Troubled edtech giant BYJU’S laid off nearly 600 employees from the content and marketing teams in October as part of its ongoing restructuring exercise, sources told Inc42. 

The move impacted the content and video team more than the marketing team as the former division was shut entirely, the sources said, adding that teachers and educators who were part of the content production team were also impacted by the move. 

The layoffs were part of the retrenchment exercise being carried out under the leadership of BYJU’S new India CEO Arjun Mohan. The development follows a report about BYJU’S marketing head Atit Mehta, content head Asheesh Sharma, and heads of other verticals exiting the company. 

A detailed questionnaire on the latest developments sent by Inc42 to BYJU’S remained unanswered till the time of publishing this story.

Last month, Inc42 reported that BYJU’S planned to lay off nearly 3,500-4,000 employees. The layoff numbers were only for Think & Learn Private Ltd, the parent company of BYJU’S, and didn’t include its subsidiaries, sources told Inc42 then.

In a statement, a BYJU’S spokesperson had then said, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base and better cash flow management. BYJU’S new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.”

BYJU’S Many Troubles

The edtech decacorn is currently fighting on multiple fronts and has been in the news for all the wrong reasons.

 It was also involved in a legal battle in the US with the lenders of its $1.2 Bn Term Loan B and is currently in talks to restructure the terms of the loan.

Amid the cash crunch, the company is planning to sell Great Learning and Epic for about $800 Mn-$1 Bn. 

According to a Bloomberg report, BYJU’s is in talks with the US-based private equity fund Joffre Capital to sell Epic for $400 Mn.

Meanwhile, sources told Inc42 that cofounder Byju Raveendran is in talks with the US and India-based edtech firms to sell Great Learning for about $400 Mn.

All this comes at a time when there is still no clarity on BYJU’S financial performance in FY22. After multiple delays and missed deadlines, BYJU’S last week released select numbers for its standalone business for FY22.

In a statement, it said Think and Learn Private Ltd reported an EBITDA loss of INR 2,253 Cr in FY22 as against an EBITDA loss of INR 2,406 Cr in FY21. Total income stood at INR 3,569 Cr as against INR 1,552 Cr in FY21. 

But neither did the statement mention the net loss figure for the standalone business nor did it provide any details about the consolidated financials for the year. The edtech firm’s consolidated net loss surged 1,880% to INR 4,588 Cr in FY21.

However, as per the sources, BYJU’S is in the process of filing its consolidated financials for FY22 with the Ministry of Corporate Affairs in the next two weeks.

Mohan’s Attempts To Put The House In Order 

Last month, Inc42 reported that Mohan, who took over as the India CEO of BYJU’S in September this year, is looking to turn around the company’s fortunes by bringing down costs.

As part of this exercise, he ordered an immediate hiring freeze and was said to have zeroed in on senior employees and vertical heads for layoffs. The company also fired employees from sales, HR, finance and tech teams in this exercise. 

“There is a rumour going on in the Bengaluru head office that the company will now be brought down to 2015 levels when it comes to the number of employees, with more focus on junior-level positions,” a source told Inc42 earlier.

However, the company would continue to hire business development associates (BDAs) as it looks to shore up its revenue. 

Meanwhile, Mohan was also said to have ordered a pause on further expansion of BYJU’S offline tuition centres, which were started last year, amid high operational costs and a large number of refund and cancellation requests from students.

While the impact of these changes would only be visible in BYJU’S financial statements for FY24, all eyes are on the edtech’s consolidated FY22 numbers for now. 

The post EXCLUSIVE: BYJU’S Sacks 600 Employees From Content, Marketing Teams In Ongoing Restructuring Exercise appeared first on Inc42 Media.

Bengaluru-based inter-state electric bus service provider Fresh Bus has raised another INR 7.5 Cr in its second seed funding round from marquee investors like CRED founder and CEO Kunal Shah, TVS Motors MD Sudarshan Venu, and Rivigo CEO and founder Deepak Garg. 

With this, the total funding raised by the startup stands at INR 23.5 Cr. 

Speaking to Inc42, Fresh Bus founder and CEO Sudhakar Reddy Chirra said the startup will use the fresh funds primarily for tech development. Some amount would also be used for expanding its team. 

“Fresh Bus is not just a bus operation but more of a tech plus sustainability business,” Chirra said. “We have a lot of data coming in, we use AI and ML to predict the fare for the routes, and so on.”

With sustainability currently being a key focus for many, Fresh Bus has been able to attract new investors as it brings both carbon emission reduction and tech innovation to the table, he added.

Founded by AbhiBus founder Chirra in 2022, Fresh Bus launched its electric bus operations on the Bengaluru-Tirupati route earlier this year. Currently, the startup has 20 buses, which operate on two routes – Bengaluru-Tirupati and Hyderabad-Vijayawada. 

It is aiming to deploy about 70 buses in total by March 2024 and operate them on eight to ten routes, including Bengaluru-Chennai, Mumbai-Surat, and Delhi-Dehradun. The startup plans to have at least 170 ebuses on Indian roads by December next year.

Fresh Bus claims to have seen substantial traction since the launch of its bus services, posting a turnover of INR 6.5 Cr from April to October this year. 

Chirra also claimed that 1.1 Lakh passengers have already used Fresh Bus’ services and 50% of them turned out to be repeat customers, travelling more than twice. 

Meanwhile, the startup has also set up its own charging stations. It currently has four charging stations and aims to increase this number to at least 20 by the end of next year to support its growing ebus ecosystem. 

With climate change and carbon emissions becoming a major issue, electric buses are steadily gaining more traction and government support. In the ebus market, Fresh Bus’ biggest competitor today is GreenCell Express. 

Earlier this year, GreenCell Express raised debt funding of INR 3,000 Cr from state-owned REC Ltd.

Meanwhile, Fresh Bus secured INR 26 Cr from ixigo in its first seed funding round earlier this year. However, Chirra told Inc42 that the startup didn’t require INR 10 Cr from that and the funding raised in that round should only be considered as INR 16 Cr.

The post Exclusive: ixigo-Backed Fresh Bus Bags Funding From CRED’s Kunal Shah, Others appeared first on Inc42 Media.

Unacademy-owned software-as-a-service platform Graphy has let go of 20-30% of its workforce, or nearly 50 employees, in the past few weeks, multiple sources privy to the development told Inc42. 

Graphy, which offers learning management system services to creators in the edtech space, has been struggling to hit the revenue target, leading to a restructuring within the firm, Inc42 learned from sources. 

However, it wasn’t immediately clear whether the restructuring was undertaken across Graphy’s acquired companies — Spayee and Scenes. 

In a statement sent to Inc42 after publishing the story, an Unacademy representative stated that the job cuts happened on the basis of performance and have nothing to do with layoffs or revenue growth plan.

“We have not done any layoffs, and we remain focussed on enhancing our team’s performance and overall productivity so we can continue to compound our growth”, a Graphy spokesperson said.

“We continue to make significant strides in achieving our goals, and our commitment to our mission is unwavering,” the statement added. 

Meanwhile, the development comes months after the Unacademy CEO took to social media to praise Graphy, saying that the creators were making approximately $3 Mn a month (INR 24 crore) by selling courses on Graphy.

“Graphy is now doing almost INR 25 Cr in monthly GMV (Gross Merchandise Value). That’s 50% of Classplus, which is the market leader with a valuation of $500 Mn. Classplus is definitely overvalued,” Munjal told employees on the company’s internal Slack channel.

In January this year, Graphy CEO Sumit Jain tweeted that the company turned operationally profitable. The firm’s FY22 revenue stood at INR 8.86 Cr against a loss of INR 3.6 Cr. 

In the same month, Unacademy’s upskilling-focussed group company Relevel laid off 40 employees after pivoting to a B2B platform, Uplevel, which was projected as a homegrown competitor to the professional networking site, Linkedln.

At the time, Munjal said that 80% of the Relevel workforce will be absorbed by Unacademy.

Notably, the SoftBank-backed edtech giant has announced multiple retrenchment rounds since last year, impacting more than 2,000 employees across all verticals.

In March 2022, the company fired 125 ‘consultants’ at its PrepLadder vertical and followed it up by laying off another 210 educators as part of its cost restructuring drive.

Graphy Fails To Take Off

The edtech unicorn envisioned Graphy to be a one-stop shop for creators in the edtech business. 

As per sources, Unacademy draws 10% commission from the creators who use its Graphy tool. 

However, just like a few other acquisitions of Unacademy, Graphy, too, started catching flak from educators and content creators for high commission rates, lack of customer support, and data ownership concerns, among other things.

The learning management system-based platforms, in general, have faced challenges due to a slump in demand for edtech tools and a decline in the number of students, the founder of an edtech firm, who did not wish to be named, said.

Notably, Graphy’s closest rival Classplus’ FY23 net loss jumped 57% YoY to INR 256.6 Cr. 

Moving on, the Unacademy boss had earlier expressed bullishness on Graphy in several internal communications in April this year.

He said Graphy recorded annualised gross merchandise volume (GMV) of $28 Mn in FY23. The SaaS platform’s net revenue retention stood at 113%.

It onboarded nearly 7,500 new creators in the last fiscal year, clocking a 2.6X growth over the past year. With 27,000+ total active courses, Graphy saw 6.61 Lakh new transacting users in FY23. 

“Graphy is turning out to be a phenomenal tech business with amazing unit economics,” the CEO said.

The edtech unicorn is keenly concentrating on refining its core business strategies as it prepares to secure additional funding. The company last raised $440 Mn in a Series H round in 2021.

PrepLadder’s Sorry State

Besides Graphy, one of Unacademy’s major bets, PrepLadder, which it acquired for $50 Mn in 2020, is facing lawsuits from former educators fired last year. 

Not just this, several media reports indicate that the test platform has been witnessing a month-on-month decline in revenues since last year. 

PrepLadder’s FY22 financials also paint a grim picture, as the company reported revenues of INR 155 Cr by incurring a net loss of INR 144 Cr. 

Sources said that Unacademy’s Prepladder has seen intense competition from Allen and Physics Wallah this year, piling up challenges for the edtech firm.

Do Unacademy’s Offline Centres Hold The Key To Recovery?

Fortunately, Unacademy’s offline business has continued to flourish, thanks to the company’s early-mover advantage in the offline space and a handsomely paid workforce.

Earlier this year, the Unacademy CEO said that the company was eyeing scaling its offline coaching vertical considerably from 10 centres at the end of December 2022 to 58 offline centres at the end of the current year. 

The startup was also looking at the number of learners at its tuition centres surging 5.5X to 55,000 at the end of 2023 from 10,000 in 2022. 

In an interesting poaching battle, Inc42 had earlier reported that the Munjal-led Unacademy lured the top teachers from Allen Career Institute (in the UPSC/ IIT-JEE/ NEET preparation segments) with paycheques as fat as INR 1 Cr-1.5 Cr a month.

Since then, Unacademy has been scaling its offline business. As per internal projections, the company’s offline centres are expected to generate INR 400 Cr in revenues in 2023, a major jump from INR 53 Cr in 2022. Meanwhile, analysts believe that the company’s projections for its offline business, which contributes more than 50% to Unacademy’s total revenues, are not overestimated.

In FY22, Unacademy saw its consolidated losses widen to INR 2,848 Cr, up 85% YoY. However, consolidated revenue from operations surged more than 80% YoY to INR 719 Cr in FY22.

Employee benefit expenses accounted for 43% (INR 1,618.9 Cr) of the company’s total expenses during the period under in the period under review. 

Meanwhile, Inc42’s queries regarding the filing of Unacademy’s FY23 financial results remained unanswered.

With Uncademy handing out pink slips in bulk since FY22, it remains to be seen if the company’s back-to-back retrenchment strategy to cull losses will help it embrace profitability or just backfire.

Update | October 26, 17:25 IST

The story has been updated to include a statement from Graphy’s spokesperson and the Unacademy group.

The post Exclusive: Unacademy’s Graphy Cuts 20-30% Jobs To Focus On Offline Ops appeared first on Inc42 Media.

Delhi NCR-based social commerce startup CityMall has conducted its second round of layoffs, according to sources familiar with the matter who spoke to Inc42. Nearly 16 months after its first round of layoffs, the company terminated the employment of around 90 team members on October 16.

Employees affected by the layoffs were asked to report to the office earlier than their usual start time and were informed of the layoff by the HR managers. The layoffs impacted nearly all departments within the company. The startup has provided month’s salary as severance pay.

A query mail sent to CityMall yesterday afternoon hasn’t elicited any response, despite multiple reminders. 

Inc42 also found out that while the startup has been conducting layoffs in smaller groups since June of this year, yesterday’s round was the most significant since June 2022, when approximately 191 employees were let go.

As per sources, the layoffs happened as a result of a cost-cutting exercise and on the direction of investors. 

“This layoff was sudden. We were hearing the startup has recently closed a funding round. Still couldn’t wrap my head around this,” a source aware of the development said. 

Earlier in June, the startup had conducted layoffs just three months after securing $75 Mn, marking its largest funding round to date. It is worth noting that the startup conducted an ESOP buyback exercise worth $1.3 Mn in September last year.

Another source highlighted that there has been tension escalating between the company’s management and its cofounders. The source also indicated that there has been be frequent top management changes in the company.

Interestingly, the startup has also changed its corporate office frequently in the past two years. “They have at least changed their corporate office 10 times in the last two years,” the source added. 

Founded in 2019 by Angad Kikla and Naisheel Vardhan, Gurugram-based CityMall is a social commerce startup offering grocery, fresh and packaged FMCG products, and electronics and fashion items. 

The startup primarily targets consumers in Tier III and Tier IV locations. According to the company’s website, its delivery service extends to cities such as Delhi, Gurugram, Lucknow, Kanpur, Varanasi, Agra, Allahabad, Meerut, and several other proximate areas. 

To date, CityMall has raised $112 Mn from the likes of Elevation Capital,  Norwest Venture Partners, Luxembourg-based Citius VC, WestBridge Ventures, Jungle Ventures, General Catalysts, and Accel India. 

The post Exclusive: Norwest Backed Social Commerce Startup CityMall Fires 90 Employees appeared first on Inc42 Media.

After quitting as cofounders from ShareChat in January this year, Bhanu Pratap Singh and Farid Ahsan have registered a new startup and are looking to make inroads into the robotics sector.

Singh and Ahsan incorporated General Autonomy Private Limited on May 10, 2023 as per Ministry Of Corporate Affairs (MCA) records. The company is registered in Bengaluru with a paid-up capital of INR 1 Lakh.

While General Autonomy’s specific business model is not clear, the company has stated that it will be in the business of “Transport and Storage” in its application to the MCA.

On his LinkedIn profile, Ahsan claims he is ‘Currently driving screws, bolts, nuts and piles,” and his current role is listed as ‘Cofounder of Stealth Startup’. Besides this, Ahsan’s X bio says ‘Robotics enthusiast’.

Interestingly, Ahsan, a material science engineering graduate from IIT Kanpur in 2014, has been working on autonomous navigation since 2012 as per his LinkedIn profile. Further, Singh was part of the robotics club at IIT Kanpur, and graduated the same year as Ahsan. Both went on to cofound ShareChat a year after their graduation from the IIT.

The term ‘general autonomy’ is a concept in robotics that deals with the automation of equipment across use cases but is particularly relevant in the case of industrial equipment.  Given the new company’s name and the business description, it would seem that Ahsan and Singh’s new business is related to automating transport and storage equipment.

Neither cofounder who quit ShareChat responded to Inc42’s calls or questions sent on email about General Autonomy Private Limited.

Globally, there are a number of companies that deal with general autonomy and often offer this technology as a service to startups, warehouses and other parts of the logistics ecosystem.

One example is San Francisco-based Polymath Robotics, which is backed by Y Combinator, Samsara Ventures and others. The startup’s tech enables businesses to add autonomous navigation to any large industrial vehicle.

Founders Starting Afresh In 2023

Singh and Ahsan’s new venture represents the latest example of second-time entrepreneurs looking at new opportunities in 2023 after quitting their previous venture. Founder-level churn and attrition have become commonplace in the past 20 months.

This year alone, the likes of Teachmint cofounder and former CTO Anshuman Kumar and GoMechanic’s Rishabh Karwa look to begin new innings due to headwinds in their previous ventures.

Of course, entrepreneurs moving on from one startup to another is not a new trend by any measure. The past few years have seen examples such as Kunal Shah (Freecharge to CRED) and Jitendra Gupta (Citrus Pay to Jupiter), Anant Goel (Milkbasket to Sorted) and Ankit Bhati (Ola to Amnic) and each of these founders raised funding quite quickly for their new ventures.

As we wrote a few weeks ago, being a seasoned founder is a major advantage when it comes to engaging with investors. The track record of second-time entrepreneurs is helpful for investors in making early bets. In many cases, these startups raise outlier rounds in the seed stages due to the founder’s past work and startup.

It’s also worth noting that the 2022-23 funding winter has also accelerated plans for many founders who were caught on the wrong side of the macroeconomic slowdown. As consumer internet business models struggled to find growth traction, many founders decided to pursue new opportunities.

There’s also a growing realisation that new and emerging technologies in 2023 such as generative AI or robotics are more relevant today from a product-market fit perspective than say a social media platform such as ShareChat.

At the moment, there’s little clarity on the stage of product development or indeed what kind of product or service the new company is working on, but it’s only been five months since the incorporation and we expect more details to emerge soon.

Before quitting ShareChat, Singh was cofounder and CTO, while Ahsan was the COO along with cofounder. The third ShareChat founder Ankush Sachdeva continues to be the CEO at the social media unicorn.

The post Exclusive: After ShareChat Exit, Cofounders Farid Ahsan, Bhanu Pratap Singh Launch Robotics Startup  appeared first on Inc42 Media.

Since the 2019 notice announcing angel tax exemption for startups, 8,066 DPIIT-recognised startups have been granted exemption from angel tax, said the DPIIT in response to an RTI filed by Inc42.

It is worth noting that the DPIIT and CBDT issued a notification on February 19, 2019, saying, “All the startups are allowed to receive angel tax exemption regardless of their share premium values given that the aggregate amount of paid-up share capital and share premium of the startup after issue or proposed issue of shares, if any, does not exceed INR 25 Cr.”

However, for eligibility, startups are required to submit Form 2 as per DPIIT vide Notification No. G.S.R. 127 (E), affirming they weren’t investing in assets like land, buildings, vehicles costing more than INR 10 lakh, or other specific assets, unless utilised for specific business-related activities.

Remarkably, most startups remained silent on this front. As of June 21, 2019, only 944 startups had applied for angel tax exemption, out of which the CBDT exempted 702 startups under this provision.

And, as of February 2021, a mere 8% (equivalent to 3,612 startups) of the recognised 44,000 startups had submitted Form 2 to avail angel tax exemptions.

The RTI response by DPIIT revealed that between February 19, 2019, and September 26, 2023, 10,809 DPIIT-recognised startups applied for the exemption, yet only 8,066 have been green granted exemption.

Currently, according to the Startup India website, India has over 99,380 DPIIT-recognised startups. Thus, the number of angel tax-exempted startups remains stagnant at 8%.

3one4 Capital’s partner, Siddarth Pai, previously told Inc42 that adhering to the guidelines of Form 2 could hamper startups. He highlighted issues, such as restrictions on loans & advances, shares & securities, and capital contributions, which could hinder activities like M&As or the creation of subsidiaries. Pai emphasised the risk, stating a violation could lead to hefty fines, nearly consuming 85-90% of a startup’s capital.

“That’s how tightly they did. And in case you violated, you pay the tax when you represent and pay a fine that is two times your tax, along with interest & penalties. You would end up losing close to 85 to 90% of your money. Who will take that risk?” Pai added.

In its notification on September 26, 2023, the Income Tax department has made changes to Rule 11 UA, introducing diverse valuation methods to offer startups and investors more clarity and adaptability. However, while the notification tackled certain concerns, it didn’t address the primary issue of disputes stemming from projected vs. actual valuations.

The post Exclusive: Over 8K Startups Exempted From Angel Tax So Far appeared first on Inc42 Media.

Delhi NCR-based healthtech startup Zivov is in advanced talks to raise around $5 Mn in its pre-Series A funding round, sources told Inc42. 

“The funding round will be led by an electronics manufacturing company, which is making a strategic investment in the startup,” one of the sources said.

Existing investors, including Titan Capital, are also participating in the funding round. The startup aims to use a part of the fresh funds to manufacture its products in-house.

Zivov intends to utilise the funds for expanding R&D capabilities across hardware and software, entering the international diabetes-tech market and expanding reach across distribution channels, Inc42 has learnt.

Aryan Chauhan, cofounder of Zivov Health, confirmed that the startup is in talks to raise funding but didn’t disclose the name of the investors as the negotiations are ongoing. 

Founded in 2021 by Chauhan and his mother Monika Chauhan, Zivov is a healthtech startup that offers an advanced metabolic health monitoring app and devices, powered with artificial intelligence (AI). 

The startup allows users to keep a track on their glucose with CGM (continuous glucose monitoring) sensors. With a hardware+software approach, Zivov helps users manage and reverse chronic conditions like diabetes and hypertension. It also offers consultations with doctors. 

Earlier, Zivov raised $300K in a seed round from Titan Capital, Reddy Futures, Haresh Chawla, and a clutch of angel investors. Zivov competes against deep-pocketed startups such as Nexus Venture Partners-backed Ultrahuman and LeapFrog-backed HealthifyMe. 

UltraHuman has raised around $25 Mn in multiple funding rounds to date and counts Alpha Wave Incubation (AWI), Steadview Capital, Nexus Venture Partners, Blume Ventures, and iSeed fund among its backers. On the other hand, HealthifyMe, which was founded over a decade ago, has raised close to $130 Mn in multiple funding rounds. 

While Zivov is a new player in the space, it aims to grab a big share in the market on the back of its affordable CGM sensors.

Currently, Zivov claims to have over 55K users, with more than 10K patients regularly using its CGM sensors. The startup, which has onboarded former Indian cricketer Jhulan Goswamani as its brand ambassador, claims to be on track to reach an ARR of $1 Mn by the end of this year.

The post Exclusive: Healthtech Startup Zivov In Advanced Discussions To Raise $5 Mn Funding appeared first on Inc42 Media.

Zomato-backed SaaS logistics startup Shiprocket is in advanced talks to raise $10 Mn-$12 Mn from  McKinsey & Company in a strategic funding round, sources told Inc42.

The Delhi NCR-based unicorn is raising the funding at its last valuation of $1.2 Bn, the sources said. Post the funding, McKinsey & Co will assist Shiprocket in expanding its business, the source added. 

“The talks are in final stages and Shiprocket will be making an official announcement soon,” one of the sources said.

A detailed questionnaire sent to Shiprocket on the funding round didn’t elicit any response till the time of publishing this story. The article will be updated on receiving a response from the startup.

The development comes almost a year after Shiprocket raised $33.5 Mn in its Series E2 round, which helped the startup enter the coveted unicorn club. The funding round, which was led by Lightrock India, saw participation from Temasek, Bertelsmann, Moore Strategic Ventures, PayPal, and March Capital. 

Prior to that, Shiprocket raised $185 Mn in a round co-led by Zomato, Temasek and Lightrock India. Following this, the logistics startup went on a shopping spree in 2022. It acquired Wigzo in January last year for $25 Mn. After this, it went on to acquire Rocketbox, Glaucus, Pickrr, and Omuni. Pickrr was Shiprocket’s biggest acquisition at $200 Mn. 

However, last month, Inc42 exclusively reported about a restructuring exercise at Omuni. As part of this exercise, about 60-70 employees were laid off. Omuni’s senior management team, including CEO and cofounder Mukul Bafna and CTO Sumeet Chandhok, was also said to have been on their way out of the company.

Shiprocket, which was founded in 2017 by Vishesh Khurana, Akshay Gulati, Saahil Goel and Gautam Kapoor, is an aggregator of third-party logistics companies, It works with 17 courier partners, including Delhivery, FedEx, Aramex, Xpressbees, DTDC, and Shadowfax. 

The startup has raised around $261 Mn in funding to date. 

Shiprocket reported a net loss of INR 93.1 Cr in FY22 as against a profit of INR 12.4 Cr in the previous fiscal year. While its operating revenue rose to INR 611 Cr in FY22 from INR 358 Cr in the previous year, total expense ballooned to INR 727.8 Cr from INR 350.6 Cr in FY21.

The post Exclusive: Zomato-Backed Shiprocket In Final Stages Of Closing $10 Mn Funding From McKinsey appeared first on Inc42 Media.

With generative artificial intelligence (Gen AI) in the driver’s seat, content creation is expected to become a child’s play. While the emerging technology has offered a new avenue for users to build tailored content within a span of seconds, the same has opened the gates for non-meaningful content that has flooded the internet. 

It is this problem that Pep aims to tackle with its approach led by curation, categorisation and credibility of content. With this in mind, the startup is building a social-first online marketplace for content enabling customers to explore, purchase, and monetise a diverse range of content and services. 

Founded in early 2023 by IIT alumni Nav Agrawal and Swapnil Upadhyay, Pep offers a one-stop shop platform for users to avail live sessions, one-on-one consultations online, and buy PDFs, videos and audio.

It caters to a wide spectrum of user interests from cooking to DIY crafts and from fashion to health and fitness.

After being in stealth mode for many months, the platform has finally emerged out of the shadows and has raised $2.5 Mn as part of its seed funding from venture capital firm India Quotient. Alongside, marquee angel investors such as Meesho cofounders Vidit Aatrey and Sanjeev Barnwal, CRED’s Kunal Shah, and Farooq Adam from Fynd also participated in the round. 

The fundraise also saw participation from names such as Parag Bhide (counsel, Trilegal), Sambhav Mehrotra and Sridhar Subramanian (founders, StartupMovers), Ravindra Yadav (data scientist), Sargun Gulati (crypto expert).

An Idea Is Born

For Nav Agrawal, this is not his first entrepreneurial rodeo. Having built two startups previously and exiting them successfully, he has had a taste of the vibrant startup ecosystem and how to navigate it. Incidentally, he conceived the idea of Pep during his stint at his previous startup, the short video platform Clip, which he eventually sold in parts to Meesho and ShareChat. 

While Clip was taking off in the country around 2017 and 2019, Agrawal noticed an interesting pattern on the platform. Users were trying to sell their content to others by sharing their phone numbers on the app. 

Basing this on the premise of curated community-driven content, a marketplace theme as well as ratings and reviews, Pep finally took off the ground early this year. However, life came full circle for Agrawal after his previous backers yet again came together to invest in his new startup, Pep. 

Speaking with Inc42, Agrawal said that users are bombarded with content these days and, as such, content discovery has become a big pain point for customers online. He adds that the platform aims to address this issue by deploying personalised machine learning algorithms to enable the discovery of tailored content at the right prices. 

“With our mobile-only approach, we enable people to sell content in a few clicks and directly monetise their knowledge, and reduce dependency on conventional ad-based income. Using personalised machine learning algorithms, our consumers discover and buy the right set of content at affordable prices with a no-regret mindset,” added Agrawal. 

For him, Pep, as a marketplace, is built on three pillars — trust, discovery and pricing. Having already built two companies from scratch and selling them to big-ticket names, Agrawal is well-versed with the idea of how to build trust and grow at scale.

Agrawal is also expected to leverage his learnings in the content and social space, which he accumulated while building Clip, to come in handy as he builds another content-focussed startup from zero.

The founder’s stint at Meesho (Agrawal worked at the ecommerce unicorn after exiting Clip) has also complemented his knowledge base on how to build a horizontal marketplace at scale, which is what Pep essentially wants to do.

Overall, at the heart of Pep is user-generated content that is stitched around the premise of micro-courses and micro-payments. In response to a question about pricing options, Agrawal adds that the marketplace sells content anywhere from INR 29 all the way up to INR 2,000. 

As Pep prepares for its next stage of growth and scale, the genesis of the startup curiously lay in Agrawal’s previous iteration as a cofounder. 

Speaking on the investment in the startup, India Quotient’s Madhukar Sinha, added, “Very excited to back Nav and Swapnil again to build the Amazon of Digital Goods & Services. With the fast-paced digitisation of the world around us, we see a huge Total Addressable Market (TAM) waiting to be unlocked.”

The platform’s app is currently fully live only on the Google Play Store app with plans to unveil iOS app soon as well. 

Eye On The Horizon

With the seed funding, the startup plans to focus on product development, shore up user growth, branding initiatives and hire more employees. 

Speaking on the product market fit, Agrawal claimed that the customers are ‘loving’ the platform and are doing repeat transactions, without disclosing the traction or user count.

With regard to its monetisation model, the startup follows a pure-play commission model based on the category. These charges range anywhere between 20-50% depending on the category. The distinction is drawn for content that requires raw materials such as gourmet cooking and the quality of the expert.

Meanwhile, Pep has set its eye on scaling up the product and growing the platform manifold in the near future. Agrawal told Inc42 that he expects the platform to notch more than 10 Mn transacting users over the course of the next two to three years. 

At the outset, the 11-member startup will largely be focussed on pitching the platform to its target audience with India at the centre of the operations. It further plans to undertake category expansion over the course of the next six to eight months as it looks to onboard users across multiple segments. 

In the mid-term, Pep cofounders want to scale the platform beyond metro cities to Tier II and Tier III cities and pad up its bottom line. However, Agrawal, in the long term, tells Inc42 that he wants to build a global content marketplace that sells to customers worldwide, especially to the US and Indonesian markets. 

On the perennial debate between scale and profitability, Agrawal believes that Pep, at the outset, would be focused on growth. He, however, added that while the company would not want to be immediately profitable, the economics of the company ought to make sense even at a smaller scale.

The Horizontal Marketplace Opportunity

Despite the tailwinds and more or less a first-mover advantage, there seems to be competition brewing underneath the space. While Pep operates a horizontal marketplace for content, many such vertical marketplaces already exist and are thriving globally. 

A case in point has been OnlyFans which largely caters to adult content users while overseas platforms such as Skillshare and Domestika focus on skill-based content. Speaking on this, Agrawal said that Pep focusses on user generated content while other incumbents in the markets are largely dependent on professionally made content. 

However, competition appears to be intensifying in this space. US-based content marketplace Whop recently bagged $17 Mn as part of its Series A round while digital goods-focussed Gumroads has been slowly making inroads in the space. 

Another headwind could likely be social media juggernauts such as Instagram and Snapchat directly embedding the feature in their app and leverage their existing user base to scale the offering. On this, Pep CEO believes that their platform’s curation methodology and price standardisation work well in their favour. “Micro-courses at micro prices is our key USP,” adds Agrawal. 

At the heart of Pep’s operations is the country’s 46.7 Cr internet-guzzling and content-craving users which have made India an attractive digital economy and a major social media market. 

Fueling this growth has been around 8 Cr content creators which cater to different users. However, barely, 0.2% of the overall content creators in the country are able to monetise their content effectively, as per a report by Kalaari Capital.

It is this two-pronged lever of growth involving both users and creators that Pep wants to leverage and piggyback on to create its niche. But, while many have struggled in the space, it remains to be seen how Pep charts its path forward as serial founders helm its ship.

The post Exclusive: Pep Bags $2.5 Mn Funding From India Quotient To Build Amazon Of Content & Digital Services appeared first on Inc42 Media.

In yet another leadership change at a prominent venture capital (VC) firm in India, Venture Highway (VH) founder Samir Sood has quietly stepped away as partner, with Priya Mohan being elevated to managing partner.

While Venture Highway confirmed the development this week after Inc42’s queries, the transition started in January 2023. Sood will retain his founder position at Venture Highway.

Sood told Inc42 that he’s stepping away from the day-to-day operations and decision making at Venture Highway to spend more time with his family. “I have been doing this for nearly a decade and I thought this is a good time to let the new generation of partners lead Venture Highway. We have a capable team in place to take this forward,” he added.

The Delhi NCR-based firm, which was founded in 2015 by Sood and former WhatsApp chief business officer Neeraj Arora, counts unicorns such as Meesho, CRED, Moglix among others in its portfolio.

The firm’s official communication to limited partners as well as portfolio company founders began in January 2023, and since then Mohan and Arora have been in the process of raising the third fund for VH.

”In addition to the formal announcement to each LP, the leadership has spent time taking the LPs through the process informally and in person as well,” Mohan added.

Changes Ahead Of Third Venture Highway Fund 

Speaking to Inc42 about Sood’s transition, Mohan said, “The transition was planned and thought through. Samir decided to step back into an advisor role in VH (Venture Highway) to support the next generation to take charge and continue building the VH franchise.”

Mohan, who was formerly a ‘Startup Sensei’ at Venture Highway will formally take on the charge of managing director. She said that the firm is moving away from informal designations.

Besides Arora and Mohan, who are both Managing Partners, the firm recently hired Rahul Garg as Partner, who was formerly a Principal at Kalaari Capital and Iron Pillar.

A chartered accountant and Indian School of Business (ISB) graduate, Mohan joined Venture Highway in 2018, when the firm was raising its second institutional fund.

Venture Highway had closed its $78 Mn second fund in January 2020, months before most of the world went into the pandemic lockdown.

Since then, the VC firm has been a key investor for Fampay (Seed & Series A), Airmeet (Series A), BetterPlace (Series B), Meesho (Series E), Cityfurnish (Series A), Wealthy (Series A), Grip Invest (Series A) among several other startups at the seed and pre-seed stage — Ivy Home, Cheq, Mergai, Ripik and others.

Before founding Venture Highway, Sood was the head of corporate development at Google for South Asia & Oceania after his stints at Dell, Microsoft, and Cisco. Arora and Sood were colleagues at Google.

Partners Look For Greener Pastures

The change in leadership comes at a time when several prominent VC firms have seen exits at the top. As Inc42 reported earlier this week, partners and fund managers at VC firms such as Orios Venture Partners, Lightbox, Rebright Partners, Together Fund have stepped down to pursue new opportunities.

In most cases, these experienced fund managers are expected to launch new funds, but some are even launching new startups to capitalise on new market opportunities.

There have also been questions from LPs in relation to fund performance as well as lapses in terms of due diligence and lack of corporate governance at portfolio companies. This has led to many leadership rejigs and partners looking at fresh funds and a new investment thesis.

In this case, Sood said he would be closely advising a few portfolio companies at VH, besides supporting the firm in the thesis and vision development. The founding partner would be relinquishing board seats at portfolio companies, but at the moment, it’s not clear if Mohan or Arora would be replacing him as director on these boards.

However, Mohan added the Venture Highway would not see any change in terms of the investment thesis under the new management and that the firm has recorded the first close of its third fund.

Venture Highway declined to comment on the corpus of the third fund, for which the firm is exclusively raising from foreign LPs, given its cross-border investment focus.

We were told that VH has completed the first close of its third fund and continues to actively invest from this corpus. “We will remain a zero-to-one seed fund investing in category-creating tech companies building in India/US for India and the globe,” the managing partner added.

In 2023, Venture Highway has invested in the seed rounds for Kidovo, Kintsugi and Weekday, all three of which are headquartered in the US, but Mohan declined to comment on the fund’s exits in the past two years.

The post Exclusive: Ahead Of Third Fund, Venture Highway Founder Samir Sood Steps Down From Partner Role  appeared first on Inc42 Media.

Bengaluru-based online gaming startup One World Nation (OWN) has temporarily halted its real money gaming operations, becoming yet another casualty of the GST Council’s decision to levy 28% GST on full face value for real money gaming.

“In light of the recent GST regulations in India, the platform has temporarily halted Real Money Gaming,” a statement on OWN’s website said last month. 

“We went live nearly 15 months ago, launching our NFTs with much love from the community. The idea of a gaming platform around cryptocurrencies felt unique and powerful at the same time,” OWN said.

The startup offered non-fungible tokens (NFT)-based play-to-earn games.

While it moved forward despite the challenging conditions of the crypto market crash and the regulatory uncertainties surrounding crypto as an asset class, OWN said the 28% GST levy made its model unviable.

Under the new GST rule, a substantial 28% tax on all deposit amounts for users in India will be mandated, and this tax is non-refundable and non-adjustable. It will be an outright expense for the end user, be it the gaming platform or the gamer, OWN added.

For OWN, the situation is of significant concern due to the fact that approximately 70% of its revenue is derived from India and nearly half of its user base is also located in the country, it explained.

“While large companies in the RMG space may be able to absorb this cost; for smaller companies like us, the business model is simply not viable. Hence, after a lot of deliberation and heartburn, we came to the difficult decision of suspending all real money gaming activities on the platform temporarily,” OWN said.

As per the statement, the platform was to transition to a free-to-play model from September 1.

On using the platform, Inc42 found that users are able to play games for free but buying and selling of NFTs has been temporarily suspended. 

Founded in February 2022 by Akhil Gupta, Dinesh Goel, Kunal Jadhav, Mayank Shekhar, OWN raised $2 Mn in its seed funding round from Better Capital, Polygon Studios, Cloud Capital and Indigg last year.

Earlier this year, the GST Council gave a major blow to the real money gaming industry with its decision to levy 28% GST on full face value for online gaming companies, with no distinction between games of skill and games of chance.

The move caused an upheaval in the gaming industry, with a number of startups laying off employees. 

Earlier this month, Inc42 reported that Bengaluru-based Gameskraft is discontinuing its fantasy offering, Gamezy Fantasy. Gaming companies such as Quizy and Fantok have also either shut operations entirely or temporarily halted them in response to the changing landscape.

Meanwhile, the likes of unicorn MPL, Kavin Mittal-led Hike, and Spartan Poker sacked employees following the GST Council’s decision.

To add to the woes, online gaming companies are likely staring at tax notices of around 1 Lakh Cr from the Directorate General of GST Intelligence (DGGI).

The post GST Woes: Better Capital-Backed OWN Halts Real Money Gaming Ops appeared first on Inc42 Media.

After food, groceries, fashion, and electronics segments, the government-backed Open Network for Digital Commerce (ONDC) is now just a few weeks away from launching an array of financial services, including personal and SMB loans, insurance (car, health and marine), and mutual funds, on the network.

Top industry sources privy to the development told Inc42 that the open network, which has been in the process of onboarding various players in the financial services domain since August, is all set to go live with the aforementioned financial services on the network via buyer applications that are registered with Insurance Regulatory Development Authority of India (IRDAI), Association of Mutual Funds in India (AMFI) and Securities and Exchange Board of India (SEBI).

Last week, on September 22, ONDC launched the ‘ONDC Network Gift Card’ in partnership with Yes Bank and OmniCard, the two issuers of the card.

The gift card is powered by the RuPay Network and can be loaded with a maximum amount of INR 10,000, enabling cardholders to shop using any ONDC-enabled buyer application.

Prior to this, fintech unicorn Razorpay joined the network in April 2023 to streamline payment processes for ONDC’s network participants, including buyers, sellers, and logistic partners.

Moving on, an ONDC spokesperson confirmed the development to Inc42 and stated that the open protocol started integrating with various fintech companies after the draft specifications for financial services were released in August.

Inc42 was the first publication to report on ONDC’s fintech foray.

“In credit, ONDC is starting with personal loans and GST-based loans to individuals and sole proprietors, respectively. The API draft specifications for the same were released in early August for market feedback, post which the integration process was initiated with interested participants. More than 65 entities had expressed their interest in joining the network, either as buyer applications, seller applications (lending institutions) or as technology service providers,” the ONDC spokesperson told us.

The spokesperson added that more than 20 entities have initiated their integration journey. Some names that have initiated integration directly or through technology service providers are Tata Digital, IndiaLends, Easy Pay, DMI Finance, Aditya Birla Finance and Karnataka Bank.

The network will soon start offering auto, health and marine insurance as well, the spokesperson added.

When it comes to investments, the open network is currently planning to go live with mutual funds. Currently, investment routes like stocks, live trading, investments in bonds, etc. have been kept out of the ambit of fintech products on the ONDC network.

“In investments, ONDC will be starting with mutual fund investments on the network and the API specifications for both insurance and investments will be released in the coming weeks. For mutual fund investments, ONDC is working with MFU (MF Utilities India Pvt Ltd) to onboard the asset management companies as seller applications,” said ONDC in an official statement shared with Inc42.

The open protocol also recently launched an “ONDC network gift card” for corporate gifting and employee engagement.

“The gift card is powered by the RuPay network and can be loaded with a maximum amount of INR 10,000. Yes Bank and OmniCard have gone live as the first two issuers of the card, while several other banks and fintech platforms with RBI-assigned pre-paid licences are also preparing to offer the card. A consumer gift card offering was also launched last month with Spice Money as the buyer application and Vistaar (Earnest Data Analytics Private Ltd) as the seller application to facilitate consumer purchases of gift cards of 100+ brands,” the ONDC’s spokesperson informed us.

Meanwhile, ONDC’s working committee of fintech experts comprises names like Ravi Prakash, the head of architecture and technology ecosystem at FIDE; Pramod Verma, the former chief architect of Aadhaar and the cofounder of FIDE; Hrushikesh Mehta, the senior vice-president, financial services, ONDC; Antriksh Parmar, product manager, ONDC; Mohit Monga, VP products, ONDC, and Ashish Desai, financial services advisor, ONDC.

What’s In The ONDC Fintech Cart?

According to ONDC’s financial services specifications on its GitHub page, the open protocol will tap the credit, investments and insurance sectors by bringing financial services institutions and fintech companies onto the open network as buyer and seller applications. 

The buyer and seller side applications will have to be compliant with the RBI’s digital lending guidelines. These players should also be with IRDAI, AMFI, and SEBI, depending on the products they have on offer. 

According to the draft specifications for financial services, ONDC aims to overcome the barriers individuals face while applying for loans or buying insurance or mutual funds.

The protocol would enable the customer to search for any financial product from any company on a single buyer application through various search options — for instance: bank name, ratings, financial product, etc. — and submit an application form once they choose to buy a product.

In the process, consumers will have to consent before sharing their financial transaction history and KYC details with the seller to secure a loan, insurance or make mutual fund investments. 

In the case of invoice-based loans, proprietors will be required to share GSTIN and invoice details with the buyer application, which will be shared with various seller apps (lenders) to enable the processing of loans.

The sellers on the ONDC will use the information received from the buyer to generate final quotes on the loan.

The loan offers and the critical information will then be made available on the buyer application from which a borrower may choose the type of loan to be secured. This is followed by the signing of an e-agreement, disbursal of the loan amount within a limited time period, and sharing of loan documents via an email/link on the buyer app.

Why ONDC’s Fintech Move Makes Sense?

ONDC’s foray into financial services aligns perfectly with the evolving fintech landscape, where regulatory scrutiny is intensifying, and millions of users are opting for digital interfaces over traditional in-person financial transactions.

Further, the open network aims to leverage India’s digital push by giving broader access of a larger customer pool to lenders and insurers. Through this move, ONDC also wants to cater to the underserved, untapped and unsecured credit markets.

According to ONDC, there was a $25 Tn credit gap between seekers and lenders in the SMB lending market in FY22.

Further, the ONDC aims to tap the rural middle-class segment for personal loans segment. As per the platform, there is a $1.2 Tn credit opportunity in this area by 2030. 

From the consumer’s perspective, ONDC plans to replicate the ecommerce model within fintech, offering access to a wide array of products without the bias of margins, advertisements, or commissions.

It also aims to use public digital infrastructure to overcome the challenges of manual banking and provide small-ticket, custom-size financial products to consumers.

When it comes to lenders, the open protocol will not only give wider access to underpenetrated markets but also an opportunity to expand their businesses to digital commerce with the available data.

Notably, the financial institutions that are backing ONDC are SBI, HDFC, ICICI, Axis, NABARD, etc.

ONDC’s Key Challenge

At the core of ONDC’s financial services play remains the crucial data transfer of customers with buyer applications and many seller applications. 

Even as the open protocol has substantiated that all the network participants must comply with industry regulations, it remains to be seen if the government-backed network will not fall prey to unethical practices that have plagued the fintech industry lately.

At the same time, the network will have to work on minimising the occurrences of misselling and cross-selling of financial products, which has remained a concern for borrowers.

While the open protocol is built on standardised digital infrastructure and provides a level playing field for all players, a significant portion of consumers could still prefer trusted channels or sources to share sensitive personal and financial information. Addressing this consumer trust challenge will be imperative for ONDC in the coming days.

The post Exclusive: ONDC’s Fintech Fiesta — Loans, Insurance, Mutual Funds To Go Live Soon! appeared first on Inc42 Media.

Electric vehicle (EV) charging infrastructure provider Bolt.Earth is in talks with investors to raise $20 Mn in its Series B round at a valuation of $100 Mn, sources told Inc42. 

The funding round will be led by an EV-focussed venture capital fund and will also see participation from the startup’s existing investor Prime Venture Partners, the sources said. The talks are in final stages and the round would value the startup at about 4X its last valuation, they added. 

“The fundraise is likely to close in a week or so,” one of the sources said. Another source said some of the angel investors exited the startup via a secondary sale share earlier this year, making handsome returns on their investments. 

A Bolt.Earth spokesperson declined to comment on the queries sent by Inc42 on the fundraise. 

Bolt.Earth, earlier known as REVOS, last raised $4 Mn from Union Square Ventures and Prime Venture Partners in 2021 at an undisclosed valuation.

Bolt.Earth Races Past Its Rivals

Besides providing EV charging infrastructure, Bolt.Earth, founded in 2017 by Jyotiranjan Harichandan and Mohit Yadav, also offers an operating system (OS) which, the startup claims, helps EV run smoothly and provides a seamless experience. The OS offers features like real-time updates, remote monitoring, and software support.

The startup, which competes with the likes of Tata Power, Ather Energy, and ChargePoint, seems to have marched ahead of its rivals in terms of setting up an EV charging network.

In a release last month, Bolt.Earth said its customers include businesses, real estate operators, individuals and government entities, among others. The startup claims to have installed over 30,000 charging points across more than 1,000 cities in India, while its OS is installed in more than 20,000 EVs in the country.

“Our network has dispensed more than 1,000MWh of energy, and equipped more than 50,000  users with smart, safe, and simple engineered devices that cater to EV charging needs. We currently partner with eight 8 of India’s top 10 two-wheeler EV OEMs,” the release said. 

Bolt.Earth partners with OEMs and EV dealers, who offer bundled services with the startup’s charging solutions.

The startup also has partnerships with public sector companies like Hindustan Petroleum Corporation Ltd, Delhi Metro Corporation, Bengaluru Metro Rail Corporation, and Indian Oil Corporation, private companies like Cyient and LTI Mindtree, and real estate developers like Prestige, Sobha, and Divyasree. 

These partnerships seem to have played a major role in making the startup the “largest electric vehicle (EV) charging infrastructure solution provider” in the country. 

India’s EV Boom

The development comes at a time when EV adoption in the country is on the rise due to rising awareness about tackling climate change and the government’s efforts to promote EVs to reduce reliance on fuel imports.

The Centre has launched schemes like FAME-II to promote EVs and production-linked incentive schemes to boost domestic manufacturing of EVs, EV components and batteries. Besides, various state governments have also launched EV policies to increase the share of EVs in total vehicles.

Consequently, the number of EV makers and their products have increased dramatically over the last few years, with EV registrations in India surging 700% since 2020. This has resulted in the development of an entire EV ecosystem, including charging infrastructure providers, battery tech startups and aggregators, in the country.

The rise of the EV ecosystem has also attracted investors and the sector has emerged as a hot favourite for PE and VC firms and others. Earlier this month, IPO-bound Ola Electric signed an agreement to raise $140 Mn in a funding round led by Temasek. Ola’s rival Ather Energy also raised INR 900 Cr from existing investors Hero MotoCorp and GIC.

Among other major funding rounds in the EV ecosystem, mobility service provider BluSmart raised $37 Mn in May this year and charging infrastructure provider Charge Zone raised $54 Mn. 

Even as the sector is flush with funds right now and competition is intensifying, with a number of automakers as well as startups building EV capabilities, the EV ecosystem would require huge investments over the coming years. India is currently home to 3 Mn EVs and the sales of EVs are projected to increase to 10 Mn by 2030. This would not only require EV manufacturers to make investments but also huge amounts of capital would have to be deployed to proportionally increase the EV charging infrastructure.

As per a report by government think tank NITI Aayog, an investment worth $267 Bn will be required in EVs, battery infrastructure, and charging infrastructure to make a full transition to EVs.

The post Exclusive: EV Infra Provider Bolt.Earth In Talks To Raise $20 Mn, Eyes $100 Mn Valuation appeared first on Inc42 Media.

US and India-based app development startup Appsmith laid off 35 employees, or around 25% of its workforce, earlier this week, sources told Inc42.

Like a number of other Indian startups which have fired employees recently, Appsmith attributed the layoffs to the challenging market conditions and the slowdown in business, the sources added.

The layoff exercise impacted employees across teams. The startup has offered a two-month salary as severance package to the impacted employees. It will also offer outplacement support and has allowed the impacted employees to keep their office laptops with them, the sources said.

Responding to Inc42’s queries on the development, an Appsmith spokesperson shared an internal mail sent by cofounder and CEO Abhishek Nayak to employees. “In 2023, our growth rates, and our revenue growth dipped. This challenge has affected us and every company. There is also a shift towards sustainable growth vs. growth at all costs. This requires us to operate differently,” Nayak said in the mail.

Consequently, Nayak said, the startup is adapting to the evolving fundraising market with focus on operational efficiency for long-term success.

He said the current and forecasted revenue requires the startup to have a “leaner, more efficient, and focused team” to prioritise revenue effectively.

“We’ve experienced the strongest revenue growth ever in recent quarters, but also recognize the need for more R&D investment, and a longer runway to reach our long-term revenue goals… The impact of reducing our team size is a terrible thing for many of us and one that I’m deeply sorry about,” the mail said.

Founded in 2019 by Nayak, Arpit Mohan, and Nikhil Nandagopal, Appsmith is an open-source low-code software startup. It helps organisations to build and customise apps as per their requirements. 

The startup provides tools using which developers can build applications within hours using its pre-built components and APIs. It competes with the likes of Builder.ai, Visual LANSA, and Mendix.

In July last year, Appsmith raised $41 Mn in its Series B funding round led by Insight Partners. The round also saw participation from Accel, Canaan Partners, OSS Capital and a few angel investors.

Prior to that, the startup raised $8 Mn in its Series A round led by Canaan Partners in October 2021. 

The development comes at a time when the ongoing funding winter has battered the Indian startup ecosystem. Lack of funding and investors’ focus on profitability has forced startups to transition from aggressive growth models to sustainable growth.

As a result, Indian startups are on a cost-cutting drive and have resorted to mass layoffs to achieve profitability and increase their runways.

According to Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.

The post Exclusive: Insight Partners-Backed Appsmith Lays Off 25% Of Its Workforce appeared first on Inc42 Media.

Following the GST Council’s decision to levy 28% GST on real money gaming and tax troubles with the GST Department, Bengaluru-based Gameskraft has decided to discontinue its fantasy offering, Gamezy Fantasy.

The gaming company is also restructuring its Gamezy super app and moving users of games other than fantasy to separate apps.

“Gamezy Fantasy will not be available from 18th September onwards,” a notice on the Gamezy app says.

Gamezy’s fantasy offering allows users to create fantasy cricket teams and participate in tournaments to win prizes.

Gameskraft is also asking the users of other games, Rummy and Ludo, which were available on the Gamezy app, to move to separate individual apps RummyPrime and Ludo Culture, respectively.

While this suggests that Gameskraft might be shutting down the Gamezy app, a company spokesperson told Inc42 it is temporarily deprioritising the Gamezy super app.

“Over the last couple of years, the Gamezy super app has provided our players a variety of different games… However, both prevailing industry trends and our internal insights have underscored the need for deep category specific experiences to provide a wholesome immersive gameplay to our players. Given the vision with regards to our portfolio, we have made a strategic decision to reassess and temporarily deprioritise our Gamezy super app” the spokesperson told Inc42 in a statement.

“We are focussing our efforts on the development and promotion of dedicated single apps, like our newly launched RummyPrime, LudoCulture and other initiatives. This focus allows us to concentrate on our core competencies and channel greater resources towards delivering unparalleled user experiences,” the statement added.

The company said that the shift will not have any “negative impact” on its workforce planning and “talent deployment”.

The development comes close on the heels of the Supreme Court (SC) staying a Karnataka High Court’s order, which quashed an INR 21,000 Cr tax evasion notice issued by the Directorate General of GST Intelligence (DGGI) to Gameskraft.

The DGGI issued the show-cause notice to Gameskraft in September last year, alleging that the online gaming startup failed to pay INR 21,000 Cr in GST, the biggest such claim in the history of indirect taxation. The notice was for the period between 2017 and June 30, 2022.

Meanwhile, the Supreme Court’s decision has reportedly paved the way for the tax department to send such show-cause notices to about 40 online gaming companies.

Gamezy’s move also comes at a time when the gaming industry has been hit hard by the GST Council’s decision to levy 28% GST on full face value for real money gaming.

However, Gameskraft in its statement said its move is not related to the recent amendments to the GST laws.

Soon after the announcement of the GST Council’s decision, gaming unicorn MPL laid off around 350 employees. Kavin Mittal-led web3 gaming startup Hike followed suit, slashing its workforce by 25%. The company attributed the layoffs to the government’s move to impose a 28% GST, due to which it was staring at a 400% increase in tax burden. 

Last month, Spartan Poker too laid off 125 employees, or 40% of its total workforce. Besides these, real gaming companies Quizy and Fantok have shut or halted their operations respectively. 

The post Exclusive: Amid Tax Troubles, GamesKraft Pulls The Plug On Gamezy Fantasy appeared first on Inc42 Media.

The government has launched Skill India Digital (SID) platform to make skill development more innovative, accessible, and personalised with a focus on digital technology and Industry 4.0 skills.

The platform, which is at the intersection of the Centre’s ‘Digital India’ and ‘Skill India’ programmes, was inaugurated by Union Minister for Education and Skill Development and Entrepreneurship Dharmendra Pradhan. Minister of State For Skill Development, Electronics and IT Rajeev Chandrasekhar was also present at the launch event.

The SID is a comprehensive digital platform that will provide industry relevant skill development courses, job opportunities, and entrepreneurship support. It will act as a comprehensive information gateway for all government skilling and entrepreneurship initiatives.

Commenting on the initiative, Pradhan said, “The consensus on India’s advocacy for global digital public infrastructure as well as for addressing skills gaps was the centrepiece of India’s successful G20 Presidency.”

Pradhan called the launch of the open-source platform another step by India towards creating digital public infrastructure. 

It must be highlighted that the Indian government used its Presidency of the G20 to promote and showcase its digital goods, created under the umbrella of the India Stack. During the G20 Summit held in Delhi, the government left no stone unturned to highlight and showcase the digital goods which have given a big boost to the country’s digital economy.

The SID platform has introduced the concept of digital CV via personalised QR codes. Recruiters can access the CVs of potential candidates by just scanning these codes, the government said in a statement. 

Further, the platform encompasses all the training programmes rolled out by the central and the state governments. Through this, the Indian government is aiming to create a unified and centralised hub for skill development initiatives. 

Speaking on the significance of the platform, Chandrasekhar said such initiatives by the government will generate employment and entrepreneurial opportunities for the Indian youth. As the world is highly tech-driven since the COVID-19 pandemic, the SID will create a future ready workforce for India. 

The Indian government has been actively advocating for digitisation and imparting digital skills to the youth for a while now. In August, it approved the expansion of the Digital India initiative and earmarked a total outlay of INR 14,903 Cr for the scheme. Making the announcement, Union IT Minister Ashwini Vaishnaw said the move will boost the domestic digital economy, drive digital access to services and support the country’s IT and electronics ecosystem.

Last year, Prime Minister Narendra Modi said that the country’s digital economy is well poised to grow to $1 Tn by 2025. Addressing the BRICS Business Forum virtually, he said that digitisation has been one of key pillars for India to recover from the effects of the pandemic on the workforce.

The post Govt Launches Skill India Digital To Bring All Skilling Initiatives On One Platform appeared first on Inc42 Media.

Revenue-based financing platform Velocity laid off around 14% of its workforce earlier this week, sources told Inc42.

The layoffs impacted employees from across verticals, the sources said. The Valar Ventures-backed startup is offering the impacted employees a two-month salary as severance pay.

Confirming the development, Abhiroop Medhekar, cofounder and CEO of Velocity, told Inc42 in a written statement, “Getting to profitability is an important priority for us and this restructuring is a crucial step in that direction. We’ve carefully restructured our organisation to avoid redundancies. We’ve also streamlined and automated key parts of our workflows, unlocking substantial efficiency gains.” 

“While this process was not without its challenges, it allows us to set a strong foundation for sustainable future growth. We’ve therefore had to make the difficult decision of reducing our team size by 22 individuals, which accounts for less than 14% of our total headcount,” he added.

However, as per the sources Inc42 spoke to, the number of employees laid off could be well above 20% of Velocity’s workforce. Prior to the layoff, Velocity had a headcount of around 150-160 employees. 

The sources attributed the layoffs to a cost-cutting exercise to increase the startup’s runway. However, Medhekar rejected this, saying most of the $20 Mn funding Velocity raised a couple of years ago remains untouched. 

Velocity reported a standalone net loss of INR 7.9 Cr in FY22, a 32X jump from INR 24 Lakh in FY21. Total revenue rose 2.3X to INR 5 Cr from INR 2.2 Cr in FY21. 

Founded in 2020 by Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity offers revenue-based financing to Indian D2C and ecommerce platforms. Besides this, the startup also offers these businesses credit cards and payment solutions. 

According to Medhekar, the startup has made over 1,500 deals to date. Apparel and fashion brands Off Duty, Sujatra, and The Ayurveda Co. are among the startups Velocity has financed this year.

Velocity raised $20 Mn in its Series A funding round from Peter Thiel’s Valar Ventures in 2021. Presight Capital, Utsav Somani’s iSeed, Maninder Gulati (OYO), Zac Prince (BlockFi) and Philippe De Mota (Hedosophia) also participated in the round. Before this, the startup bagged $10 Mn in its seed funding round. 

Velocity competes with the likes of Recur Club, Klub, and GetVantage. 

The ongoing funding winter amid macroeconomic headwinds has forced startups and global tech giants to resort to layoffs to cut costs. According to Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year. 

The post Exclusive: Revenue Based Financing Platform Velocity Lays Off Around 14% Workforce appeared first on Inc42 Media.

Varun Garg, president of Learning Experience at Ronnie Screwvala-led edtech unicorn upGrad, exited the startup on August 31, Inc42 has learnt.

Garg, who worked with upGrad for around 7.5 years, announced his departure in an internal mail. Inc42 has accessed the mail.

Garg looked after the content curriculum and product at the startup and led a team of around 480 members.

Confirming his departure, Garg told Inc42 he has joined EkStep, a non-profit organisation founded by Nandan Nilekani which aims to offer learning opportunities to students through a collaborative, universal platform that facilitates creation and consumption of educational content.

A mail sent to upGrad on the development did not elicit any response till the time of publishing this story. 

upGrad cofounder and MD Mayank Kumar, in a mail sent to employees, said Kshitij Jain, Raj Reddy, Abhishek Agarwal, and Ashish Nagar will take over the responsibilities of Garg. While Jain and Reddy will lead the content team, Agarwal will look after the delivery team. Nagar will lead the QC/BCT/Inbound team, the mail, accessed by Inc42, said.

The top-level exit comes almost ten months after upGrad CEO Arjun Mohan quit the company. 

“After almost 3 years at the helm, I have decided to move out of upGrad… While I look back on the years at UpGrad, I feel happy about the incredible company we have built which helped so many working professionals upskill. The aspects of growth and other metrics were just outcomes of giving the customers what they aspired for,” Mohan said in a Linkedin post while announcing his departure. 

Mohan joined BYJU’S in July this year. 

Founded in 2015 by Screwvala, Kumar, Phalgun Kompalli and Ravijot Chugh, upGrad is backed by the likes of Temasek, Murdoch’s Lupa Systems, International Finance Corporation, and IIFL. It has raised a funding of over $650 Mn to date.

The edtech startup has lately been in the news for all the wrong reasons. In July, GST officials visited upGrad’s office, which the startup termed as a routine survey. Prior to that, it laid off 40% of workforce at newly-acquired subsidiary Harappa Education in January this year. It also fired 120 employees at its video learning arm upGrad Campus in March this year. 

The startup also shut its data science training platform, International School of Engineering (INSOFE) abruptly in Hyderabad, in April, inviting protests from students who were reportedly promised jobs at the end of the course. 

The post Exclusive: Varun Garg Quits Edtech Unicorn upGrad, Joins Nandan Nilekani’s EkStep appeared first on Inc42 Media.

Mumbai-based interior design startup Flipspaces has raised $4 Mn in its Pre-Series B funding round led by Prashasta Seth, former CEO of IIFL AMC. The funding round, which was a mix of equity and debt, also saw participation from other prominent family groups and funds. 

Flipspaces, which is backed by Carpediem Capital, said it will utilise the fresh capital to expand its operations on the West Coast of the US and strengthen its tech.

Commenting on the development, Kunal Sharma, founder and CEO of Flipspaces, said, “We’ve seen rapid growth in the US market combined with robust India numbers. Leveraging this momentum, our impetus is to enhance our focus on tech to enable processes at scale and double down on building on our supply chain capability to serve a global demand.”

The funding round comes almost two years after the startup raised $2 Mn from Seth and other HNIs. “We have been a profitable business because of strong unit economics and thus, have a long runway with this funding,” Sharma then told Inc42.

Prior to this, the startup raised a debt round of $1.15 Mn from UC Inclusive Credit and Alex Group. It also raised $3.5 Mn in its Series A funding round from Carpediem Capital.

Founded in July 2015 by IIT Bombay alum Sharma, Vikash Anand, and Ankur Munchal, Flipspaces designs interiors and builds projects for commercial spaces. The startup is currently operational in the US and India.

The startup has two offerings – Vizworld and Vizstore. Vizworld is a tech-enabled brand which offers a full stack solution for designing and building commercial spaces, while Vizstore offers a variety of furniture and furnishing products across categories. 

The startup counts Reebok, Oppo, Zeta, Indiqube, among others, as its clients. 

Flipspaces competes against the likes of Livspace, HomeLane, and Bonito Designs. Earlier this year, Design Cafe raised INR 40 Cr in a round led by WestBridge Capital, Mirabilis Investment Trust and Alteria Capital.

According to a Technavio report, India’s online home decor segment is estimated to expand at a CAGR of 10.2% during 2021-26 to reach a size of $3.75 Bn by 2026.

The post Interior Design Startup Flipspaces Raises $4 Mn Funding appeared first on Inc42 Media.

In what seems to be a distressed sale, Delhi NCR-based omnichannel meat brand Good To Go is acquiring Chennai-based meat delivery startup TenderCuts. 

Good To Go said the acquisition would also include Happy Chops, a seven-month-old tech platform launched by TenderCuts that claims to offer an online storefront and procurement support to local butcher shops. Happy Chops was launched by TenderCuts earlier this year.

Good To Go didn’t disclose the financial details of the deal, but Inc42 has learnt more details about the downturn that has hit TenderCuts since its last fundraise during 2021’s peak funding season. 

Cutbacks At TenderCuts 

Inc42 has learnt from sources that TenderCuts shut its operations in several pockets in Chennai, the only city it currently operates in, over the last few months due to scarcity of funds.

Multiple sources told Inc42 that the startup had a very high burn rate. Its failure to secure fresh funding resulted in it shutting its operations in Bengaluru and Hyderabad last year. 

It also fired nearly 65% of its workforce after shutting its operations in the two cities. 

Despite these struggles, TenderCuts launched Happy Chops earlier this year. However, the last three-four months were very difficult, sources added.

Commenting on the state of the startup, a senior TenderCuts executive told Inc42, “Acquisition was the only way out as it (TenderCuts) was unable to secure a Series B funding round.” 

Social media is filled with irate reviews from dissatisfied TenderCuts customers, pointing out that the Stride Ventures-backed startup had issues when it comes to deliveries and availability of products. 

Having spoken to sources at TenderCuts, Inc42 contacted Nabard’s NABVENTURES yesterday (Friday, September 1), a key investor in the company, for a comment on the distressed situation at TenderCuts. Less than 24 hours after this communication, TenderCuts publicly announced the acquisition by Good To Go. 

Stride Ventures declined to comment directly about the state of operations at TenderCuts despite multiple attempts to reach its founder Ishpreet Singh Gandhi. 

The press statement on the acquisition is mum on whether investors at TenderCuts saw any returns from this transaction. 

Stride Ventures was also in the news earlier this year for its investment in GoMechanic, which went through a distress sale earlier this year after its founders admitted to inflating revenues and sales. 

If these troubles weren’t enough, TenderCuts has seen the exit of R Venkkatesan earlier this year. Venkkatesan is mulling entering the real estate sector for his next business, as per his LinkedIn profile. 

Founded by Nishanth Chandran, the startup elevated three senior employees Sasikumar Kallanai, R Venkkatesan and Varun Prasad Chandran as cofounders in 2021. Sources indicate that Chandran is also likely to quit the startup after the acquisition, along with the other cofounders. 

TenderCuts Deep In The Red

Founded in 2016, TenderCuts offers freshly cut meat and seafood to customers through neighbourhood stores, which cater to both walk-in customers as well as online shoppers. Over the years, the startup expanded its product portfolio, adding eggs, spices, ready-to-cook products, among others. 

The startup competes with unicorns such as FreshtoHome and Licious as well as marketplaces such as BigBasket and a host of other players selling through quick commerce apps. 

TenderCuts claimed to have a network of 50 retail stores in Chennai and Bengaluru after raising over $19 Mn in funding. It raised $15 Mn in its Series A round led by Paragon Partners and NABVENTURES. In 2021, it raised $3.5 Mn in debt funding from Stride Ventures.

Worryingly, the company saw a huge jump in loss in FY22. The total loss of INR 126.8 Cr was 4X higher than the INR 30.4 Cr in FY21, but revenue only grew by 1.6X to INR 130.9 Cr in FY22 as compared to INR 78.1 Cr in FY21. Overall expenses ballooned by over 2.4X YoY to INR 259 Cr in FY22. Most of these went towards purchase of stock, while advertising costs also ballooned in FY22. 

The startup also roped in Prakash Raj as brand ambassador even as it struggled to boost the revenue and improve its unit economics. 

The poor financial and operational state of TenderCuts mirrors the state of many other meat delivery startups, where Licious and Freshtohome are dominant forces. Licious has raised over $400 Mn, while FreshtoHome has secured over $256 Mn in funding since inception, highlighting the need for capital to scale up this segment. 

Despite this, Licious and FreshtoHome continue to be loss-making as per their FY22 financials — INR 856 Cr and INR 480 Cr, respectively. 

TenderCuts’ acquirer Good To Go reported INR 9 Cr in revenue in FY22, with a razor thin profit of INR 1.1 Lakh (Less than 0.01%). 

The skewed competitive landscape means other startups such as Chennai-based meat retail brand Fipola have also shut down, while Bengaluru-based CaptainFresh has completely shifted its focus towards exports rather than selling to consumers. 

It looks like TenderCuts is the latest casualty of this intense competition and opex burden for meat delivery. It’s not clear whether Good To Go would retain the brand identity that TenderCuts has invested in building over the past few years. The announcement, sent soon after Inc42’s questions about the downturn at TenderCuts, was thin on any details in this regard.

The post Good To Go Acquires Paragon Backed TenderCuts In A Distress Sale appeared first on Inc42 Media.

Shiprocket owned retail SaaS platform Omuni has laid off around 60-70 employees, or nearly 35% of its workforce, earlier this month in a restructuring exercise, according to Inc42 sources.

The layoffs, which took place in the second week of August, impacted employees from tech, product, sales, and talent acquisition teams, the sources told Inc42.

Besides the retrenchment, Omuni will also see the exits of the senior management team. Omuni CEO and cofounder Mukul Bafna, CTO Sumeet Chandhok, among others, are also exiting the company, Inc42 has learnt.

Shiprocket, without disclosing details around the number of employees impacted, leadership exits and other related details, confirmed the development to Inc42.

“At Shiprocket, we are building a full-stack ecommerce enablement platform and are always looking for opportunities to create a much bigger business impact for our merchants through partnerships, mergers and acquisitions. As we explore synergies with acquisitions, including Omuni, it often results in the consolidation of the workforce at an organisation-wide level and we have integrated some teams across various group companies. As a company, we remain committed to our vision and, consistently delivering and upholding our employee value proposition,” a Shiprocket spokesperson said.

Founded in 2014, Omuni is an omnichannel retail enablement platform for brands and retailers. Shiprocket acquired Omuni in July last year from Arvind Internet Private Limited in a combination of stock and cash for a total consideration of INR 200 Cr. 

Back then, Shiprocket said the acquisition will facilitate quick, efficient deliveries of shipments from the nearest store or warehouse, significantly reducing delivery timelines and enhancing customer experience.

Commenting on the layoffs, one of the sources said, “Nobody anticipated this would happen. We had a town hall about the upcoming product and in the evening employees were removed from the system without any valid explanation.” 

Omuni is giving a salary of two months as severance pay to the employees who were laid off.

Top-Level Exits Amid IPO Plans

As per the sources, Vivek Kalra, the cofounder and director of Glaucus Supply Chain solutions, another company acquired by Shiprocket, will lead the Omuni team in place of Bafna.

While it is not uncommon for founders and senior management employees to leave a company post acquisition, the high-level exits at Omuni right after the layoffs have raised a few eyebrows.

“Omuni is undergoing a transition at this point. Shiprocket is preparing for a public listing, and all these restructuring activities are a part of the same,” a source said. 

Another source said that Omuni generally deals with traditional business, whereas Shiprocket’s DNA evolves around new-age D2C brands. The transition will enable them to work with SMEs and MSMEs as well. 

However, multiple sources also told Inc42 that Omuni’s performance as a business unit didn’t matched the expectations set during the acquisition.

“Omuni was struggling to close deals and was lagging behind the target that was set by Shiprocket at the time of acquisition,” one of the sources said.

Shiprocket Acquisition Spree, And Losses 

Omuni’s acquisition was part of Shiprocket’s buying spree in 2022 when it acquired a number of companies for its growth ambitions. Besides Omuni, the Zomato-backed SaaS logistics startup also acquired Pickrr, Wigzo, Glaucus, and Rocketbox last year. 

The Delhi NCR-based unicorn entered the coveted unicorn club in August last year after it raised a bridge round of $33 Mn led by Lighrock India at a valuation of around $1.2 Bn. 

To date, Shiprocket has raised over $387 Mn across multiple rounds. It counts marquee names like Temasek, Moore Strategic Ventures, Paypal, and March Capital among its backers. 

Shiprocket slipped into the red in FY22, reporting a net loss of INR 93.1 Cr as against a profit of INR 12.4 Cr in FY21. While operating revenue rose to INR 611 Cr in FY22 from INR 358 Cr in the previous year, total expense ballooned to INR 727.8 Cr from INR 350.6 Cr in FY21. 

The layoffs at Omuni is an addition to the ever-growing list of Indian startups which have fired employees amid the ongoing funding winter. As per Inc42’s layoff tracker, Indian startups have laid off over 29,000 employees since 2022.

The post Exclusive: Shiprocket-Owned Omuni Fires Nearly 35% Workforce; CEO, CTO To Exit appeared first on Inc42 Media.

India’s booming startup landscape comprises over 90,000 startups, with only 10% securing funding. A majority of founders have to approach over 12 VCs resulting in them spending over 33% of their bandwidth on these efforts.

To address this challenge, we have identified common fundraising mistakes and good practices to improve the chances of securing funding and avoiding pitfalls. Ultimately, fundraising is both an art and a science.

When To Raise, What To Raise

Timing is of the essence while fundraising. When you need money, many investors may not be interested in investing. However, when you don’t need money, you can raise funds on your terms, without the pressure of urgency.

Sticking with the timing aspect of fundraising, the process takes time, sometimes even 12-18 months, and it is essential to budget for it and start early. Planning ahead will ensure that you have sufficient time to communicate your vision and business plan to potential investors and secure funding.

With the right funding, a startup can disrupt the competition, change its orbit and gain dominance in its market. Therefore, the stage and type of fundraising often dictate the fate of a startup. For example, raising a Series A/B without any early indication of product-market fit (PMF) can be detrimental to a company’s success. In such cases, opting for a Seed or Angel round would be a more suitable alternative.

Factors To Consider While Fundraising

First and foremost, it is important to understand your customer’s perception of your product in the market, as well as your strengths. Keeping a close eye on competitors can help a startup refine its positioning and communicate its unique value proposition to investors more effectively. 

Investors often evaluate numerous startups across multiple sectors, therefore, it is essential to identify your moat or unfair advantage over peers and articulate it clearly in your story and positioning.

Choosing an investor is like choosing a life partner. Maximum success is achieved when the minds of the founder and investor meet for a common vision. Occasionally, the match may not be perfect, however, it does not imply that the founder or the investor is inadequate. 

Speaking to other founders for feedback, tracking deals done by a VC and learning about their investing ethos are basic diligences that a founder should do ahead of the fundraising.

Once you have shortlisted a few VCs, wooing them even at the expense of valuation, effort, or time, is worth it. Working on feedback received by investors and sharing periodic updates on your progress are some examples of how you can engage effectively. 

Remember, VCs are equally keen on chasing like-minded founders and many times need that comfort which is possible through effective communication.

Sizing the market is critical, and it is essential to have a clear understanding of your TAM, TOM and SOM. Without this understanding, even remarkable products/brands often encounter difficulties when attempting to expand. 

The Importance Of Telling A Good Story

The importance of storytelling cannot be overemphasised. A typical VC evaluates 3-5 deals every day and the hit rate is usually less than 1%. A useful exercise is to try explaining your business to your friends or family – if you can convey your message to them effectively, then you likely have your story and logic in order.

Early stage startups have limited resources at disposal. In order to get the most out of these resources, it is important to focus and prioritise excelling in one area rather than being a jack-of-all-trades and master of none. 

Pitching shifts the focus from the sheer ‘quantity of revenue’ generated to the ‘quality of revenue’ and unit economics. For example, a company with 10 SKUs selling in a few markets via few distribution channels is far better than growing faster with 100 different SKUs or channels.

These tips can help craft a winning pitch and steer the startup towards securing timely capital and sustainable business growth.

The post Mastering The Art Of Fundraising: Tips For Raising Your Startup’s First Institutional Cheque appeared first on Inc42 Media.

With an aim to have 500 startups in its portfolio in the next 2-3 years, homegrown early stage venture capital firm 100X.VC has its eyes set on signing 100 startup funding deals this year, Ninad Karpe told Inc42 in an exclusive interaction on the sidelines of the MoneyX conference that was held last month.

100X.VC, a sector-agnostic VC investment firm, typically invests in early stage ventures and writes small cheques on the lines of the US-based startup accelerator, Y Combinator.

The investment in early stage startups is converted into equity when they raise Pre-Series A or Series A funding. The funding happens through an instrument called iSAFE (Safe Agreement for Future Equity) notes.

Karpe credits his firm for introducing this concept to the Indian startup ecosystem and is not pioneering the show. The instrument has now been adopted by many early stage venture capital firms. According to Karpe, this investment process usually restricts investors from having a seat on the board and curbs the time of the deals that take months to close, like in the case of conventional startup funding.

Founded in 2019, 100X.VC is a SEBI-registered fund, which is led by angel investor Sanjay Mehta’s family office, Mehta Ventures.

Speaking on a range of topics, from funding winter to corporate governance issues plaguing the world’s third-largest startup economy, Karpe outlined that neither there is a dearth of deals nor investors looking to place their bets. However, founders today need to get their act together in striking a balance between dos and don’ts while sitting on heaps of investor capital.

Edited excerpts…

Inc42: What impact has the ongoing funding winter had on 100X.VC’s investment strategy?

Ninad Karpe: Funding winter is a big word. It is all-encompassing, but, if you come down the ladder and slice and dice, there is no winter in some cases.

As early stage investors, we get 25,000 to 30,000 pitch decks every year. While, on the one hand, there is no dearth of deal flow, on the other hand, there is no shortage of interest from angel investors to invest in the early stage.

Also, we are witnessing greater interest from a lot of individuals who are willing to take high risks with small ticket sizes, which is a good sign. Another positive development is that we are seeing a lot of founders emerging from Tier II and Tier III cities, which has only added to the deal flow.

So, when we talk about the funding winter, the pressure is more at later stages, Series C, D, E, and so forth. However, we provide bigger VCs a solid pipeline of startups to invest in for the next 3-5 years, and by then we believe any remaining traces of the funding winter will subside.

Inc42: So, according to you there is no funding winter right now?

Ninad Karpe: I think the exuberance is gone and reality has struck, and this is both from the perspective of founders and VCs.

I think we are at the fag end of the funding winter. In the next couple of months, we should start seeing more and more funds where people are more realistic about everything, sans the blind chase for startups or ideas.

The Indian VC ecosystem is still nascent compared to the West. There is a lot more headroom for a country of our size, and we can easily grow a hundred times from where we stand today.

Inc42: How many number of deals have you closed this year?

Ninad Karpe: While we have already closed 47 deals so far this year, we intend to do 100 deals in 2023. As of now, we aim to close 30-40 deals, however, the range could vary between 80 and 110 deals. Notably, these will be the startups from the 30,000 pitch decks that we have received this year alone.

Inc42: Is there any corpus that 100X.VC has built to invest in startups?

Ninad Karpe: So, we want to keep investing. We are the first institutional cheque writers, and we want to continue with this philosophy. Within the ecosystem, founders know that 100X.VC signs the first institutional cheque by deploying founder-friendly, agile funding instrument iSAFE notes, which we have pioneered in India. So, we want to continue doing this.

Inc42: Are you looking at any specific industry vertical to invest in this year?

Ninad Karpe: Given that we are sector agnostic, we look at groundbreaking ideas, which don’t get funded by anyone else.

Inc42: What is 100X.VC’s exit strategy? Is there any timeline that you set?  

Ninad Karpe: Since we are the first cheque writers, we take a more patient approach. Realistically speaking, I don’t think that we will get an exit within five years from our investments. Given that our fund is only four years old, we haven’t had any major exit yet. However, we expect some good news in the next 1-2 years.

During the pandemic, our investment slowed down, but we are back with a bang, and we want to invest in a hundred startups every year. Hopefully, we will have 500 startups in our portfolio in the next 2-3 years.

Inc42: How have the recent issues around corporate governance that cropped up at several big Indian startups impacted your strategy or relations with your portfolio companies?

Ninad Karpe: Corporate governance is an issue that needs to be fixed. It has happened in some cases due to various reasons.

At 100X.VC, we don’t take any board seats as a VC, however, we have now started including a separate session on corporate governance and its importance before investing.

Corporate governance issues that have recently cropped up among Indian startups could be a lesson for many founders on what should not be done.

Also, founders should be aware that if they mess up, it is pretty much over for them. The situation of bad actors in the ecosystem can be kept at bay if the guilty are easily let off the hook.

Inc42: What, according to you, should young startup founders learn from recent corporate governance issues?

Ninad Karpe: Founders today need to understand that if they have the requisite capital, it is unnecessary to spend it all, just because they can.

In the Indian startup space, a root cause of the evils that have recently emerged is the flow of excessive capital, and hardly restriction on spendthrift founders.

I don’t think this will work anymore. However, this also does not mean that investors do not want founders to scale their businesses. What is important is to understand the nuances to strike a balance between dos and don’ts.

We need to understand that young founders come with a lot of enthusiasm to make a difference. They’ve quit jobs or they’ve not gone for jobs and come to the startup ecosystem where the success rate, at best, is just 10%.

When capital was flowing freely, many failed to spend it consciously. However, this will be history now, and the Indian startup ecosystem is going to see a lot of disciplined founders emerge not too far in the future.

The post What Funding Winter! Have Set Eyes On 100 Startups This Year: 100X.VC’s Ninad Karpe appeared first on Inc42 Media.

Bengaluru-based short-video platform Chingari has laid off more than 50% of its workforce in the second round of layoffs within two months amid a cash crunch, sources told Inc42.

The layoffs, which took place last week, impacted employees from teams like product, customer support, design and marketing, the sources added. 

The impacted employees were informed about the retrenchments during a one-on-one interaction with the members from the HR team or respective team managers. During the meetings, the employees were asked to tender their resignations, the sources said.

A detailed questionnaire sent to Chingari on the latest development didn’t elicit any response till the time of publishing this story. The article will be updated on receiving comments from the startup.

Commenting on the layoffs, one of the sources said, “This came out of nowhere. After the first round of layoffs, the higher management told the employees time and again that the company has enough cash runway.”

Multiple other sources echoed the same sentiment. 

Earlier in June, Inc42 exclusively reported about Chingari laying off 20% of its workforce.

Chingari now has only 50-60 employees following the latest round of layoffs, as per the sources. 

Besides layoffs, Chingari has also asked some of its employees to take pay cuts of up to 50% to bring down its expenses, the sources added. They cited a severe cash crunch as the reason behind the startup undertaking these measures.

“They (Chingari) were waiting to receive fresh funding from investors but it has been stuck in the due diligence procedure for a long time,” a source said, adding that the startup would have no option but to shut operations if it fails to get fresh funding in the next few months.

Chingari last raised an undisclosed amount of funding from Aptos Labs in February this year. The startup then said it would use the fresh funds for user growth, product development, global expansion, and to ramp up its engineering team. 

While announcing the fundraise, the startup also said it planned to launch an upgraded app on the Aptos Network by the second quarter of 2023.

Chingari’s Struggles

Chingari, like other short-video platforms, rose to prominence after the Indian government banned Tiktok, along with other Chinese apps, in 2020 citing security concerns. 

Cashing in on its newly-found fame, Chingari raised capital across multiple rounds. Till date, the startup has raised $47 Mn from investors such as OnMobile, Republic Capital, JPIN Venture Catalysts, Hill Harbour, Galaxy Digital, and Alameda. 

While Chingari started as a short-video platform, it also entered the crypto space with the GARI token, which it hoped would drive engagement and new downloads. However, the value of the token has been on a free fall since last year. 

Besides, the company has also been hit hard by the falling number of app downloads. Data sourced from Apptopia showed that Chingari’s download numbers hit a rock bottom around May-June 2022, after touching a peak of around 500K daily downloads in January 2022. The number of downloads have failed to recover since then.

In order to improve engagement on the platform and increase the number of app downloads, Chingari also forayed into 18+ content with paid live one-on-one calls between creators and users.

In terms of financial performance, the startup reported a net loss of INR 139.4 Cr in FY22, a jump of 225.7% from INR 42.8 Cr in FY21. Meanwhile, total income rose 137X to INR 49.4 Cr from INR 36 Lakh in FY21.

It must be also noted that amid the layoffs, Chingari acquired a chess team, Chingari Gulf Titans, in the Global Chess League. Recently, the startup also became a digital partner of UK-based football club, Southall Football Club. 

Chingari, founded in 2018 by Sumit Ghosh, Aditya Kothari, Biswatma Nayak, Deepak Salvi, also saw one of its cofounders Kothari exit the startup in May this year. 

The layoffs at Chingari come amid the ongoing funding winter, which has forced multiple other social media and crypto-focused startups like Sharechat, Koo, and CoinDCX to layoff employees.

As per Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.

The post Exclusive: Chingari Sacks Over 50% Employees In Second Round Of Layoffs appeared first on Inc42 Media.