The week has been exciting for the startup fraternity across the country. We have a new Unicorn, a self-made rich list with 12 under 40 Indians, a new iPhone launch -- among many other exciting developments! Let's have a look at the startup ecosystem in the middle of October.
The top startup stories of the week:
Razorpay turns Unicorn with $100 million from GIC, Sequoia Capital India and Existing Investors
Fintech company Razorpay has raised Series D funding of $100 Million, which the company said has given it more than $1 Billion in valuation. This round was co-led by GIC, Singapore’s sovereign wealth fund and Sequoia India, along with participation from Ribbit Capital, Tiger Global, Y Combinator and Matrix Partners.
Razorpay plans to use the new funding to strengthen further and accelerate its two new product lines - RazorpayX, and Razorpay Capital. The funds raised will also be used towards hiring additional 500 employees by FY’21.
Startups likely to engage CCI in a tussle against Google - tech giant’s fifth anti-trust action in India: Reports
As per reports startup founders in a virtual meet held on October 10 have decided to approach the Competition Commission of India (CCI) against Google’s alleged anti-competition policies in India. The meeting involved 15 startup founders who discussed Google’s imposition of 30 percent commission on sales made through its Android Play Store and billing system for developers, two startup founders — part of the talks
The plan is to put together industry views and convey their grievances via written complaints to the CCI and the Ministry of Electronics and Information Technology (MeitY) this week, as per the report.
This will not be Google’s first brush with the CCI. In 2018 the Silicon Valley giant was slapped with Rs 1.36 billion fine for abusing its dominance with Google Search. The watchdog is currently also investigating Google in two other cases — dominance in the smartphone segment and abuse of market position to promote Google Pay app.
India’s startup ecosystem is recovering faster than expected – ‘COVID-19 and the Antifragility of Indian Startup Ecosystem’ Report
TiE Delhi-NCR has released ‘COVID-19 and the Antifragility of Indian Startup Ecosystem,’ report in partnership with Zinnov, a global management and strategy consulting firm. The report provides an in-depth understanding of the impact of COVID-19 on the Indian startup ecosystem, by assessing multiple dimensions like funding and M&A landscape, sectoral impact, entrepreneur and investor sentiments, and changing market behaviour.
The report highlights how COVID-19 took a toll on Indian startups as 15 percent have had to halt operations, and 44 percent have cash runway for less than six months. While the impact has been severe, several sectors have recovered to pre-COVID level.
However, as the economy opened, the report suggests that the pace of recovery – both in demand and in investor sentiment – has been faster than expected. Shift to digital consumption has provided the necessary tailwind to sectors such as education, healthcare, and commerce; while several sectors like travel, hospitality, and mobility, that were negatively impacted, are now on a recovery path.
Further, deal activity – both in terms of total investments and the number of unique funded startups – has recovered to pre-COVID levels during the quarter that ended in September 2020. Interestingly, four Indian startups have become unicorns amidst COVID-19, and India is on track to have eight unicorns in 2020 – almost the same number of additions as in 2019.
IIFL Wealth Hurun India 40 & Under Self-Made Rich List 2020
With a combined wealth of Rs 24,000 crore, Zerodha’s Nithin Kamath and Nikhil Kamath tops IIFL Wealth and Hurun India’s ’40 and under self-made rich list 2020’. The Kamath brothers are followed by Divyank Turakhia with a net worth of Rs 14,000 crore.
Udaan’s founding team of Amod Malviya, Sujeet Kumar and Vaibhav Gupta are at number three. While, Devita Saraf (39), founder of Vu Technologies is the only woman in the list.
With a wealth of Rs 7,800 Cr, Riju Ravindran, 39, of online education platform, Byju’s secured the 6th spot in the list. With a wealth of Rs 7,500 Cr each, co-founders of Flipkart, Binny Bansal, 37, and Sachin Bansal, 39, shares seventh position in the list.
Bhavish Aggarwal, 35, and Ankit Bhati, 34, co-founders of ride-hailing company Ola Cabs ranks 10th and 14th in the 40 and under list with a wealth of Rs 3,500 Cr and Rs 1,600 Cr respectively,
As per the list, the entrepreneurs cumulatively added a wealth of Rs 44,900 crore, registering an increase of 59 percent compared to last year. Bengaluru is the city that houses the business headquarters the most individuals on the list – nine, followed by two each in Delhi and Gurugram.
The average age on the list is 37, and the youngest entrepreneur is Oyo Rooms’ Ritesh Agarwal (26). Logistics and Retail are the significant contributors of wealth for entrepreneurs.
PE/VC investments recorded a 21 percent y-o-y decline during Jan-Sept 2020: IVCA-EY report
According to the IVCA-EY monthly PE/VC roundup, the Jan-Sept period recorded investments worth US$28.9 billion across 686 deals, on the back of US $11.7 billion invested in Jio Platforms and Reliance Retail by a group of PE/VC funds.
For the period Jan-Sept, exits declined by 54 percent in terms of value in 2020 (US $3.6 billion vs US $7.8 billion in 2019) and is the lowest value in six years for the period under consideration. In terms of volume, exits declined by 13 percent compared to 2019 (100 deals in 2020 vs 115 deals in 2019). The decline was mainly due to fewer large deals.
The period Jan-Sept, 2020 saw US $4.4 billion in fundraising; 45 percent lower compared to the same period last year (US $7.9 billion in 2019). There were only nine fundraises of over US $100 million in 2020 (year-to-date) compared to 19 in the same period last year.
The largest fundraise in 2020 saw Sequoia raise a US $1.4 billion venture fund for investments in India and Southeast Asia followed by Nalanda Capital’s US $748 million fundraise.
Unacademy to buy back shares worth Rs 25-30 crore
Edtech startup Unacademy to buy back shares from current and former employees worth Rs 25-30 crore, the latest in a series of quickly maturing companies which are giving employees some liquidity and rewarding their loyalty.
As many as 145 current and former employees are expected to exercise their option to sell their Employee Stock Option Plans (ESOPs), given to early employees who join a startup as part of their salary.
All options vested till December 10 will be counted for the buyback. Unacademy had also done a smaller ESOP buyback of about Rs 2.5 crore in September last year.
Apple launches new iPhone 12
Tech Giant Apple launched four new iPhone 12 phones as part of its 2020 series -- iPhone 12, iPhone 12 Mini, iPhone 12 Pro & a Max variant of the Pro.
All new iPhones support 5G technology and are packed with the latest A14 Bionic under the hood. In terms of the India process, these devices start from INR 69,900 iPhone 12 Mini, going all the way up to Rs 129,900 for iPhone 12 Pro Max. Apple also unveiled a compact smart speaker called the HomePod mini.
Zoom will start rolling out phase 1 of end-to-end encryption from next week
Video conferencing platform Zoom will begin rolling out end-to-end encryption for users starting next week, the company said in a blog post. Zoom has seen a huge upsurge in its user base, owing to the boom in remote working due to the COVID-19 pandemic.
However, Zoom’s fortunes came with doubts over the platform’s security. Further, misleading claims of having end-to-end encryption when it didn’t make the concerns over Zoom’s privacy and security more prominent. Now, end-to-end encryption is on its way to Zoom, for real this time.
The rollout next week will be a technical preview, meaning that Zoom will take feedback from customers for the next 30 days to make sure its encryption is intact. “Zoom users – free and paid – around the world can host up to 200 participants in an E2EE meeting on Zoom, providing increased privacy and security for your Zoom sessions,” the company said in its blog post.
YouTube bans conspiracy theory content targeting individuals or groups
YouTube is tightening its rules on conspiracy theory content, including QAnon & pizzagate, that targets individuals and groups. The company announced that it is expanding its hate and harassment policies to ban videos “that
Instagram agrees to curbs on paid influencers, says UK watchdog: Reuters
Instagram has agreed on measures to crack down on hidden advertising by so-called influencers on its photo and video platform as per Britain’s Competition and Markets Authority (CMA).
Influencers with thousands of followers can earn large fees from companies to promotes a product on Instagram. In what the CMA described as an important behaviour shift by a major social media platform, Facebook Ireland, which operates Instagram in Britain, has committed to a package of changes.
“This will make it much harder for people to post an advert on Instagram without labelling it as such,” the CMA said in a statement.
US court agrees to expedite government TikTok app store ban appeal: Reuters
A US appeals court agreed to fast-track a Justice Department appeal of a ruling blocking the government from banning new TikTok downloads from US app stores.
US District Judge Carl Nichols in Washington issued a preliminary injunction on September 27 that barred the US Commerce Department from ordering Apple Inc and Alphabet Inc’s Google app stores to remove the Chinese-owned short video-sharing app for download by new users.
A US appeals court in Washington said all briefs are due by November 12 with oral arguments to follow. The government’s opening brief is due on Friday
Dropbox becomes ‘Virtual First’ company
Cloud storage company Dropbox will now allow all its employees to work from home as we advance to June 2021.
The company in a blog post said ‘Starting today, Dropbox is becoming a Virtual First company. Remote work (outside an office) will be the primary experience for all employees and the day-to-day default for individual work.’
The moves come after the company conducted an internal survey where they found that most employees say they’re able to be productive at home (nearly 90 ) and don’t want to return to a rigid five-day in-office workweek.
The company also announced that it would convert its existing real estate properties into flexible co-working spaces called ‘Dropbox studios’ to facilitate collaborative & team building work.
SOFTBANK: In Headlines
SoftBank Vision Fund seeking cash for a blank-cheque firm: Report
SoftBank Group Vision Fund is targeting external funding for a blank-cheque acquisition company it plans to launch, according to a report by Reuters. SoftBank is likely to put also its capital into the company, whose size is undetermined as per the report. Details of the vehicle will be revealed in the next two weeks.
Softbank invests in ed-tech startup Kahoot
Softbank has invested $215 million in ed-tech startup Kahoot. SoftBank took a 9.7 percent stake in the company, as demand for online learning platforms skyrocketed during the COVID-19 pandemic. The Oslo-based firm plans to use the funding to accelerate the growth through value-creating non-organic opportunities and to build the platform.
Over the last 12 months, the ed-tech startup claims it has witnessed 45% percent growth in users with over 20 million active accounts and reached 360,000 paying subscriptions in Q3 2020, a 160 percent year-on-year increase year over year. The company aims to reach 400,000 before the end of the quarter.
SoftBank in talks to back SaaS startup Mindtickle, valuation to double in a year: Moneycontrol
Japan’s SoftBank Group is in advanced discussions to lead a $100 million round in software-as-a-service firm Mindtickle, marking its first SaaS deal from its India team, said two people aware of the matter, requesting anonymity.
The investment will value Mindtickle at $500-600 million, double the $250 million it was valued at in July last year when Norwest Venture Partners led a $40 million round.
TOP FUNDING NEWS OF THE WEEK
First Published: Oct 16, 2020 10:15 PM IST
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