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'Online platforms changing buying pattern among urban consumers'

Economic TimesEconomic Times · 9m ago
'Online platforms changing buying pattern among urban consumers'
Medial

Consumers in metro cities are increasingly shifting from top-up purchases to stock-up purchases on online platforms, according to Kanaka Bhagwat, head of ecommerce at NielsenIQ. Quick commerce and ecommerce sales have grown at a rate of 30% quarter-on-quarter over the past five quarters, driven by convenience and assortment. Ready-to-eat foods, salty snacks, refined edible oils, biscuits, and packaged atta have seen significant growth on quick-commerce channels. FMCG companies like Nestle, ITC, Hindustan Unilever, Dabur, and Emami have reported double-digit growth on quick-commerce platforms. In metro markets, quick-commerce and ecommerce contributed 85% to incremental sales in Q3 2024, signaling the growing dominance of ecommerce.

Funding and acquisitions in Indian startup this week [09 - 14 Sep]

EntrackrEntrackr · 11m ago
Funding and acquisitions in Indian startup this week [09 - 14 Sep]
Medial

During the week, 24 Indian startups raised around $228.79 million in funding. These deals count 6 growth-stage deals and 13 early-stage deals while 5 startups kept their transaction details undisclosed. During the last week, 26 early and growth-stage startups cumulatively raised $421.29 million in funding. [Growth-stage deals] Among the growth-stage deals, 6 startups raised $182.65 million in funding this week. Mobile advertising network software InMobi spearheaded a $100 million debt funding round. MSMEs-focused fintech lender FlexiLoans raised $35 million followed by, employee healthcare platform Onsurity, spiritual tech startup AppsForBharat, consumer lending platform Moneyview, and HRtech platform HROne with $21 million, $18 million, $4.65 million, and $4 million in funding, respectively. Moneyview also joined the unicorn club following the fresh capital. One growth-stage startup that did not disclose the transaction details is Transcell Biologics. [Early-stage deals] Further, 13 early-stage startups secured funding worth $46.14 million during the week. Wealthtech startup Centricity led the list followed by D2C home decor and lifestyle brand Nestasia, AI reality intelligence platform Track3D, biotech-driven material R&D startup Dharaksha Ecosolutions, and sales outreach platform Futwork among others. As many as 4 startups that did not disclose the funding amount raised are; Trisu, Leezu’s, Fitday, and Agilitas Sports. 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 8 deals followed by Delhi-NCR, Mumbai, Hyderabad, and Kolkata. Segment-wise, E-commerce startups are on the top spot with 5 deals. Fintech, Healthtech, Cleantech, HRtech, Adtech, and AI startups followed this list among others. [Series-wise deals] During the week, seed funding deals are on top, with 9 deals followed by 4 Series A, 3 pre-seed, 2 pre-Series A, 2 Series B, 1 debt deal, and more. [Week-on-week funding trend] On a weekly basis, startup funding slipped 45.7% to $228.79 million as compared to around $421.29 million raised during the previous week. The average funding in the last eight weeks stands at around $331.70 million with 26 deals per week. [Fund launches] Three new funds launched this week to invest in startups. Playbook Partners has raised over $130 million for its growth capital fund. Proparco has invested $5 million in Omnivore’s third fund focused on agritech and climate sustainability. Arka Investment Advisory Services has launched its second alternative investment fund, focusing on real estate opportunities in India. [Key hirings and departures] Sudharshan Sharma, formerly with Google, joined CarDekho as a CBO for the auto business. Meanwhile, Cleartrip’s CBO Prahlad Krishnamurthi, and the CFOs of InCred (Vivek Bansal) and TAC Infosec (Vishal Jain) resigned from their respective companies. [Mergers and Acquisitions] Nazara Technologies, a prominent gaming company, made two major acquisitions. This includes a controlling stake in Moonshine Technology, the parent company of PokerBaazi, for a substantial sum of Rs 982 crore ($100 million) and a 15.86% stake in Stan, a blockchain-based e-sports fan engagement startup, for $2.2 million. GoKwik, an e-commerce enabler, acquired Return Prime, a global returns management app. Additionally, Moneyview, a digital lender, acquired Jify.co, an early salary/on-demand salary service provider. Yudiz Solutions, a listed blockchain and IT development startup expanded its offerings by acquiring a majority stake in ABCM App, a Mumbai-based digital payment solutions company. The acquisition was valued at Rs 6.14 crore. [Shutdown] InsurStaq.ai, a Delhi NCR-based startup developing generative AI solutions for the insurance industry, has shut down its operations. Despite a year of development and collaboration with insurance professionals, the company faced challenges that ultimately led to this decision. This news comes amidst a period of growth for the generative AI sector in India. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches and partnerships] IBV and FedTech unveil Indo-US launchpad to boost Indian startups D2C Insider launches Cohort-3 for early-stage D2C brands Zomato launches developer platform for PoS partners [Potential Deals] Slice set to raise over $35 Mn in funding via convertible debt Finova Capital to raise Rs 800 Cr funding Flipkart’s Super.money plans to raise external funds [Financial results this week] Virat Kohli-backed WROGN’s revenue dips 29% in FY24 Purplle hits Rs 700 Cr revenue in FY24, trims losses by 46% NPCI posts Rs 2,876 Cr revenue and Rs 1,134 Cr profits in FY24 [News flash this week] Peak XV, others divest stake worth Rs 1,600 Cr in MamaEarth’s parent Govt. exempts overseas startups from NCLT clearance for reverse flipping Kotak downgrades Nykaa to ‘Sell’, cuts fair value amid concerns Ather files DRHP to raise Rs 3,100 Cr via IPO; Hero MotoCorp won’t sell shares Swiggy to raise Rs 5,000 Cr via fresh issue, to file DRHP soon MobiKwik Xtra suspends ‘anytime withdrawals’; draws flak from users Aditya Birla Finance accuses BYJU’S resolution professional over alleged fraud Delhivery accuses Ecom Express of misinformation in DRHP Pravin Jadhav-led Dhan storms into top 10 stock broking apps Accel announces fourth cohort of the pre-seed investment program, Atoms Pixxel becomes the first Indian space startup to secure a NASA contract DroneAcharya share surges 20% on BSE, hits upper-circuit After Bengaluru, Flipkart Minutes goes live in Gurugram Ather Energy to manufacture electric motorcycle [Conclusion] The weekly funding shrank around 46% to $228.79 million this week. Meanwhile, three startup-focused funds launched this week namely Playbook Partners, Omnivore, and Arka. Peak XV, Stellaris Ventures, Sofina Ventures, and Fireside Ventures collectively sold shares worth Rs 1,600 crore in Honasa Consumer Limited, the parent company of MamaEarth. Kotak Institutional Equities downgraded Nykaa, a leading beauty and fashion e-commerce company, citing concerns about rising fulfillment costs and potential margin pressure. This highlights the challenges faced by e-commerce companies in maintaining profitability amidst increasing competition and operational complexities. Ather Energy, an electric two-wheeler firm, filed its DRHP for an IPO, marking the second such listing in the EV sector. Swiggy, a food delivery and quick commerce company, also planning to file the DRHP soon and is set to raise Rs 5,000 crore via a fresh issue. MobiKwik’s Xtra investors faced withdrawal issues due to changes in the withdrawal policy by its lending partner Lendbox. This was triggered by recent RBI regulations on P2P lending. MobiKwik clarified that withdrawals will be made on a monthly basis and assured customers of receiving their principal and interest.

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.

Indian startups raise nearly $1.6 Bn in August

EntrackrEntrackr · 12m ago
Indian startups raise nearly $1.6 Bn in August
Medial

The Indian startup ecosystem seems to be bouncing back from the funding winter as venture capital investment has been steadily rising each month. August 2024 has been a standout, with several big funding rounds, important investments in growth-stage startups, many deals from tier II cities, IPOs, and major mergers and acquisitions. These factors make it unique compared to other months this year. Based on data compiled by TheKredible, homegrown startups raised nearly $1.6 billion across 112 deals in August. This total included 27 growth-stage deals worth $1.32 billion and 71 early-stage deals amounting to $267 million. Meanwhile, there were 14 undisclosed transactions mainly in early-stage deals. When compared, startups raised close to $1 billion in July. [Y-o-Y and M-o-M trend] The $1.6 billion raised in August is the second-highest funding amount of 2024, following June, and the third-highest in the past 12 months. On a year-over-year basis, August 2024 also ranked at the top for total funds raised. Also, Indian startups have raked in approximately $9.6 billion in the first eight months of 2024. If this trend persists, overall funding is likely to comfortably surpass the $11 billion achieved in 2023. For context, Indian startups received $38 billion in funding in 2021 and $25 billion in 2022. [Top 10 growth-stage deals] Among growth-stage deals, Zepto’s $340 million, DMI Finance’s $334 million, and OYO’s $175 million rounds together accounted for over 50% of the total funds raised last month. With the fresh funding, Zepto and DMI Finance attained $5 billion and $3 billion valuation milestones respectively. However, OYO saw more than 75% fall in its valuation to $2.4 billion from a peak of $10 billion. Just like in July, August saw the emergence of a new unicorn, as the Hero Moto-backed Ather Energy surpassed the $1 billion valuation mark with its latest funding round. Other notable growth-stage deals included Neo, Blue Tokai, Visit Health, Yubi, Livpure, and Syfe. Swiggy, which raised funds from Amitabh Bachchan’s Family Office, did not disclose the deal size. [Top 10 early-stage deals] EV startup Kinetic Green led the early-stage funding chart with a $25 million Series A round, followed by Even Healthcare with $20 million, FreshBus with $10.5 million, and both Beco and Investors AI, each raising $10 million. Agrizy’s $9.8 million funding was the fourth-largest in agritech for 2024, a sector that has been declining recently. Other major early-stage deals included Scimplify, a specialty chemicals firm; Kindlife, a new venture from ShopClues co-founder Radhika Ghai; automotive startup Kazam; and fintech startup Punch, all of which ranked among the top 10 early-stage investments. [Mergers and Acquisitions] In August, the number of merger and acquisition deals surged to 19, up from just 17 in July. Notably, the acquisition of Paytm’s movies and ticketing business by Zomato Limited for $244 million emerged as one of the largest M&A deals of 2024. Additionally, hospitality firm OYO acquired Checkmyguest for $27.4 million, and Fusebox Games Limited was purchased by Nazara in a $27.2 million deal. Some notable M&A deals in August included BrowserStack’s acquisition of Bird Eats Bug, Radio Mirchi’s parent ENIL’s purchase of Gaana, and VerSe’s acquisition of Valueleaf. Additionally, Emami Limited raised its stake in The Man Company from 50.4% to 100%, a development first reported by Entrackr in July. [City and segment-wise deals] In terms of city-wise funding, Bengaluru-based startups led with 38 deals totaling $265 million in August. However, startups in Delhi-NCR raised $724 million across 29 deals, more than double the amount raised by Bengaluru startups. Additionally, Mumbai-based startups surpassed Bengaluru in total funding, securing $453 million across 20 deals. Segment-wise, fintech startups led the show with 27 deals followed by e-commerce (including D2C brands), healthtech, SaaS, and proptech with 16, 8, 7, and 4 deals, respectively. Visit TheKredible for more details. Edtech was one of the least funded segments with 3 deals amounting to $5 million. It contributed only 0.3% to the total amount raised in August. [Stage-wise deals] Regarding funding stages, 35 startups raised capital in the seed round, 28 in Series A, 13 in pre-Series A, and 9 in Series B. Debt-only funding made up 2.56% of the total funding for the month. For the complete breakdown of stage-wise deals, visit TheKredible. [Layoffs, shutdowns, departures, and key hirings] Layoffs experienced a significant drop from 650 employees in July to 290 employees in August. Notably, Google and Reliance-backed Dunzo reportedly fired 150 employees, Beepkart let go of 100 staff, and ShareChat reduced its workforce by 30-40 employees. Additionally, Kenko Health, My Tirth India, and Airtel’s streaming app Wynk Music shut down their operations. Wynk’s closure is attributed to increasing competition, while Kenko Health and My Tirth India ceased operations due to funding difficulties. In August, there was an increase in both hiring and the departure of key executives. Notable exits included Manish Tiwary from Amazon India, Prashant Sinha from Metadome.ai, and Srinivasagopalan Ramamurthy from Freshworks. On the hiring front, Meesho, Swiggy Instamart, EvenFlow, Zetwerks, Perfios, and OYO brought new talent into roles such as chief executive, co-founder, and independent director, among others. [Trends] More IPOs in pipeline: In the first eight months of 2024, ten startups have gone public. In August alone, Ola Electric, Unicommerce, and FirstCry completed their IPOs. Swiggy is targeting a listing in the first week of September, while companies like Infra.Market, Bluestone, Ecom Express, OfBusiness, and OYO are also progressing on their IPO plans. Additionally, Zappfresh has filed draft IPO papers with SEBI to list on the BSE SME platform. Quick commerce in action: The quick commerce sector is intensifying in competition, highlighted by Zepto’s mega-round, Flipkart’s recent entry, and BigBasket’s complete shift to rapid delivery. Amazon is expected to enter the market early next year. The e-commerce giant was also in talks to acquire Swiggy’s quick commerce business. At present, Zomato-owned Blinkit stands as the leading player in quick commerce followed by Swiggy Instamart, Zepto, and Tata Digital-owned BigBasket. Startups from tier II cities: In addition to major metro areas and startup hubs such as Bengaluru, Delhi NCR, Mumbai, and Hyderabad, there has been a notable influx of deals from cities like Mangalore, Raipur, Dehradun, Udaipur, Surat, Jodhpur, Nashik, and Lucknow. This indicates a significant, albeit minor, shift in traditional startup funding patterns. Founders fueling growth: OYO’s $175 million funding round included a significant $100 million investment from the company’s founder, Ritesh Agarwal, showcasing another instance of a founder investing in their own startup. Similarly, Yubi secured $30 million from its founder and CEO, Gaurav Kumar, while Cambrian Bioworks received an undisclosed amount from its founder during its seed round. This practice of founder investment has previously been seen with Ather Energy, Byju’s, and BluSmart. [Conclusion] While the decline of debt funding is something to be welcomed, as it doesn’t seem to sit well with the idea of backing startups, we would add a note of caution here on the sustainability of the current recovery. While, as indicated earlier, an expected interest rate cut by the US Fed will ensure the momentum stays well into 2025, the fact remains that significant parts of public markets are well into ‘exuberance’ territory in terms of valuations. Unlike the public markets, however, the private VC markets remain much more dependent on foreign fund flows, and that could yet be a disruptor in the ecosystem, despite the rise of domestic capital. Although with the US-China issues, and now, even Brazil moving arbitrarily against Twitter, India could find itself in a sweet spot yet again for global investors. It would perhaps be fair to say that the bottom has been reached, and a bounce is well on its way for Indian startups when it comes to their funding environment.

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