Ahead of February 2019 deadline for changes in foreign direct investment in ecommerce, global ecommerce giant Amazon and Walmart-owned ecommerce marketplace Flipkart had to pare down their stakes in the seller-entities through which were dominant sellers on their platforms. As a result, Amazon reduced its stake in its two major sellers — Cloudtail and Appario — to 24% and let its partners — Narayana Murthy and Patni Group, respectively — make it a majority stake joint venture.

However, that decision is now back to bite Amazon as these companies seek increased profit margins.

Media reports have surfaced that Cloudtail and Appario are renegotiating deals and asking for higher margins from brands and distributors. They are reportedly asking for a hike in margins up to 18-20%. They have been factoring in logistics cost and marketplace commissions to Amazon.in.

They are now demanding 20-21% margin on audio products, up from 17% earlier, while in television, they are asking for 10-11% margin against 9% earlier. However, for some brands in smartphones the sellers are ready to sell even at no margin.

This demand started almost two-three months ago, at the time when Amazon reduced its stake. It is being emphasised now that the entire focus of Cloudtail and Appario is now on profitability and viability as compared to revenue and building market share.

A FMCG seller went on to say, “Earlier there was no issue with working capital as there was free flow of money from Amazon. Now, Narayana Murthy is not running a charity here.”

Cloudtail is now reportedly onboarding independent sellers to trade imported food products that ARIPL is prohibited from selling. Government norms only permit the selling of local and packed food items on both offline and online retail channels.

The constraints on Amazon on control of these two sellers are viable. The government has repeatedly emphasised on following these new rules. Commerce Minister Piyush Goyal had recently emphasised that these rules should in no way be violated by any company, both in letter and in spirit. The government will not allow ecommerce firms’ discounting practices to affect small shopkeepers, he said.

The post As Amazon’s Cash Infusions Slow Down, Cloudtail And Appario Focus On Profitability appeared first on Inc42 Media.

Mumbai-based robotics startup emotix that identifies emotional intelligence, has raised $2.69 Mn (INR 18.58 Cr) in a fresh funding round. Sources close to the development indicated to Inc42 that the investment is a part of a larger funding round.

According to the Ministry of Corporate Affairs filings accessed by Inc42, the investments have come in from Chiratae Ventures (formerly IDG Ventures), Technology Venture Fund and Yournest India.

The filings further showed that the fresh funds will be invested towards company’s research and development requirements.

The creator of Miko, a robot for children focused on educating and entertaining children, emotix was founded in January 2015 by three IIT Bombay alumni: Chintan Raikar, Prashant Iyengar and Sneh Vaswani. The company last raised $2 Mn in April last year.

As per emotix, priced at $285 (INR 19,000), Miko has the capability to keep improving its knowledge graph over time by capturing new information. It said 22 pilots were conducted prior to its launch. Earlier, talking about Miko, Vaswani said that it’s an interface that “aims to fulfill the gaps in a young child’s education that can be used to engage, interact and ultimately educate the child without taking anything away from a human experience”.

The company had recently launched second model of Miko, named Miko 2. The company is also expanding its operations in the US.

As an artificial intelligence and robotics-focused company, emotix has been struggling with its expenses and the aim to achieve profitability. The company’s filings for FY 2017-18 showed that it incurred expenses of INR 2.34 Cr to generate revenues of INR 1.48 Cr.

In FY19-20 the company aims to be profitable with a Y-o-Y growth of 354%.

Other Indian startups who are utilising robotics to disrupt different segments include QTPI and Pune Bharti Robotics, among others. Apart from them, a teenage trio also developed India’s first food serving robot named Butler ‘O’ Bistro (BOB) in Bengaluru last year.

According to a report on the “Educational Robot Market by Component (Hardware and Software), Type (Humanoid and Non-Humanoid), Education Level (Elementary and High School Education, Higher Education, and Special Education), and Geography – Global Forecast to 2023”, the educational robot market is valued at $778.6 Mn in 2018 and is expected to reach $1,689.2 Mn by 2023, at a CAGR of 16.8% between 2018 and 2023.

The toys market in India is worth $3 Bn, with less than 5% in the organised segment. Beyond the play toys, a combination of programming, robotics, education and fun in one package of emotix is an interesting addition here.

The post Chiratae, Yournest Invest In Robotics Startup Emotix appeared first on Inc42 Media.

Gurugram-based ecommerce platform Snapdeal has raised an undisclosed amount of funding from Anand Piramal. Anand Piramal is the executive director of Piramal Group and founder of Piramal Realty. He has invested in the company in a personal capacity, a company statement said. 

Anand Piramal said that Snapdeal’s sharp execution in bringing great selection to the mass market segment in Tier 2-3 cities has been quite successful, leveraging the growing internet penetration in these geographies. 

“Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics. With hundreds of millions of first time ecommerce buyers yet to transact, Snapdeal is well poised to grow in the future,” Piramal added.

Led by Kunal Bahl and Rohit Bansal, Snapdeal has evolved in a new version of its operations, which founders call Snapdeal 2.0. In 2017, Snapdeal faced a massive downturn after a SoftBank-orchestrated merger with Flipkart failed. From layoffs to losses, the company went through a difficult period. 

However, over the last two years the company has scaled its operations to make productive returns. Bahl in a LinkedIn post said that company’s transacting customers grew 2.2X and traffic surged 2.3X to 70 Mn unique users/month. 

Kunal Bahl, CEO and cofounder of Snapdeal said, “Anand’s investment comes as a significant endorsement for Snapdeal and the transformation the company has undergone over the last couple of years. His appreciation for what it takes to build a company with growing revenues with good economics in a competitive market comes from his own experiences of building and operating large companies in competitive sectors like real estate and financial services.”

Snapdeal is now looking to consistently compound revenue growth and create large and valuable enterprises. The company is also looking to temper its growth to address identified parts of the process that are impacting user experience.

Snapdeal’s Return To Form

In 2017, the failed Flipkart merger left Snapdeal in shambles. The company had to let go of much of the staff, change offices, struggle with sellers and at the same time, fight for its survival. After selling all its subsidiaries including Vulcan Express, Unicommerce and Freecharge, Snapdeal got enough capital to reign in its costs and use the money to focus on its ecommerce business. As Snapdeal cofounder Kunal Bahl said in one of his earlier blog posts, “The FreeCharge sale was an important part of Snapdeal 2.0 and without that capital, our survival as a company would have been at risk.” 

As a result, Snapdeal is now the only horizontal ecommerce company at scale left in India that is independent and not owned or operated by a large multinational corporation. The company has issued details of its performance for FY19 saying that Snapdeal grew its consolidated revenues by 73% YoY to INR 925.3 Cr in 2018-19 as compared to INR 535.9 in 2017-18.

In the last two years, Snapdeal has added  over 60K new seller partners, who have added over 50 Mn new listings. Snapdeal now has more than 500K registered sellers, who have more than 200 Mn listings on the marketplace.

Earlier, founders shared that the company has been cash flow positive in June 2018 which means that the company is now earning money from its business.  Over the last two years, the company has controlled its losses by 96% and Bahl attributes this growth to:

• Getting closer to customers
• Deeper collaboration with seller partners
• Aligning technology platform with core objectives
• Putting the fun back in shopping
• Staying lean and moving fast
• Building a culture of belief 

The ecommerce environment today is in a state of flux and is currently undergoing a reorganisation to comply with the new FDI rules which came into effect in February. This is coupled with much-awaited entry of Reliance in the ecommerce industry, which is set to be a major disruptor. Snapdeal with its latest investment, is clearly looking to capitalise on the new ecommerce landscape.

The post Snapdeal Raises Fresh Funding From Anand Piramal appeared first on Inc42 Media.

Digital payments unicorn Paytm has announced its partnership with a non-banking financial company (NBFC) Clix Finance to enable digital loans for both its customers and merchants. 

According to a company statement, Paytm will avail these loans to Paytm customers and merchants in the mode of deferred payment or postpaid and merchant lines facilities. 

“We have seen an overwhelming response to Paytm postpaid and merchant lending products. With this partnership, we aim to bring our credit tested algorithmic lending products to a larger customer and merchant base,” said Nitin Misra, senior vice president of Paytm.

Further, founder and chairman of Clix, Pramod Bhasin said, “Together, we will co-create many unique and customised products that will work seamlessly to address unmet financial needs of millions of customers.”

Earlier last month, Paytm was reported to be in partnership talks with the Gurgaon-based SME lending platform Clix Capital, which is a subsidiary of Clix Finance. 

Delhi NCR-based Paytm was founded by Vijay Shekhar Sharma in 2010. Initially launched as a digital wallet company, the company has since then expanded into multiple verticals including ecommerce (Paytm Mall), online payments, mutual funds (Paytm Money), and had also launched its own Payments Bank in 2017.

The fintech major had been facilitating short-term loans to some merchants on its platform through company’s tie-ups with the NBFCs (Non Banking Financial Company).

Digital Lending In India

As per Inc42 DataLabs, the credit demand in India is projected to be worth $1.41 Tn by 2022. The estimated growth rate in credit demand is 3.73% between FY17 and FY22.

This $1.41 Tn opportunity has led to the growth of multiple lending startups in the country including LendingKart, PerkFinance, Aye Finance, ETMONEY, LazyPay, and Shubh Loans, among others. 

The prevalence of digital lending startups in India has opened new opportunities for synergies between fintech startups and established financial institutions and banks. For example, Indifi, a lending startup, has partnered with Edelweiss Retail Finance. In other similar cases, traditional financial institutions have partnered with fintech startups to leverage their technology platforms and data or expand the addressable market by tapping users of fintech products.

Between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 50.13% or $3.82 Bn was in payments tech startups, followed by 25.49% ($1.94 Bn) in lending tech startups, according to Inc42 Datalabs.

The post Paytm Partners With Clix Finance To Enable Digital Loans appeared first on Inc42 Media.

Chennai-based Software-as-a-Service unicorn Freshworks is reportedly working towards an initial public offering (IPO) as early as 2021. The listing is expected to be on New York-headquartered stock exchange, NASDAQ.

Founded by Girish Mathrubootham and Shan Krishnasamy, Freshworks claims to have over 150K clients worldwide using the Freshworks software product suites, including leading companies such as Toshiba, and Cisco, among others.

The company raised $100 Mn last July and entered the unicorn club at a valuation of $1.5 Bn. Till date, the company has raised $250 Mn from marquee investors such as Tiger Global and Sequoia. The company also reached $100 Mn ARR and launched a suite of services — Freshworks360.

Inc42 had earlier noted that Freshworks’ growth has been supported by strong financials, an acquisition-led growth strategy and bundled a suite of services with individual products.

Evolving from a startup mindset to a large-scale corporation, the company has divided roles and responsibilities of its employees.  It is now being reported that Freshworks CEO Girish Mathrubootham has relocated to the US. This is expected to keep in close touch with US headquarters in California as he now spends most of his time in the US market, closer to consumers and other stakeholders.

The company is also working to create increased awareness of its brand in the US and details of its vast customer. It is being further emphasised that in May, Freshworks also advertised for a “Senior Mgr, SEC Reporting”. The person will be responsible for preparation forms such as Form S-1, a document used by companies going public in the US markets.

It also hired a new CFO Suresh Seshadri last year, who helped US-based AppDynamics in its IPO. Mathrubootham reportedly said he is essentially splitting his time between India and the US, and travelling to other global markets London, Berlin, Bengaluru, and Sydney.

A Freshworks spokesperson told Inc42, “We are actively focusing on building the business, driving growth in new markets, and strengthening our position in existing markets. We will aim for an IPO if and when a public offering proves opportune for the business.”

As a SaaS unicorn of India, Freshworks has major competition from Zoho, Icertis etc (both unicorns). The company will create history if it goes public at this stage, as it lists internationally and is first SaaS startup from India looking to list.

Expected to reach $1 Bn by 2020, the Indian SaaS and enterprise software market currently accounts for 9% of all software sales. DataLabs by Inc42 suggests that in the period between January 2014 and June 2018, Indian SaaS startups raised $2.79 Bn across 520 deals.

The post SaaS Unicorn Freshworks May Consider A Listing On NASDAQ: Report appeared first on Inc42 Media.

Even as the fintech ecosystem has started making inroads into Tier 2 and Tier 3 sectors in the Indian market, the challenge for many fintech platforms is to monetise the maturing user base in the urban context. 

Many fintech platforms started life as free services that let users perform transactions, invest in funds and stocks, and manage their expenses or personal finances. These apps are now looking for a way to get money out of their users. Paytm is the best example, and has morphed from a wallet service to payments platform to a payments bank and is all set to offer investments, insurance and other financial services through Paytm Money. 

Similarly, Times Internet-backed ETMONEY has had to pivot and launch new features to keep pace with the users who are also maturing. While users got a taste of fintech with basic apps and payment platforms, they are only now starting to explore ways to spend more money on fintech platforms through digital insurance, investments and more. 

It started as a daily expense and spending management app in 2015, but ETMONEY has now expanded it services include multiple fintech segments such as zero commission mutual funds, short-term loans and insurance, as it chases a revenue bump. 

Talking to Inc42, ETMONEY founder Mukesh Kalra said, “While the company does not earn any profit on its mutual funds service, with loans and insurance, ETMONEY will get access to a clear revenue stream.” 

Innovating On User Experience To Tackle Competition

A clear revenue roadmap is indeed essential in the fintech market, which is growing tighter by the day. While the total funding and investor interest continue to rise, there is a feeling that business models in this space are not sustainable in the long run, owing to very few players have clear revenue channels in the long run. 

According to Inc42 Datalabs, the total funding in Indian fintech startups has surged by 8.67x from $164 Mn in 2014 to $1.42 Bn in 2018. In the same period, the number of funded startups increased 3.43x from 30 to 103. The top three fintech sub-sectors — payments tech, insurance tech and lending tech — combined made up 85.7% of the total $6.97 Bn funding in Indian fintech startups in the same period.

Considering the untapped addressable market for the fintech sector, there is a lot of competition in this space. ETMONEY, with its diverse offerings, competes with fintech startups such as Chqbook, Earlysalary, Avail Loans, along with digital investment startups including Zerodha, Groww, Sqrl and Paytm Money. On the expense and personal finance management side, it has competition such as Walnut and other smaller apps and tools. Considering the breadth of the competition, one of the biggest challenges for ETMONEY and such super fintech apps, is delivering a consistent user experience, no matter the use-case. 

Commenting on the what differentiates ETMONEY from the competition, Kalra said, “We have a solution-centric approach instead of having an open market approach. Also, user experience focussed innovations have been at the centre of our model.”

One such move, Kalra said, is introducing features such as smart deposit, video KYC for new users, instant SIP schemes, UPI payment integration for investments, and credit score generation, which are usually not available in all platforms. With the introduction of e-mandates for recurring payments, the app also lets users set up auto-payments for mutual fund SIP instalments in a paperless manner.

The question with fintech apps is always around data, and data localisation and security is one of the big goals for the Indian government these days. ETMONEY does track SMS messages and analyses spending trends based on them, but Kalra said the company is in control of sensitive consumer data and is not overly concerned about data localisation regulations. “We have put in place four layers of security on data. We are not even storing the data on the cloud, rather we have set up our own private data centres to secure the user data,” he added. 

“We are very well covered from a privacy perspective. And we don’t see any regulation coming and biting us because we have made it pretty open to the consumers.”  

The ETMONEY app currently lets users manage all their transactions and spending, invest in zero-commission direct mutual funds from 25 mutual fund providers, avail loans between INR 3K and INR 20 Lakhs, buy health and vehicle insurance among other services. The breadth of offerings has allowed the company to break even, Kalra said. 

The Challenge Of India’s Tight Fintech Market

With its new services focussed around insurance and loans, ETMONEY is shifting to a commission-based revenue model where the financial service provider pays a certain fee for each new customer. This is in stark contrast to its earlier play of zero-commission mutual funds. But that has been the primary driver of usage so far. 

ETMONEY claims to have recently crossed the landmark of INR 2K Cr worth of investments in Mutual Funds through its platform. Further, it claims to be adding more than INR 150 Cr in new investment transaction value every month from investors in 1,200 cities. It projects growth of INR 5K Cr in its AUM in the next 12-18 months. But it’s also looking at revenue-generating verticals. 

Naturally, the new services of insurance and loans have been targeted at the affluent user base. According to Kalra, an average ETMONEY customer must be earning at least INR 50K per month, have had work experience for one or two years, and would be married and have one child.  ETMONEY claims to be disbursing loans at an annual rate of Rs 150 Cr at a 30% month-on-month growth rate. 

Kalra said a majority of the ETMONEY target audience is between the ages of 25 and 35 and hail from 12 states and 1,300 cities and towns. The company claims that 65% of its users have a credit score of over 760, which indicates good credit history and thus these are not exactly underserved by the traditional banking sector. 

But the effort is to bring a touch of digitation and technology to their financial needs. It claims to have added 4 Mn users in the past 18 months and says it is driving more than $350 Mn in annual transaction volume on its platform. Kalra agreed that the Economic Times brand value has been instrumental in getting these users on board. 

And perhaps that will be the ultimate success factor for ETMONEY. With the Economic Times being such an institution in the fields of investment, business reporting and economy coverage, there’s a lot of trust in the brand, which cannot be said with the same conviction of its competition. Even so, Kalra stressed on creating differentiation by capitalising on its low user acquisition cost, which allows it to upsell with higher margins, and building specific solutions, rather than going for a marketplace model with multiple partners offering financial services.

“Our approach is catering to the individual users and figuring out the specific need and fulfilling that through partnerships rather than bringing all vendors on board like a bazaar.”

But big name brands have fallen under the trap of stretching their product and services to a point where managing them all becomes a huge challenge. For ETMONEY too, this is the biggest challenge; many fintech services have focussed on a vertical to achieve maximum traction, but ETMONEY’s multi-pronged approach is certainly ambitious. The success here will be defined by how well it competes with the likes of Paytm, Zerodha, Groww, Avail Loans, EarlySalary and others to keep up the pace of innovation and the tech integration that is essential for the fintech sector. 

The post Will ETMONEY’s Hunt For Revenue With Insurance, Loans Pay Off In Tight Fintech Market? appeared first on Inc42 Media.

It’s official, the Inter-Ministerial Committee led by Subhash Chandra Garg, secretary, Department of Economic Affairs (DEA) has submitted its report which recommends a ban on cryptocurrency in India to the finance ministry and the same has now been made public.

As reported, the IMC has recommended a complete ban on cryptocurrencies in India either an asset or currency in the country; however, the committee is agnostic about exploring the idea of RBI-backed digital currencies and has welcomed the ongoing innovations happening around the underlying technology, known as blockchain.

While the report is good news for those fighting against the existence and legality of cryptocurrency in India, crypto startups and enthusiasts feel it’s a direct violation of Article 19(1)(g) which gives them the fundamental right of freedom to business in any sector or trade. Many of the startup founders and stakeholders were naturally miffed with the decision, and some questioned the logic of the move in their conversations with Inc42.

Nischal Shetty, CEO and founder WazirX, highlighted, “Report says the government will take all measures to usher in digital economy using Blockchain. By banning Crypto there can never be a public blockchain so the report contradicts itself.” Another crypto entrepreneur, Shivam Thakral, cofounder and CEO of BuyUCoin, called it a dark day for the crypto industry which was yet to be flourished in India.

Supreme Court lawyers Vijay Pal Dalmia and Sidharth Dalmia are the first who filed a PIL (Writ Petition (Civil) no. 406 of 2017) in July 2017, seeking a complete ban on cryptocurrencies citing rising illegal activities around it.

Commenting on the IMC Recommendations, Vijay Pal Dalmia told Inc42,

“It’s a step in the right direction. This will finally end the economic anarchy that cryptocurrencies in India had created. With such stringent actions which include up to 10 years of jail as punishment and up to INR 25 Cr of penalty, the government will be able to contain illegal tradings.”

However, Sathvik Vishwanath, cofounder and CEO, Unocoin took a more moderate view point and commended some aspects of the report. He told Inc42, “The report is not surprising. The public domain had the info that the Subhash Garg Committee is not in favour of the crypto assets industry. It is just that we are seeing the full report now. It is good to see that the committee has put quite some efforts to prepare the report but I strongly feel that by being very risk-averse we will significantly hinder the progress of the industry and would only end up as being spectators of how other developed countries adopted and moving forward with it.”

It’s not just startups that have been impacted. Many VCs and angel investors have backed crypto startups. Utsav Somani, angel investor and partner at B1T Capital, spoke about the high attrition rate that’s expected in this space. Somani, an investor in crypto startup CoinDCX, told Inc42, “This report will push the digital ledger technology (DLT) community to fight or flight. All the great technical innovations coming out of this space will now be taking the flight to a more crypto-friendly jurisdiction.”

Billionaire and crypto investor, Tim Draper of DFJ Ventures, earlier after the leaked draft Bill, had tweeted, “People behaving badly! India’s government banned Bitcoin, a currency providing great hope for prosperity in a country that desperately needs it. Shame on India leadership. Pathetic and corrupt.”

The IMC Report: Highlights

The 108-page report which includes the draft “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” has gone into detail about cryptocurrency practices and official policy world over. It has marked the official position of cryptocurrencies and its definitions in the important economies around the world.

Among the main highlights of the report are:

• For the first time, cryptocurrencies, as well as blockchain as a technology, have been officially defined, though the definition itself has become controversial as it doesn’t include fiat cryptocurrencies (digital currency backed by a central bank) into the definition of cryptocurrencies.
• The report delves into blockchain in detail, recommending a slew of use cases in various sectors and organisations
• The report discusses the possibility of having a fiat cryptocurrency
• The report marks that cryptocurrencies have no intrinsic values and hence there is a need to protect consumers as well as India’s financial system and economy.
• The report likens cryptocurrencies with Ponzi schemes citing the ongoing Amit Bhardwaj $300 Mn alleged fraud case
• The report cites high volatility, malware used for illegal mining, high use of electricity for Bitcoin’s mining, cryptocurrency’s ability to affect the efficacy of RBI’s monetising capability as among the other primary reasons to recommend a complete ban on cryptocurrencies.
• The report has multiple times cited China as an example which banned cryptocurrencies trading and ICOs in the Mainland.

But at the same time, the government is bullish on distributed ledger technology, which is most commonly known as blockchain.

Speaking about this incongruity, BuyUCoin’s Thakral said, “It’s clear from the report that the government wants to boost distributed ledger technology but they need to understand that you can’t boost DLT like blockchain while completely banning crypto assets.”

The IMC Recommendations For Cryptocurrency  

• Cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises.
• The committee is of the clear view that private cryptocurrencies should not be allowed. These cryptocurrencies cannot serve the purpose of a currency. The private cryptocurrencies are inconsistent with the essential functions of money/currency, hence private cryptocurrencies cannot replace fiat currencies.
• A review of global best practises also shows that private cryptocurrencies have not been recognised as a legal tender in any jurisdiction.
• The committee recommends that all cryptocurrencies be banned in India, with the exception of any cryptocurrency issued by the State.
• The committee endorses the stand taken by the RBI to eliminate the interface of institutions regulated by the RBI from cryptocurrencies. It also recommends that all exchanges, people, traders and other financial system participants be prohibited from dealing with cryptocurrencies.
• Accordingly, the committee has recommended a law banning cryptocurrencies in India and criminalising any activities connected with cryptocurrencies in India
• The committee also recommends the government establish a Standing Committee to account for the technological developments globally and within the country and also the views of global standard setting bodies, to revisit the issues addressed in the report as and when required.
• The committee is of the view that it would be advisable to have an open mind regarding the introduction of an official digital currency in India.

What IMC Report Does Not Tell Us

The report delves into the details of cryptocurrencies being used as a mode of payments and assets. It counts the reasons why cryptocurrencies must not be allowed to be used as currency or mode of payment as it is not backed by any legal tender according to Section 26 of the RBI Act. But there are things that it misses too.

WazirX founder Shetty points out that the IMC Report incorrectly states that crypto is a “currency”, while there are cryptocurrencies classified as assets including “utility tokens” and “securities”. There is no mention of these cryptos, Shetty said. Bitcoin or Ethereum are not used as currencies in India but as assets, he added.

Shetty is right. Cryptocurrencies were never used as a legal tender or as currency in India and that was not the expectation of many crypto startups. It has been traded as an asset since the beginning, which has now been banned.

The IMC is of the opinion that these crypto-assets are not backed by any intrinsic value, but that’s not entirely true. Many cryptocurrencies, these days, are backed by petroleum, gold, as well as the US dollar in the case of Facebook’s Libra. The IMC does not make any differentiation among cryptocurrencies that are not backed by any central banks.

The report presents energy consumption as an issue in the context of Bitcoin mining, however, the report does not delve into the numerous solutions suggested world over to curb this consumption.

Shetty stated that the report falsely claims crypto to be a private currency whereas crypto is a decentralised asset not under the control of any private entity. Public crypto is built on top of open-source code and does not have any private entity owning it.

The IMC does not discuss Indian cryptocurrency sector in details. In December 2017, the Income Tax department had conducted surveys at major cryptocurrency exchanges in the country. Not only this, the department had also issued notices to over 100K cryptocurrency traders in the country.  The CBDT chairman was also a member of the IMC, however, the report has not mentioned the findings and pursuance of the notices.

This would have also provided some practical ground for ban or not to ban crypto.

Can India Completely Ban Cryptocurrency? 

There are varying thoughts over this question. While Vijay Pal Dalmia cited that the heavy penalty and punishment will ensure a complete ban, and Thakral agreed to an extent, there’s still some doubt about how enforceable this ban is.

“Yes, it is definitely possible to impose a complete ban on cryptocurrency by the government. After all, they are the governing authority for everything in a democracy. But if we talk about the ban actually working and thus stopping all the crypto transactions then I guess that won’t be possible due to its underlining technology which makes it easy for anyone to transfer or store cryptocurrency without any third party help,” Thakral said.

But Shetty differed,

“Crypto cannot really be banned due to the decentralised nature of the technology.”

According to Somani, the government can implement the ban, if it decides to rally all the ministries – a quick action to ban the virtual currency activity in the country can take place – on the face of it. But that being said, the digital ledger technology is built with privacy as it’s design principle, the 01BT Capital added. What this means is that a technically-abled person will be able to earn, lend, trade in currencies without being traceable.

Unocoin’s Vishwanath said the question is to what extent the ban is enforceable as everything happens digitally on the internet. If it cannot be enforced, then there is no point of discussing conviction which means the ban was useless anyway.

What’s The Exit Plan For The Existing Stakeholders

The IMC report has cited a report from The Wire, according to which, in February 2018 there were around 50 lakh traders in India in 24 exchanges and cryptocurrency trading volumes are in the range of 1500 Bitcoins a day, or around INR 1 Bn, compared to the global 24-hour trading volume which is in excess of $21 Bn. So there are plenty of stakeholders in the crypto ecosystem.

Besides, there are over a dozen angel investors who have invested in crypto startups. Will the government give a window to these traders and investors for a timely exit?

While there is no clarification in the report on this, the draft bill states, “Any person shall, on or after the date of commencement of this Act but on or before the expiry of ninety days from the date of commencement, make a declaration in respect of cryptocurrency in such person’s possession and shall dispose of the same within the aforesaid period.”

Somani is hopeful for a respectful exit, “We will have to wait to see what the retroactive actions look like and allow the virtual currency investors and holders to unwind their positions respectfully.”

Vishwanath chimed in “It would just be bad news. To literally not hold any crypto assets technically, the users would need to withdraw the crypto assets from exchanges if any into their own wallets and delete their private keys. But this will be the same as throwing money into the fire. However, I am sure there will be some timeline that the government would allow for users to figure out what they want to do with crypto assets before the bill gets enforced.”

Dalmia differed with that view. He said the government has time and again made it clear that cryptocurrency activities have no legal backing in the country. “Hence, there is no question of providing a window.”

IMC Report: The Aftershock Of India’s Cryptocurrency Ban

According to WazirX’s Shetty, if the draft bill gets enacted, in a short time thousands of people will lose their jobs as well as crores of their hard-earned money. India, in the long term, will see an increased brain drain, especially in regard to blockchain or decentralised apps. India will not have blockchain and crypto expertise leading to little-to-no crypto-related work reaching India. And, thus, India will lose billions in investment that the crypto sector can potentially attract and the thousands of jobs that it might create in future.

However, Shetty added that the last paragraph of Section 1.1 of the report suggests that the government should create a standing committee to revisit the issues addressed in the report when required. “I’m positive that the government will indeed create a standing committee consisting of industry experts so that India can regulate crypto positively,” he said.

Jaideep Reddy, leader and lawyer at Nishith Desai Associates, who is also representing IAMAI in a crypto case against RBI told Inc42, “There are legitimate concerns regarding crypto-assets, but the report’s recommendation of an outright ban appears excessive. Crypto-assets have benefits as well, which have been recognized globally, including by leading universities like Harvard, global corporations like JP Morgan, and international bodies like the IMF, as well as by previous Indian government reports. Therefore, as we have always recommended, crypto-assets should be regulated to promote the benefits and mitigate the risks.”

He added that traditionally courts have taken a stern view on outright bans and have generally advised for measures with a lesser impact, before endorsing complete prohibition. So hope exists for the crypto community in India, but it’s fleeting and time may be running out on cryptocurrency in India.

What do you think about the massive decision by the Indian government to look at a ban on cryptocurrency? Which side of the debate are you on? Tell us in the comments and let your voice be heard.

The post The Aftermath Of India’s Cryptocurrency Ban: Startups, Investors Poke Holes In Govt’s Plan appeared first on Inc42 Media.

In what could be its last independent annual earnings report before the merger with Ebix, Gurugram and New York-headquartered online travel aggregator Yatra has reported its performance for the financial year ending March 31, 2019.  Curiously, the company managed to have a fall in revenue, yet reduced its losses significantly in the year. In an SEC filing, Yatra has shown that its revenue decreased from INR 1224.8 Cr in FY18 to INR 935.8 Cr this year. This is a 23.6% yearly fall in the company’s revenue.

Yet, surprisingly, the company’s losses have improved substantially. From INR 405 Cr losses in FY18, the company has reduced losses by 70.5% reaching INR 119.35 Cr this year.

Coming down to quarterly performance, shareholders would not be happy that the company turned a profitable Q3 into a loss-making Q4. The company said that its loss for Q4 2019 was INR 85.9 Cr. Notably, in Q3 2019 the company reported a profit of INR 13.5 Cr, which improved on a loss-making Q2 2019 with an INR 16 Cr loss.

At the same time, Yatra revenue for Q4 2019 improved barely 10% reaching INR 225.84 Cr from INR 220.47 Cr in Q3 2019.

However, the start of the year was a major fall in revenues and the company hasn’t yet recovered from the same, even though it is trying bit by bit. In Q4 2018, the company had a revenue of INR 328.57 Cr, which was followed by INR 283.97 Cr revenue in Q1 2019.

Comparing Q1 2019 to Q4 2019, the company has barely 20% recovery in the last 9 months.

Is Yatra’s Adjusted Revenue A Valid Indicator?

Dhruv Shringi, cofounder and CEO, Yatra Online, said the company has delivered “solid growth in the fourth quarter of fiscal year 2019 despite a challenging macro environment for the aviation sector, which enabled us to exceed our full year adjusted revenue guidance.”

He emphasised that in Q4 both its consumer business and business travel platform continued to deliver strong Adjusted Revenue growth and through a combination of cost reductions and optimisation of marketing spend, it made significant progress in reducing the Adjusted EBITDA Loss.

He has also claimed that the company had to accrue certain charges related to Jet Airways being referred to insolvency process and Reservation Content Movement, which adversely impacted its Adjusted EBITDA for the quarter by INR 26.69 Cr.

In terms of yearly performance, the company’s EBITDA loss improved 35.7% from INR 191 Cr in FY18 to INR 122.8 Cr in FY19. As far as quarterly performance, the company’s EBITDA loss improved 30% from INR 62.3 Cr in FY18 to INR 43.3 Cr in FY19.

“We expect the macro environment to remain challenging on the aviation front for the next couple of quarters, however, despite this, we continue to make good progress towards our objective of achieving break-even Adjusted EBITDA in the near term,” Shringi added.

In simple terms, adjusted revenue represents revenue and other income after deducting service costs and adding back expenses related to consumer promotions and loyalty programme costs that has been reduced from revenue due to the adoption of new accounting standard, IFRS 15.

The yearly marketing and sales promotions expenses have reduced by almost 80% Y-o-Y reaching INR 80 Cr in FY19 from INR 415 Cr in FY18. However, including the expenses for consumer promotions and loyalty program costs would lead this to INR 438.1 Cr in FY19, making it a 5.5% increase Y-o-Y.

Further, the company’s personnel expenses also reduced by 12% reaching INR 255 Cr in FY19 from INR 290 Cr in FY18. The company said that this was primarily due to a decrease in employee share-based payment expenses, outsourcing of customer contact centers and certain rationalization in headcount.

The company in the statement has said that it believes that adjusted revenue provides investors with useful supplemental information about the financial performance of its business and more accurately reflects the value addition of the travel services that it provides to its customers.

Yatra: Key Operating Performances

Founded in August 2006 by Sabina Chopra, Manish Amin and Dhruv Shringi, Yatra provides a full range of travel-related services such as domestic and international air ticketing, hotel booking, homestays, holiday packages, bus ticketing, rail ticketing, activities, attractions and ancillary services.

The company claims to have tie-ups with 70K hotels in India and nearly 800K hotels across the globe. It is backed by IDG Ventures, Vertex Venture Management, Norwest Venture Partners and other investors.

Despite rising losses, Yatra has made a string of acquisitions geared towards growth and expansion. These include Travelguru, Travel-Logs, WhatsApp-based concierge app Dudegenie and Bengaluru-based auto rickshaw aggregator MGaadi. In July 2016, Yatra signed a reverse merger agreement with NASDAQ-listed firm Terrapin 3 Acquisition Corp(TRTL).

In 2017, Yatra acquired corporate travel service provider Air Travel Bureau (ATB)for an undisclosed amount. However, the acquisition has been stuck in legal proceedings after ATB alleged that balance of ATB’s outstanding shares owned by the sellers in exchange for a final payment to be made at a second closing has not been done yet.

In February 2019, Yatra India acquired all of the outstanding shares of  Travel.co.in Limited, the corporate travel business of PL Worldways, to strengthen its base in southern India.

During a rocky year, the company’s operating performance had different results. On one hand, gross bookings for the year raked in INR 9254 Cr in FY18, it improved to INR 11,115 Cr in FY19. The yearly performance was led by Air ticket as a segment which contributed INR 7915 Cr, contributing 85.5% to the overall performance.

The performance of hotels segment stayed almost similar at INR 1335 Cr for FY19 from INR 1338 Cr in FY18.

In terms of quarterly performance, the gross bookings improved a mere 10% Q-o-Q, reaching INR 2920 Cr from INR 2639 Cr in FY18. The share of air ticketing increased from 87% in Q3 to 89% in Q4 2019.

In terms of hotels revenue, the performance fell nearly 12% decreasing to INR 308 Cr in Q4 2019 from INR 320 Cr in Q3 2019.

The yearly performance of the company also makes significance as it has recently signed a merger acquisition agreement with Ebix. For the merger, each ordinary share of Yatra will be entitled to receive 0.005 shares of a new class of preferred stock of Ebix. Following the completion of the transaction, Yatra will become part of Ebix’s EbixCash travel portfolio alongside Via and Mercury and will continue to serve customers under the Yatra brand.

At the time of publishing, US markets had just opened and Yatra showed a positive performance for its results at $4.41 (11:15 AM).

The post [What The Financials] What Made Yatra Lose Revenue And Still Cut Losses By 70% In 2019? appeared first on Inc42 Media.

Bhavin Turakhia-led fintech startup Zeta has secured an undisclosed amount in Series C funding round from Sodexo Benefits and Rewards (BRS). According to the company, the funding round has been raised at a valuation of $300 Mn. With this investment, Sodexo will have a minority stake in the company.

Aurelien Sonet, CEO, Sodexo Benefits and Rewards Services, said Zeta’s payment solutions will be used by Sodexo for its suite of solutions. Zeta and Sodexo are already working together on deploying Zeta’s platform across several Sodexo subsidiaries, Sonet said. The two companies have been working together since 2017.

With this funding round, the fintech startup will look at expanding its business to the US, UK, Europe and Southeast Asia. The plan is to start with expanding to 7-8 countries in the next 18 months, before going further. The company also plans to double its engineering team with 200 new hires.

Zeta: From Bootstrap to Funding

So far Zeta has been bootstrapped with funding from the cofounders Turakhia and Ramki Gaddipati. “We have extremely ambitious plans to scale Zeta across the globe. The advantage with Sodexo is that they are a strategic partner and are committed to much more than just the investment. While they can use our platform elsewhere in the world, we can work with their customer base across the globe,” Turakhia said.

Founded in 2015 by Turakhia and Gaddipati, Zeta offers a cloud-native neo-banking platform for the issuance of credit, debit and prepaid products that enable companies to launch engaging retail and corporate products, besides offering digitised solutions to enterprises such as automated cafeteria billing, employee gifting, R&R.

According to the company, it currently has 14K corporate clients and over 1.9 Mn users who use Zeta’s employee benefits and corporate gifting platform. The company has also partnered with brands like RBL Bank, IDFC First Bank, Kotak Mahindra Bank and others, besides Sodexo.

Turakhia, cofounder and CEO of Zeta said the new investment will help the company expand operations to over 15 countries over the next two years. “Today’s banking and fintech ecosystem require cloud-native, privacy-aware, inherently secure, API first banking and payment solutions. With this new investment, we want to further our vision to accelerate to a world where payments are invisible and seamless,” he added.

The post Zeta’s Valuation Jumps To $300 Mn With Series C Funding From Sodexo appeared first on Inc42 Media.

It is estimated by McKinsey & Co. that automation systems could well and truly, undertake the work of up to 140 Mn jobs by 2025. Everest Group reports that Robotic Process Automation (RPA) is likely to lead to a cost reduction of close to 65% with its potential to register data at the transactional level, thereby enabling decision-making which is swift, precise and predictive.

Organizations that stick to a water-tight RPA implementation strategy will soon outpace those who still depend on human capital for all their processes.

RPA is gaining tons of traction for its promise of improving business efficiency, making employees more productive, and leading to an overall increase in profit. In spite of the benefits of RPA in enterprises for those who were the pioneers in implementing it, there are still some decision-makers on the fence whether or not RPA is worth their time and effort.

Robotic Process Automation is a step by step undertaking that enables companies to automate routine, repetitive tasks and free their employees to focus on more fundamental ones. Besides this, there are numerous benefits to implementing it.

To separate the wheat and the chaff, we have compiled a comprehensive list of advantages businesses may enjoy as a result of using RPA.

How Does RPA Help Enterprises?

RPA has made leaps and bounds from when it first came into existence. By automating tasks that are mundane and need little or no human involvement, businesses can-

• direct their workforce toward more critical functions that require decision making and human intelligence,
• save costs by replacing human potential with a machine,
• improve productivity as robots get more done in less time,
• minimize error,
• and, lead to a more efficient organization, overall.

Here’s a complete list of benefits that deploying RPA in business can bring –

Optimise resource use

To achieve high efficiency in business operations, you need to eliminate the risk of errors. This risk is significantly elevated with tedious tasks as humans tend to succumb to boredom and make silly mistakes when carrying out repetitive acts. These tasks are often undertaken with less interest and therefore, suboptimal vigilance.

RPA can be used in these cases to replace humans and assign them tasks that are worthy of their time and effort. By optimizing the use of human resources, companies can get significant tasks done with least resistance from employees who were worn out by repetitive ones.

Introduce adaptability and flexibility to processes

Robotic Process Automation tends to introduce flexibility to business operations. The capacity of RPA systems to adapt to conditions and situations deems them useful in businesses where parts of a constant process change in particular RPA systems have the inbuilt intelligence to make these tiny changes in their working, thus freeing human resources for more useful work.

Studies have shown that when humans are asked to make small changes in daily tasks they are habitual of, they will often forget making the modifications. RPA programs are installed on servers to combat this challenge, making processes flexible and scalable in case the demand shoots or the scope of a process expands.

Aim for cost-effectiveness

RPA tools along with workflow tools can prove to be a game-changer for businesses. Both tools don’t compete with each other- as is the popular notion- instead, complete each other. The program awaits a signal from the workflow tool to perform a specific job, and upon receiving the message, the programs perform the task and feeds the process back to the workflow tool.

In essence, RPA and workflow tools round each other off and complete the circuit needed for cost-effectiveness.

Improve communication

Replace document creation tools with RPA, as it is better equipped to carry out your critical communication processes through its intelligence. RPA can make changes in single documents with triggers along with processes and effect these changes throughout other documents, thus releasing the pressure on employees to manually update files and make tiny edits.

These processes can ensure the end-users, representatives, and on-field workers receive the latest information, every time!

Discover automated responses and triggers

Typically, every RPA system has scheduling capabilities and even though it operates way beyond the scope of a scheduler, it assists managers with completely automated and semi-automated scheduling. In the former scenario, it only triggers and responds when a particular event takes place- mostly a human activity such as a click.

In the case of unattended automation, the trigger does not need to be a human action but can be anything such as an email or a document. Businesses can identify specific areas in their operations that can be wholly or partly automated with the use of triggers and responses.

Implement RPA hassle-free

RPA implementation does not require setting up an API, which saves businesses huge costs and time. Robotic process automation comes with its own set of Graphical User Interfaces – ones that are easier to use and need little technical expertise. RPA systems can perform the same operations humans do such as clicks, keystrokes, pressing buttons, and so on, through the same UI.

Empower the workforce

When robots get to do tedious tasks, employees rejoice. Studies have shown that employee satisfaction increases as they perform meaningful and worthy jobs. As employees undertake significant duties, they look forward to appreciation, and that becomes an active driver in their efforts, leading to build an organization with driven people.

Another indirect benefit of employee satisfaction is when employees have high morale and boosted spirits, they don’t feel the need to switch jobs. Appreciation and drive for one’s work has been touted as the #1 reason for the satisfaction of employees in multiple reports and studies like this one by the Boston Consulting Group.

Insights and Analytics

With robotic hands working on data and analytics, there are lesser risks of data leakages, obsolete information, and incorrect analytics. RPA helps companies see right through their data and get actionable/verified insights with minimal error rate. Robots also help collect data where it wasn’t feasible for humans. Therefore, a wider scope of data collection and analysis leads to fuller and more comprehensive insights. Meanwhile, employees can focus on more sophisticated analytics, leading to better decision making.

Error-free operations

With RPA, this benefit comes as a no-brainer. Process automation eliminates costly mistakes – those that lead to false analytics and poor decision making. RPA helps businesses introduce precision in their operations and makes monotonous processes error-free.

An obvious benefit of this is when there is no missing, or mistaken customer information & service reps face no hassles serving customers in a personalized fashion. However, even a slight disturbance to the customer can ruin their experience with your business – a risk that becomes negligible with RPA.

Secure enterprise data

RPA can be integrated with multiple applications to enhance the security of enterprise data. These integrations will ensure that client’s apps are not modified or enhanced by a robot. This system reduces the risk of unauthorized access as business functions use and inherit the already available security infrastructure where authorization concepts are already implemented.

Planning For RPA: The Internal And External Factors

When business executives consider implementing RPA in their enterprise, they ponder on the internal policies, processes, and people. They look for the operations that, if automated, would benefit the organization. Then, they begin to plan and strategize on how to go about implementing Robotic Process Automation.

In terms of business functions or departments that are ripe with opportunities for process re-engineering, improvement, and automation through RPA, they mainly include supply chain management, sales, finance and accounting, and human resources.

When it comes down to assessing and analyzing the different areas for transformation & discovering insights that are actionable in nature, enterprises or businesses should gather metrics relevant to each process under inspection that covers –

• Where is the majority of the time spent in completing each process?
• Which applications cost the most time and effort?
• Which activities or tasks carried out result in the production of tangible results?

While internal factors play a vital role, along with that, businesses should also conduct external research to partner with the best RPA service providers. Doing this requires a holistic view of one’s needs, and a calculative study of each vendor’s strengths and weaknesses.

The right RPA implementation partner should be in a position to advise you on the scalability of RPA for your business. It helps you if they derive insights from process data to help predict and suggest the next best move for your organization.

Robotic Process Automation is an important asset in any enterprise’s digital transformation journey. Deploying automation on time-intensive, manual, admin-level tasks first, enterprises can learn from RPA-enabled processes and replicate the same kind of success elsewhere in the business. Amalgamating RPA with a broader set of technological tools is bound to improve business outcomes across all processes.

The post How Is Robotic Process Automation Assisting Businesses In Scaling Operations? appeared first on Inc42 Media.

Merchants-enabled cash withdrawal platform PayMart has raised an undisclosed amount in a seed round led by Chandigarh Angels Network (CAN). PayMart says it’s building an alternative to traditional ATMs (automated teller machines) to boost financial inclusion in remote parts of the country.

Commenting on the funding, PayMart founder Amit Narang said, “This investment will help us build our technology and accelerate our development process.” 

According to PayMart, India has a shortage of ATMs and about 15% of these remain dry at any given point of time. The problem is worse in rural areas where people may have to travel 15 kilometers just to access an ATM or bank. PayMart leverages technology to convert next-door shop owners into ‘cash points’ for individuals to easily withdraw money without having to travel long distances or looking for an cash-filled ATM.  

Chandigarh-based PayMart was founded by Amit Narang in 2015. Narang incidentally is no stranger to the fintech ecosystem having founded FX Mart, which was sold to Flipkart and is now called PhonePe. 

PayMart also lets merchants use excess cash to give credit to individuals and the repayment does not require multiple bank deposits. This intervention can also provide merchants some extra income through commissions and incentives. Transactions will be enabled through a PayMart app, which is scheduled to be launched soon. The app is said to allow ATM cards or Unified Payments Interface (UPI) mode for cash withdrawals.

Along with highlighting the need for digital payment companies, the Modi government’s demonetisation move in 2016 has also surfaced the woeful state of the ATM network. The long queues at the banks and ATMs, the recalibration of machines, the security failures at many ATMs were a sure indicator of the shortage of cash withdrawal points as well as their bad state. At that time too, local merchants became informal cash points for people who used ATM cards for the withdrawal. 

PayMart claims to have partnered with a big private bank and has planned to launch the service in September. Further, the company also plans to tie-up with all the 60 banks in India and thus become a cash withdrawal gateway.

Fintech Sector In India

Digital transactions in India saw a huge uprise during the first NDA term, with the announcement of demonetisation of INR 500 and INR 1000 notes in late 2016. Since then the popularity of digital payments startups such as Paytm, Flipkart-owned PhonePe, Google Pay, Amazon Pay and others has been on a constant rise.

In May, Google Pay recorded more than 240 Mn transactions taking the leading position in UPI transactions volume for last month. Further, Flipkart-owned PhonePe took the second position after recording 230 Mn UPI payments last month, while Paytm clocked in 200 Mn transactions.

Further, with the launch of India Stack — Aadhaar, eKYC, and UPI, Indian fintech sector has been booming with startups and investors’ interest. According to DataLabs by Inc42, payments tech startups accounted for 55.5% of the total fintech investments between 2014 and 2018. The top three fintech sub-sectors — payments tech, insurance tech and lending tech — combined makeup 85.7% of the total $6.97 Bn funding in Indian fintech startups in the same period.

The post Exclusive: Former FX Mart CEO’s Startup PayMart Raises Seed Funding From CAN appeared first on Inc42 Media.

Flipkart founder Sachin Bansal has invested INR 50 Cr (about $7 Mn) in a consumer lending startup Kissht. The investment is said to be made in the form of debt funding through Bansal and Ankit Agarwal’s investment firm BAC Acquisitions.  

The company confirmed this development to Inc42.

Founded by Krishnan Vishwanathan and Ranvir Singh in 2015, the Mumbai-based company provides purchase financing and personal loans to its customers through a financial technology platform which is integrated with online and offline merchants.

Earlier in 2018, Kissht has raised $30 Mn in a Series C financing round led by Vertex Ventures Southeast Asia (SEA) and India and Sistema Asia Fund, along with participation from existing investors Fosun RZ Capital, Ventureast, and Endiya Partners.

Prior to its Series C round, Kissht had also raised a $10 Mn funding in a round led by Chinese investment conglomerate, Fosun International. It had also secured $2 Mn earlier in 2017 from Hyderabad-based, early-stage venture capital firm Endiya Partners and Ventureast.

The startup claims to be present in more than 50 online and over 3,500 offline points of sale across categories, including consumer durables, electronics, health, alternative energy and education, and enables customers to easily access credit for their purchases.

Earlier this month, Sachin Bansal had also infused INR 200 Cr (around $29 Mn) into Ajay Piramal owned Piramal Enterprises, which is expected to use this funding for its financial services business. Also, recent reports have claimed that Sachin Bansal is in talks to acquire in Essel Mutual Fund. 

In February, Sachin Bansal was reported to be in talks with financial experts on the potential to launch a new venture in the fintech sector. He had also reportedly met Reserve Bank of India executives to figure out the eligibility requirements for starting a bank.

Sachin Bansal had marked a huge exit from Flipkart, when the company was acquired by US retail giant Walmart for $16 Bn in 2018. 

Digital Lending Investments Drives Fintech Funding Ecosystem

Overall, digital lending has been pegged as one of the fastest growing segments in the India’s fintech space. A BCG report has predicted the digital lending industry to touch $1 Tn mark in the next five years. 

According to DataLabs by Inc42, payments tech startups accounted for 55.5% of the total fintech investments between 2014 and 2018. The top three fintech sub-sectors — payments tech, insurance tech and lending tech — combined makeup 85.7% of the total $6.97 Bn funding in Indian fintech startups in the same period.

Other players in the consumer lending space include PerkFinance, ShubhLoans, Propelld, Paytm, ETMONEY, and more. Amidst the crowded digital lending sector, Kissht competes with startups such as PayU’s LazyPay, Simpl, and ePayLater. 

Kissht was also among the top Indian fintech startups to watch out for in 2018, as per Inc42’s Startup Watchlist.

[This development was first reported by LiveMint.]

The post Sachin Bansal Invests $7 Mn In Consumer Lending Startup Kissht appeared first on Inc42 Media.

The NBFC business model has been considered broken by many experts since the beginning. NBFCs rely on short-term funds which are lent out for longer terms to small and medium enterprises (SMEs) which brings in risk of asset-liability mismatch. This is said to be one of the major reasons behind the recent challenges in the state of NBFC liquidity after the IL&FS default crisis in October 2018. As their operations are catered towards unorganised and under-served segments, the risk of NPAs is also said to be much higher for NBFCs than banks and MFIs.

Yet, according to a May 2019 IBEF report, the public deposit of NBFCs increased from $293.78 Mn in FY09 to $4.95 Bn (INR 319.05 Bn) in FY18, registering a compound annual growth rate (CAGR) of 36.86%. According to RBI data, NBFCs loans and advances stood at INR 19,842 Bn at the quarter ending September 2018.

A large part of this growth has been contributed by the new-age SME lending startups. These startups are taking the traditional NBFC processes to an entirely new direction with the use of deeptech like artificial intelligence (AI), machine learning (ML) and data analytics. These are not just buzzwords when it comes to the fintech sector any more. The actual application of AI and ML have yielded new models for fintech companies. And this, in turn, has made borrowing much easier for the MSME sector.

Sanjay Sharma, cofounder and managing director, Aye Finance believes that most banks and financial companies had assumed the segment would be unprofitable and too risky, due to lack of formal business documents and small ticket sizes.

“However, SME lending startups are now solving these challenges of funding the micro-segment and enabling their inclusion into the mainstream of the economy with technology playing a crucial part,” he added.

Another startup NeoGrowth has a system in place where 85% of the loans are daily repayment products and 45% of loans have repayments from exclusive terminals which mitigates risk of default. “This model ensures a high collection efficiency of over 98%,” claimed Piyush Khaitan, Founder and managing director, NeoGrowth.

The players such as Aye Finance, NeoGrowth, LendingKart among others are not only reducing NPAs consistently but are also able to raise funds amid the ongoing NBFC crisis, indicating a greater investor trust.

NBFC Startups: Using Technology To Gain An Edge In This Tight Market

Pushing aside the inherited challenges from the business model perspective, NBFCs are today dealing with stiff competition from incumbents and the entry of fintech players. Also, dynamic regulations are continuously increasing the cost to comply and restricting the ability to freely impose pricing. Add to this the rapidly increasing expectations of customers and economic volatility, which are further hurdles in the growth for these startups.

To tackle these challenges, startups are utilising deeptech to create an edge for themselves in three key areas:

Credit Assessment And Underwriting Process

In order to ensure that the asset-liability cycle does not break, the NBFC startups need to bring in an efficient credit assessment algorithm right at the beginning. For instance, Aye Finance has designed its underwriting methodology based on the combination of industry-cluster approach, behavioral scorecards as well as alternate data underwriting methods like psychometric analysis.

“These innovative methods have allowed us to enable the financial inclusion of over 1,25,000 micro-enterprises,” added Sharma.

And that’s just one way of doing it. Mumbai-based ePayLater uses real-time microservices to gather data in real-time leveraging data science and algorithms, NeoGrowth uses digital payments data (notably card sales) while Lendingkart extracts up to 8,500 data points to assess intent and ability of the customer using machine learning and other deeptech models.

Further, the SME lending companies have at their disposal data sources such as bank statements, VAT/GST returns, Truecaller data, Justdial data, PAN/TIN/VAT/Address, ROC and MCA filings, Defaulters list; CA/CS membership; Facebook, LinkedIn, open searches for social profile verification, as well as private services such as Zauba, Probe42 and Experian Hunter, along with Aadhaar-based e-KYC among others to make a ‘leakproof’ credit assessment system at the core of their service.

Not only this, these deeptech algorithms further help in reducing the credit approval timelines for immediate needs. Akshat Saxena, cofounder, ePayLater highlights how its proprietary deeptech algorithm takes into account alternate data to provide approval within seconds.

“The customer can start using the credit line within hours of approval. The approval rate is also higher than traditional banks due to leveraging of alternate data,” Saxena said.

Automated Collection Process

Having the right collection process is as important as bringing a creditor onboard. While Aye finance uses cloud-based business process engine and variety of data models to maintain economies of scale of its small ticket size loans, ePayLater uses machine learning to streamline its collection process.

Another SME lending startup RupeeCircle uses its own RC score, a proprietary underwriting model to maintain its loss rate in check at below 2%. “We have also created a module that helps deploy investor money automatically based on the profile and risk criteria selected by the investor,” added Ajit Kumar, founder and CEO, RupeeCircle.

Interestingly, NeoGrowth has developed APIs into other permission-based rich data sources like the credit bureaus, GST data, merchant acquiring databases etc. Not only its underwriting or daily data insights model but even the repayment of NeoGrowth loans is based on a daily repayment model, where the amount repayable to them is remitted directly by the card acquiring bank to NeoGrowth.

“This is only possible because of our digital interfaces with the banks, and advance suite, our proprietary loan origination system (LOS) and loan management system (LMS) which is purpose-built for NeoCash, our unique loan product. Advance suite also directly interfaces with our data warehouse, which is a critical repository of all data sources and serves as a ’single source of truth’ for all management reporting and ‘deep analytics’,” added Khaitan.

Making Customer Comfortable With Technology

Despite having more than 627 Mn internet users, there is a large segment of Indian SMEs which is not comfortable with transacting online. However, Lendingkart founder Harshvardhan Lunia takes pride in the platform’s ability to acquire and service MSME customers at the remotest places in India using data. Startups are choosing other ways to bridge the human-digital gap. Aye Finance and Neogrowth are working with an “assisted fintech approach” thereby offering a suite of digital assets to support the Loan products.

As Sharma explains, Aye Finance’s 2000+ field staff are equipped with an Android app for loan workflow that works on the cloud infrastructure facilitating a low-cost operation that helps the inclusion of a larger number of grassroots businesses into the folds of organised lending.

On the contrary, RupeeCircle claims to be moving towards fully automated and digitised operations with minimal human intervention. The startup is also relying on certain third-party integrations to make its processes quick and user-friendly. Voicing the same strategy, Alok Mittal, cofounder and CEO of Indifi Technologies, a platform that helps lenders and NBFCs provide loans to SMEs said that the use of technology and data has allowed SME lending companies to automate a lot of steps through the customer journey from the time they land on their platform.

“For instance, at Indifi, things like auto bank statement analysis, auto decisioning, online data integrations etc have led to minimal manual intervention and quicker decision making, eventually leading to better customer experience,” he added.

SME Lending: AI/ ML Is The Core But Blockchain And NLP Is The Future

Almost all the SME lending startups Inc42 spoke to agree that to expand the access to credit to a larger population of underserved micro-enterprises, the NBFCs have to now start working on a variety of use cases for AI/ML which are currently used primarily for fraud detection, underwriting and backend operations. In future, the NBFCs may look at other deeptech use cases ranging from designing ML algorithms to automating credit approvals, image processing capabilities, etc.

“These deeptech models once deployed will bring improved efficiencies in our existing processes bringing a larger base of the underserved micro-enterprise sector into the folds of the formal economy,” said Aye Finance’s Sanjay.

As NeoGrowth’s Khaitan aptly said it’s time to leverage technology in smart ways for the future sustainability and growth of the business.

“These deeptech models become smarter as we feed them with more and more data. Thus, helping us create a bespoke offering in terms of the loan amount, tenure and pricing for various kinds of customers.”

With digital banking, the personal connection between banks and customers was lost to a certain degree. With AI and ML at the core, blockchain and natural language processing can be used to respark this connection in new and meaningful ways to become a game-changer.

The post How India’s NBFC Startups Are Using Deeptech To Change The SME Lending Game appeared first on Inc42 Media.

“When you are at an ideation stage you don’t attract investor attention. At that stage, you go for FFF- friends, family and fools. Either your friends and family believe in you or you can get them to believe in you.”

Kunal Nandwani, CEO of uTrade Solutions, was at his candid best at BIGShift Chandigarh, which was an evening to remember for this emerging startup hub. Addressing over 50+ startup founders present at BIGShift, the founding member of the Chandigarh Angels Network enthralled the gathering with his witty take on the startup life. Inc42 and DigitalOcean hosted the first leg of the 6-city BIGShift series at Chandigarh’s SpaceJam on July 19, inviting the early age startups, budding entrepreneurs as well as incubators and investors of the Chandigarh startup ecosystem.

As is clear from its growth in the past few years, Chandigarh is home to some of the most innovative startups in India and BIGShift celebrates such Tier 2 cities which often don’t get the limelight in comparison to metros and the Tier 1 cities. Chandigarh is just the first host city for the new BIGShift series, with next leg set to be in Nagpur on August 3. Supporting Inc42’s initiative, local founders, investors, incubator bodies and entrepreneurs took time out to engage with each other and solve the problems that are specific to the Chandigarh startup ecosystem. As can be expected, BIGShift witnessed startups come forth to talk about their work, challenges and participated in curated sessions with experts.

Sales101: Driving Your Sales Strategy

The first BIGShift session was with Khalid Qazi, the head of alliances, partnerships and growth at foodtech startup, Dineout. Qazi engaged the audience with insightful pointers on driving sales and increasing profitability, by building a strong marketing and product teams.

According to him, each business needs to think about these seven statements:

• Where you’ve been and where you want to go
• A clear ideal customer profile
• Your product’s SWOT analysis
• Blend of your sales and marketing plans
• Create clear revenue goals
• Develop and communicate a clear positioning
• Unambiguous action plan

“What has changed that affects your traditional sales strategy and pushes you to adjust with the modern ones?” he asked the audience. His answer was, “Customer centricity.”

He explained how companies and startups not only want to drive profits and sales but also want to focus on customer success, “They choose their target audience and then focus on how to attract them and gain their trust.”

With his engaging style, Qazi also touched on pressing questions such as the discount culture and subscriptions in the context of online shopping and the food business, comparing the traditional and modern-day sales strategies and more.

Seed Funding Playbook For Startups

A thriving investor community is what every startup hub needs. Kunal Nandwani, the CEO of uTrade Solutions and a founding member of Chandigarh Angels Network, is one such example in the context of Chandigarh. Nandwani also runs Startup Pundits, a non-profit initiative to mentor startups, funded by uTrade Solutions.

From ‘how much’ to ‘when’ from ‘whom’ to ‘how to go about valuation’ and finally the different sources available, Nandwani answered every question thrown at him by the gathering. He started his session talking about the importance of motivation, “You need to really know what your motivation is because most likely it is going to take you 5-7 years to survive, 8-10 years to set up a business in India. And there is a 99% probability of you failing.”

He urged the startups to focus on the execution, commenting, “Innovators do not make as much money as imitators do.”

Nandwani also gave the audience a look at the world of professional or angel investors. According to him the four things that investors typically look at before investing are—market size, team, business model and market landscape.

Market Size

“Market not just today but what it would be in the next five years. So, it has to be a big and growing market or a small and rapidly growing market.”

Team

“Good teams can make bad business plans work. It is about adapting, it is about perseverance. Hence, investors will back the team.”

Business Model

“You may not make money today but at some point, your business has got to make money.”

Market Landscape

“This is a bundle of a couple of things, such as who is your competition, what is your cost of distribution, what is your cost of production, how will you bring in people and many more.”

Learnings On Scaling For Early Stage Startups

Hosting the next session was Karan MV, the senior India outreach manager of DigitalOcean. From insights on building and improving the content on your website in order to drive more traffic to building products for product builders, he shared the key insights that have helped DigitalOcean in their growth journey.

Understanding the need for a startup to scale, Karan spoke about growth loops, how they differ from funnels, as well as the importance of content. Content is what drives more and more traction onto your website, according to Karan. “We have more than 2200 technical development-related and other tutorials published by both our in-house team and our contributor community. These tutorials get 3.5 Mn unique visits monthly to DigitalOcean site as the key thing that we concentrate on is the quality of the tutorials. Nearly 40% of our customers read a tutorial before they sign up”, he said.

Empowering The Founders Of Tomorrow

With the aim of satiating the curiosity of budding entrepreneurs about what successful entrepreneurs think about the ecosystem and the lessons they have learned through their journey, the next discussion was one of the highlights of the evening.

Vineet Khurana, VP of Chandigarh Angels Network, with more than 10 years of industry experience moderated the discussion. Sumeer Walia, the director of the Centre for Entrepreneurship and Education Development (CEED); Nandwani and Ritika Singh, founder, Kontent Factory joined the discussion as panellists.

Khurana dove deep into issues such as the gaps in the Chandigarh startup ecosystem, the positive and negative changes over the years and much more.

CEED’s Walia told the audience that he believes the Chandigarh startup ecosystem lacked the environment that creates the drive for entrepreneurship, unlike in Tier 1 cities. Tier 2 cities such as Chandigarh need the infrastructure and the conditions that motivate entrepreneurs to start their own venture and work on ideas.

During the session, while answering one of Khurana’s questions, Nandwani said that those who can’t take failures should never enter the startup ecosystem. “It’s a ride, adventurous and interesting but it requires courage. You should be able to accept your failures.”

Ritika Singh tackled Khurana’s question on the ‘importance of incubators and accelerators in the ecosystem’ with a crisp response. “Just having incubators and accelerators around is very reassuring for the ecosystem. For the early stage startups to grow and strengthen, the mere presence of these enablers is very comforting.”

Highlight Of The Evening: The BIGShift Pitch

Out of over 100 applications, only four startups had made the cut and were chosen to present their business ideas in front of the jury at the BIGShift Pitch. The jury constituted of Ashish Grover, cofounder of uTrade Solutions who has worked for nearly a decade in software development in India, and Ashok Mehta, MD from Emmbros Automotives, an entrepreneur with over 25 years of experience across various sectors.

The four startups that made it to the BIGShift Pitch were:

TickTalkTo

Founded in 2018 by Abhay Singhal, the mobile application connects people suffering from mental illnesses to therapists and mental health practitioners.

Singhal’s belief is that access to mental health is a basic human right and owing to that, TickTalkTo counters problems such as the stigma around mental health, and the inadequate ratio of mental healthcare professionals in India.

Using a therapy-focussed model, it claims to offer absolute anonymity and confidentiality to users. It only brings verified and experienced professionals on board and has over 3.5K downloads till date.

Zadd Bikes

Founded by Aniket Bharadwaj and Shubham Goyal in 2017, Zadd Bikes makes smart and eco-friendly two-wheelers that provide real-time tracking, crash detection, connected riding experience and other smart features.

With a focus on urban mobility, Zadd Bikes are designed to meet the commuting needs of people in Tier 1 and Tier 2 cities. The startup offers solutions such as infotainment modules, anti-theft systems, onboard diagnosis, navigation among others.

Having Samar Singla, CEO, Jugnoo, as an investor and advisor, Zadd is providing solutions to the problems of the cost of travelling, congestion, pollution and time spent on the daily commute in the metros and more.

Waypals

A connected vehicle and automated data analytics and telematics company, Waypals was founded by Sukhvinder Lamba, in 2015. It monitors, analyses and predicts driving behaviours for OEMs such as automobile makers and insurance companies.

The startup offers solutions for advanced fleet management, connected personal vehicles and the insurance industry. Its solutions range from fuel monitoring and saving to real-time track and trace to crash alerts and vehicle immobilisation as well as vehicle diagnostics, incidence reporting, telematics insurance solutions, microinsurance enablement and more.

With total revenue of more than 2 Cr till date, Waypals also offers a visual dashboard and other advanced features for drivers to manage their vehicles, while insurance admins get access to real-time data in an interactive dashboard.

Subhe

Subhe is a skill-learning platform founded by Vivek Rathore and Jagrit Gupta in 2018. The startup offers a library of video training courses and tutorials in Indian regional languages for those looking to upskill themselves for jobs.

On a mission to help the Indian youth dominate the existing learning space, they offer in-demand skills in technical and business subjects in the language that they are comfortable in. It has curriculum-based video training courses and tutorials created by industry experts.

To counter the problem of students who are not fluent in English, the platform is offering monthly courses with a minimal fee in their native languages and aims to offer annual courses soon. Students can learn the latest digital & technical skills on their time & device, in their own language.

At the end of the day, after the selected startups had made their pitches, the jury chose Zadd Bikes as the winner of BIGShift Pitch.

The startups that made the cut to the BIGShift Pitch got a direct entry into DigitalOcean’s Hatch Program which offers infrastructure credits, priority support, training and access to the startup community.

“Chandigarh has a vibrant ecosystem of startups solving various problems, supported by a community of approachable investors & enablers. Events like BIGShift offer a platform for the community to learn, network and also understand how their business can grow,” Karan MV, senior India outreach manager, DigitalOcean.

The response from Chandigarh’s startup ecosystem, the founders, investors and angels was exhilarating and vindicated Inc42’s confidence in startups from Tier 2 startup hubs.

After Chandigarh, the focus turns to the heart of India with Nagpur as the BIGShift tour continues. Inc42 and DigitalOcean will arrive in the city on August 3, and you can register for it right here.

Apply Now

The BIGShift editions for Chandigarh were supported by Dineout as Associate Partner and, TiE Chandigarh, Chandigarh Angels Network, Startup Punjab and eChai Ventures as ecosystem partners.

The post BIGShift Kicks Off In Style: Celebrating Chandigarh’s Rising Startups, Founders And Investors appeared first on Inc42 Media.

After announcing plans to introduce cheap mobile-only subscription plans for Indian users, global video streaming player Netflix has launched an INR 199 plan for the country. The plan will go live later this evening.

In its shareholder letter last week, the company had said that it will roll-out a low price mobile-only subscription plan for Indian market. Since March, the company had been beta-testing an INR 250 plan for mobile-only users, which is half the price of company’s existing basic monthly plan of INR 500.

The discussions about cheaper plans for India began when after an earnings call in July, chief product officer Greg Peters said, “We’ll experiment with other pricing models, not only for India but around the world that will allow us to broaden access by providing a pricing tier that sits below our current lowest tier.”

The INR 199 mobile-only plan for India restricts the usage of the service to one mobile device and offers only the standard definition viewing at ~480p. It also supports viewing on tablets. However, the company currently has no plans to expand a similar plan to other markets just yet.

“Our members in India watch more on their mobiles than members anywhere else in the world- and they love to download our shows and films. We believe this new plan will make Netflix even more accessible and better suit people who like to watch on their smartphones and tablets—both on the go and at home,” said Ajay Arora, director, product innovation, Netflix.

The cheaper plan is a out-of-the-natural-plan from Netflix, as CEO Reed Hastings had earlier said that the video company is not keen on bringing any cheap subscription plans for its Indian subscribers, as he does not believe that the company has a pricing issue in the subcontinent.

Over the last year, Netflix has been exploring Indian content on its streaming platform to gain user base in the country. For this its original movies and series have been the plan. Recently, Netflix had planned to launch 22 original movies and 11 series from India by 2020. This was said to be a part of the company’s effort to create diverse and appealing content from India.

Netflix had recorded $344 Mn net income for the quarter ended in March 2019. Its consolidated revenue for the quarter stood at $4.52 Bn. It added that it has 148.8 Mn subscribers across the world from the 139 Mn at the end of December 2018.

Netflix in India competes against players such as Amazon Prime, Hotstar, Zee5 etc. While the rival Amazon Prime Video costs INR 129 per month, the other major player Hotstar Premium starts at INR 199 per month.

In addition to these, India has also witnessed a hike in the popularity of companies such as ZEE Entertainment’s ZEE5 which is available at INR 99 per month, Reliance-backed ALTBalaji whose subscription plan costs INR 100 per month. Another new entrant in the sector is Times Internet’s MX Player, which currently operates on a free ad-supported model. Also Youtube has recently launched Youtube Originals, which is priced at INR 129 per month.

A recent MegaInsight study by techARC-Unomer said that 80% of smartphone users use at least one OTT platform. The report noted that Hotstar has been downloaded by 49% of smartphone users. It said that one of the main factors for Hotstar’s growth has been its sports, especially cricket content, be it IPL or now the World Cup Championship.

Counterpoint Research on India’s OTT video market revealed that Hotstar leads the Indian OTT video content market, followed by Amazon Prime Video, SonyLIV and Netflix. Poised to be a market worth $5 Bn by 2023, how cheaper plans in India pan out for Netflix will be an interesting watch.

The post After Indianised Content, Netflix Announces Pocket-Friendly Prices For The Country appeared first on Inc42 Media.

Delhi-based online lending platform Cash Suvidha has raised $2.3 Mn in debt funding through private placement on non-convertible debentures and from various financial institutions. The amount has been raised in the first quarter of FY 2019-20.

Cash Suvidha will use the funds to increase the loan books of the company. The company has raised $18.75 Mn funding till date, with $2.5 Mn in February last year.

Founded in 2016, Cash Suvidha offers business loans to small and medium enterprises (SMEs), micro small and medium enterprises (MSMEs), and women entrepreneurs as well as personal loans to individuals.

Cash Suvidha provides loans with a ticket size of INR 50,000 – INR 5 Lakh for SMEs and INR 15K – INR 50K for MSMEs. The company has tied up with over 25-30 players to expand business across India and has targeted a 4x increase in processing loan applications.

In terms of future plans, Cash Suvidha is targeting more tie-ups for business expansion.

Geeta Goswami, cofounder, Cash Suvidha, said, “Cash Suvidha’s financial performance has been strong since inception and we are glad to have significantly captured the market in just 3 years. This capital infusion will allow us to further accelerate our fast-growing lending platform and enhance our ability to provide the best terms to borrowers that do not have an established credit history.”

Some of the leading digital lending players include ZestMoney, AyeFinance etc. They have been providing loans to B2B and B2C loans i.e. to SMEs as well as individuals while players such as LoanTap, EarlySalary, Credy, Qbera, EarnWealth, etc enable B2C i.e. customer loans.

DataLabs by Inc42 said that between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 50.13% or $3.82 Bn was in payments tech startups, which was followed by 25.49% ($1.94 Bn) in lending tech startups. In Q1 2019, the total recorded funding in lending tech startups was $322 Mn which is 3.18x higher than the average quarterly funding in this sector which stands at $101 Mn.

As per a survey conducted by BCG and Google in 2018, 23% of consumers in India have availed of retail loans digitally. Another interesting fact presented in this report says SME loans and personal loans have the highest digital influence as well as purchase rate.

As per DataLabs by Inc42 estimates, the credit demand in India is projected to be worth $1.41 Tn by 2022. The estimated growth rate in credit demand is 3.73% between FY17 and FY22.

The post Cash Suvidha Raises $2.3 Mn In Debt To Increase Its Loan Book appeared first on Inc42 Media.

NASDAQ-listed ride-hailing company Uber is now exploring a subscription model to offer bundle of its services. The combination of services available on this monthly pass would reportedly include Uber rides, Uber Eats and JUMP (bike and scooter) rides.

The variants of this subscription service are being tested in San Francisco and Chicago. This service includes a fixed discount on every ride, free UberEats delivery and free rides on their scooter service, JUMP. This subscription pass will cost $24.99 per month.

Also in other cities, Uber is testing lower-priced passes that offer discounted rides and free delivery on Eats orders above a certain amount.

An Uber spokesperson reportedly said, “From meals to wheels and everything in between, we’re always looking for ways to make Uber the go-to option for your everyday needs.”

A monthly subscription model is nothing new for Uber. The company had introduced Ride Pass in October last year. At a standard monthly fee based on the distance you choose, a rider can buy a ride pass for their Uber rides.

However, a combination of services for Uber Eats, scooters and rides is a new phenomenon for the company. Though this makes complete sense and would be a lucrative move for Uber, as it locks customers into spending more money on Uber.

In India, Uber’s arch rival Ola already offers a subscription model similar to Uber’s Ride pass. Today, subscription-model has become an essential part of businesses. From SaaS to fintech to media and entertainment, every industry is today bouncing on the opportunities of creating a stickier user base through subscriptions.

Particularly for micro-mobility segment, where the challenge includes brand loyalty for both— drivers and customers. While for drivers, Uber has been experimenting with benefits such as education etc, for customers, a subscription model may crack its returns.

Horace Dediu, cofounder of Micromobility Industries, has suggested micro-mobility companies to offer a subscription model which goes door-to-door making it seamless.

The development also seeks relevance at a time when Uber has been struggling to stick ground in India. The number of daily rides has increased by a mere 4%, from 3.5 Mn to 3.65 Mn in the past six months.

Industry experts and sources said that customers today see longer wait times — from an average 2-4 minutes two years back to 12-15 minutes now. This is coupled with higher fares, around 15-20% in non-peak hours in major cities.

Uber went public in May, and has accepted that it may never make profits. The value it has created in the urban mobility across the world coupled with its dominated markets such as the US continue to support its ambitions. Even though in India, the company has been slowly losing its battle for market dominance and settling for being the number two after Ola.

The post Uber Tests Subscription Model For Discounts On Rides, Eats And Scooters In the US appeared first on Inc42 Media.

Taking Digital India a step further, passengers taking domestic Vistara flights from Bengaluru will no longer have to show their travel documents. That’s because the Kempegowda International Airport (KIA) in Bengaluru is now allowing some passengers to check in with just their face.

In December 2018, the Ministry of Civil Aviation announced a DigiYatra platform, which will enable paperless travel and avoid identity checks at various checkpoints in the airport, thanks to the use of facial recognition. The passengers will automatically be processed on checkpoints such as entry point check, entry into security check area, and at the aircraft boarding point. Specialised cameras screen all passengers for Vistara flights at the airport.

The Vistara flight UK864 from Bengaluru to Mumbai was the first to experiment with the image identification technology after Hyderabad trials. It will be effective to all Vistara flights departing from the airport by October 2019, as part of Phase 1 of the Digi Yatra project.

The technology will also be extended to the Terminal 2 said Bangalore International Airport Limited (BIAL), operator of KIA. It will be integrated with check-in and self-bag drop processes to include other domestic and international airlines as well. In the final stage, the technology will be merged with the Digi Yatra Central Platform that is being architectured by the Centre’s Digi Yatra Foundation.

Rajeev Gandhi International Airport in Hyderabad has been testing the facial recognition technology while running staff trials. The tests are expected to be completed soon and the facility will be available to the flyers.

At present, India is among the few countries experimenting with facial recognition at airports. Vistara’s Departure Control System (DCS) was integrated with the Digi Yatra technology in partnership with Portugal-based company Vision Box.

According to a report, the global facial recognition market is estimated to reach $9.78 Bn by 2023 at a CAGR of 16.81% during the forecast period. India is adopting technologies such as AI and Internet of Things to facilitate business growth as well transforming industry. At the Union Budget, the government laid emphasis on development of new-age skills such as artificial intelligence (AI), Internet of Things, Big Data, 3D printing, blockchain, Virtual reality and robotics, which are valued highly both within and outside the country. While startups are working in these sectors, initiatives such as Digital India use cases for new-age technology are supporting the innovation being done by these startups.

The post After Hyderabad, Bengaluru Airport Switches To Facial Recognition For Boarding, Passenger Screening appeared first on Inc42 Media.

Following the ban on the sale of ecigarettes’ in at least 12 Indian states, an ecigarette lobby group called Trade Representatives of ENDS (TRENDS) has been asking the various government bodies for a meeting to share their recommendations on a proposed country-wide ban on ecigarettes also known as Electronic Nicotine Delivery Systems (ENDS).

However, the group has not received any response from the state or central government bodies, TRENDS convener Praveen Rikhy told Inc42. 

In March 2019, at least 13 states in India had including Punjab, Maharashtra, Karnataka, Kerala, Bihar, Uttar Pradesh, Jammu & Kashmir, Himachal Pradesh, Tamil Nadu, Puducherry and Jharkhand banned the use of ENDS.

“Banning ecigarettes while more harmful traditional beedis and cigarettes are allowed to be sold is contradictory. It is like banning a less harmful nicotine delivery system while allowing more harmful ones free market availability. This is fundamentally unsustainable as policy or a public health imperative or even in law and consumer rights,” said Praveen Rickhy.

In its recent representation, TRENDS has asked the government to introduce regulations on the ENDS industry, instead of a hard ban. Any arbitrary ban is bound to result in the creation of a ‘black market’ for ENDS products, resulting in sale of spurious and unsafe products to the citizens, the group added. 

The ecigarette lobby group has recommended the ENDS regulations to include taxes and statutory warnings on ENDS products, specific regulations on the permitted nicotine strength and size of liquid bottles, and safety standards certification of distributors.

Further, it also proposed licensing of stores and online shops based on their compliance with age limit restrictions and other legal provisions. Prohibiting sale ENDS products near schools and educational institutes can also be considered by the government, the group added. 

TRENDS members have also showed willingness to enforce self-regulatory measures such as robust age gating, mystery shopper programmes, audit reports to the government, collaterals at point of sale prohibiting sale to minors, among other things. 

One of the biggest criticisms of ENDS is its high adoption among school and college students, who can easily get access to these products through online sites.  The range of ecigarettes and vapes vary from INR 300 for some chinese brands upto INR 7000, according to TRENDS members. 

Earlier this month, small traders representative, Confederation of All India Traders (CAIT) has also taken their concerns to India’s health minister, Dr. Harsh Vardhan. CAIT had suggested the minister to form a committee to discuss about the appropriate regulations for Electronic Nicotine Delivery Systems (ENDS).

ENDS stands for Electronic Nicotine Delivery Systems, these devices include various types of e-cigarettes and vapes, some of these work on the basis of ‘heat not burn’, where tobacco or nicotine solutions are heated to temperatures lower than cigarettes.

They are usually battery-operated devices that emit doses of vaporized nicotine, or non-nicotine solutions, for the user to inhale. These devices claims to provide a similar sensation to inhaling tobacco smoke, without the tar and other harmful byproducts that are present in cigarette smoke.

Govt Pushing For A Nation-Wide Ban?

Earlier this month, India’s Ministry of Health was reportedly planning to ban the manufacturing, import and sale of ENDS or ecigarettes in India. A drugs consultative committee is said to have concluded that e-cigarettes and other such devices would come under the Drugs and Cosmetics Act’s definition of ‘drug’ and thus, can be banned under Section 26 (A) of this Act. 

Earlier in August 2018 too, the Ministry of Health has sent an advisory to state governments to prohibit the manufacture, distribution and online sale of ENDS and other products under the Drugs and Cosmetics Act, 1940. 

Which was later quashed by the Delhi High Court. The Delhi HC order has held that these products do not fall within the definition of a ‘drug’ under section 3 (b) of the Drugs and Cosmetic Act, 1940.

However, in the following month, the Ministry of Finance issued a circular directing all custom authorities to refer import consignments of ENDS  (electronic nicotine delivery systems) including ecigarettes, heat-not-burn devices, vape, e-sheesha, e-nicotine flavoured hookah and other like devices to the Deputy Drug Controller in their jurisdiction. 

Further, according to a media report, banning alternative smoking devices is said to be a part of the Modi government’s first 100 days agenda. 

The post ECigarette Lobby Calls For Regulations Instead Of Blanket Ban appeared first on Inc42 Media.

Palo Alto and Mumbai-based SME lending startup Drip Capital has raised $25 Mn in a Series B funding round. The investment was led by Accel Partners with participation from existing investors Sequoia India, Wing VC, and Y Combinator. New investors in this round include GC1 Ventures and institutional investor platform Trusted Insight.

The funds will be used to expand its global footprint, launching in the United Arab Emirates and Mexico in 2019. Till date, the company has raised $100 Mn.

Founded in 2014 by Pushkar Mukewar and Neil Kothari, Drip Capital aims to simplify trade finance for SMEs by providing collateral-free credit. The company uses electronic data and technology to rapidly underwrite and finance cross-border B2B transactions.

The company offers working capital to exporters a credit line, which ranges from $100K-$2.5 Mn, depending on the exporter’s size and requirement. The financing is unsecured and offered without any collateral.

Drip uses electronic data and an automated risk assessment platform, and claims to ensure a turnaround of 48 to 72 hours. The company claims to have funded more than $500 Mn of trade across more than 400 exporters. “By FY 2020, Drip aims to fund $1 Bn of trade originating from India,” says Neil Kothari, cofounder and co-CEO, Drip Capital.

At present, the Y Combinator-backed company is working with over 400 SMEs in India and has strategic partnerships with export promotion councils, freight forwarders, shipping lines, other fintech companies and banks.

The trade finance gap currently stands at $1.5 Tn globally – the majority of which is amongst small business exporters in emerging markets. India exports $140 Bn worth of goods and roughly 40% of the exporters are small or medium-sized businesses.

In the trade finance industry, one of the global players Modifi has recently launched its operations in India. The company aims to do $1 Bn worth of volumes in India in 2022.

DataLabs by Inc42 said that between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 25.49% ($1.94 Bn) investment came in lending tech startups.

The post Lending Tech Startup Drip Capital Raises $25 Mn To Expand Global Presence appeared first on Inc42 Media.