It has been a busy week for the startup ecosystem. Here is wrap of all that made news this week.
Tata Digital files application with CCI on acquiring majority stake in BigBasket
Tata Digital has filed application with CCI on acquiring a majority stake in online grocery platform BigBasket. Tata Digital is seeking to acquire 64.3% in BigBasket. The stake is being bought in BigBasket's B2B arm-Supermarket Grocery Supplies. As per the filing, the proposed transaction entails BigBasket’s B2B entity acquiring sole control of the B2C arm.
CNBC-TV18 first reported on February 16 that Tata Group is picking up the majority stake for around Rs 9,100- Rs 9,200 crore, buying out investors Alibaba and Abraham Group completely. The deal values BigBasket at Rs 13,300 odd crore (around $1.8 billion), higher than the $1.23 billion that the startup was valued at as of March 2020, as per data from Tracxn. Alibaba held a 29.1 percent stake in BIGBASKET, while the Abraham Group held a 16.3 percent stake, as per data from Tracxn.
Gaming company Nazara Technologies to launch IPO on March 17; price band fixed at Rs 1,100-1,101
Rakesh Jhunjhunwala-backed mobile gaming company Nazara Technologies will launch its initial public offering (IPO) for subscription on March 17 at a price band of Rs 1,100-1,101 per share. The issue closes on March 19. The offer comprises an offer for sale of up to 52.9 lakh equity shares by promoters and shareholders. At the upper end of the price band, the company plans to raise around Rs 583 crore from the issue. Investor Rakesh Jhunjhunwala held an 11.51 percent stake in Nazara Technologies as of September 2020 end. The IPO market lot size is 13 shares. A retail-individual investor can apply for up to 13 lots. ICICI Securities, IIFL Securities, Jefferies India and Nomura Financial Advisory and Securities (India) are the book running lead managers (BRLM) to the issue.
Nitesh Mittersain, joint MD, Nazara Technologies said that the company entered this business a decade early from an India point of view and it is open to collaborations with global players. "The company has Rs 300 crore of cash reserve and we are a Zero debt company. All businesses are cash flow positive. We did not feel a need to raise immediate cash," Mittersain said. The promoter holding before the IPO is 22.8 percent and it will remain 22.61 percent after the issue.
Ola to make electric cars after e-scooters, welcomes Tesla to India
Ola is building its first e-scooter manufacturing facility in Tamil Nadu’s Krishnagiri district at a frenetic pace, with the aim to bring the vehicle to Indian roads by June of 2021. The long-term plan for the company is to also manufacture electric cars, Ola Group CEO and chairman Bhavish Aggarwal said. The company says Phase 1 of the factory on the 500-acre site will be ready by June and that it will have a capacity to manufacture 2 million vehicles annually. The factory will be built in four phases, and the company says this will be completed by June 2022, by when the company will have a capacity to make 10 million units annually.
"This will make us the world’s largest two-wheeler manufacturer, and we will be contributing 15 percent of the global capacity. We are starting with a two-wheeler which is the quintessential Indian mobility product. We will start with the scooter, then go to motor-bikes, and eventually 4-wheelers,” Aggarwal said during a press meeting at the factory site in Tamil Nadu on March 5. He did not disclose details on when and where the electric car manufacturing will begin.
Ola is pitching the e-scooters as retail consumer vehicles. There will be some added to the fleet as well, Agarwal said. The company will focus on a Direct-to-Consumer approach with a focus on digital sales, but will also partner with dealers across the country. Aggarwal told CNBC-TV18 that the company will work with investors Hyundai and Kia for supply chain, manufacturing and go-to-market partnerships. Apart from domestic sales, the company is also simultaneously focusing on exports. “We will be building a global business, exporting to many markets. We will Make in India and Make for the World. We want to use India as a base to export EVs globally, boosting the Atmanirbhar plan," Aggarwal told CNBC-TV18.
New digital media rules: Delhi HC to hear plea filed by Foundation for Independent Journalism
The Delhi High Court (HC) has agreed to hear a plea filed by Foundation for Independent Journalism (FIJ), a non-profit organisation which runs The Wire, challenging the new rules regulating digital news portals. The court said it will hear the parties “at length” on April 16. This is the first challenge that has been issued to the IT rules that were recently notified by the government.
The foundation's director and The Wire founding editor, MK Venu, and Dhanya Rajendran, Editor-in-Chief of The News Minute, are also petitioners in the case. The petition has also sought interim protection against any possible coercive action that could likely be taken under the new rules until the next hearing.
The HC has said that the petitioners may move the court if any such step is taken and has sought the government's response on the plea. The government has formulated a 3-tier regulatory mechanism for online news portals. It gave powers to the executives to regulate, block the content.
OYO vs ZO Rooms: Zostel claims win in 3-year legal battle; OYO refutes
Hostel chain Zostel Hospitality Pvt Ltd, which owns Zostel Hostels and ZO Rooms, said that it has won a three-year legal battle against Oravel Stays Pvt. Ltd, the parent company of hospitality major OYO Hotels & Homes. This is expected to lead to shareholders of ZO Rooms owning 7 percent in OYO.
The Arbitral Tribunal ruled that OYO acted in breach of its binding agreement after its acquisition of rival Zostel Hospitality and directed OYO to sign the documents and issue the shareholding as committed in the Term Sheet. The Term Sheet executed between the two parties on November 26, 2015, promised ZO Rooms’ shareholders 7 percent of OYO.
According to Zostel, ZO Rooms completed its obligation under the agreement and transferred the business but OYO failed to transfer 7 percent to ZO Rooms' shareholders, which eventually led to the arbitration process. Zostel in its statement said: “If the order from the Arbitrator is to be given effect, allotment of 7 percent to ZO Rooms' shareholders will make this outcome the biggest exit in the Indian startup ecosystem."
The order was pronounced by the Arbitral Tribunal, former Chief Justice of India, Justice AM Ahmadi on March 6, 2021. "We welcome the judgement by the Hon'ble Tribunal. Beyond the monetary compensation, it was a fight for our rights and reputation. We are extremely relieved with the judgement that the arbitral tribunal has pronounced after diligently evaluating the merits and evidences produced by us over the last 3 years,” said Paavan Nanda, Ex Co-founder, Zostel. However, in a blog on Sunday evening, OYO said, “We are stating that the Arbitration Tribunal has granted no specific relief to Zostel in terms of receiving ownership in OYO.”
VerSe Innovation acquires photo-and-video sharing app Vebbler
VerSe Innovation, the parent company of news platform DailyHunt and short-video platform Josh, has acquired photo-and-video Sharing app Vebbler. This is the company’s second acquisition in 2 weeks. The unicorn had recently acquired AI-startup Cognirel Technologies. Vebbler lets people join groups called ‘clubs’ and share photos and videos around different interests, whether it’s fashion, travel, photography or entertainment. With over 100+ categories, users create content using Vebbler’s camera, and creation tools such as AI-based neural-art filters, effects, stickers, GIFs, drawing tools and fonts along with proprietary technology on video processing and editing. The company said that leveraging Vebbler’s camera and community will give Josh a powerful differentiator in the market.
BharatPe strengthens foothold in India: Expands to 100 cities
Fintech company for merchants, BharatPe has expanded its footprint to 100 cities across India. The expansion is in line with the company's commitment to drive financial inclusion across tier 2, 3 and 4 towns and cities in the country. The company has rolled out its UPI QR payment acceptance service and loans to merchant partners in the new cities in the first phase. It will top this up with other fintech products in the second phase over the coming months, a statement said.
Jio Haptik Technologies partners with US-based Zendesk
Jio Haptik Technologies Ltd has signed a strategic collaboration with US-based customer service platform Zendesk to use the latter’s Artificial Intelligence (AI) platform for customer support. Post the deal, Haptik will act as the frontline of customer service to automate answering routine queries and improve first-response time for businesses that use Zendesk. Haptik’s integration with Zendesk will help businesses unlock the power of their existing business systems to deliver a unified and AI-first user experience, it said in a statement.
Unitus Ventures portfolio companies’ hit a revenue of $141 million, companies impacted over 12.2 million lives in 2020
Early stage venture fund Unitus Ventures’ 2020 Annual Impact Report shows that its portfolio companies impacted close to 12.2 million bottom-of-the-pyramid lives an increase of 34 percent from 8.9 million in 2019. In terms of earnings, the cumulative revenue of the companies improved by 26 percent at $141 million.
Key highlights of Unitus Venture report:
- Invested in 24 companies (new and existing).
- Out of the 24 companies, 54 percent are in jobtech, 25 percent in fintech and 21 percent in healthcare.
- 8 exits.
- 17 received follow-on funding.
- Fund I and Fund II housed 24 startups in 2020.
- Sectors in focus for 2021 are jobtech, fintech and healthcare.
Fund raising this week
In global news this week:
Southeast Asia's Grab in talks for US listing via $40 billion SPAC deal: Report
Southeast Asia’s biggest ride-hailing and food delivery firm Grab Holdings is in talks to go public through a merger with a US special purpose acquisition company that could value it at nearly $40 billion, Reuters reported. Sources told Reuters that Grab was in talks with Silicon Valley-based technology focused investment firm Altimeter Capital Management but had also held discussions with other so-called special purpose acquisition companies (SPACs). Altimeter has backed two SPACs - Altimeter Growth Corp and Altimeter Growth Corp 2. The sources said that Singapore-based Grab, which has expanded rapidly from its beginnings as a ride-hailing firm in 2012 to become Southeast Asia’s most valuable startup worth more than $16 billion, had not finalised any deal.
Baidu looks to raise $3 billion in Hong Kong listing
Chinese search engine company Baidu Inc is looking to raise at least $3.03 billion by selling 95 million shares for its Hong Kong listing, according to a company filing. The shares will be priced at no more than HK$295 per share for retail shareholders and represent 3.4 percent of the company's total shares, it said in documents sent to the Securities and Exchange Commission.
Institutional investors could pay more for the shares, a term sheet seen by Reuters showed, without specifying a range. One Baidu ADR is equivalent to eight of its Hong Kong shares, the filings show.
The $3.03 billion target is based on Baidu’s closing price of $255.14 in New York on Wednesday, according to the term sheet. A further 14.25 million shares can be sold as part of a so-called greenshoe option that would take the size of the issue to $3.48 billion, it said. The final price for Baidu’s shares will be set on March 17 and trading will begin on the Hong Kong market on March 23. A maximum price of $HK295 per share represents a 15.2% premium to the closing price of Baidu’s US-listed stock on Tuesday. Baidu intends to use about half of the proceeds raised from the Hong Kong deal to invest in technology and enhance its artificial intelligence (AI) offers, according to the term sheet.
Coupang listing: Valuation surges to over $100 billion
SoftBank Group Corp-backed Coupang was valued at around $109 billion in its market debut on Thursday after South Korea’s largest e-commerce company raised around $4.6 billion in the biggest US initial public offering this year. Coupang’s stock soared 81 percent to open at $63.50. The company had priced 130 million shares sold in the IPO at $35 per share, higher than the marketing range $32-$34 per share, giving the Seoul-headquartered e-commerce giant a market value of $60 billion.
Deliveroo plans IPO, reports $309 million loss in 2020
British food delivery firm Deliveroo announces IPO plans, disclosing it posted an underlying loss in 2020 of 223.7 million pounds or $309 million. The Deliveroo IPO is one of the most eagerly watched-for initial public offerings (IPOs) in the first half of 2021, and is expected to value the company at more than $7 billion.
Online learning platform Coursera files for US IPO
Online education provider Coursera Inc on Friday filed for a stock market listing with U.S. regulators, revealing a surge in revenue from a boost to business due to the disruption caused by the COVID-19 pandemic.
Revenue rose 59 percent to $293.5 million for the year ended December 31, 2020, the company said in a filing. Coursera offers courses such as machine learning, cloud computing and language learning, with its platform used by more than 3,700 colleges and universities, according to the company’s website. It launched “Coursera for Campus” in response to the pandemic to help educational institutions offer courses to stuck-at-home students, reported Reuters.
Bill Gates-backed Evolv to go public via blank-check merger in $1.7 billion deal
Bill Gates-backed crowd safety technology provider Evolv Technology will go public through a merger with a blank-check company in a deal that values the equity of the combined company at around $1.7 billion, the companies said. The deal with NewHold Investment Corp will provide the merged entity with $470 million in proceeds, including a private investment of $300 million, Reuters reported. Besides Microsoft Corp’s co-founder Gates, Evolv is also backed by venture capital firm General Catalyst.
Cryptocurrency platform FalconX secures $50 million investment
Cryptocurrency trading platform FalconX has secured a $50 million investment from Tiger Global and B Capital Group. Over the last year, FalconX said its net revenue had grown 46 times, driven by increased demand for cryptocurrencies from institutional investors. Interest in cryptocurrencies as an asset class has grown due to a meteoric rise in bitcoin prices, which hit a record high of $57,492 against the US dollar last month, Reuters reported. The start-up’s existing investors include Accel, Coinbase Ventures, Accomplice, Lightspeed and Avon Ventures, a venture capital fund with ties to FMR LLC, the parent company of Fidelity Investments.
Jeff Bezos names former head of environmental think tank to lead $10 billion Earth Fund
Amazon.com Inc’s Jeff Bezos named Andrew Steer, who leads environmental think tank World Resources Institute, as the president and chief executive officer of his $10 billion Earth Fund. The billionaire started the Bezos Earth Fund last year and committed $10 billion to fund scientists, activists, nonprofit organizations and other groups fighting to protect the environment and counter the effects of climate change, Reuters reported. Steer has years of experience in environmental and climate science as well as economic and social policy in the United States, Europe, Asia and Africa, Bezos said in a Instagram post. Amazon, which delivers 10 billion items a year, has a massive transportation and data center footprint, and the e-commerce giant has faced criticism from within its own workforce for the impact that the company has on the environment.
Twitter's Dorsey auctions first ever tweet as digital memorabilia
"just setting up my twttr" - the first ever tweet on the platform is up for sale after Twitter boss Jack Dorsey listed his famous post as a unique digital signature on a website for selling tweets as non-fungible tokens (NFTs).
The post, sent from Dorsey’s account in March of 2006, received offers on Friday that went as high as $88,888.88 within minutes of the Twitter co-founder tweeting a link to the listing on ‘Valuables by Cent’ - a tweets marketplace. Old offers for the tweet suggest that it was put for sale in December, but the listing gained more attention after Dorsey’s tweet on Friday.
Amazon picks a minority stake in air cargo contractor ATSG for $131 million
Amazon has taken a minority stake in Air Transport Services Group, an air freight partner that operates a significant share of the company’s fast-growing aviation logistics unit, CNBC reported. Amazon exercised warrants in ATSG that will allow it to acquire about 13.5 million shares in the cargo airline at an exercise price of $9.73 per share, or more than $131.9 million, ATSG said in an SEC filing Monday. As part of a separate agreement, Amazon also purchased approximately 865,000 shares of ATSG, with no cash exchanging hands, the filing states.
(Edited by : Jomy)
First Published: IST