SoftBank will offload the highest number of shares in Pune-based omnichannel marketplace FirstCry’s initial public offering (IPO). As per the draft red herring prospectus (DRHP), the Japanese investor behemoth will be selling up to 2 Cr shares as part of the offer for sales (OFS) component of the public issue. 

SoftBank’s SVF Frog (Cayman) Ltd holds over 12.4 Cr shares or a 25% stake in the company.

The unicorn’s IPO comprises fresh issues of shares aggregating up to INR 1,816 Cr and an OFS component of up to 5.4 Cr equity shares. 

Besides SoftBank, several others including Mahindra & Mahindra, Premji Invest, private equity investor TPG, Apricot Investments and NewQuest are also offloading their stakes in the IPO.

Mahindra & Mahindra, which holds over 4 Cr shares in FirstCry or almost an 11% stake, will offload over 28 Lakh shares in the OFS. On the other hand, Premji Invest, holding over 2 Cr shares in the startup, will offload 86 Lakh shares.

TPG Growth also holds almost 2 Cr shares in FirstCry and is looking to offload around 39 Lakh of them in the IPO. Meanwhile, TPG’s NewQuest Asia Investments III Limited will offload over 30 Lakh shares in FirstCry IPO.

FirstCry founder Supam Maheshwari, who holds over 2.8 Cr shares in the company, will also sell some stake in the IPO.

Founded in 2010 by Maheshwari and Amitava Saha, FirstCry is an omnichannel baby and kids marketplace. The unicorn is looking to use the funds raised from the IPO to set up new modern stores and warehouses, invest in its subsidiary Globalbees Brands, and other expenses for growth such as acquisition and more.

In FY23, FirstCry’s net loss surged over 500% to INR 486 Cr from INR 78.6 Cr in the previous fiscal year. Notably, the startup had logged a net profit of INR 215.9 Cr in FY21. The startup clocked a sales of INR 5,632.5 Cr in FY23, registering a 135% jump from INR 2,401.2 Cr in FY22.

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SoftBank-backed omnichannel retail startup FirstCry has finally filed its draft red herring prospectus (DRHP) with the market regulator SEBI for raising INR 1,816 Cr through fresh issues of shares.

The IPO offer also comprises an offer-for-sale complement which will allow the startup’s investors to sell up to 5.4 Cr equity shares.

If we talk about the startup’s financials, in the first three months of the ongoing financial year i.e., FY24, Brainbees Solutions Limited has reported a sales of INR 1,406.9 Cr on a consolidated basis. The ecommerce unicorn primarily earns from selling babycare products on its platform. Including other income, FirstCry’s total income in Q1 of FY24 stood at INR 1,426.8 Cr.

The first three months’ sales is almost 25% of the startup’s entire FY23 sales. In FY23, FirstCry’s consolidated operating revenue stood at INR 56,32.5 Cr, a 135% increase from INR 2,401.2 Cr it had reported in the previous fiscal year.

Including other income, total income stood at INR 5,731.2 Cr in FY23, a jump of 127.7% from INR 2,516.9 Cr in FY22.

In the Q1 of FY24, FirstCry incurred a net loss of INR 110.4 Cr. FirstCry posted a consolidated net loss of INR 486 Cr in the financial year 2022-23 (FY23), a 518% increase from INR 78.6 Cr in the previous fiscal year.

Where Did FirstCry Spend? 

The startup in Q1 of FY24 had reported a total expenses of INR 1,541.8 Cr. In the previous fiscal year, the startup’s total expenditure stood at INR 6,315.6 Cr, a 145% surge from INR 2,568 Cr in FY22.

Procurement Cost: Being a marketplace, FirstCry has spent INR 904.4 Cr for procuring products. This was almost 59% of the startup’s total expenditure in the first quarter. In FY23, the startup spent INR 3,953.3 Cr for procurement, a 150% increase from INR 1,572.1 Cr in FY22.

Employee Benefit Expenses: In the first quarter of FY24, the startup spent INR 159.2 Cr for employee benefit expenses. This also included INR 45.2 Cr worth of ESOP expenses. In FY23, FirstCry spent INR 769.8 Cr for employee benefit expense, a 127% increase from INR 338.8 Cr

Advertising Expenses: In Q1 FY24, FirstCry spent INR 164.5 Cr almost 10% of the startup’s revenue for the same period. In FY23, the startup spent INR 416.4 Cr, a 55% increase from INR 268.6 Cr in the previous fiscal year.

FirstCry’s IPO offer also includes an offer-for-sale element to it. The offer includes an OFS component comprising 5.4 Cr equity shares. Japan’s SoftBank, which owns over 25% stake, will sell the most with up to 2 Cr equity stakes, whereas Premji Invest will sell 8.6 Mn shares during the OFS. Besides, founder Supam Maheshwari will also sell his stake in the IPO. Interestingly, Maheshwari isn’t selling shares in the OFS.

The startup currently owns 321 modern stores and 615 franchise-owned stores across the country. 

FirstCry has become the third Indian startup to have filed its draft papers in December this year. Earlier this month, coliving workspace Awfis filed DRHP to raise INR 160 Cr via fresh issues and Bhavish Aggarwal’s Ola Electric which is eyeing to raise INR 5,500 Cr via public markets.

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Consumer-focused fund Sixth Sense Ventures, which has backed companies like Bira91, Vahdam and Veeba Foods among others, has invested INR 100 Cr (around $12 Mn) in Indore-based spices brand Pushp.

Sixth Sense Ventures founder and CEO Nikhil Vora told ET that through this deal the VC firm has also bought a stake in Pushp from its initial institutional investor A91 Partners.

A91 Partners, an investment firm floated by former Sequoia India executives Abhay Pandey, VT Bharadwaj and Gautam Mago, acquired a 25% stake in Pushp for INR 125 Cr in 2020. 

Pushp is known for processing and blending spices like chilli, turmeric and coriander. 

Founded by industry veterans, Mahendra and Surendra Surana, Pushp has strategically invested in distribution and branding efforts, extending its reach beyond Madhya Pradesh to states like Maharashtra, Rajasthan, Uttar Pradesh, Bihar, and Gujarat. With a consistent revenue growth of 25% CAGR over the last five years, Pushp plans to evolve from a regional leader to a significant national brand.

The company aims to expand its national footprint in the INR 90,000-Cr market. Of this, the branded spices market is estimated to be around INR 25,000 Cr.

Over the last 12-15 months, FMCG companies such as Dabur, Wipro Consumer Care, Tata Consumer, and Emami Agrotech have either entered or strengthened their presence in this segment.

Other legacy players in the spices market include Everest Food Products and MDH.

“One key thing that I’ve seen in the consumer market is that incrementally a lot of disruptors are emerging from regional powerhouses,” Vora said. 

According to a regulatory filing by Tofler, Pushp recorded a 20% year-on-year (YoY) growth in its FY23 operating revenue to INR 338 Cr, while its profit declined from over INR 16 Cr to nearly INR 10 Cr due to rising raw material prices. 

“With a consistent revenue growth of 25% CAGR (compound annual growth rate) over the last five years, Pushp is evolving from a regional leader to a significant national brand,” the company said in a statement.

The funding coincides with the government’s push to explore new spice markets, strengthen existing ones, and promote value-added products to elevate spice exports from the current $4 Bn to $10 Bn by 2030. 

India, the world’s largest spice producer, commands a 70% share in global spice production. The global spices and seasonings market is projected to grow at a CAGR of 5.7%, reaching $35.1 Bn by 2028, according to a report by IMARC Group.

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What was 2023 like for India’s fintech startups? Paytm inched towards profitability but ended the year on a sour note and PhonePe bagged the majority of all startup funding and is all set to race it out with the likes of Groww, CRED and BharatPe with its super app.

But the super app story of 2023 was tempered by tightening regulations amid the funding dip and shutdowns of heralded startups such as ZestMoney.

The RBI’s directive to regulated entities (banks and NBFCs) to increase risk weights has complicated the already-murky buy-now-pay-later (BNPL) world. Several startups are still feeling the hangover of last year’s directives for prepaid payment instruments (PPIs) to rejig their lending models.

At the same time, the fintech market is set for a disruption with the entry of Jio Financial Services, which has eyes on pretty much every vertical that these players have staked their claims on.

One also cannot forget the potential merger between fintech unicorn slice and the North East Small Finance Bank, which is likely to add another dimension to the competitive landscape.

11 Trends That Will Shape Indian Fintech In 2024

Moving on, there are some big questions ahead of 2024: Will fintech startups crack the profitability puzzle after a year of rationalising costs? With the exception of Zerodha, Neogrowth, Indifi and Groww, a majority of the fintech companies in India continue to grapple with losses, even if the likes of Paytm and CRED claim to be moving towards this milestone.

While many of these startups have banked on UPI to grow their user base, they now find themselves caught in a paradox — UPI does not have the revenue upside, but it’s still the most necessary component of the fintech stack.

These factors make for a very interesting 2024. Founders and investors believe only a laser-sharp focus on profitable verticals and growth areas will deliver the results for startups. Startups have banked on VC funding to grow their user base but now when it comes to unit economics and profitability, they are looking to extract the most out of this user base.

How will these moves play out in 2024? Here are 11 trends that we believe will permeate through the fintech ecosystem in the year ahead.

Fintech Super Apps Will Foray Into Consumer Services Verticals

The convergence of financial services across unicorns and major players has been a major trend of 2023, even if their strategies are quite different.

We have taken an in-depth look at these various approaches throughout the year — whether it is Groww building on its funnel of investment tech users, BharatPe’s merchant-first approach, or CRED’s product direction targeting the cream of the Indian fintech market. Also, one cannot overlook PhonePe, which is investing in developing and growing four separate apps, including the Indus Appstore, a unique proposition in the fintech world.

In 2024, we expect startups to keep fleshing out these models as they look to wean themselves off the UPI reliance. UPI has become a crutch and a cross to bear for these players.

For instance, Mastercard CFO Sachin Mehra said in October that UPI has been a painful experience for ecosystem participants. His concerns over the sustainability of the payments stack have been echoed by others too.

Some startup founders had earlier told Inc42 that NPCI does not seem to be worried because it is actually making money from UPI. Unlike fintech startups building on UPI, NPCI is a profitable entity.

But try as they might, super apps cannot afford to cut off UPI. Instead, we will see them build new products and verticals that will be supported by the user inflow that UPI brings in. CRED’s Garage (vehicle management product) is one such product, and we can expect startups to enter into new consumer services verticals to capitalise on any UPI momentum they have.

Founders and experts believe that fintech startups have an advantage over ecommerce platforms in building and pushing super apps since they have more habituated users than say Meesho, Amazon or Flipkart. These platforms have built the tech stack around financial services and have a clearer view of how these areas are evolving.

“There is a strong possibility of 2024 turning into a year of super apps particularly for CRED, Paytm and PhonePe. Traditionally, if you look at larger financial services companies like Bajaj Finance and even banks, they have tried to cross sell with varying degrees of success. This will happen in fintech as well,” Ashish Khandelwal, founder of Kunal Shah-backed ANQ Finance, told Inc42.

Funding To Remain Slow, Except In Digital Lending, Platform Models

The funding activity overall across the startup ecosystem and fintech, in particular, may see moderate growth in 2024 compared to last year, as per analysts. A bulk of the funding will go for platforms that have inched towards profitability, but this does not ensure that sustainable models will be the future course.

In the absence of such a surety, investors will continue to back those fintech models that are growing fastest. Here again, super apps and platform plays will be preferred due to the potential to scale up revenue. And, of course, lending tech is more or less a permanent investment focus area, given that these companies require more capital and their revenue models are time-tested and enduring.

This is particularly true for digital lending startups that have established robust partnerships with banks, and those with profitable models — the likes of Indifi and Neogrowth turned profitable in FY23, for instance. Digital NBFCs are also likely to get a lot of investment interest as well as lending SaaS companies that are creating new-age risk assessment models.

Case in point: Even as overall funding plummeted in 2023, the fintech sector saw the highest funding in Q3 2023, with $442 Mn invested as per Inc42 data, and this was driven by lending tech.

Industry experts say that although funding activity may improve compared to last year, it will not reach the 2020 or 2021 levels when fintech was one of the highest-funded sectors in India.

Ashok Hariharan, CEO and cofounder of risk management platform IDfy, expects fintech companies to see good deals from March 2024 onwards. “There may be muted funding activity towards the traditional lending-based fintech firms. Similarly, I see fewer Series A and Series B rounds happening, compared to the late stages. However, we cannot expect 2024 fintech funding at par with that of 2021 levels,” he added.

High Valuation Fintech Giants, Listed Companies To Drive M&As

The past two years have seen two major acquisition bids fail, but it gives us an idea of where the market is trending. Whereas CRED’s acquisition bid for smallcase in 2022 fell through due to valuation differences, PhonePe pulled out of the ZestMoney deal this year after issues emerged in its due diligence.

The build-vs-buy debate in fintech is particularly complicated because of regulatory overhang. Companies invest millions in building up verticals and then have to scrap them due to regulatory changes, whereas acquiring smaller players allows them to not only bring in talent but also import technology that is better suited for regulatory changes.

Plus, in some cases, there is a revenue upside from acquiring that can boost the bottom line. To bolster its lending vertical, CRED also acquired lending SaaS startup CreditVidya in November 2022 and operationalised another NBFC Newtap that it had acquired in 2021. These deals enabled the company to grow its revenue by 3.5X to INR 1,484 Cr in FY23.

Similarly, BharatPe is looking to make deeper inroads into lending with its acquisition of Trillion Loans NBFC in 2023. Trillion reported a profit of INR 74 Lakh in the financial year 2021-22 (FY22) while its revenue stood at INR 7 Cr. The acquisition is a critical part of the consumer lending plans for BharatPe, which has so far relied heavily on merchant loans.

“There will be a possibility that the large fintech platforms may open their network to smaller players who have niche products,” IDfy’s Hariharan added.

Climate & EV Financing Will Emerge As New Areas Of Growth 

While 2023 was a relatively slow year for climate tech development, funding is one of the major challenges that will be hurdled in 2024 as we wrote in our outlook for this sector.

Investors and VCs are waking up to the business models that will have a more immediate impact on the market, and climate financing, including EV auto loans, is one of the areas where there should be plenty of activity in 2024.

The expected higher inflow of capital in this sector is in line with the government’s push. At the recent COP28 summit, the Indian government emphasised the need for substantive enhancement in climate finance for developing countries, questioning existing claims about FDI inflows in this regard.

While those discussions are unlikely to yield immediate results for investors and VCs, climate financing is a model that is better understood than other climate tech models. However, so far the focus has been on electric mobility.

In 2023, the EV financing landscape saw some major shifts owing to the increasing adoption of EVs. Recently, B2B SaaS startup Finayo, which connects lending partners with EV retailers and OEMs raised $1.9 Mn, while EV financing startup Revfin raised $14 Mn in its Series B funding round led by Omidyar Network India.

A number of EV original equipment manufacturers are tying up with financial institutions to facilitate loans. IPO-bound Ola Electric entered into partnerships with Shriram Finance and other institutions to facilitate EV sales.

Jio Financial Services Expected To Give A Though Time To Fintech Giants

The launch of Jio Financial Services in mid-2023 has already upset the fintech applecart to some extent. However, in 2024, we will see the ‘nascent’ giant flex its muscles.

Not because Jio has shown its disruptive capabilities in India’s digital commerce as well as the infrastructure sector in the past couple of years. JFS has not only launched personal loan services for salaried and self-employed individuals but also has the Jio Payments Bank to rely on to improve its payments vertical and capitalise on UPI.

Plus, JFS has signed a JV with investment giant BlackRock for an asset management company (AMC), challenging the likes of Zerodha and Groww which are building their AMCs.

At least one founder told us, “Any industry that Reliance enters will be up for disruption given the scale and capital at which the conglomerate operates. There is a possibility for consumer durable lending for JFS since they already have a huge network of consumer durable outlets in the country. The disruption Reliance may cause could lead to a change in the business models of rival firms,”

ANQ Finance’s Khandelwal is, however, of the opinion that fintech incumbents need not worry about big players entering their arena as technology is still a massive competitive moat.

“The fintech industry is different because there needs to be a niche focus and expertise in digital innovations which large conglomerates don’t always have. For instance, Bajaj Group came up with Bajaj Finserv and it took them many years to establish themselves as a digital-first company,” he added.

But even at its inception, JFS was the world’s highest-capitalised financial services platform, according to RIL chairman Mukesh Ambani. This financial safety net is one of the key potential competitive edges for JFS in a fintech market where startups are not exactly flush with funds.

Fintech Unicorns Eyeing India Listing To Reverse Flip

If PhonePe’s redomiciling to India has inspired a wave of startups to take the same route, it has also inspired some fear given PhonePe’s huge $900 Mn tax outlay for this.

But for Indian fintech companies that are looking to list in the domestic bourses — Razorpay, Groww, Pine Labs, for example — bringing their holding companies to India is imperative, no matter the bill.

Groww has reportedly applied to the National Companies Law Tribunal (NCLT) to shift its base from the US to India. Payments major Razorpay is also exploring a similar strategy, while Singapore-based merchants’ payments platform PineLabs is also planning to redomicile, as per reports.

In 2024, the government is likely to ease some of the tax burden on the redomiciling of businesses in India, but there are no guarantees.

According to Manish Lunia, cofounder of lending tech startup FlexiLoans, companies are likely to move on this front with friendlier policy measures.

Others have pointed out that the GIFT City in Gujarat is one way that the government might woo Indian startups registered overseas. For the Indian government, redomiciling of startups is being seen as a priority given the amount of value it would retain within the Indian economy.

Already, many investors are lamenting the IP and value drain from India when it comes to enterprise tech, where most large startups are registered outside India. According to an analysis conducted by Inc42, approximately 65% (or 13) of Indian unicorns with headquarters abroad operate in the enterprise tech (SaaS) sector.

Speaking at Inc42’s MoneyX in July 2023, Dipesh Shah, executive director (development), IFSCA, said, “We have structured the GIFT IFSC to stop the trend of entrepreneurs moving abroad in search of better opportunities and simpler regulations. Whatever tax and other benefits PE investors would get (there), we are offering similar facilities here.”

UPI’s Product Spree, Global Foray To Continue

Whose side is the NPCI on? That’s what many fintech startups asked Inc42 when we were on the ground at the Global Fintech Fest in October.

That’s because while on the face of it, this was an industry event, one could not help but feel that the dominant factor was NPCI. Nevertheless, NPCI’s pet project UPI is easily the most important pillar of fintech.

The Indian government has already set its intentions clear of making UPI a global phenomenon. NPCI has leveraged the success of UPI in India to export it to geographies like Southeast Asia, the Middle East, and the UK.

This past year, UPI received upgrades and new features such as conversational payments, NFC-based offline payments, UPI Tap & Pay and credit line on UPI. Either way, UPI is not about to slow down after a year especially after the total transaction value touched INR 17.40 Lakh Cr in November.

Lending Tech Set For Another Disruption With ONDC, Credit On UPI

ONDC is eyeing the fintech space keenly. Inc42 reported the digital commerce network’s plans to tap into financial services after the disruption of ecommerce and food delivery. Lending tech startups would be glad for the automatic scale this might open up, but a lot of the specifics are still unclear.

For one, the government-backed ONDC has not even clarified the future fees for seller apps and buyer apps even for ecommerce. Will this be another UPI that companies have to support without seeing much in the way of revenue?

Speaking of UPI, Prithvi Chandrasekhar, the CEO of consumer finance at fintech unicorn InCred, expects UPI’s credit features (linking with credit cards and more) to gather further momentum in 2024. But there is also a fear that it steps on the toes of fintech startups that are lending outside of UPI.

There is some fear that the entry of UPI in the credit space will give banks more leverage over startups. And it’s no surprise that a lot of startups are looking at NBFC and bank licences (more on this later)

“There will be some consolidation and some rationalisation in the lending space. Small-ticket BNPL and SME loan startups are potential acquisition targets for larger players. Similarly, a lot of fintech companies will be on the lookout for NBFC licences to reduce costs,” IDfy’s Hariharan said.

Automation And AI/ML Engines Will Reduce Dependency On People

Amid its decision to scale down small-ticket loans, listed fintech giant Paytm sacked hundreds if not thousands of employees, citing the increasing usage of artificial intelligence-led automation.

If a company with the highest revenue in the Indian fintech space of nearly $1 Bn is laying off employees citing AI, we can expect others to follow suit without blinking.

“AI and ML have played a pivotal role in the digitisation of the financial sector, and the rise of AI is only bound to streamline operations, reduce costs and enhance efficiency in the coming years,” Rahul Agarwal, cofounder of lending and alternative finance startup FinnUp, told Inc42.

The path to profitability in the Indian fintech landscape will require strategic considerations of automation.

It’s not just Paytm, of course — a whole host of companies are looking to shed human resources in favour of AI, especially when it comes to content creation (financial education and engagement), risk assessment models, underwriting models, ancillary data processing, robo-advisories, document processing, KYC and more.

Bengaluru-based Plum launched a PolicyGPT feature to solve customer queries related to insurance claims. Revenue-based financing platform Velocity also integrated OpenAI’s ChatGPT to furnish business data to its customers. But these solutions are rudimentary, the real efficiencies will be driven by fintech-specific AI models, which will come into the picture in 2024.

Regulatory Focus On Payments Gateway, API Banking

Digital lending has been the primary focal point for the RBI and the central government in the past few years, and this is not about to change in 2024.

For instance, there was a directive in the last week of the year about digital platforms advertising fraudulent loan apps, and the crackdown is expected to bring some pause to legitimate apps too.

RBI has also taken note of the exponential growth in unsecured lending, leading to the announcement of stricter guidelines for banks in November 2023, which is likely to culminate in higher lending rates when it comes to retail loans.

A senior partner at a Bengaluru-based consulting firm said that these two regulations have almost led to the closure of many fintech businesses.

“This is especially true for the lending tech companies that did not have correct underwriting models in place. The cost of bad loans has not hurt these companies as much as the VCs and banks now staying away from them because of the new regulations. ZestMoney is a prime example of this. The fintech startup was relying on BNPL and unsecured loans to save itself. However, the RBI has come down hard on each of these sectors making it unsustainable for companies to operate,” the senior executive further said.

Banking-as-a-Service (BaaS) is an area that is emerging as a potential game changer for fintech, particularly API banking and embedded finance.

But many of the startups that offer core banking software to small finance banks and cooperative banks in India also have international operations. As such these startups will likely face some challenges from the Digital Personal Data Protection Act, which governs the role of data fiduciaries, data storage, data sharing and user consent mechanisms.

Payment gateways are also likely to come under the scanner as per investors and founders we spoke to.

In December 2022, the Reserve Bank of India imposed an embargo on payments aggregators which lasted till December this year, and in the case of Paytm Payments Bank, the RBI embargo is still applicable.

The payments bank is hoping that the restrictions will be lifted by March 2024, which would then allow it to bring new customers on board.

Regulations are a reality for the fintech ecosystem, but they are not always unwelcome by investors.

Speaking to Inc42 earlier, Sandeep Patil, head Asia and partner at QED Investors, said, “Regulations may create short-term disturbances in the market, but it is definitely attractive from a long-term perspective. This is because we get more clarity into the dos and don’ts of operating in a specific space.”

Fintech-Bank Partnerships Will Take On A New Colour

BharatPe and slice are the two fintech startups that have stood apart from the competition. This is because the duo have banking licences, unlike others.

But the startups have something else in common.

The Punjab and Maharashtra Cooperative Bank (PMC Bank) acquired in 2021 by a BharatPe-Centrum JV was on the verge of collapse. The resulting Unity Small Finance Bank is currently in the long-drawn process of clearing out the dues of the erstwhile PMC Bank.

And the North East Small Finance Bank, which is in the process of merging with slice after the latter received an in-principle approval from the RBI in October this year, is looking to sell its over INR 600 Cr of stressed loans, about one-third of its loan portfolio. This is after reporting INR 213 Cr in losses in FY23.

Even if slice gets the merger approval, there is a long way to go before the acquisition pays off for the Bengaluru-based fintech unicorn, as the merged bank has to dig itself out of a financial hole.

“The rationale behind the RBI approving these new banks becomes clear when one sees that both banks were distressed and obviously, the central bank did not want any more banks to go down,” the founder of a home finance company told Inc42.

And while there have been some murmurs about other fintechs going for a bank licence, the chances look bleak given that there are more experienced financial services institutions also vying for the same.

A senior investment advisor working with multiple fintech companies said that the startups which are well-capitalised are also keen on acquiring NBFCs or small banks to ensure their sustenance, but RBI is unlikely to be moved by market sentiment, especially given how critical banking is to the economy.

So bank partnerships are the only way forward for fintech startups in the current climate, till there is another opportunity to grab a licence, which may or may not arrive in 2024.

[Edited by Nikhil Subramaniam]

The post 11 Fintech Predictions For 2024 appeared first on Inc42 Media.

After much speculation, Brainbees Solutions Limited, the parent company of kids-focused ecommerce unicorn FirstCry, has filed its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI). 

The startup’s initial public offering (IPO) will comprise a fresh issue of shares worth INR 1,816 Cr and an offer-for-sale (OFS) component of up to 5.43 Cr shares.

SoftBank will offload the highest number of shares in the Pune-based omnichannel marketplace’s IPO. As per the draft papers, the Japanese investor will be selling up to 2 Cr shares as part of the OFS component of the public issue. Besides SoftBank, several others, including Mahindra & Mahindra, Premji Invest, private equity investor TPG, Apricot Investments and NewQuest, are also offloading their stakes in the IPO.

The company is also eyeing a pre-IPO private placement of equity shares to investors for an amount aggregating up to INR 363 Cr. The amount raised in the pre-IPO round will be reduced from the fresh issue.

In its DRHP, the ecommerce unicorn also highlighted several areas where it would deploy the funding raised via the public issue.

Where Will FirstCry’s IPO Money Go?

FirstCry plans to set up new retail stores and warehouses and undertake international expansion. It will invest INR 648 Cr from the IPO proceeds for setting up modern stores and warehouses and making lease payments for existing stores.

Further, the startup will invest INR 155.6 Cr in its foreign subsidiary for overseas expansion. The startup said it would set up modern stores in Saudi Arabia. However, it did not specify the details, such as the number of stores it plans to open in the Middle Eastern country.

Additionally, FirstCry intends to invest INR 170.5 Cr in subsidiary Globalbees Brands for acquiring an additional stake in the company’s indirect subsidiaries. The startup will also invest INR 100 Cr for sales and marketing initiatives and another INR 57.6 Cr in technology and data science.

According to the DRHP, the rest of the IPO proceeds would fund inorganic growth and other corporate purposes.

In FY23, FirstCry’s net loss surged over 500% to INR 486 Cr from INR 78.6 Cr in the previous fiscal year. Notably, the startup had logged a net profit of INR 215.9 Cr in FY21. The startup clocked sales of INR 5,632.5 Cr in FY23, 135% higher than INR 2,401.2 Cr in FY22.

Additionally, in Q1 of FY24, FirstCry recorded a net loss of INR 110.4 Cr on consolidated sale of INR 1,406.9 Cr.

The post FirstCry DRHP: Here’s How The Ecommerce Unicorn Intends to Spend IPO Proceeds appeared first on Inc42 Media.

SoftBank-backed online omnichannel retail startup FirstCry has filed its draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India (SEBI) for raising INR 1,816 Cr via fresh issues of shares. 

The initial public offering (IPO) offer also comprises an offer-for-sale (OFS) complement which will allow the startup’s existing shareholders to sell up to 5.43 Cr equity shares.

Besides, the company is also eyeing a pre-IPO private placement of equity shares to investors for an amount aggregating not more than INR 363 Cr. The amount raised in the pre-IPO round will be reduced from the fresh issue.

Pre-IPO placements, conducted months before the startup goes public, help in establishing a valuation base for an IPO and instil confidence among investors. The proceeds from pre-IPO placement will eventually contribute to the net proceeds of the IPO.

The startup’s IPO net proceeds will be used for the following:

• Expenditure for setting up new modern stores and warehouses, as well as lease payments for our existing modern stores in India, totalling INR 648 Cr.
• Investment in the company’s subsidiary FirstCry trading for overseas expansion via setting up new modern stores in Saudi Arabia totalling INR 155.6 Cr.
• INR 170.5 Cr as an investment in subsidiary Globalbees Brands towards the acquisition of an additional stake in the company’s indirect subsidiaries.
• Investment for sales and marketing initiatives to the tune of INR 100 Cr.
• Technology and data science cost of INR 57.6 Cr.
• The rest would be for funding inorganic growth through acquisition, other strategic initiatives and general corporate purposes.

Earlier this month, coworking space startup Awfis which filed DRHP to raise INR 160 Cr announced it might raise INR 32 Cr as pre-IPO placement ahead of filing its RHP. In another instance, Bhavish Aggarwal-led Ola Electric, which is heading for a mega IPO to raise upto INR 5,500 Cr via fresh issues of shares, in its DRHP has stated that it might also consider raising upto INR 1,100 Cr via pre-IPO Placement. 

In the first three months of FY24, Brainbees Solutions Limited, the parent entity of FirstCry reported sales of INR 1,406.9 Cr on a consolidated basis. In the Q1 of FY24, the startup incurred a net loss of INR 110.4 Cr. During the same period, the startup spent INR 904.4 Cr for procurement of materials and INR 164.5 Cr for advertisement.

The Pune-headquartered startup has raised over $700 Mn in multiple rounds till date and counts the likes of SoftBank, Chrys Capital and Vertex Ventures as among its backers.

The post SoftBank-Backed FirstCry Plans To Mop Up INR 363 Cr In Pre-IPO Placement appeared first on Inc42 Media.

Drone startup DroneAcharya on Thursday (December 28) said it has bagged a contract worth INR 15.8 Lakh from Tata Consultancy Services (TCS).

This comes a day after overseas investor BofA Securities Europe SA bought 1.67 Lakh shares in DroneAcharya in a bulk deal worth over INR 3 Cr.

In an exchange filing, DroneAcharya said that the agreement with TCS encompasses the supply of a 5G-enabled drone equipped with a visual (RGB) camera, alongside a ground control station designed for remote access and seamless live data relay.

Besides, the scope of work involves co-developing and co-engineering drone-based 5G solutions for telecom, warehousing, energy and other sectors where TCS has a presence, spanning India and across the globe. 

Founded by Prateek Srivastava in 2017, DroneAcharya offers drone-based enterprise solutions across sectors like oil and gas, mining, infrastructure and agriculture. The company also provides training for drone piloting, drone building, drone data processing and using industrial drone applications, among others. 

“The integration of 5G with drones will ensure faster data transmission with low latency while transmitting and receiving vast amounts of data efficiently. In essence, the integration of 5G technology into drones will significantly enhance their capabilities, enabling faster, more reliable, and data-intensive operations, which are crucial for various industries and applications”, said Srivastava.

Shares of DroneAcharya jumped 3.2% to INR 195 during the intraday trading hours on BSE. By the end of the session today, the company’s shares shed some of the gains ending marginally higher at INR 189.75.

The company has also issued a correction notice saying that the tender it had secured from the Haryana government’s Drone Imaging and Information Service of Haryana (DRIISHYA) project for the supply of surveying drones is valued at  INR 1,41,00,000 and not INR 1,41,75,000.

The startup has cracked many deals and contracts over the last few months. Last week, it also signed an agreement to acquire a 51% stake in Pune-based PYI Technologies, a startup that offers camera drones, DIY kits and customised drones.

The company’s shares have gained over 39% year to date.

The post DroneAcharya Shares Jump 3.2% After Securing Contract From TCS & BofA’s Bulk Deal appeared first on Inc42 Media.

Omnichannel marketplace FirstCry, which on Thursday (December 28) filed its draft papers for an initial public offering (IPO), also runs 180 preschools across 91 Indian cities under its umbrella brand – Intelli Education, which was rebranded after the former acquired Oi Playschool from Hyderabad’s People Combine Group in 2019.

At the time of acquisition, Oi Playschool operated 55 centres in Bengaluru and Hyderabad, and FirstCry had then announced it would expand the playschool to more than 1,000 centres across the country.

However, understandably, the two long years of pandemic interrupted its expansion plans.

The SoftBank-backed company’s parent entity Brainbees Solutions Private Ltd has filed its draft red herring prospectus (DRHP) with the capital markets regulator Securities and Exchange Board of India (SEBI) for raising INR 1,816 Cr via fresh issues of shares. 

The IPO offer also comprises an offer-for-sale (OFS) complement which will allow the startup’s existing shareholders to sell up to 5.43 Cr equity shares.

As per the startup’s DRHP, FirstCry under Intelli Education runs preschools which offer learning aids and core education services for kids between the ages of one to six.

The preschool offers products and services ranging from preschools, books, toys and home learning kits to baby cognitive development activities.

By the end of the first quarter of FY24, Intelli Education had a total enrollment of 6,649 students.

Founded in 2010 by Supam Maheshwari and Amitava Saha, FirstCry sells baby care and mother products through online platforms, company-owned modern stores, franchisee-owned modern stores and general trade retail distribution.

“…With the aim of providing early childhood experience learning centres to parents, in November 2019, we acquired a chain of preschools that was in existence since 2010 and re-branded them with the Intellitots brand in 2020,” the DRHP added.

These preschools instill a brand awareness about FirstCry to these kids’ parents. FirstCry’s preschool competes against Euro Kids, Kidzee, among others.

In 2021, the company also launched FirstCry Intelliskills, an early learning brand that develops educator-certified books and toys which aid a child’s learning beyond school.

The post Nuggets From FirstCry DRHP: Ecommerce Unicorn Runs 180 Preschools appeared first on Inc42 Media.

D2C unicorn Mamaearth on Thursday (December 28) informed the bourses that a senior executive of the company flouted insider trading norms. 

In a filing with the BSE, Honasa Consumer, Mamaearth’s parent, said that the startup’s vice-president of sales, Shuchi Garg, traded shares of the company without prior approval from the company secretary or compliance officer. 

The violations pertained to the Code of Conduct under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

“…We would like to inform you that one of the Designated Person (Employee) of the Company has traded into the equity shares of the Company without obtaining preclearance of the Company Secretary and Compliance Officer of the Company,” Mamamearth said. 

In the meantime, the unicorn has issued a warning letter to the erring employee and has directed her to ‘refrain’ from such actions in the future. Mamaearth also said that the matter will be placed before the company’s audit committee meeting for a ‘detailed action plan’.

As per the regulatory filing, the violations by the executive spanned two separate transactions on two different days. On December 12, Garg sold 2,000 shares of Honasa Consumer at INR 420 apiece, which translated into a total value of INR 8.4 Lakh. 

On the second occasion, on December 27, she again executed the sale of 1,500 shares of the company at a share price of INR 457.16, resulting in a cumulative value of INR 6.85 Lakh. Both the deals (INR 15.2 Lakhs in total) were undertaken without express pre-clearance from the company secretary.

Mamaearth made its stock market debut last month. The company listed at a premium of 2% (INR 330) on the NSE while it made a flat debut on the BSE at INR 324. The stock has surged more than 42% on the BSE since its listing, largely on the back of its positive Q2 FY24 financial results and an improving investor sentiment for new-age tech stocks.

Last week, brokerage firm JM Financial initiated a ‘BUY’ call on Honasa Consumer citing a better outlook and strong financial performance so far. 

Mamaearth shares closed 0.22% lower at INR 460.35 on the BSE on Thursday (December 28).

The post Mamaearth Sr Exec Flouts Insider Trading Norms, Sells Shares Worth INR 15 Lakh In Two Tranches appeared first on Inc42 Media.

Shares of PB Fintech, the parent entity of insurtech major Policybazaar, became one of the biggest gainers of 2023 on the back of the bull run in the domestic equity market, which resulted in the reversal of fortunes for new-age tech startups after the hammering they got in 2022.

Like its peers Zomato and RateGain, the fintech player made big gains in the first half of 2023 and also sustained the uptrend for the rest of the year. As per analysts, the stock is on track to continue this rally in the mid to long term.

On the back of the uptrend of 2023, PB Fintech’s market capitalisation more than doubled to $4.2 Bn by the end of the year from $2 Bn at the end of 2022. Its shares gained 73% in 2023 versus an almost 50% decline last year.

So, what led to the rally in 2023? The answer is the same as we have discussed in our analysis of other new-age tech stocks as part of Inc42’s 2023 In Review series — improvement in fundamentals and an aggressive march towards profitability.

Now, before we go into how 2024 looks for the stock, let’s take a look at the PB Fintech stock performance so far in 2023. 

March Towards Profitability Set The Stock On Fire

Amid the increasing focus of startups, both listed and unlisted, on turning profitable, PB Fintech reported its first adjusted EBITDA profitable quarter in Q4 FY23. The startup also stated that it expected to turn profitable in FY24.

The development came just a quarter after PB Fintech’s lending vertical, Paisabazaar, achieved breakeven on an adjusted EBITDA level in Q3.

Led by two back-to-back positive developments, PB Fintech shares gained over 38% year to date (YTD) by the end of May 2023.

Amid all these, the startup saw a slew of new developments in 2023, including the rise in competition after Jio Financial Services entered into the insurtech space. However, the stock not only brushed aside the concerns and continued to climb up but was also less volatile in comparison to its fintech rival Paytm.

 A look at some of the key developments at the startup during the year. 

• The Directorate General of GST Intelligence (DGGI) reportedly sent a show cause notice to Policybazaar earlier in the year for alleged wrongful claim of input tax credit.
• The DGGI notice was just the beginning of many other regulatory actions. Later in the year, the Securities and Exchange Board of India (SEBI) imposed a penalty of INR 1 Lakh on Paisabazaar Marketing and Consulting, a subsidiary of PB Fintech, for appointing a principal officer without requisite certification.
• In the most recent incident, Paisabazaar also came under the radar of the Income Tax  Department.
• PB Fintech appointed Sarbvir Singh as the new joint group CEO of the company.
• Policybazaar secured a fresh fund infusion of INR 350 Cr ($42 Mn) from its parent entity PB Fintech.
• The startup’s ESOP expenses continue to be a drag on its bottom line. However, it has managed to bring down these expenses over the last few quarters. 
• Most analysts strengthened their bullish outlook on the stock this year. 

In its last reported quarter – Q2 FY24 – PB Fintech reported a net loss of INR 21 Cr, which was a decline on a year-on-year basis but a rise on a quarter-on-quarter (QoQ) basis. However, the bull run in the stock remained unaffected by the QoQ rise as its two verticals, Policybazaar and PaisaBazaar, are showing strong growth.

The startup’s share price surged to INR 784 as of December 28 (Thursday) from INR 447.55 at the end of December 2022. The offloading of stakes by some of the major investors like SoftBank and Tiger Global during the year also failed to have any significant impact on the stock.

Decoding PB Fintech’s Shareholding Pattern

In line with the trend seen at Zomato and Paytm, PB Fintech also saw some of its pre-IPO investors selling their stakes in the startup. 

• SoftBank, which has been selling its stakes in the listed Indian companies in its portfolio, offloaded a 2.53% stake in PB Fintech in December, held via its SVF Python II Cayman. 
• Prior to that, the fund offloaded a 1.85% stake in the fintech major in October while SVF India Holdings (Cayman) also sold a 0.69% stake in the startup at the same time.
• Tencent Cloud Europe B.V. offloaded its 2.09% stake in PB Fintech in May this year, bringing down its holding to 6.28%.

Meanwhile, the rise in the stock price attracted interest from mutual funds and other institutional investors. A large number of PB Fintech shares offloaded by pre-IPO investors were lapped up by the likes of HDFC Mutual Fund, Mirae Asset Mutual Fund, ICICI Prudential Life Insurance Company Limited, Societe Generale Odi, BNP Paribas Arbitrage, and Citigroup Global Markets Mauritius, among others.

As of the September 2023 quarter, as many as 21 mutual funds held a 7.83% stake in PB Fintech as against 16 of them holding a 4.68% stake a year ago. Insurance companies also increased their stakes to 3.7% from 0.84% at the end of the quarter ended September 2022.

The stakeholding of foreign portfolio investors in the company increased to 29.92% in the quarter ended September this year. Overall, foreign institutional investors held a 49.4% stake in PB Fintech at the end of Q2 FY24.

Will The Stock Continue To Soar In 2024?

The Street is largely bullish on the stock and expects it to continue the ongoing rally next year. Some brokerages believe that PB Fintech has the first-mover advantage in the insurtech space, which, along with its strong tech backbone, will help continue the strong growth despite the rising competition. 

In a research note earlier this year, Kotak Institutional Equities said, “We believe that intense competition in the life business, with a change in tax rules and increase in maximum bancassurance partnership and increased negotiating power of PB, provide tailwinds to its growth.”

Meanwhile, Citigroup opined that PB Fintech’s end-to-end customer journey model, market dominance in digital-backed origination, robust tech backbone, and transitioning monetisation model towards annuity revenue place it in a sweet spot.

Following PB Fintech’s Q2 FY24 earnings, Keynote Capitals noted that the company was standing at a “pivotal juncture”, driven by catalysts such as renewal commission growth, strategic expansion into Tier II and III cities through offline channels, and stringent cost management. All these measures, the brokerage said, were poised to generate favourable operating leverage. 

Helped by its aggressive goals, the startup’s management now sees PB Fintech turning profitable by as early as Q3 FY24. 

However, it is pertinent to note that brokerage JM Financial flagged competition from insurance regulator Insurance Regulatory and Development Authority of India’s (IRDAI’s) Bima Sugam and the rising losses of PB Fintech’s new initiatives business as key risks to its growth thesis.

Kush Ghodasara, CMT and an independent market expert, expects the stock to perform well in the long run but sees a decline in the next 2-3 months.

All said and done, the year 2024 promises to be another good year for PB Fintech’s investors. However, the stage for it would be set by the startup achieving its net profitability goal. As such, all eyes would be on PB Fintech’s financial performance in Q3 FY24 and the subsequent quarters. 

The post Reversal Of Fortunes: After 50% Fall In 2022, PB Fintech Soars Nearly 75% In 2023 appeared first on Inc42 Media.

I recently had the opportunity to work with a D2C brand that was facing challenges in converting Facebook ad leads into actual sales. Despite generating a significant number of ‘Add-to-Cart’ actions, their overall conversion rate remained disappointingly low. 

Upon closer examination, it became clear that their ad optimisation efforts were primarily focused on attracting exploratory users rather than actively seeking out potential buyers.

This realisation spurred me to share this cautionary note with you, highlighting the importance of carefully considering the nuances of ad targeting and aligning optimisation goals with the actual behaviour of your target audience.

The Challenge With High-Value D2C Brands

Direct-to-consumer (D2C) brands that offer high-value products often find themselves facing a tricky situation. 

With conversion rates typically lower than desired, many opt to focus on optimising for softer conversions such as “Add-to-Cart” or “Checkout Initiated.” However, this strategy can sometimes lead to unexpected changes in funnel behaviour.

The Optimisation Paradox

Focusing on softer conversions, such as adding items to carts, can sometimes lead to a surge in that particular action. However, this doesn’t always translate into actual purchases. 

The reason behind this lies in Facebook’s algorithm, which tends to target users more likely to add items to their carts but not necessarily those who complete the purchase. 

These users, often referred to as ‘explorers,’ generally require a longer period of engagement before making a buying decision.

Understanding The Audience Behavior

This audience, while valuable, behaves differently. They are in the exploration phase, not the commitment phase. They might fill their carts, but the journey from cart to purchase is a longer and more complex one. It requires a different approach, one that nurtures and guides them through the decision-making process.

Striking The Right Balance

The art of optimisation lies in striking a delicate balance between capturing the attention of potential customers and gently steering them towards a purchase decision. This requires a more sophisticated approach that encompasses targeting, content, and follow-up strategies.

Your Role In Navigating This Challenge

As a marketer, you’re not just interested in what users do; you also want to understand why. By unravelling the motivations behind their actions, you can craft strategies that not only pique their interest but also lead to meaningful outcomes.

In conclusion, the journey from a click to a customer is not a straight line but a winding path filled with insights and opportunities. It’s about understanding the subtle art of digital persuasion, where every click, every add-to-cart, is a conversation with a potential customer. 

Our role as marketers is to be the guiding light on this path, turning curiosity into commitment, and interest into investment.

As we continue to navigate the ever-changing digital marketing landscape, let’s remember that the true measure of our success is not in the quantity of leads, but in the quality of conversions. 

The post A Guide D2C Brands’ Guide To Facebook Ad Leads Transformation appeared first on Inc42 Media.

Union commerce minister Piyush Goyal on Thursday (December 28) announced the extension of incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for ecommerce exports. 

“The government will be extending RoDTEP benefits for exports through ecommerce,” said Goyal while addressing an event organised by the Director General of Foreign Trade (DGFT).

He added that the incentives will be notified by the DGFT in the next few weeks. 

The scheme offers refunds on taxes, duties and levies incurred by exporters during the manufacturing and distribution of goods, which are largely not reimbursed under any other mechanism at the central, state, or the local level.

An official also said that the union commerce ministry would soon institute the necessary IT framework and other enablers for the extension of the scheme for the exporters.

The move is expected to boost ecommerce exports as well as offer incentives and sops to homegrown micro, small and medium enterprises (MSMEs) to facilitate the government’s target of $1 Tn worth of merchandise exports by 2030.

During the event, a Memorandum of Understanding (MoU) was also signed between the DGFT and logistics startup Shiprocket for ‘holding capacity building and handholding sessions’ under the DGFT’s ecommerce outreach programme. 

Speaking about the upcoming ecommerce policy, Goyal said that the proposed rules are at the final stages of discussion. He added that the government is hopeful of bringing out the policy very soon.

The RoDTEP sops come at a time when the DGFT and the Centre have taken a slew of steps to spur ecommerce exports in the country. In November, the government said the foreign trade agency was working with the Department of Revenue to develop an initiative on the lines of ‘composition levy scheme’ to waive GST for smaller MSME players.

The DGFT has also partnered with the Department of Post to strengthen and expand Dak Niryat Kendras and foreign post offices (FPOs) to shore up ecommerce exports. On the global scale, the government is also working with postal services of multiple countries to build a full stack online tracking mechanism for export consignments.

Back home, the DGFT has tied up with ecommerce platform Amazon to pilot an initiative which will train ecommerce exporters in 20 districts. The ecommerce major is also bullish on ecommerce exports out of India and is looking to ramp up the number to $20 Bn by 2025. 

The post Govt To Extend RoTDEP Sops To Ecommerce Exports: Piyush Goyal appeared first on Inc42 Media.

The Financial Intelligence Unit (FIU) of the Finance Ministry has issued notices to nine overseas crypto platforms, including Binance and Kucoin, for not complying with provisions of the anti-money laundering laws. 

The show cause notices have been issued to the platforms for not registering as reporting entities with the FIU. The unit has also written to the Ministry of Electronics and Information Technology (MeitY) to block the websites of the nine entities. 

Apart from Binance and Kucoin, the platforms under the radar of the authorities include Huobi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfenex.

FIU India is tasked with processing, analysing and disseminating information about questionable financial transactions to enforcement agencies and foreign FIUs.

“Director FIU India has written to (the) Secretary, Ministry of Electronics and Information Technology to block the URLs of said entities that are operating illegally without complying with the provisions of the PML Act in India,” said an official press statement. 

Under existing rules, all onshore and offshore virtual digital asset service providers are mandated by law to register with the FIU as ‘reporting entities’ and comply with provisions of the Prevention of Money Laundering Act (PMLA), 2002. 

The rules entail reporting, record keeping, and other obligations on the platforms and sure they are in line with local laws. Curiously, reporting entities are mandated to file annual statements of financial transactions with the Income Tax Department, which include details of any reportable account maintained by a company during the year.

Crypto exchanges and VDA companies also have to maintain KYC details or records of identity documents of their users and clients as well as account files and business correspondence with its clients.

However, it is pertinent to note that these obligations are ‘activity-based’ and not contingent on physical presence in India, as per the Ministry. 

This comes months after the union government brought VDA platforms under the ambit of the PMLA in March this year. Since then, 31 such platforms have registered with the central nodal agency including names such as CoinDCX, WazirX, Coinswitch, CoinswitchX, Zebpay, among others. 

The move has largely been led by considerations around curbing the usage of cryptocurrencies for money laundering and financing of terrorism. Non-compliance with norms would invite appropriate action under the PMLA, Minister of State for Finance Pankaj Chaudhary said earlier this month.

Apart from regulatory compliances, the government has also opted for a heavy taxation regime towards cryptocurrencies which has hammered the sector. Centre’s decisions to levy 1% tax deducted at source (TDS) on crypto transactions above INR 10,000 and 30% tax on profits last year have hammered the ecosystem and pumelled crypto trade.

Coupled with calls for crypto ban by senior Reserve Bank of India (RBI) officials and the collapse of giants such as FTX, the crypto has dampened the sentiment. This has dried up funding and resulted in crypto platforms such as Pillow and WeTrade shutting operations this year.

The post FIU Issues Notice To Binance, Kucoin & 7 Other Offshore Crypto Platforms, Asks MeitY To Block Websites appeared first on Inc42 Media.

In a post-pandemic world, regulated industries and new-age businesses have jumped on the digital bandwagon to optimise reach and maximise profits. Consumers have evolved in sync, happy to access every convenience with a click or a tap. But super-exposure to cyberspace leaves the world increasingly vulnerable to cybercrimes, and businesses, ranging from SMEs to BFSI leaders, tend to suffer the most. 

Consider this. Cyber-financial fraud accounted for 77.4% of the cybercrimes in India between January 2020 and June 2023, per a survey by the Future Crime Research Foundation (FCRF). A 2023 India Threat Landscape report by Cyfirma says startups and SMEs top the ‘most targeted’ list in 2023, while banking and financial services institutions saw 9.5% of all cyberattacks in the last three years. The losses of India Inc. are still not quantified, but globally, cybercrime costs can reach $10.5 Tn annually by 2025, according to industry research and media organisation Cybersecurity Ventures.   

As businesses across industry segments, especially those in the financial sector, are compelled to navigate a fast-growing digital minefield, they require cutting-edge financial crime solutions for protection against sophisticated cyberfraud.

To help tackle online fraud at scale, serial entrepreneur Ranjan R Reddy launched the B2B SaaS startup Bureau ID, a global, real-time risk decisioning platform for identity verification, fraud prevention and compliance management in sync with country-specific cybercrime laws and anti-money laundering (AML) checks. It primarily enables banks, fintechs, financial institutions (FIs) and enterprises to fight fraud, and compliance abuse across the customer journey, using its proprietary fraud detection suite. 

Using link analysis (examines data connections and relationships for potential fraud) and its predictive AI models, Bureau employs an identity graph to detect fraud networks. This is a critical step when securing a business against use-cases such as fraud rings, money mules and synthetic identity frauds amongs others. Bureau uses its proprietary technology and alternate data points to validate and match digital identifiers to physical identities and analyse their unique behaviour patterns to track anomalies in real-time.     

An identity network is thus built over time, securing businesses against cyberfraud throughout users’ life cycles and protecting users when they interact and transact with businesses. Bureau monitors all transactions in real time and provides data insights to companies via a unified dashboard. 

The startup’s mission is to provide an all-in-one risk decisioning platform for fraud detection and prevention that ensures digital trust. With its no-code workflows and a single API integration, businesses can validate their customer’s identities, and get continuous fraud monitoring at onboarding,  as well as the transaction stage. Reddy claims businesses can reduce fraud by 80% and speed up identity decisioning time by 95% using Bureau solutions.

The startup claims to have serviced organisations worldwide including banks, NBFCs, micro-finance institutions, BaaS platforms and companies in the gig economy, insurance, gaming and payments. Bureau’s customer base spans India, South-east Asia, Middle east and North America. According to Reddy, the startup has successfully verified 400 Mn+ identities and protected over $500m of digital transactions against vulnerabilities to date. Some of Bureau’s customers include US-based FIS Global and Enformian, KSA’s Tweeq and companies like Goibibo, Rapido, Bajaj Finance, IIFL and others from India.

Bureau has raised over $20 Mn since inception, most recently from a clutch of global investors such as GMO VenturePartners, Quona Capital and Commerce Ventures. Noted angel investors, including Mark Britto, EVP-chief product officer at PayPal, and Bobby Mehta, former president and CEO of TransUnion, also supported the cyber fraud prevention platform. 

Inside Bureau’s State-Of-The Art Fraud Prevention Offerings 

Going by its overarching cybercrime prevention strategy, it is clear that Bureau was not built in a day. For starters, Reddy dedicated much of his career to building and scaling businesses in the mobile payment space. In 2012, he founded Qubecell, a Mumbai-based payments startup, acquired a year later by San Francisco-based mobile payments company Boku. At Boku, a now publicly listed company, he served as chief business officer in his last leadership role.

Reddy elaborated that during his time at the company, he incubated and scaled its identity division which was later sold to Twilio. This experience made him realise that the existing cybersecurity solutions were fragmented and  siloed when it came to crucial components like compliance, fraud and security.

“I aspired to build a single platform, with a single API integration, that proactively and holistically monitors identities and transactions against fraud and abuse by providing real-time decisions,” said Reddy.

Hence, Bureau ID was set up in 2020 to accomplish that through its comprehensive fraud detection suite that includes no-code workflows, device intelligence, behavioural AI, compliance APIs, alternate data solutions, visualised through an identity graph. 

Regarding the issue of increasing cyberfraud, Reddy stresses that smart identity decisioning should consider how fraudsters use mule accounts to launder stolen money. Money mules are mostly individuals typically recruited by fraudsters to transfer huge sums between accounts and across locations until all links to the eventual receivers are lost (however, some mule accounts are also opened by bots). 

As human mules use multiple phone numbers, email IDs, stolen or spoofed identities for these activities, mapping digital and physical identity verifications through alternate data solutions plays a critical role in detecting them, especially when businesses onboard new customers.

Next comes device intelligence, making the procedure more foolproof. Bureau cross-checks device fingerprints, which are unique patterns generated through device configurations and usage. Pitting a device ID/fingerprint against a specific user helps prevent a fraudster from switching devices too frequently. The platform also validates IP addresses, operating systems (to analyse if they are genuine or spoofed), VPN and tracks remote desktop and malware, which are commonly used by  mules to bypass security measures.

“Mules open multiple accounts for money transfers from different devices in a very short period. With data intelligence, we can identify anomalous activity,” explained Reddy.

Bureau identifies bots in action and scans user behaviour with behavioural AI tools that look at unique human behaviour patterns such as, typing speed, scrolling patterns, and hesitation percentage to successfully authenticate an identity.

“A criminal using stolen identities to open accounts is unfamiliar with personal data. Hence, the person may display hesitation or rely on copy-pasting to enter account details,” the Bureau CEO said. 

Finally, an identity network is created with the help of link analysis. “The risk associated with an identity is assessed based on the type and number of such links while factoring in indications of past fraudulent activities reported by Bureau’s customers,” he added. 

Bureau’s no-code solutions can be easily integrated with business backends via API, allowing companies to set up customised security features as easily as dragging and dropping pre-configured blocks created for every step of the customer journey. 

According to Reddy, the startup has secured SOC2 compliance, a voluntary compliance standard developed by the American Institute of CPAs (certified public accountants) that specifies how service organisations should manage customer data. More importantly, unlike many data brokers, Bureau does not store personally identifiable information (PII) and only relevant, tokenised insights are generated for identity verification.

The startup has set up a pay-per-API revenue model, where businesses pay for the APIs and workflows tailored to suit their specific needs. It also generates revenue through a fixed monthly/annual platform fee for essential functions like building workflows, transaction monitoring and continuous screening, regardless of API usage. 

Tapping Into Investors’ Network For Growth

Although Bureau’s strong value proposition positioned it well in the niche space, raising awareness and onboarding B2B customers proved difficult for the early stage startup. Promotion through digital marketing is a common but costly tactic. What if a startup could capitalise on its investors’ network to expand its customer base? That’s precisely what Bureau did.

The startup recently raised additional capital in a Series A funding round in July 2023. Japan’s GMO VenturePartners (GMO-VP) was the lead investor in this round, and its sister company GMO Payment Gateway, the largest payment service provider in Japan, also pitched in along with existing investors. As part of the Japanese internet conglomerates GMO Internet Group, both firms specialize in fintech investments within the Indo-Pacific region, promoting cross-border innovation. GMO Payment Gateway also runs an AIF in India, providing debt funding to fintech startups.          

While the funding helped Bureau enhance its data and AI capabilities, Reddy was more than impressed when his investors stepped in to help with customer acquisition.

Leveraging GMO-VP’s connections, Bureau serviced Jai Kisan, GroMo, OTO, Niro and MobiKwik of its portfolio companies. 

“GMO has been an invaluable partner in our journey. Its extensive scale and unique perspective make it an exceptional guide and partner. Bureau has already reaped significant benefits due to its impressive portfolio and network,” he said.

Asked about this holistic hand-holding, Ryu Muramatsu, director and founding partner from GMO-VP said the benefits were mutual. “Digital trust is pivotal for all financial transactions where many challenges originate, especially the upsurge in fraudulent activities. Tackling these hurdles is crucial for the entire fintech sector. That’s why we think Bureau is a significant player [in the identity decisioning space].”

Bureau has reportedly agreed to a strategic partnership with GMO Payment Gateway. Bureau is eyeing expansion across the Middle East and Southeast Asia and aggressively marketing its solutions to increase awareness. It will also cater to more institutional players, especially in the banking sector. This makes ample sense as the BFSI sector remains the primary target for cyberattacks and accounted for more than 70% of the spend on anti-fraud measures in 2022. 

To speed up its operations, Bureau completed its strategic acquisition of Delhi-based inVOID in 2023. The digital identity verification and KYC authentication platform typically works with fintechs and FIs.

“This is a timely acquisition as the convergence of new regulations and a sharp uptick in fraud cases in recent years have escalated the demand for robust compliance and risk management solutions,” said Reddy.

The Future Is Now For Fraud Detection Businesses

Globally, the fraud detection and prevention market is estimated to reach $66.6 Bn by 2028 from $27.7 Bn in 2023, growing at a CAGR of 19.1%, a report by MarketsandMarkets says. Although this augurs well for FDP players, businesses are still not looking at the problem in its entirety. 

As a Deloitte report points out, most organisations depend on homegrown systems where fraud detection rules are framed on an ‘if-then’ scenario. This logic works well in a structured data environment. However, given the humongous and complex data in circulation, complete automation and advanced AI/ML will be required instead of the traditional logic.  

Moreover, organisations still seek use-case-specific solutions or try to integrate authorisation logic in disparate tools instead of opting for a centralised ecosystem. Unless identity decisioning is embedded as a core solution, it cannot secure the end-to-end digital journeys of businesses and their customers in real time.    

Reddy seconds this, saying businesses must leverage tools and technologies to champion consumer trust and proactively prevent fraud, instead of waiting for the regulators to introduce and enforce penalties that focus more on compliance. 

Currently, Bureau does not face direct competition from Indian players, although startups like HyperVerge and Helloverify exist in niche segments of fraud detection. The platform also holds a distinct advantage with a global presence across three regions.

Nevertheless, there is no shortage of global players in the market, including Bureau ID, New York-based Alloy, London-based Onfido and others that provide comprehensive fraud detection solutions. This also highlights that the West has recognised the need for comprehensive identity verification due to the increasing financial fraud.

Will the homegrown startup ecosystem gear up similarly and emerge as a major FDP hub, catering tailored solutions that align with the unique compliance needs of Indian banks and FIs?

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Non-banking finance companies DMI Finance and Aditya Birla Finance are in discussions to acquire Bengaluru-based fintech startup ZestMoney in a potential firesale.

Although negotiations are still ongoing, a deal may be finalised soon, ET reported.

Aditya Birla Finance and DMI Finance, both partners of ZestMoney, have examined the financial records of the lendingtech startup.

The lenders are expressing interest in acquiring not only the technology platform of ZestMoney but also considering taking control of the loan book that the startup had built for its partners.

ZestMoney currently holds an outstanding loan book of approximately INR 400 Cr, which it sourced for its lending partners. The startup primarily operated as a sourcing platform, facilitating loans for its partner NBFCs, rather than independently maintaining its own loan portfolio.

Earlier this month it was reported that ZestMoney is about to shut down as the efforts of the new management to revive the company have failed to materialise.

The fintech startup will wrap up operations by the end of December and lay off its entire workforce of 150 employees, the startup’s new leadership team announced this in a town hall meeting.

The development came after the company failed to raise a follow-on round or find a buyer to save its sinking ship.

The company’s original cofounders – Lizzie Chapman, Priya Sharma and Ashish Anantharaman, quit the startup in May this year. Their resignations also came after the acquisition talks with fintech major PhonePe failed. At the time, the company had to trim 30% of its workforce.

Founded in 2015 by Chapman, Sharma and Anantharaman, the startup offers BNPL services to customers, enabling them to pay their shopping bills in three instalments at 0% interest rate.

Backed by names such as Prosus, Quona, Zip, Omidyar Network and Ribbit Capital, ZestMoney raised more than $130 Mn during its lifetime. At its peak, it commanded a valuation of $445 Mn – $450 Mn and was considered the poster child of the BNPL ecosystem in the country.

ZestMoney’s losses grew 3X year-on-year (YoY) to INR 398.8 Cr in the financial year 2021-22 (FY22) against INR 125.8 Cr reported in FY21. However, revenues grew by 1.6X YoY to INR 145 Cr in FY22.

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After the global economic slowdown and high-interest rates brought an abrupt end to the initial public offering (IPO) party in 2022, the year 2023 saw some signs of revival in the public markets globally.

In India, the IPO landscape was abuzz with activities, especially in the second half of 2023, on the back of strong economic growth and positive domestic and foreign investor sentiments. Overall, the number of IPOs crossed the 100 mark by the start of December this year.

In line with this, new-age tech IPOs, too, picked up pace on the Indian stock exchanges. A total of five Indian new-age tech companies went public in 2023 as against a mere three in 2022.

The five new-age tech companies – ideaForge, Mamaearth, Yatra, Zaggle, and Yudiz – collectively raised over INR 3,600 Cr this year through their IPOs. 

Experts believe that 2024 will see even more Indian companies taking the IPO route given that the benchmark indices, Sensex and Nifty50, are hovering around their all-time high levels. This is also expected to result in a surge in IPOs of new-age tech startups.

While the likes of Ola Electric, GoDigit, FirstCry and OYO have filed their draft red herring prospectus (DRHPs) with the Securities and Exchange Board of India (SEBI), others like Swiggy, PayU, and Garuda Aerospace are also eyeing public listings next year.

Then, there are also not-so-prominent names like Travel Boutique Online and agri-drone company AITMC Ventures, which filed their draft documents this year and are likely to launch their IPOs next year.

In addition, Mobikwik, Capillary Technologies and ixigo, which earlier postponed their plans of public listing due to adverse market conditions, may also decide to go public, considering the improvement in investor sentiment.

Considering the aforementioned factors, Inc42 expects at least 12 new-age tech startups to go public in 2024. With that said, here are the new-age tech companies that are likely to go public next year.

12 Startups Likely To Go Public In 2024

Awfis To Be India’s First Publicly Listed Coworking Startup 

Chennai-based coworking space provider Awfis Space Solutions is set to launch its IPO in 2024 following its filing of its DRHP at the fag end of December.

As per the DRHP, the IPO comprises a fresh issue of INR 160 Cr and an offer-for-sale component of up to 1 Cr shares. With this, Awfis is set to become the first Indian coworking startup to go public. 

The OFS component will comprise share sale of up to 5.01 Mn equity shares by Peak XV, up to 4.94 equity shares by Bisque Limited, and up to 75,174 equity shares by Link Investment Trust.

The startup plans to allocate INR 52.5 Cr from the net proceeds to establish new coworking setups. It aims to launch 15 new centres under the ‘Awfis’ format in FY25. These will span across Mumbai, Bengaluru, Delhi NCR, Hyderabad, Pune, Chennai, Kolkata, Ahmedabad, Lucknow, Bhubaneswar, and Jaipur. 

The remaining net proceeds, amounting to INR 68 Cr, will be utilised as working capital.

Founded in 2015 by Amit Ramani, Awfis has evolved from a coworking network to a tech-enabled workspace solutions platform, catering to freelancers, startups, SMEs, large corporates, and MNCs.

Having secured $90 Mn from investors, Awfis completed its last funding round in May 2020.

The startup competes with the likes of WeWork, Smartworks, BHIVE, 91Springboard, OYO’s Innov8and Tablespace. 

Awfis reported revenue of INR 545.28 Cr in FY23, compared to INR 257.05 Cr a year ago. Its net loss declined slightly to INR 46.64 Cr in FY23. In the first three months of FY24, the coworking space provider reported an operating revenue of INR 187.7 Cr, while its loss stood at INR 8.56 Cr.

FirstCry Wants To Be The Second New-Age Ecommerce Major To Go Public

FirstCry filed its DRHP with the market regulator SEBI in the last week of December. The Supam Maheshwari-led ecommerce unicorn is looking to raise INR 1,816 Cr through fresh issue of shares. With this, the startup is on track to become the second new-age vertical ecommerce major to go public after Nykaa.

The public issue also includes an OFS component of up to 5.4 Cr equity shares. Japan’s SoftBank, which owns over 25% stake in the startup, will offload 2 Cr shares, whereas Premji Invest will sell 86 Lakh shares during the OFS. Founder Supam Maheshwari will also sell some shares in the IPO.

The startup plans to use the net proceeds from the IPO for setting up new modern stores and warehouses, as well as lease payments for existing modern stores in India, totaling INR 648 Cr. 

Additionally, it aims to use INR 155.6 Cr for investment in its subsidiary FirstCry Trading for overseas expansion in Saudi Arabia. It will also utilise INR 170.5 Cr from the IPO proceeds for investment in subsidiary Globalbees Brands to acquire an additional stake in indirect subsidiaries. 

While INR 100 Cr will be used for sales and marketing initiatives, INR 57.6 Cr will be utilised for technology and data science costs. The remainder amount is intended to be used for funding inorganic growth through acquisitions, other strategic initiatives, and general corporate purposes.

Founded in 2010 by Maheshwari and Amitava Saha, FirstCry is an omnichannel baby and kids marketplace, providing various categories of products from clothing to essentials.

The startup entered the unicorn club in 2020 after raising $296 Mn from SoftBank’s Vision Fund. 

It posted a consolidated net loss of INR 486 Cr in the fiscal year 2022-23 (FY23), a rise of 518% from INR 78.6 Cr in the preceding fiscal year.

Garuda Aerospace Expedites Listing Plans 

Chennai-based drone startup Garuda Aerospace, which recently raised INR 25 Cr (about $3 Mn) in a bridge funding round led by Venture Catalysts and WeFounderCircle, is eyeing a listing around mid-2024.

In an interaction with Inc42 earlier this year, founder and CEO Agnishwar Jayaprakash revealed his IPO plans, expressing the hope to initiate proceedings post-March 31, 2024. However, the startup seems to have expedited its public listing plans since then.

Founded in 2015 by Jayaprakash, Garuda manufactures and sells drones, and offers drone-as-a-service (DaaS) solutions to sectors like agriculture, defence, mining, mapping, and warehouse management.

Earlier Jayaprakash stated, “We don’t want to be a startup with an inflated valuation because then it becomes difficult to maintain that and you just keep slipping. I want to climb the mountain. I feel that adding value and making a profitable business automatically will appeal to retail investors.”

Meanwhile, the Indian government is aiming to make India the drone hub of the world by 2030 and has implemented several reforms to foster the growth of drone manufacturing and usage within the nation. Consequently, two drone startups, DroneAcharya and ideaForge, have listed on the stock exchanges since 2022.

Currently valued at $250 Mn, Garuda Aerospace is looking to close FY23 with a revenue of INR 100 Cr. Speaking with Inc42, Jayaprakash had earlier said that the drone startup was eyeing a revenue of INR 1,000 Cr in FY24.

Go Digit Refiles IPO Papers

Even after refiling its DRHP, Insurtech major Go Digit General Insurance has yet to receive the final approval for its $440 Mn IPO.

The Bengaluru-based startup, which first filed its DRHP in August last year, refiled the IPO papers in March this year to address the concerns raised by SEBI about its employee stock appreciation plans. 

Go Digit’s IPO comprises a fresh issue of shares worth INR 1,250 Cr and an offer for sale (OFS) of 109.45 Mn shares. The startup plans to deploy the proceeds to expand operations and increase its capital base. 

After filing its first DRHP with the SEBI, the startup also received the IRDAI’s approval to launch the IPO in November, but the market regulator kept the IPO in ‘abeyance’.

In its new addendum of the draft prospectus, Go Digit General Insurance disclosed that it had received a show cause notice and multiple advisories from the insurance regulator. 

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

In FY22, its loss widened 141% year-on-year (YoY) to INR 295.8 Cr. However, its operating revenue stood at INR 5,267.6 Cr in FY22 as against INR 3,243.4 Cr in the previous fiscal year.

Mobikwik Presses The IPO Restart Button 

One Mobikwik Systems Ltd, the parent company of fintech unicorn Mobikwik, has restarted preparations for its $84 Mn (around 700 Cr) IPO.

According to a report, Mobikwik is working with DAM Capital Advisors Ltd and SBI Capital Markets Ltd to get listed.

The company is looking to go public next year.

It is pertinent to note that MobiKwik filed DRHP for its IPO of around INR 1,900 Cr with SEBI in 2021 – a year marked by numerous new-age tech companies going public. According to the draft documents, the IPO comprised an issue of new shares worth INR 1,500 Cr and an offer of sale (OFS) element of INR 400 Cr.

In the same year, the fintech major also bagged the SEBI nod for the IPO.

However, the company suspended the IPO process due to a downturn in the global equities market. In January 2022, the startup explicitly said that it would refrain from making a market debut until market conditions stabilised.

Meanwhile, Mobikwik claimed to have posted profit for the second consecutive quarter in Q2 FY24 with a PAT of INR 5 Cr.

Ola Electric Becomes First Indian EV Startup To File For IPO

Recently, Bhavish Aggarwal-led electric vehicle (EV) maker Ola Electric filed its DRHP with SEBI for an INR 5,500 Cr+ public listing. 

As per the DRHP, the Ola Electric IPO will comprise a fresh issue of INR 5,500 Cr. It will also have an offer for sale (ODS) component of up to 9.5 Cr shares. 

Cofounder and CEO Aggarwal and major investors, including SoftBank, Temasek, Tiger Global, Alpha Wave, Tekne Capital, and Matrix Partners, are set to participate in the OFS as Ola Electric prepares for its listing on the BSE and NSE. 

According to the DRHP, the funds from the fresh issue will be directed towards capital expenditure for the Ola Gigafactory project, research and product development, organic growth initiatives, and general corporate purposes. Additionally, the proceeds will be allocated for the repayment or prepayment of the debt.

As per the draft document, the OEM’s net loss surged 1.87X to INR 1,472 Cr in the fiscal year ending March 2023 from INR 784.1 Cr in FY22.

The company also disclosed that its Q1 FY24 loss stood at INR 267.1 Cr.

Founded by Ola Cabs cofounder Bhavish Aggarwal, Ola Electric is an electric vehicle manufacturer, which currently has a lineup of five scooters. 

At the end of October 2023, the company managed a comprehensive omnichannel distribution network, featuring 935 experience centres, which include 414 service centres.

In October this year, Ola Electric closed an INR 3,200 Cr ($384 Mn) funding round in a mix of equity and debt. While the equity part was led by Temasek, the debt part of the round was led by the State Bank of India.

OYO Slashes IPO Size To $400-$600 Mn

OYO filed its DRHP through a confidential pre-filing route and a reduced size in March this year, three months after SEBI directed the hospitality unicorn to refile its draft papers.

OYO initially filed its DRHP with the SEBI in 2021. At the time, it planned to raise INR 8,430 Cr ($1.2 Bn). However, the IPO size has now been scaled down to INR 3,286 Cr–INR 4,929 Cr ($400 Mn-$600 Mn). 

Founded in 2012 by Ritesh Agarwal, the SoftBank-backed startup’s operating revenue grew 14% to INR 5,463.9 Cr in FY23 from INR 4,781.3 Cr in the previous fiscal year. It mainly earns revenue from sales of accommodation services, commission from bookings, and subscriptions. 

Earlier this year, Agarwal told employees that the startup was on course to report its first ever profitable quarter in Q2 FY24, with a project profit of INR 16 Cr.

Lightbox-Backed PayMate To Refile DRHP With SEBI 

Even after SEBI asked Mumbai-based B2B payments solutions provider PayMate India to refile its DRHP, the startup has yet to do so.

PayMate first filed its DRHP for an INR 1,500 Cr IPO in May 2022. It did not proceed with its IPO plans due to uncertain market conditions.  

As per the IPO prospectus, Ajay Adiseshann, the founder of PayMate intended to sell a significant portion of his stake worth INR 134.73 Cr. 

Founded in 2006 by Adiseshan, PayMate counts Visa, Lightbox and Recruit Strategic Partners as its investors. 

PayMate’s consolidated net loss stood at INR 55.7 Cr in FY23, down a marginal 3.5% YoY. Its operating revenue rose 11.7% YoY to INR 1,350.1 Cr in FY23.

PayU India Eyes $500 Mn IPO

Prosus-backed fintech giant PayU India is looking to file its draft red herring prospectus (DRHP) with the market regulator in February for an IPO of at least $500 Mn. The IPO will likely value the company between $5 and $7 Bn.

The company is said to be aiming to go public by the end of 2024. It has enlisted Goldman Sachs, Morgan Stanley and Bank of America as IPO advisors. Further, it plans to involve at least one Indian investment bank in the transaction. 

PayU claims to serve more than 4.5 Lakh merchants, over 70 large banks via Wibmo, and 2 Mn+ customers with credit facilities in India.

PayU India enables businesses to collect payments through over 150 modes, including debit cards, credit cards, net banking, BNPL, QR, UPI, EMIs, and wallets. It competes with Razorpay and Cashfree in India.

Its revenue surged 21% YoY to $497 Mn in the first half of FY24 from $412 Mn in H1 FY23, Prosus revealed in its half-yearly financial report.

Portea Medical Gets SEBI Nod For INR 1,000 Cr IPO

Earlier this year, Healthvista India, the parent company of the healthtech startup Portea Medical, received approval from SEBI for its IPO.

Portea filed its draft papers with the market regulator in July 2022, along with an addendum to its draft red herring prospectus (DRHP) on March 10, 2023.

The IPO will comprise a fresh issue of equity shares worth INR 200 Cr and an offer for sale (OFS) of up to 5.62 Cr shares worth INR 800 Cr.

The OFS will see Accel sell up to 2.48 Cr shares that it holds across Accel Growth III Holdings (Mauritius) Limited, Accel India III (Mauritius) Limited and Accel India V (Mauritius) Limited. Ventureast Life Fund III will sell up to 42.78 Lakh shares, and MEMG CDC Ventures will sell up to 44.45 Lakh equity shares.

Qualcomm Asia Pacific will be selling up to 42.56 Lakh equity shares and Sabre Partners Trust will offload up to 39.84 Lakh equity shares in the OFS.

Healthvista India plans to use the incoming funds for its subsidiary’s working capital requirements, debt repayment, medical equipment purchase, inorganic growth, marketing, and general corporate needs.

Founded in 2013 by Krishnan Ganesh and his wife Meena, Portea offers healthcare services,  which include maternal care, physiotherapy, nursing, lab tests, counselling, and critical care.

Portea is currently operational in 16 cities across India. In FY22, the healthtech startup posted a net standalone loss of INR 53.82 Cr against revenues of INR 96.37 Cr.

Swiggy Set To Float The Biggest Startup IPO Of 2024 

In what is being called the biggest IPO by an internet company next year, food delivery giant Swiggy will likely list on the stock exchanges in mid-2024 with an issue size of $1 Bn (INR 8,300 Cr).

As per market analysts, one of the major things to watch out for will be Swiggy’s valuation, which has seen various markdowns and markups. 

Swiggy initiated IPO preparations last year, initially eyeing a 2023 listing. However, global tech startup valuations experienced a sharp decline, causing Swiggy to temporarily defer its plans.

Founded in 2014 by Sriharsha Majety, Nandan Reddy, Phani Kishan Addepalli, and Rahul Jaimini, Swiggy has raised $3.6 Bn to date.

Swiggy’s net loss jumped 2.2X to INR 3,628.9 Cr in FY22 from INR 1,616.9 Cr in FY21 on the back of a sharp rise in expenses.

Unicommerce Sets Sight On A 2024 Listing

Unicommerce eSolutions Pvt Ltd, which offers a software-as-a-service (SaaS)-based order management and fulfilment platform to ecommerce and retail businesses, is expected to make a public listing late next year. The cofounder of Snapdeal, Kunal Bahl, mentioned about the Unicommerce IPO in an X post on November 7.

The startup enables end-to-end management of ecommerce operations for D2C brands, retail companies, and other online sellers through its comprehensive suite of SaaS-based technology products.

Unicommerce’s platform keeps track of stocks across multiple warehouses, keeps inventory information updated across multiple sales channels (both offline & online) and automates order pickups to support faster and more accurate deliveries.

Unicommerce’s operating revenue zoomed 52% to INR 90 Cr in FY23 from INR 59 Cr in FY22 due to a strong demand for its services.

Snapdeal acquired Unicommerce in 2015. Established in 2012  by IIT Delhi alumni — Ankit Pruthi, Karun Singla, and Vibhu Garg — the founders exited the company within two years.

[Edited by Vinaykumar Rai]

The post Spring Time On D-Street: Meet The 12 Startups Likely To Go Public In 2024 appeared first on Inc42 Media.

Electric vehicle (EV) manufacturing giant Tesla is likely to enter India with its manufacturing plant in Gujarat next year, as per multiple media reports.

The EV maker’s negotiation for the establishment of its first manufacturing unit in India is in the final stage and is likely to conclude soon.

Meanwhile, as per a report by Ahmedabad Mirror, the announcement regarding Tesla’s manufacturing unit in the state is anticipated to be made during the forthcoming Vibrant Gujarat Summit scheduled for next month.

Gujarat is already home to manufacturing units of automakers like Maruti Suzuki, etc and it is anticipated that for Tesla’s manufacturing plant possible location could be Sanand, Becharaji and Dholera.

However, so far, there has been no official announcement by the EV maker or the state government on the matter. 

During a recent Cabinet briefing, Gujarat Health Minister Rushikesh Patel expressed optimism about Elon Musk’s investment in Gujarat. 

He highlighted the state’s awareness and alignment with Tesla’s overarching goals, drawing a parallel during the address.

Patel also emphasised that the government is actively in talks with the EV maker to finalise the deal on establishing the manufacturing plant in Gujarat.  

Media reports also suggest that Gujarat has become a prime choice for Tesla’s manufacturing plant, not only due to favourable state policies but also its proximity to ports, facilitating product exports. The strategic location, particularly in Sanand, offers a short distance to the Kandla-Mundra port in Gujarat, enhancing Tesla’s export capabilities from India.

The vibrant Gujarat Global Summit was conceptualised in 2003. The tenth edition of the Vibrant Gujarat Summit will celebrate “20 years of Vibrant Gujarat as the Summit of Success”. The summit is dedicated to business networking, knowledge sharing, and fostering strategic partnerships for inclusive growth and sustainable development.

In August, Union Minister of Commerce and Industry, Piyush Goyal, reportedly met with senior Tesla executives in a closed-door meeting to discuss the carmaker’s plans to establish a manufacturing plant in the country.

Earlier, Tesla expressed interest in building a factory in India that would produce a low-cost electric vehicle (EV) priced at around $24,000 (INR 19.87 Lakhs), around 25% cheaper than Tesla’s current entry model for both the Indian market and export.

Tesla is working overtime on its plans to enter India, with multiple meetings taking place between the government and the carmaker’s executives since mid-May. Earlier, it was also reported that the carmaker has leased office space in Pune.

Tesla has leased an office spread over a 5,850 sq ft. area on the first floor of Panchsil Business Park in Viman Nagar, Pune.

Tesla also wants to bring some of its Chinese vendors to India but has been asked by Indian officials to copy Apple’s playbook in the country and ask its Chinese suppliers to set up joint ventures with Indian partners to get clearance.

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Imagine our world as a ship navigating turbulent waters. The captains? A blend of tenacious entrepreneurs and venture capitalists, both equipped with a compass of innovative climate tech solutions. As the waves of climate change grow stronger, their union becomes more crucial.

One doesn’t have to look too far back in history to see how essential innovative technology backed by capital has been in resolving our world’s challenges. The way Apple revolutionised communication, or how Jonas Salk, with the aid of funding, eradicated polio – such transformations are well documented. Today’s challenge, however, is not just of a single disease or a tech revolution but of the very planet we inhabit.

The COP27 in Sharm El Sheikh, Egypt, painted a vivid picture of this challenge. But amid the voices of urgency, there rose a beacon of hope – venture capital investment in climate tech. The marriage between venture capital and climate tech innovation has proven instrumental in shaping a sustainable future. 

Much like how the Medici family funded the Renaissance, breathing life into art and science, modern-day VC firms are now the patrons of a new, greener Renaissance.

Venture Capital And Climate Tech: Not Just Investors but Visionaries

Beyond being mere financiers, VC firms play the role of ‘sage mentors’ to fledgling startups. They are the architects of change and the discerning champions of innovation. 

For instance, picture Yoda and Luke Skywalker from “Star Wars” – with startups as the young Jedis and VC firms as the wise Yoda, guiding them in their quest to combat climate change.

A Glimpse Into The Multifaceted Impact

VC investments in climate tech are a linchpin of our sustainable future, yielding a plethora of benefits. At its core, VC funding catalyses technological innovation, pushing the boundaries of what is possible.

A case in point is Tesla. Before becoming the behemoth it is today, Tesla was on the brink of bankruptcy in 2008. Just as Tesla was getting ready to close a $100 Mn Series E in the Summer of 2008, the global economy crashed, sending the company spiralling toward bankruptcy by the end of the year. An investment round led by Elon Musk and joined by prominent VCs gave it a lifeline. Today, Tesla isn’t just a car company; it’s a torchbearer for sustainable transportation.

Climate tech is not limited to electric vehicles. As Mark Twain famously said, “Buy land; they’re not making it anymore.” However, with the recent advancements in hydroponic agriculture, we might not need as much land as we thought. 

In India, amidst concerns over volatile tomato prices, hydroponic startups such as Nutrifresh Farm Tech India Pvt Ltd, backed by venture funding, are now enabling year-round tomato cultivation, stabilising prices, and significantly reducing the carbon footprint.

Global Stakes And Local Tales

As per PwC’s State of Climate Tech 2022 report, climate tech funding in 2022 represented more than a quarter of every VC dollar invested in 2022. Concurrently, India’s streets buzzed with electric two-wheelers and three-wheelers, marking a transition to eco-friendly transport. 

Additionally, India celebrated for its culinary traditions, stands on the brink of a foodtech transformation. Merging biotech and foodtech, the aim is broader than merely meeting hunger sustainably. The fusion of biotechnology and foodtech, powered by cutting-edge technology, promises a revolution in food production and consumption.

A Surat-based startup, Zero Cow Factory, leverages precision fermentation to lead in A2 beta casein production worldwide. Pursuing global endorsement for its easily digestible protein, it targets an unprecedented production cost of $20/kg by 2025. 

With a strong sustainability ethos, ZCF aims to scale globally, championing health and eco-friendliness, with a vision to nourish 10 Bn people by 2050.

The Renaissance 2.0

The original Renaissance was an era of flourishing art and science. Today, technology has ushered in a second Renaissance, one rooted in sustainability. Aided by venture capital, climate tech startups are not just challenging the status quo but reshaping it.

In Conclusion

In the narrative of tackling climate change effectively, venture capital emerges as the unsung hero. Venture capital’s role in climate tech isn’t just about funds; it’s about faith – faith in a vision of a greener future. 

As we stand at this crossroads, it’s imperative to remember that every monumental journey in history, from man’s first steps on the moon to the digital revolution, was backed by a blend of vision and capital. 

As we write the story of our planet’s future, let’s champion the unsung heroes and recognise that our collective prosperity lies in unity, innovation, and strategic investment.

The post The New Renaissance: Venture Capital Fuels Climate Tech Innovations appeared first on Inc42 Media.

As the world has become an interconnected global village, it not only poses fewer barriers to trade and commerce but also drives the free flow of culture and education. But there is a catch. Although technology has become ubiquitous in new-millennium learning and students can access a few courses online, higher education from premier institutions has yet to witness the much-desired blurring of borders. In-person classroom learning is still the best option for aspiring youth keen to pursue the global curricula of their choice from world-class foreign universities.

Closer home, India has seen a record number of students heading out to study abroad. According to government data, more than 13 Lakh students were studying in 79 countries in 2022, and the number will likely reach 18 Lakh by 2024, per a Redseer report. Although most global universities spend a sizable sum to attract international students, the US remains the most preferred destination for Indians, and the country hosted more than 4.65 Lakh students in 2022. 

According to industry experts, the attraction of the elite Ivy League, along with economic and societal factors (career growth, better pay, quality of life), initially triggered the exodus. Currently, India is the second-largest sending country to the US after China, underscoring the young people’s intent to grow globally. However, making the cut becomes increasingly difficult due to a competitive and complex selection procedure.

This is where Athena Education comes in with its holistic solutions, preparing applicants for admission to top university programmes while helping them stay aligned with their passion and educational interests. The aim is to ensure that all their goals and aspirations reach a culmination through these courses and the promise that these students bring is fully realised in the long run. This is an innovative approach, unlike many overseas admission consultancies that rarely explore students’ interests or activities to understand their life’s purpose.         

The decade-old consultancy was set up by Princeton University graduates Rahul Subramaniam and Poshak Agrawal. It claims to have trained and mentored more than 800 Indian students, helping them get into their preferred universities across 15 countries. Students also get help with academic scores and English proficiency, which is needed for writing killer essays and compelling letters of intent. In 2022, as many as 68 Athena Education students were accepted by Ivy League schools, while 30 were admitted to MIT, Stanford University, Caltech and 20 other universities in 2023. 

A Leap Of Necessity From Offline To Online

Upon their return to India, the founders began to mentor the children of their friends and relatives for overseas admissions. At first, it was done informally, but the duo soon noticed that the country’s startup ecosystem was picking up the pace. They swiftly transitioned their offerings to a structured business and Athena Education was born. 

The onset of Covid-19 in 2020 put international admissions into turmoil as borders closed and lockdowns were extended to cope with multiple pandemic waves. Undeterred by the massive disruption, Athena Education shifted to the online mode and focussed on building student profiles and their applications to stay prepared for the future. 

Once the offline mode started picking up, the startup invested extensively in state-of-the-art facilities, including an in-house robotics laboratory, a design studio and a recording studio to provide students with hands-on learning experiences. 

Recalling the chaos, Subramaniam said the real challenge lay in helping students transition from offline to online learning as the seismic shift psychologically impacted them. To address this, Athena Education created engaging online modules and tailored its coaching style to service individual requirements. 

In addition, it started a YouTube video series titled Your Friendly Neighborhood College Counselor in 2023 to explain the intricacies of college admissions to its target audience. Clearly, the online reachout has worked well as the student community has grown 2.5x and the team strength has gone up 5x to manage the growth. 

A Deep Dive Into Athena Education’s Training Modules & Core Philosophy

Talking to Inc42, Subramaniam detailed the eligibility criteria to qualify for an Athena programme, the screening tests post onboarding and the mentor-driven preparation procedure. 

To begin with, students approaching Athena Education must secure a minimum of an aggregate  80% of all subjects and qualify in the interview conducted by Team Athena to gauge their potential.

During the orientation week, selected students have to write two psychometric tests. One has been designed to gauge their interests, strengths and goals, while the other delves deep into one’s life experiences to understand what has shaped the personality.

Subramanium emphasises that these assessments leverage the Japanese philosophy of ikigai (raison d’être or life purpose). Mentors hold one-on-one sessions with students to find their ‘purpose’ that will be nurtured throughout their journey and included in their curricula. 

These mentors at Athena Education are individual subject matter experts to work with based on their subject interest. “For example, a CS student would work with our senior technology and data science mentors, while an economics student would work with an economics researcher and expert.” said Subramaniam. 

A customised curriculum is thus developed based on the test outcomes that combine aptitude, interests, earning potential and societal value creation. Mentor-matching is also done, keeping these factors in mind. Each student is assigned a mentor for the rest of the journey until applications are sent to universities.

Mentors play a crucial role at Athena Education as they create ‘student brands’ (read profiles), help them execute capstone projects and keep track of their weekly progress. They also supervise SAT preparations, writing skill development and composition of college essays. For context, a capstone project demonstrates how well a student can put subject expertise to practical use, underscoring the person’s involvement and adding value to the profile. 

According to Subramaniam, academics are a foot in the door for Ivy League aspirants. What differentiates the crème de la crème is the social impact they create outside of school education. Based on Athena’s interdisciplinary courses (say, a combination of liberal arts and STEM subjects) and experiential learning, the capstone projects done by its students can create that kind of real-world impact. 

Athena Education’s founder shared how a capstone project achieved this goal. A student at Athena Education was passionate about music and had an academic interest in mental health (he had studied psychology in school), but lacked coding skills. So, the mentors from Athena Education’s Knowledge Center trained him and the student came up with an app that recommends therapeutic music to lift the mood of individuals suffering from mental health issues. Subramaniam claims that a Gurugram-based hospital is now using the app.

Admission Consultancy Is Booming, But Here’s The Caveat  

While the Ivy League and other premier universities will always be the first preference, the competition gets more challenging every day. For instance, Cornell University (ranked 13th on the QS World University Rankings 2024) has an acceptance rate of around 9%, the highest among Ivy League schools. Moreover, non-STEM students find fewer job opportunities in a slowing market, while those pursuing STEM programmes also face a tough environment as tech companies have resorted to mass layoffs due to macroeconomic headwinds.

But pitted against these realities is the prestige associated with foreign degrees (regardless of the education quality) and the lure of working and settling abroad.

According to recent industry reports, India has seen a 35% YoY jump in students admitted to US universities. More interestingly, American institutions also prioritise Indian students for undergraduate and graduate recruitment (70% and 80%, respectively) per the Fall 2023 Snapshot survey for the academic year 2023-24. Therefore, it is not surprising that more Indians, especially aspiring youth from Tier II and III locations, will be flocking overseas to study in not-so-premier institutions.  

This may result in an immediate boom for edtech startups (both marketplaces and pure-play entities) like Leverage Edu, iSchool Connect, AdmitKard, Admission Overseas and Athena, and the Indian market will only keep growing. A study by HolonIQ further predicts that the international education market is set to reach $433 Bn by 2030, while 70% of the global demand is in Asia and Africa. This is expected to grow exponentially and admission consultancy players will grow in sync.      

However, growth will depend on various factors such as the quality of solutions, worldwide reach and success rates across elite institutions like Ivy League schools. Too much focus on Tier II and III universities may backfire as candidates soon realise that those degrees will not fetch a significant premium in the job market despite the high cost of overseas education.

Technology, too, will play a pivotal role as many players are rapidly adopting cutting-edge SaaS solutions and emerging tech like generative AI to increase their efficiency. Although tech adoption across education businesses empowers all stakeholders and ushers in a seamless knowledge flow, a holistic approach involving diverse interdisciplinary learning, personalised training and focus on achieving social good through education may help students power ahead.

As the Harvard guidelines say: Our Admissions Office chooses carefully from a broad range of applicants who seem to us to offer the most promise for future contributions to society. Not all of the students who are best prepared for college will be among those with the most future promise, nor are all of the most promising well prepared academically. 

The post How Athena Education’s Three Pillars Of Training Prepare Ivy League Aspirants As Overseas Admission Gets Tougher appeared first on Inc42 Media.

Three spacetech startups Dhruva Space, Bellatrix Aerospace and TM2Space are reportedly set to launch their payloads aboard Indian Space Research Organisation’s (ISRO) upcoming Polar Satellite Launch Vehicle (PSLV) – C58 XPoSat Mission next Monday.

These payloads are destined for the PSLV Orbital Experimental Module (POEM-3) on the launch vehicle, scheduled to lift off from Sriharikota in Andhra Pradesh at 9:10 AM, as per Moneycontrol’s report.

Hyderabad-based Dhruva Space plans to launch its LEAPTD (Launching Expeditions for Aspiring Technologies Technology Demonstrator) to showcase microsatellite subsystems. Meanwhile, Bengaluru-based Bellatrix Aerospace will deploy two payloads, which include Rudra 0.3 HPGP, a green monopropellant thruster crucial for maintaining satellite orbit throughout their lifespan of 10-15 years, and ARKA 200.

In a previous collaboration in April 2023, Bellatrix and Dhruva Space shared space in the POEM module of PSLV-C55 to launch their individual payloads. Besides, Bengaluru-based TakeMe2Space (TM2Space) will launch Radiation Shielding Experiments Module to assess the effectiveness of tantalum coating. 

India made history in 2022 with its inaugural private rocket launch by Skyroot and numerous satellite launches, garnering global attention.

In October, Skyroot Aerospace unveiled its indigenously built rocket Vikram-I at its new headquarters. 

In the spacetech sector, we have witnessed a significant increase in the number of Indian startups, rising from just one in 2014 to 189 in 2023.

According to Inc42’s Indian Spacetech Startup Landscape & Market Opportunity Report 2023, the spacetech sector is estimated to reach a market size of $77 Bn by 2030. 

Earlier this year, Skyroot secured INR 225 Cr (approximately $27.5 Mn) in a Pre-Series C funding round led by Temasek to drive the next phase of growth through increased investments in infrastructure, reinforcement of its technology leadership, attraction of top-tier talent, and the enhancement of its launch frequency and capabilities

Another spacetech startup Agnikul, which owns the first private launchpad within the ISRO campus, secured INR 200 Cr ($26.7 Mn) in October to accelerate the commercialisation of its existing technologies.

The post Shooting For The Sky: Three Spacetech Startups To Launch Payloads Aboard ISRO’s C58 XPoSat Mission appeared first on Inc42 Media.