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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Furniture renting startup Furlenco on Wednesday (September 6) said it is taking the omnichannel approach for growth and has launched two offline stores in Bengaluru as part of this strategy.

Founded in 2012 by Ajith Mohan Karimpana, Furlenco operates an online subscription-based furniture rental platform in Bengaluru, Mumbai, Delhi NCR, among others. It also sells furniture through its marketplace. 

The startup said its offline stores would offer customers the opportunity to experience the products and make informed purchase decisions. Like its app and website, Furlenco’s offline stores will offer both buying and renting options. 

“While the online platform has been instrumental in building our brand, we understand the value of offline touchpoints. As Furlenco expands its horizons beyond the confines of a furniture rental brand, we are committed to seize the untapped potential of offline opportunities to scale our operations and propel growth,” Furlenco founder and CEO Karimpana said.

Calling the launch of the stores just a beginning of the startup’s offline expansion plans, the CEO said Furlenco aims to enhance the customer experience and cater to their diverse buying habits via these stores. Going ahead, the startup aims to open offline stores across major Indian cities.

The stores will have a material library displaying physical material swatches, miniature furniture designs, furniture joinery, and finished products. 

The development comes months after mattress brand Sleepwell’s parent Sheela Foam announced acquisition of a 35% stake in Furlenco’s parent House of Kieraya for INR 300 Cr.

In FY22, Furlenco’s net loss rose 71% to INR 149 Cr, while operating revenue surged 1.5X to INR 129 Cr.

Amid mounting losses, Furlenco laid off about 180 employees last year as part of a cost-cutting exercise to attain profitability. 

Furlenco competes with the likes of Rentomojo, Pepperfry, and Urban Ladder. On Tuesday, Pepperfry said it has raised $23 Mn from existing investors, including institutional investors and family offices. 

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Ecommerce major Flipkart on Tuesday (September 5) announced the launch of its metaverse-powered immersive virtual shopping feature, Virtual Worlds. 

With an eye on enhancing customer experience and engagement, the new offering will be available on the Flipkart app. Virtual Worlds are 3D-rendered metaverse environments where users of the platform can engage with different brands and try out products. 

Modelled after offline stores, the new feature will allow Flipkart customers to participate in gamified web experiences while interacting with a product. 

Overall, the immersive shopping experience will be available to users in two formats. While brands will be able to create dedicated and customised Virtual Worlds on the Flipkart app for their products to attract and engage shoppers, they will also be able to simply list on a ‘co-tenancy’ basis within Flipkart’s own Virtual World called Flipverse. 

“Brands can establish 3D stores for standout discovery, inspiring purchases, and rewarding customers through gamification, thereby crafting a distinct brand image,” said Flipkat in a statement. 

Besides, the company also announced the launch of its ‘Laptops Virtual Showroom’, which enables buyers to explore laptops in an immersive setting.

Commenting on the development, Flipkart Labs’ head Ravi Krishnan said, “… Brands have the opportunity to virtually present their unique characteristics, forging closer relationships with customers. The co-tenancy feature within Flipkart’s Metaverses allows brands to present a variety of products in a shared 3D space, setting the stage for the future of shopping.”

Meanwhile, Flipkart Labs claims to have multiple new Virtual Worlds launches in the pipeline as the festive season approaches. The ecommerce major also added that brands will be offered a ‘special opportunity’ to allow users to explore products in 3D on Flipverse during the festive period. There was no further clarity on what this special opportunity was. 

Flipkart is also partnering with Bengaluru-based Web3 platform Layer-E to build these Virtual World experiences. 

“Flipkart Labs enables the Virtual World experiences in collaboration with brand-facing teams within Flipkart including the Ads & Category teams, and a key external tech partner – Layer-E. Layer-E builds immersive infrastructure for Web3 commerce with global brands and creators, as well as art, media, and entertainment IPs,” the company said. 

Flipkart claims to actively leverage emerging technologies such as 3D, augmented reality (AR), blockchain, and generative AI to enhance shopping experience for its 45 Cr users. Leading from the front, the ecommerce major has been tinkering with such technologies at least for a few years now. 

It launched the 3D and AR features back in 2021, and followed it up by the introduction of beauty and makeup try-ons on its app. It also piloted Flipverse last year, which, as per the company, achieved the largest ecommerce metaverse activation globally. During the six day trial, users from 2,300 cities streamed 20,000 hours of content on Flipverse to discover products virtually in an immersive fashion.

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Singapore-based game developer Garena has postponed the much-awaited launch of the exclusive Indian version of the popular battle royale game Free Fire by ‘a few weeks’ to fully complete its localisation.

Last week, Garena said Free Fire was set to make a comeback in India after being banned for a year-and-a-half, with the game available for download on September 5.

However, the company said it is postponing the launch of the game to offer the ‘best possible experience to all their Free Fire India Fans’.

“In addition to refining the gameplay, we are taking some time to fully complete our localisation of the Free Fire India experience,” the company said in a statement.

Garena first announced the launch of its exclusive ‘Free Fire India’ version on August 31, with former captain of the India cricket team MS Dhoni as its brand ambassador. 

The company also said that Free Fire India will be an India-exclusive app, with features and content that are specific to the local market.

The Ministry of Home Affairs banned Free Fire in India in February last year, along with 53 other apps, due to security concerns. However, Garena continued its operations in India by providing a premium version of the game, Free Fire Max, which was not banned by the Centre.

The latest version of Free Fire in India will have a verification system to enable parental supervision and gameplay limitations, among others, to address the Centre’s concerns. 

The company has also partnered Yotta, a Hiranandani Group company, for the relaunch. Yotta will provide local cloud hosting and storage infrastructure for the game.

Last week, it was also reported that South Korean gaming giant KRAFTON received full approval from the Centre to operate its battle royale game Battlegrounds Mobile India (BGMI) after a three-month long audit process.

With rising internet and smartphone penetration, India has emerged as a lucrative market for gaming companies over the last few years. The number of esports players in India surged four-fold to 6,00,000 in 2022 from 1,50,000 in 2021, according to a Lumikai report.

While BGMI has seen considerable success after its relaunch in India, Garena’s ‘Free Fire India’ version is also expected to cash-in on the country’s growing online gaming industry, which is expected to reach a market size of $8.6 Bn by FY27.

Besides BGMI, Free Fire India will compete against the Made-in-India battle royale title Indus, which is being developed by Pune-based game development startup SuperGaming.

The post Garena Postpones Launch Of Free Fire India By A Few Weeks appeared first on Inc42 Media.

A month after foodtech giant Zomato started levying a platform fee of INR 2, and later increased it to INR 3 for some users, Kotak Institutional Equities has said the fee will increase the company’s customer take rate and contribution margin.

“On the app, Zomato says, ‘This small fee helps us pay the bills so that we can keep Zomato running.’ We note that over the past few quarters, bulk of the take-rate improvement has been driven by a restaurant take-rate increase and delivery take-rate has lagged,” the analysts at the brokerage said.

“The company’s intent seems to be to monetise select customers better, resulting in an increase in customer take-rate, which flatlined over the past few quarters,” said the analysts.

In simple terms, the take rate is the commission that Zomato charges from restaurants and customers for facilitating an order.

Early last month, Zomato began charging a platform fee of INR 2 per order for select users on its platform, mirroring the move of its rival Swiggy. Within a few week, Zomato increased the platform  fee to INR 3 for some customers in certain cities.

In response to Inc42’s queries on the matter, a Zomato spokesperson said that the platform fee would be applicable to all customers but the changes are still in the experiment stage and are being rolled out gradually across the country.

Giving a calculation of how the platform fee could increase Zomato’s margin, Kotak said the company reported 2.7 Mn high-frequency customers in 2022 with annual ordering frequency of more than 50. Assuming these customers transact 75 times a year on average, an INR 2 per order platform fee on all these orders would result in INR 40.5 Cr of incremental contribution to profit/EBITDA. 

The analysts said this would also imply about a 16 basis points (bps) increase in contribution margin, helping Zomato move towards its targeted 8% margin (as % of GMV) over the medium term.  

The contribution margin of Zomato’s food delivery business stood at 6.4% in Q1 FY24. 

Reiterating its ‘buy’ rating on Zomato, Kotak raised the fair value of the stock to INR 110 from INR 105 earlier, implying an upside of 12% to its last close.

Besides, Kotak also said that if Zomato increases the scale of business and control of overheads in its ecommerce business, Blinkit, and B2B business, Hyperpure, these segments can also achieve profitability over the next few quarters.

Zomato reported a net profit of INR 2 Cr in Q1 FY24 with an operating revenue of INR 2,416 Cr.

Shares of Zomato ended Tuesday’s session marginally higher at INR 98.2 on the BSE.

The post Here’s Why Kotak Sees Zomato Making A Bull Run appeared first on Inc42 Media.

B2B seafood startup Captain Fresh has raised $20 Mn in an extended Series C round led by Japan’s SBI Investments and Evolvence Capital.

The funding round also saw participation from Captain Fresh’s existing investors – Tiger Global, Accel Partners, Matrix Partners India, and Prosus Ventures. 

The Bengaluru-based startup will utilse the fresh capital to expand its operations in the European and the US markets. 

Captain Fresh also announced the appointment of Basola Valles as the CEO for the European market. 

Commenting on expansion plans for Europe, Valles said, “We aim to reduce turnaround times, invest in product innovation, and deliver on transparency and traceability needs. We will initially focus on selected European countries in partnership with local players.”

The funding round comes almost over a year after Inc42 reported that the startup raised $7.3 Mn from Evolvence Group as a part of its extended Series C round. 

Captain Fresh last announced raising $50 Mn in March 2022 to foray into Africa and Middle East. This funding round was led by Prosus Ventures and Tiger Global. Accel India, Matrix Partners India, Ankur Capital, and Incubate Fund also participated in the round.

Founded in 2019 by Utham Gowda, Captain Fresh is a farm-to-retail platform for animal protein – fish, seafood and sheep. It procures directly from agents and farmers and supplies across B2B, B2R and B2B2C channels. 

The startup indirectly competes against the likes of FreshtoHome, Licious, and Good To Go-acquired Tendercuts.

The post Captain Fresh Raises $20 Mn To Expand Operations In Europe, US appeared first on Inc42 Media.

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.

The post Top-Level Exits Continue At BharatPe; CBO Nishant Jain Steps Down appeared first on Inc42 Media.

IPO-bound D2C furniture brand Pepperfry has raised $23 Mn from its existing investors, including institutional investors and family offices. 

The fresh capital infusion will help the startup cater to its over 10 Mn customer base while strengthening its omnichannel presence, Pepperfry said in a statement.

The funding comes almost two years after the startup bagged around $45 Mn in a debt funding round from Norwest Venture and General Electric Pension Trust.  

Besides the fundraise, the startup also announced elevation of its cofounder Ashish Shah as the new CEO, after the unfortunate demise of Ambareesh Murty last month. 

The startup, which competes against the likes of Urbanladder, has been preparing for its initial public offering (IPO) since early 2022. It even converted itself into a public entity in May last year, a mandatory step before filing draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI). 

The startup is backed by the likes of Goldman Sachs, Norwest Venture Partners, Bertelsmann India Investments and State Street Global Advisors. It reported a net loss of INR 183 Cr in FY22, while total revenue stood at INR 264.1 Cr during the year. The startup’s expenses jumped 40% to INR 458.1 Cr in FY22 from INR 327.5 Cr in FY21 on the back of growing marketing expenses.

Founded in January 2012 by Murty and Shah, Pepperfry sells a wide range of furniture and other home products, including mattresses, dining and bar furniture, carpets, appliances, garden and outdoor, on its website. It also has an offline presence through its franchise model. 

Pepperfry competes against the likes of Jaipur-based Woodenstreet, which last raised $30 Mn last year, Reliance-owned Urban Ladder, Think Investments-backed Arrivae, and Upscalio-backed Green Soul.

The post Pepperfry Bags $23 Mn Funding, Appoints Cofounder Ashish Shah As CEO appeared first on Inc42 Media.

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.

The post Fintech Giant BharatPe In Talks To Raise $100 Mn From Existing Investors appeared first on Inc42 Media.

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.

The post Paytm Boosts In-Store Payments With 87 Lakh Devices Now In Use appeared first on Inc42 Media.

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.

The post Vijay Shekhar Sharma Open To Upping Stake As Paytm Inches Closer To Profitability appeared first on Inc42 Media.

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.

The post Zerodha Gears Up For Launch Of AMC, Files Draft Documents For Index Funds appeared first on Inc42 Media.

Ecommerce giant Flipkart on Monday (September 4) said it would create 1 Lakh direct and indirect seasonal jobs to strengthen its supply chain to meet the customer demand during its flagship season sale, The Big Billion Days (TBBD), this year.

The Walmart-owned ecommerce company said in a statement that it would create jobs across divisions like supply chain, sortation centres, and delivery hubs. 

Flipkart’s festive season sale will begin on September 23. Over the years, festive season sales have emerged as a big event for ecommerce companies, including Flipkart and its rival Amazon. With the rise in penetration of mobile phones and internet in the country, these companies see a spike in demand from customers during the festive season, especially in electronics and fashion segments. 

Commenting on TBBD 2023, Hemant Badri, senior vice president and head of supply chain, customer experience, and ecommerce at Flipkart, said, “The complexity and scale during TBBD require us to scale up for capacity, storage, placement, sorting, packaging, human resources, training, delivery, and the entire supply chain, and this scale is always unprecedented. This year, we are also creating over a lakh new job opportunities in our supply chain… “ 

The ecommerce major said it has also scaled its supply chain with last-mile distribution hubs and large-scale fulfilment centres to mark the 10th edition of its annual flagship event. 

Ahead of the festive sale, the company also claimed to have added more than 19 Lakh square feet of space across states like Uttar Pradesh, Gujarat, Bihar, Punjab, Rajasthan, and Telangana. 

Flipkart plans to deliver more than 40% of its shipments during the festive season through its Kirana delivery program.

Last year, Walmart said Flipkart’s flagship festive season sale in India contributed significantly to its net sales growth in Q3.

Flipkart’s archrival Amazon’s ‘Great Indian Festival Sale’ will also begin on September 23, the same day as Flipkart. Besides these two, other brands such as Meesho, Myntra, AJIO, Nykaa also make special arrangements to meet the higher demand during the festive season.

Last year, ecommerce marketplaces recorded sales worth INR 40,000 Cr during the first week of the festive season sale.

The post Flipkart To Create 1 Lakh Seasonal Jobs Ahead of Festive Season Sale appeared first on Inc42 Media.

Zomato will be liquidating its Czech Republic-based subsidiary, Lunchtime, the listed foodtech giant said in an exchange filing.

“Pursuant to Regulation 30 of the Listing Regulations, we wish to submit that Lunchtime.cz s.r.o. (“Lunchtime”), step down subsidiary of Zomato Limited (“the Company”) situated in Czech Republic has initiated the process of liquidation on September 01, 2023,” said Zomato.

According to the foodtech giant, Lunchtime had no active business operations. The subsidiary is valued at INR 28.2 Lakhs and has zero turnover or contribution to Zomato’s net worth.

Zomato has been shuttering non-performing subsidiaries across the world to focus more on the Indian market.

This year, Zomato has already closed subsidiaries in Indonesia, Portugal, and Jordan, as well as announcing a planned exit from the Philippines. Most of these subsidiaries were non-operational.

Currently, Zomato only has active operations in India and the UAE. In November 2022, Kuwait-based foodtech startup Talabat shut down Zomato’s food delivery unit in the UAE, which it acquired for a reported $172 Mn in 2019.

The Indian foodtech continues to offer restaurant discovery and dining-out services in the UAE.

At the start of the year, Zomato said it pulled out of 225 cities in the country owing to poor performance. In a shareholder letter, Zomato CFO Akshant Goyal said the foodtech exited around 225 smaller cities in January, which contributed 0.3% of our GOV (gross order value) in Q3FY23 (October-December).

The foodtech major also introduced a platform fee ranging from INR 1 to INR 3 per order to better monetise and sustain operations in smaller cities. Zomato’s monetisation and cost-cutting efforts saw it post a profit of INR 2 Cr for the June quarter of FY24, a feat it achieved for the first time. 

Last week, Tiger Global and SoftBank sold shares they held in the foodtech giant, with the former completely exiting the startup, prompting a jump in Zomato’s share price.

Zomato shares have been buoyant on the bourses over the past few months, hitting a 52-week high of INR 102.85 apiece last month. At 1:15 PM on Monday (September 4), the foodtech’s shares were trading at INR 98.05 on the BSE, slightly higher than Friday’s close.

The post Foodtech Giant Zomato Shutters Czech Subsidiary Lunchtime appeared first on Inc42 Media.

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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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.

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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

• ONDC’s New Landmark: In what could be a threat to Zomato and Swiggy, ONDC has claimed that it now has 50,000+ restaurants on its platform

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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According to the CEO of Myntra, Nandita Sinha, the Flipkart-owned ecommerce major receives nearly 40% of orders of its international brands from Tier II cities and beyond.

“I think Tier II today is one of the fastest-growing geographies. One of the interesting parts about Tier II and Tier III cities is that 40% of our international brands business comes from these cities. So, customers from Tier II and III cities are buying across brands,” Sinha said, speaking at a session during Inc42’s fourth edition of The D2C Summit 2023.

The ecommerce major has been busy launching several products and services over the past few months, including FWD and Myntra Minis, to attract GenZ customers and improve user experience on its platform.

Myntra aims to attract 10 Mn GenZ users and expand its customer base over the next two years. As of 2022, Myntra has a customer base of 8.6 Mn GenZ users. Further, the platform plans to increase the number of styles available on FWD to over 100K by 2023-end.

“So, I think the more we personalise our experience for each customer, it’s increasingly easy for us to cater to different customer types. Tier II and III cities have been a very important part of our strategy over the last few years and will continue to do so as we go forward,” Sahni said.

Talking about the larger fashion opportunity in India for D2C brands, the Myntra CEO noted that only around 30-35% of the $100 Bn industry is branded, with the rest being unbranded. 

“New brands will emerge in this country. They will, of course, be international brands, which will come. But a lot of the brands in the country will be homegrown,” Sinha added. She said that over the last few years, the Indian consumer has become far more tech-savvy, due to which the adoption of fashion brands has seen a hockey stick growth.

Myntra also has a considerable contingent of in-house private labels, including names such as Roadster, HRX, Mast & Harbour and more. Over the past few years, Myntra has launched more than 20 so-called ‘master brands’.

While the platform is yet to publish its financials for the financial year 2023 (FY23), it posted a 40.5% YoY increase in its loss to INR 597 Cr in FY22. The bottom line took a hit despite a 45% year-on-year (YoY) increase in operating revenue to INR 3,501.2 Cr in FY22.

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Zomato has become the latest startup to hop on the artificial intelligence (AI) bus with the launch of Zomato AI to offer convenience and personalistation to customers.

Zomato AI is essentially a chatbot or an assistant which would help customers suggest food dishes and restaurants. Zomato will roll out the feature gradually, exclusively for Zomato Gold users.

“Transcending the boundaries of conventional chatbots, Zomato AI is an intelligent, intuitive foodie companion, designed to cater to users’ ever-changing preferences, dietary needs, and even their current moods,” the company said in a statement.

Zomato AI’s multiple agent framework brings a variety of prompts for different tasks. For example, Zomato AI will present customers with a widget, listing all the restaurants serving a desired dish.

In addition, Zomato AI can also suggest a list of popular dishes or restaurants if a customer is unsure about what to order, the statement said.

Zomato AI will allow customers to send multiple messages and will respond back in almost real-time.

“Proficient in handling complex queries, Zomato AI is designed to be users’ ultimate foodie friend… Zomato AI is a groundbreaking innovation that will allow customers to discover the right food at the right time and has the potential to redefine food ordering experiences,” the company added.

With the rise in popularity of AI after the launch of Open AI’s ChatGPT, a number of Indian startups have adopted AI to enhance their offerings. Zomato’s rival Swiggy and online travel aggregator ixigo are among these startups.

Zomato also launched a generative AI-based product for its quick commerce platform Blinkit.

Meanwhile, Zomato has been on a spree of new launches to expand the features available to its users. In June, it launched a multi-restaurant cart feature which allows users to make multiple carts at the same time. Earlier, users could add items from only one restaurant at a time.

It also introduced ‘Zomato Food Trends’ to help restaurant partners make data-driven decisions.

Amid all this, the startup also reported its first profitable quarter in April-June. Zomato posted a consolidated profit after tax (PAT) of INR 2 Cr in Q1 FY24 as against a net loss of INR 186 Cr in the corresponding quarter of the previous fiscal year.

The gross order value (GOV) of Zomato’s food delivery business stood at INR 7,318 Cr in Q1 FY24 as against INR 6,425 Cr in the corresponding quarter of the last fiscal.

The post Zomato Introduces AI-Powered Assistant To Help Customers Place Orders appeared first on Inc42 Media.

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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At the Amazon SMBhav summit on Thursday (August 31), the ecommerce giant joined hands with Indian Railways and Indian Post to facilitate faster product deliveries in India.

Amit Agarwal, SVP, India and Emerging Markets, Amazon, said that the ecommerce giant will open up a dedicated corridor for its seller partners with Indian Post and Railways to expedite shipping across the country. Amazon has signed a Memorandum of Understanding (MoU) with the two agencies, Agarwal said.

“We have been partners with the Indian postal service for a while. This will create the first-of-its-kind, seamless, integrated cross-border logistics solution. Now, the idea of somebody sitting in the corner of the country (India) can ship products to customers in New York just becomes more real,” Agarwal said at the event in New Delhi.

India Post and Amazon also unveiled a commemorative postal stamp at the event.

Agarwal said the company has digitised more than 2 Mn SMEs in India and now aims to facilitate $20 Bn in exports from the country. So far, it has enabled $8 Bn in exports from India.

Manish Tiwary, country manager, India consumer business, Amazon India, said, “As we get closer to delivering on our India Pledges to digitise 10 Mn MSMEs, enable $20 Bn in cumulative exports and create 2 Mn direct and indirect jobs in India, we remain excited about the long-term opportunity in India.”

To be sure, the ecommerce giant had earlier announced its India plans for 2025, as mentioned by Tiwary at the event.

Amazon also launched multi-channel fulfilment, allowing D2C companies and other small businesses to use the Amazon infrastructure and run operations even if they’re not registered with the ecommerce company.

Congratulating the ecommerce giant, Dr Jitendra Singh Minister of State (I/C) said, “For lakhs of small businesses across India, digitisation can offer economic growth, broader customer reach, reduced marketing & distribution expenses, and access to foreign markets.”

Amazon Jumps On The GenAI Bandwagon

Jumping on the generative AI bandwagon, Amazon also announced Sahay, an AI chatbot, to help SMEs grow and scale. Sahay allows prospective businesses to ask questions to help them set up shop with Amazon.

“Whether they want to register, list items, get help, expand sales and be more successful, Sahay will help. I’m very excited to bring the power of generative AI to Indian small and medium businesses starting now and that should be pervasive going forward as well,” Agarwal said.

Amazon expects generative AI to transform its business entirely and said it is difficult to imagine what the company will look like 10 years from now, thanks to AI.

“We think in the next 10 years, there won’t be any aspect of our business that won’t be transformed in some meaningful way by this (generative AI). There won’t be any way that we do our business today that AI won’t transform,” Russell Grandinetti, SVP – International Consumer at Amazon, said at the event.

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Shares of the foodtech giant Zomato continued their 5% rally from the previous day as the price increased 1% in the morning trade on Thursday (August 31), after SVF Growth sold 10 Cr equity shares in the company.

Zomato shares were trading at INR 100.7 at 9:26 AM on the National Stock Exchange. However, following the initial cheer, the company’s share price fell to INR 99.45 at 12:27 PM, slightly lower than Wednesday’s close.

To recap, SVF Growth sold a 1.16% equity stake in Zomato at INR 94.7 per share in a bulk deal on August 30, earning the SoftBank affiliate INR 947 Cr. SVF Growth’s shareholding in the company was 3.35% or 28.71 Cr shares as of June 2023.

SoftBank received a stake in Zomato following the foodtech giant’s acquisition of the quick commerce startup Blinkit last August. After the one-year lock-in period expired, the Japanese investment major moved to exit the startup. Recent reports suggest that the Japanese tech giant is looking for a complete exit from the foodtech giant. 

Goldman Sachs Investments, Copthall Mauritius Investment Fund, BNP Paribas Arbitrage, Franklin Templeton Mutual Fund, Axis Mutual Fund, Kotak Mahindra Fund, Morgan Stanley Asia Singapore and others were the buyers of the deal.

The listed food delivery giant has been on an upward trajectory this year. Since the start of 2023, Zomato’s share price has rallied by 65% on the bourses, outperforming both the BSE and the NSE by many multiples. The startup’s shares recently hit a new 52-week high of INR 102.85, with its shares frequently crossing the INR 100 mark.

The foodtech also posted a profit of INR 2 Cr in the April-June quarter, compared to a loss of INR 250 Cr in the same period last year. Revenue increased 70% year-on-year (YoY) to INR 2,416 Cr in the same period.

In other news, Tiger Global Management, another foreign investor in Zomato, sold its entire shareholding of 1.44% in Zomato for INR 1,123.85 Cr on August 28. The shares were offloaded by Internet Fund III Pte Ltd in an open market transaction.

The foodtech has recently started charging a platform fee to customers, which has been a key driver in its profitability. Zomato is charging between INR 2 and 3 per order, depending on the city, with the platform fee being rolled out to customers in Tier II and III towns first.

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Japanese investor SoftBank is planning to completely divest its holdings in foodtech giant Zomato through open market transactions in the upcoming months. This comes after SoftBank gained a profit exceeding INR 100 Cr by divesting a portion of its stake in the company earlier this week.

SoftBank also holds another 2.18% stake in Zomato, and it is actively looking at divesting this stake through block deals in the upcoming months, Moneycontrol reported.

The Japanese investor offloaded 10 Cr Zomato shares at an average floor price of INR 94.70 per share, in contrast to their average acquisition cost of INR 83-85 per share. This resulted in a per-share profit ranging between INR 10-12.

The development follows the expiration of the lock-in period for Blinkit investors, who received Zomato shares following the acquisition of the quick commerce player by the foodtech giant. SoftBank, which was an investor in Blinkit, received a stake of 3.35% in Zomato post the acquisition last year.

Given that Zomato was not SoftBank’s initial investment, the investor is not willing to retain the stake in the company.

“For SoftBank, Zomato is just a monetary transaction, unlike Delhivery, Paytm or PB Fintech, which it entered as a direct strategic investor. So, it is looking at the deal only from a monetary perspective. It was waiting for Zomato to turn into a profitable bet and now that it has, it will look to exit the company fully as and when it gets opportunities,” the report added, quoting a source.

Zomato acquired the quick-commerce player in August last year in an INR 4,447 Cr deal. The shares were subject to a 12-month lock-in. Besides SoftBank, two other VC firms, Peak XV and Tiger Global, also received Zomato shares as part of Blinkit’s acquisition.

Investment firm Tiger Global also exited Zomato by selling 12.24 Cr shares, equivalent to a 1.44% stake, on Monday through open market transactions. Tiger Global’s Internet Fund III Pte Ltd sold the shares in multiple tranches at an average price of INR 91.01 per share, totaling INR 1,123.84 Cr, according to BSE bulk deal data.

In Q1 FY24, Zomato posted a consolidated profit after tax (PAT) of INR 2 Cr as against a net loss of INR 186 Cr in the corresponding quarter of the previous fiscal year.

The gross order value (GOV) of Zomato’s food delivery business stood at INR 7,318 Cr in Q1 FY24 as against INR 6,425 Cr in the corresponding quarter of the last fiscal.

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After multiple cuts, US-based asset management company (AMC) Fidelity Investments has increased the valuations of ecommerce unicorn Meesho and fintech unicorn Pine Labs, according to the monthly update filed with the US Securities and Exchange Commission (SEC).

According to the update for the month ended July 31, 2023, Fidelity said its stake in Meesho was worth $43.24 Mn, up from $41.02 Mn as of June 30, 2023. This translates to an increase of 5.41% in the ecommerce unicorn’s valuation.

At the same time, Fidelity valued its stake in Pine Labs at $34.77 Mn as of July 31, 2023, up 4.6% from $33.24 Mn as of June 30, 2023. However, the valuation of SaaS unicorn Gupshup remained unchanged.

Earlier, Fidelity cut Gupshup’s valuation thrice between April and June 2023.

Incidentally, this is the second valuation uptick for Pine Labs, as Baron Capital marked up its valuation, alongside Swiggy, earlier this week.

It must be noted that Fidelity marked down the valuations of Indian startups in the past three to four months. It cut Meesho’s valuation by 9.7% in April and Pine Labs’ valuation by more than 9% in May 2023.

Following the funding bull run of 2021 and early 2022, the Indian startup ecosystem has been hit hard by macroeconomic headwinds since mid-2022. This has dried up the capital for Indian startups. With profitability becoming the buzzword, startups have started focusing on turning profitable. Meanwhile, loss-making startups have been seeing valuation markdowns from investors.

To be sure, a valuation markdown by an investor does not immediately mean that a startup’s valuation has fallen or risen. A private company’s valuation is decided at the time of fundraising and only reduces if it raises a down round, that is a funding round at a reduced valuation.

As such, investors making changes to valuations is them reevaluating the value of their stake in a given startup, depending on factors such as financial performance and future outlook.

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