Startup Digest: Top startup stories of the week

Updated : March 05, 2021 06:22 PM IST

It has been a busy week for the startup ecosystem. Here is wrap of all that made news this week.

Razorpay announces its third and largest ESOP sale of $10 million for 750 current and former employees

Fintech unicorn, Razorpay announced its third Employee Stock Ownership Plan Buyback program worth $10 million (Rs 73 crore) for its 750 employees. All existing and former employees of Razorpay who hold vested stocks will be eligible to sell up to 33 percent of their vested ESOP shares. Sequoia Capital India and GIC, two of Razorpay’s key investors will be the buyers involved in this development. The share sale is expected to benefit employees across roles - from team leaders to support executives to administrative staff. Razorpay's 1,350 people team raised their $100 million Series-D funding in October last year.

Walmart-owned Flipkart in talks to add Cleartrip to its shopping cart: Report

Ecommerce company Flipkart is in discussions to purchase a controlling stake in online travel aggregator Cleartrip and bolster its presence in an intensely competitive segment, Moneycontrol.com reported quoting sources.

The move by Flipkart, owned by US retail behemoth Walmart, is aimed at taking on rivals MakeMyTrip, Yatra, Booking.com, EaseMyTrip, among others as the domestic economy recovers, and Indians who had deferred their holidays during the lockdown indulge in “revenge tourism”.

"Negotiations are on and the proposed deal is for the sale of a majority stake in Cleartrip," Moneycontrol quoted sources, adding that the talks may or may not necessarily fructify into a transaction. Cleartrip’s financial performance has been hit due to travel and border restrictions imposed post the outbreak of COVID-19. Besides India, it operates in the UAE, Saudi Arabia and Egypt.

"This is in line with Flipkart’s strategy to diversify and expand into product lines and categories via acquisitions and drive more GMV (gross merchandise value). If it is sealed, this deal can be seen as an opportunistic acquisition in the COVID-19 era," the person cited above added. Walmart acquired about 77 percent of Flipkart for around $16 billion in 2018, ratcheting up competition with Amazon Inc in the booming Indian ecommerce market.

Flipkart to expand grocery business to 70 cities in India

Flipkart plans to expand its grocery operations to 70 cities from the current 50+ cities as it ramps up its grocery operations to take on competition in India’s buzzing grocery segment. "Grocery continues to be one of the fastest-growing categories, with the increase in demand for quality food and household supplies from users.

In line with this, we have invested in scaling up our grocery operations across the country, strengthening ecosystem partnerships, thus ensuring a seamless grocery shopping experience through an expansive product selection, robust supply chain and smooth in-app experience for consumers," said Manish Kumar, senior vice president, grocery, general merchandise and furniture, Flipkart.

"We have witnessed increased demand for groceries from tier 2 cities in the past year, fueled by customers increasing preference for contactless shopping, from the comforts of their home. It is a trend that we think will continue and will set the course of e-grocery space in India," he added. Flipkart Grocery has over 7,000 products available across over 200 categories including household supplies, staples, snacks and beverages.

Social media cos want more time to comply with new intermediary rules

Days after the Narendra Modi government notified IT rules for social media intermediaries and digital media platforms, global players such as Facebook and Twitter, as well as domestic platforms such as ShareChat came together to discuss the implications of the new rules on Tuesday, and an extension to comply with the rules was among the issues discussed.

The meeting was held by industry body Internet and Mobile Association of India (IAMAI), which is looking to collate comments and concerns from the industry and is expected to put this forth to the government in the coming days, sources told CNBC-TV18.

While social media platforms with more than 50 lakh users have three months to comply with the new norms, sources said companies are looking for more time, especially since they have to put in place a compliance officer, a nodal contact person for 24/7 coordination with law enforcement agencies, and a resident grievance officer. Industry members said the companies will also need more time to streamline grievance redressal mechanisms, as the new rules mandate a unique ticket number for every complaint received by an intermediary, among other processes.

Many players will also have to update their AI tools, as the rules require that social media intermediaries should endeavour to deploy automated tools to identify content depicting rape, child sexual abuse etc. The companies are also seeking clarifications on a host of issues in the new rules, especially around the liability on the compliance officer, issues around breaking end-trend encryption on social messaging platforms such as WhatsApp and Signal, and the processes to provide users a mechanism for verification of their accounts.

ACT targets Rs 500 crore fundraise to tackle societal problems beyond COVID-19

ACT, a first-of-its-kind movement by founders, leaders and VCs from India’s start-up ecosystem, today announced its plans to raise an Rs 500 crore philanthropic fund to back solutions addressing societal problems at scale across four key areas - Education, Healthcare, Environment and Women’s participation in the workforce. Launched in 2020 to combat COVID-19, ACT 1.0 has funded 54 startups & 100+ projects and impacted 49 M+ lives across 27 states.

Uber says India recovery led by low cost products

Cab sharing platform Uber’s India business is showing strong signs of recovery on the back of increasing rider demand for low cost products ‘Auto’ and ‘Moto’. Some of Uber’s fastest recovering Metro markets after the lockdown are Kolkata, Hyderabad and Mumbai, the company said in a statement. Uber Auto’s recovery across India, based on gross bookings, has now exceeded pre-Covid levels with Mumbai, Delhi, Hyderabad, Mysore, Bhubaneswar, Jaipur, Nagpur, Indore, Nashik and Kochi recording the strongest growth.

UPI registers 2.29 billion transactions in February

Transactions on India’s Unified Payments Interface (UPI) stood at 2.29 billion in February compared with 2.30 billion in January, as per National Payments Corporation of India (NPCI). The total value of transactions on the UPI network stood at from Rs 4.25 lakh crore in February compared with Rs 4.31 lakh crore in January.

Fund raising this week

- UK fund manager Bay Capital has come in as a pre-initial public offer (IPO) investor in PB Fintech Pvt Ltd, the parent company of insurance aggregator, Policybazaar. Through a Rs 4,000 crore share sale, Policybazaar is set to go public. Before the insurance aggregator’s plans to unveil an IPO within the next few months, Bay Capital has finished a secondary transaction. It could invest more than $100 million in Policybazaar if Bay Capital chooses to be an anchor investor.

- Investment app Groww is looking to raise over $100 million in a fresh round, according to Entrackr, valuing the firm between $850 million to $1 billion. Ribbit Capital and Tiger Global are in an advanced stage to lead a $100-125 million worth Series D round in Groww along with significant participation from Sequoia Capital, Entrackr reported quoting sources.

- Digital debt platform Northern Arc has received $50 million debt financing from US International Development Finance Corporation (DFC), the US government’s development finance institution and one of the world’s leading impact investors, the company said in a statement. DFC has disbursed a second tranche of $25 million in financing and the first tranche of $25 million was made in December.

- Cleantech startup Clairco has raised Rs 4.2 crore in angel funding led by Sanjiv Bajaj’s Anicut Angel Fund with participation from Max Group and Angel List. The fresh infusion of funds will be used for product development, growth and hiring.

- Edtech platform ImaginXP has raised $1.5 million in funding led by Venture Catalysts along with co-investors like Shashank Deshpande, KrishKupathil, Samyakth Capital and others.

- Ecommerce cloud company Webscale has raised $26 million from investors and Silicon Valley Bank. The Series C round was led by BGV, STCAP Ventures and Mohr Davidow Ventures, with participation from Grotech Ventures, the company said in a statement.

- The ePlane Company has raised $1 million in seed funding led by deep-tech venture capitalist Speciale Invest, Indian-American entrepreneur and investor Naval Ravikant with participation from Java Capital, FirstCheque.vc, and IIM Ahmedabad’s CIIE.CO.

- IoT and Data Management startup Faclon Labs has raised undisclosed Pre Series A from LetsVenture.

- Online reseller, Cashify has raised $15 million in a Series D funding round from private equity Olympus Capital’s clean energy and sustainability arm, Asia Environmental Partners.

- EV startup Euler Motors raised Rs 30 crore as part of its ongoing Series A round, led by existing investors, Inventus India and Jetty Ventures. Existing investor Sujeet Kumar, Co-founder, Udaan also participated in this round, along with new investors Srinivas Anumolu & K Ganesh from Growth Story.

- DealShare has raised Rs 25 crore in a debt funding from Innoven Capital. This is the second round of fund raising that DealShare has raised in the last 6 months. In December 2020, DealShare raised Series C funding of around Rs 153 crore from WestBridge Capital, Alpha Wave Incubation - a venture fund managed by Falcon Edge Capital, Z3Partners, Matrix Partners India and Omidyar Network India.

- Insurtech startup Symbo Platform raises $9.4 million in Series A funding led by CreditEase Fintech Investment Fund and San Francisco based investment firm Think Investments, with participation from existing investors Integra Partners, Insignia Ventures and AJ Capital.

- School homework app, Questt has raised Rs 9.6 crore in a seed round funding led by Chiratae Ventures, AET Fund and entrepreneurs, including Kunal Bahl, Rohit Bansal, Pranay Gupta (Founder of 91 Springboard), Ramakant Sahrama (LivSpace), First Cheque, and Razorpay Founders.

- Retail tech start-up for Indian SMBs, Shoopy has raised an undisclosed amount of seed capital from US-based Campanile Investments LLC and Delhi-based investment firm Redcliffe Capital. This is Shoopy’s maiden funding round since the start-up’s inception in January 2020.

- IoT and Data Management startup Faclon Labs has raised undisclosed Pre Series A from LetsVenture. The startup helps in making Infrastructure smart, responsive, and self-learning.

In other news:

Inflexor Ventures partners with 100X.VC to fund startups

Venture Capital firm Inflexor Ventures will partner with micro VC fund 100X.VC to mentor and financially support startups. Under the partnership, 100X.VC’s deeptech portfolio companies will receive mentorship and funding access from Inflexor’s network as per a joint statement. Inflexor Ventures recently announced a DeepTech Fellowship program for seed to series A funding to startups from their $100 million fund.

FarEye acqui-hires logistics technology startup PY Technologies

Logistics SaaS platform FarEye has acqui-hired logistics technology startup PY Technologies in a bid to scale customer implementations and to incubate new ideas. PY technologies, earlier known as PRTouch, was founded by Jignesh Vasani in 2012. He will be joining FarEye as vice-president, professional services, the company said in a statement.

COGOS partners with Altigreen to Deploy 1000 EVs in its logistics fleet

Intra-city logistics company, COGOS announced its partnership with Altigreen today by deploying 1000 EVs in its fleet, a step to further strengthen its commitment towards electric mobility in the country. This partnership has materialized at an opportune time as the budget 2021 and the later impositions of green tax and new scrap policy extensively showed the government's intent to enhance EV adoption in India. COGOS would initially operate across all metros in India including Bangalore, New Delhi, Mumbai, Pune, Hyderabad, and Kolkata, before expanding to Tier 1 and 2 cities.

February 2021 records strongest comeback for IT sector post COVID-19 with 33% M-O-M growth: Naukri JobSpeak

The rise of data, digitization and automation have caused an irreversible transformation in the way companies have adapted during the post pandemic era. The hiring in the IT-Software/software services industry registered a record growth of +33 percent in February 2021 vs January 2021 because of the increased adoption of digital technologies in India.

At an overall level, the Naukri JobSpeak Index for February 2021, at 2,356, witnessed an uptick of +22 percent in hiring activity as compared to January 2021 at 1,925. In addition, at a Y-O-Y level, the overall hiring remains flat at -2 percent. With the country going back to normalcy, majority of the industries saw a positive sequential uptick in recruitment activities for the first time after the COVID-19 outbreak.

The telecom sector has registered a sequential jump of +24 percent in February 2021. Other key sectors such as medical/healthcare (+28 percent), education/teaching (+25 percent), FMCG (+20 percent), and BFSI (+17 percent) too have shown growth in M-O-M hiring in February 2021 while the Insurance sector saw a flat (-1 percent) hiring trend.

All six metros and key tier-2 cities witnessed positive hiring activities in February 2021 vs January 2021. Hiring in metros showed double-digit growth led by Bangalore (+31 percent), Hyderabad (+28 percent) and Pune (+24 percent). Tier-2 cities such as Ahmedabad (+31 percent) and Vadodara (+20 percent) also grew in February 2021 sequentially.

Zingbus drives into western India

Travel platform Zingbus has expanded its services into western India and will service cities in Maharashtra, Gujarat and some parts of Madhya Pradesh and Karnataka. With this expansion, Zingbus will be available in over 100 cities across Delhi, Punjab, Haryana, Jammu, Himachal Pradesh, Uttar Pradesh, Uttarakhand, Rajasthan, Maharashtra and Gujarat via daily connections, according to a company statement.

Facebook to end ban on political ads in United States

According to a Reuters report, Facebook will lift its temporary ban on political advertising in the United States. The company said in a blog post on Wednesday. The social media giant has had a months-long freeze on political, electoral and social ads, which it introduced as part of an effort to crack down on misinformation and abuses around the November 3 elections.

Facebook had temporarily lifted its ad pause in Georgia for the state’s January runoff elections but put it back in place. Alphabet Inc’s Google, which had lifted its own political ad ban in December, later reinstated it following the Jan. 6 siege at the U.S. Capitol by supporters of former President Donald Trump. Google lifted the ban last week.

WhatsApp adds voice and video calling feature to desktop version

Facebook Inc’s WhatsApp has introduced a voice and video calling feature on its desktop version. According to Reuters, the company said users will be able to use desktop screens for calls in both portrait and landscape mode, and the calls will be end-to-end encrypted. The move to facilitate calls over large screens would put WhatsApp on par with video-conferencing bigwigs Zoom and Google Meet, but it is not clear if it has ambitions to compete with the two in the enterprise space. WhatsApp, which recorded 1.4 billion voice and video calls on last New Year’s Eve, has benefited from the COVID-19 pandemic as people around the world used video-calling apps to stay connected while sheltering themselves at home.

UK starts probe on Apple over alleged App Store monopoly

Britain’s competition regulator has opened an investigation into Apple Inc after complaints that the iPhone maker’s terms and conditions for app developers are unfair and anti-competition, according to a Reuters report.

The probe will consider if Apple has a dominant position in the distribution of apps on its devices in the UK, the Competition and Markets Authority (CMA) said. Payment policies related to Apple’s App Store have for long drawn complaints from app developers as it requires them to use its payment system, which charges commissions of between 15 percent and 30 percent.

The company has also been at loggerheads with Epic Games, the creator of popular game Fortnite, which last year tried to avoid the 30 percent fee by launching its own in-app payment system, leading to Apple banning Fortnite from its store. The iPhone maker said on Thursday it will work with the regulator. “The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent,” Apple said in a statement.

Delivery startup Instacart valued at $39 billion in new funding round

Instacart has more than doubled its valuation in less than six months to $39 billion with a $265 million fundraising round from existing investors, as the grocery delivery company benefits from a surge in online orders during the COVID-19 pandemic. The San Francisco start-up, whose transaction volumes surged six fold last year as doorstep delivery boomed during lockdowns, said on Tuesday it plans to use part of the new funds to increase its corporate headcount by an estimated 50% in 2021, Reuters reported.

The company was valued at $17.8 billion in November following the closing of a previous funding round. That same month, Reuters reported Instacart had picked Goldman Sachs Group Inc to lead its initial public offering at around a $30 billion valuation. Its latest cash injection comes just a few months after California backed a ballot proposal that upheld the status of app-based delivery drivers as independent contractors- a major boost for the likes of Instacart and Uber Technologies Inc, which rely on people to work independently and not as employees. The new funding round was led by Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Co and T. Rowe Price Associates.

Twitter to tackle COVID-19 vaccine misinformation with labels, strike policy

Twitter will label tweets that include misleading information about COVID-19 vaccines and is introducing a strike policy to curb users from repeatedly violating those rules, to root out misinformation surrounding the coronavirus from its platform. "As health authorities deepen their understanding of COVID-19 and vaccination programs around the world, we will continue to amplify the most current, up-to-date, and authoritative information," Twitter said in a blog post.

Since introducing its COVID-19 guidance, the platform has “removed more than 8,400 Tweets and challenged 11.5 million accounts worldwide”.

The “goal is to eventually use both automated and human review to address content”, the blog said. The platform will start with English-language content and plans to expand to other languages over time.

Zoom quarterly sales surge 369% as the workforce continues to work from home

Video communications platform Zoom reported a whopping 369 percent growth in Q4 revenue at $882.5 million (YoY). Zoom is benefitting as workplaces continue to remain wary of opening up too soon. Customers with more than 10 employees surged 470 to 467,100, also exceeding estimates for a jump to nearly 442,600.

"The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic,” Zoom CEO Eric Yuan said in a statement. “As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers."

Apple's 270 US stores all open for first time since pandemic began

Apple has opened all its 270 US stores, the first time in almost a year after it was forced to shutter several outlets because of the COVID-19 pandemic. The company has been cautious in re-opening its retail stores, using a team that includes medical experts to make its own calls on a county-by-county basis and sometimes shuttering stores again when local rules would otherwise allow stores to operate. The iPhone maker has also expanded its ‘Express’ format, a wall built in front of the main store with sales counters protected by plexiglass and a few shelves of accessories such as phone cases and AirPods.

Jack Dorsey’s Square begins banking operations with Square Financial Services

Square Inc has announced that its industrial bank, Square Financial Services, has begun operations after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions, as per a company statement. Headquartered in Salt Lake City, Utah, Square Financial Services will “offer business loan and deposit products, beginning with underwriting and originating business loans for Square Capital’s existing lending product”, the statement said. “Bringing banking capability in-house enables us to operate more nimbly, which will serve Square and our customers as we continue the work to create financial tools that serve the underserved,” said Amrita Ahuja, Square, Inc. chief financial officer and executive chairwoman of the board of directors for Square Financial Services.

SoftBank's internet arm Z Holdings to invest $4.7 billion in tech over five years

SoftBank’s internet subsidiary Z Holdings will invest 500 billion yen or $4.7 billion in technology over five years with a focus on artificial intelligence, according to a Reuters report. The announcement follows the completion of the merger of its internet business Yahoo Japan with chat app operator Line creating a $30 billion internet heavyweight. Z Holdings is targeting sales of 2 trillion yen and operating income of 225 billion yen by 2023, the firm said in a statement.

Payments firm Klarna is now Europe's most valuable startup

Swedish payments firm Klarna has nearly tripled its valuation to $31 billion in less than six months with a new $1 billion private fundraising round, the company told Reuters. The new round, which was oversubscribed four times and will make the “buy now pay later” firm the most valuable European startup, confirms a Reuters story last week that it was finalising another private funding round. It also puts the Swedish fintech on a par with many of Europe’s biggest listed financial houses.

At $31 billion, the company’s value is comparable to major financial houses such as Barclays, Credit Suisse and Swiss Re and is larger than Germany’s biggest lender Deutsche Bank. Klarna chief executive Sebastian Siemiatkowski told Reuters he believes there was more opportunity ahead. “If you look at this valuation and compare it to some of the large retail banks in this whole industry, we are still a fraction of the opportunity that’s out there,” he said in an interview.

Polaris to launch its first electric vehicle

Motorcycle and all-terrain vehicle maker Polaris Inc has unveiled plans to launch its first electric vehicle, with an aim to advance the company’s position in the electric vehicle market, as per Reuters. Polaris said the full-size Ranger, which it is developing in partnership with Zero Motorcycles, would launch in late December. Deliveries of the vehicle will start in early 2022. In 2017, the company had said it planned to launch an electric bike under its marque Indian brand in four to five years. It is yet to provide an update on those plans.

Google pledges $5 million to address disparities in Covid vaccinations

Data shows that COVID-19 affects people of colour at much higher rates and Google has doubled down on its efforts to address the compounding racial and social inequities of this pandemic. According to Jacquelline Fuller, President, google.org, the company is committing $5 million in grants to organisations addressing racial and geographic disparities in COVID-19 vaccinations.

"About 71 percent of Black Americans and 61 percent of Hispanic Americans know someone who has died or been hospitalised from the virus compared to 48 percent of white Americans,” Fuller said in a statement on Friday. Data also shows that Black Americans are getting vaccinated at lower rates than their peers. “At Google.org, we aim to bring the best of Google to support underserved communities," she said. Google has already made a $100 million grant and 50,000 pro bono hour commitment to support COVID-19 relief.

Published : March 05, 2021 06:14 PM IST

Startup Digest: Top startup stories of the week

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