Bengaluru-based business-to-business (B2B) ecommerce unicorn Udaan has fired close to 120 employees, just within a week after scooping up $340 Mn in its Series E funding round.

Although, it could not be ascertained which verticals were impacted by the layoff, but as per Moneycontrol’s report, the downsizing has majorly affected staff across marketing, finance and operations.

Confirming the development to Inc42, an Udaan spokesperson said that the company is working towards providing all requisite support to the impacted employees, which includes medical insurance and compensation package.

“Over the last few years, we have made significant investments to build a solid and sustainable business. We believe in efficiency as a driver of profitable growth and are continuously making efforts to enhance efficiency, grow business sustainably and further improve customer experience,” the spokesperson said.

“We have already made significant progress in our journey towards building a profitable business and continue to make relevant interventions to our already proven business model, while remaining customer-centric and agile. However, these interventions have also resulted in some redundancies in the system,” the spokesperson added.

Founded by Vaibhav Gupta, Sujeet Kumar and Amod Malviya, Udaan enables supply chain and logistics operations focused on B2B trade. It claims to enable daily delivery across over 1,000 cities and 12,500 pin codes through udaanExpress. It counts the likes of Lightspeed, Microsoft and Tencent among its backers. 

Last Thursday, the company raised fresh capital led by UK-based savings and investment firm M&G Prudential, with participation from its existing investors Lightspeed Venture Partners and DST Global.

Udaan plans to use these funds to further strengthen customer experience, market penetration, and strategic vendor partnerships, and to reinforce long-term supply chain and credit capabilities.

Earlier, Udaan conducted operations with a nationwide scope but has recently opted for decentralisation. Each warehouse now houses multiple products spanning categories such as FMCG, Food, Lifestyle, etc, as per the report.

In the past, the FMCG team operated on a national level; however, the new approach involves organising operations on a cluster basis. This means that distinct teams will be assigned to different clusters, each responsible for overseeing all products within their designated cluster, regardless of categories.

In FY23, Udaan saw its operating revenue shrink by 43% to INR 5,609 Cr from INR 9,897.3 Cr in the previous fiscal year.

The post Udaan Fires 120 Employees Within A Week Of Raising $340 Mn appeared first on Inc42 Media.

Direct-to-consumer (D2C) snacking brand Farmley has raised $6.7 Mn (INR 55.6 Cr) in a Pre-Series B funding round led by BC Jindal Group, with participation from existing investors DSG Consumer Partners, Omnivore and Alkemi Partners.

The New Delhi-based D2C brand will deploy the fresh proceeds for product innovation, diversifying distribution channels and amplifying brand building.

Founded by Akash Sharma and Abhishek Agarwal in 2017, Farmley offers dry fruits and nuts in different flavours and snacking formats such as roasted peri peri makhanas, thai chilli cashews and date bites, among others.

It is available on all ecommerce and quick commerce channels like Amazon, Flipkart, Blinkit, Zepto, Instamart and Big Basket. It is also present in over 10,000 retail outlets across 50 Indian cities and aims to deepen its presence across offline retail touchpoints.

The startup has also onboarded former Indian cricket captain Rahul Dravid as its brand ambassador.
It claims to have crossed the annual recurring revenue (ARR) of INR 300 Cr, growing by over 400% for the past two years. It has also turned EBITDA positive.

“This new round of investment brings us a step closer to our mission of becoming a household brand and contributing to a healthier world. These funds will play a pivotal role in fuelling our product innovation efforts, in diversifying distribution channels and in amplifying the brand-building efforts,” Sharma said.

“With the increasing awareness about health and wellness, consumers are looking for options that not only taste good but also provide nutritional value. This fresh infusion of funds will allow us to take our brand to new heights and reach a wider audience of snack enthusiasts,” Agarwal said.

Earlier in 2022, Farmley raised $6 Mn in its Series A funding round led by DSG Consumer Partners and Alkemi Growth Capital.

India’s D2C market is likely to reach a size of $100 Bn by 2025. According to Inc42’s analysis, while the beauty and personal care (28.6%) segment tops the D2C market in India, it is closely followed by the food and beverages (F&B)industry at 27%. The F&B segment is expected to grow to $68 Bn by 2030.

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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.

Mukesh Ambani’s Reliance Industries Ltd (RIL) and Walt Disney Co. are reportedly in the process of finalising a non-binding term sheet for the merger of their media and entertainment operations in India.

A newly-formed subsidiary of Reliance’s Viacom18 will reportedly absorb Disney’s Star India through a share swap deal in January, as per the discussions.

The talks are on to finalise a business plan that involves an immediate capital investment of approximately $1-1.5 Bn. The ultimate shareholding structure and valuation of the entity will be determined based on the cash infusion from both Reliance and Disney.

The board is anticipated to have equal representation from Reliance and Disney, with a minimum of two directors each. Bodhi Tree, led by Uday Shankar and holding the second-largest stake in Viacom18 after Reliance at 15.97%, is expected to secure a seat on the board. Additionally, the inclusion of at least two independent directors is under consideration.

Before finalising the term sheet, both parties are expected to conduct crucial meetings. Following this, an accelerated timeline is anticipated for announcing the merger, with a potential target date as early as the end of January.

Once the term sheet is agreed upon and confirmatory due diligence is completed, the official valuation process will commence. Independent valuers will be involved in determining the valuation of the merged entity.

Additionally, Disney is likely to grant a five-year exclusive subscription video-on-demand (SVOD) content license for Disney+ originals and its library content to the joint venture company.

As part of the agreement, there is expected to be a five-year lock-in period, with exceptions allowed only in the case of an IPO of the merged company. Distribution channels and access to Jio Platforms will also be made available to the joint venture on terms agreed upon by both parties. Furthermore, a list of competitors with which any engagement is prohibited will be established.

Disney acquired the entertainment assets of 21st Century Fox in 2019 for $71.3 Bn. Post the acquisition, Star India came under the aegis of Disney and Hotstar was rebranded as Disney+Hotstar.

At the time of acquisition, Star India was considered as one of Fox’s strongest businesses, and it was an important part of Disney’s plan to build its streaming business in India.

Disney+Hotstar has been struggling to retain its paid users. Banking on the love of cricket in India, the company saw its paid subscriber growth scale to a record 61.3 Mn at the end of the quarter ended September 2022. 

As JioCinema began streaming the IPL for free, Disney+ Hotstar saw subscribers leave in droves. Facing challenges in retaining paid subscribers currently, Disney+ Hotstar experienced a surge in paid user growth to a peak of 61.3 million by the end of the quarter in September 2022. However, the strategy of streaming IPL for free on JioCinema led to a significant exodus of subscribers from Disney+ Hotstar. As of July 2023, the paid user base plummeted to 40.4 Mn.

The streaming platform has been struggling to maintain its leadership position due to a combination of factors, including the absence of high-quality English content and limited variety in its offerings, contributing to the decline in subscriber numbers, while Reliance’s JioCinema is scaling up rapidly. 

Disney Star also undertook a massive internal reshuffle earlier this year. As per Disney Star, the changes will allow the company to streamline its revenue, marketing and operations functions.

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Naturohabit Private Ltd, which owns direct-to-consumer (D2C) beauty and wellness care brand Nat Habit, has raised $10.2 Mn (INR 85 Cr) as a part of its Series B funding round led by Bertelsmann India Investments.

The round also saw participation from existing investor Fireside Ventures, with Amazon India Fund, Mirabilis Investment Trust and Sharrp Ventures joining the cap table.

The New Delhi-based startup will use the fresh capital for research and development, product diversification, brand building, offline expansion and hiring talent.

Founded in 2019 by Swagatika Das and Gaurav Agarwal, Nat Habit offers organic skincare products such as hair oils, masks, scrubs and face creams.

The startup said that it will use around $2 Mn from the latest fundraise to facilitate exits to its early-stage backers, offering returns of 4.5-5 times their initial investment within a four-year period.

In April last year, Nat Habit raised $4 Mn in its Series A funding round led by Fireside Ventures.

The startup currently claims to have an annual recurring revenue (ARR) of INR 82 Cr and aims over 4X growth to INR 350 Cr ARR in the next two years.

India’s D2C market, which is likely to reach a size of $100 Bn by 2025, has grown exponentially in the last few years. Several factors including the Covid pandemic, higher internet penetration, growth of digital infrastructure and rise in the number of millennials, among others, have shored up the D2C brands. In fact, the space has been gaining traction from a lot of investors for the past few years.

For instance, last month, Innovist, the parent entity of D2C consumer brands Bare Anatomy and Chemist at Play, raised $7 Mn in its Series A funding round led by Amazon Smbhav Venture Fund.

Several other existing investors, including 72 Ventures, the family office of Nykaa founder Falguni Nayar and former KKR India head Sanjay Nayar, Accel India and Sauce.vc, also participated in the round.

Home to more than 190 Mn digital shoppers, India has the world’s third-largest online shopping base in the world. It is this burgeoning ecosystem that the new-age D2C brands aim to capitalise on, on the back of the growing appetite of Indian consumers for innovation and waning loyalty towards traditional players, as per Inc42’s report.

Of this, fashion and clothing startups have the highest potential and are expected to grow to $43.2 Bn by 2025, according to an Inc42 report.

Some of the emerging D2C brands including Mamaearth, CaratLane and Nua merely took a couple of years to reach INR 100 Cr revenue mark.

The post Nat Habit Pockets $10.2 Mn To Boost Skincare Product Offerings, Grow Offline appeared first on Inc42 Media.

Hector Beverages, the parent company of refreshing drinks maker Paper Boat, saw its net loss widen 71% to INR 90.6 Cr in the financial year 2022-23 (FY23) from INR 53 Cr in FY22 due to higher cash burn.

The startup’s bottom line took a hit despite its revenue from operations rising 56% to INR 504 Cr during the year under review from INR 324 Cr in FY22.

Founded in 2010 by former Coca-Cola executives Neeraj Kakkar and Neeraj Biyani, Paper Boat sells fruit-based drinks in Indian flavours such as aam panna (raw mango) and jaljeera (spicy, tangy lemonade). Besides, it also sells dry fruits and healthy snacks, including chikki and aam papad.

Biyani exited the company in December 2022 and has launched a new skincare brand Asaya.

Paper Boat primarily earns revenue from sales of its products. In FY23, it sold fruit juices worth INR 474.9 Cr and food items worth INR 28.7 Cr.

Including other income, Paper Boat’s total income rose 56% to INR 508.5 Cr during the year under review from INR 325.1 Cr in the previous fiscal year.

Where Did Paper Boat Spend?

In line with the growth in its top line, Paper Boat’s total expenses rose to INR 599.1 Cr in FY23 from INR 378.1 Cr in the previous fiscal year.

Material & Stock Cost: While purchase of stock-in-trade rose to INR 205.2 Cr in FY23 from INR 149.4 Cr in FY22, cost of material consumed climbed to INR 182.3 Cr from INR 93.6 Cr in the previous fiscal year.

Employee Costs: Employee benefit expenses rose 30% to INR 54.7 Cr in FY23 from INR 42 Cr in FY22. Employee costs comprise salaries, PF contribution, gratuity, among others.

Advertising Spend: The startup, which is known for its nostalgia-infused campaigns, spent INR 13.2 Cr on advertising and sales promotion in FY23, a jump of 11% from INR 11.9 Cr in FY22.

Hector Beverages counts the likes of Sofina Ventures, Catamaran Ventures, and A91 Emerging Fund among its backers. The startup last raised a funding of INR 400 Cr ($50.1 Mn) from Lathe Investment Pte Ltd, which is owned by Singapore-based sovereign fund GIC, in 2022.

Paper Boat faces competition from the likes of Lahori and Raw Pressery in the Indian food and beverage (F&B) market. It also competes against FMCG giants such as Dabur, ITC, Pepsico, and new-age startups such as Beyond Water, and Coolberg.

The country’s F&B industry has been expanding by leaps and bounds and is further estimated to become a $156.25 Bn market by 2026.

The post Paper Boat’s FY23 Loss Surges 71% To INR 90.6 Cr, Revenue Crosses INR 500 Cr Mark appeared first on Inc42 Media.

Retail giant Walmart said its digital payments subsidiary PhonePe has reached a total payment value (TPV) of $1.3 Tn, equating with some of the largest fintech firms in the US market.

“PhonePe is doing an amount of – the equivalent in their business is TPV, Total Payment Volume versus GMV in our business. They are doing roughly $1.3 Tn in Total Payment Volume. And that is at the same scale as the largest fintech players in the US. Like, to put that in context. That have market caps there, in some cases, north of $100 Bn,” John David Rainey, chief financial officer of Walmart said while speaking at Morgan Stanley Global Consumer and Retail Conference.

PhonePe was reportedly planning for an initial public offering (IPO) in 2024-2025. The fintech platform also secured an additional $200 Mn in primary capital from Walmart at a pre-money valuation of $12 Bn in March this year.

While Walmart also has ecommerce giant Flipkart in its portfolio, Rainey said both entities are contemplating a potential path towards an IPO or going public in the future.

“And as they inch towards that, you’ll likely see improvements in profitability as well. And so, part of the improvement in our P&L is the reduction of losses in their P&L as we consolidate, and both of them have executed very well and I have got a high degree of confidence in their ability to continue to do so,” he added further.

Earlier this year, Flipkart Group CEO Kalyan Krishnamurthy said that the company would look at multiple geographies, including India, for its public issue, said to be in the range of $60-70 Bn.

Flipkart India, the business-to-business (B2B) arm of Flipkart, saw its standalone net loss balloon over 42% to INR 4,845.7 Cr in the financial year 2022-23 (FY23) from INR 3,404.3 Cr in the previous fiscal year. The company’s B2B arm saw its operating revenue increase a mere 9.7% to INR 55,923.9 Cr.

Meanwhile, PhonePe recorded a revenue of INR 2,914 Cr in the financial year ended March 31, 2023, an increase of almost 77% from INR 1,646 Cr in FY22. The startup, in a statement, attributed the increase in revenue to growth in money transfers, mobile recharges and bill payments.

The platform has been diversifying its product offerings through many new launches. It also launched the Indus Appstore Developer Platform for Android app developers to take on giants Apple and Google. PhonePe also announced its foray into the merchant lending space as well.

The post PhonePe Among Top Fintech Firms With $1.3 Tn Total Payment Value: Walmart CFO appeared first on Inc42 Media.

At the time when the real money gaming industry is reeling under the impact of the GST Council’s decision to hike the GST rate to 28%, gaming startup Gameskraft crossed the INR 1,000 Cr mark in consolidated net profit in the year ended March 31, 2023.

On the back of strong growth in its business, Gameskraft’s profit rose 14.2% to INR 1,061.9 Cr in the financial year 2022-23 (FY23) from INR 930.4 Cr in FY22.

Founded in 2017 by Prithvi Raj Singh, Deepak Singh, Rajkumar Taneja, and Sindhu Devi Jha, GamesKraft operates real money gaming platforms such as RummyCulture, RummyPrime, Playship, Pocket52 and LudoCulture.

The startup primarily earns revenue from facilitation of gameplay in the form of commission or platform fees charged to the users as a fixed percentage of the amount they spend as entry fees.

Gameskraft’s revenue from operations jumped 24.8% to INR 2,662.5 Cr in FY23 from INR 2,133.1 Cr in FY22.

Including other income, total income rose xx% to INR 2,732.1 Cr from INR 2,153.2 Cr in FY22.

Where Did Gameskraft Spend?

Gameskraft’s total expenses soared 45.7% to INR 1,300.7 Cr in FY23 from INR 892.8 Cr in FY22.

Advertising and Marketing Expenses: The startup’s marketing expenses saw a sharp rise of 346% to INR 408.57 Cr in FY23 from INR 91.51 Cr in FY22, accounting for the biggest portion of the total expenditure. Its business promotion cost also rose 96% to INR 208.1 Cr in FY23 from INR 106.4 Cr in the previous fiscal year.

It must be noted that the costs incurred by the company towards free games and contribution towards player prize money in case of tournament are recorded as an expense and reported as part of advertisement, promotional and marketing expenses.

Employee Cost: Employee benefit expenses continued to account for a significant share of the startup’s total expenditure. Employee costs increased 57% to INR 374.9 Cr from INR 208 Cr in FY22.

While the startup posted a rise in its top and bottom lines, the numbers pertain to the period before the GST Council’s decision to hike GST for real money gaming. Following the GST Council’s decision, Gameskraft decided to discontinue its fantasy offering, Gamezy Fantasy.

GamesKraft is also among the gaming majors that received GST notices from the government. In September, the Supreme Court stayed Karnataka High Court’s judgment, which quashed a goods and services tax (GST) notice against Gameskraft for alleged tax evasion to the tune of INR 21,000 Cr.

The post Amid Tax Woes, Gameskraft’s FY23 Profit Jumps 14% To Cross INR 1,000 Cr Mark appeared first on Inc42 Media.

Tech giant Google has shortlisted 20 artificial intelligence (AI)-first startups in the seed to Series A stage for the eighth batch of its startup accelerator in India.

“These startups represent cutting-edge AI innovation in India, tackling diverse challenges, including discovering antibodies, detecting identity fraud, helping small and medium-sized businesses (SMBs) to reach more customers, reducing developers’ repetitive work and focusing on building solutions that use AI to address systemic challenges,” Google said in a blog post on Friday (December 8).

The company aims to foster an environment that nurtures innovative startups and fuels the rapidly evolving AI landscape of the Indian startup ecosystem, it added.

The accelerator offers a three-month equity-free programme where selected startups get mentorship and support across areas such as artificial intelligence/machine learning, cloud, user experience, Android, web, product strategy and growth. It will also conduct workshops focused on product design, customer acquisition and leadership.

The current batch started this week with a week-long in-person boot camp, which includes training workshops and mentorship support around product, design, tech, growth and people.

What Are These 20 Startups Building?

Beatoven.ai

An AI-powered royalty-free background music creation platform for content creators

DhiWise

An AI-powered DevTool that enables developers to deliver production-ready source code for web and mobile apps 10x faster for all kinds of apps

Endimension

An end-to-end AI platform for radiology diagnosis

FilterPixel

An AI software that saves hours by automatically selecting the best photos from thousands of photos and then editing them automatically as per the style of the photographer

GalaxEye Space

A platform which is building next-generation imaging satellites using multiple sensors and generative AI for night/cloud-proof imaging

Gan.ai

A video personalisation platform that leverages generative AI to create personalised videos at scale from a single recording

Goodmeetings

A generative AI-driven video sales platform that helps salespeople sell 10X better on video

immunitoAI

A TechBio startup developing AI-generated novel antibody therapeutics with pre-defined drug properties

Kalam

A personalised mentorship and discipline-facilitating learning ecosystem tapping AI to address the challenges of affordability and accessibility to quality education in India.

Keploy

An open-source TestGPT toolkit for automating integration testing, converting network calls to test cases and data mocks for APIs and enabling production incident replays

Mugafi

Reshaping entertainment through Ved, an AI copilot that empowers storytellers to effortlessly create captivating novels or scripts, transcending traditional storytelling boundaries

NeuroPixel.AI

A deep tech startup working in the intersection of generative AI and computer vision, primarily focused on fashion ecommerce

Onward Assist

A platform which helps improve cancer outcomes by assisting the cancer biopsy reporting process through an AI-based solution that assists cancer pathologists with accurate scoring, tumor detection and workflow software.

Pepper Content

A content marketing platform that helps companies scale content marketing through expert talent and generative AI

Prescinto

An AI-powered SaaS platform that regularly collects renewable energy plant (solar, wind, storage) data, applies ML/AI models to this data to identify causes for underperformance and suggests work orders to increase electricity generation from these renewable plants

Presentations.AI

An AI-powered platform that lets everyone effortlessly create stunning presentations fast

SpoofSense.ai

A startup which helps businesses detect identity fraud using computer vision

Wright Research

A startup which aims to redefine investment in India with AI-driven, personalized quantitative strategies, delivering exceptional performance and risk management through a user-friendly, transparent digital platform

Zocket

An AI-powered SaaS platform for SMBs to grow their business with high-performing digital ads

ZuAI

An AI self-study buddy for students

The post Google Picks 20 AI-First Startups For Its India Accelerator Programme appeared first on Inc42 Media.

HRtech unicorn Darwinbox’s consolidated net loss soared 2.4X to INR 158.25 Cr in the financial year 2022-23 (FY23) from INR 65.72 Cr in the previous fiscal year on higher cash burn.

The Microsoft-backed startup’s bottomline took a hit despite its operating revenue almost doubling to INR 224.04 Cr in FY23 from INR 116.73 Cr in FY22. 

Founded in 2015 by Chaitanya Peddi, Jayant Paleti and Rohit Chennamaneni, Darwinbox is a cloud-based HRtech startup that caters to companies’ HR needs across recruitment, onboarding, core transactions (leaves, attendance, directory), payroll, travel and people analytics, among others.

Being a SaaS provider, Darwinbox earns a majority of revenue from sale of services. The startup earned INR 177.95 Cr from subscription services in FY23.

Including other income, Darwinbox’s total revenue grew over 2X to INR 249.5 Cr during the under review from INR 121.21 Cr in FY22.

Where Did Darwinbox Spend?

The rise in the startup’s expenses outpaced the growth in its revenue during the year under review. Darwinbox’s total expenses soared 2.2X to INR 407.22 Cr in FY23 from INR 186.93 Cr in the previous fiscal year.

Employee Costs: Employee benefit expenses continued to account for the biggest portion of the startup’s total expenditure. Employee costs zoomed 2.1X to INR 222.31 Cr from INR 103.59 Cr in FY22. The sharp increase is an indication that the startup might have increased its headcount.

Cloud Hosting Expenses: Darwinbox’s cloud hosting expenses jumped 2.3X to INR 48.21 Cr in FY23 from 20.73 Cr in FY22. Software and technology cost also quadrupled to INR 16.66 Cr from INR 4.14 Cr in the previous fiscal year.

Advertising Expenses: Darwinbox’s advertising and promotional expenses grew 4.3X to INR 21.66 Cr in FY23 from INR 5.05 Cr in the previous year.

Backed by the likes of Peak XV Partners (formerly Sequoia India) and Lightspeed India,  Darwinbox entered the unicorn club in early 2022 after raising $72 Mn in a round led by Technology Crossover Ventures (TCV).

In FY23, Darwinbox bagged funding from Microsoft and State Bank of India.

Darwinbox was eyeing a public listing by 2025, its cofounder Chennamaneni said earlier, adding the startup was aiming to make its India operations profitable by 2023. 

The startup currently claims to serve over 800 organisations across over 115 countries and counts Adani, MatchMove, and Mahindra among its clients.

The post HRtech Unicorn Darwinbox’s FY23 Loss Surges 2.4X To INR 158 Cr appeared first on Inc42 Media.

Nithin and Nikhil Kamath-led stock broking platform Zerodha’s net profit rose 37% to INR 2,908.9 Cr in the financial year 2022-23 (FY23) from INR 2,120.3 Cr in the previous fiscal year as the business continued seeing strong growth. 

Zerodha, founded in 2010 by the Kamath brothers, is a bootstrapped discount brokerage that allows users to trade in stocks and invest in mutual funds. The Bengaluru-based invest tech startup generates revenue from brokerage sales, user onboarding collections, and the sale of its premium tech products such as Kite Connect API.

Its operating revenue grew 37% to INR 6,832.8 Cr in FY23 from INR 4,977.3 Cr in the previous year. Of this, fees and commission charges accounted for 84% at INR 5,727.2 Cr. In FY22, Zerodha earned INR 4,128.9 Cr from fees and commission charges. 

Including other income, the bootstrapped unicorn’s total income zoomed 38% to INR 6,877.1 Cr during the year under review from INR 4,993.6 Cr in the previous fiscal year. 

Where Did Zerodha Spend?

In line with the growth in its topline, Zerodha’s total expenses rose 38% to INR 2,992.7 Cr in FY23 from INR 2,165.1 Cr in the previous fiscal year. 

Fees And Commission Expenses: As a brokerage, fees and commission account for the largest chunk of expenses for Zerodha. In FY23, these expenses stood at INR 2,223.4 Cr, accounting for nearly 75% of the total expenses. This number stood at INR 1,581.1 Cr in FY22.

Employee Benefit Expenses: Zerodha’s employee costs shot up 36% to INR 623.2 Cr in FY23 from INR 459 Cr in FY22. Interestingly, the startup spent a whopping INR 235.8 Cr on ESOP expenses during the year under review as against INR 77.5 Cr in FY22.

On a unit economic basis, Zerodha earned INR 2.3 in operating revenue in FY23 for every rupee of expense.

Earlier, while disclosing some parts of the financial statements for FY23, Zerodha cofounder and CEO Nithin Kamath attributed the growing increase in futures and options trading for the growth in the startup’s topline and bottomline.

“There’s still phenomenal interest in the markets, especially in futures and options. This has been the primary reason for the increase in revenue and profitability over the last three years. We continued to see phenomenal growth even in FY 22/23. That said, the business has plateaued in terms of revenue and profitability this financial year until now,” Kamath said.

Zerodha competes against the likes of Groww and Upstox, which are helping millennials enter the stock market with a user-friendly app interface with easy one-tap creation of free demat accounts. 

Kamath claimed that Zerodha is the only broker in the country to charge an account opening fee of INR 200 and hinted that the company has no plans to change this.

Later, squashing all speculations about valuation, Kamath said that the startup has been valuing itself at INR 30,000 Cr, or about $3.6 Bn, for all buybacks.

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

Meanwhile, Groww surpassed Zerodha in terms of active investors at the end of September 2023. As per the 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.

The post Zerodha Made INR 2.3 In Revenue For Every Rupee Spent In FY23 appeared first on Inc42 Media.

Shares of foodtech giant Zomato nudged higher during the early trading session on Friday (December 8), on the back of a large block deal.

Around 1.06% stake of the company or 9.35 Cr shares exchanged hands on the block deal. The shares exchanged hands at an average price of INR 120.5 apiece, taking the total transaction value to INR 1,127 Cr.

However, the buyers and sellers in the transactions are not known.

During the early session of the day, Zomato shares were trading at INR 123.6 apiece on the BSE, 1.3% up from its previous close.

On Thursday (December 7), Inc42 reported, citing multiple media reports, that Japanese tech investor SoftBank’s SVF Growth is looking to offload another 1.1% stake in Zomato in a block deal worth $135 Mn.

As per the reports, SVF Growth is expected to sell the shares at INR 120.5 apiece, which is a slight discount to Zomato’s close at INR 121.8 on the BSE on Thursday .

At the end of September 2023 quarter, SVF Growth (Singapore) Pte Ltd held a 2.17% stake in Zomato with 18.71 Cr shares. Following that, in October the Japanese investor sold a 1.1% stake, or 9.36 Cr shares, in the foodtech major.

In August this year, SVF Growth offloaded its 1.15% stake, or 10 Cr shares, in Zomato, bringing down its holding in the company to 2.17%.

Last week, another international investor Alipay exited Zomato by selling its entire 3.44% stake in the company via multiple block deals worth a cumulative INR 3,336.7 Cr. However, the shares were lapped up by investors like Morgan Stanley and Fidelity Investment. 

Investment firm Tiger Global also exited Zomato in August by selling 12.24 Cr shares worth INR 1,123 Cr, amounting to 1.44% stake.

Zomato reported its second consecutive profitable quarter, with profit after tax surging to INR 36 Cr during the September quarter of the financial year 2023-24 (FY24). This was an 18X jump from PAT of INR 2 Cr in the preceding quarter.

Meanwhile, Zomato and Swiggy, the duo, reportedly received notices for a cumulative goods and services tax (GST) worth around INR 1,000 Cr, which is the 18% tax levied on the total amount collected by them as delivery fees ever since they started offering food delivery services.

The post Zomato Sees INR 1,127 Cr Block Deal, SoftBank Likely Seller appeared first on Inc42 Media.

Tata Motors is reportedly urging Indian officials not to lower import taxes of 100% on electric vehicles (EVs) and to protect the domestic industry and investors, as the government evaluates Elon Musk-led US electric car maker Tesla’s plan to foray into the market.

While India is trying to boost domestic manufacturing and EV adoption, Tesla is looking to make a $2 Bn investment in India for setting up a local factory in the country, only if the government cuts import taxes on its EVs to as low as 15% during the first two years. 

During discussions with Prime Minister Narendra Modi’s office and other departments, Tata has opposed the proposal, arguing that its investors made decisions based on the assumption that the existing tax regime, favouring local entities, would remain unchanged, Reuters reported.

Tata is making the case that India’s EV industry requires additional government support during its early growth stages. The company highlights the contrast with imported gasoline or diesel cars, which still face taxes of up to 100%, despite the maturity of the industry.

Last month, it was reported that the Indian government is considering the possibility of implementing tax reductions on imported fully assembled EVs for a duration of up to five years. This strategic move aims to attract companies such as Tesla to not only sell but also potentially manufacture its electric cars within the country.

The government is formulating an EV policy designed to enable global car manufacturers to import electric vehicles at reduced duty rates, provided they commit to eventually manufacture EVs in India.

Another major player in the Indian auto sector, Mahindra & Mahindra, has also raised concerns with government officials on lowering the EV tax plan.

The government is making efforts to address the worries of local automakers. Despite these concerns, the government is strong in its position to facilitate easier entry into the EV sector for foreign players, aligning with Prime Minister Modi’s vision of 30% of annual car sales in India to be electric by 2030, compared to the current 2%.

“We will come out with a policy that addresses everyone’s fears,” a government official said, as per the report.

“If India needs to be an EV hub, we need more manufacturers … Local industry need not fear that Tesla or anyone else will wipe them out,” the official added.

India’s EVs market has garnered interest from both international and local tech firms, as well as emerging startups. Acer, the Taiwanese tech giant, has recently made its foray into the Indian EV market by licensing its brand to eBikeGo, a mobility startup.

Meanwhile, Vietnamese electric car maker VinFast also announced plans to invest $150 Mn-$200 Mn in India to set up a completely knocked down (CKD) assembly unit.

Alongside Tesla, automotive giants such as Audi and Mercedes-Benz are also eagerly positioning themselves to seize opportunities within the burgeoning Indian EV ecosystem.

EV registrations in India, across vehicle categories, stood at 1,43,325 units in November, a year-on-year jump of over 36%, as per Vahan data.

The post Tata Motors Opposes Tax Cut On EV Import Amid Tesla’s India Foray Plans appeared first on Inc42 Media.

Bhavish Aggarwal-led Ola Electric is reportedly planning to file its draft red herring prospectus (DRHP) in the next two weeks as it gears up to go public early next year.

The EV unicorn is adopting an aggressive retail strategy, such as product launches at discounted rates and price reductions on existing offerings, aiming to fortify its market share before going public, Mint reported.

Earlier this week, Ola Electric has slashed the price of its S1 X+ e-scooter by INR 20,000. The vehicle is now available at INR 89,999.This is a part of the company’s ‘December to Remember’ campaign to further accelerate sales.

The startup wants to file its draft share sale papers before December 20, aiming to precede the year-end holidays when bankers and financial market participants traditionally take a break. Moreover, it wants to ensure the initial public offering (IPO) happens before next year’s Lok Sabha elections.

Recently, Ola Electric converted into a public company. As per reports, the startup plans to raise $700 Mn and is looking to target a market capitalisation of $10 Bn through its IPO.

Ola Electric raised INR 3,200 Cr ($384 Mn) in a funding round, which was a mix of equity and debt. While the equity part was led by Temasek, the debt part of the round was led by the State Bank of India.

It has raised $998 Mn in total funding and counts Alpha Wave, DIG investment as among its other marquee investors.

Ola Electric’s net loss almost doubled to INR 1,472 Cr in the financial year ended March 2023 (FY23) from Rs INR 784.1 Cr in the previous fiscal year on the back of the company’s rising expenses.

The startup reported an EBITDA loss of INR 1,318 Cr in FY23 as its total expenses flared up to INR 3,383 Cr as compared to INR 1,240 Cr in FY22.

Electric two-wheeler registrations grew 14% month-on-month (MoM) in November to cross the 85,000 units mark on the back of high demand for top electric vehicle manufacturers during the festive season. Ola Electric retained the top spot with its e-scooter registrations jumping over 14% MoM to 27,331 units in the month.

The post Ola Electric To File IPO Papers Before December 20 appeared first on Inc42 Media.

Shares of One97 Communications Ltd, the parent entity of fintech major Paytm, were locked in the 20% lower circuit at INR 650.65 on Thursday (December 7) following the company’s plan of scaling down its focus on small-ticket loans of less than INR 50K, which predominantly comprise its postpaid loan business.

After opening over 8% lower at INR 744.95 apiece on the BSE, the stock hit 20% lower circuit at INR 650.65.

Paytm shares ended Wednesday’s (December 6) trading session at INR 813.3 on the BSE.

“While we’ll continue to do postpaid, and it may not be the same growth level that we were doing earlier, it will be significantly lower than what we were doing earlier, but it will be a product that will continue,” the fintech major said at an investors call on Wednesday.

Paytm said it will further expand its business to offer high-ticket personal and merchant loans, which would be targeted at “lower-risk and high credit worthy customers”.

Earlier reports surfaced that Paytm temporarily halted its postpaid loan operations as its non-banking financial company (NBFC) partners have become cautious following the Reserve Bank of India’s recent tightening of norms around unsecured lending. One of Paytm’s major lending partners, Aditya Birla Capital, has pulled out of the postpaid partnership.

Although Paytm rejected this report and said Aditya Birla Capital continues to be a partner, the postpaid loan section on the Paytm app currently shows a message saying it is under maintenance.

Paytm said that the postpaid loan product will not be discontinued, but it will be available only to some users.

The fintech major has significantly increased its focus on loan distribution in recent years, resulting in strong growth.

In Q2 FY24, Paytm saw its disbursals increase to 1.32 Cr loans worth INR 16,211 Cr, a jump of 44% and 122% year-on-year (YoY), respectively. The postpaid loans vertical has consistently been the highest contributor to its lending business in terms of value.

BofA, in a recent research note, said that Paytm’s business is likely to be impacted following the RBI’s move to tighten norms for lenders disbursing unsecured loans. The study also noted that as per the fintech giant’s Q2 financials, 56% of its loan value came from the buy now pay later (BNPL) segment, 20% from merchant loans and 24% from personal loans.

The post Paytm Shares Nosedive 20% After It Scales Down Postpaid Loan Biz appeared first on Inc42 Media.

Online makeup and beauty learning platform Airblack has secured $4 Mn (around INR 33 Cr) in its Pre-Series B funding round led by the Michael & Susan Dell Foundation.

The fundraise also saw participation from existing backers such as Elevation Capital and InfoEdge Ventures, as well as other investors like Blume Ventures, Thadani and Pawar Family Trust.

As per a regulatory filing at the Registrar of Companies (RoC), Airblack board has passed a resolution to issue 10 equity and 4,467 Pre-Series B compulsorily convertible preference shares (CCPS) at an issue price of INR 71,162 each to raise INR 32 Cr ($3.8 Mn).

The Michael & Susan Dell Foundation led the funding round with INR 16.32 Cr, while Elevation Capital and InfoEdge (via Beacon Trusteeship) contributed INR 6.33 Cr each. The remaining investment came from Blume Ventures (via Catalyst Trusteeship), Thadani and Pawar Family Trust.

The Pre-Series B CCPS will be converted into equity shares based on their conversion ratio.

The Gurugram-based startup plans to deploy the fresh proceeds for working capital needs, general corporate purposes and business expansion.

This development was first reported by Entrackr.

Founded by Videt Jaiswal, Vaibhav Raj Gupta and Pulkit Pujara in 2019, Airblack provides live, “do-it-together” (DIT) courses primarily in the beauty and online makeup sectors. Initially, it started as a travel company, but later shifted focus to the beauty segment after the pandemic impacted the travel and tourism industry.

Airblack’s latest funding exercise comes after 17 months. It was in June 2021 when the startup last raised $5.2 Mn in its Series A round co-led by InfoEdge Ventures and Elevation Capital.

Startup funding stood at a mere $1.7 Bn in Q3 2023 (July to September quarter), the lowest in the past three quarters, as per Inc42 data. On the year-on-year (YoY) basis, funding in Q3 2023 fell 43.8%, while the number of deals declined 38.6% to 205 from 334 deals in Q3 2022.

The seed stage funding plummeted to $159 Mn in Q3 2023, recording a 55% YoY fall. While the growth-stage startup funding nosedived 71% YoY to $0.4 Bn in Q3 2023, the late-stage investment remained flat at $1 Bn during the quarter versus $1.1 Bn raised in the same period a year ago.

The post Airblack Rakes In $4 Mn Funding To Fortify Its Beauty & Makeup Learning Platform appeared first on Inc42 Media.

Real money gaming unicorn Mobile Premier League (MPL) saw its consolidated net loss plunge 81% to $37.04 Mn in the financial year 2022-23 (FY23) from $194.47 Mn in the previous fiscal year.

M-League Pte Ltd, the Singapore-based parent entity of MPL, saw its revenue from operations soar 63% to $104.6 Mn during the year under review from $64.1 Mn in FY22, as per its filings. 

The unicorn said that revenue from international operations accounted for 38% of its operating revenue in FY23, up from 11% in FY22.

Founded in 2018 by Sai Srinivas Kiran G and Shubh Malhotra, MPL offers games ranging from skill-based fantasy sports to chess and other casual games. While India is the primary market for MPL, it also forayed into the US market in 2021. In the next year, it acquired GameDuell, one of the biggest gaming companies in Europe known for its community card and board games. 

In 2023, MPL entered Africa by partnering with Carry1st, a leading gaming company in the continent. 

Meanwhile, MPL’S other expenses declined over 67% to $95.67 Mn in FY23 from $149.06 Mn in the previous fiscal year, while employee compensation rose over 22% to $71.51 Mn from $58.29 Mn in FY22.

The improvement in MPL’s top and bottom lines come at a time when the online gaming sector in India is reeling under the impact of the GST Council’s decision to levy 28% tax on full face value of bets placed on these platforms.

MPL became the first Indian gaming startup to fire employees this year following the GST Council’s decision to increase the tax rate for the sector. In August, the unicorn laid off 350 employees, saying the increase in GST levy increased the tax burden on it by as much as 350-400%. 

Meanwhile, the Indian entity of MPL saw its FY23 loss fall over 80% to INR 87.2 Cr from INR 449.4 Cr in the previous financial year. Operating revenue rose 36% to INR 814 Cr in FY23 from INR 601 Cr. 

MPL competes against platforms such as Dream11, Fantasy Akhada, and WinZO Games. The Bengaluru-based startup entered the unicorn club in September 2021 after raising $150 Mn from Legatum Capital, Accrete Capital and Gaingels LLC at a pre-money valuation of $2.3 Bn.

Overall, MPL has raised a funding of over $350 Mn till date and counts SIG Global, Pegasus Tech Ventures, and RTP Global among its backers.

The post Gaming Unicorn MPL’s FY23 Net Loss Narrows 81% To $37 Mn appeared first on Inc42 Media.

Bengaluru-based edtech startup Simplilearn fired around 200 employees citing their poor performance over the last few days, sources told Inc42.

The layoffs affected employees at various levels, with the sales team being hit the hardest. Other departments, including marketing and operations, were also impacted by the layoffs, the sources said.

The startup began downsizing last week, starting with vice-president-level positions.

While Simplilearn told the employees that they were being sacked based on their performance, some of the impacted employees claimed that it happened abruptly and the startup hadn’t conducted any performance reviews recently.

“These layoffs were unexpected. Although the company cited the reason for this as poor performance, no performance review was conducted earlier. All of it happened suddenly. Now the existing employees are also under high pressure to get more sales,” one of the employees said.

The impacted employees were suddenly called for a one-on-one interaction with the human resources department and informed that they were being laid off, the sources said.

Meanwhile, without confirming the number of the laid off employees, Simplilearn said that performance-based exits do take place. “Our business is going as per the plan, we are hiring on a need basis across teams. Sometimes, performance-based exits do occur,” a company spokesperson told Inc42.

Founded in 2010 by Krishna Kumar, Simplilearn offers online upskilling courses in segments such as cyber security, cloud computing, project management and data science to students and working professionals.

It also offers courses in association with educational institutions and global organisations like IBM, Microsoft, Amazon, Meta, and KPMG.

In 2021, private equity firm Blackstone acquired a majority stake in the startup for $250 Mn. Last year, Simplilearn raised $45 Mn in a fresh funding round led by venture capital firm GSV Ventures.

Simplilearn’s consolidated net loss surged 26X to INR 149.9 Cr in FY22 from INR 5.6 Cr in the previous fiscal year. Total revenue stood at INR 492.8 Cr as against INR 346 Cr in FY21.

The layoffs come at a time when edtech has been among the hardest-hit sectors due to the ongoing funding winter. Edtech startups have laid off nearly 10,000 employees since the beginning of 2022.

Recently, edtech unicorn PhysicsWallah laid off around 70-120 employees. While reports suggested that the move was part of a cost-cutting exercise, the company claimed that the layoffs were due to performance issues.

The post Exclusive: Blackstone Backed Simplilearn Fires 200 Employees, Blames Poor Performance appeared first on Inc42 Media.

Joining the growing list of Indian startups who have been winding down their businesses amid macroeconomic challenges, Web3 startup Purple Pay has shut down its operations within a year of its launch.

Founded in January this year, Purple Pay is a regulatory-compliant payment protocol using blockchain to facilitate cross-border transactions. It addresses regulatory issues with a KYC-compliant protocol, incorporating ZK-enabled decentralised identity to meet global anti-money laundering regulations.

The merchant offering enables businesses to accept crypto payments in a compliant manner, tapping into the expanding crypto economy.

“After 12 months of building Purple Pay, we have decided to shut it down. Knowing when to shut shop is the hardest part,” cofounder Saumya Saxena announced in a LinkedIn post.

Saxena said that the decision to shut down the operations stemmed from the realisation that compliant transactions were not a priority for the majority of projects.

Additionally, he highlighted the predominant use of cryptocurrency for investment/speculation rather than transactions, resulting in a limited market for purchase-oriented users.

Saxena attributed the challenging landscape to excessive VC-funded players with significant resources, contributing to market saturation. In light of these factors, the decision was made to cease operations.

“We spent so much time building product and understanding ZK KYC only to find there’s very limited demand for it from our users – RWA clients and DeFi projects. I still believe that the compliance narrative will fly eventually and that the only way for crypto to go mainstream would be on the back of regulatory clarity,” he added.

The founders said they would make the Purple Pay platform open-source so that anyone can use and build on top of it.

The startup was also part of the Sony Astar incubation programme, and generated $15K revenue from a $1.5 Mn transaction, securing a $10 Mn LOI for additional sales, Saxena claimed.

The startup also received over $70K in grants/hackathon rewards from entities like Polygon, Wormhole, 0x, Eth India and Jump Pit.

Amid macroeconomic pressure and funding crunch, the year 2023 has seen 16 startups shutting their shops or closing down a segment, with ZestMoney being the latest inclusion to the list. The fintech startup will wrap up operations by the end of December and lay off its entire workforce of 150 employees.

Among other significant shutdowns, CarTrade Technologies recently shut down the auto sales division of its acquired business – OLX or Sobek Auto India Pvt. Ltd. Short video platform Tiki, vernacular content platform Bluepad, coworking space provider Friyey, crypto startup Flint Labs are among some startups which winded down their business this year.

The post Web3 Startup Purple Pay Shuts Shop In A Year After Launch appeared first on Inc42 Media.

The Ministry of Electronics and Information Technology (MeitY) has blocked over 100 websites for their alleged involvement in organised illegal investments and fraudulent part-time job schemes on the recommendation of the Union Home Ministry. 

In a statement, MHA said overseas actors were found to be operating these websites. 

“Indian Cybercrime Coordination Centre ,MHA, through its vertical National Cybercrime Threat Analytics Unit (NCTAU) had last week identified and recommended over 100 websites involved in organised investment / task based – part time job frauds. Ministry of Electronics and Information Technology (MeitY), invoking its power under the Information Technology Act, 2000, has blocked these websites,” the statement added.

These websites, which facilitated task based or organised illegal investment related economic crimes, were being operated by overseas actors and using digital advertisement, chat messengers and mule or rented accounts, the ministry said.

The proceeds from the large-scale economic frauds were seen to be laundered out of India using card networks, cryptocurrency, overseas ATM withdrawals and international fintech companies.

Modus Operandi And Precautions

These fraudulent schemes typically are carried out through a series of steps. It begins with the launch of targeted digital advertisements on platforms such as Google and Meta, employing keywords like “Ghar baithe job” and “Ghar baidhe kamai kaise karen” in multiple languages.

The ads primarily target retired individuals, women, and unemployed youth seeking part-time employment. Once a potential victim clicks on the advertisement, a conversation is initiated via WhatsApp or Telegram by an agent who persuades them to perform tasks such as video likes, subscriptions, and map ratings.

After the completion of these tasks, the victim receives an initial commission and is then encouraged to invest more in anticipation of higher returns for subsequent tasks. However, once the victim gains confidence and deposits a larger sum, the deposits are abruptly frozen, leading to financial deception.

In the past, the Ministry of Home Affairs shared advisories to exercise caution when considering investments in online schemes offering exceptionally high commissions. Individuals were also cautioned against engaging in financial transactions on WhatsApp or Telegram without proper verification. 

It also recommended scrutinising the name of the receiver in UPI apps, as random recipients may indicate a potential fraudulent scheme. “Citizens should refrain from doing transactions with unknown accounts, as these could be involved in money laundering and even terror financing and lead to blocking of accounts by police and other legal action,” the ministry said.

A number of such digital fraud cases have come to light over the last year or so. Earlier this year, the Delhi Police arrested three individuals for orchestrating a work-from-home scam.

Many of these scamsters use apps like WhatsApp and Telegram to reach out to people in the name of job opportunities and to cheat them, as Inc42 reported in a detailed story earlier this year.

The post IT Ministry Blocks Over 100 Websites For Connection With Illegal Investments, Job Fraud appeared first on Inc42 Media.

Bhavish Aggarwal-led Ola Electric’s net loss almost doubled to INR 1,472 Cr in the financial year ended March 2023 (FY23) from Rs INR 784.1 Cr in the previous fiscal year on the back of the company’s rising expenses.

The IPO-bound startup reported an EBITDA loss of INR 1,318 Cr in FY23 as its total expenses flared up to INR 3,383 Cr as compared to INR 1,240 Cr in FY22, Moneycontrol reported, citing financial statements.

However, the company saw its consolidated revenue surge by 510% to reach INR 2,782 Cr in FY23.

The company, in a note to investors and the bankers, said that it is targeting an EBITDA profitability of INR 803 Cr in FY25. It has also added that its EBITDA loss will come down to INR 950 Cr in FY24.

Meanwhile, the startup aims to hit revenue of INR 4,655 Cr in FY24.

As per earlier filings, Ola Electric saw its net loss almost quadruple to INR 784.1 Cr in the financial year 2021-22 (FY22) from INR 199.2 Cr in FY21.

The startup generated INR 348.2 Cr through the sale of products in the financial year ending on March 31, 2022, while it earned INR 19.7 Cr through the sale of its services.

Ola Electric anticipates its sales volume to reach 3 Lakh in FY24 and further increase to 9 Lakh by FY25. In FY23, Ola sold 1.5 Lakh units of EVs.

Recently, Ola Electric has converted into a public company. The startup is looking at a public listing in 2024 and will now file its draft red herring prospectus (DRHP) with the market regulator, SEBI.

As per reports, the startup plans to raise $700 Mn and looking to target a market capitalisation of $10 Bn through its IPO.

Ola Electric raised INR 3,200 Cr ($384 Mn) in a funding round, which was a mix of equity and debt. While the equity part was led by Temasek, the debt part of the round was led by the State Bank of India.

It has raised $998 Mn in total funding and counts Alpha Wave, DIG investment as among its other marquee investors.

Electric two-wheeler registrations grew 14% month-on-month (MoM) in November to cross the 85,000 units mark on the back of high demand for top electric vehicle (EV) manufacturers during the festive season. Ola Electric retained the top spot with its e-scooter registrations jumping over 14% MoM to 27,331 units in the month.

The post IPO-Bound Ola Electric’s FY23 Net Loss Almost Doubles To INR 1,472 Cr On Surge In Expenses appeared first on Inc42 Media.

Rural-focussed fintech startup Navadhan has secured $5 Mn (INR 41.7 Cr) as a part of its Pre-Series A funding exercise led by Prime Venture Partners.

The round also saw participation from the firm’s existing investors Gemba Capital and Varanium NexGen Fintech Fund.

Mumbai-based Navadhan plans to deploy the fresh proceeds to fortify its technology platform AceN as well as scaling up its distribution business and delivery model.

Founded by Nitin Agrawal, Vijay Haswani, Anirudh Ramakuru and Amit Biswal in 2019, Navadhan uses data science for its proprietary alternative underwriting model that assesses the digital footprint and cash flow surrogates. 

The RBI-registered non-banking finance company (NBFC) focuses on customers typically overlooked by traditional banks due to a lack of available banking data on these individuals.

Navadhan’s AceN offers end-to-end services, including customer sourcing, digital onboarding, underwriting, payments, and collections. In addition to its digital platform, the startup also maintains a physical presence on the ground to provide customer service.

“The new fundraise will add tailwinds to our efforts at building solutions to bring such small businesses to the formal economy. We will continue to build it for banks, NBFCs to leverage on the regulatory advantage of priority sector assets,” Agrawal said.

“The MSME sector in India has always been credit-starved and yet remains one of the critical growth sectors in the country. Nitin, his co-founders and the Navadhan team have demonstrated an extremely viable and tech-driven model for distribution, underwriting, and robust collections, while leveraging co-lending to achieve meaningful scale,” said Sanjay Swamy, managing partner, Prime Venture Partners.

In June this year, Navadhan raised seed funding of $1.5 Mn co-led by Varanium NexGen and Anicut Capital.

According to Inc42’s “State Of Indian Fintech Report Q3 2023”, the estimated number of digital payment users in India is expected to reach 1.08 Bn, surpassing the US, the UK and Germany with 320 Mn, 65 Mn and 70 Mn users, respectively, by 2027.

The Indian digital consumer lending sector is expected to touch $720 Bn by 2030, growing at a compound annual growth rate (CAGR) of 22% from 2023. Startups operating in the personal loan segment secured a substantial 86.3% or more than $2.8 Bn of the total $3 Bn+ raised in the digital consumer lending space between 2014 and H1 2023.

The post Navadhan Nets $5 Mn To Fulfil Financing Needs Of Under-Banked Households & Small Businesses appeared first on Inc42 Media.

D2C mattress brand The Sleep Company has raised INR 184 Cr ($22.1 Mn) in its Series C funding round from existing investors Premji Invest and Fireside Ventures.

The startup will use the capital for brand building, omnichannel expansion, and product innovation.

It is pertinent to note that The Sleep Company raised INR 177 Cr ($21 Mn) last year in its Series B funding round led by Premji Invest. It also saw participation from Alteria Capital and existing investor Fireside Venture.

“Our valuation has more than doubled since the last round, and since our launch in October 2019, we’ve achieved remarkable 3X year-on-year growth,” The Sleep Company cofounder Priyanka Salot told Inc42.

The Mumbai-based brand, which competes with the likes of Wakefit, Sleepyhead, Sunday, and SleepyCat in the highly competitive sleep solutions and mattress market in the country, forayed into offline retail in August 2022, with the opening of exclusive stores in Bengaluru and Hyderabad.

The Sleep Company’s unique selling proposition lies in the patented SmartGRID mattress technology. Since its launch, the company has diversified into segments like work and gaming chairs. As a result of its product diversification, the company’s non-mattress business accounts for 35% of its revenue.

Currently, the startup has 60 stores across 22 cities in India. By March 2024, it plans to take this number to 100 stores.

“We are technically opening one store every four days in the country. We want to keep the same momentum, and the same pace going forward. Over the next one year and four months, we will expect 200 outlets spanning 35-40 cities in India. Hence, a substantial chunk of fresh capital will be used there,” cofounder Harshil Salot said.

Currently, the startup’s top offline markets are Bengaluru, Hyderabad, Chennai, Mumbai, and Delhi NCR.

Offline channels account for 50% of the startup’s revenue. While 30% revenue comes from direct-to-consumer (D2C) sales, the remaining 20% is generated through various marketplaces.

The D2C brand entered the Japan and the UK markets last year. The founders claimed that the international markets currently account for 7-10% of its total revenue. They have plans to increase this number to 20% before pursuing aggressive expansion into new markets.

The Sleep Company has touched an ARR of over INR 350 Cr and aims to end the ongoing financial year with an ARR of INR 500 Cr. It is also looking at becoming EBIDTA profitable by next year.

The post The Sleep Company Raises INR 184 Cr To Boost Its Omnichannel Play appeared first on Inc42 Media.

Online gaming firms have been sent 71 show cause notices for alleged evasion of goods and services tax (GST) worth INR 1.12 Lakh Cr in the fiscal year 2022-23 and the initial seven months of 2023-24, the government informed the Parliament.

“71 show cause notices involving GST to the tune of INR 1,12,332 Cr have been issued to online gaming companies during financial years 2022-23 and 2023-24 (up to October 2023),” Minister of State for Finance Pankaj Chaudhary told the Rajya Sabha on Tuesday (December 5).

“As these notices are pending adjudication, the respective GST demand is not yet determined under the provisions of CGST Act, 2017,” the minister added.

Chaudhary did not provide names of the companies which have been issued notices. However, he underlined that no foreign online gaming company has registered in the country since October.

It is pertinent to note that besides facing financial and other troubles after the implementation of the new GST regime for real money gaming in October, online gaming firms have also been receiving show cause notices from the tax authorities for alleged GST evasion.

Under the new regulations, a uniform 28% tax will be applied on the full value of bets placed in online games, regardless of whether it involves games of skill or chance.

For instance, if a player wagers INR 100, the new tax regime will levy a GST of INR 28 on that amount. In contrast, under the previous tax system, only an 18% GST was applicable and that too on the platform fee charged for games of skill.

Just over two months back, the Directorate General of Goods and Services Tax Intelligence (DGGI), Mumbai Zone reportedly issued an INR 28,000 Cr GST notice to online gaming startup Dream11. Prior to that, the parent entity of Games24x7 received a notice amounting to INR 21,000 Cr from tax authorities.

Amid this, the union government clarified to the states that the 28% GST is not being levied retrospectively on these platforms. The Centre said that online gaming has always attracted 28% GST and as such the tax notices are not retrospective in nature.

Meanwhile, the new GST regime has dampened the growth forecast for the Indian gaming industry. In a recent report, gaming-focused venture capital firm Lumikai revised the revenue projections for the Indian gaming industry from $8.6 Bn to $7.5 Bn by 2027 due to recent tax changes in the sector.

The post Online Gaming Firms Slapped 71 Show Cause Notices Worth INR 1.12 Lakh Cr: Govt appeared first on Inc42 Media.