Launched in 2016, the Indian government’s ambitious Startup India programme has been credited as one of the major factors which have fuelled the country’s startup ecosystem. And now to showcase what all have been achieved with this project, the government has reportedly decided to introduce a tableau of Startup India for the first time in the Republic Day Parade.

Under this programme, the government has been offering numerous incentives such as exemption from angel tax and capital gains tax. Overall there are 19 components mentioned under this scheme which are aimed at fostering the startup ecosystem in the country. Until November 25, 2019, the government has exempted around 1658 startups from angel tax.

The government has also set up an INR 10K Cr Funds Of Funds under this scheme to invest in startups under this programme. The fund is managed by Small Industries Development Bank of India (SIDBI).

While the government had decided to invest using this corpus by 2025, Deepak Bagla, managing director and CEO of Invest India, has recently said the Centre is looking to utilise it much before the deadline. “While India has around 25K registered startups, the fund is looking to help around 50K startups, which are there in the Indian startup ecosystem,” he added.

Out of this 10K Cr corpus, the government has so far invested INR 2,669.83 Cr in 279 startups, commerce minister Piyush Goyal had revealed during the recently concluded winter session of Lok Sabha. Moreover, the government has also highlighted that 10% of this total corpus has been reserved for women-led startups.

Moreover, the government has also launched a Startup India television channel to promote startup-related activities in the country. The channel was announced by the finance minister Nirmala Sitharaman during her 2019 budget speech.

Besides all these policies in places, the government is now looking to receive suggestions from the department for the promotion of industry and internal Trade (DPIIT) on how startups can be given further support. The suggestions, if conclusive, are expected to be included in the upcoming Budget to be presented by Sitharaman in the Indian Parliament on February 1, 2020.

These suggestions include providing tax incentives to incubators registered under the Atal Innovation Mission (AIM), goods and service tax (GST) advantages, employee stock ownership plans (ESOPs) tax benefits, among others.

Logistics and distribution startup Ripplr has raised an undisclosed amount in a seed round led by 3one4 Capital and Sprout Venture Partners.

“The full-stack platform will use the seed funds to strengthen its tech and infrastructure and expand the team in distribution, tech and finance,” Abhishek Nehru, cofounder, Ripplr told Inc42.

Founded by Abhishek Nehru and Santosh D in June 2019, the startup has a presence in NCR, Mumbai, Pune, Chennai and Hyderabad. “Ripplr addresses a major pain point in the supply chain, particularly for new-age brands, by providing end to end logistics support to brands using technology in an asset-light approach within the existing infrastructure,” said Sahil Gupta, Partner, Sprout Venture Partners.

Lower volumes of trade among newer brands, lack of adequate infrastructure and channels are primarily why logistics and distribution costs are significantly higher in retail. That makes it difficult for new-age brands to move into general trade despite several products having high demand and market fit.

Ripplr works at breaking this inefficient cycle through its artificial intelligence or machine learning-based distribution and logistics platform. The fresh funds will further enable new-age brands to latch on to a plug and pay model that helps them with an efficient, cost-effective channel for higher reach and visibility in the market.

“Consumer aspirations of brands and personalised products are not limited to metros and Tier-1 cities anymore. New-age brands realise this but are handcuffed by the current systems. Our full-stack platform reaches that audience,” said Nehru.

The platform also caters to existing established brands that can wield this platform directly or through their distribution network to improve their reach. Gupta added that they see strong moat in terms of its technology to connect between all levels of logistics, distribution and retail intelligence. The service provider has on-boarded ecommerce and offline retail companies including Amazon, Udaan, Licious, Grofers, McDonald’s and BigBasket over the last 6 months.

“Ripplr envisions an integrated, shared, and tech-enabled ecosystem for end-to-end logistical support and distribution of consumer brands that enter into the market, empowering them with high real-time data visibility and reach,” Santosh added.

The B2B company has registered an Accounting Rate of Return (ARR) of around INR 12 Cr and aims at crossing an ARR of INR 100 Cr over the next 12 months. The Bengaluru-based startup aims at becoming a reliable, cost-effective, capital-light and risk-free distribution platform with strong tech and process-based backend.

“In Ripplr, we have been able to identify a low cost, platformised and scalable approach that allows new age consumer brands to discover distribution without requiring the organisational overhead,” said Anurag Ramdasan, Principal, 3one4 Capital. He added that the firm is excited to back a founding team that comes with tremendous domain expertise in the space.

Online food delivery unicorn Zomato has reportedly raised $150 Mn At $3 Bn valuations from existing investor Ant Financial, which is an affiliate of Chinese ecommerce business Alibaba.

The investment is reportedly a part of a larger $500 Mn funding round, which was confirmed by Zomato CEO Deepinder Goyal in December. According to an ET report, the round is expected to close in the next two months. Ant Financial has been an investor in Zomato since 2018.

In 2018, Ant Financial invested $210 Mn in Zomato for 14.7% stake and became the online food delivery company’s largest investor. Then in November 2018, Ant Financials also raised his stake to 23%. The latest round is said to value Zomato at $3 Bn.

As per the agreement signed back in 2018, Ant Financial reportedly also got to have a greater say in Zomato’s operations as compared to other stakeholders. The agreement was reportedly valid for at least three years and gave the right to Ant Financial’s parent Alibaba to subscribe to the acquired shares in Zomato.

In December 2019, Zomato CEO and cofounder Goyal also announced that Zomato will be raising $500 Mn to $600 Mn by next month (January 2020) or so. In addition, the media had been speculating that Zomato was in talks with Ant Financial to raise $500 Mn to $550 Mn for quite a while.

The investment comes at a time when Ant Financial is also looking to raise $1 Bn to invest in Southeast Asian payments and online finance startups. The funds will also include high valuation startups from India among other countries to gain a stronghold on the emerging digital economies. Moreover, Ant Financial has also applied for a digital banking license in Singapore.

As far as Zomato is concerned, market speculations also suggest that US-based cab-hailing service Uber is planning to invest $100 Mn to $200 Mn in online food delivery unicorn. Meanwhile, Zomato will be buying out the loss-making UberEats. Even the reports suggest that the $100Mn to $200Mn investment will come into the combined entity of Zomato and UberEats.

Prior to this, Uber was also reportedly in talks with Zomato’s arch-rival Swiggy to acquire UberEats. However, the deal didn’t go pan out because of the difference in valuation, among other issues. Media reports also suggest that Uber had reached out to the ecommerce giant Amazon as well, which is looking to launch its food delivery service in India soon.

Founded in 2008 by Goyal and Pankaj Chaddah, Zomato has another agenda in mind. Zomato has grown to be one of the biggest food delivery platforms not only in India but around the globe. The foodtech startup operates in 11 countries and caters to the needs of the 48 Mn customers’ Zomato serves every year, Goyal announced in December 2019.

The Zomato CEO also said that while the majority of the customers its customers come from India. Out of the 48 Mn customers, 23 Mn comes from India alone, the rest 25 Mn hail from other countries.

The company has also been looking towards profitability by next year. Goyal, in an interview, highlighted that the company has managed to reduce its cash burn by 70% in the past seven months, limiting it to $15 Mn per month.

In the burgeoning digital payments industry of India, the global payments player Paypal is investing heavily to grab a piece of the market. The company, however, is facing a tough time in India, batting with the likes of Paytm, Google Pay, Amazon Pay, PhonePe and other online payments services.

For the financial year ending March 31, 2019, Paypal India reportedly faced 3.5X surge in losses despite 2.5X growth in revenue. At the same time, the company’s expenses grew 1.53X, which proved costly.

In FY19, Paypal reported revenue of INR 657.4 Cr, as against INR 261.03 Cr in FY18. At the same time, the company’s expenses were INR 660.26 Cr, as against INR 260.8 Cr in FY18. Further, the company’s losses came to INR 8.13 Cr, as against INR 2.28 Cr in FY18.

A company spokesperson told ET that the losses were mostly on the back of high costs of merchant onboarding, infrastructure expansion and new talent acquisitions as the firm looks to scale-up their presence in the country over the upcoming fiscal years.

“Over the year, we scaled our presence in sectors such as travel, foodtech, fashion and we launched our products with merchants like Myntra, HappyEasyGo, Book-MyShow and MakeMyTrip,” the spokesperson said.

The spokesperson added, “The loss is almost negligible when you look at the revenue growth. It’s a reflection of the investments that we’re making in the market. India is a strategic market for us and we do want to be a leading player in the market. We’ll continue to invest in infrastructure, people and for growing our base.”

After operating in India for almost a decade largely for cross-border transactions, Paypal took a dive into India’s growing digital payments industry and launched domestic operations in November 2017. The company is aiming to reach the small and medium-scale businesses in cities and in smaller towns. It has also started working on a model of cluster workshops across India.

Over the next 12-18 months, Paypal India’s business plan is reportedly to get larger foodtech players on board. Paypal India’s journey as a payments provider for online food delivery started in early 2019. The company led pilot projects with smaller merchants such as Freshmenu and Fasoos, and now a large merchant is proposed to be brought on board by February 2020.

Estimated to touch $500 Bn, India’s digital payments sector is set to contribute 15% of the GDP by 2020. With the UPI revolution, India’s digital payments technology is nearly at par with the global standard, however, there is a huge scope to bridge the cross-border payments gaps.

In 2017, out of global remittances which stood at $633 Bn in 2017, India topped the list with $69 Bn. In 2018, out of $689 Bn, India again topped the list with $79 Bn, followed by China at $67 Bn. So far, 11 Indian banks have signed up for the SWIFT global payments innovation network for the faster cross-border payments services. PayPal and PayU are among other global players who have been providing cross-border payments services electronically.

Flipkart cofounder and former CEO Sachin Bansal has acquired Mumbai-based insurance company DHFL General Insurance from Kapil Wadhawan-led financial services group Wadhawan Group Capital (WGC) for INR 100 Cr ($14 Mn). The deal is seen as a distress sale for WGC, which used to run the bankrupt homegrown company DHFL.

Founded in 1984, DHFL is a 100% fully owned entity of WGC. The company has been known for over three decades for offering affordable housing finance to the middle and lower-income category. The parent company WGC also owns financial services companies such as Aadhar Housing Finance, Avanse Financial Services, DHFL Pramerica Asset Managers, DHFL Pramerica Life Insurance and DHFL General Insurance.

With the acquisition of DHFL General Insurance, Bansal has forayed into insurance space. Last year, Bansal acquired a non-banking finance company (NBFC) called Chaitanya Rural Intermediation Development Services (CRIDS) for INR 739 Cr ($104 Mn). He also took over as the CEO of CRIDS. At the time, Bansal had said that this acquisition was his entry into financial services.

The deal for DHFL has reportedly be routed through Navi Technologies, which was formerly known as BAC Acquisitions. Apart from acquiring companies after his exit from Flipkart in 2018, Bansal registered BAC Acquisitions Pvt Ltd in Bengaluru with his IIT-Delhi batchmate Ankit Agarwal with a vision of developing platforms that can optimise business automation and enable digitisation of processes across sectors.

BAC Acquisitions increased its authorised share capital to INR 7.5K Cr ($1.05 Bn) in January 2019. After which, Bansal had invested another INR 50 Cr ($7 Mn) in the company. In addition to this, Bansal has invested in companies such as Ather Energy ($51 Mn), Altico Capital India ($35.16 Mn), Vogo ($3 Mn), IndoStar Capital Finance ($35.16 Mn) and Ola ($92 Mn).

Interestingly, Sachin Bansal’s Flipkart cofounder Binny Bansal has also backed insurance tech in a big way and is looking to add on to his investments in Acko.

According to an IBEF report, the overall insurance industry is expected to touch $280 Bn by 2020. In the coming years, digital penetration is expected to grow at about 90% annually. Many experts and analytics believe that this market has the potential to absorb a lot of players across various segments. However, high customer acquisition costs and stringent regulations are a roadblock to the growth of digital insurance players amid the existing traditional players like Life Insurance Corporation (LIC) and General Life Insurance Corporation of India (GIC).

The competition commission of India (CCI) encouraged ecommerce companies including Amazon and Flipkart this week to use self-regulation to solve issues of search rigging, reviews, deep discounting, fake goods and to uphold seller interests. But that has not gone down too well with traders and mobile phone retailers who are upset over the step was taken by the statutory body.

The All-India Mobile Retailer Association (AIMRA) and the Confederation of All India Traders (CAIT) are discontent with CCI’s new policy and demand stricter action. Stakeholders questioned the merit of allowing ecommerce companies to self-regulate to solve unfair practices that have been adopted by the very same companies. As per an ET report, the two groups are likely to meet union minister for commerce Piyush Goyal next week.

Praveen Khandelwal, CAIT secretary general, tweeted, “Knowing well the unfair and monopolised business tactics of r commerce companies, what is preventing @CCI_India to take action. Why recommendation and soft view on irregularities.”

Khandelwal also urged union minister Piyush Goyal to take action against ecommerce platforms, instead of pushing for self-regulation. He demanded that the government should constitute a regulatory authority for ecommerce companies.

Sumit Agarwal, national secretary of CAIT, also tweeted, “The report gives enough details as to how ecommerce marketplaces are indulging in unethical business practices such as predatory pricing and deep discounting.The @CCI_India report released after @TEAMCAIT’s [CAIT] relentless pursuance.”

Even the mobile phone retailers’ body, AIMRA came forward. Arvinder Khurana, president of AIMRA said, “If they (ecommerce players) wanted to self-regulate, they would have never indulged in unfair practices and flouted FDI norms in the first place.”

In its report, ‘Market Study on E-commerce in India: Key Findings and Observations’, CCI asked ecommerce companies to keep a check on themselves in various matters that included discounting, revision in the contract term, data collection, review mechanism and search ranking.

CCI’s self-regulation policy included the following:

• Bring clear and transparent policy on data collection, review and rating mechanisms and discounting.
• Publish reviews for verified purchases only.
• Develop a mechanism to prevent fraudulent reviews/ratings that misleads the customers.
  Notify the “business users” about any proposed changes in terms and conditions. However, these changes cannot be implemented before the expiry of the notice period.
• Add a general description of the main search ranking parameters, among other things, of the ecommerce platform ensure fair ranking mechanism.
• Note any possibility of influencing the ranking through direct or indirect remuneration paid by business users to the company.

In its report, CCI also asserted that it can step in and investigate deep discounting practices by ecommerce platforms. The statutory body also has the authority to scrutinise the contract terms between ecommerce companies and sellers.

The Reserve Bank of India (RBI) has announced video-based Know Your Customer (KYC) as an option to establish a customer’s identity.

The decision comes as a major relief to fintech startups and digital non-banking financial companies (NBFCs) who have been calling for this feature as it cuts costs in a big way. With the new remote customer authentication option, the startups need not physically reach out to customers in remote locations.

With the changes due to amendments to the prevention of money laundering act, digital KYC has been defined as capturing live photo of the customer and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out, along with the latitude and longitude of the location where such live photo is being taken by an authorised officer of the Reporting Entity (RE). Additionally, only officials from regulated entities would be able to do the remote onboarding.

“Further, with a view to leveraging the digital channels for customer identification process (CIP) by Regulated Entities (REs), the Reserve Bank has decided to permit video-based customer identification process (V-CIP) as a consent-based alternate method of establishing the customer’s identity, for customer onboarding,” the central bank said.

The official of the RE performing the V-CIP shall record video as well as capture photographs of the customer present for identification and obtain the identification information as mentioned below by the RBI:

• Banks: can use either OTP-based Aadhaar e-KYC authentication or offline verification of Aadhaar for identification. Further, services of business correspondents (BCs) may be used by banks for aiding the V-CIP.
• REs other than banks: can only carry out offline verification of Aadhaar for identification.

The RBI has also advised entities to ensure that the video recording is stored in a safe and secure manner and bears the date and timestamp. It also encourages them to take the assistance of the latest available technology, including artificial intelligence (AI) and face matching technologies, to ensure the integrity of the process as well as the information furnished by the customer.

After the Supreme Court’s 2018 judgement prohibiting the use of Aadhaar by private companies, fintech companies have been requesting the authorities to come up with an alternative plan for completing the KYC process. The startups have been demanding amendments in the KYC guidelines to make it easier to onboard customers.

In May 2019, the RBI released new offline KYC rules which allowed banks to carry out Aadhaar authentication/offline-verification for individuals voluntarily allowing the use of their Aadhaar number. The move was welcomed by fintech companies and the latest addition of video-based KYC is expected to further help startups expand their businesses.

Bengaluru-based dockless bike rental startup Bounce has raised $97 Mn (INR 692.39 Cr) in Series D funding round led by Facebook cofounder Eduardo Saverin’s venture capital fund B Capital. With this funding, Bounce’s valuation has almost doubled to $450 Mn.

Besides B Capital, Omidyar Network, Vistra ITCL, SCI Investments and Qualcomm Ventures also participated in this round, along with existing investors Sequoia Capital, Accel Partners India and Chiratae Partners. The development was first reported by Bengaluru-based business intelligence company Paper.vc. With this funding, Bounce has raised $191 funding in total, across series.

In October 2019, two sources told Inc42 that Bounce was in discussion to raise $125 Mn from B Capital and Accel Partners. The sources had also noted that the funding can go up to $150 to $160 Mn, taking the Bounce’s valuation close to $600 Mn. Inc42’s source had also indicated the involvement of investment firm Goldman Sachs.

According to a Business Standard report, published in November 2019, Bounce will be using the fund to expand across 10 Indian cities. In addition, Bounce will also be looking for opportunities to collaborate with state and central government to provide innovative solutions for first and last-mile connectivity.

B Capital and Accel Partners have invested in Bounce’s Series C funding round. In Series C, Bounce raised $72 Mn from Falcon Edge Capital, Chiratae Ventures, Maverick Ventures, Omidyar Network India, Sequoia Capital India and Qualcomm Ventures.

In 2019, the company also raised $4.45 Mn from Flipkart cofounder Sachin Bansal’s BAC Acquisitions. The BAC Acquisitions funding came in two rounds, in March 2019 the Sachin Bansal led investment company invested $3 and $1.45 Mn in July.

Founded in 2014 by Vivekananda HR, Varun Agni and Anil G, Bounce is a bike rental service that provides premium motorcycles for rent under the brand name Wicked Rides and commuter bikes under the Bounce brand. The company was previously known as Metro Bikes.

India leads the world in the bike and scooter rental market in terms of fleet size. As per German EV manufacturer Unu, the fleet size of bike-rental apps in India is over 15K vehicles. The Indian fleet is bigger than the more developed economies of many other Western countries. Besides Bounce, Yulu, Vogo, Tazzo Bikes and ONN Bikes are some of the players in the bike-rental segment.

At a time when Japanese conglomerate SoftBank is facing severe criticism and scepticism for its investments, the investor has decided to continue splurging on its Indian bets. For this, the conglomerate has finally appointed its first operating partner in India, the search for which has been going on from last year.

In a statement on Thursday (January 9), SoftBank announced that it has appointed Vikas Agnihotri as its first operating partner in India.

SoftBank said that to continue its expansion in India and bolster portfolio companies, SB Investment Adviser (SBIA) has appointed Vikas Agnihotri as its first Operating Partner to foster closer connections with the region’s technology ecosystem and the SBIA’s global network.

Agnihotri has an experience of over 25 years and was working with Google for the last eight years. In 2019, Agnihotri had taken over as Google India’s Interim Head after Rajan Anandan stepped down as VP, South East Asia.

Agnihotri had resigned from Google in the last weeks of December, after the confirmation of former Star India president Sanjay Gupta as Google’s India head. He is on the board of the Mobile Marketing Association, the Advertising Standards Council of India, and Internet and Mobile Association of India (IAMAI). He is also an angel investor.

SoftBank Vision Fund was set up in 2017 with a total corpus of $100Bn. Most of this vision fund was raised from Saudi Arabia and Abu Dhabi. Overall, the company has invested around $10 Bn so far in Indian startups.

The sale of SoftBank’s share in the Indian ecommerce giant Flipkart resulted in a gain of $1.3Bn for the Japanese company. Flipkart was acquired by Walmart for $16Bn in August 2018. SoftBank’s other key investments in India include Ola, Oyo Hike, Paytm, FirstCry, Grofers, Delhivery, Automation Anywhere, and Paytm Mall.

For Vision Fund 2, the Japanese conglomerate wants to continue its initiative of accelerating new-age technology by investing in startups that show the most potential. SoftBank Vision Fund expects to reach $108 Bn in fund size based on the memorandum of understanding (MoUs) it has signed with investors, but this has become increasingly difficult.

Softbank has already decided to narrow down its portfolio to the companies that have a clearer path to profitability and initial public offerings (IPO). The Japanese investment firm has also decided to slow down its investment pace, especially due to the losses incurred by its Vision Fund I portfolio companies like WeWork, Wag, Slack and Uber.

Recently, reports surfaced that SoftBank Vision Fund has walked away from investing in several startups, after giving term sheets and promising that closing delays were only temporary.

India was ranked the third worst-hit economies in the world due to internet shutdowns after crisis-hit countries Sudan and Iraq. The UK-based tech research firm Top10VPN, on Tuesday (January 7), revealed that around 4,196 hours of internet blackouts in India cost the Indian economy close to $1.3 Bn in 2019.

Top10VPN’s ‘The Global Cost of Internet Shutdowns in 2019’ report stated that some of the most affected Indian states and union territories that were impacted by internet shutdowns included Jammu and Kashmir, Meghalaya, Arunachal Pradesh, Assam, UP and Rajasthan.

Further, the report stated that over 8.4 Mn internet users in India were impacted across multiple incidents, including the abrogation of Article 370 in Jammu and Kashmir, disputes over Ayodhya holy site and CAA-NRC protests among others.

Samuel Woodhams, author at Top10VPN told TOI that there were more internet shutdowns in the country in 2019. He also said that India’s economy will be affected further if the government doesn’t take the necessary actions to reduce the number and duration of internet shutdowns.

Simon Migliano, head of research at Top10VPN, further added that the internet shutdown in Jammu and Kashmir is one of the longest shutdowns and has impacted the Indian economy at $1.1 Bn in 2019. The curb of internet services in the northeast and UP due to CAA-NRC resulted in $102 Mn and $63 Mn loss respectively.

Internet Shutdowns At Its Peak In India

According to Access Now, the country constitutes up to 80% of the total internet shutdowns recorded globally in 2019.

In December 2019, the UP government had suspended the internet services in 21 districts due to CAA protest, including Lucknow, Meerut, Kanpur, Ghaziabad, Bulandshahr among others. At the time, the government claimed that the shut down of internet services was a precautionary measure to prevent the circulation of false information or rumours through social media platforms. However, the Top10VPN report did not mention any data about social media blackouts in India.

Apart from UP, in the same month, Delhi also witnessed internet shutdowns in areas like Mandi House, Seelampur, Jaffarbad, Mustafabad, Jamia Nagar, Shaheen Bagh and Bawana, following massive CAA protests. In addition to this, the government had also shut down internet services in various regions of Karnataka, Gujarat, West Bengal, Tripura and others, due to the anti-CAA protest.

Technology has disrupted our lives for the better but it has not managed to get rid of all our problems. While it has definitely made the information data flow easier, there is a lot that technology can do to improve the everyday lives of citizens, particularly those who need help the most. With the many environmental, social and economic issues on the rise, more focus is being put on the innovations that are focussing on providing solutions for these. Riding on this wave many startups have emerged to solve the issues and are being supported by the government.

In this regard, Kerala has gone a step ahead to help startups in the social tech and innovation field. With its nodal agency, Kerala Startup Mission or KSUM, the government is not only helping startups understand where to focus when it comes to social innovation but is also enabling them to go to market with their products and services.

Since its inception in 2015, the agency has been focussing on social issues and innovations, be it on women entrepreneurship, rural development, student entrepreneurship and more.

How KSUM Startups Are Making A Difference

To boost the social tech innovation sector in the state, KSUM is providing them with various benefits such as mentorship, connecting them to corporate giants, participation in various events and more.

National Coconut Challenge 2019

At the recently-concluded National Coconut Challenge 2019, KSUM invited startups and entrepreneurs to come forward and provide innovative solutions, with the help of tech, to the ailing coconut agriculture sector of the state, one of the key contributors to Kerala’s economy.

The event had many benefits such as:

• Top three teams get prize up to INR 3 Lakhs
• Top 10 teams get an opportunity to pitch for Innovation Grant of up to INR 12 Lakh
• Seed support of up to INR 25 Lakhs for selected teams
• Top 10 ideas to get exposure during international conferences
• Opportunity to seek support from government agencies

Rural Innovators Meet

KSUM in association with The Kerala State Council for Science, Technology and Environment (KSCSTE) hosts an annual programme, Rural Innovators Meet (RIM). The focus of RIM is to promote innovative minds from the rural part of the state. It gives them a platform to showcase and present their ideas, network with stalwarts as well as fellow innovators and more. It also helps them in gaining mentorship relating to various challenges from experienced entrepreneurs.

Startup Dreams Project

KSUM in association with Scheduled Caste Development Department (SCDD) of the government of Kerala is implementing the project ‘Startup Dreams’. This is a startup incubation programme which focusses on the SC community. It includes execution of incubation programmes, conduction of various training, workshops, sessions, business connect/networks, setting up and connecting various R&D Labs, branding and other operational activities.

Grants And Funds

Apart from helping the startups with incubation and acceleration, the government is providing the startups with grants and funds to help them with their products and funds.

• Innovation Grant: KSUM provides innovative startups with a non-repayable grant of up to INR 12 Lakhs to help them scale their products and innovation
• Government-As-A-Marketplace: In this initiative, the government asks startups to build products for them and post-signing a tenure, provides them with funds of up to INR 1 Cr to build the products
• R&D Grants: To help startups with research and development, KSUM provides startups with a non-repayable grant of up to INR 30 Lakhs

Other Measures To Help Social Innovation

There are various other measures through which the startups can take their social innovation products and services to as many people and markets.

• Sponsorship for national and international business seminars, events and workshops
• Market access support and incubation
• Seed loans
• Accelerator programmes
• Hardware purchase support and media and PR support
• Mentorship
• Networking with the industry

Some Social Innovation Startups From The KSUM Portfolio

Through its various initiatives and policies, KSUM has enabled more than 150 startups working in the social innovation sector in the state. Some of them are:

Embright Infotech

A tech-driven startup recognised by Startup India, Embright specialises in products and services related to virtual reality, augmented reality, mixed reality, AI and IoT. Focussing on assistive tech products related to the well-being and healthcare sector, it develops therapy modules for people suffering from autism and related neurodevelopmental disabilities.

Benefits From KSUM:

• Participation in Gitex Dubai
• 1 year moratorium period seed loan
• Part of the K Accelerator Programme
• Innovation Grant
• Government-As-A-Marketplace Grant: INR 23.36 Lakhs
• Purchased by Kerala Social Security Mission

DAAD: Digital Arts Academy For The Deaf

Operating from KSUM’s incubation programme in Technopark, Thiruvananthapuram, DAAD is developing a unique web-based application for the deaf. Its app focuses on providing computer courses in the Indian Sign Language (ISL). The uniqueness of DAAD’s product is that it is developed entirely by the deaf, all three of its founders as well as six of their eight employees are deaf.

It also offers online certificate courses on popular job-oriented computer topics, such as basic programming and Adobe Photoshop. The videos and tutorials are in the ISL with English subtitles. The startup is working towards developing an AI-based tool that will automatically translate spoken languages to the ISL.

Benefits From KSUM:

• Part of the incubation programme of KSUM
• Idea grant of INR 2 Lakhs
• Hardware purchase support
• Media outreach and PR support
• Industry connect to scale their product globally

GenRobotics Innovations

GenRobotic Innovations specialises in the design and development of robotic solutions to address the most pressing social issues. Its solutions combine the use of robotics and AI. Their product ‘Bandicoot’ is a semi-robotic device with a human-controlled interface to clean manholes. Launched in multiple states in the country, Bandicoot is solving the pressing issue in society to eradicate manual scavenging.

According to the startup, its latest G2 (generation two) model is capable of performing multifarious tasks such as handling logistics in combat military operations, at construction sites, perform roles for firefighting and rescue missions and more.

Benefits From KSUM:

• Scale-up grant of INR 12 Lakhs
• International business support
• Government-As-A-Marketplace Grant: The startup got work order from the Kerala water authority
• INR 4.28 Lakhs grant from Kerala water authority innovation zone

I Love 9 Months:

A maternity wellness organisation, I Love 9 Months has developed an m-health app through which it is providing maternity and antenatal wellness services and tips to millions of women irrespective of their socio-economic status. The services are in line with UNICEF’s ‘priority interventions’ during the critical window between pre-conception to post-pregnancy. The app also acts as a medium through which the government can monitor real-time data which can be used for policy development on health care initiatives.

Benefits From KSUM:

• INR 5 Lakhs 1 year moratorium period seed loan
• INR 7 Lakhs productisation grant
• 2 international business delegation sponsorship

Future Focus Of KSUM In The Social Innovation Sector

KSUM has been the biggest enabler for innovative startups in Kerala over the years. Through its focus on the social innovation sector, the agency is helping the country counter the many social issues that plague the country.

Elaborating on this, Ashok Kurian Panjikaran, head, business linkages and incubation, KSUM said, “Our focus has been on social innovations and impacts for society since the very beginning. Initiatives such as Government-As-A-Marketplace have extended the scope of social startups in the state. Going further, we aim to expand the focus to more segments from the sector and invite startups and corporates from across the country to be part of our initiatives.”

Electric two-wheelers Ampere Vehicles, which is owned by Greaves Cotton, has partnered with online grocery delivery unicorn Bigbasket to electrify its fleet in six metro cities — Bengaluru, Chennai, Hyderabad, Mumbai, Pune and Delhi NCR.

P Sanjeev, COO at Ampere Vehicles, said that the company is also targeting electrifying other businesses as well. By infusing Ampere’s electric fleet, companies will be able to cut down their operation cost and will prove to be beneficial in gaining competitive advantage, Sanjeev added. He also assured that the Ampere’s e-scooters is suited for both personal and commercial use.

‘Electrification For 2020’

KB Nagaraju, Chief Customer Experience Officer at Bigbasket, said that the company was planning to expand its fleet of electric vehicles (EV) 2W by “10 times within a span of one year”. He also highlighted that BigBasket was one of the first companies in India to use EV for last-mile delivery. Bigbasket started its EV fleet in 2016 and considers further electrification as a critical aspect of its logistics plan for 2020.

Nagaraju added, “This partnership with Ampere is certainly in that direction of going green and the EV fleet makes a great business case for us in terms of lowered costs and stronger social capital built through our sustainable practice.”

Bigbasket was founded in 2011 by VS Sudhakar, Hari Menon, Vipul Parekh, VS Ramesh and Abhinay Choudhari. Since its launch, Bigbasket has managed to expand its catalogue to include household essentials and cosmetics, among other items of daily use.

The company currently operates in 26 Indian cities and claims to process over 1.40 lakh orders per day. The company also claims to have over one crore of users on board. In November 2019, Bigbasket announced that it is close to the breakeven point in 10 Tier 1 cities. These cities include Bengaluru, Chennai, Hyderabad, Mumbai, Pune and Delhi NCR, where Bigbasket is planning its electrification drive.

‘Grofers Notes EV Challenges’

Bigbasket’s rival Grofers has also electrified its delivery fleet since 2016. However, Grofers has also been very vocal about the challenges in the EV industry, especially when it comes to incorporating it into the delivery fleet.

In November 2019, Grofer’s director of operations, Vinay Kumar, said that the company has been managing its electrified delivery fleet for the last three years and in that process, it has seen multiple failures at various levels.

Kumar highlighted some of the challenges the company has been facing, which included the delivery executives’ resistance to drive EVs, lack of charging infrastructure, and the discovery of EV technology manufacturers.

‘Ampere Vehicles’ 40K Customers’

Founded in 2008 by Hemalatha Annamalai, Coimbatore-based Ampere Vehicle offers two-wheeler electric models such as Zeal, V-48 LA, Magnus 60, Reo LA and REO Li. Ampere Vehicles claims to have a customer base of 40K users. In October 2019, Ampere struck a deal with Amazon and became the first automobile brand in India to sell its e-scooters online.

Recently, the company also launched Reo Elite, which is powered by 48V-20Ah lead-acid battery and can cover 55-65 Km on a single charge. Ampere Vehicles claims that the riders do not need a license or registration due to the low speed of the scooter. The scooter can go up to 25 Kmph and costs around INR 45,099.

Recently, Ampere Vehicles’ rival Ather Energy revealed an upgraded version of its flagship e-scooter 450 model. The new model is called Ather 450X and will be launched across India by the end of this month.

Correction: January 10, 2019| 3:34 PM

• Some sections of this article have been edited post-publishing to improve the clarity of language.

To celebrate India’s rising startups, Inc42 is profiling a new soonicorn every Friday in the Inc42 UpNext: Unicorns Of Tomorrow series. For the next few months, we will be speaking to founders and cofounders at these potential unicorns and shining light on their journeys and growth stories. This time, we take a look at fintech startup MobiKwik.

Cashback and discounts — the two primary factors behind value-conscious Indians finally taking the digital payments plunge. But are fintech companies and startups even thinking of profits or is it just a mad race to acquire more and more users? That’s the question that many fintech players have been faced with over the past year. 

Over a decade old in the fintech space, even MobiKwik’s team pondered over many such questions about running a sustainable business and cutting down the reliance on discounts which make up a big part of expenses. The changes it put in place led MobiKwik to achieve operational breakeven in FY2019 along with earning gross revenue of INR 184.6 CR. This was a significant leap from the company’s INR 69.29 Cr revenue in March 2018. 

“In late 2018, we had this reckoning that if we can’t figure out how to make money on our current 60 – 70 Mn user base, how will we ever make money on, say, 100 Mn users?” – Upasana Taku, cofounder of MobiKwik. 

The answer came from looking at banks such as HDFC and Kotak, which have relatively fewer account holders in comparison to public sector banks such as SBI, but in terms of valuation, both are worth billions. So one of the steps MobiKwik took to achieve this bank-like sustainability, Taku told Inc42, was by shifting the cultural focus of MobiKwik growth from deals and discounts to a more sustainable, but far less attractive, assured rewards system. 

Ending The Culture Of Discounts

According to Taku, the culture in the payments industry today is such that people feel it’s mandatory to spend 3% of their revenue on incentives. This thinking had also percolated into MobiKwik’s team, which has over 300 employees now. “We would constantly get arguments that there’s market pressure from competitors and so we also have to have the best deals,” she added. 

But we decided to go a different direction with our points-based loyalty program — ‘Supercash’. Users can avail 5% saving on any transaction against their Supercash collection. This decision did face a lot of internal pushback with some teams saying that points-based incentives will wipe out MobiKwik’s customer base because competitors are giving out hard cash. “But we decided to go with it, anyway”, said Taku.

This move was backed by the company’s analysis of its customer base, which showed that less than 3% of MobiKwik’s users were latching onto each and every deal. Other than that, users were equally divided between the ones who took advantage of some discounts and the ones who had never used any coupon or discount deal. 

“We took the call that we don’t need this 3% because their attention is anyway poor. Today, they are on our platform, tomorrow they will go wherever there’s a better deal”, added Taku. 

This approach is said to have increased the company’s retention rate by about 23% along with a significant jump in average revenue per user and the number of transactions per user. 

Gurugram-based MobiKwik — founded by Bipin Preet Singh and Taku in 2009 — claims to have over 110 Mn users and 3Mn merchants today. In October 2018, MobiKwik added multiple financial services to its platform including credit, insurance, gold loans, and mutual funds. This was in addition to bill payments, B2B payments gateway, and digital payments services. Is MobiKwik getting ready for the super app battleground?

MobiKwik’s Fintech Super App Play

Out of its wide service portfolio, the credit business is said to be making the most revenue for the company. MobiKwik claims to have disbursed 1.2 Mn loans, amounting to $152 Mn. The company is targeting the middle-income users of India who are underserved by the existing bank ecosystem. The loan size ranges from INR 2.5K to INR 5 Lakh.

The company claims to have developed its own machine learning model which generates a credit score (Mobiscore) for users, based on which the creditworthiness of users is estimated. The factors considered by the MobiKwik algorithm include the user’s age, monthly spending, vehicle ownership, and payment pattern. 

By gaining access to the user’s SMS inbox, MobiKwik is also able to track if a user is running late on bill payments and whether they are paying a late fee on their bills or credit card. In addition to this, the size of the user’s electricity bill gives them access to the user’s full address and also aids the estimation of the user’s house rent and cost.

Offering an ecosystem of financial services is not a new thing in the payments space. Both PhonePe and Paytm have been trying to increase customer retention and revenue by expanding the service portfolio. 

Taku said that MobiKwik has made offline merchants advocates for the credit product. MobiKwik is giving referral commission to merchants against every conversion made on MobiKwik credit. She added that competitors such as PhonePe and Paytm have not built up the credit offerings to the extent that MobiKwik has done. 

“We are enabling our merchants to become sort of our distributors to the extent that it also becomes a new stream of revenue for them. It’s a new engagement tool for them. And it’s also a tool for them to increase their ticket size.” 

The credit product is also said to have increased merchant retention for the company. 

In terms of competing with the plethora of digital lending companies, Taku said that none of these players has access to the volume of customers that MobiKwik is able to acquire organically every month. Taku also feels lending rivals are usually solving for a single use-case whereas MobiKwik’s credit offering can be seen as a general credit card which is compatible with all kinds of user needs.  

Although payments and credit are the two major pillars of MobiKwik’s growth, the company does have plans to add more financial products to retain its customers.

Going Beyond Unicorn And Eyeing Decacorn Valuation 

In the background of Paytm’s recent decision of adding transaction fees on loading money from credit card to digital wallet (above a monthly limit), Taku said, “I’m not a big believer in charging consumers for loading money from their credit card. If I want to use the credit card for my spending then I should be allowed to do that. I would try to ask the merchant to pay more for a credit card user because the spend of the user is riskier, but not the consumer.”

In terms of targets, the company is said to be on track for $70 Mn in revenue for this fiscal and aims to reach a $100 Mn revenue mark in the next four to five months. “The unicorn valuation would happen soon but our aim is to achieve long term valuation,” Taku said noting examples of WeWork’s recent saga as a cautionary tale to say that private market valuation is not the end goal. 

“Our dream is to reach a decacorn valuation in the public markets, where a common retail shareholder is willing to buy our share at a fair price. And this is something that we will have to learn from the stalwarts of financial services.”

Healthcare-focused SaaS company Indegene Omnipresence has raised $20 Mn from Syneos Health, a US-based biopharmaceutical solutions provider. While the Bengaluru-based company did not reveal the funding amount, a Livemint report, citing an anonymous person, had divulged the details.

Inc42 has reached out to Indegene for the confirmation of the funding amount and the story will be updated once and then the company responds.

With these funds, the company plans to accelerate the Customer Experience Management (CXM) platform for life sciences and healthcare clients. Manish Gupta, the cofounder and CEO of Indegene, reportedly said that the funds will be used primarily for market expansion, improving product capabilities, and hiring sales and marketing teams.

Additionally, the company plans to increase its presence in the international markets, especially in the US and Europe. “We will also accelerate the buildout of the patient cloud,” Gupta added.

Indegene Omnipresence, which is a wholly-owned subsidiary of Indegene, is a unified customer experience platform for healthcare and life sciences organisations. The platform provides its clients with customer relationship management (CRM), omnichannel engagement, advanced analytics, and AI capabilities. The platform applies new-age machine learning technology and combines with the modern omnichannel approach to help its clients.

In 2017, the Omnipresence platform had tied-up with Microsoft to provide Microsoft Azure analytics, Microsoft AI, and Microsoft Dynamics 365 offerings to improve their clients’ productivity and collaboration skills.

On how the strategic alliance of the companies will work, Alistair Macdonald, CEO of Syneos Health, said that Syneos Health’s Dynamic Assembly network is an open ecosystem of the most agile data and technology collaborators, such as Omnipresence, to strategically address their biopharmaceutical customers’ challenges.

India’s SaaS market is expected to be at $3.3 to $3.4 Bn by 2022, with a 36% annual growth, according to a NASSCOM report. The report also cites that the growth can be attributed to cheaper workforce, abundant talent, mature sales ecosystem, and adoption of deeptech technologies in India.

A report by Inc42 DataLabs also noted that the enterprise tech startups raised $3.01 Bn across 742 deals between 2014 and H1 2019.

Moreover, healthcare SaaS market is expected to witness another major player joining it. Rostow Ravanan, cofounder of Mindtree, after his exit from the company, is now planning to launch a SaaS platform for the healthcare and manufacturing sectors.

Noida-headquartered digital payments giant Paytm on Thursday (January 9) added yet another feature to its widening product portfolio — Paytm Business Khata. The company said that this empowers Paytm merchant partners to maintain digital ledgers of all their customer transactions including cash and credit.

Paytm further said that with ‘Paytm Business Khata’, merchants can set payment due date for credit transactions and send automated reminders. The customers will receive a notification with their billing history, and they will be able to make payments through the same link.

Sounds familiar? Khatabook already does that.

Backed by Sequoia Surge, Khatabook app helps small shopkeepers and kirana store owners in India manage their accounts by helping them track the money owed to them through the means of a digital ledger.

Khatabook was originally built by Vaibhav Kalpe. Kyte Technologies acquired the company in October 2018, with Kalpe also brought on board. Kyte was founded by Ravish Naresh, Jaideep Poonia, Dhanesh Kumar and Ashish Sonone. Khatabook claims to have over 2.9 Mn active businesses on its platforms and over 7 Mn monthly active merchants.

However, with Paytm’s Business Khata, the company is expected to face huge challenges. At present, Paytm claims that its business-centric product is used by 10 Mn merchants.

But Khatabook does not seem perturbed by the entry of the fintech giant. Speaking to Inc42, Ravish Naresh, cofounder and CEO, Khatabook, said that the company had been anticipating this. “We are the largest merchant platform with 7 Mn monthly active merchants and so this means nothing for us. In fact this is good for the entire ecosystem, and will encourage more merchants to opt for digital transactions,” Naresh said.

Paytm Business enables merchants to manage their payments, view all their transactions in one place, order Paytm QR merchandise among various other services. Further, merchants can also avail multiple business services and financial solutions such as loans, insurance.

Jaideep Poonia, cofounder and product lead, Khatabook also tweeted welcoming Paytm to the merchant ledger game. He also tagged Paytm CEO Vijay Shekhar Sharma saying “Let’s keep it fun.”

It is to be noted that over the last few months, several startups such as BharatPe, Instamojo and others have launched ledger management products like Khatabook. Talking about these entrants, Naresh told Inc42 that Khatabook was a late entrant in the market, but because of fast execution, it has been able to take the lead in the space.

Naresh added that the company has grown 120 times from January to December 2019. It is now looking to deepen the relations with merchants and bring more merchants online. Further, one of the interesting things about Khatabook’s journey is that the company has no offline agents. Talking about this, Naresh said that Khatabook has seen most of its growth via online medium, which is organic growth.

Welcoming mainstream companies into the market of single product-focussed is the new eccentric conversation in the Indian startup ecosystem. For instance, when foodtech unicorn Swiggy launched a product— Swiggy Stores— which is a clone of Dunzo, the latter tweeted welcoming the former to its world!

As per a PwC study, there are about 12 Mn mom-and-pop stores in India and these Kirana stores constitute more than 90% of FMCG grocery sales in the country. With Paytm also joining the game, things are about to heat up in the merchant-focussed fintech services space.

Goa-based electric vehicle (EV) tourism startup B:Live has expanded its services to Kerala, where the company plans to deploy over 100 electric bikes.

B:Live has flagged off the services in Kochi and will eventually start operating in Kottayam and Kovalam in the next few months. The company has also partnered with the government of Kerala for the same.

The company’s cofounders Samarth Kholkar and Sandeep Mukherjee, in a press release, said, “Our tours in Kochi offer a unique and fun way of exploring the city on e-bikes. Each tour is led by a local experienced caption for an intimate experience of the rich & diverse culture of the state zipping through some of the most fascinating and beautiful experiences.”

Founded in 2017 by Samarth Kholkar and Sandeep Mukherjee, B:Live offers immersive tours on its smart e-bikes. For this, the platform works closely with multiple state governments to encourage the early adoption of EVs across all tourist destinations in India.

In addition, B:Live also ties up with premium hospitality chains — Taj, Club Mahindra, Marriott, Hyatt, Hilton, Novotel, Radisson, etc — to give curated tours to their guests. So far, the company operates in multiple cities of five states — Goa, Puducherry, Karnataka, Rajasthan and Gujarat. The company aims to bring an eco-tourism revolution in the country through its curated experiences powered by EVs.

Previously, B:Live’s founders highlighted that the EV tourism startup has completed over 2000 rides, which has prevented close to 2 tonnes of CO2 emissions.

In September 2019, B:Live raised $563.18K (INR 4 Cr) funding from DNA Entertainment Networks, which the latter called a strategic investment. With this funding the planned to expand its presence in the country and strengthen its technology platform.

Before this, B:Live had raised $140 K (INR 1 Cr) as seed funding led by Shrinivas V. Dempo, chairman of Dempo Group and Shivanand V Salgaocar, chairman and managing director, Vimson Group.

Now, B:Live has the agenda to launch in 10 new locations in India this year and to 30 locations by 2023 with help from the Ministry of Tourism, state governments and major Hospitality chains, the company’s founders added.

B:Live had also expressed its aim to explore “popular experiential tourism destinations” in South East Asia and claims to have received a good market response.

The International Finance Corporation (IFC) is looking to invest $30 Mn for a 4.5% stake in Sachin Bansal’s Navi Technologies. According to an IFC disclosure notice, the transaction values the Flipkart cofounder’s new venture at around $650 Mn (INR 2100 Cr).

The development comes at a time when Navi is in the process of acquiring a 100% stake in Chaitanya India Fin Credit (CIFCPL) from Sachin Bansal and other investors. Notably, Bansal is already the majority stakeholder of CIFCPL, which was earlier known as Chaitanya Rural Intermediation Development Services (CRIDS). He had acquired the company for INR 739 Cr ($104 Mn).

CIFCPL, which was acquired by Bansal, in September 2019, provides access to credit to the underbanked population in rural areas. The fintech startup has recently submitted an application to the Reserve Bank of India (RBI) for a universal bank license. The license will help the company increase financial inclusion by making banking simpler, accessible and affordable for consumers with a technology-driven approach.

Though the majority of CIFCPL’s business is in microfinance, the company is planning to bridge the credit gap for the retail and MSME sector by developing industry-leading technology and global best practices as a mainstay with the license application.

As of now, Chaitanya has more than 40 branches in five states including Karnataka, Bihar, Maharashtra, Rajasthan and Jharkhand. “Building a universal bank is a reflection of our commitment to provide financial services to those who need them most,” said Bansal.

Navi’s Acquisition Spree

Navi, which was previously known as BAC Acquisitions, has also acquired DHFL General Insurance, Essel Mutual Funds and consulting firm MavenHive.

The Mumbai-based insurance company DHFL General Insurance from Kapil Wadhawan-led financial services group Wadhawan Group Capital (WGC) was acquired by Navi for INR 100 Cr ($14 Mn). DHFL is a 100% fully owned entity of WGC.

Founded in 1984, DHFL has been known for offering affordable housing finance to the middle and lower-income category.

In December 2019, Navi acquired Bengaluru-based technology consulting firm MavenHive. Founded in 2012 by Bhavin Javia and Anandha Krishnan, MavenHive is a tech firm that specialises in end-to-end product development and training. Prior to this, Navi, in October 2019, had acquired Essel Mutual Funds to venture into the mutual fund space.

This article is part of Inc42’s Startup Watchlist, an annual series in which we list the top startups to watch out for in 2020 from industries such as agritech, deeptech, logistics, healthtech, edtech and more. Explore all the stories from the ‘Startup Watchlist’ 2020 series here.

Distances no longer serve as a barrier for humans to achieve their dreams, thanks to 24×7 connectivity in most places around the world. But while internet growth has been seamless for the most part in India, the delivery of products and services has been anything but smooth in the Indian context. The seachange in transportation and logistics over the last decade has challenged distances and made the world a much smaller space, even for global tech giants.

While the logistics tech sector has been around for decades, the ecommerce boom in the early 2000’s acted as a catalyst for the logistics sector in India. The presence and impact of logistics in the day-to-day lives of people are so ingrained that we often fail to notice how quickly the delivery arrives or fathom the intensity of activity in this space. From the food on the plate to gadgets and large appliances, the logistics sector has made it possible for most businesses to reach the end consumer.

Since the sector has had a long presence, there are already unicorns to look up to. The likes of Delhivery, Rivigo, and BlackBuck have set the pace in the Indian market. There lies a wide scope for innovation to serve customers in a more efficient manner. This seems to be the mantra of new-age logistics startups in India.

Inc42 has curated a list of some logistics tech startups that have the potential to outshine in 2020.

Editor’s Note: The below list is in alphabetical order and is not meant to be a ranking of any kind.

Blowhorn

While inter-city logistics are handled by major players, the challenges in last-mile delivery make it difficult for internet businesses and ecommerce companies to fulfil orders from hub to customer doorsteps.

Blowhorn is an intra-city logistics tech company operating across Bengaluru, Chennai, Delhi, Hyderabad, and Mumbai. It claims to have pioneered the spot and fixed-contract transportation market and is now turning its attention to speed across logistics offerings. The startup provides fixed contract-based as well as variable engagement models for large enterprises, SMEs and individuals.

“While most logistics startups have been focussed on shaping intercity logistics, around 40% of the total supply chain cost is intracity. Also, we are seeing a clear industry-agnostic trend towards higher fulfillment rates at faster delivery times within cities. Customers are no longer willing to wait for the goods they have ordered. This represents a huge challenge for intra-city supply chains, and a huge growth opportunity for nimble logistics start-ups optimised for speed such as Blowhorn,” cofounder Mithun Srivatsa told Inc42.

Talking about the business model and revenue generation, Srivatsa said Blowhorn operates in an asset-light marketplace model similar to Uber or Airbnb. Adding that their monetisation model is based on a take-rate that is the difference between our total cost of accessing the supply and the revenues we get from the customer for the logistics service provided.

In terms of market impact, Blowhorn claims to work with more than 100 enterprise customers including names such as Amazon, Flipkart, and Udaan on the demand front with a 95% retention rate. On the supply front, the company has about 3000 vehicles operating on a daily basis. “Our data shows that more than 10% of our owner driver-partners go on to buy a 2nd mini-truck, highlighting the economic impact that Blowhorn provides to its driver partner network. More than 80% of our driver-partners have been able to provide for their children’s education,” Srivatsa added.

Fr8

Founded in 2016 by Vasanth Immanuel and Jayendran Panneerselvam, Fr8 is a technology-driven logistics service provider, offering long-haul trucking solutions to large corporations, SMEs, and the agribusiness ecosystem. The online marketplace for logistics transactions helps customers move truckloads between cities with little to no friction.

Cofounder Jay Panneerselvam told Inc42, “A truck in India runs only for 15 days in a month. The other 15 days are wasted waiting for loading and unloading. Addressing this will improve efficiency and better incomes for truck owners.”

Fr8 is headquartered in Chennai and is backed by the likes of Omnivore Partners. The startup earns revenue by charging a brokerage fee of 4% for every order connected to the platform. For 2020, the startup plans to increase orders to 3K orders a month by expanding from 22 to 50 branches.

Freightwalla

Founded in 2017 and headquartered in Mumbai, Freightwalla is a technology-enabled Indian shipping freight forwarder. The startup claims to focus on addressing inconsistent service levels in the B2B international logistics industry by leveraging technology to offer real-time updates, online documentation services, and consistent pricing.

Cofounder and CEO Sanjay Bhatia believes that India’s coastal shipping has a number of challenges that Freightwalla is solving. He told Inc42, “The biggest challenge the logistics industry today is the dependence on traditional approach which entails manual processes that require a huge number of man-hours to get the job done. This results in a lot of manual errors which ultimately cause either cargo delays or cost escalations. Apart from that coastal shipping in India gets hampered due to the weak landside and port facilities, and insufficient depth at ports discourage large vessels, thus curbing the large scale use of it for freight movements.”

Founded by Sanjay Bhatia, Bharat Thanvi and Punit Java, for 2020, the company plans to invest in AI and deep learning to automate the process of extraction and generation of key information for shipping documents. It further plans to improve connectivity with the shipping lines and create a central hub for simplifying the coordination with the multiple parties involved in a booking process.

Bhatia added, “We have crossed a milestone of having on-boarded over 600 businesses this year, across SMEs, large Indian enterprises and MNCs. Our aim is to get the numbers in four digits over the next year.”

LetsTransport

Letstransport is a B2B tech-logistics solution provider for intra-state deliveries. The startup aggregates light commercial vehicles for urban logistics and has on-boarded more than 50K truckers across 14 cities with up to 10 tonnes of loading capacity.

The startup was founded in 2015 by Pushkar Singh, Sudarshan Ravi Jha, and Ankit Parashar. Letstransport is headquartered in Bengaluru and registered a revenue of INR 47.59 Cr. in FY18 as per filings on Tofler. The startup believes that the $30 Bn+ market opportunity, presence of more than 10 Mn light commercial vehicles and fragmentation along with the fact that more than 90% of vehicles are owned by individual driver-cum-owners is the biggest opportunity.

However, in terms of challenge, cofounder Pushkar Singh told Inc42, “The biggest challenge is that the level of tech adoption among truckers is relatively lower. There needs to be a conscious change in this and we are trying to drive this through enabling them to get on smartphones, holding repeated training for drivers to educate them on how to use our application and technology in general.”

He added that traditionally, there has been a dearth of talent in the logistics industry but with the rise of tech-logistics players like Blackbuck, Rivigo and Letstransport, the sector has been able to pull in talent, which otherwise would not have been possible. Letstransport plans to expand to 20 cities by the end of next year along with expansion to enterprises in the apparel, pharma and auto sectors.

Locus

With a customer base of over 40 enterprises, including the likes of Blue Dart, Bigbasket, Myntra, Unilever, Tata Sky, Urban Ladder, and Lenskart, Locus is looking to bring efficiencies in the logistics sector using geocoding, deep machine learning and proprietary algorithms. It offers smart logistics solutions like route optimisation, real-time tracking, insights, beat optimisation, efficient warehouse management, vehicle allocation, and utilisation.

The startup was founded in 2015 by Nishith Rastogi and Geet Garg to bring predictive analytics to the logistics industry. Cofounder Rastogi told Inc42 that it has an extensive range of products lined up for both horizontal and vertical penetration across enterprise supply chains globally, with many coming this year.

“Our vision to become a digital supply chain officer for businesses is centered around launching products to help enterprises in automating supply chain decisions across three levels – strategic, tactical and operational. Our current suite of products allows companies to automate operational decision making, and we plan to launch products across tactical and strategic layers as well,” Rastogi told us.

LogiNext

Businesses don’t only need to make deliveries, but also need to predict routes and expected time for completion. LogiNext’s model running on AI-based algorithms predicts location-based decisions and automates the delivery processes like route planning, ETA calculation, traffic prediction and also manages exceptions, notifications and the customer experience in real-time. The startup charges an annual fixed fee per unit across various business functions like order capturing, capacity management, dispatch, and analytics.

Founded in 2015 by Dhruvil Sanghvi and Manisha Raisinghani, LogiNext has a global physical presence in 5 countries and users in 40 countries. It currently has 100 live enterprise customers and 50 customers are being on-boarded with 20% of them as fortune 500 companies. The startup is headquartered at Fremont, California and official filings accessed through Toflr state that the startup registered revenue of INR 15.43 Cr. as on FY19.

“The logistics sector has realised the importance of technology and has started embracing the fact that digital transformation is the only way ahead. However, that becomes the biggest challenge too as these folks have followed an age-old orthodox way of running their business and driving mindset change becomes very challenging while onboarding these organizations,” the startup told Inc42.

For 2020, LogiNext is looking to build and offer the world’s first enterprise map which allows customers to build their own workflows on top of it.

Shipsy

Most logistics platforms nowadays rely heavily on data and Shipsy uses data to support businesses in planning and reducing logistics costs. Founded in 2015 by Soham Chokshi and Dhruv Agrawal, Shipsy has customers in Dubai, Saudi Arabia, Southeast Asia, and North Africa and across various industries ranging from petrochemical, steel manufacturing, rice export, brick, and mortar retailers among others.

On industry challenges and strengths, cofounder Soham Chokshi told Inc42 that India’s low digitisation quotient in logistics acts as both an opportunity as well as a challenge. While it stands as an advantage to save costs, changing the mindsets of businesses to adopt digital tools are the biggest challenge.

For 2020, the startup plans to launch an intuitive and fully integrate-able shipment execution module, invoicing module, mobile applications along with financing and insurance support for shippers and forwarders.

TagBox

Securing goods and products in transit is a key challenge for ecommerce and supply chain businesses. Founded in 2016, TagBox helps customers cost-effectively and reliably ‘tag’ a product, supply chain shipment, monitor its health in real-time, and ensure that shipment quality is not compromised.

The Bengaluru-headquartered company’s BoxLens platform combines an IoT based real-time and granular sensing to monitor temperature, humidity, shock, light, energy, and location with machine learning-driven predictive insights to identify excursion, theft or damage risk and help in better planning for the supply chain.

Founded by Adarsh Kumar, Sameer Singh, and Saumitra Singh, TagBox plans to focus on providing thermal-vision powered quality and traceability solutions for cloud kitchens in the future. In addition, solutions for traceability in factory production environments (yard management, assembly line) are also in the pipeline.

“Customers see benefits like improvement in temperature compliance, reduction in (perishable) product spoilage and fragile goods damage, 100% SKU or batch traceability, reduction in delays and TAT, improvements in process metrics like loading/unloading time and complete visibility of supply chain assets like bags, boxes, and pallets,” cofounder Saumitra Singh said.

In terms of opportunity, Singh told Inc42 that ecommerce is a revolution for the logistics industry as it has created tremendous opportunities and new business models for the logistics sector. “We believe modern trade still has a lot of potential growth, especially in segments like diagnostics, e-pharma, food-delivery,” he added.

The logistics tech startups are selected for the Startup Watchlist based on editorial criteria as well as the recent funding, stage, growth or scale achieved in the preceding year and how it has differentiated itself or its model in a competitive market.

“In the Andhra Pradesh startup ecosystem, there is no one particular sector which has too many startups. Startups are scattered across various sectors, and mostly all startups are based out of Vijayawada or Vizag. These two cities are the startup hubs from the state.” – Madhav Reddy, founder and managing director, RedMad Learnings

This comment speaks volume about the uphill climb for Andhra Pradesh startups after the splitting of the state from Telangana, which ended up absorbing the IT hub Hyderabad. Since then Andhra Pradesh (AP) startups have been left rudderless as the loss of Hyderabad affected the pace of innovation significantly.

However, with the help of ecosystem enablers, educational institutions, angel investors and VCs, startups have gone beyond the struggle and are standing tall to build up the state’s ecosystem.

While there is still the issue of losing innovative startups and talented individuals to neighbouring states and startup hubs Hyderabad and Bengaluru, AP has many startups that are taking its startup ecosystem forward.

“I knew a lot of startups that shifted to Hyderabad post the split and many who went to Bengaluru or Chennai to get more support and help in their journey. Even then, the state has come a long way in helping startups that it houses. And the majority of innovative solutions in the state come from colleges and students,” Reddy told Inc42.

Taking Andhra Pradesh’s Ecosystem Forward

While names such as Fluentgrid have been active and earning profits for many years, there are many other startups helping push Andhra Pradesh up the charts when it comes state-wise startup growth.

Here are some of the up-and-coming startups making it big not only in the state but also across the country:

Dronamaps

Founded in 2016 by Utkarsh Singh and Ayushi Mishra, Dronamaps was incubated at NASSCOM 10K initiative and is an end-to-end platform to collect, process and visualise drone data. Leveraging AI tech, the startup helps businesses draw deeper insights into drone maps. It also helps drone operators prepare for flights through a recommendation engine taking into account multiple parameters and providing the optimum flight path and flying height for the campaign.

Eruvaka Technologies

Founded by Sreeram Raavi in 2012, this agritech startup develops on-farm diagnostic equipment for aquaculture farmers to help them reduce risks of loss of farm produce and increase productivity. In 2018, the startup raised Series B funding led by Nutreco and existing investor Omnivore. With the funding, it entered into a commercial partnership with Nutreco to scale up its operations and compete globally.

Teacherr

To improve the quality of education in India, Varun Beluguppa, Harsha Teja and Sonu Sharma founded Teacherr in June 2019. By building an exclusive professional community for educators, this startup is helping them share knowledge, attend professional development sessions and find local jobs and opportunities among others. The startup was discovered by Inc42 during the Vizag edition of BIGShift in 2019.

I’mNotOut

Another discovery of Inc42 from BIGShift Vizag, this startup caters to sports enthusiasts by connecting them to each other and venues and events. Founded in April 2017 by Arun and Nagendra Medapati, I’mNotOut offers features such as searching for fellow players in a locality, exploring events, networking, sports updates and more. The startup also lets sports enthusiasts organise tournaments, collaborate and manage matches, challenges and tournaments.

Botclub

This edtech startup which was showcased at Inc42 BIGShift Vizag, this startup focusses on helping students learn and understand science through practical demonstration kits named Scikits. To restructure the way science is taught, K Harsha Vardhan, Sai Verma, Vignesh and Arun Kumar founded BotClub in August 2016. In its Scikits, Grade VI to Grade IX science topics are selected, strategically grouped together and dynamic unique products are developed. All the designed Scikits are installed in the school campuses and Botclub’s instructors help and guide the schools in delivering the content to students.

Gills

Ramaseshu Botu, Venkatesh Botu and Sruthi Botu founded Gills in 2016 to improve indoor and outdoor air quality through products such as masks, respirators and air purifiers. A participant at the BIGShift event in Vizag, Gills has developed many products including air-purifying masks ranging from INR 300 to INR 1500 with a variety of SKUs targetting various demographics.

Interview Buddy

Founded in July 2017 by Ujwal Surampalli, this startup is built on the premise that practice and preparation are crucial for getting over your anxieties and fears while attending an interview. During Inc42’s BIGShift Pitch session in Vizag, the startup explained its model which involves mock interviews conducted by industry experts with candidates. It also boasts features such as interview scorecards and playback reviews which provide analysis and feedback of the session, hence helping the users overcome their doubts and concerns.

anyEMI

Founded in 2016 by Narsi Reddy Komatireddy, Sudhakar Mediboina, Srinivasa Rao Vempali and Santosh Challa, anyEMI is a fintech startup developing an end-to-end platform for EMI payments, utility payments, insurance and more. It has collaborated with various municipal corporations to ease utility payments. One such collaboration is with Indane gas for inventory management as well as online payment services.

Saif Seas

Founded by Aliasgar Calcuttawala, his father Ahmed S Abdeally and his brother Taher Ahmed in 2018, Saif Seas or Saif Automations has developed a drone that acts as a lifeguard. With the aim of reducing drowning accidents in the state, the startup made a remote-controlled water drone. It can be deployed from a distance of up to 10 km, is easy to carry and reaches the person in need in three to four minutes.

Medic TFHC

With a focus on providing the best healthcare services to rural areas, this startup was founded in 2016 by Ram Kumar Varma. Medic THFC is bringing healthcare more accessible by maintaining digital health records of patients using a unique ID such as Aadhaar numbers. Through Medic TFHC, a patient can book a doctor’s appointment, search for medical stores, gain hospital information and more from the comfort of home. The startup has support for Indian regional languages to make it easier for users in rural areas to access healthcare services.

Craftiee

Founded by Siddhartha Kothamasu, this startup is focussed on building a marketplace for artisans to reach the ecommerce market. Incorporated in 2017, Kothamsasu started trying to understand the pain points for the industry in 2015. The startup helps the artisans get maximum profits for their products and eliminates the need for middlemen. In addition to that, Craftiee also helps artisans with marketing and product development.

Fopple Technologies

This startup was incorporated by a former techie who was concerned for his asthmatic father’s health when he would go out on his farm to spray fertilisers. Ambula Gopi Raj decided to design drones that help farmers spray fertilisers and pesticides without any harm to the workers. Its Drone Raja products store, spray and cover farmland with ease. It claims to have helped over 40K farmers, with 1,500 farmers registered on the platform and 5K acres of land covered.

Carengrow

This healthtech startup is looking to improve the healthcare ecosystem at schools. Founded by Meghana Kambham in 2015, the cloud-based preventive healthcare platform delivers all aspects of preventive healthcare to school campuses through a year-long affordable health cover programme. Carengrow claims to have over 1.2K positive impact cases, covered over 50 schools and more than 16K total screenings.

“2019 is pretty much a defining year for us,” Mswipe founder and CEO Manish Patel said in a recent interview, as the fintech company is poised to enter the unicorn club.

Patel told Inc42 that 2019 was a watershed moment for Mswipe as it ventured beyond payments and into newer territories. Its plans for 2020 involve MSME merchants and tapping this burgeoning business class to achieve the growth and revenue targets.

While Mumbai-based Mswipe has so far built its business around mobile point of sale (PoS) machines, it’s looking to go into credit-like services such as EMIs. The company has raised over $80 Mn in multiple funding rounds from marquee investors such as B Capital, UC-RNT, Falcon Edge Capital, Epiq Capital, Matrix Capital Partners and DSG Partners.

Mswipe will also be rolling out EMI services soon that will be at around one-tenth of the cost that commercial banks currently charge merchants. This would allow merchants to offer EMI payment options on many products that are traditionally not sold under such plans. Post-demonetisation, the increased adoption of PoS terminals meant that Mswipe had timing on its side.

According to DataLabs by Inc42, till 2018 Indian digital POS terminal startups raised $406 Mn in funding. Some of the notable POS terminal providers are Ezetap, Pine Labs, Innoviti, Mosambee, Phonepe, Payswiff among others.

Recently, one of the biggest players, Pine Labs reported a net loss of INR 13.5 Cr for the year, a near 6x hike.

However, Mswipe has shown better control over its losses for the financial year ending March 31, 2019. The company filings with the Ministry of Corporate Affairs showed that on a standalone basis, Mswipe has seen a 33% increase in revenue with a 24% jump in expenses and loss going down by nearly 4%.

On a consolidated basis, the company’s income was INR 277.6 Cr, a 34% increase and expenses were INR 335.7 Cr, a 25% Y-o-Y increase, and loss fell 5% to INR 58 Cr. Explaining the financial performance, Patel told Inc42 that the company’s transaction processing volume has increased by 50% Y-o-Y in FY19.

Mswipe: MDR and Support Services Growth

The 10-year old startup offers end-to-end services with its smart PoS terminals and has several revenue streams. The average cost of the apps on Mswipe platform for businesses is said to be around INR 300 per month.

In its filings, the company explained that it generates revenue from transaction processing fees, sign-up fees, support services provided in relation to the mPoS terminals being installed with the merchants, sale of terminals, export and other value-added services.

On a standalone basis, the company’s operational revenue was INR 255.4 Cr, of which sale of products was mere INR 1.26 Cr. Further, we noted that revenue from the sale of services has grown 37% to INR 250 Cr while the income from the sale of products fell by 84%.

We also noted that Mswipe has seen MDR grow by 8%, but this is the major revenue source bringing in INR 133 Cr. The biggest growth came in installation charges which increased 104% and support services grew 95.6%.

Patel told us that the company’s major source of revenue is platform usage fees for using Mswipe’s payment solutions and transaction processing income. “We have a healthy mix of 45% contribution by transaction processing income and 55% by platform usage fees,” he added.

Mswipe: Advertising Costs Increase But Employee Benefits Fall

According to a recent note circulated by SBICap Securities, the brokerage arm of the SBI Group, the Indian retail industry has a market worth of about $710 Bn, of which close to 90% is unorganised, dominated by 15 Mn kirana stores. It added that just around 15% of these 15 Mn merchants can afford a PoS terminal, so the technology and the market are “significantly” fragmented with few large players and hundreds of small regional players.

Mswipe is vying for a larger piece of pie as it looks to go deeper in the Indian MSME market and it’s spending heavily to reach this market. The company’s standalone advertising expenses in FY19 grew by 102% to INR 2.32 Cr and training recruitment expenses grew 51% to INR 70.5 Lakh.

Talking about the increase in advertisement expenses, Patel said, “The company has started increasing focus on the usage of digital platforms and digital tools for the acquisition of merchants. This is primarily why the spending has increased.”

Even though the overall expenses have grown by 24%, it has seen a decrease in employee benefits costs which reduced by nearly 10% reaching INR 75.7 Cr in FY19.

Inc42 asked Patel if this is because of certain layoffs, but the CEO denied this. “There have been no layoffs. In fact, the count of employees working directly and indirectly with the Company has more than doubled. The fall is seen due to changes in sourcing strategy and accounting effect.”

Talking about plans for FY20, Patel told us, “The company’s terminal base will grow by 40% and its transaction processing volumes will grow by 45%.”