STARTUP DIGEST: Paytm gets shareholders' nod for Rs 16,600-cr IPO, LIC plans to invest in Zomato IPO, Flipkart raises $3.6 bn


There were several important developments in the startup space during the day on Monday. Here are the top stories from the startup universe.

STARTUP DIGEST: Paytm gets shareholders' nod for Rs 16,600-cr IPO, LIC plans to invest in Zomato IPO, Flipkart raises $3.6 bn
There were several important developments in the startup space during the day on Monday, which include Paytm shareholders approve primary raise of Rs 12,000 crore via IPO; LIC is planning to buy shares in Zomato’s IPO this week, reports claim; Flipkart raises fresh funds for $38 billion valuation; OLA Electric raises $100 million ahead of IPO; NRAI escalates allegation against Zomato, Swiggy in an additional information filing with CCI; and Google CEO says internet freedom under attack. Here are the top stories from the startup universe.
Flipkart raises $3.6 bn, valuation hits $37.6 bn
E-commerce giant Flipkart has raised $3.6 billion in a new round led by Canada Pension Plan Investment Board, Singapore government’s sovereign wealth fund GIC, SoftBank Vision Fund 2 and Walmart.
The funding round also saw participation from sovereign funds DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, and marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global.
The current investment has taken Flipkart Group’s valuation to $37.6 billion post-money, the company said.
Earlier, CNBC-TV18 had reported that Japanese investor SoftBank was set to return to Flipkart, three years after it exited the Indian e-commerce company after American retailer Walmart bought out the latter.
SoftBank could hand Flipkart a large $500-$600 million cheque. SoftBank's funding could be part of a larger round of $2-3 billion, sources had told CNBC TV-18, which would value the ecommerce player at around $30 billion.
Flipkart was valued last year at $24.9 billion following a $1.2 billion funding from Walmart.
Paytm EGM finalises primary fundraise of Rs 12,000 cr
Paytm's shareholders have given crucial approval for the company's mega IPO plan, approving the proposal for Rs 12,000 crore primary raise. The company also plans a secondary raise of Rs 4,600 crore, bringing the total IPO size to Rs 16,600 crore.
The shareholders also approved the proposal to declassify founder Vijay Shekhar Sharma as the promoter of the company. SEBI approval will be needed for declassifying Sharma as the promoter. However, he will continue to be the Chairman, Managing Director and Chief Executive Officer of the company.
The EGM also saw approval of the new ‘Articles of Association’ of the company as per the required guidelines, as well as the changes in the Employee Stock Options Plan.
Paytm is now looking to list as a Professionally Managed company, as per sources, and will need SEBI approval. CNBC-TV18 had reported that Alibaba and Ant Group, which own 37 percent stake in Paytm, will have to lower the stake for the company to be listed as a professionally managed company.
CNBC-TV18 had reported earlier that Paytm is eyeing a Diwali listing.
Paytm Money launches new feature, users can pre-book Zomato IPO
Digital brokerage platform Paytm Money will now let users apply for Initial Public Offerings (IPO) before the actual IPO Opening in the markets, the company said in a statement.
Paytm Money is the first in India to offer a “Pre-Open IPO Application” and this feature is expected to significantly boost the participation of retail users in IPOs.
Food delivery giant Zomato’s IPO is the first to be launched on Paytm Money with this feature and the platform has already received thousands of orders over the last 2 days, the company stated.
This new feature will allow users to place orders for IPOs throughout the week. The order placed will be recorded in the company’s system and will be sent across to the stock exchange for processing whenever the IPO opens and the users will be notified about the application process throughout the journey.
LIC plans to invest in Zomato's IPO: Report
The Life Insurance Corporation of India (LIC) is planning to buy shares in Zomato’s initial public offering (IPO) this week, according to reports.
If so, it will be seen as a big shift in LIC's investment pattern as the state-owned body usually puts money in the secondary markets or buys shares of ventures that are being privatised by the government.
The investment committee of the LIC will soon hold a meeting to take a final call on the plan to invest in Zomato’s IPO, the reports said.
The food delivery platform’s much awaited IPO is set to open on July 14, the food delivery platform plans to issue shares worth Rs 9,375 crore at a price band of Rs 70-72 per share.
OLA Electric raises $100 mn ahead of IPO
Ola Electric, the electric vehicles focused arm of ride hailing giant Ola, has raised $100 million of debt from the Bank of Baroda.
This 10-year debt will be used in funding and financial closure of Phase-I of the Ola Future factory, Ola’s global manufacturing hub for its electric two-wheelers.
Ola had, in December last year, said it will invest Rs 2,400 crore for setting up phase I of the factory.
“Today's agreement for long term debt financing between Ola and Bank of Baroda signals the confidence of the institutional lenders in our plans to build the world's largest two-wheeler factory in record time,” Ola Chairman and Group CEO Bhavish Aggarwal said.
Ola Futurefactory is coming up on a 500-acre site in Tamil Nadu. At full capacity of 10 million vehicles annually, it will be the world's largest two-wheeler factory, the company added.
CCI approves SoftBank’s investment in Swiggy; online food delivery firm elevates Phani as co-founder
Competition Commission of India (CCI) has approved SoftBank Vision Fund II’s investment in food delivery app Swiggy. Moneycontrol had reported earlier that SoftBank will invest $450-500 million in Swiggy at a post-money valuation of close to $5.5 billion.
At a time when Swiggy is preparing to close a billion-dollar fundraise, the food delivery platform has also elevated Phani Kishan Addepalli, its vice-president for strategy and investments, to a co-founder's status.
This will make Phani the third Swiggy co-founder, joining the original co-founders Sriharsha Majety and Nandan Reddy. Another co-founder Rahul Jaimini had quit in May 2020 to start up Pesto Tech.
Majety announced the move in a blog and described Phani as his 'fixer and go-to guy' for many important problems, since he joined Swiggy in 2015.
Phani's elevation comes on the heels of the company's COO Vivek Sunder stepping down.
Mobikwik files for Rs 1,900-cr IPO
Digital payments startup Mobikwik, backed by Sequoia Capital and Bajaj Finance has filed for an IPO of up to Rs 1900 Crore with the markets regulator Sebi on Monday.
About Rs 1,500 crore will be primary share sales while up to Rs 400 crore will be secondary share sales where existing investors can sell their stake.
The promoters plan to sell about Rs 190 crore of their stake, while Sequoia and Bajaj Finance will sell Rs 95 crore and 69 crore respectively, filings said.
Mobikwik was last valued at $700 million when it raised $20 million last month from Abu Dhabi Investment Authority.
Trell raises $45 mn in Series B round of funding
Lifestyle social commerce platform, Trell has raised $45 Million in a Series B round of funding led by financial group Mirae Asset, H&M Group and co-led by LB Investments. Previous investors, along with KTB Network, Samsung Ventures, and Fosun RZ Capital have also participated in this round. With this Trell’s total funding raised has reached $62 million to date.
Trell is planning to utilize the freshly infused capital to further develop its AI and ML technologies across regional languages as well as strengthen the team. Further, the funds will also help with the growth of community and commerce initiatives.
Edtech startup Oliveboard raises Rs 23 cr
Oliveboard, an edtech platform focused on competitive exams, has raised pre-Series A funding of ₹23 crore led by Indian Angel Network Fund with participation from Education Catalyst Fund (ECF) and Yukti Securities.
As per an official statement, the startup will use funds to expand its number of national-level courses and exams, and to add state-level categories. It will further focus on investing in technology for interactive data-driven products.
The company claims to have over 8 million users spanning across 2,500+ cities and towns in India.
LetsDressUp raises $300 K pre-series A round
D2C brand LetsDressUp has raised a $300 K pre-series A round of funding from Titan Capital and other marquee groups of investors. The funding saw participation from Sequoia Capital, Lykke Capital, Hauz Khas Ventures, Sweta Rau (a serial investor across multiple startups) and existing investors.
The startup will use the funds to refine the tech product, build the leadership team, and scale up the business.
LetsDressUp has built an end-to-end tech stack that brings customers, logistics partners, tailor partners and the startup’s own central hub together in one place.
SMOOR receives growth capital financing from Klub
SMOOR, a luxury chocolate brand has raised growth financing of an undisclosed amount from Revenue Based Financing platform, Klub.
The amount raised will be primarily used to sustain SMOOR’s current growth momentum as it gears up for geographical and product expansion. The funds raised from Klub will act as a bridge for SMOOR until it raises Rs 50 crore by the end of the year, the firm said.
The startup said that it clocked 20x growth in online sales during the last financial year and is now aiming to register another 10x growth this year on its online sales channel.
Jumbotail expands operations; steps up hiring
B2B marketplace Jumbotail has expanded to 13 cities across Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Punjab, Chandigarh, and nearly fifty smaller towns in Uttar Pradesh, Uttarakhand, Haryana, Bihar, Jharkhand, Punjab, Himachal Pradesh, Jammu, and Ladakh.
Having served nearly 30,000 kiranas in the Bengaluru region, the startup said it now has a national footprint with a presence across key consumption markets.
Jumbotail is investing in supply chain and logistics infrastructure for B2B e-commerce grocery in many cities including Chennai, Coimbatore, Salem, Vijayawada, Hyderabad, Mysore, Bengaluru, Chandigarh, Punjab, among others.
It is also extending fintech services for small and medium enterprises (SME) lending to kirana stores and sellers in these geographies. The company said it is hiring across all locations, roles and functions in technology, product, design, decision science, category management, marketing, supply chain planning and design.
Twitter appoints resident grievance officer, releases transparency report
Twitter, which is currently facing the heat from the government over non-compliance with the IT Rules, has now released its transparency report and has appointed a Resident Grievance Officer as per the regulations.
Twitter has named Vinay Prakash as its Chief Grievance Officer, as per its website. This comes weeks after the interim grievance officer appointed by the company had quit the position. Twitter has informed the Delhi High Court that it has appointed an interim chief compliance officer.
Twitter on Sunday also released its transparency report for the period of May 26-June 26, highlighting user complaints and action is taken. As per Twitter's report, the company took action on over 130 URLs. The majority of these cases were of defamation, while the remaining were largely around harassment.
Twitter also said it proactively suspended 18,385 accounts for child sexual exploitation and suspended over 4000 accounts for allegedly promoting terrorism globally.
TED to offer exclusive audio chats on Clubhouse
Clubhouse has announced that it is partnering with popular podcast network TED to bring exclusive chats to the social audio platform.
TED will host a series of rooms on their Clubhouse channel.
“This partnership will bring those minds into a dialogue with the millions of creators who make up the Clubhouse community,” said Kelly Stoetzel, head of thought leadership programming at Clubhouse.
Under the deal, Clubhouse will feature programs including “Thank Your Ass Off,” a weekly room hosted by author and TED speaker A.J. Jacobs and Clubhouse creator Mir Harris. Clubhouse will also add some of the interactive and social elements to TED’s content, which frequently features speakers and experts on topics from math to wildlife on its video and audio channels.
Clubhouse users will be able to engage with other audience members live and ask questions.
Exponential Capital launches early-growth fund to fuel Next Gen Entrepreneurs
In a bid to empower the next generation of entrepreneurs, Rohit Jain (Managing Director for Lionsgate South Asia and Networks-Emerging Markets Asia), Vishal Mahajan (Senior TMT and Consumer sector Investment Banker and Board Member), Debabrat Mishra (Managing Partner at Career Dynamics), Srikant Sreenivasan (Co-founder of HashInclude), and Siddharth Kabra (CEO of VoltUp) have launched a fund, Exponential Capital.
The new-age fund will support entrepreneurs who have long term vision and macro-objectives for scaling businesses that will transform lives, the fund claimed.
Exponential Capital said it will operate on +capital principle, which means the founders will bring in their network, their relationships, experiences and skills to mentor and guide entrepreneurs they will decide to invest in, serving as co-founders and partners.
The Fund is looking to back a selected few startup each year that could be the potential market shapers of next decade.
NRAI accuses Zomato, Swiggy of ‘Exorbitant Commission’ in an additional information filing with CCI
Restaurant industry body NRAI has filed additional information with the Competition Commission of India (CCI), alleging exorbitant commissions charged by aggregators Zomato and Swiggy.
NRAI claimed that Zomato and Swiggy are charging a commission in the range of 25 to 35 percent of the order value in 2020-21, and delay in payments that it said has affected the entire cash flow of its partners. It also alleged that Zomato and Swiggy are forcing restaurant partners to give discounts on their platforms to maintain good visibility on the platform and have shifted the entire cost burden on the restaurants.
“A lot of our partners are in extreme stressful conditions and are on the verge of closing. Restaurants are running at a loss since they cannot meet their expenses, yet they had to rely on Zomato and Swiggy due to the pandemic curbs and sentiments,” NRAI said in a statement.
It also added that food aggregators are threatening to delist the restaurants if they do maintain price parity.
This follows the industry body first filing information with the CCI on July 1.
UK SME fintech platform Tide raises $100 mn
UK-based fintech platform Tide has raised over $100 million in Series C funding led by Apax Digital. Existing investors Anthemis, Augmentum, Jigsaw, Local Globe, SBI, and SpeedInvest also participated in the round.
The latest round of funding brings the company’s total raised to date to $200 million. Tide is now valued at over $650 million post-money.
The new funding will allow Tide to develop their business financial platform, grow their market share, as well as expand globally, the firm said. Tide, in partnership with ClearBank, has also been awarded a total of nearly $120 million in grants from the RBS Alternative Remedies Package.
Recently, Tide announced that it was expanding into India, its first international foray with a commitment to invest $100 million and create 1000 jobs over the next five years.
China to order Tencent Music to give up music label exclusivity
China's antitrust regulator is set to order the music streaming arm of Tencent to give up exclusive rights to music labels which it has used to compete with smaller rivals, sources told Reuters.
The State Administration of Market Regulation (SAMR) will also fine it $77,150 for lapses in reporting the acquisitions of apps Kuwo and Kugou.
The move is the latest in a clamp-down to curb the economic and social power of China's once-loosely regulated internet giants. The campaign, which began late last year, has included a record 18 billion yuan fine on e-commerce firm Alibaba Group for abusing its market position.
In April, Reuters reported that SAMR aimed to fine Tencent at least 10 billion yuan, and that the social media leader was lobbying for leniency. Reuters also reported that SAMR had told Tencent Music it may have to sell Kuwo and Kugou.
China vows retaliation after US blacklists companies
China has opposed the addition of 23 Chinese entities to a US economic blacklist over issues including alleged human rights abuses and military ties.
The Ministry of Commerce said in a statement the inclusion of the Chinese entities was a "serious breach of international economic and trade rules" and an "unreasonable suppression" of Chinese companies.
Beijing "will take necessary measures to safeguard China's legitimate rights and interests," it said.
The U.S. Department of Commerce said on Friday it had added 14 companies and other entities to its economic blacklist, saying they had been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass detention, and high technology surveillance in the Xinjiang Uyghur Autonomous Region.
China tightens rules on foreign IPOs
In a move that would significantly tighten oversight over its internet giants, China has proposed new rules that would require nearly all companies seeking to list in foreign countries to undergo a cybersecurity review, according to Bloomberg News.
Companies holding data on more than 1 million users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be affected, controlled, and maliciously exploited by foreign governments,” the Cyberspace Administration of China said in a statement on Saturday.
The cybersecurity review will also look into the potential national security risks from overseas IPOs, it said.
The move announced on Saturday, which confirms a previous report by Bloomberg News, is one of the most concrete steps taken yet to restrain the ability of technology firms to raise capital in the US through a so-called Variable Interest Entity model that the likes of Alibaba Group to Baidu and Didi Global have adopted.
Google boss says internet freedom under attack
Google CEO Sundar Pichai has warned that the free and open internet is under attack in countries around the world.
In an interview to BBC, Google boss stated that many countries are restricting the flow of information, and the model is often taken for granted.
Pichai also argued that artificial intelligence is more profound than fire, electricity or the internet. Pichai told BBC that over the next quarter of a century, two other developments will further revolutionise our world: artificial intelligence and quantum computing.
WhatsApp targeted in EU consumer complaints over privacy changes
Facebook owned messaging app WhatsApp on Monday faced a barrage of complaints by the European Consumer Organisation and others over a privacy policy update, Reuters reported.
WhatsApp in January introduced a privacy policy which allows it to share some data with Facebook and other group firms. It said the changes permit users to message with businesses and would not affect personal conversations.
The European Consumer Organisation (BEUC) and eight of its members criticised the changes and filed complaints with the European Commission and the European network of consumer authorities, saying WhatsApp was unfairly pressuring users to accept its new policies.
The groups urged the European network of consumer authorities and EU data protection authorities to work together to address these privacy and consumer rights concerns.
Musk to testify in defence of Tesla's $2.6 bn deal for SolarCity
Tesla CEO Elon Musk is set to testify today in the Delaware Court of Chancery over Tesla’s $2.6 bn acquisition of SolarCity, Reuters reported.
His testimony will kick off a two-week trial in Wilmington, Delaware, before Vice Chancellor Joseph Slights, who will decide whether the SolarCity deal was fair to Tesla stockholders.
The lawsuit by union pension funds and asset managers alleges the celebrity CEO strong-armed Tesla's board to buy SolarCity, just as it was about to run out of cash. Musk owned a 22 percent stake in SolarCity, which was founded by his cousins.
Shareholders asked the court to order Musk to repay to Telsa what it spent on the deal, which would represent one of the largest judgments ever against an individual. However, even if the judge finds the deal was unfair, he could award a much lower amount of damages.
Musk has argued the deal was fair and that it was negotiated by the Tesla board free of his influence and approved by fully informed stockholders.
The report suggests that Musk plans to defend the purchase as a justifiable acquisition.
Last August, a judge approved a $60 million settlement that resolved claims made against all the directors on Tesla's board except Musk without any admission of fault. That left Musk, who refused to settle, as the sole remaining defendant.
Branson takes off first in space tourism race
British billionaire Richard Branson flew into space aboard his own winged rocket ship on Sunday.
Branson and five crewmates reached an altitude of about 88 kilometres over the New Mexico desert and then safely glided back home.
Branson became the first person to blast off in his own spaceship, beating Jeff Bezos by nine days.

Market Movers

Tata Motors295.55 -7.00 -2.31
Grasim1,549.50 -32.55 -2.06
Larsen1,611.75 -30.40 -1.85
Adani Ports680.05 -11.75 -1.70
Tech Mahindra1,131.00 -17.60 -1.53
Larsen1,612.00 -29.55 -1.80
HUL2,359.25 -19.40 -0.82
Reliance2,105.20 -15.80 -0.74
Asian Paints3,083.20 -21.25 -0.68
NTPC118.50 -0.80 -0.67
Tata Motors295.55 -7.00 -2.31
Grasim1,549.50 -32.55 -2.06
Larsen1,611.75 -30.40 -1.85
Adani Ports680.05 -11.75 -1.70
Tech Mahindra1,131.00 -17.60 -1.53
Larsen1,612.00 -29.55 -1.80
HUL2,359.25 -19.40 -0.82
Reliance2,105.20 -15.80 -0.74
Asian Paints3,083.20 -21.25 -0.68
NTPC118.50 -0.80 -0.67


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