Startup Digest: Zoom to lay off 1300 employees & India Accelerator, MeitY back Avenue Growth

Video communication firm Zoom is reducing its workforce by approximately 1,300 people as the demand for its video-conferencing services slows with the receding of the COVID-19 pandemic.

In a message to employees on the company's official blog, CEO Eric Yuan said that the company will be cutting its "team by approximately 15 percent and say goodbye to around 1,300 hardworking, talented colleagues."

"Departing full-time employees at Zoom, nicknamed "Zoomies" by the CEO, will receive up to 16 weeks of salary and healthcare benefits in the US. The fiscal 2023 annual bonus, based on company performance, as well as restricted stock units (RSUs) and stock options will also vest for six months for US employees and through August 9, 2023 for non-US employees.

According to Yuan, support for departing Zoomies in other countries will be comparable and will follow local laws."

Yuan added, "As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today — and I want to show accountability not just in words but in my own actions. To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20 percent for the coming fiscal year while also forfeiting their FY23 corporate bonuses."

Venture debt firm InnoVen Capital has put out its annual India Startup Outlook Report with insights from over 120 startup founders across sectors like Fintech, SaaS, logistics ecommerce, healthtech, and more. The report offers a compelling view of the current state of the Indian startup ecosystem.

As many as 71 percent of founders who attempted to raise funds in 2022 had a positive experience, a significant drop from 92 percent in 2021; 58 percent expect the fundraising environment to be even tougher in 2023.

There is a clear shift in focus from growth to profitability, with an emphasis on building sustainable business models.

For the first time in seven years, founders have shown a greater preference for profitability overgrowth in the survey. 55 percent prioritise profitability, compared to just 17 percent in 2021. 19 percent of founders report being EBITDA profitable, while 62 percent aim to achieve that goal within the next 2 years, an increase from 51 percent last year. 63 percent of founders see a domestic IPO as the most likely mode of exit, and 70 percent are open to having a professional CEO run their business at some point, down from 81 percent in 2021.

Lendingkart, a digital lending platform for MSMEs, has acquired personal loan provider Upwards in a cash-and-stock deal worth Rs 100 crore, Harshvardhan Lunia, Founder & CEO, Lendingkart told CNBC-TV18.

“With this partnership, Upwards will be aptly positioned to execute its strategy of helping customers smoothly obtain personal loans. Together, we are embarking upon the journey of improving access to credit to change the face of India’s financial ecosystem by bringing the indigent population on the financial map,” Lunia said in a statement.

Upwards offers personal loans to salaried professionals through its proprietary technology platform, which uses complex algorithms to analyse over 500 data points from a wide range of sources to underwrite and disburse loans.

“With Lendingkart’s credit, capital & distribution capability, we plan to deepen our presence across the country to bridge the massive credit gap in the personal loan market in India,” said Abhishek Soni, Co-Founder, Upwards.

Singapore-based private equity firm I Squared Capital has acquired a controlling stake in Polaris Smart Metering, which owns Gram Power (India), through an investment of $100 million.

Post the deal, the company will soon be rebranded as Polaris, however, the enterprise value of the transaction could not be ascertained. The funds raised will primarily be used to acquire, execute and finance large smart metering contracts across India. The capital will also go towards upgrading the company’s manufacturing capabilities to global standards, investing in research and development, and developing industry-leading talent, a statement said.

I Squared Capital, with over $36 billion worth assets under management, made this investment via its $2-billion ISQ Growth Markets Infrastructure Fund that aims at investing in the infrastructure sector across growth markets in Asia and Latin America.

LinkedIn has announced that it has crossed 100 million members in India. With a 56 percent growth in its member base over the last three years, India has solidified its position as the second-largest market for LinkedIn globally.

According to LinkedIn, the largest share of members in India are from software & IT, followed by manufacturing, corporate services (Consulting, Accounting, and HR), finance, and education industries. This steady surge in membership shows how LinkedIn has become an essential platform for professionals in India to connect, learn, grow, and get hired over the course of their careers.

Ashutosh Gupta, India Country Manager, LinkedIn said that LinkedIn’s India users are over-indexing on networking, messaging, and learning more than any other region globally. According to him, it helps them find the right opportunities, connect with peers and mentors, and acquire new skills to advance their careers.

LinkedIn has also launched the top 10 most in-demand skills required by companies, and the Workplace Learning report to reveal the priorities of Learning and Development (L&D) leaders in India. LinkedIn said that companies in India are adopting a skills-first approach to hiring with more than 50 percent of India’s recruiters on the platform explicitly using skills data to fill their roles, which is higher than the global average of 45 percent.

Shares of Freshworks, a leading SaaS company, which witnessed a rout in recent sessions, have recovered in the past two trading days. The company announced the highest number of new deals in any one quarter for the year ending December 31, 2022.

The firm’s revenue surged 26 percent to $133.2 million in the December quarter from the year-ago period. The company’s full-year revenue stood at $498 million, a 34 percent year-on-year growth and 37 percent increase adjusted for constant currency.

Freshworks exceeded the annual recurring revenue of $500 million and posted improved business efficiency with $7.2 million in net cash from operating activities and $4 million of free cash flow in the quarter under focus.

The Nasdaq-listed company said that in the fourth quarter, it added approximately 1,800 new customers and ended up with more than 63,400 total customers. It was the highest new business quarter ever for the company.

The company highlighted that the number of customers contributing over $5,000 in Annual Recurring Revenue (ARR) rose by 20 percent year-on-year to 17,722 and by 21 percent on adjusting for constant currency.

The Reserve Bank of India (RBI) Governor Shaktikanta Das has said that digital lending apps are not regulated by the central bank. He said that RBI asked non-banking financial companies (NBFCs) to submit a list of their app which was further sent to the Centre. The government has taken the step of banning after considering the list of regulated entities and their apps, Das said while addressing a press conference after making monetary policy announcements.

Backing this further, RBI Deputy Governor M Rajeshwar Rao said that the government has asked the Play Store to remove the unregulated apps.

CNBC-TV18 had earlier reported that LazyPay, Kissht, Kreditbee, and Indiabulls Home Loans were among those that were on this ban list. According to RBI, these apps don't come under their purview.

For entities other than regulated entities (REs) of the Reserve Bank, concerned authorities are, however, expected to put in place similar measures as recommended/ suggested for the REs of the Reserve Bank. This would ensure holistic compliance with the recommendations/ suggestions contained in this report.

EV startup Zypp Electric has raised $25 million in a Series B funding round led by Taiwanese battery-swapping service provider Gogoro, as the Indian electric vehicle startup looks to expand to new cities and boost its fleet size.

Several new and existing investors, including Goodyear Ventures, 9Unicorns and WFC, participated in the funding round, which comprised $20 million in equity and $5 million in debt. About $12 million in equity was from Gogoro, Zypp said in a statement.

The funding round marks Gogoro's latest effort to expand in India, where EVs are receiving mainstream push, having partnered with the country's top bikemaker Hero MotoCorp and the state of Maharashtra.

The startup, which provides EVs for last-mile delivery for online stores, plans on using the funds to increase its fleet size to 200,000 EVs from 10,000, and expand to 30 Indian cities including Chennai and Mumbai by 2025, up from six currently.

Entropik, an A-powered market research platform has raised $25 million in a Series B funding round led by Bessemer Venture Partners and SIG Venture Capital. The round also saw participation from Trifecta Capital, Alteria Capital, and long-time existing investor Bharat Innovation Fund.

With this latest round, the startup has so far raised $35 million in funding. The startup will use the fresh capital to focus on expanding their footprint across the US, Europe, and Asian markets. It also aims to build world-class products out of India, enabling the research, marketing, and product teams to move towards a more collaborative, agile, and scalable way to conduct research.

Entropik claims to have grown 7x in the last two years, riding on its patented Emotion AI Technologies and driven by its expansion into the US, Europe, Southeast Asia, and the Middle East, a statement said.

Social learning platform Bluelearn has secured $3.5 million in a seed funding round led by Elevation Capital and Lightspeed. The round also saw participation from Titan Capital, 2am VC, along with angel investors Vidit Aatrey and Sanjeev Barnwal (founders of Meesho), Awais Ahmed (Founder of Pixxel), Vivek Mohan (Private equity), and others.

The startup intends to use the funds to further strengthen the product and team as well as to grow their community user base by 10x within the year. The brand is actively hiring across functions such as product, tech, marketing, and operations and plans to almost double the team size by the end of the year.

“With the new capital we plan on accelerating our market expansion to newer and previously untapped markets in India and globally. By strengthening our core tech and product teams we will continue building impactful products that help people grow in their careers and lives,” said Shreyans Sancheti, Co-founder, Bluelearn.

B2B manufacturing and supply chain enablement platform for building materials, Magma has raised $3.3 million in its seed funding round led by General Catalyst. The round also saw participation from Accion Venture Lab and Titan Capital.

Unicorn founder angels including Aayush Phumbhra (Chegg), Varun Alagh (Mamaearth) & Srini (BigBasket, Bluestone) and existing investors WEH ventures and All in Capital also doubled down in this round.

The company said it will use the fresh capital towards expanding their product offerings, cater to the existing factory waitlist and grow the team.

“At Magma, we enable factories not only to cater to global buyers with best quality products but also improve their efficiency and profitability. With the new funding, we are excited to continue serving millions of manufacturers aspiring to be a global player through our platform,” said Neal Thakkar, Founder and CEO, Magma.

Magma said it has already onboarded over 80 factories and is projecting to close its first financial year in March 2023 with an annualised GMV run rate of Rs 150 crores ($18M).

NFTICALLY, a Web3 ecommerce platform, has raised $1 million in an equity funding round led by Spartan Group and Polygon Ventures. Blockchain Founders Capital, Blockchain Founders Fund, Mafatlal family office, and Bollywood producer Subhash Ghai also participated in the funding round.

The company intends to use the funds to expand COMEARTH, a Gamified Social E-Commerce & Brand Engagement Metaverse ecosystem. The company also plans to use the funds to double down on its technology stack as it builds COMEARTH, a Metaverse platform.

NFTICALLY will ramp up hiring and invest more in research and development as it works towards building a seamless infusion of NFTs in all major industries, such as e-commerce, manufacturing, healthcare, and more, a statement said.

Avenue Growth, an on-demand workforce platform has raised an undisclosed capital in a funding round by India Accelerator. The round also witnessed participation from Growth Opportunities Fund, IAES Ventures LLP and the Ministry of Electronics and Information Technology (Meity).

The company said it is aggressively expanding its service portfolio and plans to launch new verticals in the GIG Workforce space. The startup plans to allocate the funds to the growth of new verticals. Apart from this, the platform is also planning to utilize these funds to further strengthen its technology platform and expand its leadership team, a statement said.

Avenue Growth is already working with companies including Swiggy, Airtel, TATA AIA, V5 Global and others. The company claims to be growing 5X year on year.

Animeta, a creator tech platform founded by Anish Mehta, the former CEO of animation studio Cosmos-Maya, has received backing from investors such as Rajesh Kamat, Managing Director of KKR-backed Emerald Media, and Den Networks founder and serial media entrepreneur Sameer Manchanda.

The startup is an AI-based self-service creator tech platform that is focused on creating and nurturing digital creators by helping them grow their communities and maximize their earnings across multiple social media platforms. It will also help them customize brand solutions and offers Financial Investment, Data Analytics & Business Intelligence, Content Strategy & Creative Supervision, Brand, PR & Social Media Expertise in addition with data-driven, result-oriented & authentic brand campaigns to content creators.

"India alone has around 755 million social media users and about 80 million content creators, of which less than 0.2 percent are able to monetize their content. Animeta aims to bridge this gap through its creator tech platform & be the enabler who empowers a vast majority of creators by increasing their monetization potential in order to bring about a meaningful change in their lives”, said Anish Mehta, Founder of Animeta.

EUME, a sustainable and eco-conscious luggage brand, has secured an undisclosed capital in a seed round from Mumbai Angels and other investors.

According to the startup, it will use 50 percent of the new capital for bolstering its marketing efforts, 30 percent for its working capital, and 20 percent for team building and enhancing IT infrastructure.

“We have raised this round after investing more than INR 10 crore in Eume as a family over the past three years. We are determined to grow Eume to the next level and have gotten it to this stage by taking many calculated risks. We firmly believe in sustainable growth, and the latest infusion of capital will help us achieve the same,” said Naina Parekh, Co-founder, EUME.

The company claims to have clocked a monthly run rate of Rs 1.8 crore and have grown almost 50 percent as compared to last year. It aims to achieve a growth of 25 percent month-on-month post the closure of the latest funding round.

TVS Capital Funds, a capital private equity fund, has appointed Krishna Ramachandran as Managing Partner and COO. Prior to this, Ramachandran was the Managing Director at Accenture and was responsible for the company’s Chennai operations. He was also associated with Royal Philips, Allianz, KPMG, and Vodafone in multiple roles, a statement said.

“Krishna comes with a wide spectrum of operating experience and significant exposure to digital transformation initiatives. This is of deep value for us at TVS Capital, where we partner with next-gen entrepreneurs in business building, especially those in the venture growth stage. Krishna’s multidisciplinary experience across businesses will help drive value to our portfolio companies. It also significantly strengthens our internal initiatives in building a “neo TCF”, which will help scale the fund to the next level,” said Gopal Srinivasan, CMD, TVS Capital Funds.

TVS Capital Funds has raised approximately Rs 3,500 crore till date across three funds and backs technology-driven businesses in financial services and B2B services.

NBFC player Clix Capital Services looks to double its profit to Rs 100 crore in the next 2023-24 fiscal by focusing on lending to MSMEs and other segments.

"Clix Capital diligently utilised the Covid-induced disruption as an opportunity to reassess its business strategy as well as digitalise its core-operating model at scale," it said in a statement.

The firm added that it is poised to cross an AUM (Assets under Management) of Rs 5,000 crore by the end of this fiscal and aims to surpass Rs 9,000 crore by 2024-25.

By servicing consumers and MSMEs, Clix has disbursed more than Rs 18,000 crore to date. Most of the company's disbursements have gone to underserved MSMEs.

JARVIS Invest, an AI-based investment advisory platform, has launched a risk management service that will enable investors to book profits and cut losses from any portfolio uploaded on JARVIS system. JARVIS Protect is the company’s second product after the launch of JARVIS portfolio.

This service will act as an efficient risk management tool for investors thereby helping them turn their underperforming portfolio into a winning one. The service will be available at affordable prices for any portfolio in the Indian equity markets. JARVIS Protect will equip investors with stock exit strategies, a statement said.

“We believe that our AI-driven platform providing bias free suggestions will assist an investor in his journey of wealth creation. Jarvis Protect will provide investors with timely stock exit strategies and portfolio rebalancing. Our AI-driven model has a high downside accuracy which makes JARVIS Protect relevant to all investors,” said Sumit Chanda, Founder and CEO, JARVIS Invest.

Sportiqo, a blockchain-based fantasy cricket platform, has launched its operations in India with a choice for users to invest or trade in players. The company said that since its Beta launch, it has already acquired 32,000 active users and aims to raise the figure to over 5 million active users by 2027.

“When we launched Sportiqo, we were looking for an interactive & entertaining way to engage people while also making it informative so that they get a basic idea of the world of investing and trading. The platform is powered by cutting-edge blockchain technology and deep analytics giving each player a unique value basis several parameters. We look forward to the reaction of cricket fans across India and the world to Sportiqo,” said Anindya Kar, CPO and Co-Founder of Sportiqo.

Sportiqo has raised $1.25 million in the pre-seed round from angel investors with a focus on user acquisition in its first phase post launch. The platform is already live for the ILT20 League and will add a portfolio of other sports and leagues as well such as the English Premier League and the Indian Premier League among others, a statement said.