Bankers chase Byju’s for IPO, valuation pegged up to $50 billion

Nearly every top investment bank is chasing Byju’s and nudging the most valuable Indian startup to seriously explore the public markets as soon as next year.

Most banks have given Byju’s a proposed valuation in the range of $40 to $45 billion, but some including Morgan Stanley have pitched a $50 billion valuation if the startup lists next year, according to two people with knowledge of the matter.

The startup, which has raised $1.5 billion since the beginning of the pandemic last year, was most recently valued at $16.5 billion.

The banks’ excitement comes as the Indian public market has shown a glimpse of strong appetite for consumer tech stocks. Food delivery Zomato had a stellar $1.3 billion debut on Indian stock exchanges last month. Scores of other top startups including Paytm, PolicyBazaar, Nykaa, Ixigo, and MobiKwik have also filed paperworks for their IPOs.

Byju Raveendran (pictured above), the founder and chief executive of the eponymous startup, has publicly suggested in the past that he may list the firm in two to three years. According to a senior executive, who wish to not be named as the matter is private, and an investor, the startup has not set a concrete timeline for an IPO.

In the immediate future, odds of Byju’s raising again is high. The startup has received several inbound requests from investors to raise at a valuation of about $21.5 billion, the people said.

The startup has use a significant portion of its recent fundraises to acquire firms. Earlier this year, it acquired Indian physical coaching institute Aakash for nearly $1 billion. It has also acquired Great Learning, and U.S.-based Epic, among others, for over $1 billion in cash and stock deals.

Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years it has also expanded its catalog to serve all school-going students. Tutors on the Byju’s app tackle complex subjects using real-life objects such as pizza and cake.

The pandemic, which prompted New Delhi to enforce a months-long nationwide lockdown and close schools, accelerated its growth, and those of several other online learning startups including Unacademy and Vedantu.

As of early this year, Byju’s said it had amassed over 80 million users, 5.5 million of whom are paying subscribers. Byju’s, which is profitable, is on track to generate revenue of $300 million in the U.S. this year (per Raveendran), and as high as $1.1 billion in revenue overall by the end of the calendar year, according to a person familiar with the matter.

Byju’s declined to comment.

#asia, #byju-raveendran, #byjus, #education, #funding, #india, #nykaa, #paytm, #zomato

Zomato’s losses widen in first quarterly earnings since IPO

Zomato’s losses more than tripled in its first quarterly earnings report since its listing last month as the company’s expenses grew and the pandemic hit the firm’s dining-out business.

The Gurgaon-headquartered firm reported (PDF) a net loss of $48 million in the quarter that ended in June, up from about $13.5 million during the same period last year.

The 12-year-old firm also reported strong revenue growth, moving from $35.7 million to $113.4 million during the aforementioned period as more people in the country began to order food online.

The firm said it delivered more than 100 million food orders last quarter and has surpassed a billion orders in the past six years.

“This is largely on account of non-cash ESOP expenses which have increased meaningfully in Q1 FY22 due to significant ESOP grants made in the quarter pursuant to creation of a new ESOP 2021 scheme. This divergence in reported profit/loss and Adjusted EBITDA will continue going forward,” a blog post signed by top Zomato executives read.

The executive said in the post that the second wave of the coronavirus, which hit the country beginning in April, “significantly impacted the dining-out business in Q1 FY22 reversing most of the gains the industry made in Q4 FY21.”

Zomato’s shares on BSE.

Shares of Zomato, which had a stellar debut on the Indian stock exchanges last month, fell 4% on Tuesday ahead of the results and ended at slightly below the original issue price of $1.68 a share on July 13, which valued Zomato then at $13 billion.

The company said it will hold one call with analysts a year — instead of the typical four — and address questions through blogs and quarterly shareholder letters.

In India, Zomato competes with Swiggy, which is backed by SoftBank and Prosus. Last month, the Indian food delivery startup said it had raised $1.25 billion in a new financing round. SoftBank Vision Fund 2 evaluated Zomato before making its bet on Swiggy, people familiar with the dealflow said.

Both the firms in recent quarters have expanded to new categories including grocery delivery.

Zomato is the first Indian consumer internet startup in the current wave to go public. India’s financial services Paytm and MobiKwik as well as online insurer PolicyBazaar and online beauty products firm Nykaa have filed the paperworks to go public later this year.

#asia, #food, #india, #nykaa, #paytm, #policybazaar, #swiggy, #zomato

Food delivery firm Zomato surges 65% in key India debut

Shares in Zomato, a Gurgaon-based food delivery company and first of India’s consumer tech startups to go public, closed up 64.7% in its debut day of trading in Mumbai, delivering a key insight into the appetite investors have for the world’s second largest internet market’s burgeoning startup ecosystem.

Zomato’s shares traded all day above the issue price of 76 Indian rupees ($1) and surged as high as 138.9 Indian rupees ($1.87). The 12-year-old firm ended day one of trading on BSE in Mumbai at 125.2 Indian rupees ($1.68), securing a market cap of $13.2 billion, up from about $5 billion valuation it had attained in private markets during the startup’s fundraise earlier this year.

The startup’s $1.3 billion initial public offering was 40 times subscribed last week.

Friday’s milestone of Zomato has equally been significant for the rest of the industry as startup founders and investors closely watched the firm’s stock performance. India’s Twitter timeline on Friday was flooded with celebratory messages from industry colleagues.

Ashish Dave, India head of Mirae Asset, a backer of Zomato, said the listing and performance of Zomato today have delivered the missing piece of liquidity in Indian startup ecosystem.

“This validates that we can generate large IPOs, which then makes our startups more attractive for global LPs. It also gives Indian investors a chance to participate in the India tech journey rather than from watching it from sidelines,” he told TechCrunch, adding that retail investors of this generation will finally find a way to get in on the action with the brands they recognize and have grown up with.

Zomato chief executive Deepinder Goyal was quick to reciprocate. In a blog post, Goyal wrote, “today is a big day for us. A new Day Zero. But we couldn’t have gotten here without the incredible efforts of India’s entire internet ecosystem. Jio’s prolific growth has set all of us up for unprecedented scale. Flipkart, Amazon, Ola, Uber, Paytm – have also over the years, collectively laid the railroads that are enabling companies like ours to build the India of the future.”

“They say it takes a village to raise a child, and we are no exception. Hundreds of people have selflessly played a part in making Zomato what it is today.”

Indian tech startups have raised a record amount of capital this year as some high-profile investors have doubled down in the South Asian market. Swiggy, Zomato’s chief rival in India, said earlier this week it had raised $1.25 billion from SoftBank’s Vision Fund 2 and Prosus among others at a valuation of $5.5 billion.

A handful of other firms are also preparing to publicly list within a few months. Financial services startups Paytm and MobiKwik filed for their initial public offerings earlier this month. Online insurance aggregator Policybazaar is expected to file its paperwork within a few weeks.

“I don’t know whether we will succeed or fail – we will surely, like always, give it our best. But I hope that the fact that we are here, inspires millions of Indians to dream bigger than we ever have, and build something way more incredible than what we can dream of,” wrote Goyal.

#apps, #asia, #food, #india, #mobikwik, #paytm, #policybazaar, #swiggy, #zomato

With open banking on the horizon, the fintech-SME love story is just beginning

The fintech sector has been hugely successful (and hugely profitable) for much of the last decade, and even more so during the pandemic. But it might come as a surprise to learn that many in the industry believe that the story is just beginning and the sector is poised to achieve much more, with fintech’s next decade expected to be radically different from the last 10 years.

Long before the pandemic, the way in which banks were regulated was changing. Initiatives like Open Banking and the Revised Payment Services Directive (PSD2) were being proposed as a way to promote competition in the banking industry — allowing smaller challenger firms to break into a market that has long been dominated by corporate titans.

Now that these initiatives are in place, however, we’re seeing that their effect goes way beyond opening up a gap for challenger banks. Since open banking requires that banks make valuable data available via APIs, it is leading to a revolution in the way that small and mid-size enterprises (SMEs) are funded — one in which data, and not hard capital, is the most important factor driving fintech success.

Open banking and data freedom

In order to understand the changes that are sweeping fintech and reconfiguring the way that the industry works with small businesses, it’s important to understand open banking. This is a concept that has really taken hold among governmental and supranational banking regulators over the past decade, and we are now beginning to see its impact across the banking sector.

Allowing third parties access to the data held at banks will allow the true financial position of SMEs to be assessed, many for the first time.

At its most fundamental level, open banking refers to the process of using APIs to open up consumers’ financial data to third parties. This allows these third parties to design, build and distribute their own financial products. The utility (and, ultimately, the profitability) of these products doesn’t rely on them holding huge amounts of capital — rather, it is the data they harvest and contain that endows them with value.

Open-banking models raise a number of challenges. One is that the banking industry will need to develop much more rigorous systems to continually seek consumer consent for data to be shared in this way. Though the early years of fintech have taught us that consumers are pretty relaxed when it comes to giving up their data — with some studies indicating that almost 60% of Americans choose fintech over privacy — the type and volume shared through open-banking frameworks is much more extensive than the products we have seen up until now.

Despite these concerns, the push toward open banking is progressing around the world. In Europe, the PSD2 (the Payment Services Directive) requires large banks to share financial information with third parties, and in Asia services like Alipay and WeChat in China, and Tez and PayTM in India are already altering the financial services market. The extra capabilities available through these services are already leading to calls for the U.S. banking system to embrace open banking to the same degree.

Serving SMEs

If the U.S. banking industry can be convinced of the utility of open banking, or if it is forced to do so via legislation, several groups are likely to benefit:

  • Consumers will be offered novel banking and investment products based on far more detailed data analysis than exists at present.
  • The fintech companies who design and build these products will also see the use of their products increase, and their profit margins alongside this.
  • Arguably, even banks will benefit, because even in the most open models it is banks who still act as the gatekeepers, deciding which third parties have access to consumer data, and what they need to do to access.

By far the biggest beneficiary of open banking, however, will be SMEs. This is not necessarily because open-banking frameworks offer specific new functionality that will be useful to small and medium-sized businesses. Instead, it is a reflection of the fact that SMEs have historically been so poorly served by traditional banks.

SMEs are underserved in a number of ways. Traditional banks have an extremely limited ability to view the aggregate financial position of an SME that holds capital across multiple institutions and in multiple instruments, which makes securing finance very difficult.

In addition, SMEs often have to deal with dated and time-consuming manual interfaces to upload data to their bank. And (perhaps worst of all) the B2B payment systems in use at most banks provide very limited feedback to the businesses that use them — a lack of information that can cost businesses dearly.

New capabilities

Given these deficiencies, it’s not surprising that fintech startups are keen to lend to small businesses, and that SMEs are actively looking for novel banking products and services. There have, of course, already been some success stories in this space, and the kinds of banking systems available to SMEs today (especially in Europe) are leagues ahead of the services available even 10 years ago.

However, open banking promises to accelerate this transformation and dramatically improve the financial services available to the average SME. It will do this in several ways. Allowing third parties access to the data held at banks will allow the true financial position of SMEs to be assessed, many for the first time.

Via APIs, fintech companies will be able to access information on different types of accounts, insurance, card accounts and leases, and consolidate data from multiple countries into one overall picture.

This, in turn, will have major effects on the way that credit-worthiness is assessed for SMEs. At the moment, there is a funding gap facing many SMEs, largely because banks have been hesitant to move away from the “balance sheet” model of assessing credit risk. By using real-time analytics on an SME’s current business activities, banks will be able to more accurately assess this risk and lend to more businesses.

In fact, this is already happening in countries where open banking is well advanced – in the U.K., Lloyds’ Business ToolBox offers unlimited credit checks on companies and directors in addition to account transaction data.

Open banking will also allow peer comparison analytics far ahead of what we have seen until now. APIs can be used to provide SMEs real-time feedback on how they are performing within their market sector. Again, this ability is already available in the U.K., with Barclays’ SmartBusiness Dashboard offering marketing effectiveness tools as part of a customizable business dashboard.

These capabilities will be so useful to SMEs that they are likely to drive the popularity of any fintech product that offers them. For SMEs, this value will lie mainly in intelligent data-analytics-based insights, recommendations and automatic prompts that can be built on top of account aggregation.

Then, additional insights generated from these same monitoring tools could enable banks and alternative lenders to be more proactive with their lending — offering preapproved lines of credit, in a timely manner, to SMEs that would have previously found it difficult to access funding.

The bottom line

Crucially for the fintech sector, it’s almost a certainty that SMEs will be willing to pay fees for data-analytics-based value-added services that help them grow. This is why some startups in this space are already attracting huge levels of funding, and why open banking is at the heart of the relationship between tech and the economy.

So if fintech has had a good year, this is likely to be just the start of the story. Backed by open-banking initiatives, the sector is now at the forefront of a banking revolution that will finally give SMEs the level of service they deserve and unleash their true potential across the economy at large.

#alipay, #asia, #banking, #china, #column, #europe, #finance, #financial-services, #financial-technology, #fintech, #india, #online-lending, #open-banking, #opinion, #payment-services-directive, #payments, #paytm, #startups

Paytm files for $2.2 billion IPO

Paytm, one of India’s most valuable startups, plans to raise up to $2.2 billion in an initial public offering, it said in draft papers submitted to the country’s market regulator on Friday.

The Noida-headquartered firm — which is backed by Alibaba, Berkshire Hathaway, and SoftBank — said it will issue new shares worth $1.11 billion and offer sale worth of $1.11 billion.

The startup plans to use the fresh capital to broaden its payments services offering and enter into new initiatives.

This is a developing story. More to follow…

#asia, #finance, #payments, #paytm

UBS investment makes Byju’s the most valuable startup in India

Edtech giant Byju’s has become the most valuable startup in India after raising about $350 million in a new tranche of investment from UBS Group and Zoom founder Eric Yuan, Blackstone and others that valued the Bangalore-based firm at $16.5 billion (post-money).

In a new filing, Byju’s revealed that scores of investors including Abu Dhabi government fund ADQ and Phoenix Rising had together invested about $350 million in the startup. The new valuation helps Byju’s surpass Paytm, which was last valued at $16 billion, for the crown position in the Indian startup ecosystem. (Paytm is currently working on exploring the public markets and eyeing to raise as much as $3 billion and eyeing a valuation of up to $30 billion.)

The new tranche of investment is part of a larger round that Byju’s kickstarted earlier this year and is looking to secure over $1.5 billion. Some of its recent investors also include B Capital Group and hedge fund XN. The startup was valued at $11 billion late last year, and $5.75 billion in July 2019.

The startup plans to use the fresh capital, in part, to acquire more startups. Byju’s, which acquired Indian physical coaching institute Aakash for nearly $1 billion earlier this year, is conducting due diligence to buy and online learning startup Toppr and has also engaged with U.S.-based Epic, TechCrunch reported earlier this year.

Byju’s prepares students pursuing undergraduate and graduate-level courses, and in recent years it has also expanded its catalog to serve all school-going students. Tutors on the Byju’s app tackle complex subjects using real-life objects such as pizza and cake.

The pandemic, which prompted New Delhi to enforce a months-long nationwide lockdown and close schools, accelerated its growth, and those of several other online learning startups including Unacademy and Vedantu.

As of early this year, Byju’s said it had amassed over 80 million users, 5.5 million of whom are paying subscribers. Byju’s, which is profitable, generated revenue of over $100 million in the U.S. last year, Deborah Quazzo, managing partner of GSV Ventures (which has backed the Indian startup), said at a session in March held by Indian venture fund Blume Ventures.

The startup executives said at a UBS event earlier this year that Byju’s current revenue run rate is $800 million, a figure they expect will reach $1 billion in the next 12-15 months. It has also accelerated its international expansion plans in recent months.

#asia, #byjus, #education, #funding, #india, #paytm

YC-backed Ziina raises $7.5M seed led by Avenir Growth Capital and Class 5 Global

Cash is the predominant method of sending and receiving payments in the Middle East. If you owe someone a cup of coffee or a trip over a long period, repaying via cash is your best bet. This is one problem out of many financial issues that haven’t been addressed in the region.

The good news is that startups are springing up to provide solutions. Last month Telda, a now two-month-old startup in Egypt, raised an impressive sum as pre-seed to offer digital banking services. Today, Ziina, another startup based in Dubai, has closed $7.5 million in seed funding to scale its peer-to-peer (P2P) payment service across the Middle East and North Africa.

Ziina has managed to enlist top global investors and fintech founders in the round. Avenir Growth and Class 5 Global led this latest tranche of financing. Wamda Capital, FJ Labs, Graph Ventures, Goodwater Capital, Jabbar Internet Group, Oman Technology Fund’s Jasoor Ventures, and ANIM also participated.

The founders who took part include Checkout CEO Guillaume Pousaz via his investment fund Zinal Growth; Krishnan Menon, BukuKas CEO, as well as executives from Paypal and Venmo. This adds to a roster of executives and early employees from Revolut, Stripe, Brex, Notion, and Deel that joined Ziina’s round.

According to the company, it has raised over $8.6 million since launching last year. This includes the $850,000 pre-seed raised in May 2020 and $125,000 secured after going through Y Combinator’s Winter batch early this year.

Ziina was founded by Faisal Toukan, Sarah Toukan, and Andrew Gold. It’s the latest addition to the Middle East’s bubbling fintech ecosystem and is capitalising on the region’s rapid adoption of fintech friendly regulation.

The company allows users to send and receive payments with just a phone number —no IBAN or swift code required as is the de facto method in the UAE and some parts of the Middle East. It also claims to be the country’s first licensed social peer-to-peer application “on a mission to simplify finance for everyone.”

After meeting during a hackathon in the U.S., Faisal and Gold began exchanging ideas on how to build wallets, wanting to mirror the successes platforms like WePay, Paytm have had. At the time, VCs seemed to be interested in how the wallets ecosystem intersected with banking.

“The lines between wallets and banking have become really blurred. Every wallet has a banking partner, and people who use wallets use them for their day-to-day needs,” CEO Faisal Toukan said to TechCrunch.

On the other hand, Sarah, who is Faisal’s sister, was on her personal fintech journey in London. There, she attended several meetups headlined by the founders of Monzo and Revolut. With her knowledge and the experience of the other two, the founders decided that solving P2P payments issues was their own way of driving massive impact in the Middle East.

So how far have they gone? “We launched a beta for the market but it’s restricted for regulatory reasons and basically to keep ourselves in check with the ecosystem,” Toukan remarked. “Since then, we’ve gotten regulated. We’ve got a banking partner, one of the three largest banks in the UAE, and we’ve set a new wallet a month from now. That’s also what we were working throughout our period in YC. So it’s been quite an eventful year.”

The fintech sector in MENA is growing fast; in terms of numbers, at a CAGR of 30%. Also, in the UAE, it is estimated that over 450 fintech companies will raise about $2 billion in 2022 compared to the $80 million raised in 2017. Fintechs in the region are focused on solving payments, transfers, and remittances. Alongside its P2P offering, these are the areas Ziina wants to play in, including investment and cryptocurrency services.

According to Toukan, there’s no ease of making online investments, and remittances are done in exchange houses, a manual process where people need to visit an office physically. “So what we’re looking to do is to bring all these products to life in the UAE and expand beyond that. But the first pain point we’re solving for is for people to send and receive money with two clicks,” the CEO affirmed.

Starting with P2P has its own advantages. First, peer-to-peer services is a repeat behavioural mechanism that allows companies to establish trust with customers. Also, it’s a cheaper customer acquisition model. Toukan says that as Zinna expands geographically — Saudi Arabia and Jordan in 2022; and Egypt and Tunisia some years from now — as he wants the company’s wallet to become seamless across borders. “We want a situation where if you move into Saudi or Dubai, you’re able to use the same wallet versus using different banking applications,” he added

To be on the right side of regulation is key to any fintech expansion, and Toukan says Ziina has been in continuous dialogue with regulators to operate efficiently. But some challenges have stemmed from finding the right banking partners. “You need to make a case to the banks that this is basically a mutually beneficial partnership. And the way we’ve done that is by basically highlighting different cases globally like CashApp that worked with Southern Bank,” he said.

Now that the company has moved past that challenge, it’s in full swing to launch. Presently, Ziina has thousands of users who transacted more than $120,000 on the platform this past month. In addition, there are over 20,000 users on its waiting list to be onboarded post-launch.

Ziina has already built a team with experience across tech companies like Apple, Uber, Stanford, Coinbase, Careem, Oracle, and Yandex. It plans to double down on hiring with this new investment and customer acquisition and establishing commercial partnerships.

#africa, #careem, #checkout, #dubai, #egypt, #finance, #funding, #guillaume-pousaz, #jabbar-internet-group, #middle-east, #mobile, #monzo, #payments, #paypal, #paytm, #saudi-arabia, #tc, #tunisia, #united-arab-emirates, #venmo, #yandex

PhonePe in talks to acquire Indian app store Indus OS

Walmart-backed payments services firm PhonePe is in advanced stages of talks to acquire Samsung-backed Indus OS, a startup that operates an eponymous third-party Android app store, a source familiar with the matter told TechCrunch.

The deal values Indus OS at $60 million, the source said, requesting anonymity as the matter is private. The deal has yet to close. PhonePe and Indus OS didn’t immediately respond to a request for comment.

Indian news outlet Entrackr first reported about the development.

Indus OS powers several popular third-party Android stores including Samsung’s Galaxy Store and provides partners with localized content and apps.

Late last year, Indus OS said it offered its partners 400,000 apps in English and 12 Indian languages. The seven-year-old startup, which has raised about $21 million to date and monetizes through ads, has amassed over 100 million users.

The startup plans to launch an app store for individual users once Google begins accepting third-party app stores, another source familiar with the matter said.

It remains unclear why PhonePe is interested in Indus OS’ offering. The Bangalore-based startup has long offered its own mini app store on its app. A handful of firms — including PhonePe rival Paytm — have either launched or explored launching their own mini app stores in recent months.

#android, #apps, #asia, #fundings-exits, #google, #india, #indus-os, #paytm, #phonepe

Payments, lending and neobanks rule fintechs in emerging markets, report says

Tech investments in emerging markets have been in full swing over the past couple of years and their ecosystems have thrived as a result. Some of these markets like Africa, Latin America, and India, have comprehensive reports by publications and firms on trends and investments in their individual regions. But there’s hardly a report to compare and contrast trends and investments between these regions and rightfully so. Such a task is Herculean.

Well, a report released today by data research organization Briter Bridges and global inclusive tech accelerator Catalyst Fund is punching above its weight to offer a holistic representation to the darling sector of these three markets: fintech.

The report “State of Fintech in Emerging Markets Report” has three objectives — to evaluate the investment, product, and inclusivity trends across emerging markets.

The team surveyed over 177 startups and 33 investors across Africa, Latin America, and India. Though this sample size used is minuscule, the key findings are quite impressive.

Let’s dive in.

Fintechs have raised $23B across the regions since 2017

There’s no stopping emerging markets’ favorite. The sector has continued to receive the largest share of investments year-on-year for the past five years.

More than 300 million unbanked African adults account for 17% of the world’s unbanked population. So it’s not difficult to see why in 2019, the continent witnessed five mega deals in Branch, Tala, World Remit, Interswitch, and OPay that amounted to a total of over $775 million. While this dropped last year to $362 million, companies like Flutterwave, TymeBank, Kuda have raised sizeable rounds during this period.

fintech funding five years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Latin America is home to a growing base of digital users, enabling regulation and reforms, and vibrant small businesses. And just like Africa, the percentage of unbanked people is high, 70%. Fintechs in the region have taken the opportunity to cater to their needs and have been compensated with mega-rounds, including NuBank, Neon, Konfio, and Clip. Collectively, fintech startups have raised $10 billion in the past five years.

In 2019 alone, Indian fintech startups raised a record of $4.8 billion, per the report. Then last year, the sector brought in $3 billion. Over the past five years, they have totaled $11.6 billion with notable names like CRED, Razorpay, Groww, BharatPe, among others.

Africa’s average seed rounds stand at $1M, India and Latin America average $3M

Per the report, early-stage deals have been increasing over the past five years totaling over $1.6 billion. Their average size, especially for seed rounds, has grown from $750,000 in 2017 to $1 million in 2020. For  Latin America, the average seed deal in the last five years was around $5.7 million while India did approximately $4.6 million. The report says the data for the latter was skewed because of CRED’s $30 million seed round.

Image Credits: Briter Bridges & Catalyst Fund

Latin America is IPO-hungry, India breeds unicorns while Africa is just getting started with M&A

Last year, Stripe’s acquisition of Paystack was the highlight of Africa’s M&As because of its size and the homegrown status of the Nigerian fintech startup. Other larger rounds include the $500 million acquisition of Wave by WorldRemit (which happens to be the largest from the continent) and the DPO Group buyout by Network International for $288 million.

Unlike the African fintech market that has noticed mega acquisition deals and many undisclosed seven-figure deals, the Latin American fintech market is a sucker for IPOs. Per the report, fintechs in the region have several $100 million rounds (Nubank, PagSeguro,  Creditas, BancoInter and Neon) but have sparse M&A activity. Some of the startups to have gone public recently include Arco Educacao, Stone Pagamentos, Mosaico, and Pagseguro

On the other, India has more than 25 billion-dollar companies and keeps adding yearly. Just last month, the country recorded more than eight. These unicorns include established companies like PayTm and new ones like CRED.

Payments, credit, and neobanks lead fintech activity

The report shows that payments companies are the crème de la crème for fintech investment across the three regions. Within that subset, B2B payments reign supreme. The next two funded fintech categories are credit and digital banking.

In Africa, payments startups have seen more investments than credit and neobanks. Flutterwave, Chipper Cash, Wave, Paystack, DPO come to mind.

most funded fintech categories emerging market

Image Credits: Briter Bridges & Catalyst Fund

Latin America most funded fintechs are neobanks. And it is the only region with all three product categories closely funded at $2-3 billion. Some of these companies include NuBank, Creditas, and dLocal.

India’s top-funded fintech startups are in payments. But it has notable representation in credit and neobanks, some of which have raised nine-figure rounds like Niyo, Lendingkart, and InCred.

Investors are enthused about the future of insurance, payments, and digital banks

From the handful of investors surveyed in the report on their view on future trends in fintech products 5 years from now, most of them chose insurance, payments, and digital banking models.

Investment platforms and embedded models are also areas of interest. They were less keen on agriculture and remittances while wealth tech platforms and neobanks were also lower in priority. How is it that digital banking and neo-banking are at two ends of the spectrum of investor choice? I can’t say for sure.

investors appetite in the coming years emerging markets

Image Credits: Briter Bridges & Catalyst Fund

Parts of the report talk about underserved consumers in these regions and how fintech startups are serving them. It also discusses whether these fintech startups promote financial inclusion and what features and products would get them to that point.

In all of this, the glaring fact, which is no news, is that Africa is lagging years behind Latin America and India. Talking with Briter Bridges director Dario Giuliani, he pointed out that he’d lean on five years. He added that what makes India a better market at this stage is because it is a country rather than a continent.

“It is easier to manage one country than 54 countries in Africa and 20 in Latin America,” he said to TechCrunch. “In Africa, we use the label ‘Africa,’ but we’re very much talking about 4-6 countries. Latin America is basically Brazil, Mexico, Argentina and Colombia who are seeing massive companies rise. India is one.”

One key detail the report mentions is that most fintechs across emerging markets are crossing over to different sectors like crop insurance, credit lines for distributors and vendors, KYC, e-commerce payment gateways, medical finance, and insurance. Guiliani says he expects this to continue.

#africa, #banking, #brazil, #briter-bridges, #catalyst-fund, #chipper-cash, #digital-banking, #dlocal, #finance, #financial-inclusion, #financial-technology, #fintech, #flutterwave, #india, #latin-america, #ma, #nubank, #online-lending, #payments, #paystack, #paytm, #startups, #stripe, #tc, #tymebank, #wave, #worldremit

SoftBank-backed Indian insurance platform Policybazaar raises $75 million

Policybazaar has raised $75 million as the Indian online insurance platform looks to expand its presence in UAE and Middle East.

Sarbvir Singh, chief executive of PolicyBazaar, told TechCrunch that the startup had raised $75 million, but didn’t elaborate. Falcon Edge Capital led the new tranche of investment in the Indian startup, which has raised about $630 million to date, according to research firm Tracxn.

The 12-year-old startup, which counts SoftBank Group’s Vision Fund and Tiger Global among its investors, is among a handful of startups that is attempting to upend India’s insurance market, which is largely commanded by state and bank-backed insurers.

Policybazaar serves as an aggregator that allows users to compare and buy policies — across categories including life, health, travel, auto, and property — from dozens of insurers on its website without having to go through conventional agents.

A screengrab of Policybazaar website

In India only a fraction of the nation’s 1.3 billion people currently have access to insurance and some analysts say that digital firms could prove crucial in bringing these services to the masses. According to rating agency ICRA, insurance products had reached less than 3% of the population as of 2017.

An average Indian makes about $2,100 in a year, according to World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.

In a recent report, analysts at Bernstein estimated that Policybazaar commands 90% of share in the online insurance distribution market. The platform also sells loans, credit cards, and mutual funds. The startup says it sells over a million policies a month.

“India has an under-penetrated insurance market. Within the under-penetrated landscape, digital distribution through web-aggregators like Policybazaar forms <1% of the industry. This offers a large headroom for growth,” Bernstein analysts wrote to clients.

The startup, which is working on an initial public offering slated for next year, said it will use the fresh investment to expand its presence across the UAE and Middle East regions.

“PolicyBazaar has shown stellar innovation, execution, and relentlessness in establishing itself as the market leader in online insurance aggregation in India. We believe the playbook it has established over the last 10 years in being the most efficient sales channel for insurance manufacturers, can act as a catalyst to gain market leadership in the GCC,” said Navroz Udwadia, co-founder of Falcon Edge Capital, in a statement.

#apps, #asia, #funding, #india, #paytm, #policybazaar, #softbank, #softbank-group

Google Play drops commissions to 15% from 30%, following Apple’s move last year

Google will lower its Play commissions globally for developers that sell in-app digital goods and services on its marquee store, the company said, following a similar move by rival Apple late last year.

The Android-maker said on Tuesday that starting July 1, it is reducing the service fee for Google Play to 15% — down from 30% — for the first $1 million of revenue developers earn using Play billing system each year. The company will levy a 30% cut on every dollar developers generate through Google Play beyond the first $1 million in a year, it said.

Citing its own estimates, Google said 99% of developers that sell goods and services with Play will see a 50% reduction in fees, and that 97% of apps globally do not sell digital goods or pay any service fee.

Google’s new approach is slightly different from Apple, which last year said it would collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the company’s platform. That drop doesn’t apply to iOS apps if a developer’s revenue on Apple platform exceeds $1 million.

“We’ve heard from our partners making $2 million, $5 million and even $10 million a year that their services are still on a path to self-sustaining orbit,” wrote Sameer Samat, VP of Android and Google Play, in a blog post.

“This is why we are making this reduced fee on the first $1 million of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size. We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed.”

The move comes months after changes in Google billing system charges rattled many startups in India. More than 150 startups banded together last year after Google said it will collect as high as 30% cut on in-app purchases in a range of categories made by Android apps.

Following the backlash, Google delayed mandating the planned Play Store payments rule in India to April 2022 and had reached out to several firms in recent months in the country to better understand their concerns, people familiar with the matter told TechCrunch.

Vijay Shekhar Sharma, founder and chief executive of mobile payments provider Paytm, India’s most valuable startup, dismissed Google’s move today as a “PR stunt.”

In an interview with TechCrunch, Sharma said established firms like his will still have to pay an exorbitant amount of fee to Google. Today’s announcement by Google, he said, further raises the question whether Google plans to address concerns raised by serious internet firms at all.

The biggest concern firms face today is the inability to use a third-party payments service for billing, he said. “They are basically saying that as soon as you build a business larger than $1 million — which is a very low bar — you are going to pay a 30% fee, which after taxes, becomes 44%,” he said.

A 30% sales cut and the inability to use third-party billing system have been points of contention between many developers and app store operators — Apple and Google — and led to a lawsuit by Fortnite-maker Epic Games against the iPhone-maker last year. Epic CEO Tim Sweeney had alleged that Apple’s move to lower the App Store fee for smaller developers was orchestrated to sow division among app creators.

Sharma said he was hopeful that Google will address other concerns, especially because in a country like India “we don’t have any other operating system, or distribution platform. They effectively control the destiny of every app developer in the country.”

Android commands 99% of the smartphone market in India, according to research firm Counterpoint. “Earlier India was powered by Android, then we became dependent on Android, and now it is controlled by Android,” said Sharma, whose payments app competes with Google Pay in the world’s second largest internet market.

Google’s Samat said,”We look forward to seeing more businesses scale to new heights on Android, and to further discussions with the Indian developer community to find new ways to support them technically and economically as they build their businesses.”

“Once developers confirm some basic information to help us understand any associated accounts they have and ensure we apply the 15% properly, this discount will automatically renew each year,” he wrote.

#apple, #apps, #asia, #ecommerce, #epic-games, #fortnite, #google, #google-play, #google-play-store, #india, #payments, #paytm

India’s Paytm turns Android smartphones into POS machines in merchants push

Paytm said on Tuesday it is turning NFC-enabled Android smartphones into point-of-sale machines, as it looks to win more merchants in one of the world’s largest mobile payments markets.

A Paytm merchant partner will now be able to enable card acceptance feature from their Paytm Business app. Once activated, they will be able to process a transaction by tapping a plastic card to their phone.

Paytm Smart POS supports Visa, Mastercard, and Rupeek, the Indian startup said.

Existing payment devices in the market haven’t proven very successful in reaching small and medium sized businesses in India, most of which remain offline, said Vijay Shekhar Sharma, founder and chief executive of Paytm, at a virtual press conference today.

To win these merchants, Paytm has in recent years rolled out QR codes that work across several payment networks, and launched jukeboxes and other gadgets to make it easier for merchants to accept payments digitally.

With today’s move, said Sharma, “the obligation of buying a POS machine, too, is no longer needed.” The startup said that most new Android smartphone models support the NFC feature.

Paytm also unveiled the newer generation jukebox POS that looks similar to a QR placard. “The reason why merchants haven’t actively adopted many of the existing POS machines is that they are not comfortable with it,” said Dilip Asbe, head of payments body NPCI, at the virtual conference.

The Indian startup, which processed more than 1.2 billion transactions last month, said it will charge a small subscription fee to merchant partners for accessing either of the aforementioned payments services.

The move, which in many ways pits Paytm against Sequoia Capital-backed Pine Labs, a market leader in the POS category but a significantly smaller startup, demonstrates just how aggressively Paytm is expanding its payments platform to go after merchants.

“Just the way, mobile phones saw an evolution from featurephone to smartphone, we believe the merchant PoS market in India is at an inflexion point to evolve from the traditional (aka dumb-PoS) to Smart-PoS. Unlike traditional PoS, which only allows transactions from debit/credit-card, some of the features of a Smart-PoS are: GST compliant bill, scanner/printer, takes all payments including UPI, is Bluetooth enabled and could be customized for different merchants as per their needs. While currently the Fintech companies are offering these devices, we expect banks to catch-up eventually,” wrote analysts at Bank of America in a recent note to clients.

#asia, #finance, #india, #payments, #paytm, #pine-labs

Paytm claims top spot in India’s mobile payments market with 1.2B monthly transactions

Paytm, India’s most valuable startup, said on Monday it processed 1.2 billion transactions in the month of February, illustrating the level of penetration it has made in one of the world’s fastest-growing payments markets where it competes with Google, Facebook, Amazon, and Flipkart-backed PhonePe.

Paytm said its users made 1.2 billion transactions last month across several payments modes including wallets, plastic cards, internet banking, and UPI. This is the largest volume of transactions reported by any payments firm in India and Paytm claimed that it has consolidated its leadership position.

A Paytm spokesperson told TechCrunch that the startup clocked over 1 billion transactions in the month of January as well. A PhonePe spokesperson told TechCrunch that its app crossed a billion transactions in December, and its last month’s transacting volume was “over a billion” across UPI, wallet, and credit and debit cards.

Paytm’s figure shows how the SoftBank-backed startup has continued to grow despite not being a dominant player in the UPI ecosystem.

A payments railroad built by a coalition of retail banks and backed by the government, UPI has emerged as the most popular way users transact online in recent years though it does not offer any business model.

Last month, UPI services processed 2.29 billion transactions, the governing body NPCI said on Monday. PhonePe and Google Pay are the dominant UPI players in India, commanding over 85% of the person-to-person payments market. PhonePe processed about 970 million UPI transactions in February. (NPCI has said that it will enforce a market share cap on its member firms.)

Unlike Paytm, which leads among wallet players, and PhonePe, Google Pay and relatively new entrant WhatsApp solely operate on UPI.

Paytm has expanded to cater to merchants in recent years as several international firms launched their offerings to solve person-to-person payments in India. The startup claimed that its service dominates in offline merchant payments and is growing 15% month-on-month. The startup, led by Vijay Shekhar Sharma, said it serves over 17 million merchants. PhonePe told TechCrunch it serves over 17.5 million merchants.

Paytm said it has been “the main driving force behind building and expanding digital villages and now empowers over 6 lakh (600,000) villages in India with digital payments.” The startup said over 50% of its merchant partners have an account with Paytm Payments Bank — the startup’s digital bank — and it also commands the market with its digital wealth management service, Paytm Money.

At stake is India’s payments market that is estimated to be worth $1 trillion in the next three years, up from about $200 billion last year, according to Credit Suisse.

“We are humbled by the trust India has shown in us & made Paytm their preferred digital payments & financial service provider. We have consistently maintained industry-leading market share & growing at an impressive rate,” said Narendra Yadav, Vice President of Paytm, in a statement.

“We have been promoting all digital payment methods giving multiple-choices to consumers that have helped us in consolidating our leadership position. In fact, a large percentage of our users who started their digital journey with Paytm, have now adopted & embraced our financial services.”

#apps, #asia, #google-pay, #india, #payments, #paytm, #phonepe, #softbank

Former top Paytm exec is building his own financial services startup

The executive who built the financial services boutique for Paytm, India’s most valuable startup, from the ground is ready to do something similar all over again.

Pravin Jadhav, the former chief executive of Paytm Money, revealed on Thursday his own startup, Raise Financial Services.

This time, Jadhav — under whose leadership, Paytm had amassed over 6 million Money customers — is focusing on serving a different set of the population.

Hundreds of millions of users in India today don’t have access to financial services. They don’t have a credit card, banks don’t lend to them, and they have never purchased an insurance cover or invested in mutual funds or stocks.

Scores of large firms and startups in India today are attempting to reach these users by building an underwriting technology that can use alternative data to determine an applicant’s credit worthiness. It’s a tough and capital intensive business, built on pillars of uncertainties, assumptions and hopes.

In an interview with TechCrunch, Jadhav said Raise Financial Services is aimed at customers living in metro, tier 1 and tier 2 cities (so very much in and around urban cities). “They want financial products, they are literate about these products, but they are not being served the way they should be,” he said.

Pravin Jadhav, left, poses with Paytm founder and CEO Vijay Shekhar Sharma. Jadhav left Paytm last year.

He said his new startup will offer products across financial services including investing, financing, insurance, wealth, and payments. “Just not doing the banking part, as I believe that is more of an infrastructure play,” he said.

“The idea is to offer great exceptional products that are not being offered by anyone. Number 2: Focus a lot on tech-driven distribution. And third is that today the quality of customer service experience is bad across the market. So we are trying to solve that,” he said. “Over time, we will try to stitch all of this together.”

Jadhav also announced he has raised a Seed financing round. He did not disclose the amount, but revealed enough high-profile names, including: Kunal Shah (Cred), Kalyan Krishnamurthi (Flipkart), Amod Malviya and Sujeet Kumar (Udaan), Sameer Nigam and Rahul Chari (PhonePe), Amrish Rau (Pine Labs, Citrus Pay), Sandeep Tandon (Freecharge), Jitendra Gupta (Jupiter), Girish Mathrubootham (Freshworks), Nischal Shetty (WazirX), Kuldeep Dhankar (Clevertap), Sreevatsa Prabhakar (Servify), and Amit Bhor (Walnut).

Jadhav himself is also investing, and venture investor Mirae Asset Venture is leading the round, with participation from Multi-Act Private Equity, Blume Ventures (via its Founder’s Fund) and US based early-stage investor Social Leverage, for which it is the first investment in India.

Ashish Dave, CEO of Mirae Asset Venture’s India business, told TechCrunch that even though he had known Jadhav, it was listening to him at various Clubhouse sessions that prompted him to reach out to Jadhav.

Jadhav said users can expect the startup’s first product to be live by the end of the year. (TechCrunch understands it’s shipping much sooner. Raise Financial Services’ offerings will have some similarities with SoFi and Goldman Sachs’ Marcus.)

#asia, #finance, #funding, #india, #online-lending, #paytm, #sofi

India’s BharatPe valued at $900 million in new $108 million fundraise

India may soon have another fintech unicorn. BharatPe said on Thursday it has raised $108 million in a financing round that valued the New Delhi-based financial services startup at $900 million.

Coatue Management led the three-year-old startup’s Series D round. Other six existing institutional investors — Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo and Sequoia Capital — also participated in the round, which brings BharatPe’s total to-date raise to $233 million in equity and $35 million in debt.

The startup said as part of the new financing round it returned $17.17 million to its angel investors and employees with stock option.

“With the balance sheet well capitalized (more than US$ 200M in bank), we are now going to keep our heads down and deliver US$30B TPV and build a loan book of US$ 700mn with small merchants by March 2023,” said Ashneer Grover, co-founder and chief executive of BharatPe.

BharatPe operates an eponymous service to help offline merchants accept digital payments and secure working capital. Even as India has already emerged as the second largest internet market, with more than 600 million users, much of the country remains offline.

Among those outside of the reach of the internet are merchants running small businesses, such as roadside tea stalls and neighborhood stores. To make these merchants comfortable with accepting digital payments, BharatPe relies on QR codes and point of sale machines that support government-backed UPI payments infrastructure.

Scores of giants and startups are attempting to serve neighborhood stores in India.

The startup said it had deployed over 50,000 PoS machines by November of last year, and enables monthly transactions worth more than $123 million. It does not charge merchants for universal QR code access, but is looking to make money by lending. Grover said the startup’s lending business grew by 10x in 2020.

“This growth reiterates the trust that the small merchants and kirana store owners have showed in us. This is just the beginning of our journey and we are committed to build India’s largest B2B financial services company that can serve as one-stop destination for small merchants. For BharatPe, merchants will always be at the core of everything we build,” he said.

BharatPe’s growth is impressive especially because it was not the first startup to help merchants. In a recent report to clients, analysts at Bank of America said BharatPe has proven that fintech is not the winner takes all market.

“BharatPe perhaps has the late mover advantages in the space. It was one of the first companies to act as a universal consolidator of QR codes on UPI, giving the merchant the advantage to have one QR code (eventually others like Paytm followed). Unlike its Fintech peers, BharatPe is not educating the merchants but instead following its larger peers who have already educated the merchants,” they wrote in the report, reviewed by TechCrunch.

The startup, which has presence in 75 cities today, plans to further expand its network in the nation with the new fund.

#amplo, #apps, #asia, #beenext, #bharatpe, #coatue-management, #finance, #funding, #india, #insight-partners, #online-lending, #paytm, #ribbit-capital, #sequoia-capital, #steadview-capital

PayPal is shutting down domestic payments business in India

PayPal is shutting down its domestic business in India, less than four years after the American giant kickstarted local operations in the world’s second largest internet market.

“From 1 April 2021, we will focus all our attention on enabling more international sales for Indian businesses, and shift focus away from our domestic products in India. This means we will no longer offer domestic payment services within India from 1 April,” said a company spokesperson.

In a long statement, PayPal did not say why it was winding down its India business, but a report recently said the company, which has amassed over 360,000 merchants in the country, had failed to make inroads in India.

Indian news outlet The Morning Context reported in December that PayPal was abandoning its local payments business in India, a claim the company had refuted at the time.

Nonetheless, the move comes as a surprise. The company said last year that it was building a payments service powered by India’s UPI railroad, suggesting the level of investments it was making in the country.

PayPal had also partnered with a range of popular Indian businesses such as ticketing services BookMyShow and MakeMyTrip and food delivery platform Swiggy to offer a faster check out experience. At the time of writing, PayPal website in India appears to have removed all such references.

India has emerged as one of the world’s largest battlegrounds for mobile payments firms in recent years. Scores of heavily-backed firms including Paytm, PhonePe, Google, Amazon, and Facebook are competing among one another to increase their share in India, where the market is estimated to be worth $1 trillion by 2023. Several of these firms also offer a range of payments services for merchants.

The company, which says it processed $1.4 billion worth of international sales for merchants in India last year, added that it will continue to invest in “product development that enables Indian businesses to reach nearly 350 million PayPal consumers worldwide, increase their sales internationally, and help the Indian economy return to growth.”

#apps, #asia, #google-pay, #payments, #paypal, #paytm, #phonepe

Former Paytm execs team up to chase gold in India

Nearly every adult in India has a bank account, but fewer than a quarter of them in the South Asian nation can secure loans from the formal financial institutions.

Although much of the population in the country doesn’t have a credit score, an increasingly growing number of people here are looking for credit — and some are going to extreme lengths.

Hundreds of online lending apps have begun attempting to tackle — and in some cases, abuse — this opportunity in recent years, offering Indians short-term, collateral-free and instant loans.

The catch? Several of these apps charge such high fees that the interest rate, when annualized, could go as high as 1,000%.

Many of these apps, several of which are operated by Chinese firms, have also been found to be employing sketchy tactics, such as contacting family members and colleagues of the customer to shame them and recover their money.

Google caught wind of this recently, and last month removed hundreds of such apps from the Play Store in India. But it wasn’t until several people committed suicide in the country in an attempt to save themselves from embarrassment from family, colleagues and society.

Deepak Abbot and Nitin Misra, two former executives of Paytm, India’s most valuable startup, believe that this problem can be solved for many by using an asset that has been sitting idly in nearly 200 million homes in the country: Gold.

Indians stockpile more gold than citizens of any other country. In fact, such is the demand for gold in India that the South Asian nation is the world’s third-largest importer of this precious metal.

But once most Indians have bought gold, they don’t really do much with it other than hoarding and getting it off circulation, thereby dragging down the economy. According to estimates by the World Gold Council, Indians have stashed 25,000 tons of gold, whose value today is over $1.4 trillion.

Monetizing even a third of it can add 2% to the GDP growth rate, analysts say. Banks and other financial institutions love gold as it’s a great secure asset whose value has only grown over the decades.

New Delhi has made several efforts, too, to get stashed gold back in circulation through initiatives such as the gold monetization scheme, but it hasn’t had much success with it so far.

The core challenge with convincing people to part ways with their gold is that it’s an emotional asset, said Misra and Abbot in an interview with TechCrunch. Gold jewellery is a show of strength and pride in India, and families pass on their reserve to future generations.

“Irrespective of your state, religion, community, in India, gold has a certain auspicious sentiment attached to it. You worship it. Even when tax concession and premium price is offered to someone, they can’t fathom the idea of their necklaces and other jewellery being melted and going away,” said Misra.

The other challenge is that even when someone absolutely needs to sell their gold, which is often their last resort, to attend a family emergency or other urgent and unavoidable cause, the process of selling it is an awkward and embarrassing experience for many because of the stigma of pawning their family’s precious property.

In recent years, a handful of firms and startups — in collaboration with banks — have attempted to remove this stigma by visiting the customer at their doorstep to some success.

Abbot and Misra, pictured above, think they have a better approach and broader idea.

Many people in India keep their gold stash and other precious items in a safe locker at a bank that can charge as high as $65 a month for this service. (Banks require customers to pay the fee annually, however.) There are some downsides to using a bank’s locker: Accessing this locker is a long-process and can easily take half of your day, if not more. There’s also no insurance protection on items people keep in the locker. Customers are also required to put up a security deposit of a few hundred dollars to avail this service — and, there is also a long-waiting period before people can even avail this service.

Through their newfound startup indiagold, Abbot and Misra are offering customers a similar locker service for as little as $1.36 a month, which also includes full insurance coverage. The idea, the duo explained, is to make it easier and convenient for people to secure their previous metal reserve.

“You sign up on indiagold app, our agents come to your house, inspect and weigh the gold, and put it in a tamper proof bag. We also attach an RFID sticker to the bag, which once scanned, can detect if there was any attempt to open it. They then put the bag inside a steel box, which is locked by the customer with their fingerprint. And all of this is being captured through a body camera by one of our agents, which is streaming the feed in real-time to the customer as they leave the premise to the designated vault location,” said Misra.

With crime rates going up, very few people bark at the idea of securing their jewelries and especially when they know that their property is being insured, the duo said. Once they have deposited their gold stash with indiagold, the startup displays the real-time value of their property and offers a line of credit that could be accessed within seconds.

“It’s fine if the customer doesn’t want a loan, but should they ever need it, they have a zero-touch option available. They know that their gold is secured in a locker with their fingerprint, so their jewellery is not going to be melted or broken. If they ever need a line of credit, they can avail it in 30 seconds without talking to anyone, or even having someone quietly visit their home,” he said.

“If they have deposited multiple jewellery items, they can avail loan against just some of them. Say if the person knows that they need to use some necklace in an event soon, they can take a loan against other items in that case. And we charge at max 1% interest rate on the loan,” he added.

This is just part of the problem that indiagold, which kickstarted its operation late last year, is trying to address.

It has built a platform that determines the credit worthiness of its customers, and provides APIs to banks and other lenders who are trying to reach this untapped market.

The startup, which is currently operational in Delhi-NCR, recently raised $2 million in a financing round led by Leo Capital, with participation from high-profile investors including Kunal Shah of Cred, Amrish Rau of PineLabs, Kunal Bahl and Rohit Bansal of Snapdeal, Ashneer Grover and Bhavik Koladiya of BharatPe, Miten Sampat of Cred and MX Player, Sameer Mehta of Boat, Ashish Sharma of Innoven Capital, Ankit Agarwal of Alteria Capital, Rahul Soota of MyMoneyMantra, Ramakant Sharma of Livspace, and Blume Founders Fund.

“We think this is the only way this huge market can really be addressed, and now we are beginning to scale our efforts,” said Misra.

#asia, #finance, #funding, #india, #paytm

India proposes social security benefits for gig workers in annual budget

India’s Finance Minister Nirmala Sitharaman proposed a handful of benefits for the startup ecosystem and to accelerate the growth of digital services in the annual budget Monday as the South Asian nation looks to revive the economy that plunged into deepest recorded slump amid the coronavirus pandemic.

Sitharaman said the nation has earmarked 1,500 crore Indian rupees ($205.3 million) to incentivize the adoption of digital payments. Paytm, Google Pay, and PhonePe are locked in an intense battle to drive people in India to pay digitally, but the firms have struggled to find a viable business model with their core payments service.

Many firms were hoping that the government will permit them to charge for merchants transactions. No announcement on this front was made today.

The budget also proposed to extend social security benefits to gig workers and other platform workers and launch a website to help these workers find employment, said Sitharaman. These workers will be protected by minimum wages, she said. Additionally, she said women will be allowed to work in all categories with adequate protection.

The South Asian nation also proposed broadening the definition of small businesses, increasing the threshold for capitalization to 2 crore Indian rupees (about $275,000), up from existing limit of 50 lakh Indian rupees ($68,750). This will allow many more businesses to come under small business umbrella and avail relevant benefits such as some tax concessions.

The budget also proposed incentives for incorporation of one-person companies, a move that Sitharaman said will help companies “grow without restriction on paid up capital and turnover, allowing conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up a one-person company from 182 days to 120 days, and allow also non-resident Indians to incorporate one-person companies in India.”

Industry executives in recent weeks said they were hoping that India will further relax angel investment tax in the country and address the digital services tax the country began imposing on foreign firms last year. These matters were not addressed in the new budget.

This is a developing story. Check back later for more information. 

#asia, #finance, #google-pay, #government, #india, #paytm, #phonepe

WhatsApp faces legal challenge over privacy in its biggest market

WhatsApp is facing a legal challenge in India, its biggest market, after a petition was filed Thursday before Delhi High Court over the upcoming change in the Facebook-owned app’s data sharing policy.

The petition alleges the new terms that WhatsApp requires its roughly 450 million users in the country to accept is a violation of their fundamental rights to privacy and poses a threat to national security.

Through an in-app alert, WhatsApp has asked users in recent days to agree to new terms of conditions that grants the app the consent to share some personal data about them such as their phone number and location with Facebook.

Users will have to agree to these terms by February 8 if they wish to continue using the app, the alert said. The change has been mischaracterized by many as their personal communication being compromised, which WhatsApp clarified this week was not the case.

The Facebook-owned service, which serves over 2 billion users worldwide, said private conversations between people remain just as private as before. Facebook has also bought front-page newspaper ads in several leading Indian dailies this week to explain the change, which it first outlined last year.

The petitioner said the new terms grant WhatsApp a “360-degree profile into a person’s online activity” without any “government oversight.”

“WhatsApp has made a mockery out of our fundamental right to privacy while discharging a public function in India, besides jeopardizing the National Security of the country by sharing, transmitting and storing the users data in some [other] country and that data, in turn, will be governed by the laws of that foreign country,” the petition, which is expected to be heard Friday, reads.

Several high-profile startup founders and executives in India have also criticized WhatsApp’s new data sharing policy. Vijay Shekhar Sharma, founder and chief executive of India’s most valuable startup Paytm, accused WhatsApp of operating with double standards, pointing to how the new change was not affecting the app’s users in Europe.

The outrage over the new change has resulted in tens of millions of users exploring other communication apps such as Signal and Telegram in recent days. In an interview with TechCrunch earlier this week, Signal co-founder and chairman executive Brian Acton said “the smallest of events helped trigger the largest of outcomes. We’re also excited that we are having conversations about online privacy and digital safety and people are turning to Signal as the answer to those questions.”

#apps, #asia, #facebook, #india, #paytm, #privacy, #signal, #social, #telegram, #whatsapp

Indian startups raised $9.3 billion in 2020

The coronavirus pandemic — and a handful of other factors — slowed dealmaking for startups in India this year.

Compared to their record $14.5 billion fundraise last year, Indian startups are ending 2020 with about $9.3 billion. This is the first time since 2016 that startups in India, one of the world’s largest startup communities, has raised less than $10 billion in a year, according to consultancy firm Tracxn.

The number of deals fell from 1,185 last year to 1,088 in 2020. There were fewer larger sized rounds, too. Rounds with dealsize $100 million or larger fell from 26 in 2019 to 20 (these rounds delivered $3.6 billion this year, compared to $7.5 billion last year), and similarly rounds with dealsize $50 million to $100 million fell from 27 to 13. (The figures do not include investments in telecom giant Jio Platforms, which alone raised over $20 billion this year.)

Despite the slowdown, Indian startups saw substantial rebound in the second half of this year. In the first half, startups in the world’s second largest internet market had raised just $4.2 billion from about 461 deals, said Tracxn.

Other than the coronavirus, which has impacted startups worldwide, another factor that impacted the dealmaking was absence of — or reduced participation from — some of the biggest investors.

Chinese giants such as Alibaba — and its affiliate Ant Group — and Tencent wrote fewer checks this year to Indian startups amid tension between the two neighboring nations. SoftBank also delivered less capital as many of its high-profile portfolio firms including Paytm, Oyo Rooms, and Ola did not raise money.

But the virus also accelerated growth of some startups. Byju’s is now valued at over $11 billion, up from $8 billion in January this year. Unacademy, another high-profile startup in the online learning space, raised two rounds at the height of the pandemic, increasing its valuation from about $500 million in February this year to over $2 billion.

Bond, a firm started by Mary Meeker and other high-profile investors, backed Byju’s this year. Bond believes that Byju’s will be worth over $30 billion in three years, a person who was briefed by the investment firm told TechCrunch. Several startups in India operating on a SaaS model and catering to customers worldwide also picked up momentum this year.

11 Indian startups including RazorPay, Unacademy, DailyHunt, and Glance became a unicorn this year. (On a side note, Google and Facebook wrote several checks to Indian firms this year. Google backed Glance and DailyHunt last week, while Facebook invested in Unacademy. Both the firms also invested in Jio Platforms this year.)

“I am old enough (unfortunately!) to have seen the 2001 and 2008 downturns so when Covid hit and there were stories of doom and gloom everywhere, I remembered what I saw happening in the past downturns — a beginning of a new generation of teams who built the next generation of companies,” said Vaibhav Domkundwar, founder and managing partner at Better Capital. Better Capital, which backs early stage startups in India, wrote 43 investment and follow-on checks this year.

M&A activities also accelerated this year. Byju’s acquired WhiteHat Jr for $300 million, while Unacademy acquired PrepLadder, which offers courses aimed at medical students, for $50 million in July. It also led an investment round of $5 million to acquire a majority stake in Mastree.

Reliance Industries acquired online pharmacy Nedmeds and, in a fire sale, Urban Ladder.

But for the first time, Indian startups are on the verge of seeing another kind of exit. Zomato, Flipkart, and Policybazaar are among some startups that plan to go public next year. Analysts at Bernstein have identified Paytm, Byju’s, PhonePe, and Delhivery among those who could also go public by 2022.

#apps, #asia, #dailyhunt, #flipkart, #funding, #glance, #jio-platforms, #ola, #oyo-rooms, #paytm, #policybazaar, #razorpay, #unacademy, #urban-ladder, #zomato

From India’s richest man to Amazon and 100s of startups: The great rush to win neighborhood stores

After spending more than a decade disrupting the neighborhood stores in the U.S. and several other markets, Amazon and Walmart are employing an unusual strategy in India to face off this competitor: Friending them.

Walmart and Amazon, both of which face restrictions from New Delhi on what all they could do in India, have partnered with tens of thousands of neighborhood stores in the world’s second-largest internet market this year to leverage the vast presence of these mom and pop stores.

In June this year, at the height of the pandemic, Amazon announced “Smart Stores.” Through this India-specific program, for instance, Amazon is providing physical stores with software to maintain a digital log of the inventory they have in the shop and supplying them with a QR code.

When consumers walk to the store and scan this QR code with the Amazon app, they see everything the shop has to offer, in addition to any discounts and past reviews from customers. They can select the items and pay for it using Amazon Pay. Amazon Pay in India supports a range of payments services, including the popular UPI, and debit and credit cards.

The world’s largest e-commerce giant also maintains partnerships that allow it to turn tens of thousands of neighborhood stores as its delivery point for customers — and sometimes even rely on them for inventory.

India has over 60 million small businesses that dot the thousands of cities, towns and villages across the country. These mom and pop stores offer all kinds of items, are family run, and pay low wages and little to no rent.

This has enabled them to operate at an economics that is better than most — if not all — of their digital counterparts, and their scale allows them to offer unmatched fast delivery.

Krishna Shah, a New Delhi-based doctor, on paper is one of the perfect customers of e-commerce services. She lives in an urban city, uses digital payments apps and her earnings put her in the top 5% income level in the country. Yet, when she needed to buy food for her cats and needed it as soon as possible, she realized the major giants would take hours, if not longer. She ended up placing a call to a neighborhood store, which delivered the item within 10 minutes.

That neighborhood store, which employs fewer than half a dozen people, was competing with over a dozen giants and heavily funded startups including Grofers and BigBasket — and it won.

At stake is India’s retail market, which is estimated to be worth $1.3 trillion by 2025, from about $700 billion last year, according to Boston Consulting Group and the Retailers’ Association India. E-commerce, by several estimates, accounts for just 3% of the retail market in the country.

If that figure wasn’t small enough already, consider this: Some of the biggest customers of Flipkart and Amazon are these small retail stores. An executive with direct knowledge of the matter told TechCrunch that during some sales, as high as 40% of all smartphone units are bought by physical stores. The idea is, the executive said, to buy the devices at a discounted price, sit on them for a few days and when Amazon and Flipkart are done with their sales, sell the same phones at their standard prices.

Sujeet Kumar, co-founder of Udaan, a Bangalore-based startup that works with merchants, said that even as smartphones and the internet have reached all corners of India, e-commerce hasn’t been able to disrupt the retail market.

“The problem is that it is very difficult for e-commerce companies to build a supply chain and distribution network that is more efficient than those established by neighborhood stores. These mom and pop stores operate on an insanely different kind of cost economics. E-commerce companies are not able to match it,” he said.

#amazon, #apps, #asia, #bigbasket, #ecommerce, #facebook, #finance, #flipkart, #food, #google, #grofers, #india, #instamojo, #khatabook, #mobile, #online-lending, #payments, #paytm, #phonepe, #udaan, #walmart, #whatsapp

PhonePe raises $700 million, becomes a separate entity

PhonePe, the crown jewel in Flipkart’s acquisition by Walmart, is “partially” spinning off, the Bangalore-based financial services firm said on Thursday. To kick off its new journey, the firm said it has secured $700 million in a new financing round.

This round, the name of which was not disclosed, was led by Walmart with participation from some existing investors, PhonePe said. The new round gave PhonePe, which was founded by a former Flipkart employee, a post-money valuation of $5.5 billion.

Today’s announcement is a big boost to the confidence investors have on PhonePe. The startup has been engaging with investors for new capital for several quarters and had struggled to raise capital at a $3 valuation earlier this year, TechCrunch reported earlier.

The partial spin-off, which had been in the works for more than a year, means that Flipkart’s stake in PhonePe will reduce from a 100% to 87%. “This partial spin-off gives PhonePe access to dedicated long-term capital to pursue our vision of providing financial inclusion to a billion Indians,” said Sameer Nigam, founder and chief executive of PhonePe, in a statement.

PhonePe currently leads the mobile payments market in India, by some metrics. In October, it surpassed Google Pay to become the top UPI payments app. UPI is a four-year-old payments infrastructure built by India’s largest banks. It is the most popular way people transact money digitally in India. PhonePe reported 835 million UPI transactions in October, ahead of Google Pay, which processed about 820 million transactions that month.

“As Flipkart Commerce continues to grow strongly serving the needs of Indian customers, we are excited at the future prospects of the group. This move will help PhonePe maximize its potential as it moves to the next phase of its development, and it will also maximize value creation for Flipkart and our shareholders,” said Kalyan Krishnamurthy, CEO of Flipkart Group, in a statement.

More to follow…

#apps, #asia, #flipkart, #funding, #google-pay, #india, #paytm, #phonepe, #walmart

India opens antitrust case against Google over its payments app

India’s antitrust watchdog has opened an investigation into Google for allegedly abusing the dominant position of its app store to promote its payments service in the world’s second largest internet market.

In its Monday announcement (PDF) about opening an antitrust case against Google, Indian watchdog Competition Commission of India said it would review claims whether Google “unfairly” skews the search results on the Play Store in favor of Google Pay app over others; prominently promotes Google Pay during the setup of an Android smartphone, and if Play Store’s billing system is designed “to the disadvantage of both i.e. apps facilitating payment through UPI, as well as users.”

The informant, who has not been identified, alleged that Google “rigs its feature app lists such as ‘Editor’s Choice Apps’, ‘User Choice Apps’ and ‘Top Free apps’ … demonstrating clear bias in favor of its own app; by manipulating the search advertisements algorithm on the Play Store in favour of Google Pay; and by pre-installing and prominently placing Google Pay on Android smartphones at the time of initial set-up resulting in a ‘status-quo bias’ to the detriment of other apps facilitating payments through UPI as well.”

If the allegation provided by the informant, who has not been identified, is found credible, Google’s practices could be in violation of various provisions of Section 4 of India’s Competition Act of 2002.

Google Pay, formerly known as Tez, is one of the most popular payments services in India. It competes with Walmart’s PhonePe, Paytm, and a range of other apps. As of last month, Walmart’s PhonePe was slightly ahead of Google Pay in India. Both the apps individually process roughly 40% of all transactions on UPI, a payments infrastructure built by large banks in the country. UPI is the most popular digital payments solution in India.

Google Play Store supports a range of payments methods, including credit cards, mobile wallets, internet banking, and UPI. But, as the informant alleges, “UPI based digital payment apps are more convenient, secured, economical, etc. over other digital payment solutions.” Based on such distinct features, the Indian watchdog said, “the Informant has averred that the market for apps facilitating payment through UPI is a separate relevant market as users do not regard apps facilitating payment through UPI as interchangeable or substitutable with other modes of digital payment.”

The new antitrust case is the latest headache for Google in India, its biggest market by users. In recent months, the dominant position of Android — which powers roughly 99% smartphones in the country, according to research firm Counterpoint, has also irked many startups in the country, who have formed an informal coalition to fight back the Android maker.

Google did not immediately respond to a request for comment.

More to follow…

#apps, #asia, #google, #google-india, #google-pay, #government, #india, #paytm, #phonepe

Google and Walmart face growth hurdles as India caps payments transactions

Google and Walmart have a new challenge ahead of them as they race to expand the reach of their payments apps in India: They won’t be permitted to grow beyond a limit.

National Payments Corporation of India (NPCI), the body that operates the widely popular UPI payments infrastructure, said Thursday evening that it will enforce a cap to ensure that no single payments app processes more than 30% of UPI transactions in a month.

The payments body said the move is aimed at addressing the “risks” and “protecting the UPI ecosystem as it further scales up.” The change goes into effect in January 2021.

UPI is a payments infrastructure built by large banks in India and is backed by the Indian government. It has become the most popular digital payments method in the country in recent years.

The cap of 30% will be calculated based on total volume of UPI transactions processed in the preceding three months, it added.

The move, described by an industry executive as the most absurd thing they have heard in months in India, will severely impact Google and Walmart, whose respective apps already process more than 35% of UPI transactions each.

In fact, Walmart’s PhonePe processed more than 40% of about 2 billion transactions on UPI network last month.

It remains unclear how any payments app will comply with this limit. Let’s say PhonePe or Google Pay has already processed about 650 million transactions in three weeks. Would it just switch off UPI payments on their app for the remainder of the month?

More to follow…

#apps, #asia, #google, #india, #payments, #paytm, #phonepe, #walmart

Walmart’s PhonePe zips past Google Pay in India as UPI tops 2B monthly transactions

UPI, a four-year-old payments infrastructure built by India’s largest banks, surpassed 2 billion transactions last month, exactly a year after hitting the 1 billion monthly transactions milestone.

Driving the transactions for UPI — which has become the most popular digital payments method in India thanks to its open architecture that allows interoperability among all participating payments apps — are Walmart’s PhonePe, Google Pay, Paytm, and Amazon Pay.

But for the first time in more than a year, Google Pay did not drive the most volume of UPI transactions. PhonePe recorded 835 million UPI transactions in October, it said, while Google Pay hit about 820 million, according to people familiar with the matter.

Paytm recorded about 245 million transactions, while Amazon Pay settled with about 125 million, the people said.

In a statement, PhonePe confirmed that it assumed the “market leading position” with about 40% of all UPI transactions last month. Google and Paytm did not immediately respond to a request for comment.

TechCrunch could not determine how many unique monthly transacting users these payments firms have amassed in the country. In May, Google Pay had about 75 million transacting users, ahead of 60 million of PhonePe and 30 million of Paytm.

Unlike Google Pay, both Paytm and PhonePe also operate a wallet service. The wallet service is not powered by UPI. PhonePe said overall it processed 925 million transactions last month and had over 100 million monthly active users.

PhonePe has recently seen a surge in its transactions as more offline shops open and merchants and consumers opt for a digital alternative to complete transactions. The app has also added a range of financing services, including 600,000 insurance policies, it said.

“We are on a mission to make digital payments a way of life for every Indian citizen, and our next target is to cross 500 million registered users by Dec 2022. In line with our brand ethos of ‘Karte Ja. Badhte Ja,’ (Hindi for keep working and growing) we continue to launch new and innovative products for every strata of Indian society, as well as enable digital payment acceptance across every merchant in every village and town in India,” said Sameer Nigam, chief executive and founder of PhonePe, in a statement.

India’s mobile payments market is estimated to reach $1 trillion by 2023, according to Credit Suisse. More players are expected to join the race. WhatsApp, which has over 400 million users in India, started testing UPI payments on its app in 2018. It remains stuck in a regulatory maze, however, which has prevented it from rolling out WhatsApp Pay to most of its users in the country.

#amazon-pay, #apps, #asia, #flipkart, #google-pay, #india, #payments, #paytm, #phonepe, #walmart

SAIF Partners rebrands as Elevation Capital, secures $400 million for its new India fund

SAIF Partners has raised $400 million for a new fund and rebranded the 18-year-old influential venture capital firm as it looks to back more early-stage startups in the world’s second largest internet market.

The new fund is SAIF Partners’ seventh for early-stage startups in India. Its previous two funds were each $350 million in size, and the firm today manages more than $2 billion in assets.

SAIF Partners started investing in Indian startups 18 years ago. The firm began as a joint venture with SoftBank and its first high-profile investment was Sify. But the two firms’ joint venture ended more than a decade ago, so the firm is now getting around to rebranding itself, Ravi Adusumalli, the managing partner of SAIF Partners, told TechCrunch in an interview.

The firm — which has five unicorns in its portfolio, including Paytm’s parent firm One97 Communications, food delivery startup Swiggy and online learning platform Unacademy — is rebranding itself as Elevation Capital.

“Elevation reflects our investment ethos and re-emphasises our commitment to the founders who help redefine our future. For our existing partners, it is a commitment of continued collaboration on our path-breaking journeys together. For our new partners, it is a promise to do all we can to achieve great heights together, from day one,” said Adusumalli.

SAIF Partners has backed more than 100 startups to date. The venture firm makes long-term bets on founders and backs young firms beginning their early years when they are raising their seed, pre-Series A and Series A financing rounds.

The venture firm invests in startups operating in a wide-range of sectors and plans to continue this strategy and add more areas of interest, said Deepak Gaur, a managing director at Elevation Capital, in an interview with TechCrunch.

“Enterprise SaaS is one area where we are spending a lot of resources,” he said. “We believe the time has come for this sector and we will see many global companies emerge from India.”

More than 15 startups in Elevation Capital’s portfolio are projected to become a unicorn in the next few years, according to Tracxn, a firm that tracks startups and investments in India. These include healthcare booking platform PharmEasy, app-based platform to book home services Urban Company, insurance tech startup Acko, digital loan platform Capital Float, real estate property marketplace NoBroker and online marketplace for gold Rupeek.

A number of SAIF Partners-backed startups, including IndiaMART, MakeMyTrip and Justdial, have become publicly listed companies, too.

Mukul Arora, a managing partner at SAIF Partners, said that the state of the Indian startup ecosystem has changed for the better in the past decade. “A few years ago, we were seeing many startups replicate a foreign company’s play in India. Today, we are seeing our ideas being replicated outside of the country. Someone is building a Meesho for Brazil,” he said.

The founders have also grown more sophisticated, said Mayank Khanduja. Elevation Capital has over three dozen employees, with about two-dozen focused on the investment size.

Elevation Capital’s new fund comes at a time when many established venture capital firms have also closed their new funds for India in recent months. In July, Sequoia Capital announced two funds — totaling $1.35 billion in size — for India. A month later, Lightspeed raised $275 million for its third Indian fund. Accel late last year closed its sixth fund in India at $550 million.

All of the LPs participating in Elevation Capital’s new fund, as was the case with previous funds, are U.S.-based, and the vast majority of them are nonprofits, said Adusumalli. Without disclosing any figures, he said the firm’s previous funds have performed very well.

#acko, #asia, #capital-float, #elevation-capital, #funding, #india, #meesho, #paytm, #saif-partners, #swiggy, #unacademy, #venture-capital

Google delays mandating Play Store’s 30% cut in India to April 2022

Google is postponing the enforcement of its new Play Store billing policy in India to April 2022, days after more than 150 startups in the world’s second largest internet market forged an informal coalition to express concerns over the 30% charge the Android-maker plans to mandate and started to explore an alternative store for their apps.

The company, which is going live globally with the new Play Store rule in September 2021, is deferring the enforcement of the policy only in India, it said. It is also listening to developers and willing to engage to allay their concerns, it said.

Last week, Google said it would no longer allow any apps to circumvent its payment system within the Play Store. The move, pitched by Google as a “clarification” of its existing policy, would allow the company to ensure it gets as high as a 30% cut on in-app purchases made through Android apps operating in a range of a categories.

Google’s announcement today is a direct response to the biggest scrutiny it has received in a decade in India — its biggest market by users but also a place where, compared to Western markets, it generates little revenue. More than 150 startups in India last week formed an informal coalition to fight the company’s strong hold on Indian app ecosystem. Google commands 99% of the smartphone market in India, according to research firm Counterpoint.

Among the startups that have expressed concerns over Google’s new policy are Paytm, India’s most valuable startup, payments processor Razorpay, fantasy sports firm Dream11, social network ShareChat, and business e-commerce IndiaMART.

More than 50 Indian executives relayed these concerns to India’s Ministry of Electronics and Information Technology over a video call on Saturday, according to three people who attended the call.

Several businesses in India have long expressed concerns with the way Google has enforced its policies in India, but the matter escalated last month after the company temporarily pulled Paytm app from the Play Store for promoting gambling.

Google said Paytm had repeatedly violated its policies, and the company’s Play Store has long prohibited apps that promote gambling in India. Google has sent notices about warnings over gambling to several more firms in India in recent weeks.

A senior industry executive told TechCrunch that the company should have expressed these concerns months before the popular cricket tournament IPL was scheduled to commence. Fantasy sports apps allow users to pick their favorite players and teams. These players stand to win real money or points that they can redeem for physical goods purchase based on the real-world performance of their preferred teams and players. IPL season sees a huge surge in popularity of such fantasy sports apps. 

“The IPL even got delayed by months. Why did Google wait for so long? And why does the company have a problem with so-called gambling in India, when it permits such activities in other markets? The Indian government has no problem with it,” the executive said, requesting anonymity.

Paytm on Monday announced its own mini-app store featuring several popular services including ride-hailing firm Ola, health care provides 1mg and Practo, fitness startup Cure.fit, music-streaming service Gaana, car-rental provider Zoomcar, Booking.com, and eateries Faasos, Domino’s Pizza, and McDonald’s. The startup claimed that more than 300 firms have signed up for its mini store and that its app reaches more than 150 million users each month. (In a written statement to TechCrunch, Paytm said in June its app reached more than 50 million users in India each month.

Paytm, which says its mini-app store is open to any developer, will provide a range of features including the ability to support subscriptions and one-step login. The startup, which claims  said it will not charge any commission to developers for using its payments system or UPI payments infrastructure, but will levy a 2% charge on “other instruments such as credit cards.”

“There are many challenges with traditional mobile apps such as maintaining multiple codebases across platforms (iOS, Android or Web), costly user acquisition and requirement of app release and then a waiting period for user adoption for any change made in the app. Launching as a Mini Apps gives you freedom from all these hassles: implying lesser development/testing and maintenance costs which help you reach millions of Paytm users in a Jiffy,” the Indian firm said in its pitch.

The launch of a mini-store further cements Alibaba-backed Paytm’s push into turning itself into a super-app. Its chief rivals, Walmart-backed PhonePe and Google Pay, also operate similar mini stores on their apps.

Whether Paytm’s own mini app store and postponement of Google’s new Play Store policy are enough to calm other startups’ complaints remain to be seen. PhonePe is not one of the mini apps on Paytm’s store, a Paytm spokesperson told TechCrunch.

“I am proud that we are today launching something that creates an opportunity for every Indian app developer. Paytm mini app store empowers our young Indian developers to leverage our reach and payments to build new innovative services,” said Vijay Shekhar Sharma, co-founder and chief executive of Paytm, in a statement.

#apps, #asia, #google, #google-play-store, #paytm, #play-store

Indian startups explore forming an alliance and alternative app store to fight Google’s ‘monopoly’

Google, which reaches more internet users than any other firm in India and commands 99% of the nation’s smartphone market, has stumbled upon an odd challenge in the world’s second largest internet market: Scores of top local entrepreneurs.

Dozens of top startups and firms in India are working to form an alliance and toying with the idea of launching an app store to cut their reliance on Google, five people familiar with the matter told TechCrunch.

The list of entrepreneurs include high-profile names such as Vijay Shekhar Sharma, co-founder and chief executive of Paytm (India’s most valuable startup), Deep Kalra of travel ticketing firm MakeMyTrip, and executives from PolicyBazaar, Sharechat and many other firms.

The growing list of founders expressed deep concerns about Google’s “monopolistic” hold on India, and discussed what they alleged was unfair and inconsistent enforcement of Play Store’s guidelines in the country.

The conversations, which began in recent weeks, escalated on Tuesday after Google said that starting next year developers with an app on Google Play Store must give the company a cut of as much as 30% of several app-related payments.

Dozens of executives “from nearly every top startup and firm” in India attended a call on Tuesday to discuss the way forward, some of the people said, requesting anonymity. A 30% cut to Google is simply unfeasible, people on the call unanimously agreed.

Vishal Gondal, the founder of fitness startup GOQii, confirmed the talks to TechCrunch and said that an alternative app store would immensely help the Indian app ecosystem.

TechCrunch reached out to Paytm on Monday for comment and the startup declined the request.

In recent months, several major startups in India have also expressed disappointment over several of the existing industry bodies, which some say have failed to work on nurturing the local ecosystem.

The tension between some firms and Google became more public than ever late last month after the Android-maker reiterated Play Store’s gambling policy, sending a shockwave to scores of startups in the country that were hoping to cash in on the ongoing season of Indian Premier League cricket tournament.

Google temporarily pulled Paytm’s marquee app from the Play Store citing repeat violation of its Play Store policies. Disappointed by Google’s move, Paytm’s Sharma said in a TV interview, “This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations.”

Google has sent notices to several firms in India including Hotstar, TechCrunch reported last month. Indian newspaper Economic Times reported on Wednesday that the Mountain View giant had also sent warnings to food delivery startups Swiggy and Zomato.

Vivek Wadhwa, a Distinguished Fellow at Harvard Law School’s Labor and Worklife Program, lauded the banding of Indian entrepreneurs and likened Silicon Valley giants’ hold on India to the rising days of East India Company, which pillaged India. “Modern day tech companies pose a similar risk,” he told TechCrunch.

Some of the participating members are also hopeful that the government, which has urged the citizens in India to become self-reliant to revive the declining economy, would help their movement.

Other than its reach on Android, Google today also leads the mobile payments market in India, TechCrunch reported earlier this year.

The giant, which has backed a handful of startups in India and is a member of several Indian industry bodies, invested $4.5 billion in Mukesh Ambani’s telecom giant Jio Platforms earlier this year.

India’s richest man Ambani, who runs oil-to-retails giant Reliance Industries, is an ally of Indian Prime Minister Narendra Modi. Jio Platforms has attracted over $20 billion in investment from Google, Facebook, and 11 other high-profile investors this year.

The voluminous investment in Jio Platforms has puzzled many industry executives. “I see no business case for Facebook investing in Jio beyond saying we need regulatory help,” said Miten Sampat, a high-profile angel-investor on a podcast published Wednesday.

“This is a white-collar way of saying there is corruption involved, and if the government gets upset, I have invested somewhere with some friend of the government. All of us are losing at the benefit of one company,” he said. Sampat’s views are shared by many industry executives, though nobody has said it on record and in such clear terms.

Google said in July that it would work with Jio Platforms on low-cost Android smartphones. Jio Platforms is planning to launch as many as 200 million smartphones in the next three years, according to a pitch the telecom giant has made to several developers. Bloomberg first reported about Jio Platform’s smartphone production plans.

These smartphones, as is the case with nearly 40 million JioPhone feature phones in circulation today, will have an app store with only a few dozen apps, all vetted and approved by Jio, according to one developer who was pitched by Jio Platforms. An industry executive described Jio’s store as a walled-garden.

A possible viable option for startup founders is Indus OS, a Samsung-backed third-party store, which last month said it reaches over 100 million monthly active users. As of earlier this week, Paytm and other firms had not reached out to IndusOS, a person familiar with the matter said.

#apps, #asia, #facebook, #google, #india, #jio-platforms, #payments, #paytm, #reliance-jio, #sharechat

Indian mobile gaming platform Mobile Premier League raises $90 million

Mobile Premier League (MPL) has raised $90 million in a new financing round as the two-year-old Bangalore-based esports and mobile gaming platform grows its user base and looks to expand outside of India.

SIG, early-stage tech investor RTP Global, and MDI Ventures led MPL’s $90 million Series C financing round, with participation from existing investors Sequoia India, Go-Ventures, and Base Partners. The new investment brings MPL’s to-date raise to $130.5 million.

MPL operates a pure-play gaming platform that hosts a range of tournaments. The app, which has amassed over 60 million users and hosts about 70 games, also serves as a publishing platform for other gaming firms.

The Bangalore-based startup also offers fantasy sports, a segment that has taken off in many parts of India in recent years.

Because fantasy sports is only one part of the business, the coronavirus outbreak that has shut most real-world matches has not impeded the startup’s growth in recent months. The startup claimed it has grown four times since March this year and more than 2 billion cash transactions have been recorded on the app to date.

“Even in an environment as challenging as the current one, we are impressed with the success and accessibility of the platform concept – giving users a unique variety of experiences and social interaction. MPL’s track record speaks for itself, so we’re excited to support the team as they grow and expand,” said Galina Chifina, Managing Partner at RTP Global, in a statement.

But since an aspect of MPL is about fantasy sports, its app is not available on the Google Play Store. Google Play Store prohibits online casino, and other kinds of betting, a guideline Google reiterated last week as it pulled Indian financial services platform Paytm from the app store for eight hours. Sai Srinivas, co-founder and chief executive of Mobile Premier League, declined to comment on Google and Paytm’s episode. 

In an interview with TechCrunch, he said the startup plans to expand outside of India in the following months. He did not name the new markets, but suggested that India’s neighboring countries will likely be part of it. 

More to follow…

#apps, #asia, #dream-sports, #funding, #india, #paytm, #sports

Thanks to Google, app store monopoly concerns have now reached India

Last week, as Epic Games, Facebook, and Microsoft continued to express concerns about Apple’s “monopolistic” hold over what a billion people can download on their iPhones, a similar story unfolded in India, the world’s second largest internet market, between a giant developer and the operator of the only other large mobile app store.

Google pulled Paytm, the app from India’s most valuable startup, off of the Play Store on Friday. The app returned to the store eight hours later, but the controversy and acrimony Google has stirred up in the country will linger for years.

TechCrunch reported on Friday that Google pulled Paytm app from its app store after a repeat pattern of violations of Google Play Store guidelines by the Indian firm.

Paytm, which is locked in a battle against Google to win India’s payments market, has been frustrated at Google’s policies — which it argues gives Google an unfair advantage — for several past quarters over how the Android-maker is limiting its marketing campaigns to acquire new users, sources familiar with the matter told TechCrunch.

The explanation provided by Google to Paytm for why it pulled the Indian firm’s app this week from its app store is the latest attempt by the company to thwart the Noida-headquartered firm’s ability to acquire new users, Paytm executives said.

In a blog post Paytm posted Sunday evening (local India time), the Indian firm said Google took issue with the company for giving customers cashbacks and scratch cards for initiating transactions over UPI, a government-backed payments infrastructure in India that has become the most popular way for people to exchange money digitally in the country.

Paytm said it rolled out this new version of scratch cards that are linked to cricket on September 11. Users collected these cricket-themed stickers for sending money to others, or making transactions such as topping up credit on their phone or paying their broadband or electricity bill.

In a statement on Sunday evening, a Google spokesperson said, “offering cashbacks and vouchers alone do not constitute a violation of our Google Play gambling policies” and that Play Store “policies are applied and enforced on all developers consistently.”

But it’s arguably anything but consistent.

On September 18, Google told Paytm that it had pulled its app for not complying with Play Store’s “gambling policy” as it offered games with “loyalty points.” Paytm said that Google had not expressed any concerns over Paytm’s new marketing campaign prior to its notice on Friday, in which it revealed that Paytm app had been temporarily removed from the Play Store.

But Google itself is running a similar campaign linked to cricket in India, Paytm argues. (Why cricket? Cricket is immensely popular in India and one of the biggest cricket tournaments globally, Indian Premier League, kicked off its latest season on Saturday.)

Cricket-themed cashback offered by Paytm (left) and Google Pay (right) in India

Google Play Store in India has long prohibited apps that promote gambling such as betting on sporting events, and Google has raised concerns about Paytm’s marquee app promoting Paytm First Games, a fantasy sports app run by Paytm, in the past.

Paytm executives argued that PhonePe, a Walmart-owned payments app in India, also promoted Dream11, the most popular fantasy sports app in the country, and got away without any action.

Google also permits fantasy sports app operators — including Paytm — to advertise on Search in India.

“This is bullshit of a different degree,” Paytm chief executive Vijay Shekhar Sharma said of Google’s objection to Paytm offering cashback in a televised interview Friday. The removal of Paytm app was only on the grounds of Paytm offering cricket-themed cashback, he claimed. “Google is not allowing us to acquire new customers right now. That’s all what this is,” he added.

Google’s payments app, Google Pay, competes with Paytm in India. In fact, Google Pay is the largest payments app for peer-to-peer transaction between users in India and holds the largest market share in UPI.

Without identifying any names, Sharma, the poster child of Indian startup ecosystem, claimed that many founders in India have just accepted that it is Google that has the final say on any matter in India — and not the country’s regulatory agencies.

For Google, which reaches more users than any other company in India and whose Android operating system commands 99% o