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Hike’s revenue soars 8X to Rs 150 Cr in FY23; losses up 24%

EntrackrEntrackr · 1y ago
Hike’s revenue soars 8X to Rs 150 Cr in FY23; losses up 24%
Medial

After years of stagnant growth and change in business, Hike posted a notable increase in its scale in the last fiscal year. Hike’s Rush Gaming Universe (RGU)—which hosts multiple skill-based casual games—grew nearly 8X and crossed the Rs 150 crore revenue mark in FY23. The firm’s losses, however, also stood close to Rs 150 crore in the same period. Hike’s revenue from operations skyrocketed 7.8X to Rs 150.5 crore during the fiscal year ending March 2023 as opposed to Rs 19.21 crore in FY22, according to its standalone financial statement with the RoC. Hike generates revenue from commission on entry fees, winning amount and membership fees for joining the application as a VIP member. Previously, Hike used to be a P2P messaging application but in January 2021 it shut down the product and switched to a different domain by introducing two new platforms Vibe and Rush. Vibe is a social media platform to watch videos together whereas Rush is a real money skill-based gaming platform which hosts multiple casual games. The company also earned Rs 1.4 crore via interest and gain on investments and other non-operating income during the year. Including these, its overall revenue reached nearly Rs 152 crore in FY23. As per startup data intelligence platform TheKredible, marketing expenses emerged as the largest cost element for Hike which grew 4X to Rs 142.65 crore in FY23 from Rs 35.86 crore in FY22. Its employee benefit expenses accounted for 35% of the total expenditure and went up 46.2% to Rs 104.42 crore in FY23. Importantly, this cost also includes employee share based payment (settled in equity) of Rs 26.71 crore. Due to the GST crackdown on real money gaming companies coupled with a challenging funding environment, Hike’s Rush Gaming Universe (RGU) had fired around 55 people or 22% of the total workforce. To check complete Expense Breakdown visit thekredible.com View full data Hike’s expenses on server, information technology consultancy, payment gateway and other overheads catalyzed its total expenditure by over 2X to Rs 299.3 crore in FY23 as compared to Rs 140.4 crore in FY22. Visit TheKredible for complete expense breakdown and YoY performance. Despite rising expenses, the company’s losses didn’t increase at that pace. Its losses increased 24% to Rs 147.3 crore during FY23 as compared to Rs 118.7 crore in FY22. Moreover, its outstanding losses mounted to Rs 1,923 crore in the last fiscal year. Hike’s cash outflows from operations, however, declined by 9.5% to Rs 94.5 crore during FY23. Its EBITDA margin improved to -93.92% during the year which can be ascribed to the rising scale. FY22-FY23 FY22 FY23 EBITDA Margin -525% -93.92% Expense/₹ of Op Revenue ₹7.31 ₹1.99 ROCE -61.20% -136.21% On a unit level, the firm spent Rs 1.99 to earn a rupee of operating revenue in FY23. Hike turned unicorn in 2016 when Temasek led a $175 million funding round at a $1.4 billion valuation. In January 2021, it shut down its chat services to enter the real money skill-based gaming space. Since then, it has raised three undisclosed funding rounds from various investors. Its last funding round came in May 2022 led by Web3 investor Jump Crypto to develop Rush Gaming Universe (RGU) — a web3 based social gaming metaverse. Hike’s efforts to find a perfect fit seem to have paid off as the company generated a healthy revenue — even though it took a long time to get there. The company’s losses, however, are still a point of concern. From the time it first raised money in 2013 to the present day, Hike has seen its earliest investor Bharti Airtel grow five times in revenue. Even Softbank, the other early backer, has written off its interest in the firm sometime back as inconsequential. While that takes some pressure off, there is no denying that its legacy weighs heavily on Hike, even when it seemingly is the closest to discovering a viable business model. Will it be able to sustain this new momentum long enough to finally deliver a worthwhile return to any of its investors? Time will tell.

Cult.fit’s income crosses Rs 1,000 Cr in FY24, losses remain flat

EntrackrEntrackr · 7m ago
Cult.fit’s income crosses Rs 1,000 Cr in FY24, losses remain flat
Medial

Fitness tech company Cult.fit underwent a key leadership change in FY24 after promoting co-founder Naresh Krishnaswamy to CEO. He succeeds co-founder Mukesh Bansal, who transitioned to the role of executive chairman. While the company achieved over 30% growth in scale under the new leadership, the losses remain unchanged in the last fiscal year. Cult.fit reported a 33.6% increase in its operating revenue of Rs 927 crore in FY24 compared to Rs 694 crore in FY23. Revenue from fitness subscriptions, including flagship services like Cultpass and Cult.fit centers and platform services, accounted for 72.3% of the total revenue which increased by 46.6% to 670 crore. The sportswear and fitness equipment segment, operated under Cultsport and other operating services, contributed Rs 257 crore. Cult.fit reported a 62% decline in other income to Rs 100.45 crore in FY24 from Rs 265.36 crore in FY23 due to a plunge in Miscellaneous income which the company has not disclosed. However, Cultfit's total income stood at Rs 1,027 crore in FY24. Cult.fit operates on a hybrid fitness model combining digital offerings through its app and physical fitness centers across 300 cities in India. It provides subscription-based fitness plans (Cultpass) that grant access to gyms, group classes, and virtual training. When it comes to expenditures, employee benefit expenses contributed Rs 324 crore, including Rs 236 crore in salaries, and Rs 57 crore in employee share-based payments. While the cost of materials for Cult.fit grew by 19.6% to Rs 396 crore in FY24. Its advertising cum promotional cost grew by 40.3% to Rs 188 crore in FY24 while legal costs saw a surge of 57% to Rs 124 crore. Information technology, traveling, and other overheads took the overall cost up by 4.7% to Rs 1,563 crore in FY24 from Rs 1,493 crore in FY23. In the end, Cult.fit reported a steady loss of Rs 535 crore in FY24, slightly up from Rs 534 crore in FY23, driven by a decent increase in scale coupled with a decline in other income. Its ROCE and EBITDA margins stood at -21.5% and -22.8% respectively. Cult.fit managed to improve its expense-to-earning ratio to Rs 1.69 in the previous fiscal. Its current assets stood at Rs 1,232 crore with a cash and bank balance of Rs 349 crore in FY24. In January, Cult.fit laid off around 150 employees, stating that the decision was part of its regular annual operating planning process. To date, Cult.fit has raised over $670 million from investors including Zomato, Tata Digital, Temasek, Kalaari Capital, and South Park Commons, among others. Cult.fit has eventually followed the playbook that many dread, spending till most of the competition has been wiped out, or can't keep up. Losses finally stabilising even as growth continues indicates that the firm is well set for the next stage of the process, namely, tweaking prices and offerings to improve margins further. The unbelievable legal costs are a mystery, and one hopes to get clarity on that at some stage, but we sincerely hope it's a one off. Bigger firms have been built on those sort of costs. The acquisition of Gold Gym's India business back in 2021, or even the RPM Fit and associated brands after that pretty much guaranteed losses well into 2025, but Cult.fit could flex its muscles as it had the money in the bank. Now, it will probably look at a solid year of performance that, while cleaning out a significant part of its cash hoard, takes it closer to profitability and bigger things. The sportswear and fitness equipment business however, will remain a worry, considering the even more muscled up player in the market, French multinational Decathlon.

KaarTech posts Rs 359 Cr revenue in FY23; remains profitable

EntrackrEntrackr · 1y ago
KaarTech posts Rs 359 Cr revenue in FY23; remains profitable
Medial

Digital transformation consulting firm KaarTech raised $30 million in July 2023 and the sizable funding helped the company to hack 56% growth in its topline in FY23. However its profit remained stagnant in the same period due to a sharp rise in its employee benefit costs. While the external capital helped the firm to register 56% growth in its topline in FY23, its profit remained stagnant in the same period. Kaar Technologies’s revenue from operations spiked to Rs 359 crore in FY23 from Rs 230 crore in FY22, its consolidated financial statements filed with the Registrar of Companies show. Founded in 2006 by Maran Nagarajan, Ratnakumar N, Selvakumaran M, and George Guardian, the company specializes in SAP and S/4 HANA implementation and offers consultation, implementation, and support of SAP-based enterprise software solutions to enterprises. Income from IT services comprising software development services, support services, and maintenance were the primary sources of revenue for KaarTech. The firm’s 97% of the revenue came from exports mainly from Saudi Arabia, Qatar, Oman, UAE, and other overseas markets. Similar to other product & service oriented tech companies, its employee benefits accounted for 71% of the overall expenditure. This cost surged by 81.3% to Rs 243 crore in FY23 from Rs 134 crore in FY22. The firm’s legal professional, rent, website maintenance and development, marketing and other overheads catalyzed its overall expenditure by 65% to Rs 340 crore in FY23 from Rs 206 crore in FY22. See TheKredible for the detailed expense breakup. The 80% surge in employee benefits impacted its profit which remained constant at Rs 22 crore in FY23. Its ROCE and EBITDA margin stood at 28% and 11.5%, respectively. On a unit level, Karr Technology spent Rs 0.95 to earn a rupee of operating income in FY23. KaarTechnology has raised $35 million across rounds including its $30 million led by A91 partners in July last year. According to the startup data intelligence platform TheKredible, its co-founders Maran Nagarajan, Selva Kumaran, Chandrasekaran Venugopal, V. Chandrasekaran and Guardian George cumulatively command 78.25% of the company. FY22-FY23 FY22 FY23 EBITDA Margin 15% 11.5% Expense/₹ of Op Revenue ₹0.90 ₹0.95 ROCE 31% 28% KaarTechnology stands out for the obvious-its strength in West Asia, and the EU rather than the North America and EU combination that powers most IT firms. While the fund raise was meant to correct that imbalance with a stronger push into North America, it does leave the firm with a lot to aim for. It should also explain the sharp rise in employee costs and more, as it prepares for its US push. At its current size, it is probably still some way off from acquiring true scale that could take it all the way to a successful IPO, but chances are, the firm will get there soon.

Cyber attack hits Safexpay in FY24: revenue shrinks 67%, losses double

EntrackrEntrackr · 4m ago
Cyber attack hits Safexpay in FY24: revenue shrinks 67%, losses double
Medial

Fintrackr All Stories Cyber attack hits Safexpay in FY24: revenue shrinks 67%, losses double Mumbai-based fintech company Safexpay faced a tough fiscal year in FY24, with its revenue dropping sharply by 67% after its payment gateway was hacked in October 2023. Meanwhile, the company's losses doubled during the same period. Safexpay's operating revenue declined by 67% to Rs 88.5 crore down from Rs 269.5 crore in FY23, as per its consolidated financial statement sourced from the Registrar of Companies (RoC). Safexpay operates as a fintech company providing payment gateway solutions, digital banking, and API-based payment infrastructure for businesses, enabling secure transactions, recurring payments, and multi-currency support across various payment methods. The steep decline in revenue was mainly due to a sharp reduction in payment gateway transaction volumes, which led to a 79.57% drop in related income. Notably, the company's payment gateway was hacked, leading to significant financial and reputational damage. According to media reports, the Thane Police are investigating a Rs 16,180 crore scam linked to the breach. On the cost side, Safexpay’s total expenses decreased by 52.41% to Rs 143 crore in FY24 from Rs 300.5 crore in FY23. Employee benefit expenses fell by 17.46% to Rs 26 crore, while payment gateway charges, the firm's largest cost component, dropped by 79.57% to Rs 48 crore. Due to a hack in its core payment gateway business, legal expenses surged 5.5X to Rs 11 crore, while bad loans increased nearly tenfold to Rs 16 crore. The company also incurred a cost of Rs 21 crore after hackers breached Safexpay’s account and siphoned off the funds. Despite cost-cutting measures, Safexpay struggled to offset revenue declines, causing its net loss to widen to Rs 44 crore in FY24, compared to Rs 22 crore in FY23. Its Return on Capital Employed (ROCE) and EBITDA margin deteriorated to -186% and -42.12%, respectively. On a unit level, the firm spent Rs 1.62 to earn a single rupee in FY24. The Mumbai-based company reported current assets worth Rs 77 crore in FY24 which included Rs 10.5 crore in cash and bank balance. According to TheKredible, Safexpay has raised a total of $6 million of funding to date having Ardor Advisors and Choithram International as its lead investors. The company’s founder owns 44% of the company. The hit that Safexpay is having to endure is the kind of blow that can be fatal. Especially in the fintech business where one could argue that credibility is worth a lot more than money in the bank in this case. Safexpay faces a battle for survival no doubt, and one would have to say that the odds are lengthening unless it can find a long-term backer.

Funding and acquisitions in Indian startup this week [17 - 22 Jun]

EntrackrEntrackr · 1y ago
Funding and acquisitions in Indian startup this week [17 - 22 Jun]
Medial

As many as 41 Indian startups raised around $906.7 million in funding this week. These deals count 10 growth-stage deals and 22 early-stage deals. Moreover, eight early-stage and one growth-stage startup kept their transaction details undisclosed. In the previous week, about 31 early and growth-stage startups cumulatively raised over $336 million in capital. [Growth-stage deals] Among the growth-stage deals, 10 startups raised $857.4 million in funding this week. Quick commerce company Zepto grabbed the limelight with its $665 million funding. Ummeed Housing Finance, which provides housing and secured small ticket business loans, followed with its $76 million funding. Microlending platform Aye Finance, craft beer maker Bira 91, and fintech firm Slice also made it to the top five with $30 million, $25 million, and $20 million fundraises, respectively. D2C men’s apparel brand WROGN, small financing company Shivalik Small Finance Bank, Dvara KGFS, Aviom Housing Finance, and Jupiter’s NBFC arm Amica Finance are next on the list. [Early-stage deals] Moreover, 22 early-stage startups secured funding worth $49.3 million during the week. AI sales operating system OrbitShift spearheaded the list followed by healthtech platform Alyve Health, agriculture machinery company Balwaan Krishi, D2C fashion brand focused on custom-made The Pant Project, and SME-focused digital lending platform Supermoney. The list of early-stage startups also includes eight startups that kept the funding amount undisclosed: TaxGenie (Regime Tax Solution), Landeed, Praan, ThriveCo, Fanisko, Nirwana.ai, Lazy Cocktails & Co, and LEO1. 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 13 deals followed by Mumbai, Delhi-NCR, Chennai, Ahmedabad, Hyderabad, and Jaipur. Segment-wise, fintech startups grabbed the top spot with 12 deals. E-commerce, AI, SaaS, Food & beverages, and Healthtech startups followed this list among others. [Series-wise deals] During the week, Seed funding deals led the list with 17 deals followed by 7 Series A and 5 pre-Series A deals. Debt funding also saw 4 deals followed by Series F, Series B, pre-Seed, Series E, and Series G. [Week-on-week funding trend] On a weekly basis, startup funding surged 170% to $906.7 million as compared to around $336.45 million raised during the previous week. The average funding in the last eight weeks stands at around $421 million with 29 deals per week. [Fund launches] This week saw three significant fund launches. VentureSoul Partners launched their debut fund of Rs 600 crore to invest in established startups through venture debt. Gujarat Venture Finance Limited announced the first close of their Rs 200 crore “Prarambh Fund” targeting seed-stage tech startups with investments between Rs 1 crore and Rs 3 crore. 8X Ventures achieved a first close of Rs 60 crore for their second VC fund, aiming to invest in 18-20 early-stage deeptech startups, with a potential final corpus of Rs 300 crore. [Key hirings and departures] Here’s a summary of the key hirings and departures: Flipkart: Cleartrip, Flipkart’s travel booking unit, has appointed Anuj Rathi as its new Chief Business and Growth Officer. Vidyakul: Edtech startup Vidyakul has promoted Akhil Hari Angira to Co-founder and Chief Business Officer. He will oversee strategic partnerships, business growth, and expansion into underserved areas. Paytm: Paytm roped in Rajeev Krishnamuralilal Agarwal as a new non-executive independent director, while Neeraj Arora stepped down from the same position. Agarwal brings experience from companies like U GRO Capital and Star Health, while Arora is the founder of Halloapp and previously held positions at Meta and Google. [Layoffs] Silk product B2B marketplace ReshaMandi seems to be in deep trouble. After failing to secure Series B funding, the company has reportedly laid off 80% of its workforce and is significantly scaling down operations. It’s over Rs 300 crore debt leads to legal challenges and potential insolvency. [M&A] Ananta Capital’s beauty and wellness arm, Guardian, has acquired a 55% stake in D2C personal care startup Anveya Living, with plans to increase its stake further. Anveya Living, which owns the brands ThriveCo, Curlvana, and Anveya, will use the investment to launch new products and expand globally. Meanwhile, online travel aggregator Yatra Online has agreed to buy out its partner’s stake in the joint venture Adventure and Nature Network Private Limited (ANN), which operates in adventure tourism. Yatra Online will increase its stake in ANN from 50% to 99%, making ANN a subsidiary of Yatra Online. [Potential deals] The Indian startup scene is buzzing with potential deals. Here’s a glimpse of what’s brewing: AI-powered comic creation platform Dashtoon, with offices in India, is in late-stage talks to raise $10-12 million from a mix of new and existing investors. HealthTech startup HealthPresso is aiming to secure $1 million in pre-Series A funding, capitalizing on strong investor interest in its AI engine and distribution network. B2B SaaS platform Whatfix is on the verge of a $100-150 million funding round led by Warburg Pincus. Edtech giant Unacademy is reportedly in discussions for a historic merger with K12 Techno, the operator behind Orchids International Schools. This potential 50/50 merger could be the first major consolidation in the edtech space, which has faced a funding slowdown in recent years. Notably, Unacademy previously invested in Orchid Schools and both companies share an investor. Logistics firm Ecom Express is also reportedly in advanced talks with existing investors Warburg Pincus, CDC Group, and Partners Group to raise Rs 350-400 crore. The discussions are nearing completion, and this funding round could elevate Ecom Express’s valuation to over $1 billion, potentially making it the latest entrant to India’s unicorn club. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches] Bellavita co-founder Aakash Anand launches new venture, Unikon.ai Pocket FM partners with ElevenLabs to convert scripts into audio [Financial results this week] Awfis nears Rs 900 Cr income in FY24; losses contract 62% [News flash this week] Ola Electric gets SEBI nod for $660 Mn IPO Financial Intelligence Unit imposes Rs 18.82 Cr penalty on Binance VC firms General Catalyst and Venture Highway merge to focus on India CCI approves WeWork Inc exit from Indian co-working space Ixigo’s market cap spikes nearly 80% from the pre-IPO round Zomato, Paytm confirm acquisition talks for movie, ticketing business Flipkart-backed Blackbuck converts into a public company Peak XV tops the chart of Hurun India Future Unicorn Index 2024 Delhivery, Xpressbees looking to enter quick commerce space: Report OYO gets approval from shareholders to raise Rs 417 Cr: Report [Conclusion] The weekly funding surged around 170% to $906 million this week, majorly followed by the mega funding deal of Zepto worth $665 million. A bunch of financing companies also contributed significantly. The week saw three startup-focused fund launches by VCs namely VentureSoul Partners, GVFL, and 8X Ventures. Additionally, the week saw a layoff as Reshamandi laid off around 80% of its employees. Six months after filing a draft red herring prospectus (DRHP), Ola Electric has received approval for its initial public offering (IPO) from the Securities and Exchange Board of India (SEBI). The company, which filed the DRHP in December 2023, aims to raise Rs 5,500 crore ($660 million) through the public listing. Ixigo made a remarkable debut on the National Stock Exchange (NSE) on Tuesday, opening at a 48.5% premium above its issue price. Initially priced at Rs 93, Ixigo’s shares listed at Rs 138.5 on the NSE, while on the Bombay Stock Exchange (BSE), the shares opened at Rs 135, according to data from both exchanges. Later, the price touched Rs 194.38. Zomato and Paytm are in talks for Zomato to acquire Paytm’s movies and ticketing business. This deal is estimated to be around Rs 1,600-1,750 crore ($190-210 million). While no final decision has been made yet, Zomato says this potential acquisition aligns with their plan to focus on their core businesses and expand their “going-out” offerings. OYO got the green light from shareholders to raise Rs 416.85 crore by issuing preference shares. The funds will come from InCred Wealth by purchasing 14.37 crore Series G preference shares at Rs 29 each. Additionally, in a move to capitalize on the booming quick commerce market, logistics players Delhivery and Xpressbees are expanding their services beyond traditional e-commerce deliveries. Delhivery is now managing larger warehouses for Swiggy Instamart, which fulfills orders for quick commerce deliveries through a network of smaller, localized stores. Xpressbees is also exploring entry into this space, reportedly in talks with several players. This shift in focus highlights the growing importance of quick commerce deliveries and the potential logistics companies see in this rapidly developing market.

Funding and acquisitions in Indian startup this week [02 - 07 Sep]

EntrackrEntrackr · 10m ago
Funding and acquisitions in Indian startup this week [02 - 07 Sep]
Medial

During the week, 26 Indian startups raised around $421.29 million in funding. These deals count 4 growth-stage deals and 16 early-stage deals while 6 startups kept their transaction details undisclosed. During the previous week, 31 early and growth-stage startups cumulatively raised $490.32 million in funding. [Growth-stage deals] Among the growth-stage deals, 4 startups raised $385.61 million in funding this week. Ride-hailing app Rapido spearheaded with a $200 million worth unicorn round. Cross-border trade fintech firm Drip Capital raised $113 million followed by D2C jewellery retailer Bluestone and food delivery and grocery platform Swiggy with $72 million and $0.61 million in funding, respectively. Two growth-stage startups that did not disclose the transaction details are Xolopak and Plan B. [Early-stage deals] Further, 16 early-stage startups secured funding worth $35.68 million during the week. Proptech startup Justo Realfintech led the list followed by D2C retail brand Nutrabay, a platform for booking hostel accommodations The Hosteller, chemical recycling and sustainability startup RecommerceX, and fabless semiconductor design startup BigEndian among others. As many as 4 startups that did not disclose the funding amount raised are; Nautical Wings Aerospace, ReCircle, 0xPPL, and Carrum. 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 10 deals followed by Mumbai, Delhi-NCR, Chandigarh, Hyderabad, Pune, and Raisen. Segment-wise, E-commerce startups are on the top spot with 6 deals. Cleantech, Fintech, PropTech, SaaS, Automotive Tech, and Aviation startups followed this list among others. [Series-wise deals] During the week, Seed funding deals are on top with 11 deals followed by 5 Series A, 2 pre-Series A, 2 pre-Seed, and 1 Series E deal and more. [Week-on-week funding trend] On a weekly basis, startup funding slipped 14% to $421.29 million as compared to around $490.32 million raised during the previous week. The average funding in the last eight weeks stands at around $332.75 million with 27 deals per week. [Fund launches] VentureSoul Partners has successfully raised Rs 146.5 crore for its debut fund, targeting a total corpus of Rs 600 crore. Additionally, the Indian government has introduced a new fund called AgriSure, which is dedicated to supporting agritech startups with a financial commitment of Rs 750 crore. [Key hirings and departures] Mohit Rajani, formerly with Meta, has joined Meesho as a CPO. Freshworks onboarded former ServiceNow executive Murali Swaminathan as CTO, CoinDCX appointed Prashant Verma as chief growth and marketing officer, Wellbeing Nutrition onboarded Harleen Bhatti as the head of growth, and Nykaa (Kay Beauty) hired Sukhleen Aneja as SVP and Business Head. Meanwhile, Adda247’s Co-founder Chandan Singh and CaratLane’s MD and CEO Avnish Anand resigned from their respective companies. [Mergers and Acquisitions] Hearing care provider Hearzap has acquired Speech and Hearing Care to expand its market share in Bihar and Jharkhand, while Yatra has acquired Globe Travels to strengthen its position in the corporate travel sector and increase its customer base. [Layoffs] Airmeet, a virtual event startup, laid off around 80% (30 employees) of its tech team and some employees from its product and design teams. Dozee, a healthtech startup, also laid off around 40-50 employees from its on-field, customer success, sales, and marketing teams. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches and partnerships] Fampay launches UPI app Namaspay for foreign travelers in India Ola Electric to bring three-wheeler to market soon Zepto to launch Buy Now Pay Later service: Zepto Postpaid Mygate launches smart door locks; enters consumer electronics EaseMyTrip ventures into electric bus manufacturing Swiggy follows Zomato, pilots large order fleet in Delhi-NCR Infibeam Avenues launches CCAvenue SoundBox Max [Potential Deals] SarvaGram to raise $50 Mn from Peak XV, others B2B digital lending startup Mintifi in talks to raise $100 Mn Moneyview raising $30 Mn debt via private placement [Financial results this week] Starbucks India posts Rs 1,218 Cr revenue in FY24; losses surge 3.2X BigBasket’s revenue crosses Rs 10,000 Cr in FY24 Porter scales up 56% to Rs 2,734 Cr in FY24; losses dip 45% Swiggy reports Rs 11,247 Cr revenue in FY24; cuts losses by 44% [News flash this week] Mayhem at Arthmate after Vihaan Kumar’s arrest: COO resigns, employees exodus, and more GST Council may impose 18% GST on PAs for Small Transactions Byju’s auditor resigns over lack of transparency; founder cries foul CLSA raises Zomato price target to Rs 353 post Paytm deal Nykaa accuses former CEO Asthana of breach of confidentiality, misappropriation B2B unicorn OfBusiness eyes IPO in the second half of 2025 Coworking Space Provider IndiQube Plans IPO: Report Zepto eyes $450 Mn IPO by August 2025, initiates talks with bankers Ather Energy targets Rs 4,500 Cr IPO, to file DRHP next week: Report InMobi’s Roposo shifts to the social commerce model PharmEasy valuation slashed to $458 Mn by Janus Henderson Logistics firm Delhivery receives GST demand notice GST troubles continue for Zomato; receives another demand notice PayGlocal gets RBI payment aggregator license [Conclusion] The weekly funding shrank around 14% to $421.29 million this week. Meanwhile, two startup-focused funds launched this week namely AgriSure and VentureSoul Partners. Arthmate, a lending enabler, has been embroiled in a legal dispute with Gameskraft, leading to the arrest of its co-founder and former CEO, Vihaan Kumar. Gameskraft accused Kumar of financial irregularities and fraudulent activities, resulting in an FIR and subsequent arrest. The legal battle has caused significant disruption within Arthmate, with employee departures and a decline in company morale. Kumar’s actions, including alleged forgery and financial losses to Gameskraft, have raised serious concerns about his conduct and the impact it has had on the company. The GST Council is considering imposing an 18% GST on payment aggregators for small-value digital transactions. This move could increase costs for merchants and customers, while also impacting the profitability of fintech startups. The proposed levy could hinder the adoption of digital payments and create a more competitive landscape for payment aggregators. It is essential for the GST Council to carefully evaluate the potential consequences before making a final decision. OfBusiness, a B2B marketplace unicorn, is close to finalizing bankers for its $1 billion IPO in the second half of 2025. Meanwhile, IndiQube, a coworking space provider, is also in talks with merchant bankers to file its DRHP within the next three months. IndiQube aims to raise between $120 and $180 million through its IPO, primarily through a fresh issuance of shares.

Indian startups mop up $2.77 Bn in March 2024 quarter: Report

EntrackrEntrackr · 1y ago
Indian startups mop up $2.77 Bn in March 2024 quarter: Report
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Indian startups registered a steady growth in fund inflow during the first quarter of 2023 as they managed to cross $2.75 billion in funding. Importantly, funding in March stood out for crossing the $1 billion threshold for the first time in 2024. However, even as funding recovers, layoffs, shutdowns and departure of top-level executives continue to loom. Indian startups mopped up $2.77 billion across 326 deals in the March quarter or Q1 2024, as per data compiled by TheKredible. This included 74 growth-stage deals worth $1.87 billion and 213 early-stage deals amounting to $898 million. There were 39 undisclosed rounds. Unlike in the first quarter of 2023, two startups – Krutrim SI Designs and Perfios – entered the unicorn club after their latest fundraise in the first quarter of 2024. [Month-on-Month and Year-on-Year trend] March saw a decent jump in funding to $1.18 billion from $875 million in February and over $700 million in January. However, on a year-on-year basis, Q1 2024 recorded a fall from $12 billion in Q1 2022 and $3.4 billion in Q1 2023. [Top growth stage deals] Biotech startup Engrail scooped up $157 million in its Series B funding round to become the top-funded growth stage company in the first quarter of 2024. Audio series platform Pocket FM and logistics company Shadowfax managed to go past the $100 million funding mark in Q1 2024. Capillary Technologies, Perfios, Vivifi, Lohum, AiDash, ShareChat and Wow! Momo, were among the top 10 growth-stage deals. [Top early-stage deals] Digital lending platform mPokket, AI company Krutrim, energy tech company International Battery Company (IBC), blockchain company Avail, and generative AI startup Ema topped the list of early-stage startups. Check TheKredible for a full list. [City and segment-wise deals] City-wise, Bengaluru-based startups remain on top with 122 deals, contributing around 54% of the overall funding in the first quarter of 2024. Delhi-NCR and Mumbai followed with 77 and 54 deals, respectively. The list further counts Pune, Hyderabad, Chennai, Kolkata, Jaipur, Ahmedabad, and Thane among others. Segment-wise, e-commerce startups (including D2C brands) led the list with 64 deals followed by fintech (47), healthtech (31), SaaS (26), EV (15), AI (13), and edtech (13) startups. The complete breakdown of the city and segment can be found at TheKredible. [Stage-wise deals] Series-wise, 95 startups raised funding in Seed round followed by 71 Series A, 35 Pre-Series A, and 33 Pre-seed deals. Among early-stage, as many as 4 startups raised funding in their angel round. While 22 startups raised debt funding worth $276.65 million during the period. [Most active investors] Early-stage venture capital firm Inflection Point Ventures and Blume Ventures have emerged as the most active investors in Q1 2024 with 11 and 10 investments, respectively. Venture Catalysts was next on the list with nine deals followed by Fireside Ventures, Anicut, Accel, and Stride Ventures. The full list can be found at TheKredible. [Mergers and acquisitions] The first quarter of 2024 registered 26 merger and acquisition deals. Acquisition of Tapasya Educational Institutions by Veranda, InSemi by Infosys, Qdigi Services by Onsitego were the top 3 disclosed mergers and acquisitions deals. During the period, listed gaming firm Nazara’s subsidiary Nodwin acquired two startups: Comic Con India and Ninja Global FZCO. Among the undisclosed deals, Kuvera was acquired by fintech unicorn CRED, Captain Fresh took over CenSea while OneVerse acquired three startups including Spartan Poker, BatBall11, and Calling Station. Check the full list here. [Layoffs, shutdowns and departures] Layoffs continued in the March quarter as more than 1,100 employees received pink slips. Among them, foodtech company Swiggy topped the list with laying off of 350 employees followed by Cult.fit, InMobi, and Pristyn Care with 150, 125 and 120 employees, respectively. During the first quarter, five companies shut their operations. The list includes Resso, Rario, OKX India, GoldPe, and Muvin. Rario, however, added that it will launch a brand new platform that will enable users to play new and engaging cricket-based games. Besides layoffs and shutdowns, nearly two dozen top-level executives hung up their boots. Vijay Shekhar Sharma, founder of Paytm Payments Bank, resigned as the part-time non-executive chairman and board member of the company. Meanwhile, Third Wave Coffee’s chief executive officer Sushant Goel stepped down from his position to become a board member. The list also includes Indus Appstore CEO Rakesh Deshmukh, DealShare’s co-founder Sourjyendu Medda, and Fashinza’s co-founder Jamil Ahmed. [ESOP buyback] Amid all the ups and downs, the startup ecosystem witnessed employees stock buyback by growth and late-stage companies. For context, e-commerce company Meesho rolled out its largest ESOP buyback worth $25 million for 1,700 employees. Community management app MyGate and edtech company Classplus also announced their employee stock buyback program earlier this year. The full list can be found here. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [Conclusion] As funding revives, it is safe to say that the trend in layoffs will also subside in the coming months, if not weeks. The strength in fintechs continues, and the category will continue to seek more money and throw up the next big startups, as scale arrives faster for many. Newer categories, be it AI, Chip Design, or niche parts of healthtech look set to emerge soon, going by the churning in the markets. The big hope is that the many corporate governance issues that have plagued the ecosystem in the past two years will also take a backseat now, thanks to lessons learnt hopefully. Looking at the numbers, especially for Q1 2022 ($12 billion), many would say that opportunities and capital have been wasted. But that is the very nature of the Startup world, with tiny amounts of money and a dollop of innovation sometimes achieving what no amount of money thrown at a problem doesn’t. We remain optimistic that by Q4 of this year, India’s startup ecosystem will be stronger and more diversified than ever before.

Layoffs, departures continue as Indian startups raise $1 Bn in April: Report

EntrackrEntrackr · 1y ago
Layoffs, departures continue as Indian startups raise $1 Bn in April: Report
Medial

The year 2024 started on a good note for Indian startups: an average of $1 billion in monthly funding, which is a significant growth when compared to the previous year during which monthly funding went below $500 million three times. In April 2024, however, startups crossed the $1 billion threshold on the back of a couple of pre-IPO funding, a few late-stage rounds, and debt deals. Indian startups raked in more than $1 billion across 124 deals in April, according to data compiled by startup data intelligence platform TheKredible. This included 36 growth-stage deals worth $813 million and 65 early-stage deals amounting to $225.75 million. Moreover, there were 23 undisclosed rounds, primarily early-stage deals. During the recent Startup Mahakumbh festival, Peak XV Partners’ managing director Rajan Anandan said that Indian startups are expected to raise $8 billion to $12 billion this year. He also added that around $20 billion of private capital is lying uninvested and is committed to investment in private firms and startups in India. This estimate appears close considering the current rate of monthly funding. [Month-on-Month and Year-on-Year trend] In April 2024, there was a 14% year-on-year jump in funding from $912 million in the same month last year. Even on a monthly basis, April almost matched March’s $1.18 billion funding. Interestingly, only one startup i.e. PharmEasy managed to raise funding in three digits during the last month. Since January, homegrown startups have raised close to $4 billion, and at this rate, it may cross the $11 billion funding raised in 2023. [Top growth stage deals] Healthcare startup PharmEasy’s $216 million pre-IPO round stood at the top, though its valuation dropped nearly 90% from $5.6 billion to $710 million during the latest fundraise. Financial services firm Northern Arc also announced its $80 million Series C round while Ola Electric raised $50 million in debt even after filing draft IPO papers. Altum Credo, ProcMart, SingleInterface, Infinity Fincorp, CloudExtel, and LetsTransport also featured in the top 10 growth stage deals in April. [Top early-stage deals] Omnichannel fashion startup Lyskraft, founded by Zomato’s co-founder Mohit Gupta and Myntra and Cultfit’s co-founder Mukesh Bansal, scooped up $26 million in a seed funding round and was on the top of the list in early-stage deals in April. Gen AI startup Neysa bagged $20 million whereas spacetech company Dhruva Space and edtech firm Emversity (Beyond Odds) raised $15 million and $11 million, respectively. The rest of the early-stage startups in the top 10 list raised less than $10 million each. The list includes Traya, LightFury Games, GTM Buddy, FincFriends, and Accacia. [City and segment-wise deals] City-wise, expectedly, Bengaluru-based startups are on top with 42 deals, contributing around 26% of the overall funding in April. Delhi-NCR and Mumbai followed with 30 and 26 deals, respectively. However, Mumbai-based startups topped the list in terms of the total amount raised. The list further counts Kolkata, Hyderabad, Pune, and Ahmedabad among others. Segment-wise, e-commerce startups (including D2C brands) and fintech startups co-led the list with 19 deals each followed by healthtech (16), SaaS (15), EV (5), automotive tech (4), and foodtech (4) startups among others. Visit TheKredible for more details. [Stage-wise deals] Series-wise, 44 startups raised funding in the Seed round followed by 20 Series A deals, 13 Pre-Series A, 11 Series B deals, and 7 Pre-Seed deals. As many as 14 startups raised debt funding worth $199.2 million during the period. [Mergers and acquisitions] Indian startups saw nearly a dozen mergers and acquisitions in April of which most deals were undisclosed. Among the disclosed deals, National Investment and Infrastructure Fund (NIIF) acquired a majority stake in digital infrastructure solutions company iBUS for about $200 million. US-based Aurionpro Solutions also acquired Indian fintech company Arya.ai for $16.5 million. The notable list of M&A also includes the acquisition of Shy Tiger brands by Ghost Kitchens India, Orbit by Postman, Awign by MyNavi, and Magzter by Dailyhunt’s parent company VerSe Innovations. [Layoffs, top-level exits, and shutdown/s] The mass firing in startups continued in April as they laid off nearly 1,500 employees during the month. April surpassed the cumulative layoffs of 1,100 employees during the first quarter of 2024. Troubled edtech company Byju’s remained on top with 500 layoffs, followed by The Good Glamm Group, Healthify, and Scaler with 150 layoffs each. Check the full list here. April also saw high-profile exits from startups including five chief executives. Sujot Malhotra, CEO of Beardo, Surinder Chawla, CEO of Paytm Payments Bank, Arjun Mohan, CEO of Byju’s India, Sukhleen Aneja, CEO of The Good Glamm Group’s D2C Brands Division and Hemanth Bakshi, CEO of Ola Cabs, have quit this month. Besides layoffs and departures, Nintee, a digital health startup launched by Wingify founder Paras Chopra, announced shutting down its operations after a year of launch. During the first three months of 2024, six startups announced their shutting down operations in India. [ESOP buyback] Employees’ stock buyback also continued in April as three growth-stage companies – Pocket FM, XYXX, and The Sleep Company – announced their ESOP buyback program last month. Pocket FM bought back $8.3 million worth of stocks from employees while the rest two did not disclose the transaction details. The March quarter saw four ESOP buybacks including MyGate, Meesho, Classplus, and Imagekit. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [Conclusion] While the trajectory of fund raising is positive, its quality might worry some, as it has gone to a firm that was clearly in distress and at a massive haircut (PharmEasy), besides the large, lumpy deal from NIIF. It might also be time to relook debt funding numbers as part of overall startup funding figures, as debt is usually taken by startups that are running operations sustainably from a financial perspective, or where founders do not want to dilute stakes any more. So it’s not quite the risk capital that equity funding is. With a host of IPOs being lined up, we expect the growth trajectory to sustain as pleased investors return to find the next big opportunity.

Startups rope in new CEOs amid cash crunch, layoffs, profitability and IPO plans

EntrackrEntrackr · 1y ago
Startups rope in new CEOs amid cash crunch, layoffs, profitability and IPO plans
Medial

Management rejig and layoffs at several prominent startups have continued to make headlines this year. For layoffs, startups have cited a familiar reason i.e. redundancies, efficiencies as well as getting a step closer to profitability. As far as management changes go, reasons and circumstances vary. For instance, DealShare’s CEO position was vacant for a long time. These changes, however, also bring a fresh wave of optimism in the ecosystem, which has of late faced a host of challenges, ranging from funding crunch to stringent regulatory actions. Data compiled by TheKredible shows that this year more than 10 Indian startups have appointed, elevated or are on the verge of naming their new chief executive officers (CEOs). The list includes the likes of DealShare, MyGate, Inshorts, Cult.fit, Third Wave Coffee, Byju’s, Ola, PhonePe, and Setu, among others. Interestingly, half of them have been elevated to the role of chief executive whereas some founders took charge as the operational leaders after the exit of the existing CEO. [Elevated CEOs] The year 2024 started with a new trend of appointing new CEOs and e-commerce platform DealShare was first when they elevated Kamaldeep Singh as the new chief executive of the company from being the president of their retail business. The firm faced several challenges during the second half of 2023 as its three co-founders left the firm in a short span of time and it also had to shut down its B2B vertical after a flat growth in FY23 with rise in losses. Community management app MyGate, news aggregator InShorts and fitness tech firm Cult.fit also elevated Abhishek Kumar, Deepit Purkayastha and Naresh Krishnaswamy, respectively, as their new chief executive officers. All previous CEOs of these three companies namely Vijay Arisetty, Azhar Iqubal and Mukesh Bansal have now taken the role of chairman. Iqubal recently joined Shark Tank India season III as a judge. Also, InShorts is pivoting from news aggregation to influencer led platform which could be the reason behind this reshuffle in leadership. Cult.fit also faced challenges early this year as it fired more than 150 employees. As per the company, it reduced some redundant positions with the aim of streamlining operations. Meanwhile, fintech unicorn BharatPe finalized Nalin Negi as its full time CEO. Negi, the former chief financial officer of the company, had been working as interim CEO since January last year. Freshworks also went through a reshuffle as the firm’s founder Girish Mathrubootham stepped down from the position of CEO after 14 years. Mathrubootham has transitioned into the role of executive chairman while the company’s president Dennis Woodside has been elevated as the new CEO. Freshworks went public in September 2021. It’s important to note that most of these companies in this list had losses until FY23. Though, a few of them managed to control losses during the fiscal year. For context, DealShare’s GMV remained flat but its losses jumped 14% to Rs 502 crore in FY23. InShorts posted flat scale with 33.6% jump in losses to Rs 310 crore in FY23. MyGate, Cult.fit and BharatPe also managed to control its losses. Check the graph below for more details. [New CEOs appointed in 2024] In January, PhonePe announced the appointment of Ritesh Pai as CEO of its International Payments business while Infibeam Avenues announced the appointment of Rajesh Kumar SA as CEO of its AI business venture Phronetic.AI. These appointments appeared to be a positive sign for both companies which are expanding their businesses. Third Wave Coffee’s co-founder and CEO Sushant Goel stepped down as the firm’s chief executive role and transitioned to a board member in March this year. The WestBridge-backed company named KFC India and Nepal CEO Rajat Luthra as Goel’s replacement. Before the exit of Goel, Third Wave Coffee also went through layoffs, firing more than 100 employees. In April, Aakash Educational Services, owned by edtech company Byju’s, appointed Deepak Mehrotra as its new managing director and chief executive officer. Mehrotra joined Aakash after the exit of its chief executive Abhishek Maheshwari. Recently, the firm raised money from Manipal Group’s Ranjan Pai to clear the debt raised from Davidson Kempner in May last year. Aakash has plans for a public listing this year. Last month, API infrastructure company Setu, owned by Pine Labs, named Anand Raisinghani as new CEO of the company. Raisinghani will succeed Sahil Kini, who is the erstwhile chief executive of Setu. Earlier this month, Paytm Money’s CEO Varun Sridhar also quit the position and Rakesh Singh has been appointed as the new chief executive of the stock trading platform. Before joining Paytm Money, Singh was the CEO of fintech company Fisdom. On Monday, Adda247 appointed Bimaljeet Singh as its chief executive for skilling and higher education business. Like several edtech firms, Adda247 also went through layoffs in the last quarter of 2023. It’s worth noting that Paytm Money and Phronetic.AI are owned by public companies One97 Communications and Infibeam, respectively. In terms of financial performance, Aakash reported profit in FY22 and expected to replicate same growth in FY23. Pine Labs reported more than Rs 1,600 crore revenue with control in its losses to Rs 227 crore in FY23. Third Wave Coffee reported a three fold jump in its revenue with same growth in losses to Rs 54 crore in FY23. During FY23, PhonePe as a group posted revenue of Rs 2,914 crore and Rs 1,755 crore loss. During the period, Adda247 reported Rs 115 crore revenue and Rs 110 crore loss. [Founders, executives took the charge after CEOs exit] Last month, Arjun Mohan, the CEO of Byju’s India operations, stepped down from his position seven months after joining the edtech firm. After his exit, the company’s founder Byju Raveendran returned as the operational leader to see day-to-day functioning. During the process, Byju’s also sacked more than 500 employees. It’s worth highlighting that Byju’s has been facing a cash crunch for a long time and failed to pay the salary of its employees on time. Recently, Ola Cabs’ CEO Hemant Bakshi left the firm after three months of joining. His departure came at a time when Ola is gearing up for an initial public offering (IPO). The company also fired 10% of its total workforce. In the interim, Ola founder Bhavish Aggarwal will oversee operations until a new executive is appointed. In January, Indus Appstore’s CEO Rakesh Deshmukh announced quitting the firm. Since then, the firm has been led by ⁠its CPO and co-founder Akash Dongre, and CBO Priya Meenakshi Narasimhan. The firm is yet to announce the name of the official CEO. As per a media report, Beardo’s CEO has gone on a year-long sabbatical from April this year. During his absence, CBO Siddharth Vaya, and Koteshwar LN, head of digital first business, are expected to lead the company. Beardo was acquired by Marico Group in June 2020. In the ongoing calendar year, Sukhleen Aneja, CEO of The Good Glamm D2C vertical and Subramanyam Reddy, CEO of upGrad’s Knowledgehut also announced their departure from the company. While Knowledgehut is yet to name the new CEO, The Good Glamm has decided not to appoint a new CEO for the D2C vertical. As per reports. Ketan Bhatia and Ankita Bhardwaj will lead the brand’s business operations. Last month, The Good Glamm Group resorted to layoffs and went through top level restructuring as it is gearing up for public listing. More recently, Paytm Payments Bank’s CEO and MD Surinder Chawla decided to hang up his boots. He will be relieved from his positions on June 26 while the firm is yet to announce his replacement. Public company Paytm laid off more than 1,000 employees in December 2023 in a cost cutting effort. As per reports, the firm also went through layoffs amid back to back departures of top level executives and the recent diktat by RBI. However, Paytm denied any fresh layoffs at the company. When it comes to financial performance, Byju’s and Ola are in deep losses and Beardo slipped into the red in FY23. Edtech unicorn upGrad reported close to Rs 1,200 crore revenue in FY23 with Rs 558 crore loss in FY23. Good Glamm Group is yet to file its annual financial report for FY23. [Conclusion] For those who have sniped at CEO salaries at startups, the last year should be a good indication of just why salaries refuse to moderate. Besides the high turnover, it is no secret that many investors and even founders have considered CEO’s as a horses for courses option, taking in people with specific skill sets when they were relevant for the organisation. Thus, be it fundraising, cost cutting, or all out for growth mindset, we have seen how different CEO’s bring their own competencies, which, unfortunately, have a use by date in most cases. Many of course can simply struggle to adapt to the startup culture and the unstructured challenges it throws up, which can be the worst outcome for a startup with little achieved during their tenures. Perhaps the toughest ask of a startup CEO is what she is expected to do in what seems like compressed time to most, making it most challenging to attract quality personnel at times. That is also one reason why we see investors take over the job of bringing in the CEO when they feel a founder needs to move on to a more strategic role or simply take a break from the intense pressure. Don’t expect the CEO churn to slow down anytime soon for these reasons.

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