FloBiz raises $31 million to scale its neobank for small businesses in India

FloBiz, an Indian startup that is building a neobank for small- and medium-sized businesses in the South Asian market, said on Monday it has raised $31 million in a new financing round as it works to broaden its product offerings.

Sequoia Capital India and Think Investments co-led the 18-month-old startup’s Series B financing round. Existing investors Elevation Capital and Beenext also participated in the round, which brings FloBiz‘s all-time raise to over $41 million.

The startup’s marquee offering — called myBillBook — helps small- and medium-sized businesses digitize their invoicing, streamline business accounting, and automate workflows of their enterprises.

India, the world’s second largest internet market, is home to millions of small- and medium-sized businesses. Scores of startups have launched neobanks in the country in recent years to focus on serve millennials or businesses.

“SME-focussed neobanks are building engagement with business- clients through their ability to provide solutions like automated invoicing, collections/payments, accounting, inventory and sales management, taxes and in some cases interest on current deposits as well (banks can’t pay interest). This may help to ramp- up and upfront their monetisation prospects,” analysts at Jefferies wrote in a report to clients last week.

myBillBook, which supports Hindi, Gujarati and Tamil as well as English, will add support for “at least” five more regional languages within the next six months, the startup said, adding that the app has been downloaded over 5 million times.

“The product will also see deeper use of technologies like AI & image processing to make the onboarding process for the less tech-savvy SMB owners in tier 2 and tier 3 cities of India a delightful first step to digital accounting,” the startup said.

Scores of high-profile entrepreneurs — including Vijay Shekhar Sharma of Paytm, Kunal Shah of CRED, Jiten Gupta of Jupiter, Amrish Rau of Pine Labs, Krishnan Menon of BukuKas, and Nitin Gupta of Uni Cards — have also backed FloBiz in the new financing round.

“Small businesses are the real heroes of our economy. In order to power the SMB economy with technology, one needs deep understanding, instinct and empathy for this audience,” said Tejeshwi Sharma, Managing Director of Sequoia Capital India, in a statement.

“We are really impressed by the user centricity, product focus and experimentative approach of the FloBiz founders. There is almost a perfect founder market fit. The team is stoked to partner with FloBiz on their mission of building a neobank for the growing SMBs of India.”

Rahul Raj, co-founder and chief executive of FloBiz, said the startup will deploy the fresh capital to “accelerate projects which have been in the works up till now – building personalisable modules & features into myBillBook, diversifying core product offerings and preparing to roll out financial services. We have a slew of developments in the pipeline to further delight our SMB partners in the next 12 months.”

#asia, #beenext, #elevation-capital, #funding, #india, #sequoia-capital-india

A16z in talks to back CoinSwitch Kuber in first India investment

A16z is inching closer to making its first investment in a startup in India, the world’s second largest internet market that has produced over two dozen unicorns this year.

The Menlo Park-headquartered firm is in final stages of conversations to invest in Indian crypto trading startup CoinSwitch Kuber, three sources familiar with the matter told TechCrunch. The proposed deal values the Bangalore-based firm at $1.9 billion, two sources said. Coinbase is also investing in the new round, one of the sources said.

CoinSwitch Kuber was valued at over $500 million in a round in April this year when it raised $25 million from Tiger Global. If the deal with A16z materializes, it will be CoinSwitch Kuber’s third financing round this year.

TechCrunch reported last week that CoinSwitch Kuber was in talks to raise its Series C funding at up to $2 billion valuation. The report, which didn’t identify a lead investor, noted that the Indian startup had engaged with Andreessen Horowitz and Coinbase in recent weeks.

Usual caveats apply: terms of the proposed deal may change or the talks may not result in a deal. The author reported some details about the deal on Wednesday.

The startup declined to comment. Coinbase and A16z as well as existing investors Tiger Global and Sequoia Capital India did not respond to requests for comment.

The investment talks come at a time when CoinSwitch Kuber has more than doubled its user base in recent months — even as local authorities push back against crypto assets. Its eponymous app had over 10 million users in India last month, up from about 4 million in April this year, the startup said in a newspaper advertisement over the weekend.

A handful of crypto startups in India have demonstrated fast-pace growth in recent years — while impressively keeping their CAC very low — as millions of millennials in the South Asian nation kickstart their investment journeys. Several funds including those with big presence in India such as Accel, Lightspeed, WEH and Kalaari recently began working on their thesis to back crypto startups, TechCrunch reported earlier.

B Capital backed CoinDCX, a rival of CoinSwitch Kuber that has amassed 3.5 million users, last month in a $90 million round that valued CoinDCX at about $1.1 billion.

Policymakers in India have been debating on the status of digital currencies in the South Asian market for several years. India’s central bank, Reserve Bank of India, has expressed concerns about private virtual currencies though it is planning to run trial programs of its first digital currency as soon as December.

About 27 Indian startups have become a unicorn this year, up from 11 last year, as several high-profile investors — and global peers of Andreessen Horowitz — such as Tiger Global and Coatue have increased the pace of their investments in the South Asian market. Apna announced earlier on Thursday that it had raised $100 million in a round led by Tiger Global at $1.1 billion valuation, becoming the youngest Indian firm to attain the unicorn status.

Groww, an investment app for millennials, is in talks to raise a new financing round that would value it at $3 billion, TechCrunch reported on Wednesday. The startup has engaged with Coatue in recent days, the report said.

#a16z, #apps, #asia, #coinbase, #coinswitch-kuber, #funding, #india, #sequoia-capital-india, #tc, #tiger-global

Freshworks aims for nearly $9 billion valuation in US IPO

Freshworks disclosed on Monday that it is aiming for a valuation of up to $9 billion in its US initial public offering in which it is hoping to raise over $800 million.

The California-based firm, which started its journey in India and rivals Salesforce, said it plans to sell 28.5 million shares at a price range of $28 to $32. If the firm is able to sell its shares at the top range, it will raise $912 million. Freshworks had originally filed paperworks for its IPO in late August, but hadn’t disclosed several figures.

The 11-year-old firm was last valued at $3.5 billion in a financing round in November 2019. The startup considered raising a pre-IPO round earlier this year at a valuation of over $5 billion but decided against it, a person familiar with the matter told TechCrunch.

Freshworks, which counts Accel, Sequoia Capital India, Tiger Global, and CapitalG among its existing investors, develops and offers a variety of business software tools, from CRM to help-desk software. In recent years, it has built enterprise SaaS platform to give customers a set of integrated business tools and aggressively pursued expansion in broadening its products offering.

The startup, which has applied to list its shares on Nasdaq under the symbol FRSH, serves over 50,000 customers and its revenue in the six months of the year grew to $169 million, up from $11 million during the same period last year. At the same time, its net loss dropped to $9.8 million from $57 million a year ago.

“First, based on industry research from International Data Corporation (IDC), we believe we have a large addressable market of approximately $120 billion,” the firm said in an updated S-1 filing on Monday.

“Second, based on our internal data and analysis, we estimate the annual potential market opportunity for our products to be $77 billion. […] We expect our estimated market opportunity will continue to expand as customers onboard more or expand usage of our products, increasing the weighted average ARR per customer for use of our products.”

TechCrunch recently spoke with Freshworks co-founder and chief executive Girish Mathrubootham about the business. Mathrubootham is one of the most respected entrepreneurs in India. Along with three friends, Mathrubootham launched an $85 million venture fund in late July this year to back early-stage SaaS startups.

#accel, #capitalg, #freshworks, #fundings-exits, #salesforce, #sequoia-capital-india, #tc, #tiger-global

Leap Finance raises $55 million to help Indian students study abroad, plans international expansion

Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. Upon landing, they face myriad challenges. One big one: They don’t have a local credit history, so they can’t avail a range of financial services, including a loan or a credit card — at least not without paying a premium for it.

For banks and other financial institutions, there is an increased risk when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate of over 13%, nearly twice of what their local peers are charged.

Leap Finance, a two-and-a-half-year old startup with headquarters in San Francisco and Bangalore, is attempting to solve this problem — and many others. The startup, which sits at the intersection of fintech and edtech, grants loans to students at a fair interest rate by evaluating the data they generated — alternative and derived — in India itself.

But in recent years, Leap Finance has aggressively expanded its offerings to provide what it calls a broader infrastructure to enable students to pursue international higher education.

The startup is helping students with guidance on admission, visas, and test preparation. Leap has developed a community of over 1 million students where they advise each other and explore options. Leap Finance said it has helped over 60,000 students in their study abroad journey over the last 18 months — and just had its strongest fall season.

And as is common in the startup ecosystem, such growth is usually followed by strong interest from investors. Which brings us to the development the startup shared on Wednesday.

Leap Finance has announced it has raised $55 million in a new financing round led by Owl Ventures. The Series C round also saw participation from Harvard Management Company, more popularly known for being a high-profile LP to venture funds. Existing investors Sequoia Capital India and Jungle Ventures also participated in the round, which follows a Series B funding in March this year, and brings Leap Finance’s all-time raise to over $75 million.

Vaibhav Singh (left) and Arnav Kumar founded Leap Finance in 2019 (Leap Finance)

Since we last spoke about Leap Finance, the startup has demonstrated strong growth on various fronts, said Arnav Kumar, co-founder of Leap Finance, in an interview with TechCrunch. Its community has grown, the test preparation app is increasingly becoming popular, and its core financial services has also surged, he said.

On top of this, the startup has expanded its offerings to help students with preparing for — and landing — internships when they do join a college abroad, solving another aspect in which they struggle.

Now with the new funding, the startup is planning to expand to serve international markets including Middle East and Southeast Asia and help the students pursue higher education in 20 nations, said Kumar, who previously worked as an associate vice president at venture fund Elevation Capital.

“Leap is on the trajectory to become the preeminent study abroad platform for students. The overseas education market is fragmented where there is no single one-stop solution,” said Amit Patel, Managing Director of Owl Ventures, in a statement.

“It can be very confusing for students to know where to begin preparation, what colleges they should target, and how they are going to afford to pay for their education. Leap is creating a comprehensive platform that addresses all of these preparation and financing needs for students. Owl Ventures is excited to deepen our partnership with Vaibhav, Arnav, and the Leap team to make studying abroad a reality for as many students as possible.”

This is a developing story. More to follow…

#apps, #asia, #edtech, #education, #finance, #funding, #india, #jungle-ventures, #leap-finance, #owl-ventures, #sequoia-capital-india, #tc

Rattle raises $2.8M from Lightspeed and Sequoia to modernize enterprise sales stack

Tech employees build amazing consumer-facing apps for the world. But for their internal communications, they are stuck using applications that don’t play well with one another.

This is a problem since most employees at a mid-sized or large-sized firm spend a fourth or third of their days on internal communication applications.

Now a San Francisco-headquartered startup is attempting to build a software that makes it much more convenient to engage with business services.

Rattle is building a real-time and collaborative “connectivity tissue” to address the siloed nature of modern record-keeping and intelligence platforms, said Sahil Aggarwal, co-founder and chief executive of the eponymous startup, in an interview with TechCrunch.

“To use Salesforce, as an example, you are using it for two things: you’re writing data into Salesforce and you’re taking data out of it,” he explained. “What Rattle does is it enables you to send all the insights from Salesforce into a messaging platform and then lets you write data from within the messaging service back into Salesforce.”

Rattle’s use case extends to even more services. It can recognize phone calls and prompt individuals to log that and pursue that opportunity on Slack.

“We started with integrating Slack and Salesforce, and now with their acquisition the idea has definitely gotten validated. It’s extremely transformational for companies,” said Aggarwal, who got the idea about this startup at his previous venture when an application he built for the internal team received great feedback.

The startup, which launched its offering in March, is already seeing over 70% conversion rate among enterprises that have given it a try. Rattle has amassed over 50 customers including Terminus, Olive, Litmus, Imply and Parsely.

After implementing Rattle “[our] lead response time has gone down by 75% and key processes have sped up from days to minutes,” said Jeff Ronaldi, GTM Ops Manager at LogDNA.

The startup announced on Tuesday that it has raised a seed round of $2.8 million from Lightspeed and Sequoia Capital India. Amy Chang (EVP at Cisco & Disney board member), Ellen Levy (early investor in Outreach), Jake Seid (early investor in Brex & Carta), and Krish & Raman (the founders of unicorn SaaS firm Chargebee) also participated in the round.

“Businesses worldwide are mired in processes – from sales to marketing, HR, IT, and more. With increased digitization and remote work, processes and adherence thereof are only going to diverge over time,” said Hemant Mohapatra, Partner at Lightspeed, in a statement. “The Rattle team impressed us by their unrelenting focus on the most important piece of this puzzle: the people caught in these processes. Rarely have we seen such intense customer love so early in a company’s life and are honored to go on this journey with Rattle together!”

The startup, which charges anywhere between $20 to $30 per user per month, plans to deploy the fresh funds to expand its product offerings including adding integration with more enterprise applications.

#funding, #india, #lightspeed, #saas, #sequoia-capital-india

Amazon backs Indian wealth management service Smallcase in $40 million funding

Amazon has entered the financial services and insurance markets of India in recent years. Now it is paving the way to foray into the wealth management category.

The American e-commerce giant has backed Bangalore-based startup Smallcase in a $40 million Series C financing round.

The round was led by Faering Capital and Premji Invest as well as existing investors Sequoia Capital, Blume Ventures, Beenext, DSP Group, Arkam Ventures, WEH Ventures and HDFC Bank also participated in the new round, which brings its total to-date raise to over $65 million.

Founded by three IIT Kharagpur graduates in July 2015, Smallcase offers a platform to help introduce a new generation of investors to the Indian equity markets.

The startup offers an in-house team of licensed professionals who offer over 100 portfolios of stocks and exchange traded funds as well as provides its users access to independent investment managers, brokerages and wealth platforms.

The startup supports a dozen leading stock brokers in India including Tiger Global-backed Upstox, and Zerodha’s Kite.

Smallcase has amassed over 3 million users, who are transacting about $2.5 billion each year. It says a user can start making their investments in just two clicks after signing up for the service.

“We have created a new, fast-growing category of investment products by developing an ecosystem of 250+ businesses in the capital markets space including India’s largest and fastest growing brokerages, advisors, investment managers and digital wealth platforms,” said Vasanth Kamath, co-founder and chief executive of Smallcase.

“It has been both humbling and inspiring to see smallcases become the primary gateway to stocks & ETFs for millions of new investors. This financing increases our responsibility to continue building simple, transparent and delightful experiences and platforms, while delivering more value to our users and partners. Our true success will lie in developing the core building blocks for every investor’s portfolio and becoming a key part of their toolkit,” he added.

The startup, which employs 200 people, said it plans to deploy the fund to broaden its technology platform and win more customers.

This isn’t the first time Amazon has backed an Indian startup. The e-commerce firm, which has deployed over $6.5 billion in its India business, has invested in ride-hailing firm Shuttl, invoice discounting marketplace exchange for MSMEs M1xchange, and direct-to-customer beauty brand MyGlamm.

Earlier this year, Amazon also unveiled a $250 million venture fund to invest in Indian startups and entrepreneurs focused on digitizing small and medium-sized businesses in the South Asian market.

An Amazon spokesperson said the company invested in Smallcase through its $250 million venture fund. “As part of this Fund, we are excited to partner with smallcase in their journey to offer innovative consumer investment products. By increasing product selection and convenience, this will provide an additional channel for consumers to participate in the equity markets,” the spokesperson added.

#amazon, #arkam-ventures, #asia, #beenext, #blume-ventures, #finance, #funding, #india, #sequoia-capital-india

Outplay gets $7.3M from Sequoia Capital India to help outbound sales team scale their campaigns

Outbound sales managers typically rely on high volumes of inquiries to find customers, but this means that their revenue is often in proportion to the size of their team. Outplay helps them scale more easily with tools that automate campaigns, identifies the likeliest prospects and uses data to decide the right time to send pitches. The company announced today it has raised $7.3 million in seed funding from Sequoia Capital India.

The new capital will be used for tech development and hiring, and brings Outplay’s total raised so far to $9.3 million. Its previous funding was a $2 million raise from Sequoia Capital India’s Surge announced in March after Outplay took part in the program’s fourth cohort.

Since its seed round, Outplay says it has grown its revenue four times and now has customers in more than 50 countries, serving primarily B2B software companies.

Outplay was founded in 2019 by brothers Ram and Lax Papineni. The two previously launched AppVirality, a referral marketing tool for app developers.

Outplay was designed for sales team who contact prospects through multiple channels, like phone calls, emails, SMS, LinkedIn and Twitter. It integrates the channels into one interface, so salespeople don’t have to switch between apps. Outplay also automates sequences, or marketing campaigns that include an initial pitch sent through various channels and automatic follow-up messages if a reply isn’t received within a pre-set time.

The platform is meant to replace the process of cold-calling potential customers, which is time-consuming and difficult to scale, and enable salespeople to focus on the best prospects, helping them decide what channel to use and when to contact them.

Since its seed funding, Outplay has launched several new tools and features, including a Chrome extension that lets salespeople add prospects from LinkedIn and Gmail, send emails, make calls and perform other tasks without having to visit Outplay’s dashboard. It also added integrations with sales tools like Gong, Dynamics CRM and Zapier (Outplay was already integrated with customer relationship management platforms Pipedrive, Salesforce and Hubspot).

One major new feature is Magic Outbound Chat, a web chat box that is launched when a prospective customer clicks on an email link. Salespeople are notified and provided with context about the prospect. Laxman told TechCrunch that most chat boxes are designed for inbound sales teams, and Magic Outbound Chat has helped some of its teams grow their sales pipeline by 300%.

Laxman said that the onboarding process for Outplay takes just a few days and sales managers are provided with a playbook of successful sequences to help them get started.

Outplay’s competitors include unicorns Outbound and SalesLoft. Laxman said that in the mid-2000s, inbound sales processes and tech began rapidly evolving as SaaS adoption increased, but outbound sales teams still relied on the same high-volume tactics they had been using for years.

“The previous outbound sales tech disruption happened in 2011 when Outreach and Salesloft were founded. We really respect what they have done to the industry, but the approach is not scalable and the revenue eventually becomes a function of the size of the outbound sales team,” he said, adding that Outplay is changing the process by using data-driven signals to help sales representatives engage with the likeliest prospects at the right time in the right channel.

For example, Outplay’s Dynamic Sequencing automatically moves prospects from one sequence to another one that has a higher chance of success. In one scenario, Outplay can be configured to move a prospective who opens a sales representative’s email more than four times to another sequence that focuses on people who appear interested in a product. Laxman said some of its customers have seen open rates as high as 80% in the second sequence with Dynamic Sequencing.

In a statement, Sequoia India principal Harshjit Sethi said, “Outbound sales needs are evolving rapidly and reps now need personalized, automated and contextual tools to drive sales which Outplay is successfully enabling. Sales reps spend an average of four hours per day on Outplay, demonstrating the effectiveness of the product which has category-leading customer reviews.”

#marketing, #outbound-sales, #outplay, #sales, #sequoia-capital-india, #tc

Indian financial services firm MobiKwik looks to raise $255 million in IPO

Gurgaon-based mobile wallet service firm MobiKwik plans to raise up to $255 million in an initial public offering, becoming the latest Indian startup to explore the public markets.

The 12-year-old firm, which counts Sequoia Capital India and Abu Dhabi Investment Authority among its investors and has raised about $250 million to date, plans to offer new shares of up to $201 million and sell up to $54 million worth of equity shares, according to papers submitted to the market regulator on Monday.

The firm, which allows users to pay digitally and also cross-sells small sachet of insurance and loans as well as provides them with American Express-powered credit cards, is targeting a valuation of about $1 billion in the IPO, according to two people familiar with the matter.

“We believe our key competitive advantages include our ability to (i) cross-sell; (ii) leverage data science and technology; and (iii) efficiently manage risk,” wrote MobiKwik in papers submitted to the market regulator on Monday. (Image: MobiKwik)

MobiKwik, which has amassed over 101 million registered users and 3.44 million online, offline and billing merchant partners, said its total income for the financial year that ended in March 2021 was about $40.5 million, down 18%, while its loss also shrank 12% to $14.9 million during the period.

MobiKwik’s move comes as a handful of Indian startups including Zomato and Paytm are working to list on stock exchanges. Zomato, a food delivery startup in India, last week boosted its plan to raise $1.3 billion in its initial public offering, which opens on July 14 and closes July 16.

This is a developing story. More to follow…

#asia, #finance, #fundings-exits, #india, #mobikwik, #sequoia-capital-india

Dispatch from Bangalore

A startup founder, who hasn’t had much sleep all week, woke up on a recent Sunday to a phone call from his co-founder. A senior engineer was feeling burnt out and was contemplating leaving. For the founder, who had several calls scheduled with many high-profile Silicon Valley investors later in the day, talking this developer out of leaving the job quickly became the top agenda item for the rest of the weekend.

There’s a joke among many startup founders in Bangalore that hiring two to three engineers is currently more time-consuming and cumbersome than securing a fresh round of funding. Heavily-backed startups are increasingly paying big premiums to attract and retain talent, making it very challenging for their younger siblings to scale. And relying on recruiters is costly and still takes over a month to close a hire.

A good engineer with two to three years of experience with any recognizable startup expects $70,000 a year as salary, up from about $40,000 a year ago. A puzzled startup founder recently quizzed another peer in the industry how much a good QA engineer costs, and then answered the question himself: about $35,000, up from about $20,000.

Most difficult to poach are those who work at unicorn fintechs CRED and RazorPay, many startup founders said. Engineers from either of the firms expect as much as $150,000 a year, if not more — often four to five times the amount founders at early stage startups draw themselves.

The intense competition for talent has been prompted by newly turned unicorns increasing the pool on their captables for employee stock options, a concept that was nearly elusive just three years ago. Scores of U.S. and European startups are also aggressively hiring in India as remote working begins to take off.

India has produced a record 16 unicorns this year as Tiger Global, Falcon Edge, and SoftBank cut large size checks to the nation’s promising startups at a pace never witnessed before in the South Asian nation.

Indian startups have raised a record $10.46 billion in the first half of 2021, up from $4 billion during the same period last year, and $5.4 billion in the first half of 2019, data insight platform Tracxn told me. (In all of 2020, Indian startups raised $11.6 billion.)

The average size of a seed round in India was $1.1 million in the first half of 2021, up from $800,000 during the same period last year and $740,000 in 2019, per Tracxn. An average Series A check size this year has been $7.67 million, up from $4.30 million in the $4.30 million last year, and $5.92 million last year.

Even the early-stage startups are at the centre of attraction as virtually everyone is attempting to get in on a deal. Some second-time founders now have the confidence and networking to bypass Sequoia Capital India’s Surge accelerator program and Y Combinator and still gain access to some of the perks they offer.

Some aren’t engaging with funds at all for their seed financing rounds. Scores of startup founders from the past decade have accrued enough capital to write dozens of checks a year to early promising startups.

The abundance of dry powder in the market and the increased competition from some of the most reputable names in the industry have also changed the power dynamics between founders and investors. It’s becoming common for founders to negotiate from a place of strength to hold on the rights and preferential treatments from investors.

On a call recently, two founders discussed what many would consider a first-world dilemma: Dozens of investors had agreed to invest in them, but they no longer had so much stake to offer. So they strategize what stake to give whom and how to politely get others to reduce the size of their committed check size.

But some investors are worried that the music may stop soon.

Investors at several high-profile firms told me that many startups are taking checks from Tiger Global / Falcon / SoftBank too early in their journeys.

They argue that many of these young startups have raised funds at such a high valuation that if they are not able to hit the metrics they have told their existing lead investors, very few in the industry would be in a position to engage with them at a later stage.

“And even the likes of Tiger will not back you then,” one investor said, pointing to examples such as Bangalore-based Upstox, which raised from Tiger Global in the past, but later Tiger invested in its chief rival Groww. “Tiger is backing the race, not the horse,” another investor said.

A down cycle is a scenario many investors are preparing for. But it appears the music, so to speak, has only gotten louder in recent weeks.

Bangalore-based edtech Brightchamps is in advanced stages of talks to raise at over $500 million valuation, while Ola Electric has held talks to raise at over $3 billion valuation, according to multiple people familiar with the matter. Fidelity and Goldman Sachs have held talks to invest in a pre-IPO round at Paytm, one person said.

ShareChat is about to raise $150 million to $200 million from Temasek and others at a pre-money valuation of $2.8 billion. Prosus Ventures is in advanced stages of talks to lead an investment round in Upstox.

Sequoia is in talks to invest in Gitcoin and back Dive again, while Infra.Market, which was valued at $200 million in December last year and $1 billion earlier this year, is in talks to raise at over $2 billion valuation. Many other startups that turned unicorns this year are also in the market to finalize new rounds. BharatPe, Open, and Yap are in advanced stages of talks to finalize new rounds, TechCrunch has reported in recent weeks.

There are at least seven more $50 million+ rounds, and more than a dozen $20 million+ rounds that are expected to close within weeks. (I wish I could share the names but दोस्ती बनी रहे)

Elsewhere in Bangalore, there’s another sense of urgency. Several founders in India are starting crypto startups for customers across the world, but high-profile investors in India have largely stayed away from this category, in part because of India’s confusing stand about virtual currencies. Their absence has resulted in many of these startups secure funds from international funds and angels.

But things may change soon. Several venture funds including Sequoia Capital India, Lightspeed, Accel, WEH, and Kalaari are currently building their thesis for investments in crypto startups, people familiar with the matter told me.

#accel, #asia, #funding, #lightspeed, #sequoia-capital-india, #tc, #venture-capital

Merchant commerce Asian giant Pine Labs secures $600 million

Pine Labs said on Tuesday it has closed a $600 million financing round as the Asian merchant commerce platform sets the goal to explore the public markets within two years.

Fidelity Management & Research Company, BlackRock, Ishana, as well as a fund advised by Neuberger Berman Investment Advisers, and IIFL and Kotak invested in the round, which values the startup at $3 billion. Pine Labs unveiled the new round, a name of which it hasn’t disclosed, earlier this year.

Pine Labs, which counts Sequoia Capital India, Temasek, PayPal and Mastercard among its early backers, offers hundreds of thousands of merchants payments terminals, invoicing tools and working capital.

Its payments terminal — also known as point-of-sale machines — are connected to the cloud, and offer a range of additional services such as working capital — to the merchants. Pine Labs’s payments terminal has integration with over two dozen banks and financial and technology partners.

This differentiates Pine Labs from the competition, whose terminals typically have integration with just one bank. Each time a rival firm strikes a new partnership with a bank, they need to deploy new machines into the market. This makes the whole deployment expensive for both the fintech and the bank. (This is why you also often see a restaurant has multiple terminals at the check out.) The startup says it processes tens of billions of payment transactions.

“Over the last year, Pine Labs has made significant progress in its offline-to-online strategy in India and the direct-to-consumer play in Southeast Asia. Our full-stack approach to payments and merchant commerce has allowed us to grow in-month merchant partnerships by nearly 100% over the last year,” said B. Amrish Rau, CEO, Pine Labs.

“We are excited to bring on board a marquee set of new investors in this round and appreciate the confidence they have placed on the Pine Labs business model and our growth momentum,” said Amrish Rau, adding that he plans to take the startup public in 18 months.

In recent years, Pine Labs has made several acquisitions to broaden its business. In 2019, it acquired QwikCilver, which leads the market in gift cards category. Earlier this year, it acquired Southeast Asian startup Fave for $45 million as it broadened its consume side of the business.

Over 6 million consumers across over 40,000 merchant establishments now have access to the Fave app, the startup said.

“Through its acquisitions of QwikCilver and Fave, Pine Labs now has the market leading pre-paid platform in this region as well as the top consumer loyalty product in this market. With leadership across multiple categories, the company is very well positioned to help drive immense value to its merchant partners in India and across other SEA markets,” said Shailendra Singh, MD, Sequoia Capital.

#apps, #asia, #blackrock, #fidelity, #finance, #funding, #india, #mastercard, #paypal, #pine-labs, #sequoia-capital-india, #temasek

Sequoia unveils fifth group of startups for Surge

Sequoia Capital India has selected 23 early-stage startups for its fifth cohort of Surge, its accelerator program for India and Southeast Asia, at a time when dealflow activity is at its peak in the region.

The new cohort, Surge’s largest to date, have collectively raised $55 million, the storied investment firm said Wednesday. The cohort also includes 10 women founders, another record for the accelerator program which started its journey in March 2019.

The Surge program has enabled Sequoia Capital India — which has always backed early-stage startups but historically focused more on cutting checks for Series A and beyond rounds — to more aggressively identify promising startups while they are too young and increase the probability of broadening its portfolio with more winners, investors in the industry said.

And those odds have gotten much better in recent months. As Tiger Global and Falcon Edge begin to chase early-stage deals in India, both the firms have backed several Surge startups.

Sequoia said nearly 50% of startups from the first three cohorts have grown to raise their Series A financing rounds.

The Surge program, for which Sequoia raised an additional $195 million earlier this year, is now “tried, tested and proven to support founders through strategic mentorship from some of the world’s best startups and business minds, hands-on company building support, and a community of founder-to-founder support,” said the investment firm, which employs over 30 people in advisory roles in the region.

Some investors also said Sequoia, which offers very aggressive terms and a plethora of resources (App Annie subscription, for instance) to startups in Surge, that the accelerator program has diminished the significance of Y Combinator in India. (Rajan Anandan, who spearheads Surge, told me earlier this year that he doesn’t see Y Combinator and Surge as rivals.)

The new cohort, several names of which TechCrunch scooped early this month, includes 13 startups that are building services in fintech, payments, communications, logistics, and SaaS sectors, Surge said.

“We are incredibly proud of all 23 companies who have joined Surge 05 and the founders who have forged their businesses in sectors that have seen tremendous tailwinds. These leaders have displayed grit, exceptional talent, and relentless purpose in shaping the world,” said Anandan, who prior to joining Sequoia Capital India as MD led Google’s business in India and Southeast Asia.

“At this inflection point of global regrowth, we are excited to be part of the journey of our founders and their companies, many of which we believe will grow into large, enduring businesses,” he added.

The new cohort features the following startups as well as one that is operating in stealth mode.

  • Absolute is building a plant bioscience and AI-driven adaptive platform for precision agriculture that helps horticulture growers radically transform yields, grade and nutritional value of produce. The startup has also received an investment from Lets Venture.
  • ADPList is attempting to “democratise” mentorship and make it accessible for everyone through a community platform where people can find, book and meet mentors around the world.
  • ApnaKlub is an agent-led business-to-business wholesale platform for fast-moving consumer goods (FMCG). The startup aims to encourage and empower people to set up their own hyper-local micro-distribution businesses by providing them with better profit margins, access to a large assortment of brands and SKUs, and supply consistency.
  • Belora produces clean, high-performance, vegan makeup — free from toxins and harmful ingredients. The startup, which has also secured investment from DSG Consumer Partners, says it wants to create makeup that doubles up as skincare, so that women can wear products that are not only dermatologically tested, but also good for their skin.
  • Durianpay is building an integrated and comprehensive payments stack that enables businesses to grow and scale.
  • Dyte is a developer-friendly real time audio and video calling software development kit (SDK). The startup, which has also secured investments from Nexus Venture Partners and Y Combinator, allows developers to integrate live video into their apps in interesting and innovative ways. The SDK is simple, offers integrations within hours, and has a large number of plug-ins and configurations. These configurations provide developers with a quick and efficient way to embed audio and video calling, AI video augmentation, and collaboration features.
  • Gumlet provides a new-age media delivery infrastructure that provides low code or no-code integration plugins, which automates the entire media publishing pipeline. Developers all over the world use Gumlet to automatically provide the lowest size images and videos with the best resolution and performance.
  • Locad is making multi-channel e-commerce fulfilment easier than ever by offering a distributed warehousing network, which reduces shipping time and costs by storing products closer to customers. The startup has also secured investments from Antler and others.
  • Mailmodo is an email marketing platform that helps marketers create app-like experiences within emails and increase conversions.
  • Mesh is a new-age people management platform that makes it easy for employees to manage goals, get timely feedback, and grow faster. Y Combinator Continuity fund and RTP Global have also invested in Mesh.
  • Multiplier is a new-age employer of record that simplifies international hiring. It counts Golden Gate Ventures, MS&AD Ventures, Picus Capital among its investors.
  • OneCode is an app that connects companies with sales agents, giving these agents access to sell the products and services to less tech-savvy buyers. The startup’s mission is to digitise 50 million sales agents across India, and bridge the gap between brands and potential buyers who may need in-person interactions and physical touch points before committing to a purchase. Nexus Venture Partners and WaterBridge Ventures have also invested in the startup.
  • Powerplay is a mobile-first, vernacular construction site management app that enables project managers and workers to communicate and collaborate more effectively. The startup, also backed by Accel, helps them track their progress, deliverables, and payments across projects.
  • Pankhuri is a social community platform where women can network, learn and shop online through live streaming, chat, and micro courses.
  • RaRa Delivery is attempting to reimagine instant delivery for e-commerce in Indonesia through data driven logistics. It also counts 500 Startups among its investors.
  • Revery is using game thinking to revolutionise wellness, and the team is on a mission to make wellness affordable and accessible to anyone with a mobile phone. The startup has also secured funds from GGV Capital and Pascal Capital.
  • TWID (That’s What I Do) is a rewards-based payment network that enables customer reward or loyalty points to be used as a payment instrument. (Beenext is a co-investor.)
  • Vah Vah! is a live, online vocational training platform that offers professional beauty courses.
  • Vara is an easy-to-use and lightweight staff management platform for SMEs across Southeast Asia. It enables small companies to effortlessly manage their attendance and payroll. The startup counts RTP Global and a number of other firms among its investors.
  • Veera Health is on a mission to help women lead healthier lives. Veera’s first offering is a digital therapeutics platform that helps women identify and navigate Polycystic Ovary Syndrome (PCOS), with a comprehensive offering of therapy, coaching and specialist support. Global Founders Capital, Harvard University, and Y Combinator have also backed Veera.
  • Virtual Internships are redesigning internships for the 21st century workforce, mirroring the future of work.
  • WATI helps companies have personalised conversations with customers at scale with an easy-to-use customer engagement software that’s built on WhatApp’s Business API.

#absolute, #accel, #adplist, #apnaklub, #asia, #belora, #durianpay, #dyte, #funding, #gumlet, #india, #locad, #mailmodo, #mesh, #multiplier, #nexus-venture-partners, #onecode, #pankhuri, #powerplay, #rara-delivery, #revery, #sequoia, #sequoia-capital-india, #tiger-global, #twid, #vah-vah, #vara, #veera-health, #virtual-internships, #wat

Fleet software startup LocoNav raises $37 million to expand in developing markets

LocoNav, a startup that is helping drivers and fleet owners in over two-dozen nations run their vehicles more efficiently and save money, said on Monday it has raised $37 million in a new financing round.

Five-year-old LocoNav’s new financing round, a Series B, was funded by Quiet Capital, Anthemis Group, Foundamental, Sequoia Capital India, RIT Capital Partners, Uncorrelated Ventures, Village Global and others. The new financing round brings the to-date raise of LocoNav, which has offices in San Francisco and Gurgaon, to $47 million.

Scores of high-profile tech executives including Anjali Joshi (ex-VP of Product at Google), Anand Chandrasekaran (ex-CPO at SnapDeal and ex-Director Facebook), Manik Gupta (ex-CPO at Uber), Jai Shekhawat, Mark Licht, Akhil Paul, Vas Bhandarkar, Ajay Agarwal (Partner at Bain Capital Ventures), Abhi Ingle (COO at Qualtrics), Aadil Mamujee also participated in the new round.

Over half a million vehicle and fleet owners in 25 nations use LocoNav’s platform today that uses AI to help them manage their fleet operations, keep a watch on performance, and improve efficiency, the startup’s founders Shridhar Gupta and Vidit Jain told TechCrunch in an interview.

The startup’s platform delivers assistance and recommendations to drivers to make better choices. LocoNav also enables customers to track fuel usage, and any potential theft. Its platform supports over a thousand devices and sensors, enabling it onboard new customers very quickly.

The founders said that the market in which they operate has become very large over the past decade as many drivers and fleet owners begin to engage with tech platforms. Some of the players operating in this space include unicorns and decacorns Fleetcor, Trimble, and A16z-backed Samsara.

But these players are largely operating in developed markets, which has allowed LocoNav to win customers in emerging nations, the founders said. “In global developing markets, no one has ambitiously built a large player and we see ourselves as the first mover there,” said Gupta. The founders added that the biggest roadblock in the industry remains drivers and fleet owners who are not using any tech.

“LocoNav has built an end-to-end product that becomes deeply embedded in how fleet owners and operators run their business. As a result, LocoNav has been able to scale rapidly through word of mouth, allowing the company to become a hyper growth market leader while also being very capital efficient,” said David Greenbaum, Partner at Quiet Capital, in a statement.

By having such deep visibility into a vehicle, LocoNav has also become very attractive to a range of firms — from app-based cab aggregators, car vendors to fintech startups and sensor manufacturers, said Jain. The startup is also using its data insights to develop customer-relevant services and bringing them to a single platform, he added.

LocoNav plans to deploy the fresh capital to hire data science teams across San Francisco, Gurgaon and Bangalore. In the next two years, the startup aims to broaden its product offerings to help fleet owners cut their costs by up to 50%, the founders said.

“Shridhar and Vidit have found the ideal playbook for delivering world-class value-added services and products to fleet owners across the globe through the use of AI and software solutions. We are thrilled at how rapidly the firm has been able to expand its global footprint by replicating its own model and suite of offerings for fleet owners,” said Shubhankar Bhattacharya, General Partner at Foundamental, in a statement.


#africa, #anthemis-group, #asia, #funding, #quiet-capital, #saas, #sequoia-capital-india, #uncorrelated-ventures, #village-global

Indian online learning giant Unacademy in talks to acquire Rheo TV

Indian online learning platform Unacademy is in advanced talks to acquire Rheo TV, a less than two-year-old startup founded by two former Unacademy employees, according to three sources familiar with the matter.

The current deal values Rheo TV, a startup that has built a platform to help professional game streamers live stream their gameplays and monetize those feeds, at over $10 million, one of the sources said. The deal proposes Rheo TV’s team of fewer than a dozen people to join Unacademy.

The younger startup counts Lightspeed India Partners, Sequoia Capital India’s Surge, as well as the founding team of Unacademy — Gaurav Munjal, Hemesh Singh, and Roman Saini — among its existing investors.

Munjal and Sequoia Capital India declined to comment. A founder of Rheo TV didn’t immediately respond.

As tens of millions of college students come online and play games, the startup is betting that many of them, provided platforms are able to help them make a living, will consider streaming their gameplays as a viable career option.

Streamers on Rheo TV, which offers several features similar to those of Twitch, are currently rewarded based on their gameplays, followerbase, and past performance in different tournaments.

If the deal materializes, it would be the latest acquisition by Unacademy, the Bangalore-based startup that has amassed over 5 million monthly active users in over 10,000 cities in India.

In the past two years, the Facebook, Tiger Global, and SoftBank-backed startup has acquired WiFi Study, PrepLadder, Coursavy, and led a strategic investment in Mastree.

The startup, which also operates creator platform Graphy, this week unveiled a fund worth over $13 million to help applicants kickstart their online school.

India’s online education market is estimated to grow to $19.7 billion by 2030, up from $1 billion last year, analysts at Bernstein wrote in a recent report.

#apps, #asia, #education, #fundings-exits, #india, #lightspeed-india-partners, #sequoia-capital-india, #unacademy

FamPay, a fintech aimed at teens in India, raises $38 million

How big is the market in India for a neobank aimed at teenagers? Scores of high-profile investors are backing a startup to find out.

Bangalore-based FamPay said on Wednesday it has raised $38 million in its Series A round led by Elevation Capital. General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, Y Combinator, Global Founders Capital and Venture Highway also participated in the new round, which brings FamPay’s to-date raise to $42.7 million.

TechCrunch reported early this month that FamPay was in talks with Elevation Capital to raise a new round.

Founded by Sambhav Jain and Kush Taneja (pictured above) — both of whom graduated from Indian Institute of Technology, Roorkee in 2019 — FamPay enables teenagers to make online and offline payments.

The thesis behind the startup, said Jain in an interview with TechCrunch, is to provide financial literacy to teenagers, who additionally have limited options to open a bank account in India at a young age. Through gamification, the startup said it’s making lessons about money fun for youngsters.

Unlike in the U.S., where it’s common for teenagers to get jobs at restaurants and other places and understand how to handle money at a young age, a similar tradition doesn’t exist in India.

After gathering the consent from parents, FamPay provides teenagers with an app to make online purchases, as well as plastic cards — the only numberless card of its kind in the country — for offline transactions. Parents credit money to their children’s FamPay accounts and get to keep track of high-ticket spendings.

In other markets, including the U.S., a number of startups including Greenlight, Step and Till Financial are chasing to serve the teenagers, but in India, there currently is no startup looking to solve the financial access problem for teenagers, said Mridul Arora, a partner at Elevation Capital, in an interview with TechCrunch.

It could prove to be a good issue to solve — India has the largest adolescent population in the world.

“If you’re able to serve them at a young age, over a course of time, you stand to become their go-to product for a lot of things,” Arora said. “FamPay is serving a population that is very attractive and at the same time underserved.”

The current offerings of FamPay are just the beginning, said Jain. Eventually the startup wishes to provide a range of services and serve as a neobank for youngsters to retain them with the platform forever, he said, though he didn’t wish to share currently what those services might be.

Image Credits: FamPay

Teens represent the “most tech-savvy generation, as they haven’t seen a world without the internet,” he said. “They adapt to technology faster than any other target audience and their first exposure with the internet comes from the likes of Instagram and Netflix. This leads to higher expectations from the products that they prefer to use. We are unique in approaching banking from a whole new lens with our recipe of community and gamification to match the Gen Z vibe.”

“I don’t look at FamPay just as a payments service. If the team is able to execute this, FamPay can become a very powerful gateway product to teenagers in India and their financial life. It can become a neobank, and it also has the opportunity to do something around social, community and commerce,” said Arora.

During their college life, Jain and Taneja collaborated and built an app and worked at a number of startups, including social network ShareChat, logistics firm Rivigo and video streaming service Hotstar. Jain said their work with startups in the early days paved the idea to explore a future in this ecosystem.

Prior to arriving at FamPay, Jain said the duo had thought about several more ideas for a startup. The early days of FamPay were uniquely challenging to the founders, who had to convince their parents about their decision to do a startup rather than joining firms or startups as had most of their peers from college. Until being selected by Y Combinator, Jain said he didn’t even fully understand a cap table and dilutions.

He credited entrepreneurs such as Kunal Shah (founder of CRED) and Amrish Rau (CEO of Pine Labs) for being generous with their time and guidance. They also wrote some of the earliest checks to the startup.

The startup, which has amassed over 2 million registered users, plans to deploy the fresh capital to expand its user base and product offerings, and hire engineers. It is also looking for people to join its leadership team, said Jain.

#apps, #asia, #elevation-capital, #fampay, #finance, #funding, #general-catalyst, #global-founders-capital, #greenoaks-capital, #neobanks, #recent-funding, #rocketship-vc, #sequoia-capital-india, #startups, #tc, #venture-highway, #y-combinator

Investors race to win early-stage startup deals in India

India may be grappling with the second wave of the coronavirus, rising unemployment, and a dwindling economy, but the South Asian nation’s burgeoning startup ecosystem has never had it better.

High-profile investors in India have long aggressively chased growth-stage, and late-stage deals, pouring record amounts of capital into the country. But in a sign of the growing investor bullishness regarding Indian startups, even early-stage companies that have largely been bereft of much similar attention in recent years are now sharing the limelight.

More than 70 early-stage Indian startups are currently in advanced stages of talks to raise money, according to sources familiar with the matter. The size of the investments vary from a few million dollars to up to $100 million. TechCrunch is reporting some of the more notable deals today.

The usual caveat that many of deals haven’t yet closed, and that their terms could change or the talks may not materialize into an investment applies in our reporting. The deals described below have not been previously reported.

Sequoia Capital India, the most prolific investing firm in the country, is in talks to place capital in over two-dozen Indian startups including Register Book, a firm that operates an eponymous bookkeeping app; Vah Vah, which runs an app to educate people about makeup from artists; SaaS platform BambooBox, and email marketing software provider MailModo.

The firm is also in talks to back, alongside venture fund Nexus, OneCode, a startup that runs an app to connect digital-first brands with sellers. Sequoia Capital India, which launched a dedicated fund for early stage startups called Surge two years ago, is also in talks to invest in Probo, an app that rewards users for sharing their opinion; and Rattle.

Vaibhav Domkundwar, who runs Better Capital, said the early-stage startup scene in India has never been this hot.

“Pre-seed and seed stage momentum is at its peak, but we are also seeing pre-emptive rounds at Series As and Bs now,” he told TechCrunch.

Domkundwar, who has backed over 140 startups including Khatabook and neobank Open, attributed some excitement to the new generation of founders in India, who he said are building product-first and distribution-first companies. “We are seeing the fastest pace of investment in these teams,” he said.

A different investor, who requested anonymity, said second time founders are able to raise on a deck or a Notion doc from elite angels, unicorn founders and microVCs. The pace at which these founders are able to close the deal, the investor said, was “stunning.”

The frantic pace of investments in early-stage deals come as many of the more mature bets have become unicorns in India and many established startups are finally exploring taking the public markets.

India has birthed 14 unicorns this year, up from 11 last year and just 6 in 2019. High-profile investors such as Tiger Global and Falcon Edge Capital have increased their focus on India this year and winning founders with their large size of checks, higher valuation, access to resources, and quick turnaround time.

Many established firms are now chasing early-stage deals.

GSV is in talks to invest in Filo, a startup that operates an eponymous tutor app; and payments stack startup Inai has closed a new round from Better Capital and others and will be part of Y Combinator’s next batch. (Speaking of which, Y Combinator’s previous batch featured its largest cohort of Indian startups in history.)

One-year-old startup BrightCHAMPS, which has built a coding and math platform for kids, is currently in talks with GSV and Tiger Global to raise about $70 million.

Indiagold, a startup that allows people in the South Asian nation to access credit against their gold reserve, is in talks to close a new round with two high-profile foreign investors that have traditionally backed growth and late stage deals.

Germany’s Razor Group is in late stage talks to invest in Upscale, a startup that is attempting to replicate the Thrasio model in India.

Fintech investor RTP is in talks to invest in Fleek, a startup that is building “a payments system for subscription economy.” Falcon Edge’s AWI is in talks to invest in fitness subscription platform Ultrahuman, while SaaS platform AccelData has been approached by Bessemmer and WestBridge.

For high-profile investors with billions in dry powder, there are many rewards for spotting a promising startup in its initial years. One can buy a much larger stake in a startup for lower prices before the valuation of the startup — assuming things work out well — soars. Investing early also reduces the amount an investor may lose should things with the portfolio firm goes south.

But not everyone is happy with the new dynamics.

An investor with a micro fund told TechCrunch — on the condition of anonymity to speak candidly — that involvement of bigger investors in early stage deals has made it tougher for smaller firms to source new deals as the bigger investors are now aggressively trying to close entire rounds by themselves.

The investor said there is an additional competition in the market now: groups of high-profile founders, who tend to collectively back startups.

The investor cited earlier in the story termed these investments as “optionality cheques.” These optionality checks — that usually back second time founders or first time founders who previously worked at a unicorn or soonicorn — started with the Series A crowd such as Sequoia Capital India, Matrix, Lightspeed India Partners, he said. Now, the investor said, Tiger and Falcon / AWI are doing it, too.

There are two implications of these optionality checks, the investor said. “They make life more difficult for microVCs / seed VCs as they cannot compete with the Tigers or Falcons or Series A funds who can cut “smaller” checks with impunity, and perhaps even dilute less.”

But the investor cautioned the founders who are raising such optionality checks. “If the same fund doesn’t back them in the next round, then the negative signal can imperil their chances of raising from other VCs. Second, the excess money that they get can sometimes encourage faster expansion and higher spends.

Lightspeed India Partners, best known for its investments in unicorns Oyo Rooms and e-commerce platform Udaan, is in talks to back Vegrow, a startup that partners with farmers; 100ms.live, which operates an eponymous tool to help developers add video conferencing features to their apps, as well as edtech startup Kalaam Labs.

Dyte, which is building a “Stripe for live video calls,” is in talks with Nexus and Sequoia Capital India. Elevation Capital, which is also in talks to invest in VeGrow, is inching closer to investing in FamPay, which offers credit cards to teens at about $150 million valuation. Bangalore-based Chiratae Ventures is in the final stages of talks to invest in AeroLeap and analytics startup Locale.ai.

Fanplay, a platform for social media influencers to monetise via mobile games, has already raised from several American microVCs, but the round hasn’t closed yet. Mumbai-headquartered due diligence and monitoring platform Advarisk has been approached by “several investors” but has yet to close the round.

Trading signals provider Tradex is in talks to raise from Leo Capital. Audio social media app Frnd, radio and podcast aggregator app Kuku FM, and crop management platform Bharatagri are also in advanced stages of talks with investors to raise capital.

Plug and play payments provider Card91 has been approached by several investors, but hasn’t closed the round yet. Tournafest has closed a round from a clutch of angel investors, and so have Easy Eat and Stockgro. Kosh has raised from YC, and VentureSouq among others.

Tech veteran Nandan Nilekani’s firm Fundamentum is in talks to back Bijak, which operates a business-to-business marketplace to trade agricultural commodities, and supply chain startup Reshamandi.

A survey by InnoVen Capital, results of which were published on Thursday, said that over 80% of the investors it had surveyed said their dealflow for early-stage startups had increased this year, compared to last year.

Over 75% of the respondents in the same survey said the valuations in recent deals were on the “higher side” because of the “intense competition for high quality deals and entry of large established VCs in this space.”

“Early-stage investment activity has proven to be resilient despite the pandemic, with bigger transaction sizes and higher valuations, a clear sign of a maturing early-stage ecosystem,” said Tarana Lalwani, Senior Director at InnoVen Capital India.

#asia, #falcon-edge, #funding, #india, #lightspeed, #sequoia-capital-india, #tiger-global, #tiger-global-management

Indian health insurance startup Plum raises $15.6 million in Tiger Global-led investment

The vast majority of people in India, the world’s second most populous nation, don’t have health insurance coverage. A significant portion of the population that does have coverage get it from their employers.

Plum, a young startup that is making it easier and more affordable for more firms in the nation to provide insurance coverage to their employees, said on Monday it has raised $15.6 million in its Series A funding to accelerate its growth. Tiger Global led the funding round.

Existing investors Sequoia Capital India’s Surge, Tanglin Venture Partners, Incubate Fund, Gemba Capital, also participated in the new round, which brings the one-a-half-year-old startup’s to-date raise to $20.6 million. TechCrunch reported earlier this year that Plum was in talks with Tiger Global for the new financing round.

Kunal Shah (founder of Cred), Gaurav Munjal, Roman Saini and Hemesh Singh (founders of Unacademy), Lalit Keshre, Harsh Jain and Ishan Bansal (founders of Groww), Ramakant Sharma and Anuj Srivastava (founders of Livspace), and Douglas Feirstein (founder of Hired) also participated in the new round.

Plum offers health insurance coverage on a B2B2C model. The startup partners with small businesses to provide health insurance coverage to all their employees (and their family members), charging as little as $1 a month for an employee.

The startup has developed the insurance stack from scratch and partnered with insurers to include additional coverage on pre-existing conditions and dental, said Abhishek Poddar, co-founder and chief executive of Plum, in an interview with TechCrunch.

(Like fintech firms, which partner with banks and NBFCs to provide credit to customers, online insurance startups have partnerships with insurers to provide health insurance coverage. Plum maintains partnerships with ICICI Lombard, Care Health, Star Health and New India Assurance.)

Poddar, who has worked at Google and McKinsey, said Plum is making it increasingly affordable and enticing for businesses to choose the startup as their partner. Most insurance firms and online aggregators in India today currently serve consumers. There are very few players that engage with businesses. Even among those that do, they tend to be costlier and not as flexible.

Plum offers its partnered client’s employees the option to top up their health insurance coverage or extend it to additional members of the family. Unlike its competitors that require all the premium to be paid annually, Plum gives its clients the ability to pay each month. And signing up an entire firm for Plum takes less than an hour. (The speed is a key differentiator for Plum. Small businesses have to typically spend months in negotiating with other insurers. Bangalore-based Razorpay has also partnered with Plum to give the fintech startup’s clients a three-click, one-minute option to sign up for insurance coverage.)

The startup plans to deploy the fresh capital to further expand its offerings, making its platform open to smaller businesses with teams as small as seven employees to sign up, said Poddar. The startup plans to cover 10 million people in India with insurance by 2025, and eventually expand to international markets, he said.

India has an under-penetrated insurance market. Within the under-penetrated landscape, digital distribution through web-aggregators today accounts for just 1% of the industry, analysts at Bernstein wrote in a recent report.

“As India’s healthcare insurance industry rapidly expands and transforms, Plum is well positioned to make comprehensive health insurance accessible to millions of Indians. We are excited to partner with Abhishek, Saurabh and the Plum team as they scale their leading tech-enabled platform to employers across the country,” said Scott Shleifer, Partner at Tiger Global, in a statement.

Plum is the latest investment from Tiger Global in India this year. The hedge fund, which has backed over 20 Indian unicorns, has emerged as the most prolific investor in Indian startups in recent months, winning founders with its pace of investment, check size and favorable terms. Last week, the firm invested in Indian social network Koo.

#apps, #asia, #funding, #india, #plum, #sequoia-capital-india, #tc, #tiger-global, #tiger-global-management

Atlan raises $16M led by Insight Partners to build a collaboration hub for data-driven teams

Young startup Atlan, which has built a SaaS data collaboration platform and is courting customers in international markets, has now won the trust of some high-profile investors.

Atlan said on Tuesday it has raised $16 million in its Series A financing round that was led by Insight Partners. Bob Muglia (former CEO of Snowflake), Bob Moore and Jake Stei (founders of Stitch) and Auren Hoffman (founder of Safegraph and Liveramp), and Akshay Kothari (co-founder and COO of Notion) also invested in the round, as did existing investors Sequoia Surge and Waterbridge Ventures.

The startup — which was founded in India and now has teams across the U.S., Singapore, Philippines, and Nigeria — operates an eponymous data stack that brings together diverse data from internal and external sources such as Snowflake and Databricks to one interface and allows teams to collaborate easily.

The thesis behind Atlan is that the way most people in enterprises deal with data is inefficient. This is because of the fundamental diversity of people involved — scientists, analysts, engineers, business users — who all have their own skill sets and tool preferences.

This makes collaboration between the teams a challenge as they struggle to find the right data at the right time, for instance.

It’s a challenge that the founders of Atlan — Prukalpa Sankar and Varun Banka (pictured above) — faced first hand at their first venture, SocialCops. The venture was behind several data science for social good projects including India’s National Data Platform and SDGs global monitoring in collaboration with the United Nations.

Atlan started out as an internal tool to help the data team at SocialCops carry out projects more efficiently, before being opened up to teams around the world.

“We are reimagining the human experience with data — why can’t data assets be shared as easily as sharing a link on Google Docs, or if Google Analytics can tell you usage on a website, why can’t we do the same for our data?” said Sankar.

Teddie Wardi, Managing Director at Insight Partners, likened Atlan’s relevance to companies just as Figma is crucial to design teams and Github is important to engineering teams.

Atlan Discovery 2

Dashboard of Atlan (Atlan)

In an interview with TechCrunch, Sankar said more than 60% of Atlan’s clients today are in the U.S., and the market will be a big focus as the startup scales. She declined to reveal the number of clients the startup has amassed, but said the startup has grown 16X times in the last two quarters.

Some of its clients include giants such as Unilever, Scripps Health, Postman, and Techstyle, one of the world’s largest membership-based fashion firms with a diverse portfolio of brands including Fabletics, Savage X Fenty, JustFab, FabKids, and ShoeDazzle.

“As we rolled-out our modern data platform, we were looking for a product that made it easier to democratize our data and was less dependent on someone central answering each individual analyst’s questions on a one-off basis. Legacy solutions in the market were tailored to legacy systems and approaches where IT or a single data stewardship team owns the data,” said Danielle Boeglin Ragan, Vice President of Data & Analytics at Techstyle, in a statement.

“Atlan was the only solution that was built for a collaborative, bottom-up approach. With native integrations with our modern analytics stack like Snowflake and Tableau, Atlan was very easy to set-up – we had all of our data sources flowing within the first day.”

The startup plans to deploy the fresh capital to expand its team of 40 people across marketing, sales, and customer success, said Banka.

“Atlan has become a valuable resource for the data team to get context about data. In the long run, for our data democratization vision, we see the entire organization working towards analyzing the data and taking actions in a coherent, seamless fashion. Having Atlan in the mix of our toolchains opens the possibility of providing data context at scale, thereby enabling the entire org to be data aware and data driven.” said Prudhvi Vasa, Analytics Leader at Postman, in a statement.

#atlan, #auren-hoffman, #bob-moore, #bob-muglia, #funding, #liveramp, #saas, #safegraph, #sequoia-capital-india, #snowflake, #stitch, #waterbridge-ventures

Merchant commerce platform Pine Labs valued at $3 billion in new fundraise

Pine Labs, a startup that offers merchants payments terminals, invoicing tools and working capital, said on Monday it is raising $285 million in a new financing round as the nearly two-decade-old firm looks to expand its business.

Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures and Ward Ferry Management financed the new funding round, while existing investors Temasek, Lone Pine Capital and Sunley House Capital also participated in it, the Indian startup said.

The new round valued Pine Labs at $3 billion, up from about $2 billion in a December round last year. Pine Labs operates in several Southeast Asian markets as well.

“We’re thrilled to welcome marquee investors like Marshall Wace, Baron Capital Group, Ward Ferry Management, Duro Capital and Moore Strategic Ventures to the already pristine cap table of Pine Labs. This is an exciting phase in our journey as we enter newer markets. We excel in enterprise merchant payments and now want to scale new frontiers in the online space as well, at the same time continue to power the credit and commerce needs of our offline merchant partners,” said B. Amrish Rau, CEO of Pine Labs, in a statement.

The startup, which also counts PayPal among its investors, serves over 140,000 merchants. Its payments terminal — also known as point-of-sale machines — are connected to the cloud, and offer a range of additional services to the merchants. One of which is working capital.

Pine Labs runs an analytics app on debit card base of banks it tied up to determine the extent of credit to be made available to every cardholder. PineLabs then converts large payments into EMIs (equated monthly instalment) using its Pine Pay Later application. Amid the pandemic late last year, the startup was onboarding over 10,000 new businesses to the platform each month.

Pine Labs is the market leader in many categories. The startup — which acquired Qwikcilver in 2019 — assumed over 95% of the market share in gift cards in the financial year that ended in March 2020. Its point-of-sale machines are some of the most widely used in the industry.

FinTechs expanding into newer segments to increase engagement, the addressable market and drive monetisation (Image: Credit Suisse; Data: Company, Credit Suisse)

“We are very excited to be a part of the technological transformation that Pine Labs is driving on the ground in payments and the multiple interlinkages and efficiencies it is able to create by providing faster, cost effective consumer access to a broader range of financial products such as BNPL (Buy Now Pay Later), where it is driving a pioneering effort on behalf of the financial system. We are also excited about an Indian business being able to drive regional and potentially global adoption of its Intellectual Property and this represents significant optionality for the future,” said Amit Rajpal, CEO and Portfolio Manager of Marshall Wace Asia, in a statement.

#asia, #funding, #india, #pine-labs, #sequoia-capital-india

Bibit raises another growth round led by Sequoia Capital India, this time for $65M

Four months after leading a $30 million growth round in Bibit, Sequoia Capital India has doubled down on its investment in the Indonesian robo-advisor app. Bibit announced today that the firm led a new $65 million growth round that also included participation from Prosus Ventures, Tencent, Harvard Management Company and returning investors AC Ventures and East Ventures.

This brings Bibit’s total funding to $110 million, including a Series A announced in May 2019. Its latest round will be used on developing and launching new products, hiring and increasing Bibit’s financial education services.

Bibit was launched in 2019 by Stockbit, a stock investing platform and community, and is part of a crop of Indonesian investment apps focused on new investors. Others include SoftBank Ventures-backed Ajaib, Bareksa, Pluang and FUNDtastic. Bibit runs robo-advisor services for mutual funds, investing users’ money based on their risk profiles, and claims that 90% of its users are millennials and first-time investors.

According to Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan), the number of retail investors grew 56% year-over-year in 2020. For mutual funds in particular, Bibit said investors grew 78% year-over-year to 3.2 million, based on data from the Indonesia Stock Exchange and Central Securities Custodian.

Despite the economic impact of COVID-19, interest in stock investing grew as people took advantage of market dips (the Jakara Composite Index fell in the first quarter of 2020, but is now recovering steadily). Apps like Bibit and its competitors want to make capital investing more accessible with lower fees and minimum investment amounts than traditional brokerages like Mandiri Sekuritas, which also saw an increase in new retail investors and average transaction value last year.

But the percentage of retail investors in Indonesia is still very low, especially compared to markets like Singapore or Malaysia, presenting growth opportunities for investment services.

Apps like Bibit focus on content that helps make capital investing less intimidating to first-time investors. For example, Ajaib also presents its financial educational features as a selling point.

In press statement, Sequoia Capital India vice president Rohit Agarwal said, “Indonesian mutual fund customers have grown almost 10x in the past five years. Savings via mutual funds is the first step towards investing and Bibit has helped millions of consumers start their investing journey in a responsible manner. Sequoia Capital India is excited to double down on the partnership as the company brings the same customer focus to stock investing with Stockbit.”


#asia, #bibit, #indonesia, #investment-app, #robo-advisor, #sequoia-capital-india, #southeast-asia, #tc

Investment app for millennials Groww raises $83 million at over $1 billion valuation

More than 200 million people in India transact money digitally, but fewer than 30 million invest in mutual funds and stocks.

An Indian startup that is attempting to change this figure by courting millennials announced a new financing round on Wednesday and turned into the newest unicorn in the world’s second largest internet market.

Bangalore-based Groww has raised $83 million in its Series D financing round, which valued the Indian startup at more than $1 billion, up from $250 million in $30 million Series C in September last year.

Tiger Global led the new round, and existing investors Sequoia Capital India, Ribbit Capital, YC Continuity and Propel Venture Partners participated in it, said the four-year-old Indian startup, which has raised $142 million to date.

On a side note, Groww is the eighth Indian startup to attain the unicorn status this year — and fourth this week. Social commerce Meesho turned a unicorn on Monday, fintech firm CRED on Tuesday, and earlier today epharmacy firm PharmEasy announced a new financing round that valued the firm at about $1.5 billion.

Groww allows users to invest in mutual funds, including systematic investment planning (SIP) and equity-linked savings, gold, as well as stocks, including those listed at U.S. exchanges. The app offers every fund that is currently available in India.

The startup has amassed over 8 million registered users, two-thirds of whom are first-time investors, Lalit Keshre, co-founder and chief executive of Groww, told TechCrunch in an interview. Keshre and other former Flipkart executives — Harsh Jain, Neeraj Singh and Ishan Bansal — co-founded Groww in 2017.

Keshre said the startup will deploy the fresh funds to accelerate its growth, and hire more talent. “We now have fuel for longer-term thinking and faster growth,” he said.

More than 60% of Groww users come from smaller cities and towns of India and 60% of these have never made such investments before, said Keshre. The startup said it has conducted workshops in several small cities to educate people about the investment world.

Comparison of fintech market share in brokerage (BCG)

The coronavirus pandemic has also accelerated the startup’s growth as youngsters explore new hobbies. The startup competes with a handful of firms including Zerodha, Paytm Money, Upstox, ET Money, Smallcase, and traditional firms.

“We started Groww almost five years back to make investing accessible and transparent to everyone in India. We have made good progress, but it feels we have just got started,” said Keshre.

#apps, #asia, #funding, #groww, #india, #propel-venture-partners, #ribbit-capital, #sequoia-capital-india, #tiger-global, #yc-continuity

Sequoia Capital India on its early investment in Appier, the fund’s latest exit

Chih-Han Yu, chief executive officer and co-founder of Appier Group Inc., right, holds a hammer next to a bell during an event marking the listing of the company on the Tokyo Stock Exchange, at the company's office in Taipei, Taiwan on Tuesday, March 30, 2021. Photographer: Billy H.C. Kwok/Bloomberg via Getty Images

Chih-Han Yu, chief executive officer and co-founder of Appier Group Inc., right, holds a hammer next to a bell during an event marking the listing of the company on the Tokyo Stock Exchange, at the company’s office in Taipei, Taiwan on Tuesday, March 30, 2021. Photographer: Billy H.C. Kwok/Bloomberg via Getty Images

Appier’s initial public offering on the Tokyo Stock Exchange yesterday was a milestone not only for the company, but also Sequoia Capital India, one of its earliest investors. Founded in Taiwan, Appier was the fund’s first investment outside of India, and is now also the first company in its portfolio outside of India to go public. In an interview with TechCrunch, Sequoia Capital managing director Abheek Anand talked about what drew the firm to Appier, which develops AI-based marketing software.

Before shifting its focus to marketing, Appier’s founders—chief executive officer Chih-Han Yu, chief operating officer Winnie Lee and chief technology officer Joe Su—worked on a startup called Plaxie to develop AI-powered gaming engines. Yu and Su came up with the idea when they were both graduate students at Harvard, but found there was little demand at the time. Anand met them in 2013, soon after their pivot to big data and marketing, and Sequoia Capital India invested in Appier’s Series A a few months later.

“It’s easy to say in retrospect what worked and what didn’t work. What really stands out without trying to write revisionist history is that this was just an incredibly smart team,” said Anand. “They had probably the most technical core DNA of any Series A company that we’ve met in years, I would argue.” Yu holds a PhD in computer science from Harvard, Wu earned a PhD in immunology at Washington University in St. Louis and Su has a M.S. in computer science from Harvard. The company also filled its team with AI and machine learning researchers from top universities in Taiwan and the United States.

At the time, Sequoia Capital “had a broad thesis that there would be adoption of AI in enterprises,” Anand said. “What we believed was there were a bunch of people going after that problem, but they were trying to solve business problems without necessarily having the technical depth to do it.” Appier stood out because they “were swinging at it from the other end, where they had an enormous amount of technical expertise.”

Since Appier’s launch in 2012, more companies have emerged that use machine learning and big data to help companies automate marketing decisions and create online campaigns. Anand said one of the reasons Appier, which now operates in 14 markets across the Asia-Pacific region, remains competitive is its strategy of cross-selling new products and focusing on specific use cases instead of building a general purpose platform.

Appier’s core product is a cross-platform advertising engine called CrossX that focuses on user acquisition. Then it has products that address other parts of their customers’ value chain: AiDeal to help companies send coupons to the customers who are most likely to use them; user engagement platform AIQUA; and AIXON, a data science platform that uses AI models to predict customer actions, including the likelihood of repeat purchases.

“I think the number one thing that the company has spent a lot of time on is focusing on efficiency,” said Anand. “Customers have tons of data, both external and first-party, that they’re processing to drive business outcomes. It’s a very hard technical problem. Appier starts with a solution that is relatively easy to break into a customer, and then builds deeper and deeper solutions for those customers.”

Appier’s listing is also noteworthy because it marks the first time a company from Taiwan has listed in Japan since Trend Micro’s IPO in 1998. Japan is one of Appier’s biggest markets (customers there include Rakuten, Toyota and Shiseido), making the Tokyo Stock Exchange a natural fit, Anand said, even though most of Sequoia Capital India’s portfolio companies list in India or the United States.

The Tokyo Stock Exchange also stood out because of its retail investor participation, liquidity and total volume. Some of Appier’s other core investors, including JAFCO Asia and SoftBank Group Corp., are also based in Japan. But though it has almost $30 billion in average trading volume, the vast majority of listings are domestic companies. In a recent report, Nikkei Asia cited a higher corporate tax rate and lack of potential underwriters, especially for smaller listings, as a potential obstacles for foreign companies.

But Appier’s debut may lead the way for other Asian startups to chose the Tokyo Stock Exchange, said Anand. “Getting ready for the Japanese exchange meant having the right accounting practices, the right reporting, a whole bunch of compliance stuff. It was a long process. In some ways we were leading the charge for external companies to get there, and I’m sure over time it will keep getting easier and easier.”

#appier, #asia, #fundings-exits, #ipo, #japan, #marketing, #sequoia-capital, #sequoia-capital-india, #startups, #taiwan, #tc

MobiKwik investigating data breach after 100M user records found online

MobiKwik said on Tuesday it was investigating claims of data breach after a website claimed to have exposed private information of nearly 100 million users of the Indian mobile payments startup.

Over the weekend, a site on the dark web claimed it had 8.2 terabytes of MobiKwik user data. The data included phone numbers, email addresses, scrambled passwords, transactions logs, and partial payment card numbers.

The website also claimed that it had “know your customer” (KYA) documents of 3.5 million users, and each visit to the website displayed four random images from the data dump. KYC documents are required in India for users who want to access certain services without any limitations. Local law requires a mobile wallet firm in India, for instance, to support monthly transactions exceeding a certain limit.

The dark web site features a searchable database that allows users to look up their phone number or email to verify the authenticity of the data breach claim. TechCrunch was able to verify the accuracy of the data in several cases.

A seller on a well-known cybercrime forum claims to be selling access to the database for 1.2 bitcoin — about $70,000.

The Sequoia Capital India-backed startup says it can’t yet prove if the data actually belongs to MobiKwik users. “It is incorrect to suggest that the data available on the darkweb has been accessed from MobiKwik or any identified source,” the startup wrote in a blog post.

Rajshekhar Rajaharia, a security researcher, told TechCrunch that he alerted MobiKwik about this alleged security breach last month. In a statement, MobiKwik said the company had conducted a thorough investigation and did not find any evidence of a breach.

However, a screenshot leaked to TechCrunch shows a MobiKwik official asking an Amazon representative last month for logs relating to its cloud service after the startup “came to know that our S3 [cloud storage] data is downloaded by some other person outside the organization.”

The startup said its legal team will take “strict action against the so-called security researcher.” Rajaharia told TechCrunch that it’s his right as a user to know if his financial data is safe and that he doesn’t have the resources to fight legal battles.

MobiKwik said it was closely working with authorities and was confident that security protocols to store sensitive data are “robust and have not been breached.” It added that it was getting a third-party to conduct a forensic data security audit. “We are committed to a safe and secure Digital India.”

#asia, #india, #mobikwik, #security, #sequoia-capital-india

Indian beauty e-commerce Purplle raises $45 million

Purplle, an e-commerce platform for beauty products in India, said on Monday it has raised $45 million in a new financing round as it looks to expand its presence in the world’s second largest internet market.

The new round, a Series D, was financed by Sequoia Capital India and existing investors Verlinvest, Blume Ventures, and JSW Ventures. The new round values the Indian startup — which has raised $95 million to date — at about $300 million, up from $150 million in its 2019 Series C round, a person familiar with the matter told TechCrunch.

The new round gave partial exit to IvyCap Ventures, which had invested about $2 million in Purplle in 2015. The venture firm said in a statement that Purplle delivered a 22X return and 1.35x of its entire Fund 1.

“We continue to believe in the growth of the company and therefore we have retained our stake for Fund 2,” said Vikram Gupta, Founder and Managing Partner of IvyCap Ventures.

Eight-year-old Purplle.com, which counts Goldman Sachs among its investors, says it sells nearly 50,000 products from over 1,000 brands. The startup said it has amassed 7 million monthly active users.

“Purplle has been on a robust growth trajectory. Even with a Covid year, we have delivered >90% GMV CAGR for the last 3 years. This, while scaling our private brands successfully; Good Vibes is already an INR 150 Cr [$20.7 million] brand. The investment will help to shape Purplle into a multibillion-dollar, digital-first, beauty and personal care enterprise,” said Manish Taneja (pictured above), co-founder and chief executive of Purplle, in a statement late Monday.

The growth of Purplle is indicative of the growing e-commerce space in India, where users are beginning to purchase fashion and beauty products online. MyGlamm, an omnichannel direct-to-consumer Indian brand, last week raised $24.2 million in a round co-led by Amazon.

“We are excited to partner with Purplle as we believe they have cracked the beauty playbook of value retailing with 3 key tenets – a business built on high retention and low customer acquisition cost (CAC), a wide assortment of brands offering quality at best prices, and an attractive private label portfolio mix. We see Purplle emerging as a dominant beauty destination as the online beauty penetration grows from 10% to 25%+ over the next decade,” said Sakshi Chopra, Principal, Sequoia India.

#asia, #blume-ventures, #ecommerce, #funding, #goldman-sachs, #india, #nykaa, #sequoia-capital-india

Leap raises $17 million to help Indian students study abroad

Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. Upon landing, they face a myriad of challenges: They don’t have a local credit history, so they can’t avail a range of financial services including a loan or a credit card — at least not without paying a premium for it.

For banks and other financial institutions, there is an increased risk when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate over 13%, compared to their local peers who can secure the same amount of credit, if not more, at less than half of that interest rate.

Leap, a two-year-old startup with headquarters in San Francisco and Bangalore, is attempting to solve this problem and many others. The startup grants loans to students at fair interest rate by evaluating the data they generated — alternative and derived — in India itself.

Since the last time we wrote about Leap, the startup has evolved to address several other problems students face, explained Arnav Kumar, co-founder of Leap, in an interview with TechCrunch.

Kumar said Leap today is helping students with guidance on admission, visa, as well as test preparation. Leap has also developed a social network of sorts where over half a million students are talking to one another and use the platform’s other services to get admission in a college abroad.

About ten years ago, when I was looking to join an engineering college, I reached out to several individuals who were already studying in the colleges I had shortlisted. Turns out, over a million students in India do the exact same thing each year when they are about to begin their college life. (If I may complete the loop, I did graduate and have a bachelor’s degree in CSE somewhere in the house.)

Kumar, who previously served an Associate VP at venture firm Elevation Capital, said Leap’s community today is replicating the offline-behavior. Some students, to be sure, reach out to others on LinkedIn, or Facebook. But by just focusing on one problem, Leap is attempting to become the community for students who are looking to pursue higher education. (Its pages are indexed on Google search for better visibility.)

Leap Finance founders pose for a picture

There is a massive opportunity for startups to better solve these problems.

“India is the second-largest market globally for overseas enrolment, and in just a decade higher education enrolments are up by 8 million. This presents a huge opportunity in an otherwise fragmented landscape. Leap is addressing this huge opportunity through its end-to-end tech platform and a community-first approach,” said Amit Anand, Founding Partner of Jungle Ventures, in a statement.

Vaibhav Singh, the other co-founder of Leap, said in an interview that students from India take admission in over 5,000 schools and universities abroad each year to study tens of thousands of courses.

“So the choice spectrum is really, really wide and you need experts who can help you make the right choice. This is the most important decision you or your family will make,” he said.

Investors have spotted an opportunity in this space, too — and are backing Leap. The startup said on Tuesday that it has raised $17 million in its Series B round. The new financing round was led by Singapore-based Jungle Ventures, along with Sequoia Capital India and Owl Ventures. The startup has to-date raised $22.5 million.

The global pandemic prevented many Indian students from traveling abroad. This year, more than 700,000 students are estimated to leave India to pursue higher education. Leap co-founders said they are working to serve 150,000 of such students this year.

Leap said it plans to deploy the fresh capital to expand its tech team and reach more geographies. The startup currently helps students join colleges in several countries including the U.S., Canada, UK, and Australia. Singh said Leap is also looking to hire some tech and business talent.

“2020 was a tough year for international education with Covid related travel restrictions. We are impressed by the resilience of the Leap team during the last year, where not only have they served hundreds of students with their financing solutions but have also expanded with Leap Scholar providing counselling to thousands of Indian students looking to study abroad. This vertically integrated strategy has materially strengthened the moats for Leap,” said Ashish Agrawal, Principal at Sequoia India, which wrote its first check to Leap before the startup had a product.

#apps, #asia, #education, #finance, #funding, #india, #jungle-ventures, #leap-finance, #owl-ventures, #sequoia-capital-india

India’s CRED in talks to raise $200 million at $2 billion valuation

Bangalore’s fintech startup ecosystem is inching closer to delivering a new unicorn: CRED.

Two-year-old CRED is in advanced stages of talks to raise about $200 million at about $2 billion valuation, three sources familiar with the matter told TechCrunch. The new funding round, like this January’s Series C, will be largely financed by existing investors, the sources said, requesting anonymity as talks are private. The round is expected to close within a month, one of them said.

CRED, founded by Kunal Shah, has become one of the most talked-about startups in India, in part because of the pace at which its valuation has soared.

Backed by high-profile investors including DST Global, Sequoia Capital India, Tiger Global, Ribbit Capital, and General Catalyst, CRED was valued at $806 million when it closed its Series C round in January this year and $450 million in August 2019. (TechCrunch also scooped the Series C round of CRED.)

If the new deal goes through, CRED will be the fastest startup in the world’s second largest internet market to attain a $2 billion valuation. Prior to the upcoming Series D round, CRED had raised about $228 million.

Reached by TechCrunch early last week, CRED declined to comment. Sequoia Capital India didn’t immediately respond to a request for comment.

The Indian startup operates an eponymous app that rewards customers for paying their credit card bills on time and offers deals from online brands such as Starbucks, Nykaa, and Vahdam Teas. It had over 5.9 million customers as of January — or about 20% of the credit card holder population in the country.

The startup, unlike most others in India, doesn’t focus on the usual TAM of India — hundreds of millions of users of the world’s second most populated nation — and instead caters to some of the most premium audiences.

“India has 57 million credit cards (vs 830 million debit cards) [that] largely serves the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI and Axis) controlling about 70% of the total market. This space is extremely profitable for these banks – as evident from the SBI Cards IPO,” analysts at Bank of America wrote in a recent report to clients.

“Very few starts-ups like CRED are focusing on this high-end base and [have] taken a platform-based approach (acquire customers now and look for monetization later). Credit card in India remains an aspirational product. The under penetration would likely ensure continued strong growth in coming years. Overtime, the form-factor may evolve (i.e. move from plastic card to virtual card), but the inherent demand for credit is expected to grow,” they added.

Consumer segmentation and addressable market for fintech firms in India (BofA Research)

CRED says it is trying to help customers improve their financial behavior. An individual needs a credit score of at least 750 to join CRED. In a recent newsletter to customers, CRED said the median credit score of its customers was 830 and at “any given point in time” more than 375,000 individuals are on the app’s waiting list, many of whom have demonstrably improved their score to join CRED.

“It’s easy to be responsible when you’re empowered. 80% CRED Protect members got visibility on extra interest charges and avoided late payment fees by tracking their dues on CRED. Ignorance is not always bliss. CRED members detected additional charges worth over ₹145 Crores [$20.1 million] on their statements. CRED members avoided over ₹43.5 Crores [$6 million] worth of late payment fees,” it wrote in the newsletter.

“With the help of regular bill payment reminders, and a seamless credit card management experience; 160,000 CRED members improved their credit scores last month. CRED members know it pays to be good as they earned cash-back worth ₹12 Crores [$1.65 million] by paying their bills on time. There’s always something to look forward to on CRED. Our members got access to over 750 new rewards and products.”

The startup makes money by cross-selling financing products — for which it has a revenue-sharing arrangement with banks and other financial institutions — and levies a similar cut from merchants who are on the platform, Shah, who is also one of the most prolific angel investors in India, told TechCrunch in an interview in January this year.

#asia, #cred, #dst-global, #funding, #general-catalyst, #india, #kunal-shah, #payments, #ribbit-capital, #sequoia-capital-india, #tiger-global

Apple alum’s jobs app for India’s workers raises $12.5 million

A startup by an Apple alum that has become home to millions of low-skilled workers in India said on Tuesday it has raised an additional $12.5 million, just five months after securing $8 million from high-profile investors.

One-year-old Apna said Sequoia Capital India and Greenoaks Capital led the $12.5 million Series B investment in the startup. Existing investors Lightspeed India and Rocketship VC also participated in the round. The startup, whose name is Hindi for “ours,” has now raised more than $20 million.

More than 6 million low-skilled workers such as drivers, delivery personnel, electricians and beauticians have joined Apna to find jobs and upskill themselves. But there’s more to this.

An analysis of the platform showed how workers are helping one another solve problems — such as a beautician advising another beautician to perform hair dressing in a particular way that tends to make customers happier and tip more, and someone sharing how they negotiated a hike in their salary from their employer.

“The sole idea of this is to create a network for these workers,” Nirmit Parikh, Apna founder and chief executive told TechCrunch in an interview. “Network gap has been a very crucial challenge. Solving it enables people to unlock more and more opportunities,” he said. Harshjit Sethi, principal at Sequoia India, said Apna was making inroads with “building a professional social network for India.”

The startup has become an attraction for several big firms, including Amazon, Flipkart, Unacademy, Byju’s, Swiggy, BigBasket, Dunzo, BlueStar and Grofers, which have joined as recruiters to hire workers. Apna offers a straightforward onboarding process — thanks to support for multiple local languages — and allows users to create a virtual business card, which is then shown to the potential recruiters.

The past six months have been all about growth at Apna, said Parikh. The app, available on Android, had 1.2 million users in August last year, for instance. During this period, there have been 60 million interactions between recruiters and potential applicants, he said. The platform, which has amassed more than 80,000 employers, has a retention rate of over 95%, said Parikh.

“Apna has taken a jobs-centric approach to upskilling that we are very excited about. Lack of accountability has been the core issue with current skill / vocational learning alternatives for grey and blue-collar workers. Apna has turned the problem on its head by creating net-positive job outcomes for anyone who chooses to upskill on the platform,” said Vaibhav Agrawal, partner at Lightspeed India, in a statement.

Image Credits: Nirmit Parikh

Parikh got the idea of building Apna after he kept hearing about the difficulty his family and friends faced in India in hiring people. This was puzzling to Parikh, as he wondered how could there be a shortage of workers in India when there are hundreds of millions of people actively looking for such jobs. The problem, Parikh realized, was that there wasn’t a scalable networking infrastructure in place to connect workers with employers.

Before creating the startup, Parikh met workers and worked with them to understand where are the core challenges they faced. That journey has not ended. The startup talks to over 15,000 users each day to understand what else Apna could do for them.

“One of the things we heard was that users were facing difficulties with interviews. So we started groups to practice them with interviews. We also started upskilling users, which has made us an edtech player. We plan to ramp up this effort in the coming months,” he said.

Parikh said the startup is overwhelmed each day with the response it is getting from its customers and the industry. Each day, he said, people share how they were able to land jobs, or increase their earnings. In recent months, several high-profile executives from companies such as Uber and BCG have joined Apna to scale the startup’s vision, he said, adding that the problem Apna is solving in India exists everywhere and the startup’s hope is to eventually serve people across the globe.

The app currently has no ads, and Parikh said he intends to not change that. “Once you get in the ad business, you start doing things you probably shouldn’t be doing,” he said. The startup instead plans to monetize its platform by charging recruiters, and offering upskill courses. But Parikh maintained that Apna will always offer its courses to users for free. The premium version will target those who need extensive assistance, he said.

As is the case elsewhere, millions of people lost their livelihood in India in the past year as coronavirus shut many businesses and workers migrated to their homes. There are over 250 million blue and grey-collar workers in India, and providing them meaningful employment opportunities is one of the biggest challenges in our country, said Sethi.

This is a developing story. More to follow…

#apna, #apps, #asia, #funding, #greenoaks-capital, #india, #lightspeed-india, #recent-funding, #rocketship-vc, #sequoia-capital-india, #startups

James Murdoch’s Lupa Systems leads $31 million investment in India’s Doubtnut

Doubtnut, an Indian startup that helps students learn and master concepts from math and science using short videos, has raised $31 million in a new financing round, months after it rejected an acquisition offer from India’s largest edtech firm Byju’s.

The three-year-old Gurgaon-headquartered startup said SIG and James Murdoch’s Lupa Systems led the $31 million Series B funding round. Existing investors Sequoia Capital India, Omidyar Network India and Waterbridge Ventures also participated in the round, which brings the startup’s to-date raise to about $50 million to date.

The Doubtnut app allows students to take a picture of a problem, and uses machine learning and image recognition to deliver their answers through short-videos. These videos offer students step-by-step instructions to solve a problem.

The app supports multiple languages, and has amassed over 2.5 million daily active users who spend 600 million minutes a month on the app, the startup said. More than half of the users have come online for the first time in last 12 months, the startup said.

The startup said it has developed a bank of over 65 million questions in nine languages for students from sixth grade to high-school. Unlike several other popular edtech firms, Doubtnut said its app reaches students in smaller towns and cities. “85% of the current base comes from outside of the top 15 Indian cities, and 60% users study in state boards where typical medium of instruction is the local vernacular language,” the startup said.

TechCrunch reported last year that Byju’s was in talks to acquire Doubtnut for as much as $150 million. Byju’s later lowered its deal offer, after which the two firms ended their talks.

James Murdoch last month announced he was reuniting with Uday Shankar, an executive who helped him build the Murdoch family’s Star business in India, which was later sold to Disney. Shankar will work with Murdoch to “accelerate” Lupa’s efforts in India, Murdoch said last month. Lupa has backed nearly a dozen startups so far, including Indian news aggregator and social app DailyHunt.

“Doubtnut has been built with a vision to improve learning outcomes for all students, especially those outside the major Indian cities. We specialize in developing content in vernacular languages and use technology to create affordable solutions for people in this large target segment,” said Tanushree Nagori, co-founder and CEO of Doubtnut, adding,

“We are pleased to welcome onboard SIG and Lupa; SIG brings in strong experience of investing in ed-tech companies globally and Lupa Systems brings unparalleled experience of building world-class businesses and harnessing high-impact technologies,” she added.

The startup said it will deploy the fresh capital to add support for more language and broaden the scope of subjects it covers today. Doubtnut is also planning to introduce paid courses.

#apps, #asia, #byjus, #doubtnut, #edtech, #education, #funding, #india, #lupa-systems, #sequoia-capital-india, #sig, #unacademy, #waterbridge-ventures

India’s Zetwerk raises $120 million to scale its B2B marketplace for manufacturing parts

When you want to buy a refrigerator or a television, you can walk to the nearby electronics store or visit an e-commerce website like Amazon. But where do you go when you’re looking for parts of a crane, a door or chassis of different machines?

For several businesses globally, the answer to that question is increasingly Zetwerk, a Bangalore-based startup.

The three-year-old startup runs a business-to-business marketplace for manufacturing items that connects OEMs (original equipment manufacturers) and EPC (engineering procurement construction) customers with manufacturing small-businesses and enterprises.

All the products it sells today are custom-made. “Nobody has a stock of such inventories. You get the order, you find manufacturers and workshops that make them,” explained Amrit Acharya, co-founder and chief executive of Zetwerk, in an interview with TechCrunch.

Its customers — there are over 250 of them, up from 100 a year ago — operate across two-dozen industries (including process plants, oil & gas, steel, aerospace, medical devices, apparel and luxury goods) in the infrastructure space, and approach Zetwerk with digital designs they wish to be translated into physical products.

Customers aren’t alone in seeing value in Zetwerk. On Wednesday, the Indian startup said it has raised $120 million in a Series D financing round led by existing investors Greenoaks Capital and Lightspeed Venture Partners. Existing investors Sequoia Capital and Kae Capital also participated in the Series D round.

The new round, which brings Zetwerk’s to-date raise to $193 million, gives the firm a post-money valuation of somewhere between $600 million to $700 million, a person familiar with the matter told TechCrunch. (A quick side note: Zetwerk announced a $21 million Series C round last year, but ended up raising $31 million in that round.)

Zetwerk was co-founded by Acharya, Srinath Ramakkrushnan, Rahul Sharma and Vishal Chaudhary. Long before Acharya and Ramakkrushnan joined forces to tackle this space, they had been contemplating this idea.

Both of them studied at IIT Madras, went to the same exchange program in Singapore, and were colleagues at Kolkata-headquartered conglomerate ITC. While working there, they realized that part of a product manager’s job at the firm was dealing with gazillions of suppliers and the manufacturing items they offered.

The process was archaic: There were no databases, and people couldn’t track shipments.

The early version of Zetwerk, which was a database of suppliers, was a direct response to this. But after listening to requests from customers, the startup saw a bigger opportunity and transformed itself into a full-fledged marketplace with integrations with third-party vendors. Once a firm has placed an order, Zetwerk allows them to keep tabs on the progress of manufacturing and then the shipping. There are also quality checks in place.

Zetwerk website

Zetwerk operates in such a unique space today — Shailesh Lakhani, managing director at Sequoia India, says the startup has defined a new category of marketplace — that by and large it’s not competing with any other firm in India — or South Asia. (The startup competes with domain project consultants in the offline world.)

The opportunity in India itself is gigantic. According to industry reports, manufacturing today accounts for 14% of India’s GDP. Vaibhav Agarwal, a partner at Lightspeed, estimates that the market is as large as $40 billion to $60 billion in India and global trade-tailwinds that creates opportunity to serve international demand.

As more and more companies expand or shift their manufacturing to India — in part due to import duties imposed by India and geo-political tension with China, the global hub for manufacturing — this opportunity has only grown bigger in recent years.

“India has a lot of depth in manufacturing, but much of it has not been tapped well,” said Acharya.

Zetwerk — which grew 3X last year and reported revenue of $43.9 million in the financial year that ended in March, a 20X growth from the year prior — plans to deploy the new capital to expand to more areas of categories, and broaden its technology stack. Consumer goods (which covers items such as mixer grinders and TVs) is an area Zetwerk expanded to last year, and said it accounts for 15% of the revenue it generated in the last six months.

Currently 25 of its customers are in the U.S., Canada, Europe and other international markets. Acharya said the startup plans to open offices overseas this year as it scouts for more international customers. 

“We are excited to partner with Zetwerk on the next leg of their journey, as they expand their value proposition globally. Zetwerk’s operating system for manufacturing has digitized multiple supply chains end-to-end, ensuring on-time delivery and high quality standards. This has led to rapid growth in India and internationally, with the potential to quickly become one of the most important manufacturing platforms globally,” said Neil Shah, partner at Greenoaks Capital, in a statement.

#asia, #ecommerce, #funding, #greenoaks-capital, #india, #kae-capital, #lightspeed-venture-partners, #recent-funding, #sequoia-capital-india, #startups, #zetwerk

India’s insurance platform Turtlemint raises $30 million

Turtlemint, an Indian startup that is helping consumers identify and purchase the most appropriate insurance policies for them, has raised $30 million in a new financing round as it looks to reach more users in small cities and towns in the world’s second largest internet market.

The new round, the five-year-old Mumbai-headquartered startup’s Series D, was led by GGV Capital . American Family Ventures, MassMutual Ventures and SIG, and existing investors Blume Ventures, Sequoia Capital India, Nexus Venture Partners, Dream Incubator and Trifecta Capital also participated in the round, which brings Turtlemint’s total to-date raise to $55 million.

Only a fraction of India’s 1.3 billion people currently have access to insurance. Insurance products had reached less than 3% of the population as of 2017, according to rating agency ICRA. An average Indian makes about $2,100 a year, according to the World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.

A range of startups in India are trying to disrupt this market. Analysts at Goldman Sachs estimated the online insurance market in India — which in recent years has attracted several major giants including Amazon and Paytm — to be worth $3 billion in a report they recently sent to clients.

Another major reason why existing insurance firms are struggling to sell to consumers is because they are too reliant on on-ground advisors.

Turtlemint co-founders Anand Prabhudesai (left) and Dhirendra Mahyavanshi pose for a picture (Turtlemint)

Instead of bypassing these advisors, Turtlemint is embracing them. It works with over 100,000 such agents, equipping them with digital tools to offer wider and more relevant recommendations to consumers and speed-up the onboarding process, which has traditionally required a lot of paperwork.

These advisors, who continue to command over 90% of all insurance sales in the country, “play a critical role in bridging the gap in tier 2 and 3 towns and cities, where low physical presence of insurance companies greatly impacts seamless access to insurance products and information,” the startup said.

Turtlemint works with over 40 insurance companies in India and serves as a broker, charging these firms a commission for policies it sells. The startup said it has amassed more than 1.5 million customers.

“By developing products for the micro-entrepreneurs and the rising middle class, Turtlemint has an opportunity to have a positive impact on India’s economy,” said Hans Tung, Managing Partner at GGV Capital, in a statement. “Dhirendra, Anand, and their team built an incredible platform that enables over 100,000 mom-and-pop financial advisors to serve consumers’ best interests with digital tools, helping middle-class families in India get insured with the best products available.”

In an interview with TechCrunch, Turtlemint co-founder Anand Prabhudesai said the startup will deploy the fresh capital to grow its network of advisors and improve its technology stack to further improve the experience for consumers. The startup today also offers training to these advisors and has built tools to help them digitally reach potential customers.

“Continuous education is a very important aspect of being a successful financial entrepreneur. To this end, we have created an online education product with a wide range of courses on financial products, advice-based sales techniques and other soft skills. Our content is now available in seven regional languages and over 20,000 learners are active each month on our edtech platform. A lot of these are first-time advisors who are taking their first steps towards starting their advisory business. Our target is to create a million successful financial entrepreneurs over the next 3-5 years,” he said.

#american-family-ventures, #apps, #asia, #blume-ventures, #dream-incubator, #finance, #funding, #ggv-capital, #india, #massmutual-ventures, #nexus-venture-partners, #payments, #sequoia-capital-india, #sig

Video creation and editing platform InVideo raises $15 million

InVideo, a Mumbai-based startup that has built a video creation and editing platform, has raised $15 million as it looks to court more users and customers worldwide.

The startup offers a freemium web-based editing tool that allows users to create videos that are fit to be published on popular social media platforms (such as Twitter, Facebook, YouTube). It has amassed over 800,000 users in a year since its launch who have created videos in over 75 languages.

It has also courted several high-profile customers including Reuters, AT&T, Dropbox, and P&G, Sanket Shah, co-founder and chief executive of InVideo, told TechCrunch in an interview earlier this week. Some of these customers are white-labeling InVideo platform to their own clients.

InVideo’s $15 million Series A financing round was led by Sequoia Capital India. Tiger Global, Hummingbird, RTP Global, and Base also participated in the round.

Prateek Sharma, VP at Sequoia Capital India, said that InVideo is part of a growing number of startups in India that are building a SaaS platform for the world. “With their stellar product, design and tech capabilities, InVideo is well-placed to become the platform of choice for video creation in a potentially $10 billion market,” he said.

Unlike most SaaS startups that are emerging from India, InVideo is currently not fully monetizing its platform. InVideo app offers a range of functionalities at no charge, and charges only $10 a month for premium clients such as a marketing agency.

Shah acknowledged that the startup could charge these business customers much more, but he said the startup first wishes to reach more users before it looks into monetization opportunities. Furthermore, he is of the opinion that InVideo platform should not cost much in the first place. (During the conversation, it became clear that services such as Notion that offer a range of features to users at no charge have influenced how Shah is thinking about building InVideo.)

To that effect, InVideo plans to remove one of the biggest limitations for free users: the persistent watermark on videos.

InVideo currently does not have any mobile or desktop app. Users go to a web browser, where the startup’s own tech stack allows them to upload the video, make the editing and then process it, Shah said. (Once the video has processed, users see a one-click option to publish it on their social media platforms.) But InVideo plans to release mobile apps by early next year, he said.

Other than this, there are a number of more features including ability for users to collaborate that InVideo is working on, and the new financing around will help accelerate that, he said. The startup, which also has teams in the U.S. and several other countries, also plans to hire more people.

#apps, #asia, #funding, #india, #invideo, #sequoia-capital-india, #social

ShopUp raises $22.5 million to digitize millions of mom-and-pop shops in Bangladesh

A startup that is aiming to digitize millions of neighborhood stores in Bangladesh just raised the country’s largest Series A financing round.

Dhaka-headquartered ShopUp said on Tuesday it has raised $22.5 million in a round co-led by Sequoia Capital India and Flourish Ventures. For both the venture firms, this is the first time they are backing a Bangladeshi startup. Veon Ventures, Speedinvest, and Lonsdale Capital also participated in the four-year-old ShopUp’s Series A financing round. ShopUp has raised about $28 million to date.

Like its neighboring nation, India, more than 95% of all retail in Bangladesh goes through neighborhood stores in the country. There are about 4.5 million such mom-and-pop stores in the country and the vast majority of them have no digital presence.

ShopUp is attempting to change that. It has built what it calls a full-stack business-to-business commerce platform. It provides three core services to neighborhood stores: a wholesale marketplace to secure inventory, logistics (including last mile delivery to customers), and working capital, explained Afeef Zaman, co-founder and chief executive of ShopUp​, in an interview with TechCrunch.

Image Credits: ShopUp

These small shops are facing a number of challenges. They are not getting inventory on time or enough inventory and they are paying more than what they should, said Zaman. And for these businesses, more than 73% (PDF) of all their sales rely on credit instead of cash or digital payments, creating a massive liquidity crunch. So most of these businesses are in dire need of working capital.

Zaman declined to reveal how many mom-and-pop shops today use ShopUp, but claimed that the platform assumes a clear lead in its category in the country. That lead has widened amid the global pandemic as more physical shops explore digital offerings to stay afloat, he said.

The number of neighborhood shops transacting weekly on the ShopUp platform grew by 8.5 times between April and August this year, he said. The pandemic also helped ShopUp engage with e-commerce players to deliver items for them.

“Sequoia India has been a strong supporter of the company since it was part of the first Surge cohort in early 2019 and it’s been exciting to see the company become a trailblazer facilitating digital transformation in Bangladesh,” said ​Klaus Wang, VP, Sequoia Capital, in a statement.

The startup has no intention to become an e-commerce platform like Amazon that directly engages with consumers, Zaman said. E-commerce is still in its nascent stage in Bangladesh. Amazon has yet to enter the country and increasingly Facebook is filling that role.

ShopUp sees immense opportunity in serving neighborhood stores, he said. The startup plans to deploy the fresh capital to deepen its partnerships with manufacturers and expand its tech infrastructure.

It opened an office in Bengaluru earlier this year to hire local tech talent in the nation. Indian e-commerce platform Voonik merged with ShopUp this year and both of its co-founders have joined the Bangladeshi startup. Zaman said the startup will hire more engineering talent in India.

#asia, #bangladesh, #ecommerce, #flourish-ventures, #funding, #sequoia-capital-india, #speedinvest

India’s Razorpay becomes unicorn after new $100 million funding round

Bangalore-headquartered Razorpay, one of the handful of Indian fintech startups that has demonstrated accelerated growth in recent years, has joined the coveted unicorn club after raising $100 million in a new financing round, the payments processing startup said on Monday.

The new financing round, a Series D, was co-led by Singapore’s sovereign wealth fund GIC, and Sequoia India, the six-year-old Indian startup said. The new round valued the startup at “a little more than $1 billion,” co-founder and chief executive Harshil Mathur told TechCrunch in an interview.

Existing investors Ribbit Capital, Tiger Global, Y Combinator, and Matrix Partners also participated in the round, which brings Razorpay’s total to-date raise to $206.5 billion.

Razorpay accepts, processes, and disburses money online for small businesses and enterprises. In recent years, Razorpay has expanded its offerings to provide loans to businesses and also launched a neo-banking platform to issue corporate credit cards, among other products.

Mathur and Shashank Kumar (pictured above), who met each other at IIT Roorkee, started Razorpay in 2014. They began to explore opportunities around payments processing business after realizing just how difficult it was for small businesses such as young startups to accept money online less than a decade ago. There were very few payment processing firms in India then and startups needed to produce a long-list of documents.

The early team of about 11 people at Razorpay shared a single apartment as the co-founders rushed to meet with over 100 bankers to convince banks to work with them. The conversations were slow and stuck in a deadlock for so long that the co-founders felt helpless explaining the same challenge to investors numerous times, they recalled in an interview last year.

To say things have changed for Razorpay would be an understatement. It’s become the largest payments provider for business in India, said Mathur. Razorpay accepts a wide-range of payment options including credit cards, debit cards, mobile wallets, and UPI.

“Razorpay has established itself as a clear leader, with its strong focus on customer experience and product innovation,” said Choo Yong Cheen, Chief Investment Officer for Private Equity at GIC, in a statement. “GIC has a long track record of partnering with leading fintech companies globally and is delighted to partner with Razorpay in its journey to transform payments and banking.”

Some of Razorpay’s clients include budget lodging decacorn Oyo, e-commerce giant Tokopedia, top food delivery startups Zomato and Swiggy, online learning platform Byju’s, ride-hailing giant Gojek, supply chain platform Zilingo, caller ID service Truecaller, travel ticketing firms Yatra and Goibibo, and telecom giant Airtel.

The startup expects to process about $25 billion for nearly 10 million of its customers this year, said Mathur.

He attributed some of the growth to the coronavirus pandemic, which he said has accelerated the digital adoption among many businesses.

On the neo-banking and capital side, Mathur said, Razorpay expects RazorpayX and Razorpay Capital to account for about 35% of the startup’s revenue by the end of March next year.

Mathur said the startup’s payment processing service continues to be its fastest growing business and does not need much capital to grow, so the startup will be deploying the fresh funds to expand its neo-banking offerings to include vendor payment, and expense and tax management and other features.

The startup, which aims to work with over 50 million businesses by 2025, may also acquire a few firms as it explores opportunities around inorganic expansion in the neo-banking category, said Mathur.

“We will continue to make an impactful contribution to the growth of th