STARTUP DIGEST: Top stories of the day

Updated : March 24, 2021 05:42 PM IST

There were several important development in the startup space during the day on Tuesday. Here’s a wrap of the top startup stories today.

IvyCap exits Purplle with 22x gains; Sequoia joins cap table

Online beauty platform Purplle has closed a $45 million deal from Verlinvest, Blume Ventures, JSW Ventures and new investor Sequoia Capital India as early backer IvyCap Ventures made a partial exit at 22x returns. Sequoia Capital India has joined the cap table as the startup aims to deliver 8-10X growth in the next 4-5 years, a statement read.

IvyCap Ventures that has been instrumental in fuelling Purplle’s expansion, invested Rs 15 crore in Purplle for a 30 percent stake in 2015. It sold a part of its shares in this round for Rs 330 crore, when Sequoia and Verlinvest invested $45 million in Purplle, valuing Purplle at Rs 2,200 crore (about $300 million), it said in a statement.

“Purplle has been on a robust growth trajectory. Even with a Covid year, we have delivered nearly 90 percent GMV (Gross Merchandise Value) CAGR (compounded annually) for the last 3 years. This, while scaling our private brands successfully; Good Vibes is already a Rs 150 crore brand. The investment will help to shape Purplle into a multibillion-dollar, digital-first, beauty and personal care enterprise,” said Manish Taneja, co-founder and CEO - Purplle, in a statement.

Founded in 2012, Purplle.com claims to have 7 million monthly active users. The beauty e-tailer has over 1000+ brands with nearly 50,000 products, available on its website and app. The company raised Series C funding at the end of 2019 from Goldman Sachs and Verlinvest.

Moglix valuation to triple to $1 billion, Falcon Edge to invest: Report

Industrial goods marketplace Moglix is in talks to raise $70-100 million in a round of funding which will triple its valuation to a billion dollars- making it India’s latest unicorn, Moneycontrol reported.

London-based hedge fund Falcon Edge Capital, an investor in multiple Indian unicorns such as Dailyhunt, Dream11 and Ola is in talks to lead the round, by investing about $40-50 million, while existing backers including Accel, Sequoia Capital, Tiger Global Management will contribute the rest, the report said.

Ratan Tata and Jungle Ventures are also early investors in the company. A spokesperson for Moglix declined to comment while Falcon Edge did not respond to emails seeking comment.

Moglix was valued at about $250-300 million in its last round in July 2019, when it raised $60 million led by Tiger Global- at a time when Tiger had gone on a B2B and software deal-making spree, the report added.

SMB digitisation startup FloBiz raises $10 million in Series A funding

SMB digitisation startup FloBiz has raised $10 Mn in a Series A round led by Elevation Capital with participation from existing investors Greenoaks Capital and Beenext.

The company, which offers a billing and accounting app myBillBook as its flagship product, intends to use the capital for team expansion, product development and accelerate sales and marketing efforts, a statement said.

Founded in 2019, FloBiz has grown 12X in the last 6 months with 3M+ small and medium businesses on boarded onto the platform and $6B+ annualised transaction volume recorded, the company said.

FloBiz had earlier raised $3 Mn in its seed stage round in 2019.

Edtech platform SkilloVillaraises $300K seed round from Titan Capital and angel investors

Edtech platform SkilloVilla has raised $300K in a seed round of funding from Titan Capital and other investors. The funding saw participation from prominent industry leaders like Haresh Chawla, Partner at True North, Miten Sampat of CRED, Aakrit Vaish, Co-founder and CEO of Haptik and Varun Alagh, Co-founder and CE of Mamaearth.

The funds will be used to expand the team and evolve the learning platform into one of its kind technology products, the company said. Currently, SkilloVilla has more than 2000 students on its platform and aims to enable 2 million+ students and build their future in the coming years, the statement read.

Rukam Capital & DSG Consumer Partners lead pre-series A funding in Native Milk

Farm-to-home A2 milk startup, Native Milk has raised an undisclosed amount of capital in a Pre-Series A funding round led by Rukam Capital and DSG Consumer Partners. Currently, the company is offering dairy products, including milk and ghee, in Mumbai. Native Milk aspires to expand its presence in the overall premium milk market in the metro cities with the capital infusion while maintaining its USP of traceable cruelty-free sourcing in the next three years, a statement said.

Urban Company and MyStartupEquity open source an ESOP framework

Urban Company, a tech-enabled home services marketplace, has today open-sourced a specially crafted ESOP policy for the startup ecosystem in collaboration with MyStartupEquity, a cap table and ESOP management product by LetsVenture.

Urban Company, in collaboration with MyStartupEquity has developed the open-source ESOP framework, which is available free of cost and can be accessed by one and all. With ESOP implementation generally being a tedious process, Urban Company and MyStartupEquity aim to provide a proper guide through this open source framework to help startups as well as private companies better structure terms and conditions and roll out ESOPs with the ingrained intention of sharing ownership with employees that eventually leads to wealth creation.

Urban Company worked with MyStartupEquity to make the open-source ESOP framework freely available. This framework can be used and modified by companies or startups while building their ESOP policy. This framework is a legally vetted document and the cornerstone of the policy is having simple vesting terms, a reasonable exercise price on options and a generous exercise period. The framework also comes with easy to use templates for grant and exercise letters.

Fintech leads India’s unicorn landscape; Fintech startups have raised $10 bn: Credit Suisse

India’s fintech startups have raised about $10 billion in the last decade led by payment platforms, as per a report by Credit Suisse.

In the report titled – ‘India’s 100-strong unicorn club drives radical change in the country’s corporate landscape’, the wealth management firm says, that India is now home to the third-largest set of unicorns globally, behind the US and China, and commanding a total valuation of $90 billion.

Constituting 30 of the Indian unicorn ecosystem, Fintechs, including e-commerce, have been leaders in the Indian unicorn landscape, with the sector spawning five unicorns having an aggregate valuation of $22 billion - highest amongst Indian unicorns, the report added.

“Indian fintech companies have attracted $10 billion of capital and are now at the forefront of India’s startup ecosystem. Digital payments are primarily leading the Fintech scale-up in India and have grown 10 times over the last five years, now having a 30% share totaling $450 billion," added Ashish Gupta, Head of Asia Financials Securities Research and Head of India Securities Research at Credit Suisse.

Riding on the UPI platform, digital payments have grown 10.5 times over the past five years to an annual payment run-rate of $450 billion, constituting 30 percent of retail transactions, the report said.

Over the last 10 years, payment startups have raised $4.2 billion in funding and digital lenders have raised $2.5 billion.

Credit Suisse notes that UPI is the major driver of this accelerated payment digitization as it opened up an interoperable payment network to large technology companies.

Digital payments in India continue to grow, with over 200 million active users and acceptance at more than 30 million merchants compared to 5 million traditional point-of-sale (POS) terminals, the report added.

“Covid-19 has accelerated the pace of digitization globally across communication, shopping and payments space. While part of this shift should gradually recover, as we come out of the pandemic, there is widespread consensus that it has brought a structural change in categories such as shopping and payments,” said Ashish Gupta.

An analysis of credit card spending of customers by Credit Suisse revealed that the pace of increase in the share of digital spending was vastly accelerated by the pandemic, with online spending increasing by almost 10 percentage points within nine months from 44% to 53%. The study showed a marked shift in consumer spending from offline to online.

Consumer payment players, in particular, have expanded to offer investing, insurance, lending, and e-commerce services. Merchant payment players have also added value-added services, merchant lending, and consumer financing at POS terminals to garner a higher wallet share.

Digital lenders have grown to $10 billion with more than a 40 percent share in new personal and consumer durable loans and are adding new loan products as confidence in their underwriting models increase, the report said.

Fintech companies have also forged partnerships with banks to embed credit products as well as investment and protection products. At the same time, these platforms added new channels of monetization and increasing user engagement.

On the back of proprietary digital platforms and partnerships with fintechs, digital has helped drive cross-selling, new business acquisition and customer servicing channels for incumbent banks. Larger private sector banks and the State Bank of India have developed their proprietary digital platforms, which source 60 percent to 70 percent of new retail customers and 60 percent to 80 percent of retail fixed deposits. Additionally, 75 percent of new credit cards and 50-60% of new home/micro, small and medium enterprises loans are scored from these digital entities.

Microsoft in talks to acquire Discord for more than $10 billion: Report

Microsoft Corp is in talks to buy messaging platform Discord Inc for more than $10 billion, Bloomberg News reported, citing people familiar with the matter.

Discord has reached out to potential buyers and Microsoft is one of them, the report said, citing people familiar with the matter. One person said it was more likely to go public than sell itself.

Earlier in the day, VentureBeat reported that Discord was exploring a sale and it was in final talks with a party, as per Reuters. Microsoft declined to comment, while Discord did not immediately respond to Reuters, the report added.

Discord, which is valued at around $7 billion as of last December, is a platform on which users coordinate group activities such as games, discussions and even virtual parties. The Xbox maker has been seeking to strengthen its video game offerings with $7.5 billion acquisition of ZeniMax Media last year, its biggest gaming acquisition ever.

The COVID-19 pandemic has boosted the prospects of gaming companies as people stayed at home and turned to video games for entertainment during lockdowns. With its strong gaming business, Microsoft has also been looking to own mass social media platforms. Its last big social media deal was the $26.2 billion acquisition of LinkedIn in 2016, while it failed in its bid for short video app TikTok’s U.S. assets in September last year.

Recently, the Financial Times reported about Microsoft’s interest in buying social media platform Pinterest Inc.

Abu Dhabi funds invest $150 million in messaging app Telegram

Abu Dhabi state fund Mubadala Investment Co and Abu Dhabi Catalyst Partners, part-owned by Mubadala, said on Tuesday they had invested a combined $150 million in messaging app Telegram.

Mubadala invested $75 million in five-year, pre-initial public offering (IPO) bonds of Telegram, while Abu Dhabi Catalyst Partners invested a further $75 million, Reuters reported.

“Telegram’s user base has reached a critical mass that places it amongst global tech giants,” Mubadala executive Faris Sohail Faris al-Mazrui said in a statement. “Telegram is well-positioned for an inflection point that will transform it into a leading global technology company”, Reuters reported.

Telegram, along with messaging app Signal, have seen an increase in users this year amid privacy concerns with larger rival Facebook-owned WhatsApp. Launched in 2013, Telegram has 500 million monthly users, according to Abu Dhabi Catalyst Partners. Telegram, already headquartered in the United Arab Emirates, will open an office in Abu Dhabi following the new investment, Mubadala said.

Abu Dhabi Catalyst Partners is a Mubadala joint venture with U.S. investment company Falcon Edge Capital. Mubadala, which manages more than $230 billion in assets, is UAE’s second-biggest state investor after Abu Dhabi Investment Authority. Both have invested in technology, with Mubadala contributing $15 billion to SoftBank’s $100 billion Vision Fund in 2017. Mubadala last year bought a 1.85% stake in Reliance Industries’ digital unit, Jio Platforms, for $1.2 billion.

Musk says SpaceX to land Starship rockets on Mars well before 2030

Elon Musk’s SpaceX will be landing its Starship rockets on Mars well before 2030, the billionaire entrepreneur said in a tweet on Tuesday.

The private space company had raised about $850 million in equity financing in February even as a prototype of its Starship rocket exploded during a landing attempt after a high-altitude test launch.

The SN9 prototype was a test model of the heavy-lift rocket being developed by SpaceX to carry humans and 100 tons of cargo on future missions to the moon and Mars, Reuters reported.

Musk, who leads several futuristic companies, including Tesla Inc, Neuralink and Boring Co, said on Tuesday the “really hard threshold is making Mars Base Alpha self-sustaining.”

A first orbital flight is planned for year’s end. Musk has said that he intends to fly Japanese billionaire Yusaku Maezawa around the moon with the Starship in 2023.

Amazon to cut Deliveroo stake to 11.5% in London IPO

Amazon.com is to cut its stake in British food delivery company Deliveroo to 11.5 percent in its upcoming initial public offering from 15.8 percent previously, according to a prospectus published by the company.

Deliveroo this week began roadshows for a London IPO and set a price range of between 3.90 and 4.60 pounds per share, which will give it a market value of between 7.6 billion pounds and 8.8 billion pounds ($10.46 billion-$12.11 billion).

This includes the sale of new shares to raise 1 billion pounds and about 128.2 million shares from existing shareholders at the final price, a Reuters report said.

According to the prospectus, Amazon is set to shed around 23.3 million shares as part of this, allowing the tech giant to raise between 90.87 million and 107.18 million pounds from the deal. Amazon raised its stake in Deliveroo to 16% last year in a deal that had to be cleared by the UK’s competition watchdog, and participated in a $180 million private funding round in January that valued the firm at more than $7 billion.

Eatfit Signs cricketer Devdutt Padikkal as brand ambassador

Healthy food platform – Eatfit has signed cricketer Devdutt Padikkal, as its brand ambassador for the four years. Devdutt Padikkal has represented Karnataka state in under-16 and under-19 and India in the under-19 tournaments. The partnership between Eatfit and Padikkal will be managed by the latter's management agency, Flipside Sport. Padikkal will represent the brand in all marketing campaigns for the next four years as the company aims to expand to 10 more cities in that timeframe.

Published : March 24, 2021 05:42 PM IST

STARTUP DIGEST: Top stories of the day

You May Also Like

Private hospitals can buy COVID-19 vaccines directly from May 1

COVID vaccination: Private vaccination centres to procure directly from manufacturers starting May 1

LIC collects highest ever new premiums worth Rs 1.84 lakh crore in FY21; claims at Rs 1.34 lakh crore

Trending on CNBC-TV18

recommended for you