Mastercard-backed fintech startup Instamojo has shut down its core payments business after the Reserve Bank of India rejected its application to operate as a licensed payments aggregator in September, citing non-compliance with eligibility criteria.

Consequently, Instamojo has shifted its focus away from payments following the regulatory setback, The Morning Context reported.

Instamojo has promptly ceased its business operations after the RBI rejected its payment aggregator application. While payment companies typically have 180 days to wind down operations following a rejection, Instamojo has chosen an immediate shutdown, indicating that they would not reapply as well.

According to the report, InstaMojo is actively seeking a potential buyer as its founders aim to exit the business. Additionally, the startup has faced challenges in securing funding over the past few months, encountering difficulties with both existing and new investors.

Founded in 2012 by Sampad Swain, Akash Gehani and Aditya Sengupta, Instamojo is an ecommerce platform for independent businesses, direct-to-consumer (D2C) brands and micro, medium and small enterprises (MSMEs) that enable them to start, manage and grow their business online.

In early 2019, the startup raised INR 50 Cr as a part of its Series B funding round from Gunosy Capital, Japanese payments firm AnyPay and existing investors. It also counts Kalaari Capital and Blume Ventures among its investors.

Queries sent to Instamojo did not elicit any response till the filing of this article.

Introduced by the RBI in March 2020, the payment aggregator framework requires all payment gateway operators to obtain a license for acquiring merchants and implementing digital payment solutions.

Payment aggregators (PAs) facilitate merchants and ecommerce platforms in accepting payments by providing their technological infrastructure for streamlined online transactions. However, the licensing process, initiated three years ago, has become challenging and cumbersome procedure for payment solution providers.

Strict regulations from the central bank have resulted in numerous PA applications, including those from Paytm and LivQuik, remaining in a state of uncertainty. Even prominent names like MobiKwik’s Zaakpay faced delays and had to submit multiple applications before obtaining their licenses.

Earlier in February, RBI granted in-principal authorisation to 32 existing payment aggregators (PAs) to act as online PAs.

Amazon (Pay) India Pvt Ltd, Paymate India Ltd, Razorpay Software Pvt Ltd, Pine Labs Pvt Ltd and Zomato Payments Pvt Ltd were among the PAs that had been granted in-principle authorisation.

As per a report, the Indian payment gateways market is projected to grow to $2.68 Bn by 2027.

The post Mastercard Backed Instamojo Shuts Core Payments Biz After RBI Rejects Its Application appeared first on Inc42 Media.

The Competition Commission of India (CCI) has approved Mirae Group’s proposal to acquire a minority stake in logistics company Shadowfax.

“Commission approves the proposed acquisition of (a) minority stake in Shadowfax Technologies Private Limited by the Mirae Group Entities,” said the markets watchdog in a social media post. 

Mirae Global is a South Korea-based financial services giant that operates in India through its subsidiary Mirae Asset Capital Markets. 

As per CCI, Mirae Asset plans to undertake the acquisition via its ‘Late Stage Opportunities Fund.’ The deal will also entail the right of appointment of a Mirae’s representative on Shadowfax’s board of directors. 

The proposed combination involves… contemporaneously with the completion of the share acquisition, an acquisition of a right to appoint a director on the board of Target, collectively by Mirae Asset Naver New Growth Fund I (Mirae I), Mirae Asset– GS Retail New Growth Fund I (Mirae II), Mirae Asset– Naver Asia Growth Investment Pte. Ltd (Mirae III) and Mirae IV,” said a CCI order. 

It is pertinent to note that all deals beyond a certain threshold require CCI’s permission. The markets regulator has been tasked with keeping an eye on unfair business practices among businesses and promoting fair competition in the marketplace.

This comes three months after reports surfaced that logistics startup Shadowfax was giving finishing touches to its $60 Mn funding round after more than a year of deliberations. Back then, it was reported that TPG NewQuest would headline the funding round.

Founded in 2015 by Vaibhav Khandelwal and Abhishek Bansal, Shadowfax is a third-party logistics platform that caters to hyperlocal and delivery businesses. While Meesho is its biggest client, the company also counts big names such as Myntra, Zomato-owned Blinkit, Decathlon, Flipkart, and BigBasket as its customers. 

Shadowfax claims to deliver to more than 15,000 pincodes across the country and processes 15 Lakh orders a day and employs a workforce of 30 Lakh. 

Backed by names such as Mirae, Flipkart, Qualcomm Ventures and Eight Roads Ventures, the startup has raised more than $120 Mn till date. 

Curiously, the approval comes weeks after the competition watchdog gave its assent to a similar proposal filed by the Ontario teachers’ fund to acquire a minority stake in XpressBees. A week after that, the logistics unicorn bagged $80 Mn from the investment arm of the pension fund, Teachers’ Venture Growth (TVG).

The post CCI Greenlights Mirae’s Proposal To Acquire Stake In Logistics Major Shadowfax appeared first on Inc42 Media.

Business-to-business ecommerce solutions provider ElasticRun has nearly doubled its losses in the financial year 2023. The Pune-based unicorn has incurred a net loss of INR 618.82 Cr against a loss of INR 358.59 Cr in FY22, a 72.57% YoY increase.

Meanwhile, the startup’s revenue from operations saw a YoY increase of 24.71% to INR 4,754.86 Cr from INR 3,812.65 Cr in FY22. Further, the total revenue saw a YoY increase of 26.71% to INR 4,851.09 Cr from INR 3,828.24 Cr in the previous fiscal.

Founded in 2016 by Sandeep Deshmukh, Saurabh Nigam and Shitiz Bansal, ElasticRun’s tech platform acts as an extended arm of FMCG companies’ direct distribution networks in rural areas and enables these businesses to reach kirana stores in the hinterland.

The startup generates revenue through its tech platform which acts as an extended arm of FMCG companies’ direct distribution networks in rural areas and enables these businesses to reach kirana stores in the hinterlands of the country. It also offers logistics and warehousing services to these small businesses.

ElasticRun generates the majority of its revenue by selling products. It procures products from FMCG brands and sells them directly to local retail stores in rural areas.

As per its filings with the Ministry of Corporate Affairs, ElasticRun generated revenue of INR 4,383.39 Cr through sales of products in FY22, whereas it earned INR 368.34 Cr through sale of services.

The Expense Breakdown

ElasticRun’s total expenditure surged 30.65% YoY to INR 5,469.91 Cr from INR 4,186.66 Cr in FY22.

Increased employee benefit expenses: The company registered a YOY increase of 71.99% in employee benefits to INR 345.26 Cr from INR 200.74 Cr in FY22.

More than doubled finance costs: The finance costs saw a YoY increase of almost 2X, as it reached INR 8.08 Cr from INR 3.91 Cr in FY22.

Meanwhile, the company’s cash & cash equivalents at the end of March 31, 2023, saw a YoY decrease of 91.33% to 101.45 Cr from INR 1170.57 Cr in FY22.

In February last year, ElasticRun raised $330 Mn in funding led by SoftBank Vision Fund 2 and Goldman Sachs Asset Management. This was the round which marked its entry into the unicorn club. Overall, the unicorn has raised a total funding of $434.8 Mn and also counts Avataar Venture Partners, Prosus Ventures, Kalaari Capital, Innoven Capital and Abu Dhabi’s Chimera Investment, among others, as its investors.

The post SoftBank-Backed ElasticRun’s FY23 Loss Doubles To INR 619 Cr appeared first on Inc42 Media.

Mumbai-based cloud kitchen giant Rebel Foods’ operating revenue crossed the INR 1,000 Cr mark in the financial year ending on March 31, 2023. 

As per the recent financial statements filed with the Registrar of Companies, Rebel Foods, the parent company of both Faasos and Behrouz Biryani, reported an operating revenue of INR 1,195.2 Cr in FY23, up 39% from INR 858.6 Cr a fiscal ago. 

Founded in 2011 by Kallol Banerjee and Jaydeep Barman, Rebel Foods is a cloud kitchen startup, which houses popular brands such as Faasos, Behrouz Biryani, Ovenstory Pizza,

Mandarin Oak, The Good Bowl, SLAY Coffee, and Sweet Truth. 

The startup’s primary source of income is through the sale of its food items. Including other income, the startup earned a total revenue of INR 1,258.7 Cr in FY23, a 1.3X markup from INR 907.5 Cr it had generated in FY22. Meanwhile, the startup posted a loss of INR 656.5 Cr in FY23, up 23% year-on-year (YoY).

Expenses That Ate Into Rebel Food’s Revenue In FY23?

During the year under review, the startup’s total expenditure rose to INR 1,827 Cr, up 28% from INR 1,428.9 Cr it had spent a year ago. 

Procurement Cost Became The Biggest Contributor: Being a cloud kitchen, Rebel Foods spent most of its money on procuring raw materials. During the period under review, the startup’s procurement cost rose to INR 577.5 Cr from INR 446.4 Cr in FY22. 

Employee Expenses: The startup’s employee benefit expenses, which mostly comprised salaries, increased 34% YoY to INR 405.4 Cr in FY23. In June, Rebel Foods granted employee stock ownership plans (ESOPs) to 5,000 employees. The company has 2,743 employees as per its LinkedIn profile. 

Advertising Expenses Rise Mildly: Advertising expenses rose a mere 5% rise to INR 197.9 Cr in FY23 from INR 188.5 Cr in FY22.

Besides, the startup spent INR 163.3 Cr on commissions paid to other selling agents, mainly Swiggy and Zomato. 

On a unit economics level, Rebel Foods spent INR 1.5 to earn every rupee from operations. The startup’s EBITDA margin improved to -37.8% in FY23 from -46.4% in FY22. 

To date, the startup has raised a little over $500 Mn and counts Goldman Sachs, Peak XV Partners, InnoVen Capital, Trifecta Capital, and Qatar Investment Authority (QIA) among its backers. The startup claims that it has over 450 kitchens across 70 cities in the country. The startup primarily competes against the likes of Curefoods, Biriyani By Kilo, Freshmenu, among others. 

The post Faasos Parent Rebel Foods Breaches The INR 1,000 Cr Revenue Mark In FY23 appeared first on Inc42 Media.

Have you ever dreamed of starting your own D2C business, but felt overwhelmed by the challenges? You’re not alone. I’ve been there too. Starting an ecommerce business is a big undertaking, but it’s also incredibly rewarding. I’m here to tell you that it’s possible to achieve your dreams, even if you’re starting small.

The initial overwhelm is real. But starting a D2C business is more accessible than you might think. Thinking about why is it important?

Wider Exposure: With the internet, your customers can come from anywhere in the world. And with the recent surge in online shopping, you have the potential to reach more customers than ever before.

24/7 Shop: Imagine having a business that runs itself, allowing you to make money while you sleep. Automation can make this a reality for you, freeing up your time so you can focus on growing your business and pursuing other interests.

Low Startup Costs: Don’t let budget concerns stop you from starting your own ecommerce business. There are many ways to save money, and you can even find free online store options.

Starting an ecommerce business in India can be daunting, but it’s also an exciting opportunity. Here’s a step-by-step guide to help you get started:

Step 1: Determine Your Niche & Products

Find the perfect products and niche to solve problems for your customers, with steady demand and low competition.

Step 2: Conduct Market Research

Learn about similar products, the competition, and who your ideal customers are.

Step 3: Create a Business Plan

A well-structured plan provides clear guidance for all aspects of your business, from branding and marketing to sales and finance.

Step 4: Source Your Products

Choose the best business model for you: make your own products, buy wholesale, or dropship.

Step 5: Find A Business Name and Logo

Create a brand name and logo that will capture people’s attention and stick in their minds.

Step 6: Create An Ecommerce Website

Start your online business by choosing the right ecommerce platform for you.

Step 7: Prepare for Launch

Make sure your store has high-quality product photos, optimised SEO, and a reliable shipping strategy.

Step 8: Get Your First Customer

Use digital marketing and social media to connect with your target audience and start building relationships. This will help you attract your first customers and grow your business.

The first step is always the hardest, but it’s essential for success. Starting an ecommerce business is an exciting journey full of opportunities, learning, and growth. 

The post A Step-By-Step Guide To Start A D2C Ecommerce Business appeared first on Inc42 Media.

I recently visited Jaipur, India, where I met a local artisan named Ravi. He struggled to sell his handcrafted goods due to the dominance of middlemen. One of his friends helped him to setup and he decided to sell directly online, bypassing these intermediaries. The results were amazing. Not only did his sales increase significantly, but he also built genuine relationships with his customers.

Witnessing Ravi’s journey firsthand, I realised the immense potential of the D2C model.

Have you ever felt the frustration of trying to buy a simple product, only to have to navigate through a maze of middlemen? It can be time-consuming, impersonal, and leave you wondering if there’s a better way.

That’s where D2C brands come in. D2C stands for direct-to-consumer, and it’s a new way of shopping that’s taking India by storm. D2C brands cut out the middlemen and sell their products directly to consumers, which means lower prices, better customer service, and a more personalised shopping experience.

The COVID-19 pandemic changed the way we shop, with over 80% of consumers now preferring to buy online. D2C brands have stepped up to meet this demand, offering personalised experiences that build bridges between businesses and consumers.

• Hyper-personalised Shopping: Imagine a shopping experience that’s all about you. D2C brands like Wakefit are using advanced analytics to offer you a shopping journey that’s as unique as you are.
• Online to Offline Approach: While the digital world is vast and convenient, there’s still something special about visiting a physical store. Some of popular D2C brands, like Licious and Mamaearth, are now opening offline stores so that we can experience their products and services in person, no matter where we are.
• Social Media Dominance: Social media marketing is growing rapidly, and D2C brands are taking advantage of this. Brands like Neeman’s and Bluestone are thriving, thanks to their strong social media presence.
• Product Sampling: We all experience decision fatigue, which is why brands like Smitten offer product trials. This gives you the power to choose whether or not to commit to a product before you buy it.
• Express Checkout: Checkout processes can be a drag, but D2C brands are leading the way in streamlining them, making the shopping experience swift and hassle-free. 
• Sustainability: As we face the challenges of climate change, D2C brands are playing an increasingly important role. Some brands, like mCaffeine, are leading the way in sustainability, demonstrating their commitment to leaving a positive impact on the planet.

Ravi’s story is just one example of how the D2C model is transforming shopping in the digital age. As consumers, we have the power to choose brands that value genuine connections and prioritize our needs. 

When we support D2C brands, we’re not just shopping; we’re fostering direct relationships, championing innovation, and driving positive change in the marketplace.

Let’s embrace this new era of shopping, where every purchase tells a story and every brand interaction feels personal. I’m excited to see what the future holds for D2C brands and consumers alike.

The post How D2C Innovators Are Reshaping The Future Of Shopping? appeared first on Inc42 Media.

I was inspired to write this article after a chance encounter at a local cafe. As I sipped my coffee, I overheard a conversation between two women at a nearby table. One of them, Sarah, was a young entrepreneur who was struggling to make her small, artisanal jewelry business stand out from the competition.

Sarah was clearly passionate and dedicated, but I could tell she was also worried. She felt like she was invisible to potential customers, and her story struck a chord with me because I had faced the same challenges when I was starting Meduit.

Sarah and I met for an hour and had a great conversation. I told her about my experiences and the strategies I used to overcome the same challenges. It was heartwarming to see the hope in her eyes when she realised that she could grow and succeed with the right approach.

This encounter inspired me to create an article to offer practical advice and encouragement to other entrepreneurs who may be struggling to be seen in a competitive world.

In a world where big brands dominate, remember that your authentic voice, consistency, and genuine connection with your audience can make you stand out. Your brand may be small now, but with dedication and the right approach, you can create a lasting impact.

Social Media – Your Goldmine

• Organic Content: Share your brand’s story and values regularly. Videos often resonate more with people, so consider using them to capture your audience’s attention.
• Micro-Influencer Collaborations: Partner with real micro-influencers who share your values. Their authentic engagement can put your brand in front of a new audience without breaking the bank.
• Community Engagement: Be a part of the community you’re building, not just a broadcaster. Engage in conversations, respond to feedback, and listen to what people have to say.

Email/WhatsApp Marketing – Direct & Personal

• Build & Segment: Offer valuable content or discounts to encourage people to sign up for your email/WA list. Once people have subscribed, segment them based on their interests and demographics so you can send them more relevant messages.
• A/B Testing: Try different types of content to see what your audience responds to best. Test different subject lines, email formats, and calls to action to see what gets the most opens, clicks, and conversions.                            

Be relevant and less salesy.

Stellar Customer Experience – Your Brand’s Best Friend

Happy customers are your best brand ambassadors. Make sure your website is easy to use, respond to inquiries quickly, and be transparent, especially about shipping. When you go above and beyond for your customers, they’re more likely to recommend your brand to others. After all, word-of-mouth is the best advertising.

As you embark on your journey to succeed in this competitive world, remember that great things often come from humble beginnings. Sarah’s story, the inspiration behind this newsletter, is a testament to the power of perseverance and innovation.

Her journey is an inspiration to us all. Your brand has limitless potential, and with hard work, the strategies shared here, and a steadfast belief in your unique vision, you can light up the world with your presence.

The post A D2C Guide To Uncover The Secrets To Brand Visibility appeared first on Inc42 Media.

Home appliances manufacturer Atomberg Technologies’ loss more than tripled during the financial year ended March 31, 2023. The Navi Mumbai-based startup’s net loss grew 3.5X to INR 138.35 Cr in the financial year 2022-23 (FY23) from INR 39.3 Cr in the previous fiscal year.

Revenue from operations rose 86.59% to INR 645.13 Cr in FY23 from INR 345.74 Cr in FY22. Total revenue, including other income, jumped 81.39% to INR 649.04 Cr from INR 357.8 Cr in FY22.

Founded by IIT Bombay alumni Manoj Meena and Sibabrata Das in 2015, the home appliances startup manufactures energy-efficient, remote and voice-controlled fans and fan accessories. Its product portfolio includes ceiling, pedestal, wall and exhaust fans, mixer grinders and smart locks.

Atomberg earns a majority of its revenue from the sale of products on its own website, ecommerce portals such as Amazon and Flipkart, and offline retail stores.

Expenses Shoot Up 

Atomberg, which has been on an aggressive growth trajectory, saw its total expenses double to INR 787.39 Cr during the year under review from INR 387.01 Cr in FY22.

It must be noted that the startup has been increasing its production capacity and expanding its omnichannel capabilities. For instance, in June 2022, it launched a state-of-the-art manufacturing unit in Bhamboli (Pune) with an investment of INR 25 Cr. This facility is 4X in terms of size compared to its plant in Nerul in Navi Mumbai.

Employee Expenses Zoom: In line with its expansion plans, Atomberg is also looking to strengthen its human resources. This is reflected in its employee costs. The startup’s employee benefit expenses grew 3.4X to INR 137.13 Cr in FY23 from INR 40.11 Cr in the previous fiscal year.

Other Major Expenses: Atomberg’s cost of materials consumed rose 69.3% to INR 376.24 Cr during the year under review from INR 222.13 Cr in the previous fiscal year. Meanwhile, finance cost rose to INR 5.58 Cr from INR 1.88 Cr in the previous fiscal year.

On a unit economics level, the startup spent INR 1.22 to earn every rupee from operations in FY23.

EBITDA margin deteriorated to -21.31% in FY23 from -11.3% in FY22.

Earlier, in an interview with Inc42, Atomberg founders said that they were aiming to surpass INR 1,000 Cr mark in total revenue in FY24.

The startup last raised $86 Mn in a Series C round led by Temasek and Steadview Capital along with Trifecta Capital, Jungle Ventures and Inflexor Ventures. Overall, the startup has raised a total funding of $126.5 Mn till date.

The post Home Appliances Startup Atomberg’s FY23 Net Loss Surges 3.5X To INR 138 Cr appeared first on Inc42 Media.

Imagine Marketing, the parent company of boAt, saw its revenue cross the INR 3,400 Cr mark in the financial year 2022-23 (FY23), registering a growth of 20%. 

“While the audio business continued its trajectory towards strong top line and bottom-line growth, the overall profitability got impacted due to investments the company made in seeding the smartwatch category and scaling up the Make in India infrastructure,” the company said in a statement.

The company reported a loss due to these investments, however, it didn’t disclose the loss number. In FY22, it reported a net profit of INR 68.7 Cr.

The D2C unicorn said it will file its detailed financial statements for FY23 with the Ministry of Corporate Affairs (MCA) today. 

The New Delhi-based D2C electronics brand also claimed that it is on track to cross INR 4,000 Cr gross revenue this year. 

However, it must be noted that in June this year, boAt claimed that its net sales rose to around INR 4,000 Cr (about $500 Mn) in FY23. 

According to Sameer Mehta, cofounder and CEO of boAt, the company’s focus on innovation, technology, and ‘Make in India’, along with the government’s efforts to boost domestic production, has paved the way for its long-term growth and profitability. 

“Our profitability over the last 3 to 4 years is quite strong despite ahead of the curve investments in both wearables and Make in India infrastructure and FY24 will continue to remain strong like previous years. We are also focused and investing on building a strong talent engine in the organisation and have further strengthened our IT capabilities to drive efficiency,” he added.

The following are some of the key factors which worked in boAt’s favour in FY23:

• Growth Across The Board: boAt attributed the rise in its revenue in FY23 to increase in sales of smartwatches, TWS and home audio products. boAt’s revenue from smartwatches grew over 50% year-on-year (YoY) in FY23, while it said TWS and home audio categories saw 35%-40% growth in H1. 
• Launch Of New Products: In the first half of FY23, the company launched over 50 new products, including the ‘Nirvana Ion’ and ‘Airdopes Flex 454 ANC’. The company claimed that both these products collectively reached INR 350 Cr+ in annual run rate in FY23.
• Efficient Utilisation Of boAt Labs: Both Nirvana Ion and Airdopes Flex 454 ANC are made on boAt’s in-house platform developed by a team of over 80 engineers at boAt Labs, the R&D facility of the company. In the last few years, boAt has also made significant investments in ramping up its R&D capabilities.

Founded by Aman Gupta and Mehta in 2015, boAt operates in the larger audio and wearables markets and sells products such as headphones, smart watches and speakers. 

The company began making its products in India in early 2022 and claims to have produced more than 30 Mn units to date in India (over 15 Mn units in FY23). boAt said it is working continuously with Indian EMS vendors to streamline the processes and build a high quality manufacturing ecosystem in India. 

As part of these efforts, it has entered into a joint venture with Dixon Technologies. The company is also investing heavily in new technologies and product development and is looking to further increase its R&D capacity in the coming years.

Speaking during Inc42’s ‘The D2C Summit 4.0’ earlier this year, Gupta said, “Pre-Covid, 0% of our products were made in India. Cut to 2023, and 70% of our products are now made in India.” 

The company has raised a total funding of $177 Mn till date from investors such as Qualcomm Ventures, Warburg Pincus, InnoVen Capital, Navi Technologies, and Fireside Ventures.

The post Aman Gupta’s boAt Clocks INR 3,400+ Cr Revenue In FY23, Smartwatch Sales Grow Over 50% appeared first on Inc42 Media.

Amazon India said over 38,000 sellers achieved their highest-ever single day sales during the Great Indian Festival that started on October 8. The platform onboarded over 40 Lakh new customers and recorded 110 Cr+ visits during the month-long event. 

In a bid to help customers make the right purchase, the platform onboarded 300+ influencers to live stream for over 1,000 hours. With over 18 hours of non-stop live streaming per day, Amazon witnessed engagement from viewers, taking its viewership to an all-time high.

Amazon India’s consumer business manager Manish Tiwary highlighted that the event recorded the highest numbers of Prime sign ups with highest seller participation. Also, 5,000 new products were launched by the top brands on the platform in categories such as  smartphones, premium electronics, high-quality TVs, engaging books, health & personal care essentials, fashion items, durable luggage, home decor, and fitness gear. 

In the product category, fashion and apparel purchases increased three times compared to 2022, with a significant chunk of customers buying sarees, men’s denims, casual wear, premium shoes and sports shoes.

In addition, the Amazon Fresh products also saw more than 50% year-on-year (YoY) growth with a 3X jump in customers shopping for the first time.

• 750+ sellers made sales worth crores
• 31,000+ sellers made sales worth lakhs
• 30% YoY increase in the number of participating SMBs 
• 65% sellers from tier 2 & beyond cities
• 80% new customers came from tier 2 & beyond cities
• 19,000+ pin-codes pan India covered
• 140% YoY increase in flight purchases (by value) compared to last year

Last year, Amazon claimed 30,000 sellers and brand partners on the platforms clocked sales worth over $100K during the event. Back then, 79% of the new users came from Tier-2 and 3 towns.

The ecommerce major claimed that customers saved more than INR 600 Cr this year by availing the discounts. It said almost half of the orders to Prime members were delivered in less than 48 hours

Earlier, Amazon’s major competitor Flipkart said it set a new benchmark with 1.4 Bn customer visits during its Big Billion Days festive season sale, which took place between October 8 and 15 this year. The company said that the transacting sellers saw a 2.5X increase in their business, compared to the pre-festive period. 

According to a report by research firm RedSeer, the first week of the 2023 festive season sale, which concluded on October 15, saw online platforms clocking a GMV of about INR 47K Cr, growing at about 19% over week 1 of the 2022 festive season sale. Mobiles, electronics, and large appliances dominated the sales for the week.

The number of new customers has been changed to 40 Lakh from 15 Lakh following a revision by Amazon.

The post Festive Season Sale: Amazon Clocks 1.1 Bn Visits, Says 38,000 Sellers Achieved Highest Single Day Sales appeared first on Inc42 Media.

In the burgeoning eyewear market of India, organised players such as Lenskart, Fastrack, and Titan Eye Plus have been gaining ground on the back of a diverse range of stylish and high-quality eyewear solutions. Despite this, a stark visual disparity persists throughout the country.

A significant portion of India’s population, particularly those from low-income communities and from Tier III parts of the country and beyond, have vision impairment and hardly any access to affordable eyewear. It is worth noting that an estimated 270 Mn people in the country face vision issues, with up to 40% lacking access to a basic pair of spectacles.

Interestingly, Ghaziabad-based ClearDekho has been addressing this issue since 2017. It offers affordable glasses and eye check programmes via its stores in small towns and cities to address the scarcity of eye care facilities and essential vision care services.

The Vision Behind ClearDekho

Before starting ClearDekho, founder and CEO Shivi Singh worked with VisionSpring, a programme aimed at delivering affordable and high-quality eyewear services across Southeast Asian markets, including India.

During his tenure with VisionSpring, where he managed the supply side and sourcing for Warby Parker’s social initiative, he recognised that low-income families were not getting access to affordable eyewear.

“At the time, LensKart was doing very well and I was inspired by their growth and their disruption in Tier-I cities. Then I recognised a significant gap in the eyewear market at Tier III & IV levels. That’s when ClearDekho was born, and the idea behind its incorporation was to standardise eyewear accessibility for consumers in smaller towns and cities, providing a value-for-money experience,” Singh said.

ClearDekho started its journey focussing on online presence, and as it aspired to offer a cost-effective eyewear experience, it realised the importance of reliable eye testing and also looked at offline expansion in 2018. Due to financial constraints, they had to engage in frugal marketing activities.

Navigating The North

The eyewear startup, which commenced its journey from Ghaziabad, has been focussed on the North Indian market since inception, particularly Uttar Pradesh (UP).

This is because the state (UP) lags in the number of total optical stores, Singh said. Recognising the untapped potential in the state, the founder has solidified ClearDekho’s presence across Ghaziabad and Noida, and smaller towns like Meerut, Hardoi, and Moradabad where larger brands are not present.

Currently, ClearDekho operates in 100 stores across India under the franchise-owned company company-operated (FOCO) model. Of these, a total of 50 stores are in UP and Delhi NCR region.

ClearDekho also has its presence in northern states, including Punjab, Haryana, Madhya Pradesh, and Rajasthan. It is now looking to establish its footprint in states like Bihar, Chhattisgarh, West Bengal, and Assam.

“This is again a market where you will not find many of the eyewear brands. We look at small pockets and small towns to deliver eyewear experience and leverage the first-mover advantage,” Singh said.

The key USP of ClearDekho lies in its affordable price range for eyeglasses and sunglasses, ranging from INR 200 to INR600. However, Singh emphasises that pricing is not the sole dimension, as the business model focusses on delivering high-quality products in the convenient vicinity of small towns.

Singh gave an example of the Saharanpur district, which has a dearth of eyewear brands. “In a district where over 5 Lakh people lacked access to optical stores, ClearDekho became the first to deliver eyewear services,” he added.

Balancing Margins, Quality & Profitability

Speaking with Inc42, Singh emphasised that ClearDekho never compromised on profit margins while offering budget-friendly glasses.

Despite the high cost typically associated with eyewear, ClearDekho aimed to provide a quality product priced at 500 rupees.

For Singh, the focus isn’t solely on maximising profit margins; the primary objective is to encourage widespread adoption of the product, thereby organically expanding the user base.

With a staggering 600 Mn Indians requiring eyeglasses, the fact that 50% of this demographic lacks access to affordable eyeglasses highlights the enormous opportunity for ClearDekho.

Additionally, there is a growing demand in the kids’ eyewear and protective eyewear segments. Currently, protective eyewear contributes 10% to the total eyewear business in India, Singh added.

In FY22, ClearDekho reported an operating revenue of INR 7.5 Cr, marking a 1.7X year-on-year increase from INR 4.4 Cr in FY21, according to Tofler. However, the company incurred a loss of INR 6.4 Cr in FY22, compared to INR 3.4 Cr in FY21. The financial results for FY23 are yet to be disclosed.

Meanwhile, Singh is confident that the company will achieve profitability in the next two years.

The eyewear market in India is projected to reach $5.58 Bn in 2023, with prescription glasses dominating at an expected $2.52 Bn. Notably, 94% of sales are anticipated in the non-luxury category, indicating the country’s increasing demand for affordable yet stylish eyewear, including frames and prescription lenses. This presents significant tailwinds for startups like ClearDekho going ahead.

The post How Eyewear Brand ClearDekho Is Becoming The Lenskart For Tier III & IV Indian Cities appeared first on Inc42 Media.

Auto marketplace CarTrade Technologies reported a 132% year-on-year (YoY) increase in its consolidated profit after tax (PAT) to INR 12.96 Cr in the second quarter (Q2) of the financial year 2023-24 (FY24). The startup had posted a PAT of INR 5.57 Cr in the year-ago period. 

However, net profit declined 4% from INR 13.51 Cr in Q1 FY24. 

The auto marketplace reported a record revenue of INR 314.33 Cr in the quarter ended September 2023, up 3.57X YoY from INR 87.88 Cr in Q2 FY23. On a quarter-on-quarter (QoQ) basis, revenue from operations jumped 3.65X from INR 86.06 Cr in Q1 FY24. 

However, it must be noted that the latest quarter results also include the numbers for OLX India, which CarTrade acquired in August this year. Without OLX numbers, CarTrade’s operating revenue grew 10% YoY to INR 97.06 Cr, while PAT rose 164% to INR 14.74 Cr.

Commenting on the quarterly results, CarTrade cofounder and chairman Vinay Sanghi said, “This has been an important quarter for CarTrade Tech, highlighted by the acquisition and ongoing integration of the OLX India business. Our strategy has involved restructuring the OLX operations to improve our unit economics and ensure that the classifieds business enhances and supports our consumer group business effectively.”

Meanwhile, total expenses, including OLX numbers, jumped 254% to INR 314.74 Cr in Q2 FY24 from INR 88.73 Cr in the year-ago period. 

This was primarily on account of purchase of stock-in-trade and inventory change, which accounted for costs worth INR 182.3 Cr in Q2 FY24 and was missing during the year-ago quarter. 

Employee benefit expenses, including ESOP costs, stood at INR 65.94 Cr during the quarter under review as compared to INR 52.58 Cr in Q2 FY24. Of this, ESOP costs accounted for INR 4.4 Cr, nearly halving from INR 7.96 Cr. ‘Other expenses’ more than doubled to INR 54.49 Cr in Q2 FY24 compared to INR 27.12 Cr in Q2 FY23. 

Founded in 2009 by ex-Mahindra executive Sanghi and former eBay India head Rajan Mehra, CarTrade is an auto marketplace that sells products across all vehicle types and value-added services. The startup operates vertical leaders such as CarTrade, BikeWale, and CarWale, among others.

In a statement, Sanghi said the OLX acquisition has strengthened the company’s position in the market and made the consolidated entity the biggest auto portal, classifieds platform, and auto auction platform in the country. 

“Our platforms together attract around 70 Mn unique visitors each month, of which 90% originate organically. This is a testament to the strength of our brands and our dedication to offer a superior customer experience,” added Sanghi. 

The company also informed the bourses that it will continue to focus and grow the newly-acquired entity’s classified business. Reacting to the recent closure of OLX’s parent entity Sobek Auto India’s C2B business, CarTrade said the decision was taken on account of challenges related to unit economics. The shutting down of the arm, as per the auto marketplace, led to reduction of costs and losses in the consolidated company’s business.

Meanwhile, the company continued to see healthy growth on the operational front. The auto marketplace clocked 7 Cr average monthly unique visitors in Q2 FY24, 90% of which were organic. Of this, Carwale and Bikewale together contributed 3.89 Cr.

The number of auction listings and volume on its Shriram Automall platform declined YoY to 2.97 Lakh and 56,151 respectively in Q2 FY24. The company claims to have more than 350 physical stores, spanning Automalls, abSure, Signature and OLX outlets, across the country. 

Shares of CarTrade closed 3.4% higher at INR 728.75 on the BSE on Thursday (November 9).

The post CarTrade Q2 PAT Jumps 132% YoY To INR 12.96 Cr, Revenue Surges 3.57X appeared first on Inc42 Media.

Dunzo’s many problems are not exactly undercover — From severe cash crunch to multiple rounds of layoffs to strikes by delivery partners, and from the resignations of key board members and cofounder Dalvir Suri to the near-retreat from quick commerce, as we have uncovered in the past few weeks 

Dunzo’s downfall pretty much happened in the ongoing fiscal year (FY24) but the company’s FY23 financials released this week show just how the situation went from bad to worse for the Bengaluru-based startup.

Here’s the bottom line: The startup’s loss surged nearly 4X to INR 1,801 Cr in FY23 and operating revenue stood at a mere INR 226.6 Cr. 

The 8x loss-to-revenue ratio shows just how severe the cash crunch was and why the company does not have funds to even pay employees since July this year. 

However, the poor financial performance also indicates an underlying problem with Dunzo’s operations. The fact is that Dunzo’s expenditure, which is on par with most of the rivals, did not result in the revenue push that others have seen. The inability to generate sufficient revenue despite substantial cash outflow tells us in many ways that while Dunzo had the right idea, the failure was in the execution.

Before we delve into the company’s operations, here’s a snapshot of Dunzo’s FY23: 

• The Reliance Retail-backed startup’s operating revenue rose to INR 226.6 Cr from INR 54.3 Cr in FY22.
• Dunzo’s overall expenses jumped over three-fold to INR 2,054.4 Cr in FY23 
• Dunzo’s procurement expenses surged a staggering 9,079% YoY to INR 174.4 Cr, which is direct spending towards quick commerce 
• The startup’s advertising costs ballooned  381% to INR 309.7 Cr 
• Employee costs increased 2.4X to INR 338 Cr from INR 138.3 Cr in FY22 leading to oversized salary bills which went through mega cuts in FY24
• Dunzo spent INR 367.4 Cr on its delivery agents or runners, again pointing to how its operational scale-up on quick commerce came at a dear cost 

What Led To Dunzo’s Rise In Expense

As we can see, Dunzo’s expenses skyrocketed since FY22 largely because of the expansion of its quick commerce operations under Dunzo Daily.

Dunzo Daily was piloted in Bengaluru and Pune before it came to other major regions such as Delhi NCR, but the competition in this space was also intensifying with the entry of Zepto as well as Swiggy’s Instamart and Zomato-owned Blinkit. 

While Dunzo was more or less like a courier startup till 2020, this changed in 2021 as quick commerce became the biggest use case in metros and Tier 1 cities. Dunzo’s earlier model of picking up individual items from retail stores was not quite as hip as quick commerce. Dunzo was more or less compelled to go the quick commerce way and it had the funds to make a big play. But this also led to hockey stick-like increases in expenses.

Besides the major expenses such as advertising and employee costs, the quick commerce foray meant that Dunzo also had to bear procurement costs. 

This is essentially what Dunzo spent in purchasing grocery and other related items from FMCG brands which were then resold or supplied to the dark store partners.  

The procurement cost would have only grown exponentially as Dunzo launched more and more dark stores, which is the reality of the business model, but where others managed to eke out sustainable unit economics to some degree, Dunzo was well under par.   

In FY22, the startup’s revenue from operation increased merely by 1.1X to INR 54.3 Cr from INR 48.8 Cr. In contrast, Zepto, which only entered the conversation in FY22 outperformed Dunzo in terms of operating revenue. 

Zepto, reported an operating revenue of INR 140 Cr in FY22, almost 2.5X of what Dunzo earned. In FY23, the gulf between Dunzo and other competition only widened.  

In FY23, Dunzo reported INR 227 Cr in revenue compared to Zepto’s INR 2,024 Cr and Blinkit’s INR 724 Cr. While Zepto outspent Dunzo considerably, Blinkit’s FY23 expense of INR 1,826 Cr is still lower than Dunzo. 

Dunzo’s Expenses To Outpace Funding

Given that the revenue needle has not moved as much as some of the competition, Dunzo’s reliance on external funds is very high. Indeed, the startup has only earned around 10% of what it spent. And it has exhausted all the VC money it has raised till date.

From the above numbers, it is quite evident that the startup is only generating minimal revenue after spending so much capital.

Since FY20, the startup has raised total funding of $408 Mn and counts backers such as Reliance Retail, Google, Lightspeed, Lightbox, and Alteria Capital among others. 

Incidentally, the startup went on to raise its biggest round from Reliance Retail in January 2022 to fuel its quick commerce operations. Mukesh Ambani-led Reliance Retail has a 25.8% stake in the company.

The investment also meant Dunzo became a delivery partner for Reliance’s JioMart, and incidentally the B2B arm or Dunzo For Business is now cofounder Biswas’s biggest focus. Especially. with its consumer-focussed operations and the linked spending in that regard not paying off. 

B2B operations are asset-light since Dunzo would not need to procure products for dark stores plus it does not have to routinely offer high discounts to businesses that use its service. 

The biggest costs for Dunzo under a singular B2B focus would be employee benefits and delivery partner fees, and the heavy spending on consumer-focussed marketing can be trimmed down significantly as well. 

Dunzo declined to comment on whether it will focus purely on B2B deliveries or continue forward with a mix of consumer deliveries and Dunzo For Business.

On the consumer side, Dunzo offers some of the lowest prices for deliveries. When comparing Dunzo to other package delivery startups such as Pidge, Porter, and Swiggy Genie for a 2.5 Km delivery, we found that Dunzo offered the service at INR 79. 

In contrast, Pidge charged INR 140 for the same service and Porter’s price for the same parcel delivery was INR 95. 

Swiggy Genie was the only player that offered a lower price than Dunzo, charging just INR 65. This can be attributed to Swiggy’s substantial funding of $700 Mn in its last funding round, affording the startup to absorb the cost. In contrast, Dunzo, which is already operating at a loss and currently lacks visible funding prospects, continues to maintain the lower pricing strategy despite it not being profitable.

In contrast to the situation at Dunzo, Blinkit and Zepto have sufficient capital to support their expansion efforts and they have made measurable progress on the unit economics front. Blinkit received a capital injection of $568 Mn from Zomato during the acquisition. In Q2FY24 results, Zomato said that Blinkit turned contribution positive for the first time on a quarterly basis.

Zepto, which recently became a unicorn, got another infusion of $31 Mn this week on top of the $200 Mn it raised in August 2023. 

The Tough Question

Even as its one-time quick commerce rivals are growing, Dunzo is left with a huge bill of overdue salaries, vendor payments and more. 

Compounding Dunzo’s challenges, Reliance JioMart, the biggest client of Dunzo For Business, lowered the rates it paid for last-mile deliveries in June 2023. JioMart accounts for 30-40% of its total business and Dunzo’s gross margins on the B2B fell by 50%-75% after the change.

On the B2B delivery front, Dunzo faces challenging competition from well-established players such as Shadowfax, Xpressbees, Pidge, Porter, Shiprocket and others. These startups are capitalising on their existing customer base and delivery infrastructure for last-mile delivery and many have signed up big retail chains as clients. 

More importantly, most of these players have recently secured funding or in advanced talks to raise fresh funding rounds. Further adding to Dunzo’s woes, Zomato initiated trials of B2B logistics services in May this year, whereas Bhavish Aggarwal-led Ola introduced Ola Parcel last month in Bengaluru. 

Although Dunzo claims to have secured $45 Mn in debt funding, it’s not clear whether this money has hit the bank. 

In a desperate bid to secure the much-needed funding, Dunzo is said to be cutting its expenditure to $300K from September and will also be reducing its employees headcount to 200. As per LinkedIn, Zepto has an employee headcount of around 3,800 and BlinkIt has around 7,000 employees. 

While the startup’s cofounder Dalvir Suri left, Dunzo’s board members – Ashwin Khasgiwala, group chief of business operations at Reliance Retail, and Rajendra Kamath, finance head at Reliance Retail, and Vaidehi Ravindran, a partner at Lightrock India have also resigned this year.

Dunzo is a shell of the company that it once was. At a time when investors want sustainable models and unit economics before writing cheques, the B2B arm could be the messiah for Dunzo. Will it be enough? 

[Edited by Nikhil Subramaniam]

The post Dunzo’s Quick Commerce Folly appeared first on Inc42 Media.

Telecom giant Jio has introduced an innovative prepaid plan, the Jio-Swiggy Festive prepaid plan, which will offer Jio customers a free three-month subscription to Swiggy One Lite when they recharge their accounts.

“With this recharge, Jio prepaid customers can enjoy seamless connectivity and have great time with friends and family using Swiggy’s on-demand free delivery benefits across food, grocery and other categories,” Jio said in a statement.

Swiggy launched Swiggy One Lite, a cheaper version of its subscription plan Swiggy One, last month. Swiggy One Lite offers benefits, including free deliveries, exclusive offers, and discounts at a launch price of INR 99 for three months.

Jio’s INR 866 plan offers customers a daily data allowance of 2 GB, unlimited voice calls, and an extended 84-day period of 5G data usage.

Using the Swiggy One Lite subscription, customers can avail up to 10 complimentary home deliveries (for food orders exceeding INR 149) and 10 free Instamart deliveries (for orders surpassing INR 199). Furthermore, customers will not be subjected to surge fees for these deliveries.

While partnerships between telecom providers and content platforms are quite common, this collaboration between a telecom company and a food delivery service sets a new precedent.

This new partnership within the broader Swiggy One program is expected to enable the foodtech giant to enhance its platform’s monetisation, especially as Swiggy faces competition from Zomato in the Indian food delivery market.

Last week, Zomato reported its second consecutive profitable quarter, posting a profit after tax of INR 36 Cr. While Swiggy is yet to report its financial statements for FY23, it reported a loss of INR 3,628.9 Cr in FY22.

Swiggy CEO Sriharsha Majety, earlier this year, claimed that the company’s food delivery business achieved profitability (without factoring ESOP costs) as of March 2023.

Amid all these, Swiggy is reportedly eyeing a public listing next year.

The post In An Industry First Move, Jio Bundles Swiggy Lite Subscription With Recharge Plan appeared first on Inc42 Media.

Foodtech giant Swiggy has unveiled a new AI-based feature designed to enhance the visual appeal of restaurant menus, Swiggy Photoshoot. The feature was released around a month ago, the foodtech unicorn said in a blog post Tuesday (November 7).

The feature, baked into the Swiggy Owner app, allows restaurant owners to capture and upload menu images using their smartphones and the app. Photoshoot leverages AI to validate, enhance, and refine restaurant menu images. 

The unicorn’s image AI model rapidly validates images to ensure they meet guidelines and reduces the likelihood of image rejections and improves image quality and aesthetics while allowing users to select the background from a set of options. 

This improvement applies to both real-time images and existing ones uploaded by restaurant partners. Images captured by the owners become live on Swiggy within a few hours. 

The foodtech unicorn claimed that the higher-quality images can potentially lead to up to five times more orders. Further, Swiggy claimed that around 10,000 restaurants have adopted this feature within a month of its release. 

The launch seems to be part of Swiggy’s efforts to leverage AI and offer more features to its restaurant partners.

Earlier in July, Swiggy launched several generative AI-based products, including a food recommendation tool. In a blog post, CTO Madhusudan Rao said that Swiggy’s ‘neural search’ is an AI chatbot that offers personalised recommendations for a user’s open-ended and conversational queries.

At the time, the startup said it would be running pilots for the same in September, though it has yet to provide any updates on that front. 

In September this year, Swiggy also launched a digital learning academy, Learning Station, to support the growth of its restaurant partners. Prior to that, it launched a dashboard, called Network Expansion Insights, to help restaurant partners take informed decisions on their expansion plans.

The developments come at a time when Swiggy is reportedly eyeing a public listing next year. However, the company continues to be bogged down by losses. While Swiggy is yet to release the financial statements for FY23, it posted a loss of INR 3,628.9 Cr in FY22 on an operating revenue of INR 6,119.8 Cr.

Meanwhile, Swiggy’s rival Zomato last week reported its second consecutive profitable quarter, posting profit after tax of INR 36 Cr in Q2 FY24.

The post Swiggy Continues AI Experiments, Launches Photoshoot To Help Restaurants Create Better Menu Images appeared first on Inc42 Media.

Deloitte, which audited the financial statements of Dunzo for the financial year 2022-23 (FY23), flagged material uncertainty over the quick commerce startup’s ability to continue as a ‘going concern’.

In accounting parlance, ‘going concern’ refers to a firm that has enough resources and revenue avenues to stay afloat and avoid any potential bankruptcy risks. In simple words, Deloitte hinted that there are material concerns about Dunzo’s future ability to generate enough revenues to continue operating. 

The disclosures were part of the quick commerce platform’s financial results for FY23. The troubled startup reported a nearly 4X YoY rise in net loss to INR 1,801 Cr in FY23 on an operating revenue of INR 226.6 Cr.

“The group has incurred a net loss of Rs 1,801.8 Cr during the year ended 31st March, 2023… These events or conditions, along with other matters… indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern,” the auditor said in its comments. 

The group encompasses the parent Dunzo Digital’s subsidiaries – Dunzo Merchant Services and Dunzo Wholesale. 

Spelling out its rationale, Deloitte said the group’s liabilities in FY23 exceeded its assets by INR 325.8 Cr, which were incurred primarily on account of ‘significant high operational costs for building customer base’. 

Adding further, the auditor said that the startup’s ability to operate as a ‘going concern’ is largely contingent on the availability of additional funding and improvement in business operations. 

Reacting to the auditor’s concerns, Dunzo said it has scaled up its operations since the period for which Deloitte filed the report. 

“The audit report is from six months back and we’ve made significant developments since on business and funding. In FY23, our overall platform GMV crossed INR 1,500 Cr representing the true scale of our business. Crucially, our business burn is now neutral as we successfully implemented cost cuts and more importantly optimised our store network for Dunzo Daily, moving to a hybrid model…,” said a company spokesperson. 

Dunzo also said that its logistics/B2B vertical continues to be a strong revenue generator for the company, growing by more than 128% while becoming GM neutral. It did not specify the time period for the growth metric. 

“There’s a lot to be excited about – from our growing presence on the ONDC network, our strong logistics business, to the new avatar of Dunzo Daily. We are aiming to hit corporate level profitability in 12 months,” added the spokesperson. 

Dunzo last raised a financing round of $6 Mn debt from Blacksoil in November last year but reports have surfaced that the company has raised even more debt since then. Curiously enough, auditors had reportedly flagged similar issues even in FY22 but the situation has gone further sideways since then. 

Dunzo has been facing a severe crash crunch for the last few months. In July, the company deferred the payment of salaries and capped payout at INR 75,000 per month per employee. Since then, Dunzo has continued to delay payment of salaries even as it has laid off a major chunk of its workforce. The company is also facing the ire of vendors to whom it owes money. 

Between 2018 and 2022, the company raked up cumulative losses to the tune of more than $150 Mn against a revenue of $12 Mn. The startup even burnt through the $240 Mn funding raised from Reliance to fuel its expansion spree. 

The startup has been looking to raise about $100 Mn for nearly six months but hasn’t found success so far. Amid all this, it has also witnessed a slew of high-level exits, including that of cofounder Dalvir Suri. As the company trims operations and pivots to a hyperlocal model, it remains to be seen if it is able to weather the current crisis.

The post Deloitte Flags Dunzo’s Mounting Liabilities, Raises Doubt On Ability To Continue As A Going Concern appeared first on Inc42 Media.

Shares of Nykaa jumped almost 5% to INR 154.65 on the BSE on Tuesday (November 7), a day after the beauty and fashion ecommerce major reported Q2 FY24 earnings, which showed its fashion vertical making a strong comeback.

Nykaa posted a 50% year-on-year (YoY) jump in consolidated net profit to INR 7.8 Cr in Q2, which was also a 44.4% rise on a quarter-on-quarter (QoQ) basis. While the company witnessed growth across verticals, particularly in the fashion vertical, it was also able to cut down some expenses. 

Following the release of the results, Kotak Institutional Equities revised its fair value on the stock to INR 170 from INR 165 earlier, which implies an upside of 13.9% to the stock’s last close of INR 149.3 on the BSE today.

The brokerage maintained its ‘add’ rating on the stock but cut FY24 earnings estimates due to lower gross margin and higher depreciation charges. It also trimmed FY24-26 revenue estimates for Nykaa, primarily on account of lower BPC revenues, which is expected to result in lower gross margin value (GMV) to revenue conversion.

On the other hand, Bernstein retained INR 140 price target (PT) on Nykaa. However, with the competition intensifying, the brokerage expects Nykaa’s margins to remain under pressure.

Bernstein also said that the company missed its Q2 EBITDA margin and PAT estimates due to increasing competition in the beauty and personal care (BPC) vertical.

It must be noted that Nykaa’s consolidated GMV in the BPC category grew 23% YoY to INR 2,001.6 Cr in Q2, while GMV in the fashion vertical rose 27% YoY to INR 762.8 Cr.

With the BPC segment expected to be in focus in Q3 due to festive sales, Nykaa Fashion garnered a majority of the attention in Q2, JM Financial said in its report. 

Speaking during the earnings call on Monday, Adwaita Nayar, CEO of Nykaa Fashion, said that the vertical has reached its peak loss and its books are set to improve from hereon. 

“I do also feel that some of the challenges we faced in Q4 and Q1, the last two quarters, were pretty unique, I don’t see that coming back. I do find that Q2, Q3 and onwards, both the growth as well as the profitability will be moving in the right direction,” she added.

JM Financial, in its research report, retained its ‘buy’ rating on Nykaa with a PT of INR 210, implying an upside of 42% as it has strong conviction on the fashion vertical achieving profitability earlier than expected. 

The higher growth of net sales value (NSV) also reflects that the company has been successful in plugging leakages by undertaking line-by-line efforts such as reducing RTOs, minimising returns, churning out abusive customers and pin codes while increasing cart charges, along with improving assortment and focus on women and the premium category, the brokerage added.

For the BPC business, the brokerage expects Nykaa to retain its competitive edge as the preferred platform for brand launches, with marketing initiatives to provide brand visibility, along with its premium and sticky customer base.

The post Nykaa Jumps 5% Intraday On BSE After Q2 Earnings; Brokerages Divided appeared first on Inc42 Media.

Shares of Honasa Consumer Ltd, the parent entity of D2C unicorn Mamaearth, ended Tuesday’s (November 7) trading session at INR 337.15 on the BSE, up 4.06% from their listing price.

The new-age tech startup made almost a flat debut on the Indian bourses today. While its shares listed at a 2% premium at INR 330 on the NSE, Mamaearth shares listed at INR 324 on the BSE.

The price band for the IPO was set at INR 308-INR 324. 

Mamaearth shares jumped almost 5% to INR 340 during the intraday trading, but later pared some of the gains to settle at 4% above the IPO price.

On the NSE, the shares ended the trading session at INR 337.3, up 2.21% from the listing price.

Mamaearth’s market cap currently stands at $1.3 Bn.

Founded by the husband-wife duo of Ghazal and Varun Alagh in 2016, Honasa Consumer retails several beauty and personal care brands, including Mamaearth, The Derma Co., Ayuga, Aqualogica and Dr Sheth’s. The company filed its draft red herring prospectus (DRHP) in December last year. 

The IPO was oversubscribed 7.61X, with the highest demand coming from qualified institutional buyers (QIBs).

The public issue comprised a fresh issue of shares worth INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares. However, the company’s loss of INR 151 Cr in FY23 raised concerns in some quarters about the stock’s outlook for the near to medium term.

Meanwhile, the early investors in the company, many of whom sold their shares through the OFS route, made big gains from the IPO.

At the upper end of the IPO listing price, INR 324, Snapdeal cofounders Rohit Bansal and Kunal Bahl made nearly 101X returns on their initial investment, while actor Shilpa Shetty’s returns stood at about 7.74X. 

On the other hand, Mamaearth is reportedly Peak XV’s fourth investment in the country to offer a 10X or greater returns in the past six months since the split from its parent Sequoia. 

The post Mamaearth IPO: Shares End First Trading Session 4% Higher From Listing Price appeared first on Inc42 Media.

Logistics unicorn Xpressbees has secured $80 Mn from Teachers’ Venture Growth (TVG), the late-stage venture and growth investment arm of the Ontario Teachers’ Pension Plan. This marks Ontario Teachers’ first investment in India from the TVG arm.

The logistics major will utilise the funding to help drive further growth for the Xpressbees platform. This announcement comes after the Competition Commission of India (CCI) gave its nod to the Ontario Teachers’ Fund’s proposal last month to acquire a minority stake in the logistics giant.

Amitava Saha, founder and CEO of Xpressbees said, “We believe the logistics sector is at the cusp of technological disruption and this is the right time to expand service offerings to address the growing needs of businesses and consumers. We are elated to partner with the TVG team who bring rich experience and a vast global network which will help  as we scale our end-to-end platform to cater to the next level.”

Teachers’ Venture Growth (TVG) focuses on late-stage venture and growth equity investments in tech companies globally. TVG is part of the Ontario Teachers’ Pension Plan Board.

Kelvin Yu, senior managing director, Teachers’ Venture Growth, said “Xpressbees aligns with our TVG thesis for Asia, of partnering with exceptional management teams looking to leverage technology to accelerate growth in an attractive end market that has a long runway for innovation and development. India is a critical market for our TVG Asia strategy, where we look to lead or co-lead rounds, and Xpressbees is a culmination of one such proprietary opportunity.”

Xpressbees, founded in 2015 after being spun off from ecommerce giant FirstCry, delivers goods to over 20K pin codes in the country. The logistics startup entered the coveted unicorn club in January 2022 after raising $300 Mn from Blackstone Growth, TPG Growth, among others.

The startup offers supply chain solutions, including B2B, B2C express delivery service, cross-border logistics, and warehousing services, to ecommerce players.

Xpressbees reported a net loss of INR 180.4 Cr in FY23, an increase of 566% from INR 27.1 Cr in FY22. The Supam Maheswari-led startup’s operating revenue grew 33% to INR 2,531.5 Cr during the year under review from INR 1,904.4 Cr in FY22.

Meanwhile, Indian startups raised about $8.3 Bn from January to October 2023, nearly matching the $8.7 Bn raised during the same period in 2020, as per Inc42 analysis.

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D2C unicorn Mamaearth made its debut on the Indian stock exchange NSE with a nearly 2% premium. The shares were listed at INR 330, marking a listing gain of INR 6 over the issue price of INR 324.

On the BSE, Mamaearth shares listed flat at INR 324.

During the initial hours of trading, Mamaearth shares reached INR 337.60 per share but later settled at INR 331.45 on NSE. The company currently boasts a market capitalisation of $1.28 Bn.

Honasa Consumer Limited (HCL), the parent company of Mamaearth, allocated 2.36 Cr equity shares to anchor investors, raising INR 765.2 Cr as part of its initial public offering (IPO).

The IPO, however, had a lukewarm response on its first day, with a subscription rate of just 0.13X. BSE data shows that the issue received bids for 36.25 lakh shares out of the 2.88 Cr shares on offer. Notably, the portion reserved for employees was oversubscribed by 1.98X by the end of the day, with employees bidding for 67,344 shares against the 34,013 shares available.

On the final day of the public issue, the IPO was oversubscribed by a significant 7.61X due to strong interest from qualified institutional buyers (QIBs). It received bids for 22 crore shares compared to the 2.89 crore shares on offer.

Early-stage investors have profited handsomely from the listing. At the upper end of the listing price (INR 324), Snapdeal cofounders Rohit Bansal and Kunal Bahl are set to realise returns of almost 101X on their initial investment, while actor Shilpa Shetty is expected to see returns of 7.74X.

Among angel investors participating in Mamaearth’s OFS segment, the most significant winner appears to be Sharrp Ventures’ Rishabh Mariwala. He is projected to reap a windfall of INR 181.23 Cr at the peak listing price, resulting in a return of more than 53X on his initial investment of INR 6.05 per share. After the sale, he will still hold 34.2 lakh shares collectively valued at INR 110.81 Cr.

Speaking on the startup’s listing on the bourses today, Prashanth Tapse, senior VP research analyst at Mehta Equities, said, that the flat listing was in line with the brokerage’s expectation.

“…though risky investors feel the price is good for long-term as the business model has high potential of growth, we would continue to remain cautious on Mamaearth on the back of the loss-making nature of the business, high portion of OFS, high competition with margin pressure, low promoter stake, and weak financials which suggest a cautionary stand as historical listings with high valuations have often faced post-listing challenges,” Tapse added.

Mamaearth was founded by a husband-wife duo in 2016 and has since expanded to own multiple brands under the parent company, Honasa Consumer. The startup owns four beauty and personal care brands, including The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s.

Mamaearth has stated that the proceeds from the fresh issue will be used to strengthen marketing efforts, enhance brand visibility, establish new exclusive brand outlets, and expand the network of BBlunt salons.

The post D2C Unicorn Mamaearth Makes Public Debut At Almost 2% Premium appeared first on Inc42 Media.

As markets wait with bated breath for D2C unicorn Mamaearth’s IPO listing, it looks like the debut will surely create some winners. 

The IPO is expected to bring in heavy windfall for some of Mamearth’s earliest investors who are offloading their stake in the offer for sale component. 

At the upper end of the listing price (INR 324), Snapdeal cofounders Rohit Bansal and Kunal Bahl will see returns of nearly 101X on their initial investment while actor Shilpa Shetty will rake in returns to the tune of 7.74X. 

While both Bansal and Bahl acquired equity stake in Mamaearth at an average price of INR 3.21 per share in August 2017, the duo will earn INR 38.27 Cr each at the ceiling price. They will still be left with 11.93 Lakh shares each which translates to INR 38.66 Cr each. 

Actor Shilpa Shetty, who first invested in the startup in 2018, will offload 13.93 Lakh shares for a cumulative sum of INR 39.3 Cr at the upper price limit. Post the sale, she will still own 2.3 Lakh shares in the company valued at around INR 7.46 Cr. As per the startup’s RHP, Shetty Kundra picked up stakes in the company at a price of INR 41.86 per share.

The biggest winner among angel investors participating in Mamaearths OFS segment appears to be FMCG giant Marico scion Rishabh Mariwala. He is expected to see a windfall of INR 181.23 Cr at peak listing price, a return of more than 53X against an initial investment of INR 6.05 per share. After the sale, he will still have 34.2 Lakh shares cumulatively pegged at INR 110.81 Cr. 

Institutional investors participating in the OFS component also expected to make big gains as Mamearth lists on the bourses on Tuesday (November 7).

Early investors Fireside Ventures and Stellaris are expected to rake in INR 252.46 Cr and INR 345.98 Cr respectively at the upper end of the price band. Another major investor Sofina will see a windfall of INR 202.75 Cr through the IPO proceedings. 

No stakeholders participating in the IPO sale will completely divest their stake. 

For Mamaearth cofounders Varun and Ghazal Alagh, the IPO listing will translate into proceeds worth INR 103.2 Cr and INR 3.24 Cr respectively. 

A day earlier, it was reported that investor Peak XV Partners, formerly Sequoia Capital India, was sitting on 10X-plus returns on account of Mamaearth’s listing on the bourses. 

This comes days after the D2C unicorn’s public issue was oversubscribed 7.61X on the final day of its public issue on the back of heavy interest from qualified institutional buyers (QIBs). The IPO received bids for 22 Cr shares as against 2.89 Cr shares on offer. 

Mamaearth plans to raise up to INR 1,700 Cr via its IPO at a valuation of $1.2 Bn. The public issue comprised a fresh issue of shares worth INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares. The company has set the price band in the range INR 308-INR 324 per share.

The husband-wife duo founded the company in 2016 and since then the company has scaled up to own multiple brands under the parent company Honasa Consumer. The startup owns four beauty and personal care brands – The Derma Co., Ayuga, Aqualogica and Dr Sheth’s. 

The D2C unicorn saw its net losses zoom to INR 151 Cr in FY23 on account of a one-time loss. While many have criticised the hefty valuation sought by the company and high OFS portion of the IPO, it remains to be how markets react as the company opens its accounts on the bourses. 

The post Up To 101X Returns: Early Investors Kunal Bahl, Shilpa Shetty Set For Mamaearth IPO Windfall appeared first on Inc42 Media.

Reliance-backed troubled quick commerce startup Dunzo’s loss nearly quadrupled in the financial year ended March 31, 2023. The Bengaluru-based hyperlocal delivery startup’s loss surged to INR 1,801 Cr in the financial year 2022-23 (FY23) from INR 464 Cr in the previous fiscal year. 

Meanwhile, operating revenue increased 317% to INR 226.6 Cr in FY23 from INR 54.3 Cr in FY22. The startup primarily earned revenue from selling products to its customers from its dark stores. Dunzo earned INR 141.5 Cr from sales of products in FY23, an increase of 67.3X from INR 2.1 Cr in the previous fiscal year. 

Founded by Kabeer Biswas, Dalvir Suri, Mukund Jha, and Ankur Aggarwal in 2015, Dunzo connects consumers with stores and vendors in their vicinity and facilitates deliveries of products such as grocery, medicines, food and other everyday items.

It must be noted that the startup pivoted to the dark store business in early 2020, following in the footsteps of Swiggy’s Instamart and Blinkit, now owned by Zomato. However, amid the financial challenges, the startup has shut a majority of its dark stores over the last few months and is now partnering with retail stores to provide logistics services on a revenue-sharing model.

Where Did Dunzo Splurge?

The Bengaluru-based startup’s total expenses jumped over three-fold during the year under review. The Lightspeed-backed startup’s total expenses ballooned 286% to INR 2,054.4 Cr in FY23 from INR 531.7 Cr in the previous fiscal year.

Procurement Costs See The Biggest Jump: Dunzo’s procurement expenses surged 9,079% to INR 174.4 Cr in FY23 from INR 1.9 Cr in FY22. Procurement costs is the money spent by the startup on purchasing grocery and other related items from FMCG brands.

Advertising Cost Rises Nearly 5X: The startup’s advertising cost increased 381% to INR 309.7 Cr in FY23 from INR 64.4 Cr in FY22. It must be noted that Dunzo spent heavily during the Indian Premier League 2022 to grab more eyeballs. 

Employee Benefit Expenses Jump: Employee costs increased 2.4X to INR 338 Cr from INR 138.3 Cr in FY22. Employee benefit expenses generally comprise salaries and wages of employees. It must be noted that the startup has laid off a majority of its workforce over the last few months and has withheld employee salaries for some months since July 2023 amid a severe cash crunch. 

Runner Contract Fee & Incentives: Dunzo spent INR 367.4 Cr on its delivery agents, an increase of 174% from INR 134 Cr in FY22. This increase can be attributed to the startup increasing the number of delivery agents to expand its quick commerce service.

Additionally, order cancellations cost Dunzo INR 44.2 Cr in FY23, an increase of 232% from INR 13.3 Cr in FY22. 

On a unit economics level, Dunzo spent INR 9 to earn every INR 1 from operations in FY23. Its EBITDA margin deteriorated  to -678.6% in FY23 from -645% in FY22. 

Dunzo has raised around $457 Mn across multiple funding rounds till date and counts Google, Lightrock, Reliance Retail, Lightbox, and Alteria Capital among its investors. The startup, which raised $240 Mn from Reliance Retail in January 2022, seems to have burned all the cash, as its FY23 financials and the recent financial challenges suggest. 

Over the past few months, the startup has been in the news for all the wrong reasons. Besides the exit of its cofounder Dalvir Suri, Dunzo has been rocked by several strikes from its delivery executives demanding better pay, shut down of its dark stores, and cash crunch. The startup has been in talks to raise $100 Mn from investors for over half a year now but has managed to raise a mere $45 Mn in debt. 

Despite its ongoing struggles and the astronomical increase in its loss, Dunzo, in a statement, presented a rosy picture.

“For Dunzo, this year was about growing sustainably by strengthening our core businesses. Overall platform GMV crossed INR 1,500 Cr, representing the true scale of our business. Crucially, our business burn is now neutral as we successfully implemented cost cuts and more importantly revamped our store network for Dunzo Daily, moving from a dark store model to a partner store model,” a company spokesperson said.

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Venture capital (VC) firm Peak XV Partners, formerly Sequoia Capital India, is reportedly sitting on a 10X return on its investments in Mamearth following the D2C unicorn’s oversubscribed public issue. 

As per TechCrunch, Mamaearth is Peak XV’s fourth investment in the country that has offered a 10X or greater returns in the past six months since the split from parent Sequoia. 

It is pertinent to note that the price band for Mamearth’s IPO has been set in the range of INR 308-INR 324 per share. At the upper limit, Sequoia would have acquired the D2C unicorn’s stock at under INR 30-32 a share. 

According to the report, this will be Peak XV’s 20th IPO in India and the larger Southeast Asian region, a ‘substantially’ higher IPO count than many of its peers in the region. 

Last week, Mamaearth’s public issue was oversubscribed 7.61X as demand poured in from qualified institutional buyers (QIBs) and retail investors. The startup is eyeing to raise up to INR 1,700 Cr via its IPO at a valuation of $1.2 Bn.

The public issue comprised a fresh issue of shares worth INR 365 Cr and an offer for sale (OFS) element of 4.12 Cr shares. The price band has been set in the range of INR 308-INR 324 per share.

This comes close on the heels of Peak XV Partners reportedly selling its remaining stake in foodtech giant Zomato at a more than 10X return, bringing the shutters down on the decade-long investment journey. 

Prior to that in September, the VC firm also encashed a hefty 12X-plus return on its investment in K12 Techno Services after Kedaara Capital invested in the edtech startup. 

The hefty returns give a major boost to the VC firm’s operations in the country which have been mired by standoffs with cofounders, weak returns in the past two years due to market volatility, and floundering revenues of some of the portfolio startups. 

Peak XV Partners oversees a capital pool of $2.5 Bn, and has focussed a big chunk of its energies on targeting homegrown startups. Since its split from Sequoia Capital, Peak XV Partners has been on a term signing spree. It has so far made more than 400 investments in the India and SEA region. 

Besides, the VC firm also has 40 Indian startups under its belt that have revenue in excess of $100 Mn.

As per the report, the company recently marked up the estimated value of four of its six funds, while earning hefty returns from a spree of listings and offloading of shares. Recently, Peak XV also undertook the sale of its shares in the publicly listed Go Colors and sale of stake in Quick Heal.

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FSN E-commerce, the parent of beauty ecommerce platform Nykaa, released its financial results for the second quarter (Q2) of the financial year 2023-24 (FY24) on Monday (November 6). Here are the key highlights:

Headline Numbers: Nykaa’s consolidated net profit zoomed 50% to INR 7.8 Cr in the quarter ended September 2023 from INR 5.2 Cr in the year-ago period. On a quarter-on-quarter (QoQ) basis, the net profit jumped 44.4% from INR 5.4 Cr. 

The company attributed the profitable numbers to solid growth across business verticals and cost-control measures. 

Operating revenue grew 22.4% to INR 1,507 Cr in Q2 FY24 from INR 1,230.8 Cr in Q2 FY23. As per historical data analysed by Reuters, this was the slowest year-on-year (YoY) growth in quarterly revenue recorded by the beauty ecommerce giant since listing. This could likely be attributed to intensifying competition in the beauty and personal care (BPC) space. Besides, the festive season began in Q3 this year as against September last year, which might have also affected the revenue growth.

Gross merchandise volume (GMV) saw a 47% YoY growth to INR 2,155.8 Cr during the quarter. EBITDA improved 32% YoY to INR 80.6 Cr in Q2 FY24 on the back of both direct and indirect cost efficiencies. 

On the other hand, the beauty ecommerce giant’s overall gross merchandise value (GMV) jumped 25% YoY to INR 2,943.5 Cr in Q2 FY24. 

BPC Vertical In Driver’s Seat: The BPC vertical emerged as the main growth engine, contributing 68% to Nykaa’s total GMV in Q2 FY24. The vertical also clocked 10 Mn orders even as average order value (AOV) grew 2% YoY to INR 1,916 in Q2 FY24. 

The annual unique transacting customers on the BPC platform rose 18% YoY to 10.7 Mn during the quarter ended September 2023, while total users visits to the vertical stood at 271 Mn. 

Nykaa said it has so far earned 79% of its total revenue from existing customers with average annual user spending hovering around the $80 mark. With a cumulative user base of 21 Mn at the end of September 2023, Nykaa’s BPC vertical listed more than 3,600 domestic and international brands on its ecommerce marketplace. 

Meanwhile, Nykaa’s in-house beauty brands notched up a GMV of INR 243.8 Cr in Q2 FY24, accounting for 12.2% of the total GMV of the BPC vertical.

Nykaa Fashion At An ‘Inflection Point’: The fashion arm continued to see healthy growth, accounting for nearly 26% of Nykaa’s total GMV in Q2 FY24 at INR 762.8 Cr. While the number of orders on the fashion platform rose 22% YoY to 1.7 Mn during the quarter under review, AOV jumped by 3% YoY to INR 4,061 in Q2 FY24.

The annual unique transacting users grew 30% YoY to 2.8 Mn in Q2 FY24, while total visits to the fashion arm soared to 144 Mn. 

Nykaa-owned fashion brands reported a GMV of INR 98.9 Cr in Q2 FY24, accounting for 13% of the total GMV of the fashion vertical.  

New Growth Verticals: Apart from BPC and fashion verticals, rest of Nykaa’s businesses contributed 6% to the beauty ecommerce platform’s total GMV during the quarter under review. It notched up a GMV of INR 179.1 Cr in Q2 FY24. 

The new growth verticals include the company’s new businesses such as NykaaMan, B2B platform SuperStore by Nykaa and its internal operations. 

Number of orders rose to 0.5 Mn while AOV soared to INR 3,541 during the quarter under review. Annual monthly transacting users soared 27% YoY to 0.6 Mn in Q2 FY24. 

As per the company, the B2B arm has made ‘significant progress’ towards profitability with GMV rising 1.7X YoY and the number of orders increasing 62% YoY to 2.8 Lakh. SuperStore by Nykaa claims to have served 1.29 Lakh transacting retailers during the quarter spanning 770 cities.

Nykaa Continues Offline Expansion: The beauty ecommerce giant opened 13 new beauty stores during the quarter ended September 2023, taking the total store count to 165. These outlets encompassed an area of nearly 1.6 Lakh sq. ft. and generated a GMV per sq. ft. of INR 3,249 per month. 

With more than 10,500 total employees, Nykaa had more than 7,000 suppliers under its belt and 2,500 MSME vendors at the end of the quarter. 

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