The year so far has been no less than a nightmare for gaming players in India. This is because the online gaming industry faced numerous challenges due to the increased regulatory scrutiny and a tightened tax noose on the real money gaming (RMG) segment.

While the Ministry of Electronics and Information Technology (MeitY) provided some clarity by notifying online gaming rules in the first half of the year, the sector was shaken when the GST council mandated a 28% GST.

The move even prompted gaming-focussed VC firm Lumikai to revise its gaming revenue projection for FY28 to $7.5 Bn from $8.6 Bn.

Amid regulatory challenges and taxation impacts faced by RMG firms, funding in the gaming space declined significantly from $576 Mn in 2022 to $209 Mn in 2023 until November, Inc42 data showed.

However, not everything is gloom and doom, even as the overall sentiment for RMG appears subdued.

Well, from predictions point of view, the year 2024 is anticipated to witness springtime for mid-core and casual gaming studios. Investors will be seen tilting towards these segments amid expectations of them becoming the primary growth drivers for gaming revenue in India next year.

Even though there are hopes of a stable 2024 on the horizon, investors are expected to remain cautious while approaching the sector. This caution will likely hurt gaming segments that are sulking due to the government’s tightened GST noose.

With precisely ten days remaining in 2023, let’s understand how experts see this industry going through a shift and the key predictions that will define the Indian online gaming sector in 2024.

Here Are The 8 Online Gaming Predictions For 2024

No Relief On Cards For RMG Players

As of now, industry experts fear that gaming startups may continue to bear the extra GST cost for the next 1-2 years to retain customers, affecting their topline by about 70-80%. Further, smaller startups with limited funds may face challenges in absorbing the extra costs and could be forced to shut down. Although many smaller RMG startups are considering consolidation, larger startups are presently not showing any interest in acquiring companies within the same segment.

“The tax structure will undoubtedly impact the profitability of RMG companies. Larger VC-funded startups are using their cash reserves to absorb these additional costs. No investments were made in RMG companies during the second half of the year, and I anticipate that new investments are not likely to come in either. It’s just a matter of time that larger startups begin to feel the impact as well,” Sudhir Kamath, chief operating officer of Nazara Technologies, said.

To survive in the current stressful situation, the RMG startups are looking at optimising costs, which will likely have an impact on their innovation in the upcoming year, Kamath added.

Meanwhile, according to a senior executive at an Indian gaming unicorn, larger startups are trying to push diversification such as introducing free-to-play games. However, none of these companies have been able to make significant developments yet.

For instance, Dream Game Studios, owned by Dream11 parent Dream Sports, launched its first mobile game in India and Pakistan in October. Moreover, these companies are also looking to decrease reliance on the Indian market and looking at international expansion. Recently, MPL said its revenue from international operations accounted for 38% of its operating revenue in FY23, up from 11% in FY22.

Casual & Mid-Core Gaming To Change The Game

At a time when investors are shying away from investing in the RMG segment, there is a growing interest in casual and mid-core gaming in India.

Casual games are a category of video games intended for a wide and diverse audience. They are designed to be easily accessible, user-friendly, and enjoyable for players of all skill levels. Some examples of casual games are Candy Crush, Clash of Clans, and puzzle games.

Meanwhile, mid-core games, somewhere between casual and hardcore genres, demand a higher level of player engagement with more complex mechanics and elements, requiring a dedicated time commitment. Free Fire and BGMI are two of the many examples.

While, on the one hand, the return of BGMI (Battlegrounds Mobile India) has reignited advertising interest in the gaming space, in-app purchases for casual games are experiencing growth on the other.

Players are increasingly willing to make in-app purchases for features like skipping wait times, advancing levels, and accelerating progression.

The ease and convenience introduced by UPI have played a significant role in making users more comfortable with in-game transactions.

“I am very bullish on both video gaming and esports. There’s better monetisation potential. We have seen that gamers are now more comfortable paying for in-app purchases and are gradually moving towards big-ticket purchases, thanks to UPI,” Nazara’s Kamath said.

Meanwhile, Ashwin Suresh, the founder of game streaming startup Loco has observed a noticeable willingness to experiment with new genres among gamers.

According to him, until the middle of last year, there was a strong inclination mostly towards shooter games and the battle royale format. “However, as we progressed into the year, we observed a significant uptake in the PC format and a surge in role-playing games and massively multiplayer online games,” Suresh said.

Imperative to mention that the gaming sector is undergoing a demographic shift as well, particularly with the increasing presence of gamers from non-metro cities and towns. Within this demographic, 60% are male and the remaining are female gamers.

Lately, Nazara Technologies is seen focussing on bringing out new games. For this, the listed gaming giant has partnered with four Indian game studios to publish five casual and mid-core games in India.

On an earlier occasion, CEO Nitish Mittersain told Inc42 that Nazara was looking to invest in gaming studios capable of producing top-tier games tailored for both the Indian and global markets.

User Engagement, Retention Rate To Attract Investments

Moving on, according to industry experts, gaming studios can expect to secure anywhere between $3 Mn and $7 Mn from VCs next year.

In the casual gaming segment, investors will likely focus on metrics such as engagement, retention rate, and time spent as they evaluate potential investment opportunities.

Talking about Lumikai’s investment thesis, Salone Sehgal, the general partner of the VC firm said, “We invest in pre-product studios with a focus quality of the team, their previous experience, and the 0-1 scale of their gaming journey. For the studios that have launched one or few games, we focus on engagement, early retention metrics at D-1, D-20, and D-30, along with the time spent on the platform. We also conduct thorough product checks and competitive benchmarking as part of their evaluation process.”

Meanwhile, early stage VC WEH Ventures plans to shift focus from pre-game studios to those that have already launched 2-3 games.

According to Rohit Krishna, partner, WEH Ventures, the overall progress in AI has significantly simplified and made content creation more affordable. Moreover, the availability of new tools will play a crucial role in game development. While many studios have been experimenting this year, they will be seen launching more games next year.

Investors To Remain Cautiously Optimistic About AAA Games

At a time when the future of casual and mid-core gaming studios appears to be bright, investor interest is a bit dim towards AAA gaming. This is because the Indian gaming market predominantly follows a freemium model, and there hasn’t been a significant evolution towards paid-premium games yet. Moreover, Indian studios have not yet successfully developed AAA games.

However, things could change for good as two or three AAA games are scheduled for launch next year. This development is likely to capture the attention of investors and potentially make them more eager to invest in AAA gaming studios.

But, it’s still early days for AAA and console game development in the Indian market as startups are yet to reach that stage of maturity that is needed for this space.

Talking about the maturity in the space, game development startups are taking charge of nurturing next-generation talent. However, this will not be enough for sustainable growth, as these players will have to solve the challenge of high operational costs to subdue the impact of the 28% GST whiplash on the industry.

The post 8 Online Gaming Predictions For 2024 appeared first on Inc42 Media.

What’s a newsmaker in the context of startups and tech? Is it an outspoken founder or investor who was among the headlines over allegations and controversies, or is it someone who creates phenomena with their statements and thoughts?

Over the past month, we have recounted the personalities that found themselves among controversies and success stories of the year — from public listings to startups that turned profitable and from founder exits to shutdowns in the Indian startup ecosystem, While these were some of the bigger stories of 2023, we believe newsmakers are those who drove themes and trends that remained prominent throughout the year.

There were founders and leaders who earned prominence for other reasons too, such as Zomato CEO Deepinder Goyal or Paytm founder and CEO Vijay Shekhar Sharma for turning around their large businesses to some extent.

Or even founders of Honasa (Mamaearth), Zaggle, ideaForge and others that successfully navigated public markets for public listings. Plus, major VC ecosystem developments such as Omidyar Network’s exit from India or Peak XV Partners rebranding from Sequoia Capital also garnered plenty of attention.

But in our recap, we have chosen eight newsmakers who had a more profound influence on Indian tech. As part of Inc42’s 2023 In Review series, we are looking at these founders, CEOs and tech leaders who shaped the discourse and sparked off debates this year.

From Ola Electric founder Bhavish Aggarwal who launched a new company this year to join the generative AI revolution to Tim Cook, who turned into something of a global ambassador for the Make-In-India movement. And from Isha Ambani carrying the torch forward for Reliance’s retail legacy, to Narayana Murthy’s comments that stirred up the work-life balance debate all over again — these are the personalities that drove conversations throughout 2023.

Bhavish Aggarwal: Dominating EVs & Eyeing Generative AI

Last year, the Ola Electric founder found himself in the thick of social media disputes with competitors in the automobile industry, but this year, Aggarwal’s focus turned to pumping up Ola Electric’s two-wheeler sales figures and announcing the launch of the next generation of EV two-wheelers by the end of 2024. There are also plans for an electric car in 2025.

With Aggarwal leading the marketing push on his personal social media channels, Ola’s EV business has seen tremendous growth — nearly 50% higher monthly sales in November 2023 as compared to September 2023.

And with Ola’s growth, the overall adoption for EV two-wheelers has also picked up for other players — sales nearly doubled in November as compared to June 2023.

The Aggarwal-led company also put its IPO plans into full throttle by converting into a public company, after raising INR 3,200 Cr in a year when mega rounds were a rare occurrence. The pre-IPO filings are expected to come in December and there will be a lot of eyes on what Ola and Aggarwal expect from the public markets.

And while most of the focus has been on Ola Electric, Ola Cabs also introduced plenty of changes from ONDC integration to the Ola Prime Plus tier. But Ola Electric is clearly the biggest motivation for Aggarwal currently.

Of course, towards the end of the year, some of his focus turned to generative AI. At a time when the global gen AI fight seems to be centred around big tech giants, Aggarwal’s third venture Krutrim is looking to disrupt the space with an AI-centric cloud infrastructure, developing AI models for Indian languages and more.

Here’s a deep dive into Krutrim’s plans, and what we are more interested in seeing is whether Aggarwal changes the game in AI just as Ola did for EVs and mobility.

Isha Ambani: Revamping Reliance’s Retail Legacy

Reliance is one of the biggest newsmakers in tech every year for everything that Reliance Jio does, but this time around it’s the retail business that has taken centre stage with Isha Ambani leading the line.

Last year, Isha was elevated to chairman and managing director of Reliance Retail and the company’s moves this year signal a change towards digital-first brands, tech-driven platforms and a new-age omnichannel approach.

This year, the retail major forayed into the BPC market with Tira, and Reliance Retail’s digital and new commerce revenue surged to INR 50,000 Cr in FY23, a fifth of the overall revenue. Reliance Retail also raised over INR 15,000 Cr (nearly $2 Bn) from sovereign funds to press the accelerator on the digital commerce businesses, and acquire brands or exclusive rights to international labels.

While Mukesh Ambani and Akash Ambani helm Reliance Industries and Reliance Jio, Isha’s focus has squarely been on Tira and AJIO (fashion), along with JioMart. The revenue contribution just shows how key these platforms will be for long-term growth for Reliance’s retail business.

But that’s not all — the newly-created Jio Financial Services (JFS) has brought Isha on board as a director, and with JFS’ plans to increase credit penetration in the retail market, we could see some interesting developments between Reliance Retail and JFS in the year ahead.

Narayana Murthy: Wading Into The Work-Life Balance Debate

Narayana Murthy is no stranger to being among the headlines, but this year, the Infosys cofounder and former CEO jumped into a hot debate that has polarised the tech ecosystem.

The Padma Shri awardee argued that work productivity in India is one of the lowest in the world and urged youngsters to volunteer to work 70 hours a week. But this caused a lot of furore among certain sections of those who follow Murthy, even as many other entrepreneurs advocated for the same.

To be fair, the work-life balance debate has been a hot topic of discussion pretty much every year. In 2022, Bombay Shaving Company founder Shantanu Deshpande urged startup employees to put in 18 hours every day, which raised concerns about the pressures of working in a startup, work culture and employee happiness.

But Murthy’s comments have been particularly criticised as he cited his own experience with founding Infosys and working long hours as an example. Many pointed out that given his ownership of the company, his motivation was not unnatural, but most entry-level employees have personal goals and commitments that do not justify long working hours. Others also pointed out the low salaries paid by IT giants such as Infosys to entry-level and mid-tier talent.

Besides this Murthy was caught in a deepfake campaign where a video featuring his likeness and voice was used to promote a stock trading platform. The veteran entrepreneur was one of several celebrities seen in AI-generated fake videos this year.

But it doesn’t end there: Murthy also took a stance against government subsidies for infrastructure, saying “nothing should be given for free”. He is believed to have suggested that those availing government subsidies should be made to contribute back to the betterment of society in some form or the other.

His comments, made at the Bengaluru Tech Summit 2023 in December, are particularly ironic given that so much of Indian tech today revolves around digital public infrastructure, which is essentially a free service for users, subsidised by government and policy push.

Rahul Yadav: Return Of The ‘Bad-Boy’ Entrepreneur

While Ashneer Grover continues to cause controversies with each statement, the biggest founder-related governance issues this year have come from Broker Network and its founder Rahul Yadav.

As we recounted in our original and deep investigation into Yadav’s latest venture, Broker Network burnt over INR 280 Cr in less than 18 months, and the founder is alleged to have built a web to syphon off funds from the company.

The biggest surprise with Broker Network is that Info Edge invested INR 280 Cr in the company after being convinced by Yadav that the Housing.com ouster and the Intelligent Interfaces’ no-show are behind him.

Essentially, even one of the most experienced investors in India — led by Sanjeev Bikhchandani, one of the most reputed entrepreneurs in the country — was swayed by a pitch, which eventually turned out too good to be true. Investors have tightened up their due diligence processes for potential investments a lot in the past two years and Info Edge’s bruising experience is only likely to increase their scrutiny into founders and potential bets.

Today, Yadav is dealing with multiple cases. The Economic Offences Wing has registered an FIR against him and is looking into the bigger complaint by Info Edge. Even former employees have filed FIRs against Yadav for furnishing bad cheques. Will 2024 see Yadav being prosecuted and charged for the Broker Network saga?

Rajeev Chandrasekhar: Cementing India’s Place In Global Tech 

Few policymakers and legislators in India wade into tech debates as frequently as Rajeev Chandrasekhar, who as Minister of State (MoS) for Information Technology, is second in command after Ashwini Vaishnaw, the union minister for IT.

But Chandrasekhar has been nearly omnipresent when it comes to speaking about the government’s stand on everything from AI regulations in light of the generative AI revolution, or net neutrality given the battle between telcos and over-the-top (OTT) service providers over network fees.

As per reports, Chandrasekhar, during a meeting with his Dutch counterpart Alexandra van Huffelen, is said to have pushed for a greater role for India in swiftly putting in place global regulations for emerging tech.

The MoS for IT also pushed for greater manufacturing in India by tech giants across sectors — particularly focussing on how Apple has managed to expand its manufacturing footprint in India (more on this later). In addition to electronics manufacturing, Chandrasekhar is said to have liaised with Elon Musk-led EV giant Tesla to bring EV manufacturing to India and procure components locally.

With India looking to carve out a bigger piece of the global tech manufacturing pie in light of the China+1 movement, Chandrasekhar has emerged as the face of India’s tech policy in many ways.

Robin Raina: Eyeing An IPO For A Bankrupt Business 

There are CEOs that seem to grow into mature leaders as their companies head to the public markets, and there are the likes of Robin Raina, whose outlandishness never seems to wane.

The Ebix, Inc. and Ebix Cash CEO has had to face many tough questions in light of the company’s INR 6,000 Cr IPO plans in India, particularly related to the sorry state of its financials and its high indebtedness.

Raina joined Ebix way back in 1997 and quickly rose up the ranks, but the company’s operations have been under a cloud in the past year, especially after the Hindenburg Research report that questioned a lot of the company’s claims. Despite this, Raina has looked to stay in the limelight with his penchant for the high life — particularly, the glamour shots with his Ferrari and other luxury vehicles.

Ebix’s lenders have unsuccessfully chased the company for funds, but Raina took home a $1.8 Mn bonus in September 2023 even as the business was coming close to bankruptcy. In December 2023, Ebix Inc filed for bankruptcy in the US, after defaulting on a $617 Mn loan and several covenants associated with this debt.

The entire episode shows us the severity of corporate governance lapses in some companies, even those that aspire to raise money from public markets. And there’s also a question of how regulators approved the IPO plans for a company that has so many red flags in its leadership.

Sam Altman: The Posterboy Of Generative AI

Fired and back again in five days. Few founders and CEOs can boast of having survived such drama as Sam Altman did with OpenAI in late 2023, after being thrown out of his own company. His dismissal and subsequent reinstatement set off shock waves across the global tech ecosystem, sparking off a debate about the power struggle between a founder and a company’s board.

Altman, considered by many as the face of generative AI, has been in the news all year long — largely because generative AI itself has grabbed headlines and the attention of the world. There were reports about a DDoS attack on OpenAI in early November as well as the company’s close ties with Microsoft, its lead investor.

In the Indian context, however, controversies around Altman started much before the boardroom shenanigans at OpenAI.

Altman’s visit to India and his public appearance attracted the who’s who of the Indian tech ecosystem. But when he was asked whether Indian companies could compete with OpenAI, his answer did not please many. He called it a “totally impossible” endeavour, but later clarified that he was simply responding to a question about trying to compete with OpenAI valued at over $25 Bn+ using just $10 Mn.

Of course, all this was forgotten by the time Altman was sacked by the company’s board and then brought back swiftly, If anything, his reinstatement only seems to reinforce the notion that Altman is not only the most influential person at OpenAI, but arguably also in generative AI.

The rise of OpenAI has fuelled the generative AI revolution with a slew of startups now looking at building LLMs and models for specific needs. Case in point: Indian AI startups Bhavish Aggarwal’s Krutrim or Lightspeed-backed Sarvam AI. Plus, companies across sectors are adopting ChatGPT and generative AI en masse for their operations.

Tim Cook: Making India The Apple Of His Eye

He’s the CEO of the world’s most valuable company, and one could argue that no CEO has backed India in as big a way as Apple’s Tim Cook did this year.

In contrast to the visit of Jeff Bezos in 2020, Cook’s tour of India saw Apple launch its first own-brand retail stores in Mumbai and Delhi. But this was a relatively minor development when seen in the context of Apple’s larger plans for India.

Firstly, the tech giant expanded its manufacturing base in India and is eyeing making more than just iPhones in the country. Given the fact that accessories such as chargers and wireless earphones (Airpods) sell in larger quantities than smartphones, it could be argued that this represents the biggest push for global electronics exports from India.

Apple’s lead in India has since been followed by the likes of Google, which said it would manufacture Pixel smartphones in India from 2024.

Some of the goodwill earned by Apple has been tarnished with allegations around anti-competitive practices by its App Store, as well as the alleged hacking of iPhones of some elected officials. But these were minor blips in the Apple story.

Cook and Apple’s India plans underscore the wider China+1 movement in the tech industry, as many major players are looking to diversify their manufacturing bases away from China and to India and other geographies.

Of course, Apple being the largest company in the world by market cap, seems to dominate all discussion around the Make-In-India success story, but going forward the efforts of the company would be to boost local manufacturing of smaller electronics and components for its devices, so that it has to rely on fewer imports when assembling and making products in India.

The post 8 Newsmakers Of 2023: The People Behind The Biggest Indian Tech Stories Of The Year appeared first on Inc42 Media.

Ecommerce took centre stage on the 13th day of the Parliament’s Winter Session as the government answered a slew of questions regarding regulation, competition, ONDC and ecommerce exports.

Responding to a question, the Minister of State (MoS) for Commerce and Industry Som Parkash on Wednesday (December 20) said that the ONDC network was now live in 500 towns and cities across the country. 

“The geographic coverage of ONDC is determined both by the capability of its Network participants and the independent business decisions of merchants onboarded by the Network participants,” he added.

Parkash’s comments were part of a written response to a question by Lok Sabha member Ravikumar D on whether ecommerce regulations extended to the state-backed ONDC. 

“All existing laws and regulations of India, related to ecommerce apply to ONDC and the Network Participants on [the] ONDC network,” Parkash said.

The government also added that ONDC was also taking ‘comprehensive’ steps to ensure trust, fairness and transparency on the network, including fairness in search and discovery, payment mechanisms, KYC requirements, reviews and ratings, and enforcement, among other factors.

During the session, Parkash also pointed out that the government has so far not undertaken any studies to address competition-related issues identified by the 172nd report of the Rajya Sabha on the promotion and regulation of ecommerce in India. 

The minister added that the government had filed an ‘Action Taken’ report in response to the recommendations of the Parliamentary Standing Committee on Commerce on the matter.

Incidentally, the government had then decided not to take any recommendations on the aspect of competition.

The standing committee had recommended changes related to the current regulatory regime encompassing ecommerce, the Competition Act of 2002, abuse of dominant position by big players as well as mergers and acquisitions. The committee had also recommended that the Ministry of Corporate Affairs take ‘concerted efforts’ to finalise and enact the Competition Amendment Bill ‘at the earliest’.

The government, in its action-taken report, noted that the amendment bill would already include most of the recommendations made by the standing committee in terms of competition and address gaps in the current regulatory regime. 

DGFT Collaborating With Ecommerce Cos: MoS Commerce & Industry

On the question of whether the government has tied up with any startup or private players for ecommerce exports, MoS Commerce and Industry Anupriya Patel said that efforts were being taken to promote ecommerce exports in partnership with various stakeholders.

“… outreach events are being held in the districts under Districts as Export Hubs initiative with [a] focus on promoting ecommerce exports of the identified goods from the districts in collaboration with various stakeholders,” said Patel in a written response.

According to Patel, the Directorate General of Foreign Trade (DGFT) is collaborating with various ecommerce platforms to promote ecommerce exports from the country. 

“The core objective of this collaboration is to leverage ecommerce platforms operating in other countries to support local exporters, manufacturers, and MSMEs in India in reaching potential international buyers,” the MoS added.

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Taking on troubled startup Dunzo, logistics startup Shadowfax on Wednesday (December 20) announced its foray into the on-demand delivery space with the launch of its app Flash. 

The new service will offer last-mile delivery solutions to customers in more than 50 cities within 30 minutes. Users will be able to make pickup and drop-off requests through the app, which will cater to both merchants and end customers within the city limit. 

In a statement, the startup said that the Flash platform has introduced a new concept of ‘milk run deliveries’, enabling customers to consolidate multiple shipments on a single route which, in turn, would optimise efficiency and lower delivery costs. 

Touting the new platform as a ‘cost-efficient logistics solution’ that prioritises speed and reliability, Shadowfax said that Flash also integrates GPS technology to offer full visibility into delivery and ensuring real-time tracking capabilities.

Commenting on the launch, Shadowfax cofounder and chief business officer Praharsh Chandra said, “We are thrilled to introduce Flash by Shadowfax… This service aligns with our commitment to innovation and customer satisfaction, providing a comprehensive solution for efficient, on-demand logistics…”

The new offering pits Shadowfax directly against Dunzo. Flash will enable the company to tap into the growing demand for on-demand delivery and further diversify its portfolio. Alongside, the move will also enable the company to further scale up its offerings and create alternative revenue streams. 

The development comes at a time when Dunzo is facing a major cash crunch and has shelved its expansion plans. With the hyperlocal startup in disarray, it looks like an opportune time for Shadowfax to enter the space that has been dominated by Dunzo for the past many years. 

Interestingly, the new launch comes a month after the Competition Commission of India (CCI) greenlit Mirae Group’s proposal to acquire a minority stake in Shadowfax. The move also comes months after reports surfaced that the logistics giant was finalising a $60 Mn funding round led by TPG NewQuest.

Founded in 2015 by Vaibhav Khandelwal, Abhishek Bansal, Chandra and Gaurav Jaithliya, Shadowfax is a third-party logistics platform that caters to hyperlocal and delivery businesses. 

The startup claims to have a network of more than 1.25 Lakh monthly active delivery partners that deliver to more than 15,000 pincodes and 35 Lakh registered users. 

It is backed by big names such as Mirae, Flipkart, Qualcomm Ventures and Eight Roads Ventures. With customers such as Meesho, Myntra, Zomato-owned Blinkit, and Flipkart in its kitty, Shadowfax has raised more than $120 Mn till date.

Shadowfax reported a net loss of INR 142.63 Cr in the fiscal year 2022-23 (FY23), down 19% year-on-year (YoY), while total income rose 42% YoY to INR 1,423 Cr.

The post Shadowfax Ventures Into On-Demand Delivery With New App Flash To Take On Dunzo appeared first on Inc42 Media.

Foodtech major Swiggy has begun charging restaurants a 2% ‘collection fee’ on all orders to facilitate payments from customers on the food delivery platform. 

While the company declined to comment on the matter, sources told Inc42 that the platform has begun levying the new charge. As per reports, the fee will be deducted from the payouts to the listed restaurants.

This comes days after the company informed select partner restaurants about the impending move. 

As per a correspondence seen by The Economic Times, Swiggy said, “Commencing from December 20, 2023, we will be introducing a standardised 2% collection fee on all orders. This fee is designed to facilitate smooth customer payments on the Swiggy platform. It is important to note that this amount will be subtracted from your payouts.”

Interestingly, Swiggy is following the suite of competitor Zomato, which already imposes a similar ‘payment gateway fee’ of around 1.8% on all orders. However, the new development from Swiggy comes more than four to five years after the Deepinder Goyal-led company instituted its gateway fee. 

Meanwhile, the move seems to have sparked a major discontent within a section of the members of the National Restaurants Association of India (NRAI). The industry body’s vice president and founder of QSR chain Wow! Momo, Sagar Daryani, reportedly termed the new charges by Swiggy an ‘unwelcome distraction’.

He told ET that the ‘collection fee’ is essentially a method of indirectly raising commission costs. However, the NRAI declined to comment on Inc42’s queries on the matter. 

The new charge could likely be part of Swiggy’s strategy to create alternative revenue streams and boost its top line as it prepares for a public listing later next year. Just this year, the foodtech major also hiked its platform fee to INR 3 per order, irrespective of cart order, to enhance unit economics and spruce up revenues. 

As per reports, Swiggy’s average order value hovers around INR 400, which means that a 2% collection fee would translate into an additional INR 8 in revenue per order for Swiggy. This could pave the way for better unit economics for the company as it looks to show a healthy balance sheet to investors while filing for its IPO papers. 

As per the half yearly financial report of Swiggy’s investor Prosus, the startup’s food delivery business saw a 28% year-on-year growth in gross merchandise value (GMV) to $1.43 Bn in the first six months of FY24. 

The foodtech major was also one of the best performers in the Dutch investor’s books with an IRR of 7% in H1 FY24. 

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At its annual general meeting (AGM) on Wednesday (December 20), troubled edtech major BYJU’S‘ stakeholders approved its financial statements for the fiscal year 2021-22 (FY22). 

With close to 60 shareholders in attendance, BDO was reappointed as the statutory auditor of the company during the three-hour long AGM, BYJU’S said in a statement, adding that all the resolutions proposed by the company were passed. 

“Think and Learn, the parent company of BYJU’S, held its Annual General Meeting (AGM) today with close to 60 shareholders in attendance. All the resolutions were passed, including the accounts for FY22. BDO was reappointed as the statutory auditors of the company,” the statement said. 

As per the edtech major, cofounder and chief executive officer (CEO) Byju Raveendran kicked off the AGM with an ‘account of the state of business and its challenges’. This was followed by chief financial officer Nitin Golani briefing the stakeholders about the audit while India CEO Arjun Mohan spoke about business updates and plans. 

The AGM also saw auditor BDO answering questions from shareholders about the newly furnished financial statements. 

The audited financial results were finally approved by the stakeholders after multiple delays from the company in furnishing them. This resulted in the resignation of previous auditor Deloitte and exit of three key board members, including GV Ravishankar of Peak XV Partners, Prosus’ Russell Dreisenstock and Vivian Wu of Chan Zuckerberg Initiative.

In November this year, the troubled startup released select financial numbers for its core operations. Think and Learn Private’s standalone EBITDA loss stood at INR 2,253 Cr in FY22 compared to an EBITDA loss of INR 2,406 Cr in the previous fiscal. Total income stood at INR 3,569 Cr in the year ended March 2022 as against INR 1,552 Cr in FY21. 

While there was no mention of the net loss figure in FY22, the edtech major’s consolidated net loss stood at INR 4,588 Cr in FY21, up 1,880% year-on-year.

The edtech decacorn has been grappling with a slew of issues, including paucity of funds, mass layoffs, mounting losses, top-level leadership exits and full-blown confrontation with its lenders over the repayment of its $1.2 Bn Term Loan B. 

To tide over the crisis, the company has been scouting investors to raise funds and has also been in the market to reportedly sell subsidiaries Epic and Great Learning to repay the loan.

The post BYJU’S AGM: FY22 Audited Financials Approved, BDO Reappointed As Auditor appeared first on Inc42 Media.

Bengaluru-based B2B food and ecommerce marketplace Jumbotail’s net loss more than doubled during the year ended March 31, 2023. The startup’s loss surged 112% to INR 264.16 Cr in the financial year 2022-23 (FY23) from INR 124.74 Cr in the previous fiscal year.

The bottom line took a hit despite revenue from operations jumping 117% to INR 819 Cr from INR 377.36 Cr in FY22.

Founded in 2015 by S Karthik Venkateswaran and Ashish Jhina, Jumbotail offers a suite of go-to-market services for brands looking to reach the kirana market. It runs an online B2B marketplace for groceries and food and primarily caters to wholesale buyers.

How Did Jumbotail Make Money In FY23?

Being an ecommerce marketplace, the startup primarily earns revenue from the sale of products. It also earns revenue from the sale of services via its omnichannel retail brand J24, which integrates offline kirana stores and helps them sell both online and offline.

The startup also gets service income via its Golden Eye retail operating system, a cloud-based retail POS Operating System.

During the year under review, Jumbotail earned INR 766.59 Cr from the sale of products, an increase of 117% from INR 351.74 Cr in FY22. Revenue from services shot up 105% to INR 52.42 Cr in FY23 from INR 25.61 Cr a year ago.

Including other income, total income rose to INR 849.87 Cr from INR 398.85 Cr in FY22.

Where Did The Startup Spend In FY23?

In line with the rise in its top line, Jumbotail’s total expenses zoomed 113% to INR 1,114.04 Cr in FY23 from INR 523.60 Cr in the previous year. 

Purchase Of Stock Expenses Shot Up: Purchase of stock-in-trade accounted for the biggest chunk of expenses. The startup spent INR 760.99 Cr under the head in FY23, almost double that of INR 352.29 Cr in the previous fiscal year. 

Employee Benefits Expenses Doubled: Jumbotail’s employee costs grew to INR 101.51 Cr in the year ended March 31, 2023, from INR 52.34 Cr in FY22. 

The sharp increase indicates that the startup may have increased its headcount during the year. The startup spent INR 82.31 Cr on wages in FY23, up 84% from INR 44.69 Cr in the previous financial year.

Distribution Costs Jump: In line with its business, the transportation and distribution costs incurred by Jumbotail also saw significant growth. During the period under review, the startup spent INR 60.44 Cr on transportation, up 108.76% from the INR 28.95 Cr it recorded in FY22.

Ad Spend Increases: The startup spent INR 17.11 Cr on advertisements and other promotional activities, up nearly 90% compared to the INR 9.16 Cr it spent during FY22. 

The startup’s EBITDA margin contracted to -9.83% in FY23 from -9.26% in FY22. On a unit economic basis, Jumbotail spent INR 1.36 to earn every INR 1 in FY23.

Earlier this year, during its INR 75 Cr debt round, Jumbotail said it planned to achieve operational profitability in the next 12 months. 

In a statement, Jumbotail said it is now aiming to expand its retailer base to about 4 Lakh and reach over 80% penetration in the addressable market in FY24. Currently, Jumbotail claims to have 2.5 Lakh+ retailers across 50+ cities. The startup also said it is looking to double its operating revenue and increase the number of J24 stores to 300 stores in FY24.

Jumbotail competes with the likes of Udaan and BigBasket. It has so far raised a total funding of around $139 Mn in equity and debt from investors, including Kalaari Capital, Invus, Heron Rock, VII Ventures, Nexus Ventures, Arkam Ventures, Alteria Capital, and Innoven Capital.

The post Jumbotail’s FY23 Loss Surges 112% To INR 264 Cr Despite Doubling Sales appeared first on Inc42 Media.

Unicommerce eSolutions Pvt Ltd, which offers a software-as-a-service (SaaS)-based order management and fulfilment platform to ecommerce and retail businesses, has roped in five industry leaders to its board.

The startup, which aims to go public late next year, has appointed former SoftBank India head Manoj Kohli, along with Ullas Kamath and Sairee Chahal as independent directors and Kunal Bahl and Rohit Bansal as non-executive directors. 

These appointments are poised to boost reach, institutionalise governance structure and steer the company into the next phase of growth, Unicommerce said in a statement.

Other than SoftBank, Kohli has served as the executive chairman of SB Energy Projects Private Limited as well as a managing director and CEO of Bharti Enterprises Limited. He had been instrumental in driving growth, profitability and operational excellence across multiple sectors, the statement added.

Meanwhile, Kamath was the joint managing director of Jyothy Labs, where he played a crucial role in the transformation of the company into a multi-brand FMCG corporate entity. 

Chahal is the founder of SHEROES, a women-focussed digital platform and an ecosystem with over 20 Mn women. She is also the founder of Mahila Money, a neobank for women, and cofounder of Fleximoms, which works towards creating, enhancing and co-creating workflex opportunities for women professionals.

Bahl and Bansal are the cofounders of Snapdeal, AceVector and Titan Capital.

“The depth and diversity of their expertise aligns seamlessly with our vision of anticipating and serving the evolving technology needs of our customers both in India and in other countries,” said Kapil Makhija, MD and CEO of Unicommerce.

Unicommerce was launched by three classmates at IIT Delhi – Ankit Pruthi, Karun Singla and Vibhu Garg. It was later acquired by Snapdeal in 2015.

The startup enables end-to-end management of ecommerce operations for D2C brands, retail companies, and other online sellers through its comprehensive suite of SaaS-based technology products.

Unicommerce’s platform keeps track of stocks across multiple warehouses, keeps inventory information updated across multiple sales channels (both offline & online) and automates order pick-ups to support faster and more accurate deliveries.

The startup generates revenue by selling its SaaS solutions. Including other income, its total revenue stood at INR 92.9 Cr in FY23 as against INR 61.3 Cr in the previous fiscal year.

Unicommerce’s operating revenue zoomed 52% to INR 90 Cr in the financial year 2022-23 from INR 59 Cr in the previous fiscal year on strong demand for its services. This resulted in the SoftBank-backed startup’s net profit rising 8% to INR 6.4 Cr in FY23 from INR 5.9 Cr in FY22.

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“Returns on capital in India have sucked historically.” That’s how Tiger Global partner Scott Schleifer characterised the India experience for the hedge fund giant back in February. It may sound harsh, but that’s something a lot of Indian VC firms came to terms with, in 2023. 

There’s little doubt that 2023 has been one of the toughest years for Indian startup VCs and the investor ecosystem. The past 12 months have seen partner exits, venture capital firms pulling out of India, rebranding and separation of VC structures and new fund managers coming into the picture. 

If 2022 saw startups go through instability, then 2023 was all about churn in the investor ecosystem. Sequoia Capital India’s rebranding to Peak XV Partners and separation from the US entity was the biggest story in the first half, overshadowed by the exit of Omidyar Network from India. 

Between these two big developments, a slew of partner-level departures at the likes of Orios Venture Partners, Venture Highway, Lightbox, Rebright, Lightrock India and Together Fund made it a tough year for VCs in general. 

The slowdown in investments in the past nearly 24 months and the troubles in various portfolio companies — ranging from corporate governance issues to revenue slowdown — have together created a perfect storm for VCs and fund managers. 

The headwinds have not impacted India operations alone. Sequoia US partner Michael Moritz quit the firm in July this year after 38 years, and Prosus & Naspers CEO Bob Van Dijk also stepped down from the investment major. 

And where there are departures, there are also new partners and fund managers taking over. Marquee firms such as Peak XV, Fireside Ventures, Venture Highway, Matrix Partners and Blume Ventures are some of the VC firms that named new managing directors and partners this past year. 

These new fund managers not only have to turn around the India investment story but also lead their firms into 2024 where many expect the volatile market conditions to stabilise. 

But before we get to the outlook for the next year, it’s important to look back at 2023 and understand what makes it the year of VC rejigs. 

Churn At Indian VCs In 2023

Perhaps the most noticeable trend among VC firms this year has been a slew of partner exits for reasons ranging from increasing pressure from limited partners, governance issues in portfolios, revenue and business slowdown as well as internal tensions between partners and fund managers. 

Kushal Agrawal, partner and CFO of Lightrock India resigned, marking the latest departure in a series of exits at the firm. The primary reason for Agrawal’s departure reportedly stems from internal differences regarding the operational direction of the fund.

Most recently, SoftBank India saw significant exit as India operating partner Vikas Agnihotri exited the firm. Agnihotri’s exit comes after SoftBank sold a stake in PB Fintech and Zomato, completely exiting the latter.

This is also the reason cited for the break-up at the top of Lightbox, one of the most active venture capital firms in the country. Partners Siddharth Talwar, Prashant Mehta and Jeremy Wenokur are leaving the Mumbai-based VC. 

Lightbox cofounders Talwar and Sandeep Murthy are likely to separate the fund’s portfolio and part ways due to differing views on what strategies the firm should pursue. The departing trio is looking to set up a separate fund comprising some Lightbox portfolio companies.

In the case of Orios VP, another Mumbai-based VC firm, Rajeev Suri and Anup Jain stepped away. Reports claimed the duo were unhappy with the carry-sharing arrangements. 

Both Orios and Lightbox have seen key investments falter due to market changes and competitive dynamics. 

Orios wrote off its investment in GoMechanic after the company’s well-documented revenue misreported problem. Pharmeasy, another Orios portfolio company, has seen a major devaluation in the past year and has struggled to raise new funds.

Lightbox is dealing with problems at Dunzo, one of its earliest bets. Dunzo is caught in a severe cash crunch and is unable to pay salaries to employees or vendors. Once a hyperlocal sensation, Dunzo is now looking at a bleak and uncertain future.

“Investors didn’t realise the amount of risk and liability that they are subject to because they trusted a lot of founders. And in most cases, founders were not aware and perhaps not as competent as they needed to be,” Prime Venture Partners’ managing partner Sanjay Swamy told Inc42 in July.

LP Pressure Grows On Existing Funds

The split at Orios exposed one hidden facet of the VC game. While on paper, many fund managers may be partners, their share of the carry (profits from investments) and the performance bonuses vary.

Founding partners get the bulk of the carry, while managing partners and other partners get a smaller share. Discord between these two classes of decision makers can directly increase the risk profile of the firm for any limited partner.

As we have written in the past, many limited partners were unhappy with a slew of portfolio problems at many of the biggest VC firms in India. 

LPs typically evaluate the overall fund performance, so partners whose investments have not worked out can potentially hide behind managers and partners who have led the more profitable investments. 

Another facet exposed by the problems at VC firms is the influence of limited partners (typically larger institutional investors and high net-worth individuals). The LP-fund manager relationship goes both ways. 

When raising funds, partners are more likely to approach LPs who have backed them in the past. In other cases, LPs want partners to break away and start new funds that fit the current market thesis better. 

LP pressure has increased in the past year or so as new areas of focus have emerged. The emergence of generative AI and other next-gen segments has compelled many LPs to look at funds and firms that have built their thesis around these areas. Some VC partners have completely stepped away from investing.

Brij Singh Bhasin, general partner at the early-stage venture capital firm Rebright Partners, stepped down to launch Snow Mountain AI, a generative AI-focussed startup. And if experienced VCs are not immune to the allure of new opportunities that emerged in 2023, can LPs be far behind?

“Increasingly, the startup LP network has started to recognise that emerging fund managers are some of the biggest value creators in the market,” Ankur Pahwa, founder and managing partner of PeerCapital, told Inc42 earlier this year, pointing to how many early-stage VC funds have come up in the past year.

He added that LPs want to see fund managers with very clear guardrails in terms of their stage and sector focus. No longer are limited partners swayed by momentum or opportunistic investing, which was the case in 2021 when startup funding peaked. After that peak, LPs have rationalised their expectations and streamlined their focus on VC funds as an asset class. 

New Leaders Take The Helm

If partners left firms in pursuit of new opportunities, in other cases, VC firms rejigged their leadership to fortify themselves for the new market realities. 

Several seasoned executives were promoted to partner and cofounder roles at firms such as Peak XV, Fireside Ventures, Matrix Partners and others. 

Early stage consumer-focussed Fireside Venture promoted partners Kannan Sitaram, Vinay Singh, and Dipanjan Basu to cofounder positions, while Matrix Partners India elevated principals Aakash Kumar, Pranay Desai, and Sudipto Sannigrahi to the role of MDs. 

Soon after Sequoia Capital India’s rebranding to Peak XV Partners and separation from the US firm, the firm promoted Rohit Agarwal to the position of managing director. 

Priya Mohan took over from Venture Highway founder Samir Sood and was named as the managing partner. Venture Highway is currently raising its third fund, which is being led by Mohan and cofounder Neeraj Arora.

Most recently, Orios Venture Partners appointed Sukhmani Bedi as a partner after the departure of Suri and Jain. Bedi, a three-time startup founder, has been with the firm since March 2022 and was formerly handling portfolio management at Orios. 

The Need To Evolve: VC Outlook For 2024

It is not just VC firms that are rejigging their leadership. Even private equity firms such as TVS Capital Funds prepared themselves for the new realities of the market. The Chennai-based firm appointed Naveen Unni, a former McKinsey & Co exec, as the managing partner.  

Unni’s appointment coincides with the fact that TVS is preparing to see many of its bets mature into exits by mid to late 2024. Ola Electric has filed its pre-IPO prospectus, while another TVS portfolio company Digit Insurance is also on course for a public listing in 2024. 

In an interview with Inc42 earlier this year, TVS Capital’s Gopal Srinivasan mentioned how the firm’s core focus areas have evolved over the years. He hinted at the fact that other firms also need to grow and mature with the market. 

“Everything that’s happening in India, from the public digital infrastructure to regulatory push from the RBI and IRDAI is enabling digital businesses. When people are not afraid to go digital for financial services, it creates a huge market for businesses. And, of course, urbanisation in many parts of India is creating a lot of new behaviours,” Srinivasan said at the time. 

Despite the challenges of the past year and in light of the somewhat negative sentiment of firms such as Tiger Global, there is a streak of optimism too. Many fund managers and partners have told us throughout the year that these pains are temporary. 

For instance, Surya Mantha, managing partner at Capria Ventures (formerly Unitus Ventures), believes that the momentum is with India when you look at the global macroeconomic factors affecting China and the US. 

“Several factors underpin our view that India is ready to step up: the young population, the digital public infrastructure that not only enables hundreds of millions to participate in the country’s economic life but also enables business innovation, a large and growing consumer economy as well as relatively stable macroeconomic conditions,” Mantha told Inc42 in June this year.

This view is echoed by the likes of Bejul Somaia, partner at Lightspeed Ventures, who tweeted that the India story is just beginning, as well as Naganand Doraswamy, managing partner and founder of Ideaspring Capital. 

Even though Doraswamy agreed that historic returns have not been great, he believes this is a very early stage in the India story to be counting the chickens. 

[With inputs from Nikhil Subramaniam]

The post Not Easy Being A VC In 2023: Partner Exits, Fund Splits Hurt Investors appeared first on Inc42 Media.

Fintech startup EnKash has received the final approval from the Reserve Bank of India (RBI) to operate as a payment aggregator under the brand name ‘Olympus’.

In a statement, EnKash said with the licence in place, it aims to further drive innovation in B2B payments.

The fintech startup had received the in-principle approval from the central bank for the payment aggregator licence in January this year.

The RBI introduced the payment aggregator framework in March 2020. Under the norms, all payment gateway operators need to obtain a licence to acquire merchants and deploy digital payments solutions.

Commenting on the final approval, EnKash cofounder Yadvendra Tyagi said, “We are thrilled to have received approval from the Reserve Bank of India, making us the first new applicant in the cohort. This affirms our unwavering commitment to maintaining regulatory standards and highlights the significance of our role in advancing the industry.”

Founded by Naveen Bindal, Hemant Vishnoi and Tyagi in 2017, EnKash operates a spend management platform that allows enterprises to manage payables, receivables and expenses. It claims to have issued over 8 Lakh corporate cards till now.

Since its inception, EnKash claims to have aided over 2,50,000 businesses in digitising and decentralising corporate payments. 

The startup last raised $20 Mn in April last year in its Series B round led by Ascent Capital. Overall, Enkash has raised a total funding of $23 Mn till date and counts the likes of MayField India, Baring India, and Axilor Ventures among its backers.

The latest development comes a day after it was reported that fintech startups Razorpay, Cashfree Payments, and neobank Open received final approval from the RBI to operate as payment aggregators.

As per the latest data, the central bank has so far granted in-principle authorisation to 37 existing payment aggregators, including  Zomato and Infibeam Avenues. Besides, it has granted the in-principle approval to around 24 payment aggregators and returned applications of over 60.

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SoftBank India has seen a significant exit as Vikas Agnihotri, an operating partner who worked closely with Paytm ahead of its IPO in 2021, has exited the investment fund. 

According to an ET report, Agnihotri left SoftBank in September. It needs to be clarified if he has taken up a new role yet.

Agnihotri’s LinkedIn profile also shows he was associated with SoftBank until September this year.

The Mumbai-based executive worked with Google till February 2020, where he was the managing director for sales in India. Agnihotri joined SoftBank after this as its first operating partner to work with the investor’s portfolio firms in India. 

At Google, he is also believed to have worked closely with Rajan Anandan, now the MD of Peak XV Partners. Before his brief stint at Google, Agnihotri was the CEO of Religare Macquarie Private Wealth Management.

He is also a member of the boards of several major companies in SoftBank’s India portfolio, including FirstCry, GlobalBees and InMobi. However, sources cited by ET noted that Agnihotri is expected to transition out of his board roles in the coming months. He resigned from eyewear giant Lenskart’s board in September, around the same time as his exit from SoftBank.

Inc42 has reached out to Agnihotri and SoftBank on the development and the story will be updated upon receiving their responses. 

Agnihotri’s exit comes as the storied Japanese tech investor has been booking profits by selling its stake in listed Indian tech startups. This month alone, SoftBank sold a stake in PB Fintech and Zomato, completely exiting the latter.

Sumer Juneja, the firm’s managing partner and head for Europe, the Middle East and Africa, said in August that the Japanese conglomerate made more than $5.5 Bn in exits from its India portfolio since it began operations in November 2018 in Mumbai. He added that the late stage investor realised $1.5 Bn from exits in the past 12 to 18 months. 

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Panasonic Life Solutions India (PLSIND) and Panasonic Corporation (PC) in collaboration with micro VC fund 100X.VC have selected 12 startups as part of accelerator programme Panasonic Ignition.

The accelerator programme was launched in October to support young entrepreneurs and provide them with investment, masterclasses, expert mentorship, product strategy and growth plans. 

The selected startups will participate in the accelerator programme over the next three months and will receive comprehensive support from both Panasonic and the 100X.VC teams. 

In addition to financial resources, the startups will also receive support in the form of mentorship sessions and guidance to complete their project, said a statement on Wednesday.

Commenting on the programme, Manish Misra, chief innovation officer at Panasonic Life Solutions India, said, “This initiative underscores our commitment to fostering groundbreaking technologies and solutions that address the evolving needs of commercial spaces while contributing to a sustainable future.”

The selected startups are:

• SustLabs – Based out of Mumbai, the startup was founded by Kaushik Bose in 2016. It develops consumer IoT solutions for home energy monitoring. 
• MinionLabs – The Bengaluru-based startup was launched in 2017 by Gokul Shriniva. It has developed a product for measuring individual energy consumption in buildings.
• Clairco – Founded by Aayush Jha in 2018, the startup is headquartered in Bengaluru. It develops IoT-based smart air purification and space optimisation devices.
• Enlite – Founded in 2017 by Gaurav Bali, the Mumbai-based startup provides an AI-enabled wireless building management system. 
• Zodhya – Launched in 2017 by Rohith Pallerla, the Hyderabad-based startup is a provider of energy optimisation solutions for commercial spaces.
• Living Things – Based out of Mumbai, the startup was launched by Madhusudhan Naik in 2019. It provides smart control hubs for air conditioners.
• Sensiable – Launched in 2019 by Ashish Singh, the startup is headquartered in Bengaluru. It is a provider of an IoT-enabled workplace space management solution.
• Carbon Minus – The startup was launched in 2019 in Pune by Ashok Ranfive. It is a provider of cloud-based solutions for energy plant management.
• Nebeskie – The Chennai-based startup was launched by Anik Bose in 2016. It is  a provider of a SaaS, AI & IoT-powered electricity management platform.
• Quebeq Venture – Launched in 2019 by Logesh Janarthanan, the Chennai-based startup integrates a virtual power plant with proprietary energy solutions.
• Blaze – The Hyderabad-based startup was launched in 2007 by Arjun Valluri. It integrates smart sensor-based devices and IoT to deliver cost-effective and efficient device management, connectivity management, and application enablement solutions.
• Cymbeline – Launched in 2017 by Vivek Gowripeddi, the Bengaluru-based startup develops industrial IoT with diverse hardware, middleware, analytics, and cloud.

The development comes at a time when a number of companies and VC firms have been announcing accelerator and incubation programmes for startups. 

For instance, game development major Krafton launched its incubator programme called KRAFTON India Gaming Incubator to support early stage gaming startups with primary investment and mentorship. 

Earlier this month, GVFL in partnership with Brinc and Games24x7 in partnership with the Karnataka government announced accelerator programmes.

However, according to Inc42’s Indian Tech Startup Funding Report Q3 2023, for the first three quarters of 2023, the funding in Indian startups was merely more than $7 Bn against about $22 Bn during the corresponding quarters of 2022.

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Fintech major Paytm is aiming to generate an operating profit in under a year by bolstering its online wealth management services and onboarding more merchants on its network, coupled with cost savings from AI automation.

Paytm founder and CEO Vijay Shekhar Sharma made the projection in an interview with Bloomberg, highlighting the company’s plans to hire over 50,000 salespeople to onboard more merchants and revamp its online wealth management services.

“We have learned and we will amplify our ability to serve India, its small merchants and businesses,” Sharma was quoted as saying. “We should be crossing about 50 Mn merchant-base signed up on the Paytm platform in the year.”

Sharma’s interaction with the publication came days after Paytm faced a major setback in its growth trajectory due to the Reserve Bank of India (RBI) tightening regulations around unsecured loans. 

Earlier this month, Paytm said that it would scale down its small-ticket loans of less than INR 50K, which predominantly comprise its postpaid loan business. However, to compensate for this major change, the company said it would increase its focus on the merchant and personal loan business.

Multiple brokerages cut their estimates on Paytm’s various metrics such as revenue and EBITDA in the medium to long term following the changes in its loan disbursal business.

Besides, Paytm’s share price also took a hit, falling to more than a seven-month low. While the shares were trading over 80% year to date till October, they nosedived due to the company’s decision to scale down postpaid loans. Shares of Paytm are currently trading a little over 15% higher.

Besides the loan disbursement business, which comprises a relatively smaller part of the company’s total revenue, Paytm also has a payments business. It had around 38 Mn merchants as of September, of which nearly 10 Mn paid for offerings such as QR codes, Paytm soundboxes, and card machines.

Paytm also operates wealth management platform Paytm Money. Speaking to Bloomberg, the Paytm boss said that the company now wants to double down on this business, layering it with AI, as India’s middle class is increasingly going online to invest in the capital markets.

Meanwhile, by using automation, Paytm also plans to bring down its employee costs.

“We will be able to save the targeted 10% to 15% that we had planned in employee costs, all because AI has actually delivered more than what we expected it to,” Sharma said. 

The statements also come at a time Paytm is seeing a rise in competition. Most recently, Jio Financial Services’ marked its full-fledged foray into the fintech space, while PhonePe is also looking to diversify its offerings and launched stock broking platform Share.Market earlier this year.

The post Paytm Betting On Paytm Money, Merchants & AI To Turn Operationally Profitable In A Year appeared first on Inc42 Media.

SAR Group’s energy solutions brand Livguard said it has acquired Delhi NCR-based battery swapping and IoT solutions startup Emuron Technologies to venture into the EV battery swapping space.

However, the company did not disclose the financial terms of the deal.

Founded in 2018 by Kunal Garg, Vedant Khanna and Vibhor Bharti, Emuron Technologies is a bootstrapped startup which helps EV businesses deploy battery-swapping stations across India. 

Its offering include a battery tracking system to monitor battery health, location, and utilisation; customisable and modular smart electrical cabinet that allows swapping of discharged Li-ion batteries with charged batteries; and a battery intelligence platform which provides utilisation report and ageging predictions. The startup also claims to be working on a battery management system.

Commenting on the acquisition, SAR Group’s cofounder Rakesh Malhotra said Livguard will leverage Emuron’s battery-swapping technology alongside its own battery expertise. “Our comprehensive solutions, combined with our EV subsystems portfolio, position us as a one-stop shop for all 2 and 3-wheeler EV OEMs,” he added. 

SAR Group, which owns companies including Livfast and Mooving, launched Livguard in 2014. It offers energy-related solutions including automotive batteries, inverters, and residential solar panels. 

Recently, the group ventured into the EV business with the launch of Lectrix EV.

“We have a strong commitment towards research and development, innovation and Make in India,” Livguard’s chief executive Gurpreet Bhatia told Inc42. 

He added that Livguard is currently working on a unique energy services ecosystem for the two- and three-wheeler EV industry. Following the acquisition, it plans to rapidly deploy swapping stations in key markets to solve the range anxiety of electric vehicles.

The development comes at a time when the India EV space is buzzing with activities. From talks about Tesla’s entry into India to the potential IPO of Ola Electric, a lot has been happening in the EV segment lately. 

Recently, EV charging startup Exponent Energy secured INR 220 Cr ($26.4 Mn) in its Series B funding round to strengthen its manufacturing and business operations.

Also, Macquarie Capital invested an undisclosed amount in EV charging startup ChargeZone to help it further develop its cloud technology-enabled charging network.

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Social media platform ShareChat today fired around 200 employees in a second round of layoffs this year to cut costs, sources told Inc42.

The startup confirmed the development with Inc42. In a statement, it said that the “comprehensive restructuring effort”, which resulted in reduction in its team size by about 15%, was aimed at streamlining operations, enhancing productivity, and positioning the company for sustainable growth.

“ShareChat, today undertook a strategic restructuring as part of its annual planning for the year 2024. The decision reflects the company’s commitment to streamlining its cost base and achieving profitability within the next 4-6 quarters,” the statement said. 

However, the startup did not disclose the severance pay that will be paid to the impacted employees.

As per the sources, the employees were informed about the restructuring exercise today in a one-on-one call with the management team. 

The layoff exercise came almost 11 months after ShareChat fired around 500 employees, or about 20% of its workforce.

As per the EPFO portal, the startup credited PF amount for 1,281 employees in November 2023 as compared to 2,346 employees in November 2022.

The retrenchments in January this year came on the back of ShareChat parent Mohalla Tech shutting down its fantasy gaming platform Jeet11 in December 2022, which resulted in 100 employees losing their jobs.

In January this year, two of ShareChat’s cofounders – Bhanu Pratap Singh and Farid Ahsan – also resigned. Following this, they founded a robotics startup General Autonomy and raised $3 Mn seed funding for it last month from venture capital firms India Quotient and Elevation Capital.

Besides, the founder exits and employee layoffs, ShareChat is also struggling to raise capital. As per a TechCrunch report, the startup is in talks to raise a much needed $50 Mn at a valuation under $1.5 Bn. In March last year, the startup touched the peak valuation of $5 Bn after adding Temasek to its captable. As of date, ShareChat has raised a total of $1.7 Bn in funding across multiple rounds and counts the likes of Lightspeed Ventures, Twitter, and Google among its backers. 

ShareChat’s net loss jumped 38.17% to INR 4,064.31 Cr in FY23 from INR 2,941.51 Cr in the previous fiscal year. The bottom line took a hit despite its operating revenue surging 62% to INR 540.21 Cr from INR 332.69 Cr in FY22.

Meanwhile, its total income increased 54.90% to INR 628.85 Cr from INR 405.96 Cr in FY22. Effectively, it spent INR 7.46 to earn every rupee in FY23.

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The Reserve Bank of India (RBI) has issued guidelines to all regulated entities including banks and non-banking financial companies (NBFCs) to not make investments in any alternative investment funds (AIFs) that have invested in a borrower or investee of that lender.

In November last year, the Securities and Exchange Board of India (SEBI) informed RBI about instances of non-bank financiers evergreening loans through the AIF route.

Reportedly SEBI has detected at least a dozen cases involving $1.8 Bn to $2.4 Bn where AIFs have been misused to circumvent rules of other financial regulators including the RBI.

In October this year, Ananth Narayan G, a whole-time member of SEBI, said the regulator had come across multiple instances of entities using alternative investment funds to circumvent financial norms and urged the industry to form a quasi-self-regulatory body. SEBI has also seek commitment from fund managers to make sure that AIFs will not be misused.

The guidelines have been issued in order to curb such misuse of AIF funds.

What Are Evergreen Loans?

In simple terms, evergreen loans are the loans which never end. This means that to repay the earlier unpaid loan, the regulated entity offers the borrower another loan through AIF as an investment vehicle. AIF, being a  private credit fund, looks for such deals with the belief that with a small investment these companies could bounce back.

Banks and NBFCs resort to such loans to showcase low percentage of non-performing assets (NPAs) in their books.

“In some cases, non-bank lenders have sold non-performing loans (NPLs) to AIFs that they have partially set up themselves. The fresh funds received by the AIFs are then used to repay the original debt, preventing the loans from being classified as bad loans. This practice is seen as a classic example of evergreening,” said Mayank Mehra, managing partner, SphitiCap.

Key Guidelines Issued By RBI

To address concerns relating to possible evergreening through this route, it is advised as under:

Regulated entities (REs) shall not make investments in any scheme of AIFs which has downstream investments either directly or indirectly in a debtor company of the RE to which the RE currently has or previously had a loan or investment exposure anytime during the preceding 12 months.

If an AIF scheme, in which RE is already an investor, makes a downstream investment in any such debtor company, then the RE shall liquidate its investment in the scheme within 30 days from the date of such downstream investment by the AIF. 

If REs have already invested into such schemes having downstream investment in their debtor companies as on date, the 30-day period for liquidation shall be counted from the date of issuance of this circular. REs shall forthwith arrange to advise the AIFs suitably in the matter.

In case REs are not able to liquidate their investments within the above-prescribed time limit, they shall make 100% provision on such investments.

In addition, investment by REs in the subordinated units of any AIF scheme with a ‘priority distribution model’ shall be subject to full deduction from RE’s capital funds.

This move by the RBI has been seen in the right direction by some. According to reports, the credit exposure of banks to NBFCs stood at INR 14.8 Lakh Cr in October 2023, indicating a 22.1% year-on-year (y-o-y) growth. Further, there are currently more than 1200 registered alternative investment funds in the country as of December 2023. If remain unregulated, this poses a significant risk to the economy considering that bad NPAs may lead to a liquidity crisis in the banks, thereby triggering the ripple effect. 

However, there is a flip side to this coin as well. According to Punit Shah, Partner, Dhruva Advisors, the intention of the move by RBI is to prevent evergreening of loans by Banks, NBFCs etc. However, the circular prohibits any exposure by these entities to specified AIFs, which can be extremely damaging and can have unintended negative impact on the AIF industry, especially sponsored by financial services players.

The post RBI Tightens Norms For Banks, NBFCs Investing In AIFs appeared first on Inc42 Media.

Gaming unicorn Nazara Technologies has announced its partnerships with four Indian game studios to publish five casual and mid-core games in India.

In an exchange filing on Wednesday (December 20), Nazara said that this initiative is part of its new publishing division, focusing on promoting the ‘Make in India’ vision in the gaming sector.

The company is planning to publish ‘Gravity Shooter’ by Smash Head Studios, ‘World Cricket League’ from Wandermind Labs’, ‘Hacked: Password Puzzle’ by Pixcell Play and ATG Studios’ ‘Laser Tanks’ and ‘Paperly’.

Since its inception a month ago, Nazara Publishing has received a remarkable response from both Indian and international game developers, the company said in its statement. The Indian gaming major offers financial investment as well as comprehensive support, including mentorship, user acquisition, and live operations expertise. 

Nazara has allocated a substantial fund for the publishing division and aims to publish 20 games within the next 12 to 18 months by investing in a range of INR 1 Cr-INR 3 Cr per game.

Speaking on the new partnerships, Nitish Mittersain, joint managing director and chief executive of Nazara Technologies said that the Nazara Publishing division, enriched with innovative AI-led tools from the new Nazara SDK, is set to foster the growth and development of game creators.

As a gaming and sports media platform, the company has a footprint in India and other emerging and global markets such as Africa and North America. Over the last few years, Nazara Technologies has bolstered its offerings by making multiple strategic acquisitions in companies including NODWIN, SportsKeeda and others. 

Earlier this year, the company also increased its majority stake in mobile gaming studio Nextwave.

Nazara Technologies’ consolidated profit after tax (PAT) jumped 53% year-on-year (YoY) to INR 24.2 Cr in Q2 FY24 on an operating revenue of INR 297.2 Cr, which grew 13% YoY.

Recently, the company also raised a fresh capital of INR 510 Cr from investors including Zerodha’s Nikhil Kamath and SBI Mutual Fund. Speaking to Inc42, Mittersain had said that the company would invest the fresh funds in gaming studios capable of producing top-tier games tailored for both the Indian and global markets.

The post Nazara’s Publishing Division Partners With Four Indian Gaming Studios appeared first on Inc42 Media.

In a first-of-its-kind initiative for India, tech giant Google has rolled out a host of artificial intelligence (AI)-powered features for maps, which include address descriptors, lens integration and live-view walking navigation.

These features were designed to offer a more tailored and localised map experience for Indian users, Google said in a statement.

“In India, Google Maps has mapped Mns of kilometres of roads and 300 Mn buildings, serving Mns of users with over 50 Mn daily searches. AI technology enhances commute decisions, providing traffic predictions for over 2.5 Bn kilometres of directions daily. Google Maps features information on 30 Mn businesses, fostering over 900 Mn monthly connections between consumers and businesses,” the statement added.

Let’s take a look at the new features: 

A Comprehensive Map Localised For The Needs Of Indian Users

In the past few years, Google Maps has focused on adding key places like worship centres, medical facilities, and government services to better serve Indian users. Address Descriptors, a new India-first innovation, enhances address understanding by automatically identifying up to five relevant landmarks and area names around a pinned location. This feature simplifies location sharing, making it easier for users to navigate unfamiliar areas. 

“We launched this capability earlier this year for developers in India on Google Maps Platform to help them benefit from more intuitive addressing solutions. We’re now expanding this to developers across over 75 cities in the country,” as per a Google report.

More Visual And Immersive Maps For Navigation

The company has introduced Lens in Maps and Live View walking navigation. A year after Street View was launched, Google Maps now allows its users to view and explore over 3,000 cities and towns.

Lens in Maps allows instant identification of nearby restaurants and cafes through the camera, launching in 15 cities by Jan 2024. Live View walking navigation, featuring arrows and distance markers, will cover over 3,000 cities in India, starting with Android. These innovations combine Street View imagery with advanced AI and AR technologies to provide immersive experiences.

Catering To India’s Diverse Mobility Needs

Google Maps is introducing a fuel-efficient routing feature in India for both four-wheelers and two-wheelers by January next year, promoting sustainability. This feature, already estimated to have prevented 2.4 Mn metric tons of CO2e globally, considers real-time traffic data, road elevation, and vehicle type. 

“Over the years, we have partnered with numerous local authorities towards this goal, enabling Mns of users to find information about various modes of public transport including metros, trains, and buses in over 20 Indian cities.”

For public transport users, the Where Is My Train app, used by over 80 Mn people monthly, is expanding to cover Mumbai and Kolkata Local Trains, offering information on schedule changes, delays, and platform numbers. 

In December 2018, Google acquired Bengaluru-based startup Sigmoid Labs, the company behind the app “Where is My Train”. The app was created to improve the experiences of millions of Indian train travellers through technology. 

On Tuesday, Google also announced partnerships with ONDC and Namma Yatri, which aims to bring metro schedules and bookings to users. It is expected to launch by mid-next year with Kochi Metro on Google Maps powered by Namma Yatri, followed by other metros as they join the ONDC Network. 

As per Future Market Insights, the digital map market is expected to be valued at $18.3 Bn in 2023, with a projected growth of $73.1 Bn by 2033. The market is anticipated to achieve a CAGR of 14.8% during the period from 2023 to 2033. 

Meanwhile, Google Maps rival MapmyIndia is looking to raise INR 500 Cr by issuing equity shares through a qualified institutional placement (QIP).

The post Google Unveils AI-Powered Features For Maps In India appeared first on Inc42 Media.

Fintech unicorn BharatPe is looking to secure INR 500 Cr debt through unlisted non-convertible debentures (NCDs).

Although a final decision on the issue price is pending, the company plans to secure the funds in multiple tranches throughout the upcoming year, ET reported.

BharatPe’s board sanctioned the fundraising initiative last week. Additionally, the board also approved the appointment of Colin Bryant, chief operating officer (Private Equity) and general partner at the US-based hedge fund Coatue, as a director. Bryant is set to succeed Rahul Kishore, the previous nominee from Coatue who departed the fund in November.

Furthermore, the company elevated its General Counsel, Sumeet Singh, to the position of a whole-time director. Singh, who assumed roles at BharatPe in 2021, has been instrumental in overseeing corporate strategy, corporate affairs, and fundraising. In February of the current year, he was appointed as an additional executive director.

Peak XV-backed BharatPe last raised $370 Mn at a valuation of $2.9 Bn in 2021. Earlier in September, it was reported that BharatPe was in talks with existing investors to raise $100 Mn in a new round of funding.

Meanwhile, the fintech startup has claimed to have turned EBITDA positive in the month of October. The startup said that its annualised revenue has crossed INR 1,500 Cr in FY24, a 31% increase from FY23.

BharatPe’s lending vertical, in October alone, has facilitated loans exceeding INR 640 Cr for its merchants in partnership with its NBFC, demonstrating a 36% year-on-year jump as compared to FY22. The startup has facilitated loans worth INR 12,400 Cr since its foray into the lending business in late 2019.

The post BharatPe Looking To Raise INR 500 Cr Debt In The Upcoming Year appeared first on Inc42 Media.

There is hardly any middle-income family in India that may not be familiar with the challenges that parenthood brings with it, especially when it comes to burning holes in the not-so-deep pockets of an average Indian household. 

Well, if you think that education is the biggest expense that every Indian parent has to bravely endure, then consider speaking with the ones with newborns, infants or even toddlers. Ranging from expensive vaccines and baby food to high-priced nifty infant clothing and diapers, there is hardly any relief for parents.

While the challenges are galore, baby care brand Bumtum aims to give a much-needed respite to the pockets of Indian parents by offering economical and quality baby diapers. However, this Rome, too, was not built in a day.     

Post his return from the UK, Mayank Beria, a business student, closely observed the Indian baby care market, only to discover the opportunities waiting to be untapped. 

With a family background in manufacturing, it was natural for him to stay away from third-party manufacturers, as he planned to foray into the baby care segment.

Finally, Beria joined forces with his siblings, Chirag Beria and Neelima Beria Bhimsaria to launch Bumtum. While Bumtum has been present in the market since 2017, it was officially launched in 2021.

However, later, the founders ventured into adult hygiene care with Elduro, feminine hygiene care with Freeme and preteen skin care with Amigo, all operating under their parent company, Familycare Consumer.

Initially, Bumtum products were manufactured and sold on the parent company’s website. However, to boost visibility, the founders later started selling the baby care products on Flipkart and Amazon.

Meanwhile, the baby care brand, Bumtum, strengthened its ties with retailers across Lucknow, Kanpur, Patna, Ranchi, Indore and Ahmedabad. The company claims to have sold its baby care products to 60K customers to date.  Along with 500+ SKUs, Bumtum has baby products across 30 categories, including diapers, baby wipes, lotions, fleece coverings and more. 

The founders claim that the parent company has generated a revenue of INR 150 Cr in FY23, up 150% YoY from INR 65 Cr in FY22. Beria has now set his eyes on garnering INR 500 Cr in revenue by the end of FY24, which would be a gigantic leap of 233% YoY. 

To achieve the set target, Bumtum’s parent company, Familycare Consumer, partnered with 3PL player Emiza to deliver the Bumtum, Eduro, Freeme and Amigo range of products. 

Standing Tall Against Established Brands

Bumtum emerged as a brand with the core purpose of simplifying the lives of parents, particularly in India, where the expense of baby care products is equal to spending on luxury. This is why Beria envisioned Bumtum primarily serving Tier II and III regions, where household incomes may not match those of Tier I counterparts. 

However, a major challenge before its launch was that the market was dominated by bigger brands. Speaking with Inc42, Beria said that brands such as Mamy Poko Pants, Huggies and Pampers hold a market share of no less than 96%. 

“To stand tall against these brands, we decided to launch Bumtum as a private label and started manufacturing and selling products under the brand name on marketplaces like Flipkart and Amazon. We took the brands offline, targetting smaller towns and positioning ourselves as ‘small town India’s favourite diaper brand’,” the founder said, looking back on his journey.

As the founders forged their journey, another challenge awaited. This time the founders were struck with the dilemma of creating with brand recall while competing with established players in smaller cities and towns.

After much deliberation, the founders decided to keep the communication simple. They even picked a cartoon character, Chota Bheem, to go on the packaging of baby diapers, solving the brand recall issue. Further, every marketing campaign they did was in Hinglish. 

“For our Father’s Day campaign, we launched one of our digital ads in a Hinglish title, while the rest of the content was in Hindi. The campaign garnered 2 Mn views,” Beria said, adding that the brand recall strategies have worked wonders and the brand’s customer retention has grown by 50% since its launch. 

Quality Meets Affordability

The founders of Bumtum were quick to identify that they could increase customer stickiness with just the right pricing strategy. According to Beria, the brand’s products are at least 25% cheaper than bigger brands. He, however, stressed that despite offering competitive pricing, they do not compromise on quality. 

Interestingly, to ensure that all their products are of good quality, they have set up a manufacturing plant fully certified by International Organization Standardization, Sedex, Good Manufacturing Practice and Conformité Européenne (CE) in Pithampur, Indore. Moreover, the brand has a dedicated R&D team with its labs set up in the manufacturing unit. 

Mayank revealed that the brand generates 65% of its revenue from marketplaces such as Amazon and Flipkart, while offline sales account for 35% of its total sales. 

In terms of sharing revenue with ecommerce and logistics partners, it pays a commission to its partners. The cost for logistics partners is approximately 5-6% of their overall sales. Further, Mayank said that 90% of Bumtum’s revenue is generated from Tier II and III cities and towns, with the remaining 10% originating from Tier 1 users. 

Banking Big On Third-Party Order Fulfilment

Bumtum understands the importance of adopting an omnichannel approach to cater to the essential needs of its customer base in Tier 2 and 3 regions. While it has a robust online presence, it acknowledges that offline presence is equally significant.

Bumtum recognises that this helps in building trust and confidence in the brand. It’s also worth noting that users in these regions may not be comfortable making online orders. By taking an omnichannel approach, Bumtum has ensured that it remains accessible to all its online and offline customers.

Meanwhile, to ensure that Bumtum has an efficient offline presence, it is focussed on strategic warehousing. For this, it partnered with Mumbai-based 3PL warehousing company Emiza, which provides tech-driven warehousing management with a network of over 22 fulfilment centres across Tier 2 regions such as Indore, Lucknow, Patna and more. These tech-enabled warehouses offer multi-tier shelving systems for easy order processing and a host of safety and security features. 

Founded in 2015 by Ajay Rao and Jitendra Kumar, Emiza claimed that it works with 200 clients including Marico, Mamaearth, Clovia, The Souled Store and more.

The strategic partnership with Emiza helps the baby care product brand leverage the former’s efficient SDD/NDD deliveries and cost-effective fulfilment specifically tailored for low-priced daily consumption items.

Emiza also serves Bumtum’s parent company Familycare Consumer and provides warehousing services for the brands Freeme, Amigo and Elduro. 

When Familycare Consumer joined hands with Emiza in October 2022, it had a warehouse only in one location. Since then, the company has expanded its warehouses to 17 locations, with three more in the pipeline. Rao claimed that Emiza handles 80% of Familycare Consumer’s total volume. 

Rao said that Familycare Consumer had three prerequisites for its fulfilment partner before onboarding them as a 3PL partner. Firstly, the partner needed to execute SDD/NDD deliveries, given the parent company focusses on selling daily consumption items like toiletries. Secondly, the fulfilment services provided by the 3PL partner had to be cost-effective, considering the relatively low average selling price of these products. Lastly, the selected partner should be experienced in delivering products across diverse categories. Rao said, “Emiza fit the bill,” indicating Emiza’s suitability for the role.

Emiza also manages fulfilment services for Familycare Consumer and ensures same and next-day deliveries. Ajay Rao, founder and CEO, Emiza said that until September 2022,  Familycare Consumer’s delivery duration stretched to four to five days in remote areas. In the toiletries category, deliveries now reach customers within 24-48 hours.

What Does The Future Hold For Bumtum?

For decades now, people have been buying baby care products from legacy players like Huggies, Pampers and Mamy Poko Pants. This allowed white space for smaller brands like Super Bottoms and Bumtum to experiment with packaging and materials. 

For instance, Super Bottoms uses organic cotton jersey fabric in its diapers, which is safer for toddlers, while Bumtum leverages a popular Indian cartoon character to establish its brand recall.

Not just this, Bumtum’s playbook to penetrate deeper into the nation with affordable yet quality products appears to be a great strategy to woo Indians in the long run. Given that the company saw a 150% YoY growth in its revenues, the founders’ projections to clock in INR 500 CR in revenues looks achievable. This is more because of the market in which they are operating.  

According to a report, the baby care market is projected to reach $38.51 Bn by 2029, growing at a CAGR of 17.5%. This mirrors an immense opportunity for smaller baby care brands, which can leverage the white space created by bigger brands and continue experimenting with their products. Not to mention, technology will also play a key role in giving a much-needed boost to baby care product manufacturers going ahead. Given the tailwinds, brands like Bumtum seem poised to thrive and carve out a successful niche in the evolving market.

The post How Bumtum Is Making Quality Baby Care Accessible in India’s Tier II and III Regions appeared first on Inc42 Media.

Financial product delivery platform Finhaat has raised $3 Mn (approximately INR 25 Cr) in a seed funding round led by impact venture fund Omnivore, with participation from Kettleborough VC.

The Mumbai-based startup plans to deploy the fresh proceeds for further building technological models, rolling out innovative products, scaling up its partner base and hiring resources for new verticals.

Founded by Sandeep Katiyar, Navneet Shrivastava and Vinod Singh, Finhaat is a financial product delivery platform created for the emerging middle-class and lower-income segments primarily in the rural, tier III and IV cities. It offers a complete range of insurance products on its insurance broking platform delivered through Finhaat Insurance Broking Pvt Ltd.

The startup, which first began operations in 2022 with insurance as its first product vertical, claims to be building a business-to-business (B2B) insurance distribution platform for institutions working with the underserved, including NBFCs, MFIs, BC networks, Nidhi companies, cooperatives, NGOs and FPOs.

“Our operations already cover over 65% of pin codes in India. We are determined to transform the financial services space for the underserved,” said cofounder Singh. 

“Financial inclusion remains dismally low in rural India – just 11.5% of households have net savings, and under 10% have life insurance. This vulnerability is most acute in low-income segments, especially for farmers confronting myriad risks. Yet, tailored products to mitigate uncertainties and boost financial stability and growth are few and far between,” said Omnivore’s managing partner Jinesh Shah.

The landscape of insurance, a sector traditionally entrenched in legacy systems and cumbersome processes, is undergoing a seismic shift in India. The space has been gaining momentum for the past some time now. 

For instance, in November, insurtech startup Onsurity secured $24 Mn in its Series B funding round led by the International Finance Corporation (IFC) to co-create a technology solution with its insurance partners, to drive seamless and transparent transactions.

Also the fintech soonicorn InCred declared in a filing that it may soon foray into the insurtech segment as its board has already given a nod to apply for a corporate insurance agency licence from the Insurance Regulatory and Development Authority of India (IRDAI). 

According to Inc42’s State Of Indian Fintech Report, Q3 2023 InFocus, the insurtech market size was more than $87 Bn in 2022 and is estimated to cross the $307 Bn mark in 2030 at 17% CAGR. 

The post Finhaat Secures $3 Mn To Offer Tech-Based Insurance Distribution Solutions appeared first on Inc42 Media.

The central government has started the process of preparing regulations for artificial intelligence (AI) to support its growth, safeguard interests and encourage innovation in this evolving technology in India, said IT Secretary S Krishnan.

Addressing a conference by the Centre for Development of Advanced Computing (C-DAC) in Kolkata on Tuesday (December 19), Krishnan said that the government has been working on the preparation of the regulations on AI and it is also evaluating global inputs, as per reports.

He also hinted that discussions are underway on whether a separate act of AI should be introduced or if regulations can be introduced in existing acts.

“The government is already engaged in working on AI data and regulation. There are ongoing discussions within the government about AI data and its regulation,” he said.

The government is considering a policy approach akin to the Digital Personal Data Protection (DPDP) Act. This strategy aims not only to safeguard data but also to foster development and innovation, avoiding any hindrance to the growth of emerging technology.

With AI taking centre stage globally, the government is increasing its focus on the segment. Recently, Minister of State (MoS) for Information Technology Rajeev Chandrasekhar said that the centre is planning to fund and support AI startups in the country.

Modelled on the lines of a similar framework for the semiconductor industry, Chandrasekhar said that funding and incentives will be rolled out to scale the burgeoning ecosystem.

The government will also deploy ‘financial resources’ to build foundational AI models, large language models (LLMs) and various use cases for the emerging technology.

Chandrasekhar added that the Centre would explore synergies between AI and semiconductor industries in areas such as the development of AI chips.

These discussions come at a time when generative AI (Gen AI) has become a buzzword among Indian entrepreneurs. This has given rise to many new Indian startups in the segment.

As per Inc42 data, India is home to more than 70 GenAI startups that have raised capital in excess of $440 Mn between 2019 and Q3 2023. The homegrown GenAI market is expected to grow to a market size of $17 Bn by 2030 from $1.1 Bn in 2023.

The post Govt Actively Working On AI Regulations: MeitY Secretary S Krishnan appeared first on Inc42 Media.

What Is Patient Capital?

Patient capital refers to a type of investment characterised by a long-term perspective, where investors are willing to tie up their capital for an extended period, often several years or even decades, expecting a return on investment.

This form of capital is focussed on businesses, projects or ventures that may require time to mature and generate profits.

What Are The Types Of Patient Capital? 

There are various types of it, some of these are: 

• Family Office Investments: Wealthy families or individuals may provide it to support entrepreneurial ventures.
• Impact Investment Funds: These funds invest in socially or environmentally focussed projects with long-term objectives.
• Corporate Venture Capital: Large corporations may invest in startups and technologies to foster innovation and secure strategic advantages.
• Sovereign Wealth Funds: Government-managed funds may allocate capital to long-term, diversified investments.
• Endowments & Foundations: These organisations may invest their assets with a long-term horizon, often with a focus on achieving specific societal goals.

What Is Patient Capital In Entrepreneurship? 

In entrepreneurship, it refers to funding or investment that is provided to early-stage or growth-stage businesses with a focus on long-term sustainability and success.

Unlike traditional venture capital, which often seeks rapid returns, it allows entrepreneurs to build their businesses with a focus on long-term growth, innovation and impact.

What Are The Other Names Of Patient Capital?

It is also called patient financing or long-term capital. These terms allude to the characteristic of having an extended investment horizon, where investors are willing to wait patiently for returns on their capital over a more extended period.

What Are The Advantages And Disadvantages Of Patient Capital?

Advantages

• Stability & Sustainability: It can provide stability and sustainability to businesses by allowing them to focus on long-term growth and development rather than short-term financial pressures.
• Risk Mitigation: It allows entrepreneurs and businesses to take calculated risks as they have the assurance of long-term support.
• Flexibility: Investors providing it may be more flexible in repayment and return expectations.
• Innovation & Growth: It can support innovative and high-impact projects that might not be immediately profitable but have the potential to transform industries.

Disadvantages

• Limited Liquidity: Investors may face challenges in accessing their capital quickly as it is committed for a longer time.
• Uncertain Returns: Patient capital investments often come with higher uncertainty regarding returns as compared to short-term investments.
• Opportunity Cost: The capital tied up in patient investments cannot be used for other opportunities, potentially missing out on more immediate and lucrative ventures.

What Is The Differences Between Patient Capital And Venture Capital?

Patient Capital

• Long-Term Investment: Patient capital refers to capital invested in a business with a long-term perspective. The investors are willing to wait for a more extended period, often years, to realise substantial returns.
• Focus On Sustainable Growth: Investors providing patient capital are more concerned with sustainable growth rather than quick, high returns. They often support businesses with a vision for steady and long-term development.
• Less Pressure For Rapid Returns: There’s less pressure on the business to generate immediate profits or demonstrate quick growth. Investors are willing to tolerate slower growth initially to allow the business time to establish itself and grow steadily.
• Support For Innovation: Patient capital is more likely to support innovative or socially impactful ventures that may take time to mature and become profitable.
• Lower Risk Of Investor Interference: Investors providing patient capital typically have less involvement in day-to-day operations. They trust the management to execute long-term strategies.

Venture Capital

• High-Risk, High-Return Model: Venture capital involves investing in early-stage and high-potential companies with the expectation of high returns but also higher risk. Venture capitalists seek substantial returns within a relatively short time frame, often 5-10 years.
• Focus On Rapid Growth: Venture capital often targets startups with disruptive potential in rapidly growing markets. There’s a strong emphasis on achieving quick growth and market expansion.
• Active Involvement: Venture capitalists often play an active role in the companies they invest in, offering expertise, guidance and networking opportunities to accelerate growth.
• Exit Strategy: Venture capitalists aim for an exit strategy such as IPOs (initial public offerings) or acquisitions to cash out their investments and realise profits.
• Higher Pressure For Performance: There’s significant pressure on startups to demonstrate rapid growth, meet milestones, and achieve profitability within a shorter timeframe to satisfy investor expectations.

The post Here’s Everything You Need To Know About Patient Capital appeared first on Inc42 Media.

Reiterating her stance on 28% GST on the online gaming sector, Finance Minister Nirmala Sitharaman on Tuesday (December 19) said that the valuation rules for levying the tax on entry level bets are prospective in nature. 

“28% is the tax and as to who it will apply to and on whom the incidence will fall is clearly explained…The valuation rule to exclude winnings is prospective. So, I hope there is no confusion on that,” said Sitharaman during a discussion on the CGST (Second Amendment) Bill in Lok Sabha.

The FM made the comments in response  to a query from Biju Janata Dal Member of Parliament (MP) Sarmistha Sethi.

Citing an example, the FM said that if a user places a bet of INR 1,000, a GST of 28% would be levied. However, if the user wins INR 300 and then places another bet of INR 1,300, including the winning amount, then the GST would not be levied on the INR 300 winning amount which has been redeployed.

On the other hand, if a user loses the original INR 1,000 amount and places a new bet, then the new amount would be considered a fresh bet and would attract 28% GST.

At the centre of this row is the GST Council’s decision, in August this year, that said that 28% GST is applicable on online gaming. 

Eventually, the government notified amendments in law and the new changes came into effect on October 1. But the bone of contention appears to be the tug of war over the supposed retrospective effect of the rule. 

Since the promulgation of the new law pertaining to GST on online gaming, enforcement agencies have sent a flurry of notices to online gaming platforms for alleged tax evasion. 

The Centre recently informed the Parliament that the Directorate General of GST Intelligence has issued notices to the tune of INR 1.12 Lakh Cr to multiple online gaming companies for alleged short payment of taxes.

Meanwhile, the 28% GST has triggered an adverse domino effect on the homegrown ecosystem. When the new tax was levied, industry stakeholders had warned that the move could lead to job losses and put a spanner in the works for the budding ecosystem. 

Since then, startups such as Fantok, Quizzy, OWN have temporarily shut operations while big names such Mobile Premier League and Hike have laid off employees in droves. There have also been a barrage of legal cases filed by online gaming firms such as Games24x7 and Head Digital Works challenging the respective GST notices issued to them by the enforcement agencies. 

The regulatory flux has also resulted in the drying up of capital for online gaming firms, leading to layoffs and shutting down of ailing verticals to extend runway and conserve cash. Amid the tussle, the Indian government is mulling extending an olive branch to the ecosystem and is considering setting up a Group of Ministers (GoM) to address issues related to the industry.

The post Valuation Rules For Levying 28% GST On Online Gaming Prospective In Nature: FM Sitharaman appeared first on Inc42 Media.