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Funding and acquisitions in Indian startup this week [25 - 30 Nov]
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During the week, 18 Indian startups raised around $54.43 million in funding. These deals include 2 growth-stage deals and 13 early-stage deals while 3 startups kept their transaction details undisclosed. Last week, 23 early and growth-stage startups cumulatively raised around $596 million in funding. Among the growth-stage deals, 2 startups raised $13 million in funding this week. Direct-to-customer (D2C) e-commerce solutions provider ShopDeck is on top with $8 million in funding. MSME-focused digital lender NeoGrowth raised $5 million. Further, 13 early-stage startups secured funding worth $41.43 million during the week. Global manufacturer of plastic promotional toys SM Toys (Candytoy Corporate) led the list followed by commercial EV leasing and asset management ALT Mobility, cross-border specialty chemical distribution platform Elchemy, D2C platform for baby and mothercare products All Things Baby, and smart kitchen appliance brand Beyond Appliances. Meanwhile, DevX, BitSave, and ElecTrade also raked in funding but did not disclose the transaction details. For more information, visit TheKredible. In terms of the city-wise number of funding deals, Delhi-NCR-based startups led with 5 deals followed by Mumbai, Bengaluru, Ahmedabad, Indore, Kochi, Hyderabad, and Surat. Segment-wise, E-commerce startups are on the top spot with 6 deals. Manufacturing, EV, Chemicals, and Fintech startups followed the list among others. During the week, Series A and pre-Series A funding deals are at the top with 5 deals each followed by Seed, pre-seed, Series B, and Debt deals. On a weekly basis, startup funding dwindled 90.9% to $54.43 million as compared to around $596 million raised during the previous week. The average funding in the last eight weeks stands at around $263 million with 24 deals per week. As many as two startup-focused funds launched this week namely Stellaris Venture Partners and Kenro Capital. The startup ecosystem witnessed 2 notable hires this week. Battery Smart onboarded Amit Bhardwaj as CFO and Allianz Partners welcomed Michael Buttstedt as finance chief and board member. Additionally, Sriram Krishnan resigned from Andreessen Horowitz (a16z), Peak XV’s partner Anandamoy Roychowdhary left the firm, and Unacademy’s SVP of Design Hardik Pandya exited. E-commerce firm Nykaa announced acquired majority stakes in Earth Rhythm, Nodwin Gaming purchased Trinity Gaming, and ISMG took a majority stake in Nullcon. StockGro, a platform for learning about trading and investments, announced that it has conducted two Employee Stock Option Plan (ESOP) buyouts between 2023 and 2024. StockGro offered these buyouts purely to provide employees with the chance to cash in on their vested shares. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. Uber rolls out 'Uber One' loyalty programme in India. Meesho unveils Gen AI-powered multilingual voice bot. Miko set to raise Rs 28 Cr in Series C round. OneCard to secure $28.5 Mn in new funding round. Innov8 eyes fresh funds worth Rs 100 Cr. Sugar Cosmetics to raise funding from Anicut, Malabar. Univest plans to raise $16 Mn funding. Incupaze seeks $25 Md funding. Bloom Hotels posts Rs 250 Cr revenue in FY24; profit spikes 2.3X. CitiusTech’s profit balloons 6X to Rs 350 Cr in FY24. DailyObjects’ revenue spikes 34% to Rs 84 Cr in FY24. Pratilipi approaches Rs 60 Cr revenue mark in FY24, cuts losses by 62%. Cars24 sells 2 lakh cars in FY24, revenue nears Rs 7,000 Cr. ApnaKlub reports Rs 537 Cr gross revenue in FY24 with sound economics. Beardo crosses Rs 170 Cr revenue in FY24; regains profitability. Lendingkart posts Rs 1,090 Cr revenue in FY24, profit slips. With 500% growth, Pocket FM joins Rs 1,000 Cr revenue club in FY24. ShareChat’s revenue grows 33% in FY24 to Rs 718 Cr. EV firm Bounce on track to report over Rs 150 Cr revenue by FY25. Flipkart-owned Cleartrip spent Rs 988 Cr to earn Rs 97 Cr in FY24. Info Edge-backed Gramophone GMV shrinks 70% in FY24. HealthKart reports Rs 1,021 Cr revenue and Rs 37 Cr PAT in FY24. Zomato secures Rs 8,500 Cr via QIP. CCI probes Google after Winzo alleges anti-competitive practices. Awfis reports insider trading violation by a senior executive. Nazara Technologies raises over $100 Mn via preferential issue. CCI nods to Google's investment in Flipkart and Temasek's in Rebel Foods. IIMA Ventures and Google partner to boost 22 AI startups. Amazon India to debut in quick commerce with 'Tez' launch. Tata Neu expands into quick commerce with Neu Flash. Flipkart penalized for unfair trade practice over defective product. Zomato CEO Deepinder Goyal waives salary until FY26. Ola Electric launches affordable e-scooters for gig workers. Angel One receives SEBI approval to enter the mutual fund business. Honda enters the EV market with Activa E and QC1 e-scooters. IT department issues notices to Paisabazaar over vendor payments. Zomato’s hyperpure introduces a 4-hour express delivery service. On a weekly basis, startup funding dwindled 90.91% to $54.19 million as compared to around $596 million raised during the previous week. The week saw two startup-focused fund launches namely Stellaris Venture Partners and Kenro Capital. Amazon India is set to enter the quick commerce segment with a new delivery service, code-named ‘Tez,’ which is expected to launch by late December or early next year. Tata Group's e-commerce platform, Neu, has also introduced a quick commerce service, Neu Flash, offering 15-minute deliveries in over 20 cities across India. The District Consumer Disputes Redressal Commission (Mumbai Suburban) found Flipkart guilty of unfair trade practices over a defective product. The Commission directed Flipkart and the seller to refund the product’s cost with interest and pay INR 10,000 as compensation to the customer. It also criticized Flipkart’s ‘no return policy’ for the product, deeming it an unfair trade practice. Ola Electric has launched two electric scooter models, S1 Z and Gig, aimed at gig economy workers and budget-conscious consumers. Priced at INR 39,999, the Ola Gig directly competes with players like Yulu, catering to short-distance commutes and delivery services, while the Gig+ variant is priced at Rs 49,999. The S1 Z starts at Rs 59,999, with the premium S1 Z+ priced at Rs 64,999, offering a range of affordable options for diverse user needs. Paisabazaar, owned by PB Fintech, has received notices from the Income Tax Department regarding payments made to certain vendors and their associated entities. Issued under the Prohibition of Benami Property Transactions Act, 1988, and Section 142(1) of the Income Tax Act, 1961, the notices seek documents and explanations about these transactions. The company, in its regulatory filing, stated that it is complying with prescribed timelines and will take all necessary steps to present and defend its case before the authorities.
VLCC-owned Ustraa reports Rs 50 Cr loss with flat revenue in FY24
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Men’s grooming startup Ustraa was acquired by personal care brand VLCC through a share swap and secondary buyout in the first quarter of FY24. However, under the larger group, Ustraa experienced a slight decline in revenue along with an increase in losses. Ustraa recorded a 2.94% decline in its revenue to Rs 94.02 crore in FY24 from Rs 96.87 crore in FY23, according to its annual financial report with the Registrar of Companies. This marginal decrease indicates that it faced challenges in maintaining growth in a competitive market. Ustraa’s 95.08% of total revenue came from the sale of products, which saw a 5.1% decline compared to the previous year. The company also gained Rs 4.7 crore from other sources taking the total income to Rs 94.27 crore in the last fiscal year. On the expenses side, the largest component was the cost of materials, which surged by 63.16% to reach Rs 60.4 crore. Employee benefit expenses saw a decline of 17.5% to Rs 20.94 crore. Advertisement expenses saw a significant reduction by 64.46% to Rs 17.09 crore. In contrast, the commission's costs rose by 43.82% to Rs 10.93 crore. With miscellaneous expenses, the total expenditure of Ustraa stood at Rs 144.6 crore, a 5.11% jump from Rs 137.57 crore in FY23. As a result, Ustraa recorded a 25.27% surge in losses to Rs 50.32 crore for FY24 from Rs 40.17 crore loss in FY23. The company's ROCE and EBITDA Margin stood at 284.01% and -51.16% respectively. On a unit basis, the company spent Rs 1.54 to earn a rupee of operating revenue in FY24. The cash and cash equivalents for Ustraa as of FY24 was recorded at Rs 6.89 crore, compared to Rs 1.17 crore in FY23. No other significant bank balances apart from the cash and cash equivalents were reported for FY24 and the trade receivables for Ustraa was Rs 7.46 crore in FY24. Founded in 2015, Ustraa offers products such as fragrances, hair care, face care, and beard care. Following its acquisition, the company's founders, Rahul Anand and Rajat Tuli, continued to work with the brand while also leading VLCC's D2C initiatives. Before the acquisition, Ustraa had raised over $10 million from investors, including Info Edge, Wipro, and IIFL, among others. The brand directly competes with Beardo, The Man Company, and Bombay Shaving Company. Notably, all these companies are operating at a loss and have either become part of a larger group or sold a significant stake to a major corporation. Bombay Shaving Company registered Rs 182 crore in revenue for FY23 and aims to achieve a topline of Rs 260-280 crore in FY24. Beardo saw a 12.2% increase in its FY23 revenue to Rs 106.6 crore, while The Man Company recorded Rs 115 crore in revenue for FY23. Their audited FY24 results are yet to be released. So far, the Ustraa acquisition seems to be following a predictable pattern of a cut in manpower and advertising costs, and topline stagnation with worsening bottom line. That is nothing odd simply because it is almost a template when a firm is acquired for these events to follow, as acquirers ‘clean up’ legacy issues to try and start on a clean slate by the next financial year. The question is, will Ustraa survive the changes to deliver in the next financial year? Looking at the peer group, while profitability remains a challenge for all, topline growth should not be as difficult, especially if VLCC did the acquisition with a clear plan to infuse funds at a later stage. Where things get really sticky is when the parent firm runs into troubles of its own.
Funding and acquisitions in Indian startup this week [22 - 27 July]
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During the week, as many as 22 Indian startups raised around $113.39 million in funding. These deals count 5 growth-stage deals and 8 early-stage deals while 9 early-stage startups kept their transaction details undisclosed. During the previous week, 35 early and growth-stage startups cumulatively raised more $261.21 million in funding. [Growth-stage deals] Among the growth-stage deals, 5 startups raised $49.3 million in funding this week. Renewable energy firm Rays Power spearheaded with its $15.1 million funding. Education loan provider Auxilo, NBFC NeoGrowth, EV company Ather Energy, and wealth and asset management firm Neo followed with $12 million, $11.2 million, $7 million, and $4 million in funding, respectively. [Early-stage deals] Further, 8 early-stage startups secured funding worth $64.09 million during the week. Manufacturer of high precision tooling for aero-engines and airframes Unimech Aerospace led the list followed by wealthtech startup Stable Money, co-working solution provider Incuspaze, quick service restaurant chain Charcoal Eats, and D2C luggage brand Nasher Miles. Provider of smart building solutions Nhance, two-wheeler service provider VOC Automotive, and HR technology platform Umwelt also raised funding. As many as 9 startups did not disclose the funding amount raised are; Pneucons, Godaam Innovations, VedaFit Foods, Aqin Biotech, Mkelly Biotech, Devnagri, WTF, Empyreal Galaxy, and Mayhem Studios. For more information, visit TheKredible. [City and segment-wise deals] In terms of the city-wise number of funding deals, Mumbai-based startups led with 6 deals followed by Delhi-NCR, Bengaluru, Ahmedabad, Bareilly, Hyderabad, Jaipur, Nashik, and Rupnagar. Segment-wise, Agritech and Fintech startups grabbed the top spot with 4 deals each. E-commerce, Manufacturing, and Proptech tech startups followed this list among others. [Series-wise deals] During the week, pre-Seed, Seed, and Series A funding deals led the list with 5 deals each followed by 3 Debt and 1 Angel, pre-Series A, Series B, and Series C deals each. [Week-on-week funding trend] On a weekly basis, startup funding slipped 56.6% to $113.39 million as compared to around $261.21 million raised during the previous week. This is the lowest weekly funding in the last 15 weeks. The average funding in the last eight weeks stands at around $323 million with 27 deals per week. [Fund launches] India Accelerator has launched a new vertical to support cleantech startups with substantial funding. Former defense secretary Ajay Kumar’s VC fund focused on defense, aerospace, and deeptech has successfully raised over its target corpus. Meanwhile, the Fashion Entrepreneur Fund has secured investments from prominent figures like Ravi Jaipuria and Akshay Kumar to empower fashion entrepreneurs in India. [ESOP buyback] Adda247 is buying back shares from over 130 employees at a price 40 times their initial purchase price. This move comes ahead of the company’s planned IPO in 2027. [Key hirings and departures] Ecom Express has strengthened its leadership by appointing Jitendar Kumar as Chief Business Officer and Abhinav Imandi as Senior Vice President. Meanwhile, Swiggy Instamart has expanded its team with key hires including Himavant Srikrishna Kurnala as SVP of Product, Mayank Rajvaidya as VP of Fruits & Vegetables, Manu Sasidharan as AVP of FMCG Category, and Kumar Rahul as AVP of Business Development. Drive FITT, Gupshup, and VC firm 360 ONE Asset Management also witnessed changes in their leadership teams. While, Asia managing partner of Eight Roads Ventures, Raj Dugar has reportedly stepped down after 17 years. [Mergers and Acquisitions] Business advisory firm Riveron has expanded its operations by acquiring Yantra. In the healthcare domain, Thyrocare has strengthened its presence in Northern India through the acquisition of Polo Labs. In the insurance and seafood industries, Acko and Captain Fresh have respectively acquired OneCare and Koral to bolster their market positions and service offerings. [Potential deals] Electric mobility startup Kazam is set to raise a $5 million funding round while Wingreens Farms seeking $4.3 million in debt financing. In the tech space, Glance is in advanced talks to raise $250 million, while Leap Finance is eyeing a $70-100 million round to achieve unicorn status. Additionally, Nykaa is securing Rs 125 crore through non-convertible debentures, as per media reports. Emami is set to acquire 100% stake in The Man Company, marking its entry into the D2C space. Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights. [New launches and partnerships] Google partners with ElectricPe to bring EV charging stations to Google Maps in India CRED launches financial management platform CRED Money [Financial results this week] Go Digit’s revenue falls in Q1 FY25 but profit spikes 90% Waycool posts Rs 1,251 Cr revenue and Rs 686 Cr loss in FY23 Urban company claims Rs 827 Cr revenue in FY24; 70% cut in losses [Key highlights of the Union Budget impacting startups] Angel tax: The government abolished the Angel Tax for all investors, effective April 1, 2024. This should make it easier for startups to raise funding. Focus on MSMEs: The budget allocated Rs 2 lakh crore to support MSMEs (Micro, Small and Medium Enterprises) with a focus on employment, skilling, and other opportunities. Easier foreign investment: The government plans to simplify rules and regulations for Foreign Direct Investment (FDI) to make it easier for overseas investors to invest in Indian businesses. Changes to tax rules: Non-reporting of movable assets up to Rs 2 lakh will no longer be penalized. While, income from share buybacks by companies will be taxed as dividends for the investor, starting October 1, 2024. [News flash this week] QIA seeks court injunction to halt sale or transfer of Byju Raveendran’s assets UPI in June: PhonePe, Google Pay see marginal decline, Paytm records flat growth Paytm fined for ESOP stamp duty lapses, gets NOD to invest in payments arm Ola Electric to launch IPO on August 2 The RBI fined Ola Financial Services for flouting KYC & PPI norms Delivery startup Dunzo faces new insolvency threat Manipal Group gets green light to increase stake in Aakash Cashfree Payments first to secure RBI’s cross-border payment license Google Maps to offer metro ticket booking in Kochi and Chennai Insurtech startup Covrzy gets broking license from IRDAI [Conclusion] The Indian startup ecosystem experienced a significant slowdown this week with funding plummeting by 56.6% compared to the previous week. While there were notable fund launches and new verticals emerging, the overall funding landscape was subdued. The Indian business landscape has seen a flurry of activity in recent weeks. Fintech giant Paytm has been fined for non-payment of stamp duties related to ESOPs, while simultaneously securing approval to invest in its payments arm. In the education sector, Manipal Health Systems is set to increase its stake in Aakash Educational Services. Bengaluru-based fintech startup Cashfree Payments has become the first company to obtain a Payment Aggregator Cross Border (PA-CB) license from the Reserve Bank of India (RBI). This license allows the company to process online transactions for both imports and exports, boosting cross-border trade and payments in India. Additionally, Google Maps is introducing a new feature that allows users in Kochi and Chennai to book metro tickets directly through the app. This service will be powered by the Namma Yatri app, which handles the payment and booking process. Cash-strapped delivery startup Dunzo is facing another legal challenge. A creditor has filed for insolvency proceedings against the company, claiming that Dunzo has only paid half of its owed dues. This is the latest financial setback for the Reliance-backed startup.
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