STARTUP DIGEST: Top stories of the week

Updated : March 19, 2021 08:25:51 IST

There were many important developments in the startup space during the week. Here is wrap of all that made news this week.

Shunwei Capital exits Bombinate Technologies, parent company of Vokal & Koo

Chinese venture capital firm Shunwei Capital has exited Indian microblogging platform Koo. Former Indian cricketer Javagal Srinath, Bookmyshow founder Ashish Hemrajanai, Udaan co-founder Sujeet Kumar, Flipkart CEO Kalyan Krishnamurthy, and Zerodha founder Nikhil Kamath have bought out Shunwei’s stake, the company said. Shunwei Capital owned more than 9 percent in Bombinate Technologies, the company said in a statement. Koo's investors include 3one4 Capital, Kalaari Capital, and Blume Ventures. In February, Aprameya Radhakrishna, the CEO and Co-founder of Koo had told CNBC-TV18, that Shunwei Capital was on its way out.

Wingreens acquires Raw Pressery : A CNBC-TV18 Exclusive

Wingreens Farms has acquired loss making juices startup, Raw Pressery at a valuation of Rs 100 crore. Raw Pressery investors have got a share swap in the deal and founder, Anuj Rakyan has been paid in cash for his stake & has fully exited the company.

Meanwhile, Raw Pressery’s co-founder Shuja Shekh and its Chief Growth Officer Sreejit Nair will continue with the Raw Pressery/Wingreens combine. Raw Pressery’s Investors - Saama Capital, DSG Consumer Partners, Fidelis World, Alteria Capital and common investor, Sequoia Capital will now join Wingreens cap table. In fact, Sequoia Capital is a common investor in both companies.

New ecommerce policy draft drops regulator, cites equal treatment for sellers

A new draft ecommerce policy was circulated in inter-ministerial meeting on Saturday, with a focus on equal treatment to sellers and prevention of market dominance by a few players, a copy of which CNBC-TV18 has seen. This is the third such draft of the proposed policy for the sector that has been circulated since 2019.

The new draft does not mention an ecommerce regulator as was highlighted in the previous draft that was circulated in July 2020. Instead, it refers to a Standing Group of Secretaries on e-commerce (SGoS) that will work on administering the ecommerce policy. Also, while the previous two drafts had detailed points around data protection, the new draft policy only refers to upcoming regulations for personal, non-personal data.

Another important highlight is that for players with FDI. The FDI policy shall prevail in case of inconsistencies between the two policies.

India saw $10 bn VC investments in 2020, added 7,000 startups & 12 unicorns : IVCA - Bain & Company report

A pandemic notwithstanding, India clocked VC investments of about $10 billion in 2020, which is the highest in recent years after 2019, according to the India Venture Capital Report 2021 by IVCA and Bain & Company.

The year saw continued momentum in consumer tech and SaaS space - VC investment value in consumer tech and SaaS grew by 25 percent and 10 percent, respectively, in 2020 Vs 2019.

India focused funds raised $3 billion in the year, 40 percent higher than in 2019. Leading VC firms - Sequoia Capital, Elevation Partners, Falcon Edge, and Lightspeed closed new funds for India investments in 2020.

“In terms of key sectors receiving investments, consumer tech, SaaS, and fintech continued to lead the way, accounting for 75% of VC investments in 2020 vs. 65 percent in 2019. Fourteen of 22 VC deals were more than $100 million in size. Key subsectors receiving investments included edtech, foodtech, gaming, and media and entertainment in consumer tech; verticalised solutions within SaaS; and payments within fintech. SaaS in particular saw clear signs of maturity, with average deal size increasing dramatically in 2020 over 2019—$14 million in 2019, growing to $25 million in 2020”, the report said.

India is now among top five startup ecosystems globally, 7,000 new startups were founded in 2020, with a 13 percent growth in seed stage deals. The year also saw the largest ever increase in unicorns in a single year - 12 unicorns compared to eight in 2019. India is now home to 37 unicorns.

Even though investors were bullish, average deal size in 2020 declined by 15 percent vs 2019, driven by a higher number of smaller deals.

“Going forward, we expect deal momentum in India to continue into 2021, with the second half of 2020 seeing deal activity recover to pre-Covid19 levels—VC investments totalled $3 billion in January to March, declined to $1.1 billion in April to June, and then recovered to $3 billion each in the next two quarters. Further, the number of active VC funds continued to grow in 2020 – at 520 vs 480 in 2019, with multiple new funds investing such as Inflection Point, Avataar, Coatue, D1 Capital, amongst others”, the report said.

2020 saw a slowdown in VC exits – down 70 percent from $4.4 billion in 2019 to $1.3 billion in 2020 due to depressed valuations and disruption of operations of startups. It is expected to recover over the next 1–2 years as portfolios mature.

Compared to 2019, investment value grew 6x in Edtech, 4x in Foodtech, 2.7x in Gaming, and 2.4x in media & entertainment, signifying the role of Covid-19 in accelerating digital adoption. Meanwhile, industrial lockdowns and decline in economic activity negatively affected investments into B2B commerce and tech that saw investment value declining by 50 percent in 2020.

In Funding News

The Indian startup ecosystem picked up $202 Million in funding across 15 deals – this as per data from Venture Intelligence. The total funding so far in 2021 now stands at $2828 Million, with 152 deals so far.

Some of the notable deals include -

PolicyBazaar raises $75 mn to fund UAE expansion

Isurance aggregator PolicyBazaar raises $75 million led by Falcon Edge for UAE business. The company will deploy the capital to expand its services in the UAE and West Asia.

Neeraj Gupta, CEO at PolicyBazaar UAE, said the firm plans to build motor, health and life insurance product categories in the UAE region.

“So far, we have sold sum assured worth $100 million through our term life insurance products and we intend to scale this figure to $1 billion in the next 12 to 18 months,” Neeraj said according to media reports. Investors are understood to have infused the funds in the online insurance aggregator’s UAE arm.

Rupeek raises $33 mn funding

Gold loan platform Rupeek raised $33 million led by GGV Capital, Vostok Emerging Finance, High Sage Investments, Bertelsmann BV, and Gemini Investments. Almost a year ago, the company had mopped up $30 million in Series D financing led by Flipkart’s co-founder Binny Bansal. The company is likely to raise more capital in the ongoing Series E round.

MyGlamm raises Rs 175 crore from Amazon, Wipro Consumer and others

Direct-to-consumer beauty brand MyGlamm has closed Rs 175 crore Series C funding round with investments from Ascent Capital, Amazon, and Wipro Consumer, valuing the company at more than $100 million. This is also one of the first investments made by Amazon in a beauty brand in India.

Founded in 2017 by Darpan Sanghvi, MyGlamm offers over 600 cruelty-free and vegan products across makeup, skincare and personal care reaching out to over 10,000 offline point of sales across 70 cities in India. It plans to increase the network to 25,000 POS this year, the company said in a statement.

In August last year, MyGlamm acquired POPxo, a digital community for millennial women founded by Priyanka Gill. The company is now run jointly by Sanghavi & Gill. It is currently at a run rate of Rs 210 crore and looking at closing the calendar year with Rs 600 crore, as per the statement.

With the Series C round, MyGlamm has become the fastest beauty brand to cross the $100 million valuation mark in three years of launch.

Jungle Ventures makes maiden Ed-tech investment in Leap with $17 million in Series B

Overseas education platform Leap, which runs leapfinance.com and leapscholar.com, has raised a $17 million Series B in a new round of equity financing. The round was led by Singapore-based Jungle Ventures, with participation from Sequoia Capital India and Owl Ventures.

Founded in 2019, San Francisco headquartered Leap is an online platform that offers end-to-end services like counselling services, visa services, education loans and other financial products for students pursuing international education & careers. Leap has since expanded the product suite and also expanded to Canada, UK and Australia.

This raise comes in less than a year after Leap raised $5.5 million led by Sequoia Capital India, taking the total capital raised by the startup to $22.5 million. Leap plans to use the new capital to expand its product portfolio and further strengthen its team across technology & business functions, expand geographically and grow its student communities. The company plans to establish global offices for institutional partnerships and other business functions.

OZiva raises $12 million in Series B led by Eight Roads Ventures

Plant-based nutrition brand OZiva has raised $12 million in a Series B round led by new investor Eight Roads Ventures, with participation from F-Prime Capital and existing investor Matrix Partners India. The brand has a portfolio of products across categories such as women’s health, skin, hair, men’s health, and general wellness, developed using natural, plant-based ingredients. It combines modern science and technology with the goodness of Ayurvedic herbs to enable holistic living, the company claims. The funds from this round will be used to build out the team, enter new product categories, build out its technology platform to provide more value-added services , and establish OZiva as a leading consumer health brand in India, the company said.

Pixxel closes seed funding of $7.3 million

Space startup Pixxel has raised a $7.3 million seed round from Omnivore and Techstars with participation from Lightspeed Ventures, BlumeVentures, growX, Ryan Johnson and others.

This additional funding will enable Pixxel to continue to rapidly scale its operations to meet the growing demand of high-quality remote sensing data through hyperspectral imaging, the Bengaluru-based private earth imaging company said in a statement.

IndiaLends raises $5.1 mn from existing investors ACP Partners & DSG Consumer Partners

Major digital lending platform, IndiaLends has raised $5.1 million in a financing round led by existing investors ACP Partners and DSG Consumer Partners.

This is a follow up round to IndiaLends’ $10 million Series B, raised in July 2018, from ACP Partners and existing investors DSG Consumer Partners and American Express Ventures.

The Delhi-NCR based firm will use the fresh funds to expand its technology platform, increase its market footprint and amplify its product offerings to meet the pent-up demand in a post-COVID economic recovery.

Prescinto raises $3.5 mn in seed round

Solar analytics startup Prescinto has raised $3.5 million in a seed round by Venture Catalysts with participation from Inflection Point Ventures, Mumbai Angels and Lets Venture.

An IIOT and AI-powered clean energy SaaS platform, Prescinto claims it increases solar power plant generation by 7 percent at a cost of 0.1 percent of revenue resulting in 20X-50X RoI.

Prescinto’s AI identifies the root causes of the plant’s underperformance in real-time and helps in reducing costs of operation and maintenance. With an aim to increase clean energy without additional investment, the startup identifies and reduces the losses in the plant. This resulted in a return of 20X-50X for solar asset owners and operators in the first year itself.

Euler Motors raises additional $2.6 mn in Series A round

Euler Motors has closed its Series A funding round at $9.5 M, with additional investments of $2.6 M raised from new investor ADB Ventures, the venture investing arm of Asian Development Bank and existing investor, Blume Ventures. This also marks the first investment by ADB Ventures in an EV company globally.

The new funds will be used for Euler Motors’ upcoming launch of its three-wheeler cargo vehicle this year, and support market expansion in India to cities like Bangalore, Kolkata, Ahmedabad & Pune, in addition to Delhi NCR. This round follows capital infusion of $4 million led by its existing investors - Inventus Capital and Jetty Ventures – announced earlier this month.

With this, Euler Motors has raised a total of $11.6 M since inception in 2018. Investors include ADB Ventures, Blume Ventures, Inventus Capital, Jetty Ventures, US based Emergent Ventures, Andrew Lee, Sujeet Kumar, Cofounder, Udaan, and Srinivas Anumolu & K Ganesh from Growth Story.

Blive raises $1 mn in pre-Series A round

EV Experience platform BLive has raised $1 million as part of follow-on capital of Pre-Series A round. The funding which was a combination of debt & equity was led by LetsVenture, Mumbai Angels, JITO and Credit Wise Capital. The company had raised funds led by a strategic investment from DNA Networks in September 2019.

The company is operates in 15 cities across 9 states, and claims to have successfully completed over 10,000 eBike tours.

MODIFI announces $60 mn debt facility with SVB; to address increasing demand in India & fuel global expansion

Global fintech, MODIFI has announced a new $60 million debt facility with Silicon Valley Bank (SVB), bringing its total raised capital to $111 million. The facility from SVB’s German Branch will be used to address increasing demand in India and other existing markets, as well as fuel MODIFI’s continued growth in new geographies, particularly the US, the company said.

The venture claims, expansion into the US, paired with the existing coverage, will establish MODIFI as the only digital trade finance platform focused on SMEs that spans the three major trading regions of Europe, Asia and North America - a cluster which encompasses nearly 80 percent of global imports and exports respectively.

MODIFI’s digital trade finance platform provides SMEs with buyer and seller financing in a matter of days. Founded in 2018, MODIFI is tackling a $20 trillion industry in which 50 percent of requests for Trade Finance by SMEs are rejected by banks, resulting in a funding gap of $1.5 trillion annually.

In Global News

Google to invest over $7 billion in US offices, data centers this year

Alphabet Inc’s Google plans to invest over $7 billion in offices and data centers in the United States this year.

Google’s spending includes $1 billion in its home state of California. The move comes at a time when many companies are exiting Silicon Valley after the COVID-19 pandemic triggered a broader shift to remote work, making companies reconsider the state’s higher operational costs and hefty taxes.

The investments would create at least 10,000 new full-time Google jobs, Chief Executive Officer Sundar Pichai said.

Uber grants UK drivers worker status after losing major labor battle

On the heels of losing a major labor battle in the United Kingdom, Uber will reclassify all U.K.-based drivers as workers. Under the new designation, more than 70,000 drivers will receive some benefits, including minimum wage, holiday time and pension contributions, but they will not get full employee benefits.

Uber announced the change in a Securities and Exchange Commission filing, adding that its U.K. ride-hailing business accounted for 6.4 percent of all mobility gross bookings in the fourth quarter of 2020.

While the move will increase Uber’s costs in the U.K., the company is still targeting adjusted EBITDA profitability by year-end, CNBC reported.

Earlier this year, Uber lost a major legal battle in the U.K. around this issue. The country’s Supreme Court upheld a ruling that a group of drivers were workers, not independent contractors. While the decision applied to a small group of drivers, thousands more have taken action against the company.

In an op-ed in The Evening Standard, Uber CEO Dara Khosrowshahi wrote that following the Supreme Court ruling, “we could have continued to dispute drivers’ rights to any of these protections in court. Instead, we have decided to turn the page.”

“I know many observers won’t pat us on the back for taking this step, which comes after a five-year legal battle,” Khosrowshahi said. “They have a point, though I hope the path that we chose shows our willingness to change.”

Coinbase valuation pegged at $68 billion ahead of landmark US listing

Coinbase Global Inc, the largest U.S. cryptocurrency exchange, said that recent private market transactions had valued the company at around $68 billion this year ahead of a planned stock market listing.

The eye-popping valuation underscores how the perceived value of Coinbase has rallied in lock-step with the surge in the price of cryptocurrency bitcoin, Reuters reported.

In a regulatory filing, Coinbase said its stock in the private market traded at a weighted average price of $343.58 in the first quarter of 2021 through March 15. In the third quarter ended Sept. 30, Coinbase’s stock traded at an average of $28.83 per share for a valuation of $5.3 billion. That represents a nearly 13-fold jump in its valuation in the space of a few months. According to data platform PitchBook, Coinbase was valued at a shade over $8 billion during its last private fundraise in October 2018. Coinbase’s implied valuation eclipses that of New York Stock Exchange parent Intercontinental Exchange Inc (ICE), Nasdaq Inc and the London Stock Exchange, and puts it $4 billion short of futures exchange operator CME Group. Coinbase’s latest valuation is almost 53 times its revenue in 2020. By comparison, ICE currently trades at a 10.67 price-to-sales ratio, according to Refinitiv data.

The latest filing from Coinbase also signals heightened confidence that the listing will be approved by regulators. A successful listing by Coinbase, whose business is primarily focused on digital currencies, would represent a landmark victory for cryptocurrency advocates vying for endorsement for a sector that has struggled to win the trust of mainstream investors, regulators and the general public, the report said. It could also be seen as a tacit regulatory approval of assets traded on Coinbase’s platform. The company has more than 43 million users in more than 100 countries.

Coinbase did not indicate in the latest filing if it had received approval from regulators that would allow it to trade cryptocurrencies that have been classified as securities in the United States.

Facebook to label all posts about COVID-19 vaccines

Facebook is adding informational labels to posts about vaccines as it expands efforts to counter COVID-19-related misinformation flourishing on its platforms.

CEO Mark Zuckerberg said in a blog post on Monday, that labels will contain “credible information" about the vaccines from the World Health Organization. They will be in English and five other languages, with more languages added in coming weeks.

“For example, we’re adding a label on posts that discuss the safety of COVID-19 vaccines that notes COVID-19 vaccines go through tests for safety and effectiveness before they’re approved," Zuckerberg said. The social network is also adding a tool to help get users vaccinated by connecting them to information about where and when they can get their shot. Facebook and Instagram have been criticized for allowing anti-vaccination propaganda to spread and for being woefully slow in weeding out the misinformation, often with fact-checks, labels and other restrained measures.

Published : March 19, 2021 08:25 PM IST

STARTUP DIGEST: Top stories of the week

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