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Seven-year-old unicorn Open struggles to match deeds to reputation

EntrackrEntrackr · 1y ago
Seven-year-old unicorn Open struggles to match deeds to reputation
Medial

Neo-banking platform Open turned unicorn after a $50 million funding led by IIFL along with the participation of Tiger Global in May 2023. Despite the eminent status and significant funding, the scale and bottom line of the seven-year-old firm remained questionable as its enterprise value to revenue multiple stood at 260X until March 2023 (FY23). Open’s revenue from operations saw a modest 25% growth to Rs 30 crore in FY23 from Rs 24 crore in FY22, its consolidated financial statements filed with the Registrar of Companies (RoC) show. For context, Open recorded Rs 40 crore in revenue during FY22. The difference in revenue numbers for FY22 can be attributed to the change in accounting standards and revenue booking methods. Founded in 2017, Open offers banking, payments, and accounting solutions to small and medium businesses. Subscription sales through the company’s software and commission earned from customer transactions were the two main revenue streams for the company. It also made Rs 23 crore from interest on deposits and current investments (non-operating) taking total revenue to Rs 53 crore in FY23. For the neo-bank startup, its employee benefits constituted 50% of the overall expenditure. This cost grew 33% to Rs 149 crore in FY22 from Rs 112 crore in FY22 which also includes Rs 40 crore as ESOP cost (non-cash). The firm’s information technology, advertising, legal, payment gateway, card issuing, and other overheads catalyzed its overall expenditure to Rs 296 crore in FY23 from Rs 217 crore in FY22. See TheKredible for the complete expense breakup. Caveat: We have excluded the cost of change in fair value of compulsorily convertible cumulative participating preference shares for FY22 due to its non-cash nature. The modest scale and increased expenditure led Open’s losses to increase by 37.5% to Rs 242 crore in FY23 as compared to Rs 176 crore in FY22. Its ROCE and EBITDA margin stood at -50% and -394% respectively. FY22-FY23 FY22 FY23 EBITDA Margin -568% -394.3% Expense/₹ of Op Revenue ₹9.04 ₹9.87 ROCE -41% -50% Open’s total current assets stood at 332 crore including the cash and bank balance of Rs 311 crore till March 2023. On a unit level, it spent Rs 9.87 to earn a rupee in FY23. Open has raised over $180 million to date. According to the startup data intelligence platform TheKredible, Beenext is the largest external stakeholder at the moment with 11.72% followed by Tiger Global and Unicorn India Ventures. If readers wonder just what investors saw to pump in the funds into the firm to lift it to Unicorn valuations, then they are not alone, as even we struggle to understand the narrative that sold so well. The challenge of commercial success targeting India’s MSME sector has been well documented, thanks to the failure of multiple startups that were richly valued, only to fall by the wayside. At this stage, it’s safe to say that other than lending, practically nothing has worked, beyond the listing model of Indiamart and the likes. Considering Open raised its last funding as recently as 2023, well after it was established that the MSME sector is a graveyard for fee based efforts to ‘help’ them, one really has to wonder what Open offered to manage such amazing investor buy-in. Either way, we should know soon enough, as the clock ticks away for the firm to shake out its secret sauce.

Sedna HoReCa raises Rs 50 Cr led by Anicut Capital

EntrackrEntrackr · 2m ago
Sedna HoReCa raises Rs 50 Cr led by Anicut Capital
Medial

Sedna HoReCa, a business-to-business (B2B) platform for the hotel, restaurant, and catering (HoReCa) industry, has raised Rs 50 crore ($5.8 million) in a new funding round led by Anicut Capital. The Hyderabad-based company had previously raised $1.44 million. The proceeds will be utilized to build “India’s first integrated, technology-driven B2B solutions platform” for the HoReCa ecosystem and expand across 20 cities in the next 12 months, Sedna said in a press release. Co-founded in July 2022 by Mahadevan Narayanamoni and Saurabh Pandey, Sedna unifies software, distribution, and food product solutions under one roof. Its offering is structured around three verticals: B2B SaaS, commerce and distribution, and ready-to-cook or ready-to-serve food products. According to Sedna, its SaaS vertical includes SupplyNote, a widely used inventory management software, and BillNote, a point-of-sale (POS) software for restaurants and cafés. The commerce and distribution vertical includes Vyap, a supply distribution platform, and SupplyLink, a third- and fourth-party logistics (3PL/4PL) solution tailored for HoReCa businesses. These offerings aim to solve operational pain points such as high procurement costs, erratic supply chains, and inventory losses. Sedna intends to foray into the food segment with ready-to-cook and ready-to-serve offerings aimed at HoReCa businesses, food courts, direct-to-consumer (D2C) brands, and commercial kitchens. It is setting up a new food production facility in Bengaluru and will scale HU’s existing facility. Sedna aims to eliminate the hassles the HoReCa industry has been facing, such as escalating purchase costs, erratic fill rates, long lead times, and inventory loss due to pilferage.

Zomato becomes first Indian startup to enter Sensex 30

EntrackrEntrackr · 6m ago
Zomato becomes first Indian startup to enter Sensex 30
Medial

Foodtech giant Zomato has made history as the first Indian startup to join the Bombay Stock Exchange (BSE) Sensex 30, replacing JSW Steel Limited in the benchmark index of India’s top 30 companies. Zomato's inclusion in the SENSEX follows its strong performance over the past year. The stock has gained 38% in the past six months, 124.79% year-to-date, and 114.29% over the last year. On Monday, following its inclusion in the Sensex 30, Zomato's stock declined by 3.15% (as of 12:28 PM) to Rs 278.70 on the Bombay Stock Exchange, with a total market capitalization of Rs 2.68 lakh crore (approximately $31.9 billion) During the second quarter of the ongoing fiscal year, Zomato achieved a remarkable 68.5% quarter-on-quarter growth in operating revenue, reaching Rs 4,799 crore from Rs 2,848 crore in Q2 FY24. The Gurugram-based company also recorded a 4.8X increase in net profit to Rs 176 crore in the quarter ending September. Its arch-rival Swiggy posted Rs 3,601 crore of revenue and a net loss of Rs 625 crore during the second quarter of the current fiscal year. The recently listed firm is currently traded at Rs 592.8 per share and has a total market capitalization of Rs 1,32,695 crore (around $15.8 billion). Zomato also secured $1 billion from qualified institutional investors (QIIs) last month. The money keeps the firm with enough powder for future investments, even as the stock will benefit from index investing now, even though the BSE Sensex remains a smaller representation of India’s investment opportunities than say, the 50 share NSE Nifty. For Zomato, the index inclusion is a massive vindication of its seemingly high risk approach, where it has simply refused to rest on laurels, always pushing the boundaries to seek a competitive edge. Be it the acquisition of Blinkit, edgy communication strategies, or the investments into other startups, the firm has done enough to justify the lofty valuations, and expectations from investors thus far. The recent fundraise has also underscored its readiness to invest and invest big where it sees a need to do so. The sensex inclusion has seemed like a logical move for the pioneering tech firm, and the big question on everyone’s minds will surely be- what next?

Titan Capital launches ‘Indicorns 2025’ to highlight India’s profitable startups

EntrackrEntrackr · 2m ago
Titan Capital launches ‘Indicorns 2025’ to highlight India’s profitable startups
Medial

Titan Capital, a seed-stage venture capital firm founded by Kunal Bahl and Rohit Bansal, has released the ‘Indicorns 2025 List’ at India Internet Day. The list highlights startups in India that have crossed Rs 100 crore in annual revenue and achieved profitability, emphasizing long-term business sustainability over high valuations. The Indicorns initiative recognizes companies that focus on financial stability, operational durability, and consistent value creation. These startups reflect a shift toward building scalable businesses with a focus on long-term viability. All 202 companies on the list were founded within the last 15 years. Some have scaled without external funding, while others have been acquired or listed. Collectively, they reported a revenue of Rs 1,51,137 crore and profits of Rs 7,393 crore in FY24. Delhi NCR leads with 51 Indicorns, followed by Bengaluru with 42 and Mumbai with 35. Eight startups reached Indicorn status in under five years, 92 within ten years, and 102 within fifteen years. The top sectors include Fintech (50 startups), E-commerce (16), and Logistics (13). Notable names include OfBusiness, OYO, Razorpay, Unicommerce, and Beardo. “For too long, success in the startup ecosystem has been linked to valuations,” said Kunal Bahl, Co-founder of Titan Capital. “With Indicorns, we are recognizing companies built on profitability, steady growth, and long-term impact.” The Indicorns platform provides insights into these companies' financial data and growth strategies. These 202 startups have created over 1,46,705 jobs, reflecting their role in India’s economic development. By prioritizing profit and sustainability, Indicorns aim to redefine what successful entrepreneurship looks like in India. The list will be updated annually based on business performance and market trends.

Cygnet aims to drive business process digital transformation through specialized offerings

EntrackrEntrackr · 1y ago
Cygnet aims to drive business process digital transformation through specialized offerings
Medial

Cygnet is an Ahmedabad-based SaaS startup that aims to help organizations achieve business process digital transformation with its specialized offerings in compliance, digital and quality engineering, enterprise modernization, data, AI and analytics, hyper-automation, test automation, digital signature, and a myriad of other offerings. We spoke to the company founder, Niraj Hutheesing, to learn more about the startup, how it works, the growth of cloud and automation in the context of new-age AI, the future roadmap, and much more. How has the cloud and automation industry evolved with the arrival of new-age AI? How do you plan to make the transformation? The cloud and automation industry has evolved significantly with the advent of AI, enhancing capabilities in data processing, predictive analytics, and process automation. Our AI solutions excel in cloud monitoring and developing self-healing scripts, reducing Service Level Agreement (SLA) breaches through consolidated alerts. Additionally, AI-driven FinOps optimizes cloud infrastructure costs, while business process automation delivers real-time insights to operations teams. As pioneers in business prediction, we use AI to nullify data gaps, empowering businesses to enhance data-driven decision-making with accurate forecasts and strategic advantages. Do you also offer cyber security solutions? If yes, please explain them. If no, please help understand your point of view on adding a security layer to yourservices given the increasing risks. Yes, Cygnet offers comprehensive cyber security solutions under our ‘Security as a Service’ portfolio. Our approach is to implement ‘security by design’, ensuring all controls are implemented as a regular practice rather than add-on activities. Cygnet, certified on ISMS and SOC 2 Type 2, ensures overall compliance with industry standards for products and services provided. We also cater to our client’s needs in performing specific security practices, including Network Security assessment, Application Security assessment, Cloud assessment, documentation, Compliance reviews, etc., to help them achieve the required security posture. Cygnet also ensures the ‘Single Source of Truth’ concept using a data warehouse is implemented product-wide to ensure data reliability and integrity are maintained. Our approach includes compliance automation, ensuring adherence to industry standards and regulations. We implement infrastructure automation to maintain robust security protocols across all systems. Our applications support regulatory-required User access management modules, which ensure appropriate authentication, authorization, roles, rights, and logging are performed and stored in a secured format for future reviews. There are a bunch of companies operating in your space, with some well-established ones too. How do you stand out from the competition? With a couple of decades of robust experience in providing solutions to multiple organizations globally, Cygnet understands the need for agile deliveries and challenges occurring in a dynamic environment. The ability to adapt to changes and implement a solution or product tailored specifically for the client helps us to stand out from our competitors. Be it on critical integrations with legacy systems on the tax tech or fintech side or modernizing decade-old applications without incurring major downtimes. Cygnet is a CMMi v2 L3, SoC 2 Type 2, and ISMS-certified organization that helps us provide our clients with prompt and secure solutions. We also have a 24/7 support model for functional, process, and technical aspects to ensure client support is not hampered. With a process-driven approach, we have specific delivery teams that ensure client requirements are met in a cost-effective and efficient manner. Which are your key markets? Please explain what makes India different from other developing and developed markets? Cygnet’s key markets include India, the Middle East, America, and Europe. In India, we have a significant presence, managing one-fifth of the country’s e-invoicing traffic through our portals. India’s market is distinct due to its decentralized and distributed systems, emphasizing the importance of data integrity and integrated systems. Unlike other regions, India’s regulatory environment and digital infrastructure necessitate robust, scalable solutions tailored to diverse requirements, making it a unique and dynamic market for our product solutions. What is your roadmap for increasing your local and international footprint? Cygnet’s roadmap for increasing its local and international footprint involves leveraging its unique COSMOS Digital Transformation Framework, based on co-ideate, co-innovate, co-create, and co-evolve pillars, ensuring a collaborative and innovative environment. This strategy fosters strong client relationships and delivers tailored solutions. By partnering strategically and offering holistic service offerings for BFSI, Manufacturing, and Healthcare industries, Cygnet aims to achieve a robust global footprint. As a core thought leader in tax, compliance, and data understanding, Cygnet excels in transforming financial processes across local and global markets. Please help understand your growth trajectory in terms of users or clients or any other metric you use. And also share your future projections and measures to achieve them. Our growth trajectory has been impressive, scaling our client base and securing multi-million dollar deals across 1000+ Enterprise accounts globally. We’ve successfully retained 90%+ clients and expanded our valued clients during global economic downturns, strengthening our position as a trusted partner in driving sustained growth. Amongst all the proprietary platforms, we have more than half a lac user base globally. Wherein one of the platforms, Cygnet Tax, processes 19% of India’s E-invoicing volume. Over the past year, our product vertical grew by 45%, with a projected 50% growth this financial year. Amongst solutions provided to our clients for their Go-To-Market, we have achieved 97% client satisfaction & 65% referral-based business. Looking ahead, we plan to achieve vertical growth through cross-selling services and horizontal expansion with global e-invoicing solutions to address compliance challenges for MNCs.

Edtech startup PhysicsWallah to launch 26 Vidyapeeth offline centres

Economic TimesEconomic Times · 1y ago
Edtech startup PhysicsWallah to launch 26 Vidyapeeth offline centres
Medial

Edtech unicorn PhysicsWallah on Friday said it is launching 26 offline centres across India, in as many cities. The centres are called PW Vidyapeeth. Currently, the Noida-based startup has 67 centres operational in 38 cities. The offline centres will offer a curriculum for engineering and medical entrance examinations. “By expanding our tech enabled offline Vidyapeeth Centres across cities, our goal is to ensure access to quality education for students in their own towns, eliminating the need for them to relocate to education hubs in distant cities,” said Ankit Gupta, CEO of the startup’s offline centres vertical. The company had reportedly rolled out 50 offline centres in May this year, with an investment of around Rs 82 crore in technologies. In July, it launched the PW Institute of Innovation (PW IOI), a four-year residential programme in computer science and AI.Founded by Alakh Pandey and Prateek Maheshwari, PhysicsWallah gained unicorn status last year, when it raised $100 million in its maiden funding round from WestBridge Capital and GSV Ventures, at a valuation of more than $1.1 billion. For the financial year through March 2022, it reported standalone operating revenue of Rs 232.48 crore, a nine-fold increase from the previous year. Net profit for FY22 increased to Rs 97.8 crore from Rs 6.93 crore. Also read | Upskilling companies see brisk business as K-12, test prep stall The broader offline play Post-pandemic, edtech startups have been reeling under the pressure as demand for online and digital education in the K-12 and examination preparation has gone down. This has prompted players such as Byju’s, Unacademy and Vedantu to invest in offline centres.While Unacademy announced multiple rounds of layoffs, it also expanded its offline centres from 10 to around 58, in the first half of 2023. Vedantu also counts its hybrid centres as one of its key growth levers. The Tiger Global-backed startup had bought a majority stake in offline test prep business Deeksha for $40 million. ET had reported in December about how major edtechs across the board are expected to move away from the K-12 business model and focus on priorities such as a bigger offline play in 2023. In Byju’s case, its 302 offline tuition centres across 143 towns also double up as office spaces. Each has an office room for sales staff. This has helped ease the Bengaluru-based startup’s real estate spaces consolidation plans that have gone hand-in-hand with its layoffs. Experience Your Economic Times Newspaper, The Digital Way!Front PagePure PoliticsCompanies & EconomyCompaniesLearn more about our print editionMoreRIL may Sell 8-10% More in Rel Retail VenturesReliance Industries is likely to sell another 8-10% stake in Reliance Retail Ventures Ltd (RRVL) to fund expansion, retire debt and prepare for the initial public offering of the conglomerate’s retail business, two senior industry executives aware of the plans said.Brics Set to Add 6 New Members from N Africa, Gulf and LatAmBrics is set to add heft to the grouping of emerging economies as it announced on Thursday the inclusion of six new members, including India’s key partners in the Gulf and North Africa, a development that Prime Minister Narendra Modi described as a message that “all global institutions need to transform considering the changing times”.Strong Signals from Investors, Vi may Get Much-needed Cash SoonVodafone Idea (Vi) is closer to tying up its much-delayed equity funding with chief executive Akshaya Moondra informing the Department of Telecommunications (DoT) that the telco has term sheets from several potential investors. Read More News onphysicswallahoffline centresedtechunicornvidyapeeth centres Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox. InvestingGQG Partners rescues Adani stocks from Deloitte fiasco. But primary fundraise is a bigger issue.Under the lensHow Ireo’s Lalit Goyal allegedly siphoned off INR1,800 crore to his offshore entitiesEconomyThe phoenix-like rise of private capex, and why we should thank ‘creative destruction’ for this

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