Here are the top headlines from the start-up space.
Fintech platform MobiKwik eyes New Year listing
MobiKwik, one of India’s largest mobile wallets and Buy Now Pay Later (BNPL) players, is looking to get listed as soon as the next year, Upasana Taku, co-founder and COO of the company, said. Taku said the company is awaiting the final audit numbers and will go public soon after that.
"Bravado in entering the market does not make sense," said Taku in an interview with CNBC-TV18. "We have to be smart before going public, especially after building a company for 12 years," she said.
Taku said the company is capital sufficient and has seen 100 percent revenue growth in the last few years with the business being close to profitability now. Talking about FY21 business, she said the numbers did not demonstrate the company's full potential due to COVID-19.
"Want to show a clear path to financial performance in April-December numbers," said Taku.
According to Taku, the growth opportunity in payments and 'Buy Now, Pay Later' business is immense. "Paytm and MobiKwik are very different despite starting as wallet companies," said Taku.
Multiple sources recently told CNBC-TV18 that the fintech start-up was deferring its plans to go public by a few months amid concerns over investors’ interest and scepticism about its business model. The company had filed its papers for a Rs 1,900-crore initial public offering (IPO) in July.
upGrad to acquire Talentedge for Rs 400-500 cr
Edtech unicorn upGrad has entered into an exclusive agreement to acquire online higher education business Talentedge Education Ventures.
The deal size is pegged at Rs 400-500 crore. Once completed, the deal could be one of the largest consolidations in the Indian higher education space. Talentedge is slated to have a revenue of over Rs 130 crore this year and double its revenue in the coming year, as per reports.
This is upGrad’s ninth acquisition so far and there is likely to be more. The firm is in the active stage of closing a few larger acquisitions in India as well as abroad that will be announced over the next one to two quarters, the reports added.
Mensa Brands acquires its 13th brand - home décor label Folkulture
Mensa Brands has acquired its 13th brand which is a home decor brand Folkulture.
The brand founded in 2015 retails largely on Amazon in the US, Canada and UK, apart from other online platforms. Some of its product categories include kitchen & dining linen, home décor, incense holders, Mandala tapestry, and more.
The move comes after Mensa recently became India's fastest growing unicorn following raising $135 million in Series-B funding.
Mensa plans to deliver strong growth for Folkulture by strengthening the brand among consumers. Its association with Folkulture will prepare it for a stage of rapid growth and expansion within existing and new markets.
“We will also be looking at adding more channels and products for the brand in the months ahead, while also strengthening its presence in key global markets,” said Ananth Narayanan, Founder and CEO of Mensa Brands.
Mensa runs a model similar to US-based Thrasio and competes with the likes of GlobalBees, Upscalio and GOAT Brand Labs.
Azah doubles revenue post acquisition, eyes Rs 100 cr run rate by 2024
Women’s wellness brand Azah which was recently acquired by Thrasio style start-up Powerhouse91, has doubled its revenue post acquisition while growing almost 50 percent MOM in October alone.
Azah’s growth comes on the back of increasing awareness about premium wellness and hygiene, particularly in products like sanitary pads. In fact, the feminine hygiene market was valued at Rs 32.66 billion in 2020, and is expected to grow at a compounded annual growth rate (CAGR) of 16.87 percent, as per the company.
Leveraging Powerhouse91’s expertise in product and channel expansion, along with optimisations in marketing and supply chain, Azah is looking to expand to a broader set of demographics and geographies.
WhatsApp announces incubator programme; will select 10 firms to build digital health solutions in India
Meta-owned WhatsApp has announced an incubator programme in India that will select 10 organisations and help them build digital solutions to tackle critical health issues.
Called the WhatsApp Incubator Programme (WIP), the initiative aims to facilitate positive and measurable health outcomes at scale by leveraging the WhatsApp Business Platform.
"We hope the WhatsApp Incubator Programme brings forth more such innovative and unique solutions that will help solve India's healthcare needs," said Abhijit Bose, Head of WhatsApp India.
The 10 selected organisations will be guided through a design thinking-led process to build a deeper understanding and applicability of their WhatsApp-powered solution. The selected organisations will also be provided with technical support in order to design, prototype and pilot their health use cases.
PayPhi launches Tokenisation service for businesses on RuPay
PayPhi, Phi Commerce’s API-first digital payments platform has become the first certified tokenisation service for NPCI Tokenisation System (NTS) that supports the tokenisation of RuPay cards.
To further enhance the safety of online transactions, RBI has issued a set of guidelines to store sensitive customer information in the form of encrypted ‘token’. To comply with this guideline, NPCI announced the launch of NPCI Tokenisation System (NTS) to support tokenisation of cards as an alternate to storing card details with merchants.
NPCI’s NTS platform enables PayPhi Tokenisation service to provide partner merchants and aggregators with Token Reference on File (TROF). TROF is a unique digital identifier aka ‘token’ which replaces the 16-digit RuPay card number. Whenever any RuPay cardholder consents to save their card with an online merchant or payment gateway, PayPhi Tokenisation service will obtain a unique TROF from NPCI’s NTS platform.
New and existing merchants and aggregators will be able to integrate in a matter of days and start processing token-based transactions. PayPhi Tokenisation service ensures seamless migration of existing cards on file to NPCI TROF, thereby ensuring business continuity, the company said in a statement.
“Plug and play tokenisation services like PayPhi will help various players in the digital ecosystem meet the RBI deadlines of replacing cards of file data with secure tokens,” said Nalin Bansal, Chief of Corporate Relationships & Fintechs, NPCI.
Phi Commerce is a digital payments fintech start-up that addresses payments collection, processing and distribution requirements of networks, banks, processors & businesses across online, in-store and on-the-go channels through its omnichannel, API-first platform PayPhi.
Govt has no plans to boost cryptos in India: Finance Ministry
The government has no plans to boost the cryptocurrency sector in India, the Finance Ministry told the Parliament in a reply to a query in Lok Sabha on Monday. It added since cryptocurrencies are unregulated in the country, the government does not collect data on the sector.
A Bill on Cryptocurrency and Regulation of Official Digital Currency is expected to be taken up during the seventh session of the seventeenth Lok Sabha, it said. In the bill, the government plans to ban all private cryptocurrencies, "with certain exceptions." It is also seeking to build a framework for the adoption of a central bank digital currency (CBDC). A CBDC is introduced by central banks, as opposed to private players, Fin Min said.
The Ministry was asked the details of the predictability of CBDC and utility in banking transactions. To this, the Fin Min replied that CBDC has "the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk."
"Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated, and legal tender-based payments option," it added. However, it warned there are associated risks, which need to be evaluated against the potential benefits.
The Ministry also said that since the CBDC would be backed by the RBI, it will not witness "volatility associated with the private cryptocurrencies."
This, as Bitcoin tumbled almost 5% on Monday as the start of the week offered little respite to the world's largest cryptocurrency after a bruising weekend where at one point it lost over a fifth of its value.
Most of India's $1.1-trillion growth in next 11 years can come from yet-to-be-invented digital businesses: USISPF-Crosstower report
Most of India’s $1.1-trillion in total economic growth in the next 11 years can come from ancillary digital assets-related businesses that are yet to be invented, according to a report released by the US India Strategic and Partnership Forum (USISPF) and Crosstower.
In 2013, the market capitalisation of the digital assets market was approximately $1.5 billion. The report suggests that today, the market capitalisation is nearly $3 trillion.
According to the report, most of India’s $1.1 trillion in the total economic growth in the next 11 years can come from ancillary digital assets-related businesses that are yet to be invented.
The report shows how India can leverage the digital asset opportunity by adopting Web 3.0 and why blockchain technology is self-sufficient for digitising India’s financial ecosystem.
India is poised for growth to become a $5-trillion economy by 2024-25 as envisioned by Prime Minister Narendra Modi. Digital assets are expected to have tremendous potential in the next 11 years across countries due to their rapid adoption.
The report noted that the adoption rate of digital assets (as reflected by accounts opened on centralised cryptocurrency exchanges) is growing nearly twice as fast as that of the Internet. From digital art to ticket sales, music, collectables, luxury items and gaming, non-fungible tokens (NFTs) could transform the way people interact day-to-day. While still nascent, NFTs are projected to emerge into a market of $1-trillion or more, it said.
India’s payments transaction volumes grew 53% in 12 months, says RBI’s P Vasudevan
Despite the COVID-19 pandemic, there has been a 53 percent increase in the volume of payments transactions in the past 12 months. There has also been an increase of 28 percent in the same period, according to P Vasudevan, chief general manager, Payment and Settlement Systems, Reserve Bank of India (RBI).
Vasudhevan, who was speaking at the Digital Money Conference organised by the Payments Council of India (PCI), said the compounded annual growth rate (CAGR) for the last five years was 42 percent in volume terms, which is a sign that growth during the last 12 months has outpaced that of the last five years.
“Today, we process 21.79 crore payments transactions on a daily basis. It is heartening to recollect that in December last year RTGS was made operational 24x7x365. Till date, many initiatives have been undertaken to capitalise on this. Payment systems like NACH, and Bharat Bill Payment were enabled to settle on weekends. The number of settlements in a week has increased by 200, thereby bringing down the credit and settlement risks in the ecosystem,” stated Vasudevan.
LeadSquared, Niro partner to take on embedded consumer finance space
IT company LeadSquared has entered into a partnership with embedded consumer lending platform Niro. The partnership is aimed at enabling Niro's new customer on-boarding operations through LeadSquared’s highly scalable solutions, to deliver end-to-end sales execution and marketing automation solution for their customer lifecycle journey.
LeadSquared’s features will enable Niro to maximise the efficiency of its sales teams and complement their day-to-day activities. Additionally, LeadSquared will help Niro by generating a complete 360° view into its sales funnel and drive greater engagement through highly personalised marketing activities, the company said in a statement.
LeadSquared Marketing Automation helps businesses identify user engagement levels through intelligent scoring and build highly targeted email campaigns to improve those levels.
According to an estimate by a UK investment firm - Anthemis, the global embedded finance landscape will become a $7-trillion market by 2030.
GLOBAL TECHNOLOGY & START-UP NEWS
Alibaba overhauls e-commerce businesses, names new CFO
Alibaba Group Holding will reorganise its international and domestic e-commerce businesses and replace its CFO - changes that come as the tech giant grapples with an onslaught of competition, a slowing economy and a regulatory crackdown, Reuters reported.
It will form two new units - international digital commerce and China digital commerce which it said was part of efforts to become more agile and accelerate growth. The international digital commerce unit will include AliExpress which sells to retail buyers particularly in Europe and South America, its Southeast Asian e-commerce business Lazada and Alibaba.com which is more focused on selling to overseas business customers.
It will be headed by Jiang Fan, who had been in charge of its main Chinese retail marketplaces, and the change is seen in line with Alibaba's aim to make 'globalisation' a key focus area in addition to cloud computing and domestic consumer spending.
The China digital commerce unit will include Alibaba's two main marketplaces, Tmall for established brands and Taobao which welcomes all kinds of merchants. It will be led by Trudy Dai, who has previously overseen a number of Alibaba platforms.
Alibaba also announced that deputy chief financial officer Toby Xu will succeed Maggie Wu as CFO from April, describing his appointment as part of the company's leadership succession plan. Xu joined Alibaba from PWC three years ago.
Hit by weaker growth for the economy and fierce competition from a plethora of rivals, Alibaba last month slashed its forecast for annual revenue growth to its slowest pace since its 2014 stock market debut. It also saw sales at its banner event, online shopping festival Singles Day, grow at their slowest rate ever.
Chinese regulators have also cracked down on the tech and other sectors, particularly on anti-trust issues that have seen Alibaba abandon a policy of requiring merchants to exclusively set up shop on its platforms. The company was fined a record 18 billion yuan ($2.8 billion) in April for abusing its dominant market position.
Tech giant SoftBank’s shares get hit as Alibaba and Didi see stock slide
SoftBank Group shares fell by more than 8 percent on Monday as the value of its portfolio companies continued to slide.
The Japanese tech giant’s share price fell from 5201 yen ($46) to 5103 yen on the Tokyo stock market. At one point, shares fell as low as 5,062 yen, their lowest level since June 2020, CNBC reported.
The fall in SoftBank’s share price, which marks its seventh consecutive day of losses, comes amid a period of uncertainty around some of the company’s biggest bets and a broader regional sell-off of tech stocks in Asia.
Chinese e-commerce firm Alibaba — SoftBank’s most valuable company — saw its market cap fall by several billion dollars Monday after the company announced a restructure.
The changes come as Alibaba faces headwinds on multiple fronts, including increased competition, a slowing economy and a regulatory crackdown.
Meanwhile, SoftBank-backed ride-hailing firm Didi Chuxing announced last week that it plans to de-list from the New York Stock Exchange less than six months after its IPO. The Chinese firm said it plans to relist on the Hong Kong Stock Exchange.
Shares of Didi have plunged 57% since its IPO on June 30, and closed at $7.80 on Friday.
SenseTime launches Hong Kong IPO to raise up to $767 mn as per term sheet
Chinese artificial intelligence start-up SenseTime Group is looking to raise up to $767 million in its Hong Kong initial public offering (IPO), according to a term sheet seen by Reuters.
The deal launched on Monday for the company to sell 1.5 billion primary shares within a price range of HK$3.85 to HK$3.99 each, the term sheet said.
Demand from investors to buy SenseTime's shares had already covered the institutional tranche of the IPO within hours of it launching, three sources told Reuters.
Ahead of the launch, eight cornerstone investors have signed up for the IPO and subscribed for $450 million, or 58.6% of the deal, the term sheet showed.
China's Mixed-Ownership Reform Fund invested $200 million in the biggest cornerstone commitment. Other investors include state-owned Shanghai Guosheng Group and Shanghai AI Fund, as well as automaker SAIC Motor Corp (600104.SS), the term sheet showed.
SenseTime's shares are due to price on Friday and start trading on the Hong Kong Stock Exchange on December 17. The company plans to use the majority of the IPO funds for research and development of its main AI technologies.
Apple starts legal action against Russian regulator in App Store dispute -RIA
Apple has started legal proceedings against Russia's anti-monopoly regulator in a dispute concerning alternative payment options on its App Store platform, the RIA news agency reported, citing court filings.
Russia opened an antitrust case against Apple in late October, accusing it of failing to allow app developers to tell customers about alternative payment options when using its App Store. It said Apple could face a fine based on its revenue in Russia if found guilty.
In documents published on December 1, the Moscow Arbitration Court listed Apple as a claimant and Russia's Federal Anti-monopoly Service (FAS) as a defendant in "economic disputes over administrative legal relations."
Apple has demanded that additional documents be added to the case on December 2, RIA reported.
Forbes Russia cited a FAS representative as saying that the proceedings related to a warning it issued on August 30 over Apple's alleged failure to inform users they could also pay for purchases outside the App Store.
Apple faced pushback over its App Store rules in the United States in September when a federal judge issued a ruling forcing the company to allow developers to send their users to other payment systems.
