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.

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Paytm’s parent company, One97 Communications, is among the nine stocks newly incorporated into the MSCI Global Standard Index. Following its inclusion, One97 Communications observed its shares reaching the highest level this month.

Paytm shares are presently trading at INR 912.30, reflecting a 2% increase. The stock has registered a remarkable 72% gain in the year 2023.

IIFL Alternative Research estimates potential stock inflows at $140 Mn, while Nuvama Alternative and Quantitative Research anticipates inflows of $162 Mn.

Recently, Paytm announced a 49% year-on-year decrease in its consolidated net loss, amounting to INR 291.7 Cr for the quarter ending September 2023. Operating revenue experienced a significant 31% surge, reaching INR 2,518.6 Cr, propelled by robust expansion in the payments and financial services sector.

Meanwhile, shares of Paytm slumped as much as 10.6% to INR 882.1 during the intraday trading on the BSE on October 23 after the company released its Q2 FY24 earnings.

In addition to Paytm, IndusInd Bank, Tata Motors ‘A’ (Tata Motors DVR), and Suzlon Energy shares are also among the nine stocks included in the MSCI Global Standard Index.

As per the latest announcement by the global index provider, other stocks added to the MSCI India Index include APL Apollo Tubes, Macrotech Developers, Persistent Systems, Polycab India, and Tata Communications.

The changes in constituents for the MSCI Global Standard Indexes will take place at the close of November 30, 2023.

At the same time, MSCI has not removed any stocks from the India index.

Passive funds globally monitor the Morgan Stanley Capital International (MSCI) indices. Any additions or upward adjustments in stock weightages within these global benchmarks are likely to attract inflows from passive funds aligned with these indexes.

Morgan Stanley Capital International or MSCI is known for its stock indices. The MSCI Index includes stocks from developed markets worldwide, as defined by MSCI. It covers securities from 23 countries but excludes stocks from emerging and frontier economies, making its global scope somewhat narrower. In contrast, the MSCI All Country World Index (ACWI) incorporates both developed and emerging nations. Additionally, MSCI offers a Frontier Markets index, which includes another 31 markets.

The MSCI India Index is crafted to gauge the performance of the large and mid-cap segments within the Indian market. Encompassing 122 constituents, the index effectively spans about 85% of the entire Indian equity universe.

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BYJU’S-owned upskilling platform Great Learning’s India business net loss soared 1.2X to INR 357.3 Cr in the financial year 2022-23 (FY23) from INR 307.1 Cr in the previous fiscal. However, excluding the “exceptional items” worth INR 120.6 Cr, the edtech startup’s FY23 loss would be INR 221.7 Cr, a 27.8% markdown from FY22.

The platform’s revenue from operations jumped 1.3X to INR 391.4 Cr in FY23 from INR 307.1 Cr in FY22, as per its filings with the Ministry of Corporate Affairs. Total income grew 1.2X to INR 392.9 Cr in FY23 from INR 316.1 Cr in FY22.

Meanwhile, Great Learning was able to control the rise in its expenses. Total expenses declined to INR 614.5 Cr in FY23 from INR 633.1 Cr in FY22. In FY23, the edtech firm’s top expenditure was on employee benefits, although it decreased to INR 327.8 Cr from INR 345.6 Cr in FY22.

Advertising promotional expenses, another significant portion of overall expenses, decreased to INR 159.1 Cr in FY23 from INR 170.5 Cr in FY22.

On a unit economics level, the expenditure was INR 1.57 to generate one rupee of operating revenue.

Founded by Arjun Nair, Hari Nair, and Mohan Lakhamraju in 2013, Great Learning offers comprehensive, industry-relevant programs across various technology, data and business domains.

Earlier, it was reported that the founders of Great Learning, the platform acquired by BYJU’S in 2021 for $600 Mn, are reportedly in talks with investors to raise funds to buy the company back from the Byju Raveendran-led embattled decacorn.

Last month, lenders of BYJU’S appointed risk advisory firm Kroll to protect the “charged assets” of both Great Learning Pte and the edtech firm’s Singapore entity Byju’s Pte. Ltd.

The main objective of the appointment was to safeguard and maintain the assets and businesses belonging to Great Learning, which includes its subsidiary, Northwest Education Pte. Ltd., and Byju’s Pte. Ltd., Kroll said.

Recently, BYJU’S released a part of its FY22 numbers. Without disclosing net loss, BYJU’S said the standalone EBITDA loss declined to INR 2,253 Cr in FY22 from INR 2,406 Cr in FY21. On the other hand, total income jumped to INR 3,569 Cr from INR 1,552 Cr in FY21.

While the complete financial statements for FY22 are yet to be disclosed, BYJU’S co-founder and CEO, Byju Raveendran said in an internal mail sent to employees the company is set to initiate the audit process for FY23 soon.

The post BYJU’S Owned Great Learning’s Net Loss Swells 1.2X To INR 357.3 Cr In FY23 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).

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India’s D2C market has rapidly evolved from its early days in 2013-14 into a burgeoning sector, projected to reach a $300 Bn market size by 2030. With D2C brands now integral to people’s everyday choices, from personal care to food and beverages, their influence is unmistakable. 

The sector’s growth is further underscored by the successful public market entries of players like Nykaa and Mamaearth, showcasing promising prospects for investors and brands.

While major D2C names often capture the spotlight, numerous emerging brands across India are revolutionising consumer habits with their innovative approaches. These brands are not only challenging established ecommerce giants and traditional brands but are also setting new standards in brand building and customer experience.

At Inc42, we have been at the forefront of recognising these trailblazers. Our journey began with a virtual D2C summit in 2020 and has since expanded to form a comprehensive community encompassing D2C founders, ecosystem contributors and investors. Our interactions with these stakeholders have given us insights into how emerging brands are making remarkable strides in captivating their audiences.

In keeping with our yearly tradition, we are glad to announce the third edition of Inc42’s flagship list – FAST42. With FAST42, just like the previous years, we aim to shed a spotlight on India’s top 42 fastest-growing brands, highlighting their significant role in shaping the D2C sector’s future, as well as identifying new and emerging brands with the potential to disrupt their categories.

The third edition, in collaboration with Simpl and Emiza, FAST42 2024 aims to nurture and recognise India’s rapidly expanding D2C brands and to facilitate these brands’ discovery by investors, attract top talent and generate new business prospects.

What Is FAST42?

The FAST42 list is a compilation showcasing outstanding D2C brands distinguished by their innovative strategies and notable growth in revenues. 

The FAST42 list of brands is categorised under two heads — ‘Growth’ and ‘Emerging.’ 

Each year, Inc42 publishes an interactive online ranking that details the journey of these brands, covering their inception, growth trajectory, key milestones and future ambitions. You can explore the previous year’s ranking here.

In the past editions, we’ve seen over 2,000 applications, a number we expect to exceed as the D2C ecosystem continues to flourish. This presents a growing opportunity for an increasing number of brands to gain recognition and be featured in this exclusive list.

Some of our recognised brands, such as — XYXX, SuperBottoms, Perfora, Snitch, Pilgrim, among others, have grown multifold ever since they made their debut on the FAST42 list.

Understanding The Application Criteria

Growth Category

In this category, India’s fastest-growing D2C brands are ranked on the basis of the highest revenue growth rates between FY2021 and FY2023.

The brands should:

• Be founded before April 2021
• Have generated at least INR 1 Cr in revenue in FY21
• Have generated at least INR 7 Cr in revenue in FY 23
• Have generated at most INR 100 Cr in revenue in any financial year
• Be privately held, for profit; based in India and independent entity 
• Should sell its own products via its own website as a key sales channel

Emerging Category

This category is for India’s emerging D2C brands who have the potential to disrupt a category. Brands will be selected by Inc42’s editorial team.

The brands should:

• Be founded on or after April 2021
• Have generated at least INR 50 Lakh in revenue in any financial year
• Have generated at most INR 7.5 Cr in revenue in any financial year
• Be privately held, for profit; based in India and independent entity 
• Should sell its own products via its own website as a key sales channel

Why D2C Brands Should Apply

With a readership spanning founder and VC ecosystems, FAST42 can offer brands access to new business opportunities and help them get discovered by investors and talent.

Here’s why D2C brands should apply:

• Brand Exposure: Get an opportunity to be seen and evaluated by Inc42’s editors, reporters and analysts. Selected brands can use this recognition as an exclusive badge of honour.
• Employer Branding: The esteemed list will raise awareness about your brand and its potential as a desirable workplace.
• Visibility: Winners will take the spotlight on the Inc42 website. Inc42 journalists will also delve into intriguing brands and trends showcased in the list.
• Credibility: Earn the prestigious Inc42 seal of approval for pioneering an innovative D2C startup in India.

FAST42 2024 is dedicated to celebrating and acknowledging the unique journeys of India’s D2C brands, offering them ample exposure to accelerate their growth to the next level.

Applications are open until December 20, and the much-anticipated list will be revealed at a grand event in Delhi, scheduled for February 2024.

The post Announcing FAST42 2024: Discovering India’s Fastest-Growing D2C Brands 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.

Hospitality giant OYO reportedly plans to prepay nearly a third of its outstanding term loan B (TLB) via a debt buyback process. 

As per news agency PTI, OYO plans to make payments to the tune of INR 1,620 Cr ($195 Mn) to repurchase 30% of its outstanding TLB. While the repayment of the debt is scheduled for June 2026, the exercise will reportedly be fully funded with cash on the balance sheet and from the cash collateral account.

As per the report, the travel tech major will execute the buyback deal at par value via a public bidding process, which commenced on November 14 and will go on till November 18. In the event bids breach the stipulated amount, OYO will then buy the loan back on a pro-rata basis.

The buyback exercise is expected to reduce OYO’s annual interest liabilities by more than INR 225 Cr. At the end of November 13, OYO’s debt paper reportedly closed at 90 cents on the dollar. 

This comes close on the heels of OYO cofounder and CEO Ritesh Agarwal telling top brass, in an internal email, that OYO was on the way to report its maiden profitable quarter in the second quarter (Q2) of the financial year 2023-24 (FY24) with a profit after tax (PAT) of INR 16 Cr. 

Curiously, a month ago, the Delhi NCR-based hospitality unicorn was said to be in talks to refinance its $660 Mn TLB with Apollo Management. The loan was taken at the height of the Covid-19 pandemic in 2021 as the hospitality business came to a standstill the world over. 

In the past, the startup led by Ritesh Agarwal publicly announced that it was operationally profitable in FY23, with an adjusted EBITDA of INR 277 Cr. During the fiscal year, the IPO-bound hospitality unicorn slashed its net losses 34% YoY to INR 1,286.5 Cr against a 14% YoY increase in operating revenue to INR 5,463.9 Cr in FY23. 

The company had also noted that it was well-placed to achieve an adjusted EBITDA of nearly INR 800 Cr in FY24. It is largely on the back of this turnaround that the startup expects to fund the prepayment of TLB. 

Meanwhile, plans are underway for OYO’s much-awaited IPO, which has seen the departure of key executives, including OYO’s India CEO Ankit Gupta and head of OYO Europe Mandar Vaidya. Many key appointments have also been made amid a major management reshuffle at the company. 

Amid all this, Agarwal is all set to join Shark Tank India’s upcoming season as the newest shark.

The post Flush With Funds, OYO To Prepay INR 1,620 Cr Via Debt Buyback Exercise appeared first on Inc42 Media.

The Reserve Bank of India (RBI) reportedly appointed executive director P Vasudevan as the new head of the fintech department earlier this month. With this, Vasudevan has become the second top official of the department since its formation in early 2022. 

Sources told The Economic Times that Vasudevan has taken over the reins from the incumbent chief and RBI executive director Ajay Kumar Choudhary, who is said to have retired. As per the report, Choudhary has now been appointed to the board of the Reserve Bank Innovation Hub.

“He has immense experience handling the payment ecosystem in the country, which will help him while dealing with the growing fintech ecosystem in the country,” a senior fintech executive reportedly said. 

The RBI hived off a separate fintech department in 2022 to foster innovation and provide impetus to the burgeoning Indian fintech industry. It is this department that industry stakeholders have to coordinate with for regulatory push and policymaking. 

Industry executives told the publication that Vasudevan will likely focus on streamlining coordination between various supervisory departments and ironing out policy bottlenecks. 

The fintech department will be an additional charge for Vasudevan who already oversees currency management, the corporate strategy and budget department at the central bank. 

This comes barely three months after Vasudevan was appointed as the executive director of the central bank in July this year. The RBI executive previously served as the chief general manager in charge of the department of payment and settlement systems before the elevation. 

The new appointment comes as the central bank has issued a slew of diktats and directives to streamline the entire fintech ecosystem. Just this month, the RBI issued rules to directly regulate entities facilitating cross-border payments. 

It has also been tightening its grip around fintech players, especially payment aggregators, and mandating greater compliance with rules and regulations. In September, RBI deputy governor T. Rabi Sankar also pitched for the creation of self-regulatory organisations (SROs) in the fintech sector to tackle key issues such as market integrity, data privacy, and cybersecurity.

A flurry of diktats from the RBI in the past one year also forced companies to pivot while the business models of many other players have also been rendered useless. 

As the fintech space grows in prominence, it remains to be seen how the space evolves. With a new official at the helm of affairs, all eyes are now on Vasudevan as to how he walks the tightrope between regulation and innovation.

The post P Vasudevan Takes Over The Reins Of RBI’s Fintech Department appeared first on Inc42 Media.

Online travel aggregator Yatra Online saw its consolidated net losses surge nearly 11X year-on-year (YoY) to INR 17.1 Cr in the second quarter (Q2) of the financial year 2023-24 (FY24) on the back of a fall in revenues. In contrast, the company reported a net loss of INR 1.56 Cr in the year-ago period. Sequentially, the company posted a net profit of nearly INR 6 Cr in Q1 FY24. 

Revenues from operations jumped 14% YoY to INR 94.1 Cr in Q2 FY24 compared to INR 82.4 Cr in Q2 FY23. On a quarter-on-quarter (QoQ) basis, operating revenue declined 14.5% from INR 110.1 Cr in Q1 FY24.

Including other income, total income rose 8% YoY to INR 97.3 Cr in the quarter ended September 2023. 

Meanwhile, expenses continued to drag the company down. In Q2 FY24, total expenses zoomed more than 25% YoY to INR 113.5 Cr, up from INR 90.5 Cr in the year-ago period. 

Employee benefit expenses emerged as the biggest cost centre and contributed INR 36.6 Cr to the total expenses in Q2 FY24. Other expenses stood at INR 18.6 Cr and service costs accounted for nearly INR 16 Cr in Q2 FY24. 

Yatra claims to be one of the country’s largest online travel companies in terms of gross booking revenues and competes with the likes of players such as MakeMyTrip and EaseMyTrip. Yatra also claims to cater to more than 700 corporate customers and offer hotel bookings, holiday packages and homestays. 

The online travel aggregator claims to have more than 1.03 Lakh hotels in India and over 15 Lakh hotels available on its platform for booking. The Indian arm of the Nasdaq-listed Yatra Inc. made a muted debut on the Indian bourses in September this year. 

The stock got listed at INR 127.50 per share on the NSE and INR 130 on the BSE against the issue price of INR 142. Since then, the company has been hovering around the same range. Yatra closed 0.32% lower at INR 138.60 on the BSE on Tuesday (November 11).

The post After A Profitable Q1 FY24, Yatra Online Slips Into Loss In Q2 appeared first on Inc42 Media.

Agritech startup DeHaat, which counts Peak XV Partners (formerly known as Sequoia Capital India and Southeast Asia) and Sofina Ventures as its marquee investors, has acquired the fruit export business of Ahmedabad-based listed fruit export firm Freshtrop Fruits in an all-cash deal. The financial terms of the deal have been kept under wraps.

Under the deal, DeHaat has absorbed Freshtrop’s export network and grading, packing and precooling centres, and manpower, including the top leadership team, into its ecosystem, it said in a statement.

Founded in 1992 by Ashok Motiani and his family, Frestrop exports grapes and other fruits, including pomegranate and mango, from India to countries including the UK and the ones that fall under the European Union, among others. 

Over the last 25 years, the company claims to have continuously invested in innovative technology and operates out of two packhouse facilities in Maharashtra. 

This is DeHaat’s seventh acquisition, and it aims to fully leverage the rapidly growing Indian export market to provide better market access and price discovery to Indian farmers, the statement added.

DeHaat’s cofounder and CEO Shashank Kumar said that this investment aligns with the startup’s vision to not only boost the grape exports from India but also develop research and development capabilities to grow new varieties of grapes, offering improved value propositions to farmers across the western India.

“We established our export business 18 months ago and are today exporting more than 20 agri-produce from India to the Middle East, UK & EU. We see strong synergies around the complementary core competencies between DeHaat & Freshtrop,” Kumar said. 

He added that Freshtrop’s employees, along with the founding family and its external stakeholders will continue to remain actively involved in the business as they were. Meanwhile,   the company will be able to leverage DeHaat’s network and resources for market expansion, technology for the development of new grape varieties and technology-led deeper pre-harvest support for farmers.

Founded in 2012 by Amrendra Singh, Shyam Sundar, Adarsh Srivastav and Shashank Kumar, Patna and Gurugram-based DeHaat offers end-to-end agricultural services to farmers. Its services include the distribution of high-quality agri-inputs, customised farm advisory, access to financial services and market linkages for selling their produce.

Since its inception, the startup claims to have served over 2 Mn farmers across 11 states in India through its digital network of over 11,000 ‘DeHaat Centers’.

The startup said in the statement that it boasts a network of over 1,500 stock-keeping units, delivering over 15,000 orders per day to more than 15 countries. 

Through this partnership, the startup aims to offer its full-stack agri services, including high-quality inputs, personalised advisory, financing, insurance & access, to wider global markets. 

Interestingly, the announcement comes after the startup reported an over 253% YoY rise in its FY22 loss to INR 1,563.9 Cr. Last year, DeHaat secured $60 Mn in a Series E round, which took the total amount raised in the round to $106 Mn.

The post Peak XV Backed DeHaat Snaps Up Fruit Export Business Of Freshtrop 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.

After raising $50 Mn in its Series C funding round led by Tiger Global in June 2022, lending tech unicorn slice has now secured INR 75 Cr (around $9 Mn) from Stride Ventures in a debt funding round. 

The startup has passed a special resolution to allot 7,500 non-convertible debentures (NCD) at an issue price of INR 1 Lakh per share, slice’s regulatory filing with the Registrar of Companies (RoC) showed. The debentures issued by the company are non-convertible and have an interest rate of 14.25% per annum.

A separate filing noted that the debt funding round may reach INR 300 Cr (around $35 Mn). The development was first reported by Entrackr.

The funding round comes a month after slice and North East Small Finance Bank (NESFB) announced their merger. The joint venture seeks to integrate advanced technology solutions with initiatives to promote financial inclusion at the grassroots level, an official statement noted.

slice acquired a 5% stake in Guwahati-headquartered bank for about $3.42 Mn in March.

Founded in 2016 by Rajan Bajaj, the lending tech unicorn had to pivot after the Reserve Bank of India’s (RBI) mandate on prepaid payment instruments (PPIs) from last year. slice used to issue credit cards with pre-loaded credit lines, which the RBI has since made impossible.

Now, slice facilitates personal loans and UPI payments via its app, even though the fintech unicorn obtained a PPI licence last December. The fintech unicorn has raised $340 Mn to date and was valued at over $1.5 Bn during its Series C round.

In FY22, slice’s consolidated net loss widened 2.5X to INR 253.7 Cr from INR 100.4 Cr in FY21. Its operating revenue jumped 4.2X to INR 283.1 Cr from INR 67.7 Cr in FY21.

The post Fintech Unicorn slice Secures $9 Mn From Stride Ventures In Debt Funding appeared first on Inc42 Media.

Amid an ongoing legal battle with WalkMe, the Whatfix founder and CEO, Khadim Batti, has told his employees that litigation was a common competitive tactic in international markets and that the Israeli SaaS major has a history of doing the same.

“We believe that our success in the marketplace has led to this litigation. This legal matter does not impact our day-to-day operations or our ability to serve our customers,” Batti said in an email to Whatfix’s employees, ET reported, citing the email.

“WalkMe has a history of resorting to legal action against competition,” Batti added. 

The email comes as Indian media widely reported the ongoing legal proceedings in the United States District Court for the Northern District of California in the US between the two SaaS companies.

The Bone Of Contention

WalkMe has levelled several allegations against the SoftBank Vision Fund and Peak XV Partners-backed startup, Whatfix. In a complaint filed on August 8, the Nasdaq-listed Israeli company alleged that Whatfix gained unauthorised access to its systems, sought to interfere with customer relationships, made misleading advertising claims about its products and used its design mark without permission.

According to the court documents accessed by Inc42, WalkMe alleged that Whatfix had interfered with multiple WalkMe customer relationships and induced those customers to breach their subscription agreements with WalkMe. 

The company added that those customers provided Whatfix employees with user accounts and log-in credentials. WalkMe further alleged that the Whatfix employees used their access to gain “unauthorised insight into and copy WalkMe’s system features, functionality, and data.”

The lawsuit against Whatfix comes as the startup reported a net loss of INR 328.33 Cr in the financial year 2022-23 (FY23), down 53% compared to a loss of INR 706.26 Cr in FY22. The SoftBank-backed startup’s operating revenue rose 65.14% to INR 284.74 Cr in FY23 from INR 172.42 Cr in FY22.

The legal tussle also comes as the Indian SaaS startup is looking to raise a new funding round and is in discussions with prospective investors. Whatfix has raised $140 Mn in funding so far from investors, including SoftBank, Peak XV, Eight Roads Venture, F-Prime Capital, Anupam Mittal, Cisco Investments and Helion Ventures.

The post WalkMe Uses Litigation To Suppress Competition: Whatfix CEO To Employees appeared first on Inc42 Media.

In yet another development in the Mahadev app scam, the Mumbai Police have booked 32 people, including the director of Dabur Gaurav Burman and company chairman Mohit Burman under sections 420, 465, 467, 468, 471, and 120 (B) of the Indian Penal Code (IPC).

Citing the FIR, an ET report said that Mohit Burman has been listed as the 16th accused while Gaurav Burman is the 18th accused in the Mahadev betting app scam. 

The FIR was registered on a complaint filed by social activist Prakash Bankar on November 7. The social activist claimed that people have been defrauded to the tune of INR 15,000 Cr.

However, the Burman family of Dabur group has denied any involvement or role as alleged by the Mumbai Police.

“We have not received any formal communication on any such FIR. However, we have sighted the FIR which is being circulated to media houses. The FIR is patently false and baseless. Nothing could be further from the truth than as wrongly stated in the FIR,” said a spokesperson for the family.

Incidentally, the FIR also names actor Sahil Khan as accused number 26. Khan is accused of running another betting app related to Mahadev’s betting app, Khiladi.

“Sahil is not only accused of promotion but of earning huge profits by operating the app,” the FIR stated.

The development comes as dozens of big names and Bollywood celebrities have been included in various chargesheets and complaints registered by the police and the Directorate of Enforcement (ED). 

Last month, the ED filed a chargesheet in the Mahadev app scam, including the promoters Saurabh Chandrakar and Ravi Uppal, along with 12 other celebrities.

These include the likes of Ranbir Kapoor, Shraddha Kapoor and Huma Qureshi, among other Bollywood A-listers.

The scam, which came to light after Chanrakar’s lavish wedding in Dubai, has made headlines for the past month or so. While the investigation is on, the two promoters have denied any wrongdoing. 

In a statement sent to Inc42 last month, the duo said that the ED investigation was focussed on ‘scapegoating’ them rather than revealing the truth. They also claimed that a third person by the name of Subham Soni was the principal architect behind the Mahadev app, who operated the app through an entity based in the tax haven of Saint Vincent and the Grenadines.

As per media reports, the proceeds of the crime in the case are estimated to be around INR 6,000 Cr, of which ED has provisionally attached INR 41 Cr. A PMLA court will now likely take cognisance of the chargesheet during the next scheduled hearing on November 25.

The post Mahadev App Case: Dabur Group’s Chairman, Director Among 32 Booked By Mumbai Police appeared first on Inc42 Media.

In an attempt to replace the existing Cable Television Networks (Regulation) Act, the Ministry of Information and Broadcasting (MIB) has floated the much-anticipated draft Broadcasting Services (Regulation) Bill, 2023, for public consultation.

This move is expected to be a game changer for over-the-top (OTT) platforms in India as this bill seeks to take all such platforms under its purview. Notably, OTT platforms are currently regulated under the IT Act, 2000.

“The bill streamlines regulatory processes, extends its purview to cover the OTT content and digital news, and introduces contemporary definitions and provisions for emerging technologies,” the ministry said in a statement.

MIB added that it addresses a long-standing need to consolidate and update the regulatory provisions for various broadcasting services under a single legislative framework. This move streamlines the regulatory process, making it more efficient and contemporary, it added.

How Does The Broadcasting Bill Define OTT?

As per the draft Bill, “OTT broadcasting service” refers to a broadcasting service that provides on-demand or live content to subscribers in India through the internet or a computer resource. This includes a curated catalogue of programmes that are either owned, licensed, or contracted for transmission, excluding closed networks.

The definition also extends to cases where accessing content on non-smart televisions or viewing devices requires additional hardware or software, or a combination thereof, such as a set-top-box, dongle, or software keys.

OTT broadcasting shall not include social media intermediaries and their users, as defined by rules under the Information Technology Act, 2000, or any other entities notified by the government, the bill added.

Moreover, for OTT broadcasting services, compliance responsibility with all requirements under this bill lies with the operator providing the programme or content, not with the network operator or internet service provider.

Key Details On The Regulation

While the majority of broadcasting network operators must obtain a licence from the Centre, streaming platforms are only required to “intimate” the government if they surpass a specified subscriber or viewer threshold. To prevent “genuine hardship” for OTT broadcasters, the central government holds the authority to grant exemptions from the Act’s provisions through guidelines.

“Any person providing an OTT broadcasting service in India, with such number of Indian subscribers or viewers as may be prescribed, shall, within one month from the notification of this act or its meeting the prescribed threshold, provide an intimation to the central government of its operations,” the draft said.

Furthermore, the bill introduces a differentiated approach for programme and advertisement codes, tailored to different services. It mandates self-classification by broadcasters and enforces robust access control measures for restricted content.

In case of any violation of the programme or advertising code, OTT platforms will also be required to pay a penalty. The penalty for the initial violation is a fine of up to INR 20,000, while subsequent contraventions may incur a penalty of up to INR 1 Lakh.

The Indian OTT market is a bustling segment, including domestic players like Zee5, SonyLIV, and JioCinema alongside international majors such as Disney+ Hotstar, Amazon, and Netflix.

Revenue of the Indian video over-the-top (OTT) market is set to double from $1.8 Bn in 2022 to $3.5 Bn by 2027, according to PwC’s latest report. Further, the Indian OTT market is expected to grow at a CAGR of 14.32% over the next five years against the global OTT segment’s rate of 8.4%.

The post New Broadcasting Bill Taking OTTs Under Its Ambit Extended For Public Consultation appeared first on Inc42 Media.

Insurtech major Go Digit General Insurance, which is gearing up for its initial public offering (IPO), has received a show cause notice and multiple advisories from the Insurance Regulatory and Development Authority of India (IRDAI) last month, the company said in a new addendum to its draft prospectus filed with the Securities And Exchange Board of India (SEBI).

The development comes at a time when the company’s IPO is yet to receive final approval from the SEBI even after Go Digit refiled its draft red herring prospectus (DRHP) addressing certain concerns that the market regulator had raised earlier.

Go Digit revealed that the show cause notice from IRDAI has alleged non-disclosure of change in the conversion ratio of the CCPS issued by Go Digit Infoworks Services (GDISPL), the parent of Go Digit General Insurance, to FAL Corporation.

FAL Corporation is a part of Canada-based Fairfax Financial Holdings, which is one of the major investors in Go Digit.

“In terms of the Notice, the change in the conversion ratio of 6,300,000 CCPS issued by GDISPL to FAL Corporation, from ‘1 CCPS for 2.324 equity shares’ to ‘2.324 CCPS for each equity share’, which was reflected by way of an amendment to the JV Agreement dated August 11, 2022, is a material change to the information furnished at the time of applying for registration to the IRDAI,” the company’s regulatory disclosure to SEBI said.

As per the notice, Go Digit was expected to provide the details of such change to the IRDAI but it did not furnish the “full particulars”. Hence, IRDAI has also alleged that the startup is in violation of Section 26 of the Insurance Act.

If an adverse order is passed against Go Digit and its officers responsible for the non-compliance, the insurtech unicorn would be slapped with a maximum penalty of INR 1 Lakh for each day during which such failure continues, or INR 1 Cr, whichever is lower, the addendum mentioned.

Besides, IRDAI has also issued certain advisories and cautioned Go Digit on a few aspects.

The advisory notice has been issued for failing to take the insurance regulator’s approval for the change in remuneration of its Chief Executive Officer (CEO) on the account of the change in ESAR 2018 (employee stock appreciation rights scheme) to ESOP 2018 (employee stock option plans) and for failing to inform IRDAI of the retrospective grant of ESARs prior to the date of grant of the company’s certificate of registration.

“In the event the IRDAI is not satisfied with our responses or we fail to adhere to the advisories and cautions issued by the IRDAI, we may be subject to warnings, show-cause notices and/ or penalties in the future, which would, amongst other things, adversely impact our brand and reputation,” Go Digit said in its regulatory disclosure to SEBI.

Meanwhile, the IRDAI has also cautioned the startup to ensure due care and correct disclosures in the offer documents, of the position in relation to the commission on long-term policies and that acquisition costs incurred in the year, among several other advisories issued.

It is pertinent to note that Go Digit filed its DRHP with the SEBI in August last year. Within months, it also received the IRDAI’s approval to launch the IPO in November last year though SEBI had kept the IPO in ‘abeyance’.

In March this year, the startup refiled the DRHP with the market regulator for its $440 Mn, addressing the latter’s concerns about its ESOPs. 

In the latest filing, Go Digit said its erstwhile Go Digit – Employee Stock Appreciation Rights Plan, 2018 has been amended and changed to ESOP 2018, pursuant to the resolutions passed by the board and shareholders on March 21, 2023 and March 27, 2023, respectively. 

Founded in 2017 by Kamesh Goyal, Go Digit offers insurance policies across verticals including motor vehicle, health, travel, and property. Besides Prem Watsa’s Fairfax, the startup is also backed by prominent names such as Sequoia, cricketer Virat Kohli, and actor Anushka Sharma. 

Go Digit’s IPO comprises a fresh issue of shares worth INR 1,250 Cr and an offer for sale (OFS) of 109.45 Mn shares.

The post IPO Bound Go Digit Gets Show Cause Notice, Multiple Advisories From Insurance Regulator appeared first on Inc42 Media.

US-based electric vehicle (EV) maker Tesla is mulling to double the number of components it imports from India, Union Minister of Commerce and Industry, Piyush Goyal, said in a post on social media platform X.

Goyal wrote the post after paying a visit to Tesla’s state-of-the-art manufacturing facility at Fremont, California. “Proud to see the growing importance of Auto component suppliers from India in the Tesla EV supply chain. It is on its way to double its components imports from India.”

He added that he was delighted to see talented Indian engineers and finance professionals working across senior positions and contributing to the growth of the global electric vehicle giant. 

Though at the Tesla plant, Goyal could not meet the company’s Chief Executive Officer (CEO) Elon Musk, the minister is expected to see the latter sometime during this visit to the US. In the meeting, the two sides will discuss Tesla’s plans to set up an Indian factory which will manufacture a $24,000 worth car model, reported Reuters. 

In September Goyal said that Tesla plans to source components worth $1.7 Bn to $1.9 Bn this year from Indian vendors after buying $1 Bn worth of components last year.

In a bid to speed up the process of Tesla’s entry into the Indian market, the government is reportedly planning to expedite the approvals. The government is planning to provide all the necessary clearances to the company by January 2024. 

The development comes at a time when the Indian government is considering tax reduction on the import of fully assembled EVs for up to five years.  

Experts are of the view that this will attract global companies like Tesla and Vinfast, among others, to not only manufacture and assemble EVs in the country but also import fully assembled versions.

The government is reportedly working on an EV policy designed to enable global car manufacturers to import electric vehicles at reduced duty rates, provided they commit to eventually start the manufacturing process in India. However, the policy is yet to be finalised.

The post Tesla Mulls Doubling Import Of Parts From India: Piyush Goyal appeared first on Inc42 Media.

The Indian government is considering the possibility of implementing tax reductions on imported fully assembled electric vehicles (EVs) for a duration of up to five years. This strategic move aims to attract companies such as Tesla to not only sell but also potentially manufacture its electric cars within the country.

The government is formulating an EV policy designed to enable global car manufacturers to import electric vehicles at reduced duty rates, provided they commit to eventually manufacture EVs in India, Bloomberg reported.

However, a final decision on the policy’s outline is yet to be made.

In 2021, Tesla sought a reduction in import duties for its EVs. Tesla was seeking to lower the rates from the existing 70%-100% range to 40%, depending on the import value of its vehicles.

Tesla CEO Elon Musk is expected to meet with Commerce and Industry Minister Piyush Goyal later this week to have discussions about the company’s plans to establish a factory in India. Goyal is currently in San Francisco for ministerial engagements related to the Indo-Pacific Economic Framework and the Asia-Pacific Economic Cooperation.

Tesla is actively pursuing entry into the Indian market, one of the most promising automotive markets globally, driven by the increasing demand for EVs among India’s expanding middle class.

On the other hand, Tesla’s potential investment holds the promise of supporting the government’s agenda to boost manufacturing’s contribution to India’s GDP and simultaneously generate employment opportunities.

Tesla plans to source components worth $1.7 Bn to $1.9 Bn this year from local vendors after buying $1 Bn worth of components last year, Goyal said earlier.

“…Tesla already last year bought $1 Bn of components from all of you sitting here. I have a list of companies who supplied to Tesla. This year their target is nearly $ 1.7 bn or $ 1.9 bn…,” said Minister Goyal.

It was reported earlier that the Indian government is working to expedite approvals for Tesla’s potential entry into the country, with a goal of providing all the necessary clearances by January 2024.

A recent meeting conducted by the Prime Minister’s Office reviewed the upcoming phase of EV manufacturing in India, which includes Tesla’s investment proposal.

India’s growing demand for EVs has garnered interest from both international and local tech firms, as well as emerging startups. Acer, the Taiwanese tech giant, has recently made its foray into the Indian EV market by licensing its brand to eBikeGo, a mobility startup.

Meanwhile, VinFast disclosed intentions to invest between $150 Mn and $200 Mn in India, aiming to establish a completely knocked-down (CKD) assembly unit in the country.

Alongside Tesla, automotive giants such as Audi and Mercedes-Benz are also eagerly positioning themselves to seize opportunities within the burgeoning Indian EV ecosystem.

Overall, total EV registrations in India across categories grew to 1.32 Lakh units in October from 1.28 Lakh units in September. As of now, a total of 12,27,195 EVs have been registered in India in 2023.

The post India Contemplates Five-Year Tax Cut On EV Imports To Attract Tesla appeared first on Inc42 Media.

The Income Tax (I-T) Department in India is currently conducting investigations into the Indian units of Apple, Google, and Amazon regarding potential tax non-payment. 

Authorities, as part of a probe initiated in 2021, have sought detailed clarifications from several tech giants concerning their transfer pricing (TP) practices, as per an ET report. 

The department is contemplating a tax demand of over INR 5,000 Cr, having rejected numerous justifications provided by the companies in question.

The Indian arms involved in the matter are Apple India Pvt Ltd, Amazon Seller Services India Pvt Ltd and Google India Digital Services Pvt Ltd.

The central issue in this case revolves around the methods used for transfer pricing (TP) adjustments, which the tax department believes may lead to significant tax liabilities. This investigation covers multiple assessment years and is currently under scrutiny and legal process at various levels. 

According to an ET report, both Amazon and Apple have engaged PwC for representation in this matter. 

Transfer pricing principally aims to curb price manipulation in transactions within corporate groups, thereby reducing tax evasion. By setting transfer prices at arm’s length, or market rates, countries attempt to prevent corporations from shifting profits to low-tax areas. This practice encompasses dealings with both tangible and intangible assets. Compliance with transfer pricing laws in their operational jurisdictions is crucial for companies to mitigate tax-related complications and maintain equitable business operations.

The Income Tax Department is reportedly investigating the three technology behemoths regarding transactions associated with advertisement, marketing, and promotion expenses, payments for royalty, trading and software development segments, as well as marketing support services.

Apple, headquartered in Cupertino, California, holds the title of the world’s most valuable company, boasting a market capitalisation just shy of $3 Tn. Alphabet Inc, the parent company of Google, holds the fourth position in the valuation rankings, while Amazon holds the fifth spot.

In the case of Apple, the focus of the tax investigation primarily centres on the Indian arm’s procurement of finished products from its original equipment manufacturers and subsequent sales in the domestic market.

“While the company argues this is not an international transaction and thus falls outside the purview of taxation, the department contends it to be a deemed international transaction,” a person familiar with the matter informed ET. “The department found that the taxpayer wasn’t paying any royalty on trading, as the assessee couldn’t prove exploitation of the intellectual property, resulting in the royalty amount being benched to nil.”

In the case of Apple India, on expenses related to trading segments, the Income Tax Department has rejected the company’s justifications, leading to an alleged tax liability of hundreds of crores, according to another tax official.

Despite this, the company has seen a significant surge in net profit, increasing by 76% to INR 2,229 Cr, marking the fastest growth in net profit for the company in India over the past five years. Analysts anticipate a rapid increase in the percentage of iPhones manufactured in India, currently over 7%, in the coming years.

These cases go through different resolution stages, such as the dispute resolution panel, Commissioner of Income Tax (Appeals), Income Tax Appellate Tribunal (ITAT), and potentially the high court and Supreme Court. Companies can also choose the Mutual Agreement Procedure (MAP) for an alternative tax dispute resolution under Direct Tax Avoidance Agreements (DTAA).

The post India Tax Probe: Apple, Google, And Amazon May Face INR 5,000 Cr Tax Demand appeared first on Inc42 Media.

While Fintech unicorn Razorpay plans to relocate its parent company to India through a cross-country merger, this move could incur a tax payment of $250 Mn – $300 Mn in its current domicile, the United States.

This plan involves a merger between its US-registered entity and its Indian arm.

Razorpay and its investors are contemplating a merger at a reduced valuation from its peak of $7.5 Bn in 2021. Despite this, advisors on both sides of the deal, including those in the US and KPMG and Deloitte in India, are hesitant due to the paced growth trajectory of the payments processor over the past two years, ET reported.

A reduced valuation would proportionally decrease the tax liability; however, a significant reduction might face challenges in obtaining regulatory approval.

“Yes, there have been discussions to value the company at $3 Bn – $4 Bn, but external advisors are of the view that it may not be cleared by US authorities because of the company’s steady growth over the last year or so, even as peers in the US have seen correction in their valuations,” a source said as quoted in the report.

Razorpay is set to pursue approval from the National Company Law Tribunal (NCLT) within the next two months for the merger. Additionally, the company will appoint an auditor for the valuation discussions.

The fintech unicorn is also looking at raising a new round of funding from investors in 2024 to cover the tax payout. The uncertainty surrounding the duration of NCLT approval has prompted this strategic move.

Razorpay’s decision to relocate is primarily motivated by its goal to list on Indian stock exchanges within the next two to three years. This strategic move is also aimed at enhancing the company’s ability to navigate the regulatory landscape more effectively.

Razorpay has reportedly held discussions with government officials as well regarding the requisite approvals needed for the relocation process.

Founded by Shashank Kumar and Harshil Mathur in 2014 as a payment gateway platform, the startup has branched out into SME payroll management, banking, lending, payments, insurance among others, over the years.

In 2021, Razorpay bagged $375 Mn in its Series F round from Lone Pine Capital, Alkeon Capital, and TCV, among others, at a valuation of $7.5 Bn. Razorpay entered the unicorn club in 2020 after bagging $100 Mn from Singapore’s GIC and Sequoia Capital, among others.

Razorpay’s standalone net profit widened 20% to INR 7.3 Cr in the financial year 2021-22 (FY22) from INR 6.1 Cr in FY21 due to a strong growth in its business.

The startup’s revenue from operations surged 76% to INR 1,481 Cr from INR 841.2 Cr in FY21.

A growing trend among major players in the Indian startup scene is the consideration of “reverse flipping” — relocating their headquarters back to India. Triggered by PhonePe’s shift, which paid INR 8,000 Cr to shift domicile, for a potential public listing, this move has encountered challenges.

As per an Inc42 survey published earlier this year, over 77% venture capital funds and 65% angels said that after the SVB collapse, founders are rethinking overseas registration, with tax implications deterring a return to India for startups registered in the US.

The post Reverse Flip: Razorpay’s Cross-Country Merger May Incur $250-300 Mn Tax appeared first on Inc42 Media.

Sharechat cofounders Farid Ahsan and Bhanu Pratap Singh have raised $3 Mn in seed funding from venture capital firms India Quotient, and Elevation Capital for their robotics startup General Autonomy.

Zetwerk cofounder Srinath Ramakkrushnan, Livspace cofounder Ramakant Sharma and ShareChat cofounder Ankush Sachdeva, also participated in this round of funding. The news comes almost 11 months after they stepped down from their executive roles at the social media unicorn.

Before leaving ShareChat, Singh, as a cofounder, also served as the CTO, while Ahsan, in addition to being a cofounder, held the COO role. The third ShareChat founder Ankush Sachdeva continues to be the CEO of the social media unicorn.

Last month, Inc42 exclusively reported about Ahsan and Singh’s new venture in the robotics space.

“Our mission is to revolutionise the future of factories! Factories are complex puzzles, and automation is the key to seeing the full picture, leading to safer, [more] efficient, and standardised production… With a vision to make mass manufacturing agile and distributed like software development, we’re in Bengaluru but working globally,” Fareed Ahsan posted on X.

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. 

The term ‘general autonomy’ is a concept in robotics that deals with the automation of equipment across use cases. It is particularly relevant in the case of industrial equipment.

“Join us on this thrilling journey as we build AI-driven machines to automate the toughest parts of labour workflows in factories,” added Ahsan.

The duo’s fundraise comes as many second-time founders look at new opportunities after quitting their previous ventures. This year alone, the likes of Teachmint cofounder and former CTO Anshuman Kumar and GoMechanic’s Rishabh Karwa look to start afresh after their previous ventures went awry.

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.

This is a trend that is also visible across senior executives from major startups quitting to look for pastures anew. For instance, the likes of Paytm, Zoho and Flipkart have dozens of executives moving on to entrepreneurial ventures and raising significant funding while doing so.

The post Sharechat Cofounders Raise $3 Mn For Their Robotics Startup General Autonomy appeared first on Inc42 Media.

Bengaluru-based SaaS startup Whatfix has been dragged to court by its Israeli-origin and Nasdaq-listed rival WalkMe.

WalkMe has alleged that the SoftBank and Peak XV Partners-backed startup gained unauthorised access to its systems to interfere with customer relationships. Further, WalkMe alleged that Whatfix tried to make misleading advertising claims about its products and used its design mark without permission.

The listed Israeli entity filed the case on August 8 in the United States District Court for the Northern District of California. The last update on the matter dates back to October 23, when the court ordered WalkMe to amend its complaint after the Nasdaq-listed company sought a temporary restraining order against Whatfix.

According to court documents reviewed by Inc42, WalkMe might file its first amended complaint (FAC) or opposition to Whatfix’s motion to dismiss WalkMe’s complaint by November 22. 

In the original complaint, WalkMe accused Whatfix of interfering with its customer relationships and persuading those customers to violate their subscription agreements. The company added that those customers provided Whatfix employees with user accounts and log-in credentials.

Incidentally, the product head at Whatfix, Dipit Sharma, admitted in court to have attempted to access WalkMe’s system for ‘further competitive analysis’. According to Sharma’s testimony in the court, when he did access the WalkMe platform, he “made no attempt to access internal WalkMe systems or information [and] used the product in the same way any WalkMe customer would to observe its user interface.”

Further, WalkMe alleged that Apoorva Mittal, who is the director of customer success at the SoftBank-backed startup, used his credentials to “access and explore the following WalkMe services: WalkMe Menu Organizer, WalkMe ActionBot, WalkMe Users, WalkMe Workstation, WalkMe UI Intelligence, WalkMe Discovery, [and] WalkMe Organization.”

WalkMe alleged in its complaint that the Whatfix PL employees used their access to gain “unauthorised insight into and copy WalkMe’s system features, functionality, and data.”

The lawsuit against Whatfix comes as the startup reported a net loss of INR 328.33 Cr in the financial year 2022-23 (FY23), down 53% compared to a loss of INR 706.26 Cr in FY22. The SoftBank-backed startup’s operating revenue rose 65.14% to INR 284.74 Cr in FY23 from INR 172.42 Cr in FY22.

Founded in 2013 by Khadim Batti and Vara Kumar, Whatfix earns revenue by selling subscriptions and professional services to other businesses. The digital adoption platform offers solutions for onboarding new customers, effective training and better support to users through a contextual content display at the time of need.

Whatfix has raised a total funding of nearly $140 Mn to date. Besides SoftBank and Peak XV, the startup counts the likes of Eight Roads Venture, F-Prime Capital, Anupam Mittal, Cisco Investments, and Helion Ventures among its investors. It was last valued at $600 Mn.

The post Israeli SaaS Company WalkMe Drags SoftBank-Backed Whatfix To Court appeared first on Inc42 Media.

Baked goods startup Bakingo has secured its first-ever funding round worth $16 Mn from private equity (PE) firm Faering Capital.

With this investment, Bakingo is looking to further strengthen its distribution footprint by expanding from 75 dark kitchens to 150 and entering ten new cities. The startup also plans to open exclusive brand stores for customers to experience the product and to invest in technology to enhance its production, supply chain and forecasting capabilities.

Sameer Shroff, the cofounder and MD of Faering Capital, will join Bakingo’s board of directors after the transaction.

Founded in 2016 by Himanshu Chawla, Shrey Sehgal, and Suman Patra, the startup remained bootstrapped till the current funding round, claiming to have served over 6 Mn customers. The startup also sells its products on FlowerAura, an ecommerce platform specialising in gifting and set up by the founding team.

The brand offers a variety of cakes and desserts, including its signature cheesecake, gourmet cakes and jar cakes, among 100+ SKUs. The startup also claims to be able to customise more than 200 cake designs and deliver within two hours in 13 cities.

Himanshu Chawla, cofounder of Bakingo, said on the funding round, “We believe that India needs an authentic homegrown brand, and we are in a prime position to be the pioneering national bakery and gifting platform. This growth capital investment by Faering Capital will propel us in executing our vision and scaling nationally.”

Bakingo is present in cities like Gurugram, Delhi, Noida, Bengaluru, Hyderabad, Mumbai, Jaipur, Chandigarh and Lucknow. Bakingo recently expanded to other cities, including Meerut, Panipat, Karnal and Rohtak, intending to establish a pan-India market presence.

Sameer Shroff, cofounder and MD of Faering Capital, added, “We admire how Himanshu, Shrey, Suman, and the Bakingo team have built an INR 200 Cr brand that consistently delivers customer delight across the country. Even more impressive is that they have built the company bootstrapped. Faering Capital is delighted to invest in the first growth capital round and partner with Bakingo for their next growth stage.”

The startup competes against baking goods companies such as WarmOven, The Bread Company, Le15, Paris Bakery, and Just Bake, along with thousands of local bakeries and cafes that also specialise in baked goods.

The post Bakery Startup Bakingo Bags $16 Mn To Expand Across India appeared first on Inc42 Media.

Fintech SaaS startup Perfios turned profitable in the financial year 2022-23 (FY23), posting a consolidated net profit of INR 7.8 Cr on the back of a significant jump in its service income due to strong performance of its India business.

The startup had reported a net loss of INR 16.8 Cr in FY22 on an operating revenue of INR 136.5 Cr.

In FY23, Perfios’ operating revenue jumped almost 200% year-on-year (YoY) to INR 406.8 Cr.

Founded in 2008 by VR Govindarajan and Debasish Chakraborty, Perfios provides software solutions to financial institutions for credit decisioning, analytics, onboarding automation, due diligence, among others. It earns a majority of its revenue from the sale of services.

At INR 198.5 Cr, income from software support for loan processing had the biggest contribution to its operating revenue and grew almost 90% YoY.

Meanwhile, service income jumped over 28X YoY to INR 166.5 Cr, contributing the second-highest portion to sales revenue.

Perfios also earns revenue from software coding and maintenance services, licence and subscription fees.

On the other hand, if looked at geographically, India continues to be the biggest contributor to the startup’s income.

Perfios posted a 211% surge in its domestic revenue to INR 382 Cr in FY23 from INR 122.6 Cr in the previous fiscal year.

Meanwhile, the startup earned INR 24.7 Cr from its international businesses during the reported year, as against INR 13.8 Cr in FY22.

In a recent statement, Perfios said it processes 1.7 Bn transactions a year with $36 Bn of assets under management (AUM).

Zooming Into The Expenses

In line with the rise in its revenue, Perfios’ total expenses more than doubled to INR 386.4 Cr in FY23 from INR 155.9 Cr in the prior year.

Employee Costs The Biggest Expense: Employee benefit expenses accounted for over 55% of the startup’s total spending during the year.

Perfios’ total employee costs surged to INR 213.5 Cr in FY23 from INR 99.7 Cr in the prior fiscal. In that, a majority was spent towards salaries and wages.

The startup also spent INR 7.1 Cr on employee share-based payments (equity settled).

Other Major Expenses: Depreciation, depletion, and amortisation expense increased by over 200% to INR 32 Cr in the reported period.

Perfios’ legal professional charges surged 80% to INR 41.1 Cr in FY23, while miscellaneous expenses also increased to INR 70 Cr from INR 13.5 Cr in FY22.

In the recent past, there have been a number of new developments at the startup. In September, Perfios signed an agreement with Kedaara Capital for an investment of $229 Mn in its Series D funding round.

Recently, it also acquihired Chennai-based open finance platform Fego.ai and announced an ESOP buyback of shares worth INR 154 Cr.

Perfios also appointed Sumit Nigam as the startup’s chief technology officer (CTO) and Anu Mathew as chief people officer (CPO). At that time, the startup also said that it is eyeing an IPO in the next 18-24 months.

The post Fintech SaaS Startup Perfios Turns Profitable In FY23, Revenue Triples To INR 406 Cr appeared first on Inc42 Media.