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Here is how Skydo addressing challenges in B2B cross-border payments

EntrackrEntrackr · 1y ago
Here is how Skydo addressing challenges in B2B cross-border payments
Medial

Bengaluru-based fintech firm Skydo aspires to make cross-border B2B payments much more hassle-free and address common challenges such as steep forex charges. Founded in 2022 by former Ola executives Movin Jain and Srivatsan Sridhar, the company aims to tap into the massive market of cross-border payments, which is dominated by global players like PayPal and Stripe. We spoke to cofounder and CEO Sridhar to learn more about Skydo, how it works, and what is the roadmap ahead. Here are the edited excerpts: How did you come up with the idea of Skydo? My co-founder Movin Jain and I used to work together at Ola. This was about six years back and we’ve been good friends since then. I’ve been mostly doing business roles throughout my career. First year at McKinsey, then for several years in startups and in between for about six years I ran my family-owned business. Movin has been an engineering and product guy and most recently before we started up he was actually at Phonepe, leading the payments platform. So given I have been a manufacturing exporter myself, somehow you know making life simple for exports, figuring out the problems that exporters have in terms of the complicated foreign exchange and other things that they have to deal with has been on my mind. But I never kind of thought about it consciously until we started brainstorming about which space we have to build in. Given Movin’s recent stint in payments, he was very excited about payments and the value of technology in improving payments. So since we were brainstorming about payments, some of my experiences studying the payments and wanting to solve for them came to our thinking and then we kind of started deeply digging into whether these problems are real, how can we solve them as a small company, what kind of actual issues do exporters face on a ground level, let’s talk to a few people and understand. And as we did the initial research, we realized that this is actually a real problem and it’s worth solving and this is a large enough market for us to solve it in. So this was largely the genesis of Skydo. What are the key challenges in payments and exports, cross-border payments that have not been addressed yet and how do you plan to address this? Up until 20-30 years ago, inter-entity payments were slow and cumbersome, often involving manual processes like cheque writing. International wire transfers were particularly sluggish and document-heavy. However, the likes of PayPal, business and international payments have transitioned to facilitate online transactions globally. Conventional banking systems have also significantly improved their infrastructure, with the inclusion of faster payment systems within domestic countries. This robust infrastructure, coupled with various payment options, enables companies like us with the right tools to address unsolved customer challenges. Moreover, consumers now expect instant payments, regardless of geography. Though things like compliance pose another hurdle, with varying regulations across countries causing confusion and complexity. Simplifying and standardizing compliance procedures can enable seamless international payments and business transactions. While companies like Skydo are lowering costs, there still remains room to tackle margins through technological solutions. While issues like Forex hedging and treasury management exist, addressing these concerns should be the next frontier in the payment landscape. Can you take us through how Skydo has performed since inception. So we started the company exactly two years back in March of 2022. It took us about seven months to launch the product after our first set of partnerships and approvals came. We launched in November 2022 with a small pilot batch and since January of 2023, we have been gradually and systematically scaling the business. Today, we have onboarded close to 2,500 businesses and currently our rate of acquiring new businesses is almost 500 to 600 businesses every month. So, this number is doubled, the customer base is doubled at the end of March from what it was at the end of December 2023. And I think at this pace of growth, it looks like it is going to sustain for quite a bit of time now. From onboarding, then if I look at the total payments processed, we are currently processing about $50 million of payments. This again is growing quite strongly and I think by the end of next year, that is the March of 2025, we hope to be processing over $750 million of payments annually. That is the kind of scale that we are looking at. What are your goals in terms of product and business expansion? So in the short term, obviously we want to really scale and hold a very large market share for Indian small businesses. I think that will keep us busy for the next couple of years at least. Although we will also follow this with multiple product features that will be required to make this happen from creating more countries where we can have local collections, enabling credit card payments, enabling two-way payments both from India to outward and along with the export payments that today exist and so on. So there’s an entire product roadmap that will support this growth in India. We also have to be looking for multiple licenses throughout the world. We have already applied and are waiting for approval for the payment aggregator license that RBI gives for cross-border companies. But in addition, we will be looking for multiple licensing in other geographies that will allow us to slowly and steadily expand to more corridors beyond India, which is slightly on the longer term plan. Apart from payments, the diversification is primarily into software to start with. Over time, when we have a very large scale, we might diversify into commerce as well as working capital. But that is very long term.

The transformative journey of used car startups in India: Report

EntrackrEntrackr · 1y ago
The transformative journey of used car startups in India: Report
Medial

The Indian used car market is witnessing a significant transformation, driven by various factors such as the COVID-19 pandemic’s impact on individual mobility preferences, increased financing options in the used car market, and reduced cash inflow for new car purchases. And perhaps most importantly now, the new and spreading norms on the scrapping of cars. This shift has led to a surge in availability, and demand for used cars, with buyers seeking alternatives to new vehicles. The market is poised for considerable growth, especially with the implementation of new emission standards and focusing on reducing diesel car production. As per a report by Motor Intelligence, the Indian used car market is expected to reach $31.62 billion in 2024 and grow at a CAGR of 15.10% to reach $63.87 billion by 2029. Among the used car companies in India, Cars24 is leading the pack with over Rs 5,500 crore in earnings. Spinny achieved the second position last year with nearly 30X growth in revenue. CarDekho, CarTrade, OLX and Droom are next on the list. The funding and valuation game The used car space has witnessed four unicorns so far including Cars24, Spinny, CarDekho, and Droom. Valuation-wise, Cars24 is on top with $3.3 billion followed by Spinny, CarDekho, and Droom. At the same time, CarTrade’s market capitalization stands at around $370 million. Notably, all of these raised their last funding in 2021. In contrast, OLX has not raised any funding for a long time. Rising scale of leading used car players Cars24’s revenue from operations marginally declined 8.9% to Rs 5,534 crore during the last fiscal year while in grabbing the second spot, Spinny’s scale jumped nearly 30X to Rs 3,261 crore. CarDekho also managed 46% growth with Rs 2,332 crore in revenue. However, the company is also involved in other operations like insurance, marketing et al. Its revenue from the sale of used cars stood at Rs 952 crore during the period. CarTrade’s sales grew 16.3% to Rs 363.7 crore in FY23 as compared to Rs 312.7 crore in FY22. OLX and Droom recorded Rs 514.92 crore and Rs 253.3 crore in revenue during FY23, respectively. For context, Cars24 makes over 90% of its revenue from the sale of cars while a small part comes from financial services. Similarly, Spinny made 95% of its revenue from the sale of cars while the remaining was from services, including commissions on car sales and financial services. Where are the used car companies spending? Cars24 spent over 80% of its expenses on the procurement of goods while Spinny and CarDekho booked 72% and 33.7%, respectively, under the same. CarDekho spent 21.7% of its cost on employee benefits and 21.1% on advertising and promotional expenses. CarTrade incurred the majority (55.9%) of its expenditure on employee benefits followed by promotional and other expenses. The red and green: Bottomline of the used car players Listed on the stock exchange, CarTrade is the only profitable company among the leading players as of FY23. The company posted Rs 40.4 crore profits in FY23 against Rs 121.3 crore in losses the previous year. On the back of rising expenses, Spinny has the highest losses, but not the worst margins. Its losses crossed the Rs 800 crore benchmark in FY23. CarDekho and Cars24 are next in line with Rs 566 crore and Rs 467.7 crore losses, respectively. Meanwhile, CarDekho’s auto business reported Rs 360 crore losses during the period. A look at Covid & Pre-Covid performance The COVID-19 pandemic impact on Cars24, CarTrade, and Droom was big enough to lead to a decline in revenue. On the other hand, CarDekho and Spinny managed to achieve positive growth, although below expectations. Consolidations in used car space The pre-owned car space also saw a bunch of consolidation as bigger brands took over smaller ones over the past five-six years. CarDekho topped the list with seven acquisitions including Revv, Carmudi, Carbiqi, Help on Wheels, ZigWheels, BuyingIQ, and Gaadi.com. Listed company CarsTrade took over Olx Auto, SAMIL, Adroit Inspection, and CarWale whereas Spinny acquired three startups – Scouto, Truebil, and HopCar – since its inception in 2015. OLX as a group acquired around 12 companies which also included global companies such as Sulit and Tokobagus. Recent Developments Delhi NCR-based Cars24 is reportedly piloting a new service that allows car owners to hire drivers on-demand on an hourly basis. The startup had launched a separate app – Autopilot Driver – a few months ago to onboard drivers for the new service. CarDekho shut down its used car retail business amid continuously losing money in the B2C model because of high burn on parking, showrooms, and manpower without any sight of profitability. User behavioural shift in the used cars segment Second-hand cars have been in fashion for eons. However, there has long been a stigma attached to owning a used car. Beyond social status and related concerns, people have had trust issues regarding sellers’ credentials, the history of cars, and so forth. The growing number of startups in this space, however, have democratized the process and have made it more accessible to common users. While increased accessibility and the shedding of stigma are commonly observed, there has been a big change in how people approach used cars. As mentioned above, the pandemic has also had a significant impact, alongside changes in policies and advancements in technology. The trend toward choosing used cars is growing stronger for several practical reasons, a Cars24 spokesperson said. “Buyers are discovering that used cars offer significant value, allowing access to higher-end models and features without the steep price of a new vehicle. The reliability of used cars has greatly improved, thanks to comprehensive inspections and refurbishments, making them a dependable choice. Additionally, the fact that new cars depreciate quickly makes pre-owned vehicles an appealing option for those looking to maximise their investment. This shift in consumer behaviour reflects a smarter, more value-conscious approach to car buying,” the spokesperson explains. The spokesperson further said that car buyers in India are ready to spend 30% (FY22 vs FY23) more on their vehicles, steering towards models with premium features and better overall quality. There is also a surge in demand for SUVs. EVs are too making their way in the used car segment. “In 2023, there was a phenomenal 5X surge in enquiries for EVs on the platform, reflecting a growing interest in alternative fuel options and a shift towards cost-efficient and eco-conscious driving,” the spokesperson said, adding that Cars24 is currently averaging 200 enquiries daily for EVs. CarDekho is also bullish on the used car segment. “Used cars will still continue to do fine as the older vehicles will migrate out of metros,” said Amit Jain, co-founder and CEO of CarDekho Group. Jain also highlighted that demand for used cars is mostly from individual users as cab drivers need a yellow plate which is expensive, making the proposition unviable for cab drivers. “Cab drivers also need CNG installations as most of the used cars are either petrol or diesel which add extra burden on them,” he added. TheKredible’s take Even as it is a huge and growing market, it is well known that making money in the market is a different ball game. Buyers have the option of direct deals with owners, free listing sites and of course, a massive unorganised market, before they approach the organised players. With the option of going with the firms floated by automakers such as Maruti Suzuki True Value and First Choice are always there in case of a purchase. Thus, beyond the obvious issue of price for both sellers and buyers, these firms have to invest in differentiators that will be valued. The high losses and lack of loyalty indicate just how little success they have had in this effort. We believe lasting success in the category will continue to demand a long-term, high-investment approach that not all the existing players will survive.

Return Prime aims to make return management seamless for brands

EntrackrEntrackr · 1y ago
Return Prime aims to make return management seamless for brands
Medial

Bengaluru-based Return Prime provides a customer return platform which includes a business dashboard for managing returns. The company aims to make it easier for brands, specially smaller ones, to use its services through a plug-and-play model. Beyond basic returns, brands can use the Return Prime platform for automating return logistics, refunds, replacements, and more. We spoke to founder and CEO Shashwat Swaroop to learn more about Return Prime, what distinguishes it from the competition and the roadmap ahead. Here are the edited excerpts: How did you come up with this idea? I have always been extremely passionate about creating something and solving problems, building my brand which helped other people solve their challenges was always something that I intended to do. Once an eCommerce brand came to me with their return management nightmare. They were doing everything manually and it was too cumbersome. It was not only time-consuming but was impacting their customer experience too. Customers were used to a certain speed, standards, and experience, and to ensure their shoppers wouldn’t leave them, they needed a solution to cater to this. But building a whole software program was just out of reach – both financially and in terms of time! I then began researching, and my study confirmed what I suspected – there was a massive gap in the market for managing returns. Existing solutions were few and far between, and mostly focused on the US. We saw a chance to empower brands worldwide to make return management extremely seamless, one that ensures their GMV losses are minimized while customer experience is maximized, that’s what led to the birth of Return Prime. Please help understand how you generate revenues. The pricing models are quite fair and simple. This was one of the most important things for us to simplify. When we started building Return Prime, we were simplifying the complicated experience of returns for both brands and their customers so keeping everything around Return Prime simple was important. The pricing model is just based on the scale of business which is how many returns they do in a given month. One can start with the Free Forever plan if they are a small brand and pay nothing forever. They only have to choose a paid plan when they start to grow. As you grow, you can choose one of our Grow plans which starts at $9.99 a month. What are the key challenges in the industry that have not been addressed yet? And how do you plan to address this? We are working to solve the way businesses see returns. The correct solution is not to focus on reducing the returns but on figuring out how you can turn your returns into a revenue-making opportunity. Returns are simply inevitable so the merit is not in reducing it by another few per cent but in converting the majority of it into additional revenue. We are constantly working on it and on average, our brands see an ROI of 183%+ with Return Prime, which is on the cost they pay for Return Prime every month. This is going up constantly with our focused effort to turn returns into revenue. How has your startup performed since its inception? Please share statistics. We have been growing from day 1, completely bootstrapped. We grew 150% YoY in the last 3 years and this is not just India, across the globe. We serve merchants in 100+ countries today and our market share across these countries continues to increase every year. In the last 3 years, we have processed over 12 million returns for brands and customers globally. What are your short-term and long-term goals in terms of product and business expansion and diversification? From a product expansion point of view, we are focused on increasing the ROI for our brands as we believe in keeping strong fundamentals. While we do this, we will continue to increase our market share across other regions as well along with India. As consumer behaviour evolves, we are also trying to help brands offer Omnichannel returns experiences to their customers making it super easy and delightful for them. This not only helps the customer but also increases the repeat purchase and LTV for brands as this customer will trust them even more. On the other hand, we are also trying to help bigger brands solve more complex operational problems and policies which now with Return Prime is just a matter of click. We will continue to simplify complexities as we grow along with brands. In terms of geographical expansion, we will go deeper into some of the regions and increase our market share while we continue to turn returns into revenue for the rest of the world.

No hurry to sell, indefinite horizon on Zomato holding: Sanjeev Bikhchandani

EntrackrEntrackr · 1y ago
No hurry to sell, indefinite horizon on Zomato holding: Sanjeev Bikhchandani
Medial

Info Edge, India’s largest and most storied recruitment portal, has had a stellar run in the last three years with its portfolio company Zomato’s market cap surging almost 2.3X since its stock exchange debut. The firm’s bet on fintech unicorn Policybazaar is also paying off well. The company has made it clear it is in no hurry to book profits on these investments, even as it continues to nurse its own brands beyond Naukri to profitability. The firm, one of the few to survive the dotcom boom and bust cycle of 2000, has been led by founder and chairman Sanjeev Bikhchandani for a large part of this journey. And today, Bikhchandani has earned the right to be looked up to as the statesman for the sector. Entrackr caught up with Bikhchandani in his Gurugram office and he spoke on a range of topics including Naukri, Info Edge’s investments, serial entrepreneurs and corporate governance. Here are the edited excerpts. As a listed firm that carries a heavy overhang from its investment portfolio, does it worry you that it might impact the valuation of the core Naukri business? Not really. Institutional investors are smart. We give them adequate data so that they analyze Naukri thoroughly before making a conclusion about valuation. We don’t run Naukri for valuation every day or month or quarter. We look at how we create value for our shareholders in the long run. And that’s how we run our businesses. So, this hypothesis about our core or even group business doesn’t stand. Info Edge has been an investor in Zomato for over 14 years and despite the latter’s share price rising nearly 14o% from its listing price, Info Edge didn’t sell its shares. What level of return are you anticipating from Zomato? Actually, we don’t calculate Investment Return Rate (IRR). Info Edge invested in Zomato because of our conviction that it could become a great company. And if you are convinced about your conviction then it will happen. So, IRR is the happy incidental outcome of investing early behind companies that you want to help. That’s my belief. We are not in any hurry to sell and have an indefinite horizon. Every VC firm has a fund cycle and pressure to return capital to their limited partners but that’s not the case with Info Edge as you are investing from your own balance sheet. Could you elaborate on this? That pressure does not make this choice. We have a long term horizon and we call it patient capital. To be a successful early stage investor in India, you have to be quite patient because companies take anywhere between 10-15 years to go to IPO from seed stage. So if you have funds for only 6-10 years, you will not realize the full fruits of your investment. If you have a 20 year fund, you tend to perform better. However, such a horizon could be possible only when you’re investing from your own whole balance sheet. Do you believe that Blinkit could become bigger than Zomato? I think both are large but Blinkit is going to be fairly large. If we look at Zomato’s quarter-on-quarter numbers, online food ordering appears to have stagnated in top 10-15 cities. What’s your take on this? Obviously, there is the base effect. But, we don’t see stagnation. Also, you need to compare year-on-year, not quarter-on-quarter. When YoY numbers are compared, there is growth. I think full fiscal year performance is more important than quarter. We used to commonly hear about Naukri’s recruitment business that it was not the online presence, but your sales force or feet on the street that made the difference. Does that still hold true? Online sales have never been a big part of our strategy. When you want to sell more expensive products, you need face-to-face contact. At Naukri, we have clients whom we bill several crore rupees for annual subscription and such accounts need heavy offline touch. While the product will be consumed online, the stuff around it very often will be offline. Over the years, several players have tried to crack the recruitment business in the blue collar segment but most of them died. What are the challenges in the segment? Blue collar segment has broadly three challenges. First, it’s hyperlocal. The job seekers in this segment don’t move to different cities as they look for opportunities in and around their locality. Second, very often there isn’t a detailed text CV which makes the process slow and inefficient. Third, potential workforce in the segment do not search for jobs on the laptop and use vernacular languages. They are mostly on mobile. So you’ve got to adapt to all these things and still somehow get revenue and profit. We have been trying to get inroads in the blue collar segment for over two years now but we have just started monetizing it. Our future position in the segment depends on monetization. Some of the celebrated entrepreneurs are launching a second or third company without their first startup churning profit. How do you see this trend? I think this isn’t a progressive trend. As an entrepreneur, you need to focus on one thing and do really well. Once you’ve cracked that you can add on a second thing in the same company. Over the past couple of years, we have witnessed corporate governance issues with some startups. Even Info Edge saw serious lapses at 4B Networks. What’s your opinion about this? By and large, my belief is that 95-98% of Indian founders are genuine but there will be a few bad examples. Investors make sure that when something wrong happens in their portfolio, it is highlighted and actions are taken to ensure that such incidents do not repeat. Any governance issue isn’t good for anyone including limited partners, investors, founders and the startup ecosystem. What factors contributed to the lack of success with Info Edge’s e-commerce investments 99labels, MyDala, and Happily Unmarried? Limitation of raising foreign direct investment (FDI) and heavy investment into competition were two major reasons for failure of 99labels while MyDala had a product market fit (PMF) issue. Happily Unmarried is now a part of VLCC and we are still a shareholder there.

BluSmart drivers face uncertainty amid company troubles, founder issues

EntrackrEntrackr · 2m ago
BluSmart drivers face uncertainty amid company troubles, founder issues
Medial

BluSmart suspended its operations in April in Mumbai, Delhi-NCR, and Bengaluru, asking its 10,000 driver-partners to return their vehicles. The move has left several drivers scrambling to find new sources of income. Rajesh [name changed], a 35-year-old man in Gurugram, secured a driving job with a heavily VC-funded electric vehicle cab hailing company which once aimed to take on the duopoly of Ola Cabs and Uber in India. An average income of Rs 20,000 to Rs 25,000 per month, Rajesh admits, was not much for his family but managed to pay bills. Though, Rajesh, who also is a father of two young children, put in 10 hours to 12 hours daily - to reach the estimated monthly income. With his company now pausing the services, Rajesh has no source of earning, and does not know how he will pay his kids’ education fees. "... Now, I don’t know how I’ll manage. I missed my kids' school fees this month. My family depends on me, and I’ve never felt so helpless,” a visibly stressed Rajesh told Entrackr. One of the things that is agonising Rajesh the most is the deceptive way his employer pushed them out. “On Wednesday (April 16th), we [drivers] received a message saying the car needed to be submitted to the hub for a breakdown. We thought it was just a minor technical issue. When we got there, they told us it was a failure and we’d be informed later. But there was no word from the company after that. We just had to go home. We were left in complete shock," says Rajesh as his voice strains, reliving the fateful moment. Rajesh says he was among the first lot of employees, when the company had just 50 cars. Like many others, he too bought the company’s promise of stability. “Now, it feels like we’ve been left out to dry,” he said. “I’m considering working with Uber or Ola… I’m looking for something else, maybe a different field altogether. But BluSmart was my livelihood, and I’d go back in a heartbeat if they reopened. It was my only source of income,” he added. Rajesh’s story resonates with another thousands of drivers who are now scrambling to find new sources of income after BluSmart’s sudden suspension of its services. Entrackr has reached out to BluSmart seeking responses on how they plan to compensate the affected drivers. In case they respond, we will incorporate their inputs. Staging the protest On May 4, a group of BluSmart drivers raised their grievances at Jantar Mantar, a historic site for protests. They pressed for demands for alternative income avenues as well as called for crucial policy reforms to prevent similar abrupt dismissals. Additionally, they also sought a government intervention. Tajinder Singh, president of Parivahan Morcha Athavale and also among those spearheading the protest, told Entrackr that women drivers of BluSmart were among those bearing the brunt the most as other taxi companies refused to recruit them. He further said that some drivers were working on a per day basis as and when required but asserted that this was not a long-term solution. “We are demanding compensation for affected BluSmart drivers. We have also sought government intervention so that the drivers can continue to earn their livelihood,” Singh said. Singh also claimed that hundreds of BluSmart employees working at charging hubs were affected by the company’s sudden suspension of its services. A business model that promised to be different than rivals Even as ‘sustainability’ remained the headline grabber, BluSmart also deployed a rather different business model compared to rivals Ola Cabs and Uber. The company used a full-stack B2C model wherein they owned and managed the vehicles whereas Ola and Uber work with independent drivers. The model allowed BluSmart to have a better control on the quality of cars, maintenance, and subsequently better customer service. For drivers, the company offered a fixed salary along with incentives. An assured income was a big factor why a lot of drivers showed interest in joining BluSmart. Ola and Uber, on the other hand, operated on a familiar commission-based system, also common with several gig working-reliant service providers. Singh also highlighted this stark difference between BluSmart and its rivals. He said that the job of driver was to pick and drop the passenger and earn a regular income (per day payout and incentives). They needed to work 10 hours to 12 hours a day. Other things like maintenance and documentation was taken care of by the company, giving drivers a more relaxed environment to operate. Blusmart has raised over $180 million to date, including its $50 million series B round in January this year. Though, it received only Rs 61 crore out of $50 million. That said, a heavily-funded BluSmart juggernaut appeared unstoppable, until it did. Earlier this year, reports emerged that BluSmart delayed salary payments to cash crunch. It had also shut down operations in Dubai and also saw an exodus of top management employees, including CEO, CBO, and CTO. A month later, SEBI published findings of its probe into Gensol Engineering, BluSmart’s partner and EV lessor. The SEBI order highlighted misuse of funds, and also barred promoters Anmol and Puneet Singh Jaggi from accessing the securities market and holding key positions in Gensol Engineering. What next for BluSmart drivers BluSmart drivers facing joblessness due to the shutdown can go for legal remedy and urgently demand clearance of any unpaid dues and better severance compensation, if not given already. The legal course, which may take a relatively long time, may also help them investigate if BluSmart violated the contract by sudden halting of their services and returning vehicles. Moreover, they can also seek intervention from regulatory boards. Singh, however, did not appear enthusiastic about taking the legal course. “Companies like these make such contracts that they keep them protected in such incidents and don’t have to own any responsibility towards people working so hard for them,” he said [loosely translated from Hindi]. As far as the future of the company goes, it’s hard to predict considering the massive VC money riding on the company. Despite the major dent in public image and also several legal troubles, it’s likely that the company may stay afloat with a rather new management and new board - a few known steps troubled companies often take to course correct. It’s worth noting that quality of drivers and cabs were the top highlight of the platform, and if it resumes, it should continue with that. With the ongoing protests and lack of communication between drivers and management, it seems unlikely that the company will enjoy the same level of trust from its network drivers.

Indian startups raise $1 Bn in July: Report

EntrackrEntrackr · 11m ago
Indian startups raise $1 Bn in July: Report
Medial

After closing the first half year on a promising note, Indian startups managed to cross the $1 billion monthly funding run rate in July too. Startups are also anticipating favorable market conditions with many set for their stock market debut in early August, be it Ola Electric or Infra.Market later in the year. Meanwhile, the Indian government has abolished angel tax which is seen as a positive for the entire ecosystem. As per data compiled by TheKredible, Indian startups raised over $1.03 billion across 126 deals in July. This consisted of 28 growth stage deals amounting to $725 million and 72 early stage deals worth $311.83 million. Meanwhile, there were 26 undisclosed transactions mainly in early-stage deals. [Y-o-Y and M-o-M trend] While the last month saw a sharp decline in funding from $1.93 billion in June, this is the highest funding for July in the past three years. The sudden jump in June was steered by Zepto’s $665 million megaround followed by Flipkart, PharmEasy and Lenskart. Indian startups have raked in $8 billion in the first seven months of 2024. If the trend continues, the overall funding is comfortably expected to cross the $11 billion milestone of 2023. To recall, Indian startups saw $38 billion and $25 billion funding in 2021 and 2022, respectively. [Top 10 growth stage deals] There were two $100 million plus deals in July with Purplle and Rapido raising $120 million each. Bike taxi firm Rapido also turned unicorn and became the third company to enter the billion dollar valuation club in 2024 so far. Hospitality firm Oyo’s $50 million came in third position followed by home service marketplace Urban Company, fintech company Navi, electric vehicle firm Matter, and wealthtech startup Dezerv, among others. It’s worth highlighting that Oyo saw a major haircut in its valuation while Urban Company raised the amount in secondary and Navi raised the sum in debt. [Top 10 early stage deals] As many as 72 early-stage startups raised $311.83 million funding last month. Manufacturer of high precision tooling for aero-engines and airframes, Unimech Aerospace led the list with a $30 million fundraise followed by renewable energy services company BluPine, electric vehicle and clean energy startup Simple Energy, gen-Z focused fast fashion D2C brand Newme, and wealthtech startup Stable Money which pocketed $28.8 million, $20 million, $18 million, and $15 million, respectively. Further, artificial intelligence startup UptimeAI, biotech firm Immuneel Therapeutics, community-led mobility app Namma Yatri, wedding service provider Meragi, and NBFC Seeds Fincap also raised funding among others. The list of early-stage startups also includes 26 startups that did not disclose their funding amount. For more information, visit here. [Mergers and Acquisitions] The month witnessed 17 acquisition deals. Gaming company Nazara Technologies acquired an additional 48.42% stake in Paper Boat Apps (PBA) from its promoters Anupam and Anshu Dhanuka for a sum of Rs 300 crore while its gaming arm Next Wave Multimedia acquired the intellectual property rights of Ultimate Teen Patti from Games24X7 for Rs 10 crore. The list further counts acquisition of Excelmax Technologies by IT giant Accenture, OneCare by Acko, Ekagrata by Adda247, Koral by Captain Fresh, Centcart by CASHe, BitOasis by CoinDCX, Galleri5 by Collective Artists Network, SiliConch Systems by L&T, and Munitalks by Melooha, among others. [City and segment-wise deals] City-wise, Bengaluru-based startups maintained the top position with 42 deals, contributing around 37% of the overall funding in July. Delhi-NCR and Mumbai followed with 33 and 24 deals, respectively. The list further counts Ahmedabad, Hyderabad, Jaipur, Chennai, Pune, and Kolkata, among others. Segment-wise, fintech startups led the show followed by e-commerce (including D2C brands) and SaaS with 15 and 10 deals, respectively. Healthtech, AI, and Agritech were next on the list. Visit TheKredible for more details. [Stage-wise deals] Series-wise, equivalent to 36 startups raised funding in the seed round followed by 27 Series A, 15 pre-Series A, 13 pre-Seed, and 4 Angel funding deals. Debt-only funding contributed $160.76 million or 15.5% of the overall venture funding across deals. [ESOP buyback] Adda247 and Swiggy announced ESOP buyback programs this month. Edtech platform Adda247 has initiated its first-ever ESOP buyback benefiting over 130 employees, following its acquisition of Ekagrata Eduserv. Meanwhile, food delivery giant Swiggy has rolled out its fifth ESOP liquidity program worth $65 million, providing an opportunity for employees to monetize their equity. These moves highlight the growing trend of startups rewarding employees through ESOP buybacks. [Layoffs, shutdowns and departures] Edtech major Unacademy laid off 250 employees as part of its cost-cutting measures. Similarly, agriculture supply chain firm Waycool underwent its third round of layoffs, affecting over 200 employees. In the content creation space, Pocket FM laid off nearly 200 contract writers based in the US. The startup ecosystem also saw three shutdowns. Vernacular microblogging platform Koo has ceased operations after failing to secure a buyer or sufficient funding. Apollo Tyres has also reportedly discontinued its doorstep car service, Trumigo, due to a lack of traction. In the edtech space, Bluelearn has shut down and will return a significant portion of its raised capital to investors. Edtech major Unacademy has seen the departure of its COO for offline centers, Jagnoor Singh. Similarly, Simplilearn’s Chief Product Officer, Anand Narayanan, stepped down after an eight-year tenure. Zoomcar’s global president has resigned amidst company restructuring while Medikabazaar’s co-founder Vivek Tiwari stepped down as CEO. Eight Roads Ventures’ Asia managing partner Raj Dugar also stepped down after 17 years with the investor, as per media reports. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [Trends] It’s raining startup IPOs: This year quite a few internet companies such as TBO tech, Digit Insurance, Awfis and Ixigo have got listed on the Indian stock exchange, with all delivering spectacular returns post listing as well. Three more companies including Ola Electric, FirstCry and Unicommerce are all set to make their stock market debut. Moreover, Mobikwik, Swiggy and Avanse have been waiting for approval from the market regulator. Wealthtech on the rise: A clutch of wealthtech startups have managed to score decent funding in the ongoing calendar year. In July, Deserv and Stable Money raked in $32 million and $15 million respectively. As per reports, more wealthtech startups are on the verge of raising new rounds. Geographic expansion: Traditionally dominated by metros like Bengaluru, Delhi-NCR, and Mumbai, the landscape is now witnessing a surge in entrepreneurial activity from smaller cities. Startups hailing from Ankleshwar, Bareilly, Bicholim, Nashik, Rupnagar, and Udaipur have recently secured funding, underscoring the growing potential of these regions. Family offices spreading out: Wealthy families are diversifying their portfolios. Traditionally focused on real estate and fixed deposits, they’re now actively seeking new investment avenues. This shift has led to the creation of separate investment pools and a growing interest in equity markets. In the past month, seven family offices participated in funding rounds. These include the family offices of Sunil Singhania, Jyothi Pradhan (CEO of Kurlon), MS Dhoni, Dr. A Velumani, Vasavi Family Office, Desai Family Office, and a Tamil Nadu-based family office. [Conclusion] As we had predicted in 2023, and earlier this year, the markets are expected to pick up by H2 this year, and here we are. Perhaps the last piece in the puzzle would be an interest rate cut by the Fed, to catalyse a whole chain of events that could lead to a mini-boom yet again. While expecting the highs of 2021 might be too much to hope for ($38 billion), it is not unreasonable to expect the Indian market to attract at least $15 billion in funding in 2025. The strong record of IPOs that is building up will not hurt investor confidence at all. The only thing to watch out for might be a rotation from Fintech and E-commerce to newer and important segments like Healthcare and Climate tech. Both are areas where India has large domestic markets, multiple use cases, and the crying need for solutions that can make a difference. With the kind of huge targets the country has in front, and massive schemes to get close, expect some large deals in the renewables space soon.

Indian startups attract $4 Bn in funding during September quarter

EntrackrEntrackr · 9m ago
Indian startups attract $4 Bn in funding during September quarter
Medial

Indian startups have shown impressive resilience in the third quarter of 2024, raising over $4 billion. This funding amount is nearly on par with the previous quarter and exceeds the total from the first quarter of the year. The landscape featured several significant deals, including multiple transactions over $300 million and $200 million, along with pre-IPO rounds and secondary market activity. This robust support, especially from early-stage startups, highlights a strong recovery and continued investor confidence, making it one of the most successful quarters during the ongoing funding winter. According to data compiled by TheKredible, Indian startups raised approximately $4.08 billion in funding during the third quarter of 2024. This amount included 85 growth and late-stage deals totaling $3.3 billion, along with 207 early-stage deals worth $754.26 million. Additionally, there were 58 undisclosed deals during this period. Notably, three new unicorns emerged in Q3: Ather, Rapido, and Moneyview. In total, six startups joined the unicorn club in 2024, all based in Bengaluru. In contrast, only two startups reached unicorn status in 2023, while 26 and 44 unicorns were born in 2022 and 2021, respectively. [Y-o-Y and M-o-M trend] In Q3 2024, Indian startups secured 352 deals totaling $4.08 billion, a slight decrease from the $4.27 billion raised across 363 deals in the previous quarter. Over the last seven quarters, Q3 2024 stands out as the second most funded period. Additionally, on a monthly basis, September achieved the second-highest funding with $1.63 billion, trailing behind the peak of $1.92 billion recorded in June. As of now, Indian startups have raised $11 billion in the first nine months of 2024, matching the total amount raised throughout 2023. [Top 10 growth stage deals in Q3] This growth can be largely attributed to Zepto’s remarkable $340 million funding round, closely followed by DMI Finance, which raised $334 million. Other significant contributors included PhysicsWallah, Rapido, Oyo, and Whatfix, each securing substantial funding. Notably, all top 10 growth-stage startups on the list have raised over $100 million each, including Purplle, Drip Capital, M2P Fintech, and InMobi. [Top 10 early-stage deals in Q3] Renewable energy services company BluePine led the early-stage startups with $28.8 million in funding. Following closely were AI firm Nutrix AI, EV companies Kinetic Green and Simple Energy, healthcare startup Even, fintech startup Centricity, and gen-z focused fast fashion D2C brand Newme, all of which made it into the top five. The complete list is available through TheKredible. [Mergers and Acquisitions] Merger and acquisition activity has surged to new heights. According to data compiled by TheKredible, Q3 saw 54 M&A deals, nearly matching the combined total of 55 deals in Q1 and Q2. The top acquisition in Q3 was OYO’s purchase of G6 Hospitality for $525 million, followed by Zomato’s acquisition of Paytm’s movies and ticketing business for $244 million. OYO also acquired Checkmyguest for $27.4 million. Other notable M&A activities included Nazara acquiring Pokerbaazi and Kiddopia, Redcliffe Labs acquiring Celara Diagnostics, HomeLane taking over Design Cafe, and Radio Mirchi’s parent company ENIL acquiring Gaana. [City and segment-wise deals] Bengaluru once again led the pack, with 122 startups from the city raising over $1.38 billion in funding during Q3, representing 34% of the total funding. Following closely, Delhi-NCR-based startups completed 91 deals amounting to $1.3 billion, accounting for nearly 32% of the total funding, putting them not far behind Bengaluru. Mumbai, Hyderabad, Chennai, and Pune were next on the list. Notably, Mumbai-based startups contributed to more than 21% of the total funding in the last quarter. Segment-wise, fintech was at the top with 61 startups raising over $1.15 billion. E-commerce, healthtech, SaaS, and AI startups were next on the list. Amount-wise, automotive tech startups raised more money than SaaS and healthtech. Agritech, foodtech, edtech, and proptech saw their downfall during the first half of 2024. Edtech secured $233 million in funding during the period, with PhysicsWallah alone raising $210 million. Agritech was one of the least funded segments, contributing just 1.39% to the total fundraising, while the electric vehicle (EV) sector accounted for nearly 5% of the total. [Stage-wise deals] In Q3 2024, seed and pre-seed stage startups completed 138 deals totaling over $168 million. Series A and pre-Series A rounds recorded 73 and 37 deals, respectively. Additionally, there were 23 debt funding rounds worth $314 million, contributing 7.72% to the overall total. For more details, check TheKredible. [Layoffs, shutdowns and departures] Layoffs continued to impact the ecosystem in Q3, with 10 companies letting go of more than 1,200 employees. However, this figure is significantly lower than the over 2,200 employees dismissed in Q2. Overall, approximately 4,500 employees received pink slips in the first nine months of 2024. In comparison, this year’s layoffs are notably better than the 24,000 layoffs recorded in 2023 and the 20,000 in 2022. Recent market conditions have led to an increase in business closures. In Q3, eight startups announced their shutdowns, including Koo, Wynk Music, and Greenikk. This figure surpasses the six shutdowns recorded in Q1 and Q2 combined. Meanwhile, the startup ecosystem experienced notable departures of top executives in Q3. According to data, 16 top-level executives, including CEOs, CBOs, CFOs, co-founders, managing directors, and presidents, have resigned. During the period, there were 77 key hirings. The full list can be accessed here. [Trends in Q3 2024] Agritech: Agritech continues to be one of the least funded segments in 2024, with over 30 startups raising only $150 million by September. This trend reflects ongoing challenges, as last year saw just $178 million in agritech funding, a significant drop from $772 million in 2022 and $636 million in 2021. Wealthtech: Wealthtech is witnessing rapid growth, with venture capitalists making significant investments over the past 12 months. According to data intelligence platform TheKredible, Indian wealthtech startups raised over $100 million across five deals in Q3. IPOs from Bengaluru: Following a wave of startup IPOs from Delhi NCR and Mumbai, Bengaluru is making strides in 2024. Ola Electric and Digit Insurance have already been listed, while Ather and Swiggy have submitted their Draft Red Herring Prospectus (DRHP). Additionally, co-working space startup IndiQube is also planning to launch its IPO soon. BharatPe settles with Ashneer Grover: Fintech company BharatPe has resolved its long-standing dispute with former co-founder and managing director Ashneer Grover. This settlement represents a significant development, particularly given the serious nature of the complaints filed by BharatPe against Grover. Titan Capital launches Indicorns: Titan Capital has introduced Indicorns, a new index that showcases profitable startups generating over Rs 100 crore in revenue. This initiative highlights the growing trend of self-sustaining businesses in India, illustrating that startups can achieve profitability without heavily depending on external funding.

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