FinTech - Latest News, Policies, Startup Landscape Of FinTech In India https://inc42.com/industry/fintech/ News & Analysis on India’s Tech & Startup Economy Thu, 07 Sep 2023 08:12:37 +0000 en hourly 1 https://wordpress.org/?v=6.0.1 https://inc42.com/wp-content/uploads/2021/09/cropped-inc42-favicon-1-32x32.png FinTech - Latest News, Policies, Startup Landscape Of FinTech In India https://inc42.com/industry/fintech/ 32 32 Karnataka To Launch Integrated Fintech Programme Soon https://inc42.com/buzz/karnataka-to-launch-integrated-fintech-programme-soon/ Thu, 07 Sep 2023 08:12:37 +0000 https://inc42.com/?p=414541 Karnataka is working on a fintech programme to unite the government, venture capital and banking sector for offering funding and…]]>

Karnataka is working on a fintech programme to unite the government, venture capital and banking sector for offering funding and mentorship support to startups, said the state’s IT/BT Minister Priyank Kharge.

Speaking at the Global Fintech Fest 2023, he said that the Karnataka government has plans to set up a  centre of excellence (CoE) for fintech that will focus on nurturing talent, leadership, entrepreneurship and fostering innovation. 

Kharge highlighted that out of 23 fintech unicorns, 12 are from Bengaluru alone. “Our state boasts of 1,300 active fintech startups and we are actively working on creating a Fintech Regulatory Support framework to encourage innovation and industry growth,” Kharge said.

Last year, the state’s government announced that it was planning to invest INR 25 Cr to set up a fintech hub in Mangaluru. Karnataka’s former science and technology minister Dr. C.N. Ashwath Narayan had said that at least 50 fintech startups would be established in the hub, giving further impetus to its plan of achieving $500 Bn business turnover by 2030 from the companies in the area.

Also, last year, the state rolled out its Startup Karnataka Policy 2022-2027 with an aim to position Karnataka as the ‘Champion State’ for startups by adopting a holistic approach towards strengthening the startup ecosystem.

The government aims to do this by offering the support of funding, incubation, infrastructure, mentoring, acceleration, R&D and industry linkages. The government claims that 15,000 startups have enrolled for the programme, out of which 700 are funded startups and over 10,000 are government-recognised. 

Kharge’s statements come after Karnataka’s cabinet minister NS Boseraju announced that the state will establish a research foundation to foster R&D in the startup ecosystem. He said that the move would bridge the gap between startups and other stakeholders, further offering easy  access to research and development. He also invited domain experts to offer insights into the proposed foundation.  

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Razorpay Launches ‘UPI Autopay On QR’ For Subscription-Based Businesses https://inc42.com/buzz/razorpay-launches-upi-autopay-on-qr-for-subscription-based-businesses/ Wed, 06 Sep 2023 12:07:23 +0000 https://inc42.com/?p=414315 Fintech major Razorpay on Wednesday (September 6) launched ‘Razorpay UPI Autopay on QR’, in collaboration with the National Payments Corporation…]]>

Fintech major Razorpay on Wednesday (September 6) launched ‘Razorpay UPI Autopay on QR’, in collaboration with the National Payments Corporation of India (NPCI), at the Global Fintech Fest 2023 for subscription-led businesses.

The new offering aims to simplify and streamline the challenges faced by subscription-based businesses by making the UPI payment process for subscription quicker.

By leveraging the widespread use of QR codes, this solution aims to help subscription-based businesses drive rapid adoption and encourage quick acceptance, Razorpay said in a statement.

With the new offering, businesses can create QR codes for their subscription services and seamlessly integrate them into their marketing strategies, spanning online ads, newspapers, billboards, websites, TV, product packaging, and delivery bags, Razorpay said.

A customer will only have to scan the QR code and make the payment.

Commenting on the new launch, Khilan Haria, SVP and head of payments product at Razorpay, said, “We embarked on a steadfast mission to provide businesses with optimal results, leveraging the synergy of India’s digital payments ecosystem and our technological expertise. Introducing ‘Razorpay UPI Autopay on QR’ innovation felt like a natural step in this direction.”

“With subscription-based businesses such as OTT platforms, and insurance providers having already established themselves in metropolitan and Tier 1 cities, Razorpay UPI Autopay on QR will play a pivotal role in their next phase of growth,” he added.

The National Payments Corporation of India (NPCI) launched UPI Autopay in 2020 to enable payments for recurring payments such as mobile bills, electricity bills, EMI payments, and OTT subscriptions.

The transition towards UPI Autopay has primarily been driven by a series of guidelines issued by the Reserve Bank of India (RBI) over the past four years. These guidelines aimed to tighten regulations for recurring payments, ensuring that such transactions do not occur without the explicit consent of users.

Earlier this year, tech major Apple introduced UPI Autopay as a new payment option for subscription-based purchases on its app store in India. Google also introduced UPI Autopay as a payment option for subscription-based purchases on Google Play in India last year.

In August, UPI transactions crossed the 1,000 Cr mark for the first time. It recorded 1,024.1 Cr transactions amounting to a total value of INR 15.18 Lakh Cr.

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India In Talks With South American & African Nations To Introduce UPI https://inc42.com/buzz/india-in-talks-with-south-american-african-nations-to-introduce-upi/ Tue, 05 Sep 2023 15:53:26 +0000 https://inc42.com/?p=414179 The Indian government is reportedly in talks with multiple South American and African countries to introduce the Unified Payments Interface…]]>

The Indian government is reportedly in talks with multiple South American and African countries to introduce the Unified Payments Interface (UPI) and RuPay cards in these countries. 

A senior government official told Livemint that officials of the Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) are holding talks with their counterparts as well as high commissions and embassies of these nations.

The person further added that the discussions are at various stages of negotiations and are part of the government’s bid to internationalise UPI.

This comes close on the heels of NPCI International Payments Limited’s (NIPL) chief executive officer (CEO) Ritesh Shukla saying that UPI will double the number of countries where it is operational in the next 12-18 months. 

Recently, reports also said India is in deliberations with countries such as Namibia, Mozambique and Kenya to expand the scope of UPI. 

The move comes as UPI creates new benchmarks even as the government further pushes to scale the platform globally. Just days ago, UPI set a new record by processing more than 1,000 Cr monthly transactions in August 2023. 

Meanwhile, UPI continues to see global adoption. So far, the digital payments platform has already been deployed in countries such as France, Singapore, Nepal, UAE, Saudi Arabia, Bahrain, Singapore, Maldives, Bhutan, and Oman. 

In addition, India has also been in talks with New Zealand to deploy the digital payments system in the Pacific country to improve ease of business between two nations. 

On Monday, the RBI also allowed scheduled commercial banks to offer credit lines to their customers through UPI.

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Top-Level Exits Continue At BharatPe; CBO Nishant Jain Steps Down https://inc42.com/buzz/top-level-exits-continue-at-bharatpe-as-cbo-nishant-jain-resigns/ Tue, 05 Sep 2023 09:38:06 +0000 https://inc42.com/?p=414111 In another top-level exit at fintech unicorn BharatPe, its chief business officer (CBO) Nishant Jain has resigned after being with…]]>

In another top-level exit at fintech unicorn BharatPe, its chief business officer (CBO) Nishant Jain has resigned after being with the startup for over three years.

In a LinkedIn post on Tuesday (September 5), Jain said he was starting a new position as executive director and CBO (assisted business) at broking firm Angel One. 

“The past 3.5 years with BharatPe have been nothing short of extraordinary. It has been a thrilling experience, filled with the satisfaction of making a meaningful impact, achieving significant milestones, navigating thru (through) the challenges and triumphs & most importantly forging strong and enduring friendships,” wrote Jain in his social media post.

BharatPe was not immediately available to respond to Inc42’s query on the matter.

The latest exit comes days after it was reported that Dhruv Dhanraj Bahl, former chief operating officer of BharatPe who was recently appointed as the CBO for the merchant lending division, was set to quit the fintech startup this month.

BharatPe, which has been embroiled in multiple controversies since last year, has seen an exodus of senior executives, including chief technology officer Vijay Aggarwal, head of consumer product-PostPe Nehul Malhotra, and chief product officer of lending and consumer products Rajat Jain, over the last year or so. 

In January, its CEO Suhail Sameer also stepped down from his role

Prior to that, in 2022, BharatPe’s cofounder Bhavik Koladiya exited the company amid legal cases and the public mud-slinging with the startup’s former MD and founder Ashneer Grover, who also stepped down from his position last year.

Founded in 2018, BharatPe enables merchants to accept online payments through QR codes and PoS devices. BharatPe recently said its PoS business processes payments of over $3.5 bn annually on its machines.

In FY22, BharatPe’s operating revenue doubled to nearly INR 300 Cr while loss more than tripled to around INR 5,000 Cr.

The fintech unicorn has raised over $583 Mn in equity till date from marquee investors including Tiger Global, Peak XV Ventures, Steadfast Capital, Ribbit Capital, Insight Partners, and Steadview Capital. 

As per a latest report, BharatPe is looking to raise $100 Mn in a new round of funding from existing and new investors.

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Fintech Giant BharatPe In Talks To Raise $100 Mn From Existing Investors https://inc42.com/buzz/fintech-giant-bharatpe-talks-raise-100-mn-existing-investors/ Tue, 05 Sep 2023 06:35:50 +0000 https://inc42.com/?p=413913 Fintech unicorn BharatPe is in talks with existing investors to raise $100 Mn in a new round of funding.  The…]]>

Fintech unicorn BharatPe is in talks with existing investors to raise $100 Mn in a new round of funding. 

The fintech giant is also looking to rope in a new investor in the funding round, ET reported, citing sources. BharatPe had last raised a major funding round in 2021 when it raised $370 Mn at a valuation of $2.9 Bn.

However, the publication reported that the fintech giant might have to settle for a $2 Bn valuation at the latest round, given current market conditions.

BharatPe is planning to raise the round amid an ongoing leadership exodus. CBO Nishant Jain, VP of organised trade (mid-sized retailers), Prashant Gagneja, VP of user growth, Ashish Aggarwal, VP of products Anurag Rathor and head of product design Rahul Chauhan have all moved on.

“There have been talks for new capital at BharatPe, but the contours are not finalised yet and valuation will be tricky because of its troubles as well as the broader correction in valuation,” a person aware of the goings-on at BharatPe told ET, adding it is still a couple of months away.

Post-Ashneer BharatPe

Ever since cofounder and ex-MD Ashneer Grover’s unceremonious exit in 2022, BharatPe has seen a complete reshuffle at the top. Cofounder Bhavik Koladiya also left the fintech last year, leaving only Shashvat Nakrani as the only cofounder to be still at BharatPe.

In January this year, CEO Suhail Sameer also stepped down, which led the fintech to appoint Nalin Negi as CFO and elevate him to interim CEO after Sameer’s departure. Further, former Razorpay senior executive Pankaj Goel joined as CTO and former ICICI Bank executive Kohinoor Biswas joined as head of consumer lending. 

Before that, BharatPe got Aparna Kuppuswamy as chief risk officer and Sandeep Indurkar as CBO for banking and other alliances.

The fintech giant set a target of hitting EBITDA profitability by March 2023, leading up to an IPO in the next two years. These plans have been the backbone for BharatPe to raise fresh money and scale up its business operations. However, the fintech posted a net loss of INR 5,610 Cr for FY22, with a revenue of INR 321 Cr.

The new funding round might also be significant given BharatPe’s commitment towards Unity Small Finance Bank, where it is a significant shareholder. The company also completed the acquisition of Trillion Loans earlier this year, another non-banking financial company (NBFC) to shore up its lending operations.

In a recent press statement, the fintech said it has around 200K devices deployed across more than 400 locations in India. It intends to double its network of terminals over the next year with the launch of its new Android-based PoS terminal.

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Paytm Boosts In-Store Payments With 87 Lakh Devices Now In Use https://inc42.com/buzz/paytm-boosts-in-store-payments-with-87-lakh-devices-now-in-use/ Tue, 05 Sep 2023 05:45:01 +0000 https://inc42.com/?p=413906 Fintech giant Paytm has reported significant growth in its offline payment services. According to the Delhi NCR-based fintech unicorn, over…]]>

Fintech giant Paytm has reported significant growth in its offline payment services. According to the Delhi NCR-based fintech unicorn, over 87 Lakh merchants are using its payment devices as of August 2023.

The firm has added 42 Lakh new devices in the past year, with a notable increase of 5 Lakh devices in August alone.

According to the company, this spike in device subscriptions elevates Paytm’s recurring revenue and fuels higher payment transactions. Furthermore, it enlarges the company’s potential clientele for its merchant loan distribution services, which have also seen robust growth.

In the last two months, Paytm’s loan distribution vertical has also shown a staggering 137% YoY increase in disbursements, reaching INR 10,710 Cr. The number of loans extended through the Paytm platform has also surged 47% Yo, amounting to 88 Lakh loans.

“Over the past several quarters, we have talked about our plans to calibrate growth to further tighten credit quality of loans distributed on our platform. We have been able to successfully demonstrate improving credit quality for Paytm Postpaid, where the ECL has reduced to a range of 0.65% – 0.85% from a range of 0.75% – 1.00% in Q4 FY 2023,” Paytm said.

In July and August, Paytm processed a total of INR 3 Lakh Cr Gross Merchandise Value (GMV) from merchants, with a 43% year-on-year growth. It claims to have witnessed a steady rise in GMV from payment methods other than UPI, such as EMI and cards.

“Growth in payments volumes drives profitability for us, through net payments margin and / or from direct upsell potential,” Paytm said.

On Monday, fintech giant Paytm launched a new device, Card Soundbox, to enable card payments. The Card Soundbox will enable merchants to accept both mobile and card payments across Visa, Mastercard, American Express and RuPay networks with ‘tap and pay’.

Earlier in July, the company launched two new variants of its popular soundbox device – Music Soundbox and Pocket Soundbox.

Meanwhile, Paytm said yesterday that its CEO and founder Vijay Shekhar Sharma has become the significant beneficial owner (SBO) of the fintech giant after Antfin sold 10.3% of its stake to the CEO’s Resilient Asset Management B.V, taking his total shareholding to 19.42%.

Paytm reported a 44.5% year-on-year (YoY) decline in its consolidated net loss at INR 358.4 Cr in Q1 FY24.

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Vijay Shekhar Sharma Open To Upping Stake As Paytm Inches Closer To Profitability https://inc42.com/buzz/vijay-shekhar-sharma-upping-stake-paytm-inches-closer-profitability/ Tue, 05 Sep 2023 05:31:34 +0000 https://inc42.com/?p=413901 Vijay Shekhar Sharma, the founder and CEO of Paytm, said he’ll look to raise his stake as Paytm edges closer…]]>

Vijay Shekhar Sharma, the founder and CEO of Paytm, said he’ll look to raise his stake as Paytm edges closer to profitability.

“There is never a day that I would not buy more equity in Paytm,” Sharma told Bloomberg News in an interview on Monday. “The single largest shareholder of Paytm is now an Indian, that is myself, and I believe this is definitely a key milestone.”

Paytm reduced its losses by 44.5% year-on-year (YoY) to INR 358.4 Cr in Q1 FY24. The fintech giant reported a third consecutive EBITDA positive quarter but before the employee stock option (ESOP) cost. EBITDA, sans ESOP costs, stood at INR 84 Cr during the quarter under review versus an EBITDA loss of INR 275 Cr in Q1 FY23. 

Sharma’s comments come on the heels of his becoming Paytm’s Significant Beneficial Owner (SBO) and its largest shareholder after Anfin reduced its stake in the company. In a regulatory filing on Monday (September 4), the listed fintech giant disclosed that Antfin had reduced its ownership from 23.79% to 9.90%.

Antfin, a Netherlands-based affiliate of China’s Ant Group, trimmed its stake over two separate transactions.

Firstly, it transferred a 10.3% stake, along with voting rights (excluding economic rights) to Resilient Asset Management, a Sharma-owned company. Valued at approximately $628 Mn (around INR 5,200 Cr), this move elevated Sharma’s cumulative shareholding in Paytm to 19.42% o 19.42%.

It also sold a 3.6% stake through open market transactions last week for INR 2,037 Cr.

This ownership reshuffle also comes months after Alibaba, another subsidiary of Ant Group, offloaded a 3.31% stake in Paytm this February.

Vijay Shekhar Sharma also said that while Antfin has not indicated that they want to sell a further stake at the moment, he remains ready to ‘jump at any opportunity’ to buy more equity in the fintech giant.

The company’s shares, which have made a sharp recovery over the past eight months or so, opened at INR 863.05 apiece on Tuesday (September 5), less than 1% higher than Monday’s close of INR 856.80. While the share price has improved by nearly 60% since the start of the year, it remains some ways off from its listing price of INR 2,150.

On Monday, the fintech giant launched another soundbox, which also features contactless payments via credit or debit cards. Paytm also approved the allotment of 48,495 equity shares on Tuesday as part of its ESOP plans from 2008 and 2019, exchange filings showed.

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Zerodha Gears Up For Launch Of AMC, Files Draft Documents For Index Funds https://inc42.com/buzz/zerodha-gears-up-for-launch-of-amc-files-draft-documents-for-index-funds/ Mon, 04 Sep 2023 15:15:04 +0000 https://inc42.com/?p=413822 Investment tech major Zerodha filed draft scheme information documents for two index funds with the Securities Exchange Board of India…]]>

Investment tech major Zerodha filed draft scheme information documents for two index funds with the Securities Exchange Board of India (SEBI) on Monday (September 4) as it gets ready for the launch of its mutual fund business.

As per SEBI’s website, Zerodha Fund House has filed the documents for two funds – Zerodha Tax Saver (ELSS) Nifty LargeMidcap 250 index fund and Zerodha Nifty LargeMidcap 250 index fund.

The tax saver ELSS fund will have a statutory lock-in period of three years. It will replicate/track the Nifty LargeMidcap 250 Index.

It must be noted that Nifty LargeMidcap 250 reflects the performance of a portfolio of 100 large-cap and 150 mid-cap companies listed on the NSE. 

Zerodha has set the minimum application amount for the fund at INR 500 for new purchases and in multiples of INR 500 thereafter.

The product is suggested to be for investors looking for long term capital growth and the risk in the scheme is ‘very high’.

Zerodha Nifty LargeMidcap 250 index fund also comes under ‘very high’ risk category and is suggested for long term capital growth.

It is similar to Zerodha Tax Saver (ELSS) Nifty LargeMidcap 250 fund but would not have any lock-in period as it is not a tax-saver scheme.

The minimum application amount for the fund is INR 100 and in multiples of INR 1 thereafter for both new purchases and additional purchases.

Earlier this year, Zerodha cofounder Nithin Kamath said that the investment tech platform will team up with smallcase to foray into the mutual fund business through the launch of its asset management company (AMC). Last month, it received the final approval from SEBI to start the operations of its AMC. 

Reports were brewing for weeks now that the startup would soon launch its first new fund offer (NFO).

Zerodha Fund House is headed by former Nippon India senior executive Vishal Jain.

Kamath earlier said that Zerodha would launch simple products which investors can only understand. The fund house would only launch index funds and exchange traded funds (ETFs), he added.

Zerodha would compete with the likes of SBI Mutual Fund, Nippon India, Kotak Mahindra, and several others.

The asset under management (AUM) of the Indian mutual fund industry has grown six-fold over the last 10 years to INR 46.38 Tn, as on July 31, 2023, as per data by AMFI.

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Paytm Launches New Soundbox To Enable Card As Well As QR Code Payments https://inc42.com/buzz/paytm-launches-new-soundbox-to-enable-card-as-well-as-qr-code-payments/ Mon, 04 Sep 2023 11:44:14 +0000 https://inc42.com/?p=413782 In a bid to further strengthen its position in the soundbox market, fintech giant Paytm has launched a new device,…]]>

In a bid to further strengthen its position in the soundbox market, fintech giant Paytm has launched a new device, Card Soundbox, to enable card payments.

The Card Soundbox will enable merchants to accept both mobile and card payments across Visa, Mastercard, American Express and RuPay networks with ‘tap and pay’. Merchants will also be able to accept payments through the QR code on the soundbox.

With Paytm Card Soundbox, the company solves two problems for merchants — accepting card payments along with getting instant audio alerts for all payments, the fintech giant said in a statement.

Paytm said that the launch of the new device will transform in-store payments by expanding payment acceptance for merchants by combining Soundbox with NFC or contactless debit and credit card payments with mobile payments.

Paytm Card Soundbox has a built-in ‘tap and pay’ functionality through which merchants can accept card payments up to INR 5,000. The device offers alerts in 11 languages that can be changed by the merchant through Paytm for Business app.

“Paytm has always been at the forefront of innovating for India’s small businesses, solving their payments and financial services problems. Today with Paytm Card Soundbox, we take it to the next level. We have found that merchants and consumers need card acceptance as simply as mobile payments with Paytm QR Code. The launch of Card Soundbox will go a long way in merging the two requirements of merchants – mobile payments and card payments,” Vijay Shekhar Sharma, founder and CEO of Paytm, said.

The number of subscribers for Paytm’s Soundbox and other PoS devices stood at 7.9 Mn, according to its performance update for Q1 FY24, making it one of the largest soundbox companies in the country. While the listed fintech giant was one of the earliest to launch such a device, it is now facing competition from the likes of PhonePe, Google Pay and other payments startups.

Earlier in July, the company launched two new variants of its popular soundbox device – Music Soundbox and Pocket Soundbox. The Music Soundbox enables merchants to play music via Bluetooth while waiting for payments. On the other hand, the Pocket Soundbox is a smaller, slimmer iteration of the original soundbox, which comes with a lanyard to receive payments on the go.

Meanwhile, Paytm said yesterday that Sharma has become the significant beneficial owner (SBO) of the fintech giant after Antfin sold 10.3% of its stake to the CEO’s Resilient Asset Management B.V.

Paytm reported a 44.5% year-on-year (YoY) decline in its consolidated net loss at INR 358.4 Cr in Q1 FY24.

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SBI Rolls Out UPI On Its CBDC App To Promote Use Of Digital Rupee https://inc42.com/buzz/sbi-rolls-out-upi-on-its-cbdc-app-to-promote-use-of-digital-rupee/ Mon, 04 Sep 2023 09:01:31 +0000 https://inc42.com/?p=413756 The State Bank of India (SBI) has integrated Unified Payments Interface (UPI) with its digital rupee (e₹), or Central Bank…]]>

The State Bank of India (SBI) has integrated Unified Payments Interface (UPI) with its digital rupee (e₹), or Central Bank Digital Currency (CBDC), app with an aim to enhance user convenience.

SBI said that the feature will allow the users of ‘eRupee by SBI’ application to scan any merchant UPI QR code for swift and secure transactions.

“Bank feels that this integration will be a game changer for the digital currency ecosystem. The move is the outcome of our unwavering commitment to pushing the boundaries of digital innovation to accelerate the transition to a more cashless economy,” said SBI in a statement on Monday (September 4).

SBI was one of the first banks to participate in the retail digital e-rupee project by the Reserve Bank of India (RBI) towards the end of last year. 

The RBI began the pilot of CBDC-Wholesale (e₹-W) in November last year and the pilot for retail digital rupee (e₹-R) commenced in December. 

Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC were also among the first set of banks to participate in the phase-wise pilots.

In May this year, the RBI, in its annual report, said it was looking to further expand the pilots of the CBDC for retail and wholesale segments during the current fiscal year – FY24.

As of March 31, 2023, the value of e₹-W in circulation stood at INR 10.39 Cr while the number for e₹-R was at INR 5.7 Cr, according to the annual report.

At a time when India’s digital transaction ecosystem is booming, Reliance’s newest entity Jio Financial Services (JFS) is also set to explore new-age technologies such as CBDC for its products.

Meanwhile, SBI in its statement today said that its move to bring UPI interoperability to CBDC makes the future of CBDC integration more promising.

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Fintech Unicorn Pine Labs Launches Mini — A QR-First Device With Card Support https://inc42.com/buzz/fintech-unicorn-pine-labs-mini-qr-first-device-card-support/ Mon, 04 Sep 2023 06:54:51 +0000 https://inc42.com/?p=413732 Fintech unicorn Pine Labs has launched Mini, a digital payments device with both QR code and card support. The fintech…]]>

Fintech unicorn Pine Labs has launched Mini, a digital payments device with both QR code and card support. The fintech giant claimed that the device will be available at one-third of the price of a regular PoS device, targeting small merchants. 

The device comes with a display that can show the UPI-linked QR code of a merchant and can also accept contactless payments via credit and debit cards. 

Though unconfirmed, the QR code might also be customisable on a payment-to-payment basis, given that the Mini also has a keypad. The device might also be capable of announcing transactions, much like a soundbox, given that it also features a speaker.

Commenting on the launch, Navnit Nakra, chief revenue officer (CRO) of Pine Labs, said, “QR-based and card tap payments are a perfect solution for Indian consumers on the go. On the merchant side, an absolute must is a fast checkout experience and the elimination of the cost barrier in point-of-sale digitisation. Addressing these needs, we are delighted to launch a QR-first, card-accepting, cost-effective PoS solution called Pine Labs Mini.”

Incidentally, this is Nakra’s first product launch since he joined Pine Labs from OnePlus India last month. Nakra was the smartphone brand’s CEO in India before joining the fintech giant as the CRO.

The fintech giant already has a range of four PoS devices, including three handheld devices to enable merchant payments via credit/debit cards and UPI. Per media reports, Pine Labs has sold nearly 1 Mn PoS devices in India.

Recently, other fintech companies in India have also launched PoS devices, including PhonePe and Paytm to compete with Pine Labs, BharatPe, Mswipe and Innoviti, among others. While Paytm introduced its PoS device back in 2020, PhonePe introduced its Android-powered device in July this year.

Last week, US-based Fidelity marked up Pine Labs valuation, pinning the value of its stake at $34.77 Mn as of July 31, 2023, up 4.6% from $33.24 Mn as of June 30, 2023.

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Vijay Shekhar Sharma Becomes Paytm’s Significant Beneficial Owner After Antfin Reduces Stake https://inc42.com/buzz/vijay-shekhar-sharma-paytm-significant-beneficial-owner-antfin-reduces-stake/ Mon, 04 Sep 2023 04:34:54 +0000 https://inc42.com/?p=413711 Paytm founder and CEO Vijay Shekhar Sharma has emerged as the significant beneficial owner (SBO) of the fintech giant after…]]>

Paytm founder and CEO Vijay Shekhar Sharma has emerged as the significant beneficial owner (SBO) of the fintech giant after Antfin reduced its stake last month.

In a regulatory filing, Paytm disclosed that Antfin had reduced its ownership from 23.79% to 9.90%. “Accordingly, no person affiliated with Antfin will qualify as a Significant Beneficial Owner (“SBO”) of the Company,” Paytm said.

Simultaneously, the company also informed the bourses that Sharma’s Resilient Asset Management, now holds a 10.3% stake in Paytm, elevating his overall shareholding (direct and indirect) to 19.42% and thus making him the company’s only SBO.

This shift comes as China’s Ant Group has been reducing its stake in the fintech giant over the past few months. The Netherlands-based Antfin is an affiliate of the Chinese conglomerate, and so is the Alibaba Group. 

Antfin recently sold a 3.6% stake through open market transactions for INR 2,037 Cr. The company sold 2.27 Cr shares of One97 Communications, the parent of Paytm, for INR 895.2 per share, as per bulk and block deal data of the BSE. 

Earlier in February, Alibaba.Com Singapore E-Commerce Private Limited, another affiliate of Ant Group, exited Paytm by selling a 3.31% stake. In the same month, Ant Group’s senior vice-president Douglas Feagin also resigned from the Paytm board.

Paytm’s net loss declined nearly 45% year-on-year to INR 358 Cr in the quarter ended June 2023. Operating revenue surged 39% to INR 2,342 Cr on strong growth in payments and lending business.

Several brokerages, including Goldman Sachs, Citi, and CLSA, gave a thumbs up to the company’s Q1 performance and a ‘Buy’ rating to the stock. They have also increased their target price. During the early hours of trading on Monday (September 4), Paytm’s shares were trading at INR 860 apiece, slightly higher than the last close and nearly 62% higher year to date.

The post Vijay Shekhar Sharma Becomes Paytm’s Significant Beneficial Owner After Antfin Reduces Stake appeared first on Inc42 Media.

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PhonePe, Share.Market & Fintech Super Apps https://inc42.com/features/phonepe-share-market-fintech-super-apps/ Sun, 03 Sep 2023 02:30:16 +0000 https://inc42.com/?p=413640 Just a few weeks ago, we wrote, “PhonePe Wants To Be Paytm”. Lo and behold, the fintech unicorn has gone…]]>

Just a few weeks ago, we wrote, “PhonePe Wants To Be Paytm”. Lo and behold, the fintech unicorn has gone ahead and launched a separate stock broking app called Share.Market this past week.

As we said then, many fintech apps are following Paytm’s ‘super app’ lead, which has been around for several years yet never completely accepted by everyone as the right approach. Well, it turns out Paytm might have been ahead of the curve when it launched Paytm Money in 2018.

When it comes to PhonePe, the question is will Share.Market actually turn out to be the Paytm Money equivalent. And can it actually stand up to larger players like Zerodha, Groww, INDMoney, and is it the right time given the upcoming multibillion-dollar Jio Financial Services play?

We’ll try to take a stab at that question today, but after these top stories from our newsroom:

  • The Ola Prime Plus Question: Ola’s answer to ride cancellations and driver concerns is Prime Plus, but is it actually a solution to the problems in ride-hailing?
  • Shakeup At Omuni: The Shiprocket-owned retail SaaS platform has let go of 35% of its workforce, including founder and CEO Mukul Bafna. Read this Inc42 exclusive
  • Ultraviolette Ready For Primetime: With its high-performance EV bike ready to take on giants in the market, a deep dive into Ultraviolette’s six-year journey to the starting line

Keep reading to see the highlights from the fourth edition of Inc42’s The D2C Summit

PhonePe Takes On Zerodha & Co

PhonePe has ventured into stock broking with the launch of Share.Market, under its subsidiary PhonePe Wealth Broking (registered in April 2021). It will be a separate app to PhonePe, which is built around payments, insurance, ecommerce, and B2B lending.

To begin with Share.Market allows retail investors to trade and invest in stocks, mutual funds, exchange-traded funds (ETFs) and WealthBaskets.

WealthBaskets are similar to Smallcase’s curated collections, where a bouquet of stocks or investment products are recommended by SEBI-registered intermediaries that focus on particular trending themes or sectors, enabling active equity portfolio building.

The launch of the stock broking app has been in the works for more than a year. PhonePe acquired Mumbai-based WealthDesk, a marketplace for investment bundles, and OpenQ, a registered investment advisory (RIA) firm for $75 Mn in May 2022.

This has allowed the Walmart-owned fintech giant to offer the WealthBaskets product as an add-on to the stock broking experience.

In many ways, this is not a classical super app. The separate apps are necessitated by the fact that Share.Market requires a stock broking licence and having operational separation means any potential regulatory action will not affect the larger PhonePe operations.

This is also why Paytm has separated Paytm Money from the core app. Of course, for all intents and purposes, the larger PhonePe app will remain a key piece of the funnel, bringing users to Share.Market through cross-promotions.

With Share.Market, PhonePe claimed it’s looking to attract on-the-fence retail investors as well as reactivate those users who have a Demat account but are not actively trading. As per NSE data, the active investor count is roughly around 35 Mn in July 2023, while India has over 123 Mn Demat accounts as per July 2023 numbers, with 3 Mn accounts opened in the month.

That’s a new record as per the two depositories, CDSL and NSDL, which explains the bullishness of PhonePe and indeed another new player on the horizon, Jio Financial Services.

Missing The Big Piece

Jio’s investment tech product is yet to hit the markets, but PhonePe is several steps behind JFS in one regard, despite starting out earlier.

Stock broking is a one part of the investment tech stack — the real revenue potential comes from the asset management company licence, that Jio holds thanks to its JV with BlackRock.

Zerodha and Groww are two investment tech platforms that do have an AMC licence. In the case of Zerodha, the licence came in August 2023 thanks to a joint venture with smallcase. Groww acquired IndiaBull’s AMC business which was completed only in May this year despite the acquisition being in the works since 2021 when it was first announced.

Other startups in this space do not yet have an AMC licence and therefore are restricted to earning commissions as brokerages rather than a bigger chunk of the revenue from investments in mutual funds. An AMC licence is key for anyone eyeing a slice of India’s $540 Bn mutual fund industry, dominated by the likes of SBI, ICICI, and HDFC.

In August 2021, PhonePe had received approval from its board to set up an AMC or mutual fund business and soon after had approached SEBI for approval. The regulator has yet to approve PhonePe’s application for an MF licence.

AMCs typically charge a management fee based on the asset percentage, while brokerages generally charge per trade or offer flat-fee accounts. PhonePe will need to acquire the AMC licence if it wants to unlock the full revenue potential in this space.

PhonePe Vs Paytm: Super App Stakes

Stock broking is just one of the many new things that are in the PhonePe pipeline. The company has already raised over $750 Mn since the start of 2023 as part of a massive $1 Bn round.

The plan is to use the capital to enter and scale up new businesses such as insurance, wealth management and stock broking, lending (B2B and consumer), ONDC-based shopping (Pincode) and account aggregator services.

Earlier this year, PhonePe received a payments aggregator licence. And with Share.Market, there’s little doubt that PhonePe is looking to become the everything app for fintech and commerce.

Indeed the trajectory is very similar to Paytm, and the market timing is somewhat right. The super app approach has long been believed to have some potential, but the Indian market is only now reaching some maturity in 2023. The most active and habituated fintech customers have become familiar with digital-first financial services.

The super app strategy seems to have worked for Paytm, which nearly halved its losses on a YoY basis in Q1 FY24.

But this improvement has largely come on the back of lending products. PhonePe will need to back its investment tech play with highly efficient lending to match Paytm’s pace. Here, PhonePe is behind Paytm and only has a B2B lending marketplace right now.

So how does PhonePe stack up to Paytm on some key metrics?

For PhonePe, UPI payments and the potential to convert this user base into active investors is a huge competitive edge that even Paytm might not be able to boast of right now. PhonePe has a huge lead in the UPI space — the app processed nearly 4.8 Bn transactions in July 2023 compared to Paytm’s 1.2 Bn.

Paytm has 92 Mn monthly active users, while last year, PhonePe claimed to have over 150 Mn monthly active users. So besides UPI, that’s a massive user base to capitalise on.

In terms of the revenue base, Paytm touched INR 4,974 Cr in revenue for FY22, the last full year for which PhonePe’s revenue figures are available. In comparison, the Walmart-owned company reported INR 1,692 Cr for FY22.

The disparity in revenue scale begs the question: How quickly can PhonePe catch up to Paytm’s lead before the likes of Jio and others jump into the fray?

The Best Of The D2C Summit 

🌟 The Souled Store’s D2C Roots: 10 years after inception, the fashion brand continues to garner over 90% of its revenue from its native channels, said cofounder Vedang Patel

🌟 Digital-First Before Omnichannel: TMRW CEO Prashanth Aluru believes that early brands need to get the digital strategy right before even thinking about omnichannel presence

🌟 CaratLane’s Data Gems: CEO Avnish Anand on how the Tata-acquired jewellery ecommerce leverages data to make the most of the festive season rush

🌟 Myntra’s Mantras: Myntra CEO Nandita Sinha on the D2C strategy and how it’s capitalising on the demand for international brands from Tier 2 markets and beyond

🌟 Homecoming For boAt: From a brand that imported from China to bulking up the Made-In-India quotient — cofounder Aman Gupta on the big shift for boAt in the past year

Sunday Roundup: Startup Funding, Tech Stocks & More 

  • Weekly Funding Down: The weekly startup funding tally fell after a brief gain earlier in August, with just $52 Mn raised across 12 deals this past week, making hardly any dent in the overall tally for 2023
  • Zomato Rally: Zomato saw a big bump on the stock markets this week after SoftBank Vision Fund sold 10 Cr equity shares in the food delivery giant
  • Nazara Sees New High: Nazara Technologies’ share price touched a 52-week high before settling as the company looks to raise fresh capital through an equity issue

That’s all for this week. We will see you next Sunday with another weekly roundup, and till then, you can follow Inc42 on Instagram, X/Twitter and LinkedIn for the latest news as it happens.

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Fintech Startup Khatabook Fires Over 40 Employees In A Restructuring Exercise https://inc42.com/buzz/khatabook-fires-over-40-employees-restructuring-exercise/ Fri, 01 Sep 2023 13:35:13 +0000 https://inc42.com/?p=413411 Peak XV Partners-backed fintech startup Khatabook has seen layoffs that impacted over 40 employees in its bid to cut costs…]]>

Peak XV Partners-backed fintech startup Khatabook has seen layoffs that impacted over 40 employees in its bid to cut costs and turn profitable.

The impacted employees were informed about the move in a town hall meeting earlier this week. The startup has offered a three-month salary as a severance package to the impacted employees.

Entrackr was the first to report this development. The impacted employees were from sales, marketing, analytics and tech teams, the publication reported citing sources.

A Khatabook spokesperson confirmed the layoffs with Inc42. “In line with our profitability goals, we are reorienting some parts of our business which requires us to operate with a leaner team on certain business lines. This restructuring has impacted 6% of our 700 employees. All impacted employees have been provided with a separation package which covers 3 months of pay, stock option vesting & health insurance extension and other job search-related support,” the spokesperson said.

Khatabook, founded by Vaibhav Kalpe and later acquired by Kyte Technologies in 2018, is a bookkeeping platform that helps kirana store owners manage their accounts through a digital ledger. The startup shut down its ecommerce enablement product MyStore in November 2021 to focus on its core bookkeeping and lending businesses.

Khatabook has raised $187 Mn to date, including $100 Mn from Tribe Capital and Moore Strategic Ventures in its Series C round. It counts B Capital, Peak XV Partners and Better Capital among its investors.

The startup’s net loss widened over 3X to INR 111.1 Cr in the financial year 2021-22 (FY22) from INR 32.5 Cr in the previous year. Revenue from operations quadrupled to INR 71.1 Cr from INR 16.9 Cr in FY21, while total expenses grew 74% to INR 189.3 Cr in FY22 from INR 108.6 Cr in FY21.

The startup currently offers business management applications for MSMEs in multiple languages. It claims that its app has been downloaded by over 50 Mn users.

Khatabook competes against the likes of OkCredit, Pagarbook and Paytm’s Business Khata.

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UPI Sets New Record With 1,000 Cr Monthly Transactions In August 2023 https://inc42.com/buzz/upi-sets-new-record-with-1000-cr-monthly-transactions-in-august-2023/ Thu, 31 Aug 2023 16:43:35 +0000 https://inc42.com/?p=413218 The Unified Payments Interface (UPI) processed more than 1,000 Cr monthly transactions in August 2023 for the first time in…]]>

The Unified Payments Interface (UPI) processed more than 1,000 Cr monthly transactions in August 2023 for the first time in its seven-year history.

“Drumroll please! UPI has just shattered records with an astonishing 10 Bn plus transactions. Join us in celebrating this incredible milestone and the power of digital payments. Let’s keep the momentum going and continue to revolutionize the way we make transactions with UPI!,” the National Payments Corporation of India (NPCI) said in a tweet

UPI logged 1,024.1 Cr transactions worth INR 15.18 Lakh Cr till August 30 banking on the second consecutive month of growth in numbers. Month-on-Month (MoM), transaction count rose 2.8% from 996 Cr while transaction value declined around 1% from INR 15.34 Lakh Cr in July 2023. 

However, the number of transactions and value is expected to go further up with one day remaining for the current month. 

UPI also logged a 55% year-on-year (YoY) growth rate in terms of transaction count, jumping from 658 Cr in August 2022. On the other hand, transaction value soared more than 41% in August 2023 from INR 10.73 Lakh Cr in the year-ago period. 

The numbers are testament to the growing popularity of UPI as a digital payments tool. From crossing the 100 Cr monthly transaction mark in October 2019, the platform has scaled 10X in a span of just four years. Meanwhile, NPCI has set its eyes on growing the platform to accommodate 100 Cr transactions on a daily basis.

The payments corporation is yet to disclose the app-wise data of the UPI transactions for the month of August 2023. PhonePe, Google Pay and Paytm are likely expected to continue their dominance over the digital payments system.

In July, the three players together accounted for 95% of the total transaction count on the UPI network. 

Curiously, UPI also somewhat bucked the general trend of slowing MoM growth every alternate month. Building on the positive growth in July, the platform yet again clocked hefty growth in terms of count but recorded negative MoM growth in value. Despite this, UPI continues to see widespread adoption amid a major push from the government. 

Just days ago, it was reported that India was in talks with New Zealand to introduce the payments system in the Pacific country to improve trade, tourism  and the ease of business between two nations. 

In August, the Reserve Bank of India (RBI) also proposed two new technology additions for the UPI which would enable users to make payments via mere conversation and through Near Field Communication (NFC). RIght afterwards, the central bank also increased the per transaction limit for UPI Lite to INR 500 from INR 200.

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Fintech Unicorn Razorpay Introduces One-Tap, OTP-Less Checkouts https://inc42.com/buzz/razorpay-joins-hands-with-truecaller-to-enhance-shoppers-experience-with-one-tap-otp-less-checkouts/ Thu, 31 Aug 2023 13:19:14 +0000 https://inc42.com/?p=413167 Fintech startup Razorpay and caller identification app Truecaller have launched the new 1-Tap OTP-less verification feature to enhance the shopping…]]>

Fintech startup Razorpay and caller identification app Truecaller have launched the new 1-Tap OTP-less verification feature to enhance the shopping experience of online buyers.

In a statement, Truecaller said that the solution will enable Razorpay to offer fast and seamless checkouts to its 200 Mn-plus customers. With the new feature, customers will no longer need to enter details manually or wait for the OTP during the checkout process. Instead, their details will get auto-filled with a single tap through Truecaller.

Commenting on the development, Khilan Haria, SVP & head of payments and product at Razorpay, said, “With this 1-Tap Verification feature, customers can now securely and effortlessly bypass the cumbersome multi-step verification process and enjoy the luxury of having their information prefilled with a single tap, streamlining their shopping journey on Android devices.”

To this, Priyam Bose, global head of Truecaller for Business GTM, said that the caller identification app is looking to develop more such frictionless shopping experiences for both businesses and customers. “We are eager to further develop and scale solutions for the direct-to-consumer digital ecosystem through this collaboration,” he added. 

Razorpay competes with the likes of PayU and PayPal in the online payment gateway space. To add to the competition, in June, PhonePe launched its payment gateway and offered free onboarding to merchants. 

OTP-less and CVV-less online transactions are slowly picking pace in the Indian market. In May, the global card transaction company Visa announced the launch of a CVV-less payment feature to allow fast and seamless transactions. Earlier this month, its competitor Mastercard, too, launched a similar feature

According to Inc42’s State Of The Indian Fintech Report Q2 2023, the Indian fintech market, which fosters 22 unicorns, is set to reach a market size of $2.1 Tn by 2030, growing at a CAGR of 18%.

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PhonePe To Take On Zerodha, Groww With Stock Broking Platform https://inc42.com/buzz/phonepe-ventures-into-stock-broking-with-sharedotmarket/ Wed, 30 Aug 2023 06:56:31 +0000 https://inc42.com/?p=412635 Walmart-owned fintech decacorn PhonePe has ventured into stock broking with the launch of Share.Market, under its subsidiary PhonePe Wealth Broking.…]]>

Walmart-owned fintech decacorn PhonePe has ventured into stock broking with the launch of Share.Market, under its subsidiary PhonePe Wealth Broking.

Share.Market offers stocks (intraday and delivery), mutual funds, exchange-traded funds (ETFs) and WealthBaskets. WealthBaskets are curated collections of stocks or investment products by SEBI-registered intermediaries that align with specific themes, sectors or market trends, enabling active equity portfolio building.

Share.Market will offer users market intelligence, quantitative research-based WealthBaskets and a scalable technology platform. Share.Market is currently available as a mobile app and a dedicated web platform, enabling retail investors to buy stocks, do intra-trades and buy curated WealthBaskets and mutual funds.

For now, the app has been launched on the Google Play Store and the Apple App Store with a few features, with the fintech decacorn planning to roll out features over the next two years.

The platform will charge either 0.05% of the executed order or INR 20, whichever is lower as brokerage charges for delivery and intraday orders. Share.Market will also charge INR 199 as one-time onboarding charges. 

Once onboarded, a user can avail benefits such as zero brokerage charges up to INR 400 on orders, zero platform fees for in-house and third-party WealthBaskets and zero charges on WealthBasket transactions till March 31, 2024.

With its stockbroking platform, PhonePe will compete not only with tech startups like Zerodha, Groww, and Upstox but also with legacy stockbroking firms.

Speaking during the launch, Ujjwal Jain, CEO, Share.Market, said, “In the last few years, we have seen an increase in the percentage of savings going into equities in a big way. There is vibrant growth in the active trading community which trades with different objectives. We believe Share.Market will propel this growth with the backing of our technological prowess, reach, seamless onboarding, and superior product experience.” 

In a statement, PhonePe said Share.Market will offer quantitative research along with execution, a proven tech platform, at a competitive price. This will help create an investing journey focused on wealth creation by taking a customer-first approach.

Via the platform, investors and traders can access wealth-building opportunities powered by real-time, value-rich insights and intelligence embedded into products and DIY tools integrated with execution experience, enabling them to make informed decisions. 

The platform will also host a dedicated markets section to track the stock market, indices, stocks and sectors with an intuitive watchlist tracker.  PhonePe users can install the app as well as access the web platform by using their PhonePe-linked mobile numbers. Once they log in, they can complete the KYC process to activate their broking and demat accounts.

Sujit Modi, CIO, Share.Market added, “Share.Market will bring newer demographics into Broking, helping them get started on their investing journey with off-the-shelf quant research-led offerings including WealthBaskets. With our user-friendly interface which will integrate global standard quant research-based wealth solutions with broking for research-led guidance, we aim to reshape the way investors and Traders engage with the stock market.”

PhonePe, having raised $850 Mn in equity funding so far this year, has introduced multiple new products recently. Last month, the fintech decacorn added income tax payment and health insurance to its kitty of fintech products, alongside UPI Lite, merchant lending marketplace and point-of-sale (PoS) devices.

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BankBazaar’s Net Loss Dips 26% To INR 43.2 Cr In FY22 https://inc42.com/buzz/bankbazaars-net-loss-dips-26-to-inr-43-2-cr-in-fy22/ Tue, 29 Aug 2023 13:58:41 +0000 https://inc42.com/?p=412520 Chennai-based fintech startup BankBazaar’s consolidated net loss declined 26% to INR 43.2 Cr in the financial year 2021-22 (FY22) from…]]>

Chennai-based fintech startup BankBazaar’s consolidated net loss declined 26% to INR 43.2 Cr in the financial year 2021-22 (FY22) from INR 58.2 Cr in the previous fiscal, as its operating revenue soared. 

The co-branded credit card issuer’s revenue from operations jumped 50% to INR 95.5 Cr in FY22 from INR 63.6 Cr in FY21. 

The startup’s revenue from operations mostly comprises commission that it earns from banks. Besides being a credit card issuer, BankBazaar also allows its users to check their CIBIL score for free. 

The startup’s total income, including other income, zoomed 41% to INR 96.7 Cr in FY22 from INR 68.7 Cr in the previous fiscal year. 

It was able to control the rise in its expenses relative to the increase in revenue. Total expenditure rose only 10% to INR 139.9 Cr from INR 126.9 Cr in FY21. 

BankBazaar’s Net Loss Dips 26% To INR 43.2 Cr In FY22

At INR 80.6 Cr, employee benefit expenses accounted for the biggest portion of total expenditure in FY22. BankBazaar’s employee benefit expenses, which comprise employee salaries, PF contributions, gratuity, among others, stood at INR 77.9 Cr in FY21.

The startup spent INR 22.2 Cr on advertisement and promotional activities during the year under review, a rise of 24% from INR 17.9 Cr in the previous year. 

EBITDA margin improved to -38.3% in FY22 from -69.7% in FY21

BankBazaar, founded in 2008 by former Deloitte Touche Tohmatsu executive Adhil Shetty, former Amazon executive Arjun Shetty and former Kraft employee Rati Shetty, provides information about  financial products like credit cards, car loans, personal loans, education loans and more on its website. 

The startup intends to go public by 2024. It has raised a total funding of $115 Mn across multiple rounds to date. It is backed by the likes of Peak XV Partners, Amazon, and Experian Ventures. 

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BharatPe Senior Exec Dhruv Dhanraj Bahl To Exit Fintech Unicorn https://inc42.com/buzz/bharatpe-senior-exec-dhruv-dhanraj-bahl-to-exit-fintech-unicorn/ Tue, 29 Aug 2023 05:37:01 +0000 https://inc42.com/?p=412439 Dhruv Dhanraj Bahl, the former BharatPe chief operating officer (COO), who was recently appointed as the chief business officer for…]]>

Dhruv Dhanraj Bahl, the former BharatPe chief operating officer (COO), who was recently appointed as the chief business officer for the merchant lending division, is set to quit the fintech startup in September.

“We would like to confirm that Mr. Bahl is moving on from BharatPe to pursue his entrepreneurial passions. He has been an integral part of the organisation and contributed to the growth of the company. We thank him for his contribution to BharatPe’s journey and wish him all the best for future endeavours,” a BharatPe spokesperson told Inc42.

“At BharatPe, the merchant lending business has grown significantly over the course of the last 1 year, under the able guidance of an experienced leadership team. BharatPe has a strong internal team that will continue to drive growth in the times to come,” the spokesperson added.

Bahl joined BharatPe in May 2020 as the head of operations and was instrumental in steering the company through its reorganisation after Ashneer Grover’s exit. Bahl is expected to launch an early-stage investment firm, in collaboration with former colleagues like Suhail Sameer and Bhavik Koladiya, as per a Mint report.

The development comes just a few weeks after former BharatPe CBO Pratekk Agarwaal announced the launch of GrowthCap Ventures, a SEBI-registered category II alternative investment fund (AIF), to invest in 12-15 startups over the next two years.

Since last year, BharatPe has seen exit of several senior executives, including chief technology officer Vijay Aggarwal, head of consumer product-PostPe Nehul Malhotra, chief product officer of lending and consumer products Rajat Jain, and vice president of technology Geetanshu Singla. In January, the fintech unicorn also saw the exit of its chief executive officer Suhail Sameer.

Founded in 2018, BharatPe enables merchants in accepting online payments via QR codes and PoS devices. In addition to its core services, the fintech unicorn also expanded into the buy now pay later segment last year. Since its launch, BharatPe has raised nearly $580 Mn till date and competes with the likes of Paytm, PhonePe, among others.

Presently, BharatPe is embroiled in a legal dispute with its former managing director, Ashneer Grover. In May, the company lodged a criminal complaint against the Grover and his family members, which was registered by the Delhi Police’s Economic Offences Wing.

In FY22, the fintech unicorn reported a loss of INR 5,610.7 Cr in FY22, up 3.4X from INR 1,619.2 Cr in FY21. Meanwhile, revenue from operations rose 283% year-on-year to INR 456.8 Cr during the year.

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Layoff Saga Continues: Crypto Exchange CoinSwitch Fires 44 Employees https://inc42.com/buzz/layoff-saga-continues-crypto-exchange-coinswitch-fires-44-employees/ Mon, 28 Aug 2023 20:57:26 +0000 https://inc42.com/?p=412398 The layoff saga continues to unravel for the Indian startup ecosystem. Now, Tiger Global-backed crypto exchange CoinsSwitch has laid off…]]>

The layoff saga continues to unravel for the Indian startup ecosystem. Now, Tiger Global-backed crypto exchange CoinsSwitch has laid off 44 employees as part of a restructuring exercise.

As per the startup’s LinkedIn, it employs 519 people which would mean that 8% of the CoinSwitch’s total employee base has been impacted by the layoffs.

A CoinSwitch spokesperson confirmed the development to Inc42, stating that the layoffs predominantly impacted  the customer support team. As per the company, the layoffs at the company took place earlier this month with impacted employees ‘voluntarily resigning’ from their positions. 

“We continuously evaluate our business to stay competitive, prioritising innovation, value, and service for our customers. To that end, we right-sized our customer support team to align with the present volume of customer queries on our platform. This impacted the roles of 44 members of our customer support team, who voluntarily resigned from their roles after a detailed discussion with their managers earlier this month,” said a CoinSwitch spokesperson.

However, according to a Moneycontrol report, the company has also laid off employees in the operations department. Several positions including team leads, agents, support staff, senior managers and quality analysts were also impacted by the layoffs, the report added citing an employee.

In response to this, the company said, “At CoinSwitch, we embrace a flat organizational structure with minimal hierarchy. As an example, our Head of Customer Support directly reports to the COO. Our Customer Support team is also sometimes referred to as the Customer Operations team. There is no separate operations team for our Virtual Digital Assets Business.”

Meanwhile, a source familiar with the developments revealed that CoinSwitch has hired 60 employees since April and was actively recruiting for various roles. The person further claimed that the crypto exchange still has a funding runway of five years.

Launched in 2017, CoinSwitch has raised over $300 Mn since its inception from the likes of Andreessen Horowitz (a16z), Tiger Global, Sequoia Capital India, Ribbit Capital, Paradigm, and Coinbase Ventures. As of May 2023, the crypto exchange had 13 Mn users.

The layoffs come at a time when the entire crypto ecosystem has been reeling under the impact of the government’s heavy taxation posture towards the industry. Be it 30% tax on gains from sale of virtual digital assets (VDAs) or 1% tax deducted at source (TDS) for all cryptocurrency transactions worth INR 10,000 and above, the crypto industry has been mired under regulatory uncertainty. 

This heavy taxation regime has more or less dissuaded the general populace and has led to sharp drop in volume in the range of 85-90%. The collapse of the crypto giant FTX also added fuel to the fire, raising questions over the legitimacy of crypto exchanges. 

Back home, crypto exchanges have seen multiple raids by enforcement agencies even as WazirX’s cofounder Nischal Shetty publicly sparred with Binance’s CEO Changpeng Zhao over alleged acquisition of Zanmai Labs in 2019. 

Meanwhile, the industry has seen three crypto startups shutting shops, including Pillow, Flint Money, and WeTrade. Just last week, another crypto unicorn CoinDCX also slashed 12% workforce citing macro conditions in the prolonged bear market and the impact of TDS on domestic exchanges resulting a dip in the startup’s overall revenue.

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PB Fintech Appoints Sarbvir Singh As Joint Group CEO https://inc42.com/buzz/pb-fintech-appoints-sarbvir-singh-as-joint-group-ceo/ Mon, 28 Aug 2023 13:15:30 +0000 https://inc42.com/?p=412313 Listed fintech major PB Fintech, the parent company of Policybazaar, has appointed Sarbvir Singh as the new joint group chief…]]>

Listed fintech major PB Fintech, the parent company of Policybazaar, has appointed Sarbvir Singh as the new joint group chief executive officer (CEO) of the company.

In addition, Singh has also been elevated to the position of executive director of the startup from the current position of non-executive director, the company said in a regulatory filing. 

However, his confirmation is subject to approval of the shareholders at the upcoming annual general meeting. 

“… Sarbvir Singh, non-executive director of the company has been appointed as the executive director designated as Joint Group Chief Executive Officer of the company w.e.f. August 26, 2023 subject to the approval of members in the ensuing annual general meeting of the company,” said PB Fintech. 

With this, Singh also becomes a key managerial personnel (KMP) for the company. He will hold the position for a period of five years from the date of appointment. 

An alumni of IIT-Delhi and IIM-Ahmedabad, Singh has decades of experience under his belt. In his previous stints, he served as a managing partner at WaterBridge Ventures, regional advisor to JP Morgan private equity group, and managing director at Capital18.

Singh joined Policybazaar as CEO in late 2019 and went on to spearhead the expansion of the company and subsequent focus on profitability

Besides, PB Fintech’s board also amended the company’s ESOP policy. Under the new mandates, employees will be able to exercise their stock options at a discount of 10% to the weighted average price of the last three months preceding the date of the grant of options. 

“… the exercise of stock options at a discount of upto 10% to the volume weighted average price of last three (3) months immediately preceding working day of the date of grant of options will be in the long-term interest of all stakeholders and will meet the better corporate governance requirements,” said Policybazaar. 

The fintech major’s shares closed 0.24% higher at INR 753.95 on the BSE on Monday (August 28).

(This story will be updated soon)

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Surviving Funding Winter: How Indian Fintechs Are Thriving Via Innovation & Competition https://inc42.com/resources/surviving-funding-winter-indian-fintech-thriving-innovation-competition/ Sun, 27 Aug 2023 03:30:10 +0000 https://inc42.com/?p=412035 A funding winter is a period of reduced venture capital (VC) funding during which investors become cautious and risk-averse, resulting…]]>

A funding winter is a period of reduced venture capital (VC) funding during which investors become cautious and risk-averse, resulting in a lack of funds for startups. The global economic meltdown has had some knock-off effects on the Indian fintech industry as well.

However, the adoption rate of Indian fintech is on the rise. Per the Economic Survey 2022-23, Indian fintech companies witnessed an 87% adoption rate across varied user bases, beating the global average by 2300 percentage points. 

With 2,100+ fintech startups, India is the third-largest fintech ecosystem in the world. Indian fintech startups attracted investments worth $800 Mn in Q2 2023, a decline of 38% compared to $1.3 Bn raised in Q1 2023, according to data compiled by Inc42.

However, the total funds raised were 57% lower than the $1.8 Bn raised in Q2 2022. While the number of funding rounds in Q2 2023 experienced a jump of 20% in Q2 2023 compared to Q1 2023, the funding deals fell 56% compared to Q2 2022.

Despite the challenges, the fintech ecosystem has remained resilient, promoting innovation, improving operational efficiency and prioritising regulatory compliance to succeed.

Fintechs Modifying Business Model

In the Indian financial services industry, partnerships have played a vital role in sustaining operations and generating cash flow. To adapt, startups have adjusted their models, forming alliances and collaborations.

Fintech startups often collaborate with banks, NBFCs and insurance firms, leveraging their customer base and accessing resources, enabling them to expand their offerings.

Such startups also try to conserve cash by scaling back on activities like marketing and prioritising cost-effective approaches. By aligning expenses with revenue streams, startups can aim for sustainable growth and attract investor interest.

Innovation also extends to business models. Entrepreneurs often get funding in a 12 to 18-month period. As such, those who don’t secure consecutive funding rounds may have a limited runway. As a result, fintechs must run a sustainable and open-to-adaptation business. 

Overspending on client acquisition and other unnecessary areas could be fatal for the growth and sustenance of the business. Fintechs must keep the focus on improving unit economics and being conservative with the initial funding.

Enhancing Operational Efficiency

Beyond innovative business models, Indian fintech startups also recognise the importance of optimising operations to save money and exhibit profitability potential. Leveraging technology to increase operational efficiency is a key strategy for fintechs. 

By automating manual processes, implementing AI and ML algorithms, and utilising big data analytics, fintech startups can streamline their operations and reduce costs.

Additionally, chatbots can provide customer service around the clock, freeing up staff time for more complex tasks. These innovations lower operational expenses and improve the consumer experience, attracting a wider user base. 

Fostering Innovation

Innovation has been a driving force for Indian fintechs to attract investors and differentiate themselves. These startups have embraced cutting-edge technologies and developed innovative solutions to address the evolving needs of Indian consumers. 

For instance, many fintech startups have leveraged AI, ML and blockchain to create secure and efficient financial services platforms.

Furthermore, innovations such as differentiated banking and insurance licenses, the introduction of Central Bank Digital Currency (CBDC), Account Aggregator (AA),  the Open Credit Enablement Network (OCEN), DigiLocker, and the Open Network for Digital Commerce (ONDC) are set to fuel continuous progress in the sector.

Credibility & Regulatory Compliance

Fintech startups in India face a complex and evolving regulatory environment, as the government has moved consistently to end regulatory arbitrage in the segment. 

Compliance requirements now include obtaining licenses, adhering to data protection rules, complying with AML and KYC regulations, ensuring secure technology infrastructure, maintaining accurate records, submitting reports to regulators and undergoing audits. With data breaches and privacy concerns on the rise, startups have prioritised data security measures while maintaining transparency and responsibility in their operations.

Further, forging solid alliances with banks, financial institutions and regulatory agencies boosts the legitimacy of the whole ecosystem. Collaborative efforts to build regulatory frameworks encourage responsible lending practices and defend consumer interests to foster a trust and confidence ecosystem.

Way Forward

The future of the Indian fintech industry is in a position for growth and resilience, overcoming the challenges posed by the funding winter. To attract investor interest, fintech companies should adapt their business models, forge strategic partnerships and prioritise sustainable growth. 

Innovation will remain a crucial factor in setting fintechs apart from competitors with a focus on building scalable and profitable enterprises while optimising operational efficiency through technology integration. Upholding credibility and regulatory compliance has become paramount, including data security, transparency and responsible practices.

By collaborating with banks, financial institutions and regulatory bodies, fintech startups can create a reliable ecosystem. With government support and regulatory initiatives, the future looks promising for the Indian fintech and payments industry as it continues to drive financial inclusion and digital transformation in India.

The post Surviving Funding Winter: How Indian Fintechs Are Thriving Via Innovation & Competition appeared first on Inc42 Media.

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Ant Group Ditches 3.6% Paytm Stake For INR 2,037 Cr https://inc42.com/buzz/ant-group-ditches-3-6-paytm-stake/ Fri, 25 Aug 2023 18:57:24 +0000 https://inc42.com/?p=411924 Chinese internet giant Ant Group offloaded a 3.6% stake in fintech giant Paytm on Friday (August 25) for INR 2,037…]]>

Chinese internet giant Ant Group offloaded a 3.6% stake in fintech giant Paytm on Friday (August 25) for INR 2,037 Cr through open market transactions.

Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares of One97 Communications, the parent of Paytm, for INR 895.2 per share, as per bulk and block deal data of the BSE.

The subsidiary of the Ant Group sold the shares in 14 tranches. Shares of Paytm ended Friday’s trade 0.54% lower at INR 899.30 on the BSE.

Societe Generale, Morgan Stanley Asia Singapore Pte, Citigroup Global Markets Mauritius Private Ltd, BNP Paribas Arbitrage, Goldman Sachs (Singapore) Pte, Motilal Oswal Fund, and Nippon India Mutual Fund, among others, were the buyers of the offloaded Paytm shares.

Antfin (Netherlands) Holding held a 23.79% stake in Paytm at the end of the June 2023 quarter, which declined to 20.21% following Friday’s stake sale, as per Paytm’s shareholding data available with the BSE. 

Earlier this month, Antfin (Netherlands) Holding transferred 6.53 Cr Paytm shares, or 10.3% stake, to the fintech giant’s CEO and founder Vijay Shekhar Sharma’s Resilient Asset Management through an off-market transaction. 

While announcing the transaction, Paytm said it would reduce Antfin’s stake in the company to 13.5% and increase Sharma’s stake to 19.42%. 

The development comes at a time when the government has increased scrutiny of Chinese investments in Indian companies. The Ant Group is an affiliate of Jack Ma’s Alibaba Group.

In February this year, Ant Group’s senior vice-president Douglas Feagin resigned from the Paytm board. In the same month, Alibaba.Com Singapore E-Commerce Private Limited exited Paytm by selling a 3.31% stake.

Amid all these, shares of Paytm have been on an upswing this year due to the company’s improving financial performance and a change in investor sentiment towards new-age tech stocks.

Paytm’s net loss declined nearly 45% year-on-year to INR 358 Cr in the quarter ended June 2023. Operating revenue surged 39% to INR 2,342 Cr on strong growth in payments and lending business. 

A number of brokerages, including Goldman Sachs, Citi, and CLSA, gave a thumbs up to the company’s Q1 performance and a ‘BUY’ rating to the stock. They have also increased their target price. Shares of Paytm closed nearly 70% higher year to date on Friday.

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Crisis-Stricken Vauld To Appoint New CEO, Board To Aid Creditor Bailout https://inc42.com/buzz/crisis-stricken-vauld-to-appoint-new-ceo-board-to-aid-creditor-bailout/ Fri, 25 Aug 2023 07:18:19 +0000 https://inc42.com/?p=411836 Embattled crypto-lending firm Vauld is set to overhaul its current board, appointing a new CEO, a creditor representative, and a…]]>

Embattled crypto-lending firm Vauld is set to overhaul its current board, appointing a new CEO, a creditor representative, and a scheme manager, Vauld’s founder and current CEO, Darshan Bathija, said on X (Twitter). He said that the Singaporean courts have approved Vauld’s proposed restructuring plan.

“Vauld (Defi Payments Pte Ltd) got its scheme of arrangement passed in Singapore courts. As part of the scheme, the current board will be replaced with a new CEO, a creditor representative, and a scheme manager,” he said.

Founded in 2018 by Bhatija and Sanju Soni Kurian, Vauld is a Singapore-based crypto lending platform. Backed by investors such as Valar Ventures, Pantera Capital, Coinbase Ventures, CMT Digital, Gumi Cryptos, Robert Leshner, and Cadenza Capital. The firm holds assets valued at approximately $330 Mn, offset by liabilities amounting to $400 Mn.

Last July, Vauld announced plans to suspend operations. In an email dated July 11, Vauld’s Bathija told investors that the company had applied to a Singapore court for a moratorium. This was to prepare for a business restructuring, as the company wanted to safeguard the interests of all stakeholders.

While the company started discussions with London-based crypto lending platform Nexo, it called off a potential acquisition by rival Nexo. In December, Vauld wrote to its creditors in an email that the deal with Nexo had not come to fruition.

The company has come under regulatory scrutiny as well. Last year, the Enforcement Directorate (ED) froze assets worth INR 370 Cr belonging to a Bengaluru-based company lying with Flipvolt Technologies, the Indian entity of Vauld.

The assets were parked in Flipvolt as bank and payment gateway balances and crypto assets.

The ongoing turmoil in the crypto market, and regulatory ambiguity have hit the crypto startups in India. Due to market uncertainties, three crypto startups – Pillow, Flint Money, and WeTrade had to shut their operations in the past few months.

Recently, Coinbase Ventures-backed crypto exchange CoinDCX has let go of 12% of its workforce or 71 employees out of its total workforce of 590 employees. In a blogpost, cofounders Sumit Gupta and Neeraj Khandelwal cited ongoing macroeconomic conditions and the TDS on crypto transactions for the layoffs.

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