STARTUP DIGEST: IPO-bound OYO hikes authorised share capital, BYJU's buys Gradeup, India 2nd largest market for Coursera

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There were several important developments in the startup space during the day on Wednesday. Here are the top stories that made headlines in the startup universe.

STARTUP DIGEST: IPO-bound OYO hikes authorised share capital, BYJU's buys Gradeup, India 2nd largest market for Coursera
There are several important developments in the startup space during the day on Wednesday. Here are the top stories that made headlines in the startup universe.
OYO increases authorised share capital ahead of IPO
Oravel Stays, which operates hospitality firm OYO, has approved an increase in the authorised share capital of the company from Rs 1.17 crore to Rs 901 crore, according to a regulatory filing by the hospitality firm.
The development comes ahead of proposed initial public offering (IPO) by OYO, for which a draft red herring prospectus (DRHP) is likely to be filed in the next few months
An extraordinary general meeting of Oravel Stays on September 1, approved the resolution to increase its authorised share capital, as per a Registrar of Companies (RoC) filing by the company.
The increase in the authorised share capital of the company is from the existing Rs 1,17,80,010 to Rs 9,01,13, 59,300, the company said in a regulatory filing.
In a precursor to the IPO, OYO in August raised fresh capital from Microsoft at a post-money valuation of $9.6 billion. Microsoft has invested nearly $5 million in OYO.
OYO has initiated discussion with investment banks like JP Morgan, Citi and Kotak Mahindra Capital to manage its $1.5 billion public issue slated to raise between $1.2-1.5 billion at a valuation range of $14 to 16 billion.
BYJU's acquires Gradeup; makes 8th acquisition of the year
Edtech decacorn and India’s most valued startup BYJU’s has acquired online exam preparation platform Gradeup in a bid to double down on the competitive exam preparations segment.
The company which already had a presence in Joint Entrance Examination (JEE) and National Eligibility Entrance Test (NEET) will be going deeper into the exam preparation space and expanding its offering across 150 exams in 25 categories.
Post the acquisition, BYJU’s will be rebranding Gradeup to BYJU’S Exam Prep and offer test prepration across segments including post-graduate entrance exams, Indian Administrative Service (IAS), Graduate Aptitude Test (GATE), Common Admission Test (CAT), among others.
“The company which already had a presence in Joint Entrance Examination (JEE) and National Eligibility Entrance Test (NEET) will be going deeper into the exam preparation space and expanding its offering across 150 exams in 25 categories,” said Byju Raveendran, founder, and CEO, BYJU’s.
This marks the eighth acquisition for BYJU’s in 2021, which has already shelled out more than $2.2 billion in acquisitions, this year alone.
Think and Learn, the parent brand of BYJU’s recently reported Rs2,380 crore income in FY’20, as compared to Rs1,305 crore in the previous fiscal year (FY'19). However, the company’s growth came on the back of a major rise in consolidated losses. Think and Learn Pvt. Ltd reported a consolidated loss worth Rs262 crore in FY’20, a 30-fold increase from Rs8.82 crore in FY19.
At present, BYJU’s has over 100 million registered students and 6.5 million paid subscribers.
India becomes second-largest market for Coursera
Online learning platform Coursera grew over 49 percent in India over the past 12 months emerging as the second largest market globally with around 12.5 million users while the US reported 16.6 million users as of June-end.
Nearly 7.5 million new learners in India were added since January 2020 and overall course enrolments stood at 24.6 million as of June-end.
“India will be our global hub for certain APAC regions. We will have a few servicing groups around the world but India will be the core hub for servicing our learners around the world especially the Asian region,” Jeff Maggioncalda, CEO, Coursera said.
Maggioncalda told CNBC-TV18 that the demographic dividend of India is huge.
“There is opportunity in India, and a post pandemic world allows people to learn and work from everywhere. Online education is the only way to reach India's education targets,” added Maggioncalda.
The company has launched a series of new partnerships with enterprises and universities along with a pricing strategy that works for the price sensitive India consumer.
On Wednesday, the edtech major announced that it is adding nine new enterprise clients to the existing 90 plus customers for its ‘Coursera for Business’ offering. These include Reliance Industries, Larsen & Toubro, Wipro GE Healthcare, Usha, ITC Infotech, Welspun India, StarTek and Vardhman Group.
The B2B offering had 176,000 learners as of June-end and around 6,10,000 course enrolments starting from January 2020.
Going by the industry trends, Coursera also launched five post-graduation certificate courses with IITs and IIM. It went live with 5G and IoT and VLSI Design courses with IIT Roorkee, Digital Transformation and Power Electronics and Motors for Electric Vehicles certificate courses with IIT Bombay, and Data-Driven Decision Making Certificate from IIM Kozhikode.
The company is also looking to bridge the gender gap in learning. Talking to CNBC-TV18, Maggioncalda said in India, 62 percent of Coursera learners are male while 38 percent are female. Globally, 47 percent of Coursera learners are female. He also added that India has seen a massive rise in STEM course enrollments among women learners from 22 percent pre-2020 to 32 percent in 2020, the second-highest increase globally.
iD fresh foods founder slams fake WhatsApp propaganda
The CEO of iD Fresh Foods Musthafa PC has issued a statement condemning the fake communal message that has gone viral on WhatsApp and other social media platforms over the past few days.
Musthafa in a statement said, “Over the last few days, several customers have been reaching out to me concerned about dubious social media posts and forwards regarding iD products. While we don’t know ‘why’ these claims are being made or ‘who’ is behind this conspiracy to malign the brand, I can tell you with 100 percent conviction that none of it is true.”
This comes on the back of a viral WhatsApp forward that claimed that the company mixes calf rennet and cow bones to increase the volume of the batter. The forward further stated that the company only hires Muslims and that their products are halal certified, since the company was founded by PC Musthafa and his four cousins Abdul Nazer, Shamsudeen TK, Jafar TK and Noushad TA. According to the forward, Rs 35 crore the company raised in 2014 adhered to strict Sharia Islamic Law.
Musthafa in the statement said that their products use the finest vegetarian ingredients and are made in a facility that complies with the food safety management system.
"We need to step up and stop the spread of misinformation, particularly in today's times when the reach and effects of information spread on social media occur at such a rapid pace." Such inaccurate information could cause real world impact for millions of people,” Mustafa added.
Started in 2005, iD products are sold in various locations like Mysuru, Mangaluru, Mumbai, Pune, Hyderabad, Vijayawada, Visakhapatnam, Rajahmundry, Chennai, Ernakulam, Coimbatore, Cochin, and abroad as well, in Sharjah, Abu Dhabi and Dubai. iD also announced that they are planning to set up a manufacturing plant in the US in the next two years.
Shoptimize sees a Rs 500-cr GMV uplift in D2C ecommerce sales through its program
D2C ecommerce platform Shoptimize has launched an exclusive, by invite only program, aimed at helping consumer brands achieve exponential revenue growth.
Through this program, Shoptimize estimates that the selected brands will be able to drive a combined annual GMV of Rs500 crore via their D2C eCommerce channel, the company said in a statement.
With its AI technology and automation capabilities, the company can help to identify and act upon opportunities and risks in real time. Shoptimize will also provide digital marketing support, bearing the entire cost of ad spends, thereby reducing the strain on working capital for the brands.
This will enable the brands to invest in stocks, inventory and customer satisfaction, making it a win-win solution for everyone, including the customers, it said.
Shoptimize piloted this program in the last quarter and the participating brands are already seeing 300% growth month over month. The program has over 20 brands currently and Shoptimize plans to work with 100+ high potential brands over the next one year, the company added.
Shoptimize said it is planning an investment to the tune of Rs100 Crores and is in advanced stages of discussion with investors and lenders to fund this program.
“We have seen phenomenal growth in D2C sales across categories since the beginning of 2021. The opportunity is surely there for the taking. But it requires brands to take some risks and most are reluctant to do so. With the Accelerator Program, Shoptimize is effectively eliminating the risk for the brands. We also have a lot of support from our partner ecosystem, be it Google and Facebook for marketing or our lending partners, so we are confident we can scale this aggressively over the next year. This program will be a game changer for brands that qualify,” said Mangesh Panditrao, Co-founder & CEO, Shoptimize.
According to the company, the program is open to brands from across sectors including Fashion and Lifestyle, Food and Beverages, Consumer Electronics and Home Appliances, Health, Fitness and Personal Care. They must have an active online presence, either on marketplaces like Amazon, Myntra, Flipkart, Nykaa, or their own D2C eCommerce store. The final selection will be based on a curation and evaluation process.
Kuvera partners with Amazon Pay India
Investment platform Kuvera.in partners with Amazon Pay India. Kuvera will provide its services, products and technology know-how to create an exclusive experience for Amazon Pay’s users to facilitate investments into mutual funds, fixed deposits, and more over time.
At 600 million users and growing, India is the second-largest internet market globally. However, only 30-40 million users have access to quality investment products.
Commenting on the association, Gaurav Rastogi, founder & CEO of Kuvera.in, said, “We have built the most feature rich and transformative investing platform with a history of firsts for investors. Through this arrangement with Amazon Pay India, we seek to add value to the investors journey. Our goal is to accelerate the democratisation of investing and wealth management in India.”
With more than 1 million users and Rs. 28,000 Cr. in Assets under Advice, Kuvera has maintained a scorching pace of growth since starting in 2017, the company said.
NPCI, Fiserv to open RuPay API platform: Report
The National Payments Corporation of India (NPCI) has tied up with Nasdaq-listed fintech firm Fiserv to launch an application programming interface (API) platform for startups and banks looking to build credit card-based products on top of the RuPay rails.
As per Economic Times, the company said the collaboration will help faster and cheaper onboarding of customers and merchants by banks as well as enable fintech firms to build out new models of digital interfaces for customers launching RuPay credit card products.
“We are trying to expand the credit ecosystem in India, where a lot of great work has happened on the debit side,” Rishi Chhabra, head of India and Sri Lanka at Fiserv, told ET.
According to Nalin Bansal, the chief of corporate relationships and fintechs at NPCI, the collaboration with Fiserv will help RuPay build an ecosystem around its credit card products, thereby attracting more fintech firms to innovate and scale these offerings.
As per the report, the platform, called ‘nFiNi’, will power RuPay cards by offering access to services through the NPCI network and Fiserv’s microservices-based platform-as-a-service with a set of APIs.
PhonePe crosses 1.6 bn UPI transactions in Aug; Google gains
Digital payments platform PhonePe continues to lead the UPI ecosystem over peers including Google Pay and Paytm in terms of transaction volume and value in August.
PhonePe recorded 1,622.95 million or 1.6 billion transactions worth Rs 3,01,644.80 crore in August, data released by the National Payments Corporation of India shows. During the period, Google Pay registered 1234.75 million or 1.2 billion worth Rs 2,44,453.05 crore.
UPI had registered 3.55 billion transactions worth Rs 6,39,116 crore in which peer-to-peer (P2P) and peer-to-merchant (P2M) transactions were recorded at 1,945.80 million and 1609.74 million respectively.
In terms of volume-wise market share, PhonePe registered 45.64% share in UPI in August whereas Google Pay recorded 34.72%. In the previous month, PhonePe and Google Pay had 45.94% and 34.45% market share in the UPI ecosystem respectively.
While Paytm’s larger focus is its wallet business and other offerings, it is the third-largest player for UPI. In August, Paytm Payments Bank’s value market share dropped to 8.81 percent from 14 percent last month.
However, Paytm Payment Bank’s share in total transaction volumes in August stood at 14 percent. It clocked in 0.49 billion transactions valued at Rs 56,319 crore.
In August, total UPI transactions again set new records with overall UPI transactions at 3555.55 million, thus crossing the 3.5 billion mark for the first time. The total value of transactions in August stood at Rs. 6.39 lakh crore.
LocoNav appoints new leadership members on board
LocoNav, a disruptive full-stack fleet-tech startup, today announced the appointment of Samit Srivastava (ex-Jubilant Food Works, Jubilant Life Sciences, HealthKart, Perfetti Van Melle) as CEO - SaaS Global and Chief Business Officer, and Ashish Chawla (ex-OYO) as Head of Strategy.
In line with its aggressive expansion and strategic plans and post successful Series B fundraising, LocoNav brings these industry experts on board to realise its vision of democratising fleet-tech in emerging and high-growth markets, across the globe, the company said.
The company also recently announced the appointment of Anjali Joshi, former Google VP-Product Management, to its Board of Directors.
Automakers in India to get Rs 25,000 cr incentive in cleantech scheme
The central government will give about $3.5 billion in incentives to auto companies over a five-year period under a revised scheme to boost the manufacturing and export of clean technology vehicles, sources told Reuters.
The government's original plan was to give about $8 billion to automakers and part manufacturers to promote mainly gasoline technology, with added benefits for electric vehicles (EVs). The scheme was redrawn to focus on companies that build electric and hydrogen fuel-powered vehicles, Reuters reported on Friday, with the shift just as Tesla is gearing up to enter India.
It was not immediately clear why the allocation had been revised, but one of the sources said that since the focus had changed to clean and advanced technology fewer companies would be eligible for the incentives.
India sees clean auto technology as central to its strategy to reduce its oil dependence and cut the debilitating pollution in its major cities, while also meeting its emissions commitment under the Paris Climate Accord.
A government official told Reuters that the initial allocation over the five-year period has been reduced but that up to $8 billion could be made available if the scheme is successful, initial funds are spent, and certain conditions are met.
Details of the scheme, part of India's broader $27 billion programme to attract global manufacturers, could be made public as early as next week.
Under the revised scheme, companies that qualify will get cashback payments equivalent to around 10%-20% of their turnover for EVs and hydrogen fuel cell cars, one of the sources said. Carmakers would need to invest a minimum of about $272 million over five years to qualify for the payments.
KPMG India and dotin join hands to create a talent management solution
KPMG in India today announced the release of its talent lifecycle management, the AI platform, created in collaboration with dotin.
This AI platform provides visibility into various stages of sourcing, screening, engaging, and upskilling talent. It also enhances diversity, equity, and inclusion for any enterprise workforce. The platform is aligned to the “Future of Work” theme, the company said.
The AI platform from KPMG in India is leveraging dotin’s AI engine to oversee end-to-end talent lifecycle management. The AI platform is intended to assist recruiters, hiring managers, talent development leaders, and company decision-makers with nurturing and growing talent, assessing their resilience, and determining their future readiness.
“This collaboration with KPMG in India will enable our technology to capture the true personality, evolving technical skills, and resilience of every talent within an organisation. Best of all, it’s done without introducing bias or subjectivity, at scale, to enable seamless talent management,” said Ganesh Iyer, founder and CEO, dotin.
Late-stage technology deals at an all-time high in India: IVCA-EY report
The average ticket size of late-stage technology deals is at an all-time high so far in 2021 compared to the last two years, as per a report an IVCA-EY report
A total of 500 deals attracting venture capital funding to the tune of $17.2 billion in the first half of 2021 compared to a total of $11.1 billion in 2020, the report added.
The number of early stage deals saw a significant dip of almost half compared to 2019, the "State of Indian Markets: Investment Environment (Startup) Report" by IVCA and EY says.
The study found 245 early stage deals so far in 2021, compared to 498 deals in the same time in 2019. It further said there have been many deals above $20 million this year with a surge in the velocity of funding into startups by VCs.
“2021 has unfolded into one of the most unexpected and aggressive phases of consumer and business adoption of digital, spurring the urgency amongst entrepreneurs, and financial and strategic investors to rapidly double down on their digital forays. It promises to be an unprecedented decade of growth for digital and tech businesses in India,” said Karthik Reddy, vice chairman of IVCA, and managing Partner of Blume Ventures.
Among overall sector-wise trends and deals, fintech (financial technology) topped the charts with 61 deals followed by edtech (education technology) with 42 deals.
The report further said that India ranked third in terms of a total number of unicorns, or businesses valued above $1 billion, in 2020 and has emerged as the new home of unicorns, with 21 new ones added in the first half of 2021.
GLOBAL TECHNOLOGY & STARTUP NEWS
PayPal to acquire Japan’s Paidy for $2.7 bn
US payments giant PayPal will acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal, Reuters reported.
The deal tracks rival Square’s agreement last month to buy Australian BNPL success story Afterpay for $29 billion.
"The acquisition will expand PayPal's capabilities, distribution and relevance in the domestic payments market in Japan, the third largest ecommerce market in the world, complementing the company's existing cross-border ecommerce business in the country," PayPal said in a statement.
Buying Paidy will help PayPal expand in a country where online shopping volume has more than tripled over the last 10 years to some $200 billion, but more than two-thirds of all purchases are still paid for in cash, PayPal said in an investor presentation.
Paidy, with more than 6 million registered users, offers payment services that allow Japanese shoppers to make purchases online, and then pay for them each month at a convenience store or via bank transfer.
The Financial Times had reported last month that Paidy was considering an initial public offering.
Carlyle leads $312 mn funding round for Japanese unicorn Spiber
Global private equity firm Carlyle said on Wednesday it led a $312 million funding round for Japanese biotech company Spiber, joining other global investors in betting on a growing number of late-stage Japanese startup firms.
As per Reuters, Carlyle's 10 billion yen ($91 million) stake in Spiber represents the group's first non-buyout, minority investment in an unlisted startup in Japan, where startup funding is soaring.
The round, which also includes investments from fund managers Fidelity and Baillie Gifford, will be made through a combination of the allotment of new shares and a capital infusion at a valuation of about 135 billion yen ($1.22 billion).
Spiber makes plant-based protein polymers through microbial fermentation, which can be spun into animal- and plastic-free fibres for clothing, auto parts and other uses.
The startup plans to use the proceeds to build a mass production facility in Iowa and to prepare itself for an initial public offering that it targets in several years, Spiber co-founder Kazuhide Sekiyama told Reuters in an interview.
China bans private tutors from giving online classes
China has banned private tutors from giving classes online or in unregistered venues such as residential buildings, hotels and coffee shops, ramping up its effort to stamp out all for-profit tutoring, Reuters reported.
Authorities this year banned for-profit tutoring in subjects on the school curriculum in an effort to ease pressure on children and parents.
"In some places, subject tutoring has moved 'underground' or put on a different 'vest' to evade the regulations," the Ministry of Education said in a statement announcing the new ban.
The crackdown on tutoring has roiled the shares of tutoring companies traded in Hong Kong and New York, including New Oriental Education & Technology Group and Gaotu Techedu.
The ministry said off-campus centres that offer tutoring in subjects on the school curriculum need to be licensed, operate out of registered venues and hire qualified teachers.
Offline institutions will also not be allowed to conduct online after-school tutoring via instant messaging, video conference or livestreaming platforms, the ministry said.
ByteDance in talks with banks to borrow over $3 bn
ByteDance, the Chinese owner of short-video platform TikTok, is in talks with Wall Street banks to borrow more than $3 billion to refinance its debt, sources told Reuters.
The company plans to take advantage of currently low interest rates to repay its debt and terms and the loan size are still subject to changes.
Technology news website The Information reported that ByteDance and the banks discussed raising $4 billion to $5 billion to refinance debt and fund overseas expansion.
ByteDance had been exploring a public listing in the beginning of 2021, sources have told Reuters, but in April the company said it had no imminent plans for an initial public offering.
In 2019, ByteDance secured a loan of about $1.3 billion, which will mature in April 2022, from a syndicate of 12 banks including Goldman Sachs, JP Morgan, Morgan Stanley, UBS, Citi, Bank of China and China Merchants Bank, according to data provider Dealogic.
Bitcoin bruised after chaotic debut as legal tender in El Salva
Bitcoin licked its wounds on Wednesday, a day after its heaviest losses in 2-1/2 months as El Salvador's historic adoption of the crypto asset as legal tender caused chaos online and on the street.
As per Reuters, the coin last traded at $46,560 , having endured wild trade the day before in which it hit a near four-month high of $52,956 before plunging 11.1 percent, its largest fall since June 2.
Analysts said the sharp retreat was partly due to investors who had bought the rumour of El Salvador's move now selling the fact.
At one point on Tuesday, the digital currency fell as much as 18.6%, wiping out more than $180 billion from the market.
It was a historical day for bitcoin as El Salvador's experiment of making it legal tender got off to a bumpy start.
As bitcoin wobbled, Salvadoran President Nayib Bukele said his government purchased an additional 150 bitcoins on Tuesday, worth around $7 million.