It’s been a tale of two halves for PhonePe in 2023. But now at the end of the year, it would seem the stage is set for the fintech giant’s biggest onslaught so far.

If the first half of the year was all about getting armed for the battle with nearly $1 Bn in funding, the rest of it was about showing what it plans to do with all that money, with several new products ranging from lending to insurance to app development and digital commerce.

But beyond the announcements and the fundraises, PhonePe is perhaps signalling to the Indian tech ecosystem that this is its time.

To put things in context, the company has raised nearly 10% of all funding raised by Indian startups this year. Naturally, there’s a feeling that PhonePe is growing too big to fail, and many compared it to how Walmart gave Flipkart some much-needed impetus in 2017 and 2018 post the acquisition by the US retail giant and subsequently multiple rounds of capital infusion.

“This is what catapulted Flipkart in 2018 towards its current status as the de facto ‘Indian’ ecommerce player, and now it’s PhonePe’s time to grow into its valuation,” a CXO at a Bengaluru-based fintech unicorn told us.

Indeed, it’s hard to escape PhonePe in Bengaluru where it’s the default payments app and its soundboxes and point-of-sale devices are ubiquitous at most small merchants — whether roadside vendors or bakeries.

Such is the dominance of PhonePe in its hometown that spotting a Paytm soundbox or any other rival comes as a surprise. But it would be wrong to think that this is PhonePe’s endgame.

As we have seen throughout this year, PhonePe has much bigger plans. It has the capital, the key personnel and the burgeoning product line-up to bank on. The year has almost come to an end, but PhonePe’s era is just beginning.

With new products in lending, insurance and tax payments on the core PhonePe app, as well as separate apps for ecommerce (Pincode) and investment tech (Share.Market), PhonePe is gearing up in a big way for 2024. Even though some of these products are uncharted territory for PhonePe, it has the resources to succeed in these new areas.

In many ways, 2023 was about setting the stage for this completely new vision. Now as PhonePe prepares for a potential initial public offering (IPO) in 2024-2025, it’s important to understand where the company finds itself at the end of the year.

Recapping PhonePe’s 2023

It all started in late 2022 with the separation from Flipkart and redomiciling to India. This was a critical first step in the plan, which came with a huge tax bill for many of PhonePe’s investors.

The INR 8,000 Cr tax outlay seems like a huge expense, but it was a necessary step to bring PhonePe to India and ensure that the big product plans are not derailed by corporate structures.

Even beyond the tax bill, there was more confidence from investors when they poured millions into the fintech decacorn. The funding spree was led by Walmart, General Atlantic, Ribbit Capital, TVS Capital Funds and others. The plan was to raise $1 Bn, but  PhonePe managed to secure $850 Mn.

PhonePe had its war chest ready and soon after came a flurry of new products that have changed the company considerably and given observers a thing or two to ponder upon.

In April, it launched Pincode, an ONDC-integrated digital commerce app, followed by merchant lending services in June. Then came a new point-of-sale device for UPI and cards, income tax payments and health insurance products in July.

In August, we saw the introduction of Share.Market, a separate product for investments and stock broking, and finally the formal launch of the Indus Appstore in September.

Interestingly, with the last of these product launches, PhonePe is not just a fintech app any more. And indeed Indus Appstore holds plenty of potential for PhonePe in the long run.

A New Trump Card: Indus Appstore

In March, we said that PhonePe wants to be Paytm, but that comparison seems off the mark given the launch of Indus Appstore, which promises to be another lucrative long-term revenue stream.

The app store is an alternative to Google Play on Android, and PhonePe’s investment and acquisition was finalised soon after the Competition Commission of India ruled to allow third party app stores on Android devices.

So the more we think about what PhonePe is doing at the end of 2023, the more we wonder whether the Walmart-owned giant is indeed more than a fintech platform.

With 500 Mn lifetime registered users and 37 Mn+ merchants on its platform, PhonePe is poised to press ahead on other fronts besides payment and fintech.

The Indus Appstore product is unmatched by PhonePe’s primary competition such as Paytm, CRED or Groww. While these are also fast building up platform plays around multiple products, PhonePe’s Indus Appstore could be the trump card in the revenue race.

For context, in-app spending is forecast to reach $182 Bn by 2024 and $207 Bn in 2025, according to research firm Sensor Tower. Consumers are said to have spent $132 Bn in 2021, so the projected figures for 2024 represent nearly 40% growth in two years.

Google will get about $10.3 Bn in revenue from app sales and in-app purchases from the Play Store globally in 2023, according to a Time report. In this context, it’s easy to see why PhonePe has invested heavily in an app store. More importantly, Indus does not have Google’s stipulations around commissions and billing policy.

The likes of MPL, Dream11, Nazara, A23, Gameskraft and others have already come on board the Indus Appstore thanks to its zero commission policy. Plus, Indus Appstore is available in 12 Indian languages, which is also expected to be a major competitive advantage against Google and Apple.

While zero commissions have added to the initial attraction for Indus Appstore, PhonePe is likely to add commissions in the future to make this a veritable revenue source.

Both Google and Apple have been hit by antitrust cases in the US and India in relation to their app store policies. It’s the perfect entry point for PhonePe. PhonePe’s marketing machine has also stepped on the accelerator in recent times to show that it has the user base to capitalise.

The PhonePe-Verse 

“PhonePe is living up to its name. It wants to be everything on your smartphone, from the app store to financial services to digital commerce and more. The Indian market is fast maturing and this is perhaps the best time for a super app or platform play,” says the founder quoted above.

It is impossible to look at PhonePe’s year, without seeing the similarities with the competition that is on a comparable scale. The super app movement or the convergence of financial services is a clear theme emerging in 2023.

For several years, it was believed that Indian apps could replicate the success of super apps such as WeChat, Grab or Gojek in China and Southeast Asia.

But while the likes of Paytm tried this in the past, the strategy did not succeed fully due to a lack of market depth and consumer maturity. Even as late as 2021, Paytm bemoaned the fact that the platform model was not well understood by retail investors.

But times have changed and now the Indian market is looking like a better bet for super app players. Let’s look at two key pieces in PhonePe’s armoury in this battle — ecommerce and investment tech.

ONDC’s New Wings

Built on ONDC, the Pincode app was launched in Bengaluru in April where it has already delivered over 1 Lakh orders as of July 2023, and PhonePe has expanded to Delhi NCR, Mumbai, Chennai, Hyderabad, and Pune, among other cities.

ONDC has become the crutch for non-ecommerce players to scale up their digital commerce footprint quickly.

Take for instance, Paytm Mall, which was once a unicorn, but has faded into the background in comparison to marketplace giants Flipkart and Amazon India. Today, Paytm’s digital commerce business also hinges on ONDC, just like PhonePe’s Pincode.

CRED is relying on a highly curated marketplace approach, while Google Pay is playing the aggregator game. PhonePe’s dedicated app is an interesting approach in this space and unlike any other player in the super app race.

A company spokesperson told us, “The initial response and rapid consumer adoption of Pincode has given us the confidence to expand our services. We are fully committed to championing local sellers and delivering an exceptional shopping experience to our consumers.”

The company added that it will be investing heavily to expand to more cities and into more categories, including medicines, fashion, and electronics to become a full-fledged ecommerce app.

Entering The Investment Fray

The other big piece of the puzzle is Share.Market, which PhonePe has sequestered from its core business as is standard practice. Even though it’s a separate app with a stockbroking licence, Share.Market’s revenue growth will be a key contributor to PhonePe’s business in the long run.

The revenue model for stock broking is relatively straightforward as platforms take a cut on trades and transactions. With the right scale, profitability is not a long shot either.

Fellow Bengaluru fintech unicorn Groww reached profitability in FY23 thanks to its growing user base and today has more than 6.63 Mn+ active investors.

This makes the company the biggest discount brokerage by clients in India. PhonePe would be betting that its existing user base of 200 Mn+ monthly active users can help it leapfrog Groww, Zerodha and others.

At the scale that PhonePe operates on, even an incremental increase in the volume means tens of millions more revenue-generating transactions. For instance, Paytm Money turned profitable in FY23, posting a net profit of INR 42.8 Cr and bounced back from a loss of INR 10.7 Cr in FY22, helped by steadily growing brokerage income.

A PhonePe spokesperson added that in the past two years, the company has seen a huge increase in adoption from Tier III  and IV cities and beyond when it comes to payments and other in-app services.

And now is the time to press the accelerator on other products that are tied into the payments core. PhonePe said it registered INR 2,914 Cr as revenue on a consolidated basis in FY23, but the company did not reveal whether it has managed to bring its losses down from the INR 2,013 Cr it reported in FY22.

What we do know is that PhonePe has reached a $1.3 Bn in lifetime total payments value, according to Walmart CFO John David Rainey. Will this translate into profits in the next year?

Where Will PhonePe Go In 2024?

Revenue from the investment tech business will likely contribute in a major way towards bringing the consolidated business towards the black. But other parts of the PhonePe empire will also be key to getting out of the loss-making streak.

It’s interesting that the new products at PhonePe are grabbing a lot of the interest internally from the company, but let’s not forget that PhonePe’s fintech services primarily hold the key for the turnaround.

Merchant services — lending and device subscription — is likely to be a crucial piece. PhonePe is gearing up to roll out consumer lending services on its platform by January next year. Marking its foray into the consumer lending space, Walmart-backed company is likely to operate initially as a distributor for personal loans.

“The Indian market has seen a lot of maturity in 2023. The most active and habituated fintech customers have become familiar with digital-first financial services, and we believe the opportunity is rich for platforms to accelerate the process of unlocking the flow of money and access to services,” the company spokesperson added.

PhonePe’s trajectory is very similar to Paytm, even if there are many differences in strategy. The scale of both companies is similar in terms of the users, and they have got the market timing right on a number of new products. But Paytm is still a long way away from PhonePe in terms of revenue — INR 7,990 Cr for the listed giant vs INR 2,914 Cr for PhonePe.

For PhonePe, 2024 will be about not just proving its thesis around the platform play, but also utilising its deep pockets to grow sustainably and show profits by the end of the year. This is a critical juncture for the company.

Several startups seemed to have cracked the profitability question in FY23 and many of them did not have the luxury of having raised $850 Mn in the year. PhonePe is like royalty in that sense, but even empires face pressure eventually, even when they have a large war chest.

Funding is not a guarantee of success. PhonePe has the right tools and the stage is set, can the fintech giant make something of it in 2024?

The post PhonePe’s Billion-Dollar Year: A War Chest To Fight Super App Wars appeared first on Inc42 Media.

After a troublesome 2022, when the Meta stock hit a low of $90, the company has bounced back strongly, surging as much as 271% on the US stock exchange this year, as of December 15. 

While the tech giant saw a revival on the back of stronger-than-expected financial results for the company’s second quarter of 2023, the exceptional performance of the company was anchored in various tailwinds, including a suitable growth environment in the home country, improving market sentiment, and aggressive cost-cutting, just to count a few.

However, in stark contrast, the company’s India stay was not very comfortable during the year, as it had its fair share of fires to douse on the regulatory front. 

While regulatory bottlenecks were one of the recurring peeves for Meta’s operations in the country, the social media major was time and again cornered by Indian courts and law enforcement agencies for failing to keep a check on notorious elements, such as deepfakes and misinformation, doing rounds on the platform.

During the year, Indian authorities also unearthed an alleged INR 10,000 tax fraud involving Facebook sellers. Meanwhile, weak global cues forced Meta to cut corners, resulting in an undisclosed number of mass layoffs at its India office. 

Amid all this, the company also grabbed headlines after some of its shareholders mounted an offensive for its alleged bias in India operations. 

Notwithstanding the challenges, 2023 also turned out to be the year during which Meta kicked into motion a full-scale monetisation plan with Meta verified and a slew of offerings for merchants. The Indian arm continued to rake in hefty revenues while the ad business saw considerable growth in the country. 

However, despite gaining a huge response at the outset, its much-touted new launch ‘Threads’ turned out to be a dud. For the uninitiated, Threads is Meta’s answer to X and is focussed on textual conversations, rather than visual media. 

As we approach the end of 2023, let’s steal a glance at the journey of the social media juggernaut in India this year.

Meta’s Sabre-Rattling With The Govt Continued In 2023

The Mark Zuckerberg-led company found itself roiling in a bevy of regulatory challenges throughout the year. As the Centre undertook a flurry of reforms in the form of the Digital Personal Data Protection Act and the new IT Rules, Meta found itself burdened with additional compliance requirements and mandates.

The adverse regulations also made the company liable for hefty fines and opened Meta to potential lawsuits if users’ grievances went unresolved. With little wriggle room under the new laws, the fear of losing safe harbour protections sent alarm bells ringing for the social media behemoth. 

“While the exact impact of the Digital Personal Data Protection (DPDP) Act is yet to be seen, there might be some implications on the storage and transfer of data of Indian subjects.  This might have more of an implication for Meta as their tech implementation might have to significantly change,” identity verification platform IDfy’s chief executive officer (CEO) Ashok Hariharan told Inc42.

What also proved to be a major headache for the company were the large number of content take-down requests by the Indian government. The country emerged as the second biggest source of government requests to Meta in the first half of 2023, second only to the US. 

Between January and June 2023, Indian authorities issued 70,612 requests, of which 63,586 were legal process requests while the remaining were ‘emergency disclosure requests’. 

Curiously, Meta’s worst hit arm in India appeared to be WhatsApp, which found itself at the centre of many regulations. A Competition Commission of India (CCI ) probe into WhatsApp’s 2021 privacy policy case continued to be in limbo. 

As if these issues were not enough, generative AI became a cause of concern for Meta. The deepfake controversy, involving actor Rashmika Mandanna, saw Facebook at the centre of enforcement action as authorities issued notices to the company to act on synthetic content and reveal information about the origins of the post. 

A Long List Of Troubles For Meta India

Amid a tussle with government authorities, Meta also found itself in the middle of other controversies that grabbed negative headlines throughout the year. 

A case in point is the consultation paper floated by the Telecom Regulatory Authority of India (TRAI), which explored the idea of bringing OTT communication apps under the regulatory ambit and selective banning of such apps. 

The aftermath triggered a full-blown war with telcos and startups as telecom operators pitched for a revenue-sharing framework with OTT platforms based on network traffic as a parameter. The proposed move directly strikes at the heart of Meta as it consumes a major chunk of telecom bandwidth domestically. 

Making matters worse was the surge in pesky job calls to WhatsApp’s India users from international mobile numbers. The controversy made the government crack its whip on Meta yet again. Subsequently, 66,000 WhatsApp accounts and 8 Lakh payment wallets were deactivated.

WhatsApp also continued to face outages in the country. Meanwhile, one of the major issues that shook Meta in India came from an unlikely place – its own shareholders. Some of the company’s stakeholders moved a proposal to probe alleged biases in Meta’s India operations and sought an assessment of the same. 

While the proposal was eventually vetoed, this added a new dimension to the already reported allegations that Meta favoured the ruling party. 

Meta’s Sob Story Of Leadership Exodus & Layoffs 

One of the biggest issues that gripped Meta India during the year was layoffs, as the company reportedly fired 400-450 employees in the country.

Even senior executives were not spared by the company as part of its restructuring drive. The company’s director of marketing, Avinash Pant, and director and head of media partnerships, Saket Jha Saurabh, were unceremoniously shown the exits as part of the exercise.

Curiously, just before the layoffs commenced, director and head of partnerships, Manish Chopra, put in his papers.

Meta Ramps Up India Push

Amid all these, the company undertook a slew of new launches in the country as it began to vociferously monetise its offerings. Following the footsteps of its peer X (formerly Twitter), Meta began rolling out its ‘Meta Verified’ service in India in June 2023 to build alternative revenue streams in the country.

It also announced a slew of business-focussed features on WhatsApp to tap into the B2B ecosystem.

On the financial front, Meta India continued to witness healthy growth, although the economic downturn slowed down the momentum. The Indian arm of social media major, Facebook India Online Services, recorded a net profit of INR 352 Cr in FY23, up 19% year-on-year (YoY), against gross advertisement revenue of INR 18,308 Cr, up 13% YoY.

To fuel its operations and build goodwill with the Centre, the company also announced several partnerships and accelerator initiatives with the government to mentor Indian startups, especially in emerging areas such as mixed and extended reality.

Meta In 2024: Gazing Into The Crystal Ball

With more digital laws expected to be promulgated in India in 2024, the company could be headed down a rough road as it looks to balance growth with regulations.

“If GDPR (General Data Protection Regulation) repercussions are anything to go by, India and Indian laws might have similar implications for Meta.  A case in point being the DPDP Act which, just like GDPR, has a requirement on the use of data from minors. Given that there are roughly 500 Mn Indians below the age of 18, it opens up a lot of exposure for Meta if they’re not compliant with the new law,” added IDfy’s Ashok Hariharan.

Meanwhile, emerging challenges such as GenAI could put a spanner in the works for the company even as compliance demands surge from authorities.

Notwithstanding this, India continues to be one of the biggest markets for Meta globally, accounting for more than 1 Bn users across three apps — Facebook, Instagram and WhatsApp. 

Walking on a regulatory tightrope in India, Meta’s India journey so far this year has been both bitter and sweet. Now, with global headwinds expected to ease and consumption likely to surge next year, Meta could put its Indian ambitions in full throttle in 2024. 

The post On A Regulatory Tightrope: Here Is How Meta India’s Odyssey Unfolded In 2023 appeared first on Inc42 Media.

It has been a year of oxymorons for the Indian startup land and its incumbent. While the year was mostly bogged down in the extended wave of an unforgiving funding dry spell (aka the infamous funding winter), it also saw a spring of Indian founders rolling out their second or even third ventures.

It is imperative to mention that the year so far has seen more than 30 CXOs, including founders, switch their tracks to join other companies, float new ventures or assume new roles within existing companies. 

While many stepped down under mysterious circumstances or took an exit after their ventures were acquired or for various other reasons, the zeal of Indian founders to start afresh cannot be ignored.  

Interestingly, the trend of entrepreneurs not sticking to one particular venture in the world’s third-largest startup ecosystem is not new but became more evident with examples like Ola cofounder Ankit Bhati quitting the ride-hailing giant to focus on his SaaS venture Amnic.

The past few years have also seen eminent entrepreneurs like Kunal Shah (Freecharge to CRED), Jitendra Gupta (Citrus Pay to Jupiter), Anant Goel (Milkbasket to Sorted), et al. raise funds to start their new ventures.

However, one may ask if this trend is having any particular impact on the world’s third-largest startup ecosystem, especially investors. 

According to industry experts, investors tend to have more confidence in second and third-time founders, making them preferred choices for investment. And there is a simple explanation for this  — such entrepreneurs are already well-versed in the industry cycles and the rules of the game.

As far as the realm of the Indian startup ecosystem is concerned, such founders are more likely to succeed, without relying much on vanity metrics like valuations, and mentor new breeds of entrepreneurs entering the domain.

As we inch towards embracing new hopes for the Indian startup ecosystem with the year 2024 in sight, let’s steal a glance at some of these founders who started up again.

8 Founders Who Started Up Again In 2023

Dineout’s Cofounder Vivek Kapoor Marked His Healthtech Foray

This year, Dineout cofounder Vivek Kapoor left Swiggy to join Delhi-based healthcare financing startup AyushPay as its cofounder and chief business officer. 

The transition was also triggered by his desire to make a meaningful contribution to the Indian healthtech sector. Notably, he was AyushPay’s angel investor for a considerable period and had actively mentored the AyushPay team.

AyushPay (formerly known as DoctCo), a healthcare solutions provider, announced his appointment in July.

Founded in 2021 by Nimith Aggarwal and Col Hemraj, AyushPay provides financing and payment solutions to patients to make healthcare accessible and affordable. 

Kapoor became part of Swiggy’s leadership team after Dineout’s acquisition by Times Internet last year at a valuation of $150 Mn-$200 Mn. 

Anshuman Kumar Left Teachmint For The Love Of His Dating App

In a bid to focus on his new venture Duolop, a dating and relationship management app, Teachmint’s cofounder and CTO Anshuman Kumar quit the edtech startup in March.

“I am stepping into a new role as the founder of Duolop, a dynamic and innovative Indian app revolutionising how couples connect and grow together,” Kumar announced about his exit in a LinkedIn post.

Duolop is an app for couples, both married and unmarried, which aims to simplify the complexities of managing a relationship. It offers a private chat feature where couples can send messages, images and videos to each other and help them plan dates.

The app has already been launched on the Google Play and Apple Stores.

Founded in 2020 by Kumar, Mihir Gupta, Payoj Jain and Divyansh Bordia, Teachmint helps teachers and schools digitise their classrooms. The startup counts Lightspeed India, Rocketship.vc and Better Capital as among its marquee investors.

In November 2022, Teachmint laid off 45 employees or around 5% of its workforce. The startup’s net loss skyrocketed 24X to INR 131.70 Cr in FY22 from INR 5.52 Cr in FY21, while its operating revenue stood at INR 77.45 Lakh.

Zolostay’s Akhil Sikri Set Sail For A New Expedition

Akhil Sikri, cofounder of Zolostays, stepped away from his operational role at the coliving startup to pursue his new entrepreneurial venture.

In August, Sikri, along with his fellow directors Ketan Kapoor and Ayon Dutta, floated Quick Response Financial Technologies Pvt. 

The Bengaluru-based Quick Response engages in activities encompassing computer programming, consultancy and related services.

As per Sikri’s LinkedIn profile, he transitioned out of his active role at Zolostays in March. However, he continued to retain his position on the company’s board. His LinkedIn bio lists him as the cofounder of an upcoming, unnamed project.

Launched in 2015 by Sikri, along with Isha Choudhry, Nikhil Sikri and Sneha Choudhry, Zolostays offers affordable paying guest accommodations, service apartments and independent flats to students and working professionals via its AI-powered app.

The startup competes with the likes of Isthara and Stanza Living, among others.

On A New Adventure, GoMechanic’s Cofounders Deny To Throw In The Towel

Automobile after-sale services startup GoMechanic’s cofounders Rishabh Karwa and Nitin Rana stepped down from their roles after admitting to financial misreporting.

The story began in January this year, when GoMechanic cofounder Amit Bhasin, who continues to be associated with the startup as per his LinkedIn profile, admitted to committing “errors in judgement” regarding financial reporting while trying to pursue growth. 

While the dust is far from settled on the GoMechanic front, Karwa and Rana joined the list of founders starting up again.

Both of them are now working on two separate and unnamed new startups. 

Not much details are known about Rana’s new startup, except that his latest venture focusses on “Building Travel & Hospitality Product for Indian Subcontinent and World”.

However, Karwa has been quite vocal about starting anew, posting about the journey of building a new product and startup. His social media posts about Figma plugins and projects indicate some degree of progress. As per his LinkedIn profile, he is “building for local businesses”.

Both Karwa and Rana have not publicly announced raising any funds for their new startups till now. Now, it remains to be seen if the controversies around GoMechanic change anything for their new ventures. 

Polygon’s Cofounder Is Now The Captain Of Two New Ventures

In October, Polygon cofounder Jaynti Kanani resigned from his position at the blockchain scaling platform to focus on his new opportunities.

As per Kanani’s LinkedIn profile, he has cofounded two new startups – Mozak and Morphic. 

While Morphic is developing a platform designed to assist creators, filmmakers, and animators in producing high-quality content using AI technology, not many details are available for Mozak except that it is a Web3 platform. 

“After kickstarting Polygon in 2017, around six months back, I decided to step back from the day-to-day grind,” Kanani said in a post on X while announcing his decision to quit.

His LinkedIn profile shows that he served as the cofounder of Polygon until March 2023. 

Kanani is said to have stepped down from Polygon around the same time when the company undertook mass layoffs earlier this year. In February, the blockchain scalability platform culled 20% of its workforce as part of a restructuring exercise amid the ongoing crypto winter.

ShareChat’s Cofounders Quit To Incorporate A Robotics Startup

After quitting their first venture ShareChat in January, cofounders Bhanu Pratap Singh and Farid Ahsan established their second venture, General Autonomy, in May this year.

In November, the cofounders raised $3 Mn in seed funding from venture capital firms India Quotient and Elevation Capital for the robotics startup, General Autonomy.

Before leaving ShareChat, Singh also served as its CTO, while Ahsan held the COO’s role. The third ShareChat founder, Ankush Sachdeva, continues to be the CEO of the social media unicorn.

The cofounders’ exit coincided with ShareChat’s parent firm, Mohalla Tech, laying off 20% of its workforce or 500 individuals earlier in the year.

Founded in 2015, parent Mohalla Tech positions ShareChat as an Indic language social media platform. In 2022, it acquired Times Internet-owned social short-video platform MX TakaTak for over $600 Mn to foray into the competing short-video social space. 

Mohalla Tech’s loss jumped 38.17% year-on-year to INR 4,064.31 Cr in FY23, while operating revenue grew 62% to INR 540.21 Cr.

The post 8 Indian Startup Founders Who Started Up Again In 2023 appeared first on Inc42 Media.

Just when the Indian startup ecosystem was poised to reach new heights, the year 2022 unfolded like a nightmare and with it unravelled a flurry of distasteful events.

While the likes of Trell, Zilingo and BharatPe made headlines in 2022 for all the wrong reasons, 2023 became the extension of what could not be accomplished a year ago in terms of setting wrong precedents. 

From the boardroom brawls of BharatPe, founders falling victim to deception at a startup forum, financial mismanagement and syphoning of funds to accusations that Shark Tank judges failed to uphold their promises, the year thus far has been rife with controversies, painting a less-than-ideal picture of the Indian startup landscape.

Now that we stand on the edge of 2023 to welcome 2024, let’s take you through this year’s top controversies and disputes that we wished had never happened to start with.

With that said, let’s get the ball rolling.

Revisiting Major Startup Controversies That Stirred Up A Storm In 2023

BYJU’S 2023: A Year Of Turmoils

In 2023, the edtech juggernaut, BYJU’S, found itself ensnared in a series of controversies. The year commenced with a saga of delayed financial reporting, prompting the departure of auditor Deloitte Haskins & Sells and the exit of three influential board members — MD of Peak XV Partners V Ravishankar, Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu. 

As the year unfolded, BYJU’S encountered an inquiry by the Enforcement Directorate (ED), alleging a staggering INR 9,000 Cr violation of FEMA rules, resulting in a show cause notice. 

The challenges intensified when the Board of Control for Cricket in India (BCCI) took BYJU’S to the National Company Law Tribunal (NCLT) over a dispute concerning sponsorship dues amounting to INR 158 Cr for the Indian cricket team’s jerseys.

In the midst of a difficult year, BYJU’S named Arjun Mohan as its India CEO. Close on the heels of him taking over the reins of the company, the edtech announced that it will have to let go of 4,000 employees. Not to mention, the edtech decacorn had already been laying off employees in small groups.

On December 6, it came to the fore that the startup had not submitted the PF of its staffers since August, even after deducting the same from their paycheques. BYJU’S made a similar folly last year too.  

Now, BYJU’S has scheduled an Annual General Meeting (AGM) on December 20, which is aimed at resolving a list of issues, including its much-awaited financial results for FY22. Although it has already posted an EBITDA loss of INR 2,253 Cr for FY22, much is still to be reported.

Under the pile of aforementioned troubles also lay the edtech’s legal tussle with its TLB investors, back-to-back valuation markdowns, several instances of misselling, and a likely sale of its subsidiary companies Great Learning and Epic by Byju Raveendran. 

As of now, the entire startup ecosystem seems to be closely keeping its eye on how the BYJU’S chapter will unfold in the upcoming year.

Financial Deception At GoMechanic & Mojocare 

In the early months of 2023, automobile after-sales startup GoMechanic, too, faced corporate governance crisis. Cofounder Amit Bhasin publicly admitted to committing “errors in judgement” regarding financial reporting while trying to pursue growth. 

The startup allegedly misled investors for years by showing fake numbers. GoMechanic was acquired by a consortium led by Lifelong Group, a majority shareholder in GoMechanic rival Servizzy for about INR 220 Cr. But major investors of GoMechanic, including Orios Venture Partners and Peak XV Partners, filed a joint complaint against the startup’s founders, leading to an FIR by the Delhi Police’s Economic Offences Wing. 

 In a similar story, healthtech startup Mojocare’sfounders, Ashwin Swaminathan and Rajat Gupta, too, confessed to cooking the books. 

This confession led to a change in leadership and eventual plans to shutter operations, returning capital to investors. 

India’s Very Own Fyre Festival For Startups 

Just three months into 2023, the patience of Indian founders was put to the test by the organisers of The World Startup Convention (WSC).

Promoted as India’s biggest funding festival by influencers such as Ankur Warikoo, Prafull Billore, Chetan Bhagat and Raj Shamani, the three-day event was supposed to host minister Nitin Gadkari, Tesla’s Elon Musk, Google’s Sundar Pichai, and the Crown Prince of Dubai as speakers from March 24 to March 26 in Greater Noida.

Much to everyone’s annoyance, the event proved to be a sham, triggering a clash as some attendees spent over INR 50 Lakh to become a sponsor of the event for the World Startup Convention.

While the organisers of the event, Luke Talwar and Arjun Chaudhary, denied any charges of cheating and duping the participants anywhere between INR 6,000 to INR 8,000 for a three-day pass, clashes between organisers and attendees led to police intervention at the venue.

Along with organisers Luke Talwar and Arjun Chaudhary, influencers like Ankur Warikoo and Chetan Bhagat were blamed for endorsing the event. 

At the time we had questioned — “Where is India’s influencer economy headed?” 

The  Broker Network Implosion 

In the middle of the year, 4B Networks, the third entrepreneurial stint of Housing.com founder Rahul Yadav, came into the headlines. The controversy started when its investor Info Edge initiated a forensic audit into the affairs of the proptech startup. 

As the investigation unfolded, from unsettled debts to multiple entities to an alleged illicit transfer of funds from Broker Network to two other companies associated with Rahul Yadav and his wife, Karishma Singh, several issues were revealed.

It turned out that the money from 4B Networks took a detour to Yadav’s holding company and then found its way to a company called Kult App, where Yadav’s wife played a big role. 

In November, Rahul Yadav was quite close to being put behind bars but had a close shave in an INR 50 Lakh cheque bounce case filed in May by an erstwhile Broker Network employee, Arun Singh Shekhawat. 

It must be noted that the Economic Offences Wing is also investigating two separate cases against Yadav, one of which is filed by Broker Network’s lead investor Info Edge, alleging an INR 288 Cr graft. In addition, employees of the company have also not been paid since September 2022.

Embroiled in multiple allegations of fraud, Yadav’s story once again shows how important it is for founders to have strong ethics in place.

The BharatPe-Ashneer Grover Brawl Intensified In 2023

The BharatPe-Ashneer Grover brawl continued to make headlines into 2023 as well. Topping the list of headlines was a criminal complaint against Grover, his wife Madhuri Jain Grover, and her family members, which turned into a full-blown FIR by Delhi Police’s Economic Offences Wing (EOW). 

Despite Grover’s consistent denial of allegations, a lookout circular led to the couple being stopped at the Delhi Airport. Alongside, the EOW’s probe allegedly uncovered payments to sham HR consultancies run by Madhuri Jain and her kin.

Already in the face of EOW questioning for allegedly syphoning funds from BharatPe, beleaguered former managing director Ashneer Grover landed himself in yet another legal soup just last month (November).

The fintech juggernaut filed a fresh case against its outspoken ex-MD in the Delhi High Court for publicly sharing the company’s confidential information on a social networking platform. The ex-MD had to apologise for the posts and was slapped with an INR 2 Lakh fine.

Mounting a multi-pronged legal offensive against the Grovers, BharatPe has initiated as many as 15 proceedings against the couple and their kin, including a civil suit for alleged embezzlement that seeks INR 88.67 Cr in damages from the duo.

The INR 200 Cr Wedding Aisle That Led To Mahadev Betting App Scam

In February 2023, the opulent INR 200 Cr wedding of Indian native Sourabh Chandrakar in Ras Al-Khaimah, the UAE, drew the attention of enforcement agencies. Hailing from his humble origins as a juice vendor in Chhattisgarh’s Bhilai, Chandrakar’s meteoric rise raised the eyebrows of many in the government as they began a full-scale investigation into his finances. 

Seven months later, the Enforcement Directorate unearthed the Mahadev app online betting scam, exposing Chandrakar and Ravi Uppal as its masterminds.  

In October, the ED filed a chargesheet, naming 14 persons, including Chandrakar and Uppal, before a PMLA court in Raipur, Chhattisgarh. The Mumbai Police later joined the probe, too, and booked 32 individuals during its investigation. 

Caught in between seem to be a clutch of prominent figures and Bollywood celebrities who have been interrogated and named in various chargesheets and complaints filed by both the police and the ED. 

Meanwhile, on December 23, it was reported that Uppal was detained in Dubai by the local police on the basis of a red notice issued by the Interpol at the behest of the enforcement directorate.

ZestMoney’s Saga Of Failed Acquisitions, Founder Troubles & Shut Down 

The journey of ZestMoney, once the BNPL poster child of India, came to an end after the management shocked its employees by asking them to stay at home from December 7.

The management had to pull the plug on the company after an internal funding round failed to materialise, as per sources. 

For the uninitiated, the cash-starved startup was fighting many battles — founders calling it quits, failed acquisition bids, regulatory hurdles and a severe slowdown in the core BNPL business. 

It is imperative to mention that ZestMoney once held its head high with a peak valuation of $455 Mn. However, soon the company fell into a debt trap due to growing NPAs, sub-par collections and a faulty business model. This was despite the company’s claim of catering to 17 Mn registered users. In FY22, ZestMoney’s losses bloated 3X YoY at INR 398.8 Cr due to a steep rise in expenses. 

Operating within a business model similar to BNPL players like LazyPay and Simpl, ZestMoney was sitting on an NPA rate exceeding 13%, way above the healthy BNPL loan default rate of 2-3%.

Earlier in the year, ZestMoney’s cofounders Lizzie Chapman, Priya Sharma, and Ashish Anantharaman stepped down. Following their exits, the new management took over and was in talks to raise funds but to no avail.

Did Sharks Ghost Founders? 

The popular TV show Shark Tank India has undeniably left a lasting impact on citizens, so much so that the show is one of the topics of discussion at the Indian dinner table.

However, the euphoria surrounding the show has been marred by allegations from young founders who have voiced concerns about the conduct of investors, aka ‘Sharks’. 

Many participants of Shark Tank India told Inc42 that the Sharks have deliberately delayed investments under various pretexts. The participants have also alleged that the Sharks are impolite in person and deride their business models even after promising investments.

Complicating matters further, as per the participants, is the absence of proper documentation of the funding commitments they get on-air, which makes it tough for them to seek legal recourse. Notably, verbal promises lack the legal weightage necessary for pursuing legal recourse.

In June, we were also told that Sony TV only assures of providing a platform, and there are no terms and conditions to protect our interest if judges renege on their pledge.

At the time, it also came to the fore that Sharks got defensive and reneged from their commitments after engaging in the due diligence processes of some of the show’s participants.

[Edited by Shishir Parasher & Vinaykumar Rai]

The post Disputes, Deception & Fibs: Revisiting Major Startup Controversies That Stirred Up A Storm In 2023 appeared first on Inc42 Media.

Last year, this time around, we remember mentioning how 2023 would be no different from the year in review (2022), which took jobs of more than 18K startup employees due to reasons galore. 

As expected, the layoff axe continued to slash employee headcounts at Indian startups, with over 17K jobs already lost as of December 8 this year. Essentially, the primary factors that played a macro role in making 2022 an attrition-heavy year found their way into 2023 as well.

For the uninitiated, the entire 2022 was laden with the impact of Russia’s invasion of Ukraine on the global economy, ailing markets, rampant inflation and the fear of a global recession. These, in turn, impacted investor sentiment, along with the fact that Indian startups had little to deliver but cash burns.

Long story short, according to the data collated by Inc42, more than 35K startup employees have lost their jobs since the onset of the funding winter in Q1 2022. However, if industry experts are to be believed, 5,000+ layoffs have gone unreported.

Moving on, leading the onslaught are BYJU’S, Ola, Unacademy, Blinkit, and WhiteHat Jr, which have shown doors to 13,740+ employees in the last two years. Interestingly, among these industry frontrunners in living the layoff dream, BYJU’S takes the podium with 6,500+ job cuts.

While BYJU’S, Ola, Unacademy, Blinkit and WhiteHat Jr together sacked an estimated 9,390 employees in 2022, BYJU’S, Skill-Lync, GoMechanic, ShareChat and ZestMoney made 6,075+ employees look for pastures new.

Now, we can either blame the ongoing funding winter for the meltdown in the startup job market or talk about the factors that have largely remained hidden in plain sight, adding more blue to the Indian startup gloom.

Two Attrition-Heavy Years: Who’s To Blame?

As per the Inc42 analysis, homegrown startups raised $8.67 Bn between January and November 2023 against $22 Bn and $27 Bn during the same time in 2022 and 2021, respectively.

Looking at the correction rate, which stands at 61% for 2022 and 68% for 2021, it is easy to blame the funding winter, which is the root cause of almost every anomaly in the Indian startup space.

However, if you are a regular reader of Inc42, you would know that we always try to look beyond the clichés in our endeavour to bring forth deeper analogies and equations working in the background.  

In our perusal to look beyond the funding winter, we learned that the world’s third-largest startup economy is also vulnerable to attrition caused by high work stress.

It is also imperative to mention that, unlike typical 9-5 office jobs, startups seek high levels of commitment, ownership, accountability and efficiency from their employees. “Therefore, several employees leave due to high stress and workload,” an industry expert said. 

According to a March 2023 EY report, the ecommerce, technology and related sectors – all startup-related segments – experienced attrition rates exceeding 20%, with an average involuntary turnover of 4.4% across segments.

Moving on, given that many similarities exist between startups and tech companies regarding employee skill sets, the high attrition rate in the two circles results from people leaving one domain to enter another.

Further, it is anybody’s guess that the state of the Indian startup workforce has been adversely impacted by geopolitical and macroeconomic developments over the past two years — rising energy and food prices, the US hitting its debt ceiling, the trade war between the US and China, the Russia-Ukraine war and the Palestine-Israel conflict.

Global inflation rose on the back of these developments and all these factors confected a reduced market liquidity. This has broken the confidence of VCs and PEs in Indian startups, making them think twice before embarking on the route fraught with uncomfortable twists and turns. 

As such, grappling with falling revenues and mounting losses, capital-hungry Indian startups have been sacking employees just to extend their cash runway for a bit longer.

Adding insult to injury, the emergence of generative AI has been yet another dent in the image of the Indian startup corporate culture. With the rapid adoption of AI, industry experts see consumer-facing roles being rendered obsolete soon. 

Startup Turnarounds Made Employees Pay Heavily In 2023

According to Inc42’s Indian Startup Layoff Tracker, which monitors startup layoffs across the country, nearly two-thirds of the layoffs that took place during the year (2023) were attributed to restructuring or turnaround efforts by various Indian startups. 

In terms of numbers, nearly 11K employees have been impacted by restructuring exercises so far this year. Going by the available data, only about one-fifth of the laid-off employees lost their jobs due to cost-cutting measures. This number ought to be much higher, but the current analysis only considers the official reasons for layoffs provided by the startups.

Meanwhile, during the year, late stage Indian startups accounted for more than half of the total layoffs conducted in the Indian startup realm, witnessing a respite from 2022 when late stage startup layoffs accounted for approximately 70% of the total job cuts.

On average, a late stage startup sacked 14% of its workforce in a typical layoff exercise in 2023 compared to 265 growth stage and 41% at the early stage. It is imperative to note that industry experts see the layoff trend mirroring stage-wise funding trends observed during the year. 

According to Inc42 data, growth stage funding fell 38% during the first half of 2023. Meanwhile, late stage funding increased by 30% YoY, which might be a reason why late stage startups saw fewer layoffs this year than last year.

Edtech, Consumer Services, Enterprise Tech Employees Among The Worst-Hit

Among the 11 startup segments that saw layoffs during 2023, edtech, consumer services and enterprise tech saw the most job losses. Two of every three startup employees laid off during the year worked in one of the aforementioned segments.

Refusing to budge, edtech continued to be the startup employees’ worst nightmare, accounting for more than 40% of all layoffs during the year at more than 6,758. BYJU’S, the edtech behemoth, alone accounted for nearly a quarter of the total layoffs recorded by Inc42 during the year so far.

Consumer services retained its unfortunate label alongside edtech as being among the top segments impacted by layoffs for two consecutive years. This year, 11 startups in the sector fired over 2,105 employees. Across the past two years, 19 startups in the space let go of nearly 7,400 people.

Enterprise tech became an unexpected entry into the startup layoff realm as 18 startups from the segment fired over 1,700 employees during the year. Troubled by the fall in enterprise spending across the globe, the segment’s share in handing out pink slips jumped from 2.6% in 2022 to 10.3% in 2023.

Will 2024 Be Any Better?

The last few years have been quite paradoxical. While we have observed investors going gaga over the charm of Indian founders, we have also witnessed them tightening their purse strings in no time.

For instance: The nine months between July 2021 and March 2022 were witness to the most intense funding activity the Indian startup ecosystem had ever seen. In just three quarters, homegrown startups raised $44 Bn.

In contrast, the nine months between July 2022 and March 2023 saw the worst layoffs during any time in the history of the Indian startup ecosystem. During this period, 63 Indian startups fired 12,214 employees.

However, the only common trend in 2023 has been investors’ distastefulness in making vanity startup bets, despite accumulating billions of dollars in dry powder.

As analysts continue to sound caution over unsustainable business models and growth trajectories, Indian startups seem to be rethinking their approach and strategy.

On a different note, rating agency Fitch delivered a mix of good and bad news earlier this week. While the good news is that the US economy has managed to avoid a recession, the bad news projects the world’s growth to fall sharply to 2.1% in 2024 from 2.9% in 2023.

Predicting the future is a fool’s errand. However, we can only expect 2024 to be the year of revival, with global supply chains returning to normalcy and core inflation cooling off faster than anticipated.

However, given that the current funding scenario reminds one of the pre-pandemic funding era, employee retrenchment is an anomaly we may see Indian startups bracing in yet another painful year on the employee front.

The post Two Years, 35,000+ Job Cuts: Indian Startup Layoffs Continue, Will 2024 Bring Change? appeared first on Inc42 Media.

Studies reveal that one in four Singaporeans dine out daily, while 80% opt for at least one restaurant meal every week. This shift away from traditional home-cooked meals has stemmed from broader socio-economic changes such as busy lifestyles, increased affluence and, most importantly, the rise of on-demand food delivery services riding the wave of ubiquitous digital tech and the smartphone economy.

But the dynamics of change are not limited to the island nation alone. In the past decade, India has witnessed a similar transformation in eating habits, driven by the rapid growth of the online food delivery segment. As mentioned by Statista, a Rakuten survey in December 2022 found that most Indian respondents aged 16-54 dined out at least once a week. 

Given the exponential growth across India, the online food delivery market volume is estimated to reach $81.9 Bn by 2028, growing at a CAGR of 19.7% during 2023-2028. However, this surge would not have been possible without the sturdy industry stalwarts – Zomato and Swiggy – who lay the groundwork for the food-delivery ecosystem.

Both leverage the techvantage of a digital-first ecosystem to cater to the diverse Indian food palate but compete fiercely for a bigger market share. Zomato has maintained a sizable lead over its closest competitor in terms of execution. But is Swiggy lagging far behind or breathing down its rival’s neck?

An assessment of the year gone by (2023) and the outlook for 2024 will reveal these interesting ground realities and the shape of things to come.    

Is It Zomato All The Way In 2023?

The narratives of Gurugram-based Zomato, now a listed company, and its unlisted peer Swiggy from Bengaluru are not analogous. However, much of their growth is the direct outcome of innovative marketing strategies (more on that later) and lucrative sales tactics such as discounts, cashback deals, exclusive offers and attractive loyalty programmes.

These sureshot bets (to say nothing about their expansive reach in the pan-India restaurant market) have lured gastronomes to online food-ordering over the years. Subsequently, engagement has increased and customer loyalty has split into two distinct camps. (Take a look at the app download comparison.)

The Zomato-Swiggy face-off in the food-delivery space has been accelerated by sustained investor interest. Together, these industry leaders have raised $5.4 Bn for strategic acquisitions, cloud kitchens and implementation of value-added services. More importantly, their deep pockets and industry dominance slowly squeezed out other players from the arena.

For instance, ride-hailing giant Uber India’s food delivery business UberEats was acquired by Zomato in early 2020, while Ola completed the 100% acquisition of Foodpanda (India) in early 2022 from Germany-based Delivery Hero.  

The outcome: The industry has a duopoly now where the arch-rivals claim nearly identical market shares in India. However, Zomato maintained its lead with a 54% market share compared to Swiggy’s 46% in the food delivery space as of H1 2023, according to reports.

Although it has not been a smooth ride for either of the companies in 2023, Zomato has taken the lead in several critical areas to hold strong as an icon of India’s post-pandemic gig economy boom. Here is a look at how the companies have fared this year.   

Zomato Tops The Consumer Sentiment Survey

According to Inc42’s Consumer Sentiment Survey 2023, done in collaboration with Clootrack, Zomato emerged as the preferred online food delivery service among Indian consumers.

The conclusion was based on a Clootrack analysis of more than 24K user reviews on the Apple App Store and Google Play Store between January 1 and November 22. The findings underscore Zomato’s stronghold and positive reception in the highly competitive food aggregation, online ordering and delivery market.

The survey also revealed that key success metrics, including offers and discounts, food quality, customer service, delivery time and interactions with delivery partners, received high scores for Zomato on a scale of 1-5, where 1 signified the lowest and 5 represented the top score for consumer experience.

Zomato Sweeps The Field In App Downloads

According to an Inc42-AppTweak analysis, the combined monthly app downloads of Zomato and Swiggy averaged 7.6 Mn and reached a total of 83.5 Mn between January and November 2023. Zomato led with 47.5 Mn downloads (56.9%), while Swiggy recorded 36 Mn (43.1%).

It is worth noting that the Swiggy app covers its grocery services (Instamart) and restaurant deals and discovery (Dineout) vertical besides food delivery.

Although Zomato has integrated UberEats’ operations with its own to strengthen the food delivery business, its quick commerce platform Blinkit (formerly Grofers, which was acquired in 2022) operates via a separate app. It has seen 14 Mn downloads in 2023 (excluding December data), and combined with Zomato’s download numbers, puts the parent company in a superior position.

But Financial Dips, Critical Exits – Who Has Weathered It Better

Zomato faced a challenging start to 2023, marked by the departure of its CTO, Gunjan Patidar. A subsequent 2% dip in its share prices was followed by an 8% decline, hitting its lowest since July 2022. Despite the setback, Zomato’s consolidated revenue for Q3FY23 (October-December 2022) surged by 1.75x to INR 1,948 Cr, but the foodtech giant saw a 5x spike in losses, reaching INR 346.6 Cr. 

Not only this, it liquidated its subsidiaries in Jordon, Czech, Portugal while in process of shutting operations in the Philippines and Indonesia with active operations only in India and the UAE. 

Zomato had also placed early bets on non-metro markets to widen and deepen its reach, a cash-burning exercise as it would not provide immediate results. However, given the global slowdown in 2023 due to macro headwinds, the foodtech unicorn focussed on improving its financial performance.

Zomato hit overall profitability in Q1 (April-June 2023) and Q2 (July-September 2023) of the current financial year and reintroduced its Gold loyalty programme in January, which has now surged to 38 Lakh members.

Although it is not strictly contextual (Swiggy is not a listed company), Zomato stock has given excellent returns in 2023 on a YTD (year-to-date) basis. After some dismal performances post its IPO, the stock has emerged as a multibagger and gained around 103% as of November 2023.

We have not considered the market loss it suffered on December 11, 2023, as the company was under pressure after SoftBank offloaded its remaining stake in Zomato.

Swiggy, too, grappled with persistent losses, high-profile exits and diminished investor confidence ahead of its impending IPO. 

The Bengaluru-based foodtech unicorn is yet to announce its FY23 earnings, but it reported a loss of INR 3,628.9 Cr in FY22 with an operating revenue of INR 6,119.8 Cr. It also restructured the business and adopted cost-cutting measures, resulting in the termination of 380 employees.

Key people, including Karthik Gurumurthy (Senior Vice President and Head of Swiggy Instamart), Dale Vaz (CTO), Anuj Rathi (SVP, Central Revenue and Growth ), Ashish Lingamneni (VP, Marketing) and Dineout cofounder Vivek Kapoor, were among its high-profile exits.

To add to its woes, the US-based investment firm Invesco marked down Swiggy’s valuation twice earlier this year, eventually slashing it to $5.5 Bn from an earlier $10.7 Bn. Swiggy reached the decacorn valuation when it raised $700 Mn from the US investor in 2022.   

Things took a turn for the better when Swiggy CEO Sriharsha Majety claimed that the foodtech unicorn’s food delivery business achieved profitability as of March 2023, excluding ESOP costs. Investors also displayed renewed confidence, with Invesco marking up Swiggy’s valuation by nearly 43% to $7.85 Bn and Baron Capital internally raising the valuation by 33.9% quarter-on-quarter to $8.54 Bn.

Creative, Relatable & Witty: How Zomato Campaigns Capture Foodies  

Innovation-driven marketing is a major growth driver in today’s business scenario, and Zomato has vroomed into that space. Take, for instance, the age-old SEO tools consistently driving traffic 24×7. According to traffic analyser Ubersuggest, Zomato ranks in India for 2,494,988 keywords as of August 2023, with monthly organic traffic amounting to 30,484,205, as mentioned in an IIDE (Indian Institute Of Digital Education) report. Although these figures are a tad lower than its SEO performance in February 2023, Zomato has outperformed Swiggy by 2.5 times.

However, the company has taken the cake in the social media domain.

Zomato and Swiggy are active on major social media platforms like Instagram, Facebook and X (formerly Twitter). As of November 2023, Zomato has 891K followers on Instagram, 1.9 Mn on Facebook and 1.5 Mn on X. Swiggy is a notch down, with 457K followers on Instagram, 999K on Facebook and 209K on X.

Zomato’s ability to attract and engage people on every medium can be attributed to its use of trendy and witty posts. For instance, a recent collaborative campaign with Blinkit tweaked a famous Bollywood dialogue, leaving people in splits. While the Blinkit billboard turned the original dialogue on its head and said: Doodh mangoge, doodh denge (Ask for milk, and we will deliver it), Zomato took a page from it and made a humorous addition: Kheer mangoge, kheer denge (Ask for kheer, and we will deliver it). 

Then there are other campaigns – the story of Raksha and Bandhan, Zomato vs Zomato and Humans of Zomato – which are equally intriguing and never fail to captivate consumers. A recent case study by IIDE also highlighted the food delivery giant’s effective strategy of creating witty and relatable content to enhance engagement and appeal to its audience.

Moreover, when Zomato’s founder and CEO, Deepinder Goyal, joins the upcoming season of the popular TV show Shark Tank India, the event can set social media on fire. The company will not let go of this opportunity to impress netizens.

As global customer reach is its primary objective, Zomato utilises every available digital marketing tool to understand the preferences of its target audience and cater relevant content. According to the digital marketing agency Ideatick, the company sticks to a creative marketing strategy to stay at the forefront of the industry.

That does not mean Swiggy is lagging. The company has earned industry acclaim for its skilful storytelling, exemplified by its famous campaign What’s In A Name, where it ingeniously weaves relatable stories around restaurant names. Swiggy typically looks at people’s hunger quotient to craft a comprehensive marketing strategy, epitomised by its timeless tagline: Craving Something?

It also captivates its audience with visually compelling content and relevant Indian topics, ranging from cricket to political unrest. Again, pictures of delicious food are promoted on Instagram to position the company as the go-to choice for those desiring delectable meals.

Recognising the fast-growing significance of memes in the new millennium vernacular, Swiggy infuses its distinct flavours into them to enhance customer interaction on social platforms. A notable example is its viral Vadapav meme on Instagram (posted in September 2022), which got more than 1.2 Mn views and 5K comments, showcasing the effectiveness of this approach.

2024 Outlook: Competitive Sparring On The Menu

According to a Statista report, the number of users across the meal delivery market in India is estimated to reach 346.6 Mn by 2028. This anticipated surge in user numbers has transformed online food aggregation and delivery into a highly lucrative segment, attracting new players and investors. 

So, it is not surprising that startups like Waayu and Thrive, as well as the Indian government’s ambitious digital commerce network ONDC, are challenging the longstanding duopoly of Zomato and Swiggy.

Interestingly, WAAYU distinguishes itself as a no-commission food delivery platform, backed by Bollywood actor and investor Suniel Shetty and supported by the Mumbai-based Indian Hotel and Restaurant Association (AHAR). The startup charges an introductory fee of INR 1K per month per outlet, which will be doubled a month after the onboarding. Restaurants also have to pay a one-time onboarding/setup fee of INR 3,650.

Another noteworthy contender is Thrive, a foodtech platform supported by Coca-Cola. It collaborates with restaurants for online and WhatsApp ordering, order management and setting up digital menus. Thrive claims to have a large restaurant base (exact number not disclosed) as it charges a 3% commission compared to 18-25% levied by Zomato and Swiggy.

The presence of ONDC makes the market more competitive as it has already onboarded more than 50K restaurants, signalling a tough time ahead for Zomato and Swiggy. 

As we approach 2024, the fate of these industry leaders remains uncertain. Only time will tell if they can operate in a stable market and grow sustainably, or it will continue to be a roller-coaster ride.

[Edited by Sanghamitra Mandal]

The post The 2023 Face-Off: How Zomato Powered Past Swiggy In The Food Delivery Race appeared first on Inc42 Media.

The year was 2017 and four Flipkart executives decided it was time to disrupt the investment tech market. But Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal had a different view of fintech than most entrepreneurs who jump into this sector. The result was mutual funds distribution platform Groww, where the consumer-first mindset is still paying off.

“We come at problems from a consumer lens because that’s what we know best. Solving problems that customers and consumers face has been our biggest learning at Flipkart,” Jain tells Inc42 at Groww’s HQ in Bengaluru, where nearly 40% of all Indian unicorns have their bases.

But unlike many of its neighbours, Groww has had an optimistic 2023. Jain seems nonplussed when I ask him what it feels like to finally turn profitable as a group. As per him, profits are a byproduct of Groww’s approach to solving the problem.

“We haven’t done anything different, and profitability is just one of our goals. In fact we never had this as a target in our mind that next year we will be profitable. Because we trust that the process of being consumer-first will pay off,” he says, reiterating Groww’s focus on solving consumer problems, which has brought in the results as far as profits are concerned.

Beyond profits, Groww reached another landmark with 6.63 Mn active investors at the end of September 2023, as against Zerodha’s 6.48 Mn. This made the company the biggest discount brokerage by clients in India. For context, Groww had 5.3 Mn active investors at the end of 2022, compared to Zerodha’s 6.3 Mn.

And there’s one more reason why 2023 has been different for Groww — the company’s plans to venture beyond investment tech are becoming clearer and clearer. In other words, Groww too is joining the super app race in some ways, though these are still early days in that regard.

But the blueprint has been laid out — if Groww grew to its current stature on the back of mutual funds and stockbroking, its future could very well be determined by what it took on in 2023.

Firstly, like most other fintech unicorns, Groww jumped onto the lending bandwagon in late 2022, and in 2023, it also entered the tightly contested payments vertical. Effectively, Groww is joining the likes of Paytm, PhonePe, CRED, BharatPe and others in this space, although its lynchpin product remains investment tech.

But as Jain is keen to point out, the approach will be consumer-first. We wanted to understand what that meant for Groww and how the company has leveraged this direction to outgrow long-time competitor Zerodha in some ways.

Our visit to Groww’s headquarters was a part of Inc42’s 2023 In Review series, and we wanted to dive into the fintech unicorn’s journey in 2023 as it prepares for a brave new leg in 2024 with a slew of new products. Here’s what we learnt:

Groww’s Content Stack

At one point during our conversation with executives, Groww is often referred to as a D2C company. The direct-to-consumer model is more commonly used with ecommerce, but even there, the model has become diluted through multiple channels and distribution points.

But in the case of Groww, the approach extends to how the company thinks about new products and verticals.

Another senior executive at Groww tells us that the company’s key strength has been able to convince even on-the-fence customers that investing is not rocket science. The content-to-commerce chain is something D2C brands have tried to leverage for growth. But in the case of Groww, this extends to handholding customers through tough financial decisions via content and allowing them to take charge of their investments in a transparent manner.

The first step is not treating new investors any differently than existing customers except when it comes to content. The end goal for both cohorts of users is the same, Jain reminds us, which is to manage their money better.

Often, discount brokerages get stuck in their positioning around casual or serious investors, and this tends to make it harder for the platform to grow unless the market matures. For Groww, content and its educational initiatives have been the great leveller.

“There’s no such thing as a casual investor. If someone earns INR 15K a month and invests INR 500, they are making a very serious financial decision. So content is critical to help them make the right choice,” the executive mentioned above adds.

Unlike new investors, those who are already familiar with the market and investment strategies need a different degree of assistance from a content POV. There’s also a focus on localisation of content through regional language videos that simplify strategies for new investors.

Localised content is a key pillar for Groww, as we will see, because this ties into the company’s larger plans around lending and other verticals.

Yet, there’s a governance aspect to the content being produced as well, which guards the company against the temptation to bombard new users with content just to drive growth. While many rival investment tech platforms have brought in influencers to bolster content, Groww does it all in-house.

Influencer-led investment marketing has earned a bad reputation in recent months, and Groww does not want to go into this model. On YouTube, it has nearly 2.15 Mn subscribers, compared to Zerodha, which has less than 600,000 followers. Groww launched its YouTube channel in 2017, compared to Zerodha’s 2014 launch.

Instead of relying on other investment experts, Groww prefers a DIY approach when it comes to users Influencer-led investment content has brought trouble for platforms such as Vauld and others in the past, and even market regulator SEBI is cracking down on unauthorised selling.

“We don’t even give our business teams targets to increase transactions, so asking someone like an influencer is out of the question. Again, we wanted to focus on solving for the consumers which influencer-led marketing does not do,” adds cofounder Jain.

Jain believes that not chasing growth has brought the growth that Groww has seen in the past year. “If you do right by the customers, they will stick with you, and eventually each user becomes more profitable. We won’t change this philosophy just for growth.”

In 2021, Groww saw its valuation jump from $250 Mn to $3 Bn+ thanks to massive funding rounds and backing from the likes of Tiger Global, Lone Pine Capital, and many others. The company has since then expanded its lineup of investment tech products, as highlighted above, and added more pieces in 2022-23.

From A Lending Play…

It’s hard to hide from the competition in the fintech space. One way or the other, you will cross paths.

The great fintech convergence is one of the more enduring themes of the past year, as individual apps turned to platforms. Groww is also a platform in many ways, but key leaders in the company believe the difference is in the way it has approached this transition.

Thoughtful product expansion has been the hallmark of CRED in 2023, while massive deployment of capital and resources has been the playbook for PhonePe. Groww has taken customer-first to a different level. And for the company, this is a key USP because it creates a long-term trust bridge between the platform and its users.

“For many days in the past year, our founders have been on the ground and talking to customers directly. We had roadshows to meet some of our most active investors in Tier 2 and Tier 3 towns, where we saw that our customers have deeper problems and a trust in Groww,” says another key member of the Groww platform.

The trust comes from the fact that Groww has helped these individuals see returns on their wealth. Users know that Groww is a legitimate partner and therefore they are more likely to turn to the company for other services.

Based on the feedback from the users on the ground, Groww added lending as the first piece of the platform beyond investments. It had also acquired an NBFC licence through Groww Creditserv Technologies in late 2022 for its first real attempt into lending, and by mid-2023, it had also ventured into UPI payments.

…To Joining The UPI Race

Let’s get one thing clear — UPI is not exactly a novel product by any means and can be expensive to maintain at scale despite its low revenue contribution given the current zero MDR regime.

Even market leader PhonePe struggles to monetise UPI and has to turn to non-payments revenue for growth. But UPI is a glue in the fintech ecosystem and every app realises that UPI can be a top funnel to gain more users.

Groww ranked 28th among all UPI apps in October 2023, facilitating 5.89 Mn transactions totalling INR 3,354 Cr in value. As such, it has a long way to catch up with PhonePe, Google Pay, Paytm and CRED, which are the top four UPI apps in India.

While other companies spend to drive usage, Groww is looking at UPI as a nice-to-have and not as a core focus area. UPI only adds to the trust element of a platform.

Sources close to the company told Inc42 that Groww is also working on a payments gateway business, which is being used to reconcile transactions made by investors on its app. It’s very likely that the company will offer it to other businesses to recoup the investment towards building this product. But Groww did not comment on the plans to enter the enterprise fintech space.

What Can Groww Count On?

Trust is a fundamental building block for any platform, says a founding partner at a Bengaluru-based early stage VC firm. The partner, who primarily looks at fintech investments, believes that fintech platforms need to become walled gardens and there are various ways in which companies are doing this.

Paytm has the deep brand value, CRED has cutting-edge product and design, PhonePe has the scale — for Groww, this is replaced to some degree by the trust from its customer base.

On the lending side, the company has looked at consumer durable loans at the points of sale as well as merchant loans to begin with, but according to sources close to the leadership, there are plans for home loans, personal loans and other credit products.

But the company’s plans are not just restricted to lending. Reports in the past year indicated that Groww is also looking at a co-branded credit card and there was even some speculation earlier about a tie-up with Federal Bank for a neobanking play. These are very much on the cards as well.

Interestingly, Zerodha, Groww’s chief rival on the investment tech side, is also eyeing a banking licence, as per reports. A banking licence is being considered a critical advantage in the discount broking space for speed of executing transactions. As more and more companies look to automate processes for a quicker turnaround time on transactions, having an in-house bank would be a massive competitive edge.

So Groww’s primary objective with its content stack is to inform — and that was also the objective with meeting people on the ground. It’s not about bringing new users, but building trust and visibility with the brand.

If digital-first new-age brands do it through retail channels, Groww does it with roadshows.

Rethinking Asset Management 

Groww’s NBFC licence keeps the door open for a larger banking play in the future, but another critical factor is the new asset management business.

Earlier this year, Groww completed the acquisition of Indiabulls’ AMC licence, a process that began in 2021. For Groww, the AMC licence is critical from a revenue point of view as AMCs typically charge a management fee based on the asset percentage, while brokerages generally charge per trade or offer flat-fee accounts. But for Jain, the opportunity is not about revenue but actually changing the trust equation.

Once again, Groww links the product expansion to consumer-first thinking. The consumer does not want the business to ask for money to solve the problem. The consumer wants to see the value of the brand, and needs to trust the brand to solve the problem.

“There is a lack of trust in the industry because products are not very simple. Customers or new investors need a very simple report. They want to know how to invest. They ask, ‘How do I get the money back? Where is it invested? Is it invested with the right philosophy? Are people taking too much risk or are they very conservative?’ We have the opportunity to create that level of transparency with our AMC and that level of governance,” Jain said.

As per him, Groww’s approach to content and solving the problems faced by consumers easily extends to other categories such as insurance. In other words, it’s not just the AMC space or the investment space that is fraught with bad information.

Sources at Groww talk about insurance as one of these areas and how it has remained a mystery product for certain categories. “Think about life insurance. It is the most critical product for long-term financial planning, but it’s the least understood product and it’s the most mis-sold product. There’s the need to demystify this in the right way and no one is doing that yet,” one source close to the management says.

Groww’s Super App Moment 

Once again, content is the answer for Groww because the questions the company is asking itself are the questions that the consumer has. Even if content does not always translate into monetisable users, there’s a strong belief that investment tech, mutual funds or even fintech as a whole is not a winner-take-all market. Growing the base of eventual users only helps the ecosystem.

Groww might be more suitable for one kind of consumer, because it has a deep consumer insight. But there will always be room for other companies, just like a healthy economy has multiple banks competing.

Despite having higher active user numbers, Groww trails Zerodha in terms of revenue. Nithin Kamath-led Zerodha reported INR 6,875 Cr in revenue and a net profit of INR 2,900 Cr in FY23. In contrast, Groww reported a net profit of INR 449 Cr in FY23 on an operating revenue base of INR 1,277 Cr.

The gap is evidently wide, but comparisons with Zerodha are perhaps misrepresentative of Groww’s place in the fintech ecosystem. Or, at least, will be if the company is able to press the accelerator on its larger plans.

Indeed, the comparisons then will be made with the likes of Paytm or PhonePe, and it will be interesting to see where each of these fintech ‘super apps’ stand a year from now. Will their product diversity stand the test of time?

In some ways, Groww has been lucky so far that the company’s products have been well timed with the market growth and the push for investments in India from policymakers. Plus, digital investment platforms grew by leaps and bounds during the Covid pandemic aka one of the biggest bull runs in India.

Even though the past few years have brought in some correction, Groww believes in taking a broader decade-long view. The aspirations of modern Indians are already growing and this is also an important time to help Indians grow in the right manner.

The cofounder believes that just like Groww got ‘lucky’ in the past few years with its core business, it has the good fortune to be building new products for this new India. Incidentally, this is also the best time to prove any thesis around super app platforms as the consumer base is maturing.

And Groww says it knows consumers well — will this be its trump card?

The post Groww’s ‘Super App’ Year: Going D2C To Win The Fintech Race appeared first on Inc42 Media.

CRED doesn’t do labels — ask the company to name its key leaders, and there’s no straight answer. The refrain time and again is about functional teams and high ownership across the ranks.

But I wasn’t at the company’s new second office in Bengaluru to discuss official designations. Instead, we wanted to dive into the year that went by with the leadership. And I couldn’t help but notice an airier, more open version of the company which is otherwise quite guarded.

After all, 2023 is a big year for CRED — it’s about the coming-of-age for the company’s products and embracing the platform life and proving that financially too, it is on the right track. With new products that could add significant revenue momentum, CRED is answering many who had questioned its business model for years. This year was also about showing that building patiently and slowly has its rewards.

With its new office, the Kunal Shah-led startup has now bookended an entire block on Indiranagar’s 100-foot road, creating what can only be described as the CRED bubble.

The CRED bubble is, of course, not a bad thing. It’s largely indicative of Shah’s outsized influence on the Indian tech ecosystem. Naturally, most people associate CRED with its founder — the only designation that cannot be hidden.

Having completed five years in 2023, CRED is finally opening up, even though it’s awkward about it.

As part of Inc42’s wrap-up of 2023, we dove deep into the year gone by for CRED and unearthed some insights from how the startup builds its products, its relatively slow-burn approach and the questions about profitability.

‘CRED’s Broad Canvas’

For CRED, the benchmark is not Paytm or PhonePe or any other fintech app, it’s Apple and Mercedes — no surprises there (more on this later). It’s the one thing that perhaps sets the startup apart from the horde of competitors in the rapidly growing fintech space.

Every company is gearing up to become an all-in-one fintech app, but CRED claims to have taken a deliberate approach, without compromising on the product ethos — deeply thought-out features, high-quality design assets and UX, and products that fit into CRED’s customer persona model, which make sense for the platform.

“Kunal had a very crisp vision of what the opportunity is, which is that the trustworthy and credit-worthy user base in India deserves better, and can be served in a unique way. That was the broad canvas and that canvas is still the same today,” says the company spokesperson, adding that the primary challenge for CRED from a product vision point of view is choosing what to do next.

Choosing what to do next is not something most startups have the luxury of. In CRED’s case, that’s largely due to the capital raised by the company that allows it to take its time, but it also goes deeper than that. Shah’s reputation as a founder who has seen a big exit also brings a lot of time to grow.

The company has raised over $1 Bn over 10 rounds in five years, so it’s not lacking capital. But it’s also about knowing what pieces of the puzzle will actually fit next to each other.

“You really cannot do step seven, unless you do step one through six. And then you may imagine I want to do step 27 also, but you don’t get the right to do that until you sort of actively build the layers and things adjacent to it,” the spokesperson said.

‘Is This A Delta-4 Experience?’

So when did CRED choose to go into something like vehicle management with CRED Garage, which came out of the blue, but fits like a glove within the platform. After the launch, it seems like a very obviously CRED product, but how did the company arrive at that point?

For the company, it goes back to the underlying thesis of building for the ecosystem of people who are high-trust, which is based on an objective metric called a credit score. In some ways, this cohort represents the cream of the overall Indian fintech TAM. Essentially, the very premium layer comprises the 100 Mn Indians who own a credit card.

“So when we look at the problem statements that they have in their life where we can potentially make a difference. That’s the starting point of how we think about all products, not just Garage. There are some products which we aspire to make, but until we have a unique insight that fits this persona, we’re not gonna go build it.”

The origin point for Garage was more than a year before the launch when the CRED team was ideating on developing a product linked to FasTAG electronic toll payments. By itself, the product would have been just another FasTAG service like Paytm or PhonePe, but the idea was to flesh it out more fully.

Another decisive question that CRED asks itself in the process of product development: ‘can we create a Delta 4 experience’, based on the theory put forward by Shah. Put simply, Shah claims, “Once the user experiences a significantly better way of using a product, there is no way he or she is going back to the old way of doing things.”

The company claims a product like Garage doesn’t exist anywhere in the world, and it’s similar to how CRED changed credit card bill payments, which seems like an afterthought today, but it was also a unique product at the time. In the first three weeks, CRED Garage claims to have hit 1 Mn vehicles registered.

Building backward from the customer persona, CRED is looking to intersect with the digital commerce and lifestyle journey of its users. Besides, the company is also eyeing investment tech vertical as the next area of growth.

Garage is also unique in the sense that CRED did not acquire any companies to build this product, as it has done on the lending side with the acquisitions of CreditVidya in 2022 or Spenny in 2023 or even the likes of Happay in 2021.

While these acquisitions are key for CRED’s grander plans in the investment tech and lending space, Garage remains a wholly unique proposition.

What’s not unique is CRED’s UPI play, but even here the company banked on building for the customer persona, which has paid off in a big way.

‘Why’s Yours Black And Why’s Mine White?’

For years, fintech meant payments and payments meant UPI. Startups built user bases through UPI and now realise they need services for revenue, something which UPI does not contribute towards.

In October 2022, when CRED launched UPI payments, we wondered whether it was too late to enter the game. But since the launch, the company has managed to climb up the UPI rankings and is the fourth-most used UPI app in the country today.

The launch of UPI has been critical for CRED to drive engagement among its users and it’s also one of the places where we can see the product philosophy pay off. “It was an important piece in the puzzle as it ties the various verticals together and you can see the impact in terms of the financials and the growth,” says a Bengaluru-based founding partner at an early-stage VC firm that has invested in several fintech startups.

Unlike other players of its ilk, CRED decided to take a gradual approach to UPI, launching nearly half a decade after the likes of PhonePe or Paytm or Google Pay. And it helps that perhaps people want to try new apps for UPI because there is no cost involved with switching apps.

“The paucity of rewards on other apps after five long years meant CRED had the opportunity to offer rewards and syphon off users. Users ant rewards and delight, and CRED offers both in spades,” the spokesperson added.

We asked CRED team what led to this quick success for CRED UPI, and the answer was — people use different signals for different transactions.

Someone with multiple credit cards will likely pull out the fanciest one in the right company, and the same could be said about CRED’s UPI play. “There’s the factor of ‘Why’s yours black and why’s mine white?’ We also focussed on speed, safety and privacy. We have the fastest QR scanner today and we have fraud protection measures, which is basic but no other app has done that,” the spokesperson said.

The UPI product has been key in converting the user base from low-frequency actions for credit card payments to high-frequency actions like daily small-ticket purchases. And indeed, Garage or CRED Escapes (travel) or the CRED Store are all part of this effort to push up engagement among the most active users.

‘Building Like Apple Or Mercedes’

Products by themselves don’t matter of course. It’s about how they move the revenue needle. For CRED, the FY23 performance is seen as a turning point, but there’s an even more meaningful outcome that the company had been chasing for — higher engagement from its users.

The startup reported a total revenue of INR 1,484 Cr in FY23, a 251.6% increase from INR 422 Cr in the previous fiscal year. On the other hand, losses grew marginally at 5% to INR 1,347 Cr, thanks to expenses growing to INR 2,831.9 Cr from INR 1,702 Cr.

On the engagement side, an average CRED monthly transacting user (MTU) now opens the app more than 20 times a month, which the company claims is one of the best in the industry.

One-third of the credit card bill payments by value were done on CRED, we were told and on a unit economics level, CRED spent INR 2 to earn every single rupee from operations.

That’s a major improvement from INR 4.3 it spent last year to earn a rupee of operating income. So, there have been some measurable improvements for CRED in the past 12-16 months, and new products are very clearly a part of it.

For CRED, financial prudence is not new, and in fact, the company claims to be CM1 positive for seven quarters now and CM2 positive for five quarters (as of December 2023). These are of course the fundamentals that indicate the right trajectory from a unit economics point of view. And these metrics will be sacrosanct — or in other words, they won’t be sacrificed for growth.

As for EBITDA breakeven, for CRED and many other companies at a similar stage, it’s a choice. The company is likely to invest in growth if there are products worth chasing.

The company also claims to be ahead on its plan for EBITDA breakeven, without stating any timelines for when that might be announced. Perhaps, it’s the company’s shyness for labels that’s once again surfacing here.

But even the likes of Google and Amazon faced questions on profitability and their business models before they went public. Until the larger vision and the business fundamentals became clearer. CRED is not in a hurry to claim profitability.

The analogy we were given is of Apple or Mercedes. The best companies in the world take their time because they are pushing the envelope on products. Whether that be a car or a smartphone or laptop or indeed a fintech app. These titans of industry have earned the right to garner the largest share of profits or goodwill among customers.

Of course, success is a factor of the work and not just patience. For the company, the key will be to fight, perform and deliver every day; becoming less and less quiet about the progress. And then perhaps CRED might not shy away from labels as much.

Update | 11th Dec, 9:40 IST

Some parts of the story have been edited for clarity.

The post Five Years In The Making: CRED’s Year Of Vindication appeared first on Inc42 Media.

A landmark fine by the Competition Commission of India (CCI) on Google in late 2022 set into motion a series of events that echoed well into 2023. The domino effect led to a turbulence that hit Google’s ship, a force to reckon with and a digital juggernaut. 

Emulating its global operations, 2023 turned out to be a tumultuous year for the big tech major in India as well. The CCI penalty emboldened Indian startups to take the company to courts and even paved the way for the homegrown ecosystem to wrest control of a key industry body (IAMAI) from Google.

Piling on top of these issues were other anti-competitive cases brewing in the news aggregation and the smart television space. 

Besides, as a flurry of legislation, centred on the country’s digital ecosystem, took shape this year, Google found itself in the crosshairs of the government. Be it rap from authorities for failure to crack the whip on fake news or the emergence of deepfakes, the year turned out to be a trying time for the big tech giant.

Macroeconomic headwinds too hit the company as layoffs brought bad press for the big tech giant.

Notwithstanding these challenges, Google continued to focus on India, its biggest market globally in terms of users. 

From chief executive officer (CEO) Sundar Pichai’s bonhomie with Prime Minister Narendra Modi to moving some of the production of Pixel smartphones to India, Google left no stone unturned to tout its India push. 

The year also saw Google bolster its fintech ambitions while rolling out new AI offerings for its Indian audiences. While 2023 indeed was, in some sense, a mixed bag for the company, unease prevailed among the company’s top leadership over regulatory strife and legal cases stuck in limbo.

Google Caught In The Great Indian Legal Limbo

As the competition watchdog issued a landmark antitrust judgement against Google in October 2022, little was known that it would stir up a big storm for the company. 

The CCI slapped two separate fines, totalling over INR 2,200 Cr, on Google for abusing dominance in the Android devices market and over its Play Store policies. It also directed the US-based major to undertake sweeping reforms to its operations in the country. 

Refusing to take the order lying down, the company appealed the decision before the National Company Law Appellate Tribunal (NCLAT). 

As cases dragged on, Google was forced to change course and instituted a slew of changes to India operations. It made some changes to its agreements with original equipment manufacturers (OEMs) and even announced a new user choice billing system (UCBS), which slashed developer commissions to 11-26%.

However, as Google began rolling out new policy changes to comply with the CCI rules, it met an unexpectedly tough adversary — Indian startups. 

First on the menu were public statements by Indian startup founders, trashing the new billing policy and equating it with British-era ‘Lagaan’. Some even termed Google a threat to the country’s startup ecosystem. 

What followed was Indian startups banding together to file cases against Google’s UCBS in Delhi High Court and Madras High Court. The homegrown players even approached the NCLAT and other stakeholders to pitch their case against the new policy.

As this saga played out, many founders were irked by the silence of industry body Internet and Mobile Association of India (IAMAI) on the matter. Consequently, the startups trained their guns on the industry body, which, as per many founders, was controlled by big tech executives. 

The aftermath saw Indian founders participate in huge numbers in the IAMAI’s elections and wrest its control from Google representatives – a small win for the Indian startup ecosystem.

In the middle of all this, it was the regulatory standoff that seemed to be the biggest trouble in Google India’s paradise.

Google’s Regulatory Pitfalls In India

A recurring theme of Google’s operations in India has been its behind-the-scenes, if not always public, skirmishes with the government. As the government undertook the overhaul of key digital laws in 2023, Google found itself in the middle of the action. 

While the amended IT Rules brought the safe harbour protections into question, the Telecommunication Bill hinted at the possibility of regulation of its OTT communication apps. The Digital Data Protection Act proposed an elaborate set of homework, hefty fines and additional compliance burden for the Sundar Pichai-led company.

The emerging threats such as deepfakes as well as misinformation, ahead of 2024 general elections, has also put the company in the crosshairs of the union government. 

In a bid to tide over this, the company has largely resorted to its time-tested strategy of engaging with authorities behind closed doors, partnering with the Centre on a slew of initiatives, and emboldening its Make in India push. 

Be it the production of Pixel smartphones in India or launching accelerator programmes for Indian startups, in partnership with MeitY, Google pitched itself as a force dedicated to the cause of the Indian digital economy. 

Meanwhile, the company continued to shore up its fintech ambitions, looking to capitalise on the burgeoning number of Indians joining the digital fold. 

The India Ambition Scales Up

Google continued to heavily scale up operations to capture a bigger pie of the Indian digital economy, which is projected to soar to a market size of $1 Tn by 2025. 

Diversifying from offering mere digital payments services, the big tech major forayed into the financial services segment. In partnership with Indian banks and startups, Google Pay, starting 2023, began to offer merchant credit lines and sachet loans for consumers.

With an eye on accelerating its fintech growth, Pichai also announced that the company would set up its global fintech operation centre at the GIFT City in Gujarat. 

Capitalising on GenAI, the flavour of the season, Google announced a spree of AI-focussed launches this year. Be it Bard or visual search, the tech giant rolled out a host of AI-led products and services for its Indian users even as competition intensified from Sam Altman-led OpenAI. 

Meanwhile, it continued to feel the heat of the global economic meltdown that unfolded in 2023. As a result, Google undertook a cost cutting exercise to streamline operations which resulted in axing of more than 450 jobs in India. 

The Mountain View-based company also shut down and announced the discontinuation of a slew of products and services, such as Google Podcasts, Google Stadia, and Google Jamboard, to focus on actual money-minting products. 

In India, YouTube also shut down its live social commerce app Simsim, just two years after the streaming giant splurged millions of dollars to acquire the Indian startup. 

What 2024 Holds For Google?

After a turbulent 2022 and 2023, Google has work cut out for itself in 2024. With general elections around the corner, Google could be in the spotlight as apprehensions grow over misinformation and negative use of generative AI.

While its legal troubles and standoffs with government authorities are expected to continue well into next year, the company could be hoping for some relief from Indian courts as it charts its path ahead in India.

The company will also continue to pump millions of dollars to roll out GenAI offerings, especially its GPT-4 rival Gemini. The suite of AI products will largely cater to consumer-facing products while it straddles potential regulations for the emerging technology. 

The world is also expected to return to sanity as macroeconomic pressures ease, paving the way for healthier revenues for the big tech giant. While the antitrust rulings are expected to continue, the company will continue to scale up its presence in India, focussing more on vernacular media and tapping into the growing Indian population that wants to access the internet in their own language.

The post 2023 In Review: A Year When Digital Goliath Google Met Its Adversaries In India appeared first on Inc42 Media.

Call it the year of a prolonged funding winter or the year of corrections, the fact is that investors have not forgotten how their funding was burnt ruthlessly in the name of the rapid expansion of half-done business models and whatnot.

As a result, funding dry spell remained a norm throughout the year, and the world’s third-largest startup ecosystem couldn’t help but mint only one unicorn in 2023 versus 21 in 2022 and 44 unicorns in 2021.

Towards the end of last year, positive anticipations had held their heads high as industry experts saw a funding revival on the cards. However, much to everyone’s dismay, the funding winter seeped into 2023, and the Indian startup ecosystem saw a 75% year-on-year decline in funding in the first quarter (Q1) of 2023.

Besides, the number of deals, too, nosedived 58% YoY to 213 during the quarter under review from 506 in the year-ago quarter.

What triggered this was the inability of a majority of Indian startups to turn a profit, particularly at the late stage.

Corrections continued unabated and the funding winter stretched well into Q3 CY23, marking its 18-month-long journey.

According to Inc42’s latest “Indian Startup Funding Report Q3 2023”, startup funding stood at a mere $1.7 Bn in Q3 2023, the lowest in the past three quarters. On the year-on-year (YoY) basis, it fell 43.8%, while the number of deals declined 38.6% to 205 from 334 deals in Q3 2022.

However, something was different this time. Industry experts saw the country’s startup ecosystem heading towards a renaissance, with founders taking lessons from the likes of Broker Network, BYJU’S, Mojocare, Zilingo, ZestMoney, GoMechanic, just to name a few bad apples.

Interestingly, a keen focus on positive unit economics and effective corporate governance practices was seen returning to the system. Not just this, but away from the gloom and doom, many startups turned profitable this year.

Nevertheless, while the year 2023 had its own set of challenges in terms of investors further tightening their purse strings despite sitting on billions of dollars of dry powder, silver linings did exist. And amid all this, some of the most noteworthy funding deals were inked.

As we stand at the precipice of 2024, we have compiled a list of some of the biggest startup funding deals of the year.

Here Are 2023’s Highest Funded Startups

PhonePe Tops The Charts With A Mammoth $850 Mn Raised In 2023

Even as the entire Indian startup ecosystem was struggling to raise capital and was gripped by funding winter in 2023, investors continued to flock to invest in Walmart-owned fintech startup PhonePe.

This was evident by the fact that the finch decacorn secured a mammoth $850 Mn (INR 7,021 Cr) in funding during the year, at a valuation of $12 Bn.

In what was touted as the largest equity fundraise by an Indian startup, the cash infusion saw participation from big names including Walmart, Ribbit Capital, Tiger Global, TVS Capital Funds, and General Atlantic, among others.

Of its stated intention to raise $1 Bn in 2023, PhonePe achieved 85% of its target while many other unicorn peers were mired in valuation markdowns and paucity of funds.

The move to raise big-ticket funding rounds was likely attributed to the INR 8,000 Cr tax liability on account of shifting headquarters to India and to fuel its growth ambitions ahead of the planned IPO.

Since securing the capital, the company has undertaken a blitzscaling approach – introducing a slew of new products and foraying into new categories such as income tax payment and health insurance.

PhonePe also plans to introduce a range of consumer credit products in the coming six to seven months to bolster its lending play.

Founded in December 2015 by Sameer Nigam, Rahul Chari, and Burzin Engineer, PhonePe is a digital payments and financial services company. It claims to have more than 400 Mn registered users that use its products across the country.

The Bengaluru-based startup recorded a revenue of INR 2,914 Cr in the financial year 2022-23 (FY23), up almost 77% from INR 1,646 Cr in FY22. The startup didn’t disclose its net loss for the financial year ending March 2023.

The fintech platform competes against the likes of Paytm, Google Pay, and CRED in UPI transactions.

Lenskart Fancied A Solid At $600 Mn In 2023 

Eyewear unicorn Lenskart successfully secured $600 Mn in 2023, with a significant portion of $500 Mn coming from the Abu Dhabi Investment Authority (ADIA) and an additional $100 Mn from private equity player ChrysCapital. The investments propelled Lenskart’s total capital infusion to nearly $850 Mn.

According to Inc42, Lenskart raised $879.6 Mn in funding between 2014 and November 2022. The Faridabad-based eyewear brand has raised more than $205 Mn since the beginning of 2022 alone.

Established in 2010, Lenskart stands as India’s largest omnichannel eyewear retailer, extending its reach to Singapore, the UAE, and other geographies. The company currently boasts a customer base of 20 Mn in India.

Lenskart is aggressively expanding internationally, particularly across Asia and the Middle East. In June last year, the ecommerce platform made headlines by acquiring Japan’s largest online eyewear brand, OWNDAYS, in a deal valued at $400 Mn.

With over 2,000 stores, including 1,500 in India and the remaining spread across various geographies, Lenskart is positioned for further growth.

Earlier this month, the eyewear brand announced that it was set to strengthen its presence in Southeast Asia (SEA) by launching 300-400 stores in the region over the next two years.

With approximately 70 stores currently operational in Singapore, the Delhi NCR-based unicorn plans to extend its footprint to Thailand and the Philippines.

The company’s FY23 profit stood at INR 260 Cr against a loss of INR 100 Cr in FY22, the company’s founder and CEO Peyush Bansal told ET in an interview. The startup also reportedly more than doubled its revenue to INR 3,780 Cr.

Lenskart has also ventured into the creation of a Thrasio-styled eyewear-focussed ecommerce roll-up brand, Neso Brands. To further broaden its customer base, the company is actively engaged in vertical integration through a new manufacturing facility, enabling the brand to maintain competitive pricing.

DMI Finance Lapped Up $447 Mn From Multiple Investors 

In April this year, Mumbai-based DMI Finance secured $400 Mn in a funding round led by Mitsubishi UFJ Financial Group. Investor Sumitomo Mitsui Trust Bank (SuMi TRUST Bank), too, participated in the funding round, which included both primary and secondary transactions.

In January last year, the NBFC arm of the DMI Group raised $47 Mn in an equity round from Sumitomo Mitsui Trust Bank and existing investors NXC Corporation and New Investment Solutions.

With this year’s funding round, the total funding raised by the non-banking financial company (NBFC) has reached $900 Mn.

Founded in 2008 by Shivashish Chatterjee and Yuvraja C Singh, DMI Finance is a pure-play digital lender. It extends credit lines in the form of personal and MSME loans. DMI Finance sources and services customers through digital channels. It is an embedded digital finance partner for the likes of Samsung, Google Pay and Airtel.

Ola Electric’s $384 Mn Funding Buffet

In October this year, Bhavish Aggarwal-led Ola Electric secured INR 3,200 Cr ($384 Mn) in a combination of equity and debt to fuel the expansion of its EV business and establish India’s first lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu.

Temasek spearheaded the equity portion, while the State Bank of India led the debt segment of the funding.

The company lapped up funds at a time when it was alleged of violating FAME-II subsidies norms. Besides, allegations of sub-par quality of its scooters and concerns with after-sales service have continued to shroud the EV maker for long.

Despite this, investors see a lot of potential in Ola Electric, which now plans to file its IPO papers before December 20. The startup plans to raise $700 Mn and is looking to target a market capitalisation of $10 Bn through its IPO.

Founded on May 26, 2017, under the leadership of Bhavish Aggarwal, Ola Electric is a subsidiary of Ola and operates as an Indian electric two-wheeler manufacturer. The company is headquartered in Bengaluru, Karnataka.

In October, electric two-wheeler registrations in India surpassed 70,000 units after four months. Despite facing controversies, Ola Electric’s escooter registrations continued to lead the market.

In the meantime, the startup expanded its product line, launching the Ola S1X escooter model in August shortly after delivering the Ola S1 Air model to customers.

Ola Electric’s net loss almost doubled to INR 1,472 Cr in FY23 from INR 784.1 Cr in FY22 due to a steep rise in expenses.

Its consolidated revenue during the fiscal surged 510% YoY to reach INR 2,782 Cr in FY23. The EV startup aims to garner revenue of INR 4,655 Cr in FY24.

Builder.ai Received A $250 Mn Qatar Investment Authority Boost

London-based AI startup Builder.ai raised $250 Mn in a Series D funding round led by Qatar Investment Authority (QIA). Other investors who backed the startup included Iconiq Capital, Jungle Ventures, and Insight Partners.

In a statement, the Microsoft-backed startup revealed that the funding round resulted in a valuation increase of over 1.8X.

Builder.ai had raised the funds for hiring new talent, fostering partnerships, and advancing its technology.

The company claims to have doubled its headcount since January 2022 and expanded its global presence with the opening of four new offices in the US, the UAE, Singapore and France.

With its last funding round, Builder.ai’s total funding now stands at over $450 Mn.

Founded in 2016 by Sachin Dev Duggal and Saurabh Dhoot in Gurugram, Builder.ai offers a platform for entrepreneurs to build apps without little to no coding knowledge using AI.

InsuranceDekho Lapped Up $210 Mn To Disrupt Insurtech Sector

Insurtech startup InsuranceDekho raised $210 Mn across two funding rounds in 2023 to expand its presence across the country.

In February, the startup raised $150 Mn in a Series A funding round, which was a mix of equity and debt. The equity round was led by Goldman Sachs Asset Management and TVS Capital Funds, and also saw participation from Investcorp, Avataar Ventures and LeapFrog Investments

Almost seven months after this, InsuranceDekho secured $60 Mn in a mix of equity and debt in its Series B round. It saw participation from Mitsubishi UFJ Financial Group, Inc, BNP Paribas Cardif, Beams Fintech Fund and Yogesh Mahansaria Family Office. Existing investors TVS Capital, Goldman Sachs Asset Management, and Avataar Ventures also participated in the round, which valued the startup at around $650 Mn-$700 Mn.

The insurtech soonicorn said it planned to utilise the capital to enhance marketing efforts, expand distribution in rural India, scale up its tech platform, and explore inorganic growth opportunities.

Founded by Ankit Agrawal and Ish Babbar in 2017 as the insurance arm of online car marketplace CarDekho, InsuranceDekho received $20 Mn from its parent firm Girnar Software in 2020. Later, it was hived off to function as a separate unit. The platform allows users to compare and buy insurance from top companies. The insurtech platform offers motor, life, health, pet, and travel insurance.

The startup reported a 29% decline in its net loss to INR 51.5 Cr in FY23 from INR 72.2 Cr in the previous fiscal year. Operating revenue doubled to INR 96.4 Cr from INR 47.9 Cr in FY22.

Perfios Inked $229 Mn Funding Deal With Kedaara Capital

In September, Bengaluru-based fintech SaaS startup Perfios signed an agreement with Kedaara Capital for an investment of $229 Mn in the startup’s Series D funding round through the combination of a primary and a secondary sale.

The investment had come almost 19 months after Perfios raised $70 Mn at a valuation of $400 Mn.

The funds were intended to fuel its global expansion plans, particularly into North America and Europe. Additionally, the startup had planned to invest in technology to enhance its comprehensive suite of decision analytics SaaS products.

Founded in 2008 by VR Govindarajan and Debasish Chakraborty, Perfios is a credit decisioning and analytics startup, which operates in B2B and B2C segments. Currently operating in 18 countries, it claims to be working with over 1,000 financial institutions.

According to the company, it delivers 8.2 Bn data points to banks and financial institutions every year to facilitate faster decisioning and processes 1.7 Bn transactions a year with an AUM of $36 Bn.

Fintech SaaS startup Perfios turned profitable in FY23, posting a consolidated net profit of INR 7.8 Cr on the back of a significant jump in its service income from India business.

The startup reported a net loss of INR 16.8 Cr in FY22 on an operating revenue of INR 136.5 Cr.

Zepto Turned Unicorn With $200 Mn Funding Round

Mumbai-based quick commerce unicorn Zepto successfully raised $200 Mn in its Series E funding round in August at a valuation of $1.4 Bn, becoming the first and only unicorn of 2023. Without disclosing how it planned to use the fresh capital, the startup said it plans to go public by 2025.

Later in November, Zepto raised an additional $31.25 Mn as part of the Series E funding round from Goodwater Capital and Nexus Venture Partners, along with the participation of angel investors such as Oliver and Lish Jung, and Mangum II LLC.

Founded in 2021 by Aadit Palicha and Kaivalya Vohora, Zepto seized the opportunity created by the increased demand for rapid ecommerce delivery during the Covid-19 pandemic. The startup gained attention when it secured $60 Mn in funding in November 2021 from investors like Glade Brook Capital, Nexus, and Y Combinator.

Zepto competes against the likes of Swiggy’s Instamart, Zomato-owned Blinkit, and Reliance-backed Dunzo.

Zepto’s net loss surged 3.35X to INR 1,272.4 Cr in FY23 from INR 390.3 Cr in the previous financial year. Revenue from operations zoomed 14.3X to INR 2,024.3 Cr during the year under review from INR 140.7 Cr in FY22.

B2B Manufacturing Unicorn Zetwerk Secured $120 Mn In Series F

In October, B2B ecommerce unicorn Zetwerk raised $120 Mn in its Series F funding round, which was led by Avenir Growth Capital and saw participation from existing investors Lightspeed, Greenoaks Capital, and Steadview Capital.

Additionally, the B2B unicorn secured INR 100 Cr (around $12 Mn) in debt funding in March this year.

Notably, Zetwerk raised $210 Mn at a valuation of $2.7 Bn in a round led by Greenoaks in December 2021.

Founded in 2018 by Amrit Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary, Zetwerk connects manufacturing companies with vendors and suppliers for customised products, industrial machine components and other equipment.

Zetwerk has raised nearly $674 Mn in funding since its inception. The B2B unicorn competes with the likes of Infra.Market, Moglix and OfBusiness.

While the unicorn has yet to file its financials for FY23, it posted a loss of INR 59.7 Cr in FY22, up 45% from INR 41.1 Cr in FY21.

Last year, Zetwerk went on an acquisition spree, picking up four companies between July and November 2022 for a total of $50 Mn.

Mintifi Raised $110 Mn To Give Indian SMEs A Lending Push 

In March, the B2B digital lending startup, Mintifi, announced that it raised $110 Mn (INR 902 Cr) in a Series D funding round led by Premji Invest.

The startup’s existing investors, Norwest Venture Partners, Elevation Capital, and International Finance Corporation (IFC), too, participated in the round.

Mintifi had raised the funds to deepen its presence in the supply chain financing domain and expand its product range. The startup also intended to deploy investments towards scaling up the B2B payments vertical and dealer management system.

A part of the funds was put aside to strengthen the tech stack and enhance engagement. The investment also enabled Mintifi to expand its capital base for credit purposes to more than $600 Mn.

The post Big Money Moves: Here’s The List Of India’s 10 Highest Funded Startups Of 2023 appeared first on Inc42 Media.

The years 2020 and 2021 were among the most historical ones for the Indian startup ecosystem. Amid the Covid-19 pandemic wreaking havoc across the globe, Indian startups made a name for themselves on the back of their innovations. This resulted in global investors making a beeline to pump in capital in the country’s startup ecosystem.

Such was the gold rush to India that the startups in the country raked up a record $42 Bn funding. Every investor of note seemed to be wanting a piece of India’s digital ecosystem. The fear of missing out took over and the bottom lines of the startups in which capital was being infused took a back seat. 

To put things into perspective, as many as 55 out of 74 Indian unicorns incurred a cumulative operating loss of $5.9 Bn in FY22, as per an Inc42 analysis. This was almost double the cumulative loss of $3 Bn incurred by 53 of these startups in FY21. However, this didn’t deter investors from participating in the funding rounds of these startups.

At the time, it seemed as if nothing could go wrong for the Indian startup ecosystem. Then, came the funding winter. Amid the global economic slowdown and tight liquidity, investors suddenly started focussing back on profitability and the growth-at-all-costs approach was thrown out of the window.

This came as a rude shock to Indian startups, which had got accustomed to the free-flowing funding scenario of the previous years. As investors tightened their purse strings, realisation struck that they needed to focus on their bottom lines to extend their runways and get fresh funding. This resulted in the start of restructuring exercises across startups.

Layoffs, pay cuts, and cuts in advertising expenses became the norm as turning profitable and cutting down loss became the top priority. As per Inc42’s layoff tracker, Indian startups have laid off over 29,000 employees so far. 

But did it help Indian startups turn profitable? While a majority of Indian startups are still in the red, a few of them managed to turn profitable in FY23. Besides, many of them also managed to cut down on their losses. 

As 2023 nears its end, we have collated a list of startups that managed to turn around their business and became profitable in FY23.

Editor’s Note: This compilation is neither exhaustive nor a ranking of any kind. Startups are listed alphabetically.

Decline In ESOP Expenses Steers CarTrade To The Profitability Lane

Listed auto marketplace CarTrade turned profitable in FY23. It reported a net profit of INR 40.43 Cr in FY23 as against a net loss of INR 121.35 Cr in the previous fiscal year.

The sharp improvement could be attributed to the decline in its ESOP expenses, or non-cash share-based payment expenses. ESOP expenses plummeted to INR 27.94 Cr during the year under review from INR 185.18 Cr in FY22. This resulted in a drop in the startup’s overall expenses to 23.2% to INR 367.16 Cr in FY23 from INR 478.07 Cr.

On the other hand, the startup’s revenue from operations rose by 16% to INR 363.74 Cr during the year from INR 312.72 Cr.

Meanwhile, the startup has continued its profitable ride in FY24 as well. In Q2 FY24, it reported a 132% year-on-year (YoY) increase in consolidated profit to INR 12.96 Cr. 

Exceptional Gain Catapults Fractal Into The Profitable Club

AI Intelligence startup Fractal, which took almost two decades to enter the unicorn club, reported a profit of INR 194.4 Cr in FY23 as against a loss of INR 148.4 Cr in the previous financial year.

However, the startup would still have posted a loss if not for an exceptional item gain of INR xxx Cr from the loss of control of a subsidiary company. An email sent to Fractal seeking information about this exceptional item gain didn’t elicit any response till the time of publishing this story.

Meanwhile, Fractal’s operating revenue zoomed 53% to INR 1,985.4 Cr in FY23 from INR 1,295.3 Cr in the previous year, with majority of the revenue coming from the US. 

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, along with core team members – Nirmal Palaparthi, Pradeep Suryanarayan, and Ramakrishna Reddy, Fractal offers AI and advanced analytics solutions to Fortune 500 companies.

The startup has raised a funding of around $680 Mn to date and counts TPG, Apax Partners, and Khazanah Nasional among its investors. 

Groww’s Growing User Base Helps It Become Profitable

Billionbrains Garage Private Limited, the parent entity of Groww, turned profitable in FY23. It reported a net profit of INR 448.7 Cr in FY23 as against a loss of INR 239 Cr in the previous fiscal year.

The primary reason for the startup turning profitable was strong growth in its operating revenue, which rose over three-fold to INR 1,277.8 in FY23 from INR 351 Cr in the previous fiscal year. Meanwhile, total expenses rose a meagre 1.4X to INR 932.9 Cr.

The increase in operating revenue could be attributed to the startup’s growing user base. Groww surpassed bootstrapped unicorn Zerodha in terms of number of active investors at the end of September 2023. 

As per National Stock Exchange (NSE) data, Groww had 6.63 Mn active investors at the end of September 2023 as against Zerodha’s 6.48 Mn.

Besides its stock broking platform, Groww has also started offering loans. Earlier this year, it rolled out UPI payments feature on its broking app and acquired the mutual fund business of Indiabulls Housing Finance for a consideration of INR 175.6 Cr.

Increase In MSME Lending Helps Indifi Post Profit

ICICI Venture-backed Indifi reported a profit of INR 5.1 Cr in FY23 as compared to a loss of INR 39 Cr in the previous fiscal year.

The improvement in the startup’s financials could be attributed to the 2X jump in its operating revenue. The MSME lender reported an operating revenue of INR 197.9 Cr in FY23 as against INR 96.29 Cr in the previous fiscal year.

As per Aloke Mittal, the founder of Indifi, the startup saw a sharp improvement in business during the pandemic due to higher demand from MSMEs for working capital. Amid the stay-at-home restriction, MSMEs relied more on digital lenders for their hassle-free and digital offerings than banks, which often require tedious paperwork and visits to the branch.

Lower Expenses Help NeoGrowth Report Profit

Mumbai-based non-banking financial company (NBFC) NeoGrowth turned profitable in FY23 on the back of decline in its expenses. The startup reported a profit of INR 17.2 Cr in FY23 against a loss of INR 39.4 Cr incurred in FY22.

Neogrowth’s operating revenue rose 5.3% to INR 381 Cr during the year under review from INR 361.5 Cr in FY22. At INR 363.1 Cr, the NBFC earned the biggest chunk of revenue from interest income in FY23. This number stood at INR 357.5 Cr in the previous year. 

Besides interest income, NeoGrowth also earned revenue from commissions and fees. Total revenue rose to INR 382.9 Cr in FY23 from INR 362.7 Cr in FY22. 

Meanwhile, total expenses declined 14% to INR 357.4 Cr in FY23 from INR 414.5 Cr in FY22. 

The NBFC raised $66 Mn in a mix of debt and equity funding across multiple rounds in FY23. Overall, it has raised around $188 Mn to date and counts Dutch development bank FMO, Development Finance Corporation (DFC), Omidyar Network, and Lightrock among its backers.

 
Perfios Turns It Around In FY23

Fintech-focussed SaaS startup Perfios achieved profitability in the fiscal year ending on March 31, 2023, marking a significant milestone after four consecutive years of losses. 

The Bengaluru-based company reported a profit of INR 7.8 Cr after incurring a net loss of INR 16.8 Cr in FY22.

In FY23, Perfios’ operating revenue surged nearly 200% YoY to INR 406.8 Cr compared to the INR 136.5 Cr reported in the preceding fiscal. 

The company generates revenue by providing software solutions to financial institutions, covering areas such as analytics, onboarding automation, and due diligence.

Earlier this year, Perfios secured $229 Mn in its Series D funding round from Kedaara Capital.

Looking ahead, Perfios is gearing up for a public market listing within the next 18-24 months. For this, the company has appointed Sumit Nigam as the Chief Technology Officer (CTO) and Anu Mathew as the Chief People Officer (CPO).

Tracxn Takes The Profitability Route

Listed data intelligence platform Tracxn turned profitable in FY23 with a PAT of INR 33.09 Cr against a loss of INR 4.85 Cr a fiscal ago.

During the year under review, Tracxn recorded a deferred tax expense of INR 23.26 Cr. Additionally, in the December 2022 quarter, the company recovered INR 4.78 Cr, previously recognised as an IPO expense, from shareholders who sold their shares during the public offering.

Excluding the aforementioned recovery of IPO expenses and the deferred tax expense, the startup’s profit stood at INR 5.34 Cr in FY23 versus a loss of INR 36 Lakh in FY22.

The startup’s operating revenue rose 23% to INR 78.11 Cr in FY23 from INR 63.45 Cr in FY22 on the back of continued growth in large accounts and increased uptake of products globally, especially in India, the Americas, and Asia Pacific. It must be noted that around 70% of the startup’s revenue comes from outside India.

In the first quarter of FY24, the startup’s profit declined 18% to INR 69 Lakh from INR 1.36 Cr reported in the same quarter last fiscal year. Revenue from operations increased to INR 19.82 Cr, up 8% YoY.

The post Balancing The Books: Here’re The Indian Startups Which Turned Profitable In FY23 appeared first on Inc42 Media.

With 111 unicorns, the Indian startup ecosystem stands as an enticing arena for investments from diverse industries. According to Inc42’s State Of Indian Startup Ecosystem Report 2023, the world’s third-largest startup ecosystem has successfully garnered funding exceeding $141 Bn.

The allure of this thriving ecosystem extends beyond traditional investors, as individuals from the sports fraternity are increasingly making substantial investments. According to Inc42’s data, several sports stars invested in Indian startups this year. 

Interestingly, the startup investment fever has not only infected retired players but also the ones who are active on the field. 

Esteemed names like Sachin Tendulkar, Virender Sehwag, Sourav Ganguly, and others have taken their place in the investors’ realm, while current players including Neeraj Chopra, Hardik Pandya, and more are following suit.

Adding an interesting twist to the narrative, cricket commentator Harsha Bhogle has also embraced the role of an investor. 

In 2023, he contributed to the funding of Bowled.io, an online fantasy gaming startup that appointed him as a leader on the board, alongside other international cricketers.

As we approach the conclusion of 2023, let’s delve into the noteworthy list of sports stars who ventured into startup investments this year.

Editor’s Note: This compilation is not a ranking of any kind. Celebrity sports stars are listed alphabetically.

Sports Stars Who Backed Startups In 2023

Ajinkya Rahane Backed Dairy Alternatives Startup OATEY

In August, cricketer Ajinkya Rahane made an undisclosed investment in dairy alternative startup OTEY and concurrently assumed the role of its brand ambassador. 

The startup had plans to deploy the capital to boost awareness about its plant-based dairy alternatives, fortify its brand presence, scale hiring, expand into the offline channel, and launch new products. 

Back then, Rahane highlighted OTEY’s commitment to quality products and its brand values aligned with his principles. 

Launched in 2021 by Jamadagni and Prashant Chauhan, OTEY sells plant-based dairy alternatives like oat milk, millet milk and chocolate oat milk. The startup generates revenue through its website and other ecommerce marketplaces. 

OTEY claims to have grown steadily over the past two quarters. It attributes the growth to the changing preferences of people in leaning towards sustainable plant-based products. 

Hardik Pandya Made Strategic Bets On Kids’ Footwear Brand Arreto, D2C Food Startup Yu

Hardik Pandya has made undisclosed investments in two startups, Arreto and Yu, so far this year. 

In April, the cricketer announced to have backed D2C food startup Yu and joined the startup as its brand ambassador. Yuand Hardik had inked an agreement to promote the brand in India and across the globe.

Founded by Bharat Bhalla and Varun Kapur in 2020, Yu offers breakfast meal bowls, lunch and dinner. It sells instant noodles, different kinds of pasta, and desserts.

“Hardik Pandya has participated with a minority investment in the company to create long-term value. Funds from the investment will be used towards launching the brand’s maiden campaign during the ongoing IPL season as well as the upcoming ICC World Cup in India later this year,” its cofounders had then said. 

Four months after investing in Yu, Pandya backed Arreto, a kids’ footwear startup. The USP of the company’s shoes is that they grow in size as children age.

Launched in 2019 by Krutika Lal and Satyajit Mittal, the startup raised $550K from a number of investors, including Pandya, in August this year. It had raised funds to expand its market presence, strengthen its workforce and ramp up R&D for new products.

Aretto also had plans to launch its first retail store in Pune and partner with multi-brand outlets in key metropolitan cities to cater to a wide customer base in India. 

Aretto operates in the kids’ fashion industry, which is estimated to become a $24.5 Bn market opportunity by 2028.

Mahendra Singh Dhoni Picked Up Equity In Rigi, Tagda Raho

Mahendra Singh Dhoni, the former captain and wicketkeeper of the Indian cricket team, recently made strategic investments in two startups — Rigi and Tagda Raho.

On January 25, Rigi, which is a platform for content creators to monetise their communities, announced that it raised INR 100 Cr (about $12.5 Mn) in a funding round led by venture capital firm Elevation Capital. 

Dhoni was one of the investors in the funding round. Other notable investors included names like CRED’s Kunal Shah, NoBroker’s Amit Kumar Agarwal, Country Delight’s Chakradhar Gade, and social media influencer Sharan Hegde.

Founded in October 2021 by BITS Pilani graduates Swapnil Saurav and Ananya Singhal, Rigi helps creators, influencers, and celebrities grow, manage, and monetise their community. 

It offers a suite of services to knowledge-based creators such as subscription-management tools for monetising via WhatsApp and Telegram. 

The platform also helps creators offer paid one-to-one sessions, pre-recorded courses, and live webinars to their audience.

Meanwhile, the former cricketer’s last startup investment was in Tagda Raho in November this year. Dhoni had invested an undisclosed amount in the fitness startup to help it expand its footprint across the country. 

Launched in 2020 by Rishabh Malhotra, Tagda Raho provides fitness programmes that combine traditional Indian equipment such as Gada, Mudgars, Vajra, and Sumtola with modern training applications.

It claimed that its equipment and training programmes have been used by Lucknow SuperGiants, Haryana Steelers and the National Cricket Academy (NCA).

It is pertinent to note that Dhoni is an active investor in the Indian startup ecosystem and has backed several startups, including Shaka Harry, Garuda Aerospace, and HomeLane to date.

Olympian Neeraj Chopra Infused Funds Into Shark Tank Participant Stage 

Last month, Javelin thrower Neeraj Chopra, who won a gold medal at the Tokyo Olympics 2020, invested an undisclosed sum in the regional OTT platform Stage. 

Founded in 2019 by former executives of digital content platform WittyFeed – Vinay Singhal, Parveen Singhal and Shashank Vaishnav – Stage is an online entertainment startup, which caters to the regional language-speaking audience of Haryana and Rajasthan.

Speaking about his investment in Stage, javelin thrower Chopra said he had always wanted to revive the flames of India’s diverse regional dialects.

“We will embark on a journey together to reawaken dormant languages and empower every voice, ensuring that our cultural heritage thrives in its true form through this platform,” Chopra had then said.

The Shark Tank Season 2 participant has raised money in three rounds of funding so far. Stage is backed by Blume Ventures and was last valued at INR 286 Cr during its INR 36 Cr Series A funding round earlier this year.

The startup claims to have more than 6 Mn downloads and over 5,50,000 paying subscribers on the platform. It charges INR 400 for a year’s subscription.

Sachin Tendulkar Helped AZAD Engineering Fuel India Vision

Also known as the ‘Master Blaster’ of Indian cricket, Sachin Tendulkar stands out as an active investor in the startup ecosystem. 

In May, the former cricketer made an undisclosed investment in Hyderabad-based AZAD Engineering.

Founded in 2008, AZAD offers technology solutions for global OEMs in the clean energy, aerospace, defence, oil & gas and SPS industries.

The company plans to use the funding to fuel its Atmanirbhar Bharat and Make In India goals.

Prior to bagging Tendulkar’s investment, the company secured $20 Mn from DMI Management in 2021. 

In the same year, the startup announced to set up its third manufacturing plant in Telangana at an investment of over INR 500 Cr.

The company counts Boeing, GE, Mitsubishi, Siemens Energy, Honeywell, Eaton, GE Aerospace, Baker Hughes, and domestic giants such as HAL, Godrej, TATA and Mahindra Aerospace, among others as its clients. 

TagZ Foods Roped In Shikhar Dhawan To Promote Healthy Snacking

In June, former Indian cricketer Shikhar Dhawan backed TagZ Foods by pumping an undisclosed amount into the D2C snack brand. Dhawan was also roped in as the brand ambassador. 

The startup had plans to deploy the capital to build a range of advertising campaigns to cater to more customers and promote the brand. Besides, TagZ wanted to leverage Dhawan’s brand persona to scale the brand.

Launched in 2019 by Anish Basu Roy and Sagar Bhalotia, the omnichannel snacks brand offers popped potato chips, gourmet dips and cookies through its website, quick commerce platforms, and offline retail stores.

According to Dhawan, the brand’s philosophy aligns with his interest of eating healthy. The funding from Dhawan comes days after the startup raised $2 Mn in a pre-Series A funding round led by 9 Unicorns. 

Backed by names such as Dexter Angels, Agility Ventures, Venture Catalysts, Klub and Indifi, TagZ competes with the likes of Happilo, Nourish You and others.  

Sourav Ganguly Bought A Minority Stake In Food Delivery Startup JustMyRoots

Former Indian cricket team skipper Sourav Ganguly snapped up a minority stake in food delivery startup JustMyRoots this year for an undisclosed sum.

Alongwith the investment, the former president of the Board of Control for Cricket in India (BCCI) also partnered the startup as the brand ambassador.

According to media reports at that time, the startup was also in talks with a clutch of investors to raise up to INR 150 Cr to expand its footprint. 

Launched in 2016 by Samiran Sengupta, Rajan Sachdeva and Promita Sengupta, JustMyRoots serves as an intercity food delivery provider. The startup said it clocked a revenue of INR 208 Cr in FY23 and was aiming to hit INR 350 Cr mark in the next fiscal year.

Talking about his investment, Ganguly said he prefers to order food and eat at home. “Nowadays, most people have long working hours, so going to a restaurant is not always possible. Therefore, I have decided to pick up a strategic stake as a personal investment.”

Currently, Ganguly has stakes in four businesses, out of which he encashed one recently. 

Virender Sehwag Became An Angel Investor To Back Two Brothers Organic Farm 

Former cricketer Virender Sehwag joined other investors, including actor Akshay Kumar, to back Two Brothers Organic Farm (TBOF). 

Sehwag invested an undisclosed amount in the startup, which said it would use the capital to expand its business both in India and overseas. It was also aiming to use the funds to scale up its manufacturing capacity and train farmers.

Launched by Ajinkya Hange and Satyajit Hange in 2012, Pune-based TBOF sells farm produce at the farmers’ market of Mumbai every weekend to shorten the supply chain between the farmers and the consumers.

Sehwag said it was heartening to see the positive impact that the startup has brought to the lives of farmers and people’s health across India and beyond.

Yuvraj Singh Forayed Into The F&B Space With Greto 

Former Indian cricketer Yuvraj Singh ventured into the F&B industry through an undisclosed amount of investment in Greto in October. 

As part of the deal, Singh was also to support the startup in its promotional activities.

Delhi NCR-based Greto, owned by Mahu Tasty Foods, was launched by Sanchit Tyagi, Divyanshu Rao and Abhishek Rao this year. It has 40 products in its portfolio, including probiotic drinks, natural ice cream, fruit yoghurt, and snacks.

Greto said the funds would be used to set up a franchise network across the country. At the time of investment, it said it was aiming to set up 100 Greto franchises in the next 6-12 months across major cities in the country, starting with Delhi NCR. 

Talking about his interest in the startup, Singh said that his journey as a sportsman has taught him the importance of dedication, perseverance, and teamwork, and he could see all these values resonating with what Greto represents.

The post From The Field To Boardrooms: Sports Stars Who Backed Startups In 2023 appeared first on Inc42 Media.

As the year 2023 approaches its end, it is now safe to say that listed Indian startups have largely surpassed the challenges of the previous year and made a smart recovery. The situation has also improved when it comes to the initial public offerings (IPOs) of startups. 

The IPO sentiment for new-age tech startups remained quite underwhelming in 2022, with only three companies – Delhivery, Tracxn Technologies, and DroneAcharya – getting listed on the bourses. In contrast, 2023 saw a clear recovery as five startups went public during the year. 

This was in line with the overall improvement in the IPO market. According to the BSE data, 2023 witnessed a total of 92 IPOs, including 40 mainboard listings, till mid-November, compared to a total of 90 IPOs in 2022 with 38 mainboard listings. 

In 2022, the country’s IPO landscape remained relatively quiet compared to the stellar 2021 due to the global economic slowdown. This was despite the fact that India saw one of its biggest IPOs last year in the form of Life Insurance Corporation of India (LIC). However, it must be noted that India’s IPO landscape was still better compared to other markets. 

But the IPO market started buzzing in 2023 and also saw some stellar public listings like those of Mankind Pharma, Tata Technologies, and JSW Infrastructure. 

As per EY India’s Q3 IPO Trends report, India was leading globally in the number of IPOs in 2023. The third quarter of the year alone saw 21 public listings, a significant rise from just four in the same quarter last year.

Among the new-age tech startups, ideaForge’s IPO stood out as the drone startup listed at a substantial 94% premium to its issue price. Although subdued, the IPOs of Mamaearth and Yatra were also quite noteworthy.

As 2023 concludes, let’s have a look at the five new-age tech startups that successfully bucked the decelerating IPO trend in the Indian startup space, setting examples for others to embark on their IPO journeys.

ideaForge

After a lull of six months, drone maker ideaForge became the first new-age tech startup to go public in 2023 in the month of July. 

Its IPO comprised an offer for sale (OFS) component of 48.7 Lakh shares and a fresh issue of shares worth INR 240 Cr. It was priced in the range of INR 638-672 per share.

The public issue saw an overwhelming response and was oversubscribed within a few hours of its opening. Retail investors led the show, followed by non-institutional investors (NIIs) on the first day of the IPO. While the retail category was subscribed almost 12.5X, the portion reserved for the NIIs was subscribed 5.13X.

By the last day, the IPO was subscribed 106 times. It attracted significant interest from qualified institutional buyers (QIBs), who placed bids for 31.81 Cr shares against the 25.28 lakh shares on offer. Overall, the portion reserved for QIBs was subscribed 125X. 

Finally, the shares of the company listed on the bourses on July 7. The stock listed at INR 1,300 per share on the NSE, a premium of 93.5% to the issue price. On the BSE, the stock opened at INR 1,305.10 per share, a premium of over 94%.

Established in 2007 by IIT Bombay alumni Ashish Bhat, Ankit Mehta, Rahul Singh, Vipul Joshi, and Amardeep Singh, ideaForge had a 50% market share in the unmanned aircraft systems space at the end of the financial year 2021-22 (FY22).

The company’s net profit tanked over 77% year-on-year (YoY) to INR 89.2 Lakh in Q2 FY24 as revenue from operations declined 41% to INR 23.7 Cr.

Shares of ideaForge ended 0.36% higher at INR 791.20 on the BSE on December 5. 

Mamaearth 

Honasa Consumer, the parent of D2C unicorn Mamaearth, was the last new-age tech startup to go public in 2023.

Mamaearth had set the IPO price band at INR 308-INR 324. The startup’s IPO comprised a fresh issue of equity shares aggregating up to INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares.

A day before the opening of its public issue, Mamaearth raised a total of INR 765.2 Cr from anchor investors.

On the first day of the IPO, Mamaearth IPO’s employee portion was oversubscribed within a few hours. Of the 34,013 shares reserved for employees, bids were placed for 67,344 shares, translating to a 1.98X subscription.

Meanwhile, retail investors bid for 17.82 Lakh shares against the 52.24 Lakh shares available. Qualified institutional buyers (QIBs) followed suit, lapping up 15.43 Lakh shares against 1.55 Cr shares on offer. 

Overall, the issue was subscribed a mere 0.13X at the end of Day 1. It received bids for 36.25 Lakh shares as against 2.88 Cr shares on offer.

The issue picked up pace on Day 2 of the IPO, November 1, receiving bids for 2.01 Cr shares as against 2.88 Cr shares on offer.

On November 2, the last day of the IPO, the issue was oversubscribed 7.61X on the back of a huge demand from QIBs, who bid for 22 Cr shares as against 2.89 Cr shares on offer, accounting for 82% of the total bids.

On November 7, shares of Honasa made a muted debut on the bourses. While the stock listed at INR 330 on the NSE at a premium of 2% from the issue price, it made a flat debut on the BSE at INR 324.

Founded in 2016 by the husband-wife team of Ghazal and Varun Alagh, Honasa counts brands like The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s in its artillery, besides Mamaearth. 

Mamaearth posted a profit after tax (PAT) of INR 29.4 Cr in Q2, registering almost a 94% jump year-on-year (YoY), while its operating revenue also increased 21% to INR 496.1 Cr.

Shares of Honasa ended the trading session on December 5 at INR 363.85 on the BSE, 5.12% lower from the previous close. 

Yatra 

Online travel aggregator Yatra’s IPO comprised a fresh issue aggregating up to INR 602 Cr and an OFS element of 1.21 Cr equity shares. The price band for the IPO was set at INR 135-INR 142.

A day ahead of the opening of its IPO on September 14, Yatra Online announced that it raised INR 348.75 Cr from 33 anchor investors at INR 142 per share. The company, whose issue opened on September 15, had allocated 2.45 Cr shares to anchor investors. 

On the first day of the IPO, the traveltech startup’s issue was subscribed 11%. 

However, it picked up pace on the subsequent days and the company’s issue was subscribed 1.61X on the last day, receiving bids for 4.99 Cr shares as against a total of 3.09 Cr shares on offer.

The retail portion received around 1.2 Cr bids against 56.77 Lakh on offer. The QIBs bid for 3.44 Cr shares as against 1.67 Cr shares allocated for the category. The NII category remained the weakest, receiving bids for 35.41 Lakh shares as against 85.16 Lakh reserved shares.

The company, which is also listed on Nasdaq, made a muted debut on the bourses on September 28. The stock was listed at INR 127.50 on the NSE at a discount of 10.2% to the issue price of INR 142 per share, while it was listed at INR 130 on the BSE at a discount of 8.5%.

Founded in August 2006 by Dhruv Shringi, Manish Amin and Sabina Chopra, Yatra is among the largest online travel companies in India, rivalling players such as MakeMyTrip and EaseMyTrip. Yatra also claims to cater to more than 700 corporate customers and offers hotel bookings, holiday packages and homestays. The online travel aggregator claims to list more than 1.03 Lakh hotels in India and more than 15 Lakh globally. 

After a profitable first quarter in FY24, Yatra slipped into the red in Q2. Its net loss surged nearly 11X YoY to INR 17.1 Cr in the second quarter, while revenue from operations rose 14% to INR 94.1 Cr. 

Shares of Yatra ended the trading session on December 5 at INR 132.65 on the BSE, up 0.23% from the previous close.

Yudiz Solutions 

Blockchain and IT development startup Yudiz Solutions was the second new-age startup to go public in 2023. Its shares listed on the NSE’s SME platform.

Its IPO comprised a fresh issue of 27.17 Lakh shares. The price band for the issue was set at INR 162-INR 165.

The issue was subscribed 0.8X on Day 1, receiving bids for 15.92 Lakh shares as against 19.57 Lakh shares on offer. 

However, it was oversubscribed 4.75X by the end of the last day of the issue, receiving bids for 92.91 Lakh shares by the end of Day 3 as against 19.57 Lakh shares on offer. While the portion reserved for retail investors was subscribed 6.4X, the NII portion was oversubscribed 3.8X. 

The company’s shares listed at over a 12% premium at INR 185 apiece on the NSE’s SME platform on August 17.

Founded in 2011, Ahmedabad-based Yudiz is a global IT services provider and consultant, which offers solutions in domains such as web and mobile app development, AR/VR, AI/ML, IoT, and blockchain.

Yudiz reported a net profit of INR 1.33 Cr in the first half of FY24 as against a net loss of INR 54 Lakh in the year-ago period. Revenue from operations jumped more than 45% to INR 15.87 Cr in H1 FY24 from INR 10.91 Cr in H1 FY23. 

Shares of Yudiz Solutions ended the trading session on December 5 at INR 137.20 on the NSE’s SME platform, up 1.78% from the previous close. 

Zaggle

The Raj P Narayanam-led fintech SaaS startup Zaggle took its own sweet time, 11 years to be precise, to get listed on the Indian bourses. Zaggle’s IPO comprised a fresh issue of shares worth INR 392 Cr and an OFS element of 10.5 Mn shares.

A day before floating its public issue, Zaggle secured INR 253.52 Cr from 23 anchor investors at INR 164 per share.

On the first day of its public issue on September 14, 2023, retail investors placed bids for 31.13 Lakh shares as against 35.37 Lakh shares on offer. Despite this, the day saw a muted response, receiving 37.01 Lakh bids against 1.93 Cr shares on offer.

However, the issue got oversubscribed 12.57X on the last day. It received bids for 24.29 Cr shares as against 1.93 Cr shares on offer, led by QIBs. The portion reserved for QIBs was subscribed 16.73X with 17.45 Cr bids against 1.04 Cr shares reserved for the category.

Founded in 2011 by Narayanam, Zaggle is a spend management and corporate employee benefits platform. It helps businesses automate their accounts and issues prepaid cards, in partnership with banking partners, to reward their employees with incentives and gifts. 

The company reported a net profit of INR 7.5 Cr in Q2 FY24 as against a net profit of INR 2.05 Cr in the preceding June quarter. Revenue from operations surged 55% quarter-on-quarter to INR 184.2 Cr.

Shares of Zaggle ended the trading session on December 5 at INR 241.35 on the BSE, 2.50% lower from its previous close.

The post Bucking The Trend: Here’s How Five New-Age Tech Startups Redefined The IPO Narrative In 2023 appeared first on Inc42 Media.

In 2023, the Indian startup ecosystem experienced steady growth, drawing the attention of actors and celebrities who found it to be a lucrative space for investment. Inc42’s data reveals that over 19 celebrities from the entertainment industry backed a total of 26 startups so far this year.

Interestingly, several Bollywood celebrities have not only embraced the role of investors but have also ventured into entrepreneurship as startup founders. Notable names in this category include Alia Bhatt, Deepika Padukone, Akshay Kumar, and Kareena Kapoor.

For instance, Kareena Kapoor has taken on the role of cofounder at Quench Botanics, a Korean skincare brand associated with SUGAR Cosmetics’ founders Vineeta Singh and Kaushik Mukherjee. Moreover, she has made an undisclosed investment in Pluckk, a direct-to-consumer fruits and vegetables brand.

Suniel Shetty has also emerged as a noteworthy name in the startup ecosystem. In 2023, he diversified his investment portfolio by supporting startups across various industries.

The trend extends beyond Bollywood, with figures from the music industry, such as The Chainsmokers and comedians like Zakir Khan and Tanmay Bhat, making strategic investments.

As we bid farewell to 2023, Inc42 presents a comprehensive list of some of the most prominent Bollywood celebrities who have actively embraced the role of investors this year, contributing to the dynamic landscape of the Indian startup ecosystem.

Editor’s Note: This compilation is not a ranking of any kind. Celebrities are presented in alphabetical order.

TV & Movie Celebs Who Backed Indian Startups In 2023

Akshay Kumar Made An Agritech Bet

Akshay Kumar stands out as an actor actively engaged in the startup ecosystem, consistently making strategic investments. This year, he, along with cricketer Virender Sehwag and some unspecified investors, invested in Two Brothers Organic Farm, an agritech startup.

In April this year, the startup announced that it would use the funding to expand the business domestically and globally. With this infusion of funds, the startup aimed to enhance the manufacturing capacity and train farmers associated with the startup.

Underlining his interest in the startup, Kumar said he was a firm believer in sustainability and the vision of Two Brothers Organic Farm aligned with his principles.

Launched by Ajinkya Hange and Satyajit Hange in 2012, the Pune-based startup sells farm produce at the farmers’ market of Mumbai every weekend to ensure a shorter value chain of buying directly from farmers, for consumers.

Besides investing, Kumar also signed a joint venture (JV) with The Good Glamm Group to enter the men’s personal care segment through the launch of a new brand. Per the terms of the deal, both sides will invest capital and work together to scale the business. 

Alia Bhatt Solidified Her Baby & Mother Care Playbook With SuperBottoms

In August, Alia Bhatt invested an undisclosed amount in the baby and mom care brand SuperBottoms, joining the company’s cap table and becoming the brand ambassador.

Launched in 2016 by Pallavi and Salil Utagi, the startup offers cloth diapers, underwear, and reusable menstrual hygiene products.

An advocate for sustainability, Bhatt highlighted then that her investments were on the back of her becoming more mindful of the matter that children need a healthier planet. She also highlighted that her vision aligned well with the startup’s range of sustainable products. 

It is pertinent to note that Bhatt is also an entrepreneur. She launched a kidswear and maternity wear brand, Ed-a-Mamma, in 2020, which was acquired for about INR 300 Cr by Reliance Retail in September. 

Deepika Padukone Invested In Blue Tokai’s Series B Round

Deepika Padukone has been an active entrepreneur and investor for some time. This year, her investment entity, Ka Enterprises, infused an undisclosed amount in Blue Tokai Coffee Roasters’ Series B funding round. 

Launched in 2013 by Matt Chitharanjan, Namrata Asthana and Shivam Shahi, Blue Tokai is an Indian speciality coffee brand. The Gurugram-based startup also operates in Japan.  

In India, it has four roasteries and over 80 physical outlets across major Indian cities, including Delhi NCR, Mumbai, Bangalore, Hyderabad, Kolkata, Chandigarh, Mohali and Pune. 

According to Padukone, she is passionate about homegrown brands and deeply values the authenticity and transparency of domestic startups. Therefore, Blue Tokai was an evident choice for her. 

Last year, the Indian actor launched 82°E, a personal care brand with skincare, in partnership with Jigar Shah. 

Dia Mirza Backed Good Glamm Group’s BabyChakra

In a bid to create awareness about the importance of sustainable baby and mother care products, actor Dia Mirza invested an undisclosed amount in Good Glamm Group’s BabyChakra in September this year.

The D2C brand aims to create products specifically tailored to meet the evolving needs of mothers.   

As per the terms of the deal, Mirza’s role is to engage closely with the startup’s users on its community platform Good Community. This initiative helps mothers share their motherhood experiences and stories, and collaborate with doctors and care practitioners.

Founded in 2015 by Naiyya Saggi, BabyChakra is a D2C babycare brand and parenting community. It was acquired by MyGlamm in 2021, following which, MyGlamm, POPxo and BabyChakra together formed the Good Glamm Group. 

Ekta Kapoor Invested In B2B Marketplace The Yarn Bazar

In June, B2B marketplace startup The Yarn Bazar announced that producer Ekta Kapoor invested in its $1.8 Mn Pre-Series A round led by Rajiv Dadlani Group and Equanimity Ventures. 

Launched in 2019 by Pratik Gadia, the startup operates as a one-stop solution for all yarn-related requirements. It offers discovery, trading, financing, logistics, advisory, and market intelligence services. 

It enables yarn sellers to expand their market reach, boost sales, and achieve higher margins, while buyers can effectively reduce raw material and procurement costs.

With the fresh infusion of funds, the startup had plans to build a robust leadership team and enhance tech infra. 

The startup claims to have facilitated transactions worth over INR 370 Cr, with an average order value of INR 19 Lakh. 

The Ayurveda Co. Lapped Up Funds From Kajal Agarwal

In its Series A funding round of INR 100 Cr, which was led by consumer-centric venture fund Sixth Sense Ventures, D2C brand The Ayurveda Co. (T.A.C) received an undisclosed amount of funding from Indian actress Kajal Agarwal. 

At the time of the funding announcement, the actress said that she chose T.A.C because she believed in Ayurveda and its power to transform the world. 

Launched in 2021 by Shreedha Singh and Param Bhargava, the brand offers ayurvedic products across categories such as skincare, haircare, natural makeup, and more. It also sells wellness products like immunity boosters and other supplements. 

T.A.C has an offline presence in 15 Indian states, including Punjab, Uttar Pradesh, Delhi NCR, and Rajasthan. The Gurugram-based D2C brand has plans to emerge profitable by FY25. The company claims to have witnessed 4X growth in FY23 to INR 45 Cr from INR 12 Cr in FY22. The founders aim to generate revenues to the tune of INR 150 Cr in FY24.

Kareena Kapoor Khan Made Two Strategic Bets This Year

In August, Kareena Kapoor Khan invested an undisclosed amount in the D2C fruits and vegetables brand, Pluckk. Besides, she also became the brand ambassador of the brand, which offers over 400 products across 15+ categories. 

Established in 2021 by Prateek Gupta, the startup operates in Mumbai, Delhi, Bengaluru and Pune. It has plans to expand to more geographies in the coming quarters.

Moving on, in October, the actress invested an undisclosed amount to launch a Korean skincare brand, Quench Botanics, in a joint venture with the cofounders of SUGAR Cosmetics, Vineeta Singh and Kaushik Mukherjee. 

As a cofounder of Quench Botanics, her role is to scale the omnichannel brand and offer Korean skincare solutions at ‘affordable’ prices. Quench claims to be a ‘made in Korea’ skincare brand that is tailor-made for Indian skin and weather conditions.

Singer Lucky Ali Champions Hyperlocal Innovation With Investment in Knocksense

Legendary singer Lucky Ali infused an undisclosed amount of capital in content startup Knocksense’s Pre-Series A round. 

The funding round also saw the participation of Nazara Technology’s CEO & founder Nitish Mittersain and Teamwork Arts’ Mohit Satyanand. 

Established in 2016 by Vibhore Mayank &Varul Mayank, Knocksense is a Lucknow-based youth-focussed hyperlocal content commerce platform. 

It actively involves brands and communities from Tier-II cities, providing its user base with hyperlocal digital content, recommendations, events, and business opportunities.

At the time, Lucky Ali said that the startup’s idea of fostering an authentic community to connect the youth in smaller cities with greater opportunities through engaging content and commerce is what attracted him to invest in the startup. 

Malaika Arora Stepped Up Her Fitness Playbook With Get-A-Whey

In January this year, actress Malaika Arora invested an undisclosed sum in healthy dessert startup Get-A-Whey. The startup also appointed her as the brand ambassador.

Launched in 2019 by Jash Shah, Pashmi Shah and Jimmy Shah, the startup offers low-calorie, high-protein desserts such as ice-cream sandwiches, popsicles, kulfis, and ice creams. 

With Arora on board, Get-A-Whey also had plans to introduce keto cheesecakes, vegan gelatos, and other healthy desserts. 

Back then, the startup said that it would use the funds to expand its offline and online footprint across India. Besides, it had plans to expand its product line, manufacturing capabilities and strengthen sales channels.

Masaba Gupta Ramped Up Her Luxury Fashion Folio With Purple Style Labs

An Indian fashion designer and actress Masaba Gupta infused an undisclosed amount into Purple Style Labs’ $14 Mn Series C funding round, which was led by ValueQuest, ScaleFund, and Singularity Growth Opportunities Fund I.

Founded by Abhishek Agarwal in 2015, Purple Style Labs retails high-end designer brands under Pernia’s Pop-Up Shop brand. It also incubates young designer brands and helps them with sales, marketing, and technical support.

Gupta backed the startup in April and also participated in its latest round as an existing investor. 

Purple Style Labs acquired Pernia’s Pop-Up Shop in 2018 and claimed to have scaled Pernia’s Pop-Up Shop over 70X in the last five years. 

Actress Nayanthara Infused Funds In D2C Superfoods Brand The Divine Foods  

Actress Nayanthara, along with her husband filmmaker Vignesh Shivan, infused an undisclosed amount in Chennai-based The Divine Foods in October. 

Launched in 2019 by Kiru Maikkapillai, The Divine Foods is a direct-to-consumer (D2C) foodtech startup. It specialises in making products from traditional superfoods such as turmeric, moringa, and millet. 

The startup secured the funds to scale up its infrastructure and expand its product line. 

The D2C startup, which has also received a grant from the Tamil Nadu government under its flagship seed funding scheme TANSEED 4.0, wanted to use funds to create brand awareness among the masses and encourage other celebrities to support native businesses. 

Shark Tank India-Featured Clensta Onboarded Parineeti Chopra As An Investor

Actress Parineeti Chopra pumped an undisclosed amount of funding into sustainable personal care startup Clensta in July 2023 and joined the startup as its ambassador. 

Founded in 2016 by Puneet Gupta, Clensta offers sustainable products spanning categories such as wellness, haircare, skincare, among others. The D2C brand’s unique selling proposition (USP) lies in offering consumers clean, effective and sustainable solutions that minimise the carbon footprint. 

Explaining her investment thesis then, Chopra had touted Clensta’s focus on ‘ethical and conscious’ product development. Gupta, on the other hand, said that the actor understood the company’s long-term vision to make ‘sustainable, affordable and effective personal care solutions that are locally made for one and all.’

The startup even featured on the maiden season of the popular show Shark Tank India. The brand also recently appointed former Mamaearth SVP Ashish Mishra as cofounder and chief business officer (CBO). 

Sanjay Dutt Infused Capital In Alcobev Firm Cartel & Bros, DawnTown

In June this year, Bollywood’s Munna Bhai Sanjay Dutt injected an undisclosed amount of funds into alcobev startup Cartel & Bros. 

Manish Sani of Living Liquidz, Jittin Merani of Drinq Barmen & Academy and Rohan Nihalani of Morgan Beverages are other investors of Cartel & Bros which is a partner venture registered in 2021. 

At the time of the funding announcement, the startup said that it would set up a factory in Scotland and would price its products in a manner that they are accessible to a larger number of people. 

Shilpa Shetty Kundra Made Two Bets On The Indian Startup Ecosystem In 2023

Actress Shilpa Shetty Kundra backed two startups in 2023 – WickedGud and KisanKonnect, investing an undisclosed amount of capital in the two homegrown players. 

Launched in 2021 by Bhuman Dani, Monish Debnath and Soumalya Biswas, WickedGud is a Mumbai-based ready-to-cook D2C brand that sells products such as pasta and noodles, which it claims are made using healthy ingredients.

On the other hand, KisanKonnect was launched in 2020 by Vivek Nirmal and Nidhi Nirmal. The agritech startup claims to source food directly from its network of 5,000 farmers through its village-level collection centres and then deliver it to its consumers in Mumbai and Pune.

Shetty Kundra infused capital in WickedGud as the startup’s brand values and mission statement aligned well with her investment thesis and her love for both food and fitness. 

With regards to KisanKonnect, Kundra cited considerations such as solving the problem of safe-to-eat food and promotion of health in the country. 

The year also saw the actor offload 13.93 Lakh shares during the listing of D2C unicorn Mamaearth, which at the upper limit of INR 324 implied a cumulative sum of INR 45.13 Cr.

Singer Sukhbir Singh Backed Vegan Wellness Brand Fitspire

In August, Bollywood singer Sukhbir Singh invested an undisclosed amount in vegan healthcare and personal care product startup Fitspire’s pre-Series A funding round. 

The round also saw participation from Ashish Chand and Sohil Chand of LC Nueva, Ivor Braganza of Next5 Ventures Oman and Redcliffe London’s Dheeraj Jain.

At the time, Fitspire said that it would use the funds to boost the health and personal care ecosystem in India, expand its reach in India and abroad, launch new products and add new revenue streams.

Launched in 2020 by Vipen Jain, Delhi-based Fitspire addresses contemporary lifestyle concerns and offers healthy nutrition supplements. 

It claims to have over 1 Mn customers and a network of 10K fitness influencers. Earlier, the startup raised $1 Mn in seed and bridge rounds.

The startup has plans to garner revenues to the tune of INR 300 Cr in the next three years.

Actor Turned Entrepreneur Suniel Shetty Backed Multiple Startups This Year 

Actor, entrepreneur and active startup investor Suniel Shetty invested in multiple startups this year. Some of the notable names include WAAYU, Klasroom, Pro Panja League, and REGRIP. 

In May, the actor backed WAAYU, a no-commission food delivery platform that intended to end the dominance of Swiggy and Zomato in the food delivery space. 

Founded by Anirudha Kotgire and Mandar Lande, the startup’s zero-commission playbook encouraged restaurants to operate on competitive pricing and pass on benefits to their customers.

In June, Shetty invested an undisclosed amount in Mumbai-based Klassroom Edutech’s Pre-Series A round. 

Founded in 2016 by the mother-and-sons trio of Alka, Dhruv and Dhumil Javeri, the edtech startup is working on supporting rural and urban students with affordable, accessible, accountable and flexible education.

At the time of the infusion of funds, the startup said that it would use the capital to shore up its tech and scale offline presence. 

Further, In July, the actor acquired a minority stake in Pro Panja League, a professional arm-wrestling tournament launched by the celebrity couple Parvin Dabas and Preeti Jhangiani through their company Panja Sports.

Similarly, in August, the actor invested an undisclosed amount in REGRIP India Private Ltd, a re-engineered tyre startup brand. 

The post Lights, Camera, Capital: Meet The TV & Movie Celebs Who Made Waves In Startup Ecosystem In 2023 appeared first on Inc42 Media.

The year 2021 will be etched in history as the most fructiferous year for the Indian startup landscape. The entire world was in crisis due to the Covid-19 pandemic at that time, but Indian entrepreneurs shone brightly by embracing innovation.

Indian startups shot to fame and investors across the globe wanted to be a part of the country’s startup ecosystem. The result was investors infusing a whopping $42 Bn in Indian startups in 2021, which resulted in the creation of a record 44 unicorns during the year.

However, the start of the Russia-Ukraine war in 2022, increase in interest rates by central banks to combat inflation, and the global economic slowdown brought startup funding to a standstill. Investors increasingly started focusing on profitability and valuation, and this resulted in the creation of new unicorns almost halving in 2022.

All hopes for an uptick in funding activities in 2023 were quickly dashed as investors refused to loosen purse strings. Amid this, a lot of investors also felt that the startups in their portfolios were overvalued and started re-evaluating the valuations. This resulted in prominent backers of many Indian startups slashing the latter’s valuations on their books. Unicorns like BYJU’S, Meesho and PharmEasy were among those which saw valuation markdown by their investors in 2023.

As the ongoing year nears its end, we, at Inc42, have collated a list of major unicorns that saw valuation markdowns by their investors in 2023.

8 Indian Unicorns That Faced Valuation Markdowns In 2023

Troubled BYJU’S See BlackRock, Prosus And Baron Cut Valuation 

Edtech giant BYJU’S became the most-valued Indian startup in March 2022 by clinching a valuation of $22 Bn, just before things started going downhill for it and the entire ecosystem. Since then, BYJU’S has been fighting on multiple fronts and this resulted in three of its investors slashing the value of their stake in the company in their books.

It began with investment firm BlackRock marking down the value of its shares in the company by 50%, cutting BYJU’S overall valuation to $11 Bn. In April, the US-based firm, which owns less than 1% stake in BYJU’S, marked down the value of its shares in the edtech company to $2,855 per share from $4,660 per unit in April 2022.

A month later, it further marked down the value of its shares, taking BYJU’S valuation 61.9% lower to $8.36 Bn from $22 Bn. 

In June, Prosus, which owns 9.6% stake in the startup, marked down its share value by 76.8%, thus bringing down its valuation to a meagre $5.1 Bn.

Just last week, Prosus, during its earning call, further revealed that it has marked down BYJU’S valuation yet again, bringing it below $3 Bn.

Baron Capital also jumped on the bandwagon in August, trimming BYJU’S valuation by 45% to $11.7 Bn.

Amid all these, BYJU’S has been in the news for all the wrong reasons. While it is entangled in a legal battle with lenders for a $1.2 Bn Term Loan B it took, the company is also being probed by the Enforcement Directorate (ED) for alleged FEMA violations. 

The company has also failed to file its financial statements for the FY22. This delay also resulted in the resignation of its statutory auditor Deloitte, which was replaced by BDO (MSKA and Associates). Three out of its six board members – GV Ravishankar of Peak XV Partners, Russell Dreisenstock of Prosus and Chan Zuckerberg’s Vivian Wu – also resigned to further add to its woes.

The company has also been plagued by high-level exits, including of top executives such as Mrinal Mohit, Anil Goel and Ajay Goel. After firing thousands of employees since 2022 so far, BYJU’S is currently also undertaking another layoff exercise which would see around 4,000 employees lose their jobs. 

 Swiggy Fails To Satisfy Investors’ Appetite

Foodtech major Swiggy entered the decacorn club in early 2022 after bagging $700 Mn in a funding round led by Invesco. However, amid the funding winter, the same investor marked down the value of its stake in Swiggy by 25%. This took the startup’s total valuation to $8 Bn, making it lose its decacorn status.

It must be noted that Invesco slashed the value of its stake in Swiggy in October 2022, but it was reported in April 2023.

Later, the Atlanta-based investment firm again slashed the value of its stake, taking the startup’s valuation 48.5% lower from its peak $10.7 Bn. 

Besides Invesco, the US-based asset management company (AMC) Baron Capital also marked down Swiggy’s valuation twice – once by 32% and later by 39% from its last valuation of $10.7 Bn.

It is pertinent to note that around this time, Swiggy also initiated steps to cut costs with an eye on profitability. It laid off around 380 employees and pulled the plug on gourmet grocery delivery vertical Handpicked.

Swiggy is yet to file its FY23 financials. The startup’s loss doubled to INR 3,629 Cr in FY22, while operating revenue increased to INR 5,704.9 Cr. This takes its peak valuation to 15X of its operating revenue.

Debt-Laden PharmEasy Faces Wrath Of Neuberger Berman, Janus Henderson

PharmEasy, which has been facing a financial crunch for some time, saw its investor Neuberger Berman slash the value of its stake in the epharmacy startup by 21% in May. This took the startup’s valuation to $4.4 Bn from its peak $5.6 Bn

In November, Neuberger Berman further slashed the valuation of its stake in the startup by over 90% to $550 Mn, stripping it off the unicorn status.

Besides, the UK-based investment firm Janus Henderson too slashed PharmEasy’s valuation twice this year. In May, the investor slashed the value of its stake in PharmEasy by 50% on its books. Later in June, it trimmed the valuation further by 52%.

However, amid these valuation cuts, PharmEasy had bigger issues to worry about. After cancelling its proposed INR 6,500 Cr IPO plan in 2022, the startup took a loan of INR 2,280 Cr ($285 Mn) from Goldman Sachs to pay off an earlier debt it raised from Kotak Mahindra Bank to buy Thyrocare. But the startup breached its loan covenant terms with Goldman Sachs within a year after raising the debt and found itself struggling to repay it. 

The startup is also plagued by other issues such as thousands of layoffs, mismanagement of the profitable Thyrocare business, and exit of key personnel. While PharmEasy is yet to file its FY23 financials, the startup’s loss jumped 4.3X to INR 2,731 Cr in FY22, while its operating revenue stood at INR 5,729 Cr. This translates to a valuation to an operating revenue ratio of 7.8X at its peak valuation.

In October, PharmEasy cofounder Dhaval Shah claimed that the startup’s INR 3,500 Cr rights issue was oversubscribed.

Pine Labs’ Valuation Goes South

Singapore-based fintech unicorn Pine Labs, which is among the few Indian unicorns that have not laid off employees amid the funding winter, saw two of its investors reduce the value of their stakes in the company.

It began with Neuberger Berman reducing the valuation of its stake in Pine labs by 38%, resulting in the unicorn’s plummeting to $3.1 Bn from $5 Bn in July 2021.

Besides, Boston-based Fidelity Investment also marked down the value of its shares in Pine Labs by 9.2% in June this year. The developments came on the heels of Pine Labs deferring its IPO plans citing weak market sentiment.

The startup, which has raised over $1.2 Bn in funding, is currently focusing on expansion in Southeast Asia, Malaysia, and the Middle East. 

While Pine Labs is yet to disclose its FY23 financial numbers, the startup’ loss stood at INR 259 Cr in FY22. Operating revenue stood at INR 1,017 Cr during the year, translating to a valuation-to-operating revenue ratio of a whopping 39X at its last valuation.

Ola Cabs Sees Multiple Valuation Cuts

Bhavish Aggarwal, who introduced online cab aggregator services in India with the launch of Ola Cabs, has of late been more focused on his second venture Ola Electric. 

While Ola Electric continues to rake up huge funding, Ola Cabs has faced a fair share of problems, including valuation markdowns. In May this year, the US-based Vanguard Group reduced the valuation of its stake in Ola Cabs’ parent company ANI Technologies by 35%, bringing the overall valuation of the startup to $4.8 Bn from $7.4 Bn.

In August, Vanguard further slashed the startup’s valuation to $3.5 Bn in its books.

A month later, the investor again cut the worth of its shares in ANI Technologies, valuing the cab-hailing startup by 63.7% lower from its peak valuation at $2.7 Bn.
It is pertinent to note that Vanguard holds less than 1% stake in Ola.

The valuation markdown came at a time when Ola has been facing multiple challenges, ranging from regulatory challenges and delay in filing financial statements to mounting competition from peers such as Uber and BluSmart. 

Besides this, in July this year, more than 350 Ola Cabs drowned during floods in Uttar Pradesh’s Noida in a parking yard, which almost sparked a major standoff with local law enforcement agencies.

While ANI Technology is yet to file its FY23 financial results, the startup’s overall loss increased to INR 1,522.3 Cr in FY22 and operating revenue doubled to INR 1,970.4 Cr. This translates to a valuation to operating revenue ratio of 30X at its last reported valuation.

The Private Shares Fund Marks Down Eruditus’ Valuation

Singapore-registered edtech unicorn Eruditus saw one of its investors, The Private Shares Fund cut down the value of its stake in the startup by 8.56% in the March quarter, bringing down its valuation to $2.9 Bn from $3.2 Bn.

The Private Shares Fund has a 0.2% stake in Eruditus and pegged the fair value of its 36,264 shares in the edtech firm at $4.66 Mn.

The development came just a couple of months after Eruditus reported that its loss for FY22 shot up 1.5X to $386.6 Mn, while the revenue from operations rose 1.8X to $245.2 Mn. This translates to a valuation to an operating revenue ratio of 13X.

Recent media reports suggested that the startup might see exit of some US-based investors via a secondary round. Japan’s SoftBank and Canada Pension Plan will reportedly pick up stakes in the startup. 

Meesho Faces Fidelity Investments’ Ire 

Once the posterboy of social commerce in India, Meesho too was hit by investor markdowns in 2023. Its key investor Fidelity Investments internally marked down the value of its stake in the startup by 9.7%, pegging the company’s valuation at $4.4 Bn as against its peak valuation of $4.9 Bn. 

The markdown came right after the ecommerce giant recorded a 550% surge in its loss to INR 3,247 Cr in FY22 from INR 498 Cr in the previous fiscal year. Operating revenue also surged 300% to INR 3,359.4 Cr in FY22 from INR 838.6 Cr in FY21. 

Meesho, which has moved away from its social commerce model, now more or less operates within the ambit of B2C ecommerce space. It competes with the likes of giants such as Amazon and Flipkart. 

The startup has lately undertaken a cost-restructuring exercise, cutting corners and streamlining operations. As part of this, the company shut down its grocery vertical Meesho Superstore in August last year and has fired more than 700 employees since 2022 across multiple layoff rounds. 

While the ecommerce giant is yet to file its FY23 financial numbers, its valuation to operating revenue ratio stand at 12X at its current valuation.

Investors’ Snatch Gupshup’s Unicorn Status

SaaS startup Gupshup was also among the unicorns that were hit by valuation markdowns in 2023. 

The situation was especially dire for Gupshup as the first round of markdown by the US-based asset management company (AMC) Fidelity Investments, in May, snatched the coveted unicorn tag from it. Back then, Fidelity slashed the value of Gupshup’s shares on its books by 36% to $957 Mn.

A month later, in June, Fidelity again trimmed the startup’s valuation by 36% internally, bringing its valuation to $882 Mn. The AMC struck again in July as it went on to truncate the values of its share by 50%, resulting in Gupshup’s valuation dropping further to $697 Mn.

The startup, which turned a unicorn in April 2021, reported a net profit of INR 40 Cr in FY22 on revenue from operations of INR 1,132 Cr. This implies a valuation to operating revenue ratio of 9.8X.

The post Valuation Markdowns: 8 Indian Unicorns That Faced The Investors’ Wrath In 2023 appeared first on Inc42 Media.

At the end of 2022, there were telltale signs of distress in the Indian startup ecosystem. But not much attention was paid to the eight Indian startups that shut down in 2022 as it was seen as sanity returning to the market after the funding boom of the previous year.

However, as 2023 progressed, the impact of the slowdown hit home as a wave of shutdowns hit the Indian startup arena.

At the outset, it was smaller players such as edtech platform DUX Education and crypto platform WeTrade that wound up operations this year. However, the fire soon spiralled out of control and took down big-ticket funding baggers such as crypto platform Pillow and edtech startup FrontRow.

So what happened?

“The wave of shutdowns among Indian startups is largely a repercussion of the funding frenzy of 2021 and 2022. During this period, a surge in capital led to the emergence of unsustainable business models. Even viable models were distorted by the ‘growth at all costs’ mentality, fueled by excessive funding. This approach often neglected the path to profitability and is now faltering under the weight of higher capital costs and attractive, lower-risk investment alternatives in the market,” Anirudh Damani, managing partner at Artha Venture Fund, told Inc42.

If investors were apprehensive in 2022, they completely began re-evaluating their investment strategies in 2023. Funding taps suddenly dried up as global interest rate hikes made it tough and unattractive for investors to place their bets on new ventures. This created an extremely challenging environment for homegrown startups that operated on razor-thin margins and, in many cases, were over-reliant on external funding.

“A number of these shutdowns can be attributed to the consequences of higher interest rates by the Federal Reserve. This tightened liquidity in the system and changed investor expectations from high growth to high operating cash flows. This also affected M&A as well as future fundraises as investors became more discerning about their investments,” said Siddarth Pai, founding partner at 3one4 Capital and co-chair of the regulatory affairs committee of the Indian Venture and Alternate Capital Association (IVCA). 

Chiming in, D2C footwear brand Fausto’s founder Sumit Agarwal attributed the shutdown trend to startups pushing the paddle, on the back of VC money, in terms of scaling up with products that lacked product market fit (PMF). 

To make matters worse, government regulations also hit some of the sectors hard. The Centre’s heavy taxation approach (30% tax on profits and a 1% TDS (tax deducted at source) levy) towards crypto space and 28% GST on the real money gaming ecosystem came in like a wrecking ball and left a trail of bloodbath in its wake.

While Pai expects the trend of startup shutdowns to continue in 2024 as well, he also believes that the next year will see the emergence of startups with strong financial metrics.

While much seems to be on the horizon in 2024, the year 2023 will no doubt be remembered for shutdowns. As the ongoing year nears its end, we, at Inc42, have collated a list of Indian startups that bid adieu to the ecosystem in 2023. 

Note: The list has been compiled in alphabetical order.

Here’s The List Of 15 Startups That Shut Down In 2023

Low Retention Forced Elevation-Backed Anar To Shut Shop

Founded in 2020 by Nishank Jain and Sanjay Bhat, Anar was a LinkedIn of sorts for small medium enterprises. It helped small enterprises network across the board, from manufacturers to retailers, connect and interact online with one another. 

In November 2023, the startup’s cofounder and chief executive officer (CEO) Jain announced that it would cease its operations and return the remaining capital to the investors. 

The announcement came just two years after Anar raised a $6.2 Mn seed funding round co-led by Elevation Capital and Accel India in September 2021. It was backed by marquee cofounders and angel investors such as Pratilipi’s Ranjeet Pratap Singh, ShareChat’s Farid Ahsan, Meesho cofounders Vidit Aatrey and Sanjeev Barnwal, among others. 

In a LinkedIn post, Jain attributed the decision to shut the platform to low retention rate, not creating enough value, and the failure to solve enough for sellers. 

While Anar has bit the dust, cofounder Jain is mulling exploring a new venture in the AI space to solve super-large problems that will fundamentally define how society operates. 

Belora Cosmetics Wound Up Ops Due To Capital Crunch

In September 2022, Belora Cosmetics was eyeing a full-scale public expansion with an ARR of INR 500 Cr in the next three to four years. By October 2023, reports began to surface that the cosmetics brand was nearing a ‘dead end’ as funding taps ran dry with no capital in sight. 

A month later, neither its website was functional nor were its Instagram and Facebook pages. 

As per a report, the startup failed to elicit any interest from existing investors, including Peak XV’s Surge. Belora Cosmetics was also said to have explored talks with multiple players in the space for a potential acquisition but the talks also fell through. 

Founded in 2019 by Ainara Kaur and Akaljyot Kaur, Belora used to sell vegan and toxin-free makeup and skincare products such as lipsticks, moisturisers, eyeshadows, among others. 

The startup last raised an undisclosed amount of seed funding from marquee names such as accelerator initiative Peak XV Surge, DSG Ventures, and a few other angel investors.

PMF Issues Led To Content Startup Bluepad’s Demise

A brainchild of Sanjyot Bhosale, Devakrishna Asokar and Kishore Garimella, Bluepad was founded in 2020 and aggregated content for Indian users in vernacular languages. Users could read and post written content, including blogs, poems, stories and experiences, in regional languages and form communities.

Bluepad shut shop in April 2023 as it ‘could not envision a strong need for the product in the market.’

In a LinkedIn post, cofounder Bhosale attributed the lack of a reliable monetisation channel in the long term and no ‘strong urgent need’ for the product among the users as the reason behind the decision to shut shop. 

The startup had raised INR 1.8 Cr in its pre-seed round, led by Titan Capital and AngelList’s Syndicate, in 2021. Bhosale told Inc42 that the startup returned the remaining capital to investors.

After shutting operations, the three cofounders parted ways and moved on to different projects. While Bhosale is now a product manager at Koo, Garimella is the founder of WorkBrow. Meanwhile, Asokar has joined Articuno Coding as the chief executive officer.

Kalaari-Backed ConnectedH Folded Up Due To Unaddressable Market Realities

Another casualty of the funding winter in 2023 was Kalaari Capital-backed healthtech startup ConnectedH. 

The startup shut shop in August 2023 and returned the remaining capital to the investors. ConnectedH attributed the shutdown to ‘certain market realities’ that could not be addressed. As a consequence, the startup laid off its entire workforce.

Founded in 2018 by Subham Gupta, Rahul Kumar, and Suresh Singh, ConnectedH was a full-stack B2B healthtech startup that offered CRM solutions, online report management tools and other services for diagnostic labs. 

Over the course of its lifetime, the startup catered to more than 5 Lakh patients, aggregating a database of 10 Mn health data points during the process. 

Backed by marquee names such as Kalaari Capital, Incubate Fund India and angel investors such as CRED’s Kunal Shah, Roman Saini of Unacademy, ShareChat’s Farid Ahsan, ConnectedH had raised $2.5 Mn in total funding, $2.3 Mn of which was raised in a seed round in 2021 alone.

The startup’s cofounder Singh, in a LinkedIn post, said he would iron out the idea of a new venture over the course of the next couple of months. 

As per Gupta’s LinkedIn bio, he has already taken over as the CEO of AI platform I’mBesideYou. 

Funding Winter Forced Malpani Ventures-Backed DUX Education To Shut Shop

Edtech startup DUX Education was one of the first Indian startups to shut down in 2023. DUX Education failed to raise funds, prompting the founders to cease operations in April 2023.

Founded at the peak of Covid-19 pandemic in 2020 by Rohit Jain, Udit Chaturvedi and Manika Tiwari, the edtech startup offered school curriculum-based online classes for K-12 students. 

The Bengaluru-based startup raised INR 2 Cr over the course of its lifetime from angel investment firm Malpani Ventures, and other investors. 

Since shutting the startup, Chaturvedi has joined athleisure brand Techno Sportswear as chief financial officer (CFO) while Tiwari is now the chief strategy officer at edtech startup LXL Ideas.

28% GST Forced RMG Startup Fantok To Temporarily Suspend Ops

Real money gaming startup Fantok decided to temporarily suspend operations after the GST Council decided to levy a 28% Goods and Services Tax (GST) on online gaming platforms.

Citing the ‘shifting regulatory environment’ for real money gaming in India, the startup said that the new GST regime led to complicated legal challenges which compelled it to suspend operations. 

The startup also attributed the decision to challenges related to high tax deducted at source (TDS), issues related to payment gateways, and the substantial cost of customer conversion. 

Fantok plans to use the breather to explore a pivot that is in line with India’s evolving regulatory landscape and its bid to deliver meaningful experiences to end users. 

A brainchild of Ronak Ahuja, Prakhar Saxena and Ashok Vishwakarma, the Gurugram-based Fantok was founded in 2022 and operated a social gaming platform for real money binary prediction games hosted by social media creators.

Funding Winter Sent Fipola Down The Liquidation Route 

One of the first casualties of the ongoing funding winter in 2023, D2C meat delivery startup Fipola shut shop in February as it failed to raise capital from investors. 

The startup’s founder and managing director Sushil Kanugolu told a news portal that Fipola failed to raise a follow-on round owing to unfavourable market conditions amid the funding winter. 

Last heard, the startup was looking for ways to liquidate assets to pay off operational dues.

Founded in 2016, Fipola delivered meat to customers via its app and website. It also operated restaurants under the brand names Fipola Exclusive Cafe and Grill House by Fipola, which have also become non-operational. 

Fipola last raised a Series A funding round of $3 Mn in March 2022 which saw participation from CK Ranganathan’s Cavinkare. The startup was even looking to raise another $40 Mn by 2023-end. It even onboarded actor Nayanthara as its brand ambassador in mid-2022.

At the end of February, Fipola had 65 stores under its belt spanning multiple cities in South India and had plans to expand to 250 stores by the end of 2023.

Not Enough Traction, Heavy Cash Burn Led To Friyey Shutting Shop

Pune-based coworking space provider Friyey’s cofounders made an appearance on the second season of the popular show Shark Tank India but the startup met an abrupt end just months later.

Founded in 2019 by Yogesh Thore, Friyey was a coworking startup that had a unique business model – converting places such as restaurants, pubs, and clubs into coworking spaces during morning hours, when the footfall is lower. 

The startup attributed the shutdown to paucity of funds, with founder Thore adding that raising capital for idea-based startups was more difficult than for product-based businesses in India. On top of that, the Covid-19 pandemic appeared to have further hammered the startup’s business model.

Noting that the startup failed to create enough traction, Thore said expenses were much higher than the top line. Eventually, Friyey folded operations in July 2023. 

Friyey last secured an undisclosed amount of seed funding from angel investor Tarun Bhalla in 2020. By the time it shut down, the startup boasted of more than 500 restaurant partners and more than 24,000 remote workers operating out of its spaces.

Despite Raising $17 Mn, Lightspeed-Backed FrontRow Folded On Account Of Low Traction 

One of the biggest Indian startups to bite the dust in 2023 was extracurricular activity startup FrontRow.

The startup’s struggles came as a surprise as it had raised a big-ticket Series A round of $14 Mn in September 2021. However, it found itself struggling to stay afloat within a year and laid off 75% of its employees in October 2022.

As 2023 unfolded, the funding winter took a toll and the startup set course for path correction and profitability. But it was too late by then. FrontRow first culled most of its workforce and then decided to shut operations by mid-June and return the remaining capital to investors. 

The startup folded on account of the deadly concoction of the funding winter, adverse market conditions, the failure to gain traction and retention, and absence of a real product market fit (PMF). 

In the words of cofounder Ishaan Preet Singh, the startup’s annualised revenue plateaued after the initial ‘burst’, while marketing cost ballooned to more than 100% of revenue and course completion stayed below average. He also conceded that the startup overestimated the Indian online extracurricular activities market. 

There were also issues such as delayed pilots, and lack of a strong product and profitable unit economics. 

FrontRow raised $17 Mn during the course of its lifetime and was backed by big-ticket investors such as Eight Roads Ventures, GSV, Lightspeed, Elevation Capital and marquee angel investors such as CRED’s Kunal Shah, Unacademy’s Gaurav Munjal and ShareChat’s Farid Ahsan, among others.

Accel-Backed OSlash Returned Capital To Investors After Failure To Find Traction 

The year 2023 also saw Bengaluru and San Francisco-based SaaS platform OSlash shut operations, almost one-and-a-half years after it raised a hefty post-seed funding round of $5 Mn at a valuation of $50 Mn. 

OSlash shut shop at the end of November 2023 and returned the remaining capital to its investors. It cited failure to find traction and commercial success as the reason behind the decision to shut operations.

Founded in 2020 by Ankit Pansari and Shoaib Khan, OSlash was a SaaS startup that offered plug-and-play artificial intelligence (AI)-based copilots for teams and individuals to improve productivity at the workplace. It essentially enabled employees to access information across an organisation using everyday keywords, helping teams collaborate seamlessly.

The Accel-backed startup raised more than $7.5 Mn over the course of its lifetime and found investors in names such as Better Capital, CRED’s Kunal Shah, YouTube senior executive Christian Oestlien, Notion COO Akshay Kothari, among others. 

Pillow Folded Due To Tough Business Environment, Adverse Crypto Regulatory Regime

Crypto investment platform Pillow was the biggest startup, in terms of funding raised, to shut operations in 2023. It attributed the decision to wind up to ‘difficult regulatory headwinds’ and tough business environment that made it ‘impossible’ to sustain its operations. 

The startup wrapped up operations in July-end and claimed to have returned nearly 80% of the total capital raised to investors. 

The big blow came just nine months after Pillow raised a massive $18 Mn in funding from Accel, Quona Capital, Elevation Capital, Jump Capital, among others, in 2022. In total, it bagged $21 Mn over the course of its lifetime.

Founded in 2021 by Arindam Roy, Rajath KM, and Kartik Mishra, Pillow allowed users to invest in US dollar-backed stablecoins and other cryptocurrencies such as Bitcoin and Ethereum via its app.

While the crypto industry appeared to be investor favourites in 2021, government regulations and imposition of heavy tax regime on the industry pummelled the entire ecosystem. The strong criticism of cryptocurrencies and calls to ban them by the top officials of the Reserve Bank of India (RBI) further dampened the sentiment. To add to this, the collapse of giants such as FTX only made matters worse for India’s crypto industry. 

Tax Woes Forced Quizy To Shut Operations

Founded in 2021 by Amit Kumar and Sachin Yadav, Quizy was a real money gaming platform that offered gamified educational learning experience for users. The platform hosted experts that would write content for academic writings such as assignments, essays, book reports, book reviews, among others. 

The startup shut shop in August 2023 due to considerations around regulatory headwinds, especially the increase in GST. 

“Recent GST changes have thrown significant challenges our way. The removal of the TDS exemption limit and the adding flat 30% TDS on all winnings, regardless of the amount, hit us hard. This sudden change substantially impacted player earnings and motivation, leading to a decline in user engagement and loyalty,” Quizy cofounder Sachin Yadav said then. 

Before shutting down, the startup burned through $317K of investor capital. Quizy was backed by names such as 100X.VC, We Founder Circle, Capital A.

Since then, both Kumar and Yadav have moved on and currently serve as the assistant vice-president at lendingtech platform BASIC Home Loan.

Tiki Closed Down Due To Funding Drought, Market Challenges 

Short video platform Tiki shut in June citing the ‘recent challenges faced by the tech industry’. 

The shut down came at the top of the raging funding winter as investors tightened their purse strings while startups looked for investors to tide over the capital drought. The industry was also plagued by lower retention and competition from global social media giants. 

Announcing the shutdown, Tiki said it would delete all user data from its servers in India and Singapore and recommended its users download any videos important to them.

Incubated by Peak XV Surge, the startup raised $3.63 Mn in funding over its lifetime. 

Peak XV-Backed Vah Vah! Shut Shop Due To Declining Revenue, Weak Unit Economics

Vah Vah!,  A brainchild of former India head of Zynga Shailesh Chaganlal Daxini and two ex-Zynga employees – Akash Senapaty and Muthukaleeshwaran Subbiah, was a vocational training startup that offered certificate courses in makeup artistry, hair styling and grooming.

Founded in 2020 and incubated by Peak XV Surge, the startup silently shut operations in July 2023 and fired its entire workforce of 150 employees. The ensuing fracas also saw police intervention.

In a deep dive done by Inc42 into the startup’s fall, several erstwhile employees claimed that the startup was plagued by declining revenue, ballooning loss, weak unit economics, lack of traction, lack of business model, and inability to raise funds. 

Over the course of its lifetime, Vah Vah! secured $2 Mn in funding. 

Meanwhile, Daxini and Subbiah have already begun work on their new venture – a Thrasio-style gaming platform Brightpoint. They have reportedly secured funds to the tune of $5 Mn to $6 Mn from Peak XV, Nexus, among others for Brightpoint. 

Regulatory Headwinds Led To Crypto Platform WeTrade’s Demise

Another crypto startup that bit the dust in 2023 was Bengaluru-based crypto platform WeTrade. Hit by the funding winter, regulatory headwinds and uncertainty in the crypto market, WeTrade shut shop in January 2023. 

“WeTrade started in 2022 with a vision to make trading in cryptocurrency easy and rewarding. However, with the crypto winter deepening and the ambience turning increasingly hostile, we have decided to pause our services,” the startup said back then. 

The startup was also said to have fired all its employees as a result of the shut down. 

Founded in 2022 by Prashant Kumar, WeTrade was a crypto trading platform that charged zero trading fees and allowed customers to begin crypto investing with a minimum amount of INR 100. It also offered fixed interest products on their stable cryptocurrency investments. 

The startup raised more than INR 15 Cr from external investors during its lifespan. 

Since shutting down WeTrade, Kumar has moved on to work on his new fintech venture Kredit.Pe where he serves as the founder and CEO. 

The post Plagued By Funding Winter & Bad Economics, Here Are 15 Indian Startups That Shut Down In 2023 appeared first on Inc42 Media.

After a frantic 2022, the year so far has been no consolation. The extended funding winter, macroeconomic pressures, tightening business margins, and absurd unit economics posed several challenges for Indian startups during the year, triggering all-scale business restructuring and retrenchment, and even shutdowns.

Further, while the doom and gloom of the funding winter left many employees jobless, top leadership at these startups, too, couldn’t escape its dread.

As a result, the world’s third-largest startup ecosystem saw over 30 cofounders and chief executive officers taking the golden parachute, transitioning to other companies, starting new ventures and even assuming new roles within their existing ventures.

Pertinent to mention that this trend started in 2021 when entrepreneurs such as Abhinay Choudhari and Anant Goel left BigBasket and Milkbasket, respectively, after the companies underwent a significant shift.

In a similar vein, Ola cofounder Ankit Bhati also left the ride-hailing startup to pursue his own SaaS venture Amnic in 2021. This trend continued well into 2022, plaguing many such as BharatPe and Zilingo.

Some notable exits include those at ShareChat, ZestMoney, Teachmint, DealShare and Chingari, among others. While some were asked to leave amid governance issues at their respective startups, others stepped down to start afresh.

Meanwhile, many second-time founders were also seen embarking on yet another adventure, a trend that fuelled the creation of new startups this year. 

As 2023 is about to conclude soon, let’s take you through key leadership changes that made headlines during the year. With that said, here are the Indian startup founders and CEOs who stepped down this year.

Note: We have segregated founders and CEOs under different heads. The list has been compiled alphabetically.

Founders Who Left Their Ventures 

B2B Fintech Startup CARD91 Cofounder Quit 

Kush Srivastava bid adieu to Bengaluru-based B2B fintech startup CARD91 in March this year. Srivastava, who oversaw payments infrastructure, left for personal reasons. 

As of March 31, 2022, Srivastava held a 31.58% stake in CARD91, with fellow cofounders Ajay Pandey and Vineet Saxena owning 31.58% each. As of now, the company continues to grow under the leadership of Pandey and Saxena.

Founded in 2020, CARD91 offers a plug-and-play payment issuance infrastructure that helps businesses and banks launch co-branded cards. The startup counts Infinity Ventures, Point72 Ventures, Sabre Partners, Blume Founders Fund, and Inflection Point Ventures among its investors.

Short Video Startup Chingari’s Kothari Showed Himself Out

Chingari cofounder Aditya Kothari announced his departure from the short-video platform in May. The cofounder exit came amid the ongoing churn in the short-video space.

Without disclosing his plans, Kothari had said he was open to meeting startup founders in the capacity of an investor or an advisor to discuss ideas and possible tie-ups. 

“Life update: Chingari is about to become my old flame… The tiny sparks that flew a few years ago have now turned into a formidable blaze of 170 Mn+ users, and the time has come for me to hand over my torch,” Kothari said in an X thread.

Kothari, a serial entrepreneur and former business lead at Bounce, cofounded Chingari in 2018, amid the rise of short-video platforms, following the TikTok ban.

Chingari is an on-chain social app that allows users to post, browse and share video content. Earlier this year, Chingari raised an undisclosed amount of equity funding from Aptos Labs.

DailyRounds, Marrow Cofounder Quits After 8 Years

In March, Deepu Sebin, cofounder of the healthcare-focussed edtech platform DailyRounds, resigned from the company and its NEET PG test preparation vertical, Marrow. 

Sebin, who dedicated eight years to the company, served as the CEO since its inception until April 2022. 

Upon Sebin’s departure, Vineet Bagri, who had been collaborating closely with him for over three years, was appointed as the new CEO of the edtech platform.

DealShare Cofounders Stepped Down Amid Restructuring Efforts

The cofounders of DealShare, Vineet Rao and Sankar Bora, stepped down following multiple rounds of layoffs and business restructuring. 

In July, Rao stepped down from his role as the chief executive and was initially anticipated to work with the board to fetch a new CEO. However, he left the company abruptly. Bora, the chief operating officer, also left the company.

Despite the departure of its cofounder, DealShare has been actively making key appointments in recent months. Meanwhile, the startup slashed approximately 6% of its workforce (around 100 individuals) to attain profitability.

Established in September 2018 by Sourjyendu Medda, Vineet Rao, Sankar Bora and Rajat Shikhar, DealShare operates as a social ecommerce marketplace, catering to first-time internet users.

Dineout Cofounder Vivek Kapoor Quits Dineout

Dineout cofounder Vivek Kapoor left Swiggy to join Delhi-based healthcare financing startup AyushPay as its cofounder and chief business officer. Kapoor became part of Swiggy’s leadership team after Dineout’s acquisition by Times Internet last year at a valuation of $150 Mn-$200 Mn. 

Announcing his exit in a LinkedIn post, Kapoor said, “While bidding farewell to Dineout on paper, I want to express my heartfelt gratitude to everyone who has been a part of this incredible journey. We achieved great things at Dineout and it would be pretty naive of me to try and hog the credit for Dineout’s achievements.”

Kappor also expressed his desire to make a meaningful contribution to the Indian healthtech sector. He shared that he was AyushPay’s angel investor for a considerable period and had actively mentored the AyushPay team.

Besides Kapoor, Dineout’s other cofounders –  Ankit Mehrotra, Nikhil Bakshi, and Sahil Jain – also joined Swiggy’s leadership team after the foodtech giant acquired the dining and online restaurant booking platform to take on Zomato.

Dunzo Cofounders Leave Amid Business Rejig 

Bengaluru-based hyperlocal delivery startup Dunzo is currently undergoing significant changes following the recent resignations of cofounders Mukund Jha and Dalvir Suri. 

Suri, who served as a cofounder for six years, played a pivotal role in Dunzo’s B2B delivery arm, Dunzo Merchant Services (DMS). His departure coincides with challenges such as delayed salaries and fundraising issues.

Established in 2014 in Bengaluru by Kabeer Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha, Dunzo experienced a significant change on October 2, 2023, with Suri’s departure. Later, Jha, too, revealed his decision to leave the company.

Freshworks CTO Shanmugam Krishnasamy Bid Farewell

After dedicating more than 11 years towards building Freshworks’ products and technology, the SaaS giant witnessed the departure of cofounder and chief technology officer (CTO) Shanmugam Krishnasamy in March.

The reports of Krishnasamy’s exit came when the SaaS unicorn was bogged down in multiple challenges, ranging from mounting losses to legal troubles. 

The company’s CY22 annual loss stood at $232.13 Mn, up from $204.8 Mn in CY21. Despite nearing the $500 Mn revenue mark, Freshworks laid off approximately 90 employees in December last year.

GoMechanic Cofounders Took An Exit After Allegations Of Fraud 

GoMechanic cofounders Rishabh Karwa, Kushal Karwa, and Nitin Rana stepped down from their roles at the automotive service platform after admitting to financial misreporting.

In January this year, GoMechanic cofounder Amit Bhasin, who continues to be associated with the startup as per his LinkedIn profile, admitted to committing “errors in judgement” in regard to financial reporting while trying to pursue growth. 

The admission triggered a forensic audit and business restructuring, which resulted in a consortium led by Lifelong Group acquiring GoMechanic in a fire sale.

While GoMechanic went on to raise $6 Mn in a strategic funding round earlier this month, the startup’s cofounders are the subject of a probe by the Delhi Police’s Economic Offences Wing due to a complaint of alleged fraud and cheating filed by its investors Orios Venture Partners, Peak XV Partners (Sequoia Capital), and Chiratae Ventures.

Amid all this, Rishabh Karwa and Rana are working on two separate and unnamed startups. Rana’s new startup is focused on “Building Travel & Hospitality Product for Indian Subcontinent and World”, according to his LinkedIn profile, while details about Rishabh’s latest venture remain undisclosed. 

Polygon’s Cofounder Resigned To Pursue New Opportunities

Polygon cofounder Jaynti Kanani resigned from his position at the blockchain scaling platform in October this year.

“After kickstarting Polygon in 2017, around six months back, I decided to step back from the day-to-day grind,” Kanani posted on X (formerly Twitter).

As per his LinkedIn profile, he served as the cofounder of Polygon until March 2023. His LinkedIn now lists him as the CEO of two new startups —  Morphic, a generative AI-based venture, and Mozak, a web3 platform. 

Kanani, along with Sandeep Nailwal and Anurag Arjun, founded Matic Network in 2017, which later evolved into Polygon. 

After Polygon’s $450 Mn funding round, Kanani became one of the country’s first crypto billionaires. His departure coincided with Polygon laying off 20% of its workforce in February, as the crypto winter wreaked havoc.

Bidding farewell to the company, Kanani mentioned his intention to focus on new adventures while continuing to support the blockchain startup from the sidelines. 

Google-Backed ShareChat Cofounders Called It Quits

The founders of Google and Twitter-backed ShareChat, Bhanu Pratap Singh and Farid Ahsan, stepped down in January. However, both continued to remain on the company’s board.

“After nearly eight years of building ShareChat to unicorn status, Bhanu and Farid have chosen to step down from their active roles in the company. ShareChat would not be the company it is, without their contributions,” a ShareChat spokesperson had stated in an internal email at the time. 

The cofounders’ exit coincided with ShareChat’s parent firm, Mohalla Tech, laying off 20% of its workforce or 500 individuals earlier in the year.

Founded in 2015 by three IIT Kanpur alumni – Sachdeva, Singh, and Ahsan – ShareChat emerged as an early player in regional language content. 

Post the TikTok ban, the platform introduced Moj in June 2020, achieving significant growth alongside DailyHunt’s Josh.

Slash Founder Laman Ansari Moved On

Slash founder Laman Ansari left the fintech startup in April. He is currently working at UK-based Anthropic.

Former BharatPe cofounder Bhavik Koladiya’s venture capital firm, Finix Partners, subsequently acquired Slash. All stakeholders, including founders and investors, exited the startup, while Finix Partners retained key assets, including IP and trademark. The entire workforce of Slash either left or was let go.

The Slash App is undergoing a revamp and is set to be relaunched soon for new users. Originally owned by Greenbacks Technologies and founded by Ansari and Rahul Mahajan, Slash received backing from Elevation Capital, Tanmay Bhat, and others. The startup offers payment solutions to social ecommerce merchants, facilitating a platform-agnostic and integrated approach for small brands and online creators to monetise their products, skills and services.

Teachmint’s Anshuman Kumar Steps Down To Start Up Again

The edtech’s cofounder and CTO Anshuman Kumar announced his departure in April to focus on his new venture, Duolop, a relationship management app for couples.

In a LinkedIn post on April 7, Kumar shared, “I am stepping into a new role as the founder of Duolop, a dynamic and innovative Indian app revolutionising how couples connect and grow together.”

At the time, Kumar told Inc42 that he left Teachmint because he was looking to build a platform, which was more technically aligned with my vision.

Founded in 2020 by Kumar, along with Mihir Gupta, Payoj Jain and Divyansh Bordia, Teachmint helps teachers and schools digitise their classrooms. The startup is backed by marquee investors such as Lightspeed India, Rocketship.vc and Better Capital.

Kumar exited Teachmint when the edtech startup was grappling with significant losses. The startup also discontinued its course-selling platform, Teachmore, which it acquired in 2021. 

Teachmint was initially an app that helped tutors digitise classrooms, however, later the startup transitioned to digitalising schools with its software.

In November 2022, Teachmint laid off 45 employees or around 5% of its workforce. The startup’s FY22 net loss stood at INR 131.70 Cr, up from INR 5.52 Cr in FY21, against operating revenues of just INR 77.45 Lakh.

Founder Of  Drone Maker TAS Resigned

Nagendran Kandasamy, the founder of Bengaluru-based drone maker Throttle Aerospace Systems (TAS), stepped down as the CEO, along with the entire leadership team, including COO Nischitha, CFO Girish Reddy and CTO Shashi Kumar R in July, citing financial struggles and interference in decision-making.

They continued to be the shareholders, collectively holding a 40% equity stake in the company. The first DGCA-approved Indian drone maker, TAS, encountered challenges after RattanIndia Enterprises acquired a 60% stake in May 2022. 

Management’s decision to terminate CFO Girish Reddy triggered the leadership team to resign. Sharath Chandra Gudlavalleti, the head of NeoSky, was anticipated to assume a leadership role at TAS.

ZestMoney Cofounders Bid Adieu After Startup Acquisition Bid Falters

The fintech startup faced significant changes after its cofounders, Lizzie Chapman, Priya Sharma and Ashish Anantharaman, resigned in May this year. 

“Over the last few weeks, we have done a lot of thinking and it has been hard for us to arrive at this conclusion. We have decided to step down from our roles as CEO (Chapman), CFO and COO (Sharma), and CTO (Anantharaman) at ZestMoney,” Chapman had stated in an internal mail to employees.

A day after all cofounders of ZestMoney stepped down, a new leadership took over the reins of the Bengaluru-based digital lending startup.

This was followed by the failure of an acquisition bid by PhonePe a couple of months prior. Notably, PhonePe was planning to acquire ZestMoney for $200 Mn to $300 Mn but abandoned the plans due to concerns about the quality of ZestMoney’s loan book.

Founded in 2015, ZestMoney offers buy now, pay later (BNPL) services, enabling users to settle shopping bills in three interest-free instalments. Following the unsuccessful acquisition attempt by PhonePe, reports suggested that ZestMoney would shift its focus to lending.  

Zomato’s Cofounder & CTO Stepped Down

In January, the foodtech giant announced that its cofounder and chief technology officer (CTO), Gunjan Patidar, resigned from the company. The unicorn added that Patidar was no longer a key managerial personnel.

As one of Zomato’s initial employees, Patidar played a pivotal role in crafting the company’s fundamental tech systems during his decade-plus tenure.

Originally from Madhya Pradesh’s Khargone, Patidar graduated from the Indian Institute of Technology, Delhi. After interning with Zomato during college, he joined the US-based event management company Cvent. Later, he joined Zomato in a full-time role, progressing to become the CTO. His association with Zomato began in December 2008.

Following his resignation from Zomato, Patidar joined the advisory board of PubLive, a platform dedicated to empowering publishers in the digital landscape.

Zomato experienced four top-level exits between November 7, 2022 and January 2, 2023. In response, CEO Deepinder Goyal said that several senior leaders have had multiple stints at the company, often aligning with shifts in the company’s context or changes in their roles. 

CEOs Who Left The Ventures They Led

Mrinal Mohit Jumped Off BYJU’S Ship

BYJU’S India CEO Mrinal Mohit, who was associated with the edtech giant since 2015, exited the company in September. 

The development came at a time when BYJU’S was in the news for all the wrong reasons, ranging from delay in filing financial statements and resignations of auditor and board members to a potential debt crisis.

In a statement, BYJU’S said Mohit quit to pursue his personal aspirations. “Mrinal’s contributions have left an indelible mark on our organisation, and we bid him a bittersweet farewell. I am immensely proud of what we have achieved together,” BYJU’S founder and CEO Byju Raveendran said.

Meanwhile, the edtech company appointed former upGrad India CEO Arjun Mohan, who is in his second stint with BYJU’s, as the successor to Mohit.

CEO Of Flipkart Health+ Tendered Resignation

Having dedicated a little over a year to Flipkart Health+, Prashant Jhaveri tendered his resignation as the CEO. Kanchan Mishra, an internal candidate at Flipkart, replaced Jhaveri and assumed the role of CBO of Flipkart Health+.

Jhaveri was appointed as the CEO of Flipkart Health+ in March 2022. Before this, he was the CEO of Apollo Health and Lifestyle Limited and MediBuddy.

Flipkart entered the e-pharmacy segment through an acquisition in November 2021, securing a 75.1% stake in Kolkata-based healthtech startup SastaSundar. Following the acquisition, SastaSundar was rebranded as Flipkart Health+. 

Axis Bank-Owned Payments Startup Freecharge’s MD & CEO Bid Adieu

Siddharth Mehta, the former MD and CEO of Axis Bank-owned payments startup Freecharge, departed from the company to embark on his entrepreneurial venture. 

Mehta served as the MD of the payments wallet startup from August 20, 2019, to August 19, 2023. His tenure at Freecharge began in July 2018 when he joined as chief business officer after almost three years with Axis Bank. Mehta left Freecharge in February 2023 after nearly four years with the company.

Mehta is currently the cofounder of fintech startup Kiwi, which provides credit offerings on UPI. Last month, the startup raised $13 Mn in a Series A funding round led by Omidyar Network India.

Meanwhile, Freecharge, founded in 2010, offers mobile recharge, bill payments, investment, and lending services. It was acquired by Snapdeal in 2015 for around $400-$500 Mn. In 2021, Axis Bank acquired Freecharge for just $60 Mn in an all-cash deal.

CEO Of MobiKwik’s Zaakpay Moved On For Greener Pastures

Mukul Saxena resigned as the CEO of MobiKwik’s financial services and Zaakpay units this year after joining the company in May 2022 to take on the role of Chief Business Officer (CBO) at Tata Digital. 

As per Saxena’s LinkedIn profile, he is responsible for overseeing product development, profit and loss management, and new initiatives in the fintech sector at Tata Digital. 

His appointment came after Tata Digital conducted a large-scale reshuffle of its leadership team earlier this year to compete with Reliance Retail on all fronts.

Saxena has held key positions at IndusInd Bank and HSBC Saudi Arabia. 

Nodwin Gaming CEO Stepped Down After 4 Years

To pursue new challenges aligned with his career goals, Siddharth Kedia quit as the CEO of the gaming and esports arm of Nazara Technologies, Nodwin Gaming, after a four-year stint. Nodwin’s co-CEO, Gautam Singh Virk, assumed the operational role left by Kedia.

Chirag Shah, who had been the head of the telecom business at Nazara Technologies for over 16 years, also left to explore new opportunities.

Kedia took over as the CEO of NODWIN Gaming in November 2019. Before joining the gaming giant, he was the chief strategy officer at Viacom18. 

Before that, he cofounded the private equity (PE) firm, Ambit Pragma Ventures, in 2007. 

Founded in 2014 by Akshat Rathee and Gautam Virk, Nodwin Gaming is an esports company that owns a slew of gaming and sports entertainment intellectual properties (IPs) and offers sports-related products and services to customers. Nazara acquired a majority stake in the esports company in 2018. 

The CEO of Amazon-Owned One Medical Resigned

Amir Dan Rubin, the CEO of primary care provider One Medical, which Amazon acquired in July 2022, is all set to leave the company after serving as its CEO for more than six years.  

“I want to share with you all that after six-plus years as CEO of One Medical, helping guide the organisation to new levels of impact, Amir Dan Rubin has decided to leave One Medical later this year,” Neil Lindsay, who leads Amazon Health Services, wrote in an internal memo.

One Medical is a membership-based primary care practice aiming to make quality healthcare more affordable and accessible. 

upGrad CEO Arjun Mohan Resigns

Arjun Mohan, the former CEO of Ronnie Screwvala-led edtech major upGrad, announced his exit in January in a LinkedIn post.

The departure came when edtech startups in the country were laying off heavily amid a funding crunch and widening losses. 

“I started my journey in the education sector in the year 2008 and believe there is a lot to be done to solve the persistent problems of access, affordability and quality. So, I am in the exploration phase of what I can do in education next,” Mohan announced on social media at the time.

Before joining upGrad, Mohan served BYJU’S for over 11 years until 2020.

Founded in 2015 by Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh, upGrad is backed by the likes of Temasek, Murdoch’s Lupa Systems, International Finance Corporation, IIFL, among other major names.

BYJU’S-Owned WhiteHat Jr CEO Put Down Papers

Ananya Tripathi, the CEO of WhiteHat Jr owned by BYJU’S, submitted her resignation in August, marking another senior-level exit at the edtech giant. 

Tripathi was on maternity leave and decided to resign, as per media reports. The edtech has not officially acknowledged her resignation. 

Tripathi took on the role at WhiteHat Jr in April 2022. Before joining WhiteHat Jr, she was the managing director at KKR Capstone. Tripathi also held the position of chief strategy officer at Myntra for almost four years.

WhiteHat Jr was acquired by BYJU’S, which is currently fighting on multiple fronts, in 2020 for $300 Mn. Founder Karan Bajaj departed from WhiteHat Jr in August 2021. 

Note: We have segregated founders and CEOs under different heads. The list has been compiled alphabetically.

The post Startup Realm’s Changing Guard: Founders & CEOs Who Bid Farewell In 2023 appeared first on Inc42 Media.

The Indian startup ecosystem was in the strong grip of the ongoing funding winter at the beginning of 2023. As such, it was expected that funding scarcity and a drop in valuations would lead to a sharp increase in the number of mergers and acquisitions in the Indian startup ecosystem during the year. However, as the year comes to an end, the data compiled by Inc42 presents a different picture.

Only 95 mergers and acquisitions (M&As) took place in the first three quarters of the ongoing year. This number is almost half of the 205 M&As that took place in 2022, which was a growth from 120 such deals in 2021. According to Inc42’s Indian Tech Startup Funding Report Q3 2023, the number of M&A deals stood at 35, 33 and 27 in Q1, Q2, and Q3, respectively, this year. 

While the funding crunch resulted in some fire sales this year, like Aurum PropTech’s acquisition of Nestaway, several Indian corporates also acquired startups to expand their businesses, like Reliance Retail’s acquisition of Alia Bhatt’s Ed-a-Mamma and Saregama’s acquisition of Pocket Aces. 

Besides, many new-age tech companies like Swiggy and RateGain also went shopping this year to further expand their business. The icing on the cake was the acquisition of Indian startups by international companies, highlighting the growing prowess of the Indian startup ecosystem. Startups like Flutura, TrustCheckr, and Rephrase.ai were acquired by global corporates Accenture, Truecaller, and Adobe, respectively, this year. 

Overall, ecommerce, enterprise tech, fintech and edtech were among the top sectors in terms of M&A deals in the first three quarters of 2023. The minimum deal amount for the year stood $7.5 Mn, while the highest went up to $67 Mn. 

As 2023 approaches its end, let’s take a look at some of the major startup acquisitions this year.

Top Startup Acquisitions Of 2023

CarTrade Snaps Up OLX India’s Business

Auto marketplace CarTrade acquired Sobek Auto India Private Limited, the parent company of OLX’s India business, for $67 Mn (INR 535.54 Cr) in August this year. OLX’s India business comprised its classifieds platform and consumer-to-business (C2B) operations of auto transaction business.

At the time of acquisition, CarTrade, which competes with the likes of Spinny and Cars24, said Sobek Auto would bring with it 68 Mn average monthly visitors and 32 Mn product listings annually. CarTrade’s employee count crossed the 4,000 mark post the acquisition.

However, months after the acquisition, CarTrade shut down the C2B business of Sobek Auto, citing its unit economic challenges.

CarTrade said shutting down the C2B business would result in a reduction in its headcount but Sobek will continue to grow its classified business, which includes both auto and non-auto verticals. 

CarTrade reported a 132% year-on-year rise in its consolidated net profit to INR 12.96 Cr in the September quarter of the financial year 2023-24 (FY24).

Reliance Retail Expands Portfolio With Acquisition Of Ed-a-Mamma 

Isha Ambani-led Reliance Retail acquired a majority stake in Bollywood actor Alia Bhatt’s children’s wear brand Ed-a-Mamma to expand its portfolio.

The startup, launched in 2020, is a D2C kids and maternity wear brand that sells its products through its own website, ecommerce platforms, and retail chains like Lifestyle and Shoppers’ Stop.

Without disclosing the financial details of the deal, the retail vertical of Reliance Industries Ltd said it acquired a 51% stake in Ed-a-Mamma. Media reports stated that the acquisition amount ranged between INR 300 Cr and INR 350 Cr

In a statement, Reliance Retail said it was looking to leverage the management strength of its subsidiary Reliance Brands to spearhead Ed-a-Mamma’s business. 

Swiggy Enters Food, Grocery Retail Market With LYNK Logistics’ Acquisition

Swiggy forayed into the food and grocery retail market by acquiring FMCG retail distribution company LYNK Logistics. While the foodtech giant did not disclose the financial details, reports pegged the deal at $39 Mn.

Founded in 2015 by Abinav Raja and Shekhar Bhende, LYNK enables leading FMCG brands to grow their retail presence through its network of 1,00,000+ retail stores across the top eight cities of India.

It leverages a proprietary, integrated technology platform to manage retail distribution throughout the supply chain, including warehousing, inventory management and logistics operations. It counts marquee names like Hindustan Unilever, ITC, Tata, PepsiCo, and Britannia among its clients.

Led by cofounder and chief executive officer Shekhar Bhende, LYNK continues to operate as an independent entity even after the acquisition. 

Music Production Giant Saregama Picks Stake In Pocket Aces 

Music-producing major Saregama acquired a 51.82% stake in digital entertainment startup Pocket Aces for $21 Mn (INR 174 Cr) at a valuation of $40 Mn in September. At the time of the acquisition, Saregama also committed an additional investment of INR 15 Cr ($1.8 Mn) in the startup. 

Saregama also said it planned to take its stake in the digital content startup to 92.61% over the next 18 months. It said the additional 40.79% stake acquisition would be based on the adjusted value of Saregama’s holdings or the enterprise value of Pocket Aces, whichever is higher

Launched in 2013 by Aditi Shrivastava, Ashwin Suresh and Anirudh Pandita, Pocket Aces is a digital content creator and publisher behind popular channels FilterCopy, Nutshell, and Gobble. Since inception, it claims to have created over 3,000 content pieces across formats such as — web series, sketches, music videos, and reels.

Pocket Aces also operates in the talent management segment through Clout. It manages over 100 digital influencers, while its long-form studio, Dice Media, produces youth-centric web series available on OTT platforms like Netflix, Hotstar, and Amazon.

According to Saregama’s stock exchange filings, Pocket Aces reported a 34% jump in revenue in FY23 to INR 104 Cr. 

RateGain Acquires Adara To Consolidate Position

Listed traveltech SaaS company RateGain announced the acquisition of US-based data exchange platform Adara for $16.1 Mn (INR 134 Cr) in January 2023. The deal was aimed at leveraging synergies with Adara’s tech stack and strengthening RateGain’s position as a viable tool for its clients’ commercial teams. 

Additionally, the acquisition also opened the door for the listed new-age tech company to access more than 50 travel marketing organisations in the US.

At the time of the deal, the consolidated entity cumulatively managed 30 Bn data points and processed more than 200 Bn ARI (availability, rates, and inventory) updates. The two companies together also counted more than 700 partners across 100+ countries under their belt. 

Founded in 2009 by Charles Mi, Adara is a data collection and management platform that offers business intelligence solutions such as AI-enabled data service to travel and hospitality companies for optimal consumer engagement.

Back then, Adara was said to deploy AI to collate 24 Bn data elements from across 130 countries, which, in turn, helps enterprises spur engagement with consumers and increase profitability.

Lendingkart Bags Upwards Fintech 

Fintech giant Lendingkart acquired digital lendingtech platform Upwards in February 2023 in a deal pegged between INR 100 Cr and INR 120 Cr. 

The acquisition enabled Upwards to access Lendingkart’s credit, capital and distribution capability to further deepen its presence across the country. 

Additionally, the acquisition paved the way for Lendingkart to bolster its offerings, especially in the SMB segment, by leveraging Upwards’ tech stack. Lendingkart also received access to the startup’s credit underwriting engine to streamline the overall user experience and the lifecycle of loan disbursement. 

Upwards continues to operate as an independent entity led by its existing leadership. 

Founded in 2014 by Harshvardhan Lunia, Lendingkart offers loans to SMBs and MSMEs. Backed by Fullerton Financial Holding, Bertelsmann and Mayfield India, the startup claims to have disbursed more than $1 Bn worth of loans since its inception.

On the other hand, Upwards, launched in 2017 by Abhishek Soni and Nimesh Verma, is a lendingtech platform that offers personal loans to salaried professionals and operates a proprietary underwriting engine that analyses more than 500 data points to ascertain the creditworthiness of a user. 

The Mumbai-based startup is backed by India Quotient, Mayfield, among others, and claims to have disbursed loans worth more than INR 500 Cr across 200+ cities, since inception. 

ReadyAssist Snaps Speedforce 

Roadside assistance startup ReadyAssist acquired two-wheeler servicing chain SpeedForce for a sum of $10 Mn in a cash and stock deal. 

At the time of the transaction, SpeedForce said the deal would enable the consolidated entity to set up more than 1,000 workshops in 2024, and an additional 4,000 outlets in the next five years.

SpeedForce was incorporated in 2012 by Kapil Bhindi, Deepen Barai and Ashok Shah. Following a multi-brand two-wheeler servicing franchise model, SpeedForce offers roadside assistance to riders, including pick up and drop facility, on-road breakdown support, insurance support, annual maintenance contracts, warranty program on spare parts, and lubricants, among others. 

Meanwhile, founded in 2018 by Vimal Singh SV, ReadyAssist offers roadside support to vehicle owners. Working in liaison with service providers, the startup offers services such as on-road repair, battery jumpstart, fuel delivery, key unlocking facilities, towing, flat tire repair and other allied services. It also offers doorstep full-bike service.

The deal was announced two months after ReadyAssist secured $5 Mn in a pre-Series A funding round led by Howen International Fund.

OfBusiness Ventures Into Food Processing By Acquiring Koeleman India 

To venture into the food processing sector, B2B marketplace OfBusiness acquired 100% stake in Koeleman India, a subsidiary of Netherlands-based Koeleman Foods International, in April for $10 Mn. 

Bengaluru-based Koeleman India processes fruits and vegetables and supplies them to major food corporations in the US, Europe, and Australia.

Through this acquisition, OfBusiness gained access to the food processing facility and export markets of Koeleman. 

Founded in 2016 by Asish Mohapatra, Ruchi Kalra, Vasant Sridhar, Bhuvan Gupta and Nitin Jain, OfBusiness sources raw materials from SMBs and MSMEs. The startup also provides cash-flow-based financing to SMEs through its financial arm Oxyzo, which became a unicorn in March 2022.

OfBusiness reported a 130% increase in its FY23 net profit to INR 463.2 Cr, while operating revenue zoomed 115% to INR 15,342.5 Cr.

Razorpay Buys B2B Digital Billing Startup BillMe 

In a bid to strengthen its omnichannel play, fintech unicorn Razorpay bought paperless billing solutions provider BillMe for an undisclosed amount in September. At the time, Razorpay said the move would help it engage more efficiently with end customers.

Established in 2018 by Jai Hemrajani, Rupam Jain and Kuber Pritmani, BillMe claims to have catered to over 4,000 businesses to date. Currently, the startup manages over 15,000 retail points of sale. It counts the likes of McDonald’s, Burger King, Decathlon, Baggit, Relaxo Footwear, and Cinepolis as its customers.

Though the two sides did not disclose the financials of the deal, the acquisition amount was estimated to be around $10 Mn.  

Razorpay said that the acquisition would help it serve its aim of converting bills into multidimensional tools for merchants to understand, engage, and target their customers much more effectively.

Fintech Startup Siply Acquires Chit Fund App myPaisaa 

In February, Bengaluru-based fintech startup Siply announced the acquisition of chit fund app myPaisaa for $7.5 Mn. The acquisition was aimed at offering customers innovative, fully digital, sachet financial services, all while driving growth and financial inclusion. 

Founded in 2020 by Ravindranath Kamma & Veera Praveen Reddy, myPaisaa is a regulated digital chit-fund application, which distributes chits licenced by the Government of India and the Registrar of Chit Funds. The app allows users to save through its multiple investment plans.

On the other hand, Simply, launched in 2020 by Sousthav Chakrabarty and Anil Bhat, is a micro-savings platform, which allows people to invest in mutual funds, gold, and other assets for as little as INR 1. The startup started operating with three centres and now claims to have 14 branches in three states.

Back then, the startup had plans to launch 1,000 branches across 115 cities in India over the next three years.

The post The Big Moves Of 2023: A Look Back At The Biggest Acquisitions In The Startup Ecosystem appeared first on Inc42 Media.