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Groww and Zerodha user base shrinks in February, PhonePe gains

EntrackrEntrackr · 4m ago
Groww and Zerodha user base shrinks in February, PhonePe gains
Medial

For the first time in the past year, the number of registered users on these platforms declined, slipping by 1.37% to 48.97 million in February, down from 49.64 million in January. Groww retained its top position in overall active users with a 26.57% market share, despite a 1.68% decline in its user base, which fell to 13.01 million in February from 13.23 million in January, according to NSE data. Meanwhile, Zerodha, the second-largest brokerage who holds 16.25% market share, also witnessed a 1.55% month-on-month decline, with its active client base dropping to 7.96 million in February from 8.08 million in January. Angel One, the third-largest broker, saw a 1.53% decline in its user base, ending February with 7.65 million active clients and a 15.62% market share. The decline in user numbers across platforms can be attributed to sluggish market conditions over the past few months. Other major brokers, including Upstox and ICICIdirect, retained their 4th and 5th positions, respectively, but also saw a drop in active users. Upstox, backed by Ratan Tata, reported 2.79 million active users with a 5.70% market share, down 2.42% month-on-month. Similarly, ICICIdirect's active user base declined by 0.57% to 1.94 million. Among traditional players, HDFC Securities bucked the trend, recording a 1.97% MoM growth, while Kotak Securities saw a 0.93% decline, ending February with 1.49 million users. Motilal Oswal and SBI Securities maintained their 8th and 9th positions, respectively, with 1.02 million and 0.98 million active users, holding market shares of 2.08% and 2.01%, respectively. On the other hand, PhonePe’s Share. Market saw one of the highest growth rates among emerging brokers, expanding its user base by 2.58% to 0.35 million active clients. Other rising platforms, Dhan and INDmoney, also increased their user bases by 0.70% and 1.12% MoM, respectively.

WLDD in talks to acquire ScoopWhoop from The Good Glamm Group

EntrackrEntrackr · 4m ago
WLDD in talks to acquire ScoopWhoop from The Good Glamm Group
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Marketing company Wubba Lubba Dub Dub (WLDD) is in talks to acquire the digital media platform ScoopWhoop from The Good Glamm Group (GGG). Livemint, which first reported the development, stated that WLDD has issued a term sheet, and due diligence is currently in progress. The report also mentioned that The Good Glamm Group is planning to sell ScoopWhoop for Rs 18-20 crore. It’s worth noting that ScoopWhoop was acquired by The Good Glamm Group in a deal worth around Rs 100 crore in October 2021. The Good Glamm Group declined to comment on the story. Last week, Sirona repurchased its brand from The Good Glamm Group to operate independently. According to sources, the buyback occurred at a significantly lower price than the original acquisition deal. The Darpan Sanghvi-led company may allocate proceeds from selling its digital media vertical to cover salaries, vendor payouts, and other payment obligations. Over the past year, Good Glamm has struggled financially, experiencing salary delays and layoffs. Media reports indicate that the group is now negotiating a funding round at a substantially lower valuation. The Delhi-based firm became a unicorn in 2021 with a $250 million funding round. Since then, it has raised $30 million in a bridge round in March last year. Last month, The Good Glamm Group witnessed the exit of key representatives, including Anand Daniel (Accel Partners), Vishal Gupta (Bessemer), and Gaurav Kothari (Prosus Ventures), who resigned as independent directors. In January 2024, Priyanka Gill, co-founder of The Good Glamm Group, also decided to step down from her active role at the New Delhi-based company.

INDmoney revenue spikes 73% in FY24, earns Rs 58 Cr from other income

EntrackrEntrackr · 8m ago
INDmoney revenue spikes 73% in FY24, earns Rs 58 Cr from other income
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INDmoney has continued its growth streak in the fiscal year ending March 2024. The Tiger Global-backed firm has managed 73.2% year-on-year growth in its operating revenue during the last fiscal. At the same time, its losses grew only 12% in the same period. INDmoney’s revenue from operations spiked 73.2% to Rs 70 crore in FY24 from Rs 40.6 crore in FY23, its consolidated financial statements sourced from the Registrar of Companies (RoC) show. INDmoney lets users manage their money through investments in mutual funds including Indian and overseas stocks. It claims to have amassed 10 million users on the platform. Income from distribution services accounted for 76% of the operating revenue which increased by 56% to Rs 53.6 crore in FY24, whereas income from broking activities surged to Rs 10.7 crore in FY24 from Rs 10 lakh in FY23. The company added another Rs 6 crore from allied services during the last fiscal year. The Gurugram-based company also made Rs 57.7 crore from interest and gain on sale of current investments which pushed its total revenue to Rs 128 crore in FY24. This significant other income is a result of its huge current financial assets which stood at Rs 725 crore at the end of March 2024. When it comes to expenses, employee benefits remained the largest cost driver for INDmoney. This overhead grew 11% to Rs 124.53 crore in FY24 from Rs 111.86 crore in FY23. IT expenses stood at Rs 57.18 crore while marketing burn contributed Rs 33.80 crore in FY24. Finance, depreciation, depletion, amortization and other expenses pushed the total expenditure to Rs 233.6 crore in the last fiscal. This is a 17% increase from Rs 199 crore in the previous fiscal year. INDmoney reported a 12% growth in its net losses to Rs 82.55 crore in FY24. Its ROCE and EBITDA margin stood at -11.47% and -75.6%, respectively, on a unit level, it spent Rs 3.32 to earn a rupee during FY24. INDmoney has raised $133 million since its inception in 2019. The Ashish Kashyap-led company raised its latest funding worth $75 million in January 2022 at a valuation of more than $600 million. While obviously good at raising funds, it remains to be seen if INDmoney can find a market big enough and willing to give it a shot. It's in a segment where massive consumer shifts are not unknown, even though INDmoney itself doesn't seem to have got there yet. Something like investing overseas, where awareness is still low could become winners if the market shifts in that direction. However, it remains a cluttered and tough space to eke out a profitable existence, and INDmoney will need to make a big bet soon, despite its already high cost structure.

IPO Prep: Swiggy paints a healthy financial picture in first 9 months of FY24

EntrackrEntrackr · 1y ago
IPO Prep: Swiggy paints a healthy financial picture in first 9 months of FY24
Medial

A decade after launching, foodtech and quick commerce decacorn Swiggy is eyeing a public listing this year and is leaving no stone unturned to present a healthy financial picture. The company seems to be achieving a steady 25-30% year-on-year growth in the ongoing fiscal year (FY24). During the first nine months of FY24, IPO-bound Swiggy’s revenue from operations was Rs 5,476 crore, according to a document drafted by an investment banker on behalf of Swiggy. While the company reported Rs 8,265 crore in revenue in FY23, the document revealed it did a collection of Rs 6,623 crore in the last fiscal year, it appears Swiggy changed its revenue recognition method. Within this, the food delivery business constituted 82.65% of the total operating revenue, amounting to Rs 4,526 crore. The remaining income came from Swiggy Instamart, the firm’s quick commerce vertical. Sources indicate that the company is exploring a secondary market deal as it wants to offer exits to its early as well as late-stage backers. “Swiggy is likely to go for an IPO in the second half of this year and the secondary transaction appears to be an attempt to spruce up its cap table,” said one of the sources requesting anonymity. Sources outline that Swiggy will be seeking its last primary valuation in the potential secondary transaction. “The company closed Rs 384 crore from Ramco Group in August at a valuation of Rs 73,520 crore [$8.85 billion],” mentioned the document, cited above. Just months after this funding, US-based assets manager Baron Capital Group marked up the valuation of Swiggy to $12.1 billion. It’s worth noting that Swiggy acquired Lynk Logistics around the same time (August 2023) and the above transaction might be linked to it. Queries sent to Swiggy didn’t elicit any response. The document further stated that during the first nine months of FY24, Swiggy’s gross order value (GOV) stood at Rs 24,230 crore, with food delivery comprising a substantial 76.2%, equivalent to Rs 18,472 crore. The remaining GOV is attributed to Instamart. With a sharp focus on profitability, the Bengaluru-based company has significantly improved its EBITDA margins which registered at -1.9% and -109.5% for the food delivery biz and Instamart, respectively during the nine-month period. These figures stood at -17.5% and -259% in FY23. Swiggy’s cost-cutting measures and IPO preparations have been evident. In January, Entrackr reported that Swiggy was planning to lay off 6% of their workforce to trim expenses. In February month, the company changed its registered name from Bundl to Swiggy and recently shortlisted seven bankers including Kotak Mahindra and JP Morgan. “Swiggy will file papers for IPO by May and ultimately go IPO around the festive season. The company will seek valuation in the range of $12-15 billion,” said another source who also requested anonymity. This person also said that the firm may give a discount in valuation as far as secondary transaction is concerned. The timing seems good, with closest peer Zomato doing well since its listing to approach a $20 billion valuation this week. Even after factoring in the lead for Zomato in topline, a $12 billion valuation or even higher should not be out of reach for Swiggy after it files its FY24 financials. However, it is clear that factors like market dynamics at the time of the IPO, the share of offer for sale versus funds for the firm, or the plans of Big Basket or even Zepto will likely impact perceptions on future profitability. Even as Zomato has achieved operational profitability, Swiggy was some way off when it last announced numbers, and that red ink is bound to weigh heavily on its price unless a turnaround is visible and sustained.

Clear’s revenue spikes 93% to Rs 210 Cr in FY24, cuts losses

EntrackrEntrackr · 7m ago
Clear’s revenue spikes 93% to Rs 210 Cr in FY24, cuts losses
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Clear aka Cleartax, a taxation and financial solutions provider for businesses and consumers, reported notable financial performance during the last fiscal year. The company’s operating scale grew by 93% year-on-year in FY24, while it reduced its losses by 59%, bringing them below Rs 100 crore for the said period. Clear’s revenue from operations soared to Rs 209.84 crore in the last fiscal year (FY24) from Rs 108.77 crore in FY23, according to its consolidated financial report sourced from the Registrar of Companies (RoC). Clear (formerly Cleartax) provides taxation and financial solutions for both businesses and consumers. Its business offerings include accounts payable, e-invoicing, and invoice discounting, organized under three main categories: Finance Cloud, Compliance Cloud, and Supply Chain Cloud. For individuals, the platform simplifies tax filing and related services. Clear earns via taxation-related and corporate secretarial services. It derived 91.5% of its revenue from software subscription and support services which surged 84.1% during FY24 to Rs 191.9 crore. Unlike FY23, the company sold software worth Rs 14.63 crore during the year, while the remaining collection was collected from platform, technical services, and commission for acting as a distributor for the purchase and sale of mutual funds. The Archit Gupta-led company obtained a mutual fund distributor license from the Association of Mutual Funds in India (AMFI) and launched its mutual fund distribution app, Black, in January 2021. The firm also cornered Rs 4.92 crore via non-operating activities, including interest income, pushing its total revenue to Rs 214.76 crore in FY24. Employee benefits were the largest expense category but declined by 19.4% to Rs 202.57 crore in FY24, including non-cash ESOP costs of Rs 11.78 crore. Expenses on web hosting and software support increased by 17.7% to Rs 39.61 crore, while spending on business promotion amounted to Rs 18.83 crore for the fiscal year ending March 2024. Clear also spent Rs 6.43 crore on system integration charges and Rs 3.58 crore on the sales commission during FY24. Despite almost 2X growth in operating scale, the company cut down its total expenses by 9.8% to Rs 310 crore in FY24. Clear reduced its losses by 58.8% to Rs 96.24 crore, due to tight control on spending and solid growth. Operating cash outflows also improved, decreasing by nearly 60% to Rs 73.61 crore in the last fiscal. Its EBITDA margin improved significantly but remained negative at -40.26% due to high operational costs, outlining the need for continued focus on expense management. On a unit level, Clear spent Rs 1.48 to earn a rupee of operating revenue in FY24. As of March 31, 2024, Clear has cash and bank balances of Rs 53.39 crore, while its current assets stood at Rs 112.59 crore. The company’s outstanding losses climbed to Rs 865.63 crore during the period. According to TheKredible, Clear has raised $140 million to date, with Kora and Composite Capital Management as its lead investors. In a business that thrives on the fear of heavy-handed repercussions of a mistake in paperwork, it is interesting that none of the online offerings promise freedom from the dreaded ‘query’. Or a promise to resolve issues should they turn up, as long as they are not due to customer end omissions of course. By focusing instead on financial distribution to shore up bottom lines is a clear sign of investor pressure rather than long-term vision.

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.

E-comm unicorn DealShare’s gross revenue nosedives 75% in FY24

EntrackrEntrackr · 8m ago
E-comm unicorn DealShare’s gross revenue nosedives 75% in FY24
Medial

DealShare underwent a management change in the last fiscal year as three co-founders left the firm, which has visibly impacted its financial performance in FY24. The company’s gross scale declined by 75% in the fiscal year ending March 2024, while losses decreased by 66%. DealShare’s gross revenue from operations fell to Rs 499 crore in FY24 from Rs 1,963 crore in FY23, its consolidated financial statement sourced from the Registrar of Companies (RoC) shows. Collection from traded goods shrank 74.7% to Rs 495.8 crore for the Jaipur-based company, whereas income from marketing services also narrowed 44.3% to Rs 3.3 crore during the last fiscal year. Cost of Material was the largest burn for the company which stood at Rs 529.3 crore in the last fiscal year while it incurred Rs 99 crore on employee benefit expenses which decreased 54.7%. Meanwhile, depreciation and amortization expenditures were reduced by 58.8% to Rs 14.75 crore. With other expenses of Rs 123.58 crore, its total expenses fell 69.9% to Rs 768.18 crore during the last fiscal year. While the gross scale dwindled significantly, the firm managed to cut down losses by 66% to Rs 167.7 crore in FY24 from Rs 502 crore in FY23. Its ROCE and EBITDA margin stood at -12.2% and -25.26%, respectively, on a unit basis, DealShare spent Rs 1.54 to earn a rupee in FY24. As of March 31, 2024, DealShare had a cash and cash equivalents of Rs 108.64 crore while bank balance (excluding cash equivalents) jumped three fold to Rs 292.3 crore from Rs 94 crore in the previous year. Meanwhile, its trade receivables decreased to Rs 525.7 crore in FY24. The last fiscal year (FY24) was quite challenging for DealShare as the firm let go of more than 100 employees and it had to shut down its B2B vertical. Out of four, three co-founders have left the firm and currently, its retail business chief Kamaldeep Singh is leading the firm. According to startup data intelligence platform TheKredible, DealShare has raised $393 million to date from investors like Tiger Global, ADIA, Alpha Wave, and Kora Investment. Soon after becoming a unicorn in January 2022, it raised another $45 million at a valuation of $1.7 billion. If the exit of three founders was not enough, the sharp drop clearly indicates all is not well with the firm. In this season of wholesale changes, a new leadership team seems keener to start on a clean slate perhaps, by withdrawing from many deals and processes that the previous founders found acceptable. One hopes they have good reasons for that. It is not an uncommon problem in India to have founders holding on to the ‘secret sauce’ that keeps their forms humming, leading to a sharp drop in case the relevant person leaves. The hope usually is that the firm will reach enough scale and credibility to manage on its own. In this case, that has clearly not happened quickly enough for DealShare, despite significant topline growth. A 75% decline from a significant size indicates deeper issues at the firm. Or that it would take much more than a single financial year to resolve. We would comfortably place DealShare outside the Unicorn club for starters, if investors haven’t already done so.

Funding and acquisitions in Indian startup this week [08 - 13 July]

EntrackrEntrackr · 1y ago
Funding and acquisitions in Indian startup this week [08 - 13 July]
Medial

This week, as many as 22 Indian startups raised around $116.26 million in funding. These deals count 4 growth-stage deals and 16 early-stage deals while 2 early-stage startups kept the transaction details undisclosed. During the previous week, 24 early and growth-stage startups cumulatively raised more than $270 million in funding. [Growth-stage deals] Among the growth-stage deals, 4 startups raised $80 million in funding this week. Wealthtech platform Dezerv spearheaded with its $32 million Series B round. E-commerce roll-up brand Goat Brand Labs, B2B e-commerce firm Infra.Market, and higher education services platform CollegeDekho followed with $21 million, $18 million, and $9 million in funding, respectively. [Early-stage deals] Moreover, 16 early-stage startups secured funding worth $36.26 million during the week. Biotech brand Immuneel Therapeutics led the list followed by semiconductor startup iVP Semi, Marathi OTT platform Planet Marathi OTT, consumer electronics manufacturer Circuit House Technologies, and healthcare-focused fintech startup Care.fi. QSR chain House of Briyan, online real-estate broker Jugyah, and electronics renewal and refurbishment startup QarmaTek also raised funding among others. 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 seven deals followed by Mumbai, Delhi-NCR, Ahmedabad, Thane, Chennai, and Ankleshwar among others. Segment-wise, e-commerce startups grabbed the top spot with three deals. Fintech, SaaS, AI, and Automotive tech startups followed this list among others. [Series-wise deals] During the week, Seed funding deals led the list with 10 deals followed by 3 debt and 3 Series A deals. Pre-Seed, pre-Series A, and Series B are next on the list. [Week-on-week funding trend] On a weekly basis, startup funding declined 57% to $116.26 million as compared to around $270.3 million raised during the previous week. The average funding in the last eight weeks stands at around $381.54 million with 28 deals per week. [Fund launches] Anicut Capital announced the close of its maiden late-stage Equity Continuum fund at Rs 300 crore, aimed at supporting high-potential companies preparing for IPOs within the next 2-4 years. Former Premji Invest partner Atul Gupta, along with Rajesh Ramaiah and Pravan Malhotra, launched Trident Growth Partners (India) to invest in startups across various sectors such as consumer, financial services, enterprise software, technology, industrial, manufacturing, and healthcare. Additionally, former defense secretary Ajay Kumar introduced the MountTech Growth Fund, a Rs 250 crore fund targeting early-stage startups in the defense, aerospace, and deeptech sectors, which has secured SEBI approval and Rs 280 crore in subscriptions. Lastly, NABARD (NABVENTURES) launched the ‘Agri-SURE’ fund with an initial corpus of Rs 750 crore to support agritech startups, with contributions from NABARD, the Ministry of Agriculture, and other institutions. [Key hirings and departures] Zepto elevated Devendra Meel to Chief Business Officer, effective July 2024, to lead category management and brand partnerships. Petzzco appointed former cricketer Ravi Shastri as principal advisor and brand ambassador. Grip announced its expansion into fund management and portfolio management distribution services, with Founder Nikhil Agarwal transitioning to Group CEO to co-lead the EV management platform, Electrifi Mobility. Adrenalin eSystems appointed Sanjay Kamath as Senior Vice President and Business Head. In terms of departures, Medikabazaar’s cofounder Vivek Tiwari stepped down as CEO and took a board role, with the company undergoing a management restructuring and audit by PwC. Zoomcar’s global president Adarsh Menon resigned, following the termination of cofounder Greg Moran from the CEO position. [M&A] Google-backed edtech company Adda247 acquired the CA test preparation platform Ekagrata Eduserv. Fintech startup CASHe entered the insurance broking sector by acquiring Centcart Insurance Broking Services. Melooha acquired Bengaluru-based Munitalks to enhance its AI astrological offerings. Edtech platform Schoolnet acquired K-12 focused quiz-based learning app Genius Teacher in an all-stock deal. IT major Accenture acquired Bengaluru-based chip design startup Excelmax Technologies. Construction giant L&T is also acquiring a semiconductor design startup SiliConch Systems in exchange for Rs 183 crore. [Potential deals] Farm-to-fork firm Otipy is set to raise fresh capital in an extended series B round from new and existing investors. Generative AI startup Simplismart is preparing to raise a new round led by Accel. Despite the ‘funding winter’ in edtech, PhysicsWallah (PW) is close to securing a new large round. Goldman Sachs is reportedly looking to invest $30-50 Mn in Bengaluru-based SaaS provider MoEngage via a secondary deal. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches] Vidyut launches offline platform for pre-owned commercial EV sales and financing Wow Skin Science forays into the cosmetic category with the launch of ‘Color Cupid’ [Financial results this week] Exotel crosses 400 Cr revenue in FY23; losses jump 2.5X Tata 1mg’s revenue nears Rs 2,000 Cr in FY24; losses down by 75% OfBusiness revenue nears Rs 20,000 Cr in FY24; profits crosses Rs 600 Cr [News flash this week] Blackbuck files DRHP; Accel to divest 24.2% of OFS Paytm received a nod from Govt. to invest Rs 50 Cr in Payment Services Menhood to raise Rs 19.5 Cr via IPO on NSE Emerge Invesco marks down valuations of IPO-bound Swiggy and Pine Labs [Conclusion] The weekly funding shrank nearly 57% to $116.26 million. This week saw four startup-focused fund launches by VC firms: Anicut Capital, Trident Growth Partners, MountTech Growth Fund, and NABVENTURES (Agri-SURE). Jaipur-based D2C men’s grooming brand Menhood is set to go public with an IPO on NSE Emerge, opening on July 16 and closing on July 19. The company, under its parent entity Macobs Technologies Limited, will issue 25,95,200 equity shares with a face value of Rs 10 each, priced between Rs 71-75 per share. At the upper end, Menhood aims to raise Rs 19.5 Cr. The IPO proceeds will fund the expansion of product offerings and enhance operational capabilities. In another significant development, Paytm has received approval from a government panel for its Rs 50 Cr investment in Paytm Payment Services. This clearance brings Paytm closer to obtaining the final approval from Finance Minister Nirmala Sitharaman. Once approved, Paytm will apply for an online payment aggregator license from the Reserve Bank of India. The panel, which includes representatives from the ministries of home, finance, and industries, as well as inputs from the foreign ministry, is responsible for reviewing investment proposals from neighboring countries. Meanwhile, US-based fund manager Invesco marked down the valuations of its portfolio startups, Swiggy and Pine Labs, at the end of April 2024. According to its half-yearly shareholder report filed with the SEC, Invesco valued its 1.77% stake in Swiggy at $219.2 million, translating to a $12.3 billion valuation for the foodtech company. This is a 3% decline from the previous $12.7 billion valuation but still 15% higher than the $10.7 billion valuation during Swiggy’s $700 million funding round in 2022. Meanwhile, Pine Labs was valued at $3.5 billion, down 8.5% from January 2024 and over 27% from December 2023. Online trucking platform Blackbuck has also filed its draft red herring prospectus (DRHP) with SEBI for an initial public offering (IPO). The firm aims to raise Rs 550 crore through a fresh issue of equity shares and an offer for sale (OFS) of up to 2,16,09,022 equity shares. Accel plans to divest 24.2% of the total OFS, equating to 52,32,632 shares, while Quickroutes International, International Finance Corporation, and Tiger Global will offload 3,973,898, 3,973,898, and 1,711,962 shares, respectively. The fresh issue and OFS will have a face value of Re 1, with the price band and minimum lot size to be determined in consultation with the book-running lead managers.

Indian startups show sign of recovery with $7 Bn funding in H1 2024

EntrackrEntrackr · 1y ago
Indian startups show sign of recovery with $7 Bn funding in H1 2024
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The Indian startup ecosystem is going through a recovery phase: there have been larger funding rounds, an increase in the number of deals, a surge in secondary deals and ESOP buybacks, and a decline in layoffs. As per data compiled by TheKredible, Indian startups raised nearly $7 billion in funding during the first half of 2024. This is more than the $5.92 billion raised in H1 2023. But it’s also far less than $20 billion in H1 2022 which now seems like the golden phase for startups, at least in terms of venture capital inflow. The $7 billion funding consisted of 182 growth or late stage deals worth $5.4 billion and 404 early-stage deals worth $1.54 billion. Meanwhile, 99 were undisclosed deals. During the first half, Indian startups produced a couple of unicorns: Perfios and Krutrim SI Designs. In 2023, only two startups managed to go past the unicorn valuation while 2022 and 2021 saw the emergence of 26 and 44 unicorns, respectively. [Y-o-Y and M-o-M trend] As mentioned above, there is a significant increase in the number of startup deals and funding in H1 2024 from $5.92 billion in H1 2023. If we see the last four consecutive half yearly data, H1 2024 stands at the top in terms of total amount raised. The growth can be attributed to a bunch of $100 million plus rounds and mega deals bagged by late stage firms such as Zepto, Flipkart, PharmEasy and Lenskart. When it comes to month-on-month trends, June saw nearly $2 billion in funding which is more than double of the average of $1 billion monthly funding until May this year. [Top 10 growth stage deals in H1] Late stage companies such as Zepto, Flipkart, PharmEasy and Lenskart were on the top with $665 million, $350 million, $216 million, and $200 million funding, respectively. Lenskart’s $200 million funding was a pure secondary transaction play whereas Zepto may have also had some secondary component in the last funding round. Overall, all startups in the top 10 list have raised more than $100 million each during the first six months of 2024. The list includes Engrail, Atlan, Pocket FM, Nephroplus, SEDEMAC and Shadowfax. [Top 10 early stage deals in H1] Invite-only networking platform SCOPE led the funding chart for early stage startups with $90 million funding. This was followed by AI startup Krutrim, blockchain startup Avail, e-commerce startup Indkal and battery tech startup IBC. Lyskraft, Ema, StockGro, Hunch and Rozana also made it to the top 10 list of early stage deals. Notably, more than 30 early stage startups have raised over $10 million each during H1 2024. [Mergers and Acquisitions] The first half of 2024 saw 55 mergers and acquisitions, which is lower when compared to the previous years. The year 2021 saw more than 250 mergers and acquisitions which declined to 204 in 2022 and further reduced to 145 in 2023. Even if we double the number of M&A, it will hover around 100 in total by the end of 2024. There were stress deals during the period which included the acquisition of ZestMoney by DMI Group, MX Player by Amazon, Kuvera by CRED, Spartan Poker by OneVerse, and ET Money by 360 One (formerly IIFL Wealth). Check the list for more details: [City and segment wise deals] Bengaluru, once again topped the list with 253 startups from the city having raised more than $2.83 billion in funding during 2023. This accounted for 40% of the total funding. Delhi-NCR-based startups followed with 164 deals amounting to $1.3 billion. Mumbai, Hyderabad and Pune made it to the top five list. Notably, Mumbai-based startups contributed to nearly 22% of the total funding whereas Delhi NCR-based startups accounted for 18.76% of the overall fund inflow. Segment wise, e-commerce was at the top with 124 startups raising over $1.87 billion. Fintech, healthtech, SaaS and EV startups were next on the list. Amount wise, EV startups raised more money than SaaS and healthtech. Agritech, foodtech, edtech and proptech saw their downfall during the first half of 2024. [Stage wise deals] In H1 2024, seed and pre-seed stage startups saw 266 deals amounting to more than $457 million. Series A and pre Series A saw 134 and 80 deals, respectively. There were 58 debt funding worth $784 million and 5 pre-IPO rounds worth nearly $250 million. Check TheKredible for more details. [Layoffs, shutdowns and departures] Layoffs, shutdowns and departures continued even in 2024. However, there was a sharp decline when compared with the previous years. For context, Indian startups saw 3,300 people being laid off during H1 2024 which is roughly one-third of the over 9,000 in H2 2023 and 15,000 in H1 2023. Byju’s, ReshaMandi, Swiggy, Ola, Cult.fit, Healthifyme, Scaler and PrepLadder topped in terms of laying off employees during the first half. During the first quarter of 2024, five companies shut their operations. The list includes Resso, Rario, OKX India, GoldPe, and Muvin. Rario added that it will launch a brand new platform that will enable users to play new and engaging cricket-based games. However, only one startup announced its shutdown during the second quarter taking the overall shutdown to six in H1. In 2023, more than 15 startups shut their operations. High profile departures were a big concern during the first half of 2024. As per data compiled by TheKredible, 45 top level executives left their posts. These include co-founders, CEOs, CFO, CBO, COO, and managing directors, among others. [Comparison] For a better understanding of startup funding, we have created a comparison graph for the first and second quarter of the year which showed that the number of deals and total funding saw an uptick in Q2 when compared to Q1. [Trends in H1 2024] Surge in generative AI and spiritual tech deals: Overall, AI startups saw 27 deals amounting to $237 million. Generative AI startups grabbed a significant portion of the total funding. In the past six months, these startups have managed to mope up nearly $100 million. The list includes Sarvam AI, Ema, Neysa, Vodex, and KonProz, among others. Spiritual tech startups also saw an uptick in the number of deals. In the ongoing calendar year, such startups have raised more than $36 million and some new rounds are in the pipeline. Maiden funding for established fashion brands: During H1, a clutch of fashion and apparel brands raised their maiden institutional round. In May, A91 Partners led a $21 million round in TechnoSport whereas Libas raised $18 million led by ICICI Venture’s fund. Recently, Rare Rabbit raised $18 million in primary capital led by A91 Partners. The round is expected to close at around $50 million. ESOP and secondary deals: More than 10 startups announced their ESOP buyback program worth nearly $58 million in H1 2024. While the majority of them did not disclose the amount, Meesho, Urban Company and Pocket FM announced their largest ESOP buyback program. Similarly, secondary transactions have also increased during the first six months. Some of the biggest beneficiaries of secondary transactions are Lenskart, Meesho, Shadowfax, Fibe, Wow! Momo, Porter, among others. Startup IPOs on the rise: In the ongoing calendar year, TBO tech, Digit Insurance, Awfis and Ixigo have been listed on the stock exchanges while Unicommerce, FirstCry and Ola Electric got final approval from SEBI and Mobikwik, Swiggy and Avanse have been waiting for approval from the market regulator. Overall, 2024 appears to have better prospects for startups in the public market. In 2021, more than 10 startups listed on stock exchanges. This number plummeted in 2022 (two IPOs) and 2023 (five IPOs). Moreover, a bunch of companies are assessing the right time to launch their IPO, Zepto, Flipkart, PharmEasy, The Good Glamm Group, and others may announce their exact IPO timeline anytime soon. Debt deals: Besides increase in equity and secondary deals, debt deals also contributed a significant portion in H1. As per data, H1 2024 saw 57 debt only deals amounting to $784 million. There were several deals which included equity as well as debt components. However, we couldn’t ascertain the actual breakdown of such deals which may push the overall debt to more than $1 billion in the said period. [Conclusion] While the peaks of H1 2022 might take some time to be reached and crossed again, considering the typical cycle of at least 3-5 years for such funding peaks, things are certainly improving fast. While stability in government helps, it is the booming stock markets that will drive funding for startups too, as investors cash out gains and redeploy from successful IPOs or broader market gains. Ironically, many firms that could barely get VC or PE funding have managed IPOs in recent weeks, further underscoring the case for a correction in the stock markets or a diffusion of the bullishness to startup funding as well. But while the markets will continue to value revenues and some profitability ideally, the real job of backing ideas and innovations will also benefit as multiple VCs, family offices and other investors return to the startup funding market to seed the next crop of startups.

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