Startup Digest: Delhivery files papers for IPO, Ola reports first-ever operating profit

Here are the top headlines from the start-up space.

Logistics startup Delhivery has filed its prospectus for a Rs 7,460-crore initial public offer (IPO), in which it looks to raise Rs 5,000 crore through a fresh issue of shares and Rs 2,460 crore through an offer-for-sale (OFS).

The selling shareholders in the OFS include China Momentum Fund (Deli CMF) - Rs 400 crore; Carlyle Group (CA Swift) - Rs 920 crore; Softbank Vision Fund (SVF Doorbell) - Rs 750 crore; and Times Internet - Rs 330 crore.

The company has listed two main objects of the offer in the prospectus, which include funding organic growth initiatives (Rs 2,500 crore) and funding inorganic growth through acquisitions and other strategic initiatives (Rs 1,250 crore).

Digital payments major Paytm plans to raise $1.1 billion (Rs 8,250 crore) from anchor investors, including Blackrock, Canada Pension Plan Investment Board, GIC and other sovereign wealth funds ahead of its IPO.

According to CNBC-TV18 sources, the anchor investment round of One97 Communications Ltd, which runs the Paytm payments service, will close on November 3. As per a communique from the company, the anchor round will see mega investors making one of their first investments in India through tech-focused funds.

Paytm's anchor round, the largest India has ever seen, is in itself bigger than the overall IPO size of most Indian companies, said a source. Currently, Paytm is narrowing down its anchor investors for its mega IPO. The company, according to the source, has garnered interest from blue-chip global tech funds that are set to participate in its anchor round.

The development comes days after Paytm increased its IPO size from Rs 16,600 crore to Rs 18,300 crore. After the IPO, the company’s valuation is likely to increase to $20 billion.

Ride-hailing giant Ola has notched up its first-ever operating profit since beginning operations a decade ago, documents sourced from Tofler showed.

The company reported standalone operating profit or EBITDA (earnings before interest, tax, depreciation and amortisation) of ₹89.82 crore ($12 million) for the fiscal year ended in March 2021, versus a loss of ₹610 crore ($81.55 million).

Despite revenue being down 65 percent from a year ago after a fall in demand for ride-sharing amid the pandemic-led lockdowns, Ola has turned profitable, helped by aggressive cost cuts and workforce reduction, the filing showed.

Founded in 2010 by Bhavish Aggarwal, Ola plans to raise up to $1 billion through an IPO in the next few months, joining a slew of Indian startups preparing to list.

Uber India has reported its revenues for financial year 2020-21 at Rs 539 crore, a 30 percent fall since the last financial year, as per filings sourced from Tofler.

The company further reported a net loss of Rs 334 crore during the same fiscal.

This is an increase of 146 percent from the last financial year. The company’s total expenses for the fiscal were reported at Rs 985 crore.

Uber had offloaded its food delivery vertical to Temasek-backed Zomato in February last year for a reported Rs 1,493.5 crore or $206 million and were allotted shares of Zomato Private Limited for the same.

The company derives its revenues primarily from drivers and restaurants’ use of Uber’s platform and related services, acting as a mediator for ride-hailing and online food ordering transactions.

Cryptocurrency exchange Coinbase has acquired artificial intelligence-powered support platform Agara for an undisclosed amount. This marks the startup’s first acquisition of an Indian company.

The company said this deal would bring Agara's deep expertise in machine learning and natural language processing to the company’s engineering team. The Nasdaq-listed firm plans to leverage the platform’s deep learning and conversational AI technology to automate and enhance its customer experience tools, according to a company blog post.

“In the past few months, we have increased our support staff headcount by 5X and announced that we’ll deliver 24/7 phone support and live messaging by end of year. Through this acquisition, we’ll be able to provide our customers with new personalided, intelligent, and real-time support options,” said Manish Gupta, EVP - Engineering at Coinbase.

Earlier this year, Coinbase announced its strategy to build out a tech hub in India and had hired former Google Pay executive Pankaj Gupta to head its India development center.

Coinbase, which went public in April this year, has also backed domestic crypto exchanges such as CoinDCX and CoinSwitch Kuber.

More than 2.2 million Indian accounts were banned by WhatsApp, while 560 grievance reports were received by the messaging platform in September, according to its compliance report.

In its latest report released on Monday, WhatsApp said 2,209,000 Indian accounts on the platform were banned in September. An Indian account is identified via a ''+91'' phone number, it added. In accordance with the IT Rules 2021, WhatsApp has published its fourth monthly report for the 30-day period of September 1-30.

Previously, the Facebook-owned company had stated that more than 95 per cent of the ban was due to the unauthorised use of automated or bulk messaging (spam). The global average number of accounts that WhatsApp bans to prevent abuse on its platform is around 8 million accounts per month.

WhatsApp, in its latest report, said it received 560 user reports spanning across account support (121), ban appeal (309), other support and product support (49 each) and safety (32) during September.

During this period, 51 accounts were actioned based on the reports received. About two million Indian accounts were banned by WhatsApp, while 420 grievance reports were received by the messaging platform in August.

Fintech platform for gold loans Ruptok Fintech has raised Rs 16 crore (around $2.14 million) in Pre-Series A funding round from existing and new investors including Manuvel Malabar Jewellers, industry veterans and high net individuals including Nivedan Sahay and Neeraj Aggarwala.

The fresh capital will be utilised to bolster its business growth by diversifying its loan book and integrating technology into its financial products and services, the firm said.

“The gold loan industry has seen tremendous changes in recent years. As the need for short-term industry and retail loans continues to rise, we aim to strengthen our efforts of providing customers with technologically-driven quick loan disbursals,” said Ankur Gupta, Founder and CEO, Ruptok Fintech.

Spacetech startup SatSure has raised an undisclosed amount of equity funding in a round led by Baring Private Equity India.

According to reports, the funding will be used for expanding its team to 100 people by March 2022, grow its product portfolio, and increase its international business footprint. It is also looking to capitalise its high-resolution optical and multispectral payload demonstration mission in orbit that was announced earlier this year.

Founded in 2017, SatSure is a decision intelligence company that works at the convergence of space technology, artificial intelligence, and sustainability.

Neobank Jupiter is in talks with US-based venture fund QED Investors to co-lead a new $100-million funding round, along with its existing investor Sequoia Capital India, sources told Economic Times.

New York-based Tiger Global is also in talks with Jupiter to participate in the funding round, they said. If the deal goes through, Jupiter’s valuation will more than double to around $700 million, the report added.

The development comes just three months after Jupiter closed a $45-million funding from Brazil’s neobank major NuBank and others.

Niyogin Fintech, a publicly-listed fintech platform which caters to MSMEs and rural individuals, announced that its board has approved plans to invest Rs 100 crore to boost growth.

The company also posted a loss of Rs 1.78 crore, attributable to shareholders of the company, on a consolidated basis in the quarter ended September, slipping further from Rs 12.4 lakh loss in the year-ago period and Rs 1.52 crore in the quarter ended June, it said in a statement.

However, its revenue was up 230.5 per cent at Rs 26 crore in Q2FY22 compared to the corresponding period last year. Its balance sheet has become debt-free and had cash and cash equivalents of Rs 171.4 crore as of the quarter ended September.

The fintech company said that its rural distribution touch points reached 198,593, up 199.9 per cent on a year-on-year (YoY) basis in Q2. The gross transaction value (GTV) for the quarter was Rs 2,100 crore, growing 12.1 per cent YoY.

As part of the ongoing 5G trials in India, telecommunication companies Vodafone Idea (Vi) and Ericsson have partnered to showcase the case studies for 5G in the healthcare sector, more specifically, in the rural areas of the country.

Vi had teamed up with Indian startups Vizzbee Robotic Solutions and Tweek Labs, to test 5G use cases for air fleet management solutions.

Earlier, Bharti Airtel conducted its own rural 5G trials in partnership with Ericsson, where it was able to realise speeds of over 100 mbps even at a 10-km radius.

Under the current trials, the 5G network set up by Vi on the 3.5GHz mid band and 26GHZ mm Wave Band in Pune helped deploy Ericsson-based products on the cloud. As part of the demonstrations, Vi and Ericsson also showcased enhanced mobile broadband (Embb) and fixed wireless applications with 5G.

An October 2019 report by Ericsson estimated that the total 5G enabled opportunity in B2B markets will touch $17 billion by 2030.

E-commerce firm GoPaisa has clocked GMV of Rs 150 crore in the first three weeks of the festival season sale.

The brand had recently announced the target of Rs 200 crore GMV to be covered by the end of the current fiscal. In the first three weeks of the festival sales, the platform saw a 2.5X jump in month-on-month (MoM) traction.

The rising traction has enabled the platform to cross 2 times the target GMV for the year, with the sale witnessed in just three weeks of the festival season sale. Overall, the brand has witnessed, 4X rise in festival season sales compared to last year, it said in a statement.

The company said that major traction was witnessed from tier 2 and tier 3 cites in India.

Growth in India’s job market once again surpassed pre-pandemic levels, showcasing a 19 percent YoY uptick in October, according to The Naukri JobSpeak index.

Hiring was led by IT sector (85 percent) followed by telecom/internet service provider (84 percent) and retail (51 percent). Demand for tech professionals continued to soar as the sector witnessed a significant 85 percent annual growth in October, the report added.

The findings showed that hiring activity also picked up in sectors like retail (51 percent) and hospitality/travel (48 percent) amid the holiday season, opening up of major offline outlets and peak sale season for e-commerce retailers.

Other sectors like education/teaching (41 percent) and banking/financial services (39 percent) also experienced growth as compared to October last year.

Hiring in metros surpassed tier-2 cities, growing 59 percent annually in October 2021. Growth of the IT-software/services sector has enabled metros to outperform their tier-2 counterparts in annual growth charts, the report claimed.

The Sandbox, a Hong Kong-based gaming platform that allows users to build a virtual world using non-fungible tokens (NFTs), has raised $93 million from investors led by SoftBank’s Vision Fund 2, the company told Reuters.

The latest fund-raising came a little over a year after its last round, as the company saw fast growth in monthly active users and crossed $144 million in transaction volume on the platform. It also marks Vision Fund 2’s first investment in a company that issues its own crypto currency.

The company declined to disclose its valuation, but the crypto currency it backs, the Sandbox coin, has a market cap of nearly $2 billion. The company said it currently owns about 22 percent of the tokens.

This investment will help fuel the growth of the Sandbox creators’ economy as it expands from gaming into fashion, architecture and virtual concerts, Sebastien Borget, Chief Operating Officer and co-founder told Reuters in an interview.

In her first public address since she leaked a trove of damaging documents about Facebook's inner workings, whistleblower Frances Haugen urged her former boss, Mark Zuckerberg, to step down and allow change rather than devoting resources to a rebrand.

“I think, it is unlikely the company will change (if) Mark Zuckerberg remains the CEO,” Haugen told a packed arena on Monday at the opening night of the Web Summit, Reuters reported.

The former Facebook product manager replied in the positive to the question of whether Zuckerberg should resign, and added: “Maybe it’s a chance for someone else to take the reins... Facebook would be stronger with someone who was willing to focus on safety."

The social network, with nearly three billion users, changed its name to Meta last week, in a rebrand that focuses on building the “metaverse”, a shared virtual environment that it bets will be the successor to the mobile internet.

Commenting on the rebranding, Haugen said it made no sense given the security issues that have yet to be tackled.

Apple has cut back production of iPad tablets to allocate more components to iPhone 13, a sign the global chip supply crunch is hitting Apple harder than previously indicated, Nikkei said.

Production of the iPad was down half from Apple’s original plans for the past two months, the newspaper said on its website, adding that parts intended for older iPhone devices were also being switched to iPhone 13.

Even though iPhone 13 production hit a snag due to factory closures in Asia and high demand in the second half of the year, Apple has weathered the supply crunch better than many other companies due to its massive purchasing power and long-term supply agreements with chip vendors, eating into its rivals’ market share in the third quarter.

The iPhone maker is prioritising iPhone 13 output in part because it forecasts stronger demand for the smartphone than for the iPad as Western markets begin to emerge from the pandemic, the report added.

Rivian Automotive, which is backed by Amazon, is targeting a valuation of more than $53 billion for its US debut, making the electric vehicle manufacturer potentially almost as valuable as rival Honda Motor.

According to Reuters, the startup is looking to raise up to $8.4 billion, setting it up to be the third-largest IPO by funds raised in the past decade in the United States.

While Rivian has yet to sell any significant volume of its electric vans or trucks, it could likely be valued higher than Ferrari, although less than Honda, General Motors or its backer Ford Motor Co.

The company said it would sell 135 million shares at a price range of between $57 and $62 each. Reuters reported in September that it could seek a valuation of nearly $80 billion and raise up to $8 billion in its US listing. Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters.

Tesla is recalling nearly 12,000 US vehicles sold since 2017 because a communication error may cause a false forward-collision warning or unexpected activation of the emergency brakes, the National Highway Traffic Safety Administration (NHTSA) said.

As per Reuters, the California automaker said the recall of 11,704 Model S, X, 3 and Y vehicles was prompted after a software update on October 23 to vehicles in its limited early access version 10.3 Full-Self Driving (FSD) (Beta) population.

FSD is an advanced driver assistance system that handles some driving tasks but Tesla says does not make vehicles autonomous.

NHTSA said Tesla “uninstalled FSD 10.3 after receiving reports of inadvertent activation of the automatic emergency braking system” and then “updated the software and released FSD version 10.3.1 to those vehicles affected.”

The agency said it “will continue its conversations with Tesla to ensure that any safety defect is promptly acknowledged and addressed.”

The recall comes after NHTSA last month asked Tesla why it had not issued a recall to address software updates made to its Autopilot driver-assistance system to improve the vehicles’ ability to detect emergency vehicles.

Tesla said the issue was prompted by a software communication disconnect between two onboard chips that prompted an issue that could produce “negative object velocity detections when other vehicles are present.”

The posting of an ancient Chinese poem by Tesla CEO Elon Musk on social media on Tuesday has driven Chinese internet users to engage in a frenzied debate over his meaning, with many also praising him for his knowledge of the text.

Musk, who is known for his cryptic Twitter posts, wrote in English “Humankind” before posting an abbreviated version of the ‘Seven Steps Verse’ in Chinese on his official Twitter and Weibo accounts.

The highly allegorical poem describes the relationship between two brothers from a royal family during China’s warring Three Kingdoms period that is taught in all of China’s primary schools about the importance of getting along, according to Reuters.

Discussions about how to interpret Musk’s posts trended heavily on Weibo on Tuesday, receiving over 100 million views. Twitter is blocked in mainland China.

Popular interpretations suggested Musk was alluding to two rivalling dog-themed cryptocurrencies, shiba inu and dogecoin, which he had been tweeting about this week. His tweets are known for moving crypto currency markets although crypto currency trading is banned within China’s borders.

Reference News, a publication under state-run Xinhua news agency, said Musk’s post could be a nod to a heated exchange he had with the United Nations World Food Programme’s executive director on Monday about donations.

TikTok CEO Shou Zi Chew will step down as its parent ByteDance’s chief financial officer (CFO) to focus on running the short-video platform full time, according to an internal memo the company shared with Reuters.

The memo, which was sent by ByteDance co-founder Liang Rubo to staff on Tuesday, also outlined a major reshuffle at the Beijing-based company to create six business units (BUs).

This is the biggest organisational change since ByteDance co-founder Zhang Yiming said in May he would step down as CEO. Zhang remains chairman and has more than 50 percent of voting rights. Liang will officially take over from Zhang as CEO in December.

Chew’s shift comes after ByteDance said in April that it did not have any imminent plans for an IPO. It had been looking at a Hong Kong or New York listing, sources previously told Reuters.

ByteDance will also be reorganised into six units ― TikTok and its Chinese version Douyin, work collaboration unit Lark, business services unit BytePlus, gaming unit Nuverse, and education tech unit Dali Education, Liang said in the memo.

This will help ensure “business lines and teams that work closely together are grouped as Bus”, he added.

The TikTok unit will support operations of the short-video app and its expansion into areas such as global e-commerce.