There were several important developments in the startup space during the day on Monday. Here are the top stories from the startup universe:
BYJU’s acquires Great Learning & Toppr
Edtech unicorn and India’s most valuable startup BYJU’s is continuing its acquisition spree by buying upskilling platform Great Learning for $600 million in a cash and stock deal.
BYJU’s will invest another $400 million in Great Learning, as it looks to expand its education services globally across categories. After acquiring brick-and-mortar coaching network Aakash Institute for close to $1 billion, Great Learning is now BYJU’s second biggest acquisition.
The edtech firm has acquired after-school learning app Toppr too. With this, BYJU’s has acquired 14 companies so far, across India and the US.
The edtech company in June raised $1.5 billion from UBS Group, Abu Dhabi sovereign fund ADQ, and Blackstone Group LP among others, at a valuation of $16.5 billion, making it the highest valued Indian startup, as it overtook IPO-bound Paytm’s $16 billion valuation.
Unacademy buys Rheo TV
Learning platform Unacademy buys Rheo TV - that helps professional game streamers livestream their gameplays and monetize those feeds.
Rheo TV’s existing investors Lightspeed India Partners, Sequoia Capital India’s Surge, AET Fund, Phanindra Sama, Founder and Former CEO of RedBus, and Mahesh Narayanan, Ex-Country Head of Google Mobile will exit fully.
Post the acquisition, Rheo TV founders Saksham Keshri and Prakash Kumar will join Relevel — an Unacademy Group company that enables job-seekers to showcase their skills through tests, and secure employment at some of India’s top companies — as Co-Founders.
Mamaearth raises $50 mn, valued at $730 mn
D2C personal care startup Mamaearth has raised $50 million in a funding round led by Belgian investor Sofina Ventures, valuing the company at $730 million. Existing investor Sequoia Capital also participated in the funding round.
Meanwhile, early investors Fireside Ventures, Stellaris Venture Partners, Sharp Ventures and Titan Capital also sold a portion of their stake in the round.
The company will use the fresh funds to double down on its brand’s growth through deeper offline expansion and explore inorganic growth opportunities in beauty and personal care.
In a span of 4 years, Mamaearth has created a product portfolio of more than 120 products and has reached over 5 million customers in 500 Indian cities, and is the fastest-growing FMCG start-up to hit ₹500 crore run rate in India, the company said.
G.O.A.T Brand Labs raises $36 mn
D2C brand GOAT BrandLabs has raised $36 Million in Series A funding round led by Tiger Global, with participation from Flipkart Ventures, the early stage venture fund of Flipkart, Mayfield, Nordstar & Better Capital and prominent angel investors.
GOAT Brand Labs was launched by Rishi Vasudev, former Flipkart’s executive who had headed Flipkart’s Fashion along with Myntra and Jabong for more than five years.
The startup says it will invest the fresh capital in digitally native brands to accelerate their growth. According to the company, it is in advanced discussions with at least 10 brands for acquisition and is looking for brands in fashion, beauty, personal care, and home and kitchen spaces.
Swift raises $2.2 mn in pre-Series A round led by Kalaari Capital
Internet commerce enabler Swift has raised $2.2 million in Pre-Series A funding led by Kalaari Capital, with participation from existing investors FirstCheque, Indian Angel Network and other angel investors.
Founded in 2019, Swift’s commerce platform simplifies online shopping for consumers by helping SMEs, D2C and omnichannel brands run their internet commerce ventures without any hassle.
The company said that the funds from this round will be used to scale engineering efforts and simplify complex business workflows across checkout, payments and fulfillment.
“Competing with marketplaces like Amazon and Flipkart, without the infrastructure to enable commerce is akin to running a mule in a horses' race. At Swift, we have built a one-stop solution that enables sellers to focus on their core business while our infrastructure manages everything around it - cart conversions, payments, fulfilment, and returns reconciliation,” said Prayas Mittal, Co-founder, Swift.
According to Swift, the D2C space in India is expected to become a $100 billion market by 2025 while internet spending is estimated to grow at over 39 percent CAGR. With the industry at the cusp of monumental growth, Swift aims to help grow India's internet economy.
Edtech startup Knorish raises $1.1 mn
Edtech startup Knorish, has raised $1.1 million in a Pre-Series A round of funding led by Inflection Point Ventures along with participation from Rockstud Capital, Pentathlon Ventures, Prophetic Ventures syndicate, among others.
The latest round comes on the heels of a $323,000 round in June last year, bringing the total amount raised by the firm to $1.4 million.
The investment will empower the startup to create the world’s most advanced stack for building sales funnels and automations for Online Academies, the company said.
Nykaa converts into a public company ahead of IPO
Ahead of its IPO, online cosmetics retailer Nykaa has converted into a public entity now.
According to its regulatory filings, the holding company of Nykaa has been renamed FSN e-commerce Ventures Limited from FSN e-commerce Ventures Private Limited.
Nykaa’s shareholders passed a special resolution on July 16 and approved the change in the status of the company from a private company limited by shares to a public company limited by shares, regulatory filings sourced from Tofler showed.
The Mint reported last month that Nykaa plans to go public later this fiscal at a valuation of $4.5 billion.
Spinny expands its ESOP pool size to $45 mn: Report
Used car retailing startup Spinny has expanded its employees stock ownership plan or ESOP pool size to $45 million, Entrackr reported.
The company has passed a special resolution to alter its existing ESOP Scheme to increase the number of shares in its ESOP pool to 36,353 options worth Rs 335.82 crore or $45 million, the report added.
The ESOP expansion scheme at Spinny comes after the company’s latest $108 Series D round led by Tiger Global Management.
3one4 Capital to fully tie up commitment for over $100 mn fund this quarter
3one4 Capital, an early-stage venture capital firm, expects to fully tie up commitments for its latest fund of over $100 million corpus during the current quarter.
The firm said that there has been overwhelming interest from global institutions into investing in India as the pandemic underscored the true potential of technology and digital firms.
“The latest fund has evoked a strong response and 3one4 Capital expects it to be fully subscribed very soon,” said Anurag Ramdasan, Principal - Investments at 3one4 Capital.
3one4 Capital's new fund had seen more demand than anticipated and is now very close to clinching over $100 million commitment from investors. The fund, like the past ones, would continue with the strategy of making 8-12 investments annually, Ramdasan added.
Disbursals from the new fund have begun and over 10 investments have been made so far. 3one4 Capital said it has three funds in the seed stage, one in early seed stage and one 3one4 Capital opportunities fund, across which it manages a little under a quarter billion dollars.
Sequoia announces $100K fellowship for women entrepreneurs
Sequoia India has launched ‘Spark’ fellowship, a year-long programme to support women entrepreneurs in India & Southeast Asia.
The fellowship will offer $100,000 grants to 15 women-led, early-stage startups. The cohort will kick off in November.
The firm said that recipients will also receive one-on-one mentorship with a senior Sequoia India investment advisor who will work closely with them for a period of 12 months. The recipients will have hands-on support from Sequoia India portfolio specialists across hiring, legal. Finance, product, technology and marketing.
Some of the founder mentors who will be helping the recipients include co-founder and CEO of Zilingo Ankiti Bose, Byju’s co-founder Divya Gokulnath, CRED founder Kunal Shah, Groww co-founder and CEO Lalit Keshre, MobiKwik co-founder Upasana Taku, and Meesho founder and CEO Vidit Aatrey.
Pagarbook lays off over 80 employees: Report
Payroll management company Pagarbook has laid off more than 80 employees due to troubles ranging from product failures to shortage of cash, Moneycontrol reported.
Backed by Sequoia India and other investors, the startup helps small businesses digitise attendance and payroll. The company fired nearly its entire marketing and sales team last month, six people familiar with the matter told Moneycontrol.
The list of laid-off employees includes content writers, designers, people on the ground in small cities as well in Pagarbook’s office in Bengaluru, across junior and relatively senior levels.
Flipkart Pay Later witnesses double-digit growth in customer base
E-commerce firm Flipkart plans to expand its Flipkart Pay Later credit offering, targeting a 2X growth over the next six months. Currently, there are over 2.8 million customers who have adopted Flipkart Pay Later and have made more than 42 million transactions on the platform to date.
Owing to the growing reliance on digital payments, Flipkart Pay Later has seen a 70 percent adoption rate among customers at the time of check-out and plans to cross the 100 million transaction benchmark by the end of the year, the company said. Flipkart Pay Later has seen an increase of over 50% in the number of registered users as of July 21 in comparison to the previous year.
Flipkart plans to expand the reach of its ‘Pay Later’ construct to make credit available not just on Flipkart’s platform but on other partner channels as well.
‘Flipkart Pay Later’ offers its customers convenient and affordable credit solutions for their shopping needs. It is a 30-day credit product that does not have an interest fee and offers bank-grade security.
Quick commerce to become $5 bn opportunity by 2025: RedSeer
Quick commerce is expected to grow 10-15x in the next five years and become a $5 billion opportunity by 2025, according to consulting firm RedSeer.
Quick commerce is defined as the delivery of consumables within a span of 45 minutes with a nominal delivery charge. According to the report titled ''Quick Commerce: A $5 billion market by 2025'', the market penetration of ''quick commerce'' is estimated at about $300 million in CY2021. This is expected to grow 10-15x in the next five years to $5 billion by 2025, it added.
The major growth drivers for quick commerce are rising adoption among convenience seeking customers with unplanned ordering behaviour, increasing the affinity of online and Gen-Z customers towards top-up and indulgence purchases, and COVID-led change in consumer behaviour towards using online as a replacement for Kirana, it said.
The report said quick commerce penetration within the online consumables market is about 7 percent, and is expected to grow to 12-13 percent by 2025.
The online consumables market penetration is expected to grow exponentially in the next five years to become $30 billion-plus in size by 2025 with about 50 percent of an online market expected to come from the metro and tier-I cities.
Tesla lobbies India for sharply lower import taxes on electric vehicles: Sources
Tesla has written to Indian ministries seeking a big reduction in import duties on electric vehicles (EVs), a move it says will boost demand and generate revenue for the government, two sources with knowledge of the matter said.
Tesla, which aims to begin sales in India this year, said in a letter to transport and heavy industries ministries and Niti Aayog that slashing federal taxes on imports of fully assembled electric cars to 40% would be more appropriate, according to the sources.
“The argument is that at 40% import duty, electric cars can become more affordable but the threshold is still high enough to compel companies to manufacture locally if demand picks up,” sources told Reuters.
According to Tesla’s US website, only one model – the Model 3 Standard Range Plus – is priced below $40,000.
Its pitch, however, is likely to face resistance from Prime Minister Narendra Modi’s administration which has championed high import taxes for many industries in a bid to boost local manufacturing.
Bitcoin leaps 12% to test recent peaks, ether hits 3-week high
Cryptocurrencies popped to the top of recent ranges on Monday as short sellers bailed out in the wake of a strong week and while traders hoped a handful of positive comments from influential investors might signal a turnaround in fragile sentiment.
As per Reuters, Bitcoin rose as far as 12.5 percent to hit $39,850, its highest since mid-June during the Asia session, while ether hit a three-week peak of $2,344. On the heels of bitcoin's best week in almost three months, the move put the squeeze on short sellers.
Last week, Tesla boss Elon Musk said the carmarker would likely resume accepting bitcoin once it conducts due diligence on its energy use. It had suspended such payments in May, contributing to a sharp crypto selloff.
GLOBAL TECHNOLOGY & STARTUP NEWS
Bezos-backed plant food firm NotCo joins unicorn club after latest funding
Jeff Bezos-backed food-tech firm NotCo has raised $235 million in its latest funding round that also included athletes Lewis Hamilton and Roger Federer, valuing the plant-based food company at $1.5 billion. The funding, led by Tiger Global, also saw venture capital firm DFJ Growth Fund and social impact foundation ZOMA Lab pitch in.
It makes plant-based milk, burger patties, meat and ice creams, and plans to use the new funding to expand in Asia and Europe and produce newer products for the North American market.
According to Reuters, NotCo plans to invest more on its artificial intelligence technology, Giuseppe, which explores new combinations of plants to replicate animal-based food products.
Universal Music strikes licensing deal with video-sharing app Lomotif
Universal Music has struck a licensing deal with Lomotif, a rising Singapore-based video-sharing app. Financial terms were however not disclosed.
The agreement gives Lomotif users access to thousands of songs by Universal Music artists, including Taylor Swift, Drake and Olivia Rodrigo, to use in their video clips. Lomotif, a smaller rival to TikTok, encourages users to “turn your favourite moments into a music video”, with editing tools to create short clips soundtracked to songs.
The deal comes as Universal Music, the largest record label that controls about a third of the world’s music, prepares for an initial public offering in September.
China orders Tencent to give up exclusive music rights
China's market regulator has barred Tencent from exclusive music copyright agreements and fined the company for unfair market practices in the online music market after its acquisition of China Music Corporation.
The competition watchdog has ordered Tencent and its affiliates to relinquish its exclusive music rights within 30 days, and to end requirements for copyright holders to grant the company better treatment than to its competitors.
The State Administration for Market Regulation on Saturday imposed a fine of 500,000 yuan ($77,141) on the company citing violations in its acquisition of China Music in 2016.
In response, Tencent said it will “comply with all the regulatory requirements, fulfill our social responsibilities and contribute to healthy competition in the market.”
Earlier this month, Reuters reported that the regulator would block Tencent’s plan to merge the country’s top two videogame streaming sites, Huya and DouYu , on antitrust grounds.
Beijing tutoring crackdown slams US-listed Chinese stocks
Fears of increased of regulation from Beijing crushed US-listed Chinese stocks on Friday following a Chinese government crackdown on private educators.
As per Reuters, US shares of TAL Education Group and New Oriental Education & Technology Group, which provide tutoring and test preparation services in China, each dropped more than 50% after news that the government is barring tutoring for profit in core school subjects to ease financial pressures on families that have contributed to low birth rates. read more
Heavyweight Chinese internet stocks also deepened a recent selloff as the move by China added to concerns about increased regulation of Chinese companies listed on Wall Street. Alibaba and Baidu both lost 4% and Didi Global tumbled 20 percent.
Didi has fallen over 40 percent from its June 30 IPO price, while Baidu has tumbled 50% from its February record high and Alibaba is down 35 percent since October, according to Reuters.
The policy change threatens to decimate China's $120 billion private tutoring industry and imperils the listing ambitions of numerous venture capital-backed education firms, including Alibaba-backed Zuoyebang, and online education platforms Yuanfudao and Classin, both backed by Tencent.
China’s EdTech assault hits investors fom Tiger to Temasek
Global investors from Tiger Global Management to Temasek Holdings are reeling as China prepares to impose its harshest curbs yet on its $100 billion private tutoring and online education sector.
According to Bloomberg News, in rules currently under debate, the platforms may lose their ability to raise capital or go public—depriving their backers of the exits they need to cash out.
And foreign capital could be banned from the sector, with uncertain ramifications for the likes of Singapore’s Temasek and GIC as well as Warburg Pincus and SoftBank’s Vision Fund that have all invested in many of the industry’s big players.
S Korea to toughen rules to collect cryptocurrencies from tax dodgers
South Korea will look to tighten a crackdown on tax evasion by cryptocurrency investors and high-income earners as it seeks fresh revenue to cover rising welfare costs, Reuters reported.
The government proposes revising tax codes so that tax authorities will be able to seize crypto assets held by tax dodgers even if their cryptocurrencies are stored in digital wallets, starting next year.
Current regulations make it difficult for authorities to confiscate virtual assets held in digital wallets, although those accessible through exchanges can be seized to pay overdue taxes, according to Reuters.
Going after tax evaders is part of South Korea's broader probe to tighten oversight of crypto markets to root out money laundering and other financial crimes using cryptocurrencies, as President Moon Jae-in looks to expand the tax base to fund increased welfare spending.