in seed round from DSG Consumer Partners, others

ICON, an internet-first direct-to-consumer luggage and travel accessories (LTA) startup, has raised $1.2 million in its seed round led by DSG Consumer Partners with participation by a clutch of angel investors. The proceeds will be used to ramp up ICON’s existing product line, expand its team, strengthen its distribution network, and boost its innovative portfolio. Founded by Mohammad Patel, Poojan Shah, Fazal Lakhani, and Aakash Mehta, ICON’s product portfolio consists of hard luggage, backpacks, and handbags. The tiro’s previous venture MyFitness was acquired by Mensa Brands in 2022. Through innovative products, ICON aims to capitalise on the post-pandemic travel renaissance, which is driving a luggage revolution. As per an industry report, the Indian tours and travel industry is poised for a growth of 12–15% in fiscal 2025, and the Indian luggage market is estimated to be Rs 20,000 crore where branded players are expected to make up about 54% of the market.

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Medial Quiz

Which FAANG company holds the patent for a system that uses natural language processing to generate automated responses to customer inquiries?

•   Apple•   Tesla•   Amazon•   Microsoft
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