Fintech major Groww’s asset management arm has paid INR 9 Lakh to the Securities and Exchange Board of India (SEBI) to settle a case related to alleged violation of norms. 

Groww Asset Management Company Ltd (formerly known as Indiabulls Asset Management Company Ltd) and Groww Trustee Ltd (formerly known as Indiabulls Trustee Company Ltd) filed a suo motu settlement application with SEBI to settle, by neither admitting nor denying the findings of fact and conclusions of law, the enforcement proceedings that may be initiated against them for the violation of a SEBI circular.

In the settlement application, Groww AMC and Groww Trustee said during April 1, 2020 to March 31, 2022, certain scheme related expenses were being paid by the AMC and were not paid from the schemes. 

This was in violation of SEBI norms, which say that all scheme related expenses, including commission paid to distributors, has to be paid from the scheme, and not from the books of the AMC, its associate, sponsor, trustee or any other entity through any route.

It is pertinent to note that Groww completed the acquisition of Indiabulls Asset Management for a consideration of INR 175.6 Cr in May 2023.

After the filing of the application, the authorised representatives of Groww AMC and Groww Trustee held a meeting with the internal committee of SEBI to discuss the aforementioned issues and the terms of the settlement.

Following this, the applicants proposed revised settlement terms to settle any enforcement proceedings that may be initiated against them for the violations.

“The High Powered Advisory Committee (HPAC) in its meeting held on December 21, 2023 and March 04, 2024, considered the revised settlement  terms proposed  by  the applicants and recommended the case for settlement upon payment of INR 9 Lakhs,” said SEBI in its order dated June 28. 

Following this, the applicants made the payment and the same was confirmed by SEBI.

The settlement will offer the company protection from any future “enforcement action” from SEBI in connection with the said violations. 

The acquisition of Indiabulls Asset Management paved the way for Groww’s entry into the mutual fund space. Groww AMC received SEBI’s nod to launch its first mutual fund in September last year. Earlier this year, it also got the regulator’s nod to launch India’s first Nifty non-cyclical consumer index fund.

Zerodha, Groww’s rival in the discount broking space, also received SEBI’s greenlight to launch an asset management company last year. Following this, Zerodha Fund House launched its maiden mutual funds in October last year.

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Following the Securities and Exchange Board of India’s (SEBI) circular on Monday (July 1), barring market infrastructure institutions (MIIs) from offering discounts based on trading volumes or members’ activities, Zerodha cofounder and CEO Nithin Kamath has said that the brokerage might have to let go of its zero brokerage structure.

In a post on X, Kamath said, “With the new circular, we will, in all likelihood, have to let go of the zero brokerage structure and/or increase brokerage for F&O trades. Brokers across the industry will also have to tweak their pricing.”

SEBI, in its circular yesterday, said that the charges MIIs recover from the end client should be “True to Label”. Besides, the charge structure of the MII should be uniform and equal for all its members and not slab-wise. 

It is pertinent to note that members of MIIs refer to stock brokers, clearing corporations, and depositories, including discount broking platforms such as Zerodha, Groww and Upstox.  

As per SEBI’s circular, MIIs will have to ensure that their charges recovered from end-customers by its members are deposited entirely in the account of MIIs. 

In a blog post today, Kamath said, “This circular has an impact not only on brokers but also on trading and investing customers.”

Topline Of Brokerages To Take A Hit

He explained that stock exchanges charge a transaction fee based on the overall turnover contributed by a broker in a month. More turnover implies a lesser transaction fee. 

The difference between the brokers’ charges from the customers and the exchanges’ charges from the brokers at the end of the month is a rebate. Kamath said that such rebates are common across the major markets in the world. 

“We earn about 10% of our revenue from these rebates. This could range between 10% and 50% of the revenue for other brokers. For us, this has increased from about 3% to 10% in the last four years because of the increase in options turnover,” said Kamath. “Today, 90% of our revenue from these rebates comes from options trading alone. With the new circular brokers will no longer earn these rebates.”

Since 2015, Zerodha has been offering free equity trades. Kamath said this was possible because F&O trading revenues were subsiding equity delivery investors.

“This structure could now potentially change. As a business, we may have to introduce a brokerage fee for equity delivery investments, which is currently free, or/and increase F&O brokerage,” he said. 

He added that this is even more important given the big uncertainty around the future of F&O trading volumes. 

It is pertinent to note that SEBI chief Madhabi Puri Buch said last week that the regulator is open to taking “some derivative products” off the market amid a sharp jump in options trading in the country.

Responding to this, Kamath said earlier that Zerodha was a big beneficiary of the surge in options trading and SEBI’s regulatory action can hurt the revenues of brokerages, as most of them earn a large part of income from options trades. 

Meanwhile, Kamath said in his latest blog post that all brokers will be forced to tweak their pricing models in a few months following the latest circular. 

“We are still trying to ascertain the second-order effects of the circular. In all likelihood, we will probably have to let go of the zero brokerage structure for equity delivery trades which we have been able to offer for the past nine years,” he added.

SEBI circular will come into effect starting October 1, 2024. 

Meanwhile, stock brokerage platform Angel One’s shares slumped nearly 9% during Tuesday’s trading session. Shares of Motilal Oswal Financial Services also declined over 4%, while those of IIFL Securities’ fell 3.6% on the BSE today.

Explaining SEBI’s circular, Capitalmind founder and CEO Deepak Shenoy, in a post on X, said, “SEBI just said no more of this, and charge only true-to-label fees, meaning if you say it’s an NSE fee, it should be what goes to NSE. (and NSE needs to charge the same fee without lowered fees for higher turnover).”

To compensate for this, brokerage costs might go up, he added. 

“For a lot of F&O players, this can hurt somewhat, but it will hurt brokers more as brokerage numbers are competitive and those willing to keep lower margins will shine out,” he said.

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Continuing last week’s rally, shares of PB Fintech surged 10.6% to touch a record high at INR 1,544.15 during the intraday trading on the BSE on Monday (July 1).

The shares of the parent entity of insurtech major Policybazaar have been on an uptrend since last week. On June 27, PB Fintech shares touched a 52-week high at INR 1,415 on the BSE.

The jump was followed by the Citi Group increasing its price target on the stock to INR 1,600 from INR 1,435 earlier. As per reports, the brokerage increased the target citing PB Fintech’s strong business momentum and the successful execution of its ‘phygital’ strategy.

Citi expects the company to reflect sustained growth in fresh retail health and term insurance premiums in the first quarter of FY25, along with a continued improvement in point-of-sale margins.

Overall, the stock had gained 4.6% last week.

After touching a fresh all-time high today, the stock pared some gains and ended the session 8.7% higher at INR 1,517.2 on the BSE.

It is also pertinent to note that Morgan Stanley also picked PB Fintech as one of its top stock choices in its internet coverage last week.

The fintech major posted a consolidated net profit of INR 60.2 Cr in Q4 FY24 as against a loss of INR 9.3 Cr in the previous year’s quarter. Its operating revenue saw over a 25% rise on a year-on-year (YoY) basis to INR 1,089.6 Cr in the quarter. 

Shares of PB Fintech have rallied over 91% year to date.

The post PB Fintech Shares Touch An All-Time High At INR 1,544.15 appeared first on Inc42 Media.

Private equity firm HDFC Capital has picked up 8.5% stake in Mumbai-based proptech startup TruBoard for an undisclosed amount. 

The firm has made the investment via its tech platform H@ART (Housing and Affordable Real Estate and Technology). 

The startup will look to leverage the fresh capital to fuel its expansion into international markets with a focus on residential, commercial real estate, warehouse and data centres.

HDFC Capital’s parent entity HDFC Bank intimated the bourses that it had initiated the stake acquisition on May 30, 2024. In its filings, the bank said that it had entered into a share subscription agreement for acquisition of 1,043 equity shares of TruBoard for INR 698.77 per equity share. This translates into an investment of INR 7.28 Lakh. 

“We are poised to accelerate our growth, innovate at a faster pace, and make a greater impact and will continue to strive for excellence and innovation,” TruBoard’s cofounder Vipul Thakore said in a statement. 

Founded in 2020 by Nandkumar Surti, Srickant Rajagopal and Thakore, the startup furnishes its consumers with multiple AI-driven platforms to provide insights for asset management of real estate projects.

It offers three platforms, TruGenie for asset management of under construction real estate projects, TruGreen for asset management of renewable energy projects, and TruCollect for collection management of retail loan portfolios. 

The proptech startup claims to have $1.8 Bn assets under management (AUM), 1 GW renewable energy assets, 700 kms of road assets, among other real estate assets under its management. 

“We believe that technology solutions will play a critical role in real estate development and asset management. Our investment in TruBoard is part of the H@ART initiative which has been set up to invest and partner in technology companies that bring efficiencies in the real estate ecosystem,” HDFC Capital’s managing director and CEO Vipul Roongta said. 

The development comes over two years after the real estate private equity arm of HDFC Group committed undisclosed investments in 15 proptech startups under its H@ART initiative. Besides its investment in TruBoard, HDFC Capital has backed Provident Housing,  Loyalie, HomeExchange and Monsoon CreditTech till now. 

The PE firm was set up HDFC back in 2016 and is the investment manager to four SEBI registered Category II Alternative Investment Funds (AIFs) with a combined net worth exceeding $3 Bn.

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The Reserve Bank of India has flagged the high levels of delinquency being seen by fintech lenders for small loans below INR 50,000.

In its Financial Stability Report, the central bank said that its decision to increase the risk weight for certain segments of consumer credit, which came as a major blow to several fintech players in the digital lending space, including Paytm, reduced the growth rate in overall consumer credit.

“Even as inquiry volumes remain robust, the impact of increase in risk weights on certain segments of consumer credit pulled down the rate of growth in overall consumer credit, especially personal loans and credit cards,” the report said. 

The report showed that the growth rate in personal loans declined to 30% as of March 2024 from 31% in the year-ago period.

However, the RBI said there are a few concerns in the consumer credit segment that require close monitoring, including the unsecured lending category. The delinquency levels among borrowers with personal loans below INR 50,000 remain high, the central bank said.

“In particular, NBFC-fintech lenders, which have the highest share in sanctioned and outstanding amounts, also have the second-highest delinquency levels, only below that of small finance banks,” RBI stated.

Even the vintage delinquency, which is a measure of slippage, remains relatively high in personal loans at 8.2%, said the RBI.

For the uninitiated, in lending, delinquent accounts are those where repayment haven’t been done by the due date. 

Meanwhile, vintage delinquency is defined as the percentage of accounts that have anytime become delinquent (90 days or more past due) within 12 months of origination. It is a commonly used industry metric to assess the efficiency of the loan underwriting process.

Further, the central bank in its report said, “Little more than a half of the borrowers in this segment (personal loans) have three live loans at the time of origination and more than one-third of the borrowers have availed more than three loans in the last six months.”

It is pertinent to note that a number of fintech startups like InCred, slice and KreditBee offer unsecured personal loans to consumers. On Wednesday, Inc42 exclusively reported that slice is piloting a new loan product under which it will offer users personal loans of up to INR 5 Lakh for a tenure of up to 60 months.

Meanwhile, the central bank said that delinquency levels in other segments like housing loans, property loans, and auto loans remained low in FY24.

Amid the rapid growth in unsecured loans, the RBI, in November last year, increased the risk weightage for outstanding and new unsecured consumer credit exposure of commercial banks as well as NBFCs by 25 percentage points to 125% from 100% earlier. This pushed up the lending costs for unsecured consumer loans.

Following the central bank’s decision, fintech major Paytm decided to “go slow” on sub-INR 50,000 loans and focus on high-ticket personal and commercial loans. Earlier this year, Paytm paused its small personal loans business including the Postpaid portfolio.

The post RBI Flags High Delinquency Levels For Fintech Lenders In Below INR 50K Loan Category appeared first on Inc42 Media.

Prosus-owned digital payments giant PayU India’s credit service LazyPay has partnered with Blinkit to facilitate its users with one tap mobile payments.

With the introduction of LazyPay’s advanced payment solution, Blinkit users will now be able to get a credit line, with no additional cost to merchants.

Additionally, Blinkit merchants will gain access to LazyPay’s payment mode and dashboard, enabling them to monitor business performance more efficiently.

“By integrating LazyPay’s advanced payment solutions with Blinkit’s platform, we enable customers to utilize their credit line through a seamless and secure platform. This partnership aligns perfectly with our mission to provide swift, reliable, and secure ‘Pay Later’ services, streamlining digital payments,” said Niket Shrivastava, head of merchant business at LazyPay.

With the Blinkit addition, LazyPay has expanded its portfolio of quick commerce clients, which includes Swiggy Instamart, Zepto and Big Basket.

PayU India enables businesses to collect online and offline payments via more than 150 payment modes, including debit cards, credit cards, net banking, BNPL, QR, UPI, EMIs, and wallets. It competes with the likes of Razorpay and Cashfree in India.

In 2017, PayU entered the consumer credit segment with LazyPay, a lending platform which offers point-of-sale credit solutions.

The development comes at a time when PayU India is looking to make its stock market debut. As per media reports, the fintech giant could file its draft red herring prospectus (DRHP) with the Securities and Exchange Commission of India (SEBI) this year for an initial public offering of at least $500 Mn.

In April, PayU India received an in-principle authorisation from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA). The nod allowed the company to onboard new merchants for its payments business. 

Earlier this week, Dutch investment company Prosus, in its annual 2024 report, said that PayU India posted a 11% year-on-year (YoY) jump in its revenue to $444 Mn in the financial year 2023-24 (FY24).

The growth in revenue came primarily on the back of the rise in volumes from its existing merchant user base and growing “value added” services.

While PayU India’s total payment value (TPV) rose 22% YoY in FY24, its payment service provider business logged a 3% trading loss as against a 3% trading profit in the previous year.

The post PayU’s LazyPay Integrates With Blinkit To Enable One Tap Mobile Payments For Customers appeared first on Inc42 Media.

What happened when tech giant Google flexed its muscles and delisted 10+ popular Indian apps from its world-leading app store, citing the long pendency of billing compliance? Well, homegrown Internet companies got angry; #EvilGoogle started trending and government intervention was sought to redeem the situation.

A temporary truce is in place, but Indian developers are now actively seeking a robust alternative. And that’s where fintech giant’s PhonePe four-year plan comes into the play, with a made-for-India Indus Appstore.

Much of this narrative is familiar. Once again, Google is up in arms, trying to ensure that all Play Store apps, annually earning $1 Mn or more, use its billing system so that it can collect 30% commission on every in-app purchase — more on the current fee structure later.

Google has been at it since 2020, allowing a year’s grace period for non-compliant apps to integrate the technology. After that, the tech giant faced roller-coaster legal battles in India regarding its alleged market dominance and anti-competitive practices on Play Store. Petitions have also been filed before the NCLAT against Play Store’s billing policy. 

Unsurprisingly, Google lost its initial lawsuits and was fined a little over INR 1,337 Cr and INR 936 Cr in two separate cases by the Competition Commission of India (CCI). After all, the tech behemoth owns the Android operating system, and Google Play Store, a leviathan of an app marketplace, comes preloaded on almost all Android smartphones. The reach and the convenience typically make the Play Store the go-to choice. Hence, it might have hit Google harder when Walmart-owned PhonePe launched the Indus Appstore in February this year to challenge Google’s dominance.

No doubt Google restored the apps after MeitY’s (ministry of electronics and information technology) intervention. But it is merely an extension of the payment deadline, and the tech giant will continue to send invoices to ‘non-compliant’ apps. Unless developers from all categories are ready to shell out the 30% ‘Google tax’ and want to abide by the company’s aggressive approach (the outright ban slapped on the Indian apps is proof enough).

The timing of Indus’ launch could not have been better. Indus went live on February 21, just ten days before Google made its delisting announcement on March 1, and nearly throttled a host of major apps such as Matrimony.com, Jeevansaathi, Shaadi, Naukri, 99acres, KukuFM and STAGE, among others. In essence, the all-new app store had a fortuitous entry amid a growing clamour for fair industry practices, while developers started looking for an India-focussed robust alternative. 

In contrast, the Indus Appstore offers a hyper-localised and affordable pp marketplace, aligning better with Indian customers through multilingual solutions.

Within three months of its launch, the new app store has started to make a dent in Google’s ‘alleged’ monopoly, as it offers a developer-friendly environment, charges zero commission on in-app transactions for the first year and has zero publishing fee. (Google charges a one-time publishing fee of $25, but Apple’s App Store is more expensive as it charges $99 per year.) It lists more than 2 Lakh apps across 45 categories and has surpassed 2 Mn installs, a PhonePe spokesperson told Inc42.  

Indus supports 12 Indian languages for access to localised content and has introduced a host of India-specific features such as voice search,  video-led discovery, multi-format ads and more.

“We are seeing a steady increase in the number of users. The app store has gained significant traction since its launch, especially in Tier II cities, which account for 45% of the user base. Popular app categories include finance, games, social media, entertainment, tools, communication and shopping,” the Indus Appstore and PhonePe spokesperson added.

For context, PhonePe has moved its domicile from Singapore to India, shifting all businesses and subsidiaries to India, including the Indus Appstore. Besides this, it had also been fully hived off from Flipkart, which had acquired PhonePe, and currently Walmart is the majority owner of PhonePe.

Why Google Play Store Has Won So Far 

Indus is not the first app marketplace to challenge the Play Store. Earlier, there were several app stores such as Nokia Download (SymbianOS), Download Fun, Pocket Gear, GetJar, Handango, Handmark and MiKandi. Others like Opera Mobile Store, BlackBerry World and HP App followed suit after the Play Store was launched in 2012. But challenging Google’s monopoly in the app marketplace was not possible even for pure-play tech companies like Opera, Firefox or others.

While Google fights lawsuits in various courts over industry practices and commission rates, will Indus be able to gain a strong position in the app marketplace? Before we delve into the pros and cons of the new app store’s success potential, let us look at the existing marketplaces and their fee structures.

Going by how Google Play Store stacks up compared to the competition, will it be fair to suggest that its contentious billing policy may pave the path for success for the likes of Indus? Amit Ranjan, founder of SlideShare (acquired by LinkedIn for $120 Mn) and architect of the Indian government’s project DigiLocker, said the priorities would tend to differ in this case. 

“Building an app store requires deep technical expertise and a strong technical team. The business aspect comes later. You also need to maintain ‘cyber hygiene’ by tracking and filtering out fraudulent apps. This is an ongoing process, and any misstep will directly impact the store’s reputation,” Ranjan told Inc42.

Ranjan has a point. Consider how Opera Mobile Store was fully decommissioned last year, although it catered to 130 Mn+ monthly active users and clocked 1 Mn daily downloads of apps at one point. The reason for shuttering: Opera was allegedly involved in unfair and illegal data transactions.

Even the Google Play Store drew flak and suspended or removed around 4.7K fraudulent loan apps between April 2021 and August 2023, according to Rajya Sabha data. Therefore, nothing short of a robust tech ecosystem and stringent compliance can ensure success for independent app stores despite significant download numbers. 

Nevertheless, a few Android app stores like Samsung have thrived as they have built robust technology and business ecosystems. Interestingly, Google has reportedly struck a deal with the Samsung Galaxy Store to keep its Play Store as the default app marketplace on Samsung mobiles. According to media reports, Google offered Samsung exclusive gaming content, deals and events on the Play Store and YouTube and agreed to ‘white label’ its Play Store as the Galaxy Store so that Samsung could maintain its branding.

When negotiating with Samsung, Google preferred a lump sum payment model over a user-focussed payment strategy.

Will these ‘agreements’ make it difficult for developers and users to opt for alternative app stores? We have an intriguing parallel here. In an antitrust lawsuit held in the US last year, states and the federal government questioned Google’s stand regarding its search engine dominance and how it tried to squash competition by paying Apple and other tech companies to ensure that Google search remained the default option. The search giant defended itself by saying none of these agreements were ‘exclusive’ in nature and users could easily change default settings and opt for other search options.

Although Inc42 cannot independently verify whether similar ‘business deals’ are impacting the app economy in India, Google’s agreements with different OEMs cannot be ignored. And these may warrant more scrutiny from the regulators in the near future (more on these challenges later). Incidentally, a company spokesperson has confirmed that the new app store no longer caters to the Samsung Galaxy Store.  

A user-friendly interface, a supply-demand match (enough engaging apps across categories are required to keep users coming back) and a robust revenue model for developers and publishers are also critical for an app marketplace to survive, according to Karan Lakhwani, India head at the app intelligence firm AppTweak. The major challenge is surpassing the Play Store’s consumer experience, validated by reviews, ratings and download numbers, he added.

How PhonePe Joined The App Store Bandwagon

Google Play Store may enjoy cutting-edge tech prowess and a better business network, but the biggest USP of Indus Appstore is its made-in-India tag, according to the PhonePe spokesperson. 

“Most users are driven to download and use the app store because it is made in India, for India. On the other hand, the developer-friendly ethos of the app store makes it an ideal platform for app creators – that’s the general feedback. They also think the integrated phone login, targeted advertising and engaging features will help them reach niche audiences, driving widespread adoption and engagement,” PhonePe said.

However, the Indus Appstore was not built in a day. Here is a brief look at the backstory, from the initial launch of Mofirst by three IIT-Bombay alumni to many pivots and developments – first as a smartphone maker and then as an app bazaar. Eventually, the company was acquired and rebranded by PhonePe after an intense valuation dispute with key stakeholders, including Affle. 

Many think that the Indus Appstore will soon emerge as the darling of the Indian market, offering unique features to empower consumers and enhance user delight.

How Indus Appstore Is Building A Moat Against Google Play

Indus parent PhonePe is aware that no standalone app store can counter Play Store’s power of innovation and deep pockets. However, it has a long-term plan to take on Google’s ubiquitous app marketplace by leveraging its knowledge of the local market and the subsequent rise in user base. 

Unlike other independent app stores that looked to take on Google, PhonePe holds an edge with more than 535 Mn registered users and 260 Mn monthly active users (MAU), which guarantees a significant number of quality users, and, hence, monetary success for developers.

However, this may not be comparable to what one earns on the Google Play Store or Apple App Store. 

PhonePe aims to create a moat around its app store business by partnering with smartphone makers such as Nokia and Lava. The goal is to pre-install Indus Appstore on up to 300 Mn devices by the end of 2024.

“Our collaborations will ensure seamless app installations and updates. We want to make the Indus Appstore a default choice on smartphones in India, signifying a shift towards a more inclusive, autonomous and developer-friendly app ecosystem,” the company’s spokesperson said.

PhonePe has also acquired a payment aggregator licence from the RBI to enable seamless in-app transactions (payment aggregators allow clients to accept various payment methods and disburse to multiple stakeholders). 

PhonePe Technology Services, a wholly owned subsidiary of the group, was also issued an account aggregator (AA) licence by the RBI. AAs typically share financial data across accounts and institutions securely so that financial information users or FIUs (like lenders or insurers) can make informed decisions. However, no data can be shared without the explicit consent of account holders.

“Some of our clients are keen to be on the Indus Appstore,” said Lakhwani of AppTweak. “I understand that its way of communication and advertising is very different from others. Google Play Store requires a different set of app metadata to succeed. So does Apple. And Indus, too, has a different strategy. Each has created a unique strategy for its app store to succeed.”

However, to attract more users, the company must target different segments uniquely, which Koo should have done when it tried to become as a Twitter killer.

“There’s always a value-seeking user, a discount-seeking user and a luxury or premium user seeking a high-quality experience. Indus should target different types by tailoring its communications to highlight discounts, user experience or specific apps,” said Lakhwani.

Can Indus Become The Atmanirbhar App Store? 

For a long time, Indian entrepreneurs and app developers have demanded that a truly Indian app store be built to look after their interests and counter the Play Store. Paytm founder and CEO Vijay Shekhar Sharma was particularly vocal, saying Google’s charges were costlier than the business taxes the internet businesses paid in India. Paytm also launched a mini app store, and a few more popped up, thinking it was an opportune moment. One such entity was Mitron, a short video app that hurriedly launched an app discovery platform. However, none of these lasted for long after the initial euphoria died.

Given these ground realities, can PhonePe’s app store topple the Google Play Store this time? Two of the five experts with whom Inc42 spoke doubted whether it would be viable in the long run due to Google’s near-monopoly across the Android ecosystem. 

For instance, the entire Android market can be split into five major segments – the licensable OS market for smart mobile devices (smartphones, tablets, and more), app stores, web search services and online video hosting platforms (OVHP). Google has standardised agreements with various companies to maintain its dominance in these segments. Its crucial agreements with OEMs encompass mobile application distribution, anti-fragmentation (for seamless versioning), Android compatibility commitment, revenue sharing and mobile service distribution/placement bonus.

OEMs must adhere to these stringent agreements, which prevent them from developing Android non-compatible hardware. Moreover, they can only include Google Mobile Services (a collection of applications and APIs such as Google Search, Chrome, Gmail, Google Maps, YouTube and more that help support functionality across devices) after signing the mobile application distribution and anti-fragmentation agreements. 

Also, Android prevents installations from third-party sources. When users manually download apps from a third-party app store, they receive multiple security warnings that the apps sourced from elsewhere may harm the device. These warnings often deter users, while developers have little choice but to operate through the Play Store.

Of course, such ‘trade practices’ under the guise of security have been challenged worldwide, including in India. The CCI had already fined the tech giant, but these penalties have been challenged in the Supreme Court. In a separate case, Winzo Games is also fighting a case in the apex court regarding these ‘security warnings’ and other issues. 

Elsewhere, in the Epic Games versus Google case, a California jury found that the latter violated antitrust laws (laws to ensure economic competitiveness and counter monopoly) in Google Play Store’s billing practices. The presiding judge will announce the measures to be undertaken in 2024. 

In May 2022, the European Commission and the Competition and Markets Authority also probed Google Play Store’s business practices. South Korean regulators are also investigating Play Store’s billing, including a formal review of Google’s compliance with new billing regulations.

Rameesh Kailasam, CEO at IndiaTech.Org, a think tank for Indian tech startups, pointed out that the Play Store makes in-app purchases prohibitively expensive and economically unviable for startups and internet economy companies.

To begin with, 15-30% commissions are an issue if transactions are done within the Google Play Billing system. Google came with an alternate billing system, where the app developers can use their payment gateways but have to pay a service fee of 11-26%, which is currently being investigated by CCI. But until now, it has not been a win-win for small developers, paying a cut to one of the world’s richest tech companies.

“Moreover, many of these apps are built outside India despite catering to the Indian market. It means the income from apps or the commission does not accrue to India. Although Google allows for some bypass routes, these are still prohibitively costly,” Kailasam added.

Even when developers list their apps on another app store, integrating them with Google Ads requires Google Play Store listing IDs. Therefore, anyone looking for a wider reach through Google’s pay-per-click advertising platform is compelled to list the apps on the Play Store.

But there’s more to this narrative. While developers struggle to cope with all sorts of arm-twisting, winning a business battle with an industry heavyweight could be too difficult, as the Aptoide App Store soon found out. The Portugal-based mobile app marketplace runs on the Android OS, and the store can be accessed and installed via the store’s official page. Moreover, unlike Google, developers can manage their stores on the platform.

“With Aptoide, that moment [of contention] came in 2018. We took Google to court after the tech Goliath tried by all means unnecessary to suffocate the company’s activity and kill the competition,” founders Paulo Trezentos and Álvaro Pinto shared on their website. “They told users that Aptoide was a menace to the mobile society. They made Aptoide’s app vanish from Android phones without warning. They kept circling more wagons around Google Play Store, making Android app downloads increasingly difficult outside of the platform.”

Google eventually lost the case. The courts and the European Commission found it guilty of abusing its dominant position and anti-competitive behaviour. The tech giant was heavily fined and ordered to backtrack.

But one thing is clear. Given its influence, capital and resources, it will always be tough to beat Google at its own game. Closer home, it will be even more difficult. After all, 95% of smartphones in India run on Android and the Google Play Store has been the default app store for most of these users.

Just like Aptoide, PhonePe or even Walmart may have to lock horns with Google sooner or later for a greater market share. However, the success of the Indus Appstore will largely depend on its ability to deliver a superior user and developer experience that can convince all stakeholders to give it a shot. 

PhonePe’s founder and CEO Sameer Nigam once said that a billion people or more could not be dictated regarding app discovery or transaction if they wanted a change. Indus and PhonePe could be heralding that change.

[Edited by Sanghamitra Mandal]

The post An App Store For India: Can PhonePe’s Indus Loosen Google’s Grip? appeared first on Inc42 Media.

Expanding its automotive play, insurtech unicorn Acko has forayed into the car repair and service space with the launch of ‘Acko Drive Service Centre’. 

The startup has launched two such service centres in Bengaluru. It plans to open 100 service centres in Delhi, Mumbai, Pune, Hyderabad, Ahmedabad, and Chennai in the next six months.  

Acko said that the personnel employed in these centres are well trained and will exclusively use original OEM spare parts to guarantee the longevity and reliability of the repairs. 

“Our commitment to deliver an unparalleled retail experience, leveraging cutting-edge technology, and fostering deep industry partnerships, underscores our vision to become a one-stop shop for all things automobiles,” Acko’s vice president of strategic partnerships Saumitra Raj said. 

Explaining the rationale behind the move, the startup said that the aftermarket service space is largely dominated by unorganised players and it is looking to cement its position as a holistic service provider in the space.

“By entering the aftermarket space, the company will attain the capability to seamlessly direct accidental repair vehicles arriving at Acko for insurance claims to Acko Drive Service Centres,” it added.

In this segment, Acko will compete with the likes of Cars24, Droom, and CarDekho. 

Founded in 2016 by Varun Dua and Ruchi Deepak, Acko offers insurance for vehicles, health and travel. It counts the likes of General Atlantic, Multiples Private Equity, Lightspeed, and Intact Ventures among its investors. Last year, it also launched an insurance plan for batteries of electric vehicles (EVs). 

Acko has raised a total funding of over $450 Mn till date and counts the likes of Amazon, General Atlantic, and Multiples Private Equity Fund among its backers. Its net loss jumped 53% year-on-year to INR 738.5 Cr in the financial year 2022-23 (FY23), while operating revenue grew 32% to INR 1,758.6 Cr.

The post Insurtech Unicorn Acko Wants To Repair Cars Now; Opens Two Service Centres appeared first on Inc42 Media.

Bengaluru-based fintech unicorn slice is piloting a new lending product under the name ‘slice personal loan’, under which users can avail a loan of up to INR 5 Lakh for a tenure of 5 years (60 months), sources told Inc42. 

Currently, the product is being offered only to select users, the sources said, adding that it would be expanded to cover more consumers in the coming months. slice is charging an interest of up to 14% on these loans.

The startup is targeting users with high credit scores for the new product. The new offering is an extension of its existing product slice borrow, under which its users can borrow up to INR 2 Lakh from the startup and its NBFC partners with a repayment period of 12 months.

A query mail sent to slice on the new offering didn’t elicit any response till the time of publishing this story. 

Earlier this month, Inc42 exclusively reported that slice is raising $20 Mn (about INR 170 Cr) in a debt funding round from Neo Asset Management’s Credit Opportunities Fund. The funding is part of a larger $30 Mn (about INR 255 Cr) debt round. While the startup has received $20 Mn, it is expected to receive the remaining amount soon.

Back then, Inc42 learnt that slice would utilise the funds for corporate purposes and working capital requirements. 

Founded in 2016 by Rajan Bajaj, slice operated as a buy now pay later (BNPL) platform till 2022 and offered a credit card-esque prepaid payment instrument (PPI) that came with no annual fees, interest, or late charges. 

However, after the RBI cracked the whip on fintechs in 2022 and barred NBFCs from offering credit on PPI, slice discontinued the service. The regulatory headwinds forced it to change its business model and the startup began exploring merger options.

slice currently offers UPI payments, consumer credit, and a prepaid payment banking account through its app. 

Earlier this year, slice received the Competition Commission of India’s (CCI) approval for its merger with Guwahati-based North East Small Finance Bank.

slice, last valued at $1.5 Bn, is backed by marquee investors such as Tiger Global, Gunopsy Capital, Blume Ventures, Advent International’s Sunley House Capital, Moore Strategic Ventures, and Anfa.

The startup competes against the likes of KreditBee, MoneyTap and CASHe.

The post Exclusive: slice Doubles Down On Its Lending Play; Pilots Personal Loans Of Up To INR 5 Lakh appeared first on Inc42 Media.

Gold loan provider Rupeek is in advanced talks to raise around INR 200 Cr (about $24 Mn) in a funding round which will be a mix of primary and secondary transactions, sources told Inc42.

The funding round will see Elevation Capital joining the digital lending startup’s cap table. Besides, a couple of existing investors will also participate in the round.

Elevation Capital will be a “major contributor” in this funding round, which will value the startup at $250 Mn, – a decline of almost 60% from its peak valuation of $600 Mn, the sources added.

As part of the secondary transaction, Rupeek’s employees will be selling their shares to investors.

Earlier, Economic Times reported that Ranjan Pai’s investment office Claypond Capital is likely to join the funding round. 

The new funding round kicked off earlier this month, with Rupeek raising INR 51 Cr from 360 One Large Value Fund (formerly IIFL Wealth Management) and BlackSoil. 

Founded in 2015 by Sumit Maniyar and Ashwin Soni, Rupeek offers custom gold loans as well as other standard lending products, with gold as collateral. It claims to be present in more than 40 cities across the country and have a customer base of more than 5 Lakh.

Backed by the likes of Peak XV Partners, Accel, GGV Capital, and Bertelsmann, the startup has raised a total funding of over $164 Mn till date. 

Rupeek saw its net loss narrow more than 22% year-on-year (YoY) to INR 281.6 Cr in the financial year 2022-23. However, operating revenue also declined 27.7% to INR 88.9 Cr in FY23 from INR 122.9 Cr in the previous year.

The startup has been focussing on profitability for the last few years. As part of this, it fired almost 250 employees in two layoff rounds amid the ongoing funding winter.

The post Exclusive: Rupeek To Raise INR 200 Cr From Elevation, Others At 60% Haircut appeared first on Inc42 Media.

Homegrown crypto exchange CoinDCX has introduced a Web3 mode within its app that will now enable users to buy digital assets in rupee.

According to the company, this Web3 integration will give users access to more than 50,000 emerging, trending and pre launch DeFi tokens from blockchain networks, including Solana, Polygon, Base and Binance Smart Chain among others.

The Web3 mode will facilitate purchase and transfer of tokens, including Ethereum (ETH), MATIC, Tether (USDT) and USD Coin (USDC) in INR within the CoinDCX app, it added.

Besides, CoinDCX has also introduced a unified deposit and withdrawal mechanism, allowing users to seamlessly transfer funds between their CoinDCX wallets and the Web3 mode for virtual asset purchases.

“The launch of Web3 Mode marks a significant milestone in our mission to simplify Web3 access. This integration was made possible via Okto Chain. Last month, we introduced our fully expressive orchestration layer, a groundbreaking solution that holistically addresses chain Abstraction,” said Neeraj Khandelwal, cofounder of CoinDCX.

“In just a month, the first product using this technology is already live for CoinDCX users. CoinDCX users can now seamlessly interact with multiple chains, perform cross-chain token swaps, and confirm their identities across various networks—without dealing with the complexities of blockchain, which is made possible by chain abstraction powered by Okto’s ‘Orchestration’ Chain,” he added.

CoinDCX has also announced a points airdrop to reward its existing users. The company will dole out Okto points to users for each Web3 interaction with the app, based on their transaction history on the platform.

This comes days after CoinDCX unveiled CoinDCX Prime to offer personalised investment for high net worth individuals, family offices and institutional investors.

Founded by Sumit Gupta and Khandelwal in 2018, CoinDCX claims to have a user base of more than 1.5 crore. It offers easy access to Web3 experiences and democratise investments in virtual digital assets with user safety and security.

CoinDCX became the country’s first crypto unicorn in 2021 after raising $90 Mn in Series C from Facebook cofounder Eduardo Saverin’s B Capital Group, Coinbase Ventures, and others. 

It counts Pantera, Steadview Capital, Kingsway, Polychain Capital, B Capital Group, Bain Capital Ventures, Cadenza, Draper Dragon, Republic, Kindred, and Coinbase Ventures among its backers.

It was also reported earlier that CoinDCX was planning to launch an in-house blockchain and token to fuel DeFi adoption in the country.

Recently, CoinDCX also invested in crypto taxation platform KoinX in line with its plans to facilitate secure crypto trading experience for its users.

The post CoinDCX Rolls Out Web3 Mode To Facilitate Crypto Purchases In INR appeared first on Inc42 Media.

Prosus-owned PayU India’s revenue grew 11% year-on-year (YoY) to $444 Mn in the financial year 2023-24 (FY24), the investment group said in its annual report. 

However, this was lower than the 31% revenue growth in FY23 and over 40% jump in FY22 as the company was unable to onboard new merchants due to its pending payment aggregator application with the Reserve Bank of India (RBI).

PayU received an in-principle authorisation from the Reserve Bank of India (RBI) to operate as a payment aggregator (PA) in April 2024. Only after the nod, which came after a 15-month “embargo”, the fintech company was allowed to onboard new merchants for its payments business. 

Prosus attributed the growth in the revenue of India business to rise in volumes from its existing merchant user base and growing “value added” services. The company also said that PayU India’s total payment value (TPV) grew 22% YoY. 

However, the company’s payment service provider (PSP) business reported a 3% trading loss in FY24 as against a 3% trading profit in the previous fiscal. Prosus said this was due to the “change in merchant and payment method mix (predominantly driven by the embargo)”. 

Despite this, the Indian market continued to be the largest contributor to PayU’ PSP business, accounting for 46% of its global payment operations revenue and 60% TPV in FY24. 

Meanwhile, PayU India’s credit business, which comprises buy now, pay later (BNPL), personal loans, and a pilot on providing loan services to small and medium businesses, registered a growth in terms of revenue but saw its loss widen during the fiscal. While its revenue grew 29% to $107 Mn, trading loss widened to $20 Mn in FY24 due to “continuous investment in building the merchant lending portfolio and relatively stable loss from 2.5% in FY23 to 3.1%”. 

The company said that the uptick in the revenue for India credit business came despite a slowdown in issuance of loans as a response to evaluate new regulations shared by the RBI. 

It is pertinent to note that the central bank has taken a number of steps over the last few quarters to better regulate the digital lending space and curb the sharp rise in unsecured loans.

On the outlook for PayU, Prosus said, “We are present in high-growth markets and we will continue to emphasise India. With the in-principle authorisation by Reserve Bank of India to operate as a payment aggregator and onboard new merchants, India is expected to demonstrate strong growth in payments.”

It added that PayU’s credit business is likely to benefit from increasing demand for credit in India. 

On a consolidated basis, PayU’s revenue grew 22% to $1.1 Bn in FY24. It also managed to cull its trading loss to $67 Mn, a 23% improvement from FY23’s $83 Mn. The company attributed this improvement to the “closure of the loss-making digital bank offering in India and cost optimisation”.

In the fiscal, PayU shut its LazyCard, a prepaid payment instrument backed by a credit line. In November 2023, Prosus said that the decision resulted in reduction of losses and an enhancement of overall profitability within the group’s fintech and payments portfolio. 

It is pertinent to note that PayU India is said to be eyeing a public listing in 2024.

The post PayU India Posts $444 Mn Revenue In FY24, Growth Slows To 11% Due To Restrictions appeared first on Inc42 Media.

Fintech major Paytm witnessed significant growth in its travel segment in the March quarter (Q4) of the financial year 2023-24 (FY24), with flight bookings surging 19% year-on-year (YoY), exceeding the industry average of around 3%.

In an exchange filing on Monday (June 24), the company said international flight bookings on the platform rose 15% YoY in the month of April, driven by global travel partnerships and robust travel solutions.

In November last year, Paytm joined hands with travel tech firm Amadeus, giving users access to a vast inventory of global flight options, including from carriers such as Singapore Airlines and Qatar Airways among others.

The collaboration between Paytm and Amadeus automated travel operations for users by harnessing artificial intelligence.

In line with its expansion plans, the company has now on-boarded three more carriers, including Cambodia Angkor Air, SalamAir and FlyDubai, the filings showed.

“We are committed to expanding our travel business offerings and enhancing the overall customer experience. Our partnerships with global travel aggregators and leading airlines, combined with the integration of artificial intelligence, underscore our dedication to providing seamless, convenient, and competitive travel solutions,” a Paytm spokesperson said.

Paytm further claimed that it emerged as the second-largest online travel aggregator (OTA) in train bookings in terms of market share, propelled by features such as guaranteed seat assistance and easy tatkal bookings.

The platform has also partnered with bus operator Mettur to expand its service offerings and provide more travel options to users.

Its free cancellation service, where users can avail refunds on their tickets, has also seen robust growth in trains and buses, followed by flights, Paytm added.

This comes days after former Paytm employees filed complaints with the Labour Ministry, alleging “unlawful termination” without proper compensation.

Inc42 reported earlier that the fintech startup was forcing employees to resign voluntarily or face disciplinary action. At the time, many aggrieved employees also claimed that Paytm was looking to claw back the joining and retention bonuses of the employees. 

Paytm has found itself mired in myriad issues in recent times. The trouble started when the Reserve Bank of India ordered Paytm Payments Bank to wind down operations from March 2024.

The fintech major also saw a 2.9% (YoY) drop in its revenue to INR 2,267.10 Cr in Q4 FY24. Meanwhile, net loss surged 3X YoY to INR 550.5 Cr during the same period.

The post Paytm Sees 19% Jump In Flight Bookings in Q4 FY24 appeared first on Inc42 Media.

Zerodha was down again this week, as the platform was struck by an outage just before 10 AM on Friday, June 21, rendering users unable to place new stock trade orders or modify existing ones.

This was the second such outage just this month, after a similar one took down Zerodha, Groww and others on June 3, a day before the results of the 2024 General Elections.

And over the past two years, there have been over a dozen such outages on Zerodha’s platform alone, with others such as AngelOne, Groww and Upstox also facing some challenges on occasion. It’s no coincidence that these outages have come as the overall base of Indian retail investors has grown exponentially.

But given this spurt of new users, any doubts about platform stability can also see users jump ship. Zerodha, which lost out to Groww in terms of active investors last year, is especially under the heat. Other platforms are catching up and the entry of Jio Financial Services has also made it more difficult to compete in this space.

So is Zerodha’s lead under threat — that’s what we are looking to answer this Sunday, but after a look at these top stories from our newsroom this week:

• Upheaval At Reshamandi: After burning through $40 Mn of VC money and more in venture debt, ReshaMandi is looking to respawn through another company. Here’s the full story of the B2B marketplace
• Zomato’s Next Target: After grabbing a lion’s share of the quick commerce segment with Blinkit, Zomato has now set its sights on the events and movie ticketing business. Will the potential deal with Paytm have the same fairytale ending?
• Edtech Consolidation: Edtech unicorn Unacademy and K-12 Techno Services have been in discussions for a potential acquisition of the former, according to Inc42 sources, but the deal hinges on Unacademy’s path to profitability

Rivals Feast, Zerodha Watches

Just a couple of years ago, Zerodha’s lead in the active investor base seemingly looked untouchable, and this gave it an aura of being the de facto platform for online trading. But Groww had other ideas, and it used VC funds to acquire users by the millions.

The pandemic-fuelled boom in online trading had seemingly worked more in favour of Groww and others of its ilk than Zerodha. While Zerodha had already reached 6.5 Mn active investors by June 2022. In comparison, Groww was second at 4.4 Mn active investors.

But nearly one year later, by March 2023, Zerodha was still at 6.4 Mn investors, while Groww’s base had increased to 5.4 Mn users. The momentum was in Groww’s favour as it finally surpassed Zerodha in September 2023, and reached 6.63 Mn as against Zerodha’s 6.48 Mn.

Launched in 2017 — seven years after Zerodha — Groww raised a staggering $360 Mn in 2020 and 2021 to smash its way through the investment tech market.

In fact, Groww only launched stock trading in 2020 and primarily focussed on mutual fund investments till then. After it raised its first major round of $30 Mn in September 2020, the Bengaluru-based fintech super app has rapidly added many other asset classes and trading platforms.

It would seem that most of the user boom of the past four years has been seen by platforms other than Zerodha. Groww now boasts over 1.03 Cr (10 Mn) active investors on its trading platform as of May 2024, with closest rival Zerodha coming in second with 75 Lakh (7.5 Mn) active investors.

Among other investment platforms, Angel One gained 1.84 Lakh users in May, taking its total count to 64.86 Lakh, while Upstox has an active user base of 25.91 lakh, and Paytm Money had 7.86 Lakh active users as of May 2024.

Outages Galore For Zerodha

Incidentally, as Groww was catching up, Zerodha was mired in issues such as outages. Between 2021 and 2023, the bootstrapped startup faced as many as 15 technical glitches during trading, leading to customer complaints.

As we saw in our year-end survey on customer sentiment in 2023, customers preferred rival platforms to Zerodha due to the outages and tech glitches. Groww, Upstox, Angel One scored higher on this front.

In 2024, we have seen three outages that have been widely reported — including one in January and two in June. To be fair, two of these outages affected other platforms as well, such as the disruption to mutual fund transactions and orders on June 3, 2024, which also affected Groww users. But as the largest investment tech platform in India by revenue, Zerodha definitely gets a lot more attention.

Last year, the BSE’s Grievance Redressal Committee asked Zerodha to compensate a trader for losses due to a technical outage. The order said that Zerodha failed to take corrective action despite being alerted by the exchange. However, Zerodha called parts of the order a “blatant mistake”.

And in many cases, the outages are short lived. The most recent one on June 21, 2024 lasted just 30 minutes from what Inc42 could understand, but since this happened just after the markets opened, users were understandably frustrated.

What Explains The Glitches?

Our conversations with industry players revealed that Zerodha alone is not impacted by outages, but there is a bigger glare on the platform. However, a lot of the older investors still use Zerodha and they seem to have a louder voice on social media and generally have more influence on other investors.

This puts Zerodha immediately under the spotlight whenever there are issues. Plus, Zerodha founders Nithin Kamath and Nikhil Kamath are always in the public glare and responding to issues and user challenges on social media, which makes it easier for others to talk about these problems openly.

From a technical standpoint, Zerodha or Groww or any other platform have not explained why these outages happen, except for the disruption on June 3 a day before the Lok Sabha Election results. Coin, Zerodha’s mutual fund platform went down and a similar disruption was seen on Groww.

It must be noted that the record gains seen on June 3 in the stock market were followed by the biggest crash in four years. This volatility resulted in crores of losses for investors, but many also blamed the outages for their losses on June 3.

Neelesh Verma, product head for Coin by Zerodha, said at the time, “We work with multiple payment aggregators, and one of them faced issues on Tuesday. Even after pointing out the problem on time, it could not be fixed. As we work with multiple payment aggregators, only a small percentage of the transactions were affected.

Groww also said it was a problem with payment aggregators and gateways that impacted users. “In MF investments, money flows directly from customer accounts to the banks (managed by payment aggregators or through direct integrations, not touching intermediaries like brokers or MF distributors), where it is aggregated and sent to the clearing corporations. The delay in receiving money by clearing corporation resulted in delayed NAV,” the company’s statement said.

While there is ire among users, they also acknowledge that the benefits of Groww or Zerodha outweigh the odd disruption. Yes, it can be a big problem on key days like June 3, but overall, investors say that these platforms have made it easier for everyone to invest, which has brought investments into mainstream conversation.

“If you look at the past month, Groww has faced just as many issues, but mostly everyone talks about Zerodha. As Groww’s user base has grown, there have been just as many complaints about Groww,” said one Bengaluru-based investment advisor, who added that many investors have moved to Groww when Zerodha had issues and they also move to Zerodha when Groww has problems.

As such, neither platform wins or loses from one isolated incident. It’s just about long-term stability and Zerodha has definitely had issues in this regard over the past two years. It doesn’t help that it has also lost users during this period, or at least has not capitalised enough as the market has boomed.

Zerodha Up Against It 

Given the rising competition, its tech issues and the slow user growth, perhaps Zerodha should be worried. The company has never spoken about competition except to explain the rationale for its annual maintenance charge (AMC) of INR 300 which investors don’t have to pay on other platforms.

The Kamath brothers have always claimed that the AMC allows Zerodha to offer investors the best features and new products. But in light of the disruption, there are many questions that users have raised about the fee.

What Zerodha’s fee model means is that it has the operating revenue among investment platforms as of FY23. Even retaining a portion of its 75 Lakh active investors automatically brings in hundreds of crores in revenue for Zerodha based on the AMC alone.

The platform’s revenue grew 37% to INR 6,832.8 Cr in FY23 from INR 4,977.3 Cr, while profit grew to INR 2,908.9 Cr. The profit itself is higher than the revenue earned by both Groww and Upstox.

In contrast, Groww recorded INR 1,277 Cr in operating revenue last fiscal and turned profitable for the first time since inception. Upstox also claimed it turned profitable in FY23 with a consolidated profit of over INR 25 Cr, on a revenue base of over INR 1,000 Cr. However, the company has not filed audited financials yet.

Angel One, the third largest platform after Groww and Zerodha, reached INR 3,000 Cr in revenue in FY23, with INR 889 in net profits. This is the closest rival to Zerodha in terms of revenue from online stock broking.

Angel One is the only platform to release its FY24 numbers, which show a revenue YoY jump of over 35% to INR 4,520 Cr, while profits grew to INR 1,125 Cr. What will be really interesting to see is where Zerodha ended up in FY24, even as the likes of Jio Financial Services and PhonePe continue to press the accelerator on their respective investment platforms.

The company has lost its pace of user acquisition, while rivals such as Angel One have caught up and Groww has surpassed it. With IPO season in full swing (at least for new-age tech companies) and likely to continue well into 2025, investor activity is expected to surge in the next few years.

Historically, new high-profile IPOs draw a lot of casual and new investors to the market and we saw this happen with nearly a dozen listings in 2021. Now that Go Digit, Awfis, TBO Tek, ixigo and others have listed, and the likes of Mobikwik, Ola Electric, Swiggy, PhonePe and Flipkart expected to come to the IPO table next, India is on the cusp of a major inflection point in stock market investing.

Can Zerodha capitalise on this new gold rush with its 15-year-long experience of catering to the Indian investor? Or will its baggage of tech glitches hold it back against competition that is on the rise?

Sunday Roundup: Tech Stocks, Startup Funding & More

• Led by Zepto’s massive $665 Mn round, Indian startups raised over $800 Mn across 29 deals this week, the largest weekly tally in months
• Google has hit pause on real money games on the Play Store in India and globally, citing the absence of a licensing framework and monetisation model challenges. Another blow for India’s online gaming startups

• Travel tech major ixigo saw a rousing debut on the stock markets getting listed at a 45.16% premium on the BSE earlier this week
• Logistics giant Blue Dart has commenced drone deliveries in partnership with drone startup Skye Air with an initial focus on ecommerce deliveries and last-mile services

The post Zerodha’s Downtime Blues appeared first on Inc42 Media.

Amid the ongoing layoffs at Paytm, several employees of the fintech major have reportedly knocked on the doors of the Ministry of Labour and Employment, alleging “unlawful termination” without compensation.

As per Moneycontrol, multiple Paytm employees have filed complaints on the ministry’s Samadhan portal.  

Citing grievances dated June 1 to June 12, the report claims that the aggrieved employees have sought the reinstatement of their employment, alleging unfair and unethical termination by the Paytm management.

The online complaints also include supporting documents such as emails and other other papers. “We are awaiting a response from the ministry and hope the case will be taken up by them. If not satisfactory, will take the court route,” a complainant reportedly said. 

Another laid-off employee also reportedly added, “There is a clause in the offer letter which mentions that in case any dispute arises between the employer and the employee, it has to be resolved via a third-party arbitration committee and be settled amicably. We cannot take them (Paytm) to the courts directly and will have (to) first settle this via the committee”.

Meanwhile, All India Professionals’ Congress (AIPC) has also extended its support to the impacted employees of Paytm. In a post on X, the Congress wing sought details from the impacted employees allegedly “forced to resign without compensation”. 

“News reports say Paytm has sacked professionals in violation of their contractual obligations. Are you an Ex-Paytm Professional? Were you forced to resign without compensation? All India Professionals’ Congress will fight for your cause,” AIPC said. 

This comes just a week after Inc42 reported that the fintech startup was forcing employees to resign voluntarily or face disciplinary action. At the time, many aggrieved employees also claimed that Paytm was looking to claw back the joining and retention bonuses of the employees. 

The development comes at a time when Paytm is grappling with fires on multiple fronts. It started after the Reserve Bank of India (RBI) announced curbs on Paytm Payments Bank in January, citing “material supervisory concerns”. The central bank barred the payments bank from undertaking any deposits or processing any UPI transactions. 

On account of this, the fintech major’s revenue from operations declined 2.9% year-on-year (YoY) to INR 2,267.10 Cr in the March quarter (Q4) of the financial year 2023-24 (FY24). Meanwhile, net loss soared 3X YoY to INR 550.5 Cr during the same period.

To rein in the losses, the company has been aggressively looking to cut costs and streamline operations. As a result, it has undertaken mass layoffs. In a letter to shareholders on May 22, founder and CEO Vijay Shekhar Sharma said that the fintech major would take steps to cut employee costs, which will help the company save up to INR 400 Cr to INR 500 Cr annually.

Meanwhile, top-level exits continue at Paytm. Earlier this week, Neeraj Arora resigned as the non-executive independent director of the fintech major and was replaced by former SEBI (Securities and Exchange Board of India) board member Rajeev Krishnamuralilal Agarwal.

As a result, the company’s stock has been under selling pressure since the RBI announced its curbs. The fintech major’s stock is down 35.3% year-to-date (YTD). Paytm shares closed 0.09% lower at INR 411.30 on the BSE on Friday (June 21). 

The post Paytm Employees Move Labour Ministry Citing Unlawful Termination appeared first on Inc42 Media.

With its reverse flipping plans in full motion, fintech unicorn Pine Labs is now reportedly eyeing an initial public offering (IPO) of $1 Bn (about INR 8,300 Cr) in India. 

Citing sources, a Bloomberg report said that the company is likely to seek a valuation of over $6 Bn for the IPO.

The fintech major may opt for a pre-IPO funding round before the IPO, the report said, adding that the size and valuations may change as no final decision has been taken yet.

Inc42 has reached out to Pine Labs seeking its comments on the development. The story will be updated on receiving a response. 

This is the second stab by the point of sale (PoS) and merchant commerce solutions provider at a public listing. In 2022, Pine Labs filed its IPO documents with the US Securities and Exchange Commission for a $500 Mn public issue. However, it deferred the IPO plans due to weak market sentiments. 

The latest development comes at a time when Pine Labs has seen a couple of upwards revisions in its valuation. Earlier this year, Baron Capital increased the unicorn’s valuation to $5.8 Bn and Invesco bumped it up to $4.8 Bn.

Like many other Indian startups, Pine Labs is also currently in the process of shifting its base to India with an eye on listing on the Indian exchanges. Last month, the company got the approval from a Singapore court to merge its Singapore-based entity Pine Labs Limited (PLS) with the India entity Pine Labs Private Limited (PLI). 

Now, it is awaiting the go ahead from the National Company Law Tribunal (NCLT).

Founded in 1998 by Lokvir Kapoor, Rajul Garg, and Tarun Upadhyay, Pine Labs provides a number of payment solutions like point of sales devices and payment systems to businesses. It also offers other solutions like pay later and rewards and cashback to businesses.

The company has raised a total funding of about $1.6 Bn till date from investors like Peak XV Partners, Actis Capital, Temasek, PayPal, Mastercard, Alpha Wave Global, Chimera Capital, and State Bank of India. 

Pine Labs reported a net loss of INR 56.2 Cr in the financial year 2022-23 (FY23), more than double of INR 22.6 Cr in the previous fiscal year. Operating revenue grew 37% to INR 1,280.5 Cr during the year under review from INR 932.3 Cr in FY22. 

The post Fintech Major Pine Labs Eyeing $1 Bn IPO In India appeared first on Inc42 Media.

Online stock trading platform Zerodha suffered yet another service outage on Friday (June 21), which prevented traders from accessing the platform for several minutes.

According to Downdetector, a service that tracks online outages, Zerodha was struck by an outage just before 10 AM, rendering users unable to place new stock trade orders or modify existing ones.

While 48% of the users were facing issues with Zerodha’s mobile app, 32% and 20% were unable to access the website and make transactions for trade, respectively.

The complaints peaked at around 10:33 AM with about 2,595 reports, with a gradual decline till 10:56 AM. The cause of the outage remains unknown.

The outage caused significant frustration for Zerodha users who depend on the platform for daily trading.

Many users took to social media platforms to express their concerns, with some of them highlighting the repeated outages on the broking platform. 

One user said in a post on X that they were so fed up with repeated outages on Zerodha that they have switched to another stock trading platform.

Responding to the post, Zerodha acknowledged the technical glitch and said that the issue was resolved in a short time.

Several other users also complained about the Zerodha app being completely frozen.

Outages on Zerodha’s broking platform have become quite frequent in recent times. Earlier this month, on June 3, Zerodha suffered another technical glitch.

Between 2021 and 2023, the bootstrapped startup faced as many as 15 technical glitches during trading, leading to customer complaints.

Last year, the BSE’s Grievance Redressal Committee (GRC), in an order, asked Zerodha to compensate a trader for losses due to a technical outage. The order said that Zerodha failed to take corrective action despite being alerted by the exchange. However, Zerodha called parts of the order a “blatant mistake”.

Zerodha, which competes with the likes of Groww and Angel One, saw its net profit rise 37% year-on-year to INR 2,908.9 Cr in the financial year 2022-23 (FY23). Operating revenue also grew 37% to INR 6,832.8 Cr during the year.

The post Zerodha Suffers Another Outage, Users Take To Social Media To Complain appeared first on Inc42 Media.

Neobanking startup Jupiter has raised INR 20 Cr (about $2.4 Mn) in the maiden funding round for its non-banking financial (NBFC) arm Amica Finance.

As per the regulatory filings accessed by Inc42, the funding round saw participation from Peak XV Partners, Matrix Partners India, BEE Accelerate Fund, QED Fund, Global Founders Capital, Tiger Global, among others.

The development was first reported by Entrackr.

Amica Finance raised the funding by allotting 97.89 Lakh Series A compulsory convertible preference shares (CCPS) at INR 20.43 apiece. 

While Peak XV infused INR 5.25 Cr, Matrix Partners India invested INR 4.32 Cr. QED Fund infused INR 3.58 Cr in Jupiter’s NFBC arm.

Amica Finance said it would use the proceeds to meet the general corporate needs of the company.

It is pertinent to note that Jupiter received the NBFC licence from the Reserve Bank of India (RBI) in April last year. 

Earlier this year, rating agency ICRA said in a report that Amica Finance leverages the Jupiter platform and its client base for loan originations, in addition to funding access in the form of inter-corporate deposits. 

The NBFC provides short-term unsecured personal loans with an average ticket size of about INR 26,000 for non-interest-bearing loans and about INR 31,500 for interest-bearing loans, as per ICRA.

Amica Finance began loan disbursements in June 2023 and had assets under management (AUM) of INR 60.5 Cr as of September 30, 2023, with the cumulative disbursements of INR 94.1 Cr during H1 FY2024, the rating agency said.

Founded in 2019 by serial entrepreneur Jitendra Gupta, Jupiter offers a range of financial services, including debit cards, SIPs, mutual funds, personalised savings options, expense management, and UPI payments.

It has raised a total funding of about $169 Mn till date and counts the likes of Tiger Global, Peak XV Partners, and Matrix Partners among its investors. 

Last week, it was reported that Jupiter has received a prepaid payments instrument licence from the RBI and the startup plans to introduce a prepaid account facility in the coming months.

Jupiters’ consolidated net loss more than doubled year-on-year to INR 327 Cr in the financial year 2022-23 (FY23), while operating revenue soared over 1,500% to INR 7.1 Cr.

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PhonePe is in advanced talks with two major smartphone manufacturers to pre-install its Indus Appstore on their devices as it looks to onboard 150 Mn users by the end of the year.

Indus Appstore has formed strategic OEM (original equipment manufacturer) partnerships with Nokia and Lava, and is in advanced negotiations with several other major smartphone manufacturers to further expand its reach, Indus Appstore cofounder Akash Dongre told ET.

“Indus Appstore aims to have more than 150 Mn users by the end of the year and is ready to rival the scale of the competition by building deep partnerships with the developer ecosystem, focused on transparent policies, fair commissions and local support,” Dongre was quoted as saying.

The appstore claims to have achieved over 2 Mn downloads to date, with Tier-II cities accounting for 45% of its user base, indicating strong traction in these areas.

The appstore supports 12 Indian languages and includes features like voice and regional search. Video-led discovery features make it more than just a distribution platform, turning it into a consumer engagement and marketing tool, Dongre explained.

He also mentioned that the platform will capitalise on PhonePe group’s experience in developing straightforward and sustainable payment business models for developers.

Fintech giant PhonePe launched Android app marketplace Indus Appstore earlier this year to  take on Google Play Store and Apple App Store.

In a statement, the company said that the platform hosts more than 2 Lakh apps across 45 categories. Several Indian brands, including Zomato, Myntra, Domino’s, Flipkart, Dream11, and Swiggy, have published their apps on Indus Appstore.

PhonePe acquired the parent company of Indus Appstore in May 2022 for $90 Mn. It was originally cofounded by Rakesh Deshmukh, Akash Dongre and Sudhir Bangarambandi. While Dongre and Bangarambandi are still working with the app marketplace, Deshmuk resigned in January this year.

The marketplace is currently offering “no app listing fees” for developers till March 2025. The launch of the app marketplace came at a time when Google is involved in disputes with Indian startups over its commission rates and the rollout of its new user choice billing system.

Earlier this year, the app store delisted dozens of Indian apps for not complying with its terms and conditions. While the issue was later resolved temporarily, the dispute remains.

According to a report, Indians spent nearly 1.1 Tn hours on mobile apps in 2023, up from 800 Bn hours in 2022.

India also emerged as the second largest source of app downloads globally, totaling 26.4 Bn downloads in 2023. On average, Indians spent 4.77 hours per day on their mobile phones, surpassing users in the US, UK, Japan, and China in daily usage.

The post PhonePe In Talks With Smartphone Makers For Pre-Installing Indus Appstore On Devices appeared first on Inc42 Media.

Cryptocurrency exchange Binance, which was banned by the Indian government in January for non-compliance with anti-money laundering laws, will have to cough up INR 18.82 Cr (around $2.25 Mn) in fine to resume operations in the country.

As per a notification issued by the Finance Intelligence Unit (FIU) of the finance ministry on Wednesday (June 19), Binance failed to comply with multiple provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

“After considering the written and oral submissions of Binance, the Director, FIU-IND, based on the material available on record, found that the charges against Binance were substantiated,” the notification said.

“Furthermore, specific directions have also been issued to Binance to ensure diligent compliance with the obligations outlined in Chapter IV of the Prevention of Money Laundering Act (PMLA) of 2002, in conjunction with the PMLA Maintenance of Record Rules (PMLA Rules) of 2005 for prevention of money laundering activities and combating the financing of terrorism (AMLCFT),” it added. 

The development comes days after Binance discontinued the cash payment option for peer to peer (P2P) trades in India.

It was earlier reported that the FIU had cleared applications of Binance and Kucoin to operate as virtual asset service providers in India.

While Kucoin has paid fines to the tune of INR 35.5 Lakh for past non-compliances, Binance was reportedly planning a comeback to India after paying a $2 Mn penalty.

It is pertinent to note that Binance was among the nine offshore crypto exchanges that received show cause notices in December last year from the FIU for illegally operating in the country and running afoul of India’s anti-money laundering laws. These offshore crypto exchanges were not registered with the FIU as virtual asset service providers. 

As a result, the government blocked access to the websites of these exchanges and their apps were delisted from Google and Apple’s app stores.

In March 2023, the Indian government brought crypto businesses under the provisions of the PMLA, mandating them to report suspicious transactions and conduct customer due diligence among others.

As per the existing rules, offshore crypto exchanges are required to obtain a licence from the FIU to operate as virtual asset service providers to trade in India.

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Ahmedabad-based GVFL Ltd’s seed stage fund has marked its first close at INR 100 Cr (around $12 Mn).

The fund, Prarambh Fund, which aims to raise a total corpus of INR 200 Cr, will be invested in tech startups across B2B SaaS, healthtech, agritech, climate tech and deeptech.

The fund aims to back 25-30 seed startups this year with an average ticket size of INR 1-3 Cr.

Founded in 1990 through the initiative of Gujarat’s government and the World Bank, GVFL is an independent venture capital firm based in Ahmedabad.

GVFL, formerly known as Gujarat Venture Finance Limited, claims to have raised nine funds to support over 110 companies and has divested from over 75% of portfolio companies providing stellar returns to its investors.

Its portfolio includes biotech company Amrita Therapeutics, 3D Dynamic Beam laser machine maker SLTL Group and household products retailer Varmora Homeware, among others.

Kamal Bansal, managing director at GVFL said, “Prarambh Fund will aim to foster innovation across diverse sectors and create an ecosystem of funding & mentorship for young entrepreneurs.”

“Prarambh Fund will ensure the availability of a seamless funding pathway for startups from seed to growth stages. We believe that providing capital support to pre-revenue and early-stage startups will position GVFL as a comprehensive venture capital firm, capable of supporting companies through all stages of their development,” he added.

This comes at a time where investor firms are heavy in allocating capital to bet on emerging startups with innovation, strong margins and that promises handsome returns.

Earlier this week, VentureSoul Partners launched its maiden debt fund, VentureSoul Capital Fund I, with a target corpus of INR 600 Cr. The company is eyeing the first close of the fund by the end of June.

The fund will invest in startups that are at Series A or beyond stage, with a demonstrated revenue model and having raised at least $10 Mn of equity funding.

Last year, GVFL partnered with global venture accelerator Brinc to launch an accelerator programme to back early-stage startups across four different sectors, with an aim to aid startups operating across consumer, industry and enterprise, emerging tech, and sustainability sectors.

The post GVFL’s Seed Stage Fund Marks First Close At INR 100 Cr appeared first on Inc42 Media.

Goldman Sachs and Marshall Wace together offloaded Paytm shares worth INR 208.35 Cr via bulk and block deals on Tuesday (June 18).

As per the information available with the exchanges, Goldman Sachs (Singapore) PTE sold 4.42 Lakh shares of Paytm at INR 415.1 apiece. This translates to a deal size of about INR 183 Cr.

As per Paytm’s shareholding pattern for the March quarter of 2024, Goldman Sachs (Singapore) PTE held 1.32% stake, or 84.01 Lakh equity shares, in the company. 

Meanwhile, Marshall Wace Investment Strategies – Eureka Fund sold 5.85 Lakh shares of Paytm for INR 425.05 in a block deal. This translates to a deal size of about INR 25 Cr.

The shares sold by Marshall Wace were lapped up by BNP Paribas.

This is the second such deal by Marshall Wace in two trading sessions. Last week, it offloaded 5.85 Lakh shares of Paytm in an INR 25 Cr block deal. 

The latest development comes amid regulatory troubles at Paytm. The fintech major’s stock has been under selling pressure since the Reserve Bank of India (RBI) announced curbs on Paytm Payments Bank in January citing “material supervisory concerns”.

The central bank barred the payments bank from undertaking any deposits or processing any UPI transactions. 

Hit by the curbs, Paytm’s revenue from operations declined 2.9% year-on-year (YoY) to INR 2,267.10 Cr in the fourth quarter (Q4) of the financial year 2023-24 (FY24) as net loss ballooned 3X YoY to INR 550.5 Cr during the same period. 

Earlier this week, Neeraj Arora resigned as the non-executive independent director of the fintech major citing his preoccupation and other personal commitments. Following this, the company appointed ex-SEBI (Securities and Exchange Board of India) board member Rajeev Krishnamuralilal Agarwal as his replacement. 

Inc42 also recently reported that the troubled fintech juggernaut was asking employees to resign voluntarily or face disciplinary action. The fintech major has also been looking to retrieve various bonuses already paid to the employees. The company denied these allegations.

The fintech giant is currently undertaking a restructuring exercise as it looks to realign its business and turn its attention back to core digital payments and financial services businesses. 

As part of this, Paytm is also in talks with foodtech major Zomato to sell its online ticketing business in a deal reportedly pegged at INR 1,500 Cr. It also struck a partnership with Samsung Wallet for flight, bus, movie, and event ticket bookings. 

As a result, the stock has seen some upward movement in the past one week. The stock is now trading above the INR 400 level for the first time since April this year. 

On Tuesday, Paytm shares closed 1.84% lower at INR 417.10 on the BSE.

The post Goldman Sachs, Marshall Wace Offload Paytm Shares Worth INR 208 Cr appeared first on Inc42 Media.

Lending tech startup Aye Finance has raised a debt funding of INR 250 Cr (around $30 Mn) from Dutch entrepreneurial development bank FMO.

The fresh capital will be used to disburse loans to underserved micro, small and medium enterprises (MSMEs) across India, the startup said in a statement.

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance offers affordable business loans to micro enterprises in the country. It uses cluster-based credit assessment with AI algorithms to assess risk in the absence of traditional business documents.

It claims to have disbursed loans worth over INR 10,000 Cr to more than 8.67 Lakh borrowers till date.

Commenting on the investment, Krishnan Gopal, chief financial officer of Aye Finance, said, “This latest funding from FMO will be instrumental in allowing us to rapidly scale our lending efforts and include the grassroots businesses that form the backbone of the Indian economy.”

The fundraise comes nearly three months after Aye Finance raised INR 137 Cr in debt funding from German impact investment and portfolio management firm Invest in Visions in March.

In December last year, the startup raised INR 310 Cr in a Series F funding round led by the UK’s British International Investment (BII).

Overall, Aye Finance has raised a total funding of over $380 Mn till date.

The startup claimed its net profit grew 3X year-on-year to INR 161 Cr in the financial year 2023-24 (FY24), while revenue from operations rose 67% to INR 1,072 Cr.

Aye Finance operates in the fast-growing Indian fintech market, which is expected to reach a size of $2.1 Tn by 2030. The lending tech market alone is expected to become a $1.3 Tn opportunity by the end of the decade, as per an Inc42 analysis.

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The churn at Paytm continues as Neeraj Arora has now resigned as the non-executive independent director of the fintech major. 

In a filing with the BSE, the company said that Paytm’s board approved Arora’s resignation during a meeting on Monday (June 17). In his resignation letter, Arora cited his preoccupation and other personal commitments as the reason behind his resignation. 

Paytm founder and CEO Vijay Shekhar Sharma said, “I would also like to express my gratitude to Shri Neeraj Arora for his significant contributions, which have been instrumental in our company’s evolution. We remain committed to innovation and growth as we continue our efforts to serve our nation with financial inclusion”.

Meanwhile, Paytm has appointed former Securities and Exchange Board of India’s (SEBI) whole time member Rajeev Krishnamuralilal Agarwal as the replacement for Arora. 

“The Board at its meeting held today, i.e., June 17, 2024… has approved the appointment of Shri Rajeev Krishnamuralilal Agarwal as a non-executive independent director of the company with immediate effect for a term of five (5) consecutive years, subject to the approval of the members of the company,” the filing said. 

The fintech major said that the latest appointment will enable it to enhance its “corporate governance with additional regulatory and compliance insights”.

Commenting on this, Sharma added, “I am very happy to welcome Shri Rajeev Agarwal to the Paytm board. His expertise in regulatory and government-related matters will be an invaluable addition to our board”.

An alumni of IIT Roorkee, Agarwal is a 1983 batch Indian Revenue Service (IRS) officer. He currently serves as the board member of companies such as ACC, Star Health Insurance, and UGRO Capital. 

The development comes at a time when the fintech major has been grappling with regulatory headwinds. In January, the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding any new customers and undertaking any fresh customer deposits. 

The central bank also directed Paytm Payments Bank to not provide any other banking services, such as UPI facility and fund transfers.

Hit by the curbs, Paytm reported its first quarter of revenue decline since its listing in the fourth quarter (Q4) of the financial year 2023-24 (FY24). While revenue from operations declined 2.9% year-on-year (YoY) to INR 2,267.10 Cr in the quarter ended March 2024, net loss ballooned 3X YoY to INR 550.5 Cr in Q4 FY24. 

On account of these developments, the company has seen multiple top-level exits. Last month, Paytm’s president and chief operating officer (COO) Bhavesh Gupta stepped down, while CEO and managing director (MD) Paytm Payments Bank Limited (PPBL) Surinder Chawla announced his departure in April.

As a result, the company’s shares have been on a downward spiral. Paytm’s shares are trading 33% lower year to date and closed Friday’s (June 14) session at INR 424.90 on the BSE.

The post Neeraj Arora Resigns As Paytm’s Independent Director, Rajeev Agarwal Named Replacement appeared first on Inc42 Media.