Seventeen years is a long time in any era — for Flipkart most of this time was spent creating ecommerce in India. But now in 2024, ecommerce is more than just about marketplaces.

Flipkart and Amazon India created what was believed to be ecommerce for so long, but now things are changing and quick commerce is the belle of the ball. At the same time, ecommerce is also broadening and turning into digital commerce, that pretty much means selling anything and everything online — from electronics to fashion to unbranded products to insurance to travel and even personal loans.

The past year for Flipkart has been about seeing this market in transition. It tried some things to stay relevant, it reportedly looked to acquire startups that could fill the gap, but now Flipkart is going at it alone, launching its fintech product Super.Money in beta and is gunning for the quick commerce vertical next.

So this Sunday, we wanted to see how Flipkart is getting ready for the brave new digital commerce world. But first, here’s a look at the top stories from our newsroom this week:

• Indus Vs Google Play: Indian startups are growing increasingly wary of Google’s stronghold on the app ecosystem, and PhonePe’s made-for-India Indus Appstore is looking to become the alternative. Can PhonePe loosen Google’s grip?
• NODWIN’s Next Focus: Even as it commands 80% market share in the esports market, NODWIN Gaming is eyeing a wider presence in the youth-centric recreational entertainment space and plenty of acquisitions to get there

The New Flipkart 

When Flipkart started out in 2007, India’s internet economy was a newborn. It’s only come of age in the past eight to nine years after the 4G revolution made internet access ubiquitous for Indians. So it’s worth noting that for the first half of its existence, Flipkart was pretty much reliant on the consumers from metro cities.

And the truth is that Flipkart has always been chasing the ‘eight ball’ ever since this inflection point. That’s because even the internet revolution has not been as equal as many claim it to be.

Consumers could access Flipkart, but logistics problems needed to be solved. Cash on delivery suffered a disruption with demonetisation. UPI solved this issue to a large extent after 2016, but then marketplaces suffered setbacks in terms of policy decisions and ecommerce rules in 2017 and 2018.

When Walmart acquired Flipkart in 2018, it was seen as a major validation for the business, but things were changing on the ground.

By 2019, D2C brands were rising, and many bemoaned the over-reliance on marketplaces such as Flipkart, leading to alternative channels, native stores and more. This was of course as true for Amazon India as it was for Flipkart.

Covid was the next big disruption to Flipkart and in some ways, it changed ecommerce for good. As all commerce moved online, Flipkart found itself part of this growing and evolving ecommerce ecosystem. As the pandemic ripped through the economy, access to credit was a major gap to be solved. The digital lending boom is a testament to how large this gap was.

From 2021 onwards and increasingly in the past year, the game has moved to quick commerce, and cross-selling, which has once again sparked off a super app race. This is the moment that Flipkart finds itself right now, and it is arguable that it’s definitely moving towards becoming a super app itself.

Flipkart’s Fintech Dreams

The newest piece in the Flipkart universe is Super.Money, which has launched with UPI payments but will see other financial services soon.

The cross-selling strategy is obvious when you see the introductory offers on Super.Money, which include cashback rewards of up to 10% on Flipkart, Myntra and Shopsy.

The other financial products include a credit card offering in partnership with Utkarsh Small Finance Bank, a pre-approved personal loan service called “superCash”, and a fixed deposit offering “superDeposit”, which would also require banking partnerships.

As Inc42 reported earlier this year, Flipkart initiated the fintech app’s development in July 2023 and earmarked an investment of $20 Mn for the project. Back in January, the company rolled out personal loans on the Flipkart app, which will soon be offered through Super.Money.

This after the company launched UPI services to select users in March. In its first month, Flipkart recorded 5 Mn UPI transactions worth INR 197.24 Cr.

Flipkart’s full-fledged fintech entry comes a year after its demerger with PhonePe, and interestingly, PhonePe will be one of the biggest competitions for Flipkart, along with the likes of Paytm, CRED, Jio Financial Services (JFS) and others.

The launch is one thing, scaling it up will be critical. PhonePe invested billions of dollars in scaling it up, just like Paytm or Google Pay, Amazon Pay or others. While the market is undoubtedly large, competition makes it hard to acquire and retain users.

Quick Commerce Rebuffs

We’ve written about it before — Flipkart is looking to get third time lucky with grocery deliveries and quick commerce, after two relatively unsuccessful attempts over the past few years. But before venturing out on its own, the company looked at its options, as per reports.

First there were talks with IPO-bound Swiggy some time late last year, as reported this week. The talks fizzled out as the two giants failed to come to consensus over a valuation. Besides this, Flipkart is also said to have demanded a majority stake in Swiggy, which proved to be a roadblock to the deal.

Separately, Flipkart reportedly held talks with Reliance-backed Dunzo which was in a severe cash crunch throughout last year, and has scaled back to B2B deliveries only.

Flipkart also held talks with Zepto, which is currently in the quick commerce spotlight thanks to its massive fundraise and high valuations. These talks also failed due to a lack of valuation consensus.

The biggest factor behind Flipkart’s most recent push into quick commerce is the revenue outcome. Ten-minute deliveries are no longer just a fancy proposition, as they were in 2020 and 2021. Cumulatively, Swiggy Instamart, Zepto, Blinkit — the three biggest quick commerce platforms — are on track to report combined revenue north of $1 Bn in FY24, as we had reported earlier.

Flipkart’s next-day grocery delivery business clocked 1.6X year-on-year (YoY) growth in FY24, but the company did not share the revenue numbers for this vertical, which is said to be present in over 200 cities already.

Over the past two years, Flipkart has watched as quick commerce platforms demonstrated massive growth, and indeed even encroached on ecommerce territory in recent months with larger warehouses and plans to deliver large products and electronics, which have been the forte of marketplaces for so long.

Instead of relinquishing the opportunity, Flipkart wants to build it anew. It’s not alone, Reliance Retail and JioMart also have plans to extend their reach into quick commerce, so here again, Flipkart is faced with a massive revenue opportunity but strong competition with a foothold on a segment that will be new for Flipkart.

On The Prowl For Profits

For Flipkart, these two new verticals come at a critical moment. Some might call it a defining moment for the company, which seems strange given that it has been around for nearly two decades. But Flipkart cannot afford to wait too long.

Earlier this month, Flipkart majority owner Walmart said that the company (along with PhonePe) is heading towards profitability. Interestingly, Flipkart brought Google on board as a minority investor as part of the funding round led by the US-based retail giant.

In a statement, Flipkart said, “Google’s proposed investment and its Cloud collaboration will help Flipkart expand its business and advance the modernisation of its digital infrastructure to serve customers across the country.”

This points to Flipkart looking to scale up its various digital commerce verticals across categories. It needs to do a lot to get back into the black after years of losses.

Flipkart’s B2C arm saw a 42% YoY jump in revenue to INR 14,845.8 Cr in FY23, while its loss reduced 9% to INR 4,026.5 Cr. On the other hand, the B2B arm of the company saw its standalone net loss widen to INR 4,845.7 Cr in FY23.

Last year, the company went through a reorganisation and also laid off employees to cut costs. But the new fintech and quick commerce play will be critical for Flipkart in turning the ship around and heading in the direction of profits.

Neither fintech services nor quick commerce are saturated by any means — opportunities exist to disrupt the incumbents and gain a foothold. But execution will be key and both these segments require diligent focus and operational efficiency.

Flipkart has watched Indian ecommerce and digital commerce evolve for the past few years, and now it’s ready to jump in from the sidelines. Can the ecommerce giant find new wings 17 years after it took off?

Sunday Roundup: Tech Stocks, Startup Funding & More

• The weekly startup funding fell to $196 Mn this past week, a 75% decline from the previous week, when the tally was inflated by Zepto’s $665 Mn round
• The Ministry of Corporate Affairs (MCA) had to step in to clear speculation around BYJU’S being cleared of financial fraud and major corporate governance lapses reportedly after a ministry probe
• Zoomcar cofounder Greg Moran has been removed as the CEO of the company after a 12-year tenure as the Nasdaq-listed company faces regulatory scrutiny

• Adding to its product portfolio, Zomato has rolled out a restaurant services hub to plug in operational requirements such as hiring, regulatory requirements, taxation and trademarking
• Bhavish Aggarwal-led Ola is all set to roll out grocery delivery through ONDC on its app after seeing success with the food delivery pilot

The post Flipkart On The Chase Again 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.

Touted as the pioneer of esports in India, NODWIN Gaming has experienced phenomenal growth and diversification since its acquisition by Nazara Technologies in 2018.

When Nazara acquired a 55% majority stake in NODWIN, it was already a trailblazer in India’s nascent esports industry, fostering relationships with global giants like ESL and Valve Corporation. However, NODWIN’s ambitions extended beyond esports.

Recognising the pulse of India’s youth, the company began to spread its wings, venturing into music festivals and other pop culture events. This strategic expansion was fuelled by a combination of organic growth and numerous strategic acquisitions, turning NODWIN into a versatile entertainment powerhouse.

“At the time of the acquisition, NODWIN was already a dominant player in the esports sector, which was one of the key reasons behind our decision. We believed in the long-term potential of this acquisition, and it has certainly paid off,” reminisced Nitish Mittersain, joint managing director & CEO of Nazara Technologies.

He added that since the acquisition, NODWIN’s revenue growth has been exceptional. Today, it contributes 37% to Nazara’s total revenue, having grown 25X in just six years. “This growth is a testament to the foresight of integrating NODWIN into the Nazara portfolio,” he said. Notably, NODWIN’s revenue surged from a modest INR 18 Cr in FY18 to INR 427 Cr in FY24.

Now, before we dive deeper into understanding what NODWIN’s acquisition has meant for Nazara, let’s steal a glance at the company’s early days.

NODWIN’s Early Days 

Founded in 2014 by Akshat Rathee and Gautam Virk, NODWIN Gaming is gradually emerging as a youth-centric recreational, entertainment company with esports being its primary focus area.

Rathee, a gamer at heart, who spent much of his childhood immersed in gaming, began organising esports tournaments at home before the launch of NODWIN. Along with Virk, he set up 30-40 computers in a LAN environment, transforming his house into a hub for gaming enthusiasts. This effort helped the duo build a strong community of gamers, ultimately paving the way for the incorporation of NODWIN Gaming in 2014.

When NODWIN Gaming started, Rathee took the initiative to organise tournaments, which required securing sponsorships. Reflecting on his early days, Rathee said that obtaining sponsorships was challenging and unconventional back then. 

“I often received returnable mousepads as sponsorships, which had to be used for the tournaments and then returned to the sponsors. The concept of turning this into a sustainable business was unclear to everyone, including myself,” Rathee said. 

“During 2010-14, there were not enough marketing companies targeting the gaming market in India. The country’s PC gaming base was too small, and mobile gaming didn’t exist yet. We had to build a fundamentally new category. We sought to redefine the ecosystem by changing its value proposition. Therefore, we focussed on selling to gamers directly rather than people buying a mouse, headset, keyboard, laptop, desktop, or graphics card,” Rathee said.

Fortunately, like many startups, the period of demonetisation (November 2016) provided a significant boost to NODWIN. The esports startup benefited from the wave of digitisation, with everyone turning to digital payments and affordable mobile phones becoming widely available. 

At the time, India had “14 telecom operators”, which were engaged in a desperate cut-throat to slash data prices, which immensely helped them. 

“We were fortunate to be in the right place at the right time. Although we had no role in making data prices cheaper in India, this reduction played a crucial role in our success,” Rathee commented.

The cheaper data prices and the rise of the smartphone era gave a significant boost to the gaming industry, and NODWIN was quick to capitalise on this opportunity. 

As per Nazara filings, NODWIN today owns an 80% share of the Indian esports market basis which it garnered INR 427 Cr in revenue in FY24, up 10% year-on-year. 

NODWIN’s Expansion Strategy At A Glance

Although NODWIN started with esports tournaments, it has expanded its wings over the years to organise music festivals and other youth-centric events.

In addition to growing its intellectual properties (IPs) organically, NODWIN has also taken the M&A route to broaden its reach and influence in the industry. Currently, it has 50+ IPs. 

“We are now operating based on a theory we like to call “Timeshare of Mind Share”. This metric spans NODWIN’s entire ecosystem, encompassing gaming and youth culture. Whether it’s Comic Con events, “Playground” on Mini TV, influencers on Instagram, live streams on YouTube, or our tournaments and BGMS play, this approach is integral to our strategy,” Rathee said.

For example, NODWIN’s IP, BGMI Masters Series, is considered India’s biggest esports tournament. It also started broadcasting BGMS on Star Sports in 2022. Another IP is “Playground”, which premiered on Amazon Mini TV and achieved remarkable success. It has reached over 25 Mn unique viewers across all touchpoints, as per Nazara’s investor presentation.

In a bid to expand its presence in the global entertainment landscape and diversify offerings, NODWIN Gaming acquired Comic Con India earlier this year. 

Including Comic Con India, Nodwin has made five acquisitions. While it acquired Publish.Me and Branded in 2023, the Nazara esports arm took over Ninja last week. Earlier this year, it bought a 13.5% stake in a Germany-based marketing services company for gaming and esports, Freaks 4U Gaming, for €8 Mn (around INR 72 Cr).

While these investments are part of its broader strategy to dominate the esports and youth media space, the financial impact from these acquisitions is expected to reflect in FY25 and beyond.

Moving on, as per Rathee, the startup aims to establish its presence not only on traditional media channels but also across all relevant social media platforms and streaming services. 

“We encompass all forms of media — from digital to social and television — ensuring comprehensive coverage. Additionally, our focus extends to esports and sports media, targeting our audience. Currently, NODWIN Gaming’s sweet spot is individuals between the ages of 16 and 35, with our demographic continuously evolving. As time progresses, our core age demographic will shift, growing by approximately two years annually,” Rathee said.

NODWIN’S Beyond-India Aspirations 

In its quest to capture the attention of the youth, NODWIN Gaming is also focussing on emerging markets. With India as its key market, the company is aggressively foraying into other regions. 

Notable growth is happening in Turkey, Central Asia, and South Asia. Additionally, NODWIN has been setting its footprint in African markets such as Nigeria, Kenya, and South Africa for the past three-four years. 

“We aim to expand beyond our current 22 office locations. Currently, we are aiming for 40 to 50 locations worldwide,” Rathee said.

Moreover, NODWIN Gaming has plans to acquire at least 5-7 more companies in the coming years. 

“Although substantial revenue potential exists in regions around the Tropic of Cancer such as Japan, China, Korea, Europe, and America, our focus on delivery will be directed towards developing and lower-cost markets. This includes countries like the Philippines, Malaysia, Thailand, India, Turkey, Nigeria, Kenya, South Africa, and CIS nations like Uzbekistan and Kyrgyzstan. We also see promising opportunities in Latin American markets such as Mexico and Brazil,” Rathee said.

According to him, the Global South as a market will continue to expand, driven by conversations at forums like the G20 and the United Nations. The growth engine of the world, especially among young people, is increasingly shifting towards these regions. 

Nazara’s NODWIN Game Plan

Nazara Technologies, a prominent gaming company, acquired a majority stake in NODWIN Gaming in 2018. Since then, NODWIN has been significantly contributing to Nazara’s revenue stream. Despite witnessing a slow FY24 due to the impact of India’s ban on online games, NODWIN Gaming anticipates a robust resurgence in FY25, particularly in the esports sector.

Over the past two years, the Indian government has banned popular mobile games like Battlegrounds Mobile India (BGMI) and Free Fire, which are widely used in esports tournaments. This ban has significantly impacted the business case for esports organisers. Nodwin Gaming, in particular, has intellectual properties (IPs) linked to BGMI, which has been affected by these bans.

Moreover, it is also imperative to mention that NODWIN Gaming posted a loss of INR 20 Lakh in FY24 compared to a profit of INR 7.1 Cr in FY23 due to the acquisition made during the year. 

Despite this, the Nazara CEO and joint MD Nitish Mittersain is positive about NODWIN. In an investor call, he highlighted positive developments such as the success of the Playground IP, particularly with Season 3 performing exceptionally well and garnering international interest. 

“Overall, we are optimistic that FY25 will be a much stronger year for esports, building on the groundwork laid in FY24,” he said.

As per the Nazara CEO, with a strong focus on expanding esports operations during FY25, NODWIN is all set for significant international activities in the coming quarters.

Interestingly, Mittersain’s optimism emerges from the fact that NODWIN Gaming accounted for 38% of Nazara’s FY24 revenues which stood at INR 1,138.3 Cr. 

All in all, NODWIN is surrounded by enough growth tailwinds. Given its large market share, new monetisation opportunities, acquisitions and backing from gaming giant Nazara, NODWIN Gaming is expected to start generating significant profits in no time, all while giving a boost to its parent Nazara.

The post How NODWIN Gaming Has Become Nazara Tech’s Biggest Revenue Contributor In 6 Years 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.

Till two years ago, India’s edtech startups had all the leverage. They also had the funding, unbridled optimism and amassed talent by the thousands to scale up. But as we all know this story has come undone since 2022.

The past two years have shown the weak foundations on which this optimism stood — the edtech sector has led in terms of notable shutdowns and layoffs in the startup ecosystem. It’s quite clear now that edtech has lost its shine and a lot of the leverage.

But what it has also lost is the trust that is inherent in education businesses, and that’s not just from the consumer standpoint but also from the point of view of other more traditional education businesses. Given BYJU’S high-profile corporate governance meltdown, questions about multi-year revenue recognition, buried costs and a severe cash crunch, there’s definitely a pall over the edtech market in India.

Which is why the report this week about edtech unicorn Unacademy looking at a merger with K-12 Techno Services Private Limited (K-12 Techno) piqued our interest. What caught our eye specifically was the reported 50:50 partnership between the two companies, because it would be the first such deal in edtech history in India.

While Unacademy did not respond to our queries seeking a clarification on the development, a K-12 spokesperson declined to comment on the speculation.

Inc42 has learnt from two separate sources that while talks between the two companies are ongoing, but we are quite a away from even entering advanced discussions. More importantly, both sources claimed that if a deal materialises, it would not be a merger, instead, K-12 Techno would acquire Unacademy. However, the deal is nowhere close to done, as currently the companies only met to initiate talks.

Founded in 2010 by Jai Decosta and Maguluri Srikanth, K-12 Techno operates the chain of Orchids International Schools across India. Besides, the company offers full-stack solutions to educational institutions from curriculum and academic design to technology services, solutions for administrators and teachers as well as for education marketing. Decosta is currently the CEO and managing director at the company.

K-12 Techno would potentially leverage Unacademy to add a B2C test prep to its chain of Orchids International Schools and other B2B edtech services.

The first source, close to Unacademy’s leadership, said that the companies have held talks for the past few weeks, but these discussions have cooled down to some extent in recent days. At the moment, things are moving slowly on this front.

The second source, privy to developments at K-12 Techno, corroborated this claim, and added that K-12 Techno is far from convinced about the value that a potential Unacademy acquisition would add to the business. The source close to K-12 Techno Services claimed the company is yet to identify the profitable verticals and products in Unacademy.

“The first thing you need to know about K-12 is that it is a very profit-driven company. So the first step for K-12 is to understand the economic engine of Unacademy, and the company is yet to arrive at a clear conclusion on this front,” the source close to K-12 Techno Services said.

As per both sources, K-12 Techno is a profitable company on an EBITDA level (INR 100 Cr as of FY24), whereas Unacademy is yet to solve the unit economic challenges that have kept it mired in losses. Despite having higher revenue than K-12 Techno (as of FY23), Gaurav Munjal-led Unacademy is far from profitable (more on this later).

Unacademy K-12 Services

Currently, K-12 Techno runs Orchids International Schools in 19 locations in India for day schooling and five boarding schools. Our source in the company told us that last year, nearly 3,000 students graduated from class X across Orchids’ 20+ facilities in India.

On the other hand, 2015-founded Unacademy is primarily a test prep platform, which has recently expanded to offline or hybrid learning and also operates verticals such as Relevel (job assessment tests), NextLevel (gamified job search), and Graphy (course creation and management).

In June 2022, Unacademy launched Cohesive as a developer-focussed SaaS product, which then pivoted to generative AI content creation in 2023. Most recently, it has launched Unacademy Stars, a 12-week course designed for those looking to become Unacademy teachers, and expanded its language learning app Unacademy Languages for more foreign and Indian languages. Incidentally, Unacademy Languages is operated by Unacademy, Inc, the company’s US-based entity.

Unacademy’s vast product universe is one of the challenges that K-12 is looking to solve, according to sources. There’s a lot that K-12 Techno is less than convinced about. One of the sources added, “Unacademy needs a turnaround because it has huge losses, though the test prep business is said to be making money. K-12 wants to know whether it is making money on online courses or in offline learning, and which courses or verticals in test prep is Unacademy getting the most money from.”

Other hurdles in the way are Unacademy’s negative gross margins, which would not be accretive to K-12 Techno’s EBITDA-positive business. Every company has different verticals and each of these verticals may have varying accounting cycles and revenue recognition processes. “There are other questions too, such as what is the revenue recognition process or how does the company recognise multi-year revenue or revenue collected for future courses where there could be refunds,” according to the first source.

Has Unacademy Fixed Losses?

Over the years, K-12 Techno has raised more than $175 Mn from investors such as Peak XV Partners, Sofina, Navneet Education and others. Incidentally, Unacademy is also backed by Peak XV, but it has raised more than $440 Mn since inception, at a valuation of $3.5 Bn (as of 2021).

From the financial performance (FY23) standpoint, K-12 Techno seems to have utilised the funding raised in a more efficient way.

In FY23, K12 Techno registered INR 382 Cr in revenue with a loss of INR 39 Cr. According to sources, the company almost touched the INR 500 Cr mark in FY24 and a positive EBITDA of INR 100 Cr.

In comparison, Unacademy reported revenue of INR 907 Cr in FY23, with a staggering INR 1,678.1 Cr in net loss. Sources claimed that Unacademy has nearly doubled its revenue in FY24 which is now close to INR 2,000 Cr.

Inc42 could not verify the FY24 numbers as neither company has disclosed its performance.

Late last year, Munjal took to Twitter to announce that Unacademy had slashed its cash burn by 60% in the calendar year 2023. While the online business saw a degrowth of 30%, EBITDA was claimed to have improved by 87%. Munjal also claimed that the Unacademy Centres offline business had 32,000 students in 2023 from 6,000 in 2022.

He also said that the startup’s Graphy vertical was on the verge of achieving profitability, but did not reveal more details about this. But the improved EBITDA performance is certainly linked to the layoffs of over 2,000 employees since the beginning of 2022.

Besides, Unacademy also cut pay for higher management, and many senior-level employees have walked out of the company since late 2023, including:

• Arnab Dutta – Senior Vice President Strategy
• Vivek Sinha – Chief Operating Officer
• Abhyudaya Singh Rana – Chief of Staff, Chief Compliance Officer
• Subramanian Ramachandran – Chief Financial Officer
• Siddharth Manchanda – General Counsel
• Tina Balachandran – Senior Vice President, Talent and Culture
• Sachin Aggarwal – Head Franchisee Business (Offline Centres)
• Karan Shroff – Partner & Chief Operating Officer
• Ashish Arora – Senior Vice President & National Head Academics

Most recently, cofounder Hemesh Singh stepped away from the CTO role and day to day operations to take on an advisory capacity position.

The departures of these key leaders has undoubtedly stymied some of the momentum that Unacademy had achieved during the Covid years, and left the company bereft of the talent that had the institutional knowledge to turn things around.

Edtech’s Trust Deficit

Even so, the work put in over the past decade has created ‘Brand Unacademy’, which still has quite a pull in the market. In the case of Unacademy and K-12 Techno, the strategic match is plain to see.

As our second source added, “Synergistically, Unacademy is a great fit for K-12 Techno. Gaurav Munjal has built a massive brand for test prep, and from it would be a good way for K-12 to extend the revenue pipeline, as the next big step after the tenth or 12th grade is test prep.”

Given the lack of diverse employment opportunities in India, the test prep market continues to be in demand. The recent controversy around NEET results has also shown that there are a lot more problems to be solved in this space.

But then, there are deeper trust issues related to the high-profile meltdown of BYJU’S. And the erosion of trust is very real for those looking to raise funds or find exits. This is now perceived to be an industry-wide problem, especially in matters of revenue recognition.

According to a Bengaluru-based entrepreneur in the test prep space, “Investors want to plug all corporate governance holes after what happened at BYJU’S, which is why everything is delayed from fundraising to other strategic deals. Every disclosure and claim is being minutely examined.”

Besides revenue recognition, cost recognition is another aspect where founders are being pressed for answers. The founder quoted above added, “Two years ago, investors had little reason to suspect that companies are not removing the refund costs from revenue, or whether they are accounting for financing costs properly when offering courses on EMI through lending partners. But now these have become hygiene.”

In many cases, these problems are not just limited to edtech startups. It has become increasingly common to see corporate governance trouble stemming from revenue inflation or GMV inflation, so the trust erosion is pan industry.

Traditional educational institutions and schools — even those offering tech-first solutions — know that trust is paramount and have invested in building that for the long term. Orchids and K-12 have a track record of running schools for nearly 15 years, and while K-12 also relied on VC funding to grow and scale up to some extent, the profit-driven approach has paid off results.

Past M&As in the edtech space such as the $1 Bn BYJU’S-Aakash deal or Vedantu’s $40 Mn acquisition of Deeksha have shown mixed results for acquisitive edtech startups.

A long-drawn ownership battle in Aakash after the acquisition and the fact that loss-making BYJU’S depended heavily on its profits have had a negative impact on the offline coaching giant. Aakash was supposed to be margin accretive for BYJU’S, but the company’s situation has gone from bad to worse and BYJU’S has been accused of mismanaging the business to save its ship.

It’s less clear how Vedantu has leveraged Deeksha, since the edtech startup has remained under the radar relatively speaking, but like others in its space, Vedantu had a massive task of clawing back its way after reporting losses of INR 358 Cr in FY23.

The success — or lack thereof — of such deals often comes down to the entrepreneurial mindset and how it varies between new-age companies and so-called traditional businesses. Bringing these forces together is not an easy task and several acquisitions have failed to have the right impact as a result.

In Unacademy’s case too, we have written about how its acquisitions have not yielded the right outcomes and many of these were culled from the company in the past.

With ten years of operations, investors have shown patience with Unacademy too, now close to its 10th anniversary, but given the improving market for IPOs, this patience is wearing thin. If not in the case of Unacademy then certainly in the case of Swiggy, Ola, OYO and other startups that are of a similar age as the edtech unicorn.

An exit through an acquisition may not have been the vision that Gaurav Munjal harboured when starting the Unacademy journey, but it could well come to that.

From what we were told, it’s not even clear whether a potential deal will cover Unacademy’s entire business or whether it would just be the test prep vertical that would change hands. Sources claimed Unacademy has close to INR 1,600 Cr or $200 Mn in the bank, which offers it a long runway, but having nearly 30 shareholders on the cap table complicates the structuring and the contours of the deal.

After arriving at a decision on the viability of the acquisition deal, there is still the matter of ironing out these final nuances, which could take a few more months. All said, any potential deal is only likely to materialise towards the end of the year.

The post Merger Or Acquisition? Unacademy, K-12 Techno Services And Edtech’s Trust Deficit appeared first on Inc42 Media.

Mohit Gulati, managing partner of ITI Growth Opportunities Fund believes in the power of purpose, the raison d’être, to be precise. He may not have been the brightest student as a kid, but he was a dreamer with an in-depth understanding of people’s aspirations. Growing up with doctor parents, he also understood the importance of performance and delivery.

Given this mindset, Gulati wanted founders to succeed and knew he must become a jack of all trades to help people with different aspirations. This philosophy is also reflected in his work at ITI GO.

An MBA from IIT-Bombay, he launched Fund I worth INR 62 Cr in 2018 in partnership with the Investment Trust of India (ITI). The financial services conglomerate is led by Sudhir V. Valia, cofounder and director of Sun Pharma, and owns more than 15 businesses in key sectors such as lending, broking, wealth management and more. As a result, the group provides significant cross-synergies for ITI GO across various verticals, including equity funding, venture, debt, investment banking and IPOs.

The fund has performed well in the past five years, investing in 22 startups and returning half the capital to investors. Gulati is working on his next endeavour, ITI Growth Opportunities Fund II, which has a corpus of INR 200 Cr and a greenshoe option of INR 100 Cr.

“We did it in record time. We got the SEBI approval in October 2023 and have already closed INR 80 Cr of our target. We are now ready to deploy the capital,” said Gulati in an interaction with Inc42 as part of our ongoing Moneyball series.

According to him, the entry of new limited partners (LPs), including a major family office and other veteran investors, is critical to this success. Having a seasoned partner like the ITI Group is another key criterion. The VC firm also leverages the presence of a competent board of advisors, including large asset managers and market players, providing strategic insights into business development.

“Most of our LPs are mature investors seeking diversification. With ITI’s support, we can help them invest across assets to maximise returns,” he added.

Historically, most LPs partnered with big VC funds for secure and profitable investments. But with the private investment scenario undergoing a tectonic change in a post-pandemic world, where agility and adaptability matter most instead of set pieces, smaller but efficient VC firms are gaining traction rather than the VC leviathans.

Let us take you through ITI GO’s investment playbook, its intriguing potential and the measures taken to deliver attractive returns amid economic volatility.

Fund I Investment Thesis And How It Performed In Tough Times  

Gulati is sticking to a consistent investment thesis for both funds, believing that successful venture capital investment often requires swimming against the tide and backing resilient founders who can survive against all odds. This has led to early investments in startups such as the all-in-one mobility app Bolt, logistics drone specialist Redwing Aerospace Labs and D2C skincare brand Cureskin, among others.

The VC emphasises that their investments have always been in areas they like and understand. During the funding frenzy of 2021 and 2022, ITI GO made only two investments from Fund I due to skyrocketing valuations and subsequent market corrections.

“However, we made six investments in 2023 when the markets stabilised and we are launching the second fund now,” he said.

The first fund was well-aligned with Gulati’s vision, weathering the test of time and delivering significant returns. ITI GO made 22 investments and exited agritech startup Fasal within a year apart from partially exiting another startup. The fund has an IRR (internal rate of return) of 33% and a DPI (distributed-to-paid-in capital) ratio of 0.45, while four portfolio companies have seen more than 3x valuation markups.

Overall, the fund has achieved a 4.9x valuation markup on deployed capital within 60 months of inception.

While the fund’s core focus areas were consumer internet, healthtech, edtech and the new-age economy, it also invested in aerospace, agritech, fintech, electric vehicles and enterprise tech.

Fund II From ITI GO To Remain Sector-Agnostic

As with Fund I, Gulati prefers not to commit to any specific sector to ensure broader access. While freezing investment and deployment principles for Fund II, the VC has adopted two more strategies.

“About 35% of our fund will be allocated for pre-seed and seed stage investments, while 65% will be reserved for Series A, selective Series B funding and pre-IPO opportunities. In fact, we will have a preferential allotment for some of our portfolio companies heading for IPO. These will ensure a broad deployment spectrum and necessary liquidity to recycle capital,” he said.

Redeploying capital mid-fund will allow ITI GO to opt for fund distribution, returning the money to investors early on. “We are one of the few VCs in India that has managed to return at least half the capital in less than five years while running the first fund. We want to set up a practice where we can return principal investment capital within 5-5.5 years,” added Gulati.

ITI GO Is Not Bullish About Three Popular Sectors

The deal pipeline for Fund II currently features four startups in agritech, wealthtech, consumer internet and edu-fintech. But this time, Gulati is wary of the direct-to-consumer (D2C) space.

“We will approach this sector cautiously while allocating capital from Fund II. D2C is still trying to find its path to scale, and it has been difficult for most brands to progress beyond the initial stage,” he said.

With the emergence of GenAI and the rapid integration of ChatGPT-like technologies across the knowledge industry, Gulati feels that the edtech sector may witness a dip in investor interest. He also has reservations regarding deeptech, believing execution will be difficult in India.

Deeptech startups built on top of intellectual property (in the form of patents, data, know-how, or expertise) may still have potential. However, non-IP products/services (tech commoditised for scale and simplicity) are price takers, not protectable and often lack business control. Spacetech is an exciting area, but Gulati believes the valuations need to adjust for more venture capital investments.

“Nevertheless, we foresee India as a $10-12 Tn economy by 2030, which makes wealthtech a key focus area. India’s wealth is expected to compound at 14-16% annually in the next five to six years, creating numerous opportunities for capital allocation. So, alternative investments are particularly attractive for us,” Gulati pointed out.

AI & Other Tech Tools Assessing Deals, Managing VC Operations

As Gulati and his team soon discovered, running a SEBI-registered fund would offer many learning opportunities. They went through all the nitty-gritty when raising Fund I and strengthened the firm’s internal processes through tech enhancements. These processes help identify focus areas, evaluate strategic investments and time exists effectively as market cycles change.

“We have a comprehensive tracking system for our deal flow and integrated several advanced AI solutions into our evaluation process. It enables us to reach out to entrepreneurs much faster than most VCs in the industry,” he added.

The ITI GO team has also developed an internal ERP for day-to-day VC operations, including deal sourcing, portfolio monitoring, value addition and network expansion. This team will continue to explore and implement advanced technology tools based on AI, data analytics and SaaS to maintain a competitive edge.

Small And Targeted Funds Work Better In India

Globally, the venture capital market is not exactly booming due to an exit drought even after billions of dollars were put into startups in recent years. But for Indian VCs, it can be fairly comfortable going ahead.

Gulati says that venture capital firms in India are uniquely positioned at this point. These are well-capitalised (the country’s PE/VC firms are reportedly holding dry powder worth $20 Bn) and looking for the right investment opportunity.

This capital advantage, coupled with the absence of overseas giants like Tiger Global, SoftBank, Accel and others from the Indian market, presents a promising opportunity for Indian VCs. After a FOMO-driven funding frenzy during the pandemic, major global funds became cautious and rarely took part in mega deals here, given the volatility across the Indian startup ecosystem.

“The next two to three years will be pivotal for Indian venture capital practices. The surge in domestic SIP inflow to INR 18-19K Cr per month makes the capital markets less dependent on foreign investments, although the latter was significantly higher in the past. I see a similar transition in the Indian venture capital market,” said Gulati.

Incidentally, the total amount collected through SIP during May 2024 stood at INR 20,904 Cr per an AMFI report, compared to INR 14,749 Cr in the year-ago period, a 41.73% jump. If this indicates improved risk appetite at the retail level, it is hardly surprising that 270+ Indian investors, with a cumulative corpus of $33.72 Bn announced during 2021-2023, will only be too eager to track bright business plans and hit landmark moments.

The ITI GO founder also anticipates further development of patient capital, as investors are willing to adopt a long-term approach and build businesses from the ground up. LPs are also more proactive, driving the investment momentum. Raising INR 80 Cr for Fund II with zero distribution speaks amply of active commitments from LPs, says Gulati.

Moreover, a non-distributed fund (where fund managers need not split their fees with external entities), even if it is a small one, ensures a higher margin and enables quicker capital returns due to better performance. In contrast, it is challenging for an INR 2K Cr fund to be fully invested and returned, given the limited depth of the Indian market. Only one or two funds in India can do this.

“Therefore, our strategy is to focus on raising smaller, targeted funds. We plan to raise INR 300 Cr for Fund II and will continue to raise similar amounts for the next funds. This will ensure healthy cash flows across all funds, which is difficult to achieve when pursuing an ultra-large fund,” concluded Gulati.

[Edited by Sanghamitra Mandal]

The post ITI GO Fund’s Mohit Gulati On INR 300 Cr Fund II, Indian VCs’ ‘Dry Powder’ Advantage & More appeared first on Inc42 Media.

Three founders come together to launch a startup which is solving a real problem, the startup raises millions from VCs, launches many products and looks to scale up aggressively, but eventually the momentum is stalled and the startup has to wind down. 

This is a fairly typical and unremarkable montage of what happens to most startups. But ReshaMandi’s story is anything but typical, because instead of winding down, ReshaMandi is looking to respawn inside another company.

And in the process, investors in ReshaMandi are likely to be left with nothing to show for their capital, while employees that have waited for salaries for months might also be left empty-handed. 

Here’s a gist of what’s happening: Hit by a cash crunch and revenue challenges, ReshaMandi started laying off employees in June 2023. It offered employees a ‘chance’ to work without salaries for three months. The employees who did so found out that there was no cash for any of the pending salary payments. These employees are still awaiting their dues. 

ReshaMandi, which operates a B2B fibre, silk and yarns marketplace and other verticals for silk supply chain, scaled down over the past year. 

By December 2023, the workforce had been cut down by nearly 85%, and in March 2024, the few employees that were holding ReshaMandi together despite delayed salaries were given another ‘choice’ — Move from Bengaluru to Noida-based Genzr, operated by Genzr Solutions Private Limited, and get paid the salary backlog as a ‘signing bonus’. 

“It’s not just employees who are moving to Genzr. Even the two founders of ReshaMandi have joined Genzr and all key personnel have moved,” according to one of the dozens of former employees and other sources that Inc42 has spoken to over the past few months. 

It’s not that such deals are not commonplace, it’s just that Genzr — by all indications — is seemingly not in a position to pull off such a deal. 

In fact, till April 2024, Genzr Solutions Private Limited used to go by the name Top 12th Academy Private Limited, which was incorporated in 2009 as an education company.  There was no overlap in the business of ReshaMandi and Genzr (Top 12th Academy) till the latter amended its article of association in March 2024 to carry on the business of fibre and silk supply.

Founded in 2020 by Mayank Tiwari, Saurabh Agarwal, and Utkarsh Apoorva (who quit in 2022), ReshaMandi raised $40 Mn+ in equity funding from Creation Investments, Omnivore, Venture Catalysts and other VCs, as well as nearly INR 300 Cr ($25 Mn) in debt from venture debt investors and other lenders. 

In FY23, Genzr reported INR 50,000 in revenue — that is not a typo — whereas ReshaMandi reported INR 413 Cr in revenue in FY22 and in the past had claimed to have crossed INR 1,200 Cr in revenue in FY23. 

Worse still, employees who ‘joined’ Genzr were asked to do the same work they were doing at ReshaMandi. 

“The management is trying to recreate ReshaMandi in another startup as they don’t want to be associated with the previous corporate entity which ran ReshaMandi. So they are starting afresh in another company after burning all the funds raised for ReshaMandi,” one source told Inc42.

Are you starting to see why we said the ReshaMandi story is not simply a story about a failed startup? 

So what business does Genzr have paying lakhs of rupees of salary backlog for ReshaMandi? And why did a startup with millions in funding need such a drastic helping hand? Here’s what our investigation showed us.

Where’s The Funding? 

It was a yes or no question — “How many of you will be able to work without salaries for the next three months?” ReshaMandi cofounder Mayank Tiwari asked employees exactly one year ago. 

The question instilled fear and confusion among 400-odd employees of ReshaMandi, who till then were under the impression that the startup had already raised a new round which would set the company up for growth. 

The truth, as many employees alleged in conversations with Inc42, was that there was no money and what began as delays in salaries in June, worsened soon after with no salaries being paid at all.  

“I know people who had to take loans to survive in an expensive city such as Bengaluru, while the management didn’t have a clear response on the salary,” one former employee who worked at ReshaMandi until May 2023 and is still unpaid added. 

Sources told Inc42 that Reshamandi was facing a host of issues, with allegations ranging from lax corporate governance to financial mismanagement.

From 500 employees in January 2023 to around 100 by the end of the year, the company scaled down heavily. And in the process, 300-odd employees are still awaiting their final dues and salaries. Besides this, ReshaMandi is said to have failed to credit tax deducted at source (TDS) and provident fund contributions for these employees, despite deducting these amounts on the pay slip. 

In response to our questions, ReshaMandi said: “At the foremost, we would like to mention that ReshaMandi was established in 2020 to bridge the gap existing in the ecosystem today, solving for which could set India as the top silk superpower and would have helped us set our name in the agritech space.”

However, the company did not respond to specific questions around allegations of financial mismanagement, the involvement of Genzr Solutions, why Reshamandi expanded into new verticals and then scaled back in two years. 

The statement from the company further claimed that the first few quarters of 2023 saw tremendous growth where revenue grew by 3X compared to 2022. “However, we started to face some challenges which are a normal course of business for a company in our space i.e. collections from our retailers and the funding winter which impacted almost every startup in the ecosystem in one way or the other.”

ReshaMandi also claimed that there are no corporate governance issues or company restructuring. And it added: “Owing to the challenges we saw based on the financial crunch we are trying to navigate, we had to take some calls to keep the company afloat. Those decisions were taken in the best interest of the company and to be accountable for the fiduciary responsibility we have towards our shareholders, board members and lenders.”

But the company declined to explain the Genzr connection, nor did it tell us what happened to the millions that Reshamandi had already raised for its operations. 

Expansion Without A Plan 

ReshaMandi operates in the B2B fashion and textile supply chain space, which is rife with challenges related to scaling up. The high-profile controversy around Zilingo in 2022 and Accel-backed Fashinza’s hard pivot from fashion supply chain to fashion manufacturing are a testament to this.

The case once again typifies the misplaced optimism of startups that raised funds in an easy market in 2021 and then failed to live up to the expectations, thanks to a spray-and-pray approach and the lack of a clear product-market fit for many new verticals. Along the way, to rise up to the expectations of investors, startups have also turned to revenue inflation, double-booking revenue, invoice round-tripping and more. 

According to employees, ReshaMandi’s downfall was due to rapid expansion across verticals, immediately before and after it raised funds in October 2021. 

The company began as a crop advisory and supply chain platform for silk farmers, connecting them to reelers, weavers and manufacturers. It set up three new entities in March and April 2022 to manage new verticals — precision farming, financing, and a consumer brand, as shown above. 

Even before it had completed two years of operations and proven its supply chain model, the company had entered into territories that called for a completely different design thinking to develop products. 

Building a silk supply chain platform is leagues apart from running a D2C brand, or building an IoT-centric precision farming platform. While we can see the logic of building a vertically integrated platform for silk supply, ReshaMandi had not even ironed out the kinks in its primary business.

To add to these, Reshmandi also acquired a stake in Healios Wound Solutions LLP and launched beauty products under the brand SeriSkin, which is now manufactured by Esthetic Insights Private Limited, where ReshaMandi has no involvement.  

With these new verticals and millions of dollars in funding, there was pressure to grow. Naturally, ReshaMandi undertook extensive hiring and went on to launch ambitious programmes: 

• Set up a processing centre in Karnataka’s Ramanagara silk cocoon market, claimed to be Asia’s second-largest market of its kind
• Acquihired software development firm Hashtag to bolster IoT offerings, but the precision farming product has been wound down 
• Announced its foray into the Middle East and North Africa for silk supply; operations shut down as Reshamandi has scaled back

Most of these initiatives have either been phased out or transferred to other businesses, as seen in the case of SeriSkin.

Sources alleged that before it raised funding, the startup had around 200-250 employees. This count rose to around 600 by the mid of 2022. Teams were also sent to Paris and Dubai to represent ReshaMandi and bring in international business and promote the Resha Weaves D2C brand which has now been shuttered. 

Around this time, the company was also said to be in talks with Temasek for a Series B growth round in early 2023. But this round never went through. 

In August 2023, ReshaMandi cofounder Agarwal told a publication that Temasek will revisit the deal after a quarter, but given the current situation at ReshaMandi, this is unlikely to be on the table now. 

According to sources, the company fell victim to the growth-at-all-costs mindset, which drove it to inflate revenues in FY23 and FY22. It’s very likely that Temasek and other investors caught wind of the allegations now being raised by employees on social media and in their conversations with us. 

From Revenue Inflation To Fake Vendors

As of January 2023, ReshaMandi claimed to have revenue of INR 1,248 Cr in the first three quarters of FY23, and was targeting INR 2,000 Cr for the full year, as per its website. In comparison, the company reported revenue of INR 414 Cr in FY22 (March 2022). 

Incidentally, these projections, which were reported by ET in January 2023, have now been deleted from ReshaMandi’s website.

Screenshot of ReshaMandi’s Website

Former employees alleged that the revenue shown to investors and the public for FY23 was inflated through fake invoices, reporting pending collections as booked revenue invoice discounting, and sales to customers that never existed. The company is also said to have onboarded vendors that did not exist.

“Early last year, I was sent to check on our buyers in the Delhi NCR region. When I reached the location, I was shocked. The address housed a building with a rickety exterior. The outstanding amount from this buyer was almost half a crore,” one of the sources told us. 

The problem is compounded by the fact that most silk reelers, silk weavers, farmers and manufacturers deal in cash, as is the standard practice in the industry. Such cash-heavy models are typically more prone to revenue leakage and disparities in booked revenue and the collected revenue, as we have seen in multiple cases in the past two years.

Inc42 couldn’t independently verify these claims by employees around fake vendors because the startup is yet to file its FY23 financials with the Ministry of Corporate Affairs. 

Sources further claimed that ReshaMandi had a tough time in recovering payments from such sellers. There are other concerns which could be seen as red flags particularly related to financial controls. 

In March 2022, Reshamandi appointed former EY executive Ritesh Kumar Talreja as CFO, who quit within a year. He was replaced by former KPMG executive Samadrita Chakravarty, who quit within nine months. 

Other executive positions have also been vacated in recent months. For instance, Abhishek Kumar, the former SVP of marketing, and HR head Subramanya Srikan quit within seven and eight months of joining, respectively. This is in addition to the departure of cofounder Apoorva less than two years after starting the company.

Inc42 reached out to Chakravarty, who was CFO at ReshaMandi till October 2023, but did not receive responses about these allegations raised by employees. 

As stated earlier in the story, the company declined to comment on specific allegations and did not respond to questions about these discrepancies. 

Sources claim that ReshaMandi shut down most of its nearly 45 warehouses at the end of last year. The startup also shifted its registered office to a coworking space in Bengaluru, but it’s not clear how many employees are currently working there.

Reshamandi’s Streak Of Loan Defaults 

By all indications, ReshaMandi has all-but wound down operations across its various verticals. And it’s not just employees who are awaiting dues from ReshaMandi but also vendors and lenders.

As per sources, the startup has debt and trade payables to the tune of INR 250 Cr – INR 300 Cr to vendors and lenders. 

At least three venture debt lenders and another vendor have taken the company to the National Company Law Tribunal Court (NCLT) under Section 7 of the Insolvency & Bankruptcy Code, 2016. 

Northern Arc’s application pertains to a total debt of INR 14.4 Cr availed by ReshaMandi from Northern Arc. The debt was recalled through a notice dated July 7, 2023 pursuant to certain instances of default by ReshaMandi. The matter is currently pending with NCLT. 

Besides this, AU Small Finance Bank (AU SFB) has also filed an NCLT application against ReshaMandi to recover an amount of INR 9.7 Cr. Northern Arc, along with other creditors, holds a pari-passu charge over certain assets of Reshamandi that were hypothecated to secure borrowings from AU SFB. 

One of the above lenders told Inc42 that ReshaMandi is a delinquent borrower, which indicates that the company has fallen behind on repayments. “They have done business with high credit-risk vendors and sellers. And right now, they are not getting their money back,” the lender told Inc42. 

It must be noted that all venture debt investors have suffered. Stride Ventures and Innoven Capital were repaid the amount invested in ReshaMandi, Inc42 has learnt from the respective firms.

Decoding The Genzr Connection

Finally, the most striking aspect of the ReshaMandi meltdown is how the startup dealt with employees this year by forcefully transferring them to  Noida-headquartered Genzr — as mentioned at the beginning of this story. 

“In early 2024, we were told that ReshaMandi doesn’t have the money to pay pending salaries so we should resign and join Genzr. The management said we would get the pending three months of salary as a joining bonus from Genzr,” one such employee who joined Genzr from ReshaMandi told Inc42. 

No explanation was given for the transfer between the companies. But Genzr did clear the salary backlog for some employees who moved from ReshaMandi. 

The Genzr website doesn’t reveal much besides the fact that it is into the textile and apparel supply chain business, similar to ReshaMandi. This is despite the fact that Genzr Solutions Private Limited is registered to do business as an education company.

As per the MCA documents, Genzr made amendments in its articles of association in March 2024 to allow it to design, manufacture and trade in natural and artificial fibres, fabrics, textiles, and offer services in fibre supply chain with technology interventions for yarn manufacturers, fabric mills, and weavers, fibre farmers, and retailers. If that sounds familiar, it’s because this was ReshaMandi’s core business model. 

ReshaMandi’s two founders – Agarwal and Tiwari, as well as other management personnel, are now with Genzr, and are being paid by Genzr. Several sources alleged that ReshaMandi is still trying to recover its pending payments from customers through the employees being paid by Genzr today.

According to an offer letter from Genzr, seen by Inc42, the company’s HR director is Sophronia K, who is also the HR director of Reshamandi. 

So, has Genzr acquired ReshaMandi? And if so, how did it complete the transaction with no real revenue? And what about the VCs who had invested in Reshamandi? 

According to MCA records, Genzr’s directors are Kaustubh Das and Aditya Jaiswal, who were both appointed earlier this year. It’s not clear if they are related to Reshamandi, or why Genzr has stepped in to pay off the dues to Reshamandi’s employees. 

Incidentally, Genzr Solutions Private Limited has received INR 8 Cr (~$1 Mn) in funding in May 2024 from Ivy Icon Solutions LLP, a subsidiary of Hero MotoCorp.

We asked Hero MotoCorp why it chose to invest in a fashion supply chain company that seemingly had no operations till last year and was in an unrelated education business. Hero MotoCorp did not respond to the questions. 

Another Startup Bites The Dust

With ReshMandi’s debacle, numerous questions remain unanswered, which have primarily left employees with little to no recourse. Despite filing complaints against the company, sending numerous emails to HR and the founders, Reshamandi’s former and current employees find themselves out of options at this point. 

While some have considered legal action, they realise this would not be a swift solution. And many have lost hope of recovering their salaries and dues. 

The situation once again underscores the inherent challenges of the B2B fashion industry, and more specifically for the new-age tech companies heavily reliant on investor funding to scale up, and how this creates a pressure to show growth at all costs.

Incidentally, none of the investors who had backed ReshaMandi, responded to Inc42’s questions about the issues that plagued the Bengaluru-based startup.

Once again, an Indian startup’s failure has highlighted concerns about VCs investing without adequate due diligence — a theme that’s very common among startups that raised large early rounds in 2021. 

Of course, from a corporate governance point of view, ReshaMandi’s founders are also just as accountable for the mess. 

Does due diligence stop with the infusion of funds? Or should investors take responsibility about where the money has been used and whether employees that create value for their portfolio companies are indeed being paid and treated fairly? 

One also hopes that the ReshaMandi episode is the final nail in the coffin for the B2B fashion supply chain segment. There is plenty of evidence that this model is fraught with persistent challenges — from sourcing materials and establishing a robust network of genuine vendors and sellers to ensuring integrity of products during transit and storage and the ability to collect payments from vendors. 

These challenges have derailed startups and caused losses to investors in the past. Now, ReshaMandi finds itself in this less-than-august company.

Update | June 20, 4:20 PM

After our story was published, ReshaMandi shared additional clarification: 

Mayank Tiwari, cofounder of ReshaMandi, said, “We acknowledge that the company is facing severe headwinds in the journey but to make such allegations without proper evidence is tantamount to maligning the organisation name and also the individuals associated with it in the past and present. Hearsay from disgruntled employees to defame or malign the reputation of the org they leave cannot be the premise of work accomplished by the company since its inception. We have had big four doing Internal Audit, Process Control, Statutory Audits, Due Diligence over the whole course of Reshamandi. Multiple lenders, auditors have looked at our books without issues, while lenders continue to help us collect our receivables from the market together. Investors used to do periodic diligence of Reshamandi & it’s untrue to say that it was only done at time of fundraising.”

On the Genzr connection, the company added: “Founders and management remain committed to ReshaMandi, its shareholders, lenders & stakeholders. Founders are not absolved from our duties and continue to remain very much a part of ReshaMandi. We are very well working within the ambit of our fiduciary responsibilities and all efforts are towards reviving the company and settling all financial obligations in the near future. ReshaMandi is a functional entity and founders with current employees continue to be on its payroll. Many past and present business associates of ReshaMandi have engaged in various new ventures together or otherwise, jobs and we cannot control or comment on that.”

Edited By: Nikhil Subramaniam

The post Inside The Upheaval At ReshaMandi: A Questionable ‘2nd Innings’ After A $40 Mn Collapse appeared first on Inc42 Media.

The investment landscape in the country is going through a shift never seen before, with more and more women founders and investors winning themselves a bigger share in the high-octane arena of the Indian startup space. 

Be it Swati Nangalia Mehra of Sixth Sense Ventures, who directly ventured into the world of investing, or the founders-turned-investors Ghazal Alagh and Vineeta Singh, many of these trailblazing women have made their mark in the homegrown startup ecosystem. This is notwithstanding other veterans such as Kiran Mazumdar Shaw and Rekha Menon who have already set examples for many in the past. 

Many of these women investors bring years of experience to the table and have today emerged as role models for the country’s youth. However, things were not the same a few years ago, the founder of She Capital Anisha Singh told Inc42.

“It was hard explaining to people that women are successful as entrepreneurs. Now that we have given mega returns to our investors, they’re excited… and understand that women are great business persons,” she added. 

As sharp as a knife, these new-age women investors have their eyes on the stars and feet on the ground, and they are charging through with great perseverance. With numerous successful exits, Indian women investors are creating templates that will be followed by many in the years to come. 

However, more importantly, women founders and investors possess something really important when it comes to building an enterprise and the world of investing.

“They will call a spade a spade and tell you things exactly as they are and not how they can be,” opines the cofounder and CFO of B2B building material marketplace OfBusiness Ruchi Kalra on what makes women great investors. 

We, at Inc42, have collated some of the names that are making waves in the startup investment world. These are the names of the women that aim to build an equitable world of tomorrow and are leaving no stone unturned in their quest.

If you are a women investor or want to nominate a women investor in the startup ecosystem, nominate us at editor@inc42.com. This is a running list, and we would love to add more women who are changing the investing landscape in the Indian startup ecosystem.

Note: This is not an exhaustive list or ranking of any kind. We have placed investors in alphabetical order. 

Here Are The 44 Women Investors Spearheading The Startup Investment Game In India

1. Aarti Gupta

As a veteran investment strategist, Aarti Gupta has been at the forefront of driving the business of her family office, DM Gupta Family, Jagran Group, for the past 13 years.

Gupta also serves as the chief investment officer at Anikarth Ventures, an angel-investing firm that backs early stage startups focussed on transformative solutions.

She also holds multiple positions ranging from being a National Head for FICCI FLO Startups, which focus on women founders and investors, to her association with Jindal Stainless Steels as an independent director.

Besides, Gupta leverages her investment strategy skills to contribute to several boards of family-owned businesses and startups. Furthermore, she also champions initiatives for women’s financial literacy entrepreneurship and job readiness.

Gupta’s academic credentials include a PhD in Economics from IIT Kanpur, a post-graduate diploma in business studies from Harvard University and a Master’s degree in Economics from Northeastern University.

2. Anisha Singh

Anisha Singh is the founder of women-focused VC firm She Capital. She founded the VC firm in 2020 to stimulate more women founders to enter India’s startup ecosystem. Some of the portfolio companies of the VC firm are Samosa Singh, Spark Studio, Elev8 Sportz, and Nova Nova.

Earlier, she founded ecommerce platform MyDala and also headed B2B startup Kinis Software as its CEO. She has also worked as a manager with Centra Software.

She is mostly seen talking about women’s empowerment and supporting women-focussed businesses and startups.

3. Alia Bhatt

Bollywood superstar Alia Bhatt has also donned the hat of an investor and has quite an interesting portfolio. One of her prominent investments was in beauty ecommerce marketplace Nykaa. Her investment grew more than 10X within months to INR 54 Cr when Nykaa got listed on the Indian bourses.

Bhatt’s portfolio also includes Mumbai-based personal styling platform Style Cracker and Kanpur-based biomaterial startup Phool.

Besides investing in other startups, Alia Bhatt has also set up her startup, Ed-a-Mamma, which operates in the kidswear category.

4. Anjali Bansal

Founder and chairperson of Avaana Capital Anjali Bansal has been actively investing in Indian startups. In 2022, Avaana funded four Indian startups — BambooBox, Gold Setu, and Groyyo, according to the Inc42 funding report.

In addition to the aforementioned startups, Anjali has invested in various startups – Delhivery, Urban Company, Darwinbox, and Nykaa, to name a few.

Currently, Bansal is a member of the ONDC steering committee. She is also on the board of various Indian companies such as Tata Power, Nestle India, and Piramal Enterprises. She has also worked with TPG Growth, Spencer Stuart, McKinsey, and Dena Bank

5. Anjali Sosale

Anjali Sosale, partner at Waterbridge Ventures, plays a pivotal role in shaping the success of early stage technology companies for the VC firm. With a special focus on consumer tech, ecommerce, and marketplaces, Sosale wants to enable the next wave of rural Indian internet users

She is an active investor in startups such as BigFatPhoenix, BimaKavach, BitClass, CBREX, Downtown Club, EloElo, and Yellow Metal. 

Waterbridge Ventures specialises in early-stage technology investments, providing $250K to $3 Mn to seed to Pre-Series A stage companies.

With a portfolio comprising 31 investments and collaborating with over 70 founders, Waterbridge takes a lead role in funding rounds and remains dedicated to supporting its portfolio companies throughout their growth journey, extending investments until Series C. 

6. Ankita Vashistha

Ankita Vashistha is the founder of Saha Fund and StrongHer Ventures, which backs female-led early-stage startups operating in the fintech, health tech, consumer tech, and Web 3.0 segments.

She is currently associated with multiple names such as MySpaces, Tholons Capital, NASSCOM,  Aureos Capital, and Abraaj Group. In her more than 10 years of professional journey, she has worked with tech ventures, private equity and VCs across the UK, the US, and Asia.

She is currently an active investor in Indian Angel Network. Her startup portfolio comprises startups such as Licious, Uniphore, Fitternity, LoveLocal, Zumata, and Insta Health.

She got her master’s degree from the Cranfield School of Management, Stanford University, and is an alumna of Ramaiah Institute of Technology.   

7. Archana Jahagirdar 

Archana Jahagirdar is the founder and managing partner of Rukam Capital, which invests in early-stage consumer products and services companies. 

Earlier, she headed companies like Textron, Angelworks and Espace Corporate and worked as a journalist with media organisations such as Business Standard, The Times of India, Zee News, Outlook, and India Today.

In the last few years, Archana has made more than 10 investments in startups like Yoho, Sleepy Owl Coffee, Anveya, Pilgrim, The Indus Valley, and GoDESi, among others. She completed her masters in English literature from St Stephen’s College.

8. Archana Priyadarshini

Archana Priyadarshini is a founder of Forward Slash Capital, which backs pre-seed to pre-Series A stage tech startups. In 2022, she invested in four startups – Broomees, CogniSaaS, Ekank Technologies, and Threado.

Over the years, she has participated in more than 25 startup deals, which include Metastable Materials, Exprto Live, and VAMA, to name a few.

At the moment, she is working as a general partner at PointOne Capital. She has also worked with companies such as Wells Fargo, Bootcamp Fitness Studio, IBM and CGEY. She has done her B.Tech in chemical engineering from IIT Kanpur

9. Bala C Deshpande

Bala C Deshpande is the founder partner of Megadelta Capital, which is an India-focussed mid-market growth fund. It typically invests $15 Mn to 25 Mn of growth equity in startups across sectors such as consumer, healthcare, and enterprise tech.

Megadelta Capital’s portfolio includes startups such as ecommerce unicorn Firstcry and health tech startup GOQII, among others.

Deshpande has nearly two decades of experience in investment advisory. She started her investing career with ICICI Venture in 2001. Later, she joined global VC firm NEA to set up their India platform where she headed the practice for ten years and helped NEA US in investing and backing startups in the mid-market space.

10. Bharati Jacob 

Bharati Jacob is the founder and managing partner of Seedfund, which invests in startups operating in diverse industries. She holds more than 24 years of experience in venture investing, marketing, and financial services.

Earlier, she worked with venture capital firm Infinity Venture Fund, investment bank Lazard, and aviation company Northwest Airlines.

An XLRI graduate, Jacob completed her MBA in marketing from the Wharton School, University of Pennsylvania.

11. Bhawna Bhatnagar 

Bhawna Bhatnagar is the cofounder of We Founder Circle (WFC), which invests in pre-seed to pre-series A-stage startups.

So far, she has invested in edtech OLL and F&B direct-to-consumer (D2C) startup Bored Beverages. Besides, she has also participated in six startup deals, including ParkMate, ParkMate, Quizy, and Commaful.

Prior to founding WFC, she worked with leading companies such as ByteDance, Cheetah Mobile and India Today.

After completing her bachelor’s in biochemistry from Delhi University in 2009, she went to the Indian Institute of Mass Communication and then earned her master’s degree in East Asian studies from Delhi University in 2014.

12. Debjani Ghosh 

Debjani Ghosh is currently the president of NASSCOM, an industry body representing the IT-BPM space. In her career of nearly three decades, she has worked with Intel Corporation and Yes Bank.

She has also been on Cisco’s India Advisory Board and served as an advisor to the FICCI S&T/Innovation Committee.

An MBA from S.P. Jain Institute of Management and Research, Debjani completed her graduation in political science from Osmania University. 

13. Deepika Padukone 

With five startups in her portfolio, Bollywood actor Deepika Padukone has recently worn the investor’s hat. She began her entrepreneurial journey by founding 82°E in 2021.

82°E, which is led by Padukone and Jigar Shah, got $7.5 Mn funding from DSG Consumer Partners and IDEO Ventures, along with multiple ultra-HNIs and Padukone’s family office, Ka Enterprises.

Ka Enterprises mainly backs consumer and consumer-tech companies across the globe. Its portfolio companies include Epigamia, Furlenco, Blu Smart, Bellatrix, Playshifu, Atomberg, Front Row, Mokobara, Supertails, and Nua. 

14. Ghazal Alagh

Mamaearth’s cofounder Ghazal Alagh is an active angel investor. In 2022, she backed 14 startups, including Humpy Farms, unScript AI, and Wishlink. Her startup portfolio also comprises companies like BlissClub, HumpyFarm and Uvi Health.

Before founding Mamaearth, she set up a fitness platform dietexpert.in, which shuttered its operations in 2013.  She has a BCA degree from Panjab University and holds certifications in visual arts from New York Academy.

15. Harsha Kumar

Harsha Kumar is a Partner at VC firm Lightspeed India Partners Advisors. Her journey began as a software engineer and product manager at Persistent Systems in 2009, followed by a stint at the American online gaming startup Zynga in 2012. She pursued an MBA degree from INSEAD while advancing her career.

In 2014, Kumar joined Ola as the product head, contributing to its exponential growth from 3,000 rides per day to a million rides a day by the time she concluded her tenure in 2016. Her instrumental role in scaling up Ola’s product significantly contributed to its unicorn valuation.

At Lightspeed Venture, Harsha has been actively involved in various investments over the past 7 years. Notable investments include API marker Setu, digital ledger OkCredit, vernacular audiobook app PocketFM, and product manager hiring platform Upraised.

16. Ishani Chanana

Ishani Channa, partner investments at Sarcha Advisors, plays a pivotal role in managing family office investments and shaping capital allocation strategies across a diverse spectrum of assets, encompassing equity, debt, and alternative investment opportunities, with a significant focus on startups.

With investments in over 50 startups, including notable names like BluSmart, Josh Talks, STAGE, TrulyMadly, Prescinto, and The New Shop, and active participation in 20+ follow-on rounds, Ishani has been instrumental in nurturing entrepreneurial talent and fostering innovation.

In addition to her role at Sarcha Advisors, Chanana is an angel investor and has stakes in startups like JumpingMinds, BatX Energies, Yatrikart, Newmi, and Jobsgaar.

Prior to her current role, Ishani spent nearly four years at a hedge fund within Edelweiss Financial Services, where she honed her skills in buy-side research. Her work involved in-depth analysis of Indian-listed companies across diverse sectors, making valuable contributions to investment decisions within the fund.

Chanana holds a master’s degree in finance from Warwick Business School. Her investment track record includes successful exits and the ability to attract substantial investments from renowned investors to her portfolio companies, underscoring the prudence of her investment choices

17. Kanika Mayar 

Kanika Mayar is a partner of Vertex Ventures, which infuses money in seed to Series B-stage startups operating in Southeast Asia and India. Vertex’s portfolio companies include Grab, Patsnap, 17Live, Nium, FirstCry, Licious, AsianParent, Validus, and Warung Pintar, among others.

So far, Kanika has participated in four startup deals – Chatty Bao, Proactive For Her, Onato and Karkhana.io. She has also worked with leading companies such as IFC, TechnoServe, Goldman Sachs, and Ernst & Young.

A graduate of economics from the prestigious Lady Shree Ram College, Kanika completed her MBA from IIM Ahmedabad.

If you are a women investor or want to nominate a women investor in the startup ecosystem, nominate us at editor@inc42.com. This is a running list (and not a definitive one), and we would love to add more names who are changing the investing landscape in the Indian startup ecosystem. 

18. Namita Thapar

Namita Thapar is the executive director of India Business for Emcure, a pharmaceutical company. Thapar rose to fame after she joined the TV Show ‘Shark Tank India’ as one of the sharks.

So far, Thapar has participated in 11 startup deals, including Medulance, Ubreathe, Snitch, JhaJi Store, and TagZ Foods, among others.

She recently invested in ePharmacy when the startup bagged an investment of INR 2 Cr from multiple investors on Shark Tank India.

A chartered accountant from The Institute of Chartered Accountants of India, Namita holds an MBA degree from the Fuqua School of Business.   

19. Nandini Mansinghka

Nandini Mansinghka is the co-promoter and CEO at Mumbai Angels Network. She is also a founder investor at Digibooster, a content marketplace. Over the years, she has participated in more than 55 startup deals.

Founded in 2006, Mumbai Angels Network invests in early-stage startups in India. The network backs a slew of startups such as Adsparx, Adonmo, and BabyChakra, among others.

After her graduation (BCom) from the University of Calcutta, she completed her CFA from the Institute of Chartered Financial Analysts of India

20. Nruthya Madappa 

Nruthya Madappa assumed the role of partner at the early-stage VC firm 3one4 Capital earlier this year, where her primary responsibility is to enhance and fortify the firm’s portfolio.

Her journey at the venture capital firm began in 2020 when she joined as a principal and took charge of growth and capital development.

Demonstrating exceptional leadership and strategic acumen, she swiftly progressed to the position of director for the growth and capital vertical in the subsequent year.

21. Padmaja Ruparel

Padmaja Ruparel is one of the cofounders of the Indian Angel Network. She is also recognised as a key player in the Indian entrepreneurial ecosystem.

So far, she has participated in over 16 startup deals, which include names like Phool, Nivesh, Sirona Hygiene, goStops, and Dhruva Space, among others.

Last year, Indian Angel Network launched the IAN Alpha Fund, a SEBI-registered category II venture capital fund, worth INR 1,000 Cr.

So far, Indian Angel Network has invested in over 180 startups. Some of its portfolio companies are Zypp Electric, Crest, Huddle, Elctrifuel, Indium Finance, and Sirona Hyginene, among others.

Before starting her journey in the Indian startup ecosystem, Ruparel worked as the head of corporate communications at the UK-based Xansa.

22. Paula Mariwala

Paula Mariwala has been an early-stage investor for the past 15 years, and is a founding partner of Mumbai-based Aureolis Ventures, and the founder of Stanford Angels & Entrepreneurs India.

A Stanford alumna, Paula invests in early-stage startups and has been a key investor in Tapchief, Tread, Browntape, Thinklabs, RedBus, and Carwale, among others. In terms of sectors, she has been actively investing in segments like technology, sustainability, social impact, women empowerment, and education.

Paula is a member of the governing council of the Foundation for Innovation and Technology Transfer, IIT Delhi. She is also on the board of the Center for Human Rights and International Justice at Stanford University.

23. Pearl Agarwal

Pearl Agarwal is a prolific angel investor, with investments in 16 startups across sectors such as web3, fintech, edtech, gaming, and SaaS. Some of her notable investments include InFeedo, BluSmart Mobility, GroMo, Trell, and Redwing Labs.

Pearl is also the founder and MD of Delhi-based VC firm Eximius Ventures, which has its investments in startups such as Eka.Care, Jar, iTribe, Fego, Zorro, KalaGato, Oyela, Flux, Stan, Fleek, and Skydo.

Before becoming a full-time investor, Pearl worked at Merril Lynch. Pearl has also worked in the private equity sector with names like UTIMCO and Global Infrastructure Partners.

She is also the cofounder of DotReview, a platform where first-time investors can learn about startup funding.

24. Pooja Mehta

Pooja Mehta , AVP , investments and investors Relation at Gensol Group, was the chief investment officer (CIO) at JITO Angel Network (JAN), a platform which connects angel investors with startups. She has expertise in evaluating startups, managing angel investment deals, and administering investment operations and mentoring startups on growth stage.

In the last four years, she has invested in over 30 companies, including Blusmart, Batx, HomeCapital, Nexus Power, Uravu, Terra Biware, Matrix Gas Jumping Minds, Oneplay, Magenta, etc.

Currently, she is a venture capital advisor and on the board of multiple companies, including the global advisory council of Tech India Advocates. A seasoned management professional with an MBA degree in finance, Pooja’s skillset ranges from business development, market research, and management to building business strategies and financial analysis.

25. Priyanka Chopra

Priyanka Chopra, in her capacity as the COO and managing partner at CIIE.CO, assumes a pivotal role in the startup ecosystem, particularly focussing on digitisation, deeptech, climate tech, and financial inclusion.

With a dedicated commitment to empowering women entrepreneurs, she takes the lead in spearheading accelerator and incubation programmes.

These initiatives are designed to enhance skills, promote technology adoption, establish a robust online presence, drive customer engagement, and facilitate strategic partnerships.

Chopra has significantly influenced over 1,200 startups through various CIIE.CO programmes. Notable startups under her guidance include Razorpay, which turned into a unicorn in 2020.

26. Raakhe Kapoor Tandon

Raakhe Kapoor Tandon runs a family office – The Three Sisters: Institutional Office – with two of her sisters, Radha and Roshini Rana Kapoor. Raakhe, Radha and Roshini are the daughters of Rana Kapoor, the founder and MD of Yes Bank.

Under the family office, Raakhe founded ART Capital (India), an investment vehicle. The Three Sisters also has its investments in Delhi-based Awfis Space Solution, a real estate tech startup.

A Wharton alumna, Raakhe has founded two more ventures under ART Capital – ART Housing Finance (India) and Rural Agri Ventures India.

While ART Housing Finance provides long-term mortgage finance to retail customers, Rural Agri Ventures is an incubation/project development firm focussed on agritech startups. 

27. Rema Subramanian

Rema Subramanian is the co-founder and managing partner at Ankur Capital Fund, which backs early-stage startups in the agritech, fintech, health tech, and edtech segments.

She is currently working as an advisor consultant at DY Works. Earlier, she has worked with various Indian companies such as Dasra, ADTS, Element K India, Zee Interactive Learning, Ion Exchange, Datamatics and JK (Raymonds).

So far, Rema has participated in more than four startup investment deals. These names include SportVot, Josh Talks, MyCaptain, and Banyan Environmental Innovations.

A cost accountant from ICFAI, Rema has worked across education and IT/ITES, taking young companies from scratch to midsize ventures.

28. Renuka Ramnath

Renuka Ramnath is the founder and CEO of Multiples Alternate Asset Management, a Mumbai-based venture capital firm that has supported startups such as Delhivery, ACKO, Dream11, MoEngage, and LivPure, among others.

Ramnath founded Multiples in 2009 with the vision of creating a highly respected, sustainable, and successful institution focussed on alternative asset investments in India. Fifteen years later, Multiples manages nearly $3 Bn in assets and has a portfolio of 30 companies across three funds.

An alumna of Harvard Business School, Ramnath also serves on the board of the Multiples Good Faith Foundation, a scholarship programme that provides financial and skill-development support to children from disadvantaged backgrounds.

With over three decades of experience in financial services, Ramnath previously served as the managing director and CEO of ICICI Venture for eight years. Between 1986 and 2001, she held various positions within the ICICI Group.

29. Ritu Verma

Ritu Verma, the cofounder of Ankur Capital, has backed several startups over the years. Some of the companies in her portfolio include names like CropIn, ERC, HealthSutra, Big Haat, Niramai, Tessol, Suma Agro, and Karma Healthcare.

In 2022, Verma took part in more than 13 startup investment deals, including D-Nome, IBISA, Vegrow, Wasabi, and Offgrid Energy Labs, among others.

At present, she is acting as a board observer in various Indian companies such as BigHaat India, String Bio, AgricxLab and Niramai. She is also on the board of Tessol, Health Sutra and CropIn.

Earlier, she worked with Truven, Philips and Unilever. She has a PhD in physics from the University of Pennsylvania and an MBA from INSEAD.

30. Ruchi Kalra 

Ruchi Kalra helms the financial affairs at one of the few profitable new-age tech startups in the country. The CFO of B2B building material marketplace OfBusiness also helped found the startup back in 2016 and has not looked back since then.
An alumna of the prestigious Indian Institute of Technology Delhi, Kalra studied chemical engineering and then went on to work at Evalueserve for a couple of years. Afterwards, Kalra enrolled at the Indian School of Business in Hyderabad and completed her MBA.

Immediately after that, Kalra landed a job at McKinsey & Company and was entrusted with overseeing the insurance and retail banking sector. After nine years working at the consulting firm, Kalra took the plunge into the world of entrepreneurship and helped found OfBusiness.

Not stopping there, she has helped scale the business to new heights while she has also continued investing in multiple other businesses as an angel investor. She has so far invested in as many as 10 startups, as an angel, including seafood marketplace Captain Fresh, tyre marketplace TyrePlex, women-led lifestyle brand FableStreet, and B2B pharmacy marketplace Saveo, among others.

31. Seema Chaturvedi

Seema Chaturvedi, the Founder and Managing Partner of Achieving Women Equity (AWE) Funds, boasts an impressive 25-year track record in capital markets and financial management. Her primary mission is to drive gender equity in entrepreneurship.

A staunch advocate for entrepreneurship with a specific focus on women’s empowerment, Chaturvedi aims to empower 30 Mn women in India by 2030 through AWE Funds.

She also chairs TiE Global’s prominent initiative, the Project All India Roadshow for Women’s Economic Empowerment through Entrepreneurship (AIRSWEEE), securing funding from the US Department of State for six consecutive rounds.

Earlier this year, AWE Funds announced the first close of its maiden fund in India – the Achieving Women Entrepreneurs Early Growth Fund I – at $15 Mn. While promoting gender equity and climate action as a strategy, the fund aims to invest in scalable innovations in sectors such as climate tech, agritech, health tech, edtech and fintech.

32. Shagun Tiwary

Shagun Tiwary is a senior principal at Verlinvest, a Belgium-based investment firm. She is equipped with 12 years of work experience and has invested in companies across consumer and healthcare services such as Dr Lal PathLabs, Indira IVF, Epigamia, and Veeba.

Prior to joining Verlinvest, she worked at TA Associates and Nomura in Mumbai, where she focussed on growth equity investment and capital market transactions. She holds a master’s degree in economics from the Delhi School of Economics, University of Delhi.

Verlinvest is largely involved in late stage venture capital funding and mid-market private equity. Typically, the firm invests between $20 Mn and $200 Mn in startups, depending on the stage they are in.

33. Shanti Mohan 

Shanti Mohan is the founder of LetsVenture, a Bengaluru-based investor network that allows angels and HNIs to invest in startups. She has also founded trica, a platform that allows people to invest in startups and private equity.

In the last few years, she participated in more than 10 startup deals, which include Minko, Simply Services, Bimaplan, and Aulerth.

With LetsVenture, Shanti has invested in startups such as Absolute Foods, Agnikul, BharatX, CityMall, Dukaan, Trell, Yulu, Blusmart, and The ePlane Company, among others. Her personal portfolio comprises Siply, Minko, and Bimaplan.

Shanti is an active angel investor and part of the SEBI advisory AIF committee. She is also active with the RBI Council on startup funding. Further, Shanti is part of the startup committees of several states in India.

34. Shrishti Sahu

The founder of Hustle Hard Ventures, Shrishti Sahu, has been actively supporting Indian startups and has so far backed 30 startups, including Plum, Kutumb, Rupifi, Chingari, 10Club, Leap Club, Eeki Foods, GrowthSchool, Accacia, Descrypt, and Gold Setu, among others.

Sahu shared that she writes off cheques between INR 3 Lakh and INR 25 Lakh for homegrown startups.

Currently, she is a managing partner and angel investor at Swadharma Source Ventures. She has also worked with multiple companies like Emoha Eldercare, Facebook, Lumis Partners, Aqaya Source Foundation, and Aqaya. She completed her graduation from the University of Warwick.

35. Shruthi Cauvery Iyer

Caha Capital founder Shruthi Iyer is an active angel investor, who is overseeing two early-stage startups’ expansion strategies. She administers Wharton Alumni Angels (South Asia) and HBS Alumni Angels.

Earlier, she worked with international companies such as Agate Medical Investment LP, PT Perintius,  International Finance Corporation (IFC), and Eastern Energy Resources. She is one of the cofounders of the ecommerce startup Blend8.

She did her MBA from the Wharton School and completed her B.Tech from Visveswaraya Technological University, Karnataka.  

36. Sowmya Suryanarayanan

Sowmya heads the impact and ESG functions at Aavishkaar Capital – an impact fund manager that invests in impact enterprises across India, South and South East Asia and East Africa. She is responsible for delivering significant impact, gender and ESG value across Aavishkaar’s various impact funds and portfolio companies.

At Aavishkaar, Sowmya has helped invest in sectors such as agritech, financial inclusion, and essential services. Some of the portfolio companies of Aavishkaar Capital include Nalanda Learning Systems, GoBolt, Milk Mantra, and Seven Ocean, among others.

37. Sunitha Viswanathan

Sunitha Viswanathan is a partner at the early stage VC firm Kae Capital. With over a decade of experience in venture investment, banking, and technology, she brings a wealth of expertise to her role.

Kae Capital, founded in 2012, has backed 81 startups, including notable names like Porter, Zetwerk, Nazara, and Tata 1mg.

Prior to joining Kae Capital, Sunitha spent over 8 years at Unitus Ventures, an early stage VC fund based in Bangalore. During her time there, she served on the boards of Cuemath, Masai School, Salesken, Awign, and Blowhorn, among others. She also gained experience working with mid-market clients at YES Bank.

Sunitha holds a bachelor’s degree in Electronics and Communications Engineering from PES Institute of Technology, Bangalore and a Master’s in Finance from S.P. Jain Institute of Management & Research, Mumbai.

Her investment focus spans sectors such as fintech, consumer tech, D2C, and Healthtech. Notable companies in her portfolio include Assurekit, Bold Finance, Everheal, Foxtale, Freightwalla, Nua, Supernova, Traya Health, and Wysa.

38. Surabhi Washishth

Surabhi Washishth, the founding partner of Paradigm Shift Capital, has been actively supporting the Indian startup ecosystem.

So far, she has investments in 20 startups, including Ixana, Zeda, Landeed, Praan, 10XAR, Samudai and Arcana Network. In her personal capacity, she writes cheques between $250K and $300K for startups.

At present, she is acting as a ‘Global Shaper’ with the World Economic Forum. She has also worked with multiple companies such as WeWork India, Headout, Target, AOL, and ING Life, among others. She has a B.Com degree from Christ University, Bengaluru. 

39. Swapna Gupta 

A prolific investor, Swapna Gupta is currently a partner at Avaana Capital, a climate-focused VC firm. Before joining Avaana Capital, Swapna spent more than seven years at Qualcomm Ventures, where she led India investments.

She is an investor and board observer in multiple Indian startups, including Locus, Shadowfax, Ninjacart, Zuddl, FabHotels, MoveInSync, Reverie, Stellapps, and attune, among others.

Swapna also launched Qualcomm Women Entrepreneurs India Network (Qwein), a networking, learning, and mentoring programme for deeptech, and early-stage female entrepreneurs in India.

Swapna has recently been recognised by GCV among the Top 50 emerging leaders in the corporate venture community. Surprisingly, she is the only Indian on the list. She is also part of the prestigious Global Kauffman fellows programme.

40. Swati Nangalia Mehra 

Swati Mehra’s tryst with investments began long ago. One of her first jobs was to oversee investment research in the consumer space. The job came in handy when she decided to take the plunge into the world of investing. 

In 2014, she helped cofound Sixth Sense Ventures, the country’s first domestic and consumer-focussed venture fund. Since then, the firm has invested in a host of new and emerging D2C brands that have created a niche for themselves.

Nangalia Mehra has helmed the venture fund, which has invested in a slew of emerging brands, including homegrown beer brand Bira91, men’s grooming and personal care brand Bombay Shaving Company, and gaming and entertainment platform Smaaash. She also has stakes in CarterX, Pariksha, and ProcMart. 

41. Tarana Lalwani

Tarana Lalwani is a founding partner of InnoVen Triple Blue Capital, which has backed multiple startups such as Zetwerk, Chaayos, Ather, slice, and Bounce.

As an angel investor, Lalwani bets on startups working in the consumer, consumertech, health tech, fintech, and SaaS sectors. She also holds expertise in pre-seed to Series D funding rounds via equity and debt instruments.

Presently, she is an advisor at Aureolis Ventures and a senior director at InnoVen Capital India. Earlier, she worked with companies like Anand Rathi Securities, Kae Capital, SeedFund, Edvance Learning, Webaroo, Radian Group, and Morgan Stanley.

She is also on the advisory board of Oscar Foundation and CII. Not only this, Tarana is currently part of the venture capital and private equity committee of IMAI (Internet and Mobile Association of India).

She holds an MBA degree from Columbia Business School and a bachelor’s degree from La Salle University. 

42. Vani Kola 

Vani Kola is the founder and managing director of the early-stage VC firm Kalaari Capital. She has led over 30 investments at Kalaari. Some of the prominent names include Dream11, Myntra, Cure.fit, and Snapdeal.

Vani is currently on the board of CXXO. She has also worked with Certus Software and RightWorks. She likes mentoring first-time entrepreneurs and ushering them into becoming seasoned business leaders. So far, she has participated in over 63 startup deals. Some of these names include Climbes, Bombay Play, Zocket, StanPlus and Zluri, among others.

After graduating from Osmania University, she completed her master’s degree from Arizona State University.

43. Varsha Tagare

Varsha Tagare is the managing director at Qualcomm Ventures where she manages a $150 Mn fund dedicated to India and cross-border digital enterprise investments.

Prior to joining Qualcomm Ventures, Tagare served as an investment director at Intel Capital, responsible for global equity investments in mobile technology.

At Qualcomm Ventures, she has led and managed investments in Capillary Technologies, Ideaforge, MapMyIndia, among others. 

44. Vineeta Singh

Widely popular for being featured on Shark Tank India, Vineeta Singh is the CEO and cofounder of beauty and personal care brand SUGAR Cosmetics. Singh is an alumna of the prestigious Indian Institute of Technology, Madras and the Indian Institute of Management, Ahmedabad.

Singh is a serial entrepreneur and the founder of FAB BAG, a beauty and grooming subscription startup. Since appearing on Shark Tank India, Singh has shot to fame and has invested in a slew of Indian startups featured on the show.

As an angel investor, Vineeta Singh has participated in multiple fundraisers. Some of her bets include Padcare Labs, JhaJi Store, Snitch, and Josh Talks, among others.

Note: The information has been collected from available public resources and websites.

If you are a women investor or want to nominate a women investor in the startup ecosystem, nominate us at editor@inc42.com. This is a running list (and not a definitive one), and we would love to add more names who are changing the investing landscape in the Indian startup ecosystem. 

Last updated on June 19, 2024 | The list has been updated to include one more women investor. 

The post Meet 44 Women Torchbearers Of India’s Startup Investment Space appeared first on Inc42 Media.

With the key ministry positions and the council of ministers now finalised for Prime Minister Narendra Modi’s third term, the Indian startup ecosystem is looking at real action to address long-held concerns.

Startups have laid down their expectations from the government even before the interim Budget was released earlier this year. And with no major changes to the key portfolios, the ministers in charge would also be well-versed with what the ecosystem wants.

For instance, those in the fintech sector sought much-needed relief from the high regulatory and compliance burden, while startups across sectors want angel tax to be taken off the table. And these issues continue to persist.

The key points raised by others include a broader focus on domestic artificial intelligence (AI) development and IP creation, as well as clearer directions on subsidies for EV and semiconductor manufacturing. There were also some expectations such as creating new policies specifically for AI as well as a new fund for seed startups.

What Startups Want From Modi 3.0

With the cabinet ministers in the Modi 3.0 government expected to submit their 100-day plan for each portfolio, startups will once again be looking for improvements in the ease of doing business in specific sectors as well as other reliefs.

Based on our conversations with founders and investors before the interim budget earlier this year and close to the General Election results, here is the wishlist of Indian startups from the Modi 3.0 government’s first 100 days.

The below list is in no particular order. 

• Repeal Angel Tax Altogether And Dispose Of Pending Cases

Angel tax has been a constant blot in what has otherwise been a bright decade for India’s startup ecosystem. “The opposition included its removal in their manifesto, despite being the ones to introduce it. The Modi government should repeal the law to eliminate angel tax,” T.V. Mohandas Pai, the former CFO of Infosys and partner at Aarin Capital, told Inc42 a day after the election results.

Pai also believes that the government must resolve all disputes promptly and refrain from harassing people with unnecessary complications.

• Establish INR 50,000 Cr Fund Dedicated To Emerging Technologies

Highlighting that subsidies have been extended to farmers and MSMEs, key stakeholders such as Pai have questioned the lack of discussion over a new fund for startups.  “We must establish an INR 50,000 Cr fund through various entities in the next five years. With the economy at $3.6 Tn this year, we’re lagging behind in AI and other frontier technologies due to inadequate investment,” the Aarin Capital partner added.

• Improve Commercialisation Route For Indian R&D In Climate Tech

Climate tech is one sector that is seeking a major impetus from the government as the VC ecosystem continues to remain hesitant about backing Indian companies in a big way. As a result, India’s rich R&D culture and talent pool is migrating overseas, taking value and IPs with them.

The government needs to enable a culture of R&D that has outcomes and a scope of commercialisation within India. This will have a major impact on the country’s role in the fight against climate change and its ability to meet the Sustainable Development Goals of 2030.

• Focus On Agri Food Life Sciences To Boost Food Production 

Climate resilience is a major focus area for the agriculture industry, as food production is expected to be impacted by climate change. To solve this, the Indian government needs to encourage adoption of cutting-edge agri food life sciences (AFLS) to increase food production in a sustainable manner.

Encouraging crops and agri techniques that have a lower carbon footprint is an essential first step, along with backing R&D in crop genetics, low-water agriculture methods and creating better market linkages.

• Modi 3.0 Needs To Expand Startup India Seed Fund Scheme

Initially introduced in April 2021 with a corpus of INR 945 Cr, the Startup India Seed Fund is set to conclude in 2025 and key ecosystem stakeholders want significantly larger allocation for the fiscal year FY26, compared to the INR 175 Cr seen in FY25.

Stakeholders believe the total fund size needs to be doubled to cater to the fast-growing startup ecosystem. Besides, early-stage founders say credit guarantee schemes will help fill the gap when it comes to VC funding, as many business models have an impact on grassroots growth, which is not always the focus of VCs.

• Specalised Funds For Untapped Sectors Like Semiconductor Manufacturing

Launched in December 2022, the India Semiconductor Mission (ISM) is poised to become a major focus for the government over the next five years, and a roadmap for the ISM’s evolution needs to be a priority for the government, according to several stakeholders that we have spoken to over the past few months.

The Modi 3.0 government will have to ensure that the INR 76,000 Cr ($9 Bn) incentive package announced for the ISM is deployed in the right manner, and does not become a barrier for startups in the field. While the overall allocation is encouraging, founders and investors believe that a dedicated seed or startup fund needs to be carved out from this allocation to enable semiconductor and ESDM startups.

A similar approach is needed for robotics and EV component manufacturing, where startups typically have to toil away for years before investors are ready to back them. A government-backed fund would fill the capital gap at the right stage and accelerate growth and innovation, which is critical to building long-term value.

• Regulatory Oversight To Protect Limited Partners 

Given some of the major lapses when it comes to governance practices at venture capital firms and due diligence of investments, many limited partners (LPs) and investors in funds have called for a mechanism or framework that protects the interests of LPs, just like SEBI does for the public markets.

As more funds come into the market, it widens the base of LPs and increased transparency on individual partner performance is only going to strengthen the case of startups as an investment asset for the future. This is no different from various fund managers of public market mutual funds being under the scanner individually.

Besides this, other ecosystem stakeholders believe that as a regulator, SEBI could step in to bring more transparency in commercial agreements between partners in a fund, which are shrouded in secrecy. The terms of these agreements can lead to conflict within the leadership of a VC firm, and this directly impacts the portfolio as well as the LP’s investment in the fund.

PE and VC industry insiders believe that AIFs need to disclose agreements between partners that can have a material impact on investments by LPs. For example, LPs often don’t know whether the partner is actively involved in deal evaluation and sign-off, and there’s also secrecy around management fee sharing and carry sharing, which often are the root cause of conflicts inside a fund.

• Resolve Issues In The Ministry Of Corporate Affairs Portal

Several startups have struggled with their compliance requirements due to technical challenges with the Ministry Of Corporate Affairs’ website. This has resulted in delays in financial disclosure, uploading board resolutions and key documents needed for fundraising.

While the government launched MCA 3.0 to solve the challenge of catering to lakhs of startups, the portal has routinely suffered from outages, weeks-long issues in uploading filings and loss of precious manhours. Startups would hope that the Ministry of Corporate Affairs, which falls under Finance MInister Nirmala Sitharaman, would spruce up the website in keeping with the times.

• Promoting Self-Regulation In AI To Preserve Innovation

AI regulations will become a major theme for the Indian government — as it has for other authorities around the world — in the coming year. As seen at Inc42’s recent The GenAI Summit, the industry has called for broader frameworks and a self-regulation approach rather than sweeping regulations banning certain models and AI products.

“Startups cannot wait for regulations because that will take its due course of time. Instead, the idea should be to practise responsible AI development and self-regulate so that innovation can keep happening,” said Tanuj Bhojwani, head of People+ai, which is looking to create digital public infrastructure around AI.

While the threat of regulations has spooked some startups already, the industry would be hoping that the government is in alignment with the self-regulation push so that existing businesses and new startups are not hurt. “If a national AI agenda is set – similar to Digital India, Startup India, and Make in India – we are sure to see Indian startups rally and make this a success,” noted 3one4 capital partner Pranav Pai.

• Curb Disproportionate Response To Minor Transgressions By Startups 

“Make regulatory agencies less coercive in nature, every small default does not indicate fraud. With the collection process of TDS, PF, ESI, GST becoming so strict… when receivables are delayed due to genuine reasons, there should be a lenient approach of nominal fines with no future repercussions as long as the default is of a short period of time,” said Amit Prasad, founder and CEO of SatNav Technologies.

He added that at times the language of government communication is alarming. Even minor violations or routine inquiries are called show-cause notices or demand notices, which creates a lot of panic among younger founders.

• Clear Ambiguity For Ecommerce Marketplaces With Dedicated Policy

For years, ecommerce marketplaces have become targets of protests and antitrust cases filed by retailer bodies. Despite 15-plus years of operational history in India for Flipkart and 10-plus years for Amazon India, both marketplaces continue to be accused of bias for large sellers, favouritism for private labels and generally outpricing retailers. With the ONDC, the government has looked to break this duopoly but that has not had a large impact as yet.

Many expect that 2024-25 will bring about a change that can not only soothe the woes of retailers but also eliminate ambiguity for Flipkart, Amazon and other marketplaces, which have foreign investments. Besides these two giants, even Reliance Retail — with JioMart, Tira, AJIO and other marketplaces — will benefit from clarity in this matter.

• Review Key Concerns In Personal Data Protection Act

While the Indian startup ecosystem has welcomed the DPDP Act, many have highlighted that it falters on the potential loopholes in implementation and the high compliance burden for startups.

The implementation fine print of Europe’s GDPR seems to be missing from the DPDP Act, 2023. “One significant consequence of this Act could be an increase in the expenses related to implementation and compliance, potentially demanding more resources and a heightened level of awareness,” said fintech startup Niro’s founder Aditya Kumar.

• Enforce Rules For Financial Disclosures By Private Companies

While founders have complained about the problems with the MCA website and filing paperwork, investors bemoan the lack of transparency when it comes to startup financials. Well-publicised cases such as the delay in BYJU’S FY23 filings and other instances have only sharpened these concerns.

Investors believe that not all shareholders have the same information rights which leaves some of them on unequal footing when it comes to their portfolio. To solve this, investors are seeking more stringent enforcement of late fees and other penalties for the violating startups.

• Higher Government Spending To Boost Agritech Adoption

Agritech startups have been knocking on the government’s doors for many quarters looking for improved credit access to farmers, which would in turn boost the adoption of agritech products and services to increase crop yield, supply chain and reduce wastage.

In the 2023 Union Budget, the central government provided a gift of sorts to agritech startups by announcing an agriculture-focused accelerator fund to encourage such startups in the rural parts of the country. But tax incentives, which many players were hoping for, was given a skip by the finance minister.  While no such incentives were announced in February, startups are hoping the issue will be taken up once again in July when the next Budget is presented.

• More Clarity On FAME-III Subsidies For EV Startups

Among the biggest expectations is the extension of the existing FAME scheme and clarity on which parts of the EV ecosystem the scheme would apply to.

For instance, while vehicle manufacturing and charging infrastructure companies could reap the benefits of FAME thus far, the expectation now is for the same enablement for battery and ancillary component manufacturing, reducing import duties, GST rates, and introducing demand incentives or incentives to increase EV penetration.

Many in the industry believe that it would be revised to increase focus on electric buses, trucks, and electric cars, while electric two and three-wheelers might take a backseat. The government’s push to electrify large commercial vehicles might manifest through Fame-III whenever it is announced.

In a recent interview with Inc42, G20 sherpa for India, Amitabh Kant, said the EV sector would need the government’s support till 2030. “The INR 10,000 Cr subsidy under FAME-II pushed the EV sales growth. Hence, there is a need to continue subsidies and incentives under FAME-III, with a focus on public transport and charging infra for the next five years,” Kant said.

• Incentivising Domestic Investments In EV Infrastructure

With subsidies for EV manufacturing proving ultra successful for two-wheelers, many in the EV ecosystem want a similar approach to component manufacturing as well as new investments in manufacturing facilities and plants.

“Ola has launched a massive Gigafactory in Tamil Nadu for its own manufacturing but boosting manufacturing of key components would allow the ecosystem to grow faster through collaboration. Startups would also require lower capital for manufacturing if such a collaborative environment is fostered,” a mobility-focussed investor told Inc42.

• Incentivising Global OEMs To Partner With Homegrown Players

In a similar vein, companies want the government to not just court foreign OEMs such as Tesla and others to manufacture in India but also incentivise partnerships with Indian players. Joint ventures between global and Indian companies would allow for knowledge sharing and would help create new IPs that will belong to Indian entities.

While investments in EV manufacturing will have a linked exemption in import duty, encouraging partnerships will be more beneficial for the Indian EV players and the larger manufacturing industry in India.

• GST Standardisation For Charging, Battery Swapping Models

Currently, the EV original equipment manufacturers have to pay a 5% GST on the sale of vehicles while the GST rate on batteries and certain services continues to be 18%. The industry had kept its demand earlier as well for making a 5% GST standard for all EV players, which has remained unfulfilled.

Varun Goenka, CEO and cofounder of Chargeup, told Inc42 earlier, “We expect the government to reduce GST applicability on EV products and services, and to include the EV as well as battery development, charging networks, and allied services in the priority sector lending list. This would open the doors for investments in the ecosystem, and accelerate India’s EV adoption.”

• Improve Drone Adoption By Formalising Drone Loan Frameworks

Despite the rise of drone tech startups, the industry is plagued by lack of adoption as businesses are unable to get loans and working capital advances for drone-based operations. The industry as a whole is seeking lower interest rates for loans to procure drones as well as service-linked incentives besides incentivising production.

Just like EV loans are a problem area that many companies are looking to solve, the drone tech industry is hoping for innovative lending and underwriting models that will help increase the loans for drones. In this regard, government guidance will become key, particularly the RBI, which has heavily regulated lending tech operations in the past few years.

• Expedite Approvals For Mobility And Aviation Applications

Drone tech startups are also seeking further simplification of the rules and faster approval processes for drone operations, especially those pertaining to urban air mobility solutions which encompass use cases such as food and medicine deliveries.

“In the context of urban air mobility, drone startups may also expect regulatory support for testing and implementing urban air mobility solutions. This could involve collaboration with urban planning authorities and the development of appropriate infrastructure,” Prateek Srivastava, founder and managing director, DroneAcharya told Inc42 in January this year.

• Lower GST On Drone Components To Boost Domestic Manufacturing

Just like the EV ecosystem, India’s drone industry has also benefitted from the push for local manufacturing. The ban on import of drones or knock-down kits brought in some challenges but pushed the industry in the right direction.

In line with this, startups have also pitched for an extension of the production-linked incentive (PLI) scheme for drones and drone components.

The central government’s Ministry of Civil Aviation disbursed INR 30 Cr to manufacturers of drone and drone components under the PLI scheme in FY23 out of a total allocation of INR 120 Cr between FY23 and FY25. Now, startups seek a bigger piece of the national expenditure in the upcoming budget in July.

• Modi 3.0 Can Streamline Disparate Labour Laws For Startups
  

Contrary to popular perception, labour law compliance for startups is not just about ensuring fair working conditions for employees. In fact, with ESG (environmental, social and governance) goals and new business models, startups need to think deeper.

For instance, the rise of quick commerce has brought establishment compliances into the picture for consumer startups. Factory and plant compliances will become key for D2C brands, semiconductor makers as well as the host of EV and electronics manufacturers coming up. Environment, health and safety compliances vary from business to business and new startups often fall short on some of these aspects.

Given the proliferation of startups, it would be prudent for the government to look at a single-window clearance pertaining to labour law for many of these sectors, which would not only increase ease of doing business by several degrees, but also promote growth of new ventures.

• Increased Tax Benefits To MSMEs For Ecommerce Participation

India’s MSMEs are seen as the backbone of the economy — not just for the present but also for the future, given the government’s big focus on boosting exports. While ecommerce adoption has driven exports, startups believe there is a lot more value that the government can extract by enabling MSMEs to scale up without operational overheads.

For instance, Zameer Malik, the CEO of Kaya Kalp, is seeking a bigger allocation from the government for the ‘Raising and Accelerating MSME Performance’ (RAMP) scheme, which is built around tech adoption.

“This would help MSMEs upgrade their technology, adopt digital solutions, improve quality standards and access new markets. Measures to promote ecommerce among MSMEs such as simplifying the regulatory framework, providing tax benefits, and creating infrastructure for logistics and digital payments will be welcome,” Malik told Inc42 earlier.

He also expects that MSMEs can scale up while keeping operational costs low if there is enough incentive to continue using digital tools. The introduction of ONDC was one such policy, and startups argue that the government could incentivise MSME digital transformation leveraging ONDC’s reach.

• Ease On-Ground Logistics Hurdles In Ecommerce Value Chain

Logistics is one of the biggest drains on brands leveraging ecommerce. Government initiatives such as PM Gati Shakti and the National Logistics Policy have made it a lot easier to ship across India and out of India, but on-ground hurdles and nagging issues persist. These issues have to be cleared to bring in MSMEs to the ecommerce fold and make online selling more sustainable for smaller operations.

While so far the government has looked to increase expenditure on ports, roads and digitisation, it has not had as big an impact on intracity or intercity logistics as expected. A lot of the logistics development is designed to connect large cities and India to other countries, but connectivity to smaller towns is still patchy, which limits the reach of ecommerce deliveries.

While delivery companies claim to have a wide network, most deliveries to smaller towns go through two or three players, which hurts the sentiment of consumers in markets where ecommerce needs to build trust the most.

• Ease Taxation Rules For Startups Reverse Flipping To India

In March 2024, commerce minister Piyush Goyal said Indian startups mulling reverse flipping will have to bear tax liabilities. The government’s view is that it would be difficult to justify exemptions for certain startups or companies from paying taxes, solely because they are moving back to India.

While most startup founders may find this a bitter pill to swallow, what they would seek is some water to go with it. For instance, after redomiciling to India, PhonePe’s CEO Sameer Nigam said the taxes can become a huge burden for a startup that is still early and not scaled enough to handle the costs. “It [taxes] worked for us because we have very long-term investors. We have people like Walmart and Tencent and other balance sheet investors who can take a multi-decade view. But we have about 20-odd unicorns who (have) already reached out to us asking us how we can get this changed,” Nigam said.

After PhonePe, a bunch of companies have decided to reverse flip to India, but their plans have been delayed as they look to minimise their tax burden. For instance, founders claim that startups should be allowed multiple fiscal years to settle the taxes instead of a one-time expense which can be a major overhead.  Will the Modi 3.0 government ease the path back to India for startups that cannot afford the big tax bill?

• Bolster GIFT City Physical And Financial Infrastructure

India’s maiden IFSC (international financial services centre) at GIFT City, Gujarat, has created a lot of buzz in the past couple of years as the newfound hub for alternative investment funds (AIFs), fintechs and a diverse range of international financial services. But as Inc42 reported, it’s not all smooth sailing for businesses coming to GIFT City.

Sumir Verma, the head of Merisis Opportunities Fund (a Cat I AIF) and founder & managing director of Merisis Advisors, said, “GIFT IFSC has been successful so far and will continue to be, given it’s a new enterprise. But certain issues must be addressed to provide better clarity to AIFs and boost the project’s overall impact in promoting economic growth. There can be challenges galore such as inadequate [physical] infrastructure, difficulty in INR conversion, long settlement periods or stringent rules around certain overseas transactions. Again, meeting all regulatory requirements may take time and delay operations.”

Plus, despite being an IFSC, GIFT is currently subject to many local laws that are not considered business-friendly, including the lack of open alcohol sales in Gujarat as well as high-speed rail connectivity to major metros, which is important to ensure high levels of employment in the city. Authorities are still working to resolve some glaring conflicts, but this is bound to be a time-consuming process, which many startups and investors would be hoping gets accelerated in the next few months.

• Clarity On RBI Action Against Fintech Players

In line with the call for transparency in regulations, several fintech players have called for RBI to reduce the opacity of its actions. The months-long saga involving Paytm in early 2024 created panic in the fintech ecosystem, leading to unwanted speculation and fears.

Since then, founders have asked for transparency from the RBI and other regulators when taking action against fintech players. Many feel that the RBI needs to allow startups more time to course-correct in case there are issues in their models or compliance. And others pointed out that it can be painstaking to deal with regulators once any official action is taken.

At the same time, fintech ecosystem stakeholders are also increasingly realising that startups cannot just focus on customers, but also need to align with regulators too. As Siddarth Pai, founding partner of 3one4 Capital, said at a recent event in Delhi, founders should not treat regulatory entities as their enemies, and that startups need to be more cognisant of the relationships they have with the regulators and their consumers.

• Final Clarity On RBI’s Stance On Cryptocurrencies

Even though the finance ministry has imposed taxation on cryptos, the Reserve Bank of India (RBI) remains a steadfast opponent of digital currencies. Citing financial risks associated with cryptos, the top officials of the central bank have multiple times called for a ban on them.

However, the government has so far not cleared its stance on the sector. As a result, there is a cloud of uncertainty hanging over cryptos, and startups want this to be addressed as soon as feasible. As they see it, regulations will only serve to encourage crypto startups and their customers instead of the grey status quo.

• Reduce TDS From 1% On Crypto Transactions And Virtual Assets

Another long-standing demand from the crypto ecosystem: reduce the TDS on crypto transactions to spur on investments and economic activity. Manhar Garegrat, country head, India and global partnerships at Liminal Custody Solutions, 1% TDS in 2022 has led to an estimated loss of $420 Mn in government revenue in FY23, primarily due to migration of Indian crypto traders to overseas platforms.

Crypto exchanges also believe that since TDS is a way for the government to monitor the number of transactions, a lower levy would also suffice. However, the crypto ecosystem has been waiting for changes in taxation for more than two years with no success. Will this change under the Modi 3.0 government?

• Create Fraud Protection Frameworks For Crypto Exchanges

Crypto fraud is still a major challenge and only expected to grow with the rise in crypto trading activity. As Inc42 reported recently, India’s crypto startups are on the cusp of another major surge, and this calls for regulations and frameworks to protect investors and exchanges.

Many believe that bringing crypto startups under a regulatory umbrella will serve investors better than spending years unearthing money syphoned off via crypto fraud — just like SEBI regulates public markets and trading platforms to protect investor interest.

• Relief From Retrospective GST Collection From Online Gaming Players

When talking about sectors hit badly by regulations, online gaming is not far behind the crypto industry. The clarity around 28% GST on the full entry fee paid by users in real money gaming has changed the fortunes of the industry. Many believe that while the government is unlikely to change its view on the GST levy going forward, it needs to pay heed to the industry’s demands in relation to retrospective taxation.

Gaming giants like Dream11 and Games 24×7 have received tax notices for thousands of crores, adding complexity and uncertainty to the tax landscape for these entities. Hence, the industry is seeking clarity on the taxation policy now.

• Push Game Development Ecosystem Through Grants, Talent

The online gaming industry is not just about entertainment, but it actually offers job opportunities across content development, game design, animation, programming, engineering, testing, UI & UX design, analytics, marketing, and sales.

One of the reasons why game development hasn’t taken off in India is the shortage of talent across all these areas, especially as startups in other sectors can compete on the basis of VC money, unlike game development.

Consequently, gaming cos are seeking the announcement of skill-building programmes with a focus on the industry in the upcoming budget. “The government should create a SEZ for game development with special incentives to promote and assist skill-building programmes in game design and development,” Nitish Mittersain, MD and CEO of Nazara Technologies, told us in Feb.

Mobile Premier League COO Namratha Swamy believes that dedicated courses in universities and colleges that seek to position gaming as a lucrative career opportunity will help the Indian ecosystem a great deal. MPL runs game development studio Mayhem. “These courses will play a pivotal role in nurturing the next generation of game developers and professionals, ensuring a steady supply of skilled talent to fuel the industry’s growth,” she said.

• Follow Through On Budget Allocation For Animation & Special Effects Industry

The Animation, Visual Effects, Gaming, and Comic (AVGC) task force was constituted in April 202 as part of the National AVGC Mission and had a dedicated budgetary outlay to promote the sector. The task force was said to be looking at sweeping changes to develop the burgeoning sector, but there has been no further update on this for the past two years.

Naturally, AVGC startups, including game development studios, are again seeking clarity and allocation of funds for the AVGC sector in the upcoming Budget in July, once again to be delivered by Nirmala Sitharaman.

Reacting to the lack of action on this front Games24x7 CFO Rahul Tewari told Inc42 in February, “We anticipate the government will continue its support for the burgeoning online gaming industry, in line with previous commitments such as the formation of the AVGC task force. This backing is crucial for fostering innovation in game design and development in addition to nurturing a pool of globally competent resources coming out of India.”

• Opening Up Path For Public-Private Partnerships For Edtech Platforms

The government cracked down on educational institutes, colleges and universities partnering with edtech companies. The University Grants Commission and the All India Council for Technical Education (AICTE) barred colleges from running quasi-franchises through edtech platforms.

While both the bodies had issues with quality control, edtech platforms had called for regulated partnerships rather than a complete bar. With the market for K-12 learning being more or less dead from an edtech point of view, most companies are left with test prep and skill development as the only viable verticals.

Many want to add higher education courses from Indian universities which would be a lot more affordable for students than the current situation where platforms offer courses of overseas universities through their platforms.

• Introduce Production-Linked Incentive Schemes For Spacetech Manufacturing

The space tech Industry wants to borrow the PLI playbook that has worked so well for electronics, EVs and drones. Specifically, startups have called for policy and schemes that would boost manufacturing of space-grade components in India, which would also eliminate supply chain hurdles for current players.

Plus, while Indian space tech is already renowned to be ultra efficient, PLI schemes would help reduce import dependencies by encouraging domestic manufacturing either by global giants or Indian players.

Ahead of the interim budget in February, some industry stakeholders told Inc42 that besides PLI, the government can boost spacetech by extending GST exemption to all rocket vehicles, satellites, and ground equipment manufacturing.

The post 35 Startup Expectations From Modi 3.0’s First 100 Days  appeared first on Inc42 Media.

After grabbing the lion’s share of the Indian food delivery market and entering the quick-commerce segment with Blinkit, the foodtech behemoth Zomato has now set its sights on the events and movie ticketing business. 

Reports first surfaced on Sunday about Zomato being in talks with Paytm for acquiring the latter’s movies and event ticketing business. Both the companies confirmed the development but said that the talks were in preliminary stages and no binding agreement was signed.

The aforementioned reports pegged the deal size at about INR 1,500 Cr.

The development has come within a year after Zomato launched a dedicated Live tab on the app. As per reports, Zomato was planning to expand its Live reach by venturing into new cities and developing fresh intellectual properties (IPs). 

Launched in 2018, Zomato Live initially centred around the Zomaland IP, a food carnival and music festival. This popular event has since grown to encompass eight cities.

Meanwhile, the anticipated acquisition holds significant potential for Zomato and the broader entertainment and event ticketing market in India. 

For Zomato, this move could enhance its existing live event offerings and position it as a formidable competitor to BookMyShow, the current market leader, which posted a net profit of INR 85.1 Cr in FY23. 

By integrating Paytm’s movie and events vertical, Zomato could leverage cross-promotional opportunities, expand its customer base, and diversify its revenue streams.

On the other hand, Paytm’s divestiture of its events business could signal a strategic realignment towards its core financial services and payments platform. This shift might allow Paytm to reallocate resources and focus on strengthening its market position amidst intensifying competition. 

Now, before we dive deeper into understanding what this deal could mean for Zomato and BookMyShow, let’s understand why Paytm may want to get rid of this vertical.

A Quick Look At Paytm’s Movie And Events Biz

In 2017, Paytm acquired a majority stake in online ticketing and events startup Insider.in for nearly $5.42 Mn (INR 35 Cr). A year later, it acquired Alibaba-owned ticketing platform TicketNew to ramp up the business.

For Paytm, movie ticketing and events business has been a part of its marketing services business. Besides, the segment also includes advertising, credit card marketing, and deals and gift vouchers. 

In FY23, Wasteland Entertainment Pvt Ltd, through which Paytm runs its Insider business, posted an operating revenue of INR 191 Cr compared to INR 46.5 Cr in FY22. 

The entity also narrowed its loss to INR 19.2 Cr from INR 26.1 Cr in FY22. Hence, the numbers indicate it is a growing business for Paytm, although it contributes only a small amount to Paytm’s overall business.

While Orbgen, the registered entity of its ticketing service had INR 15.6 Cr revenue in FY23 and reported an INR 4.6 Cr loss. 

The decision to sell the movie ticketing and events business comes at a time when Paytm’s core payments business has been hit by the Reserve Bank of India’s curb on Paytm Payments Bank.

In its clarification to exchanges after the report of the company being in talks with Zomato to sell the ticketing business, Paytm said, “As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses.”

Besides, Paytm is also undertaking a restructuring exercise as it looks to cut costs and optimise its business.

“Paytm, of course, is going through its own set of struggles. Perhaps that’s why they’re looking to exit this business, which may not be a core proposition for them,” Karan Taurani, VP Elara Capital said.

What’s In It For Zomato?

Taurani added that while Zomato’s core proposition has been food, it has performed exceptionally well in the commerce sector. “If the company acquires the Paytm ticketing business and executes well with superior customer experience, it can definitely challenge market leader BookMyShow,” he added.

This will also allow Zomato to build a loyal customer base that can be monetised through various means such as ad revenue and ticket bookings. By partnering with content or event owners and charging a convenience fee for online bookings, Zomato can enhance its revenue streams. Given the shift towards online transactions, this strategy should do well, as customers increasingly prefer buying tickets online rather than from physical locations, according to Taruni.

Notably, if the deal pans out, it will be Zomato’s biggest bet since the INR 4,477 Cr Grofers deal, later rebranded as Blinkit. The successful execution of Blinkit’s operations demonstrates Zomato’s potential to make its bets successful. 

Within two years of coming under Zomato’s wing, Blinkit has emerged as a significant competitor to leading quick commerce services such as Swiggy’s Instamart and Zepto.

Now, with the combined user base of Zomato and Blinkit, its extensive distribution system, and its existing experience in organising live events, Zomato has the potential to push its live business with the Paytm Insider deal. 

Currently, Zomato’s live business contributes a single-digit percentage to its overall revenue. However, if this deal is executed, it could boost this contribution to mid-double digits within the next three years, according to an analyst.

Almost a year ago, Zomato hinted that its Going-out vertical could emerge as an important contributor to its business. In its shareholders’ letter for Q1 FY24, when Zomato announced that ‘Going-out’ would be reported as a separate business segment in its financials from the next quarter (Q2), founder Deepinder Goyal expressed his optimism about the vertical. 

“Our exposure to the live events space, and Zomaland’s success has us excited about how the live-events space in India is evolving… Dining-out + Live =“Going-out”. We believe this combo could be the 4th large business coming out of Zomato, that powers India’s changing lifestyles,” the CEO said then, adding that the company was also mulling spinning out Going-out business into a separate app.

While there has been no update on a separate app since then, it is important for the company to find an alternative revenue stream amid the slowdown in its core food delivery business. 

In Q4, Zomato saw a decline in the gross order value (GOV) of its food delivery business on a QoQ basis. Its GOV fell to INR 8,439 Cr during the quarter under review from INR 8,486 Cr in the previous quarter. 

While Zomato already offers a Gold subscription plan, the move has the potential to give a boost to its dine-out offerings as well.

Should BookMyShow Worry?

There is little doubt that Zomato, in this segment, will have to face tough competition from BookMyShow, which has been in the business for a very long time. 

Founded in 1999 by Ashish Hemrajani, Parikshit Dhar and Rajesh Balpande, BookMyShow’s online ticketing platform for events, movies, sports and plays was launched in 2007.

The company posted an operating revenue of INR 975.5 Cr in FY23, witnessing a 252% YoY jump. However, this growth was largely due to the opening up of the economy after multiple pandemic-induced lockdowns. 

During the peak of the Covid-19 pandemic in FY21, BookMyShow’s revenue had crashed to INR 74 Cr from INR 563 Cr in FY20.

Despite everything said and done, BookMyShow has several advantages that set it apart. Firstly, it has a significant first-mover advantage in the market. Secondly, it enjoys strong customer recall due to its long-standing presence in the industry. Moreover, it has built solid relationships with event activation companies and offers a wide range of events. 

On top of that, BookMyShow is also said to be inching closer to finalising a $300 Mn round that will enable PE major KKR to acquire a significant minority stake in the startup via a secondary share sale by existing investors. If fructified, the fundraise will help it line up a warchest to further scale up its operations. 

“While Paytm also hosts exclusive events, BookMyShow is more renowned for its extensive variety,” Taurani noted.

According to the industry veteran, BookMyShow’s comprehensive ecosystem — from customers to suppliers to content and event owners — works seamlessly. For instance, in sports and large-scale events like the IPL, BookMyShow is the largest aggregator, benefiting from its robust network and established reputation.

“Online ticketing is clearly a lucrative business if executed efficiently, as evidenced by BookMyShow turning profitable in FY23. However, it’s too early to predict whether BookMyShow will continue to have its monopoly in the market. The key factor will be how these platforms are able to enhance the customer experience,” Taurani said.

Meanwhile, Zomato has plenty to learn from BookMyShow’s mistakes. Last September, it had to cancel the India tour of Punjabi-Canadian singer Shubhneet Singh, also known as Shubh, due to backlash from netizens over some of the rapper’s social media posts featuring a distorted map of India. This incident led to calls for a boycott of the ticket-booking platform on various social media platforms.

Furthermore, officials from the Cricket Association of Bengal (CAB) and BookMyShow were summoned by the Kolkata police in a complaint about the black marketing of tickets for the ICC World Cup match between India and South Africa.

Moving on, Zomato is trying to mark its foray into the Indian live event management space at a time when there is a notable rise in the disposal incomes of Indians. Moreover, the timing of Zomato’s entry into the space seems perfect for two reasons. 

Firstly, the foodtech startup is expected to get enough headroom to grow and expand due to limited competition. Next, it is poised to witness enough sectoral tailwinds, as the industry is projected to become a $2.3 Bn market opportunity by 2025, growing from $1.2 Bn in 2020.

If one were to look beyond the aforementioned advantages then sports such as cricket, soccer, and others foster significant growth opportunities, and if the deal goes through, Zomato will likely have numerous opportunities to expand its Live business.

The post Can Zomato-Paytm Deal Be The Next Blinkit Story In The Making? appeared first on Inc42 Media.

The quick commerce game in India right now is a game of stealing the spotlight. If Blinkit grabbed the attention with its FY24 performance last month, it’s time for Zepto now.

This past week, Zepto was in the spotlight for two very different reasons, which underline the present state of the quick commerce business.

First, the Mumbai-based unicorn grabbed attention with a head-turning $650 Mn round, talks for which are said to be in the final stages. That’s a massive infusion for a three-year-old company, but also speaks volumes about what it takes to grow a quick commerce business, and it’s not just for Zepto, mind you.

Second, an ice cream delivered by Zepto to a Mumbai customer was found to be contaminated with a human finger. The social media meme fest aside — and there were plenty of them — the issue highlighted that scaling up rapidly comes with some serious challenges that also have to be addressed by Zepto, Blinkit, Swiggy and other players.

So this Sunday, let’s take a look at the other side of the quick commerce boom. After a brief detour into these top stories from our newsroom this week:

• Kenko In Catch-22: The Peak XV-backed startup is staring at an uncertain future and a potential shut down over an investor deadlock and has even laid off more employees in 2024
• The Sherpa’s View: The former NITI Aayog CEO and current G20 Sherpa for India, Amitabh Kant is bullish about the future of Indian tech particularly given the focus on semiconductor industry, EVs and green energy
• Introducing The D2C Retreat: Inc42 is launching The D2C Retreat, an exclusive 3-day ‘unconference’ bringing together India’s top D2C and retail leaders to drive innovation in Indian retail

Quick Commerce Fuel Guzzlers

By now, there can be no argument that creating and sustaining a large consumer business in India takes plenty of capital. If and when its latest round materialises, Zepto would have raised nearly $1.2 Bn since inception in 2021.

The latest round, which brings in CRED-backer DST Global and Lightspeed, would see the company valued at close to $3.5 Bn, thrusting it into the upper echelons of India’s unicorn club. This is after three full years of operations, one of the most unique journeys in the Indian startup ecosystem for sure.

The fact that Zepto reached a revenue base of INR 2000 Cr+ in its second full year in FY23, which is well higher than many other unicorns shows the massive momentum behind the company and quick commerce. For context, Blinkit only reached that mark in FY24, one year later, despite being around since 2013 as Grofers before pivoting to quick commerce in December 2021.

But what Zepto’s story also shows is how expensive it is to run a quick commerce business. The company has only got here after raising more than $580 Mn thus far, and the next leg of the journey will take more than that.

It’s not just Zepto of course. Zomato is investing INR 300 Cr ($38 Mn) in Blinkit over the next few weeks. The company has invested INR 2,300 Cr ($290 Mn) in Blinkit since the acquisition in August 2022.

Swiggy is looking at an IPO in the next year or so, and is said to be in talks to raise fresh funding before the potential public listing. Swiggy was the first to enter the quick commerce space with Instamart and is expected to close FY24 with revenue of over INR 5K Cr.

Zomato’s infusion comes as ecommerce giant Flipkart and JioMart are set to foray into the quick commerce space. Moreover, Blinkit plans to double its store count in 2024, which would require plenty of capital as well.

Similarly, Zepto is likely to make a major push in terms of adding more locations and expanding the delivery network. The quick commerce platform has added multiple additional revenue streams in addition to commissions from orders to improve its bottom line.

Where’s Zepto Heading?

As cofounder and CEO Aadit Palicha has said several times since last year, Zepto’s advantage is its singular focus on executing the quick commerce model. In terms of revenue, it has worked well at least as far as FY23 is concerned.

Plus, in FY24, Zepto shored up its bottom line further with the introduction of platform fees, handling charges, surge fee and a separate “cart fee” for orders below INR 100. It also unveiled a new membership programme Zepto Pass, starting at INR 99 a month, for select users.

For FY24, the numbers are likely to be significantly higher. Reports in the past said the company claims to be on track to turn EBITDA positive by end of Q2 FY25 with over INR 10,000 Cr in gross order value or GOV.

Even as Zepto pushes for growth, a portion of the new funds are also likely to go towards fulfilling tax obligations for a potential reverse flip from Singapore to India. The startup is said to be close to redomiciling to India and also has eyes on a public listing by 2026.

In Zepto’s corner is the fact that none of its major rivals currently have focussed on building up private labels, whereas the Mumbai-based company launched meat brand Relish in late 2023. Relish is reportedly clocking INR 150 Cr in annual recurring revenue and can be INR 1,000 Cr standalone business by the time Zepto plans its IPO in 2026.

Dark Store Hurdles

Growing competitive intensity is also likely to push Zepto, Blinkit and Swiggy to spend more to acquire users, and it would also complicate expansion plans as more platforms fight for dark store and warehousing space.

And it’s looking increasingly like authorities and consumer protection bodies are looking to take a fine-tooth comb to quick commerce operations.

In this light, the Zepto ice cream incident from this past week makes for bad reading. The company has not officially responded to the incident, but there have been questions about whether quick commerce platforms have their eye on quality of products, expiry dates and hygiene of perishable goods.

While grocery was the primary focus for a long time, platforms are rapidly updating their warehouse and dark store layouts to accommodate new product categories, larger appliances and other products.

At the same time, they are pushing hard to bring D2C brands on board. Quick commerce has given a new meaning to the fast moving consumer goods segment, where products tend to get sold out every day.

In fact, many of these D2C brands themselves are pushing to scale up and quality control issues trickle down to quick commerce quickly. Brands — particularly food and beauty brands — realise that quick commerce is a major channel for them and as a result, they are accelerating manufacturing to meet the demands of these channels.

Besides Zepto, in early June, the Telangana food safety department raided a Blinkit warehouse and found the premises to be “disorganised, unhygienic and dusty”. The department also seized edible items worth INR 82,000 from the premises, which either did not comply with food safety norms or had expired licence.

The Central Consumer Protection Authority (CCPA) had reportedly asked quick commerce players Blinkit, Swiggy Instamart, Zepto and Big Basket (BB Now) to prove their ‘10 minute’ delivery claims. Many of these platforms don’t actually deliver in 10 minutes, though the advertising hinges around this promise.

In the past, we have seen government bodies crack down on ecommerce platforms for counterfeit goods, fake orders, delivery fraud and most recently, predatory pricing and brand or seller bias. Will this focus on cleaning up the online shopping journey trickle down to quick commerce as well?

For now, Zepto, Blinkit, Swiggy Instamart and BBNow might not be under the scanner in a major way, but will the rising competition force companies to cut corners when scaling up?

Will Competition Throw Zepto Off?

No matter how we look at it, Zepto has actually managed to disrupt players such as Zomato-owned Blinkit and Swiggy’s Instamart which should ideally have made the most of their existing scale when quick commerce emerged as a category in 2020.

The company saw that grocery by itself would outpace food delivery, and the mixed focus of Zomato and Swiggy allowed Zepto to come out of the left field.

To be clear, Swiggy and Zomato have the larger network in India till now, but Zepto still continues to enjoy the unique advantage of singular focus over its rivals.

The three-horse quick commerce race is about to change though with the entry of Flipkart and Reliance JioMart, as well as the growing reliance of BigBasket on quick commerce.

The Tata-owned platform has replaced slotted deliveries with BBNow, modelled after Instamart, Blinkit and Zepto, and is pumping in serious marketing dollars to grow its customer base.

Mukesh Ambani-led Reliance Industries Ltd (RIL) is reported to be close to launching its own quick commerce operations through JioMart after taking a punt earlier and pulling out. Reliance is looking to deliver groceries in select cities in under 30 minutes and is likely to ramp up operations by next year.

JioMart will tap into Reliance Retail’s network of over 18,000 stores across the country. That kind of scale would allow JioMart to potentially catapult the existing group of quick commerce apps, Blinkit, Swiggy’s Instamart and Zepto as well as Tata-owned BigBasket and Flipkart.

Flipkart is fresh with funds from Google and majority stakeholder Walmart and is also likely to make a major push for grocery delivery, where Blinkit, Zepto and Swiggy have created a precedent on how to make this work.

Can Zepto continue to bank on its execution and singular focus on quick commerce to succeed in a market, where it not only has to fight off Blinkit and Swiggy, but also giants such as Reliance and Flipkart?

Sunday Roundup: Startup Funding, Tech Stocks & More  

• This past week, startups cumulatively bagged funding of $201 Mn across 21 deals, with Battery Smart’s $65 Mn round making the bulk of this tally
• Nykaa expects its fashion business to only become EBITDA positive by FY26, or nearly two years from now. How will the markets react to this timeline? 

• The NCLT has directed BYJU’S to maintain status quo with regard to existing shareholders and their shareholding, effectively putting a halt to its $200 Mn rights issue
• Data from recruitment firms points towards a declining trend in salaries for key edtech roles, with annual pay falling by almost 50% compared to the highs of 2021
• Times Internet has reaped at least $1 Bn from selling its multiple digital properties since 2022, with ET Money’s $44 Mn deal being the most recent example

The post Zepto’s Turn In The Spotlight appeared first on Inc42 Media.

In 2022, physics teacher Mayank Kumar moved from his home in Uttar Pradesh’s Bijnor to Kota in Rajasthan. An edtech unicorn offered him an annual package of INR 32 Lakh per year and free accommodation in Kota, renowned as the coaching centre capital of India.

Kumar, who taught physics to engineering aspirants, said several teachers like him made the journey from their home towns to coaching hubs in 2020–21 and even in 2022-23. Kota, in particular, became a battleground for teachers as edtech companies and other legacy players looked to on-board ‘star’ educators. 

“The salaries being offered touched sky-high levels and the teachers were literally being poached from local coaching institutes. Some friends of mine even became celebrities on social media and “crorepatis in no time,” he told Inc42.

The edtech poaching wars had also intensified as startups looked to compete with legacy coaching institutes in test prep space. Some teachers even earned as much as INR 1 Cr per year, as we reported back then. 

But the hype has now well and truly fizzled out. Academicians like Kumar have returned to their hometowns and are back on the job hunt as edtech startups cut costs across the board. “Today, even annual pay of INR 10 Lakh is good enough,” Kumar says. 

50% Decline In Edtech Salaries

Data sourced from talent recruitment firms Xpheno and CIEL HR Services shows that the salaries of most key edtech roles across various departments have seen as much as a 50% drop from the highs of 2020-2021.

“The salary packages in edtech have since 2022 undergone corrections and calibrations to return to normalised scales. The workforce optimisation and continued cost shedding has seen job offer packages shrink by 30% to 80% compared to the previous high of 2021 and early 2022,” Prasadh MS, Workforce Research and Communications Specialist at Xpheno said. 

Since the peak of edtech funding in 2021, startups have had to pivot to hybrid models from online-only learning. The pivots forced startups to review the high employee costs and other customer acquisition spends. 

The cash crunch due to lack of growth on the online learning front resulted in nearly 15,000 layoffs and dozens of shutdowns. Startups such as Lido, Udayy, SuperLearn, DUX Education, Frontrow, Crejo.fun among others shut down operations. 

“As projections over commercial prospects for the sector spiked and valuations climbed, edtech ventures went all out to hire and hoard talent at high costs to create capacity for expansion. The overall buoyancy in hiring across sectors saw offer packages grow and multiply in value and volume,” Prasadh added.

According to Inc42 data, edtech startups raised a mere $283 Mn in 2023, compared to $2.4 Bn in 2022 and $4.73 Bn in 2021.

Notably, edtech unicorns like BYJU’S, Unacademy have accounted for a majority of the layoffs, with both giants having to scale back in verticals. The layoffs meant increased the talent supply in the edtech market with thousands of job seekers now ready to work at 50%-60% lower salaries than what they drew before. 

Salary Corrections Across Edtech Roles

BYJU’S problems are well publicised and Inc42 has also reported exclusively on the startup rejigging its hiring strategy specifically from a cost perspective. Besides this, even Unacademy is reviewing costs associated with its sales team, as we reported. 

Even as hiring remains muted, recruitment firms say it has not come to a total halt. When it comes to sales or business development (BD) functions salaries have seen nearly 80% drop. 

Aditya Narayan Mishra, CEO of CIEL HR, believes that the companies are extending their runway by cutting costs wherever possible. “Secondly, the talent market has understood the ground reality and is open to salary rationalisation; salary expectations of candidates while changing jobs have significantly come down as well. These dynamic forces have been able to support the new benchmarks in salaries,” he added.

Besides this, salary packages in finance have dropped by 30%-50%, whereas marketing roles are seeing offer letters with 40%-60% lower salaries, according to data shared by Xpheno. Similar drops have been observed in salary for teachers, engineering roles and sales. 

Prasadh added that this much needed rebalancing and correction has stabilised talent costs in the edtech sector for now and hiring has come down to record lows. “At the peak of the buoyancy, we had edtech players rolling out offers that were highly competitive and clearly to gain an edge over the offers that IT services and SaaS players were rolling out.”  

In particular, salaries for front-end engineers, one of the most in-demand roles in edtech, have seen more than 70% drop since 2021. As the slowdown in edtech began, front-end engineers were being paid around INR 12 Lakh to INR 26 Lakh per year in 2022, which has now dropped to INR 10 Lakh to INR 18 Lakh per year.

“At one point, BYJU’S, which has seen huge value erosion, was called a workforce giant with a strength of 50,000 employees paying very good packages, enviable bonuses which raised the bar in the industry. However, as companies like BYJU’S collapsed, so did the high salary trend and talent demand throughout the industry,” the founder of a skill development startup added. 

Edtech Salaries To Remain Flat?

Far from the over-optimism that the founders and investors placed on online only mode of learning, a hybrid model across K-12, test preparation and upskilling verticals is now assuming significance. Edtech firms like Unacademy, Physics Wallah, BYJU’S owned Aakash have in fact strengthened their offline business models which now contribute to a major portion of revenues. 

Other edtech startup founders also agreed that there is an industry-wide correction going on. “This shift is largely due to limited funding and an increased focus on revenue and profitability. Startups are placing the right value on talent and normalising the previous ‘pay highs’ and include variable pay components linked to the performance,” according to Anil Nagar, CEO of test prep platform Adda247. 

The Adda247 founder added that the changes reflect a more sustainable and stable approach within the industry, ensuring long-term growth and success for both companies and employees.

Recruitment experts say annual compensation or increments will not see a significant increase for the next few quarters. As layoffs continue, salaries will remain flat. “The negotiation bandwidth on new offers has returned to the 25%-35% range and in line with the pre-pandemic period,” Xpheno’s Prasadh said. 

It’s been a challenging time for edtech startups in the past two years, but there is also some optimism that the pain will give way to fortunes in the long run. “We see a silver lining on the horizon. One of our recent studies among startups shows that 65% of companies are planning to increase hiring in the coming 6 months [July-Dec],” CIEL HR’s Mishra added.

[Edited by Nikhil Subramaniam]

The post Edtech Startup Salaries Plummet By 50% In 2024 As Deep Cuts Continue appeared first on Inc42 Media.

For Mumbai-based Kenko Health, the future was always about insurance. The founders — Aniruddha Sen and Dhiraj Goel — launched Kenko Health in 2019 after spending more than two decades collectively in the sector.

The idea was to make health insurance more affordable and healthcare more accessible through deeper insurance penetration. But without an insurance licence from the Insurance Regulatory and Development Authority (IRDA), Kenko’s go-to-market strategy was built around a quasi-insurance model.

But the goal was always insurance. And given the background of the founders and the large value creation opportunity in insurance, Kenko attracted the attention of major investors.

By early 2022, it had already raised more than $13 Mn from Peak XV Partners, Beenext, Orios Venture Partners, angel fund Waveform Ventures, accelerator 9 Unicorns and the likes of Jupiter cofounder Jitendra Gupta, CRED founder Kunal Shah, Pine Labs CEO Amrish Rau as angel investors.

Buoyed by this capital, Kenko seemed to have cracked the revenue model for its subscription-based health plans for consumers. This is a quasi-insurance product, which covers outpatient department (OPD) benefits during hospitalisation as well as medicine purchases.

As we see in its official filings, Kenko’s revenue grew from roughly INR 5 Cr in FY22 to INR 85 Cr in FY23 (17X growth), even though the net loss almost tripled to INR 68 Cr from INR 24 Cr in the previous year. But given that this was just the third full fiscal year in its lifetime, there were encouraging signs of growth.

In fact, things couldn’t have looked better for the company when it was about to raise close to INR 220 Cr ($27 Mn+) in June 2023 from Healthquad, B Capital, Bertelsmann and other large institutional funds as indicated by its regulatory filings. Armed with this, the startup was hoping to clear the capital requirements threshold for insurance.

But this is also where things came undone for Kenko — not only did the Series B not go through, but Kenko is left in a difficult Catch-22 position.

Right now, the insurance goal is looking more and more out of reach for Kenko, according to sources close to the shareholder group and the founders of the company.

Insurance Hurdles Derail Kenko

“Kenko approached IRDA and the regulator was of the opinion that while any company is free to raise capital from VCs, the easiest path to a licence is having an Indian entity with domestic capital as the lead investor. We were told that the insurance regulator was very specific in asking for domestic capital backing new insurance players,” one source close to the investor group told Inc42 last month.

But discussions between the management and the existing shareholders have resulted in discord, Inc42 has learnt over the past two months.

In particular, some shareholders are displeased with the restructuring proposal, which they believe leaves them with very little value for the capital already invested.

It must be noted that Peak XV Partners (investing as Sequoia Capital India & Southeast Asia) is Kenko’s lead external shareholder having led its Series A round. Peak XV is followed by Orios Venture Partners and Beenext in terms of shareholding.

Inc42 sent questions to Kenko Health’s cofounders Sen and Goel separately in early May 2024, as well as its existing shareholders. CEO Sen did not respond to our questions sent on email or follow-up text messages.

On the shareholder side, only one investor responded to our questions but declined to comment.

Other sources close to the investor and management group at Kenko spoke to us on the condition of anonymity. And the problem, we were informed, began roughly a year ago when the company had to rethink what investors it brings on.

Having to change its fundraising strategy in the middle of a key round in August 2023 was a major blow for Kenko. It had seen commitments from marquee investors such as B Capital, Healthquad and Bertelsmann and turning them down was never going to be easy.

While there was real confidence about Kenko’s future because of the founders’ pedigree and the revenue growth, even the best of founders cannot adjust as quickly as Sen and Goel had to.

Another source, who has seen the company’s journey closely, added, “Getting a big commitment in the middle of a funding winter was not easy. And then the company had to shift its focus to Indian investors, specially family offices or large corporations. The founders had to tell large VCs and investors to hold on.”

Beyond the need to bring in domestic investors, the corporate structure of Kenko also posed some problems as the insurance business had to be run by a new entity which was created only in 2022, whereas the current operations are handled by the parent company Redkenko Health Tech Private Limited from 2019.

Focus Turns To Domestic Investors

Raising from Indian family offices sounds simple enough — HNIs and family-run corporations are increasingly looking to diversify their portfolio and back startups. In fact, HNIs and family offices are also backing large funds in India as limited partners. So the regulator’s stipulation was not unusual.

Even in a tough market for fundraising, Kenko is said to have seen interest from two large family offices in India. One of them is still in talks with the company on how to proceed. According to the ET report on the state of Kenko, the company had received a term sheet from Hero Group.

Inc42 could not verify whether Hero Group had prepared a term sheet for the investment. However, it is the contours and the structure of this deal that has forced Kenko Health into a Catch-22.

Firstly, the incoming investor has to get the go-ahead from Kenko’s existing shareholders for the proposed new structure. Existing investors have to give approvals to their revised equity holdings.

In this case, Kenko Health had to restructure its entire cap table. Existing shareholders would have had to relinquish some stake in this restructure and dilute equity in favour of any incoming investor.

“Some of the shareholders felt they needed to be either adequately compensated through some kind of returns for backing the startup when it did not have a licence, and others were wary of whether the resultant equity dilution would essentially leave them with a really small piece of the company,” one of the key shareholders in Kenko told Inc42.

Even if shareholders agree prima facie, the specific terms of the deal could become a problem later on as talks advance, added another source close to the group of existing shareholders in the company.

Another source close to the investor group added, “The company has to first get shareholder approval for a new investor. Even if there is a consensus on dilution, there might be differences in terms governing information or anti-dilution rights in the new deal.”

Talks between the founders and representatives of the family office are said to have been going on for months, with no real headway in either direction. Nothing is certain, but if things take a lot of time, the family office may back off, another person close to the company’s management told Inc42.

The Compliance Bar For Investing In Insurance

What complicates the matter more is that Kenko would only be an attractive investment opportunity if it could get the insurance licence.

Getting the regulatory nod depended on a large domestic investor coming in as the lead shareholder. However, even this may not guarantee a licence, and with no such guarantees, this is a risky bet for any incoming investor.

“There was no doubt on the execution side of things. The founders are a perfect fit for insurance but the company needs the licence to prove it. And regulators can reject applications for a number of reasons. Even the likes of Paytm or PhonePe are waiting for an insurer licence,” added the cofounder of a Bengaluru-based insurance tech startup.

To get the general insurance licence, Kenko registered a new entity called Kenko General Insurance Limited in May 2022. One of the requirements for an insurer licence is that the entity has to clearly state the word ‘insurance’ in its registered name. The new corporate entity would essentially carry out the business of insurance for the Kenko group.

While it was the holding company Redkenko Health Tech Private Limited that raised the funds till date, any new capital was set to be invested towards the insurance play.

Under the restructuring proposed by founders, existing shareholders would be given shares in Kenko General Insurance Limited in lieu of their shares in Redkenko Health Tech Private Limited, the current main entity.

There are of course other eligibility criteria for prospective insurance companies, including capital requirement of between INR 100 Cr and INR 200 Cr depending on the segment and insurance model.

Perhaps the most critical eligibility requirements are to do with the shareholding of the investors and promoters.

While 100% FDI is allowed in the insurance space, there are a number of restrictions on how much shareholding each investor can have, and this changes depending on the number of insurers these investors have invested in, as per the updated regulations as of December 2022.

To steer clear of the hurdles posed by these restrictions, companies applying for an insurance licence are often advised to have a clear domestic lead investor as well as significant equity holding for the promoter group — in this case, founders and the lead investor.

Further, companies that have been rejected by IRDA have to wait between two and five years before reapplying for a licence. Plus, in certain cases, reapplication is not allowed if the licence bid is rejected.

So Kenko could not afford to rush the deal and slip up in any manner when it comes to the eligibility criteria.  Given IRDA’s requirements, in many ways, restructuring at Kenko is being forced due to regulatory reasons. The founders have very little room to manoeuvre in this non-bargainable position.

Massive Opportunity Waiting To Be Unlocked

The best option for the founders was getting Kenko Health’s various investors on the same page about dilution, but this is proving to be difficult. Three out of the five institutional shareholders in the company are against the proposed restructuring, while several other investors seem to be on-board.

An existing shareholder, who was not completely in favour of the deal, told us on the condition of anonymity, “We have been open to any new investment in the company, subject to the offer being fair to all parties, non-discriminatory & consistent with the terms of shareholder agreements.”

So what has led to the disagreements and is the deal proposed by the company to existing shareholders and the incoming investor unfair?

“As far as the deal proposed by the company under the new structure, up to 75% of the equity would be held by the incoming investor, the founders would have a large enough single-digit stake, while other existing investors would see dilution from their current positions. In some cases, they would end up seeing their stake reduced by 4X or 5X,” claimed another source close to the existing investor group.

The problem, of course, is that such a dilution would give many existing investors a smaller piece of the company, albeit one that could potentially become much larger than Kenko Health in its current state.

One investor who has assessed Kenko in the past year said that most VC funds would rather have a small stake in a large company with an insurance licence, rather than a large piece of a company that had very limited prospects without this licence.

“Typically speaking, in the insurance business, given the low penetration in India, valuations tend to be higher than other fintech segments. There’s also a bigger IPO opportunity for investors with a registered insurance company than for a healthtech company that is quasi-insurance like Kenko right now,” we were told.

An insurance licence is only handed out on the condition that investor and promoter shares stay locked in for a period of at least years since the time of IRDA registration. It is only during a public issue that insurance companies can suspend the staggered lock-in periods for investors and promoters.

So the IPO opportunity is in fact critical for investors in the insurance space if they are to see returns before the lock-in period.

However, the potential for things to go wrong in the meanwhile is one of the reasons that some existing investors are wary of restructuring the cap table. For one, there’s no guarantee of an insurance licence even if the shareholding is resolved.

That’s not to say that all existing investors are opposed to the proposed changes.

According to one source close to a fund that has backed Kenko, “The vision from the beginning was around insurance and these are the realities of working in the insurance business. Yes, there is an equity dilution, but the deal is fair if you look at the long-term value.”

Kenko’s Future Uninsured

At the moment, however, there is no certainty of any deal materialising. The founders are still in talks with domestic family offices for a deal that works for all parties involved.

If these talks fail to materialise into an investment, Kenko Health has to swallow a bitter pill. The company laid off 20% of its workforce in August 2023, just after its bid to raise INR 220 Cr from foreign VCs failed due to potential regulatory hurdles.

Soon after that Kenko Health raised INR 10 Cr in venture debt from Blacksoil as per regulatory filings. And then in January and February this year, existing investors — Waveform, Peak XV, Orios, Beenext and 9 Unicorns — infused INR 12 Cr in the company as a bridge round, show the company’s filings with the Ministry of Corporate Affairs.

Without the insurance licence in place, Kenko’s future rests on how sustainably it can scale up its health plan subscription play, if it chooses to stay operational.

Sources indicate that another round of layoffs is underway at Kenko. This is because Kenko has to save costs to repay debt obligations as well as pending employee costs and other operational expenses for its current business in FY24.

Employees have taken to LinkedIn to raise concerns about unpaid dues after being laid off in April 2024. Customers are claiming that the company has withheld reimbursements for OPD costs incurred while their plans were active.

Kenko did not respond to our questions about these dues to customers or its former employees.

While the revenue growth in FY23 is encouraging, the company’s biggest expenses are insurance costs, benefit payouts and employee benefit costs. It spent INR 42 Cr, INR 37 Cr and INR 35 Cr respectively in this regard. The layoffs in 2023 would have reduced the employee benefit costs in FY24, but the other two costs are directly linked to revenue growth, and cutting them would mean taking a bath on overall growth.

In other words, while Kenko set out to build an insurance business, at the moment, its costs are like a B2C healthcare middleman that works with insurance providers.

As per FY23 filings, the company has over INR 42 Cr in the bank and it looks like Much of this reserve was exhausted during the course of FY24. This can be understood by the fact that the company raised debt from Blacksoil, and got a bridge round in early 2024, as stated above.

Some sources close to the company expressed optimism that a deal may be cracked with the new investor given that the business had good traction with users till FY23. But this optimism is not shared by all close to the company. While some are opposed to the deal, others are left with little to no recourse but to write off the investment if the new deal does not go through.

And in case the startup is unable to resolve this situation, it stands to lose out on all the value it had created in the past four years. So in a sense, Kenko is in a make-or-break situation and the startup has no insurance to fall back on.

The post Kenko Health In Catch-22: Investor Deadlock Puts Insurtech Startup On Thin Ice appeared first on Inc42 Media.

Marc Andreessen had it right when he declared, “Software is eating the world” in a 2011 Wall Street Journal article. More than a decade later, SaaS (software as a service) is still thriving. But enterprises and end users are keen to leverage the AI edge to usher in new, more efficient and cost-effective software solutions than traditional SaaS.

That does not mean enterprise/B2B SaaS, as we know it, is in any immediate danger. The Indian SaaS market size is estimated to reach an annual recurring revenue (ARR) of $50 Bn by 2030 as the ecosystem caters to local and global clientele. Additionally, SaaS centaurs (startups with $100 Mn ARR) and unicorns are expected to generate between $20 Bn and $25 Bn in revenues by that time.

The growth has been further fuelled by venture capitalists putting in $32 Bn+ (according to Inc42 data) across India’s enterprisetech ecosystem between 2014 and 2023, per Inc42 data. Besides, more than 13 pure-play B2B SaaS-focussed VC funds were launched between 2022 and 2024, while every sector-agnostic or B2B-focussed technology fund has SaaS or enterprisetech as one of its key focus areas.

But there’s more to it. Industry experts are now debating a fundamental rethinking of the software industry and how an innovative blending of SaaS and artificial intelligence may soon emerge as the next big technology transformation.

When Pune-based Pentathlon Ventures announced its second B2B tech fund with a corpus of INR 450 Cr ($54 Mn), it caught our interest for several reasons. For starters, its primary focus is deep-diving into B2B SaaS, but it is not too vertically focussed and its approach is industry-agnostic. More importantly, it explores Digital Transformation 2.0 (read an enterprise AI makeover), along with new-age SaaS. Ensuring that Indian tech startups can use this basket of technologies for innovative products, global scale and sustainable growth is Pentathlon’s mission.

Set up in 2020 by a team of seven, Pentathlon is positioned as a founder’s fund and brings more than 150 years of cumulative entrepreneurial and investment experience. It launched Fund I with a corpus of nearly INR 80 Cr ($9.5 Mn) and invested in 23 startups. Out of these, 11 portfolio companies claim an ARR (annual recurring revenue) of more than $1 Mn and 8x revenue growth since the VC’s investment.

The second fund came in September 2023, aiming to invest in 25 B2B SaaS startups across sectors, including enterprise digital transformation, ecommerce enablement, fintech, vertical SaaS, applied AI, sustainable tech and healthtech.

Pentathlon’s core team includes Gireendra Kasmalkar (founder of IdeasToImpacts), Sandeep Chawda (founder of Clarice Technologies), Saurabh Lahoti (former investment officer at Grassroots Business Fund), Madhukar Bhatia (founder of Sapience Analytics), Ashok Mayya (founder, Mayya Consulting LLC), Hemant Joshi (cofounder of Sprih) and Shahshank Deshpande (cofounder of Cubyts).

Asked about the backstory, Chawda said his startup Clarice Technologies was acquired in 2015 by Globant, a New York Stock Exchange-listed MNC. For the next five years, he worked with the U.S. company to scale Clarice from a 300-person team to a 2K-strong organisation.

“I started contemplating my next move by 2019-20 and saw a couple of options. I could launch another startup or build one to help scale 20-25 ventures. That was how the idea of getting into the venture capital ecosystem came to my mind,” he added.

The VC firm has been named after the five-event Olympic sport for a reason. “The qualities required by pentathletes are typically strength, focus, perseverance, stamina and resilience. A startup founder also needs these to become successful and be a part of our VC fund. Hence, the name,” said Chawda.

In an exclusive interaction with Inc42 as part of the Moneyball series, he shared the VC firm’s journey and vision and the opportunities ahead of India’s burgeoning SaaS startup ecosystem. Here are the edited excerpts.

Inc42: Pentathlon primarily focusses on B2B tech. Why did you zero in on this space in spite of more attractive B2C narratives?

Sandeep Chawda: For us, Pentathlon is nothing but a startup in the VC world. For any startup to succeed, there are two crucial things – clear differentiation and clear focus. Our biggest differentiation is that we are defined as a VC firm ‘by the entrepreneurs, for the entrepreneurs’. As for focus, it was clear from Day 1 that we would not invest in anything and everything that could make money. Instead, we would look at going deeper into specific sectors.

As all the partners had exposure to enterprise software, we realised this had to be a core part of our thesis. That way, we could bring more insights to our portfolio companies and help create a more profound impact across many fields. Had we invested in B2C startups, we could not have helped much beyond the capital.

At the time, the choice seemed counterintuitive because India had already witnessed the success stories of B2C startups. Nevertheless, there were early indications that many B2B startups were doing well, which eventually proved true. Of the total 115 Indian startups that have attained unicorn status so far, 44 are in B2B tech, according to Inc42 data.

We felt confident about B2B tech when 15 portfolio companies raised follow-on rounds. We invested in 23 startups from Fund I, and two to three companies are already profitable. Our exit from Tripeur gave us 2.5x returns. This is enough, as 100x usually doesn’t happen in B2B.

Inc42: What is Pentathlon’s USP? What are your key capabilities as a VC fund?

Sandeep Chawda: Many funds are now investing in B2B tech or B2B SaaS. But very few say they are pure-play B2B SaaS funds and solely invest in that domain. Of course, that is our focus area, and as I said earlier, focus is extremely important. In fact, that is one of our differentiators. Our unwavering focus on enterprise SaaS has helped us go deeper into the ecosystem, think up new value additions for our portfolio companies and fine-tune our strategy to find the right companies.

Take, for instance, Tripeur, the company we exited. It specialised in travel spend management and we funded it in early 2020. As you know, the travel industry crashed during Covid-19 and Tripeur had negative revenues at the time. Its founders were under tremendous stress and wanted to give up. We stitched together a bridge round for them, a small round of INR 30-35 Lakh, but no other existing investor came forward then. We also helped the startup trim its workforce, extend its runway and survive a difficult phase.

As the pandemic subsided, its revenue grew at 100% MoM for the next few months and quickly returned to its pre-Covid level. Now, Tripeur is part of the US-based Navan, a $10 Bn company.

It was a terrific journey for all of us. A company that was almost a write-off gave Pentathlon a handsome exit with some help from the VC firm. It was such a leap that the startup’s founder is now an LP for our Fund II.

Inc42: That’s a remarkable turnaround. So, what areas do you target within B2B SaaS and how do you perceive their growth? 

Sandeep Chawda: In the last 20 years, software services companies dominated the entire industry in India. The next 20 years will belong to software products companies from India, which will do exceptionally well.

If we look at our fund and its focus on horizontal SaaS, enterprise AI transformation will be a very prominent theme there. People would have called it digital transformation earlier, but the new flavour of digital transformation is AI transformation and every company has to embrace it. We have made two investments in this space. One is Vodex, which uses generative AI [GenAI] for sales lead validation, and another is ElevateHQ, which uses AI for sales compensation management.

Next in line is the entire ESG [environmental, social and governance] wave, including sustainable and climate tech, now emerging as a strong theme. So, for us, the opportunities are not in ecommerce companies but in products that provide building blocks to take other firms’ products online. We call these ecommerce enablement products, another prominent theme that will play out in the future. Cybersecurity is another area where we see huge potential for Indian software companies.

Given these areas of interest, it’s clear that we are not too vertically focussed and we are also industry-agnostic.

Inc42: Has your investment thesis changed in between? Will you do things differently when allocating from Fund II? 

Sandeep Chawda: Well, our second fund will see a few changes, but the core thesis remains the same. We invest in early stage B2B SaaS companies with revenue between INR 1 Cr and INR 5 Cr. However, we have raised more capital this time. Fund I had a corpus of INR 80 Cr or so, while Fund II is worth INR 450 Cr. This is a big jump – earlier, we were writing cheques of INR 2-2.5 Cr, but now we can write cheques in the INR 4-8 Cr range.

It means we can lead more rounds and negotiate for better equity. Also, our portfolio startups won’t have to approach five other investors to raise the amount they need. Maybe Pentathlon alone or just one more VC fund can co-invest in a round. It will also allow us to do more follow-on rounds.

Additionally, Fund I had a 70:30 ratio for first cheques and follow-ons, but with Fund II, it will be 50:50.

Inc42: Will there be more global opportunities for Indian SaaS startups?

Sandeep Chawda: Let’s go through the opportunities one by one. To start with, talent has never been an issue here. When it comes to talent in the product ecosystem, even if these are not Indian products [MNCs are increasingly setting up their global capability centres or GCCs in India], many engineers got exposure to building and deploying world-class software offerings.

We are also seeing the flywheel effect in the Indian startup ecosystem, creating continued growth and improvement. The scenario was not so vibrant when we launched our venture in 2008. But today, as a VC fund, we evaluate more than 200 B2B SaaS startups every month.

Furthermore, SaaS is not a product. It’s a channel, an avenue to deliver value to end users. It is a powerful growth mechanism because you can provide software as a subscription or software as a service. And it will be easier to scale globally if the product has been thought through from a global perspective from Day 1.

Finally, it comes to markets. Earlier, you would only target the US market as a growth engine when you wanted to grow globally. But that scenario has changed. Companies are now exploring other markets, especially Southeast Asian economies and Gulf countries. These are geographically closer and easier to enter, and the US may emerge as the final base camp.

Inc42: What about unicorns? Do you think many more Indian SaaS startups will reach a billion-dollar valuation soon? 

Sandeep Chawda: After the Covid-19 pandemic, Indian businesses have also understood that SaaS can take their business growth in an entirely different direction. Overall, it is a very welcome change to see the Indian ecosystem consume a lot of software product offerings.

We also see more unicorns emerging from the sector, but we are not swayed much by that tag. Valuation is just a byproduct for companies with decent revenue growth. I value a startup more for making $50-60 Mn instead of one with a unicorn tag just because somebody has decided to give it that valuation.

If a startup sees good growth and its revenues are growing, those are very positive indicators for us. And it is going to happen. The revenues of B2B tech companies will continue to grow at a fast clip.

Inc42: We see a huge price disparity in India compared to global SaaS markets. Can Indian players charge as much as their overseas counterparts? 

Sandeep Chawda: I think it is a function of how much value a company gives to the product and what impact it is going to have on the overall top line or the bottom line of the business. And then they will be more than willing to pay. It is all about how a company values a product and how the product impacts its top or bottom line. If products bring value, companies will be more than willing to pay, and the price disparity will decrease. On the other hand, rising competition in overseas markets may lead to lower pricing and ensure an overall parity.

Other factors may also contribute. For instance, new or evolving technologies can drastically reduce overall costs for product companies, helping them retain their profit margins despite the competition. As Indian businesses invest more in technology, they can leverage it to their advantage and increase their profits without inflating the price index.

Inc42: What are the critical challenges for early stage SaaS startups? How does Pentathlon create a difference there?

Sandeep Chawda: Most tech [startup] founders in India come from a technology background and their tech acumen is usually very sharp. However, we have seen them somewhat lacking in go-to-market or sales and marketing.

At Pentathlon, we have launched an initiative called GTM Dialogues [Go-To-Market Dialogues] to address this. Every month, we pick a different city, such as Pune, Bengaluru, Chennai, Delhi, Noida, or Mumbai, and hold a meetup where 100+ B2B SaaS founders or sales and marketing heads come under one roof. We also have some experts coming in who have succeeded in the go-to-market space.

We have fireside chats and panel discussions, during which they provide insights and tips to these founders based on their firsthand experience about what works and what does not work for various aspects of go-to-market.

Inc42: What are the key areas B2B SaaS startups must tap into for scaling up? 

Sandeep Chawda: Well, there is no specific formula for this. Founders must draw upon their professional experiences and the domains they have worked in. In that way, they can readily identify the gaps, and their firsthand experience will help them come up with innovative solutions. The use of technology is a given in any solution, but the crucial aspect is finding the right solutions backed by their domain expertise. Founders must offer something highly differentiated, a quality we prioritise when evaluating potential investments.

Inc42: Do you have a specific target or plan for this year or the next? How do you see the Indian startup ecosystem growing?

Sandeep Chawda: We are witnessing early signs of progress, indicating light at the end of the tunnel. After the funding winter in 2022-2023, investments are beginning to pick up, transitioning from an artificially inflated market two years ago to a more cautious period when investors are hesitant, although the capital is available.

This hesitancy is gradually easing, and investors are starting to re-engage. This is an opportune moment for investors because founders’ expectations have become more realistic than two years ago. Earlier, they sought extraordinary valuations that were not always justified by their revenues or business plans. But now, founders are more grounded, creating a favourable environment.

We plan to make two investments per quarter in the next two years, steadily building our portfolio. Based on our current pipeline, the outlook appears highly positive.

[Edited by Sanghamitra Mandal]

The post Pentathlon’s Vision For B2B SaaS: A Deep Dive Into The ‘Selective’ Investment Thesis, AI Insights & Fundamentals appeared first on Inc42 Media.

India’s direct-to-consumer (D2C) market, which is likely to reach a size of $100 Bn by 2025, has grown exponentially in the last few years. Several factors including the Covid pandemic, higher internet penetration, growth of digital infrastructure and rise in the number of millennials, among others, have shored up the D2C brands. 

Home to more than 190 Mn digital shoppers, India has the world’s third-largest online shopping base in the world. It is this burgeoning ecosystem that the new-age D2C brands aim to capitalise on, on the back of the growing appetite of Indian consumers for innovation and waning loyalty towards traditional players. 

Of this, fashion and clothing startups have the highest potential and are expected to grow to $43.2 Bn by 2025, according to an Inc42 report.

Some of the emerging D2C brands including Mamaearth, CaratLane and Nua merely took a couple of years to reach INR 100 Cr revenue mark. This is a testament to the success of D2C brands in the country.

Let’s take a look at some of the popular D2C brands in the country. 

The list is not meant to be a ranking of any kind. We have listed the Indian D2C startups in alphabetical order.

1. 82°E

Founded in 2021 by Bollywood Actress Deepika Padukone and Jigar Shah, 82°E is a direct-to-consumer (D2C) personal care brand. 

It sells four skincare products – moisturisers, face oil, cleanser and sunscreen – in the price range of INR 1,200 and INR 2,900, as per the company’s website. 

In December 2022, it secured $7.5 Mn in seed funding from DSG Consumer Partners, IDEO Ventures, Padukone’s family office, and some ultra-high net worth individuals (UHNIs). 

It also has a research and development lab in Bengaluru city.

2. Alphavedic

Founded in 2019 By Shrey Jain and Shruti Khare, Alphavedic is a bootstrapped D2C startup that sells Ayurvedic beauty and personal care products. With 24 stock keeping units (SKUs) in its kitty, the startup sells haircare products, shampoos, conditioners, lip balms, creams, among other beauty products. 

The company plans to launch ayurvedic vitamins and supplements over the course of next few months.

The startup competes with the likes of The Ayurveda Company, Kapiva, and Forest Essentials. 

Alphavedic sells its products through its websites and ecommerce platforms such as Amazon, Nykaa, and Flipkart. It has retails its products across 40 offline chains in India. 

3. Anveya Living

Founded in 2018 by serial entrepreneur Saurav Patnaik and a former FirstCry executive Vivek Singh, Anveya Living sells sustainable hair and skin care products.

In 2022, the D2C startup launched its flagship products Colorisma and Curlvana and added a gold acne kit to its offerings. The startup clocked a revenue of about INR 11.7 Cr in the fiscal year 2021-22 (FY22).

The Bengaluru-based startup aims to clock a revenue of INR 45 Cr in 2023. It has added more hair care products to its offerings.  

In February 2022, Anveya raised INR 8 Cr in a seed funding round from Venture capital firm Rukam Capital.

4. Arata

Founded in 2017 by Dhruv Madhok and Dhruv Bhasin, ARATA’s first-ever product, a homemade hair gel, came to being around Madhok’s wedding. Madhok had made the chemical-free hair gel for Bhasin. 

24 months later, the D2C brand’s first product was sold on its website and the company took shape. The startup derives its name from the Japanese word ‘Arata’, which means ‘fresh and new.’  

ARATA finds its differentiation in the chemical-free beauty and skincare segment, and its range includes products such as hair gels, hair creams, shampoos, conditioners, toothpaste, face wash and serums. 

The D2C brand procures ingredients globally and locally from certified organic farms, which are developed into finished products after extensive research and development (R&D). The startup claims to offer zero-chemical and toxic-free personal care products that use only recycled plastic for packaging as part of its sustainability promise.

The D2C brand currently has 26 SKUs and a user base of more than 5 Lakh customers. It claims to have sold more than 7 Lakh products by mid-2022. However, a majority of its sales, around 70%, take place from ecommerce marketplaces such as Amazon, Nykaa, Flipkart, and BigBasket.

5. Atomberg 

Set up in 2012 by Manoj Meena and Sibabrata Das, Atomberg manufactures energy-efficient fans and allied equipment, along with mixer grinders. Its product portfolio includes pedestal, wall and ceiling fans, among others.

In 2021, Deepika Padukone-led family office KA Enterprises invested in Atomberg’s Series B funding round. In May 2023, the startup raised a further $86 Mn in a Series C round.

Besides Padukone, its cap table also includes A91 Partners, Survam Partners, Trifecta Capital, and Whiteboard Capital Fund, Temasek, Steadview Capital, among others.

During the time of its last fundraising, the startup was said to have 400 service centres throughout India and clocked an annual revenue rate of INR 300 Cr.

6. Bacca Bucci

Much before the Gen Z lingo acquired buzzwords such as sneakers or running shoes, the duo of Anuj Nevatia and Natwar Agrawal was quietly working on setting up something of their own in the footwear industry.

For Nevatia, the decision to focus on footwear was primarily driven by factors such as business seasonality, the organized nature of the market, and the timeless demand for shoes, which laid the groundwork for the inception of Bacca Bucci, a direct-to-consumer (D2C) footwear brand established in 2015.

As a bootstrapped startup, Bacca Bucci leverages artificial intelligence (AI) in its backend processes for shoe manufacturing. Beyond footwear, the platform also offers a range of complementary products, including belts, wallets, and toiletry bags.

Presently, Bacca Bucci markets its products through its official website and various ecommerce platforms.

7. Beco

Founded in 2019 by Aditya Ruia, Akshay Varma, and Anuj Ruia, Beco is a sustainable kitchen, home, and personal care brand. It sells biodegradable and combustible products such as tissue rolls, bamboo facial tissues, dishwashing liquid, toothbrushes, and garbage bags.

In September 2022, the startup secured $3 Mn in its Series A round led by Rukam Capital along with  Prashant Pittie, Titan Capital, Priyavrata Mafatlal and Better Capital. 

While announcing its Series A fundraise, it claimed that it would expand its retail stores to 10K across India.

Prior to this, it had raised INR 4 Cr in its seed funding round from Climate Angels Fund, Rukam Capital, Sequoia Sprout, and Zivame founder Richa Kar, among others. 

8. Bewakoof

Founded in 2012 by Prabhkiran Singh and Siddharth Munot, Bewakoof sells a wide variety of clothes, stationery items, footwear and mobile accessories on its website. The D2C brand also sells a host of merchandise clothes and accessories in partnership with Marvel, F.R.I.E.N.D.S, Star Wars, Disney, DC and Looney Tunes.

In August 2021, it secured $8.09 Mn in its Pre-Series B funding round and in December 2022, Aditya Birla Group’s house of brands business TMRW invested INR 200 Cr in the D2C startup Bewakoof. 

In total, Bewakoof has raised a total funding of INR 23.6 Mn to date. Its cap table includes IvyCap Ventures, Spring Marketing Capital, Investcorp and Klub-led accelr8 fund, among others. 

At the time of its last fundraising activity, it was said to have sold more than 1 Cr products and served 60 Lakh customers. It also aimed to record INR 2000 Cr in sales by 2025.  

9. Beyoung

Founded in 2018 by Shivam Soni, Shivani Soni, Sakshi Soni, and Shankar Mali, Beyoung is a D2C apparel startup that manufactures and sells fashion wear through its app, website and ecommerce platforms.

The Udaipur-based startup last raised INR 40 Cr ($4.8 Mn) in funding via revenue-based financing from Klub last year. The startup claims to have clocked a turnover of INR 100 Cr during the financial year 2022-23 (FY23).

Last year, the startup had underlined plans to open more than 100 offline stores in Tier-II and Tier-III cities Indian cities by 2023-end.

10. BlissClub

Set up in 2020 by Minu Margeret, BlissClub sells a host of women’s activewear including bottom wear, sports bras, tops, tees and co-ords, among others. Under the BlissQueen Royalty Program, the D2C startup offers reward points to its loyal customers. 

In May, the Bengaluru-based D2C startup secured $15 Mn in its Series A funding round. It has raised a total funding of $17.25 Mn to date.

The startup claims to have grown its sales by 25X over the last year. It aims to attain an annualised revenue of INR 100 Cr by the end of 2022.

Eight Roads Ventures, Elevation Capital, Swiggy’ Sriharsha Majety, Mamaearth’s Ghazal Alagh, Licious’ Vivek Gupta and Abhay Hanjura, SoftBank’s Munish Varma and Sumer Juneja, Shopify’s Brennan Loh are among its investors.

11. Bluestone

Set up in 2011 by Gaurav Singh Kushwaha and Vidya Nataraj, Bluestone offers more than 8000 jewellery designs in rings, pendants and other allied products. It follows an omnichannel approach to selling its products. 

In March this year, the D2C jewellery brand secured $30 Mn from Hero Enterprise’s Sunil Kant Munjal and other investors at a post-money valuation of $410 Mn. So far, it has raised $87.8 Mn from investors including Ratan Tata, Accel, IvyCap, Saama Capital, Kalaari and Iron Pillar, among others. 

In the financial year 2020-21, it narrowed its consolidated losses by nearly 43% to INR 13.8 Cr. Meanwhile, its revenue from operations grew by 5% year-on-year to INR 269 Cr in the corresponding period.

12. boAt 

Launched in 2016 by Aman Gupta and Sameer Mehta, boAt is an audio direct-to-consumer brand that manufactures a host of audio products such as earphones, headphones and speakers, among others. It retails these products on its website and ecommerce marketplaces. 

In October 2022, boAT secured nearly $61 Mn from Warburg Pincus and Malabar Investments. With this fundraising, the startup also decided to delay its IPO plans. 

Its cap table includes InnoVen Capital, Qualcomm Ventures and Fireside Ventures, among others. 

In the financial year 2021-22 (FY22), its profit dipped 20% YoY to INR 68.7 Cr in FY22 against INR 86.5 Cr in FY21. Revenue of the New Delhi-based D2C electronics brand surged 117.5% YoY to INR 2,886.4 Cr in FY22. 

13. Bold Care

Founded in 2020 by Rajat Jadhav, Rahul Krishnan, Harsh Singh, and Mohit Yadav, Bold Care is an end-to-end men’s health and wellness platform that centres around sexual health, hair care and daily nutrition. 

It sells sexual wellness kits, complete hair care packs, and natural supplements to boost immunity, sleep, haircare, and sexual health. 

Accelerated by Huddle, the health and wellness D2C brand has so far catered to 2.3 Lakh men and sells its products on marketplaces and its own website. The startup has secured $3 Mn in funding to date.

Bold Care is backed by names such as Sharrp Ventures, Anthill Ventures, Stanford Angels & Entrepreneurs and Shiprocket, NB Ventures, among others. 

14. BoldFit 

Fitness startup BoldFit, which was founded in December 2018 by Pallav Bihani, sells nutritional supplements and fitness equipment to consumers. 

The startup sells Food Safety and Standards Authority of India-certified (FSSAI) products in the market and works with WHO-GMP-approved manufacturing firms to implement quality checks at every stage. 

The fitness startup has created more than 400 SKUs across health and ayurvedic supplements, healthy foods, home gym equipment and accessories in the last three years. 

In the financial year 2022, it reported a revenue of INR 63 Cr and sold over 5 Mn products.

With an annual revenue rate (ARR) of 205%, BoldFit has served more than 2.5 Mn customers to date. 

15. Bombay Shirt Company

Founded in 2012 by Akshay Narvekar, Bombay Shirt Company is an online clothing brand. The startup sells bespoke apparel for men and women. It presently leads four brands–Bombay Shirt Company, cityof_, Pause and Korra. It has a presence in India, Dubai and New York.

In 2019, the Mumbai-based clothing startup reportedly raised $9 Mn in its Series B funding round. It has raised a total of $11 Mn in funding to date. 

Its cap table includes venture capital firm Lightbox and individual investors Amit Patni and Arihant Patni.

16. Bombay Shaving Company

Founded in 2016, Bombay Shaving Company initially started as a men-focussed D2C personal care brand but later started offering a range of products in hair removal and hair care categories. It has a portfolio of over 100 SKUs including shaving regimens, trimmers, beard products, razors for women, wax strips, hair removal creams, and other allied personal care products.

Earlier in 2022, it secured INR 30 Cr in its then-ongoing Series C funding round. So far, it has a total of $45.6 Mn in funding. It counts Gulf Islamic Investments, Malabar Investments, Patni Advisors, Singularity AMC and Reckitt Benckiser as its investors.

It claims to have served over 3 Mn customers till date and has clocked INR 150 Cr annual revenue rate, expanding 35% on a quarter-on-quarter basis.

17. Boult

Founded in 2017 by siblings Varun and Tarun Gupta, Boult was born out of the duo’s passion for music and creating high quality audio products out of India. 

The D2C startup offers a diverse range of products across categories such as TWS (true wireless), neckbands, headphones, speakers and smartwatches. The bootstrapped profitable brand claims to have more than 100 SKUs and sells its products on both ecommerce marketplaces as well as its own website.

With presence in India, the UK and Nepal, the D2C audio brand plans to foray into the US and European markets in FY25. 

It competes with the likes of homegrown giants such as boAt and Noise as well as legacy players such as JBL, Bose, Sony, among others. 

18. CaratLane

Founded in 2008 by Mithun Sacheti and Srinivasa Gopalan, CaratLane offers a host of jewellery, right from bracelets to kids-focussed pendants to customised pieces of jewellery. It retails its products through an omnichannel marketing strategy.

In 2019, Tata Group-led Titan Company infused INR 99.9 Cr in CaratLane thereby, increasing its stakeholding to 66.39% in the startup.  Subsequently, the conglomerate, in August 2023, announced plan to acquire an additional 27.18% stake in CaratLane for INR 4,621 Cr.

Once the deal goes through, Tata will effectively own 98.28% of the company with the jewellery startup acquiring a valuation of INR 17,000 Cr ($2 Bn).  

The jewellery brands reported a consolidated revenue of INR 2,169 Cr in FY23. Besides, CaratLane’s net sales value (NSV) also surged to INR 571 Cr in FY23, up 56.7% compared to FY22. 

19. Chaayos

Founded in 2012 by Nitin Saluja and Raghav Verma, Chaayos sells a wide variety of tea and packaged food products. It sells tea at its physical stores while other packaged food products are sold via ecommerce marketplaces and physical stores.

In June 2022, it secured $53 Mn in its Series C funding round from investors including Elevation Capital, Think Investments, Tiger Global and Alpha Wave Ventures. It has raised $85.5M in funding to date. 

20. Chai Point 

Set up in 2010 by Amuleek Singh Bijral and Professor Tarun Khanna, Chai Point follows an omnichannel approach to selling tea varieties and other snacks. It opened its first retail store in 2010 followed by introducing home delivery of its flagship teas in 2014 and rolling out tea and coffee vending machines in 2016.

In 2018, the D2C F&B brand secured $20 Mn in its Series C funding round. So far, it has raised $36 Mn in funding from investors including Paragon Partners, Eight Roads, Saama Capital and DSG.  

In the financial year 2020-21, it reported revenues from operations at INR 55.64 Cr and loss after tax stood at INR 78.49 Cr, according to Tofler.

21. Chumbak 

Founded in 2010 by husband-wife duo Vivek Prabhakar and Shubhra Chadda, Chumbak is a home and lifestyle brand that sells furniture, home decor items, jewellery and footwear, among others. It has an omnichannel presence across India, particularly in Tier-1 cities.

In 2019, the Bengaluru-based D2C brand secured INR 7.39 Cr in its Pre-Series E funding round from Gaja Capital Fund. So far, it has bagged $23.5 Mn in funding from investors. 

It looks to set up over 50 physical retail stores across India and further aims to have more than 100 retail stores in the country in the next one to two years.

22. ClearDekho

In a space that is populated by big names such as Lenskart, and Titan Eye Plus, ClearDekho found a niche in the country’s D2C eyewear segment. Building on his prior experience in the space, ClearDekho founder and CEO Shivi Singh is tapping the burgeoning eyewear market in Tier III & IV cities of India. 

In a chat with Inc42, Singh said that the company aims to standardise eyewear accessibility for consumers in smaller towns and cities while offering value for money. 

Founded in 2017, the startup has so far raised $7 Mn in funding. It counts names like Venture Catalysts, Jaipuria Family Office, and Dholakia Ventures as its investors. 

With more than 100 franchisee stores across India, ClearDekho has a presence in Punjab, Haryana, Madhya Pradesh, and Rajasthan. 

23. Clensta

During his eight-year-long stint with the Indian defence startup ecosystem, Puneet Gupta came across a peculiar problem — soldiers stationed at the high-altitude areas of Drass and Siachen would go for months without a bath due to freezing weather conditions and extreme water scarcity. 

Gupta, an IIM-Calcutta alumnus, developed a waterless body bath and shampoo that can be used by people to take baths sans water while maintaining proper personal hygiene. 

Featured in the 2022 edition of Inc42’s Fast42 list, Clensta claims to offer more than 14 SKUs and sold more than 3.8 Mn products in 2022. It clocked revenues to the tune of INR 13.3 Cr in FY21. Clensta claims to have seen a 100% increase in its FY23 top line, which its plans to further grow 3X in FY24. 

Founded in 2016, the startup is backed by the likes of IAN Fund, N+1 Capital, IPV Fund, HEM Securities and Venture Catalysts. It has so far raised INR 105 Cr in a mix of debt and equity across multiple rounds.

24. Clovia

Founded in 2013 by Suman Choudhary and husband-wife duo Neha Kant and Pankaj Vermani, Clovia is a women’s lingerie brand that offers over 3,500 intimate wear styles. Recently, it has added Soumya Kant and Abhay Batra to its founding team.

In March 2022, Reliance Retail invested INR 950 Cr in Clovia’s parent company Purple Panda Fashions for an 89% stakeholding in the startup. So far, Clovia has raised $24.7 Mn from investors.

Its cap table includes AT Capital, IvyCap Ventures, Singularity Ventures and Ravi Dhariwal, Ex-CEO of Bennett, Coleman and Company Ltd, among others.

25. Country Delight 

Founded in 2013 by Chakradhar Gade and Nitin Kaushal, Country Delight sources milk and other food products such as ghee, cottage cheese, fruits and vegetables from farmers and delivers them to customers’ doorstep.

In May 2022, it secured $108 Mn in its Series D funding round from Venturi Partners, Temasek, SWC Global, Trifecta Capital and a slew of other investors. Prior to this, it had also raised $25 Mn in a Series C round led by Elevation Capital. So far, it has raised a total of $133 Mn in funding.

It claims to have grown 10x in the past three years and has served more than 1.5 Mn customers across the country. It further asserts to be delivering over 8 Bn orders every month across 11 Indian states.

Its cap table includes Matrix Partners, Orios Venture Partners, Elevation Capital, and IIFL PE Fund, among others.

26. Curefoods

Founded in 2020 by Ankit Nagori, Curefoods is a cloud kitchen aggregator that houses several brands–EatFit, Sharief Bhai, Aligarh House Biryani and CakeZone, to name a few. It manages over 150 cloud kitchens in 15 Indian cities.

In 2023, it raised  $37 Mn from Binny Bansal’s fund Three State Ventures. In addition, Bollywood actress Nora Fatehi invested in Curefoods and, also, became the brand ambassador of its sub-brand CakeZone. 

Its cap table includes Iron Pillar, Chiratae Ventures, Accel Partners, Sixteenth Street Capital, Iron Pillar and Bollywood Actor Varun Dhawan, among others.

In the financial year 2021-22, it reported revenue from operations at INR 1.3 Cr while its consolidated losses were INR 7.4 Cr, according to Tofler.

27. DaMENSCH

Founded in 2018 by Anurag Saboo and Gaurav Pushkar, DaMENSCH is a men’s clothing brand that sells a range of clothing styles such as odour-cancelling men’s underwear, polo-t-shirts, t-shirts, hoodies, joggers, tank tops, and chino shorts, among others.

In February 2022, it raised $16.4 Mn from A91 Partners, Matrix Partners, Whiteboard Venture Partners, and Saama Capital. So far, it has raised a total of $23.1 Mn from investors.

In the financial year 2021, it reported losses of INR 5.8 Cr whilst its revenue from operations stood at INR 22 Cr, as per Tofler.

28. Desi Farms

Set up in 2016 by Prateek Gupta and Sunil Shahi, D2C startup Desi Farms sells dairy products such as Malai Dahi, whole buffalo milk, Shrikhand, and Amrakhand, among others. 

To eliminate intermediaries, the dairy startup partners with local farmers and procures fresh milk and milk products from them. Later, these products undergo rigorous quality checks at the processing unit, wherein the milk is treated without using chemical preservatives. 

It delivers dairy products to customers without levying any charges and also provides customised subscription services to its users.

The startup currently offers 48 SKUs and claims to have more than 10K paid-up customers. In 2022, it set up over 50 offline outlets in Pune and Navi Mumbai, while in fiscal year 2022, it generated a revenue of INR 8.8 Cr.   

29. Dogsee Chew

Founded in 2015 by Bhupendra Khanal and Sneh Sharma, the Bengaluru-based pet food startup offers vegetarian dog treats that are prepared from yak milk, sourced from villagers residing in Nepal, Sikkim, and Darjeeling.

Dogsee Chew raised $6.7 Mn in its Series A funding round in 2021, and in 2022, it raised $60.59 Mn from Mankind Pharma along with the existing backers. In total, the startup has raised funding of $67.29 Mn so far. 

It claims to be the fourth-largest pet food exporter in India and currently operates in more than 30 countries. 

30. Dr. Vaidya’s 

Founded in 2016 by Arjun Vaidya, Dr. Vaidya’s is an Ayurvedic products startup. It claims to sell over 100 FDA-certified products and has a manufacturing facility in Silvassa, Mumbai. Its offerings include LIVitup, HERBOfit, Chakaash. 

The Mumbai-based startup also manufactures products to cure chronic ailments such as diabetes, asthma and arthritis, among others. It sells products through its website and ecommerce marketplaces such as Amazon, Flipkart and Snapdeal. 

In 2021, the startup reportedly got acquired by RP-Sanjiv Goenka Group’s venture capital arm for $6.9 Mn. Following this, its valuation soared to nearly INR 144 Cr.

31. Drink Prime

Founded by Vijender Reddy Muthyala and Manas Ranjan Hota in 2016, DrinkPrime offers subscription-based water purification services to households. The founders started their entrepreneurial journey by building a platform, called Waterwala, to deliver drinking water cans to people. 

Later, the startup pivoted to a new model and began offering subscription-based customisable water purifiers to customers. The company’s RO purifiers deploy Internet of Things (IoT) to offer customised offerings and cater to the water purification needs of families living in different localities. 

Drink prime’s subscriptions cost as low as INR 333 a month, including installation and maintenance. 

Drink Prime, which counts names such as Venture Catalysts++, PeakXV, and 9Unicorns as its backers, has raised INR 70 Cr since its inception. 

The startup was also featured in the 2023 edition of Inc42’s Fast42 list. 

32. Earth Rhythm

Founded in October 2020 by Harini Sivakumar, Earth Rhythm is a beauty and personal care brand that sells a host of haircare, skincare and body care products. It also sells zero-waste products including toothbrushes, vanity bags, combs and soap dishes, among others.

The Delhi NCR-based claims to have 160 stock-keeping units (SKUs) and has served over 150K users to date. It has raised a total of $1.2 Mn in funding from Anicut Capital. It aims to reduce the carbon footprint and at the same time, use sustainable ingredients in making its products. 

In the financial year 2021-22, it posted earnings from operations at INR 6 Cr. It asserts to have witnessed a 3x rise in its customer orders since its inception. In January this year, it received 15K orders.

33. Ecosoul

Rahul Singh and Arvind Ganesan first met each other during their stint at the American furniture goods company, Wayfair, where they worked on the sustainable product categories. Realising that there was a huge gap in the market for eco-friendly products, the duo left their high-paying jobs in the US and founded EcoSoul in 2020.

EcoSoul Home sells eco-friendly home products such as crockery, cutlery, garbage bags, and tableware. Headquartered in the US, with operational presence in countries like China and Vietnam, the company forayed into India earlier this year.

The D2C eco-friendly home essentials brand sells its products primarily through its website as well as ecommerce platforms. It currently offers 43 product varieties and 1,800 SKUs.

Since its inception, EcoSoul has secured more than $15 Mn in funding from notable investors, including venture capital firm Accel. Furthermore, actor Bhumi Pednekar recently made an undisclosed investment in the startup.

34. eské

Founded in 2018 by Shivam Khanna, eské is a D2C lifestyle brand that offers products such as luxury handbags, laptop bags, accessories, luggage and travel items for men and women. 

The startup primarily sells its products online through its own website and ecommerce platforms such as Amazon and Myntra. 

Backed by the likes of Mistry Ventures and Fluid Ventures, eské has raised $1.5 Mn in funding till date and competes with names such as Zouk, Scarters, Mokobara, and Chumbak.

35. FableStreet 

Founded in 2016 by Ayushi Gudwani, FableStreet is a women-focused clothing brand. It offers readymade as well as bespoke clothes for female working professionals. It claims to use a three-body measurement algorithm for creating customised apparel.

In 2019, it raised $2.95 Mn in its Series A funding round. Prior to that, it secured an undisclosed amount of seed funding in 2017.

Its cap table includes Fireside Ventures, Pradeep Parameswaran from Uber India and South Asia, Dilip Khandelwal from Deutsche Bank, Suhail Sameer from RP-Sanjiv Goenka Group, and Fusiontech Ventures, among others.

36. FabAlley 

FabAlley, founded in 2012 by Shivani Poddar and Tanvi Malik, is a brand of High Street Essentials (HSE). It sells a wide range of women’s Western apparel via online marketplaces, physical retail stores, multi-brand outlets (MBOs), and its own website. 

In May, FabAlley’s parent company HSE secured INR 40 Cr from Stride Ventures. So far, HSE has raised $14.02 Mn in funding from investors including Elevational Capital, India Quotient, Dominor Holding, Trifecta Capital Advisors, SenseAI Venture, Baird Capital, and Institutional Venture Partners. 

In the financial year 2020-21, FabAlley reported a profit of INR 27.5 Cr, while its revenue from operations stood at INR 105 Cr, according to Tofler. 

37. Farmley 

Brainchild of Akash Sharma and Abhishek Agarwal, Farmley is a D2C snacking brand that was founded in 2017. The startup sells products such as roasted peri peri makhanas, thai chilli cashews, date bites, etc.

Farmley claims to be EBITDA positive and sells its products through ecommerce marketplaces and quick commerce platforms such as Amazon, Flipkart, Blinkit, Zepto, Instamart and Big Basket. 

It also claims to have a presence in more than 10,000 retail outlets across 50 Indian cities.

The startup has raised nearly $15 Mn in funding till date and counts names such as BC Jindal Group, DSG Consumer Partners, Omnivore and Alkemi Partners as its backers.

38. Flistaa 

Founded in 2021 by CA Harshvardhan Chhatbar, Flistaa is a beverage brand that offers premix beverages in sachets. It offers a wide range of Indian beverages such as street juices, milkshakes and sharbat, etc. 

In December 2021, the Ahmedabad-based D2C startup reportedly received an undisclosed amount of investment from ah! Ventures’ First Gear Platform.

39. Flo Sleep Solutions

With an aim to offer good quality mattresses and other sleep essentials to Indian consumers, Gaurav Zatakia founded D2C startup Flo Sleep Solutions in 2018.

Flo primarily sells varied types of mattresses and pillows such as ortho mattresses, ergo mattresses, anti-gravity latex mattresses, baby mattresses, fibre pillows and memory foam pillows. It counts Mistry Ventures as its investor.

Flo’s founder Zatakia is also leading a B2B firm Hush for over 13 years now. Hush mainly supplies mattresses and allied sleep essentials to luxury hotel chains such as Taj Hotels, JW Marriott and the Hyatt Group. 

40. Foxtale

Foxtale is an omnichannel beauty and personal care (BPC) brand that sells skincare products such as serums, masks, moisturisers, face washes, sunscreens, among others. 

Founded in 2021 by former venture capitalist Romita Mazumdar, Foxtale primarily sells its products through its own website, online marketplaces as well as offline stores. It claims to have a presence across 1,050 offline retail stores and 50 modern trade chains.

Backed by marquee names such as Panthera Growth Partners, Matrix Partners India and Kae Capital, Foxtale has raised capital in excess of $18 Mn till date. It competes with names such as Minimalist, Pilgrim, Plum, and Mamaearth in the homegrown D2C BPC space. 

The D2C brand also featured in the 2024 edition of Inc42’s FAST42 list of the country’s top and emerging 52 D2C brands.

41. Freakins

Back in 2018, Puneet Sehgal, Sachin Shah and Shaan Shah experimented with the idea of building a desi women-centred denim wear brand. Investing INR 10 Lakh of their capital, the duo first designed and manufactured a few denim wear samples to see if they were headed in the right direction .

They received overwhelming response, setting the stage for launch of their D2C denim wear brand Freakins in 2019. However, the startup forayed into the men’s category in February 2023 to emerge as a full-fledged Gen-Z denim wear brand.

The startup raised $4 Mn in July 2023 in a seed funding round led by Matrix Partners India and Blume Ventures. Freakins is also backed by the likes of angel investors such as Revant Bhate of Mosaic Wellness, Meesho’s Utkrishta Kumar, and OfBusiness’s Asish Mohapatra.

The D2C brand’s product portfolio currently spans more than 35 categories and 1,500 styles.

Freakins sells its denims via online marketplaces such as Amazon, Flipkart, and Myntra. The company clocked a gross revenue of INR 22 Cr in FY23 and is eyeing to become an INR 100 Cr brand by the end of 2024.

42. FreshToHome

FreshToHome was incorporated in 2015 by serial entrepreneur Shan Kadavil and Mathew Joseph. The inspiration to venture into the direct-to-consumer (D2C) meat and fish industry struck Kadavil when his personal fish supply was disrupted due to the impending closure of Sea To Home, an ecommerce platform based in Kerala.

Collaborating with Joseph, one of the cofounder of Sea To Home and an angel investor, Kadavil embarked on his new venture. Since then, the direct-to-consumer (D2C) meat startup has significantly expanded, now serving 160 cities in India and all seven emirates in the UAE.

With investors such as Amazon Sambhav Venture Fund, E20 Investment, Mount Judi Ventures, Investcorp and Iron Pillar in its kitty, the D2C meat startup has so far raised $256 Mn in funding across multiple rounds. 

The company competes with the likes of Licious, Zappfresh, and Meatigio, among others. To fuel its growth, FreshToHome plans to expand its store count to 100 across all major metros by 2024-end. 

43. GIVA

Founded in 2019 by Ishendra Agarwal, Nikita Prasa and Sachin Shetty, GIVA is a D2C brand that sells budget-friendly fine jewellery to its customers — both men and women. The startup largely prices its offerings in the price range of INR 1,000 to INR 20,000. 

Competing with the likes of homegrown brands such as CaratLane, Melorra, Tanishq and BlueStone, the omnichannel brand derives 90% of its revenue from online channels. 

The startup’s revenue saw a 100% YoY rise in FY22. GIVA claims to have a customer base of 1.2 Mn. The D2C brand, which currently operates more than 40 exclusive brand outlets in the country, aims to launch 100 retail outlets in tier II and tier III Indian cities by FY24. 

The startup has raised INR 130 Cr in equity funding since its inception. In March this year, it secured INR 40 Cr in debt from Alteria Capital. 

44. Good Health Company (GHC)

Founded in 2021 by Samarth Sindhi and Saurav Panda, Good Health Company (GHC) is a subsidiary of Raksha Health. 

GHC sells a range of men-focussed wellness and personal care products, including anti-hair thinning kits, hair regrowth, beard care kit, and glowing skin kits, among others. 

It also offers free consultations to customers regarding their skincare, haircare and sexual health problems.

So far, it has raised $20.7 Mn funding from a number of investors, including Left Lane Capital, Khosla Ventures, Quiet Capital, and Weekend Fund, among others. 

45. Gynoveda

After suffering from lifestyle disorders for more than a decade, Vishal Gupta eventually found respite in the ancient science of Ayurveda. During his research, Gupta discovered effective remedies for a host of gynaecological problems such as PCOS (polycystic ovary syndrome), abnormal discharge, and umpteen, among other issues. 

Realising a prevailing gap in the market, Gupta, along with his wife Rachana and Dr Aarati Patil, founded Gynoveda in 2019, blending the age-old science with modern technology and content. 

Gynoveda sells products ranging from moisturisers to Ayurvedic capsules via its website and ecommerce marketplaces. Of its total revenue, 80% comes from its own website while the rest comes from ecommerce websites. 

With a customer base of 3 Lakh women, the startup is eyeing scaling this number to 10 Lakh in the next three years. It claims to have annualised revenue of INR 100 Cr. 

The startup has so far raised funding in excess of $11 Mn and counts names such as India Alternatives Fund, Fireside Ventures, Wipro Enterprises, Alteria Capital and RPG Ventures as its backers. 

46. HairOriginals

A brainchild of Jitendra Sharma, HairOriginals was founded in 2019 and is a D2C brand that sells hair extensions and do-it-yourself wigs. 

The D2C brand sells its offerings through its website and ecommerce platforms. It claims to make its offerings from ethically-sourced real human hair and exports products to 22 countries including the US and other European nations.

The startup has raised $3 Mn in funding till date and is backed by names such as Anicut Capital, Venture Catalysts, She Capital, JITO Angel Fund, among others.

The startup competes with the likes of Nish Hair and Ind Natural Hair. 

47. Happilo 

Founded in 2016 by Vikas Nahar, Happilo sells a host of healthy snacks such as nuts, dry fruits, seeds and dry roasted snacks, among others, via its website and offline stores. It also offers an option to pay through EMIs.

In February, the Bengaluru-based D2C brand secured $25 Mn from Motilal Oswal Private Equity. The startup then claimed that it had expanded over 4x in the previous 24 months. It also said that it was aiming for a revenue of INR 2,000 Cr over the next four years. 

So far, Happilo has bagged total funding of $38 Mn.  

48. Happy Nature

Founded in 2022 by Sahil Chopra, Parth Birendra, Vikas Singh and Vishal Rastogi, Happy Nature is a farm-to-fork dairy startup. It runs a dairy farm in Jhajjar, Haryana. 

The startup has developed its standard operating procedures (SOPs) to keep aflatoxin levels low in cow’s milk, without adding chemical preservatives and antibiotics. It currently sells more than 35 SKUs to over 80K customers across Delhi-NCR, Punjab and Haryana.  

In the fiscal year 2021-22 (FY22), it reported a 69% YoY rise in its revenue to INR 14.4 Cr. Further, it plans to generate INR 150 Cr in annual revenue by 2025. 

49. Heads Up For Tails 

Founded in 2008 by Rashi Narag, Heads Up For Tails sells a wide range of pet products such as preservative-free pet treats, organic supplements, and orthopaedic beds. It aims to increase awareness among pet parents regarding the need for pet care and wellness. 

In August 2021, the Delhi-based pet care brand secured $37 Mn in its Series A funding round led by Verlinvest and Sequoia Capital India. It had a headcount of 350 employees then. Back then, it was looking to launch new product offerings across India and expand its product portfolio in international markets.

The startup has raised $50.3 Mn in aggregate to date. 

50. Herby Angel

Founded in 2023 by Sherry Jairath, Herby Angels is an omnichannel brand that manufactures nutraceutical and pharmaceutical ayurvedic products for babies. It claims to make its products with certified organic ingredients.

The Noida-based startup raised $2.5 Mn in maiden funding from JCBL Group late last year.

The startup sells its products through its website and other ecommerce platforms. It also claims to have a presence in 1,300 retail across 13 states. At the end of November 2023, the brand claims to have achieved a monthly revenue of INR 12 Cr and aims to double the number by March 2024.

51. Himalayan Organics

Himalayan Organics is a D2C nutraceutical startup that was founded in 2018 by Vaibhav Raghuwanshi and Suditi Sharma. The company offers a variety of products across several categories, including beauty, skincare, immunity boosters, and haircare.

To provide the best service to its customers, Himalayan Organics collaborates with nutritionists and dieticians to offer free consultations. The company mainly sources raw materials from the Himalayan region and uses natural ingredients such as fruits, vegetables, herbs, seeds, and nuts to manufacture its products.

In FY22, Himalayan Organics achieved revenue growth of 37%, increasing from INR 24 Cr in FY21 to INR 33 Cr. 

52. iD Fresh Food

Set up in 2005 by PC Musthafa, Abdul Nazer, Shamsudeen TK, Jafar and Noushad TA, iD Fresh Food offers a slew of ready-to-make food – dosa and idli batter, rice rava idli batter – in India as well as abroad. 

In January 2022, the Bengaluru-based D2C startup raised $68 Mn in its Series D funding round, thereby accumulating a total funding of $104 Mn. 

Currently, it is operating in more than 45 cities across the world such as Mumbai, Bengaluru, Pune, Hyderabad and Dubai, among others.

Its investors include NewQuest Capital Partner, Premji Invest, Sequoia Capital, Helion Ventures and Azim Premji.

53. Innovist

Innovist (formerly known as Onesto Labs), set up in 2018 by Rohit Chawla, Sifat Khurana, and Vimal Bhola, sells personal care products under three brands – Bare Anatomy, Chemist at Play, and SunScoop.

In June 2022, Innovist secured $3.5 Mn in its pre-series A funding round led by Accel Partners and 72 Ventures. Manu Chandra from Sauce.vc, Jani Ventures Inc, CRED founder Kunal Shah and Alok Mittal from Indifi Technologies, among others, also participated in the round. 

In 2021, the startup had raised $2.5 Mn from 72 Ventures, Ramakant Sharma of Livspace, Suhail Sameer of BharatPe, and Sauce.vc. 

The startup mainly sells products via its website and ecommerce marketplaces. It also has an offline presence. 

54. Jimmy’s Cocktails

Founded in 2019 by Ankur Bhatia and Nitin Bhardwaj in 2019, Jimmy’s Cocktail’s is a D2C food and beverage (F&B) brand that sells cocktail mixers, sparkling mixers and barwares. 

The D2C startup has raised $4.81 Mn across multiple rounds till date and is backed by the likes of Parth Ventures and 7Square Ventures as well as angel investors such as Paytm’s Vijay Shekhar Sharma, HDFC Life chairman Keki Mistry, among others. 

It competes with the likes of big players such as PepsiCo, Coca-Cola, Hector Beverages and Red Bull, and operates in the larger Indian non-alcoholic beverages market. 

55. Juicy Chemistry

Set up in 2014 by Megha Asher and Pritesh Asher, clean beauty startup Juicy Chemistry sells organic skin, hair and body care products. 

To manufacture these products, it procures ingredients from organic farmers in 20 countries. It develops these products at its ECOCERT-certified manufacturing unit, where it conducts rigorous quality checks to ensure that everything complies with ECOCERT’s organic standards.

To date, it has raised $7 in funding from a bunch of investors, including Verlinvest, Spring Marketing Capital, and Manoj Lifestyle. 

In November 2022, it launched an organic makeup range viz Color Chemistry. In FY22, it generated INR 29 Cr in revenue and sold nearly 75K products every month. 

In 2023, it aims to open 10 retail outlets and nearly 20 kiosks in major Tier-1 cities. It further aims to enter international markets like the Middle East, the UK and the US by 2025.

56. Kapiva

When the pandemic locked millions of Indians indoors back in 2020, the ancient Indian science of health Ayurveda suddenly turned into the flavour of the season. For Ameve Sharma, Ayurveda was never relegated to the margins. 

Hailing from the iconic 103-year-old Baidyanath family, the INSEAD and New York University-educated scion grew up witnessing how the age-old science helped people from all walks of people. After being inundated with queries from friends about ayurvedic medications, Sharma realised that there was a huge whitespace in the market and he sat down to build Kapiva. 

With more than 100 SKUs in its kitty, Kapiva sells Ayurvedic consumables and products such as juices, Shilajit, hair oil, shampoos, and resins, among others. 

At the heart of Kapiva’s operations is sourcing high-quality raw materials and ensuring global-standard processing. The startup is betting big on raising awareness, scaling product categories and enhancing quality for large-scale adoption. As a result of these, the startup claims to have seen 7.5X growth over the last three years.

Sharma recently told Inc42 that the company achieved revenue of INR 115 cr in the last financial year from its India business, while it is eyeing an annual revenue of INR 850 Cr by FY26 from its consolidated global operations, including India. 

Backed by names such as Vertex Ventures, Fireside Ventures, and 3one4 Capital, Kapiva has so far raised $15.77 Mn across multiple rounds. 

57. Koparo Clean

When the use of chemical-laden sanitisers for groceries and home cleaning saw an uptick during the pandemic, Simran Khara realised that these products could harm kids, pets and even adults.

Responding to the challenge, Khara, who hails from Delhi, launched a range of natural, toxin-free cleaning products under the brand name Koparo Clean in 2020. The D2C brand sells more than 15 products across categories such as core cleaning, speciality cleaning, and accessories.

It claims its products to be free of volatile organic compounds (VOCs), synthetic dyes, ammonia, and parabens, among others. 

Opting for an omnichannel strategy, the company sells the products through ecommerce marketplaces, its website and more than 70 retail stores of Reliance Retail and Modern Bazaar.

The D2C brand recently disclosed plans to grow 8X by mid-2025. It is also looking at expanding its distribution points and introducing products.

In July 2023, the D2C brand raised a Pre-Series A funding of $1.5 Mn led by Saama Capital.

58. Lahori

Lahori, founded in 2017 by Saurabh Munjal, Saurabh Bhutna and Nikhil Doda, sells Indian beverages in four flavours – Zeera (cumin), Nimboo (lemon), Kacha Aam (raw mango) and Shikanji (lemonade) – across India. 

Lahori’s parent company Archian Foods creates approximately 1 Mn bottles in its manufacturing facility that are certified by FSSAI, ISI, HACCP, RoHS and Make In India. 

In January 2022, the Punjab-based startup received its first institutional funding of $15 Mn from Verlinvest for a minority stake in it. 

59. Lenskart 

Founded in 2010 by Peyush Bansal, Amit Chaudhury, and Sumeet Kapahi, Lenskart is an omnichannel eyewear brand. It has nearly 750 retail outlets in more than 175 cities. It claims to serve over 7 Mn customers annually. 

The eyewear unicorn has been on a spree of fundraising this year. In June, it secured a $100 Mn investment from private equity player ChrysCapital. This followed a capital infusion of $500 Mn from the Abu Dhabi Investment Authority for a 10% stake. Overall, Lenskart has raised nearly $850 Mn in the past year.

The unicorn is backed by marquee investors such as Chiratae Ventures, TPG, Premji Invest and Unilazer Ventures, among others.

Lenskart reported a consolidated loss of INR 102.3 Cr in FY22 versus a profit of INR 28.9 Cr in FY21. On the other hand, the startup’s revenue from operations zoomed 66% YoY to INR 1,502.7 Cr in the year ended March 2022, compared to INR 905.3 Cr in FY21.

60. LetsShave

Founded in 2015 by Sidharth Oberoi, LetsShave is a grooming brand that sells shaving kits, trial kits, blades and shaving foams.

The D2C grooming brand supplies razors to high-end hotels and hospitality brands such as Marriott, St. Regis, and Ritz Carlton.

Backed by South Korean razor giant Dorco Korea, LetsShave recently raised an undisclosed amount from its existing investor Wipro Consumer Care. The startup has raised more than $6 Mn till date.

The Chandigarh-based startup has a workforce of 57 employees and caters to clients in the UAE, the US, Canada, the UK, Australia and Europe.

61. Libas

Taking over from his father, Sidhant Keshwani helmed D2C ethnic wear brand Libas’ online foray in 2014. The omnichannel brand sells fast fashion Indian traditional apparels for women across both offline and online channels. 

Since its online entry, the startup has aggressively scaled up operations and clocked a revenue of INR 500 Cr in the financial year 2023-24 (FY24).

The startup emerged out of stealth mode in May 2024 after it raised INR 150 Cr in a strategic funding round from ICICI Ventures. 

62. Licious 

Licious, founded in 2015 by Abhay Hanjura and Vivek Gupta, sells a wide range of meat and seafood products such as mutton, prawns and kebabs. 

In March, the Bengaluru-based unicorn raised $150 Mn from Amansa Capital, Kotak PE, Axis Growth Avenues AIF – I, Nithin and Nikhil Kamath of Zerodha, Aman Gupta from boAt and Haresh Chawla from True North. So far, it has raised a total funding of $488 Mn from investors.

63. Mamaearth 

Mamaearth, founded in 2016 by Ghazal Alagh and Varun Alagh, started as a baby care products brand but later pivoted to become a personal care brand. Its product offerings include haircare, skincare and body care products.

The IPO-bound startup counts Fireside Ventures, Sequoia India, Rishabh Mariwala from Marico and Kunal Bahl and Rohit Bansal from Snapdeal among its investors. It has so far raised $111 Mn in funding across multiple rounds.

64. mCaffeine 

mCaffeine, founded in 2016 by Tarun Sharma, Mohit Jain, Saurabh Singhal, Vikas Lachhwani and Vaishali Gupta, sells a host of caffeine-based skin and hair care products ranging from soaps to scrubs to oil through its website and physical retail outlets.

In March 2022, the D2C startup secured over $31 Mn in its Series C funding round led by Paragon Partners. Singularity Growth Opportunities Fund, Sharrp Ventures, Amicus Capital Partners and RPSG Capital Ventures also participated in the round.

The startup has raised a total funding of $37.5 Mn to date. 

65. Melorra

Founded in 2016 by Saroja Yeramilli, Melorra sells a wide variety of gold jewellery for women via its website and offline stores. It claims to have a presence in 718 districts and over 2,800 towns in the country. 

In May 2022, it raised $16 Mn in its Series D funding round from Axis Growth Avenues AIF-I, SRF Family Office, N+1 and a slew of existing investors. The startup has so far raised a funding of $66.9 Mn.  

Mellora reported an operational revenue of INR 364.4 Cr in FY22, up 4.6X from INR 78.6 Cr during the previous fiscal year. Alongside, losses spiked 73.5% YoY to INR 106.7 Cr in FY22.

66. Minimalist 

Founded in 2020 by Mohit and Rahul Yadav, the Jaipur-based D2C startup sells a host of skin care products ranging from serums to moisturisers to toners. It retails products via its website and ecommerce marketplaces. 

In 2021, Minimalist secured $15 Mn in its Series A funding round led by Sequoia Capital India and Unilever Ventures. A bunch of international investors also participated in the funding round. 

67. Mosaic Wellness

Mosaic Wellness, founded in 2020 by Revant Bhate and Dhyanesh Shah, sells men and women-focused health and wellness products under the brands Manmatters and Bodywise. Both brands offer telemedicine services along with medicines, supplements and other allied products. 

The Mumbai-based D2C startup has built a content community for people to confer about their health and other related subjects. 

In 2021, it secured $24 Mn in its Series A funding round from Sequoia Capital India, Elevation Capital and Matrix Partners India. In total, it has raised a capital of $35.2 Mn to date. 

68. Mylo

Mylo, founded in 2018 by Vinit Garg, started as a community-based platform for new and expecting mothers and gradually turned into a personal care brand. Last year, it pivoted into a personal care startup offering over 100 stock-keeping units of ayurvedic products. 

In April, Mylo secured $17 Mn in its Series B funding round led by W Health Ventures, ITC Ltd and Endiya Partners. Riverwalk Holdings, Alteria Capital and Innoven Capital also participated in the funding round.

The D2C personal care startup has raised a funding of $24 Mn so far. 

69. Nat Habit

Brainchild of Swagatika Das and Gaurav Agarwal, the idea of Nat habit emerged from the difficulties faced by the duo while procuring authentic ayurvedic products.

In 2019, the two founded Nat Habit, a beauty and personal care brand that sells a slew of offerings made from fresh and natural ingredients. Its product range includes products such as hair oils, masks, scrubs and face creams.

The startup was featured in the 2024 edition of Inc42’s coveted FAST42 list, which collates India’s emerging and top D2C brands. 

Nat Habit claims to have clocked a revenue growth in excess of 150% YoY in FY23 and has more than 250 SKUs. Nat Habit last raised $10.2 Mn in a Series B round in December 2023. It also secured $4 Mn in its Series A round led by Fireside Ventures in 2022.

Backed by Peak XV Partners and Bertelsmann India Investments, it competes with Plum and Mamaearth in the BPC category. 

70. Neemans

Founded in 2018 by Taran Chhabra and Amar Preet Singh, Neemans aims to upend the Indian shoe industry with natural, renewable, recycled and biodegradable fibres in its shoes. 

The company claims that its products have a considerably lower carbon footprint and lower impact on the water table compared to conventional products, which are dominated by synthetic fibres.

The startup has so far raised $9.8 Mn in funding and is backed by names such as Anicut Capital and Sixth Sense Ventures. With more than 3 Lakh users under its belt, the omnichannel brand prices its products anywhere between INR 2,999 and INR 6,999.

Earlier this year, the company also ventured into the apparel industry with the launch of its collection of clothes. 

The Hyderabad-based startup locks horns with the likes of international giants in the shoe industry such as Skechers, Nike, Adidas, Reebok, Puma, AJIo, among others.

71. Nestasia

Home decor brand Nestasia is the brainchild of Anurag Agarwal and Aditi Murarka Agarwal, whose passion for decorating and designing homes spawned the rise of the startup in 2019.

The D2C brand sells a range of home decor products such as crockery garden accessories, and kitchen utilities, among others. Unlike other marketplaces, which connect buyers and sellers, Nestasia operates a full-fledged D2C business that buys products from Indian artisans and then sells them directly to customers.

The startup last raised $4 Mn as part of its Series A funding round in December 2021, which saw participation from Stellaris Venture Partners, Mamaearth’s Varun Alagh, Delhivery’s Sahil Barua, and Livspace’s Anuj Srivastava and Ramakant Sharma, among others. 

The D2C brand currently lists more than 6,000 products across eight key product categories and has so far fulfilled more than 1 Lakh orders. 

72. Noise

Founded in 2014 by Amit Khatri & Gaurav Khatri, Noise is a smart wearable and wireless headphones brand. It sells products on its website and ecommerce marketplaces such as Amazon and Flipkart. 

The bootstrapped startup reported a 8% year-on-year (YoY) rise in net profit to INR 35.5 Cr in the financial year 2021-22 (FY22) against a total income of INR 804.9 Cr during the same period, up over 2.2X YoY.

73. Nua 

Founded in 2017 by Ravi Ramachandran, Nua is a women-focused wellness brand. Its offerings include sanitary pads, skin care and intimate hygiene products. 

So far, it has raised $12.5 Mn in aggregate from the last four funding rounds. Its cap table includes Lightbox VC, Kae Capital and actor Deepika Padukone, among others. 

It claims to have served more than 5 Mn customers so far. It further asserts to have 10 SKUs and witnessing 50% of its customer base revisiting its website.

74. NutriGlow

Set up in 2011 by Aditi Suneja and Ashish Aggarwal, Nutriglow sells men and women-focused haircare, skincare, body care and make-up products via its website and ecommerce platforms. 

The Noida-based direct-to-consumer (D2C) startup claims that its beauty products have natural and certified organic ingredients and vegan-friendly and paraben-free formulations.

In June 2022, it secured an undisclosed amount of funding from ecommerce rollup GOAT Brand Labs for developing its infra and research and development (R&D). 

75. Organic Harvest

Founded in 2013 by Rahul Agarwal, Organic Harvest is an organic personal care brand that offers plant-based skincare, haircare, body care products and essential oils via online and offline channels.

According to its website, It claims to use ingredients and raw materials that are approved by international organisations – EcoCert, OneCert, and Natrue.  

At the beginning of 2022, it received a capital infusion of INR 75 Cr from Good Glamm Group in exchange for a majority equity. In March 2023, it was reported that the content-to-commerce unicorn was all set to buy out the entire 100% stake in Organic Harvest and would give an exit to the D2C brand’s founders by the end of next year.

It said that it operated 25K retail outlets as of October 2022 and looked to increase the number of its retail outlets to 1 Lakh by 2024.

76. Perfora

Jatan Bawa and Tushar Khurana crossed paths during the Jagriti Yatra, a two-week long entrepreneurship train journey, in 2016. With a wealth of experience garnered from startups such as OYO, Cure Fit, and Vahdam Teas, the two found common ground during the journey and eventually conceived the idea for an oral care brand, Perfora, in 2021.

Perfora offering a diverse range of oral care products, including electric toothbrushes, toothpaste, mouthwashes, flossers, teeth whitening products, and more.

This direct-to-consumer (D2C) oral care brand distributes its products through its official website and various e-commerce platforms like Amazon, Flipkart, Nykaa, Blinkit, and others. Since its incorporation, Perfora boasts of serving over 2 Lakh customers.

Backed by notable investors such as RPSG Capital Ventures, Sauce.VC, Lotus Herbals Family Office, Huddle, and others, Gurugram-based Perfora has successfully raised a total of $3.7 Mn in funding through multiple rounds.

77. Pilgrim

After a combined experience of over two decades in the beauty and wellness industry, Anurag Kedia joined forces with fellow IIT Bombay alumni, Gagandeep Makker, to embark on an entrepreneurial journey.

At the core of their mission was the vision to craft vegan, cruelty-free, and toxin-free beauty products that would be accessible to the Indian market at affordable prices.

Together, they established Pilgrim in 2019. This D2C beauty brand distinguishes itself through the use of carefully sourced ingredients from around the world, spanning from South Korea to France. Pilgrim’s product range comprises items like hair growth serums, night serums, day creams, night gel creams, facial masks, and more.

With a portfolio of over 90 SKUs, Pilgrim earned recognition as one of the fastest-growing D2C brands, earning a place on the 2022 edition of Inc42’s FAST42 list. Pilgrim claims to have served more than 50 Lakh customers and add over 5 Lakh new customers every month.

Supported by prominent investors such as Fireside Ventures, Temasek, and Rukam Capital, Pilgrim has successfully secured nearly INR 214 crore in funding to date.

78. Pluckk

Incorporated in 2021 by Pratik Gupta, Pluckk is a D2C fruit and vegetable brand, which distinguishes itself by offering users a diverse selection of over 400 products spanning 15+ categories. These offerings include salads, dips, juices, cuts, mixes, and exotic fruits and vegetables.

Currently, Pluckk operates in major cities such as Mumbai, Delhi, Bengaluru, and Pune. It has plans to extend its presence to more cities in the coming years. The brand distributes its products through its dedicated app, website, and quick commerce platforms like Amazon, Swiggy, Dunzo, Zepto, and Reliance Signature Stores. 

In early 2023, Pluckk secured $5 Mn in seed funding from Exponentia Ventures. It has also secured an undisclosed amount of funding from actor Kareena Kapoor Khan.

79. Plum

Founded in 2013 by Shankar Prasad, Plum sells a wide variety of beauty products in skin care, hair care, personal care and makeup categories via its website and ecommerce marketplaces. It claims to operate nearly 1,500 assisted retail outlets and over 15,000 unassisted outlets throughout India.

In March 2022, the D2C beauty brand secured $35 Mn in its Series C funding round from A91 Partners, Unilever Ventures and Faering Capital. 

The startup generated revenue to the tune of INR 250 Cr in FY22 and has set its eyes on doubling its revenues in FY23 to INR 500 Cr. 

80. Power Gummies 

Founded in March 2018 by Divij Bajaj, nutraceutical startup Power Gummies sells flavoured and chewable vitamins for hair, nail and skin problems. Its products are gluten-free and certified by the Food Safety and Standards Authority of India (FSSAI).

Its revenue soared by over 6X to INR 54 Cr in FY22 as compared to INR 8.8 Cr a year ago. So far, it has sold over 40 Lakh products to more than 10 Lakh customers.

It plans to launch 40+ SKUs in the next five years, including a dedicated range for kids. It also looks to ramp up its presence in the UK and other international markets and build more manufacturing facilities to regulate production, daily operations and logistics.

To date, the startup has raised a total of INR $12.9 Mn in funding. Power Gummies’ cap table includes 9Unicorns, Venture Catalysts, DSG Consumer Partners, Wipro Consumer Care Ventures, and Sharpp Ventures.

81. Rage Coffee

Founded in 2018 by Bharat Sethi, Rage Coffee sells a host of coffee-based products across India. Certified by FDA, FSSAI and ISO, Rage Coffee claims to have so far served more than 7.5 Lakh customers and has 18 SKUs in its kitty.

In March, this Delhi-based food and beverage D2C brand received an undisclosed investment from Indian cricketer Virat Kohli. Prior to that, it secured nearly $5 Mn in its Series A funding round. 

In total, it has raised $7 Mn in capital from marquee names such as Sixth Sense Ventures, 9Unicorns, Refex Capital and Keiretsu Forum Chenna. 

Rage Coffee logged revenues of INR 23.5 Cr in FY22 and is targeting a revenue of INR 92 Cr by FY23-end. Earlier, it had also underlined plans to double down on its physical presence and scale its number of outlets to 10,000 by March 2023. 

82. Revour Consumers

Revour Consumers was founded in 2019 by Jaideep Singh Gaur and Ranjit Singh and specialises in selling kitchen and home-based electrical appliances. 

The startup partners with various OEMs to produce consumer electronics, including light bulbs, electric kettles, fans, and irons. 

Revour Consumer clocked a  revenue of INR 17.5 Cr FY22 and has so far served more than 30 Lakh customers across the length and breadth of the country. 

The startup has so far raised $1 Mn in funding and counts Oriano Clean Energy as its key investor. Going forward, the D2C brand plans to deepen its focus on consumer electronics and intends to introduce new product lines.

83. Sanfe

Founded in 2018 by Archit Aggarwal and Harry Sehrawat, Sanfe is a D2C femtech brand that started with the vision of addressing the stigma around women’s health and hygiene. After debuting with a roll-on to tackle period pain, the brand has now forayed into the beauty segment. 

In addition to sanitary and hygiene products, the company sells skin and hair products. The company claims to have catered to more than 10 Mn customers and sold 28 Mn-plus products by the end of FY21. 

Targeting Gen-Z and millennials, the company sells its products through its website and other ecommerce marketplaces. Backed by S Chand Family Office, Seeders and Lets Venture,  the D2C brand has raised $4.5 Mn in funding since its inception. 

84. Slurrp Farms

A dearth of healthy snacking options in the market for their kids brought two mothers —   Meghana Narayan and Shauravi Malik — to the discussion table. The duo found a big gap staring right at them in the kids’ snacks market. 

To fill in this gap, they founded Slurrp Farm in October 2016. The D2C brand sells a range of healthy products from ready-to-mix pancakes and dosas to noodles and pastas.

Slurrp Farms, which sells its products via its website and ecommerce marketplaces, caters to users in countries such as the UAE, the US, and the UK, apart from India.

Backed by the likes of the Investment Corporation of Dubai, Fireside Ventures and actor Anushka Sharma, Slurrp Farms has so far lapped up a total of around $9 Mn in funding. 

Building on its current growth momentum, the D2C snacks brand is eyeing a revenue of INR 500 Cr by 2025.

85. Snitch

Founded in 2019 by Siddharth R Dungarwal, Snitch started off as an retail fashion brand but later pivoted to the online channel as Covid-19 pandemic swept through the world.

Snitch is a men’s fast fashion brand that sells products such as Shirts, T-Shirts, Jeans, Trousers, among others. Featured on the second season of popular TV show Shark Tank India, the company last raised INR 110 Cr in Series A funding from SWC Global, and IvyCap Ventures, among others.

The company sells its offerings through its website and app, as well as other major online marketplaces.

It competes with names like XYXX, DaMENSCH, Chromozome, BlissClub, Freecultr, Bombay Shirt Company among others.

with Plum and Mamaearth in the BPC category. 

86. SoleThreads

Founded in 2020 by Gaurav Chopra, Sumant Kakaria, Aprajit Kathuria and Vikram Iyer, Solethreads manufactures footwear products. 

The company sells its products through both its own website as well as ecommerce platforms. Solethreads has raised INR 57 Cr in funding to date and is backed by names such as Fireside Ventures, DSG Consumer Partners and Saama Capital. 

It competes with the likes of Flatheads, Bacca Bucci, Yoho, among others.

87. Soothe Healthcare

Set up in 2012 by Sahil Dharia, Soothe Healthcare sells sanitary napkin products and baby diapers under the brand Paree and Super Cute, respectively. It retails its products through various distribution channels including direct selling and selling through intermediaries.

In October 2022, Soothe Healthcare secured INR 175 Cr as part of a strategic funding round from the US International Development Finance Corporation (DFC) and other existing investors. With the funding round, the startup’s cumulative fundraise reached INR 301 Cr. 

Symphony International Holdings, Sixth Sense Ventures and badminton player Saina Nehwal are among its investors. 

88. SUGAR Cosmetics

SUGAR Cosmetics, founded in 2015 by Vineeta Singh and Kaushik Mukherjee, is an omnichannel D2C brand that sells products in lips, skin, eyes and nail care categories. It claims to operate more than 45,000 multi-brand stores spread across 500+ cities in the country. The D2C brand also has 125+ exclusive outlets in its kitty.

In May, the Mumbai-based D2C brand closed its $50 Mn Series D fundraising round led by L Catterton’s Asia fund. Existing investors A91 Partners, Elevation Capital and India Quotient also participated in the funding round.

The startup has so far raised a cumulative funding of $87.5 Mn from investors.

In the financial year 2021-22 (FY22), it widened its loss to INR 75 Cr, while revenue from operations stood at INR 221.1 Cr during the same period.

89. Super Bottoms

Pallavi Utagi’s tryst with entrepreneurship started when she, as a new mom, struggled to find quality diapers for her newborn baby. While conventional cloth diapers had absorbency issues, synthetic nappies left her baby with rashes.

Realising that there was a huge gap in the space, Utagi leveraged her years of research experience in the pharma space to launch her new venture Superbottoms – an eco-friendly and baby skin-friendly nappy brand – in 2016.

SuperBottoms’s range of products includes cotton ‘langots’, potty training pants, and kid’s clothing, among more.

In August 2023, the D2C brand secured $5 Mn as part of its Series A1 funding round led by Lok Capital and Sharrp Ventures. SuperBottoms is also backed by DSG Consumer Partners and Saama Capital.

The startup retails its products via its website as well as Amazon and Flipkart. Leveraging its online presence, SuperBottoms doubled its revenues YoY to INR 40 Cr in the fiscal year ended March 2022.

90. Sweet Karam Coffee

Brainchild of Anand Bharadwaj, Nalini Parthiban, Srivatsan Sundararaman and Veera Raghavan, Sweet Karam Coffee sells preservative-free South Indian sweets and snacks. Its range of offerings also includes the ubiquitous filter coffee and ready meal mixes, catering to audiences across the country.

Founded in 2015, the D2C brand aims to solve the problem of poor availability and accessibility of well-packaged traditional sweets and snacks, which are free from palm oil.

The brand SKC sells its products via its website and app and has customers in more than 32 countries. SKC competes with the likes of new-age startups such as id Fresh Food, DropKaffe, Chaayos, TagZ, among others.

Backed by Fireside Ventures, the startup picked up $1.5 Mn funding in October 2023. 

91. TagZ

The D2C snack brand came into the limelight after featuring in the maiden season of the TV show Shark Tank India and has not looked back since then. Founded in 2019 by Anish Basu Roy and Sagar Bhalotia, the company sells popped chips, which are neither baked nor fried.

The idea came from Roy’s experiences during his international travels, which pushed him to tinker around in the healthy snacks category. 

From the cricketer Shikhar Dhawan to 9 Unicorns, the backers of TagZ have pumped in over $4.2 Mn in the startup to date. The growth has also seen an uptick as the D2C brand claims to have logged a 30X increase in volumes in the past 18 months, ending May 2023. 

Retailed through 5,000 stores across 22 cities and via quick commerce platforms, TagZ also sells its products overseas in markets such as Kuwait, Dubai, Maldives and Australia.

92. Tailor And Circus

Back in 2016, Vasanth Sampath, Gaurav Durasamy and Abishek Elango came together to explore the idea of making antimicrobial, self-cleaning underwear for astronauts. In the subsequent months of research, they found that the homegrown men’s and women’s undergarment segment was plagued by basic issues such as lack of comfort and style.

After much deliberations, the idea of Tailor and Circus took shape and the startup was launched in 2016. The D2C brand manufactures underwear for both men and women, offering products such as trunks, bralettes and maternity undies. The startup also sells tops for both men and women and allows users to customise their products and build a matching underwear cart. 

The startup last raised seed funding of $241K from multiple angel and institutional investors in April 2021. It competes with the likes of homegrown brands such as Freecultr, XYXX, and DaMensch, among others.

The startup sells its products on marketplaces such as Amazon India and Myntra and through its own website. 

93. TenderCuts

Founded in 2016 by Nishanth Chandran, TenderCuts sells a wide variety of meat and seafood products such as chicken, mutton, eggs and frozen food products via its website and offline stores.

The startup last raised INR 110 Cr in a round led by Paragon Partners in February 2021. To date, it has raised $29.1 Mn in funding from marquee names such as Stride Ventures and Nabventures. 

In August 2023, the D2C meat delivery brand was acquired by omnichannel meat brand Good To Go in what appeared to be a distress sale for an undisclosed amount.

94. The Ayurveda Co. (T.A.C)

Founded in 2021 by Param Bhargava and Shreedha Singh, The Ayurveda Company manufactures and retails products across multiple categories such as haircare, wellness, skincare, immunity boosters and health supplements.

Opting for an omnichannel strategy, its 5,000 physical touchpoints traverse 18 cities across 15 Indian states, including Delhi NCR, Uttar Pradesh, Punjab and Rajasthan. The startup is targeting to grow these retail points to more than 20,000 by FY25.

In March 2023, the D2C ayurvedic beauty and personal care brand raised INR 100 Cr in a Series A funding round led by consumer-centric venture fund Sixth Sense Ventures. 

Since its inception, T.A.C has raised $16 Mn in funding, across debt and equity, from marquee names such as Sixth Sense Ventures, Wipro Consumer Care Ventures and Vector NXG. 

95. The Beauty Co

Founded in 2018 by Suraj Raj Vazirani, The Beauty Co is a D2C personal care startup, which sells toxin-free body care, haircare, skincare and essential oils via its website and ecommerce marketplace such as Nykaa, Myntra, Amazon, Flipkart, Paytm Mall, BigBasket and Snapdeal.

The startup’s founder claims that at least 99% of the ingredients used in The Beauty Co’s products are natural. It operated more than 40 stock keeping units as of 2022.

96. The Divine Foods

Founded in 2019 by Kiru Maikkapillai, The Divine Foods is a D2C superfoods brand that sells packaged products centred on Indian kitchen staples such as turmeric, moringa, millet, and others. 

Its products primarily encompass four categories, including women care, immunity boosters, diabetic care and kids. The D2C brand’s range of offerings include skincare products, mil mixes, powdered superfoods, and spreads.

Incubated under the Tamil Nadu government’s flagship seed funding scheme, TANSEED 4.0, the startup counts names such as superstar Nayanthara and her husband-director Vignesh Shivan as its investors. The Chennai-based D2C brand secured an undisclosed amount of funding from the celebrity duo in October 2023.

The startup claims to have so far served more than 25,000 customers and is available in five nations across the globe. 

97. The Moms Co

The Moms Co, founded in 2016 by Malika Sadani, sells organic products for expecting mothers and babies in the face, hair, pregnancy, and body care categories. It claims to have catered to more than a million customers since its inception. 

In 2021, the Delhi-based D2C brand was acquired by beauty unicorn Good Glamm Group. In March 2022, Inc42 reported that Good Glamm Group had increased its stake in The Moms Co to 90% from 75%.

At the end of September 2022, the brand claims to have had an offline presence in 5,000 retail outlets spanning 20,000 pin codes across the country.

98. The Pant Project

The Pant Project was founded by siblings Dhruv and Udit Toshniwal and offers customised bottom wear for both men and women, with free alterations and monogramming services provided to customers. 

Its products are primarily sold through its website and other e-commerce marketplaces, including Amazon.

In the fiscal year 2021-2022 (FY22), The Pant Project reported a revenue of INR 7.3 Cr, a significant increase compared to the INR 1 Cr earned in the previous fiscal year FY21.

99. The Sleep Company

The story of The Sleep Company starts with a baby. After taking care of their newborn at odd hours, entrepreneur couple Priyanka Salot and Harshil Salot were left aghast when their multiple attempts to buy a new mattress met a dead end. 

Realising the prevailing gaps in the sleep market, especially the lack of innovation, the duo decided to start their own venture and that’s how The Sleep Company was born. 

Since the startup’s inception in 2019, the Salots have scaled up the platform, grabbing the interest of multiple investors, including Fireside Ventures, Premji Invests and Alteria Capital.

The Sleep Company has so far raised INR 190 Cr and is eyeing to create an INR 1,000 Cr brand. With two state-of-the-art manufacturing facilities in Maharashtra and Karnataka, the D2C brand claims to produce 1.2 Lakh mattresses daily. 

The Sleep Company clocked a revenue of INR 58 Cr in FY22 and plans to open more than 100 stores across the country by March 2024. 

100. The Souled Store

Founded in 2013 by Vedang Patel, Harsh Lal, Aditya Sharma and Rohin Samtaney, The Souled Store is a casual wear and pop-culture D2C startup. It is said to have over 180 licences–Disney, Warner Bros, WWE, and Viacom18, to name a few. 

The omnichannel lifestyle brand recently raised INR 135 Cr in a strategic funding round led by Xponentia Capital. To date, the company has raised a total of INR 220 Cr from multiple investors.

Its cap table includes Elevation Capital, Sahil Barua from Delhivery, Gunjan Soni from Zalora, Revant Bhate from Mosaic Wellness and Ramakant Sharma from Livspace, among others. Its product offerings include top wear, bottom wear, innerwear and activewear.

101. The Woman’s Company

The moment Anika Parashar’s daughter hit puberty, she was gripped by questions about which feminine products were good enough. While researching, Parashar found that there was a huge gap in the market for female hygiene products, and it was this epiphany that set the ball rolling for her new venture, The Woman’s Company. 

After working as the COO of Fortis La Femme Hospitals for decades, she founded the startup in 2020, along with Roopam Gupta. The D2C brand operates in the women’s hygiene space and sells products such as sanitary pads, tampons, menstrual cups, and bamboo razors, among others. 

The D2C startup last raised $1.4 Mn in 2021 from marquee names such as Pradip Burman of Dabur. 

The startup sells its products through its website and marketplaces such as Amazon, Flipkart, and Nykaa, among others. 

102. True Elements

Founded in 2013 by Puru Gupta and Sreejith Moolayil, True Elements is an omnichannel brand that sells millet, grains, and seeds-based breakfast and snack foods. 

Apart from its own website and ecommerce platforms, it also retails its products at brick-and-mortar stores. Backed by the likes of Marico and Maharashtra State Social Venture Fund, the startup has raised $2 Mn in funding till date. 

In 2022, FMCG major Marico acquired a 53.98% stake in the Bengaluru-based startup’s parent HW Wellness Solutions for an undisclosed amount.

103. Vahdam Teas

Vahdam, founded in 2015 by Bala Sarda, is an online tea brand. It sells its products in domestic as well as international markets.

In September 2021, Vahdam reportedly secured INR 174 Cr in its Series D round led by IIFL AMC’s PE Fund. After the round, the startup claimed that it had raised INR 290 Cr in total funding from investors.

In FY22, it clocked a revenue of over INR 200 Cr, up from INR 161 Cr in FY21. However, the D2C brand slipped into the red as it reported a loss of INR 16 Cr in FY22 against a profit of INR 1.94 Cr in profit in FY21.

The startup aims to clock a net revenue of INR 500 Cr by 2024.

104. Voylla  

Voylla, founded in 2011 by Vishwas Shringi, is an online artificial and silver jewellery brand. It sells jewellery and other allied products through its website and ecommerce marketplaces. 

In 2021, Voylla was acquired by Thrasio-style D2C aggregator GOAT Brand Labs. Besides Voylla, GOAT Brand Labs also acquired 14 other brands, including Label Life, trueBrowns & Abhishti, Frangipani, Neemli and Nutriglow, among others.

Prior to the acquisition, Voylla had raised a total of $16.9 Mn funding in Series B and Series A funding rounds. Its cap table includes Peepul Capital, Snow Leopard Technology Ventures and a slew of other angel investors.

105. Wakefit 

Founded in 2016 by Ankit Garg and Chaitanya Ramalingegowda, Wakefit sells a host of sleep and home decor products such as mattresses, pillows, bed frames, comforters, and back cushions, among others. It sells these products via its website and ecommerce marketplaces.

The Bengaluru-based startup manufactures products at its facilities in Bengaluru, Jodhpur and Delhi. In FY23, the startup launched 22 physical stores across 15 cities in the country. The brand clocked a revenue of INR 825 Cr in FY23 and is eyeing a revenue of INR 1,000 Cr by FY24. 

Wakefit has raised a total funding of $145 Mn so far. Its cap table includes Sequoia Capital, Verlinvest and SIG. 

106. Wellbeing Nutrition

An avid runner, Avnish Chhabria used to rue the lack of homegrown options for organic and plant-based nutritional supplements in India, which were necessary for him to stay at the top of his game. 

His dependence on global brands ignited the idea of building a desi plant-based vitamin and mineral supplements brand. With an eye on offering a better-priced alternative to a majority of Indians who could not afford to import plant-based supplements, Chhabria founded Wellbeing Nutrition at the fag end of 2019. 

Since then, it has rapidly scaled operations. It currently offers more than 53 SKUs and deploys an omnichannel strategy to woo customers. The brand manufactures plant-based vitamin and mineral supplements in the form of capsules, oral strips, and effervescents, among others. 

The startup partners with a global team of gastroenterologists to nutritionists to build its line of products. Besides, it sources its raw materials from more than 200 organic farms and certified companies from across 19 countries.

Its multi-pronged omnichannel strategy helped it clock a revenue of INR 19.5 Cr in FY22. The Mumbai-based D2C brand is eyeing 100 Mn customers and INR 100 Cr revenue in 2023. It plans to foray into the US, the UK and the UAE by 2025. 

Backed by the likes of Hindustan Unilever Limited (HUL) and Fireside Ventures, Wellbeing Nutrition has so far raised $10Mn from multiple investors. Last year, HUL acquired a 19.8% equity in the startup.

107. Wellversed 

Founded in 2018 by Aanan Khurma, Aditya Seth and Ripunjay Chachan, Wellversed is a health and wellness brand. Its products are sold via its website and ecommerce marketplaces.

On an acquisition spree, the umbrella brand has acquired three startups – Sportfit, Rimoy Naturals and Ketofy – in the past four years to strengthen its house of brands. It claims to have offered over 12K health plans for weight loss, skin nourishment and other ailments to customers. 

It has raised a total of $3.2 Mn in funding from investors such as Jubilant Foodworks, Yuvraj Singh, KLUB Works and Velocity.

In the financial year 2021, it reported earnings from operations at INR 20 Cr.

108. Wingreens Farms 

Founded in 2011 by Anju Srivastava and Arun Srivastava, Wingreens Farms sells packaged food products such as sauces and spreads, spice mixes, breakfast cereals, non-dairy milk, and protein shakes, among others. It sells these products via its website and offline distribution network in more than 200 Indian cities.

In May 2022, the D2C food brand acquired Postcard’s parent company Dharmya Business Ventures for about $2.1 Mn in a cash and share swap deal.

In December 2021, it raised $17 Mn in its Series C funding round led by Investcorp. Subsequently, it also reportedly bagged INR 22 Cr in funding from Anicut Capital. So far, it has secured a total funding of $49.8 Mn from investors. 

109. WishCare

Founded in 2019 by Stuti Kothari, Ankit Kothari and Ayush Kothari, WishCare is a sustainable beauty care brand that sells a range of sustainable skincare and haircare products.

WishCare’s portfolio spans products such as hair treatments, hair growth serums, face serums, and body lotions. The company claims that its products are formulated with clinically proven ingredients.

The D2C brand sells its products through its own website as well as more than 15 ecommerce platforms such as Nykaa, Amazon, and Flipkart, among others. It currently claims to serve more than 10 Lakh customers. 

WishCare recently secured INR 20 Cr ($2.4 Mn) in its first round of funding from Unilever Ventures. 

110. Wonderchef 

Wonderchef, founded in 2009 by Ravi Saxena and celebrity chef Sanjeev Kapoor, offers cookware, kitchen appliances, bakeware, and other allied culinary tools. It claims to operate 22 exclusive retail outlets and has served over 3 Cr customers so far.

In 2021, it secured INR 150 Cr in a funding round led by Sixth Sense Ventures. Godrej Family Office, Malpani Group, and other high-net-worth individuals also participated in the funding round.

It claims to have over 500 SKUs and a presence in India, the US, the UK, Australia, and Canada, among others. It is looking to increase the count of its exclusive outlets to 100 by 2025.

111. Wooden Street 

Wooden Street, founded in 2015 by Lokendra Ranawat, Dinesh Pratap Singh, Virendra Ranawat and Vikas Baheti, sells furniture and home decor products such as modular furniture, kitchen and wardrobe, lighting and office furniture, among others, via its website.

It operates over 100 experience stores and 30+ warehouses across the length and breadth of the country. With 30,000 home furniture products in its kitty, the D2C brand claims to have served more than 15 Lakh customers in more than 300 Indian cities. It has several manufacturing facilities and R&D units in the country.

In April 2022, it secured around $30 Mn in its Series B funding round led by Westbridge Capital. Wooden Street then claimed that it grew its business 100% year-on-year over the previous three years, and aimed to attain a turnover of INR 600 Cr in the next two years. 

112. Wow Skin Science

Founded in 2014 by Manish Chowdhary and Karan Chowdhary, WOW Skin Science is a beauty and personal care brand. It sells a host of skincare, haircare, body care and nutraceutical products via its website. It claims to have 400 SKUs and has a presence in 30,000 general trade stores across the country.

In June 2022, the Bengaluru-based D2C skincare brand secured $48.02 Mn from Singapore-based GIC at a post-money valuation of $280 Mn. Prior to that, it raised $50 Mn from ChrysCapital.

In the financial year 2021-22, it reported losses of INR 135.83 Cr while its revenues grew 3.4X YoY to INR 343.94 Cr.

113. XYXX

Founded in 2017, XYXX is a D2C menswear brand that sells a range of products across categories such as underwear, loungewear and athleisure. It is also the brainchild of Yogesh Kabra. 

What works in favour of the brand is its fashionable touch and skin-friendly fabrics that it claims is suitable for India’s humid climate. The idea germinated after Kabra realised that there was a big gap in the Indian men’s innerwear market, which suffered across the board from style to comfort. 

Leaving aside his father’s textile business, Kabra jumped into the fray and pursued his entrepreneurial talent, the result of which is XYXX. 

The D2C brand has also seen a warm response from investors. It recently bagged INR 110 Cr as part of its Series C funding round led by Amazon Smbhav Venture Fund. Since its inception, the startup has raised INR 390 Cr in multiple rounds of funding. 

With 1,000-plus SKUs, XYXX sells its products online on 14 ecommerce platforms as well as its website. It also claims to operate multi-brand outlets (MBOs) and exclusive brand outlets (EBOs) across more than 18,000 touchpoints in 150+ Indian cities. The startup closed FY22 with a revenue of INR 57 Cr.

114. Zappfresh

Founded in 2015 by Deepanshu Manchanda and Shruti Gochhwal, ZappFresh is a Gurugram-based D2C meat delivery startup. The startup grew in prominence as customers preferred online avenues to order their meat as pandemic locked people indoors. 

Backed by names such as SIDBI Venture Capital, Dabur Family Office, LetsVenture and Keiretsu Forum, ZappFresh has so far raised $7.9 Mn in funding. The startup recently acquired Dr. Meat for an undisclosed amount to mark its foray into Bengaluru. 

Banking on its growth numbers, Zappfresh is targeting INR 300 Cr in overall revenue by end of FY24 as it eyes deeper penetration in Southern India. It competes with the likes of players such as Licious as well as quick commerce players such as Swiggy Instamart, and Blinikit, among others.

115. Zivame 

Zivame, founded in 2011 by Richa Kar and Kapil Karekar, sells lingerie, activewear, shapewear and sleepwear via its website and offline retail stores. 

The startup had earlier claimed that nearly 42% of its sales come from Tier-2 and 3 cities in India. 

In 2020, Reliance Brands acquired a 15% stake in Zivame. Following this, the conglomerate also announced the acquisition of an 89% stake in the lingerie brand for a consideration of INR 950 Cr last year.

Zivame claims to have built an offline presence in more than 30 retail stores and more than 800 partner stores across the country.

This is a running article, we will keep adding more names to the list.

Last Updated:  June 12, 2024. The listicle has been updated to add three new brands.

The post 115 D2C Brands That Are Disrupting India’s Consumer Market appeared first on Inc42 Media.

At a recent event in Bengaluru, the former CEO of NITI Aayog and current G20 Sherpa for India, Amitabh Kant, highlighted the potential of the Bengaluru-Mysore belt in Karnataka by stating that it could become the epicentre of the country’s semiconductor industry.

Kant said the region’s abundant minerals, water resources, and reliable electricity supply make it an ideal location for chip manufacturing and a global hub for semiconductor design.

While Kant was extremely optimistic about India’s semiconductor story, he said that one of the most critical steps for this industry would be semiconductor productisation, which essentially refers to transforming technical capabilities into tangible semiconductor products.

Interestingly, what seems to be shaping Kant’s perspective is the rising demand for electronic devices and the global search for alternative semiconductor hubs, beyond China, to fill this gap and meet worldwide chip demand.

It is imperative to mention that the country’s semiconductor industry, as per an Inc42 report, is expected to grow at a 24% CAGR to reach $150 Bn by 2030 from $33 Bn in 2023. 

Moving on, given that Kant advises the Indian government on multiple policies and policy changes and has been extremely vocal about the developments and gaps in the Indian technology landscape, we tried to understand from him where the nation’s tech startup ecosystem is headed.

In a written response to Inc42’s queries, the former secretary of the Department of Industrial Policy & Promotion (now DPIIT) gave insights into the country’s burgeoning tech startup landscape and the government policies backing it. 

He also called for patient capital from banks, pension funds, sovereign wealth funds, and insurance firms to ensure domestic funds support the Indian startup movement.

Talking about the country’s EV30@30 vision, which aims for 30% of all vehicles to be electric by 2030, the bureaucrat sought consistency in the FAME scheme. 

From the need for government subsidies for the Indian EV ecosystem to the importance of domestic manufacturing of batteries, the roadmap for India’s growth policy in the next five years, and need for better corporate governance in startups, Kant said it all during the interview.

Here are the edited excerpts…

Inc42: What will policy changes look like in the next five years for the tech startup ecosystem after the new government takes over?

Amitabh Kant: In my view, the next five years will be the defining years for Indian startups and the digital economy, with some of the biggest startups set to go for public listings and AI changing the product and market dynamics. 

Next-generation technologies like AI, quantum computing, cybersecurity, drone technology, remote sensing, biotech and genomics, semiconductors, AR & VR, and web3 will redefine India. 

The country will also be redefined by the implementation of responsible AI in the healthcare and retail sectors, ensuring data security and privacy through the enactment of the Digital Personal Data Protection (DPDP) Act.

The country will have to ensure 100% penetration of the BharatNet Program and fibre network across all the villages and gram panchayats in the next two to three years.

Drone technology will be pushed big time in the next five years under the ‘Make in India’ initiative.

Inc42: As India aims for significant growth in next-generation technologies, is the lack of skills an issue? Are there enough skilled professionals in the country? How do skilled people prepare for AI, ML, and other Industry 4.0 technologies?

Amitabh Kant: Skill development is a key focus for India as the country has more than 50% of its population below the age of 25 and more than 65% below the age of 35. The average age of an Indian is 29 years, compared to 37 in China and 48 in Japan. 

Hence, it is critical to ensure the right skill development of youth so that they are absorbed in the skilled and semi-skilled workforce. Also, promoting degree apprenticeship will be key to employability.

In the semiconductor space, the nodal agency Indian Semiconductor Mission (ISM) will have to be equipped with the right workforce and expertise as they will play a pivotal role in the development of the country’s semiconductor ecosystem. 

Secondly, the requirement for software engineers who have expertise in the semiconductors and automotive sectors will grow.

As the top 500 corporates would need over a million AI/ML experts and data scientists, all skilled professionals will have to keep themselves updated with the latest technology in cybersecurity, AI-ML through certifications, short-term courses, etc.

Inc42: What is your take on India’s EV policy? Will FAME-III come into the picture? If yes, why is it important and what should it entail? Are subsidies still necessary for the sector?

Amitabh Kant: In FY24, EVs accounted for only 5% of the total vehicle sales in the country. If we want to achieve the EV30@30 vision, we have to ensure FAME-III policy consistency.

The INR 10,000 Cr subsidy under FAME-II pushed the EV sales growth. Hence, there is a need to continue subsidies and incentives under FAME-III, with a focus on public transport and charging infra for the next five years.

The EV sector needs the government’s support till 2030 to bring price parity and mitigate the upfront cost barrier of EVs. 

Additionally, the private sector must understand that post-2030, there will be no further support from the government. This will help the ecosystem grow gradually, adapt to future challenges, and make India an export hub for EVs.

Meanwhile, to develop the EV ecosystem, there is a need to push various initiatives, including the development of charging infrastructure, developing low-cost financing solutions for EVs, promotion of public transportation, including ebuses, and pushing for secondary market development of EVs.

Inc42: What’s happening on the battery technology front? Where are we still lacking and what can the government do to improve it? 

Amitabh Kant: India’s import bill from batteries touched $2 Bn in 2023, with over 85% of imports from China (including Hong Kong). India, therefore, must do domestic manufacturing of batteries. We cannot keep depending on China.

I think the awarding of the balance 20 GWh of the PLI ACC programme must be completed as soon as possible by the Ministry of Heavy Industries (MHI) and Ministry of New and Renewable Energy (MNRE), as there is growing demand and dependency on batteries for the energy transition and decarbonisation pathway.

Besides, out of the 30 GWh already awarded, a project monitoring unit (PMU) needs to be formed to monitor the scheme and ensure strict implementation and adherence to timelines, as beneficiaries have made little progress in the last two years.

Moreover, there must be operationalisation of niche battery technologies through a dedicated scheme for new chemistries like solid state, sodium ion, redox flow, metal batteries, etc., as there is a need for safer batteries, which can last longer and are more energy efficient for heavy transport, aviation, drone technology and grid storage use.

Inc42: What’s the next big thing expected to happen in the semiconductor sector from a policy standpoint? Is there a scope for improvement in policies?

Amitabh Kant: The semiconductor industry represents the heartbeat of the modern global digital economy and is expected to be $1 Tn by 2030. Currently, 65% of the global share is with China, and India imported chips worth INR 1.5 Lakh Cr in 2023. The critical step from here on is the semiconductor productisation, from the silicon idea into a manufacturable product. A nation that can complete all the steps for 100% of the productisation process will lead to technological advancement. 

Hence, developing the supply chain ecosystem from foundry, equipment, intellectual properties (IPs), design, assembly, test, marking, and packaging will ensure value addition.

Going forward, the key improvements will be setting standards for semiconductors, establishing stable IP partnerships, building ISM expertise, and creating the right financing instruments.

Inc42: What is your take on India’s Green Hydrogen Mission?

Amitabh Kant: Green hydrogen will offer a solution to the needs that are hard to meet through direct electrification, mitigating close to 20% of CO2 emissions. Presently, the Green Hydrogen Mission, with an outlay of INR 19,744 Cr, is expected to facilitate the deployment of the green hydrogen ecosystem and create opportunities for innovation and investments across the value chain, translating into investments, jobs, and economic growth.

Given the substantial market in India for hydrogen, it is critical to upscale the production and deployment of high-performance electrolysers from existing 2-4 GW/annum to 25-30 GW/annum capacity in the next 3-5 years with new technologies. 

Harmonising green hydrogen standards, establishing dedicated green hydrogen hubs, and mandating green hydrogen consumption for industries with bulk hydrogen demand can be measures to work towards in the next five years.

Inc42: Does the increasing number of startup IPOs indicate the maturity of the startup ecosystem? What impact will it have on the ecosystem in terms of funding and global attention?

Amitabh Kant: While startups going public adds maturity to the Indian startup ecosystem and depth to the stock market, it also opens up opportunities for retail investors. Hence, there is a clear need to rethink the strategies of the startup ecosystem as India harbours an ambitious goal of becoming a $35 Tn economy by 2047. They need to focus on better corporate governance, which has been endorsed during the G20 summit.

Besides, venture capitalists should shift their focus from quantity to quality, and revenue to profitability. They must avoid quick exits and focus on sustainable growth while prioritising shareholder profit over shared prosperity.

Also, there is a clear need for patient capital from banks, pension funds, sovereign wealth funds, and insurance firms to ensure domestic funds support the Indian startup movement.

We also need to create a Fund of Funds for deeptech sectors so that there is risk sharing with VCs.

The post Achieving EV30@30 Vision Requires Consistency In FAME-III Subsidies & Incentives: Amitabh Kant appeared first on Inc42 Media.

When we caught up with ixigo cofounder Aloke Bajpai in early 2023, the focus had turned away from the company’s first bid to go to the public market.

And now 15 months later, Bajpai and ixigo are once again on the cusp of the IPO. This time around though there’s no hitting the brakes like in 2021.

The ixigo IPO opens tomorrow morning and with this one of the most unique startups in the Indian ecosystem will soon be jostling with listed competition in the stock market.

Unique because ixigo is often called a ‘cockroach startup’. “We have always been a very scrappy and frugal company,” Bajpai told us last year in reference to the cockroach startup moniker, when we dove into ixigo’s playbook for frugal and sustainable growth

And also unique because it is a major milestone in the 18-year journey of a venture funded startup. Not many venture-backed startups have displayed such resilience, survived multiple cycles of recessions and reached profitability like ixigo has done.

So the ixigo story is something different, and that’s the subject this Sunday. But only after a look at these top stories from our newsroom this week:

• The Startup Ecosystem’s Wishlist: Aarin Capital’s partner Mohandas Pai has called on the next Narendra Modi-led government to ease angel tax hurdles and set up an INR 50K Cr fund of funds for startups to take the Startup India vision forward
• Swiggy’s IPO Test: With Swiggy all set to bring in one of the largest IPOs in India for a tech startup, what is the grey market’s view on the valuation and what Swiggy needs to do to win over investors
• Zomato’s Rollercoaster: Despite the high potential for Blinkit, a profitable food delivery business and the ever-growing Hyperpure B2B vertical, Zomato seems to have lost some of its charm in the stock market. So what gives?

ixigo On The IPO Bandwagon

After three startups went for public listings in May, it’s now ixigo’s turn to keep the IPO momentum going in June. Come tomorrow, the ixigo IPO will open for subscription and once again test the appetite of public markets investors for new-age tech stocks.

Given the recent experiences of TBO Tek, Go Digit and Awfis last month, the subscription for ixigo is expected to be healthy, the competition is steep in the travel tech segment. But ixigo’s profitability and its sustainable model are being counted as major advantages despite the competition.

The ixigo IPO comprises a fresh issue of shares worth INR 120 Cr and an offer for sale (OFS) component of 6.67 Cr shares worth INR 620 Cr. The startup has set a price band of INR 88-93 per equity share for its public issue.

At the upper end of the price band, ixigo is expected to raise a total of INR 740 Cr. Out of this, the company has raised over INR 333 Cr from 23 anchor investors at a price of INR 93 per equity share.

Most analysts believe that the competition will be iixgo’s biggest challenge given players such as EaseMyTrip, MakeMyTrip, Yatra, Flipkart-owned Cleartrip, as well as the likes of Paytm, Amazon, PhonePe and others that have travel ticketing verticals.

In fact, travel tech is one of the most competitive spaces in India and the market is still underpenetrated to a large extent given the use of ticketing agents and travel agencies in smaller towns and even large cities for corporate bookings.

This could be a cause for concern according to some analysts, because investors might not move to ixigo as soon as they see the IPO. Many investors have built a robust travel portfolio in the past two years, so this could be one potential hurdle for ixigo, but in all likelihood the IPO will see healthy oversubscription.

“The likes of EaseMyTrip, Yatra, TBO Tek and others might have tapped some of the liquidity of large investors in the past two years, and nobody wants too much exposure to travel given the present geopolitical situation around the world,” says one travel segment analyst with a Big Four firm.

The analyst added that ixigo has a strong moat in the railway ticketing business, which is an untapped market for investors after IRCTC.

Going Beyond The Comfort Zone

As we noted a few weeks ago, the competitive advantage in railway ticketing could become a double-edged sword for ixigo since IRCTC is the platform’s most important partner and also its biggest rival for direct train bookings. In its DRHP, the company highlighted that any variation or termination of its agreement with IRCTC might have an adverse impact on its business.

Train ticketing constitutes almost half of ixigo’s revenue. For the nine months ending December 2023, train ticketing revenue of INR 265 Cr contributed 45.3% to the total ticketing income of INR 585 Cr. ixigo posted a consolidated net profit of INR 65.7 Cr in the first nine months of FY24, up 3X from INR 23.4 Cr in the entire FY23.

At the same time, this is also a moat for ixigo, since its revenue base is higher than EMT or Yatra.

Analysts believe that it might be a good opportunity for investors to subscribe to the IPO from a long-term perspective, and the profitability track record is also very encouraging. But for long-term value creation, ixigo has to compete with majors such as EaseMyTrip, Yatra, MakeMyTrip, Cleartrip and others that focus primarily on flights and hotels.

This will help reduce the company’s high dependence on IRCTC as a partner, which is pretty much the biggest risk for investors, according to analysts.

So while ixigo has largely relied on its railway ticketing business to grow and increase its user base, the same energy has to be brought to the air ticketing, hotels and packages businesses as well.

Given that ixigo’s core target customer in Tier 2 or Tier 3 India is price-sensitive, the company has to spend significantly on customer acquisition. Advertising and sales promotion expenses made up 24% of total revenue as of December 2023, and this is much higher than the 18.6% in FY23

Other risks such as its limited experience of operating as an online ticketing agent also come into play, since ixigo transitioned to ticketing in 2019-20 from being a travel aggregator. It has also expanded into hotel bookings only as recently as 2024, so here too it has limited operating experience.

Will ixigo Go For Acquisitions?

But these risks apply equally to players who are looking to grab market share from ixigo in the train bookings space. At the end of the day, all travel tech players will have to push the accelerator on all key verticals in travel.

For example, ixigo recently launched an AI-powered travel planning and recommendations tool called “ixigo PLAN” for personalised itineraries and destination suggestions, which the company is hoping will target customers in metros and Tier 1 cities.

The company is also building its hotels business from the ground up since late 2023 and launched this recently. So there are some areas where ixigo will clearly need to invest from the proceeds of the IPO. And there could be more acquisitions on the cards as well.

After narrowing down on train and bus bookings as a core business, ixigo acquired Confirmtkt and AbhiBus in 2021. Other players have also gone for inorganic expansion to enter new verticals.

For instance, EaseMyTrip acquired ETrav Tech in April this year to focus on the corporate bookings space as the company looks to diversify its portfolio in the non-air segments.

In 2023, EMT acquired Guideline Travels, TripShope Travel Technologies and Dook Travels, as well as hotel booking marketplace cheQin. This after acquiring Spree Hotels & Real Estate for INR  18.25 Cr in 2021.

It must be noted that EMT was a bootstrapped company when it went public and as a result, it is doing what the likes of ixigo did with VC money in their growth stages.

But it’s also fair to say that ixigo’s competition is also new to some of the key lines of business in travel, and it’s definitely a large enough market for multiple players.

The Cockroach Mentality

India’s travel tech ecosystem is witnessing promising growth and is expected to receive a further boost with the advent of AI-led tools and products. Unlike the ecommerce sector, where there is a duopoly of Amazon and Flipkart, the travel tech segment has plenty of players with high brand visibility and the numbers to back it. At the moment, the market is far from saturated, and this means ixigo and others can grow and thrive without cut-throat competition.

A report by Allied Market Research estimates the global travel tech market to reach $21 Bn by 2032, growing at a CAGR of 8.6% between 2023 and 2032.

The analyst quoted above said there is no shortage of capital in the Indian public markets, and all manner of investors are ready to invest in companies with unique stories and attractive valuations. In both these regards, ixigo scores highly.

The valuation itself has sobered down from the 2021 expectations significantly with the IPO size cut almost in half from three years ago.

But most importantly, ixigo’s story continues to be unique among Indian startups for its steady run of profitability and the clues it leaves behind for startups to solve the growth vs profits dilemma. It’s showing that even cockroaches can get to the stock markets.

Sunday Roundup: Tech Stocks, Startup Funding & More 

• Funding momentum plummeted in the second week of June with $97 Mn raised by Indian startups across 10 deals, 55% lower than the previous week’s tally
• Unacademy cofounder and CTO Hemesh Singh is stepping away from day-to-day operations at the edtech startup and transitioning to an advisory role
• HSBC has cast serious doubts on the future of edtech giant BYJU’S, assigning zero value to Prosus’ nearly 10% stake in the company for which it invested over $500 Mn

• After a marketwide rout on Tuesday, June 4 coinciding with the results of the Indian General Elections, new-age tech stocks rallied back mid-week and most stocks showed an upward movement this week
• As a new government is all set to take power at the centre, startups want lower regulatory and compliance burden and a bigger focus on AI over the next five years
• RBI’s draft guidelines for payment aggregators have sparked concerns among payment majors, particularly in relation to KYC compliance and the bar on direct fund disbursal to vendors

The post ixigo IPO: The ‘Cockroach Startup’ Goes Public appeared first on Inc42 Media.

In July 2021, when Zomato filed for its IPO, there was no precedent for the food delivery market. Zomato had recorded a loss of INR 886 Cr in FY21 and was not profitable, a critical consideration for investors looking at a fresh IPO.

Despite all misgivings, the market sentiment for Zomato was positive. Few big tech companies or startups had gone for an IPO before Zomato. As a well-known brand for many Indians in tier I, II, and III cities, Zomato managed to bring in more than enough interest.

The IPO was subscribed 38.25 times, and Zomato listed at a premium of over 51% compared to the issue price. 

And now, the focus is on Swiggy, which, fortunately or unfortunately, has Zomato as a benchmark. 

Zomato has recovered from past losses and is trading at an all-time high. An investment of INR 1 lakh a year ago would have yielded over 200% profit today, showing investor confidence in the business.

Bengaluru-based delivery and quick commerce giant, Swiggy submitted draft papers to SEBI on April 30 for a confidential filing. While we don’t know the particulars of the IPO, Swiggy plans to raise approximately $1.25 Bn from the IPO, with a fresh issue of $450 Mn and an offer for sale (OFS) component worth $800 Mn. And, $90 Mn through pre-IPO placement.

After LIC, Paytm, Coal India, General Insurance and Reliance Power, this will be the sixth-largest IPO in the Indian market.

For Swiggy, the situation is clearer. With Zomato already listed, there is little room for overvalued pricing. If Swiggy’s pricing is accurate and the market remains positive, the IPO could easily be oversubscribed.

Drawing a parallel with Zomato, Umesh Chandra Paliwal, cofounder of UnlistedZone, said the current environment is positive for companies looking to raise funds via IPOs. The success of Zomato, which has delivered good returns and recently achieved profitability, sets a favourable precedent for Swiggy. 

“Zomato has become profitable in its food delivery business, although its Hyperpure and Quick commerce segments are still incurring losses. Quick commerce is expected to become more significant than the food delivery business in the future. We believe Swiggy, given its market position and potential growth in Quick commerce, should achieve profitability within the next two years,” said Paliwal.

If Swiggy is to replicate Zomato’s success, a clear barometer would be the company’s performance in the unlisted market. So how are grey market traders looking at Swiggy? 

Swiggy In The Grey Market

One caveat before we look at the analysis: Swiggy stocks are currently available only in tranches. Due to the limited supply, the stocks are not even being traded on multiple platforms, according to grey market analysts. 

Inc42 checked up to six unlisted market platforms where Swiggy stocks are traded, and saw share prices ranging between INR 320 and INR380.

Confirming this, UnlistedZone’s Paliwal said Swiggy’s stock is being traded very sparingly in the unlisted market so this traction is still inadequate to gauge the potential IPO sentiment. 

In January 2022, the company raised about $700 Mn at a $10.7 Bn valuation, led by US-based asset management company Invesco and Dutch investor Prosus Ventures. 

However, Invesco cut Swiggy’s valuation twice in 2023 before raising the value of its investment in Swiggy to over $12.7 Bn. In line with this, Baron Capital also raised the value of its investment in Swiggy to over $15 Bn this week.  

Currently, in the grey market, Swiggy is trading at a valuation of $9 Bn to $9.5 Bn, which could see some adjustments with Baron Capital’s markup. 

Abhishek Ginodia, cofounder of pre-IPO platform Altius Investech, said that since Swiggy shares were introduced in the unlisted space, they have been trading in the range of INR 320-INR 350, which is at a valuation of $9 Bn-$9.5 Bn. 

Trades are also limited as cheque sizes have been restricted to INR 5 Cr and above. 

Based on the available information, Paliwal estimates Swiggy’s IPO valuation to be around $10 Bn. On the other hand, Ginodia expects the IPO valuation to be around $11 Bn-$12 Bn, approximately 30-40% lower than Zomato’s current market cap.

A managing partner of an auditing firm closely working with Swiggy said the IPO is the ultimate exit strategy for most investors, particularly late-stage ones. To offer them a profitable exit, the valuation could be anywhere between $12 Bn to $14 Bn, depending on how the pre-IPO round goes. “This is why Swiggy shares could also see a decline initially, as many might consider it overpriced,” they added.

Swiggy Vs Zomato: How The Two Giants Compare

Despite Swiggy surpassing Zomato in revenue till FY 23, Zomato has always led the way, from building the food delivery industry to going public.

Swiggy has no choice but to directly compare Zomato’s bottom line and scale while justifying its pricing. And, it falls short on multiple accounts compared to Zomato which has recorded a 67% rise in revenue for FY 24.

Swiggy lags in monthly active users (MAU) and gross order value (GOV). Zomato claims over 30 Mn MAUs, while Swiggy has around 24 Mn. Zomato’s GOV is $3.1 Bn, compared to Swiggy’s $2.6 Bn.

Ginodia points out that quick commerce is Swiggy’s key differentiator. “Swiggy and Zomato have similar revenue rates, but Zomato has performed better. Zomato improved its performance by reducing losses from Blinkit, while Swiggy’s quick commerce business negatively impacts its contribution margin by 50%. This could result in Swiggy’s IPO being valued lower than Zomato’s,” said Ginodia.

While Swiggy’s food delivery services have become profitable, the quick commerce segment, Instamart, has incurred significant losses despite revenue growth. 

As per sources, who have seen Swiggy’s disclosures as of September 2023 (H1FY24), the company has touched INR 4,735 Cr in revenue from food delivery and quick commerce. 

Thanks to this momentum, Swiggy is on course to report over 20% higher revenue in FY24, from the INR 8,260 Cr it reported in FY23. 

While we don’t know the loss for FY24, Swiggy trimmed its net loss to around $207 Mn (INR 1,730 Cr) in the first nine months of the fiscal year. Sources did not indicate whether Swiggy would finish FY24 with a profit, after it reported a net loss of INR 4,179.3 Cr in FY23.

Will Confidential Draft Papers Sway Investors?

Swiggy has opted for the confidential route for its IPO. Will this create confusion among investors?

A managing partner of an audit firm explained that this means Swiggy’s draft red herring prospectus (DRHP) won’t be immediately available for public scrutiny. Swiggy can control the flow of information for a little longer. However, the papers will still be shared with institutional investors, so it won’t impact the overall IPO. 

The confidential filing strategy helps the company control the narrative for a bit longer and is beneficial for the pre-IPO round.

Does the lack of a public DRHP raise concerns about transparency for potential retail investors?

Paliwal explained, “Filing confidential draft papers is unlikely to impact investor confidence negatively. IPO investors typically fall into three categories: QIB, HNI, and Retail. QIBs usually have access to detailed business and financial information, while HNI and retail investors rely more on the grey market premium (GMP). Therefore, we do not foresee any adverse effects on investor confidence.”

Zomato And Swiggy’s Interlinked Future

Market analysts and experts believe that the timing for Swiggy to go for IPO couldn’t be better, especially with Zomato trading at an all-time high for several weeks. There has been some weakness in the stock in the last month or so, however, when there has roughly been a 12% drop in Zomato share price. 

This indicates that Zomato is not yet a stable stock and could be more vulnerable to market volatility. Paliwal thinks the timing looks favourable for Swiggy, however, when one compares the market to one year ago. 

The IPO market is lively, and Zomato’s strong performance in the past year has yielded significant returns for investors. Swiggy, being valued lower than Zomato, might attract investors seeking value opportunities. They may sell Zomato shares to buy Swiggy shares, hoping for similar or better returns.

Others also said that the IPO momentum is strong which is a good factor for new IPOs, but Ginodia believes Swiggy faces challenges in its core business, especially with the focus shifting towards quick commerce, where it has lost ground as highlighted by our data above.

Beyond immediate factors, broader market trends and shifts in consumer behaviour are crucial. 

The increasing adoption of online food delivery and quick commerce offers significant growth opportunities for Swiggy even as competition has grown in the latter — with the rise of Zepto and the imminent entry of Reliance Jio and Flipkart. 

Strategic partnerships and cutting per-order costs will be crucial for Swiggy, even as it explores ways to improve the customer experience, which has lagged behind the competition.

Ultimately, the success of the Swiggy IPO will depend on the company’s ability to effectively communicate its growth strategy and financial roadmap to investors and show that it indeed has a clear path to profits, like Zomato. 

After a decade-long duopoly and trying to outpace its archrival, Swiggy is realising that after all, its fortunes are more closely linked to Zomato than it may want to believe. 

[Edited by Nikhil Subramaniam]

The post Can Swiggy’s High Valuation Stand Up To The IPO Test? Here’s What Grey Market Indicates appeared first on Inc42 Media.

The Zomato stock has been one of the most intriguing success stories from the 2021 vintage of startups that went for public listings.

After popping on listing, Zomato has typified the investor sentiment when it comes to tech stocks. In the first year of being a public company, the Zomato stock crashed, along with the rest of the market, amid the massive sell-off at the end of 2021 and early 2022. However, this also set the stage for a big comeback.

And Zomato’s comeback did happen, coinciding with the company inching towards profits by around March 2023. We’ve of course covered the ups and downs in detail, but every quarter for the past five quarters, Zomato gathered momentum and became one of the hottest stocks.

The company’s market cap touched the $20 Bn (INR 1.6 Lakh Cr) along the way, and when Zomato ended FY24 with record profits of INR 351 Cr ($40 Mn), it seemed that the stock would continue to climb. But in the weeks since the release of its Q4 results, Zomato has been one of the weakest new-age tech stocks.

After touching an all-time high of INR 207 during the intraday trading on May 13, Zomato closed the trading session on Wednesday (June 6) at INR 183.65. This is a decline of over 11% from the all-time high mark in less than a month. In fact, the stock fell to as low as INR 146.85 during the intraday trading on June 4, when the votes for the Lok Sabha elections were being counted.

However, the stock did manage to rally nearly 7% on June 5 as investors went shopping after the previous day’s crash. But despite the high potential for Blinkit and the possibility of unlocking massive profits there, Zomato’s profitable food delivery business and the ever-growing Hyperpure B2B vertical, Zomato seems to have lost some of its charm.

In fact, even the day after it reported the profits for the full fiscal year FY24, Zomato saw a 6% drop in share price.

At the time it was believed that the company’s less-than-robust performance in the food delivery segment particularly grated investors, many of whom looked to book profits anticipating slower growth in Q1 FY25 (the ongoing quarter).

In its Q4 presentation and earnings call, Zomato stressed that it would also have to invest heavily to scale up Blinkit, which is also being seen as a hurdle in the quick commerce vertical’s bid to reach profitability.

Zomato Stock, But Value Tied To Blinkit 

The rapid growth seen in the quick commerce business has compelled Zomato to double down on Blinkit. It is looking to nearly double its store count by the end of FY25. This aggressive expansion is also likely to have tempered investor expectations around future growth in profits.

While Blinkit did turn adjusted EBITDA positive in Q4, the road to full profitability is still long. And since the Q4 results, a raft of bad signals have come to the market, including the entry of Reliance and Flipkart as stiff competition in quick commerce, possibly spooking many investors.

Mukesh Ambani-led Reliance Industries Ltd (RIL) is reported to be close to launching its own quick commerce operations through JioMart after taking a punt earlier and pulling out.

The conglomerate is looking to deliver groceries in select cities in under 30 minutes and is likely to ramp up operations by next year. Reliance reportedly plans to take it to around 1,000 cities in future, and JioMart will tap into Reliance Retail’s network of over 18,000 stores across the country.

That kind of scale would allow JioMart to potentially catapult the existing group of quick commerce apps — Blinkit, Swiggy’s Instamart and Zepto — and also end the nascent ambitions of Tata-owned BigBasket and Flipkart before they take off.

Flipkart is fresh with funds from Google and majority stakeholder Walmart and is also likely to make a major push for grocery delivery, where Blinkit, Zepto and Swiggy have created well-oiled playbooks.

While the potential threat from Reliance cannot be ignored, the fact is that Blinkit has not yet cleared the doubts in the investor mind by itself. So JioMart only compounds the problems for Blinkit.

Remember, Blinkit is not just a vertical for Zomato, it could soon become larger than food delivery. Analysts such as Bernstein estimate that Blinkit will have larger revenue than food delivery by FY27.

“A lot of the value built into the Zomato stock over the past year is linked to the growth potential for quick commerce, and if Zomato is shedding the gains now, that’s largely because of the potential weakness in the Blinkit narrative,” according to an analyst at a Mumbai-based brokerage that has been covering Zomato since August 2021, a few weeks after the listing.

Patience Needed For New-Age Stocks

Another thing that most analysts told Inc42 is that Zomato is not a stock for the short-term gain chasers. It’s a stock that can have a 2X or 3X growth in the next two years if investors show patience. This seems obvious, but it’s important to have this context when talking about the recent weakness seen in the stock.

Particularly because a lot of new-age investors are joining the market who are more exposed to the power of brands like Zomato or Nykaa or Paytm. Paytm’s woes have become part of memes, but the fact is investors have lost real money and it won’t be the first time that a ‘startup’ stock sees such a meltdown.

“Zomato’s gain in the past year is only half the story. The stock has grown as a direct result of operational efficiency, but this comes at the expense of a large scale. Zomato still needs to show it can continue to bring in profits despite the investment needed for scale which is a matter of a few quarters at least,” the analyst quoted above added.

Investors in the public market cannot expect to see the rocket growth that private market investors and VCs are used to. Assuming that a new-age tech stock will sprout wings is a big mistake made by investors, particularly novice investors, because they may not see threats to business models in the same way as experienced investors who have lived through cycles.

“Tech-first business models are more exposed to the changes in the underlying infrastructure and the internet ecosystem around which they are built. Newer investors don’t have the years of expertise needed to react unpanicked to such changes, one relevant example of which is AI,” the founder of a Bengaluru-based consultancy and auditing firm added.

However, one cannot blame investors alone. Brokerage signals are not all in the Zomato stock’s favour.

Australian brokerage firm Macquarie gave Zomato an ‘underperform’ rating and assigned the stock a price target of INR 96, roughly half of the price Zomato is trading at today.

Macquarie’s view is centred around the competition from Reliance JioMart which has a last-mile logistics arm Grab, and has invested in Dunzo which does have operational history in the quick commerce space.

And given that Swiggy is also likely to be listed within a year, things are not going to be easy for the Deepinder Goyal-led company. Zomato has done the hard yards when it comes to profits, but now it has to drive value for shareholders to retain their long-term faith and that’s an entirely new ballgame.

The post Zomato’s Up-And-Down Ride: Is The Stock Losing Its Charm? appeared first on Inc42 Media.

Last month remained action-packed for the new-age tech startups aiming to get listed on the Indian stock exchanges. While Go Digit, Awfis and TBO Tek made the headlines for their stock market debut, ixigo received the market regulator SEBI’s nod for its IPO.

From what the trends suggest, this is just the beginning of a significant momentum that’s impending in the tech startup IPO space in the months to come. 

Late last year, Inc42 reported that at least 10 startups were expected to get listed in 2024, a majority of which would be embarking on their IPO journeys only after election results. 

Notably, IPO activity remained muted in April and May due to market volatility, with only two mainboard IPOs in April and five in May, including the IPOs of the tech startups mentioned above.

Interestingly, despite a wave of caution across the broader market, B2B travel portal Travel Boutique Online or TBO Tek made a noteworthy listing at a premium of 50-55% to its issue price. Its public issue was subscribed 86.7X.

Similarly, Peak XV-backed coworking startup Awfis was listed at a 12.8% premium to its issue price. Its public issue was subscribed 108X. 

However, the IPO of Fairfax-backed insurtech startup Go Digit lacked lustre, with the company making a muted market debut at a 3-5% premium to its issue price. Also, Go Digit’s issue was subscribed only 9.6X, a far cry from the interest garnered by its other two peers.

Analysts believe that in the prevailing market condition, the differentiating factors of the companies and their unique value propositions (USPs) are deciding their fate in the IPO market.

Speaking with Inc42, senior VP (research) at Mehta Equities, Prashanth Tapse, said that the companies that lapped up decent valuations during public listings either have a first-mover advantage or differentiating business models to attract investors. 

To comprehend the current situation better, we decided to analyse the recent tech startup listings on the Indian bourses and decode what the upcoming months are going to look like for the IPO-bound startups and the broader IPO market.

However, before delving deeper into analysing some of the recent tech IPOs, let’s first understand what the broader market trends suggest.

A Closer Look At The 2024 IPO Run 

After a slump in the IPO market in 2022, last year witnessed some IPO green shoots on the back of improving global as well as domestic market sentiments. 

As per market experts, the year 2024 is expected to see these green shoots further bloom, with as many as 100 companies anticipated to embark on their stock market expeditions.

However, what’s worth noting is that the IPO size has declined despite a rise in the number of public listings.

In 2023, for instance, India saw 57 mainboard IPOs raising INR 49,434 Cr, enduring a decline from INR 59,302 Cr raised by 40 companies a year ago.

As many as 29 mainboard listings have already taken place so far this year, collectively raising INR 27,652 Cr.

However, SME exchanges have seen more activity in 2024 so far. On the startup front, too, SME exchanges have witnessed much bustle, with Trust Fintech and TAC Infosec listing at significant premiums on the NSE SME platform. 

While fintech SaaS company Trust Fintech listed at a premium of 42% on NSE Emerge, SaaS cybersecurity company TAC Infosec listed at a 173.6% premium to its issue price on the same platform.

Despite this uptick in the IPO momentum, Mahavir Lunawat, MD at Pantomath Capital Advisors believes that there is an appetite for more IPOs. As per Lunawat, India is very short of capital formation, and as an economy, the country needs more than INR 2.5 Lakh Cr of capital formation if it has to double its economy by 2030. 

“Also, if we look at it from a liquidity perspective, we have more than INR 2 Lakh Cr coming in the capital market from mutual funds, insurance, pension, and other modes annually. So, if there are fewer fresh equity issuances and IPOs (which currently stand at INR 60K-INR 70K annually), where will this money flow?” Lunawat pointed out.

Hence, to meet the demand and supply equilibrium, the Indian market needs to beef up its IPO activities by 4X from the current level, he observed. 

Shrinking IPO Sizes On The Rise

According to Lunawat, the country is witnessing a surge in IPOs on the back of several small-size offerings. 

Interestingly, in many recent IPOs of new-age tech startups, we have noticed companies reducing their IPO sizes after receiving SEBI approval.

In Go Digit’s case, the insurtech unicorn cut the size of the fresh issue to shares worth INR 1,125 Cr and an offer for sale (OFS) component of 54 Mn shares. Earlier, it was looking at raising INR 1,250 Cr from the fresh issue, along with an OFS component of 109.45 Mn shares. 

Similarly, Awfis brought down the amount raised via fresh issue of shares to INR 128 Cr from INR 160 Cr earlier (as per DRHP). However, the coworking space provider increased its OFS component slightly to 1.23 Cr shares from 1 Cr earlier. 

On the other hand, travel tech major ixigo, whose IPO is scheduled to open next week on June 10, is looking to raise INR 120 Cr in primary capital, which is a sharp drop from INR 750 Cr it was aiming for in 2021.

While the companies largely attribute this revision to their decreased appetite for capital, it could also be attributed to the lukewarm response received by Paytm, Life Insurance Corporation of India (LIC), and a few others’ IPOs in 2021 and 2022.

Indian Startups To Take Cues From Go Digit 

Among the new-age tech startups going public in 2024, across mainboard and SME, the IPO of the Virat Kohli and Anushka Sharma-backed startup received a lukewarm response.

Discussions with market experts suggest that its valuation and lack of a differentiating factor in a crowded market like insurance failed to garner much interest in the public market. This is despite the startup turning profitable.

The company was eyeing a valuation of $3 Bn on the higher band, which was lower than its last private valuation in 2022 of $4 Bn. However, Digit’s valuation expectations were still relatively higher compared to other more established insurance players in the market. At the higher end of its IPO price band, the startup’s valuation multiple was 680X of its revenue. This number for leaders in the insurance industry stood at about 43X.

Just a few days after its listing, brokerage Emkay Research has a ‘sell’ rating on the stock with a downside potential of 30% from its listing price (INR 281). 

The brokerage’s cautious sentiment stems from the rationale that Go Digit is “just another general insurance player” at its core and does not have a clear moat. 

Besides, the brokerage believes that there is no justifiable reason for the stock to trade at a premium valuation over the industry leaders like ICICI Lombard and Star Health, which have established their profitable business model, have a far stronger retail business, and are powerful brands. Emkay has also raised profitability-related concerns in the company in the near-to-medium term.

Riding On The First-Mover Advantage

While market experts believe that strong fundamentals will play a crucial role in making the public offers of startups attractive to investors, elements like first-mover advantage in a particular industry and other USPs should not be underestimated. Interestingly, there are several examples to substantiate this statement. 

For instance, coworking space provider Awfis is the first-of-its-kind in its sector to get listed on the Indian stock exchanges. Its shares were listed at INR 432.25 on the BSE, lapping up a 12.8% premium over the issue price of INR 383. On the NSE, the startup’s shares opened at INR 435, 13.5% higher than the issue price.

This has been despite Awfis being a loss-making entity. 

Tapse said, “We believe the healthy listing is justified on the back of the company’s number one rank among the top five benchmarked players in India in the flexible workspace segment.”

Tapse also drew a parallel with the IPO of foodtech major Zomato. He said that during its IPO, Zomato was also a loss-making company, but it has been a leader in its segment and first-of-its-kind to go public. 

“Right now, though its balance sheet and P&L are negative, going forward Awfis will leverage the growing demand for flexible office spaces in India to expand its business. Also, like Zomato, Awfis will experience a growing awareness of its brand post listing, which will eventually lead to profitability,” Tapse added.

Sonam Srivastava, founder and CEO at Wright Research also emphasised that Awfis has gone public piggybacking on the untapped potential of shared office space in India. Besides, it’s also not extremely overvalued, which also makes it a good addition to one’s folio.

What’s Next? 

The Indian stock market is expected to see some of the most noteworthy new-age tech IPOs this year. The likes of Swiggy, Ola Electric, FirstCry, ixigo, Unicommerce, Ola Cabs, PayU, and MobiKwik are likely to go public this year.

Inc42’s recent discussion with market experts revealed that there is a positive public market response for ixigo on the anvil. Besides its profitability quotient, the company has differentiated itself from its other listed competitors such as EaseMyTrip, Yatra, and MakeMyTrip with a focus on railway ticketing, and a deeper penetration into the Tier II and smaller markets, which analysts expect to act as major contributors to the success of its IPO.

Speaking on the startups preparing for their respective IPOs, ixigo cofounder and CEO Aloke Bajpai told Inc42 that IPOs ensure that these ventures have strong corporate governance guardrails in place and more professional management teams running the show.  

“After the 2021 era, some of the learnings from public markets are now acting as a feeder into the private market, which necessitates companies to have strong fundamentals and a sustainable business model, as well as the realisation that they need to turn profitable at some point and start delivering positive cash flows,” said Bajpai.

“I think for any company wishing to approach the public markets, these are some of the basic hygienes to check.”

Currently, the high valuations and big issue sizes of loss-making Swiggy and Ola Electric present a notable challenge, making them key IPOs to watch this year.

Meanwhile, after much back and forth, hospitality chain OYO withdrew its IPO papers again in May, with plans to refile its draft red herring prospectus (DRHP). However, the timeline for this is still unclear.

Despite this, public market investors are expected to get plenty of opportunities to invest in new-age tech companies in 2024 and beyond.

A recent research report by Pantomath suggests that the equity raised through IPOs could exceed the INR 1 Lakh Cr mark in FY25. Among the 56 prospective IPO candidates in the fiscal year, nine new-age tech firms are said to be looking to raise around INR 21,000 Cr collectively.

[Edited by Shishir Parasher]

The post Inside India’s New-Age Tech IPO Frenzy Of 2024 appeared first on Inc42 Media.

In light of World Environment Day, it is worth noting the increasing number of cleantech startups in India working to address the country and the world’s environmental challenges. These startups are developing innovative solutions that aim to balance the need for economic growth and development with sustainability.

Inc42 has identified 56 such startups making strides in the cleantech sector. Their approaches vary widely, from harnessing solar energy on rooftops to implementing biomethanation technology for organic waste management, and even purifying air and water. These cleantech startups represent a growing trend in India towards embracing clean technology to mitigate the environmental impact of industrialisation and urbanisation.

While the long-term impact of these startups remains to be seen, their emergence signifies a promising shift in the Indian business landscape towards greater environmental consciousness. It also highlights the potential for technological innovation to play a significant role in achieving India’s clean energy goals and contributing to a more sustainable future. As we celebrate World Environment Day, these startups are a reminder that the transition to a greener economy is necessary and increasingly feasible.

The list below is not meant to be a ranking of any kind. The startups have been listed in alphabetical order.

List Of Cleantech Startups In India

75F

• Founded In: 2012
• Founders: Deepinder Singh, Pankaj Chawla
• Funding Raised To Date: $25 Mn
• Investors: Siemens AG, Breakthrough Energy Ventures, Climate Initiative, Building Ventures, Revolution, Clean Energy Trust, WIND Ventures
• Headquarters: Bengaluru

75F offers smart building solutions such as wireless sensors, equipment controllers and cloud-based software, delivering predictive, and proactive building automation to save energy and reduce greenhouse gas emissions. 

75F’s products mainly predict, monitor and control hot and cold spots of a building and thus, avert damages to the edifice. In the beginning, the startup focused on the commercial real estate market but in 2015, it also started providing HVAC (heating, ventilation and air conditioning) solutions. 

It works along with facility management companies, systems integrators and energy service companies to add more properties within its umbrella. Besides, it also outsources manufacturing units in the US, India and China. 

In July 2021, it reportedly secured $5 Mn in a Series A funding round from Siemens AG. With this, the startup raised a total of $28 Mn in the Series A financing round.

Its cap table includes Breakthrough Energy Ventures, Climate Initiative, Clean Energy Trust and WIND Ventures, among others. 

Ace Green Recycling

• Founded In: 2019
• Founders: Nishchay Chadha, Vipin Tyagi
• Funding Raised To Date: $10 Mn
• Investors: Circulate Capital, Climate Angels, Newchip 
• Headquarters: Singapore

Ace Green Recycling is a battery recycling startup, which claims to have developed clean and efficient lead-acid battery recycling technology.

Its battery operates at room temperature, contains zero air emissions, and wastes and reduces heavy metal emissions, resulting in significantly lower environmental damage, the startup said. 

Further, the cleantech startup has said it is working on the commercialisation of lithium-ion battery recycling in an environmentally sustainable manner.

Battery recycling technology startup secured more than $7 Mn in a funding round led by Circulate Capital and Climate Angels in February 2022. 

Adding this round, the startup’s total fund raised stands at $10 Mn so far, according to the startup.

The startup is planning to develop its lithium reusable technology and expand the 30-member team to 50 in the coming months. The startup is also focusing on developing fossil fuel-free lithium battery recycling technology.

AirOk

• Founded In: 2015 
• Founders: Deekshith Vara Prasad, Pavan Reddy Yasa, Vanam Sravan Krishna
• Funding Raised To Date: Undisclosed
• Investors: Ncubate Capital Partners
• Headquarters: New Delhi

AirOk has developed a patented air filter called EGAPA that is capable of removing 99.7% of air pollutants from the environment. The filter is designed to target cancer cells and break down air pollutants such as viruses, VOCs, bacteria, and mould, as claimed by the company.

In addition to air filters, AirOk offers a range of products, including air purifiers, air purifier filters, face masks, purifying bags, data centre solutions, and pollution seizure solutions.

According to its financial report for FY21, the company generated operating revenue of INR 1.94 Lakh but also reported a loss of INR 2.25 Lakh.

AirOk has secured investment from Ncubate Capital Partners, a VC fund based in Gurugram.

altM

• Founded In: 2022
• Founders: Apoorv Garg, Yugal Raj Jain
• Funding Raised Till Date: $3.5 Mn
• Investors: Omnivore, Theia Ventures, Thai Wah Ventures, Sanjiv Rangrass, Neha Mudaliar, Maninder Gulati (OYO), Mirik Gogri (Spectrum Impact), Paula Mariwala (Aureolis Ventures)
• Headquarters: Bengaluru

Founded in 2022 by ex-Tesla employees Apoorv Garg and Yugal Raj Jain, altM is on a mission to develop sustainable materials from agricultural residue and help companies reduce their carbon footprints and increase circularity in their supply chains.

altM uses lignocellulosic agricultural residues to produce advanced materials that offer sustainable alternatives to conventional products. Lignocellulosic residue refers to dry plant waste that is left during or after the processing of crops. It includes items such as barley straw, corn stover, sorghum stalks, coconut husks, sugarcane bagasse and banana leaves.

Last month, altM secured $3.5 Mn in a seed funding round led by Omnivore. It was also featured in the 40th edition of Inc42’s ‘30 Startups To Watch’ list.

Bambrew

• Founded In: 2018
• Founders: Vaibhav Anant
• Funding Raised To Date: $2.67 Mn
• Investors: Blue Ashva Capital, Supack Industries, Mumbai Angels
• Headquarters: Bengaluru

Founded in 2018 by Vaibhav Anant, Bambrew offers sustainable alternatives for food packaging, pouches and foldable cartons, ecommerce mailer bags, and PVC. The startup uses bamboo to make its products and claims that all its products are plastic-free and made in-house.

The Bengaluru-based green packaging startup picked up $2.35 Mn in a Pre-Series A round in January 2022, which was led by Blue Ashva Capital and Supack Industries. The funding round also attracted investments from Mumbai Angels and other angel investors.

Since its funding round, Bambrew has expanded its product range to include offerings such as paper straws, cups and glasses, and wooden spoons and forks.

Bariflo Labs

• Founded In: 2018
• Founders: Mrityunjay Sahu, Anudhyan Mishra
• Funding Raised To Date: +$10.00K
• Investors: CSIR, Startup Odisha, JSW, the Telangana AI Mission (T-AIM), and VIT Technology Business Incubator
• Headquarters: Bhubaneswar

Founded in 2018 by Mrityunjay Sahu and Anudhyan Mishra, and headquartered in Bhubaneswar, Bariflo Labs is a water body management and aquafarming startup. The startup has developed an Intelligent Aqua Bodies Management system using principles of fluid dynamics and deploying technologies like industrial internet of things (IIoT), AI and robotics.

The Aqua Bodies Management system works using Bariflo Labs’ India-patented sediment aeration device. This device diffuses air at the sediment level in a water body, maintaining dissolved oxygen at the sediment oxygen boundary layer. It reduces energy consumption by up to 75% and capital cost by 20%. 

The startup’s AI-based monitoring device can predict water quality parameters such as dissolved oxygen, un-ionised ammonia, phosphate, nitrite, nitrate, sulphide, pH and ORP. 

Bariflo Labs’ is backed by CSIR, Startup Odisha, JSW, the Telangana AI Mission (T-AIM), and VIT Technology Business Incubator, among others.

BatX Energies

• Founded In: 2020
• Founders: Utkarsh Singh, Vikrant Singh
• Funding Raised To Date: $1.96 Mn
• Investors: LetsVenture, JITO Angel Network, family offices of Mankind Pharma, Excel Industries and BluSmart
• Headquarters: Gurugram

Founded in 2020 by Utkarsh Singh and Vikrant Singh, Gurugram-headquartered BatX Energies is a Lithium-ion (Li-ion) battery recycling startup. The startup works to provide battery-grade materials by recycling end-of-life batteries.

Using its proprietary process, BatX Energies extracts black mass of less than 1% impurities from used Li-ion cells. This process allows the startup to extract high-quality lithium, nickel, cobalt and manganese from black mass. The startup also produces plastics, aluminium, copper and stainless steel from recycled batteries, which it sells to recyclers.

In December 2023, BatX Energies secured $5 Mn in its Pre-Series A funding round from Zephyr Peacock, with participation from LetsVenture and existing investors, including JITO Angel Network, family offices of Mankind Pharma, Excel Industries and BluSmart. The startup plans to deploy the fresh capital to scale up production of its recycled battery-grade lithium, nickel, and cobalt and establish a nationwide reverse logistics network for sourcing.

Buyofuel

• Founded In: 2020
• Founders: Kishan Karunakaran, Venkateswaran Selvan, Sumnath Kumar, Prasad Nair
• Funding Raised To Date: $1.6 Mn
• Investors: IPV, VCATS, Gruhas Proptech, LV, Lead Angels Fund
• Headquarters: Coimbatore

Coimbatore-based BuyOFuel aggregates, biofuel suppliers, consumers and waste generators (waste biomass is converted to biofuels).

It claims that 90% of its users are active and repeat customers, and the business has clocked a 2x increase in monthly revenue since May 2022. The cleantech platform saw transactions involving 30K million tonnes (MT) of waste and biofuels since May, substituting 10K MT of fossil fuels.

It has raised $1.6 Mn (INR 13.22 Cr) to date, from investors including IPV, VCATS, Gruhas Proptech, LV and Lead Angels Fund.

Chakr Innovation

• Founded In: 2016 
• Founders: Kushagra Srivastava, Arpit Dhupar, Bharti Singhla
• Funding Raised To Date: $3.6 Mn
• Investors: Neev Fund II, Indian Angel Network, ONGC, Parampara Capital, Globevestor
• Headquarters: Delhi NCR

Chakr Innovation offers an emission control device that checks pollution at the source and captures harmful particulate matter emissions. 

The cleantech startup claims its products are coupled with exhaust and absorb over 80% of the particulate matter emitted by diesel engines. 

Chakr Innovation’s device Chakr Shield claims to collect 90% of particulate matter emissions from the exhaust of diesel generators without causing any adverse impact on the diesel engine. The collected emissions are used to create the ink. 

According to the startup, the Chakr Shield can significantly reduce particulate matter (PM2.5 and PM10), carbon monoxide and hydrocarbon emissions after retrofitting the tailpipe of the DG set.

Last year, Delhi’s upscale mall Select CityWalk installed Chakr Shield to reduce pollution from the DG sets by up to 80%. The shield would help reduce annually an estimated 378 kg of PM or black soot emissions which is equivalent to more than 174 tonnes of carbon dioxide emissions or the carbon sequestered by 228 acres of forest in one year alone, said Chakr’s cofounder Bharti Singhla. 

Chakr Innovation raised an undisclosed amount in the Series B round from Neev Fund II in November 2021. 

The startup has raised multiple rounds of funding, including a Series A round of INR 19 Cr led by IAN Fund and ONGC. It had also raised seed capital from Parampara Capital and Globevestor. 

Chakr Innovation will be working on other technology solutions including Metal-Air battery technology. The startup plans to scale its production and expand its operations across more than 12 cities in future.

Clairco

• Founded In: 2018
• Founders: Aayush Jha
• Funding Raised To Date: $572.6K
• Investors: AngelList, Max Group, Sanjiv Bajaj, Anicut Angel Fund
• Headquarters: Bengaluru 

Clairco is an Internet of Things (IoT) startup which enables air quality monitoring and purification. It uses low-drag air filters which can be retrofitted to any type of air conditioning and turn them into air purifiers. 

According to Clairco, it has developed this patent-pending air purification system in-house. It analyses air quality data of a particular premise on a real-time basis and installs ultra-low resistance air filters in existing air conditioning units. This is then converted into a smart air purification system. 

It helps businesses ensure clean air affordably and measurably by adding air purification to existing AC systems. It offers filter technology for up to MERV-13 filtration with a low-pressure drop, monitors PM2.5, PM10, CO2, VOC, and other air quality parameters, and maintains optimal health of air filters and purifiers in any season.

For its monetisation plan, Clairco charges its customers a monthly subscription fee for businesses of all sizes and scales. 

Clairco raised INR 4.2 Cr in angel funding in March last year. The round was led by Sanjiv Bajaj (Bajaj Capital) at Anicut Angel Fund. Investors including Max Group and Angel List also participated in the round. 

The cleantech startup is looking to expand its footprint to key cities across the country. It is also looking for product development and growth.

CleanMax Enviro Energy Solutions

• Founded In: 2011
• Founders: Kuldeep Jain, Sushant Arora
• Funding Raised To Date: $188.2 Mn
• Investors:  IFU, Warburg Pincus, UKCI, International Finance Corporation 
• Headquarters: Mumbai

Rooftop solar startup CleanMax is a sustainability partner to corporations and develops solar and wind projects under the Build Own Operate model by providing renewable electricity under long-term agreements, creating significant savings for end-users.

The startup currently serves more than 150 customers, including Facebook, Adobe, Cargill Foods, Volvo, Tata Group, Mahindra Group, Grasim, MG Motors and others.

The Danish Investment Fund for Developing Countries (IFU) invested $34 Mn in the renewable energy startup in December 2021. 

The investment in CleanMax is IFU’s second within renewables in India, following the signing of the India-Danish Green Strategic Partnership in 2020 by Prime Minister Narendra Modi and Danish Prime Minister Mette Frederiksen.

CleanMax signed a deal with social media giant Facebook last year to co-run a portfolio of wind and solar projects across India that will supply clean energy to the electrical grid. 

In India, the startup has new investments lined up in solar, wind and wind-solar hybrid projects in states, including Karnataka, Gujarat, Maharashtra, Haryana, Uttar Pradesh and Tamil Nadu, to serve the needs of corporate customers.

CleanMax is planning to accelerate its growth in the commercial and industrial renewable energy space in India, as well as in the Middle East and South East Asia. 

Devic Earth

• Founded In: 2018 
• Founders: Shaguna Sinha, Srikanth Sola, Shivani Sinha Sola
• Funding Raised To Date: $1.36 Mn
• Investors: Blue Ashva Sampada Fund
• Headquarters: Bengaluru

Cleantech startup Devic Earth creates scalable solutions with ‘Pure Skies’, its air pollution control equipment for industries and large areas. Pure Skies improves air quality. 

The Pure Skies tech system reduces specific pollutants like particulate matter to less than 10 microns (both PM10 and PM2.5). The air quality index typically improves in heavily polluted areas in less than three months.

Pure Skies comes with an intelligent wifi-based technology to handle airborne gaseous and particle pollutants across industries, homes, and cities. A single push of a button can help remove 40-50% of nano-sized particles at <20µm.

Pure Skies has been installed with companies operating in sectors including steel, cement, hotels, mining, and manufacturing. It claims the product also addresses challenges arising out of polluting events such as crop burning, forest fires, and construction.

The green technology startup raised its first institutional funding of INR 10 Cr last year from the Blue Ashva Sampada Fund.

Devic Earth is planning to expedite more growth and product roadmaps and expand its operational presence in the country and global markets.

DigitalPaani

• Founded In: 2020
• Founders: Mansi Jain and Rajesh Jain
• Funding Raised To Date: $1.2 Mn
• Investors: Enzia Ventures, Elemental Excelerator, Bharat Founders Fund, peercheque, Ashish Goel
• Headquarters: Gurugram

Founded in 2020 by the father-daughter duo of Rajesh and Mansi Jain, DigitalPaani helps resolve water asset management issues with its IoT-enabled integrated operations platform, driving operational excellence while significantly reducing costs.

Its solution operates in three key steps, beginning with a comprehensive assessment of each water asset’s needs based on its design and current operational status. The platform acts as a manager, automating processes, providing precise dosing recommendations for chemicals, guiding maintenance tasks, and facilitating troubleshooting when issues arise. DigitalPaani also recommends operational and physical improvements to enhance overall performance.

The startup raised $1.2 Mn in December 2023 in a seed round led by Enzia Ventures, and was featured in the 43rd edition of Inc42’s ‘30 Startups To Watch’.

EdgeGrid

• Founded In: 2020
• Founders: Sunil Talla, Prasad Yerneni, Mushtaq Ahmed, Neeraj Sansanwal, Vamsi TP
• Funding Raised To Date: $6 Mn  
• Investors: Lightrock India, Theia Ventures
• Headquarters: Hyderabad

EdgeGrid is a B2B cleantech platform that transits energy to last-mile customers such as households, small businesses, commercial building owners and EV charging stations.

The startup mainly uses the Internet of Things (IoT), AI and industry innovation to resolve energy-related problems in various industries. It claims that it enables customers to consume energy efficiently and also works with energy distribution companies to save costs and expand renewable energy in the ecosystem.

In March 2023, it secured $6 Mn in a fundraising round led by Lightrock India. Theia Ventures and some angel investors also participated in the round. In July last year, it reportedly partnered with Andhra Pradesh Central Power Distribution Co Ltd to help transmission and distribution companies in the state save power purchasing costs.

Electriq

• Founded In: 2021
• Founder: Anand Thakur
• Funding Raised To Date: Undisclosed  
• Investors: Moto Business Service India
• Headquarters: Hyderabad

Founded in 2021 by Anand Thakur, Electriq is an IT, web and app-based platform that tracks electric vehicles and their drivers. Under its B2B vertical, it sells EVs to aggregators such as Zepto and Swiggy and individual customers. 

The startup’s vehicles are installed with IoT devices that share the real-time location of vehicles and vehicle drivers. Electriq’s partnership with Vodafone Idea (VI) allows it to offer connectivity electric scooters.

The startup last raised funding in October 2022 when Yamaha Motors’ subsidiary Moto Business Service India (MBSI) infused an undisclosed amount in a corporate round. That was also the first funding round the startup had raised.

Freyr Energy

• Founded In: 2014
• Founders: Saurabh Marda, Radhika Choudary
• Funding Raised To Date: $4.6 Mn 
• Investors: Total Carbon Neutrality Ventures, Schneider Electric Energy Access Asia, and C4D Partners
• Headquarters: Hyderabad 

Freyr Energy is a rooftop solar expert for residential and commercial solar solutions. It also caters to micro, small and medium enterprises (MSME) sectors, catering to customers across 22 states in India.

Freyr Energy is working to bring much-needed consolidation in the green energy sector. The cleantech startup has come with its app, SunPro+, through which it has made the process of owning a solar system simple and seamless. The entire process of owning the system including financing, execution, and after-sales service, has become easier with the app.

Freyr Energy raised INR 18 Cr as an equity investment in April 2021 from Total Carbon Neutrality Ventures, Schneider Electric Energy Access Asia, and C4D Partners. The cleantech startup is working towards mass-market adoption of solar energy, and looking to accelerate growth and enhance its customer experience.

Gegadyne Energy 

• Founded In: 2015 
• Founders: Jubin Varghese, Ameya Gadiwan
• Funding Raised To Date: $5 Mn
• Investors: V-Guard, Mumbai Angels 
• Headquarters: Mumbai 

Gegadyne Energy develops eco-friendly alternatives to conventional lithium-ion batteries. Its battery consists of nano-material composites and advanced battery architectures to enable quick charging with high energy density similar to lithium-ion batteries.

Gegadyne’s batteries charge from 0 to 100% in around 15 minutes; unlike lithium-ion batteries that take hours to recharge. The price range of the battery pack will be at par with lithium-ion batteries and will drop further as the economy of scale kicks in, as per the startup.

The batteries are aimed to be a direct replacement for existing use cases and will be available in cylindrical, pouch and prismatic forms, according to the startup.

Electric vehicles are the main focus of the startup. However, these batteries can be used in any other consumer devices, telecom towers, and stationary energy storage systems.

Gegadyne Energy raised $4.5 Mn from V-Guard Industries in a Series A round of investment in January 2021.  It plans to build a pilot plant to service its contract with selected OEMs.

GPS Renewables

• Founded In: 2012 
• Founders: Mainak Chakraborty, Sreekrishna Sankar
• Funding Raised To Date: $23 Mn 
• Investors: Neev Fund II, Hivos-Triodos Fund, Caspian
• Headquarters: Bengaluru 

GPS Renewables focuses on biomethanation technology to solve the organic waste management challenge, accelerate the substitution of fossil fuel with bioenergy and mitigate climate change.

The startup has a captive biogas product called the ‘BioUrja’, and GPS renewables claim to have more than 100 BioUrja installations across South Asia. GPS Renewables commissioned a BioCNG plant based on Source Separated Organics (SSO) in Indore. The plant, which is Asia’s largest in its class, was inaugurated by Prime Minister Narendra Modi in February 2022 and is set up over 15 acres of land.

The biogas plant is expected to produce 17 tonnes of bio-CNG every day from 550 tonnes of organic household waste. GPS Renewables aims to power 400 city buses in Indore with the BioCNG generated from the plant. The cleantech startup raised $3 Mn in a Series A funding led by Hivos-Triodos Fund and Caspian in 2020. GPS Renewables closed undisclosed funding in a Series B round in March 2022 from Neev Fund II, managed by SBICap Ventures. 

The cleantech startup is working to complete the world’s largest BioCNG plant in Hyderabad, in partnership with development partners from Japan. It aims to accelerate the substitution of fossil fuels with bio-energy. The startup aims to expand its research and development centres and support its next phase of growth and expansion.

Greenjoules 

• Founded In: 2018
• Founders: V Radhika, VS Shridhar, S Viraraghavan, R Sethunath
• Funding Raised To Date: $4.5 Mn
• Investors:  Blue Ashva Capital 
• Headquarters: Pune

Greenjoules specialises in making renewable biofuels, which are curated entirely from agri-residue and renewable waste from agro-processing industries. 

The biofuel can be used for industrial applications (to power boilers, and gensets) and commercial applications (diesel vehicles). Greenjoules claims to utilise non-food and non-feed wastes to manufacture biofuels. The manufactured biofuel meets the same IS1460 standards that petroleum and diesel also follow.

According to Greenjoules, its biofuel can be used without any modification with the current diesel engines, gensets or boilers in use. This makes its product a direct replacement for petroleum or diesel.

The cleantech startup is serving various large enterprise customers from its biorefinery in Chakan, Pune. It now plans to significantly scale up production by setting up a large facility near Pune to cater to the increasing demand for green diesel. Greenjoules raised $4.5 Mn in its Series A funding round last year in June from Blue Ashva Capital. The funds raised are a combination of equity and debt.

Greenjoules will focus on growing its current product range but also on developing a portfolio of high-energy density liquid and gaseous biofuels. It will also focus on new research and development initiatives in future. 

Greenko Group

• Founded In: 2004
• Founders: Anil Chalamalasetty, Mahesh Kolli
• Funding Raised To Date: $6.7 Bn
• Investors: GIC, Abu Dhabi Investment Authority, Deutsche Bank, JP Morgan, DBS Bank, Barclays  
• Headquarters: Hyderabad

Greenko is a cleantech startup, that enables sustainable and affordable energy, with a net installed capacity of 7.5 GW across 15 states in India. It provides utility-scale, clean and affordable energy to customers. 

Greenko has been opting for the green bond route in the past to raise funds for developing sustainable energy projects. It is developing state-of-the-art three multi-gigawatts scale integrated renewable energy storage projects with national grid connectivity in Karnataka, Andhra Pradesh, and Madhya Pradesh. 

Greenko has raised funding from GIC, Abu Dhabi Investment Authority, Deutsche Bank, JP Morgan, DBS Bank, and Barclays. These projects will harness the power of solar, and wind resources with digitally connected storage infrastructure to provide round-the-clock power to the grid.

Last month, global steel and mining firm ArcelorMittal partnered with Greenko to develop a round-the-clock renewable energy project with 975 MW of nominal capacity. The project will be owned and funded by ArcelorMittal. Greenko will design, construct and operate the renewable energy facilities in Andhra Pradesh. The project commissioning is expected by mid-2024.

h2e Power Systems

• Founded In: 2011
• Founders: Siddharth R Mayur, Amar Chakradeo, Bhavana S Mayur
• Investors: Poonawalla Group
• Headquarters: Pune

h2e is an end-to-end fuel cell and electrolyser company that offers clean energy solutions, including green hydrogen and alternate e-fuels. It also offers power solutions such as energy modules and power boxes. The startup claims to have built the country’s first green hydrogen production plant.

The startup follows the CRS (conserve, replace, sustainable and scalable) programme, which is central to the system. In 2020, it acquired Swiss company Hexis AG for an undisclosed amount.

With presence in four countries, the startup claims to cater to 182 clients and has more than 25 business partners. It competes with the likes of homegrown startups such as NewTrace, Ossus Biorenewables, Hydrogen Gentech, among others.

Hygenco

• Founded In: 2020
• Founders: Amit Bansal, Anshul Gupta, Aashish Gupta
• Funding Raised To Date: $25.4 Mn
• Investors: Neev II fund
• Headquarters: Gurugram

Hygenco develops green hydrogen and green ammonia production assets for commercial purposes. 

The startup’s LinkedIn profile says Hygenco’s team holds a combined experience of more than 30 years in construction, renewables, operations & maintenance, investment banking and private equity.

In October, the startup received $25.4 Mn in funding from the private equity fund Neev II fund. During that time, it said that it plans to invest more than $300 Mn in developing green hydrogen projects across the country in the coming three years.

Before that, it inked an offtake agreement with Indian steel company Jindal Stainless to build a multi-megawatt green hydrogen facility. With this plant, the startup would help Jindal reduce carbon emissions by nearly 2,700 metric tonnes annually.

Inficold

• Founded In: 2015
• Founders: Himanshu Pokharna, Nitin Goel
• Funding Raised To Date: $9 Mn
• Investors: RVCF, Shell Foundation 
• Headquarters: Delhi NCR 

Cleantech startup Inficold provides cold storage solutions to its customers. The current product portfolio consists of modular cold storage and instant and bulk milk coolers. It provides round-the-clock cooling with just seven hours of grid/solar power. 

Inficold claims to have developed a retrofittable thermal energy storage technology for storing cooling in a low-cost medium such as water to ice.

The technology is designed to use solar electric energy to make ice, and later use it for cooling purposes. Inficold’s products enable the application of thermal storage for virtually any cooling needs — be it milk, cold storage, air conditioning, or vaccine refrigeration — without making any major modifications to existing cooling hardware. 

The startup raised INR 6.5 Cr in a funding round last year from RVCF and other undisclosed HNIs as a part of its Pre-Series A funding round. 

The startup has installations in more than 17 states of India with a strong presence in northeastern states, including Assam, Meghalaya, and Tripura. Inficold claims that it is aggressively ramping up its production capacity by more than 10 times.

The increased capacity will allow it to cater to the demand with a minimised lead time for the customer, it said. 

The startup is planning to expand its overall manufacturing, sales, and servicing capabilities. It plans to penetrate dairy, horticulture, poultry, meat, cold logistics and air conditioning segments across India. 

ION Energy

• Founded In: 2016
• Founders: Akhil Aryan, Alexandre Collet
• Funding Raised To Date: $4.6 Mn
• Investors: YourNest Venture Capital, Riso Capital, Venture Catalysts, Climate Pledge Fund, Climate Capital
• Headquarters: Mumbai 

ION Energy builds advanced electronics and software platforms for new energy companies. The company’s flagship product so far has been its Battery Management System (BMS), which enables OEMs/Battery Pack Makers to deploy smart battery systems.

In 2019, the cleantech startup launched Altergo (previously called Edison Analytics), a digital twin platform for battery intelligence. Altergo now manages 700+ MWh of battery storage in the cloud.

ION currently supplies to 75+ OEMs across 15 countries including India, France, Spain and the US. Since its inception, ION Energy claims to have deployed more than 60,000 smart BMS in electric vehicles and stationary storage systems. 

The startup raised $3.6 Mn in Pre-Series A funding in July 2021 from the Climate Pledge Fund, joined by Silicon Valley-based Climate Capital, early-stage investor YourNest Venture Capital, Riso Capital, Venture Catalysts, and other angel investors. 

This startup is looking to expand its product development and software business in other countries. 

Log9 Materials 

• Founded In: 2015
• Founders: Akshay Singhal, Kartik Hajela, Pankaj Sharma
• Funding Raised To Date: $65 Mn
• Investors: Metaform Ventures, Exfinity Venture Partners, Surge Ahead, Petronas Ventures, Incred Financial, Unity Small Finance Bank, Oxyzo Financial Services, Western Capital Advisors, Amara Raja Batteries
• Headquarters: Bengaluru

Battery technology startup Log9 Materials is a graphene research and development startup that accelerates the commercialization of graphene nanotechnology. Their first developed product of this technology is ‘smoke-safe’ which is a cigarette that reduces the risk of getting cancer by 90%.

Log9 Materials has developed technology for both stationary and automotive applications such as electric vehicles (EVs). Aluminium fuel cells are aluminium-air batteries (AI-air batteries) that produce electricity from oxygen and aluminium reactions. The technology used in the battery is similar to the hydrogen fuel cell but more economical, safer and scalable.

In January, it secured $40 Mn funding in its Series B round led by Amara Raja Batteries Ltd. Before this, it raised $3.5 Mn funding in a Series A round led by Exfinity Venture Partners and Sequoia Capital India’s accelerator programme Surge.

In April last year, it inaugurated its indigenously developed cell manufacturing facility at Jakkuru in Bengaluru. 

It has been working on unique cell chemistry for its RapidX battery packs powered by InstaCharge technology, which offers nine times faster charging, better performance, and battery life as compared to conventional lithium-ion electric vehicle batteries.

It aims to achieve at least 50MWh of peak cell production capacity in the next year, and scale it to over 5GWh in the next three to five years, Log9 Materials said in a statement.

Lohum 

• Founded In: 2017
• Founders: Rajat Verma, Justin Lemmon and Gazanfar Safvi 
• Funding Raised To Date: $7 Mn
• Investors: Baring Private Equity Partners, Talbros 
• Headquarters: Delhi NCR

Lohum is a lithium-ion (Li-ion) battery pack manufacturer and battery materials (cobalt, lithium, nickel, etc) recycler. 

The cleantech startup addresses battery business across three cycles, first life with new batteries for two and three-wheeler original equipment manufacturers (OEMs) and stationary applications including for UPS and telecom, second life, which enhances the life of existing batteries, and lastly, end-of-life management offering recycling solutions. 

Given the government’s focus on setting up giga factories in India, the startup sees a huge unfolding opportunity to provide the entire lifecycle management solutions.

The startup claims to generate 80% of its revenue from sales of EV batteries to solar plants, and electric two and three-wheeler companies, while 10% comes from the energy storage system (ESS) and 10% from its recycling business.   

The recycling startup Lohum raised $7 Mn in a fresh round of funding from institutional investors led by Baring Private Equity Partners in January 2021.

Lohum has plans to expand its manufacturing capacity of lithium-ion batteries from 300 MWh to 1000 MWh (1 GWh) and its recycling capacity 10 times, from 1,000 tonnes per annum to 10,000 tonnes per annum.

Loom Solar

• Founded In: 2018
• Founders: Amod Anand, Amol Anand 
• Funding Raised To Date: $2 Mn
• Investors: Social Investment Managers and Advisors
• Headquarters: Delhi NCR 

Loom is a B2C solar startup that offers solar panels, lithium batteries, solar inverters, solar wires, panel stands and charge controllers. It operates in both online and offline channels. 

Apart from offering solar solutions, the startup also provides a credit facility to consumers to procure products at a 0% interest rate. In January this year, it secured $2 Mn in funding from Social Investment Managers and Advisors (SIMA) under the Energy Access Relief fund.

It operates one manufacturing unit and has a presence in 500 Indian districts. As per its website, the startup manages 100 employees. 

In FY2021, its revenue stood at INR 35 Cr and of this, 60% was accounted for solar panels. It aims to expand its energy storage solutions and grow its market share from 1% to 5% by 2025. 

It also claimed to have connected with 10,000 resellers and looks to partner with strategic investors in the future.

Metastable Materials

• Founded In: 2021
• Founders: Shubham Vishvakarma, Saurav Goyal Manikumar Uppala
• Funding Raised To Date: Undisclosed
• Investors: Sequoia Surge, Speciale Invest, Theia Ventures, Akshay Singhal, Archana Priyadershini
• Headquarters: Bengaluru

Founded in October 2021, Metastable Materials claims to have developed the world’s first, chemical-free integrated carbothermal reduction process for recycling and extracting valuable materials, such as copper, aluminium, cobalt, nickel and lithium from Li-ion batteries.

The startup opened a 21,000 sq ft urban mining facility located on the outskirts of Bengaluru in October 2022. The facility can process 1,500 tonnes of material annually, which accounts for up to 6% of India’s recycling demand for Li-ion batteries.

It has raised an undisclosed amount of funding recently from Sequoia’s Surge, as part of its Surge 08 cohort. 

MYSUN

• Founded In: 2016
• Founders: Gagan Vermani, Gyan Prakash Tiwari, Ashit Maru
• Funding Raised To Date: $9 Mn
• Investors: Tata Cleantech Capital, General Catalyst 
• Headquarters: Delhi NCR

MYSUN is a technology-backed B2B2C rooftop solar platform providing hyperlocal end-to-end solar solutions and long-term maintenance services. It provides solar energy to industries, small and medium enterprises/medium small and micro enterprises, and homes.

The cleantech startup is creating a network of clients/buildings (residential, industrial and commercial customers) across 100 cities (Tier 1/2/3). Last year, MYSUN bagged 140-megawatt  open-access solar power projects from Uttar Pradesh Power Transmission Corp Ltd. 

Under its new asset vehicle MYSUN+, it is expanding its presence across states such as Uttar Pradesh, Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Andhra Pradesh, Tamil Nadu and Delhi NCR. The cleantech startup is already in early-stage development of more than 220 MW of projects under the captive/ open access mechanisms.

In July 2021, the firm raised INR 15 Cr from Tata Cleantech in debt funding to expand its pipeline of projects.

MYSUN is looking to improve its technology infrastructure, scale up its service offerings, and expand to newer geographies, both in India and globally, including parts of the Middle East, Asia-Pacific, and Africa.

Nepra

• Founded In: 2011
• Founders: Sandeep Patel, Dhrumin Patel, Ravi Patel
• Funding Raised To Date: $24.5 Mn 
• Investors: Aavishkaar Capital, Circulate Capital, Asha Impact 
• Headquarters: Ahmedabad 

Nepra offers an integrated, efficient and scalable waste management solution that connects all stakeholders along the value chain, from municipalities to informal waste pickers, as well as recyclers and brand owners.

The startup processes over 500 tonnes of dry waste every day across Ahmedabad, Indore and Pune with the help of 1,700 collectors. The cleantech startup claims to have positively impacted the lives of 5K people at the very bottom of the waste management industry over the last eight years.

The dry waste management startup raised $18 Mn in Series C funding from Aavishkaar Capital and Circulate Capital in 2020. The cleantech startup claims to bring transparency and scalability to the highly unorganised waste management sector in the country. 

Nepra plans to expand its capacity generation and manage dry waste across more cities in India. It plans to expand to 25 cities in India by 2025. 

NewTrace

• Founded In: 2021
• Founders: Prasanta Sarkar, Rochan Sinha
• Funding Raised To Date: $6.6 Mn
• Investors: Speciale Invest, Micelio Fund
• Headquarters: Bengaluru

Newtrace develops batteries and electrolysers for producing green hydrogen for industries. Before founding the startup, both founders had completed PhD degrees in engineering disciplines. 

In July, the startup secured $1 Mn in a pre-seed funding round led by Speciale Invest and Micelio Fund. Angel investors also have participated in the funding round. In May, the startup picked up another $5.6 Mn in seed funding. 

During that time, it wanted to build electrolyzers offering 1 megawatt (MW) by 2025 and further increase the capacity of electrolyzers to 10MW by 2027. It further looks to help varied industries such as petrochemical, ammonia, mobility, energy and steel, among others reduce their carbon footprint. 

As per the startup’s website, it is currently pilot-testing its products. Back in 2021, it tested its prototype at IIT Madras and before that, it got shortlisted for a pre-incubation programme led by NSRCEL and Maruti Suzuki. 

Offgrid Energy

• Founded In: 2018
• Founders: Rishi Srivastava, Tejas Kusurkar, Brindan Tulachan, Ankur Agarwal
• Funding Raised To Date: $1.3 Mn
• Investors: Shell Ventures, Ankur Capital, APVC 
• Headquarters: Kanpur 

Energy tech startup Offgrid has developed a rechargeable zinc-carbon battery that outperforms available battery technologies in terms of power density, life and cost. 

Offgrid has more than 15 patents, designs and trademarks to its name, with a primary focus on renewable energy storage, microgrids, electric vehicle charging and grid applications in utilities.

The startup’s flagship product, ZincGel Battery technology has energy efficiency at par with a lithium-ion battery. It has twice the life cycle and negligible operational cost — thereby saving up to 30% cost for energy storage projects. Alternatively, existing lead-acid manufacturers can make ZincGel batteries easily with available equipment.

In February 2022, Offgrid raised undisclosed funds from energy solutions giant Shell, venture capitalists Ankur Capital and APVC to take its flagship product rechargeable zinc-based battery ZincGel to the market.

The startup has previously raised a small angel round from overseas investors and was seed-funded by Shell India.

The cleantech startup plans to cater to multiple industries such as renewables, microgrids, electric vehicles and utilities through its different variants of zinc-carbon batteries.

Oorjan Cleantech

• Founded In: 2014
• Founders: Roli Gupta, Das Gautam 
• Funding Raised To Date: $450K
• Investors: Aditya Sharma, Globevestor, Nisha Pillai, Mayur Bhat, Sayandev Chakravartti
• Headquarters: Mumbai

Solar energy startup Oorjan offers solar on-grid systems, ranging from 1kWp to 10kWp, to residential, commercial and industrial use cases. Besides this, it also operates three verticals–SolarSME, Greenstitute and Greenjobs. 

Under its SolarSME, the startup helps small and medium-sized enterprises to kick start as well as promote their solar businesses. It additionally provides credit facilities to individual consumers and PPA financing to commercial customers.

Under Greenstitute, it offers certified courses on solar energy and systems to students in association with academic institutions. On the other hand, Greenjobs acts as an online job portal connecting job seekers with companies. 

In 2017, it raised $450K in seed funding led by venture capital firm Globevestor. Chakravartti, Aditya Sharma, Nisha Pillai and Mayur Bhat also participated in the funding round.

The startup claims to have served more than 1,500 customers across 15+ states of India. 

Ossus Biorenewables

• Founded In: 2017
• Founders: Suruchi Rao, Shanta Rao and Kamar Suhail Basha
• Funding Raised To Date: $2.4 Mn
• Investors: Gruhas, Rainmatter Climate
• Headquarters: Bengaluru

Founded in 2017 by Suruchi Rao, Shanta Rao and Kamar Suhail Basha, Ossus’ AI-powered bioreactors absorb carbon from wastewater produced by industries and supply them with green hydrogen gas. 

The bioreactors mainly use microorganisms sourced directly from wastewater as catalysts for green hydrogen production. The startup currently works with steel, starch and energy companies and helps them produce hydrogen gas at a cost of less than $1 per kg. 

In May 2023, Ossus secured $2.4 Mn in funding in its pre-Series A round from Gruhas, cofounded by Zerodha’s Nikhil Kamath with Puzzolana’s Abhijeet Pai, and Rainmatter Climate. The startup invested the fresh funds to accelerate the deployment of its bioreactor, OB HydraCel, across sectors like refining, foods, brewing, chemicals and pharmaceuticals.

Orb Energy 

• Founded In: 2006
• Founders: Damian Miller, NP Ramesh  
• Funding Raised To Date: $13.6 Mn   
• Investors: FMO, Bamboo Capital Partners, Rianta Capital, Acumen Capital Market Funds I, Pamiga SA
• Headquarters: Bengaluru 

Orb Energy offers solar energy solutions (solar electricity and solar water heating) to residential, commercial and industrial customers, especially small and medium-sized enterprises (SMEs). 

To enable SMEs to afford solar energy, the cleantech startup has set up an in-house finance facility to provide extended payment terms to customers. Orb also provides credit to SMEs to invest in solar panel systems.

Since its inception in 2006, Orb has sold more than 160,000 solar systems, with cumulative installations of more than 110MW of rooftop solar systems.

Further, Orb Energy manufactures its solar panels and solar water heating systems in-house to control quality and cost. 

Orb Energy raised a $15 Mn debt fund in 2019 to augment its capital base. It raised an undisclosed amount from Shell’s New Energies business by divesting an almost 20% stake in the firm in a Series C round of funding in 2019. 

Shell’s New Energies business has acquired a 20% stake in solar firm Orb Energy in a funding round in 2019. It has so far received more than $13 Mn in equity and around $10 Mn debt in Series A and Series B rounds. 

Orb is based in Bengaluru, where it runs two factories, one producing solar photovoltaic panels and the other producing solar water heating systems. Orb is looking to help more Indian SMEs to benefit from lower-cost solar power in future.

OxyGarden

• Founded In: 2019
• Founders: Anshu Gupta, Abhishek Gupta
• Funding Raised To Date: $70K 
• Investors: NA
• Headquarters: Gurugram

OxyGarden has developed Forest, an automated vertical green wall designed to purify the air in homes and commercial spaces. The green wall uses a soil and root-based filtration system to naturally purify the air, creating a forest-like environment within living spaces.

In addition to air purification, Forest helps to regulate relative humidity levels with the help of controlled transpiration in plants. The product is designed to require minimal maintenance and does not require any human intervention once installed, according to the company.

To date, OxyGarden has raised $1.7 Mn in funding from investors to support the development and growth of its product line.

Pi Green Innovations

• Founded In: 2019
• Founders: Irfan Pathan and Rizwan Shaikh
• Funding Raised To Date: $4.8 Mn
• Investors: Opus Consulting Solutions, Harshal Morde (Morde Foods) 
• Headquarters: Pune 

Pi Green Innovations creates technology-driven solutions for the reduction of particulate matter emissions at source. The startup has a patented filterless technology that converts smoke to its powder form, soot.

Some of the startup’s solutions include carbon cutter machines, filterless retrofits for diesel generators and heavy vehicles; and RepAi, a filterless ambient air-purification tower that can be installed in public spaces. 

As per the founders, the cleantech startup has developed a retrofit solution for existing conventionally-fuelled heavy vehicles, diesel-fuelled generator sets and industrial boilers to reduce and capture hazardous particulate matter (PM) emissions and pollution caused every day. 

Pi Green’s retrofit device can capture 90% of the particulate matter emitted from the genset in real-time ranging from PM2.5 to PM10. The device works on the principle of electrostatic precipitator. 

The cleantech startup secured over $4.5 Mn in Series A funding in December 2021. The round was led by the Investment Fund of Opus Consulting with a total of $4.3 Mn. 

Its plans include working on after-treatment solutions for crematoriums. A pilot run is already underway at a crematorium in Bengaluru and a heavy vehicles retrofit pilot with the Bengaluru Municipal Corporation for two buses. 

Prescinto

• Founded In: 2016
• Founders: Puneet Jaggi, Ram Menon, Sanjay Bhasin
• Funding Raised To Date: $5.3 Mn
• Investors: Mumbai Angels Network, Inflection Point Ventures, 9Unicorns Accelerator Fund, Lets Venture
• Headquarters: Bengaluru 

SaaS solar energy startup Prescinto uses Artificial Intelligence to identify the root causes of plants’ underperformance in real-time and suggest actions to improve generation in clean energy plants by 5 to 7%. It helps in reducing costs of operation and maintenance.

Prescinto has been deployed across 10,000+ MWs of solar and wind projects across 14 countries with marquee clients like SoftBank Energy, Macquarie and Radiance Renewables managing their solar and wind assets on Prescinto.

Prescinto IOT platform is designed for vendor-independent connectivity and provides insights for solar PV plants. Prescinto’s patent-pending technology buckets losses into downtime, soiling, and systemic loss and immediately converts each loss into actionable job tickets along with projected gains. 

It has customers such as Stride Climate Investments, Essel Infrastructure, and GMR, among others to achieve traction of 3X annual growth reaching over 9 Giga Watts of solar plants across more than 10 countries.

Prescinto raised $3.5 Mn in a Seed funding round in March 2021 led by Venture Catalysts. Inflexion Point Ventures, Mumbai Angels and LetsVenture also participated as part of this round.

The Bengaluru-based cleantech startup is looking to expand in international markets, primarily in the US market, and for Intellectual Property development. Prescinto aims to expand into wind and energy storage as well.

Proklean

• Founded In: 2012
• Founders: Sivaram Pillai, Bala Chandrashekar, Vishwadeep Kuila
• Funding Raised To Date: $5.36 Mn
• Investors: Raintree Family Office
• Headquarters: Chennai

Founded in 2012 by Sivaram Pillai and Bala Chandrashekar, and later joined by Vishwadeep Kuila, Proklean offers non-toxic and biodegradable green chemistry solutions to clients across industries such as textiles, pulp and paper, water management and biosurfactants. 

Proklean also sells household cleaning products across online marketplaces and offline stores in Chennai. 

Proklean last raised $4 Mn as part of its strategic funding round from the Raintree Family Office in June this year. The startup claims to have turned EBITDA profitable in the financial year 2022-23 (FY23) with a revenue of INR 40 Cr.

Recykal

• Founded In: 2016
• Founder: Abhishek Deshpande
• Funding Raised To Date: $44.5 Mn
• Investors: 360 ONE Asset Management, Morgan Stanley, Circulate Capital, Bank of Singapore, Triton Investment Advisors, Pidilite Industries, Vellayan Subbiah, Arun Venkatachalam
• Headquarters: Hyderabad

Founded in 2016 by Abhishek Deshpande, Hyderabad-based Recykal offers cloud-based solutions that enable transparent and traceable material flows in waste. 

The startup works with businesses to track and meet their EPR (extended producer responsibility) targets, dispose of e-waste responsibly, track their plastic footprint and offers a SaaS-based track and trace platform to monitor industrial waste and help report accurate ESG (Environment, Social and Governance)  and SDG (the United Nations Sustainable Development Goals) metrics.

In April 2024, Recykal raised INR 110 Cr (around $13.5 Mn) in funding in its Series B round led by 360 ONE Asset Management. The startup reported a net loss of INR 25.7 Cr in the financial year 2022-23 (FY23) as against a net profit of INR 1.2 Cr in FY22.

ReNew Power

• Founded In: 2011
• Founders: Sumant Sinha
• Funding Raised To Date: $3.2 Bn
• Investors: Goldman Sachs, Franklin Templeton India, JP Morgan, L&T, Sylebra Capital, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board 
• Headquarters: Delhi NCR

ReNew Power is an independent power producer (IPP) of renewable energy using clean sources such as wind, hydro and solar power. The startup can generate more than 8 gigawatts of power assets across 16 states in India, including commissioned as well as under-development projects. 

Renew Power joined the startup unicorn club in 2017 after raising $300 Mn through a rights issue. Goldman Sachs, Abu Dhabi Investment Authority, and the Canada Pension Plan Investment Board have subscribed to the issue, with each shareholder infusing $100 Mn, it said. According to its website, ReNew’s total capacity was 10.2 GW and its commissioned capacity was 7.3 GW, as of February 2022.

ReNew Energy raised $400 Mn in January 2022 at 4.5% by issuing green bonds. ReNew is setting up a joint venture (JV) with Fluence to boost the energy storage sector and meet the local needs of Indian customers. The startup has entered into a partnership agreement with Larsen & Toubro (L&T) to develop, own, execute and operate green hydrogen projects in India. 

To enable India’s decarbonisation push, Indian Oil Corporation, L&T, and ReNew Power signed a JV company on April 3, 2022. It is working to develop the green hydrogen sector in India. The cleantech startup intends to own 18 GW of renewable energy assets by FY25.

rePurpose

• Founded In: 2019
• Founders: Svanika Balasubramanian, Peter Wang Hjemdahl, Aditya Siroya
• Funding Raised To Date: Undisclosed
• Investors: NA
• Headquarters: Bengaluru/New York City

Founded in 2019 by Svanika Balasubramanian, Peter Wang Hjemdahl and Aditya Siroya, rePurpose is a social enterprise, which also acts as a plastic credit platform. rePurpose enables individuals and businesses to become plastic-neutral and take responsibility for their plastic footprint by funding recycling the same amount of plastic waste they produce.

The startup allows companies to track their plastic footprint, offers advice on reducing their plastic footprint and works on projects related to recovering plastic waste. rePurpose claims to have recovered 22,369 tonnes of nature-bound plastic waste so far.

In its endeavour, the startup has received several accolades and has been recognised by the United Nations Environment Programme as one of the top 12 innovators in plastic recycling in the world.

Sea6 Energy 

• Founded In: 2010
• Founders: Nelson Vadassery, Shrikumar Suryanarayan, Sowmya Balendiran, Sri Sailaja Nori 
• Funding Raised To Date: $17.9 Mn
• Investors: Aqua-Spark, Silverstrand Capital, Tata Capital Innovation Fund
• Headquarters: Bengaluru 

Sea6 Energy develops technologies to convert biomass into biofuel, plant growth stimulants, plant defence products, animal feed ingredients, and other bio-renewable products to replace chemicals and plastics. 

The cleantech startup has also developed proprietary technologies to convert fresh seaweed into environmentally friendly products for a range of industries including agriculture, animal health, food ingredients, bioplastics and renewable chemicals.

Sea6 Energy exports its patented agriculture biostimulant product to countries including the USA, Indonesia, Sri Lanka and Vietnam.

The seaweed farming and processing startup raised $9 Mn in Series B funding in July 2021 led by Aqua-Spark, the Netherlands-based investment fund. Singapore-based Silverstrand Capital is the co-investor in the round.

The startup will work on additional SeaCombine systems to increase the supply of seaweed raw material and expand its processing capacity with additional facilities to produce Sea6’s agricultural biostimulant and animal health products. 

SenseHawk

• Founded In: 2018 
• Founders: Rahul Sankhe and Swarup Mavanoorl
• Funding Raised To Date: $7.1 Mn
• Investors: Alpha Wave Global, SAIF Partners, Elevation Capital
• Headquarters: Bengaluru  

Cloud-based cleantech startup SenseHawk enables owners, managers and developers of solar assets to gain new insights about their plants that enable maximisation of returns. 

The initial focus of the startup is on the rapidly growing solar industry with future expansion to other similar sectors.

Its solutions combine different kinds of unmanned aerial vehicles (UAVs), sensors, data processing and planning chains to create decision-making tools that drive productivity in the energy and infrastructure industries. 

The startup claims that it has delivered data analytics for more than 28 GWs of solar assets across 15 countries worldwide, and has nearly 80 clients.

SenseHawk raised $5.1 Mn in a Series A funding round in 2020 led by Alpha Wave Incubation, backed by Abu Dhabi-based ADQ. Existing investor SAIF Partners also participated in the round.

The startup is looking to expand its presence in Abu Dhabi, and also build a team of data scientists, product managers and engineers in the region. 

It is planning to use Abu Dhabi as the global base for international expansion while targeting the Gulf Cooperation Council countries — the Middle East North Africa and other global markets.

Skilancer Solar

• Founded In: 2017
• Founders: Manish Kumar Das, Neeraj Kumar
• Funding Raised To Date: $652K
• Investors: Boundary Holding, Venture Catalysts, IIML-Incubator, Neeraj Kumar, Dhianu Das, Alfa Ventures
• Headquarters: Noida

Skilancer Solar offers cleaning services for solar panels installed in commercial parks and other establishments. 

The startup was founded by Neeraj Kumar, who has three years of experience in the solar industry, and Manish Kumar Das, who brings ten years of experience in instrumentation engineering to the team.

Skilancer Solar’s client portfolio includes several prominent organisations such as Hindustan Petroleum, Adani, Ambit Energy, and Unilink Group. 

The startup has received over $652K in funding from a range of investors, including Boundary Holding, Venture Catalysts, IIML-Incubator, Neeraj Kumar, Dhianu Das, and Alfa Ventures.

Solar Ladder

• Founded In: 2021
• Founders: Manan Mehta, Abhishek Pillai, Farhan Ahmed
• Funding Raised To Date: $1.34 Mn
• Investors: Axilor Ventures, Titan Capital, DeVC, Stride Ventures, Varun Alagh
• Headquarters: Mumbai

Founded in 2021 by Manan Mehta, Abhishek Pillai and Farhan Ahmed, Solar Ladder is an EPC (engineering, procurement and construction) service provider in the rooftop solar energy space.

Having partnered with five NBFCs, the Mumbai-based startup offers collateral-free financing to both EPC installers and end users. 

Solar Ladder also offers a free SaaS tool, which integrates modules encompassing sales, marketing, installation, accounts and project management. It gives EPC installers more visibility into a business’s various functions such as ongoing projects, inventory and payments.

The cleantech startup last secured INR 11 Cr ($1.34 Mn) in funding in May 2023 to fuel its expansion plans.

SmartJoules

• Founded In: 2014
• Founders: Arjun P Gupta, Ujjal Majumdar, Sidhartha Gupta
• Funding Raised To Date: $4.35 Mn
• Investors: ADB Ventures, Sangam Ventures, Max Limited, cKinetics Accelerator, Dabur family’s Saket Burman 
• Headquarters: Delhi NCR

Energy-efficiency-as-a-service startup Smart Joules offers capital expenditure-free retrofits for commercial and industrial facilities by improving the overall design of energy-intensive systems like cooling, heating, compressed air and steam. 

The cleantech startup claims its DeJoule technology platform utilises various sensors and IoT controllers to track and control equipment and optimise overall facility performance in real-time using data. This tech platform allows SmartJoules to guarantee its clients 15% energy savings.

Its JoulePAYS service makes energy savings easy and profitable from day one with zero investment and zero risk for hospital/hotel owners under a single pay-as-you-save agreement.

Smart Joules has provided its full-stack solution for leading Indian hospital chains, including Apollo, Fortis, KIMS, Aster, and CARE, among others. 

In March 2021, Smart Joules raised $4.1 Mn in its Series A funding round from various investors, namely ADB Ventures, Sangam Ventures, and Max Limited, among others. It raised $4.9 Mn in a Series A funding round from various investors in April 2021.

SmartJoules’ plans include strengthening its energy management team, enhancing its digital technology platform, expanding its presence across hospitals and scaling its cooling-as-a-service offering for commercial buildings and industries with heavy air conditioning loads such as pharmaceuticals and data centres.

SolarSquare

• Founded In: 2015
• Founders:  Neeraj Subhash Jain, Nikhil Satejlal Nahar
• Funding Raised To Date: $16.08 Mn  
• Investors: Elevation Capital, Lowercarbon Capital, Good Capital, Rainmatter, Vidit Atrey, Sanjeev Barnwal, Maninder Gulati, Ashish Goel, Amit Kumar Agarwal, Akhil Gupta, Saurabh Garg 
• Headquarters: Mumbai

Cleantech startup SolarSquare offers rooftop solar panels for residential and commercial purposes. It also provides financing facilities to customers at a 0% interest rate. It currently has a presence in Bengaluru, Delhi, and Hyderabad as well as states including Gujarat, Madhya Pradesh and Maharashtra

Initially, the startup only provided commercial rooftop solar solutions but in 2020, it started catering to the needs of residential consumers too. During the same year, it elevated Shreya Mishra, its CEO to the position of cofounder. 

In November last year, it raised $12.08 Mn in a Series A funding round led by Elevation Capital and Lowercarbon Capital. Good Capital, Rainmatter, Meesho’s Vidit Atrey and Sanjeev Barnwal also participated in the round. 

Its cap table includes Lowercarbon Capital, Symphony Asia, OYO’s Maninder Gulati, Urban Ladder’s Ashish Goel and Nobroker founders Amit Kumar Agarwal, Akhil Gupta & Saurabh Garg, among others.

Earlier, it claimed to have served nearly 5,000 residential customers and also aimed to standardise its installation quality. 

SolarTown Energy  

• Founded In: 2012
• Founders: Vikram Dileepan, Dhanush Kuttuva 
• Funding Raised To Date: $200K
• Investors: GREX
• Headquarters: Chennai 

SolarTown Energy makes clean energy for homeowners, businesses, schools, non-profit and government organisations at low cost. 

The cleantech startup provides solutions and products for home-based systems, small and mid-size businesses, and buildings. 

SolarTown provides for the sale, lease and installation of solar rooftop systems from 1 kW to 300 kW for residential, commercial and industrial customers. SolarTown Energy claims to have installed more than 100 solar systems and counts Infosys and Renault-Nissan among its customers. 

The startup is looking for market expansion, investment in technology, international business development and working capital requirements.

Swajal 

• Founded In: 2015
• Founders: Advait Kumar, Vibha Tripathi
• Funding Raised To Date: $2.8 Mn
• Investors:  Rajasthan Venture Capital Fund, Pramod Agarwal (former CFO at Procter & Gamble), ACPL 
• Headquarters: Delhi NCR

Swajal is an artificial intelligence (AI) and Internet of Things (IoT)-enabled water purification solution that looks to enable access to clean drinking water across the socio-economic spectrum. 

The cleantech startup claims to have developed solar-energy-powered remote sensing water purification systems (also known as water ATMs) with user interfaces and payment mechanisms for airports, hotels, offices, schools and railway stations among others, where it essentially replaces the plastic, encouraging people to bring their utensils/bottles to fill water. 

Swajal also helps corporate customers move away from plastic bottles to glass bottles using its in-house water bottle washing, filling and monitoring plant (WaterCube). The startup earns revenue from consumers buying its systems or a per-litre price for the as-per-usage model.

Last year, Swajal raised $1.6 Mn in funding from the social impact fund Rajasthan Venture Capital Fund, alongside Pramod Agarwal (former CFO at Procter & Gamble), ACPL and other angel investors.

The startup is planning to further enhance its research and development capabilities, thereby making drinking water more accessible, sustainable and plastic-free in the country.

The Energy Company

• Founded In: 2021
• Founders: Prashant Rathee, Rahul Lamba, Pratik Somani
• Funding Raised To Date: Undisclosed
• Investors: LetsVenture, WeFounderCircle, SIA Angel Network, Monokeros Ventures
• Headquarters: Bengaluru

The Energy Company has developed a full-stack battery solution for EVs in India that helps B2B vehicle aggregators manage vehicle life cycles by giving them a longer-lasting battery pack via FlexiPack and better visibility on the battery life via its SaaS tool FlexiTwin.

The startup claims that its battery pack is scalable across electric two-wheelers, three-wheelers and buses and helps vehicles run for 50 km on just a 15-minute fast charge and 100 km after a 40-minute charge.

Meanwhile, The Energy company’s SaaS tool, FlexiTwin, takes inputs from the sensors installed on a battery to digitally record the battery performance, degradation and service history, with insights on battery health and ageing.

For now, the cleantech startup is in talks with five B2B clients, which have around 25,000 two-wheeler EVs. The startup also has letters of intent (LOIs) for around 2,000 electric two-wheelers.

Uravu Labs

• Founded In: 2019
• Founders: Pardeep Garg, Swapnil Shrivastav, Venkatesh R, Govinda Balaji
• Funding Raised To Date: $274K
• Investors: Speciale Invest, Peter Yolles (EchoRiver Capital), Soren Schroder, Shigeru Sumimoto (Conselux Corporation), Tomoki Kaneko (Kaneko Cord)
• Headquarters: Bengaluru 

Watertech startup Uravu Labs builds atmospheric water generators that run on 100% renewable energy. It creates water from the air using only renewable energy sources like solar, waste heat, or biomass to produce renewable water.

Uravu’s working prototype can channel air into a chamber containing desiccants like Silica which absorb the water content in the air. Once the desiccant is fully saturated, heat is applied to it using solar energy to extract the water in liquid form, as claimed by the startup.  

The water-from-air concept is not new, as many startups already operate in the space. But unlike Uravu, most of them use refrigeration as a method to condense air in the atmosphere, which is an expensive process with high energy requirements. 

Uravu’s method uses a desiccant that is relatively less capital-intensive and energy-intensive and also requires much less maintenance. The desiccant used in the machine has a shelf life of around ten years, and the rest of the components are mostly conventional electronic components like fans and pipes, according to the startup. 

The water tech startup raised an undisclosed amount during a pre-seed funding round in December 2021 led by Speciale Invest. The startup plans to work with corporations on CSR efforts, and with government agencies like Jal Shakti, and MNRE, among others, to deliver clean drinking water to remote and rural areas in the country. 

Varaha

• Founded In: 2022
• Founders: Madhur Jain, Ankita Garg, Vishal Kuchanur
• Funding Raised To Date: $4 Mn
• Investors: Orios Venture Partners, Omnivore, RTP Global, Better Capital, Kunal Shah 
• Headquarters: Gurugram

Climatetech startup Varaha helps agricultural farmers adopt regenerative agricultural practices by producing carbon credits, which help grow revenue and decrease operating expenses. It has a presence in six Indian states. 

Explaining the modus operandi, the startup said it enrols agricultural farmers, quantifies greenhouse gases, verifies carbon credits, and then sells those credits to buyers. 

In December 2022, it secured $4 Mn in a seed funding round for expanding business in South Asia. The round was led by Orios Venture Partners along with participation from Omnivore, RTP Global, Better Capital and CRED founder Kunal Shah.

Earlier, it claimed to have covered an expanse of more than 1.32 Lakh acres under its agroforestry, forest conservation and reforestation activities, among others. As per its website, the cleantech startup cloistered over 3.5 Lakh tonnes of carbon emissions and saved 1.55 Lakh Mn litres of water so far.

WEGoT

• Founded In: 2015
• Founders: Abilash Haridass, Vijay Krishna, Mohideen Haja, Sundeep Donthamshetty
• Funding Raised To Date: $3.5 Mn
• Investors: GRUHAS Proptech, Rahul Talwar (DLF Family Office) Harshad Reddy (Apollo Hospitals Family), HDFC Capital Advisory Ltd, Prestige Group
• Headquarters: Chennai 

Internet of Things-based cleantech startup WEGoT Utility Solutions delivers water management solutions to clients from single houses to multi-unit apartments and commercial complexes.

The cleantech clients include Prestige Group, Godrej Properties, Brigade Group, Mahindra World City, and Brookfield among others. WEGoT’s Smart Water Meters manage water consumption and quality in real-time. Its app enables effective monitoring, control and modification of water consumption based on user insights. 

Since its inception, WEGoT has successfully implemented over 100,000 smart devices in over 30,000 homes and on over 40 Mn sq feet of commercial real estate. It has plans to scale up to one million devices in the coming months. The cleantech startup has effectively conserved over 3 Bn litres of water to date and pledges to further save 10 Bn litres in 2022, as claimed by the startup.

The startup that makes smart water meters, raised $1.5 Mn in a funding round in December 2021 led by Gruhas Proptech, a company backed by Abhijeet Pai of Puzzolana Group and Nikhil Kamath of Zerodha.

The startup plans to deploy more water management devices to houses and offices in 2022. WEGoT plans to deploy 10 lakh water management devices by the end of 2022.

Zenatix 

• Founded In: 2013
• Founders: Amarjeet Singh, Vishal Bansal, Rahul Bhalla
• Funding Raised To Date: $1.4 Mn
• Investors: Blume Ventures, Microsoft Accelerator Bangalore, Pi Ventures,   
• Headquarters: Delhi NCR 

Energy-data startup Zenatix is a data-driven energy efficiency platform that works with banks and large retail chains. 

The cleantech startup helps organisations to save up to 10-30% on their electricity spend. The startup has deployed WattMan in over 500 retail outlets including bank branches and ATMs, across its clientele of 20 companies.

The energy-data startup raised INR 8 Cr in a Pre-Series A round of funding in 2017 led by pi Ventures. 

Zenatix (part of the $11 Bn Hero Group) expanded its operations to the UAE and the Middle East in the April 2022 region to offer organisations a robust cloud-based energy and asset management solution. 

The cleantech startup plans to deploy 2,500 WattMan in the coming months, increasing its clientele to over 50-60 companies across India, Singapore, Malaysia, Indonesia and Thailand. Based on a subscription-based model of revenues, Zenatix aims to expand more in the international markets in future. 

ZunRoof 

• Founded In: 2016
• Founders: Pranesh Chaudhary, Sushant Sachan
• Funding Raised To Date: $4.7 Mn 
• Investors: Godrej Investment Office, Intellecap Impact Investment Network, Ramakant Sharma, (Livspace); Gaurav Gupta (Dalberg Advisors); Pradeep Tharakan (Asian Development Bank); Vismay Sharma (L’Oréal); Ajith Pai (Paipal Ventures); Arun Diaz (IntelleGrow)
• Headquarters: Delhi NCR

ZunRoof specialises in solar rooftop design, installation, and management using technologies such as computer vision, AI and VR. 

The cleantech startup helps reduce its electricity bills by using unutilised rooftops for solar power generation. It also offers IoT devices for power usage monitoring through a companion app.

ZunRoof offers projects with capacity in a range between 1 kilowatt (kW) and 70 kW for residential clients, small factories, schools, hospitals and hotels. Its total installed capacity has crossed 10 Megawatt since its inception in 2016. 

The cleantech startup assessed more than 250,000 homes, designed over 30,000 rooftop solar systems in 75+ cities in India, and installed 15 MW+ of rooftop solar and 50,000+ IoT devices, as of last year.

ZunRoof Tech raised $3 Mn in a Series A round of funding from Godrej Investment Office in 2020. Godrej had invested $1.2 Mn in the startup in a Pre-Series A round in 2019. The cleantech startup entered the solar rooftop market in Bengaluru a few years ago and is planning to enter cities like Chennai, Hyderabad and Kochi in future. 

ZunRoof aims to resolve the affordability issue of solar rooftops in Indian homes. It will soon launch its service to improve the affordability of solar rooftops.

Last updated on June 5, 2024

The listicle has been updated to include three new startups – DigitalPaani, Ossus Biorenewables, and Recykal. 

The post 56 Cleantech Startups Working Towards Making India’s Future Cleaner & Greener appeared first on Inc42 Media.

With the BJP-led National Democratic Alliance securing 290 out of 543 seats in the general election, Prime Minister Narendra Modi is poised to be sworn in for his third term. 

However, this time, the PM won’t command the same majority as before, with the ruling BJP winning 240 seats and its alliance partners securing 50 seats, unlike the previous election where they surpassed 350 seats.

The BJP’s victory for the third consecutive term has raised optimism among certain Indian startups and VCs. And there are reasons for that. Over the past decade, the number of startups has surged from a few hundred in 2014 to 1.38 lakh currently, plus the previous two Modi-led governments were seen as being bullish on Indian startups through policy as well. 

The introduction of the Startup India initiative in 2015 was a significant stride towards promoting entrepreneurship, offering policy support and encouragement. Measures like self-certification for startups under labour and environmental laws aimed to reduce compliance burdens. 

The establishment of the Fund of Funds for Startups scheme, managed by SIDBI, has facilitated funding, complemented by regulatory reforms that have simplified business processes, with over 50 implemented since 2016.

Notably, concerted efforts have been made to promote female entrepreneurship, including earmarking funds for women-led startups. Additionally, the government’s establishment of over 10,000 Atal Tinkering Labs in schools fosters innovation among students, underscoring its commitment to nurturing a dynamic startup ecosystem in India.

However, expectations are higher this time. Speaking to Inc42, T.V. Mohandas Pai, the former CFO of Infosys and partner at Aarin Capital, emphasised the need for funding support. He stated, “We must establish a INR 50,000 Cr fund through various entities in the next five years. With the economy at $3.6 Tn this year, we’re lagging behind in AI and other frontier technologies due to inadequate investment.”

Repeal Angel Tax

Angel tax continues to harass startups, and stakeholders across the ecosystem and Pai stressed that angel tax must be abolished. “The opposition included its removal in their manifesto, despite being the ones to introduce it. The Modi government should repeal the law to eliminate angel tax.”

Angel tax pertains to the taxation of capital raised by unlisted companies through the issuance of shares, where the share price surpasses the fair market value of the shares. The excess amount is considered as income and taxed at the startup’s hands, as per Section 56(2)(viib) of the Income Tax Act, 1961.

Initially introduced to combat money laundering via the issuance of shares at a premium substantially higher than their fair market value, angel tax has often impacted genuine startups, raising concerns within the entrepreneurial ecosystem.

In response, the Indian government has taken measures to alleviate the burden of angel tax on startups, including providing exemptions for eligible startups meeting specific criteria. However, this has resulted in creating numerous restrictions for startups, as evidenced by the fact that out of 1,14,902 startups registered with the Department for Promotion of Industry and Internal Trade, only 10,939 have applied for exemption from angel tax thus far.

“And they must, once again, resolve all disputes promptly and refrain from harassing people with unnecessary complications. Furthermore, suppose income tax officers lose a case in the high court. In that case, they should be penalised because only a certain group of people are deliberately causing such issues for reasons known to them,” Pai added.

Create INR 50K Cr Fund To Address The Capital Issue

During its first term in 2016, the Modi government launched the Fund of Funds for Startups (FFS). Through this scheme, the government has facilitated investments worth INR 17,354 crore in 928 Indian startups as of December 18, 2023.

Pai believes that since the startup fund is either exhausted or nearing exhaustion, the government should initiate another fund because startup funding remains insufficient. 

“For instance, deeptech and startups that have high gestation models don’t receive adequate funding. Once you establish a foundation, attention must be directed towards areas like deeptech and frontier technologies, which have not been adequately supported.”

Highlighting that over INR 8 Lakh Cr worth of subsidies are provided to farmers and others, Pai questioned, “Why not allocate additional funds to startups, which represent the next generation and create significant employment opportunities?

Additionally, he bemoaned the lack of participation by insurance companies in the investment pool for the startup ecosystem. “Globally, insurance companies are the largest investors, but in India, despite having a balance sheet of 65 lakh crores, they have invested minimally in startups. They should have invested, as it makes sense in the long term through funds of funds. However, this significant source of capital remains untapped,” the Aarin Capital partner remarked.

He believes that one of the priorities for the new government in the next five years should be to establish an INR 50,000 Cr fund through various entities. Despite the measurable progress in GDP, sectors such as AI and new emerging technologies are lagging behind in India due to inadequate investments.

Ease Of Doing Business: Address The Regulatory Cracks

While the Modi government deserves credit for introducing a fast-track tax dispute resolution mechanism, self-certification for startups under labour and environmental laws to reduce compliance burden, and tax incentives for startups, including a three-year income tax exemption, there is much more to be done, and some steps have even been taken in the reverse, believes Pai.

Pai criticised the government for making taxation laws complex. “I believe in the last 10 years, more controls have been implemented to grant more power to the taxman than in the previous 10 years. Although refunds and assessments have been expedited for the vast majority of people in the last three years, which is commendable, disputes have not decreased.” 

He pointed out that despite more refunds being issued last year, disputes have not decreased and that in fact, the amount involved in disputes has increased. This indicates that the dispute resolution process has been unsuccessful, which eventually hurts the ease of doing business, just as angel tax.

Additionally, Pai highlighted some RBI restrictions for startups that could have an adverse effect on investments in fintech startups. “Despite having $650 Bn in FDI equity inflow, there are too many restrictions and excessive documentation, which has resulted in a decline in FDI. Even though many big startups are returning to India today, they had previously left to establish domiciles outside. 

Now they are returning because they believe listing in India will provide them with better value. This decision is purely driven by self-interest, which is positive because India is an attractive market. However, the government could have done more for startups to foster a more positive environment, which they have not done.”

Pointing out the unnecessary requirements of three separate valuation reports, Pai said. “When two parties engage in a transaction, they determine the premium and provide a valuation report. However, remitting money takes longer because banks often misplace documents. The process should mirror that of the public market. It’s commendable that shares have been dematerialised, which allows for better tracking of investments in startups and funds. Therefore, it is essential to implement these measures. The IBC has prepared a document that I believe the government should follow.”

Reflecting on the achievements of the past 10 years, Pai asserted that the Modi government has made significant strides for startups by envisioning initiatives like Startup India and Stand-up India.

Moreover, the government has successfully propelled a digital revolution by establishing digital public infrastructure (DPI), which has been highly beneficial for startups.

The post Repeal Angel Tax & Set Up INR 50K Cr Startup Fund: Mohandas Pai Urges Modi 3.0 Govt appeared first on Inc42 Media.

In 1999, the Tata group considered selling its car business to Ford. The latter dismissed the idea, saying it would be doing the Indian conglomerate “a favour” by purchasing the business. The Tatas called off the deal but in 2008, acquired Jaguar Land Rover from the iconic automaker for $2.3 Bn, elevating India’s position in the global market.

More than a decade later, India once again witnessed the corporate house making a firm stride to lift the country’s semiconductor industry.

On March 22, 2024, the Tata group announced setting up a semiconductor ATMP (a combination of assembly, testing, marking and packaging) worth INR 27K Cr in March 2024 Assam. In February, Tata Electronics (TEPL) also received approval to build India’s first AI-enabled semiconductor fabrication facility in Gujarat’s Dholera.

TEPL is developing the project in collaboration with Powerchip Semiconductor Manufacturing Corporation of Taiwan (officially, the Republic of China), investing about INR 91K Cr in the fab and creating more than 20K jobs.

However, the Tata group is one of many players in the semiconductor space. The Vedanta Group is also building a chip foundry in Dholera and India-based SaaS MNC Zoho recently announced its plans to launch a commercial semiconductor manufacturing unit in Tamil Nadu. In early 2023, the US-headquartered Micron Technology said it would build an INR 22K Cr semiconductor testing and packaging plant in Sanand, Gujarat.

The list gets longer. However, global automotive giant Tesla’s strategic pact with TEPL for sourcing semiconductor chips has positioned the country as an emerging force to reckon with. But the question is: Why are domestic and international players bullish on India’s semiconductor story, a sector largely monopolised by Taiwan, Japan, the US and South Korea? This is all the more pertinent as India was a laggard here long after its independence.

Simply put, it is about finding capable industry players who can meet the growing demand in a global market.

According to a March 2024 report by Visual Capitalist, Taiwan had a 68% share in 2023, followed by South Korea (12%), the US (12%), and China (8%) in advanced foundry capacity (manufacturing of semiconductor chips). Whereas India’s share was miniscule in comparison.

However, Taiwan’s dominance is expected to shrink by 2027, with countries like the US and Japan investing more in domestic fabrication. Besides, global companies are also planning to fund semiconductor fabs, making it a $1 Tn opportunity by 2030. The shift in global sentiment and investment patterns may bring new opportunities to India as it tries to establish itself as a significant player.

Inc42’s report, “The Rise Of India’s Semiconductor Startups Report 2024” estimates that India’s semiconductor market will reach $150 Bn by 2030, up from $33 Bn in 2023, witnessing an impressive CAGR of 24%.

“There has always been a talent advantage for India on the global stage, whether in design or engineering. This advantage, honed in the software industry, can now be leveraged in the semiconductor sector. Therefore, there is substantial potential for Indian startups to capitalise on,” Haresh Abhichandani, managing director at Millennium Semiconductors told Inc42.

The Making Of An Indian Chip: A Saga Of Five Decades

India formally entered the semiconductor space in the mid-70s when the Union Cabinet, chaired by then Prime Minister Indira Gandhi, approved a proposal to set up the Semi-Conductor Laboratory (SCL), an autonomous body currently operating under the ministry of electronics and information technology (MeitY). However, Continental Device India (CDIL) is the country’s first private-sector semiconductor manufacturer.

It was launched in 1964, collaborating with Continental Device Corp. of Hawthorne, California. Around the same time, Bharat Electronics (BEL), a public sector undertaking under the ministry of defence, started developing semiconductor devices.

Speaking to Inc42, Prithvideep Singh, general manager at CDIL, said that India was home to many semiconductor companies until the mid-90s. Additionally, the country boasted a robust ecosystem of electronic equipment manufacturers, with companies like Onida, Videocon and BPL emerging as front-runners.

The global landscape changed when the World Trade Organization’s (WTO) Information Technology Agreement (ITA-1) came into force. The agreement eliminated all import duties and other charges on IT and semiconductor products, compelling India and other nations to compete globally rather than regionally.

Again, other nations typically provided massive subsidies and grants to bolster their semicon ventures. But that kind of state capitalism was not practised in India until the government introduced the India Semiconductor Mission (ISM) in 2021 as a nodal agency, with an outlay of INR 76K Cr to revitalise the semiconductor ecosystem.

In addition, the government has set aside INR 1K Cr to fund semiconductor design startups, and states are likely to contribute substantially. The government has also committed $30 Bn in electronics and semiconductors, of which $10 Bn would be allocated for semiconductor manufacturing research and design.

MeitY also introduced a design-Linked incentive (DLI) scheme in December 2021 to support domestic companies, startups and MSMEs at various stages of semiconductor design, including integrated circuits (ICs), chipsets, systems on chips (SoCs), systems and IP cores, and semiconductor-linked designs.

To encourage local production of semiconductors, the government has further waived the basic customs duty (BCD) on certain types of capital goods, machinery, electrical equipment and other instruments and their parts. However, this exemption does not cover populated printed circuit boards used in semiconductor wafers and liquid crystal displays (LCDs).

However, India’s recent proposal to the WTO about not extending customs duty moratorium on electronic transmissions will hinder local design companies working for global partners. Designing chips often require frequent data exchange across locations, within the country and outside. But taxing that data is bound to throw a spanner in fast and seamless operations.

A close look at the last five decades underscores the challenges the industry has long faced, including inadequate infrastructure, sluggish technology adoption, subdued demand, a shortage of top-tier talent and financial constraints.

Shashwath T R, cofounder and CEO of Chennai-based Mindgrove Technologies, noted that the semiconductor business is capital-intensive, so much so that setting up a single outsourced semiconductor assembly and test (OSAT) plant can cost more than $500 Mn. Even in the design space, a successful fabless enterprise may require tens of millions of dollars before becoming profitable.

“Such capital was scarce earlier. But now, with the government’s support, it is available both as equity and debt,” he added.

What Pushed Indian Policymakers & Startups To ‘Chip Up’

Traditionally, the semiconductor landscape at home has been dominated by global giants like Intel, Nvidia, Micron, NXP and Qualcomm. Government entities like DRDO (Defence Research and Development Organisation) also play a significant role in this domain.

Although the foundation was there, and R&D into advanced semiconductor material and device technologies was ongoing, India did not make significant strides towards design and fabrication goals for decades due to huge expenses and the intricacies of the processes involved. But when the Covid-19 pandemic broke out in 2020, it brought a host of challenges, including a complete breakdown in the global supply chain and a subsequent shortage of microchips.

The massive shortage deeply impacted several industries, especially electronics and automotive, as these chips are essential components of many digital consumer products (more on their functions later). Additionally, their demand skyrocketed as consumer and industrial requirements increased during months-long lockdowns for containing the pandemic.

India, too, faced the impact. A 2019-20 report by the ministry of statistics, planning and implementation (MoSPI) estimated supply deficiency in major sectors such as education, health, transportation, communication, entertainment and certain household gadgets using chips-based devices.

A dearth of merchandise depleted nearly 50% of average consumer spending across these categories, thus affecting the companies and the overall economy. On the other hand, a long-term supply crunch pushed the prices up and saw an inevitable demand dip. Not exactly a healthy scenario in post-Covid times when every industry and every country tried to regain pre-pandemic growth rates.

Given these ground realities, India saw an opportunity to establish itself as an up-and-coming semiconductor hub to meet the increasing global and local demand. It also coincided with the surge in the startup ecosystem and the rise of aspiring entrepreneurs making forays into trending technology segments.

“In the past decade, the demand for semiconductor chips has grown significantly, while India is boosting its manufacturing in key sectors for exports. Therefore, investments in the semiconductor space and related electronics businesses seem feasible now,” said Shashwath.

Chips, Chips Everywhere, But What Do They Do?

According to the Inc42 report, more than 100 startups are functioning across the value chain, specialising in R&D, design, assembly, verification and validation. In fact, the widespread demand for semiconductor chips will continue to rise for powering everything electronic and digital and building an IoT/IIoT ecosystem of smart devices and systems, which require sensors and integrated electronic circuits/chips for receiving inputs and executing actions based on logic.

In essence, chips are the brains and building blocks of all things tech – from video games, cars and supercomputers to precision farming and weaponry. These electronic circuits are embedded in tiny wafers made from semiconductor materials (like silicon) and contain multi-layered lattice works interconnected electronic components called transistors for transmitting signals.

Also, the smaller the size of an individual transistor (there can be a million or a billion in a chip), the more can be packed tightly, making a chip more powerful. Chips are measured in nanometres (nm), referring to the size of an individual transistor and equalling a millionth of a millimetre.

Nowadays, the ‘nano scale’ generally indicates a chip’s overall performance rather than the exact size of the transistor. But true to the original quality parameter, most advanced chips remain the tiniest on the nm scale, ensuring fast processing, less power consumption and less heat generation.

However, these require a high level of technical sophistication, component purity and stringent quality control implemented by very few global companies. Even a state-of-the-art chip manufacturer like the Taiwan Semiconductor Manufacturing took three decades to reduce the chip size from 3 micrometres to 3 nanometres (1 micrometre is equal to 1K nm).

Semicon chips can be analogue, digital or mixed, with different functionalities – namely, logic chip, memory chip, ASIC (application-specific integrated chip) and SoC (system on a chip).

Although experts are already debating the ‘Beyond CMOS’ concept that surpasses traditional digital logic, the current technology has ushered in ingenious products such as power-over-ethernet (PoE) standards for connected lighting, MOSFET (metal-oxide-semiconductor field-effect transistor) signal switchers and signal amplifiers for the telecom sector and the insulated gate bipolar transistor (IGBT) devices, which guarantee low power losses and are widely used in automotive, consumer electronics, IT and communications, healthcare, aerospace and defence.

How Indian Startups Are Seizing The Newfound Opportunity

Although India might not be looking at fabricating 2-3 nm chips right now, larger design features below 200 nm work well for automotives, audio chips and display drivers and account for a substantial market. Additionally, the country’s growing focus on developing networking devices and telecom equipment, coupled with the rapid adoption of artificial intelligence (AI)  and 5G, will help drive the domestic market.

As Shashwath of Mindgrove points out, the multiple usage and fast evolution of the semiconductor technology are creating new opportunities for Indian startups, which are rapidly building the expertise and the resources to design (and fabricate) widely used microchips, as well as more complex ones required for AI applications. In fact, it is one of the most promising sub-sectors within the semiconductor space.

At present, the tech clusters of Bengaluru remain the most active semiconductor startup hub, housing 63.7% of the ventures. It is followed by Delhi NCR (9.9%), Hyderabad (5.5%) and Chennai (4.4%).

A few startups in the semiconductor space have also attracted investor interest and raised early stage funding, although the ticket sizes are pretty small. Among these are InCore Semiconductors ($3 Mn), a processor design startup; Mindgrove Technologies ($2.32 Mn), specialising in RISC-V-based SoC designing, and AGNIT Semiconductors ($1.37 Mn), a designer and manufacturer of GaN (gallium nitride) components used for defence and telecommunications.

The funding landscape may soon change, given the global trends. According to a recent report by Moody’s Analytics, Asia will continue to lead in chips and electronics production in the foreseeable future as innovation leaders across the globe work with top manufacturers from Taiwan and South Korea to keep the formidable cost of chip production as competitive as possible.

With India focussing on both fab and non-fab expertise, tech companies are bound to explore yet another emerging hub. Of late, a few investments in the semiconductor industry seem to be moving away from China, yet another reason why investors may turn towards India. The growing ecosystem of startup enablers within the country’s semiconductor industry will further fuel growth and funding potential.

The infographic below features some key startups in India’s semiconductor services landscape. Also, there is a rising wave of semiconductor startups catering to specific verticals such as AI, industrial automation, consumer electronics, automotives (including EVs and autonomous vehicles), and telecom and wireless communication.

Among the leaders are Ola Krutrim, Semiconsoul, Signalchip, Cientra, Wafer Space (now ACL Digital), Saankhya Labs, AGNIT, InCore and Sensesemi Technologies, among others. Located in Bengaluru, the fabless chip design venture Sensesemi develops SoCs for the Internet of Medical Things (IoMT) and other IoT devices. On the other hand, Krutrim is pioneering a unique chiplet architecture for system-in-package solutions, targeting Indian companies specialising in Edge computing and automotive products.

Can India Emerge As The Next Big Chip-Maker? 

India aims to become a chip-making superpower, propelled by robust government support and a burgeoning startup ecosystem. But the path ahead is fraught with challenges. The lack of fabrication facilities and manufacturing experience, along with heavy dependence on procuring raw materials from global suppliers, can limit a country’s capabilities.

Next comes the most pertinent question: Has India got talent for chip design and fabrication? A Q4 CY23 report by Zinnov-NASSCOM estimates 50K+ specialised workforce catering to more than 55 semiconductor GCCs (global capability centres) across the country, underlining there is no dearth of engineering talent in India. However, there is a shortage of service and maintenance experts and a lack of individuals well-versed in the fundamentals of semiconductor equipment.

“These things accumulate over time, leading to inventory pile-up, longer lead times and higher freight costs,” observed Singh of CDIL.

Shashwath of Mindgrove also pointed out the competitive landscape, emphasising that Indian chips are frequently compared to those from industry giants like Texas Instruments and NXP, which have established relationships with OEMs. This makes it exceedingly difficult to penetrate the global market.

On the flip side, there is growing optimism among stakeholders due to robust government support and the upcoming launch of quite a few top-grade semiconductor plants. In many cases local and global leaders are working in collaboration (think of the tie-up between Tata Electronics and Taiwan’s PSMC) for the best possible output, which will put all doubts about quality at rest.

The government’s plan to establish a graphics processing unit (GPU) cluster to support startups specialising in AI model training also aligns with the INR 1,100-1,200 Cr design-linked incentive scheme. For certain fabrications, ATMP and OSAT units, the government will provide 50% of the project cost/capital expenditure to eligible applicants on a pari-passu basis, an incentive driving many companies to set up semiconductor units across the value chain.

In line with an earlier analysis by McKinsey & Company, Inc42’s latest semiconductor report projects that the global AI semiconductor market will reach $190 Bn by 2030, with India poised to account for $21 Bn. This growth is attributed to the country’s ambitious smart city projects, infrastructural development and the increasing popularity of AI-powered consumer devices like smart home appliances and gadgets.

Given these developments, there will be opportunities galore for startups in the semiconductor space, whether they ensure a steady supply of bespoke ingredients to fab and fabless units, double down on intricate designs or do the final magic and make the chips. Also, the co-location of suppliers, designers and manufacturers will help fulfil every activity of the value chain, eventually unlocking new product potential.

Meanwhile, India must overcome a few practical difficulties (meet the expenses, for starters, and access the latest know-how) and gear up for global competition to ensure that these Make-In-India deeptech projects will finally take off.

[Edited by Sanghamitra Mandal]

The post Decoding The $150 Bn+ Semiconductor Market Opportunity For Indian Startups appeared first on Inc42 Media.

India is set to get a new government by today evening, whichever way you look at it, as the results of the 2024 General Elections are announced. And if you ask Indian startups, no matter who is in power by June 4, 2024, there is a need to set the right vision for the next five years.

Many believe that the next five years will be the defining years for Indian startups, with some of the biggest startups set to go for public listings and AI changing the product and market dynamics. As such the results of the 2024 Indian elections could well decide the future of Indian startups.

Founders that have been celebrated for years will be put to pre-IPO litmus tests and the fate of some giants hangs in the balance. The government has set 2030 as a target for many key milestones particularly in relation to electric mobility and sustainability, so the next five years will be just as critical as the past ten years, which have been celebrated as the golden age of startups.

So what can the startup ecosystem expect from the next five years? And what should be the new government’s vision which would hold Indian startups in good stead till 2030 and the decade that will come after that

Through conversations with some veterans of the startup ecosystem and venture capitalists that have seen India mature over the years, we are able to bring some clarity to those questions — although there are no definitive answers yet.

Startup Founders In Election Games

A few days ago on May 20, 2024, right in the thick of the 2024 General Elections, a curious development involving some of the biggest Indian startups caught our attention.

Zomato’s Deepinder Goyal, Urban Company’s Abhiraj Bahl, Honasa’s Varun Alagh, EaseMyTrip’s Rikant Pittie, MapmyIndia’s Rohan Verma, Peak XV Partners’ MD Rajan Anandan among others gathered in Delhi, but it was not a tech conference.

Instead, it was a night where these CEOs, venture capitalists and drivers of the tech economy mingled with the leadership of the current ruling party, the Bharatiya Janata Party (BJP), and spoke glowingly about the past ten years for Indian startups

To be fair to the entrepreneurs and CEOs, this was not an endorsement of the current ruling party, but meant to be a celebration of how far the Indian startup ecosystem has come in the past ten years. But the subliminal message was clear, given the timing of the evening, and reportedly some of the founders even endorsed the current government for another term.

With the members of parliament elected by the day’s end and a new government soon to be in place, perhaps this is the right time to understand where startups fall in the political machinery today. And also answer why many entrepreneurs found themselves in the middle of electoral campaigns.

This is not the first startup event that has the government’s support. The Startup Mahakumbh in March, for instance, was bigger and even saw Prime Minister Narendra Modi meet some of the startups on the ground. And the National Startup Day, introduced in 2022, is another example of how the government has directly engaged with startups.

The Indian government’s policies for startups and engagement with the stakeholders is perhaps unique among the large economies of the world. The Startup India programme launched in 2015 and formalised in 2016 is all set to complete a decade. Indeed, Startup India was one of the flagship programmes for the current government during the 2014-2019 tenure, and was given some more impetus in the past five years.

“I have seen the tech industry of the early 2000s and the government did not necessarily promote technology, but rather focussed on traditional economic growth engines. By 2013-14, tech was firmly a growth engine and the last two governments had to capitalise on this movement. This is why we saw the policies that enabled tech such as Startup India and Digital India,” a senior tech founder and investor told Inc42.

The next government will also have a big focus on digital products and services. “They are the future. Every industry will go through the tech transformation so there needs to be an automatic focus on tech policies, especially with AI coming up,” the founder and CEO added.

Indian Startups In The Election Debates

When it comes to the 2024 General Elections campaigns by various parties, that May evening in Delhi was the biggest showcase for startups and how far the tech ecosystem has come. Naturally, given that this happened right in the midst of polls, not everyone was so happy about this subtle endorsement of the BJP by entrepreneurs.

Many on X (Twitter) and social media pointed out that entrepreneurs ought to be neutral in their public stance on elections and focus on the business. The fact that many present on the night — Zomato’s Goyal, EaseMyTrip’s Pitti, MapmyIndia’s Verma and Honasa’s Alagh — run public companies and have a larger responsibility towards neutrality was another point raised by some.

Of course, those on the opposing side to the BJP were not happy that many of the founders did not engage with non-BJP parties on manifesto points, seemingly out of fear, even though founders put forth certain points such as angel tax as being problem areas.

When it comes to the vision for the next five years, there is some indication that the two major parties (and their allies) have some specific plans for the tech and startup ecosystem.

For instance, the manifesto of the Indian National Congress (INC) states that the party, if elected, would abolish angel tax. “We will eliminate “Angel tax” and all other exploitative tax schemes that inhibit investment in new micro, small companies and innovative start-ups,” the INC’s poll manifesto states.

The INC also talks about job-creation push in laggard states. “Congress will restructure the Fund of Funds Scheme for start-ups and allocate 50 per cent of the available fund, as far as possible equally among all districts, for providing funds to youth below 40 years of age to start their own businesses and generate employment.”

The Congress also spells out some measures it would potentially implement to improve ease of doing business such as ensuring adequate sharing of resources needed by entrepreneurs. “We will remove the current environment of distrust and fear, and create a healthy ecosystem where private enterprises, regulatory authorities, tax authorities and government will work in a spirit of mutual cooperation and respect.”

The opposition alliance party also says it would focus heavily on green energy and deeptech sectors for future growth. “The challenges of the future include the changes in the global economy, advanced technology such as artificial intelligence, robotics and machine learning, and climate change. The future of our energy is Green Energy. We will mobilise the massive capital required for our green energy transition,” the Congress pre-poll manifesto added.

Now, let’s take a look at what the BJP says about startups in its manifesto.

Given the fact that the previous BJP-led government brought in Startup India, it’s no surprise that the startup ecosystem features on the BJP manifesto for 2024 too. It spoke about four points — Expanding the Startup Ecosystem, Expanding Funding for Startups, Providing Mentorship to Startups, Encouraging Startups in Government Procurement.

“We will expand the existing Startup India Seed Fund Scheme and Startup Credit Guarantee Scheme to ensure adequate funds,” the BJP manifesto says.

The manifesto talks about the impact of the various enablement programmes for startups and how they will be expanded under the next government, if the BJP is reelected to power. The party also says it would encourage new startups in Tier 2 and Tier 3 cities. Besides this, the BJP states that it would promote startups in the sports sector and those building forest-based enterprises.

When it comes to future growth, the BJP manifesto focussed heavily on the space sector and areas such as quantum computing, geospatial data and more. There’s also prominent mention of supporting the electronics and component ecosystem by promoting semiconductor design and manufacturing.

“We will develop a comprehensive ecosystem under the IndiaAI mission, driving AI innovation through collaborative strategic programs and partnerships to position Bharat as a global leader in AI innovation and build domestic capacities to ensure tech sovereignty,” ruling party BJP says in the manifesto.

It must be remembered that election manifestos don’t always materialise. But the fact is that both the major parties have looked to focus on startups, technology and emerging industries when it comes to job creation and economic growth.

One could argue that the BJP is more direct about the areas it wants to target, and indeed, startups have been a more clear focus of the BJP-led governments of the past two terms. However, there’s little in the manifestos beyond continuing that vision, nothing that talks about what Indian startups need in 2024.

“It can be said that neither of the manifestos focus on specifics on enabling the next phase of growth for Indian startups. The vision is there, broadly speaking, but specific action points are missing. Many founders might prefer the current government because of the track record of supporting startups,” says a Delhi-based partner of a noted VC firm.

Focus On The New Era For Indian Startups

Of course, the fact that the Indian startup ecosystem has flourished in the past eight to nine years is a testament to the entrepreneurial spirit of Indians, even though a lot of credit is due to the startup-specific policies brought in since 2015, and frameworks that have eased new venture creation.

We have written extensively about how Startup India has fuelled entrepreneurship and encouraged investments into Indian startups, but others believes that this is a pivotal time for Indian startups and tech. One could argue that just focussing on how things have improved might be missing the point a bit.

Action is also needed on several other fronts from whoever wins the 2024 General Elections. There’s a need to remove the fear of regulations in key startup sectors, the need to secure the future of Indian businesses and people with climate resilience action, the need to boost semiconductor manufacturing, the need to build IPs in AI, next-gen software development, robotics, and a lot more, with specific policy that will attract the big investments for Indian startups.

“It can’t be argued that startups have not grown, but now, the new government needs to focus on new areas and look at incubators and accelerators for domain-specific growth. If we are serious about AI, semiconductors and robotics then we need to show this through action and dedicated projects. Space tech is a good example of how to make this happen,” the managing director of a marquee VC fund pointed out.

The government made a bridge between spacetech startups and government-backed organisations such as ISRO. A similar backing was seen for fintech applications with the RBI sandbox and digital public goods.

The future of Indian tech is ultimately not going to be determined by government or policies of the past or simply sticking to what worked. The maturing and profitable business models of Zomato, Honasa, Urban Company and others in the past year show that past government action has resulted in the right outcomes. Now it’s time to enable different kinds of startups.

“When it comes to AI, data protection, semiconductors and deeptech, a more firm course of action is needed. India has a rich history of R&D in science, biotech, pharma and all areas that will be changed by technology and AI in the next few years, but this is lost because we cannot compete when it comes to commercialisation like the West. This needs to change,” said a managing partner of a Mumbai-based VC firm.

It’s true that government support has created the right conditions for some of these startups to thrive in the past eight years, but that was an India which was waiting for the consumer base, where internet access was limited and where startups were a fairly new idea.

Now the focus needs to turn on the gaps that do exist, and here simply, relying on past laurels may not be enough.

Startup India was a tech policy for the 2015 era, but this is a new generation of tech. Time for the next central government to look at what Indian tech and startups need for 2024 and beyond.

The post Elections 2024: The ‘Startup India’ Vision For The Next Five Years appeared first on Inc42 Media.