Startup Digest: ZestMoney and Akudo to shut shop, Elon Musk's AI firm files to raise up to $1 billion and more

Teen-focused neo-banking platform Akudo is shutting down its operations this month, according to an in-app notification sent to its customers.

The news which was first reported by Entracker said, the Y Combinator-backed startup’s decision to wind-up operations is an outcome of Reserve Bank of India (RBI)’s direction to PPI issuers to stop using Unified Payments Interface (UPI) in a co-branding arrangement.

“Akudo wallet will be shut down on Dec 31, 2023. Please take an immediate note of this and withdraw your funds and wallet balance as soon as possible,” the company told its users via an in-app notification.

Ola Electric has slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, after reduced government incentives pushed up e-scooter prices.

A document seen by Reuters with Ola's latest financial projections shows it now expects to record 300,000 e-scooter sales in the ongoing fiscal year to March 2024, two-thirds lower than the earlier goal of 882,000 which Reuters reported in July.

The revenue target for the ongoing fiscal year period is now $591 million, versus the earlier goal of $1.55 billion—a cut of about 60%, according to the internal document. The scaling back of Ola's targets comes ahead of its $700 million stock market debut plan.

The Sleep Company has raised ₹184 crore in the Series C funding round from existing investors Premji Invest and Fireside Ventures. The valuation of the Mumbai-based startup has doubled since the last fundraising in October 2022, the company said.

The startup has raised nearly ₹190 crore since its inception. Premji Invest and Fireside Ventures have been the lead investors through this period.

The fresh investments have come at a time when both profits and a plan for an initial public offering (IPO) are visible on the horizon.

Investment firm Sense AI has launched a $25 million (about ₹200 crore) fund which will primarily invest in Indian artificial intelligence start-ups over the next three-and-a-half years.

SenseAI Fund I plans to invest in 18-20 AI-first startups, focusing on early-stage companies and may further make follow-on investments in its most promising portfolio companies, the company said in a statement.

"We (will) fully invest the fund over the first 3.5 years and exit by the end of 8 years," SenseAI Ventures cofounder Rahul Agarwalla said. He said that the fund is primarily focused on Indians but it may do a few foreign domiciled startups with Indian founders.

Digivriddhi Technologies (DGV), a fintech startup serving the dairy industry, has received $6 million in a Series A funding round led by Omidyar Network India, with participation from existing investors Omnivore and InfoEdge Ventures.

In Gujarat, the firm said it works with 75% of all dairy processors including Amul, to create the last mile financial access infrastructure for 3.6 million dairy farmers. DGV is now expanding its footprint into Karnataka, Andhra Pradesh, Telangana, Madhya Pradesh & Maharashtra, providing an entire gamut of Banking, Financial Services and Insurance products, a statement added.

“The livestock management industry presents a $70-80 billion opportunity with significant gaps in bovine discovery, pricing and productivity. DGV CONNECT addresses these gaps with embedded financing options and is progressively becoming a one-stop-platform meeting all the needs of the Indian dairy farmer,” said Ragavan Venkatesan, Founder and CEO, DGV.

VoiceClub, the on-demand audio consultancy platform, has secured $700,000 in a seed funding round led by Better Capital, with participation from TDV Partners, Blume Founders Fund, Sunn91 and Astir Ventures.

Angel investors, including founders of Kutumb, Dhan, PagarBook, Flobiz, Khatabook, among others also pitched in.

The startup intends to use the fresh capital for product development and to fuel strategic expansion of the platform. It currently boasts an Annual Recurring Revenue (ARR) of $300,000, and aims to achieve $2 million in the next 12-18 months.

Offside, a social app for cricket enthusiasts, has bagged $150,000 in pre-seed funding from 100X.VC. This strategic investment will propel Offside's growth trajectory, enabling it to expand its user base to 5,00,000 in the coming months, the firm said in a statement.

The firm said it garnered garnering 50,000 users during the recent World Cup and is witnessing a daily engagement time exceeding 30 minutes for the past three months.

“This investment from 100X.VC has fueled our ambition to become the ultimate social destination for cricket fans worldwide. With this support, we'll accelerate our expansion plans, reach a broader audience, and establish Offside as the undisputed social hub for cricket enthusiasts." Said, Shivam Jha, CEO, Offside.

EsportsXO, a SaaS-based tournament discovery platform for gaming enthusiasts, has raised an undisclosed amount in its ongoing funding round led by SOSV’s Orbit Startups and existing investors SucSEED Indovation Fund and Mumbai Angels.

The round also saw participation from other strategic backers such as WeFounderCircle and Imperial Holdings.

The startup will use the funds for expansion and innovation. “XO aims to become the largest game and player discovery platform for gamers. Game advertising is a $130 Bn market. With BattleXO, we are not just targeting gamers but also addressing the needs of game developers and tournament organisers, enabling them to leverage technology for scalable reach through data-driven campaigns. The infusion of capital will further empower us to tackle the next significant challenge – expanding our company in size and increasing our user base,” said Vikas Goel, CEO and Co-founder of EsportsXO.

IPO-bound foodtech platform Swiggy has announced the appointment of FMCG veteran Anand Kripalu as an independent director and the chairperson of its Board of Directors.

Kripalu’s addition is viewed as part of the company’s efforts to bolster its corporate governance framework before going public in 2024. CEO Sriharsha Majety said, "Anand is a veteran in the consumer goods industry, and his deep knowledge and perspective will be instrumental in guiding Swiggy as we continue to innovate and redefine the on-demand delivery landscape in India."

Swiggy had also appointed three independent directors ahead of its planned IPO in 2024. Delhivery founder and CEO Sahil Barua, TAFE chairman and managing director Mallika Srinivasan and Shailesh Haribhakti & Associates chairman Shailesh Haribhakti were brought in as independent directors in February.

Unnati Agri, an agriculture supply chain and financial services startup, claims to have turned EBITDA positive in October 2023, registering 1.1% earnings before interest, taxes, depreciation, and amortization (EBITDA) margins. The firm said it has clocked a 2x growth compared to the previous fiscal year.

The firm’s exclusive branded product line, encompassing seeds, fertilizers, and crop protection solutions, has witnessed an impressive 8-9x year-on-year growth, a statement said.

The total transactional value conducted on Unnati's platform is on a trajectory to surpass ₹700 crores this year, marking a 70% growth from the previous fiscal year, it added.

Fintech unicorn Razorpay reported a 60 percent growth in its POS Business in FY23 following the acquisition of Ezetap (Razorpay POS) in 2022.

Razorpay POS witnessed a 40 percent growth in its Total Payment Volume (TPV) from April to October 2023 compared to the corresponding period last year in 2022, the firm said. 91 percent of the cumulative TPV for this timeframe was attributed to UPI transactions at doorstep, while SMS Pay contributed 9%, it added.

The firm saw 21% increase in the conversion of cash on delivery to digital payments, surpassing the transaction volume recorded from April to October 2022.

Fintech platform Paytm has unveiled plans to broaden its loan distribution business. The company said it aiming to focus on higher-ticket personal and merchant loans, strategically targeting lower-risk and high credit-worthy customers, forming partnerships with major banks and non-banking financial companies (NBFCs).

This expansion comes as a result of robust portfolio performance and the widespread acceptance of Paytm's loan distribution services.

In the previous quarter, Paytm initiated steps towards offering higher-value loans and has since witnessed promising early trends in this direction, it said in a statement. Building on this success, the company now plans to include higher-ticket personal and merchant loans in its portfolio, further diversifying its loan offerings.

T-Hub, a startup incubator has launched a Space Tech Incubation Program under the AIC T-Hub Foundation program to cultivate innovation and fuel growth within India’s emerging SpaceTech entrepreneurial landscape.

The program is expected to impact nearly 10 SpaceTech firms across India, leveraging criteria such as founder experience, product innovation, and a robust business model.

“The launch of Space Tech Program can mark a step towards building a thriving and collaborative environment for startups in this transformative industry,” said Mahankali Srinivas Rao, CEO, T-Hub.

Unidentified governments are surveilling smartphone users via their apps' push notifications, a US senator warned.

In a letter to the Department of Justice, Senator Ron Wyden said foreign officials were demanding the data from Google and Apple. Although details were sparse, the letter lays out yet another path by which governments can track smartphones.

Apps of all kinds rely on push notifications to alert smartphone users to incoming messages, breaking news, and other updates. These are the audible "dings" or visual indicators users get when they receive an email or their sports team wins a game. What users often do not realize is that almost all such notifications travel over Google and Apple's servers.

US antitrust enforcers will argue that a federal judge got it wrong when she ruled that Microsoft's $69 billion deal to buy "Call of Duty" maker Activision Blizzard was legal under competition law, in their latest attempt to stop the deal.

Microsoft closed the deal, originally proposed in January 2022 as the biggest acquisition in the history of the gaming industry, on October 13 of this year after obtaining the approval of British regulators.

The Federal Trade Commission, however, is expected to tell a three-judge appeals court panel in California that the lower-court judge held the agency to too high a standard, effectively requiring it to prove that the deal was anticompetitive when the standard is simply that the deal raises serious competitive concerns.

Elon Musk's artificial intelligence startup xAI has filed with the U.S. securities regulator to raise up to $1 billion in an equity offering, according to a filing seen by Reuters.

The company has raised $134.7 million in equity financing from a total offering amount of $1 billion, the filing with the Securities and Exchange Commission showed.

Fundraising for AI remains a bright spot for startups this year, following OpenAI's launch of popular chatbot ChatGPT last year and raising of $10 billion from its strategic backer Microsoft. Regulators, however, are concerned about the potential use of the technology to spread misinformation.

European Union ambitions to take a lead in landmark rules for artificial intelligence hang in the balance as member states and lawmakers meet on Wednesday to try to hammer out a deal on biometric surveillance and how to regulate systems like ChatGPT.

If agreed, the EU's first-of-a-kind AI Act, which was proposed by the European Commission two years ago, could serve as the benchmark for countries seeking an alternative to the United States' light-touch approach and China's interim rules.

Talks between EU members and lawmakers will start at 1400 GMT and are expected to run into the early hours of Thursday, with the most likely outcome a provisional deal on principles but not crucial details, five people directly involved said.

TikTok owner ByteDance is offering to buy back around $5 billion worth of shares from investors at a price that will value the company at about $268 billion, Reuters reported.

The Chinese technology giant is offering to buy the shares at $160 each, the same price it offered employees last month.

The $268 billion valuation was about 10% lower than its value a year ago when it conducted a share buy back plan for investors, the report added.

Amazon's streaming unit Twitch said it will shut down operations in South Korea in February next year, due to high operating costs and network fees.

"Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country," CEO Dan Clancy said in a blog.

Network fees in Korea are still 10 times more expensive than in most other countries, he said, adding that the company spent significant effort working to reduce operating costs to remain in business.