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HC Seeks Govt’s Reply On Plea Over Provision In Consumer Protection Rules

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HC Seeks Govt’s Reply On Plea Over Provision In Consumer Protection Rules

The Delhi high court has issued a notice to the government asking for responses on a petition filed by Dhruv Sethi which challenges a provision in the Consumer Protection (ecommerce) Rules that mandates all ecommerce entities to be registered as a company in India.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued the notice to the Ministry of Consumer Affairs seeking its clarity on the matter.

Petitioner Dhruv Sethi stated that this rule makes registration as a company mandatory for sole proprietorship business. In such a situation, ecommerce business cannot be done without registration as a company.

He further said that the rule is beyond the power of the Constitution “as it discriminates against all forms of legitimate business organisations like sole proprietorships, limited liability partnerships, hindu undivided families, etc.”

The plea challenges the vires of Rule 4(1)(a) of the Consumer Protection (E-Commerce) Rules, 2020.

Appearing for the petitioner, advocates Anand Grover and Samyak Gangwal, told the court that this rule stops every business which is not a company to be a part of the ecommerce sector. Or they will have to sell their products through forums like Amazon or Flipkart, reported ET.

The petitioner has also claimed that he is personally affected by the rule as he is an entrepreneur, who, through his sole proprietorship, Where Next Daily, sells custom merchandise online.

To this, the bench gave a suggestion to the petitioner asking him that he can sell his products and services by listing on Amazon. To which, the advocates replied that by doing this, they will have to pay Amazon, which does not have to be made on the sale of products through itself.

Advocate Grover also said that the obligation to incorporate as a company and the consequent exclusion of Sole Proprietorship, Limited Liability Partnerships, Hindu Undivided Families etc. from the e-commerce space, is neither reasonable, nor in the interests of the general public.

It was also argued that the impugned rule is violative of Article 14 of the Constitution of India as it discriminates against all forms of legitimate business organisations.

The post HC Seeks Govt’s Reply On Plea Over Provision In Consumer Protection Rules appeared first on Inc42 Media.


#GoingD2C Webinars: Register Now To Learn How To Take Your D2C Brand Global

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#GoingD2C Webinars: Register Now To Learn How To Take Your D2C Brand Global

To fuel India’s ongoing direct-to-consumer (D2C) rush, Inc42 has partnered with PayPal and Shopify to help small businesses and retail brands go digital, leverage technology and expand to global markets.

The holistic growth of D2C businesses is dependent on equipping brands with the right knowledge to scale their businesses across geographies and markets. After going through the basics of going D2C in our webinars on setting up a D2C brand and implementing scalable and seamless digital payment solutions, our focus is now on helping Indian brands leverage the ‘build local and sell global’ trend. 

Looking beyond the Indian market is one way that D2C brands and businesses can maximise their revenue growth and create brand awareness on a global scale. During the webinar, Udit Khanna, cofounder of luxury textiles brand Tilfi Banaras and moderator Apurva Chamaria, SVP, Tech Mahindra will talk about the challenges of taking a brand global and the way forward for cross-border ecommerce.

Learn about the best practices for selling in multiple geographies, challenges of understanding consumer behaviour across borders and how to capitalise on the ‘Make In India’ wave to boost revenue by selling abroad.  

  • Date: December 9, 2020
  • Time: 3 PM

Book Your Slot Now

#GoingD2C: How To Take Your D2C Brand Global

There is no denying that ecommerce, particularly the D2C model, has grown tremendously in recent months due to the lockdown and the pandemic-induced fear of buying from physical stores and retail outlets. In the first six months of this year alone, the contribution of ecommerce to retail rose to 4.5% compared to 1.5% in the past three years. 

With the world moving towards online selling and retail automation, even traditional brands and small and medium businesses have started selling their products directly to consumers. Reaching audiences online has never been easier, thanks to the proliferation of ecommerce platforms and marketing tools. 

However, there are still a lot of bottlenecks for new brands and this is where enablers such as PayPal and Shopify are playing a huge role. 

Ecommerce platform Shopify provides retail businesses access to its wide range of cross-border services and tools, thus helping them increase visibility, acquire more customers and also generate more revenue. The platform has worked with over 10 Lakh businesses in 175 countries and processed over $200 Bn in gross sales.

Payments major PayPal engages with online sellers and D2C brands to enable digital financial services and payments on their native ecommerce platforms in a more secure way. With support for multiple payment modes, PayPal has over 350 Mn active users in more than 200 markets.

Powered by these giants, the third #GoingD2C webinar will help businesses understand:

  • The emerging cross-border ecommerce opportunities
  • Best practices and recommendations for scaling across geographies
  • Challenges in setting up global ecommerce stores, payments, logistics and compliance
  • Tricks and strategies for generating demand, marketing and customer engagement

Register Now To Get Your Concerns Addressed

About The Speakers

Udit Khanna is the cofounder of Tilfi Banaras, a heritage luxury textile brand based in Varanasi. A seasoned entrepreneur, Udit has previously run and exited businesses in the UK and in Kazakhstan.

In just over four years, Tilfi has established itself as one of the leading brands in Banarasi textiles. By being digital-first, Tilfi has enabled patrons of these fine crafts around the world to get access to the brand’s timeless Banarasi weaves.

The company has been growing more than 60% year-on-year with almost all of its revenues from its own website. The company now boasts of over 6,000 HNI customers from over 30 countries. The business has also grown over 80% since pre-lockdown levels.

The webinar will be moderated by Apurva Chamaria who has donned many hats over the years — currently, SVP at Tech Mahindra, Chamaria is also an active angel investor and a charter member of TiE, New Delhi. Prior to joining Tech Mahindra, he has worked with brands such as Rategain, and HCL Technologies.

As an investor, Chamaria focusses on sectors including fintech, AI, mixed/augmented/virtual reality, content, video and more. Over the years, he has invested in more than 20 startups in India, such as Witty Feed, Josh Talks, Chqbook, Innov8, Lucideus Tech, Skill Acquire and more.

Book Your Slot Now

The post #GoingD2C Webinars: Register Now To Learn How To Take Your D2C Brand Global appeared first on Inc42 Media.

Cars24 Enters Unicorn Club With $200 Mn Fundraise In Series E

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Cars24 Enters Unicorn Club With $200 Mn Fundraise In Series D

Gurugram-based online used car marketplace Cars24 has entered the unicorn club by raising $200 Mn in a Series E funding round led by DST Global.

Existing investors Exor Seeds, Moore Strategic Venture and Unbound also participated in the round that valued the company above $1 Bn. Cars24 will use the funding to invest aggressively in technology and product innovation and scale new business verticals.

The company had raised $100 Mn (INR 714 Cr) its Series D funding round from a batch of new and existing investors led by Unbound and Toronto-based KCK Global. Both these companies have invested $25 Mn each in the company.

The company had then announced that it would use the capital to strengthen the footprint of the company in new cities, franchise model, technology and boost its consumer lending (NBFC) business. Overall, the company has raised more than $300 Mn from nearly 21 investors.

Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal and Mehul Agrawal, Cars24 claims to create an efficient and reliable way for car owners to sell their used cars at the best price. A consumer can simply book an appointment with any of the Cars24 branches, visit the branch and sell a car in a single visit.

The company has expanded its presence through the franchise model and intends to scale up its presence from 130 cities to over 300 Tier II, III and IV cities and towns by 2021. At present, it claims to have over 10,000 channel partners registered on its platform and intends to increase the network to more than 20,000 partners by next year.

The company claims to be noting an uptake during the pandemic. With annual transactions exceeding 2,00,000 units and 4x increase in website engagement, the company claims to have surpassed pre-Covid levels in the third quarter of 2020.

The company recently offered an ESOP (employee stock ownership plan) cash-out scheme worth INR 35 Cr to its employees. “The initiative has been announced keeping in mind the support and trust that the employees showcased in the company during the difficult times,” the company said.

The post Cars24 Enters Unicorn Club With $200 Mn Fundraise In Series E appeared first on Inc42 Media.

Edtech Startup upGrad Enters Test Preparation Market; Acquires The Gate Academy

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Edtech Startup upGrad Enters Test Preparation Market; Acquires The Gate Academy

Indian edtech startup upGrad has made its foray into the test preparation market by acquiring Bengaluru-based coaching institute The Gate Academy (TGA) for an undisclosed amount.

With the acquisition, TGA will operate as a subsidiary of upGrad and will continue with its brand name and Ritesh Raushan will become its CEO.

The edtech startup also plans to invest over INR 100 Cr into this test preparation subsidiary and will be developing over 20K hours of content in multiple languages to provide access to at least one million test-takers annually, the company said in a statement.

upGrad, founded in 2015 by Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh, focuses on higher education, as well as helping working professionals develop proficiency in the most in-demand technical skills. 

The company aims to help working professionals and individuals by providing them with university education online through structured programmes and facilities which include courses on deep technology, digital marketing, management, entrepreneurship certification among others. upGrad has over half-a-million users globally, of which 30K are paid learners.

upGrad cofounders Ronnie Screwvala & Mayank Kumar, said in a joint statement, We’re thrilled to onboard Ritesh and team. TGA provides upGrad a non-linear growth opportunity in new-segment entry and deeper penetration in the semi-urban & rural markets, which is in line with our core vision of making Bharat employable by adopting the mantra of LifeLong Learning. With every strategic move, we are ensuring that upGrad leads from the front as India emerges as the teaching capital of the world.”

In August, upGrad had raised a debt of INR 50 Cr from IIFL Income Opportunities Fund – Series 2. Inc42 reported that the company had allotted 500,000 unlisted, secured and redeemable Non-Convertible Debentures at a face value of INR 1,000 each to IIFL Income Opportunities Fund – Series 2.

The company had also announced the reinstatement of full salaries for all its employees. Early, upGrad had announced that it would revoke all salary deductions from the second quarter of the financial year 2021, starting July. 

upGrad, which had announced 30% salary deductions for its employees due to the financial disruption caused by the pandemic, said that it would return 100% of the amount deducted from employees’ salaries, besides announcing work from home (WFH) for all employees till the end of the year. 

Ritesh Raushan, founder & CEO, The Gate Academy said, “We all are very excited to join hands with upGrad team. We aim to employ our extensive experience in both physical and online modes of teaching to create a world-class product that will bring fundamental changes in the way technology enables learning in the future.”

The post Edtech Startup upGrad Enters Test Preparation Market; Acquires The Gate Academy appeared first on Inc42 Media.

India Bans AliExpress, Taobao Live And 41 Other Chinese Apps

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India Bans AliExpress, Taobao Live And 41 Other Chinese Apps

The Government of India Tuesday blocked 43 Chinese mobile apps from accessing by users in India, under section 69A of the Information Technology Act. 

Notable names that have been featured on the list are the ecommerce company AliExpress, Snack Video — which had been gaining popularity after the ban of TikTok — and Alibaba Workbench.

The action is taken based on inputs regarding these apps for engaging in activities prejudicial to India’s sovereignty, integrity, defence, security and public order.

Earlier on 28 June, 2020 the Centre had blocked access to 59 Chinese mobile apps and on September 2, 2020 118 more apps were banned under section 69A of the Information Technology Act. 

The order comes amid border tensions between India and China which has been going on for months.

The latest ban follows a series of such moves taken by the government against Chinese apps in recent times. 

The ban follows rising tension between China and India. Rising geopolitical tensions between the two countries, since border clashes between the two armies in Ladakh’s Galwan Valley last in June, are now manifesting in trade and economic ties, with members of the Indian political brass calling for a boycott of Chinese products and services.

See the complete list here:

The post India Bans AliExpress, Taobao Live And 41 Other Chinese Apps appeared first on Inc42 Media.

Ola’s Etergo Acquisition: Global Dream Faces Lawsuit, Angry Investors

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Ola's Etergo Acquisition: Global Dream Faces Lawsuit, Angry Investors

When Ola Electric, the EV arm of the ride-sharing unicorn Ola (ANI Technologies), announced in May 2020 that it would start operating as a full-stack manufacturer of electric two-wheelers (2W), the euphoria was palpable. News reports claim that Ola Electric is deliberating with electric vehicle (EV) equipment manufacturers and also holding talks with several state governments to set up a 100-acre manufacturing unit, with a production capacity of 1 million scooters a year. Initially, these two-wheelers are expected to be manufactured in the Netherlands. And Ola is reportedly planning to ship these to European markets and India in the early months of 2021.

These developments at Ola Electric may seem promising, but behind it lies an acquisition it made recently in the Netherlands, which is a tale of multiple hits and misses, an erosion of (minority) investors’ wealth and trust, and an alleged charge of defrauding that may soon reach a court of law. Did Ola conduct its due diligence before grabbing the EV firm? But before we go into that, let us look at the beginning of the whole saga. (more on this later).

It all started with Ola’s acquisition of the Amsterdam-based EV startup Etergo BV, which had to undergo a fire sale or face bankruptcy. In May 2020, Ola Electric announced the buyout for an undisclosed amount. Now the Indian unicorn plans to utilise Etergo’s App Scooter design and engineering capabilities to build a smart electric two-wheeler. 

The backstory, however, is quite grim. Lauded as the ‘Tesla of e-scooters’ by the European and Dutch media, Etergo was a crowdfunded initiative that raised millions of euros in two crowdfunding rounds. But after raising around 21 Mn ($24.8 Mn) in equity financing from more than 6,000 individual investors (most of them were carried away by the e-scooter craze), the company got sold to Ola Electric for 3.75 Mn ($4.44 Mn) valuation, according to internal emails and multiple Etergo investors who spoke to Inc42

More than 900 investors who put their money into Etergo through crowdfunding campaigns are now in the process of filing a lawsuit in a European court to recover their money from Etergo and its current owner Ola Electric. Inc42 spoke to at least five such investors who have invested 2,000-5,000, but now getting back barely 10% of their original investments. Many of them have held onto their shares since 2017, hoping to get their hands on the swanky App Scooters promised by Etergo. 

 Angered by the breach of promise, some of these investors have started their own crowdfunding campaign on GoFundMe to pay for a lawsuit that might be filed before the end of the current calendar year. Also, some of them have joined a Facebook group that keeps buzzing with ideas and legal suggestions on how to recover their money. 

Gofundme Ola Etergo
GoFundMe Page Setup By Minority Investors To Raise Money For Legal Suit

What Went Wrong At Etergo

Founded in 2014 by Bart Jacobsz Rosier and Marijn Flipse, Etergo had conceptualised an all-electric state-of-the-art AppScooter that depends on battery-swapping for a quick recharge and an increased run time. Unveiled in 2018, the AppScooter claims to use high-power energy density batteries to deliver a range up to 240 km and quick acceleration. But according to two investors aware of Etergo’s operations in the Netherlands, even after three years of research and development since 2015, not a single scooter was delivered to people who purchased actual shares in the company via a pseudo-public offering. This fundraising vehicle can be used by any private company in Europe. 

In the Netherlands, the government allows private firms to set up STAKs (Stichting Administratiekantoor) or an Administration Office Foundation to help companies raise equity funding by issuing shares. Etergo BV diluted around 10% equity stake in September 2017 and set up a STAK with targeted funding of €1.5 Mn ($1.7Mn), which was also its first publicly raised money. Etergo used Seedrs, a platform that allows European retail investors to buy shares in private companies. 

In fact, it is similar to GoFundMe, but only startups can use the platform to raise money from investors, and the latter will own an equity stake in the company. The Seedrs page for Etergo is still live and indicates that the scooter was supposed to go into production by Q2 2018. The Seedrs crowdfunding campaign was a massive success for the founders as it seemingly overshot the original target and amassed a total of €3.2 Mn, valuing the company at more than €25 Mn.

Seedrs Page Of Etergo
What Etergo Promised To Investors Who Picked-up Stake via Crowdfunding

“Although the first public funding (crowdfunding) happened via Seedrs, the owners of the company later used their own website to gather and raise funds, as they started getting momentum for their brand… Everything was fine until late 2019, and I got some email from the (investor relations) team promising that the scooter would be delivered by March 2020, and then suddenly it was sold to an Indian company by May 2020, and none of us got any such heads, and I learnt from the news itself,” says an Amsterdam-based investor who picked up shares worth 5,000 in Etergo in 2017. The investor does not wish to be identified.

A copy of the prospectus issued by the company and reviewed by Inc42 reveals that Etergo was valued at north of 65 Mn in March 2019. This was more than double the valuation the company had in 2017, during its first crowdfunding campaign. Before the end of 2019, its share was reportedly priced at 0.40. But after the buyout, the per-share price came down to 0.0179986, according to emails sent to Etergo investors in May 2020. It essentially means investors lost nearly 90% of their original investments.

Ola Electric Etergo Email To Investors
Investor Announcement Sent To Etergo’s Shareholders After Ola’s Acquisition In May

The email also mentioned that they might redeem their shares at €0.0179986 per unit, which according to Inc42’s estimates, values Etergo at around 3.75 Mn after the Ola buyout. The shareholders with whom Inc42 spoke also point out that they are now being forced to redeem their shares, and they do not have an option to renegotiate the price. 

According to the email exchanges between Etergo and two different shareholders, which have been reviewed by Inc42, the Dutch startup has also stated that investors do not have an option to hold onto their shares or convert those into equity shareholding in Ola Electric.

“The company (Etergo) let itself be tied into a negotiation with a potential investor that waited until the cash ran out to pick up the pieces out of the rubble for near to nothing. And (the) management is retained and properly incentivised for the next run. So, early investors lost nearly all,” says one of the early investors mentioned above.

Before Etergo conducted its second crowdfunding campaign in March 2019, its investment prospectus clearly laid at least 10 pages of “risk factors” due to which the share price could be affected leading to erosion of the original investment value. These included market, financial, and technological risks. However, the 6,000 lot of investors who placed their trust on the Etergo brand probably didn’t expect an acquisition to wipe out their share value.

Etergo App Scooter Prospectus
Risk Factors Mentioned On Etergo’s Original Prospectus Issued To Potential Investors in March 2019

Inc42 has also reviewed several email exchanges between retail investors and an email by Etergo. The latter clearly states that the shareholders who purchased equity in Etergo via the STAK structure are minority shareholders. Hence, they do not have any say on the acquisition.

“…It is important to note that Stichting Administratiekantoor Eterrgo II (STAK), as a minority shareholder, was not in a position to help negotiate a higher purchase price. It is OLA who made the final offer which was formally approved by the shareholders to prevent bankruptcy. The STAK had no other option but to participate in the transaction…The shares have been transferred to OLA. It is OLA who paid the STAK and other shareholders the purchase price of 0 .0179986 per share,” reads another email sent to one of the investors who purchased shares in Etergo through crowdfunding.

The email further mentions that cofounders Rosier and Flipse have decided to waive their right to consideration for their shares in Etergo. It means the cofounders have waived their shares in Etergo and distributed those in the STAK pool — the entity that holds the stake of the minority shareholders. 

“To mitigate some of the losses made by the investors, the founders, Rosier and Flipse, have decided to waive their right to consideration for their shares in Etergo. These amounts have been distributed pro-rata among other shareholders on a fully diluted basis, resulting in an effective share price of 0.0179986 per share,” states the earlier May 2020 email sent to investors.

Will Etergo’s Investors Weigh Heavily On Ola?

Even as Etergo is at loggerheads with its minority investors, it is important to ask: Who wins this game? A Dutch startup that spent three years of engineering and development efforts and marketing and sold its entire shareholding to Ola Electric for 6% of its original valuation of 65 Mn? Or is it Ola that had gone window-shopping in Europe and returned to India with a cheap deal? 

The Bhavish Aggarwal-led company has just been handed over an e-scooter prototype ready to go for manufacturing on a boilerplate, and according to its statements to the Press, Etergo founders, Rosier and Flipse, will continue to work under Ola’s management. However, it is still not clear if an actual e-scooter will hit the market within the stipulated time frame. Ola declined to comment on a questionnaire sent by Inc42.

According to a senior partner at a Netherlands-based venture capital firm, who is aware of Etergo’s operations, the startup was looking for a buyer since the beginning of 2020, especially after the App Scooter’s certification from automobile regulators was delayed. “The firm spent most of its money on getting its prototype right. But it fell short of cash when it was production time, and hence, had to shop for a buyer. By then (early 2020), the Covid-19 pandemic was sweeping through Europe and selling the company at the right price turned out to be an impossible task,” he tells Inc42, requesting anonymity. His VC firm has also made several investments in the mobility sector across the European Union.

“What has happened at Etergo mostly happens when too many investors put in their money via crowdfunding,” he adds. “These investors did not understand all the business risks involved and only hoped they would be the first ones to get the App Scooters. But with the ‘upcoming’ lawsuit in Europe, Ola may not want to deal with the regulators there. So, the company has rushed to pay the money back to investors, especially as the deal looks like a sale to prevent bankruptcy,” he said.

Etergo already had a pre-money valuation during its two crowdfunding rounds. But when Ola acquired the company, the same retail investors who took part in the crowdfunding rounds were forced to sell back their shares at a lower price. It has happened because the people who purchased shares via the STAK system do not have voting rights. Hence, the decision made by the majority shareholders – founders and promoters – becomes final.

“These investors (who purchased shares via crowdfunding) are basically minority shareholders, making up less than 25% of the company. Usually, in a buyout, to prevent bankruptcy as seen in the Ola-Etergo case, the minority shareholders directly follow the decisions of majority shareholders and have no say in the acquisition. It also means these minority shareholders cannot block the Ola-Etergo transaction or negotiate a new price, unlike the public stock market. As Etergo could not deliver a single scooter in the past three years, the value of the company is going down. So, the value of its shares is also erased,” the VC mentioned above adds.

“If you are making an acquisition where there are minority shareholders, they should get the same price per share just like the majority shareholders even under the STAK model. However, this crowdfunding feature can be misused as STAK shareholders have no voting rights. Whether or not Ola-Etergo misused this clause is subject to a debate,” says a Bengaluru-based lawyer who advises companies on funding and mergers and acquisitions, and does not want to be named.

Ola Electric Etergo Timeline

The Road Ahead For Ola Electric

Although reports in the Indian media claim that Ola Electric is prepared to ship the much-awaited App Scooters to Europe and India by early next year,  Etergo’s retail investors, who spoke with Inc42, say the company has not communicated any such plans. In fact, the last email communication (November 2019) to investors mentions that “with the production line being set up, the goal is to manufacture the first batch of early Dutch investor editions in February and then deliver these in March 2020”. But just months after this timeline passed, Etergo became an Ola company. 

EV industry experts and analysts further point out that regulatory certification is not the only hurdle Ola will have to face when it sets up its manufacturing unit in India. The company will have to find a way to source Lithium-Ion batteries without depending too heavily on Chinese manufacturers, who are now facing pushback from Indian businesses. Due to the current geopolitical situation, the Indian company is in talks with battery cell manufacturers such as Bosch and Samsung so that it can locally assemble these batteries, according to a Mint report published in September 2020.

“It is true that China governs the majority of the lithium-ion reserves, just like it does in the solar cell segment. But the supply of cells may soon come from places like Taiwan, Japan, Canada, the US, Chile and even Australia. Moreover, Indian companies like Tata Chemicals and Adani are also coming up as cell manufacturers,” says Chinmoy Mallick, Head, M&A and Strategic Alliances, at VSL Ventures that funds startups in the IoT (Internet of Things) and EV segments.

However, Ola Electric is a company that has puzzled many experts and investors. Launched in 2017, it has raised more than $300 Mn and become a unicorn, thanks to two rounds of funding. But as of now, there is no tangible product on the ground. The EV arm started with a pilot in Nagpur in late 2017 with e-rickshaws and their charging points. But the project came to a grinding halt in 2018 due to multiple delays and the drivers concerned returned the vehicles. Despite these issues, the startup has raised equity funding from top investors, including Japanese conglomerate SoftBank, parent company ANI Technologies, Hyundai Kia and Ratan Tata, among others. 

However, the steady exodus of cofounders and senior executives does not bode well for the company. 

Ankit Jain, a cofounder of Ola Electric, stepped down in August 2020, three months after Ola laid off 1,400 employees as revenues were badly hit by the coronavirus-induced crisis. Another co-founder, Anand Shah, also resigned from Ola Electric in August last year, according to an Economic Times report. Ola Electric’s chief business officer Sanjay Bhan also left in July this year. 

Moreover, this is not the first time when Ola has acquired a company for cheap and tried to turn around its operations. In January 2018, Ola acquired Foodpanda India from Germany-based Delivery Hero Group for about $31.7 Mn. The acquisition, which took place in late December 2017, marked Ola’s return to India’s online food aggregation and delivery space after its first attempt Ola Cafe was shut down in March 2016. But after many failed attempts to break into the food delivery and take on UberEats, Foodpanda India was laid to rest just 18 months after the acquisition. And hundreds were laid off.

Etergo’s App Scooter may seem like a done deal. But the target company’s blemished history of fundraising and the upcoming lawsuit by (minority) shareholders in a European court may weigh heavily on the Indian company. In fact, tougher questions must be asked right now before Ola lands into a legal quagmire and loses its reputation globally.

To start with, is Ola aware of Etergo’s handling of its early investors and the discriminatory share pricing to which they are subjected? Did it conduct its due diligence well before lapping up the steal deal? Has the Indian company played any role in the erosion of Etergo shareholders’ wealth? Can it ensure that they get their justified dues as well as the EV two-wheelers promised by the Dutch company? It sounds like a tall order, but a local company’s global dream must live up to global expectations not only in terms of the products it sells but also in terms of business ethics. 

Maybe Ola saw this coming, but clearly, there is a lot at stake with this acquisition. The Etergo buyout is probably the only chance for Ola Electric to justify its billion-dollar valuation and deliver to the world. The only caveat here: If success is a journey that is achieved by taking small steps over a period of time, failure, too, is an outcome of small oversights in the wild pursuit of one’s dreams.

The post Ola’s Etergo Acquisition: Global Dream Faces Lawsuit, Angry Investors appeared first on Inc42 Media.

Exclusive: Radio Technology Startup Inntot Bags Funding From Unicorn India

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Exclusive: Radio Technology Startup Inntot Bags Funding From Unicorn India

Kochi-based radio technology company Inntot has raised an undisclosed amount from Unicorn India, who had led the company’s seed round in 2018. The recent fundraiser is a part of the bridge round before the company can open up its Series A round.

Inntot had planned to raise its Series A funding round this year, however, the plans have been kept on the backseat due to the pandemic. The company plans to use this funding for product development, business development and financing their solutions that are underway.

The company aims to compete with other big players in the domain like New Delhi-based OEM manufacturer Communications System Inc, which was launched in 1993.

The company has four patents two in India and two in the US. The company plans to raise Series A funding to file for more patents and clock in more royalty deals.

The investment was a part of Unicorn India’s INR 400 Cr Fund II, and which has invested in insurtech startup Fedo, blockchain startup ChitMonks, IoT startup Probus Smart Things and others.

Overall, fund II had announced its first close at INR 90 Cr, and has invested in six startups so far. It focuses mainly on Pre Series A and Series A investments rounds across sectors such as SaaS, fintech, healthtech, robotics, gaming and digital content.

Inntot Technology was founded in 2014 by two former Wipro employees Prasanth Thankappan and Rajith Nair to revolutionise the way radio content is consumed in India. The company develops software solutions to negate the use of specialised hardware chipsets with an aim to reduce the cost of digital radio receivers for original equipment manufacturers (OEM).

The company currently has three types of clients, namely home consumers, OEMs of solutions for automobiles, and smartphone manufacturers. The company’s biggest client is the automobile sector, and includes names like Faurecia-owned car navigation unit Clarion (formerly owned by Hitachi), and South Korean chop market Telechips.

As Covid-19 may pose personal vehicles as a safe bet, the company has started noticing an increase in queries from this segment. Besides, digital radio may also become an effective solution for remote education.

Commenting on the latest fundraise, Anil Joshi, managing partner of Unicorn India, said, “At the time of [first] investment the company was at the development stage and since investment, the company has rolled out products which have been deployed in many cars. The company works with many OEM for leading car companies. Now in the process of deploying technology in a million cars.”

How Does Inntot Work?

A normal analog radio works on Amplitude Modulation (AM) and Frequency Modulation (FM). AM is the first mention used for the audio radio transmission in All India Radio (AIR) for news and bulletins, it has a range of only 60 Kms which creates dropouts on highways, underground structures and remote areas.

Meanwhile, FM, which is used by current channels like Radio Mirchi and Fever 104, has limitations in content broadcasting and the number of channels.

In comparison to analog transmission, digital radio offers many advantages. For instance, it is possible to have 3-4 channels on a single frequency carrier depending if it’s FM or AM broadcast respectively. The digital radio technology will help broadcasters in the transmission of different kinds of data together such as music, news and traffic updates, and graphics-based advertisements.

Beyond entertainment, digital radio can also act as an emergency warning system that will give alerts in both switched-on radio or the one in the standby state. It will continuously issue warnings to listeners within a range of 300 km in the event of natural disasters.

Inntot Technologies provides software-enabled IP solutions for Digital Mondiale (DRM) receivers enabled receivers and ISDB-T (a technical standard for digital TV broadcast) Digital Television paving the way to digital radio transmission.

The company is facilitating software-defined radio (SDR) based DRM+ Receiver solution, wherein the software can be embedded directly to the fixed receivers, automotive/in-car radios, smartphones, as well as USB dongles.

These SDR solutions cover several digital radio broadcast standard and geographies, namely DRM in India, Russia, South Africa and Indonesia; DAB/DAB+ (Digital Audio Broadcasting) in Europe, Australia and Middle East, HD-Radio in USA, Canada and Mexico; and CDR (Call Detail Record) in China.

Inntot’s software solution can also help OEMs, radio receiver manufacturers, and semiconductor chip manufacturers in doing away with recurring costs of the demodulator chip that will reduce the bills of material. It will also help in easy portability on platforms like Android, system integration and field testing.

The post Exclusive: Radio Technology Startup Inntot Bags Funding From Unicorn India appeared first on Inc42 Media.

Exclusive: Data Of 1.4 Mn Registered Users On IIMjobs Allegedly Leaked On Dark Web

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Data Of 1.4 Mn Registered Users On IIMjobs Leaked On Dark Web

The data of 1.4 Mn registered users on jobs listing website iimjobs.com was allegedly leaked on the dark web on Monday (November 23). 

Inc42 has learnt from cybersecurity researcher Rajshekhar Rajaharia that the data, sized 50 GB, was being sold on a dark web marketplace by an anonymous user for as low as INR 370. 

Screenshots of the breached database accessed by Inc42 indicate that the leaked data is sensitive, as it includes the names, phone numbers, email addresses, exact location of users (latitude and longitude), their industry of work and links to their LinkedIn profiles. 

The leaked data also includes users’ encrypted passwords. However, Rajaharia said that the passwords had been encrypted using the MD5 message-digest algorithm, which is an outdated method of data encryption and can be easily decrypted by hackers today.

“Cybersecurity has moved beyond MD5, which was used only 10-15 years back. Most websites today prefer to use more sophisticated algorithms for data security and encryption,” said Rajaharia.

IIMjobs is an online recruitment platform for middle and senior management positions in India. It claims to have more than 1 Mn registered users and says that it works with 30,000 recruiters from sectors such as banking and finance, consulting, sales and marketing, human resources, information technology and operations, BPO and legal to help them recruit talent. 

IIMjobs was founded by Tarun Matta in 2008. Last year, Info Edge India, a publicly listed online classifieds company which operates popular portals such as Naukri.com, jeevansaathi.com and 99acres.com, acquired Highorbit Careers, the parent entity of iimjobs.com and hirist.com, the latter being a classified website for jobs in the IT industry. The deal was worth INR 81 Cr. 

Inc42 has learnt from Rajaharia that the leaked data is from last year, as the most recent ‘date of registration’ for a user whose data has been leaked in the MySQL database is someday in January 2019, four months before iimjobs was acquired. 

It is apparent that the company has since updated its security procedures, also suggesting that it’s aware of the data leak that has happened. Notably, all registered users on iimjobs, upon keying in their login details on the portal, are required to reset their passwords through a reset link sent to their registered email ids. 

When asked about the data breach, Info Edge said that it is investigating the platform and keeping a close tab on reports, adding that it would take some time to deep dive into the alleged problem.

Cyber Attacks On Indian Platforms

Recent months have seen several Indian companies, such as Google-backed hyperlocal delivery platform Dunzo, online grocery delivery service BigBasket, popular India food manufacturing company and restaurant chain owner Haldirams, Indian edtech platform Edureka, online travel marketplace RailYatri and even the personal website of Prime Minister Narendra Modi suffer cyber attacks, with the data on these websites being subsequently leaked on the dark web, where it was available for purchase. 

In May this year, users’ data from another Info Edge-owned jobs portal Naukri.com had been leaked on the dark web.

Vineet Kumar, the founder of Cyber Peace Foundation (CPF), a think tank of cybersecurity and policy experts, said that with increased digitisation of companies and their processes, data has become the new oil. 

Hence, anti-social elements are drawn to hacking and other sophisticated practices to launch modern-age attacks on people and countries as such. 

“You get good money when you sell users data on the dark web. Hackers discovering vulnerabilities and using SQL injections to pull entire databases remains a common practice for hacking,” Kumar told Inc42

Kumar added that as Indian startups scramble to lure investors and raise growth capital in an intensely competitive market, ensuring the security of users’ data is the last of their concerns. 

“You’ll see a lot of these Indian startup platforms get hacked in the near future. Hackers know that lapses will happen here since cyber hygiene isn’t being maintained by these companies,” he said. 

Government data shows that in 2019 alone, India witnessed 3.94 lakh instances of cybersecurity breaches. In terms of hacking of state and central government websites, Indian Computer Emergency Response Team (CERT-In) data shows that a total of 336 websites belonging to central ministries, departments and state governments were hacked between 2017 and 2019. 

According to Nasscom’s Data Security Council of India (DSCI) report 2019, India witnessed the second-highest number of cyber attacks in the world between 2016 and 2018. This comes at a time when digitisation of the Indian economy is predicted to result in a $435 Bn opportunity by 2025.

The post Exclusive: Data Of 1.4 Mn Registered Users On IIMjobs Allegedly Leaked On Dark Web appeared first on Inc42 Media.


Govt Plans To Set Up Infra For 69,000 EV Charging Stations Across India

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Govt Plans To Set Up 69,000 EV Charging Stations Across India

As part of the government’s bid to make India an electric vehicle nation by 2030, Union transport minister Nitin Gadkari has announced setting up infrastructure for one e-charging kiosk at around 69K petrol stations across India.

Addressing a virtual conference, Gadkari said the government had taken a slew of measures to promote EVs like cutting GST to 5%, allowing delinking of battery cost of 2-3 wheelers from vehicle cost as it accounts for 30% of the cost.

In February 2020, the government had given an in-principle nod to firms, including NTPC, EESL and REIL, to set up 2,600 EV charging stations.

During the meeting, Gadkari emphasised the importance of making flex engines that could use petrol or ethanol/CNG as fuels.

“Our auto industry has made significant strides in terms of the development of different designs and models, robust R&D, huge market, stable government framework and bright and young engineering minds. India already is the largest manufacturer of two-wheelers in the world,” he added.

In October, the Department of Heavy Industry had floated an Expression of Interest (EoI), inviting proposals from government organisations, Public Sector Undertakings (PSUs), state-owned distribution companies and other public and private entities to build and operate charging infrastructure for electric vehicles (EVs). 

Under Phase-II of the FAME India Scheme, the Government of India (GoI) intends to support the development of EV charging infrastructure by extending capital grants to organisations for promoting the use of electric vehicles. The Centre has approved Phase-II of FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) scheme for three years commencing from April 1, 2019.

According to a MarketWatch report, the charging infrastructure market in India is expected to grow at a compound annual growth rate (CARG) of 40% in the next five to six years. Most industry experts also believe that 40-45% electric conversion by 2030 is a realistic expectation, provided that the infrastructure is created for it.

As per Inc42Plus, to meet the charging requirement for 20 Lakh electric cars, India needs about 4 Lakh charging stations installed by 2026.

The post Govt Plans To Set Up Infra For 69,000 EV Charging Stations Across India appeared first on Inc42 Media.

Payments Banks And The Broken Business Model

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Payments Banks And The Broken Business Model

In January 2014, the Nachiket Mor Committee on ‘comprehensive financial services for small businesses and low-income households’ floated the idea of creating a new category of financial institutions called payment banks (PBs) in its recommendations. The idea behind this new category was to take banking services to the country’s hinterlands with the help of the private sector via a profitable model.

The initial euphoria around the new concept was stupendous. And it was visible in the launch statement of Airtel, the country’s largest telecom player at the time.

“Just like mobile telephony leapfrogged traditional telecom networks to take affordable telecom services deep into the country, Airtel Payments Bank aims to take digital banking services to the unbanked over their mobile phones in a quick and efficient manner. Millions of Indians in rural areas will get their first formal banking experience with Airtel Payments Bank,” said Sunil Bharti Mittal, Chairman, Bharti Enterprises, during the formal launch of Airtel Payments Banks in 2017.

Mittal’s vision was in line with other PB peers who believed that the new initiative would give them access to millions of small-ticket financial customers, paving the way for financial inclusivity and a larger payments economy. And there would be more leverage when digital outreach reaches the grassroots and makes a massive dent in a cash-loving rural economy. An M-Pesa dream of sorts within a banking format. Four years down the road, the hype and the vision around PBs have taken a severe beating, and the revenue crunch is choking them.

Too Many Stumbling Blocks

In August 2015, the Reserve Bank of India (RBI) gave in-principle approval to 11 applicants to set up their payments banks by February 2017. In November 2016, Airtel launched the first payments bank of India even as the country was reeling under demonetisation. It was followed by IndiaPost and Paytm payments banks in the next six months.

But all was not well in the payments bank space. Out of the 11 applicants who sought PB licences from the RBI, Cholamandalam Investment and Finance, Tech Mahindra and a consortium, including IDFC Bank, Telenor Financial Services and billionaire Dilip Shanghvi (in a personal capacity), dropped out by late 2016. Aditya Birla Idea Payments Bank shut shop in September 2019, 20 months after commencing operations.

The PBs which have remained operational include Airtel, IndiaPost, Fino, Paytm, NSDL (National Securities Depository Ltd.) and Reliance Jio. Of these, Paytm Payments Bank has the highest revenue and financial performance metrics backed by substantial funding in the Paytm ecosystem. Reliance Jio, another telecom major, entered the space with a 70:30 partnership between Reliance Industries Ltd (RIL), the parent company, and the State Bank of India.

Payments Banks in India : Status Check

The G-Sec Hurdle

A look at the investment structure and the revenue stream will further clarify what has gone wrong with their viability. For starters, the minimum paid-up equity capital requirement for each payments bank is  INR 100 Cr. They are required to maintain 75% of their deposits in government securities, or G-Secs, for a year and only 25% of the deposits could be parked with small commercial banks. But there is a cap on user deposit here.

Each customer can only deposit a maximum of INR 100K in his/her PB account, which means the total deposit would never reach the levels of a traditional bank and the overall earning on the deposit would be much less. The mandatory G-Sec deposit for a specific period does not help either, thanks to steadily dipping interest rates. The yield on one-year G-Sec was 7-8% for the past three-four years, but in the past few months, it has fallen below 5.5% and will further squeeze their earnings.

The payment banks’ customised service bouquets cannot rake in the moolah too. PBs are allowed to offer remittance services as well as other day-to-day banking services, including deposit charges as applicable, mobile payment, doorstep banking, bill payments, fund transfer across the interbank payment network, withdrawal via ATM/debit cards and shopping at merchant PoS. Additionally, they can deal in third-party financial products such as insurance, carry out transactions for other banks who deploy their business correspondents (BCs) and undertake non-risk activities such as Aadhaar enrolment or become members of clearing houses. PBs charge up to 1% commission on each transaction, but unless it is done on a massive scale, the revenue stream will remain weak.

Why Lending Matters

What hinders payments banks most is the underlying no-lending business model – they cannot lend money from their deposits, and hence, they have no scope to earn high interest on a user’s borrowed capital. Credit as a product does not exist for PBs, placing them at a great disadvantage against commercial banks. The idea is to protect them against non-performing assets (NPAs), a major bane of the Indian banking ecosystem in the current decade, but it has taken its toll on the revenue stream.

A weak revenue stream and consequential losses incurred by most of the PBs (more on that later) are bound to hinder customer acquisition at scale. The PBs entered the market with high-interest rates on deposits as their operational costs were estimated to be low, given the low-cost infrastructural footprint and greater usage of technology. In 2017, Fino, Airtel, Paytm and IndiaPost were offering 4%, 7.25%, 4.5 and 5.5%, respectively, which proved to be quite lucrative.

As of November 2020, the big four are offering 2.75%, 2.5%, 2.75%, and 2.75%, respectively as they sought to safeguard their margins, even below what most banks pay for low-value savings deposits. The slide in interest rates may easily lead to a dwindling customer base and a major loss of business as ‘scale’ lies at the heart of payments banks. They must grow their users and leverage low-value transactions to the hilt in a bid to survive.

UPI Vs Payments Banks

Payments banks are also facing stiff competition from totally unexpected quarters. The Indian payment ecosystem was quite different in 2017. India was still reeling under demonetisation; the Unified Payments Interface was yet to catch the fancy of the masses, and the wallets ruling the digital payment space were plagued by regulatory headwinds. None of the PB aspirants was prepared for the sudden popularity and the wide adoption of the UPI in the next couple of years. Its seamless interoperability, stringent security and huge cashbacks from third-party payments apps on the platform soon made UPI the star of digital transactions. And much like the wallets, the transaction side of the payments banks has been hugely impacted by the third-party UPI apps ecosystem.

Unlike payment banks, the UPI has a simple interface that is not subject to banking regulations. It is a single-tap solution that a user can directly initiate without the need for KYC. In contrast, the PBs have targeted the unbanked millions, especially in the non-urban areas, and aimed to monetise their vast user databases for credit risk profiling, insurance sale and other purposes. The telecom and fintech companies in play also wanted to leverage and grow their existing databases. But it is unclear whether the PBs are exploring this possible usage of bank data or have a long-term analytics strategy in place to boost their revenues.

“The payments bank model did not take off the way it was intended because they were subject to regulations on risk and securities much like other banks, but no revenue model exists for them. In a way, UPI was able to tap into that space because it was much more technology-driven,” Shilpa Mankar Ahluwalia, who leads the fintech practice at law firm Shardul Amarchand Mangaldas & Co told Inc42 in a recent interaction.

Interestingly, most of these fundamental constraints, especially the non-lending parameter, were known to the stakeholders from the beginning. Experts, however, say that most of the licensees wanted to come in for a different reason. Eventually, they were planning to expand to mainstream (banking) roles and building the expertise and a captive user base required for the same. For telcos, it was all about ensuring better engagement with their subscriber base and providing complementary services.

“The PB model was an experiment that did not work, and the RBI has, in some ways, accepted it by allowing PBs to apply for SFB licensing after five years of operations,” says Tamal Bandyopadhyay, a veteran banking journalist and senior advisor to Jana Small Finance Bank.

In fact, an internal report by the RBI working group last week has recommended that a PB should be allowed to apply for a small finance bank (SFB) licence after three years of operations instead of five years as mandated earlier this year. Unlike payment banks, SFBs cater to small borrowers and can lend up to INR 25 lakh (subject to RBI norms). The report also recommended that NBFCs with an asset size of INR 50,000 Cr and above, including those which are owned by a corporate house, may be considered for conversion into banks subject to completion of 10 years of operations. Is it one way of resurrecting the fast-dwindling payments banks?

What Is Happening On The Ground?

Going by the latest policy twist by the RBI, things may not look up for the payments banks anytime soon.  A deep dive into operational costs and earning trends would throw light on what has been happening on the ground.

According to a December 2019 report by the central bank, in spite of an improvement in net interest income and non-interest income, a rise in operating expenses resulted in overall negative profits for PBs in FY2018-19. The limited operational space available to them and the large initial costs involved in setting up the infrastructure would take them longer to break even. However, they have managed to expand their customer base.

Select Financial Ratios of Payments Banks

Understandably, PBs must invest to expand their reach across the payment landscape, but their revenue structure is not in sync with it. According to RBI data for FY2018-19, the ratio of operating expense to total income was around 1.24, showing high input cost, even though the majority of the PB revenue comes from low-return SLR (statutory liquid ratio) investments in G-Secs. SLR investment indicates the proportion of deposit a bank has to keep in assets (gold and government bonds and securities) as specified by the RBI.

As of FY2019-20, Fino, Airtel and Paytm PBs reported revenues of INR 689 Cr, INR 474 Cr and INR 2,100 Cr, respectively. As consolidated revenue and profit data for payments banks are not available, the select financial ratios provided by the RBI demonstrate the PBs’ return on investments in the first two years of operations. Interestingly, Paytm PB reported a profit INR 29.8 Cr, up 55% year on year while Fino PB said it had turned operationally profitable in FY20.

“PBs hoped to reach a scale that would help them earn from transaction charges. But that scale has not been achieved yet even though the scope exists. They have been working aggressively on cross-subsidisation solutions like insurance products, but they were disadvantaged right from the conceptual stage,” says a fintech veteran who does not wish to be quoted.

Seema Prem, cofounder and CEO of FIA Technology Services, which deploys BCs for different banking entities, notes that the limited products offered by PBs also limits the revenue opportunities for the agents. “As traditional banks offer credit, they need additional services for EMI, loan processing and recovery. All of these increase the revenue potential for BCs working with those banks. While public-sector entities have a social responsibility towards BCs operating in far-flung regions, private players in the financial services space feel less inclined to ensure the same,” she says.

Business correspondents are bank representatives (either on direct payroll or via agencies) who help account holders in unbanked regions open accounts and transact for a stipulated fee commission.

Suhasini Verma, Associate Professor at the School of Business & Commerce, Manipal University, sums up the situation well. “As of now, the payments banks have wafer-thin margins. They have to keep a large part of their funds (75%) in G-Secs and the remaining with small commercial banks. The majority of their revenue was supposed to come from remittances, insurance and other financial services. But the competition is tough and it is difficult to earn a significant chunk of revenue from those segments. So, even a government-owned entity like India Post PB is struggling in spite of high transaction volumes,” she said.

Payments Banks Playing To Their Strengths

As Indian payments banks fail to find their revenue dreams, most of them are trying to leverage their core strengths to reach the market. For instance, each operator in the ecosystem is servicing different financial products. Some have enabled PoS transactions or got into FasTAG partnerships or focussed on utility payments in rural areas. But these are only a few scattered solutions and not well-orchestrated, long-term strategies.

Take, for instance, IndiaPost PB (IPPB). Based on its massive presence in 650 districts and among 3.5 crore customers, the IPPB has set up a full suite of banking services and strong linkages with all interoperable payment and settlement systems. It is now focussing on pan-India G2C (government-to-citizen) payments, especially rural DBT (direct benefit transfer) disbursements under the Pradhan Mantri Garib Kalyan Yojana.

Unlike other payments banks, IPPB does not use PoS devices or issue debit cards. Its local agents – postmen, postwomen or BCs, initiate transactions by taking a customer’s biometrics and Aadhaar number which are stored in a QR card. Unlike debit cards which need personal identification numbers (PINs) for payment initiation, QR cards use the QR code to scan and pay. In spite of these benefits, the bureaucratic weight has held IPPB back from utilising its full potential and taking digital payments to remote regions, say industry experts.

In contrast, Fino PB has utilised its massive BC network to reach out to people. “We cannot sell Mercedes to a customer who wants a Maruti,” says Rishi Gupta, managing director and chief executive officer of Fino.

“The focus has been on distribution in a way that could compete with our telecom peers, and we did it without any fanfare,” he says, explaining the BC-first approach that Fino has taken to expand its market presence.

In Fino’s case, experts see a good model that utilises the existing BC network. But it has not helped the company realise the ‘digital’ vision of the payments banks.

Gupta, however, thinks that the ability to enable microcredits will most certainly give it an edge in the PB model. “With our deep BC penetration across the country, we are poised to take care of recovery as well. We are not a small finance bank, but we want to use our infrastructure to complete the portfolio of solutions with microcredit for our last-mile customers if the RBI allows it,” he says.

Most fintech experts concur, saying both IndiaPost and Fino have demonstrated the best use cases in the current PB ecosystem.

Both Fino PB and IPPB have enabled an Aadhaar-enabled payment system (AePS) for maximum convenience. Airtel PB has also set up a cardless cash withdrawal system called Instant Money Transfer (IMT), which can be used via its mobile app. Apart from this recent e-PoS initiative, its AePS can be used to transact at micro-ATMs manned by BCs. During the Q3 earnings call of Bharti Airtel, the company indicated new initiatives for the PB business, which would be rolled out soon. With a network of more than 10 lakh retailers, Airtel PB has the most extensive merchant reach in the country.

Paytm, on the other hand, has several payment solutions in its portfolio. For the PB business, the company has roped in a number of big-ticket partnerships, including tie-ups with major auto manufacturers for FASTags under the National Electronic Toll Collection programme. But a large number of products across its ecosystem often dilutes Paytm’s PB performance.

“Today, only Paytm’s payments bank appears to be a success story with profits coming in, but the company is doing so many other things to achieve this. In fact, the customer acquisition cost is huge in this sector,” says Verma of Manipal University.

Will The Fault Lines Widen?

According to independent fintech consultants, each payments bank seems to be targeting different areas and business/operational models. But these performance metrics have not necessarily served the target PB customers (read the rural unbanked) as expected. According to a report compiled by Dvara Research in September 2020 and based on the RBI data for FY2018-19, payments bank accounts are overwhelmingly used for transactions instead of deposits.

Transaction Vs Deposit volumes of Payments Banks

The high volume and value of transactions compared to deposits clearly show that PB account holders have been transacting more than depositing in these accounts, which beats the fundamental principle of consumer banking – making it easier for people to save and invest. Currently, RBI data on the number of accounts and deposit balances in payments banks is not available.

“The PBs might not be able to viably reduce interest rates further as they operate on tight margins due to the regulatory requirement (75% G-sec deposits). Therefore, the PBs’ business model is not favourable to fulfilling the objective of providing small savings accounts to the underserved.  However, given the high number of transactions against the total deposit amounts held at PBs compared to that of SFBs or select SCBs, it can be concluded that the users of PB accounts have employed them not as a store of value but as a checking account for undertaking payment transactions with a formal bank,” write Amulya Neelam and Anukriti Tiwari of Dvara Research.

The report also notes that transaction-focussed payments bank accounts can still exist alongside deposit-focussed accounts of full-sized banks.

According to banking experts, PBs either need to align themselves with mainstream banks or introduce customer-centric solutions (again to a non-smartphone using base) if they want to build a sustainable future.

Vijay Mani, Partner at Deloitte India and head of digital payments, digital banking and other digital services, notes that most payments banks sell multiple products — their own payments products as well as other products like insurance from partners. But in many of these product markets, the competitive landscape has changed since the inception of PBs. They now face very focussed, aggressive and often deep-pocketed competitors such as the UPI payment service providers or large merchant acquirers/aggregators (say, Billdesk). The latter has been able to grab bigger market shares than PBs in many of those market segments.

“Payment banks may need to re-examine their customer and merchant acquisition/retention strategies and associated revenue models in the light of the changing competitive landscape. Lending can be a useful element in this effort, but it should not be seen as a panacea; it has to go hand in hand with customer focus,” says Mani.

However, the central bank’s proposal for setting up a National Umbrella Entity (NUE), which will work in parallel with the National Payments Corporation of India (NPCI) to expand the digital payments ecosystem, could be a positive development for payments banks. As it will be a for-profit entity (or entities, depending on the final structure), it is an opportunity for PBs to seek out profitable use cases. Think of real-time cross-border remittances, micropayments (beyond what the UPI is addressing), payments to a long tail of billers and so on, says Mani. The headroom for growth is large enough to enable payments banks to grow with others in the market if they clearly define their place in it. For instance, various semi-urban/non-urban and some urban customer segments are still underserved.

“We have more than 500 Mn smartphone users (and at least a couple hundred million more addressable feature phone users), but maybe no more than 175 Mn users of mobile payments. The next five years will see the market aggressively realising this growth potential. Therefore, it is going to be a critical period for payments banks,” says Mani.

The post Payments Banks And The Broken Business Model appeared first on Inc42 Media.

Spacetech Startup Astrogate Labs Raises Funds From Speciale Invest, Eyes $70 Mn Revenue By 2025

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Astrogate Labs Raises Funds

Bengaluru-based spacetech startup Astrogate Labs raised an undisclosed amount in its pre-series-A round on Tuesday (November 24). The round was led by Speciale Invest. Anicut Angel Fund and SuprValue.vc also participated in the round which saw existing investor FirstCheque.Vc also pitching in.

Founded in 2017 by two IIT alumnus and former Team Indus engineers Nitish Singh and Aditya Kedlaya, Astrogate plans to build an entire chain of optical communication systems to tackle the problem of high-speed communication in space. 

Commenting on the fundraise, Nitish Singh, cofounder and CEO, Astrogate Labs said, “Our focus has been and continues to be on solving the space communication bottleneck. The current fundraise is a validation of our vision. We are overwhelmed by the trust our investors have shown in us.” 

The startup plans to use the funds to launch its flight terminals into space. The company plans to support the growing satellite downlink needs with a network of optical ground stations and in-space relays using the technologies developed in-house amongst other ambitious projects. 

The company, which has raised $750k (about INR 5.5 Cr) in funding so far, is aiming to get $60-70 Mn in revenue over the next five years.

The company also aims to unveil its space-to-ground laser communications link from its smallsat optical downlink terminal onboard a 3U nanosatellite. Astrogate has further plans to establish itself in space-to-space laser links with a subsequent mission.

In satellite communication terminology, the ground station refers to antennas put up on the ground to communicate with the satellite. They typically resemble parabolic dishes deployed at remote sites.

Earlier this year, Astrogate partnered with Momentus, a Space Transportation and Space Logistics company and a graduate of the prestigious Y Combinator program based in Silicon Valley to demonstrate space-to-ground laser communications from its smallsat optical downlink terminal.

“Currently, space systems largely rely on RF protocols for interplanetary, inter-satellite and space-to-ground communication. RF works but is both limiting on bandwidth and expensive. We are excited to partner with Astrogate Labs, which we believe is disrupting the small satellite communication market – by increasing bandwidth 10x+ and reducing cost 10x+. The team has a unique mix of domain strength and tenacity that will get them to space,” said Vishesh Rajaram, managing partner, Speciale Invest.

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Cryptocurrency This Week: Behind The Scenes Of The Bitcoin Bull Run & More

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The Bitcoin bull run is real! It has now stretched on for 112 days, according to industry watchers. But unlike the stock market, where the fluctuations in prices of stocks are directly influenced by events happening around the world, the reasons for a cryptocurrency’s bull run aren’t easily decipherable. 

This is because cryptocurrencies operate independently of the traditional financial system. Hence, events that shape the day for the stock market seldom affect the price of cryptocurrencies. 

According to Sumit Gupta, cofounder and CEO of Mumbai-based crypto exchange CoinDCX, the Bitcoin bull run can be primarily attributed to the cryptocurrency being the preferred choice for new investors and having strong fundamentals. 

Besides, known giants in the payments space such as PayPal and Mastercard also launched crypto offerings for their humungous userbase this year, thus enabling easy access to bitcoin and other cryptocurrencies for those with a sound knowledge of the product. 

Another reason for the Bitcoin bull run was the third halving for the cryptocurrency. Gupta elaborated on the same.

“In May 2020, we also witnessed the third halving, a supply shock event that happens every four years, where the number of daily mined bitcoins gets cut in half. In the previous two halvings too, Bitcoin and the overall crypto market cap rose exponentially, and we are expecting a similar trend. This time around, we are witnessing interest not only from retail but institutional investors globally too,” he told Inc42

Global crypto experts have also tied the Bitcoin bull run to the accumulation of bitcoins by whales i.e. individuals or entities who hold large amounts of the coin for long periods of time, hence playing a major role in price manipulation. In November, analysts have spotted whale clusters, which emerge when Bitcoin whales buy the cryptocurrency at a specific price point and don’t move them. 

According to researchers at Santiment, an on-chain market analysis platform, the current number of Bitcoin whales with at least 10,000 coins is somewhere around 114. 

According to Monark Modi, founder and CEO of Bitex, the UAE-headquartered crypto exchange which recently expanded its operations to India, the Bitcoin bull run is being caused due to increasing investment from institutional investors, investment banks and more importantly payment companies.

“Millennials are already considering Bitcoin as Digital Gold. The financial industry has been quite forthcoming in addressing this changing investment behaviour, be it global fintech like PayPal that has started accepting cryptocurrency on its platforms or an investment bank like JP Morgan Chase, which has adopted blockchain-based interbank payment systems through Stablecoins,” Modi told Inc42

“Judging by this heightened interest towards cryptocurrencies, Bitcoin has the potential to touch $22,000 by coming quarter,” he added. 

While the Bitcoin bull run will no doubt attract new investors to the emerging digital asset class, which has given 130% returns this year as opposed to 30% on gold, its notorious price volatility remains a cause for concern for market watchers. 

Although, Gupta of CoinDCX explained that the price volatility was directly related to the maturity of the Bitcoin technology. 

“Five years ago, Bitcoin was way more volatile than it is today. However, with increased adoption and a growing market cap for the cryptocurrency, Bitcoin will no doubt stabilise. I also expect the ongoing bull run to be more stable than the previous one in 2017,” he said. 

It is worth noting that when there’s an upward movement in the price of Bitcoin, as there is currently, it positively affects the market sentiment towards other leading cryptocurrencies. For instance, Ethereum has also been witnessing an upward trend since the first quarter of the current financial year 2020-21. This is mainly because both Bitcoin and Ethereum have strong fundamentals 

In fact, over the last week, while the price of Bitcoin has grown over 11% to $18,870, the price of Ethereum has grown 22% to $605. 

Nevertheless, Vikram Rangala, chief marketing officer at Singapore-headquartered crypto exchange ZebPay offered a reality check, as well as an investment strategy for the ‘Bitcoin SIP’.

“No one can predict how far a rally can go, so short-term speculation is very risky. However, there is one smart investment strategy: cost averaging for the long term. Buy small amounts of Bitcoin daily or weekly, hold it long-term through the ups and downs, and stick to your buying plan for years, not months. It’s like an SIP for bitcoin,” he said.

“At some point, there is always a correction (fall) in price. Anyone who pretends to know more than this is fooling himself or others. Although, Bitcoin will continue to go up (with periodic corrections) and could easily hit INR 1 Cr by 2030, as our CEO (Rahul Pagidipati) has predicted. Investors should plan in years, not weeks.”

The Bitcoin bull run has also seen the leading cryptocurrency challenge gold as an asset class for millennials in India. Inc42 analysed the development, learning from some of the leading crypto exchanges in India about them seeing increased traction from young working professionals around the Diwali festive season when Indians consider it auspicious to buy gold. 

Moreover, growing interest from global players such as Cashaa, Coinbase and Tim Draper-owned Draper Associates in the Indian crypto market, coupled with the Bitcoin bull run, could help crypto adoption in the country. 

However, market sentiment for crypto in India could come crashing down, the next time speculations about an impending ban on cryptocurrencies in the country start doing the rounds. 

Ultimately, the burgeoning industry will remain at the mercy of news speculations and a confusing regulatory scenario for cryptocurrencies in India, until the Indian government chooses to regulate digital assets.

According to Crebaco Global Inc, a credit rating and complete audit firm for the blockchain and crypto industry, the Indian crypto industry has a potential market size of $12.9 Bn, if the sector is regulated.

Prices

By the time of writing, Bitcoin was trading at $18,870, registering an around 11% increase from last week’s price of $17,029. Its market cap was $350 Bn.

Ethereum was trading at $605, a 22% increase from last week’s price of $469. Its market cap was around $68 Bn. 

Other News 

Why Bitcoin price just hit $19,000 for the first time in 3 years

The price of popular cryptocurrency Bitcoin continues to surge, currently trading at just below $19K. Experts in the space are expecting the price to cross the $20K mark this year itself. But what are the reasons for the same? According to a Cointelegraph story, whale accumulation, decreasing exchange supply and explosive volume trends are contributing to the BTC’s buoyant rally. Read the full story here

Japanese financial giant SBI debuts Bitcoin lending service

Japanese financial giant SBI Group is introducing a cryptocurrency lending service through its crypto-related subsidiary, SBI VC Trade. According to an official announcement on November 24, the new crypto lending platform will allow users to lend their crypto to SBI and earn interest at a rate of 1% with taxes included. You can read the full Cointelegraph story here

The post Cryptocurrency This Week: Behind The Scenes Of The Bitcoin Bull Run & More appeared first on Inc42 Media.

Personal Data Of 2.8 Lakh WhiteHat Jr Students, Teachers Exposed

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WhiteHat Jr Data Leak: Over 2.8 Lakh Students, Teacher Impacted

Personal data of 2.8 Lakh students and teachers enrolled on BYJU’S-owned online coding platform WhiteHat Jr was reportedly exposed for an undetermined time due to multiple vulnerabilities of the company’s server till mid-November. WhiteHat Jr has reportedly fixed the vulnerability after it was brought to its notice, however, it is as yet unclear whether any of the user data was compromised when the flaw had not been fixed.

According to a cybersecurity researcher, who spoke to The Quint anonymously, the BYJU’S-owned company was using Amazon Web Services (AWS) servers and the S3 buckets, where data is stored, were left open, allowing access into folders containing documents, files, data and videos. Typically, these folders are stored are only accessible by authorised company personnel with a username and a password.

WhiteHat Jr told the Quint, “Based on the information received from responsible disclosures made to WhiteHatJr about possible security vulnerabilities, we reviewed our setup and patched the identified vulnerabilities… We always strive to improve our customer experience and performance of the application, and to support this we use various industry-validated tools and software.”

Inc42 has reached out to WhiteHat Jr and AWS to confirm the validity of this report as well as whether any user data might have been compromised in the time before the vulnerability was patched. The article will be updated to include the response from both the companies.

The database which was left exposed included the personal data of thousands of minors, their parents and guardians, as well as teachers along with documents related to WhiteHat Jr, which is currently embroiled in multiple court cases. Additionally, internal company documents related to employee salaries as well as dozens of recorded videos of the classes being conducted on WhiteHat Jr’s platform.

Responding to queries of data collection, WhiteHat Jr had told the publication that the company stores basic customer data such as name, contact information, projects and curriculum-related info, and pictures. The data collected is stored with the required consent of the party involved. The company has emphasised that it does not have here are no other personally identifiable information (PII) of its customers, employees, suppliers collected/ processed by WhiteHatJr on our applications.

The researcher had reached out to WhiteHat Jr on October 26, but received no response. The researcher then mailed the company CTO Pranab Dash on November 19 and 20, and received a response on November 21.”I got a response from the company’s CTO Pranab Dash on 21 November who acknowledged the vulnerabilities and informed me they had been taken care of,” the researcher told The Quint, which had first reported this development.

Meanwhile, according to queue management app DINGG’s founder Santosh Patidar, WhiteHat Jr was also found to have been leaking personal data through its API (Application Programming Interface), where one user could view another’s data including transaction details. This vulnerability was later fixed.

whiteHat Data breach

This story is developing and will be updated with more information in real-time. Do check back for an update soon. 

The post Personal Data Of 2.8 Lakh WhiteHat Jr Students, Teachers Exposed appeared first on Inc42 Media.

Zerodha-Backed Rainmatter Invests INR 10 Cr In ERPNext

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Zerodha-backed Rainmatter invests INR 10 Cr in ERPNext

Zerodha’s fintech fund and incubator Rainmatter has invested INR 10 Cr in open-source enterprise resource planning software ERPNext.

Founded in 2008 by Rushabh Mehta, ERPNext offers various modules for inventory management, payroll, sales and support CRM, ticketing, human resources and employee wellness. It is built on top of the Frappe Python framework that allows one to rapidly customise and build complex business applications and workflows. The company has more than 5,000 customers including Zerodha. ERPNext is offered as a hosted cloud solution for businesses with competitive prices.

“This is a strong signal of the arrival of ERPNext as an alternative to the large, expensive and proprietary ERP products. ERPNext is powerful, scalable and 100% opensource and with the investment, we will continue investing in the product and the community,” said Rushabh Mehta, founder & chief executive officer, ERPNext.

“ERPNext has played a significant role in helping us rapidly build and scale the Zerodha technology stack into the largest stockbroking platform in India,” said Kailash Nadh, chief technology officer, Rainmatter and Zerodha.

Zerodha set up Rainmatter in April 2019 to boost stock market investments by funding entrepreneurs. Through Rainmatter, Zerodha invests between $100k -$1M for a minority stake in startups that are trying to bring more Indians to invest in stocks, mutual funds, ETFs, Bonds, G-Secs, and participate in the economy more directly.

“We are very happy to be able to support ERPNext, the best Free and Open Source (FOSS ) project out of India, and also make this investment into the FOSS ecosystem here…Rushabh Mehta founded ERPNext 10 years ago as a system to help manage his family’s business, and since then, he and his team have turned it into a sophisticated and expansive piece of technology…The team of passionate technologists and FOSS developers are now at a juncture where they have to expand to non-technology arenas such as sales and consulting to cater to the growing list of enterprise, B2B customers,” said Nadh. 

This is Rainmatter’s latest bet on a startup. The incubation platform-cum-fund says it provides capital and workspaces to companies that it backs. Rainmatter led an angel funding in child-focused learning firm QShala and Terra.do Inc., ImStrong, Sensibull and digital learning platform LearnApp.

The post Zerodha-Backed Rainmatter Invests INR 10 Cr In ERPNext appeared first on Inc42 Media.

PDP Bill’s Ambit Likely To Include Data Localisation, Digitisation

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PDP Bill’s Ambit Likely To Include Data Localisation, Digitisation

The ‘personal’ in the Personal Data Protection (PDP) Bill may just be a part of the proposed legislation. If the recommendations of the joint parliamentary committee (JPC) is accepted, then the bill may include localisation of data and data digitisation.

The Committee recently said that it has completed its discussion on more than 50 out of the total 98 clauses in the bill.

In the undergoing clause-by-clause discussion, the members of the committee are of the opinion that the bill would now focus on data, localisation of data and digitisation of data while personal data will only be part of the crucial Bill.

“The Personal Data Protection Bill is likely to undergo a complete transformation as the intent of the Bill is likely to get changed. Most of the members of JPC are of the view that the ambit of the Bill needs to be expanded and it cannot just be about personal data. JPC members are unanimous that the PDP Bill should be about data and protection of data,” a person aware of the matter told Mint.

After Facebook, Twitter and Amazon, the committee has now invited Cyble, PayPal Payments, Mastercard India Services, iSPRIT Foundation, Visa Consolidated Supported Services for discussion in its next meetings. 

The PDP Bill, 2019, which is likely to be tabled in Parliament during the Budget session 2021 seeks to ensure that the personal data of Indian citizens are safeguarded and not stored overseas.

JPC members also believe that the biggest headache for them is about localisation of data as a lot of data that is collected from India is stored outside the country and there is very little control over the data.

“The biggest concern before the committee now is localisation of data because some of the representatives of companies and organisations that have been invited before the JPC have informed the parliamentary panel most of the social media platforms store data beyond the boundaries of India. So in case of any investigations, it will be difficult to retrieve the data for investigation purposes,” another person knowing the matter told the publication.

The post PDP Bill’s Ambit Likely To Include Data Localisation, Digitisation appeared first on Inc42 Media.


SaaS Logistics Startup Shipsy Raises $6 Mn In Series A From Sequoia, Info Edge

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SaaS Logistics Startup Shipsy Raises $6 Mn In Series A From Sequoia, Info Edge

Gurugram-headquartered SaaS (software-as-a-service) startup for shippers and logistics companies, Shipsy, has raised $6 Mn in Series A funding in a round led by Sequoia Capital India’s Surge, a rapid scale-up program for startups in India and Southeast Asia, and existing investor, the publicly-listed Indian online classifieds company Info Edge. 

The company claims that the funding would be directed towards its efforts of creating the largest global trade network by bringing all stakeholders of the international logistics ecosystem on a single platform. 

The company explains its approach as ensuring a strong SaaS workflow management platform which allows network participants to collaborate, thus reducing process bottlenecks and improving efficiency. 

The five-year-old startup claims to be processing 10% of India’s trade and having some of the biggest players in the Indian logistics and manufacturing space, such as DTDC, Bajaj Steel Industries and Zenith Birla (India) Limited as its clients. 

“The platform helps shippers reduce freight costs by automating and digitising freight negotiations, reducing incidental charges, significantly improving shipping turnaround time and minimising working capital loss for shippers through advanced machine learning models,” said  Soham Chokshi, cofounder and CEO of Shipsy. 

“The money raised will help fuel our growth and enable us to become a market leader, allowing us to continue our aggressive geographical expansion, besides investing in product innovation to keep us ahead of the curve,” he added. 

Shipsy was cofounded in June 2015 by IITians Soham Chokshi, Dhruv Agarwal, Himanshu Gupta, and Sahil Arora. Shipsy’s platform helps enterprises manage their end-to-end logistics across multiple modes and also collaborate more efficiently with their vendors onboarded on the platform. 

Seeing the needs of the market where players needed real-time visibility and reduced costs, the team set out to build a platform for supply chain management—creating the largest supply chain network by bringing all participants such as exporters, importers, third party logistics, shipping lines, banks, insurance companies on a single platform.

The company claims to have multiplied its revenue 3x in the last 18 months, and doubled its customer base amid the Covid-19 induced lockdown this year, with enterprises searching for digital solutions to manage their shipments. 

The company had last raised funds in November 2019 from Info Edge in a Pre-Series A round, although the amount for the same was undisclosed. Shipsy has raised INR 10 Cr in funds to date and says that it has customers across Dubai, Saudi Arabia, North Africa, Singapore and Malaysia. 

At present, the logistics market is crowded with a lot of existing players and startups. Some of the players that are operating in this space include Cogoport, Rivigo, Shipsy, Delhivery, Blackbuck, Freightwalla among others. The logistics tech sector has produced two unicorns — Delhivery and Rivigo — as the rise of ecommerce, distribution for online platforms and hyperlocal deliveries have got the innovation and investments flowing in the sector.

According to an Indian Brand Equity Foundation (IBEF) report, the Indian logistics industry is poised to touch $215 Bn in 2020, growing at a compound annual growth rate (CAGR) of 10.5%. It is estimated the industry will employ around 40 Mn people by this year. 

The post SaaS Logistics Startup Shipsy Raises $6 Mn In Series A From Sequoia, Info Edge appeared first on Inc42 Media.

App-Based Bus Service CityFlo Bags $7.7 Mn From Lightbox To Expand Service

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Bus Service CityFlo Bags $7.7 Mn From Lightbox To Expand Service

Mumbai-based app-based bus service Cityflo has raised INR 57 Cr ($7.7 Mn) in Series A funding round led by Lightbox Ventures to expand its services on the current and new route.

The company had previously raised INR 3 Cr ($405K) from India Quotient and other angel investors in a seed round in 2019. The company had also raised $750K from IDG Ventures shortly after its launch in 2015.

Cityflo also plans to use this Series A funding to enhance its offerings beyond industry standards and strengthen its position as a daily commute brand for the city’s working professionals. It is also working towards skilling drivers with regard to customer service etiquette, soft skills and grooming, among other aspects.

Soon, the company will be launching a facility for drivers to park the business and rest by the end of the day.

Commenting on the fundraise, Cityflo cofounder Jerin Venad, said, “We plan to invest the proceeds from our Series A funding to upgrade our operations, increase our presence across heavy traffic routes in Mumbai and grow Cityflo into a go-to brand for office commute.”

CityFlo was founded in August 2015 by IIT Bombay grads  Jerin Venad, Subhash Sundaravadivelu, Rushabh Shah, Advaith Vishwanath, Ankit Agrawal and Sankalp Kelshikar. CityFlo works together with the biggest bus operators in Mumbai to provide a reliable mode of transport for Mumbaikars at an affordable price. Using the CityFlo app, a commuter can find route and timing info, and can book a ride to work.

The company connects popular residential areas in Mumbai like the Western suburbs, Navi Mumbai and Thane, to major commercial hubs in the city. Over the years, it has expanded its presence to office hubs in Lower Parel, Andheri, BKC and Colaba. It runs 160 buses and log over 8000 bookings daily.

“The public transport system in India is broken and overstressed. For those who drive their cars to work, the problem is compounded by traffic and long travel time. The pandemic has made the situation more delicate with heightened apprehensions around safety, hygiene, and sanitisation,” said Siddharth Talwar, partner at Lightbox Ventures.

Cityflo competes with other app-based bus services Such as Bengaluru’s ZipGo, and Gurugram’s Shuttl, among others. Earlier this year, Shuttl had also raised INR 57 Cr ($7.7 Mn) in its Series C round from private equity firm SIG Global India Fund.

The Gurugram-based company was also founded in 2015, just like Cityflo. It currently claims to enable over 100K rides daily through its premium buses and caters to the large working population of India.

Meanwhile, ZipGo had raised $29.14 Mn in Series B round back in 2018 from Essel Green Mobility (EGM). The same year, it acquired  Supreme Trans Concepts.

The post App-Based Bus Service CityFlo Bags $7.7 Mn From Lightbox To Expand Service appeared first on Inc42 Media.

Meet The Startups Selected For Sequoia Surge 04

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Meet The Startups Selected For Sequoia Surge 04

Venture capital firm Sequoia Capital, on Wednesday (November 25), announced the names of the 17 startups shortlisted for the fourth cohort of the Surge programme which kicked off online on November 19.

Like Surge 03, Surge 04 will run entirely online through to mid-March 2021.

Surge 04 startups collectively raised $45.35 Mn in their round from both Surge as well as other co-investors, including Blume Ventures, Naval Ravikant, Kunal Shah, Girish Mathrubootham, and others.

Shortlisted startups span a wide range of sectors, including edtech, fintech, SME tech, devtools, consumer, health tech and B2B marketplaces.

Rajan Anandan, managing director, Sequoia Capital India LLP, said, “Surge 04 has an incredibly talented and determined group of founders we’re proud to partner with. These are founders who have shown the courage to start-up and persevere through an extremely challenging year. This cohort is a reflection of how the region’s startup ecosystem will look and think for the next few years – possibly impacting entire economies.”

Meet The Indian Startups Who Made It To Surge 04

Aampe

Founders: Paul Meinshausen, Sami Abboud, Schaun Wheeler, and stealth founder

Headquarters: Singapore

Founded In: 2020

Aampe turns customer communication into a retention growth engine. It acts as an automated testing tool that allows messaging to be personalised for the individual customer.

Epsilo

Founders: Quang Tran and Hang Pham

Headquarters: Vietnam and Singapore

Founded In: 2019

Epsilo is a SaaS company that helps ecommerce marketers and category managers deliver advertising operations across the online retail platforms in Southeast Asia.

Hashnode

Founders: Sandeep Panda and Syed Fazle Rahman

Headquarters: Europe, India and Africa

Founded In: 2020

Hashnode is a blogging platform that helps developers and teams start blogs and share them with the broader developer community.

Kyt

Founders: Bhavik Rathod and Tripti Ahuja

Headquarters: India and Singapore

Founded In: 2020

Kyt is an online-first global academy focussing on extracurricular learning for children.

LambdaTest

Founders: Asad Khan and Jay Singh

Headquarters: San Francisco

Founded In: 2019

LambdaTest is a testing infrastructure company which allows users and developers to run both manual and automated tests on their websites and web apps on over 2,000 different browsers, browser versions and operating system environments.

Let’s Dive

Founders: Nitesh Agrawal and Om Prakash Shanmugam

Headquarters: India

Founded In: 2020

Let’s Dive is on a mission to build togetherness online. The SaaS platform provides a social space for remote teams to build their culture through fostering better human connections.

Mod.io

Founders: Scott Reismanis and Patrick Sotiriou

Headquarters: Australia

Founded In: 2019

mod.io is a service that helps game developers launch in-game, platform-agnostic user-generated content (UGC) communities.

Otoklix

Founders: Martin Reyhan Suryohusodo, Joseph Alexander Ananto and Benny Sutedjo

Headquarters: Jakarta

Founded In: 2019

Otoklix is digitising Indonesia’s automotive aftermarket sector by providing online to offline solutions for car services. 

PagarBook

Founders: Adarsh Kumar, Arya Adarsha Gautam and Rupesh Kumar Mishra

Headquarters: India

Founded In: 2019

PagarBook is a mobile-first payroll and workforce management app that aims to digitise human capital management for SMEs in India.

Plum

Founders: Abhishek Poddar and Saurabh Arora

Headquarters: India

Founded In: 2020

Plum is an employee insurance provider on a mission to make group health insurance more seamless and affordable for India’s small businesses and middle class.

Richpanel

Founders: Amit RG and GDJ Dorai

Headquarters: India and US

Founded In: 2019

Richpanel is a customer service platform, purpose-built for e-commerce merchants to deliver a buying experience better than leading online retail sites.

Shipsy

Founders: Dhruv Agrawal and Soham Chokshi

Headquarters: India

Founded In: 2015

Shipsy is an enterprise SaaS company that helps its customers manage their end-to-end logistics across multiple modes like ocean, air and road transportation.

Studyroom

Founders: Ashish Ranjan and Suhail Abidi

Headquarters: India

Founded In: 2020

Studyroom is an edtech platform that helps students learn better by empowering educators to create customised learning experiences for them.

Tazapay

Founders: Arul Kumaravel, Rahul Shinghal and Saroj Mishra

Headquarters: India

Founded In: 2020

Tazapay is a cloud-based trade management platform for small and medium-sized businesses (SMBs) to conduct cross-border commerce safely.

The post Meet The Startups Selected For Sequoia Surge 04 appeared first on Inc42 Media.

Big Win For Paytm? TRAI Fines Telcos INR 35 Cr For Failing To Clamp Down On Fake SMSes

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The Telecom Regulatory Authority of India (TRAI) has imposed a penalty of INR 30.1 Cr on the state-run telecom company Bharat Sanchar Nigam Ltd, as it failed to curb cybercriminals from sending fake SMSes to dupe users of digital payments applications. BSNL had also failed to respond to TRAI’s show-cause notices and produce performance-monitoring reports. 

Further, a fine of INR 1.82 Cr has been imposed on Vodafone Idea (Vi), INR 1.41 Cr on Quadrant Teleservices and INR 1.33 Cr on Airtel, as these telecom service providers (TSPs) had also failed to curb spam calls and text messages to their users. 

In all, eight Indian telcos, which also include Reliance Jio, Mahanagar Telephone Nigam Ltd (MTNL), Videocon and Tata Teleservices, have been fined a collective amount of INR 35 Cr by TRAI. 

TRAI’s move comes even as digital payments giant Paytm is embroiled in a legal tussle with the leading players of the Indian telecom industry, in an ongoing case in the Delhi High Court. 

At a hearing in September, the court had asked TRAI to act against service providers violating regulations to curb spam calls and text messages. 

Paytm’s contention was that telecom operators had been lax in monitoring the issuance of SMS headers — unique IDs through which commercial text messages are sent — to telemarketers. Hence, those wanting these SMS headers for fraud purposes had been able to get one, enabling them to send promotional SMSes to unsuspecting customers. A lot of these messages are disguised as coming from banks or payment executives, asking for the customer’s private details. Those who reply with their details, see their funds being siphoned off from their bank accounts or digital wallets. 

According to the Economic Times, which first reported the development, TRAI’s penalties on telcos are on various counts of violation of the Telecom Commercial Communication Customer Preference Regulation (TCCCPR). 

TRAI Says “No Information” About Number Of Fraud Telemarketers

Meanwhile, Inc42 had filed an RTI (right to information) request with TRAI, requesting the number of registered and unregistered telemarketers/senders of commercial text messages who’ve been penalised, off-boarded or blacklisted by TSPs, under the provisions of TCCCPR 2010, for the period for which TCCCPR 2010 and its amendments were in force. 

The RTI had also requested TRAI to provide information about the complaints received regarding unsolicited commercial communication i.e. fake SMSes for fraud purposes, received from customers of TSPs from 2010-20. 

In response to the RTI, TRAI said that there was no information available regarding the query. 

In September, Inc42 reported that digital payments giants PhonePe, Mobikwik and Infibeam Avenues had backed Vijay Shekhar Sharma-led Paytm’s claims that telecom companies and the TRAI had been ineffective in handling the rising number of phishing cases in India.

In its original petition filed with the Delhi HC in July this year, Paytm had called out TRAI and telecom companies inaction in controlling phishing scams. It had also sought INR 100 Cr in compensation.

Paytm had explained that several scammers are registering themselves as telemarketers on these networks under headers similar to Paytm’s. Some examples are PYTM, PTM, IPAYTN, PYTKYC, BPaytm, FPaytm, PAYTMB, Ipaytm, mPaytm and other derivatives.

Once successful, these scammers send out malicious messages to Paytm customers, fooling them to reveal their personal and sensitive information including account details and passwords. Sometimes, these scammers also call customers to seek private information under the pretext of completing their know-your-customer (KYC) requirements to continue using their Paytm wallets.

However, the telecom giants Jio and Vi had, in turn, attacked Paytm for shifting the blame of its own lapses to evade legal liability of financial frauds and phishing scams that are occurring through its app. Jio had also highlighted that telecoms cannot be held liable for “unlawful activity” occurring over calls and messages under the Telecom Commercial Communication Customer Preference Regulation (TCCCPR), 2018.

It is worth noting that the eight telcos penalised by TRAI, could yet challenge the penalties in court. 

The post Big Win For Paytm? TRAI Fines Telcos INR 35 Cr For Failing To Clamp Down On Fake SMSes appeared first on Inc42 Media.

SaaSBOOMi Looks To Strengthen SaaS Community With Awards For Indian Startups

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SaaSBOOMi Looks To Strengthen SaaS Community With Awards For Indian Startups

The SaaSBOOMi community has decided to recognise and reward Indian software-as-a-service (SaaS) companies and startups that have been working to set India on the global tech map.

The award is aimed to add incremental value to the startups in multiple ways. Beyond recognising well-deserved startups, it will also bring them to the public’s attention, build a comprehensive directory of SaaS startups in India, collate credible and up-to-date information about SaaS startups and help SaaS community to come together and self-organise under one unified shield.

“Most startup awards in India hitherto have been either self-serving, lacklustre, or opaque. We want to change this norm and create a new brand of awards that exemplify authenticity and integrity,” the SaaSBOOMi said. 

The SaaSBOOMi award will be given across eight categories.

  1. SaaS startup of the year: For startups that have achieved great traction at a global level, and serves as a milestone to be achieved for other entrepreneurs in India.
  1. Breakout SaaS startup of the year: Startup that has achieved great traction in the recent past, whether through a paradigm shift or focused execution.
  1. Bootstrapped SaaS startup of the year: Startup that has scaled without raising any institutional money over $100K. The company should only rely on its revenue to fund and grow operations.
  1. Deeptech startup of the year: Startup that is solving deep technical problems through extensive research and development (R&D). The company should intend to commercialise the product or should have already done so.
  1. Category creator SaaS startup of the year: The startup that is solving completely new pain points for their customers and has created a new category out of that.
  1. Vertical SaaS startup of the year: The startup that operates in a vertical domain, and has achieved great traction within that domain. This traction can also be in terms of revenue or customers.
  1. Moonshot startup of the year: This title will be awarded to the “most ambitious startup idea”, which is trying to achieve a milestone crossed by few companies. This award can also be received by an early-stage startup.
  1. B2D SaaS startup of the year: The startup that builds tools, libraries, or systems for developers, sells to a global audience and has received critical acclaim for the same. 

Interested SaaS startups can fill out the application before December 20, 2020. The startups can either nominate themselves or others for a maximum of two categories. SaaSBOOMi will announce five finalists for each category on January 15, 2021. The winners will be announced in March 2021, during SaaSBOOMI’s Annual.

Along with a trophy, the winners will also receive PR, investor and media attention. Besides that, the winner will get recognition in SaaSBOOMi’s website and ebook, along with an award batch that can be featured on their website, and marketing materials.

The winners will be selected by an independent jury through a voting mechanism. The jury includes Capillary Technologies’ CEO and cofounder Aneesh Reddy, Mad Street Den’s CEO and founder Ashwini Asokan, Freshworks’ founder and CEO Girish Mathrubootham, Eka1’s CEO and founder Manav Garg, Kissflow’s CEO Suresh Sambandam, Chargebee’s cofounder and CEO Krish Subramanian, and Charts.com’s founder and CEO Pallav Nadhani, who had previously founded and headed FusionCharts (acquired by Idera).

“SaaSBOOMi Awards is an endeavour to celebrate our SaaS companies and their founders – to recognize and laud their achievements, to bring to light little-known gems, to inspire others to follow their path… SaaSBOOMi Awards is the first awards program in India that is shaped and judged entirely by the community. You will be judged and recognized not by corporate sponsors or VC investors but by your peers in the Indian SaaS community,” Nadhani said in a blogpost.

Indian SaaS companies are estimated to have an annual recurring revenue (ARR) of over $3.5 Bn representing a 30% annual growth. According to a NASSCOM report, there are more than 1K SaaS companies in India, out of which, about 150 companies generate an ARR of over $1 Mn. Many companies like FreshWorks, Druva, Zoho have also hit the unicorn club.

The post SaaSBOOMi Looks To Strengthen SaaS Community With Awards For Indian Startups appeared first on Inc42 Media.

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