Startup Digest: Fractal 2nd unicorn of 2022, Udaan Raises $250M and Delhivery invests in Falcon Autotech

TPG's involvement in Fractal includes a mix of primary investment and a secondary share purchase from funds advised by buyout firm and existing investor Apax Partners. The share purchase deal will close by the first quarter of this year, following which Apax will continue to remain a major shareholder of the startup.

“As we continue to build upon this foundation, the investment from TPG will accelerate our ability to scale and meet the rising demand of AI globally,” said Pranay Agrawal, Co-founder & CEO, Fractal.

Fractal was weighing options including an initial public offering or a private investment that would value the startup at more than $1 billion, Bloomberg News reported in July.

The startup has over 3,500 employees spread across 16 locations around the globe including the United States, United Kingdom, India, Singapore, Ukraine and Australia.

Business-to-Business ecommerce company Udaan has raised $250 million in fresh capital via convertible note and debt. The firm that helps retailers secure inventory and working capital picked up $200 million in convertible note and the rest through debt.

A convertible note is short-term debt that converts into equity and will help the company as it prepares for an initial public offer in the next 18-24 months.

In an email to employees reviewed by CNBC-TV18, Udaan’s CFO Aditya Pande said, “We are excited and glad to share that we have 5 new marquee investors coming onboard the udaan juggernaut, as part of our recently concluded convertible note financing. round was oversubscribed 2x and also saw participation from our existing investors, including those who bought into the company through the secondary (ESOP) round in H1 2021.”

A convertible note is an instrument typically used by companies at pre-IPO stage, and the instrument converts into equity at the IPO. Large scale tech companies that have successfully used convertible notes include Airbnb, Uber, Spotify, Robinhood etc., the email said.

The fundraise reflects Udaan’s “broadening the capitalization strategy” as it charts its journey to the public markets and beyond. “With this convertible offering, we, as a company, have started building a complete new muscle in our finance function - which we will continue to strengthen as we go forward”, Pande’s note to employees said.

Backed by Lightspeed Ventures, Tencent, DST Global, GGV Capital and InnoVen Capital among others, the platform has raised $1.4 billion in funding so far and was last valued at $3.1 billion. In CY21, the unicorn raised over $500 million from investors.

IPO-bound logistics firm Delhivery has invested an undisclosed amount in Falcon Autotech, a logistics automation solutions provider.

This investment is in line with Delhivery's stated objective of sustained investments in future-ready hardware solutions in its operations, the company said in a statement. With this partnership, Delhivery expects to work closely with Falcon Autotech to design and implement new automation solutions for transportation and warehousing operations.

The partnership will also enable the bundling of the hardware automated solutions along with Delhivery’s SaaS platform, one of the proposed growth verticals for Delhivery in the national and international market, the startup added.

“The collaboration with Falcon Autotech strengthens our ability to drive greater speed, precision, and efficiency across our business lines,” said Ajith Pai, Chief Operating Officer, Delhivery.

Delhivery (including Spoton) already operates 20 automated sortation centres, 124 gateways, and 83 fulfillment centres across India as of June 30, 2021.

In November, Delhivery filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), for an issue size of Rs 7,460 crore. According to the DRHP, Delhivery plans to utilise net proceeds of the IPO towards funding organic and inorganic growth through acquisitions and other strategic initiatives.

Living Food, a digital marketplace focused on fresh food, has raised $7.5 million in Series A funding round led by global venture capital firm Amasia.

SOSV, Blume Founders Fund besides Xander Group founder Sid Yog and Nexus Venture Partners co-founder Sandeep Singhal, also participated in this fundraise.

The startup plans to expand to Mumbai and other cities this year and will utilise the funds to hire talent, improve logistics and tech offerings, and launch new brands, it said in a statement.

“This funding round is a testament to our focus on transforming our consumers’ eating behaviours by providing access to a vast selection of fresh, clean, and credible food through our fast and innovative fresh food supply chain,” said Akash Sajith, Founder and CEO of Living Food.

The content-to-commerce 'house of brands' Good Glamm Group has announced the acquisition of two more influencer management platforms - Winkl and Vidooly.

And, with it, it has created a new entity called the Good Creator Company (GCC) to bring together all its influencer and creator platforms under a single umbrella.

To build this tech platform and acquire more influencer-driven companies, the Good Glamm Group has seeded the new venture with Rs 200 crore.

With the combined strength of Plixxo, Winkl, MissMalini and Vidooly, the good creator company will host 250,000 influencers and reach over 70 million users every month.

The GCC currently has a Rs 75 crore revenue run rate and is targeting a Rs 250 crore revenue run rate by December 2022.

First, e-commerce, then, social commerce and live commerce and now, influencer-led commerce is here to change the way young India shops online. As per a Group-M report, influencer marketing industry is set to reach a size of over Rs 2000 crore by 2025.

Express delivery platform Borzo that facilitates same-day intra city deliveries has acquired NOW Delivery for a cash + stock deal.

Founded in 2016, NOW Delivery is an quick delivery platform for local retailers. It is backed by Maple Accelerator, Maple Capital Advisors, Naveen Munjal of Hero Electric and others. NOW Delivery’s seed investor Maple Capital Advisors will exit the startup post the deal.

NOW Delivery’s Uber-styled platform runs on a fleet of over 1,500 riders across ten cities in the country and clocks over two million orders per annum. It has plans to expand its service to 20 cities in the next 12 months.

The deal marks Netherlands-based Borzo’s first acquisition in India. The firm has about 700,000 active monthly users in emerging markets including Brazil, India, Indonesia, Korea, Malaysia, Mexico, the Philippines, Russia, Turkey, and Vietnam. Borzo has raised over $60 million from investors such as Mubadala, VNV Global, RDIF, and Flashpoint Venture Capital. It was previously known as WeFast in India.

This partnership will allow NOW Delivery's B2B last mile express expertise to complement Borzo’s same-day delivery services. Post the acquisition NOW Delivery will continue to work as an independent brand.

Amazon Wholesale India has collected a revenue of Rs 3,143 crore in financial year 2020-21, marking a 7 percent year-on-year decline. In FY20, the e-commerce giant had posted a revenue of Rs 3,388 crore, as per data sourced from Tofler.

The company has reported a net profit of Rs 43 crore in FY21, which marks a 132 percent increase as compared to the last fiscal.

Amazon Wholesale India’s total expenses for FY21 were reported as Rs 3,098 crore.

In terms of revenue, this marks a second consecutive year of decline for the company. The revenue had dipped by 70 percent in FY20, as compared to FY19 when it was recorded as Rs 11,250 crore.

Battery swapping network for e-rickshaws Chargeup has appointed Ankur Madan, former Head of Product, Spectra, as its COO and Co-founder.

Ankur will head operations and technology at the startup and will be leading Chargeup’s product strategy, the company said in a statement. Prior to this, Ankur has held key positions in Ubico Networks, Bharti Airtel, Haier Appliances, and Spectra.

“We are aiming to leverage best-in-class technologies to constantly improve our battery services, and Ankur’s joining augurs well for our plans on this front as well,” said Varun Goenka, CEO and Co-founder, Chargeup.

Chargeup provides a two-minute battery swap within a radius of 2 km to effectively double the revenue for drivers and dealer partners. The company has now expanded the network to 70 stations and caters to over 700 drivers daily. The startup is clocking 20,000 swaps a month and has already covered 10 million km since the launch.

Amid the buzz around the impending Cryptocurrency Bill to address unregulated crypto assets in the country, leading industry players continue to attract investors, according to a report from Bobble AI.

Crypto trading platform CoinDCX witnessed a 45.78 percent spike in installed users between October and November 2021. At the same time, another industry player Bitbns leads in terms of active users at 41.33 percent.

As per the report, Bits was able to register a 62.70 per cent rise in the terms of new users, followed by CoinDCX, ZebPay, and WazirX, respectively. However, Unocoin and CoinSwitch took a hit in terms of new installs. This hit could be temporary and partly be attributed to the news of the government hinting to introduce the Cryptocurrency bill 2021 to regulate digital currencies, the report added.

In terms of active users, Bitbns led the way with 41.33 per cent rise, followed by WazirX with 23.53 per cent rise. Coin DCX and CoinSwitch were next in the line among the top six players, the report highlighted.

After delivering handsome returns for investors last year, Google’s top leaders are getting a salary boost for 2022 along with hefty stock awards.

As per CNBC, Google parent Alphabet said in a filing with the SEC that its board approved new compensation packages for finance chief Ruth Porat, legal head Kent Walker, search boss Prabhakar Raghavan and Philipp Schindler, the company’s chief business officer.

The executives’ base salaries will increase from $650,000 to $1 million, according to the filing, which hit the SEC’s website on Tuesday and is dated December28. They each received stock awards valued at between $23 million and $35 million, split between performance-based equity and stock that vests over time.

Raghavan and Schindler received the biggest stock award packages for 2022. The company granted each of them $12 million in performance-based stock that will vest between from 2022 to 2024, depending on how the share price performs compared to members of the S&P 100. They received an additional $23 million in restricted stock that will vest quarterly in 12 installments, subject to continued employment.

Porat and Walker each received $5 million in performance-based equity and $18 million in restricted stock.

Alphabet hasn’t disclosed how much executives were paid last year, but its C-suite enjoyed a big 2020. The company said in its latest proxy filing that Porat and Walker received $50.2 million in stock awards that year, while Raghavan received $54.6 million and $65.5 million went to Schindler.

Each of the executives will be eligible to participate in a maximum $2 million annual bonus program “based on contributions to Google’s performance against social and environmental goals for 2022,” the filing said.

Google said its cloud division had acquired Israeli cybersecurity startup Siemplify, as the US tech giant expands its security offerings amid rising cyber-attacks.

Financial details of the deal were not disclosed by the companies, but a source familiar with the matter told Reuters that Google paid about $500 million in cash for Siemplify.

The deal came after Google made a pledge to US President Joe Biden last August to invest $10 billion in cybersecurity over the next five years, amid a significant rise in cyber-attacks and data breaches.

Siemplify, led by co-founder and chief executive Amos Stern, provides security orchestration, automation and response solutions. It has raised $58 million from investors including G20 Ventures and 83North.

With a partnership with Google Cloud, Siemplify attracted the buyer's interest as it was in the process of raising a new round of private capital, the source added. Google said Siemplify's platform would be integrated into its cloud and serve as the foundation for the capabilities it will invest in.

The buyout, Google's first Israeli cybersecurity firm deal, will help the tech giant take advantage of the Middle Eastern nation's deep pool of cybersecurity talent.

Since the pandemic started in 2020, Google's revenue from the cloud business has nearly doubled to around $5 billion as companies shifted to working from home.

Germany's cartel office said it was examining Google's use of personal data and its Google News Showcase product under its new powers to regulate internet companies, and was also considering cases involving Amazon, Apple and Facebook owner Meta, as per a report by Reuters.

The regulator said it had determined that Google's owner Alphabet  met the scale threshold required for a company to be subject to new extended supervisory powers to regulate large internet companies that it acquired last year.

"The Federal Cartel Office can now tackle concrete forms of behaviour that harm competition," office president Andreas Mundt said. "We have already started looking more intensively at Google's processing of personal data and the topic of Google News Showcase."

He added that the office was also considering further cases involving Amazon, Apple and Facebook owner Meta.

A Google spokesperson expressed confidence that the company was in compliance.

"To the extent that changes are necessary, we will continue to work constructively with the Federal Cartel Office to find solutions that make it possible for people and businesses in Germany to continue using our products in ways that are helpful to them," said the spokesperson.

The office began looking at Google's use of personal data in May last year and at the selection of news offered under Google News Showcase in June.

Chinese gaming and social media company Tencent Holdings has raised $3 billion by selling 14.5 million shares at $208 each in Sea, which owns e-commerce firm Shopee, according to a term sheet seen by Reuters.

Tencent said late on Tuesday it had entered into a deal to reduce its stake in the Singapore-based gaming and e-commerce group to 18.7% from 21.3%. The company plans to retain the substantial majority of its stake in Sea for the long term.

The sale comes after Tencent said last month it would divest $16.4 billion of its stake in JD.com, weakening its ties to China's second-biggest e-commerce firm, amid pressure from Beijing's broad regulatory crackdown on technology firms.

Sea's shares fell 11.4% on Tuesday in New York to $197.8 following the divestment news. Ahead of the announcement, Sea said Tencent had also agreed to cut its voting stake in the company to less than 10%.

"We believe with a lower voting right control, it could reduce any potential conflict if Tencent's gaming teams plan to publish more games directly in global markets and help reduce any potential geopolitical friction if/when Sea plans to expand more strategically into new markets in more countries," Citi's analysts said in a report on Wednesday.

Sea said Tencent and its affiliates had given an irrevocable notice to convert all their Class B ordinary shares.

China's top market regulator said on Wednesday it has fined units of Alibaba Group, Tencent and Bilibili for failing to properly report about a dozen deals.

According to Reuters, China's State Administration for Market Regulation (SAMR) placed penalties of 500,000 yuan ($78,692) on the companies per deal, the maximum under China's 2008 anti-monopoly law.

The penalties come amid an ongoing regulatory crackdown on a range of industries in China, with the tech sector as a main target.

SAMR in particular has targeted unreported deals involving tech giants. Last November it listed 43 investments that companies failed to report and levied a 500,000 yuan fine for each one.

China’s cyberspace regulator said that developers launching apps that have the ability to influence public opinion should undergo a security review, as per CNBC.

The move marks another step by Beijing to control and monitor information on China’s already highly censored internet. It’s unclear what regulators consider as functions or technologies that could influence public opinion.

The latest rules are part of a draft regulation issued by the increasingly powerful Cyberspace Administration of China (CAC) on Wednesday which seeks to lay out a framework for how app makers should operate.

App providers should not use their software to engage in activities that endanger national security or disrupt social order, the rules say.

Any news information apps must also obtain a license, which is subject to review by the regulators, the CAC said. China’s news landscape is broadly state-backed and already highly censored.

Over the past year, China has tightened regulation on its domestic technology sector in areas from antitrust to cybersecurity.

The CAC’s new document brings together previous laws and regulations into one set of rules — though much of it is not new.

Facebook owner Meta has applied to be able to appeal a ruling by a British competition watchdog that it must sell popular animated images platform Giphy, Reuters reported.

The Competition and Markets Authority (CMA) said in November it had found that the acquisition of Giphy would reduce competition between social media platforms and in display advertising.

The Competition Appeal Tribunal said on Wednesday that Meta had lodged an application for review on Dec. 23, challenging the ruling on six grounds.

Qualcomm is working with Microsoft on custom chips that would control lightweight augmented reality glasses for use by both consumers and businesses for metaverse apps, as per Reuters.

At the Consumer Electronics Show in Las Vegas, Qualcomm Chief Executive Cristiano Amon said during a press conference that the two companies will work together to mate the custom chips with the software that developers need to create virtual worlds in which people can work and play.

He said that future devices from the collaboration will work with a Microsoft software product called Mesh that allows users to beam a realistic likeness of themselves into the headset of another user so that it feels like the two people are in the same room.

The future hardware will also use software from Qualcomm called Snapdragon Spaces that helps perform basic augmented reality functions like mapping out physical spaces so that digital objects can be overlaid on them and hand-tracking so that users can manipulate those digital objects with hand gestures.

The two companies did not give details about when the chips and headsets would be available.

Japan's Sony Group plans to launch a company this spring to examine entering the electric vehicle market, looking to harness its strengths in entertainment and sensors to play a bigger role in next-generation mobility, Reuters reported.

The new company, Sony Mobility comes as the Japanese tech giant is "exploring a commercial launch" of electric vehicles, Sony chairman and president Kenichiro Yoshida told a news conference, speaking ahead of the CES technology trade fair in the United States.

"With our imaging and sensing, cloud, 5G and entertainment technologies combined with our contents mastery, we believe Sony is well positioned as a creative entertainment company to redefine mobility," Yoshida said.

Yoshida unveiled a prototype sport utility vehicle (SUV), the VISION-S 02, which uses the same electric vehicle platform as the previously announced VISION-S 01 coupe that began testing on public roads in Europe from December 2020.

WonderFi Technologies, backed by investor Kevin O'Leary, agreed to buy Bitbuy's parent company First Ledger Corp for about C$206 million ($162.13 million), giving it full ownership of the Canadian crypto marketplace.

As per Reuters, crypto aggregating platform WonderFi will pay with 70 million new shares and C$50 million ($39 million) in cash, C$20 million of which will be paid upfront and C$30 million in deferred cash.

The deal will give WonderFi access to Toronto-based Bitbuy's more than 375,000 users. More than $4.4 billion has been transacted through the Bitbuy market place since 2016 and the company generated over $31 million in revenue last year, according to the WonderFi statement.

The acquisition is expected to close during the first quarter of 2022.

Estrella Salazar, a 17-year-old science whiz from a working-class town near Mexico City, was inspired by her sister to develop an app to help deaf and hard-of-hearing Mexicans communicate more easily, according to Reuters.

Salazar's older sister, Perla, was born with a rare disorder that affects mobility and hearing, called MERRF syndrome. The 25-year-old has undergone close to a dozen surgeries followed by years of physical therapy, and was told by one sign language school that she would be unable to learn to sign due to her condition.

Estrella formed a community of nearly 90 participants - including native speakers and interpreters - to develop the app, called Hands with Voice, which she hopes to launch this year. In recent months, the family has started to learn sign as Perla's mobility has improved.

To cover the cost of the $3,500 camp, Salazar launched a crowd-funding campaign on her Instagram account. With weeks left to reach her goal, she says she's 75% there.