Exclusive Archives - Inc42 Media https://inc42.com/tag/exclusive/ News & Analysis on India’s Tech & Startup Economy Mon, 04 Sep 2023 18:17:00 +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 Exclusive Archives - Inc42 Media https://inc42.com/tag/exclusive/ 32 32 Interior Design Startup Flipspaces Raises $4 Mn Funding https://inc42.com/buzz/interior-design-startup-flipspaces-raises-4-mn-in-pre-series-b-funding-round/ Tue, 05 Sep 2023 01:30:21 +0000 https://inc42.com/?p=413832 Mumbai-based interior design startup Flipspaces has raised $4 Mn in its Pre-Series B funding round led by Prashasta Seth, former…]]>

Mumbai-based interior design startup Flipspaces has raised $4 Mn in its Pre-Series B funding round led by Prashasta Seth, former CEO of IIFL AMC. The funding round, which was a mix of equity and debt, also saw participation from other prominent family groups and funds. 

Flipspaces, which is backed by Carpediem Capital, said it will utilise the fresh capital to expand its operations on the West Coast of the US and strengthen its tech.

Commenting on the development, Kunal Sharma, founder and CEO of Flipspaces, said, “We’ve seen rapid growth in the US market combined with robust India numbers. Leveraging this momentum, our impetus is to enhance our focus on tech to enable processes at scale and double down on building on our supply chain capability to serve a global demand.”

The funding round comes almost two years after the startup raised $2 Mn from Seth and other HNIs. “We have been a profitable business because of strong unit economics and thus, have a long runway with this funding,” Sharma then told Inc42.

Prior to this, the startup raised a debt round of $1.15 Mn from UC Inclusive Credit and Alex Group. It also raised $3.5 Mn in its Series A funding round from Carpediem Capital.

Founded in July 2015 by IIT Bombay alum Sharma, Vikash Anand, and Ankur Munchal, Flipspaces designs interiors and builds projects for commercial spaces. The startup is currently operational in the US and India.

The startup has two offerings – Vizworld and Vizstore. Vizworld is a tech-enabled brand which offers a full stack solution for designing and building commercial spaces, while Vizstore offers a variety of furniture and furnishing products across categories. 

The startup counts Reebok, Oppo, Zeta, Indiqube, among others, as its clients. 

Flipspaces competes against the likes of Livspace, HomeLane, and Bonito Designs. Earlier this year, Design Cafe raised INR 40 Cr in a round led by WestBridge Capital, Mirabilis Investment Trust and Alteria Capital.

According to a Technavio report, India’s online home decor segment is estimated to expand at a CAGR of 10.2% during 2021-26 to reach a size of $3.75 Bn by 2026.

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Good To Go Acquires Paragon Backed TenderCuts In A Distress Sale https://inc42.com/buzz/stride-venture-backed-tendercuts-sees-distress-sale-acquired-by-good-to-go/ Sat, 02 Sep 2023 13:06:37 +0000 https://inc42.com/?p=413599 In what seems to be a distressed sale, Delhi NCR-based omnichannel meat brand Good To Go is acquiring Chennai-based meat…]]>

In what seems to be a distressed sale, Delhi NCR-based omnichannel meat brand Good To Go is acquiring Chennai-based meat delivery startup TenderCuts. 

Good To Go said the acquisition would also include Happy Chops, a seven-month-old tech platform launched by TenderCuts that claims to offer an online storefront and procurement support to local butcher shops. Happy Chops was launched by TenderCuts earlier this year.

Good To Go didn’t disclose the financial details of the deal, but Inc42 has learnt more details about the downturn that has hit TenderCuts since its last fundraise during 2021’s peak funding season. 

Cutbacks At TenderCuts 

Inc42 has learnt from sources that TenderCuts shut its operations in several pockets in Chennai, the only city it currently operates in, over the last few months due to scarcity of funds.

Multiple sources told Inc42 that the startup had a very high burn rate. Its failure to secure fresh funding resulted in it shutting its operations in Bengaluru and Hyderabad last year. 

It also fired nearly 65% of its workforce after shutting its operations in the two cities. 

Despite these struggles, TenderCuts launched Happy Chops earlier this year. However, the last three-four months were very difficult, sources added.

Commenting on the state of the startup, a senior TenderCuts executive told Inc42, “Acquisition was the only way out as it (TenderCuts) was unable to secure a Series B funding round.” 

Social media is filled with irate reviews from dissatisfied TenderCuts customers, pointing out that the Stride Ventures-backed startup had issues when it comes to deliveries and availability of products. 

Having spoken to sources at TenderCuts, Inc42 contacted Nabard’s NABVENTURES yesterday (Friday, September 1), a key investor in the company, for a comment on the distressed situation at TenderCuts. Less than 24 hours after this communication, TenderCuts publicly announced the acquisition by Good To Go. 

Stride Ventures declined to comment directly about the state of operations at TenderCuts despite multiple attempts to reach its founder Ishpreet Singh Gandhi. 

The press statement on the acquisition is mum on whether investors at TenderCuts saw any returns from this transaction. 

Stride Ventures was also in the news earlier this year for its investment in GoMechanic, which went through a distress sale earlier this year after its founders admitted to inflating revenues and sales. 

If these troubles weren’t enough, TenderCuts has seen the exit of R Venkkatesan earlier this year. Venkkatesan is mulling entering the real estate sector for his next business, as per his LinkedIn profile

Founded by Nishanth Chandran, the startup elevated three senior employees Sasikumar Kallanai, R Venkkatesan and Varun Prasad Chandran as cofounders in 2021. Sources indicate that Chandran is also likely to quit the startup after the acquisition, along with the other cofounders. 

TenderCuts Deep In The Red

Founded in 2016, TenderCuts offers freshly cut meat and seafood to customers through neighbourhood stores, which cater to both walk-in customers as well as online shoppers. Over the years, the startup expanded its product portfolio, adding eggs, spices, ready-to-cook products, among others. 

The startup competes with unicorns such as FreshtoHome and Licious as well as marketplaces such as BigBasket and a host of other players selling through quick commerce apps. 

TenderCuts claimed to have a network of 50 retail stores in Chennai and Bengaluru after raising over $19 Mn in funding. It raised $15 Mn in its Series A round led by Paragon Partners and NABVENTURES. In 2021, it raised $3.5 Mn in debt funding from Stride Ventures.

Worryingly, the company saw a huge jump in loss in FY22. The total loss of INR 126.8 Cr was 4X higher than the INR 30.4 Cr in FY21, but revenue only grew by 1.6X to INR 130.9 Cr in FY22 as compared to INR 78.1 Cr in FY21. Overall expenses ballooned by over 2.4X YoY to INR 259 Cr in FY22. Most of these went towards purchase of stock, while advertising costs also ballooned in FY22. 

The startup also roped in Prakash Raj as brand ambassador even as it struggled to boost the revenue and improve its unit economics. 

The poor financial and operational state of TenderCuts mirrors the state of many other meat delivery startups, where Licious and Freshtohome are dominant forces. Licious has raised over $400 Mn, while FreshtoHome has secured over $256 Mn in funding since inception, highlighting the need for capital to scale up this segment. 

Despite this, Licious and FreshtoHome continue to be loss-making as per their FY22 financials — INR 856 Cr and INR 480 Cr, respectively. 

TenderCuts’ acquirer Good To Go reported INR 9 Cr in revenue in FY22, with a razor thin profit of INR 1.1 Lakh (Less than 0.01%). 

The skewed competitive landscape means other startups such as Chennai-based meat retail brand Fipola have also shut down, while Bengaluru-based CaptainFresh has completely shifted its focus towards exports rather than selling to consumers. 

It looks like TenderCuts is the latest casualty of this intense competition and opex burden for meat delivery. It’s not clear whether Good To Go would retain the brand identity that TenderCuts has invested in building over the past few years. The announcement, sent soon after Inc42’s questions about the downturn at TenderCuts, was thin on any details in this regard.

The post Good To Go Acquires Paragon Backed TenderCuts In A Distress Sale appeared first on Inc42 Media.

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Exclusive: Shiprocket-Owned Omuni Fires Nearly 35% Workforce; CEO, CTO To Exit https://inc42.com/buzz/exclusive-shiprocket-owned-omuni-fires-nearly-35-workforce-ceo-cto-to-exit/ Wed, 30 Aug 2023 12:07:26 +0000 https://inc42.com/?p=412711 Shiprocket owned retail SaaS platform Omuni has laid off around 60-70 employees, or nearly 35% of its workforce, earlier this…]]>

Shiprocket owned retail SaaS platform Omuni has laid off around 60-70 employees, or nearly 35% of its workforce, earlier this month in a restructuring exercise, according to Inc42 sources.

The layoffs, which took place in the second week of August, impacted employees from tech, product, sales, and talent acquisition teams, the sources told Inc42.

Besides the retrenchment, Omuni will also see the exits of the senior management team. Omuni CEO and cofounder Mukul Bafna, CTO Sumeet Chandhok, among others, are also exiting the company, Inc42 has learnt.

Shiprocket, without disclosing details around the number of employees impacted, leadership exits and other related details, confirmed the development to Inc42.

At Shiprocket, we are building a full-stack ecommerce enablement platform and are always looking for opportunities to create a much bigger business impact for our merchants through partnerships, mergers and acquisitions. As we explore synergies with acquisitions, including Omuni, it often results in the consolidation of the workforce at an organisation-wide level and we have integrated some teams across various group companies. As a company, we remain committed to our vision and, consistently delivering and upholding our employee value proposition,” a Shiprocket spokesperson said.

Founded in 2014, Omuni is an omnichannel retail enablement platform for brands and retailers. Shiprocket acquired Omuni in July last year from Arvind Internet Private Limited in a combination of stock and cash for a total consideration of INR 200 Cr

Back then, Shiprocket said the acquisition will facilitate quick, efficient deliveries of shipments from the nearest store or warehouse, significantly reducing delivery timelines and enhancing customer experience.

Commenting on the layoffs, one of the sources said, “Nobody anticipated this would happen. We had a town hall about the upcoming product and in the evening employees were removed from the system without any valid explanation.” 

 

Omuni is giving a salary of two months as severance pay to the employees who were laid off.

Top-Level Exits Amid IPO Plans

As per the sources, Vivek Kalra, the cofounder and director of Glaucus Supply Chain solutions, another company acquired by Shiprocket, will lead the Omuni team in place of Bafna.

While it is not uncommon for founders and senior management employees to leave a company post acquisition, the high-level exits at Omuni right after the layoffs have raised a few eyebrows.

“Omuni is undergoing a transition at this point. Shiprocket is preparing for a public listing, and all these restructuring activities are a part of the same,” a source said. 

Another source said that Omuni generally deals with traditional business, whereas Shiprocket’s DNA evolves around new-age D2C brands. The transition will enable them to work with SMEs and MSMEs as well. 

However, multiple sources also told Inc42 that Omuni’s performance as a business unit didn’t matched the expectations set during the acquisition.

“Omuni was struggling to close deals and was lagging behind the target that was set by Shiprocket at the time of acquisition,” one of the sources said.

Shiprocket Acquisition Spree, And Losses 

Omuni’s acquisition was part of Shiprocket’s buying spree in 2022 when it acquired a number of companies for its growth ambitions. Besides Omuni, the Zomato-backed SaaS logistics startup also acquired Pickrr, Wigzo, Glaucus, and Rocketbox last year. 

The Delhi NCR-based unicorn entered the coveted unicorn club in August last year after it raised a bridge round of $33 Mn led by Lighrock India at a valuation of around $1.2 Bn. 

To date, Shiprocket has raised over $387 Mn across multiple rounds. It counts marquee names like Temasek, Moore Strategic Ventures, Paypal, and March Capital among its backers. 

Shiprocket slipped into the red in FY22, reporting a net loss of INR 93.1 Cr as against a profit of INR 12.4 Cr in FY21. While operating revenue rose to INR 611 Cr in FY22 from INR 358 Cr in the previous year, total expense ballooned to INR 727.8 Cr from INR 350.6 Cr in FY21. 

The layoffs at Omuni is an addition to the ever-growing list of Indian startups which have fired employees amid the ongoing funding winter. As per Inc42’s layoff tracker, Indian startups have laid off over 29,000 employees since 2022.

The post Exclusive: Shiprocket-Owned Omuni Fires Nearly 35% Workforce; CEO, CTO To Exit appeared first on Inc42 Media.

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Mastering The Art Of Fundraising: Tips For Raising Your Startup’s First Institutional Cheque https://inc42.com/resources/mastering-art-fundraising-tips-raising-first-institutional-cheque/ Sun, 27 Aug 2023 08:30:40 +0000 https://inc42.com/?p=412042 India’s booming startup landscape comprises over 90,000 startups, with only 10% securing funding. A majority of founders have to approach…]]>

India’s booming startup landscape comprises over 90,000 startups, with only 10% securing funding. A majority of founders have to approach over 12 VCs resulting in them spending over 33% of their bandwidth on these efforts.

To address this challenge, we have identified common fundraising mistakes and good practices to improve the chances of securing funding and avoiding pitfalls. Ultimately, fundraising is both an art and a science.

When To Raise, What To Raise

Timing is of the essence while fundraising. When you need money, many investors may not be interested in investing. However, when you don’t need money, you can raise funds on your terms, without the pressure of urgency.

Sticking with the timing aspect of fundraising, the process takes time, sometimes even 12-18 months, and it is essential to budget for it and start early. Planning ahead will ensure that you have sufficient time to communicate your vision and business plan to potential investors and secure funding.

With the right funding, a startup can disrupt the competition, change its orbit and gain dominance in its market. Therefore, the stage and type of fundraising often dictate the fate of a startup. For example, raising a Series A/B without any early indication of product-market fit (PMF) can be detrimental to a company’s success. In such cases, opting for a Seed or Angel round would be a more suitable alternative.

Factors To Consider While Fundraising

First and foremost, it is important to understand your customer’s perception of your product in the market, as well as your strengths. Keeping a close eye on competitors can help a startup refine its positioning and communicate its unique value proposition to investors more effectively. 

Investors often evaluate numerous startups across multiple sectors, therefore, it is essential to identify your moat or unfair advantage over peers and articulate it clearly in your story and positioning.

Choosing an investor is like choosing a life partner. Maximum success is achieved when the minds of the founder and investor meet for a common vision. Occasionally, the match may not be perfect, however, it does not imply that the founder or the investor is inadequate. 

Speaking to other founders for feedback, tracking deals done by a VC and learning about their investing ethos are basic diligences that a founder should do ahead of the fundraising.

Once you have shortlisted a few VCs, wooing them even at the expense of valuation, effort, or time, is worth it. Working on feedback received by investors and sharing periodic updates on your progress are some examples of how you can engage effectively. 

Remember, VCs are equally keen on chasing like-minded founders and many times need that comfort which is possible through effective communication.

Sizing the market is critical, and it is essential to have a clear understanding of your TAM, TOM and SOM. Without this understanding, even remarkable products/brands often encounter difficulties when attempting to expand. 

The Importance Of Telling A Good Story

The importance of storytelling cannot be overemphasised. A typical VC evaluates 3-5 deals every day and the hit rate is usually less than 1%. A useful exercise is to try explaining your business to your friends or family – if you can convey your message to them effectively, then you likely have your story and logic in order.

Early stage startups have limited resources at disposal. In order to get the most out of these resources, it is important to focus and prioritise excelling in one area rather than being a jack-of-all-trades and master of none. 

Pitching shifts the focus from the sheer ‘quantity of revenue’ generated to the ‘quality of revenue’ and unit economics. For example, a company with 10 SKUs selling in a few markets via few distribution channels is far better than growing faster with 100 different SKUs or channels.

These tips can help craft a winning pitch and steer the startup towards securing timely capital and sustainable business growth.

The post Mastering The Art Of Fundraising: Tips For Raising Your Startup’s First Institutional Cheque appeared first on Inc42 Media.

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What Funding Winter! Have Set Eyes On 100 Startups This Year: 100X.VC’s Ninad Karpe https://inc42.com/features/what-funding-winter-have-set-eyes-on-100-startups-this-year-100x-vcs-ninad-karpe/ Sat, 26 Aug 2023 03:30:07 +0000 https://inc42.com/?p=411910 With an aim to have 500 startups in its portfolio in the next 2-3 years, homegrown early stage venture capital…]]>

With an aim to have 500 startups in its portfolio in the next 2-3 years, homegrown early stage venture capital firm 100X.VC has its eyes set on signing 100 startup funding deals this year, Ninad Karpe told Inc42 in an exclusive interaction on the sidelines of the MoneyX conference that was held last month.

100X.VC, a sector-agnostic VC investment firm, typically invests in early stage ventures and writes small cheques on the lines of the US-based startup accelerator, Y Combinator.

The investment in early stage startups is converted into equity when they raise Pre-Series A or Series A funding. The funding happens through an instrument called iSAFE (Safe Agreement for Future Equity) notes.

Karpe credits his firm for introducing this concept to the Indian startup ecosystem and is not pioneering the show. The instrument has now been adopted by many early stage venture capital firms. According to Karpe, this investment process usually restricts investors from having a seat on the board and curbs the time of the deals that take months to close, like in the case of conventional startup funding.

Founded in 2019, 100X.VC is a SEBI-registered fund, which is led by angel investor Sanjay Mehta’s family office, Mehta Ventures.

Speaking on a range of topics, from funding winter to corporate governance issues plaguing the world’s third-largest startup economy, Karpe outlined that neither there is a dearth of deals nor investors looking to place their bets. However, founders today need to get their act together in striking a balance between dos and don’ts while sitting on heaps of investor capital.

Edited excerpts…

Inc42: What impact has the ongoing funding winter had on 100X.VC’s investment strategy?

Ninad Karpe: Funding winter is a big word. It is all-encompassing, but, if you come down the ladder and slice and dice, there is no winter in some cases.

As early stage investors, we get 25,000 to 30,000 pitch decks every year. While, on the one hand, there is no dearth of deal flow, on the other hand, there is no shortage of interest from angel investors to invest in the early stage.

Also, we are witnessing greater interest from a lot of individuals who are willing to take high risks with small ticket sizes, which is a good sign. Another positive development is that we are seeing a lot of founders emerging from Tier II and Tier III cities, which has only added to the deal flow.

So, when we talk about the funding winter, the pressure is more at later stages, Series C, D, E, and so forth. However, we provide bigger VCs a solid pipeline of startups to invest in for the next 3-5 years, and by then we believe any remaining traces of the funding winter will subside.

Inc42: So, according to you there is no funding winter right now?

Ninad Karpe: I think the exuberance is gone and reality has struck, and this is both from the perspective of founders and VCs.

I think we are at the fag end of the funding winter. In the next couple of months, we should start seeing more and more funds where people are more realistic about everything, sans the blind chase for startups or ideas.

The Indian VC ecosystem is still nascent compared to the West. There is a lot more headroom for a country of our size, and we can easily grow a hundred times from where we stand today.

Inc42: How many number of deals have you closed this year?

Ninad Karpe: While we have already closed 47 deals so far this year, we intend to do 100 deals in 2023. As of now, we aim to close 30-40 deals, however, the range could vary between 80 and 110 deals. Notably, these will be the startups from the 30,000 pitch decks that we have received this year alone.

Inc42: Is there any corpus that 100X.VC has built to invest in startups?

Ninad Karpe: So, we want to keep investing. We are the first institutional cheque writers, and we want to continue with this philosophy. Within the ecosystem, founders know that 100X.VC signs the first institutional cheque by deploying founder-friendly, agile funding instrument iSAFE notes, which we have pioneered in India. So, we want to continue doing this.

Inc42: Are you looking at any specific industry vertical to invest in this year?

Ninad Karpe: Given that we are sector agnostic, we look at groundbreaking ideas, which don’t get funded by anyone else.

Inc42: What is 100X.VC’s exit strategy? Is there any timeline that you set?  

Ninad Karpe: Since we are the first cheque writers, we take a more patient approach. Realistically speaking, I don’t think that we will get an exit within five years from our investments. Given that our fund is only four years old, we haven’t had any major exit yet. However, we expect some good news in the next 1-2 years.

During the pandemic, our investment slowed down, but we are back with a bang, and we want to invest in a hundred startups every year. Hopefully, we will have 500 startups in our portfolio in the next 2-3 years.

Inc42: How have the recent issues around corporate governance that cropped up at several big Indian startups impacted your strategy or relations with your portfolio companies?

Ninad Karpe: Corporate governance is an issue that needs to be fixed. It has happened in some cases due to various reasons.

At 100X.VC, we don’t take any board seats as a VC, however, we have now started including a separate session on corporate governance and its importance before investing.

Corporate governance issues that have recently cropped up among Indian startups could be a lesson for many founders on what should not be done.

Also, founders should be aware that if they mess up, it is pretty much over for them. The situation of bad actors in the ecosystem can be kept at bay if the guilty are easily let off the hook.

Inc42: What, according to you, should young startup founders learn from recent corporate governance issues?

Ninad Karpe: Founders today need to understand that if they have the requisite capital, it is unnecessary to spend it all, just because they can.

In the Indian startup space, a root cause of the evils that have recently emerged is the flow of excessive capital, and hardly restriction on spendthrift founders.

I don’t think this will work anymore. However, this also does not mean that investors do not want founders to scale their businesses. What is important is to understand the nuances to strike a balance between dos and don’ts.

We need to understand that young founders come with a lot of enthusiasm to make a difference. They’ve quit jobs or they’ve not gone for jobs and come to the startup ecosystem where the success rate, at best, is just 10%.

When capital was flowing freely, many failed to spend it consciously. However, this will be history now, and the Indian startup ecosystem is going to see a lot of disciplined founders emerge not too far in the future.

The post What Funding Winter! Have Set Eyes On 100 Startups This Year: 100X.VC’s Ninad Karpe appeared first on Inc42 Media.

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Exclusive: Chingari Sacks Over 50% Employees In Second Round Of Layoffs https://inc42.com/buzz/exclusive-chingari-sacks-over-50-employees-in-second-round-of-layoffs/ Thu, 24 Aug 2023 13:15:55 +0000 https://inc42.com/?p=411747 Bengaluru-based short-video platform Chingari has laid off more than 50% of its workforce in the second round of layoffs within…]]>

Bengaluru-based short-video platform Chingari has laid off more than 50% of its workforce in the second round of layoffs within two months amid a cash crunch, sources told Inc42.

The layoffs, which took place last week, impacted employees from teams like product, customer support, design and marketing, the sources added. 

The impacted employees were informed about the retrenchments during a one-on-one interaction with the members from the HR team or respective team managers. During the meetings, the employees were asked to tender their resignations, the sources said.

A detailed questionnaire sent to Chingari on the latest development didn’t elicit any response till the time of publishing this story. The article will be updated on receiving comments from the startup.

Commenting on the layoffs, one of the sources said, “This came out of nowhere. After the first round of layoffs, the higher management told the employees time and again that the company has enough cash runway.”

Multiple other sources echoed the same sentiment. 

Earlier in June, Inc42 exclusively reported about Chingari laying off 20% of its workforce.

Chingari now has only 50-60 employees following the latest round of layoffs, as per the sources. 

Besides layoffs, Chingari has also asked some of its employees to take pay cuts of up to 50% to bring down its expenses, the sources added. They cited a severe cash crunch as the reason behind the startup undertaking these measures.

“They (Chingari) were waiting to receive fresh funding from investors but it has been stuck in the due diligence procedure for a long time,” a source said, adding that the startup would have no option but to shut operations if it fails to get fresh funding in the next few months.

Chingari last raised an undisclosed amount of funding from Aptos Labs in February this year. The startup then said it would use the fresh funds for user growth, product development, global expansion, and to ramp up its engineering team. 

While announcing the fundraise, the startup also said it planned to launch an upgraded app on the Aptos Network by the second quarter of 2023.

Chingari’s Struggles

Chingari, like other short-video platforms, rose to prominence after the Indian government banned Tiktok, along with other Chinese apps, in 2020 citing security concerns. 

Cashing in on its newly-found fame, Chingari raised capital across multiple rounds. Till date, the startup has raised $47 Mn from investors such as OnMobile, Republic Capital, JPIN Venture Catalysts, Hill Harbour, Galaxy Digital, and Alameda. 

While Chingari started as a short-video platform, it also entered the crypto space with the GARI token, which it hoped would drive engagement and new downloads. However, the value of the token has been on a free fall since last year. 

Besides, the company has also been hit hard by the falling number of app downloads. Data sourced from Apptopia showed that Chingari’s download numbers hit a rock bottom around May-June 2022, after touching a peak of around 500K daily downloads in January 2022. The number of downloads have failed to recover since then.

In order to improve engagement on the platform and increase the number of app downloads, Chingari also forayed into 18+ content with paid live one-on-one calls between creators and users.

In terms of financial performance, the startup reported a net loss of INR 139.4 Cr in FY22, a jump of 225.7% from INR 42.8 Cr in FY21. Meanwhile, total income rose 137X to INR 49.4 Cr from INR 36 Lakh in FY21.

It must be also noted that amid the layoffs, Chingari acquired a chess team, Chingari Gulf Titans, in the Global Chess League. Recently, the startup also became a digital partner of UK-based football club, Southall Football Club. 

Chingari, founded in 2018 by Sumit Ghosh, Aditya Kothari, Biswatma Nayak, Deepak Salvi, also saw one of its cofounders Kothari exit the startup in May this year

The layoffs at Chingari come amid the ongoing funding winter, which has forced multiple other social media and crypto-focused startups like Sharechat, Koo, and CoinDCX to layoff employees.

As per Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.

The post Exclusive: Chingari Sacks Over 50% Employees In Second Round Of Layoffs appeared first on Inc42 Media.

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Exclusive: GoMechanic Founders On EOW Radar As Investors Push For Probe https://inc42.com/buzz/gomechanic-founders-eow-investigation-investors-push/ Tue, 22 Aug 2023 11:16:01 +0000 https://inc42.com/?p=411337 GoMechanic investors have approached the Economic Offences Wing to probe the role of the company’s four cofounders in misreporting financials…]]>

GoMechanic investors have approached the Economic Offences Wing to probe the role of the company’s four cofounders in misreporting financials and any potential misappropriation of funds.

In January 2023, GoMechanic was hit by controversy after it emerged that the auto services startup’s founders had admitted to misleading investors with fake revenue figures.

Confirming the development, Orios Venture Partners’ general partner Rehan Yar Khan told Inc42, “The complaint with EOW has been filed by Orios, Sequoia [Peak XV], Tiger [Global] and Chiratae. As investors in GoMechanic, we are the aggrieved parties and are pursuing this legally.”

Other sources close to the investor group also told us that the EOW has been engaged to look into how the revenue inflation by GoMechanic’s founders might have resulted in the misappropriation of funds.

The startup came under the corporate governance spotlight in January 2023 after cofounder Amit Bhasin publicly admitted to committing “errors in judgement” in regard to financial reporting while trying to pursue growth.

“Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgement as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” Bhasin had said in a LinkedIn post at the time.

The company was founded in 2016 by Amit Bhasin, Kushal Karwa, Rishabh Karwa and Nitin Rana. Besides Bhasin’s public confession, the other founders of the company were also said to have admitted to misreporting revenue figures, as per sources.

The GoMechanic case emerged at a time when the Indian startup ecosystem was already dealing with plenty of corporate governance lapses. This prompted limited partners in funds, including the likes of the Small Industries Development Bank of India (SIDBI) which invests in alternative investment funds (AIFs), to question funds about due diligence lapses and irregularities at various startups.

Sources close to a SEBI-registered AIF had told Inc42 at the time that the bank had questioned some VCs that had backed GoMechanic. Even the Registrar of Companies was reported to be looking into GoMechanic’s books amid allegations of financial irregularities.

Since its inception, the startup has raised roughly $55 Mn (or over INR 440 Cr) in funding from influential investors such as Tiger Global, Peak XV Partners (previously Sequoia Capital India), Orios Venture Partners, and Chiratae Ventures. Notably, Orios and Chiratae both have received fund commitments from SIDBI.

GoMechanic Sold; Founders Move On

Two months after the controversy broke out, GoMechanic was acquired by a consortium led by Lifelong Group, which is a majority shareholder in GoMechanic rival Servizzy.

Sources told Inc42 at the time that the transaction saw write-offs by all GoMechanic equity investors, while the venture debt investors in the company managed to recover some portion of their invested funds.

While the Lifelong Group did not reveal the size of the transaction, sources told Inc42 that the deal is to the tune of INR 220 Cr (roughly $27.5 Mn).

Responding to our queries, Orios’ Khan added that the firm has stepped up due diligence in all companies when investment and reinvestment rounds come up. “As GoMechanic managed to evade multiple rounds of audits and due diligence, while committing fraud, by Big 4 auditors, we have set up an internal process of “evidence based diligence” for all companies when we invest and reinvest in them,” Khan said.

Under the new best practices at Orios, Khan said that when startups submit bank statements showing transactions and balance, the fund asks them to show online bank account statements on video conference calls to verify the claims.

As Inc42 reported exclusively in late July, GoMechanic cofounders Rishabh Karwa and Nitin Rana are currently working on two separate and unnamed new startups, just six months after the controversy broke out.

Rana is working on a new startup and “Building Travel & Hospitality Product for Indian Subcontinent and World”, as per his LinkedIn profile, while Rishabh Karwa is looking to develop a location-based product for retail storefronts.

Incidentally, earlier this week, Servizzy sent a press release claiming that between April and June 2023, GoMechanic serviced more than 68,500 cars across India. It also claimed ~30% growth in both service revenue and GMV in the quarter.

“Over 10,000 new Miles Memberships have been activated since April 2023 alone, solidifying an impressive count of more than 48,580 active memberships. The team’s efforts continue to strengthen the brand’s position as a reliable choice for car owners nationwide,” the company said.

It remains to be seen whether the potential EOW investigation into GoMechanic will result in any fallout for Servizzy or the new business.

EOW Knocking On Startup Doors

Incidentally, in recent months, the EOW has been kept busy with investigations into allegations of corporate governance lapses at several startups.

BharatPe’s first information report (FIR) against ousted cofounder and MD Ashneer Grover, his wife Madhuri Jain Grover, and family members, including Deepak Gupta, Suresh Jain, and Shwetank Jain, was registered by EOW in May this year. The case pertains to an alleged INR 81 Cr fraud.

More recently, Broker Network founder and former Housing.com cofounder Rahul Yadav fell on EOW’s radar after a vendor alleged fraud to the tune of INR 10 Cr and criminal breach of trust.

Following the registration of the FIR, a lookout circular (LOC) has been issued by the EOW. Yadav’s bank account is said to have been frozen, with searches conducted at his residence.

The post Exclusive: GoMechanic Founders On EOW Radar As Investors Push For Probe appeared first on Inc42 Media.

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Exclusive: Dunzo In Advanced Talks To Raise $100 Mn In Series G https://inc42.com/buzz/exclusive-dunzo-in-advanced-talks-to-raise-around-100-mn-in-series-g-round/ Thu, 17 Aug 2023 12:34:22 +0000 https://inc42.com/?p=410549 Bengaluru-based beleaguered hyperlocal delivery startup Dunzo is in advanced talks to raise $100 Mn in its Series G round of…]]>

Bengaluru-based beleaguered hyperlocal delivery startup Dunzo is in advanced talks to raise $100 Mn in its Series G round of funding, according to sources. 

The startup is in talks to raise the funds from its existing investors, including Lightbox and Lightrock. However, Reliance Retail is not participating in the funding round, the sources told Inc42.

“Dunzo is finalising a funding between $80 Mn-$100 Mn in its Series G round. The round mostly comprises equity funding and can have a small debt element,” one of the sources said.

A mail sent to Dunzo seeking its response on the funding round didn’t elicit any response till the time of publishing this story. 

 The capital infusion will come as a breather for the cash-strapped Google-backed startup which has delayed salaries of its employees and received legal notices from many of its vendors for outstanding dues.

Dunzo claims it has been undertaking a major business model transition since October last year. It has been reducing its dark stores across India to cut costs and is instead partnering with retail stores to provide logistics services on a revenue-sharing model.

The fund infusion will help Dunzo pay the salaries of its employees and clear the pending dues of its vendors.

“The fresh round of capital will help the startup to move ahead. The capital will be utilised to achieve profitability in the coming six to nine months, scale its business, and strengthen its delivery network,” another source said. 

Earlier this year, Dunzo raised around $45 Mn via convertible notes from Google and Reliance Retail. 

The startup also laid off around 30% of its workforce, or around 300 employees, in April this year amid mounting losses and the changes in its business model. 

Dunzo’s net loss jumped over 2X to INR 464 Cr in the financial year 2021-22 (FY22) from INR 229 Cr in FY21. Operating revenue grew 2.1X to INR 54.3 Cr in FY22 from INR 25.1 Cr in FY21, while total expenses doubled to INR 531.7 Cr in FY22. 

Advertising and promotional expenses jumped almost 6X to INR 64.4 Cr during the year under review from INR 11 Cr in the previous fiscal year.

The fresh equity funding round will come almost 19 months after Dunzo raised $240 Mn in its Series F funding round, led by Reliance Retail Ventures Limited (RRVL). As per Inc42’s calculation, the startup was valued at $775 Mn in this round. However, the valuation for the new funding round couldn’t be ascertained.

RRVL picked up a 25.8% stake in Dunzo in the Series F round for $200 Mn. Existing investors Lightbox, Lightrock, 3L Capital, and Alteria Capital also participated in the round. 

Last month, Inc42 exclusively reported that another quick-commerce startup Zepto is about to turn unicorn with a $150 Mn Series E funding round at a valuation of $1.3 Bn.

 

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Exclusive: Ex Tesla Exec’s Tekion Lays Off 10% Workforce, 200 Indian Employees Impacted https://inc42.com/buzz/exclusive-tekion-lays-off-around-200-indian-employees/ Wed, 02 Aug 2023 14:00:08 +0000 https://inc42.com/?p=408598 California headquartered SaaS automation startup Tekion laid off around 300 employees, or 10% of its workforce, earlier this week as…]]>

California headquartered SaaS automation startup Tekion laid off around 300 employees, or 10% of its workforce, earlier this week as part of a cost-cutting exercise, sources told Inc42.

Of the 300 employees impacted by the layoffs, around 200 were from Tekion’s India office, the sources added. 

The startup has offices in Bengaluru and Chennai and has a majority of its employees in India.

In a town hall meeting on Monday (July 31), Tekion’s leadership team informed the employees that the startup would be conducting a restructuring exercise which would result in job cuts. Following the meeting, the impacted employees received mails about the layoffs, the sources said.

The layoffs impacted employees from teams such as tech, sales, marketing, talent acquisition, human resources, among others, as per the sources. 

Tekion confirmed the layoffs to Inc42 and hinted at “changing macroeconomic conditions” as the reason behind it. However, it didn’t comment on the number of employees who lost their jobs in the restructuring exercise. 

“Building a large-scale business while keeping our mission intact requires us to make tough, but important business decisions; mainly organisational adjustments to navigate through changing macroeconomic conditions,” Marylou Hastert, vice-president of marketing at Tekion, told Inc42 in a statement.

“This week, we have made the difficult decision to reduce a small percentage of our workforce in some areas of the business. We deeply empathise with these impacted colleagues and are working to support them with their career transitions with severance pay, outplacement assistance, and additional support through our Employee Assistance Program,” Hastert added.

Sources told Inc42 that Tekion failed to achieve the revenue targets which it projected to its investors earlier and this was the main reason behind the layoffs. Besides, the startup is also rebuilding some of its products as they failed to generate revenue, they added.

Amid all these, Tekion also lost many of its clients over the last few months, as per the sources. The layoffs comes on the heels of Tekion acquiring interstate and state vehicle registration solution provider Five64. 

Founded by former Tesla CIO Jay Vijayan in 2016, Tekion is a cloud-native SaaS platform that uses machine learning and artificial intelligence to bring together original equipment manufacturers (OEMs), retailers/dealers and consumers on a single platform. The startup offers an end-to-end dealer management system, where dealers can review vehicle inventory and service department metrics. 

The latest development comes almost 1.5 years after Tekion raised $250 Mn in a funding round, which tripled its valuation to $3.5 Bn. The funding round was co-led by Alkeon Capital and Durable Capital. 

Tekion entered the coveted unicorn club in 2020 after it bagged $150 Mn from Index Ventures, Exor, the holding company of Ferrari, and FM Capital, among others.

The startup has raised a total funding of $435 Mn till date and counts Hyundai Motor Company, General Motors, and BMW i Ventures among its backers. 

The startup claims to work with lead vehicle manufacturers such as Lamborghini, Lexus, Mercedes Benz, Aston Martin, Lyft, among others. 

The development comes at a time when multiple SaaS startups have laid off employees in the recent past amid the ongoing funding winter. Earlier this week, Inc42 exclusively reported that Increff laid off around 20% of its workforce. Prior to that Suumit Shah-led Dukaan laid off 30% of its workforce. 

Amid macroeconomic headwinds and global economic slowdown, many global giants such as Google, Meta, Microsoft, and X (earlier known as Twitter) also undertook layoff exercises over the last year or so which resulted in many employees in their Indian offices also losing jobs. 

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Exclusive: Premji Invest-Backed Increff Lays Off 20% Workforce To Cut Costs https://inc42.com/buzz/exclusive-premji-invest-backed-increff-lays-off-20-workforce/ Tue, 01 Aug 2023 12:02:03 +0000 https://inc42.com/?p=408428 Premji Invest-backed SaaS startup Increff laid off around 60 employees, or 20% of its workforce, last week in a cost-cutting…]]>

Premji Invest-backed SaaS startup Increff laid off around 60 employees, or 20% of its workforce, last week in a cost-cutting exercise, sources told Inc42.

The laid off employees were from tech, sales, customer success, and HR teams, among others. The impacted employees were informed about the layoffs in one-on-one meetings with the higher management and asked to resign on the spot, the sources said.

Responding to Inc42’s queries on the development, Increff CEO and cofounder Rajul Jain confirmed the layoffs.

As per the sources, adverse macroeconomic conditions and failure to meet the targets for onboarding new clients was behind the decision to layoff employees. 

“Increff was not meeting the expectations in terms of onboarding new clients that it had projected earlier. Besides this, the startup even saw some existing clients dropping out,” said a person aware of the development. 

Another person aware of the developments at the startup said Increff’s expansion plans for the US and Europe didn’t pan out the way it expected despite spending big on marketing in these regions. 

Increff’s sales team in the US was among the biggest casualties in the layoff round.

However, Rajul said that the startup is not halting its expansion plans in the US and Europe. “… our sales will be more partner-led rather than direct,” he said. 

It must be noted that Increff, when it raised its Series B round led by TVS Capital last year, said it would utilise the capital to strengthen sales and marketing in international geographies, specifically in the US and Europe. 

“The layoffs were a part of the cost-cutting exercise that Increff is doing to achieve profitability at the earliest. Without attaining profitability, the startup won’t get the valuation that it is seeking,” one of the sources said.

However, Rajul said the startup has not yet “gone to the market” for the next round of funding. On profitability, he said, “We touched profitability a couple of years back. We are now focusing on becoming profitable again.”

Increff has also cut down its marketing expenses in its quest to turn profitable, as per the sources. 

Founded in 2016 by Rajul, Anshuman Agarwal and Romil Jain, Increff helps fashion brands and retailers optimise inventory and improve sales velocity through its inventory management and supply chain solutions offered via its SaaS platform.

Last year, it raised $12 Mn in a Series B round, which saw participation from Premji Invest, Binny Bansal’s 021 Capital, among others. Earlier, in 2017, it raised around $2 Mn from Sequoia Capital (now Peak XV Partners). 

Currently, Increff boasts of having clients such as Puma, Adidas, Bata, Levi’s, Pepe, Celio, Gap, Benetton, among others.

Its revenue from operations rose over 27% year-on-year to INR 44.4 Cr in FY22, while loss dropped over 37.5% to INR 2.8 Cr. 

As per Rajul, the startup clocked a revenue of INR 85 Cr in FY23.

With the job cuts, Increff has become the latest Indian startup to join the long list of startups which have laid off employees over the last year or so amidst the funding winter. According to Inc42’s layoff tracker, Indian startups have laid off over 28,000 employees since last year.


Update | 1st August, 20:55

Some parts of the story has been edited.

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Exclusive: GoMechanic Cofounders Eye New Startups Six Months After Fake Revenue Fiasco https://inc42.com/buzz/gomechanic-cofounders-new-startups-six-months-fake-revenue/ Mon, 31 Jul 2023 12:15:02 +0000 https://inc42.com/?p=408252 More and more second-time startup founders and serial entrepreneurs are looking at whitespaces in the tech ecosystem to start up…]]>

More and more second-time startup founders and serial entrepreneurs are looking at whitespaces in the tech ecosystem to start up again. And GoMechanic cofounders Rishabh Karwa and Nitin Rana are two more noted entrepreneurs joining this bandwagon.

Rishabh and Rana are currently working on two separate and unnamed new startups, even as dust is far from settled on the GoMechanic front. Indeed, it was just over six months ago that the controversy broke out.

Rishabh and Rana are two of four cofounders of GoMechanic, along with Kushal Karwa and Amit Bhasin. We don’t know much about Rana’s new startup, but more details are available about Rishabh’s latest venture.

For one, his X (Twitter) bio reads, ‘Building for Local Storefronts around the World’, and his recent tweets indicate that the GoMechanic cofounder has spent a considerable time in the US.

The other GoMechanic cofounder Rana is working on a new startup and “Building Travel & Hospitality Product for Indian Subcontinent and World”, as per his LinkedIn profile.

Neither have registered a new entity in India or the US yet as per Inc42’s checks on official portals.

Rishabh has dropped hints about his next business since June this year.

“We are trying to create [sic] is a Suspension Score for Business to check the risk their Business Profile is facing. Truly believe it can help a lot of Small Store Owners avoid a lot of frustration!” Rishabh revealed at the end of a thread on July 19 about the risk for businesses being red-flagged by Google Business, and therefore Google Search and Google Maps.

Rishabh did not respond to questions sent via an X (Twitter) direct message about his new venture or indeed what happened towards the end at GoMechanic after its controversies came under the spotlight.

Life After GoMechanic

The Peak XV (Sequoia) backed startup’s founders admitted to financial misreporting, and was acquired by a consortium led by the Lifelong Group, which is a majority shareholder in GoMechanic rival Servizzy.

The deal saw write-offs by all GoMechanic’s equity investors, while venture debt investors managed to recover some funds. Sources told Inc42 at the time that the distress sale was executed at INR 220 Cr (roughly $27.5 Mn), roughly half of the total lifetime funding raised by GoMechanic.

Most importantly, GoMechanic founders were not part of the deal and did not get any equity in the acquiring company.

While only one cofounder — Amit Bhasin — has publicly spoken about the misreporting and fake revenues, in private, all four cofounders are said to have admitted to the discrepancies that eventually turned GoMechanic’s fate.

As per sources close to one of GoMechanic’s key investors, punitive or legal action against the founders, including Rishabh and Rana, has not been ruled out, though nothing is certain as yet.

For legal action against founders, a consensus has to be reached by all the shareholders in the company.

Last month, sources close to GoMechanic told Inc42 that the matter is still sensitive, indicating that the deal may not have been finalised. But Servizzy has clearly taken over GoMechanic’s operations as the latter’s website is now seemingly being run by Servizzy’s parent entity Service Easy Technology Private Limited.

What Are GoMechanic Cofounders Cooking Up?

Nevertheless, Rishabh has been quite vocal about starting anew, posting about the journey of building a new product and startup. His social media posts about Figma plugins and projects indicate some degree of progress.

“The good thing about losing something you have built is you get to experience building something new again!” he tweeted in early June, followed by “0 to 1 can be the most stressful & most fun time simultaneously!” one month later.

It’s clear that Rishabh is looking to solve problems for businesses that have an online listing and want to improve discoverability. He regularly asks his timeline for questions about Google Business APIs and other listings-related problems that businesses currently face.

Second-time founders starting again from scratch is a major trend that has fuelled new business creation in the past three years. And while Rishabh Karwa has not yet raised funds to build a new product as far as we know, the question is will the controversies around GoMechanic change anything for his new venture or Rana’s.

Despite controversies in their previous companies, the likes of Rahul Yadav, Ashneer Grover have raised funds from investors — Yadav’s Broker Network raised over INR 280 Cr by itself.

While Grover is caught in many legal battles and Yadav is likely to see one too, the GoMechanic cofounders seem to have so far evaded court drama. Is it because the four confessed to their malfeasance? Or is there more trouble on the horizon even after the company has been sold?

Rishabh Karwa as well as Rana’s next ventures, might well secure more funding than GoMechanic — it’s not unheard of in the case of new startups from serial entrepreneurs — and this might actually turn out to be the defining achievement of their careers.

But at least for the first few years, there will be a nagging doubt about both cofounders’ new ventures from the overhang of the GoMechanic controversy. We saw this in the form of questions around Yadav’s Broker Network in the early days and even for Grover’s Third Unicorn now in its first few months.

So besides taking on giants such as Google or Apple and other existing giants in their respective industries, both Rana and Rishabh Karwa would also have to fight perception battles of their own.


Correction Note | August 01, 2023; 12 PM
  • An earlier version of this story said Broker Network had raised $280 Mn. This has now been corrected to INR 280 Cr

 

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Exclusive: Milkbasket To See Exit Of 130 Employees Amid Restructuring https://inc42.com/buzz/milkbasket-to-see-exit-of-130-employees-amid-restructuring/ Thu, 27 Jul 2023 16:07:37 +0000 https://inc42.com/?p=407863 At least 130 employees of Milkbasket are set to lose their jobs due to a restructuring exercise being undertaken at…]]>

At least 130 employees of Milkbasket are set to lose their jobs due to a restructuring exercise being undertaken at the startup owned by Reliance Retail, sources told Inc42.

Employees from teams like tech, product, category, procurement, marketing, among others, will be impacted by the exercise, the sources said. 

The startup began informing the impacted employees about the development over the last two months and asked them to look for other opportunities, the sources added. 

Milkbasket cited role redundancy as the reason behind the decision, sources told us. The impacted employees will be paid remuneration as per their notice periods.

The restructuring exercise is in line with Milkbasket’s ongoing efforts to integrate with JioMart over the coming months to improve efficiency. Inc42 has also learnt that the startup is working on a new business model and is likely to undergo rebranding. 

It must be noted that Reliance Retail Venture Ltd, the retail arm of Reliance Industries Ltd (RIL), acquired a 96.49% stake in Aaidea Solutions Private Limited, the parent entity of Milkbasket, in 2021. 

Some of the impacted employees affected by the restructuring exercise are likely to be absorbed in other verticals of Reliance Retail, the sources said.

An email sent to RIL did not elicit any response till the time of publishing this story. The article will be updated on receiving a response from the company.

The latest development comes close on the heels of Milkbasket’s top executives, including CEO, CFO, and COO, exiting the company. While three cofounders of Milkbasket exited last year, according to Entrackr, the startup’s fourth founder Yatish Talvadia, COO Abhinav Imandi, and CFO Gaurav Srivastava, left the company recently. 

Founded in 2015 by Anant Goel, Ashish Goel, Anurag Jain and Talvadia, Milkbasket caters to household grocery needs like fruits and vegetables, dairy, bakery, among others, by delivering them at home. Before its acquisition by Reliance Retail, Milkbasket had raised $38.5 Mn in multiple funding rounds from investors such as Kalaari Capital, Innoven Capital, Unilever Ventures, among others. 

At the time of acquisition in 2021, the startup has operations in Delhi NCR, Hyderabad and Bengaluru. Since then, it has expanded its operations to over 30 cities, including Navi Mumbai, Ahmedabad, and Jaipur.

Milkbasket’s revenue from operations dropped 19% to INR 421.18 Cr in FY22 from INR 522.62 Cr in FY21. However, net loss soared over 99% to INR 65.9 Cr from INR 33.17 Cr in FY21. 

In Q1 FY24, Reliance Retail’s net profit surged 18.8% to INR 2,448 Cr from INR 2,061 Cr in the year-ago quarter. Interestingly, Milkbasket didn’t find any mention in RIL’s Q1 presentation or post-earnings call with analysts.

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How Former Zynga India Head Silently Shut His Startup After Slashing 150 Jobs https://inc42.com/features/how-former-zynga-india-head-silently-shut-his-startup-after-slashing-150-jobs/ Tue, 18 Jul 2023 06:30:02 +0000 https://inc42.com/?p=406532 India’s edtech industry was once brimming with capital investments as Covid presented multiple opportunities. However, since startups raised millions of…]]>

India’s edtech industry was once brimming with capital investments as Covid presented multiple opportunities. However, since startups raised millions of dollars of funding on fancy valuations using the country’s billion dollars market size as a bait, every stakeholder has been looking down the rabbit hole.

Reason? Bloated valuations + weak unit economics equals to a scared investor and a funding winter. And we have many examples to prove this point.

Ranging from BYJU’S, the edtech decacorn that is now cornered on multiple fronts, to many others who have shut shops, are on the verge of winding down their operations, or are looking to get acquired, all have been the casualties of the fancy funding and valuation windfalls that they unlocked during the pandemic gold rush.

Since last year, companies such as Udayy backed by Northwest Partners, Lido Learning and most recently FrontRow have shut down operations, ousting hundreds of employees.

Away from media attention and limelight, the former India head of Zynga, Shailesh Chaganlal Daxini, has silently shut down his nearly three-year-old venture, Vah Vah, of course, after slashing several headcounts.

Founded in 2020 by Daxini and two ex-Zynga employees, Akash Senapaty and Muthukaleeshwaran Subbiah, Vah Vah, a vocational training startup, last raised $2 Mn from Sequoia Capital India & SEA (now Peak XV Partners) under its scale-up programme for startups, Surge. Vah Vah also received an additional $1 Mn in a bridge round in 2022, sources informed us.

According to Vah Vah’s website, the early stage venture offers certificate courses in makeup artistry, hair styling and grooming. On the website, the online vocational training platform claims to have its main office in Koramangala, Bengaluru.

When we (Inc42) visited the office, we were surprised to find that the office had long been closed. Sources close to the startup said Vah Vah also invited police intervention after it abruptly sacked 150 employees in April this year.

Daxini’s Well-Decorated Resume

While on the ground, we were told that Daxini, an experienced tech entrepreneur, has a great rapport with top VC funds in India and US. It is on the back of this reputation that Daxini first set up Six Red Guns in June 2017.

Six Red Guns’ core focus was combining robotics with social media gaming. With this playbook, the startup aimed to capture a big share of the burgeoning gaming industry. However, the fate of the venture was short-lived and the startup had to embrace its early demise in just a year.

Daxini has a proven track record of turning around the fortunes of global gaming firm, Zynga in India. However, when it comes to his own ventures, he has already run out of luck, twice.

On his Linkedin profile, Daxini endorses himself for the success of Zynga’s most popular games — Mafia Wars, Farmville, and Farmville 2, among others.

“With annual revenues over $160M and margins over 50%, I have grown it (Zynga) into the most profitable studio for Zynga and drive a significant amount of top line and bottom line for Zynga Inc and created the playbook that doubled the LTV (revenue per player),” Daxini mentions in his LinkedIn profile.

Zynga was acquired by Take-Two Interactive Software, an American video game company, in 2022 for $12.7 Bn, marking the second-largest acquisition in the global gaming industry.

How Did Vah Vah Come Into Existence?

Betting big on the pandemic-led boom, Vah Vah was launched in 2020. Like any edtech player, the aim was to leverage the power of technology and the internet to upskill and train individuals who were forced to stay in the confines of their homes due to multiple pandemic waves and extended lockdowns.

“Under his leadership, Zynga flared quite well. The success he got with Zynga brought him everything — reputation, wealth and a network. And the next thing on his mind was to do startups,” a source said.

“Daxini joined hands with Senapaty and Subbiah and cofounded Vah Vah. They pitched something along the lines of coding and robotics before Sequoia and ultimately zeroed in on vocational training in the beauty segment,” we were told.

The pitch was simple: In the next three years (by 2023), India will need a skilled workforce of over 70 Mn individuals, with the beauty industry alone accounting for 3 Mn new workers. Given that the infrastructure (back then) had the capacity to train about half a million people, Vah Vah was looking at a humongous opportunity to fill the gap of labour shortage in the sector.

It targeted skilling individuals with little exposure to formal education so that they could generate a livelihood for themselves.

A Nobel Cause, But What Went Wrong?

After speaking with several erstwhile employees, one thing was clear — Vah Vah was ailing with what almost all edtech have in common — falling revenues and bloating losses — weak unit economics, largely.

Vah Vah offered online courses on professional makeup artistry, hairdressing and personal grooming in the range of INR 15,000 to INR 45,000. The duration of these courses lasted anywhere between two weeks and two months.

The vocational skilling platform also extended easy EMI options to attract the interest of individuals and aspirants, which proved to be a failure.

“Many who signed up for its courses defaulted on paying EMIs even after finishing their courses. Even though the company’s vocational training courses were reasonably priced, students started faltering on EMIs and soon the company was left with no other way to generate revenue,” a former senior employee said.

Adding to the pressure was Vah Vah’s big sales team, (more than 50 employees) which was only straining the startup’s operational cost.

Finally, it all came down to hardcore sales and recovering EMIs, which remained the startup’s Achilles heel, as all cash taps ran dry with each passing day.

According to Vah Vah’s FY22 financial report filed with the Ministry of Corporate Affairs, the company reported a loss of INR 7 Cr during the year against a mere revenue of INR 3.2 Cr.

“A team of 150 employees, including trainers, salespeople, tech staff, et al., makes no sense when you are burning cash. The cofounders had to ultimately fire 150 people in one go and shut down its offices,” a source said.

The source added this made way for a full-scale drama, and even cops got involved when employees created a ruckus over the non-payment of their final dues by the company.

We (Inc42) have sent a detailed questionnaire to Daxini and his team to tell their side of the story. The article will be updated accordingly.

According to sources, Daxini is in talks to pick funding for his next startup, which could be a mobile gaming venture.

Third Time’s A Charm

Well, there is no doubt about the fact that investors are always more comfortable with second-time founders and entrepreneurs. This is because such entrepreneurs bring loads of experience around on what could and won’t work for them and their next business venture.

In Daxini’s case, investors already know that Zynaga’s India operations grew leaps and bounds under his leadership. Furthermore, Daxini’s third attempt could work as a charm as he is expected to operate in his area of expertise, i.e., gaming.

Moving on, in Vah Vah’s case, even though the founders tried to cash in on the pandemic bull run and the edtech gold rush, things started falling apart, adding much to his chagrin. Given that Vah Vah wasn’t the only casualty of the 2020-21 windfall, much could yet be anticipated to save the venture from meeting its judgement day.

The Indian startup ecosystem currently is way too much exposed to uncertainties, and this is probably the reason why almost 90% of startups are unable to commit to dying another day.

At this point in time, only time will tell if Daxini’s third attempt will prove to be a charm or just another stepping stone to a future venture, paving the way for his fascination to do startups.

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Urban Company Rocked By Another Protest By Gig Workers For Blocking Their IDs https://inc42.com/buzz/urban-company-rocked-by-another-protest-by-gig-workers-for-blocking-their-ids/ Wed, 12 Jul 2023 14:06:53 +0000 https://inc42.com/?p=406109 Gig worker troubles at Urban Company refuse to end, as the startup was hit by another protest by its service…]]>

Gig worker troubles at Urban Company refuse to end, as the startup was hit by another protest by its service partners on Wednesday (July 12).

Over 200 partners of Urban Company staged a protest outside the startup’s Gurugram office against it permanently blocking their IDs in the last couple of months, two gig workers part of the protests told Inc42.

Inc42 has also reviewed photographs and videos of the protest.

Gig workers unions such as the Centre Of Indian Trade Unions (CITU) and All Indian Gig Workers Union (AIGWU) also lent their support to the protestors for their demand to unblock their IDs. 

While there has been dissatisfaction among partners of Urban Company over it permanently blocking IDs for the last year or so, Inc42 has learnt that the issue has aggravated in recent months. 

At the heart of the issue is Urban Company’s decision to increase the customer rating required by the partners to continue to work with the platform. Earlier, the partners had to maintain a customer rating of 4.5 to operate on the platform. However, the startup increased this rating to 4.7 and the partners are unhappy with this. 

In an internal video message addressed to salon category partners, Urban Company cofounder Abhiraj Singh Bahl said the startup intends to make the criteria for partners to be eligible to operate on the platform more stringent in the coming months to improve the quality of services. Besides customer rating, partners would also have to maintain the specified acceptance rate, product usage score, among others, to operate on the platform.

Meanwhile, Urban Company, in response to Inc42’s queries on the matter, sent the same statement which it issued after a protest by the partners over the same issue last month. The startup said it encourages dialogue with partners and is committed to building a high-quality home services platform.

The startup also unblocked several partner IDs over the past few weeks, Inc42 has learnt.  

The issue is not limited to Delhi NCR. Last month, Inc42 reported that Urban Company Partners in Bengaluru and Kolkata were also facing the same issue. 

Last month, AIGWU secretary Saubhik Bhattacharya alleged that Urban Company is exploiting gig workers and urged the startup to listen to the demands of the workers. 

Founded in 2014 by Abhiraj Bahl, Raghav Chandra, and Varun Khaitan, Urban Company offers salon, cleaning, appliance repair services, among others. In July last year, it raised $225 Mn in its Series F round, led by Prosus Ventures, Dragoneer, and Wellington Management, at a valuation of $2.1 Bn. In total, it has raised $445 Mn till date. 

The startup’s net loss doubled year-on-year to INR 514 Cr in FY22, while operating revenue rose 75% to INR 509 Cr.

The post Urban Company Rocked By Another Protest By Gig Workers For Blocking Their IDs appeared first on Inc42 Media.

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Exclusive: Leadership Exodus At Throttle Aerospace Systems; All Executives Step Down https://inc42.com/buzz/exclusive-leadership-exodus-at-throttle-aerospace-systems-all-executives-step-down/ Wed, 12 Jul 2023 09:59:49 +0000 https://inc42.com/?p=406064 Nagendran Kandasamy, the founder of Throttle Aerospace Systems (TAS), a Bengaluru-based drone hardware and software maker, has stepped down from…]]>

Nagendran Kandasamy, the founder of Throttle Aerospace Systems (TAS), a Bengaluru-based drone hardware and software maker, has stepped down from his role as CEO. Not only this, the entire leadership team, including COO Nischitha, CFO Girish Reddy, and CTO Shashi Kumar R, has also resigned from their respective positions.

Meanwhile, they continue to remain the shareholders of the company.

TAS is India’s first provisionally DGCA-approved drone maker for civil drones and has a license to manufacture military drones from the Ministry of Defence under the country’s new drone policy.

The company has designed and developed indigenous drones for multiple verticals which include agriculture, inspection, mapping, mining, monitoring, cargo payload, last-mile delivery and surveillance.

Kandasamy, along with Nischitha, Reddy and Kumar, holds 40% of the company’s equity.

It is worth noting that in May 2022, RattanIndia Enterprises, a diversified firm, acquired a 60% stake in Throttle Aerospace Systems for an undisclosed amount. This investment was made through NeoSky India Ltd, a wholly-owned subsidiary of RattanIndia.

Through its subsidiary, NeoSky, RattanIndia aims to provide comprehensive 360-degree drone solutions to customers, including drones as a product (DaaP), drones as a service (DaaS), and software as a service (SaaS).

What Exactly Happened

“It turned out to be a wrong marriage,” said one of the team members who resigned.

“While manufacturing drones was our forte, we were struggling financially. And, this is where RattanIndia came into the picture,” he added.

Having acquired the majority of shares, the management started interfering in every decision and creating various constraints using the majority. The executive team was not even allowed to take decisions for day-to-day functioning, the financial support to TAS was almost stopped, Inc42 learnt from sources.

The resignation spree followed the management’s decision to sack TAS CFO Reddy. The entire leadership team extended their full support to Reddy and resigned.

The management team wanted to depute its person and that’s how it all started.

With the resignation of its key members, it is believed that Sharath Chandra Gudlavalleti, who heads NeoSky, will also lead TAS.

Inc42 has reached out to RattanIndia Enterprises for comments on the latest developments. The story will be updated upon receiving a response from the company.

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Exclusive: Zepto Likely To Be 2023’s First Unicorn With $150 Mn Series E Funding https://inc42.com/buzz/zepto-likely-to-be-2023s-first-unicorn-with-150-mn-funding/ Wed, 12 Jul 2023 00:30:27 +0000 https://inc42.com/?p=405988 After a prolonged dry spell, the Indian startup ecosystem is about to welcome its first unicorn of 2023. Quick-commerce delivery…]]>

After a prolonged dry spell, the Indian startup ecosystem is about to welcome its first unicorn of 2023. Quick-commerce delivery startup Zepto is currently in advanced discussions to secure around $150 Mn in its upcoming Series E funding round, which would catapult its valuation to $1.3 Bn.

The funding round, which is likely to conclude in the next one month, is being led by StepStone Group, sources told Inc42. 

It must be noted that StepStone is an LP (limited partner) of Zepto’s existing backer – Nexus Venture Partners. 

“While StepStone is infusing around $60 Mn, Nexus Venture Partners will be pumping in around $40 Mn. The remaining amount will come from other existing investors,” the sources said. 

Besides Nexus Venture Partners, existing investors such as Glade Brook Capital and Lachy Groom will also be participating in the funding round. It will be an equity funding round with no debt component, as per the sources. 

Zepto refused to comment on Inc42’s queries on the matter. 

While India got 44 unicorns in 2021, the number fell sharply to 21 in 2022. With the latest funding round, Zepto will become the first Indian unicorn of 2023 after almost seven months since the start of the year. 

Founded in 2021 by Aadit Palicha and Kaivalya Vohora, Zepto entered the market by capitalising on the rising demand for quick commerce delivery following the outbreak of the Covid-19 pandemic. It quickly rose to fame on its promise of delivering groceries in 10 minutes and attracted interest from several investors.

The startup turned heads when it raised $60 Mn in a funding round from Glade Brook Capital, Nexus, and Y Combinator, among others, in 2021. Later, it raised $100 Mn in Series C round and last year bagged $200 Mn in its Series D round, led by Y Combinator’s Continuity Fund, at a valuation of around $900 Mn. 

Zepto reported a standalone net loss of INR 390.3 Cr in FY22, its first year of operations. Operating revenue stood at INR 142.3 Cr during the year. Zepto, which began operations in April 2021, incurred total expenses of INR 532.7 Cr in FY22. 

Zepto primarily competes against deep-pocketed players like Swiggy’s Instamart, Zomato-acquired Blinkit, and Reliance-backed Dunzo. While Swiggy last infused $700 Mn in Instamart in December 2021, Zomato acquired Blinkit for $568 Mn last year. However, Dunzo, which raised $240 Mn from Reliance Retail early last year, is facing a severe cash flow issue, forcing it layoff employees and withhold salaries of many others. 

The post Exclusive: Zepto Likely To Be 2023’s First Unicorn With $150 Mn Series E Funding appeared first on Inc42 Media.

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CRED Appoints Financial Industry Veteran B Sriram As An Independent Director https://inc42.com/buzz/cred-appoints-financial-industry-veteran-b-sriram-as-an-independent-director/ Wed, 05 Jul 2023 10:55:48 +0000 https://inc42.com/?p=405150 Fintech unicorn CRED on Wednesday (July 5) said it has appointed financial services industry veteran B Sriram as an independent…]]>

Fintech unicorn CRED on Wednesday (July 5) said it has appointed financial services industry veteran B Sriram as an independent director on its board.

Sriram comes with an experience of over 40 years in domains such as banking, finance and technology. He will play a vital role in providing guidance and counsel for CRED’s long-term strategy, growth plans, and execution roadmap, the Kunal Shah-led company said in a statement.

The development comes at a time when CRED has been on a spree of new launches and is now trying to expand its lending play.

Sriram is expected to help the company in strengthening its fintech offerings. Earlier, he served as the managing director of the State Bank of India, IDBI Bank, and State Bank of Bikaner & Jaipur. He has also held board positions at various subsidiaries of SBI, including SBI Life Insurance, SBI General Insurance, SBI DFHI, SBI Global Factors, SBICap Securities, and SBI Cards & Payment Services. 

Currently, he is also an independent director on the boards of ICICI Bank, National Bank for Financing Infrastructure and Development, TVS Credit Services, TVS Motor Company, TVS SCS Singapore, TVS Supply Chain Solutions, Nippon Life India Asset Management and IndiaIdeas.com.

Commenting on the appointment, CRED founder and CEO Shah said, “I am delighted to welcome Mr. Sriram to our board as we scale and prepare for our next growth phase. His domain expertise in the financial sector will be invaluable for us as we innovate and build products for the top 10% of Indians.”

CRED’S Expansion Plans

CRED has raised over $920 Mn from investors such as GIC, Tiger Global, and Alpha Wave since its founding. It is valued at nearly $6.4 Bn currently.

Having established the brand in the fintech market and armed with a large customer base, the startup has been announcing its entry into new segments over the last few months. 

Last October, it launched the Scan & Pay UPI product. In February this year, it also forayed into the BNPL space. Soon after, it entered the luxury travel space with CRED escapes.

All these launches are aimed at increasing the revenue of the startup amid increasing competition and funding winter. Despite this, CRED’s loss continues to rise. In FY22, the startup reported a 2.4X year-on-year jump in net loss to INR 1,279 Cr, while operating revenue rose 4.4X to INR 393.5 Cr. 

Last month, CRED also acquihired Y Combinator-backed micro-savings platform Spenny.

The post CRED Appoints Financial Industry Veteran B Sriram As An Independent Director appeared first on Inc42 Media.

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Ownership Battle Erupts At Nirmalaya Wellness After Shark Tank Fame https://inc42.com/buzz/ownership-battle-erupts-nirmalaya-wellness-shark-tank-fame/ Fri, 23 Jun 2023 12:01:47 +0000 https://inc42.com/?p=403209 Featuring on Shark Tank India Season 2 in February 2023, the founders of Nirmalaya Wellness made a promising pitch to…]]>

Featuring on Shark Tank India Season 2 in February 2023, the founders of Nirmalaya Wellness made a promising pitch to woo investors about their premium incense sticks, fragrances and other products. They claimed the startup recycled more than 40 tonnes of flowers, collected donated flowers from more than 300 temples in Delhi each month to make these products.

Even without securing any funds from Shark Tank judges, Nirmalaya rode on its fifteen minutes of fame on the show. The founders focused on scaling up the business in this spotlight, but another controversy has now derailed these plans.

Officially launched in June 2021 by Bharat Bansal, Surbhi Bansal and Rajeev Bansal, the organic incense and fragrance brand competes with the likes of Phool and other legacy players in this space.

Cut to June 2023, Nirmalaya is on the verge of a potential legal battle. An FIR filed by Vikas Garg against the company and its founders claims that he is the original founder of the startup and that he was allegedly cheated out of his stake in the company.

In the FIR, registered last week, Vikas claimed that the startup he founded was taken over by Bharat, his wife Surbhi, and their family friend Rajeev, who ‘dishonestly’ forced him out of the company.

While Vikas alleges he was thrown out of his startup, the current founders claim that he voluntarily left the startup and has now come forward to stake a claim after Nirmalaya has gained fame.

The interesting thing to note here is that Vikas and Bharat are relatives and the whole affair looks like a big family feud. While the police uncover more details in the matter, here’s what we found on perusal of the FIR and speaking to both parties.

From Consultants To Founders

This is the broad timeline of the events as alleged in Vikas’ FIR against Nirmalaya and its founders:

  • February 28, 2020: Vikas Garg and Rajeev Bansal register Recycle Aastha Nature
  • Mid-2020: Rajeev approaches Bharat Bansal & Banbros Consulting to revamp the company
  • October 15, 2020: Vikas Garg resigns as a shareholder, transfers shares to Rajeev 
  • June 18, 2021: Bharat Bansal registers new company, Nirmalaya Wellness; adds Surbhi & Rajeev Bansal as directors
  • August 2022: Nirmalaya raises $800K funding
  • February 2023: Nirmalaya appears in Shark Tank
  • May 1, 2023: Vikas visits the factory, leading to a fight
  • May 3, 2023: Vikas, an unknown person visit the office, allegedly force employees out and lock the premises
  • May 15, 2023: Bharat registers a complaint
  • June 16, 2023: Vikas files FIR
  • June 21, 2023: Whistleblower emails FIR and allegations against founders

Speaking to Inc42, Nirmalaya CEO Bharat said that the company was incorporated on February 28, 2020, the same date as mentioned by Vikas in his FIR.

As per the FIR, seen by Inc42, Vikas and Rajeev had registered the company as Recycle Aastha Nature Pvt. Ltd. It was subsequently renamed to Nirmalaya Wellness Pvt. Ltd.

Bharat and Surbhi were not the original founders of the startup and they joined at a later date as consultants through Banbros Consulting, the CEO said. However, Vikas also claims that he hired Bharat Bansal as an additional director, even though he did not elaborate on the reason for this hiring.

Bharat told Inc42 that Vikas and Rajeev had “suffered a loss of roughly INR 60 Lakh-INR 70 Lakh”, following which the duo sought Bharat’s help to run the company.

Bharat claimed he joined the company on the condition that he would not work with Vikas, which Rajeev had allegedly agreed to.

After joining the company, Bharat said he undertook a complete overhaul, changing the product line to cater to the premium segment and rebranding the startup.

The group then filed a declaration for commencement of operations with the Registrar of Companies (RoC) on October 9, 2020.

According to Bharat, following this, Vikas resigned as a shareholder of the erstwhile Recycle Aastha Nature on October 15, 2020, and transferred his shares to Rajeev, who then transferred those shares to Bharat.

However, Vikas has disputed this turn of events in the FIR. He alleges that Bharat and Surbhi ‘forcefully’ took 300 shares owned by him by allegedly forging his signature on a letter of resignation to oust him from the startup. As per the FIR, Vikas’ shares were worth INR 6 Cr, against Nirmalaya’s pre-money valuation of INR 22 Cr at the time.

Incidentally, Garg also resigned as a director of the company in May 2021, claimed Bharat. This claim is corroborated by the documents filed by the company with the Ministry of Corporate Affairs (MCA), as per which Garg resigned on May 10, 2021.

After changing its name to Nirmalaya, the startup raised $850K across two rounds. According to their Shark Tank India pitch, Nirmalaya’s founders diluted a 20% stake during the last funding round.

A Scuffle And An FIR

The ownership dispute took a violent turn on May 1, 2023, when the concerned parties met at Nirmalaya’s factory in Delhi NCR.

In the FIR, Garg claimed he had gone to the Nirmalaya factory with his family members to meet Bharat’s family to find an ‘amicable solution’.

However, this is where things get complicated. In the FIR, Vikas claims that Bharat pushed his father. But separately Bharat alleged that Garg entered into a scuffle with his father.

Inc42 has seen video footage of a scuffle, but this footage does not clearly show the identity of any of the alleged assailants.

Further Bharat also alleged that Vikas forced the employees out of the office and locked the premises in a subsequent meeting on May 3, 2023. Inc42 could not independently verify this particular claim despite being shown CCTV footage of the premises. 

While both Garg and Bharat went to the police to register a complaint against each other, Bharat’s complaint is still not registered as an FIR. He has now moved to a district court to convert his non-cognizable report into an FIR.

Both parties seem to more or less agree on the version of events except for the differing views on the alleged violence at the Nirmalaya factory on May 1.

At the moment, we don’t know if there is any truth to Garg’s allegations in the FIR or, indeed, Bharat’s counterclaims. Will the police investigation lead to a change in ownership at Nirmalaya?

Another Startup In A Tangle

Ownership issues have popped up now and then at Indian startups, with old founders and executives coming forward to claim ownership or shareholding.

A case in point is Paytm. In 2021, a former director of the company, Ashok Kumar Saxena, alleged that he owned a 55% stake in the fintech giant. However, he lacked documentary evidence to support his claim and the police could not bring a case against Paytm or investigate the matter.

Sometimes, none of the parties involved wants anything to do with a startup. For instance, last year’s controversy around WazirX saw Binance and Nischal Shetty refuse to take ownership of the crypto platform. The two companies are still fighting over who owns what aspect of WazirX.

While Nirmalaya’s story appears to be a family feud at a cursory glance, more details are set to come to light as police investigate the matter.

The post Ownership Battle Erupts At Nirmalaya Wellness After Shark Tank Fame appeared first on Inc42 Media.

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Exclusive: Peak XV To Invest In Grapevine, A 6-Month-Old Anonymous App For Professionals https://inc42.com/buzz/exclusive-peak-xv-to-invest-in-grapevine-a-6-month-old-anonymous-app-for-professionals/ Tue, 20 Jun 2023 14:17:35 +0000 https://inc42.com/?p=402910 Bengauru-based anonymous social media app Grapevine is in talks to raise its maiden funding round from Peak XV Partners (formerly…]]>

Bengauru-based anonymous social media app Grapevine is in talks to raise its maiden funding round from Peak XV Partners (formerly Sequoia Capital India).

The six-month-old social media platform will be raising around $3 Mn in its seed funding round, which will be led by Peak XV Partners, sources told Inc42. 

The talks are in final stages and an official announcement is likely soon, the sources said, adding that the funding round will also see participation from some angel investors. 

Grapevine and Peak XV Partners refused to comment on Inc42’s queries on the funding talks.

Started by first time founders Saumil Tripathi, Jainam Talsania, and Shreeyash Dharmadhikari, Grapevine is a social media platform for corporate and startup employees. It enables employees to discuss various issues, including salaries, hiring, layoffs, and work culture, anonymously. 

While the concept of an anonymous platform for office-related discussions is not new, Grapevine has gained popularity in the country within a short span of six months, especially among India’s growing startup community.

The platform has multiple “Communities” for different topics to allow its users to participate in discussions as per their choice. It was launched in January this year and currently claims to have over 30,000 users.

As per its LinkedIn page, the startup currently has 8-9 employees.

Grapevine’s app was initially launched on both iOS and Android stores. With a steady growth in users, the platform also launched a web version last week to allow users to post from their laptops. Currently, it allows users to post text without any-specific word limit, unlike Twitter. Users can also post images, links, and run a poll.

Globally, Grapevine competes with Blind, which has already mopped up over $60 Mn in funding. Meanwhile, in India, it locks horns with Hood (formerly known as Zorro). 

Hood, founded by Jasveer Singh, Abhishek Ashthana, and Deepak Kumar in 2021, defines itself as a pseudonymous social network. It raised $3.2 Mn in a seed round in December 2021 from startup founders, including Vijay Shekhar Sharma, Ritesh Agarwal, Lalit Keshre, Jitendra Gupta, and other angel investors. The social media app also raised INR 1.2 Cr from Peyush Bansal and Aman Gupta during Shark Tank India Season 2. 

Grapevine is in talks to raise​​ capital at a time when many social media platforms have been laying off employees to cut costs amid the ongoing funding winter. Google-backed ShareChat, Koo, and VerSe Innovations (parent entity of DailyHunt and Josh) are among such Indian platforms which have laid off employees over the last few months. 

On Monday, Inc42 exclusively reported about short-video platform Chingari laying off around 20% of its workforce. 

Globally, Twitter, LinkedIn, and Meta, which runs Facebook, WhatsApp, and Instagram, have also trimmed their workforce in recent times.

The post Exclusive: Peak XV To Invest In Grapevine, A 6-Month-Old Anonymous App For Professionals appeared first on Inc42 Media.

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Exclusive: Weeks After Cofounder’s Exit, Short-Video App Chingari Lays Off 20% Workforce https://inc42.com/buzz/exclusive-weeks-after-cofounders-exit-short-video-app-chingari-lays-off-20-workforce/ Mon, 19 Jun 2023 16:26:10 +0000 https://inc42.com/?p=402799 There seems to be no end to layoffs in the Indian startup ecosystem, as short-video app Chingari has now fired…]]>

There seems to be no end to layoffs in the Indian startup ecosystem, as short-video app Chingari has now fired 20% of its workforce.  

According to its LinkedIn page, Chingari has around 240 employees, which means it has laid off around 48 employees. 

The development comes weeks after Chingari cofounder Aditya Kothari quit the startup.

The impacted employees were informed about the layoffs by the HR team during one-on-one interactions on Monday (June 19), sources told Inc42, adding that the employees working at Mumbai and Bengaluru offices of the startup were impacted. 

While employees across teams lost their jobs, the tech team was impacted the most, the sources added.

Chingari has offered a two-month salary as severance pay to the affected employees and extended their health insurance by three months. 

The startup confirmed the development with Inc42. A spokesperson of Chingari said in a statement, “We deeply regret the need for these workforce reductions of 20% as a part of Chingari’s organisational restructuring. These were one of the toughest decisions for our management and we understand the impact they have on our employees. We are appreciative of their contributions and commitment to Chingari.”

Chingari, founded in 2018 by Aditya Kothari, Biswatma Nayak, Deepak Salvi, and Ghosh, is an on-chain social app that enables users to upload videos, interact with friends, and share and browse content. 

Chingari also has a native cryptocurrency token, GARI. The app enables short-form video creators to monetise their content on the blockchain.

The Chingari app is currently available in India, the UAE, Indonesia, Turkey and the US. 

The layoffs at Chingari come at a time when both cryptocurrency and short-video apps are struggling

The restructuring exercise also comes four months after Chingari bagged an undisclosed amount of funding from Aptos. The startup then said it would use the fresh funds for user growth, product development, global expansion, and to ramp up its engineering team. It needs to be highlighted that as per media reports, the startup was eyeing entering the unicorn club and was in talks to raise much more capital than what it actually raised. 

In October 2021, Chingari raised $19 Mn in an extended Series A token-based round led by Republic Crypto, Galaxy Digital, Alameda Research, and Solana Capital. However nine months later, GARI slumped over 80%. At the time of filing this story, Gari was trading at $0.037, as per Crypto.com. 

Chingari’s net loss widened 225% to INR 139.4 Cr in FY22 from INR 42.8 Cr in FY21. Meanwhile, total income rose 135X to INR 49.4 Cr from INR 36 Lakh in FY21. 

With the layoffs, Chingari has joined the long-list of Indian startups which have fired employees since last year amid the ongoing funding winter. As per Inc42’s layoff tracker, Indian startups have laid off over 27,000 employees since 2022.

Earlier today, it was reported that BYJU’S is undertaking another round of layoffs, which could see over 1,000 employees losing their jobs.

The post Exclusive: Weeks After Cofounder’s Exit, Short-Video App Chingari Lays Off 20% Workforce appeared first on Inc42 Media.

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Exclusive: IPO-Bound Mamaearth To Shut Momspresso’s MyMoney, Brand Marketing Vertical https://inc42.com/buzz/exclusive-ipo-bound-mamaearth-to-shut-momspressos-mymoney-brand-marketing-vertical/ Wed, 14 Jun 2023 00:30:51 +0000 https://inc42.com/?p=402169 IPO-bound D2C unicorn Mamaearth will shut Momspresso MyMoney, the influencer engagement platform of Momspresso, later this month due to the…]]>

IPO-bound D2C unicorn Mamaearth will shut Momspresso MyMoney, the influencer engagement platform of Momspresso, later this month due to the latter’s mounting losses, sources told Inc42.

Mamaearth acquired the parenting platform Momspresso in 2021 for INR 152.3 Cr. Momspresso currently operates three verticals – user generated content platform (blogging platform), brand marketing, and MyMoney.

According to Inc42 sources, in a town hall meeting in the first week of April, Momspresso’s top management, including the cofounders, informed the employees about the decision to shutter MyMoney.

“MyMoney has been witnessing a drop in sales since its acquisition by Mamaearth,” said another source added. 

The D2C beauty unicorn is also likely to shut Momspresso’s brand marketing business, multiple sources informed us.

The sources also said that Momspresso recently laid off over 80-100 employees from both the verticals. Employees in tech, content, customer service, marketing, and product roles were majorly impacted amid this move. 

The sources said that Mamaearth took the decision to shut the loss-making verticals because of its upcoming initial public offering (IPO).

Multiple emails sent to Mamaearth and Momspresso cofounder Vishal Gupta seeking comments on the developments remained unanswered till publishing this story. 

However, Momspresso’s MyMoney app is no longer available on Google PlayStore, while the iOS app is plagued with glitches. 

Inc42 also learnt that Momspresso had previously conducted a restructuring exercise in December 2022 to cut costs. 

The sources quoted above also said that Gupta, and Prashant Sinha, another confounder of Momspresso, have started a new marketing agency and hired about a dozen employees laid off by Momspresso. The marketing agency began its operations last week.

Momspresso: Mamaearth’s First Acquisition Turns Sour?

Momspresso, a user-generated women-focussed content platform, was the first acquisition of the beauty and personal care unicorn Mamaearth in 2021. The acquisition was meant to expand Mamaearth’s content and influencer management capabilities.

Founded in 2016 by Gupta, Sinha, and Asif Mohammed, Mamaearth focusses on providing parenting tips and pregnancy advice to mothers. Its content is largely generated by women in English, Hindi, and eight other regional languages. 

Momspresso launched MyMoney in 2019. It allowed individuals to work as micro-influencers for brands on the MyMoney platform by participating in marketing campaigns and posting relevant content on their social media handles.

Meanwhile, Momspresso’s brand marketing vertical works as a third-party agency to develop content for brands in both video and article formats. 

As per Mamaearth’s DRHP, the net value (assets minus liabilities) of Momspresso was INR 16.2 Cr at the time of its acquisition in December 2021. However, Mamaearth acquired a majority stake in it for INR 152.3 Cr. Mamaearth paid INR 136 Cr for “goodwill arising on acquisition,” the DRHP showed. 

In FY22, Momspresso’s loss widened 42X to INR 10.9 Cr from INR 25.7 Lakh in the previous fiscal year. Its revenue increased a mere 1.1X to INR 31.2 Cr from INR 27 Cr in FY21. 

Mamaearth acquired two more businesses after purchasing a majority stake in Momspresso – Dr Seth’s and BBlunt

Startups Shelve Loss-Making Businesses To Navigate Downturn

The latest developments at Mamaearth come at a time when Indian startups, especially unicorns, are shifting focus to their core business and shutting down loss-making verticals to achieve profitability.

Last year, Bhavish Aggarwal-led Ola shut its quick commerce delivery platform Ola Dash and used car marketplace Ola Cars. Apart from this, food delivery giant Swiggy shut Handpicked, a gourmet grocery delivery vertical, in May this year. Earlier, Swiggy also sold its kitchen infra business, Access, to Kitchens@ in March and shut its private label The Bowl Company in Delhi NCR late last year.

However, it must be noted that Mamaearth turned profitable in FY22 and also posted a net profit in the first half of FY23.

It reported a consolidated operating revenue of INR 943.4 Cr in FY22, up 105% year-on-year (YoY), while its net profit stood at INR 14.4 Cr as against a loss of INR 1,332 Cr in FY21. Similarly, the company reported an operating profit of INR 732 Cr and a net profit of INR 3.6 Cr in the first six months of FY23. 

The post Exclusive: IPO-Bound Mamaearth To Shut Momspresso’s MyMoney, Brand Marketing Vertical appeared first on Inc42 Media.

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Exclusive: Troubles Erupt For Urban Company As Beauticians Protest ID Bans https://inc42.com/buzz/exclusive-troubles-erupt-for-urban-company-as-beauticians-protest-id-bans/ Mon, 12 Jun 2023 18:27:02 +0000 https://inc42.com/?p=402022 Amidst a growing wave of gig workers speaking out against alleged unfair employment practices employed by various startups, a large…]]>

Amidst a growing wave of gig workers speaking out against alleged unfair employment practices employed by various startups, a large group of beautician partners on Monday (June 12) gathered at the Gurugram office of Urban Company to raise the issue of purported permanent blocking of IDs by the company.

Inc42 team spoke with over a dozen partners present at the premises, who said that the company has made its partner policies stringent over time causing distress to them.

The Urban Company beautician partners have been facing the issue of frequent blocking of IDs for nearly a year now. However, the problem has accelerated over the past couple of months.

According to the protesting workers, the company has been blocking their IDs (both temporarily and permanently) due to issues such as booking cancellations, and a fall in user rating, just to name a few. 

Notably, the group of agitating partners said that earlier the company’s beautician partners had to maintain a minimum rating of 4.5 to be eligible for operating on the app. Now, they have to keep a minimum rating of 4.7, which has only added to their burdens.

“Often, clients don’t pick up our calls to avoid cancellation charges, making us the scapegoats. They then resort to filing a complaint against us, on the platform, for not reaching on time. After multiple such instances, the company applies a cancellation charge without verifying and even takes disciplinary action by blocking our IDs,” a partner said.

In a statement to Inc42, the company said that it has asked some of its partners to quit as they were unable to meet the “marketplace standards” despite multiple prior notices.

“We had recently asked a few partners who were not meeting the marketplace standards despite multiple prior notices and re-trainings, to part ways with the marketplace. We continue to maintain an open-door policy and encourage dialogue with our partners. We remain committed to building a safe, high-quality home services platform,” the company spokesperson said.

Gig Workers Face Issues Across Segments

The issue of blocked IDs is being faced by many Urban Company partners across segments, besides salon services providers, they claimed.

“The management is not giving any clear response to us. At times they are saying that our IDs will be unblocked tomorrow, sometimes they are saying it will take months. Nothing is concrete. They are not sharing anything in writing,” said one of the protesting partners.

While beauticians in the Delhi NCR region gathered at the Gurugram office to share their concerns, the partners in other cities such as Bengaluru and Kolkata also shared a similar sentiment. 

“The company is asking for the resubmission of security deposits, amounting an INR 25K to 30K to open new IDs, rather than unblocking old ones,” a Bengaluru-based Urban Company partner told Inc42.

Meanwhile, many partner beauticians are also facing issues regarding service bookings. We were told that if a partner has open slots for appointments, Urban Company’s app, at times, fails to show the availability of its partner beauticians, impacting their income. 

The protesting partners alleged that the company is promoting new beauticians on the platform. It is because of this that many old partners are unable to get repeat bookings.

Gig Worker Union Lays Out Demands 

Meanwhile, the Centre of Indian Trade Unions (CITU)-affiliated All India Gig Workers Unions (AIGWU) has also lent its support to the workers on strike. In a statement issued on Monday, AIGWU Secretary Saubhik Bhattacharya said that Urban Company was forcing the gig workers to work under exploitative practices and urged the company to listen to the demands of the workers. 

He also alleged that the consumer internet unicorn was using the wrong set of internal rules and automated systems, which is impacting the livelihood of many workers.

The AIGWU also issued a long list of demands for the Urban Company:

  • Reinstatement of permanently banned user IDs 
  • Permanent dissolution of the policy of permanent ID bans on the app
  • Maintaining a single system of ratings (user feedback), against systems based on cancellation, response and input rate
  • Decrease the minimum threshold of partner rating below the current 4.7 or 4.85
  • A weekly off for the protesting workers listed on the platform as well as a sick leave provision for pregnant and menstruating women partners.

Gig Workers Protests — Not The First Time

This is not the first time that Urban Company is in the limelight for causing alleged distress to its partners. 

Back in 2021, Urban Company salon partners staged protests against the company following changes in its policies. Back then, the company had also filed a civil suit against four protesters, citing the protest as illegal.

The agitation has come at a time when the company has been facing mounting losses amid a funding drought. Urban Company’s consolidated net loss more than doubled to INR 514 Cr in the financial year 2021-22 (FY22) from INR 249.2 Cr in FY21 on the back of its soaring expenses.

Compounding problems seem to be the rising competition from new-age tech operating in altogether different areas. Last month, Zomato CEO Deepinder Goyal said the foodtech company was looking to enter the at-home services space via its quick commerce vertical Blinkit.

As the latest agitation pans out, many similar platforms are also under the regulatory scanner for their alleged predatory employment practices. Amid rising complaints, the labour ministry, in April, held talks with multiple new-age tech startups, including Urban Company, to provide benefits such as life insurance, personal accident and health covers to their respective gig workers.


Update | June 15, 3:00 PM

The story has been updated to include the company’s statement.

The post Exclusive: Troubles Erupt For Urban Company As Beauticians Protest ID Bans appeared first on Inc42 Media.

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Exclusive: Prosus-Backed Airmeet Lays Off 30% Workforce https://inc42.com/buzz/exclusive-prosus-backed-airmeet-lays-off-30-of-its-workforce/ Thu, 25 May 2023 13:12:36 +0000 https://inc42.com/?p=400054 Virtual events platform Airmeet has become the latest Indian startup to layoff employees amid the funding winter. The Bengaluru-headquartered startup…]]>

Virtual events platform Airmeet has become the latest Indian startup to layoff employees amid the funding winter. The Bengaluru-headquartered startup fired about 30% of its 250-300 people workforce, or at least 75 employees, earlier this week, sources told Inc42.

The layoffs impacted multiple teams, including sales, marketing, tech, and operations. Besides India, employees working in the US, Europe, among others, were also impacted by the layoffs.

The sources said that the startup took the decision to layoff employees to increase its cash runway and improve operational efficiency amid a slowdown in the business.

In an internal mail, Lalit Mangal, cofounder and CEO of Airmeet, said the startup had to layoff employees as its ‘execution’ was not yielding the desired outcomes. Inc42 has accessed the mail sent by Mangal.

“…with drastically reduced marketing budgets everywhere and rapid commoditization of the virtual event category, our steadfast execution is not yielding the needed outcomes for retaining a healthy financial state,” Mangal said.

Highlighting that “AI-paradigm” will change everything about business processes and software, he said, “Airmeet has become a lean and nimble company again to build the new future of digital engagement for communities and companies.” 

The startup has offered two-months of salary as severance pay to the Indian employees and acceleration of vesting of all ESOPs options till June 30, 2023. It will also extend its health insurance coverage for these employees till August 18, 2023. 

It will offer severance pay to the impacted US employees as per the local regulations.

Mangal confirmed the layoffs with Inc42 but didn’t disclose the number of employees impacted.

The layoffs came more than a year after Airmeet raised $35 Mn in its Series B funding round from Prosus Ventures, Sistema Asia Fund, RingCentral Ventures, KDDI Open Innovation Fund, DG Daiwa Ventures and Nexxus Global. 

The funding round also saw participation from existing investors Sequoia Capital India and Accel India.

The startup mopped $12 Mn in its Series A round led by Sequoia Capital in September 2020. 

Founded in 2019 by Mangal, Vinay Kumar Jasti, and Manoj Kumar Singh, Airmeet is an online meeting and event hosting platform. It allows participants to also connect with other attendees for one-to-one and one-to-many online interactions.

Airmeet’s Indian entity, Airmeet Networks Pvt LTD, posted a 1.8X jump in net profit to INR 5 Cr in FY22 from INR 2.75 Cr in FY21. Revenue from operations increased over 1.9X to INR 75.8 Cr from INR 40 Cr in FY21. 

As per Inc42 layoff tracker, Indian startups have to date laid off around 27K employees since the beginning of 2022.

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Exclusive: CRED-Owned Happay Trims 35% Workforce In A Restructuring Move https://inc42.com/buzz/exclusive-cred-owned-happay-trims-35-workforce/ Sun, 14 May 2023 18:08:44 +0000 https://inc42.com/?p=398797 Fintech unicorn CRED-owned Happay has reduced its workforce by approximately 35%, sources privy to the development informed Inc42.  On Friday…]]>

Fintech unicorn CRED-owned Happay has reduced its workforce by approximately 35%, sources privy to the development informed Inc42. 

On Friday (May 12, 2023), teams were informed about the restructuring by their respective managers. 

According to Happay’s LinkedIn profile, the startup has more than 450 employees. This indicates that at least 160 employees across various departments, including sales, marketing, tech, product, and operations, were let go as part of the significant restructuring exercise.

As part of the severance package, the startup is offering employees three months’ salary along with additional benefits, such as an extension of insurance coverage and job placement assistance.

Another source has stated that the restructuring exercise was part of the annual appraisal cycle and was linked to employee performance.

Inc42 has reached out to CRED for comments. The story shall be updated as and when we receive more details from the company.

Founded in 2012 by Anshul Rai and Varun Rathi, Happay is a business expense, payments and travel management platform.

In December 2021, Kunal Shah’s CRED announced the acquisition of Happay in a cash and stock deal worth $180 Mn. 

“With professional expenses forming a significant portion of credit card spending, bringing professional expense management into the CRED ecosystem is a natural extension of our proposition,” CRED founder Kunal Shah had then said in a statement.

As part of the acquisition, it was announced that Happay would continue to operate as a separate entity, and all of its employees would also receive rewards under CRED’s ESOP schemes.

CRED, founded in 2018 by Kunal Shah, offers premium credit card users rewards and benefits for paying their bills. The fintech giant has also forayed into the ancillary services business built around its primary ecosystem of credit card-centric services.

Last year, CRED had also acquired lending-as-a-platform CreditVidya in a mix of cash and stock deal, to expand its credit products’ portfolio.

Over the last couple of months it has introduced several new features and services to expand its offering, these include:

  • Unified Payments Interface (UPI)-based peer-to-peer (P2P) payments system
  • CRED escapes — a curated travel platform that offers stays, experiences and ‘other privileges’ for CRED customers
  • Buy-now-pay-later (BNPL) product — CRED Flash
  • Tap-to-pay offering for retail payments using credit cards
  • Scan & Pay’ to enable its customers to make payments directly through their bank accounts.

In FY22, CRED saw its total revenue increase to INR 422 Cr, a 4.4X jump from INR 95 Cr in FY21, while its losses ballooned to INR 1,279 Cr, a 2.4X increase from INR 524 Cr. The fintech unicorn’s marketing expenses increased by 3X to INR 975 Cr from INR 324 Cr in FY21.

The startup, which is valued at $6.4 Bn, has raised over $800 Mn in funding since its inception. Last year, amidst the funding winter, CRED bagged $140 Mn as part of Series F round from Singapore’s GIC. CRED counts Sequoia Capital, Tiger Global, Alpha Wave, and Dragoneer Investments, among others, as its backers.

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