The Indian software as a service (SaaS) sector enjoyed a bumper 2021. According to Bain & Company’s India SaaS Report 2021, the sector received investments worth $4.5 billion – up 170% over 2020. 

The good times are expected to continue, at least for the next decade. Earlier this month, the Economic Times quoted a Motilal Oswal report that projected the sector to jump from $2.6 billion in revenue to between $50 and $70 billion by 2030. This would give the sector about a 7-9% share of the global market. 

In other words, the SaaS sector is likely to play an increasingly significant role in India’s growth story. 

What is SaaS?

Put simply, Software as a Service refers to using the cloud to deliver software over the internet, usually for a subscription fee. It is actually not a new concept – your email would be an early example of SaaS. Today, however, SaaS encompasses a wide range of software that has applications across industries and functions. 

As Oracle notes on its website, “modern cloud applications can span – and connect –everything from financials, human resources, procurement, and supply-chain processes to commerce, marketing, sales, and service solutions.”

In effect, it’s the change from having to buy a disk to install Microsoft Office, and storing all your data locally, to using Microsoft 365 and storing your data on the cloud, where it can be accessed and used from any location and shared among multiple users. 

In 2021, the global SaaS market was worth  $130.7 billion. It is projected to grow over five times to $716.5 billion by 2028. A little over a third of all software today is SaaS. By 2030, SaaS is expected to account for 80% of all software. 

India currently has over 1,000 SaaS companies, out of which 15 are unicorns. 

"SaaS has emerged as one of the biggest disruptors in the global technology industry over the last two decades. It continues to accelerate further as the world rapidly shifts to a cloud-based environment. The Covid-19 outbreak exacerbated the push to SaaS, which offers greater flexibility, functionality, and better remote productivity," the Motilal Oswal report says.

Advantages of SaaS

The main advantages of SaaS are convenience and lower costs. 

Since the software exists online, it can be acquired and installed in a matter of hours. It also enables users to access information from any device with an internet connection and reduces the risk of losing data. If a computer crashes or a mobile device is lost, the data remains safe and secure. 

The licensing costs tend to be lower as well, as do the maintenance costs. These are usually shared by multiple customers, thereby reducing the individual cost of the service. 

The software applications are scalable. As a company grows, it can proportionally increase its use of SaaS products. This makes it ideal for small and medium-sized businesses, which may not have the cash to spend on a one-size-fits-all software solution. 

A company that uses SaaS doesn’t have to worry about setting up data storage facilities and figuring out the different rules and regulations for data storage in different markets either. Instead, it can focus on its core business, knowing that its valuable data is in good hands. 

Fuelling the next decade

At an event in February 2022 hosted by SaaSBOOMi, a community of SaaS company founders, Mr. Kushagra Gupta, Associate Partner at McKinsey, said, “We think in the next decade till 2030 this will be the largest value creation opportunity in India, not [just] in tech. We see it creating about a trillion US dollars in value by 2030 and creating half a million jobs in the process. At that point of time we would rival what the tech services industry did in 30 years, but we would do it faster, in 10 to 15 years.”

In a podcast series called McKinsey on Start-ups, host Daniel Eisenberg discussed the report produced by McKinsey and SaaSBOOMi, titled ‘The SaaS Landscape – India and the Valley’, with Manav Garg, founder and CEO of Eka Software Solutions and founding partner of SaaSBOOMi, and Sid Tandon, a McKinsey partner. 

According to Tandon, one of the key requirements for the sector to reach its potential is a sufficient level of investment in growth. While the sector lacked capital in the past, with investment hitting new highs, funds are no longer a problem. Tandon stresses the need to use these funds to drive growth. 

“The mindset of the founders and investors was to build a sustainable business and start producing profitability,” Tandon said. “And it is not a bad thing to build a sustainable business but at the rate at which SaaS is evolving, you need to have your pedal to the medal to invest in growth … we expect that mindset to shift more aggressively towards a growth mindset than it had been in the past.”

Of course, chasing growth without having the right product would be fruitless. Therefore, the report also recommends that companies make sure they define and understand “the Product-Market Fit before starting to invest in growth”.

According to Bain, emphasis also needs to be placed on customer success. Indian SaaS companies must demonstrate their value to their customer’s business and facilitate their customer’s success in addition to their own. 

That way everybody wins. 

Quite often we hear stories of enterprises in India using digital technologies to build solutions. Unsurprisingly, most of the unicorns that India added in 2021 were in the digital economy.

India’s share in labour-intensive sectors has been falling recently and its position in skill-intensive manufacturing isn’t strong. Sectors like automobiles see a large home production base but exports remain low. However, growth in exports of Information and Communication Technology (ICT), along with pharmaceuticals and chemicals, has been impressive. India leads in best practices for digital payments and must use such capabilities to make high-value enterprises in the digital economy that are capable of becoming world leaders. 

Speaking at the Azadi ka Digital Mahotsav, Minister of State for Electronics and IT, Rajeev Chandrasekhar, said, “Primary objective is to make sure that our digital economy is a trillion-dollar economy — the largest in the world. If not the largest, then at least one of the top two digital economies in the world.”

India has a huge market for digital consumers and it’s growing rapidly. It has over 750 million internet users which could grow to over 1.5 billion by 2040. The mobile data consumption rate in India is the highest in the world, with each user consuming 12 GB a month. This is only going to go up, considering every quarter it’s adding almost 25 million new smartphone users.

There are over 1.2 billion mobile wireless subscriptions in India and nearly 27 billion apps were downloaded in 2021 alone, with smartphone users spending an average of 4.7 hours on their devices. Compared to other emerging economies, India is digitising much faster.

Both private and public sectors are driving the growth of digital consumption in India. With billions of people covered by the biometric digital identity, Aadhaar, and millions of businesses onboarded on one platform thanks to the Goods & Services Tax (GST), digitisation has been widely accepted and adopted. Data consumption and internet subscriptions have seen an exponential rise as a result of competitive data plans offered by telecommunication service providers.

This has bridged the digital divide and has driven low-income states to grow faster than high-income ones in internet subscriptions and infrastructure.  

“India’s consumer digital economy, which was pegged at $85-90 billion in the calendar year 2020, is expected to become an $800 billion market by 2030, according to reports released by consulting firm RedSeer at its flagship event Ground Zero 5.0”, writes the Business Standard.

McKinsey Global Institute surveyed over 600 firms and found that when it came to businesses across all sectors, digital adoption had been uneven. For instance, it’s 15 times more likely that a digital leader in the top quartile of adopters will centralise digital management. Compared to a firm lying in the bottom quartile, they’re two to three times more likely to use technology for processes such as search engine optimisation (SEO), enterprise resource planning (ERP) or customer relationship management (CRM).

But if we delve a little deeper, we find that the size of a firm is not always a differentiator. Big firms may be ahead in areas of large investment such as successfully selling online through mobile apps and websites but smaller firms leapfrog ahead in areas like accepting digital payments, using social media platforms to sell products or using video conferencing for reaching and supporting customers.

India has to formulate and implement legislation of a global standard in this regard. This will ensure that technologies and the internet remain safe, open, trusted and accessible to the citizens of the country. Smart architecture must be intensified to drive the digitalisation of government services and have a clear, broad architecture of digital governance. Chandrashekhar further said, "We will be leaders at emerging technologies, artificial intelligence, blockchain, quantum computing, high-performance computing, cyber security where focus on emerging technologies. We must lead the world in these technologies". 

Rajendra Kumar, MeitY Additional Secretary, believes there has to be a focus on developing platforms. “We also need to focus on cyber security, where India has made very significant progress in the last three years. Currently, we are ranked 10th in the world in cybersecurity. That's an area we need to constantly be on the watch for emerging threats and counter them”, he said.

The proliferation of digital applications will happen across most sectors of the Indian economy. Core digital sectors could double their GDP level by 2025. In 2025, newly digitised sectors could each create up to $150 billion increment in economic value. 

Unlocking the digital economy will create several million jobs and using digital applications will help save time and costs, raise output, improve matching supply with demand and reduce fraud. Digital ecosystems are already visibly reshaping business-consumer interactions in fields such as agriculture, logistics, retail and healthcare.  Data-driven operations in the farm sector can be used to provide solutions like mapping out efficient routes for cargo and monitoring its movements on Indian highways.

In healthcare, we saw the pivotal role telecommunication played in connecting patients to doctors via audio and video during the pandemic. Retail stores commonly go digital by selling on e-commerce websites. 

For India to reach its full digital potential and fulfil the dream of a $5 trillion economy, stakeholders have to be efficient in responding to the transition. Digital forces that can disrupt the market have to be identified, investments must be made in capabilities and talent must be acquired to deliver projects.

The government needs to invest in public data and digital infrastructure for organisations to leverage, simultaneously devising strong security and privacy safeguards. 

Reaping the benefits of a digital economy will not only require ease of creating, scaling and exiting businesses but also policies that can facilitate new jobs and retrain workers. 

According to the Global Entrepreneurship Monitor (GEM) 2021/22 report, India is one of the top 5 places to do business. A global consortium of more than 500 researchers was involved in this report that considered different conditions of the entrepreneurial framework to gather data of respondents across all low, medium and high-income economies. Respondents were asked questions on entrepreneurial activities, view of the local entrepreneurial ecosystem and attitudes to enterprise. 

“The GEM report put India on the top amongst low-income economies (according to GDP per capita) on different Entrepreneurial Framework Conditions such as Entrepreneurial Finance, Ease of Access to Finance, Government Policy: Support and Relevance; and Government Support: Taxes and Bureaucracy; while Government Entrepreneurial Programmes was ranked second highest”, according to Business Standard.

However, as much as the numbers have reflected an improved entrepreneurial ecosystem, growth expectation remained low among over 80% of entrepreneurs and the general population’s entrepreneurial intentions are still mute. This isn’t surprising if you just see the difference in documents and permissions required to obtain licences for a restaurant business compared to that of a firearm. 

Mint wrote, “According to Sanjeev Sanyal, the Principal Economic Advisor to the Government of India, getting the go-ahead from the police was one of 26 licences needed to open a restaurant in the Indian capital. An entrepreneur wanting to start a restaurant business in Bengaluru needs 36 licences while those in India’s financial capital Mumbai need 22.”

Although India’s massive population and the increasing spending habits of the middle-class are generating entrepreneurial excitement and attracting foreign investments, it’s essential that entrepreneurs are aware of the challenges in order to plan strategically and work patiently and diligently.

Advantages of doing business In India

In the survey, 82% respondents believed in the ease of starting a business in India, 83% believe good opportunities are available and 86% believe in their knowledge and skills to start a business in India.

Let’s look at some advantages of doing business in India:

• Scope for sustainable business
  Development plans and a growing population means that businesses will only grow in India. A rural to urban transition will increase the portion of the middle-income strata, creating more business opportunities for companies to sail through.

• Organised employability
  India has a strong labour force, mostly of individuals younger than 30 years of age. India’s low average age of working individuals and their ambitions can be leveraged by businesses to generate employment and boost productivity.

• Economical operational costs
  From infrastructure to taxes, the cost of running a business in India is low and affordable. Businesses can provide capital, strategic knowledge and technology to their workforce and capture a customer base for their products and services.

• Stable economy
  India’s robust democracy, private consumption, government investment and structural reforms have been key for India’s economic growth in the past decades, helping it achieve a high macroeconomic stability ranking.

• Business reforms
  The Indian government has eased restrictions on Foreign Direct Investment (FDI) which have attracted more foreign investments and newer reforms have improved the business environment. While praising this achievement, Junaid Ahmad, World Bank Director in India said, “India’s impressive progression in the Doing Business rankings over the past few years is a tremendous achievement, especially for an economy that is as large and complex as India’s”.

• Digital competitiveness
  India is a powerhouse in global technology innovation. Companies across all industries are equally sophisticated and prominent as their international counterparts in China and the US.

• Massive consumer market
  India has the third-largest market size out of 141 economies and the largest market for manufactured goods and services. With a large, spending middle-class, the total consumption expenditure of India is estimated to grow to $6 trillion by 2030.

• Presence of a startup ecosystem
  The culture of business in an economy is crucial for new companies. The Indian market accepts new business ideas, letting them enter the market easily, especially in the fields of financial services, e-commerce and technology. 

Due to the Covid-19 pandemic, over 77% entrepreneurs are seeking new opportunities due to the possible long-term positive impact of the pandemic. 

Need for reform

Here are the areas where reform is needed to improve the standing of the Indian business ecosystem.

• Ease of doing business
  India’s process of starting a business, registering property and enforcing contracts is laborious, time consuming and costlier than other Organisation for Economic Co-operation and Development (OECD) nations. According to The Print, “Entrepreneurs on social media have been listing pain points of sustaining businesses in India, noting the many compliances and how digitisation hasn't made processes particularly easy. Multiple compliances, large volume of paperwork and a hostile environment are some of the reasons behind the unease of owning small businesses in India, according to entrepreneurs in the country.”

• Protectionist policies and high tariffs
  In order to protect domestic businesses, India already has high tariffs (highest among any G20 country) and trade regulations that are unpredictable and non-transparent. It has now increased import tariffs and plans to ban any product deemed detrimental to domestic businesses. India has also limited foreign ownership and brought in stringent requirements of local presence for future investors.

• Vast but fragmented market
  We already know that India’s market is vast and growing but its fragmented nature is a challenge for businesses and investors. Large states having nation-like populations, with diverse cultures, infrastructures, talent and languages, are further fragmented by rules, policies and regulations varying from state to state.

• Infrastructure
  Even though tall claims of infrastructural developments are made, India’s network of railroads, seaports, roads and airways, power grids and telecommunication often hinder growth and service.

• Safeguarding intellectual property
  Enforcement of laws safeguarding intellectual property are often concerning even though they’re compatible with US and EU IP laws. Bureaucratic delays and lack of transparency are causes for inadequacy in protecting intellectual assets.

India needs support for scaling-up ventures and a change in culture to reduce the fear of failure. 

“Thus, encouraging new start-ups in differentiated, knowledge-based high-value business services compared to consumer services may improve the development path of developing economies like India, paving a path to its USD 5 trillion economy ambition”, writes Business Standard. 

Entrepreneurship is key to sustainable growth of the economy and creating opportunities for employment. Only a holistic approach to developing entrepreneurship can bring major changes to the socio-economic landscape of India. 

Over the last few years, startups and developers from around the world have been challenging Apple and Google over its app store policies. Epic Games, the developer of the popular game Fortnite, was the trailblazer who fired the first salvo with its anti-trust lawsuits in the US. The trigger: Epic being kicked out by Apple from their AppStore.

The India edition of the battle started with two independent but back-to-back actions by Google: the company’s decision to remove Paytm from its Playstore and the announcement to enforce its own billing system on developers. Following this, founders and developers in India were up in arms, knocking on the doors of the government to intervene.

The Competition Commission of India (CCI), at the time, found prima facie merit in the claim that Google was indulging in anti-competitive practises on its Playstore. The CCI also started an investigation into the matter.

While the CCI verdict is still awaited, the South Korean Assembly recently went on to enact groundbreaking legislation, one that bars app marketplace operators like Google and Apple from forcing developers to use their in-app payment systems.

This legislation has opened the way for app developers to themselves choose their payment option as well as for other payment providers to compete in the app economy. The bill also contains provisions for authorities to intervene in the case of any disputes, prevent retaliation or any actions that undermine fair competition.

The Heart of the Matter

At the heart of the disputes is the practice being adopted by both Apple and Google, whereby any and every app developer that sells digital goods on their stores is mandated to use only their in-app payment systems. On top of that, they have to pay a 30% fee, charged as commission on every digital good sale transaction that occurs on the app.

This policy and practice were challenged as being anti-competitive, one that ran foul of fair competition laws. The major violations were on two counts: first, that Google and Apple were forcing their own billing option on developers – thereby forcing out other payment companies from competing in the app economy and denying choice of payment processor to app developers, and second, that the two giants were unilaterally and arbitrarily charging a 30% commission for every dollar earned by developers through their apps.

The only payment option being extended, forced rather, was their own proprietary in-app purchasing system. On top of that, a 30% royalty tax is charged as commission on every transaction and dollar earned via their mobile apps. It didn’t matter whether the store even played a role in enabling discovery or that other payment providers were charging as low as 1-2% fee.

Developers who attempted to integrate an alternate payment method, or did as much as to communicate to their own customers the option of alternate payment methods, risked being kicked out of the store and losing their business.

A Welcome Development and Way Forward

The South Korean legislation sets the precedent of law, which can act as a guiding point for Indian regulators as well as for other countries and markets. The fact that it was a near-unanimous decision – with 180 of the 188 members voting in favour – makes it all the more significant.

Until now, the conversation was limited to advocacy – bringing attention to the policies of Apple and Google and how they affect large segments of app store beneficiaries. It has now sharply shifted towards legislation.

The issue has never really been about the 30% figure, but rather the arbitrary and high-handed manner in which rules were being enforced by both Apple and Google in the name of “policies”. Viewed from this perspective, nearly every notable app developer has been at the receiving end of their gatekeeper approach. This is also why enabling legislation is needed – to pave the way for fairer markets, fairer distribution of power and better enforcement of rights.

The need for legislation is all the more pertinent in India, given that we do not have strong anti-trust laws, and without enabling legislation, it would be near impossible for companies to pick up a battle with either of the Big Tech companies. Any legislative action will also force Apple and Google to adopt fairer policies.

Our work at ADIF was also focused on raising awareness around the issue and bringing the voice of the developers and startups to the policymakers. We will now look to re-engage the government on the matter and advocate for similar legislation in India as well.

This op-ed has also appeared in VC World.

Among the issues ADIF is working on, we are fighting Google and Apple on their app store monopolies.

The Alliance is now 450+ members strong. Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Over the last few years, startups and developers from around the world have been challenging Apple and Google over their app store policies. Epic Games, the developer of the popular game Fortnite, was the trailblazer who fired the first salvo with its anti-trust lawsuits in the US. The trigger: Epic being kicked out by Apple from their AppStore.

The India edition of the battle started with two independent but back-to-back actions by Google: the company’s decision to remove Paytm from its Playstore and the announcement to enforce its own billing system on developers. Following this, founders and developers in India were up in arms, knocking on the doors of the government to intervene.

The Competition Commission of India (CCI), at the time, found prima facie merit in the claim that Google was indulging in anti-competitive practises on its Playstore. The CCI also started an investigation into the matter.

While the CCI verdict is still awaited, the South Korean Assembly recently went on to enact groundbreaking legislation, one that bars app marketplace operators like Google and Apple from forcing developers to use their in-app payment systems.

This legislation has opened the way for app developers to themselves choose their payment option as well as for other payment providers to compete in the app economy. The bill also contains provisions for authorities to intervene in the case of any disputes, prevent retaliation or any actions that undermine fair competition.

The India influence and opportunity

Digital technology platforms like app stores are not country-specific but global. It’s extremely challenging and costly to investigate and incriminate Google, or any of the Big Tech companies for that matter, for alleged anti-competitive practices given the nature of tech platforms. This is compounded further given its global operations and the vast resources at the company’s disposal.

It is all the more problematic for nation-states and jurisdictions with limited resources to take on the tech giant, much less stand up to them or bring them to book. In January, Google threatened to pull out of Australia when faced with regulatory intervention.

What this also means is that India has a unique opportunity: Android enjoys a nearly 90% share of the smartphone market here. The country also accounts for nearly two-thirds of the Android developer and consumer base globally. It is also the market that is expected to bring in maximum growth over the next decade. All of this makes India a crucial market for both Google as well as the global smartphone industry.

Given the size and significance of the Indian market, any legislative action in our country will significantly influence and determine the rules governing the global app economy. What happens here will set the tone and discourse for smartphone markets all over the world.

In doing so, not only will we be providing leadership to the world, we would also be coming to the aid and rescue of developers across the globe and not just from within the county – a modern-day diplomatic and peacekeeping mission if you will.

If Google were to roll out a set of policies in India, say as a result of legislative action, given the global nature of app stores, it would be prudent for the company to release the same terms and benefits to all their developers and customers across the globe. It would also be expected of them.

The need for proactive legislation

Another story that is emerging – based on antitrust probes and verdicts from around the world – is that the challenge of anti-competitive practices by Google is not just limited to the app economy but manifests in almost every market the technology major is operating in: be it search, browser, advertising, smartphone OS, smart tv OS, keyword bidding, app economy or payments.

There have also been several instances where Google has been found guilty of anti-competitive misconduct across these markets with fines also being imposed – the most recent being the South Korean one wherein its antitrust regulator – the Korea Fair Trade Commission – fined the company $177 million for abusing market dominance.

The quantum of fines has ranged from a few millions to a few billions in some. While some of these fines would be the highest imposed by the antitrust regulartors in their respective jurisdictions, and while the amounts are also high enough for some of the major companies in their respective jurisdictions, for the behemoth in perspective, the fines, even the ones in few billions, tantamount to a light rap on the knuckle.

An indictment verdict, if at all, comes after a couple of years, and even when it does, the fines would not be substantial enough to make any dent in business fortunes. The playbook is as old as the Microsoft vs Sun battle from the early days of the internet. By the time both parties decided to settle, Microsoft had become a dominant player and had also garnered significantly more revenue than it put into defending its position in the legal challenge.

In our own backyard, we have the story of the valiant Murugavel of Bharatmatirmony taking on the might of Google and securing a favourable verdict from the CCI, and in the process expending energy and resources that should ideally have gone into building his company and brand. Fortunately for him, the story is that of a favourable verdict, a successful company and a heroic effort.

Not everyone will be that fortunate. Not everyone will have the liberty to take on such a heroic path – nor should everyone have to. This brings us to the point of proactive legislation.

Given Google’s presence and dominance in multiple key markets is tied to the health of the digital and internet economy (search, advertising, browser, smartphone & smartphone OS, app economy, payments etc), it becomes pertinent for the Indian Government, and its key regulatory institutions involved – MeiTY, CCI and RBI – to take note and proactively enact legislative actions for the benefit of our ecosystem and our startups.

In the long run, it is not ex post facto fines but proactive and progressive legislative efforts that will nurture and nourish a healthy, innovative and competitive ecosystem.

This article originally appeared on PCQuest.

Two-year-old Apna becomes one of the fastest Indian unicorns

The job platform for blue-collar workers has been valued at $1.1 billion after raising $100 million in a round led by Tiger Global. Among those who also participated in the round include Owl Ventures, Insight Partners, Sequoia Capital India, Maverick Ventures and GSV Ventures.

Founded by former Apple executive Nirmit Parikh in 2019, Apna is currently the in pre-revenue stage and does not make any revenue yet.

Gaming startup Mobile Premier League joins the unicorn club

The Esports and skill gaming app MPL has raised funds at a $2.3 billion valuation in Series E financing. The round was led by Legatum Capital with participation from existing investors including Sequoia, SIG, RTP Global, Go-Ventures, Moore Strategic Ventures, Play Ventures, Base Partners, Telstra Ventures, and Founders Circle Capital.

Founded in 2018 by Sai Srinivas and Shubh Malhotra, the Bengaluru-based startup offers over 70 games across several categories.

Pine Labs raised $315 million

The fintech company will close the round at $600 million, ascribing it a post-money valuation of nearly $3.5 billion.

The firm is considering a US IPO in the next 18 months as it looks to expand in both Indian as well as Southeast Asian markets.

Within a day, Ola Electric sold scooters worth Rs 600crore

The firm had announced in July that its electric scooter has received a record-breaking 100,000 reservations within the first 24 hours, making it the most pre-booked scooter in the world.

Byju’s acquired coding site Tynker for $200 million

The ed-tech unicorn is paying for the purchase in cash and stock. Tynker’s service, launched in 2013, offers classes and camps on coding, with some curriculum offered for free and premium content sold to schools for an average of $5,000 a year.

PharmEasy acquired healthcare supply chain start-up Aknamed

The parent company of the healthcare unicorn, API Holdings, has acquired a majority stake in Aknamed for an initial investment of Rs 308 crore. This will be the third acquisition by the company this year.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

GTM Buddy raised $2 million in seed round

The Hyderabad-based sales-tech SaaS startup’s seed round was led by Stellaris Venture Partners. Founded by Sreedhar Peddineni, Santa Thounaojam, Sundar Vellaichamy, and Chandramani Tiwary, the company is reimagining the sales enablement category and intends to be a category disruptor.

The capital will be used for enhancing product capabilities and for building out the go-to-market teams – across sales, marketing and customer success functions.

SaaS startup Amagi raised $100 million

The Bengaluru-based firm’s funding round was led by Accel, Avataar Ventures, Norwest Venture Partners, and Premji Invest. Founded in 2008 by Baskar Subramanian, Srinivasan KA, and Srividhya Srinivasan, the company has raised a total of $150 million from external investors to date.

Healthtech startup HexaHealth raised $4.5 million

The platform to digitise in-patient care has raised $4.5 million in seed funding led by Omidyar Network India and Chiratae Ventures, with participation from 3one4 Capital. The company has been co-founded by Vikas Chauhan, Ankur Gigras, and Dr Aman Priya Khanna.

The Gurugram-based company plans to use the capital to revolutionise the way Indians think of surgery and provide them with a seamless experience.

Byju’s raised ~$150 million from three investors

The new round of funds for the ed-tech company has come at a time when it is reportedly in talks with several investors to raise $1.5 billion at over $21 billion valuation.

Logistics startup Delhivery raised $76.4 million

Series I of the company was led by Addition. Delhivery had also announced the acquisition of Bengaluru-based Spoton Logistics for an undisclosed value. Spoton operates a pan India network covering more than 300 locations and over 22,000 pin codes.

Vahdam Teas raised $24 million in Series D

The latest funding round of the e-commerce startup that sells fresh teas was led by IIFL AMC’s Private Equity Fund. Existing backers along with a consortium of Sixth Sense Ventures affiliates, the Mankind Group Family Office, Kris Gopalkrishnan’s family office, Urmin Group and White Whale Ventures have also participated in the round.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Let’s look at the main issues that arise out of the imposition and enforcement of Google’s native billing system and the 30% Google commission.

High Fees: A developer making an app has to part with 30% of every digital sale they make – that is a steep fee. Most Indian digital startups don’t have such a high margin. In fact, many startups have negative margins as they are focused on market building and their hope is to start making money once they have gained market recognition and share.

Adding 30% to their cost will be disastrous. 

Impact on end-consumers: Companies will have to pass on this 30% increase in cost – either wholly or partly – to end-users. Indian customers are still not entirely open to paying for digital goods and services. Most are only now opening up to the idea of subscriptions and in-app purchases.

A 30% rise in cost could drive such hesitant customers away.

Impact on fledgling sectors: This 30% commission isn’t a one-time fee. This recurring fee is applied for every single transaction. This is not justified, especially at such a high rate.

For firms in spaces like ed-tech or for SaaS companies, where recurring payments are a necessity, such a steep fee will have an impact on their revenue model.

SMBs constitute the main customer base for startups in SaaS and a 30% increase in prices will mean higher costs for small businesses, who are just now beginning to embrace tech.

Every single sector and digital business that has an app and intends to monetise it will now be impacted by this steep recurring fee.

Considering how young and nascent these digital segments are, such heavy fees will have a chilling impact on innovation and growth.

Limited payment options: Google’s native billing system does not cover all payment options in India. For instance, RuPay cards are not covered, and net banking and UPI cannot be used for subscriptions.

This is limiting.

Monopolistic practices: Forcing the Google billing system is monopolistic and does not foster competition. Other billing systems and providers – particularly, Indian startups – will be adversely impacted. This is not good for companies and customers, especially when these billing services charge only around 2% as a service fee per transaction.

India was the most significant contributor to Google Play downloads during the second quarter of 2021. The number of Google Play app downloads in India has increased from 6.7 billion in Q2 2020 to 7.23 billion in Q2 2021, representing an appreciable increase of 7.9% YoY (Source: Sensor Tower).

Google is heavily entrenched within the tech and digital ecosystem in India as its platform is the de facto gatekeeper to much of the internet for most Indians. In India, Android has 95% market share and most app downloads happen on Google Play.

This is a clear abuse of its dominant position.

Suppression of competition: By insisting on the usage of only its billing system, Google is ensuring it has an unfair advantage over other payment and billing systems as it is is the distributor of apps and the owner of the billing system.

While Google claims that it allows apps to be sideloaded, unlike Apple, the fact is that sideloading needs a setting change on the phone and it is shown as an unofficial install, thus putting off many Android mobile phone users.

A sideloaded install is also cumbersome. Plus, most customers are wary of doing such an install, especially of lesser-known apps. While there are other app stores on Android, none of them has the kind of reach that the Play Store does.

It is effectively creating a walled garden.

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The third week of July marked an epochal moment – Zomato’s IPO and Paytm's filings of its draft red herring prospectus have signalled the coming of age of the Indian startup ecosystem. The multiplier effect – both financial and emotional – of these two events and their impact on our Indian psyche will be immense. If we are looking for a moment in time to mark the before and after of two distinct phases of growth of the startup sector, it is that week.

Two independent and unrelated industry events also occurred recently: the Reserve Bank of India (RBI) barred Mastercard from adding any new customers for not complying with data storage regulations and Google extending the deadline for phasing out third-party cookies on its Chrome browser.  These four developments have laid bare the opportunities and challenges ahead of us. While the two landmark IPOs foretell the promise of the sector, the RBI-Mastercard tussle points to the policy challenges for the nascent industry and the Google Chrome-third-party cookies development portent the threat of monopolisation powers of Big Tech. Exciting times lie ahead – ones that bring along their own share of opportunities and unique challenges. 

What the IPOs herald

The Indian startup ecosystem is at a cusp and is steadily entering into the next phase of growth. What we as an ecosystem have managed to achieve in the first phase – spanning 12-15 years – is nothing short of phenomenal. The Zomato & Paytm IPOs will usher in the next wave of talent and capital into the sector. What we are witnessing is a genuine inflection point in terms of wealth creation by first-generation entrepreneurs in the country. It further speaks to the aspirational Indian and will trigger the next wave of entrepreneurship. What we are also seeing is the ascent of startups as an asset class. The aspirational Indian now wants to invest in startups rather than in land or gold. What we can expect going forward is more character, more audacious bets being made by founders and founder angels, more India-first products and services, and more global brands from the country. The sector is poised to spearhead the transition of our country from services to a wealth-creation economy.

The big shift

The hallmark of the startup sector is digitisation and democratisation, which have resulted in upending traditional ways of doing business. Nowhere is it more visible than in how we discover, produce and consume content. TikTok and Instagram influencers are replacing the traditional media in the discovery of everything from news to information to entertainment. The impact of this shift on both business and society will be monumental. The pandemic will drive this digital shift further and turn out to be the biggest democratization force that we are to witness. While the RBI-Mastercard tussle plays out, let it be noted that large swathes of our population from across the country – those deemed unworthy by credit card companies – are joining and participating in the digital economy in droves. The majority of them would have never visited a bank and nearly all of them would never want to visit one in the future. Credit cards are a relic of a different era and in today’s digital-first world, what needs to be understood and appreciated is that the paradigm has shifted. 

The policy challenge 

For the startup sector to deliver the riches, it's imperative that access remains fair, the internet remains free and markets remain competitive. On the other hand – as can be observed in the case of Chrome and third-party cookies – we are facing monopolisation or gatekeeping practices by some of the dominant players. At about 10-15 years, the startup sector is still nascent and policies are yet to catch up. It is the choices that we make as a market and as a country that will set the stage for the course forward, and will also end up serving as a blueprint for nations around the world as everyone transitions into a digital-first economy and society. This crucial time calls for imagination and leadership.

This article originally appeared on Business World.

Factors.AI raised $2 million

B2B SaaS startup Factors.AI’s seed funding was co-led by Elevation Partners and Emergent Ventures.

Founded in March 2020 by Aravind Murthy, Praveen Das, and Srikrishna Swaminathan, the US and Bengaluru-based startup mines customer data for insights through its proprietary AI engine, resulting in better campaign decisions and amplified ROI for marketing teams.

The funds will be used for hiring additional talent.

Khatabook raised $100 million

The Kirana-tech startup’s Series C was led by US-based venture capital firms Tribe Capital and Moore Strategic Ventures. The latest round also saw participation from Alkeon Capital and existing investors B Capital Group, Sequoia Capital, Tencent, RTP Global, Unilever Ventures, and Better Capital.

The company also plans to buy back $10 million worth of employee stock ownership plan (ESOP) shares.

Edtech firm camp K12 raised $12 million

The Series A funding round of the edtech startup was co-led by Matrix Partners India and Elevation Capital.

The company is focused on building a global online school for 21st-century skills, and will use the capital to hire leaders across functions, hyperscale operations and marketing, and to build a world-class engineering and product team.

TartanSense raised $5 million

The agritech startup’s Series A round was led by FMC Ventures and Omnivore and saw participation from Blume Ventures. The company has raised a total of $7 million to date.

Founded in 2015 by Jaisimha Rao, the startup builds small agricultural robots, equipped with artificial intelligence-assisted computer vision, to help small farms reduce their expenditures and improve their incomes.

Curefoods raised $13 million

The Series A round of EatFit parent was led by Iron Pillar along with participation from Nordstar and Binny Bansal. 

SuperGaming raised $5.5 million

The game development company’s Series A round was led by Skycatcher, and included AET Fund (the venture arm of Akatsuki), BAce Capital, Dream Incubator, 1Up Ventures, and Monish Darda.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

AgNext Technologies raised $21 million in Series A

The Chandigarh-based agritech startup has raised a Series A round led by Alpha Wave Incubation. Existing investors Omnivore and Kalaari Capital also participated in the latest funding round.

AgNext, which was founded in 2016, plans to use the capital to enter into newer commodities and international markets such as the Middle East, Europe, and South Asia.

Navia Life Care raised $1 million

As part of its Series A funding, the Delhi-based digital health startup has raised $1 million led by Anicut Angel Fund with participation from 9Unicorns.

The company plans to use the funds for technology, business development, product innovation and development, strategic hiring, and expansion across all healthcare hubs of India, metro cities, along with tier-II and III cities.

Stock investment platform Smallcase has raised $40 million

The Series C round was led by Faering Capital and will be used to launch better investment products for the retail investor and to create additional value for smallcase’s partners – Zerodha, Upstox, and HDFC Ban.

Founded in 2015, the startup creates direct indexing and model portfolios of stocks and ETFs.

Smart Express raised a seed round

The Mumbai-headquartered Indian logistics startup has raised Rs 100 crore led by IIFL India Private Equity Fund and Smiti Holding & Trading Company.

Founded in 2018 by Yogesh Dhingra, the startup helps its institutional clients with logistical support through its services.

Gaming platform Zupee raised $30 million

Founded by Dilsher Singh Malhi and Siddhant Saurabh, Zupee is a mobile-based app which enables its users to participate in quiz tournaments across a range of topics and win real money.

The Series B round of the Gurugram-based startup was led by Silicon Valley-based WestCap Group and Tomales Bay Capital. 

Hashnode raised $6.7 million

Developer blogging community platform, Hashnode has raised a Series A round led by Salesforce Ventures with participation from Sierra Ventures, Sequoia Capital India’s Surge and Accel Partner as well as a clutch of angels.

Hashnode is a free content creation platform and community that allows users to publish articles on their own domain and helps them stay connected with a growing developer community.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Postman becomes India’s most valued SaaS unicorn

The company this week raised $225 million at a valuation of $5.6 billion – becoming the country’s highest-valued software-as-a-service (SaaS) platform. The capital infusion comes a little over a year after Postman entered the unicorn club with a valuation of $2 billion.

The Series D round of the application programme interface (API) development platform was led by venture capital firm Insight Partners.

Cars24 set to raise $350 million

The latest funding round would value the company at around $1.8 billion. Founded by Vikram Chopra, Mehul Agrawal, Ruchit Agarwal, and Gajendra Jangid in 2015, Cars24 entered the unicorn club in November 2020, when it raised $200 million.

Emeritus raises a $650-million funding round

The investment into the edtech company was led by Accel and SoftBank Vision Fund 2 and values the company at $3.2 billion – quadrupling its Series D valuation from last August.

The capital would help the startup create new products and industry verticals, expand its business serving governments and enterprises, double down on new geographies and fund acquisitions.

Byju's set to raise $1.5 billion

The fundraising is expected to close within a month’s time. The edtech company is India’s most valuable startup, and the new expected valuation of $21 billion is a 27% jump from the $16.5 billion valuation it had achieved after the June funding round.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Klub raised $20 million in seed funding

The seed round of Klub, a fintech startup that provides revenue-based financing, was led by 9Unicorns and Sequoia Capital India’s accelerator programme Surge.

The 2019 company was started by Ishita Verma and Anurakt Jain and offers flexible growth capital ranging from Rs 2 lakh to Rs 30 crore to digital brands.

Rapido raised $52 million in latest funding round

The bike taxi platform’s latest funding round came from Shell Ventures, Yamaha, Kunal Shah CRED Founder, Amarjit Singh Batra CEO Spotify India, and Positive Moves Consulting.

Ultrahuman raised $17.5 million in Series B

The metabolic fitness startup’s latest funding round came from Alpha Wave Incubation (AWI), Steadview Capital, Nexus Venture Partners, Blume Ventures and Utsav Somani’s iSeed fund.

With this, the company has raised a total of $25 million in funding to date.

Eruditus raised $650 million

The ed-tech startup’s latest funding round was led by Accel US and Japan’s SoftBank Vision Fund II. With this capital infusion, the company’s valuation increased to $3.2 billion.

Pickrr raised $12 million in Series B

The SaaS-based logistics startup’s Series B was led by IIFL, Amicus Capital, and Ananta Capital.

Existing investors Omidyar Network India and Guild Capital also participated in this round.

Credgenics raised $25 million in Series A

With the funding round, the SaaS-based end-to-end debt resolution and legal automation platform’s valuation increased to $100 million.

The round was led by Westbridge Capital, Accel Partners, and Tanglin Venture Partner and also saw participation from Ashneer Grover, founder and CEO of BharatPe, Abhimanyu Munjal, MD and CEO of Hero Fincorp Group, Karthik Bhat, founder of Force Ventures, and Kushal and Gautam, founders of Fareye.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Google earlier announced that it will phase out third-party cookies from its web browser. Moreover, it will not build alternative identifiers to track individuals.

While it was anticipated that Google Chrome will be removing third-party cookies by next year, on June 24, the company announced an updated timeline where it delayed plans to phase out third-party cookies until 2023.

On a blog titled ‘An updated timeline for Privacy Sandbox milestones,’ Vinay Goel, privacy engineering director for Chrome, cited numerous reasons for the delay. But the foremost reason for the new timeline is Chrome’s decision to end the initial trial of its proposed alternative for third-party cookies, Federated Learning of Cohorts (FLoC). It is being developed as a part of Google's Privacy Sandbox initiative.

What is FLoC?

FLoC is a type of web tracking that groups people into “cohorts” based on their browsing history for interest-based advertising.

The algorithm analyses users' online activity within the browser, and generates a "cohort ID" using the SimHash algorithm to group a given user with other users who access similar content.

Each cohort contains several thousand users in order to make identifying individual users more difficult, and cohorts are updated weekly. Websites are then able to access the cohort ID using an API and determine what advertisements to serve.

Google does not label cohorts based on interest beyond grouping users and assigning an ID, so advertisers need to determine the user types of each cohort on their own.

While promising, FLoC as an alternative has come under criticism and scrutiny. 

Opposition to FLoC

The technology has been criticised on privacy grounds by groups including the Electronic Frontier Foundation and DuckDuckGo, and has been described as anti-competitive. It has generated an antitrust response in multiple countries as well as questions about General Data Protection Regulation compliance.

Aside from the security concerns related to FLoC, given the dominance of Chrome browser, the real issue is that Google is using its dominance in the browser market to extend dominance in the internet ad market as well as a result of the combined effect of the moves (phasing out third party cookies + FLoC).

There is the added risk of google turning into a gatekeeper.

Our point of view at ADIF

It’s heartening to see that conversations and explorations are happening around finding better alternatives to third-party cookies, ones that respect both user’s need for privacy and personalisation.

FLoC could be one of the solutions in that direction – the litmus test would be whether or not such solutions pass the GDPR test.

But if FLoC gets implemented unilaterally by Google as a system, it would pose its own set of challenges. Google already has a monopoly on search and browser through Chrome, and with FLoC, there’s a danger of Google becoming the gatekeeper and that would give it more market dominance, which would put other players in the internet economy at a disadvantage. That’s a major area of concern for us.

The choice of third-party cookies or FLoC should thus be left to marketplaces and not exclusively to Google.

Should you have any thoughts on Google’s FLoC, please share in the comments section or write to Tom Thomas, who heads Policy and Research at ADIF, at tom@adif.in.

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Mayank Pratap Singh is nothing if not persistent. When the co-founder and CEO of Supersourcing – which helps companies hire remote engineers – takes on a challenge, he puts all his focus and attention on it.

“Whatever you do, if you’re persistent enough, sooner or later you will achieve it,” Mayank said. This belief – and his persistent nature – are what helped him achieve his dream of having Vijay Shekhar Sharma as an investor in his company.

The Paytm founder, Mayank said, is the person he most admires and looks up to in the Indian startup ecosystem. Around 2013-14, when he first attempted to get in touch with him, Mayank and Aditi Chaurasia were running a platform called MotorBabu – an app for automobile servicing – in Indore. He wrote in his email to VSS: ‘Dear Vijay, I want to meet you.’ Upon not getting a response, the young entrepreneur tried again, this time with slightly formal wording, ‘Dear sir, I want to meet you.’

The second email also went unanswered, so Mayank changed strategies. This time, he wrote the full text in Hindi, hoping that it would elicit a response. Scores of emails and nearly three years later when he had still not heard back from the Paytm founder, Mayank was convinced that his account was marked as spam.

At the same time, he noticed that Vijay Shekhar Sharma was fairly active on Twitter. So, staying true to his persistent nature, Mayank took a whiteboard and wrote on it with a red marker:

“Dear Vijay sir (PayTm), please revert to my mail. It’s been more than 30 days and #12th reminder. – Team MotorBabu”

Dressed in black t-shirts with the company logo printed in yellow on them, Mayank along with Aditi and four other team members took a picture with the whiteboard – all looking into the camera solemn-faced. Mayank then tweeted the image with the text: “Dear @vijayshekhar. I want to meet you, waiting for your reply :(.”

And it worked!

Just hours later, Paytm’s founder tweeted back, and they were able to schedule a meeting.

It took him years, but building and nurturing this one contact with his mentor helped him and his IT outsourcing company secure seed funding of Rs 1.5 crore earlier this year. Investors in the one-year-old venture include Vijay Shekhar Sharma, Ritesh Malik and Nikhil Sharma.

The journey

Mayank and Aditi started the company in 2020 to attempt to solve the demand and supply problem in the IT outsourcing industry. Supersourcing is a next-generation platform built to help companies find the best companies in tech to work with.

“We aim to become Alibaba for IT agencies,” Mayank said.

There’s a two-sided problem in the industry, he explained. One, when someone posts a requirement for an outsourcing partner on LinkedIn, for example, 100s of people respond claiming large teams in foreign locations – when, in fact, they are all India based and not necessarily verified. “To solve for that, on the platform we are curating verified and relevant tech partners who are capable of doing work in a specific industry,” he added.

On the other side, the big problem Supersourcing is solving is getting quality engineers who may be struggling to get hired. “We’re a two-sided marketplace on a mission to digitise the outsourcing industry,” he said. On one side, they have an agency that provides engineers, and on the other, there are funded companies or entrepreneurs who are looking for product experts for their team. “We have helped a lot of companies fulfil their requirements and grow faster,” Mayank added.

This is not Mayank’s first startup. In fact, he said he’s had three failed ventures before. After multiple failures, Mayank knew the only way to learn the in’s and out’s of the business was by working with a startup – even if it meant compromising on pay. So he did just that while living in Bengaluru: learning how a startup goes from the idea stage to becoming a successful company.

Seven years ago, he and Aditi started an IT services company in Indore called EngineerBabu which now has over 200 employees. Supersourcing, owned by EngineerBabu, has a team size of about 12. The company is now in the process of raising another round.

Advice for young entrepreneurs

Two things are crucial for any entrepreneur, according to Mayank. The first is clear intent and the second, being a consistent learner.

“No matter where you’re learning from – books, YouTube, etc – it’s important to keep learning every day,” he said, adding: “Before reaching out to someone and asking for their time, it’s better to do your own homework: everything is available on the internet now.”

Mayank also advises being loyal to one’s customers and employees.

“If you have a good heart, they people might leave your company but never leave you – and even end up coming back. When there is trust, your company will grow rapidly,” Mayank said.

Digital-first ecosystem

Earlier, the problem for a lot of businesses was that tech wasn't something they were looking at as a solution. Everybody was content with local customers, but now, due to the pandemic, things are changing. Everything has become digital.

“If you don't have a website or app right now, I think doing business would be very, very tough,” Mayank said.

India, he said, is changing rapidly and he thus sees great opportunities for those who are looking to grow. If a non-tech entrepreneur, for example, wanted to build an app or website and don’t have much knowledge about it, then theirs is the right company to tap.

“We don’t take commission and have ended up helping a lot of people,” Mayank said. “We simply wanted to do our part.”

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

CoinDCX raised $90 million

The Series C round of the cryptocurrency exchange – led by co-founders Sumit Gupta and Neeraj Khandelwal – was led by Facebook co-founder Eduardo Saverin’s B Capital.

The latest round valued the company at $1.1 billion, making it a part of the unicorn club. CoinDCX is India’s first crypto company to become a unicorn.

Log 9 materials raised $8.5 million

The advanced battery tech startup’s funding round was led by Amara Raja Batteries. Existing investors – Exfinity Ventures and Sequoia Capital India's Surge Programme – along with a group of new investors were also a part of the Series A+ funding round.

The funds will be put towards the expansion of production capacity and business development efforts of the company’s latest innovation: Rapid Charging Battery technology.

FlashPrep raised $500,000 in pre-seed funding

The funding round in the Bengaluru-based ed-tech startup was led by Venture Highway and saw participation from Better Capital, First Cheque and a few angel investors.

FlashPrep – a mobile-based platform that offers school curriculum-related learning solutions – was started in October 2020 by Dhiresh Nagwani and Ashwini Dhekane.

UpGrad raised $185 million to become a unicorn

Singapore state investor Temasek, the World Bank Group’s International Finance Corporation, and investment firm IIFL participated in a series of funding rounds in the ed-tech startup that raised the company’s valuation to $1.2 billion.

The Mumbai-based startup was founded by Phalgun Kompalli, Mayank Kumar, and Ronnie Screwvala.

Neobank Jupiter raised $44 million

The Series B round was led by Brazil’s Nubank and also saw participation from Global Founders Capital, Sequoia Capital India, and Matrix Partners India.

Jupiter was founded in 2019 by Jitendra Gupta and its total funding to date stands at $69 million

Mindtickle raised $100 million to become a unicorn

The software-as-a-service (SaaS) startup turned a unicorn last week when the latest funding round of $100 million led by SoftBank Group Corp increased its valuation to $1.2 billion.

The company has raised $281 million to date.

Zeni raised $ 34 million from Elevation Capital, others

The Series B round of the platform that provides bookkeeping and accounting service for startups was led by Elevation Capital with participation from new investors Think Investments and Neeraj Arora.

With this, the firm has raised $47.5 million so far. The latest round of capital will be used to bring the company’s intelligent bookkeeping and accounting platform and services to more customers by investing in its team in the United States and India.

BharatPe becomes a unicorn with $370 million in funding

The latest funding round of $370 million – led by Tiger Global Management –increased the company’s valuation to $2.85 billion.

Existing investors Coatue Management, Insight Partners, Sequoia Growth, Ribbit Capital and Amplo have also participated in the latest round.

StockGro raised $5 million in pre-Series A

The funding round in the Bengaluru-based social investment startup was led by Roots Ventures and Velo Partners. The capital will be used towards growing the company’s user base, hiring tech talent, and building new features.

The startup was founded last January by former venture capitalist Ajay Lakhotia.

Yellow.ai raises $78.15 million

The Series C round of the company, which aims to automate total customer experience, was led by WestBridge Capital, Sapphire Ventures, and Salesforce Ventures.

The capital will be used to fund the startup’s growth and global expansion plans and hire talent across Southeast Asia, Latin America, the US, and India.

Infra.Market raised $125million

The funding, part of its Series D round led by Tiger Global, valued the company at $2.5 billion.

The constructions material marketplace raised $268.5 million in funding till now from investors, including Evolvence India, Sistema Asia, Accel Partners, Nexus VP, and Trifecta Capital Advisors.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Here’s the top news

A win for Amazon in the Supreme Court. India’s apex court on Friday put on hold the proposed Rs 24,713-crore merger deal between Future Retail Limited and Reliance Retail, ruling in favour of Amazon.

PM Modi launched a new payment system. e-RUPI – the Indian government's digital payment solution meant to ensure delivery of welfare services – is set to go live at a Mumbai Covid vaccination centre.

Policybazaar filed DRHP for IPO. The online insurance aggregator’s initial public offering (IPO) will comprise a fresh issue of Rs 3,750 crore and an offer for sale of Rs 2,267.5 crore.

Delhivery to acquire Spoton Logistics. The company has inked a $200-million deal to acquire a 100% stake in the rival logistics player.

BharatPe became a unicorn. The latest funding round of $370 million – led by Tiger Global Management –increased the company’s valuation to $2.85 billion.

BYJU’s acquired AR startup Whodat. The deal, made for an undisclosed amount, will help the company accelerate their product roadmap to provide immersive educational products across product lines.

ixigo became a public limited company… This marks the first step of the online travel company’s journey toward an IPO.

…and acquired Hyderabad-based AbhiBus. Acquisition of the bus ticketing and aggregation platform was made for a mix of cash and ixigo stock as consideration.

Indian govt may speak to stakeholders on e-commerce rules. Companies are hoping for certain clauses to be diluted.

Zomato incorporated a payment subsidiary. Zomato Payments Private Limited (ZPPL) has been incorporated as the foodtech unicorn’s payment and technology service.

In the Spotlight: Nykaa – India's first woman-led unicorn is set to go public

In a historic move, ex-banker Falguni Nayar’s firm has filed its draft papers for an initial public offering (IPO) and the unicorn is looking to sell about 10% of the equity, raising approximately $500 million.

The IPO comprises a fresh issue of equity shares worth Rs 525 crore and an offer for sale of 4,31,11,670 equity shares by the selling shareholders.

The company will use these funds to invest in certain subsidiaries – FSN Brands or Nykaa Fashion – set up new retail stores, for capital expenditure, repayment of the debt, and enhance the visibility and awareness of its brands.

Read the unicorn’s incredible journey here.

Unicorn news

Mindtickle became a unicorn. The tech startup that provides sales readiness technology has raised an additional $100 million in Series E led by SoftBank Vision Fund 2 at a valuation of $1.2 billion – making it a part of the unicorn club.

BharatPe became a unicorn and named a new CEO. The financial payments startup this week raised $370 million in its Series E round led by Tiger Global. With the new round, the company’s valuation increased to $2.85 billion. The newly-minted unicorn has also appointed Suhail Sameer as its new CEO.

BigBasket’s co-founder exited the company. Abhinay Choudhari is now planning to enter the online laundry business. In his parting letter to the staff, Choudhari mentioned that he wishes to build another business from scratch.

Funding updates

Apnaklub raised $3.5 million. With the latest funding from Sequoia Capital India’s Surge, the company’s total capital raised is at $5 million.

Unacademy raised $440 million in Series H. The six-year-old startup has raised $860 million to date and with the latest round, its valuation increased to $3.44 billion.

Minimalist raised $15 million. The Series A funding round was led by Sequoia Capital India and saw participation from Unilever Ventures.

SP Robotic Works raised $3 million. The Series A funding round of the AI-based edutainment startup was led by Mount Judi India Growth Fund.

Crypto platform Vauld raised $25 million. The Series A funding round of Vauld – a crypto platform for financial products – was led by PayPal founder Peter Thiel's Valar Ventures.

Easy raised $15 million in Series A. The mortgage finance startup provides fully insured home loans to protect consumers against vulnerabilities.

Flam raised $3.5 million. The AR-powered social media networking platform’s seed funding round was led by Silicon Valley Quad and Inventus Capital Partners SV and saw participation from 9Unicorns, Kwaish Ventures, and prominent angels.

Tweet of the week

That’s all for this week, thank you for reading. Hope you have a great weekend!

Regards,
Amanat Khullar
Content & Editorial, ADIF

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Mindtickle became a unicorn

The tech startup that provides sales readiness technology has raised an additional $100 million in Series E led by SoftBank Vision Fund 2 at a valuation of $1.2 billion – making it a part of the unicorn club.

The company was founded in 2011 by Krishna Depura, Deepak Diwakar, and Nishant Mungali.

BharatPe became a unicorn and named a new CEO

The financial payments startup this week raised $370 million in its Series E round led by Tiger Global. With the new round, the company’s valuation increased to $2.85 billion.

The newly-minted unicorn has also appointed Suhail Sameer as its new CEO.

BigBasket’s co-founder exited the company

Abhinay Choudhari is now planning to enter the online laundry business. In his parting letter to the staff, Choudhari mentioned that he wishes to build another business from scratch.

Nykaa filed for an IPO

The e-commerce company has filed its draft red herring prospectus with the Securities and Exchange Board (SEBI) for an initial public offering (IPO).

Falguni Nayar, its founder, as well as her family, will continue to own a majority stake in the company post the IPO.

Policybazaar filed DRHP for IPO

The online insurance aggregator’s initial public offering (IPO) will comprise a fresh issue of Rs 3,750 crore and an offer for sale of Rs 2,267.5 crore.

Unacademy raised $440million in Series H funding

The six-year-old startup has raised $860 million to date and with the latest round, its valuation increased to $3.44 billion.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to transform India’s startup ecosystem into the best in the world.

Mumbai-headquartered e-commerce company Nykaa is all set to go public. In a historic move, ex-banker Falguni Nayar’s firm has filed its draft papers for an initial public offering (IPO) and the unicorn is looking to sell about 10% of the equity, raising approximately $500 million.

The IPO could value Nayar’s startup at over $4 billion. This is the unicorn’s incredible journey.

How it began

When Nayar – a former managing director at Kotak Mahindra Capital Company – was nearing 50, she decided to change gears, reinvent herself and become an entrepreneur. She wanted to dedicate at least 10-15 years of her working life towards something greater.

The widespread interest in the makeup and beauty industry at the time made her venture into the online cosmetics industry.

“A lot of entrepreneurs believe in something ahead of the times, and they build it out against popular belief,” Nayar said during an interview with ET Now. “I wanted to do the same.”

With that vision, she went on to start Nykaa – launched as an e-commerce portal with a range of beauty and wellness products – in 2012.

The journey

From pretty much the first day of its launch, Nykaa began receiving 20 orders a day, which slowly grew to 100 and then 500. Today, the company clocks 13,00,000+ orders a month with 55,00,000 monthly visits globally.

In 2015, the company realised the need for physical stores and thus adopted an online-offline approach. Now it is one-stop online cosmetics and beauty store and also has over 70 offline stores in 38 cities in India.

The movement towards physical stores, according to a Techstory report, has brought about a change in how people perceive the brand. Moreover, this has enabled the brand to reach a group of people they were never able to reach otherwise.

In 2018, Nykaa decided to expand, launching its fashion vertical and then a men’s grooming platform a year later. “Consumer adoption of beauty has really gone through the roof,” Nayar said in a 2019 interview. “It’s not a push strategy – it’s more about educating the customer and the customer wanting it.”

Funding rounds

The company raised $3.4 million in Series A from private investors in July 2014 followed by a Series B round of another $9.5 million in October 2015 led by the TVS Shriram Growth Fund.

Its Series C came a year later, in September 2016, when the e-commerce platform raised $13.5 million. Series D of $24 million was closed in May 2018.

In September of the same year, Mumbai-based PE firm Lighthouse invested $15.7 million.

In March 2019, the online fashion and beauty products retailer raised another $14.4 million from private equity firm TPG Growth Capital post which its valuation rose to $724 million.

Turning a unicorn

During the Covid-19 pandemic, when companies all over had taken a hit due to the imposed lockdowns, Nykaa overnight made a pivot towards being an essentials-only online store.

For that, the company made use of its physical locations to do hyperlocal delivery. With this move, the company also launched a new category of hygiene essentials: hand wash, sanitiser, masks, and so on.

“We would match the products ordered online with what was available at the store to deliver to the nearest pin code,” Nayar told Fortune India during an interview.

In May 2020, the company raised $8.9 million from Steadview Capital at a valuation of $1.2 billion, thus turning into a unicorn amid some difficult times.

Then, in November 2020, Nykaa raised funds from the Boston-based asset management company Fidelity Management & Research Company and through the investment, some of the company’s employees also sold their ESOPs.

IPO dreams

Nykaa on Tuesday (August 3) filed its draft red herring prospectus with SEBI for an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares worth Rs 525 crore and an offer for sale of 4,31,11,670 equity shares by the selling shareholders.

The company will use these funds to invest in certain subsidiaries – FSN Brands or Nykaa Fashion – set up new retail stores, for capital expenditure, repayment of the debt, and enhance the visibility and awareness of its brands.

Amanat Khullar oversees content and editorial at ADIF.

Join the Alliance of Digital India to become a part of our journey to grow India’s startup ecosystem.

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Amanat Khullar is the Content and Editorial Manager at ADIF.

Join the Alliance of Digital India to become a part of our journey to grow India’s startup ecosystem.