Tag: News

Jio Financial Services Ltd: The $19 Billion Valuation Puzzle

September 10, 2023

Reliance Industries Ltd. recently spun off its financial services segment into a separate company, Jio Financial Services Ltd. This move, intended to safeguard the company’s inclusion in major global indices, resulted in an eye-catching valuation of over $19 billion. However, the market’s exuberance in assigning such a high valuation to a company shrouded in mystery raises several questions. In this article, we delve into the reasons behind Jio Financial Services Ltd.’s lofty valuation and explore whether the market is putting the cart before the horse.

One of the most puzzling aspects of Jio Financial Services Ltd.’s valuation is the lack of transparency regarding its business operations. The company’s information memorandum filed with stock exchanges provides little insight into the nature of its activities. Despite this opacity, every brokerage seems to agree on a substantial valuation ranging from $19 billion to $22 billion, based primarily on its perceived future potential. This optimism stems from the strong backing of Reliance Industries Ltd. and a well-established board and management team, led by the renowned financial expert, KV Kamath, former Chairman of ICICI Bank Ltd.

Jio Financial Services Ltd.’s subsidiaries hint at a diverse range of financial services it plans to enter. These include retail lending, asset management in collaboration with BlackRock, insurance (both life and non-life), and digital payments. However, the lack of a clear roadmap and detailed business plans leaves both investors and analysts in the dark.

Entering the financial services sector, especially lending and insurance, is not without its challenges. Jio Financial Services Ltd. is expected to commence operations with consumer durable and merchant lending, working capital, and small-ticket business loans for SMEs. Scaling up in this space can be arduous, as SMEs often require a wide array of services, from bank guarantees to overdrafts. Moreover, the company’s current size and employee count are minuscule compared to its competitors in the industry. While it boasts a substantial consolidated net worth, a significant portion is tied up in its stake in Reliance Industries Ltd., limiting its lending capacity.

In its asset management venture, Jio Financial Services Ltd. and BlackRock have pledged to invest $150 million each. However, the mutual fund business is fiercely competitive, and building a distribution network is no walk in the park. The payment bank partnership with SBI and account aggregator business face challenges too, with regulatory restrictions and a lack of a clear business model.

The insurance sector is a long-term play that typically takes at least a decade to achieve meaningful scale. Unless Jio Financial Services Ltd. acquires an existing insurer, it will face an uphill battle in this space. Insurance brokerage is highly competitive, especially with bancassurance channels holding an edge. The question that looms large is whether the market’s eagerness to assign such a high valuation to Jio Financial Services Ltd. is justified. The lack of transparency regarding the company’s business operations and strategy is a red flag. Investors and analysts are left to speculate about the company’s future prospects, which is far from ideal. While the Reliance pedigree and strong leadership are undeniable assets, they cannot compensate for the absence of a clear business plan.

In conclusion, the $19-22 billion valuation of Jio Financial Services Ltd. appears to be a bet on its potential rather than its current reality. As the company gradually reveals its plans and executes its strategy, the market will have a clearer picture of whether this valuation is justified or if it’s indeed putting the cart before the horse. Transparency and communication from the company’s management will be key to reassuring investors and justifying the market’s high expectations.

Startup Funding Summary

IndoSpace, Mumbai-based logistics company, has raised $150 Mn in a funding from Qatar Investment Authority and Grosvenor’s Diversified Property Investments – Read More

Ola Electric, Bangalore-based electric mobility startup, has raised $140 Mn in a funding from Temasek – Read More

Ather Energy, Bangalore-based electric mobility startup, has raised $108 Mn in a funding from Hero MotoCorp and GIC – Read More

Pepperfry, Mumbai-based furniture marketplace, has raised $23 Mn in a funding from HNIs – Read More

Captain Fresh, Bangalore-based seafood supplier, has raised $20 Mn in Series C funding from SBI Investment, Evolvence Capital, Accel, Matrix Partners India, Prosus Ventures and Tiger Global – Read More

M&A Snippets

Delhi-based F & B company Good To Go has acquired Chennai-based F & B startup TenderCuts for an undisclosed amount – Read More

Empowering Credit Access: RBI’s Public Tech Platform Redefines Lending

September 4, 2023

As of August 17, 2023, the Reserve Bank of India (RBI) initiated a transformative pilot project. Through the launch of a Public Tech Platform, the lending landscape may undergo a paradigm shift. This new approach may streamline credit access, promising efficiency and accessibility for borrowers and lenders alike.

The Public Tech Platform, meticulously crafted by the RBI’s Innovation Hub, is an all-encompassing digital ecosystem. This platform, designed with an open architecture and universal APIs, invited participation from financial institutions across the spectrum. Traditional banks and innovative fintech companies could seamlessly integrate through a ‘plug and play’ model, bolstered by the potential of open APIs.

Mr. Souparno Bagchi, COO of Balancehero India, lauded the platform’s prowess. Open APIs facilitate the integration of essential financial data, enhancing operational efficiency. By centralizing borrower data on a unified platform, the credit evaluation process can be streamlined. A collaborative effort involving banks, NBFCs, fintech entities, and startups, this alignment is likely to foster seamless credit solutions, promoting innovation, cost reduction, and heightened efficiency.

The complex web of data required for credit approval posed a significant challenge in lending. Gathering information from diverse sources led to delays and inefficiencies. The RBI responded with the Public Tech Platform, offering instant digital access to requisite information. By consolidating data sources, the platform aimed to expedite loan processing and underwriting, enabling enhanced credit accessibility across segments.

A core impact of the Public Tech Platform was the potential to reduce operational costs and expedite loan processing times. Centralized data exchange promised lowered lending costs and faster approvals, reshaping the credit landscape and extending accessibility to a wider audience. Initial pilot products encompassed Kisan Credit Card loans, dairy loans, uncollateralized MSME loans, personal loans, and home loans through partnering banks.

Beyond loan processing, the platform aimed for comprehensive integration. It facilitated Aadhaar e-KYC, state government land records, satellite data, PAN validation, transliteration, and more. This holistic approach forged a financial ecosystem.

The RBI showcased the platform’s potential at the G20 meet, highlighting the Digital Kisan Credit Card and Digital Dairy Loan journeys. These examples illuminated how digitized data expedited loan approvals, minimizing physical branch visits.

Leading institutions, including Axis Bank, embraced the platform’s potential. Axis Bank’s pilot initiative introduced Kisan Credit Cards in Madhya Pradesh and unsecured MSME loans nationwide. The platform enabled efficient credit services, driven by authenticated data sources, indicating a future of expedited and improved credit access.

The pilot phase signaled a transformative future. The Public Tech Platform’s reach will broaden, revolutionizing India’s credit landscape. A testament to RBI’s commitment to innovation and inclusive financial services, the platform embodies efficiency and accessibility for all.

Startup Funding Summary

Credgenics, Noida-based fintech platform, has raised $50 Mn in Series B funding from Beams Fintech Fund – Read More

MediBuddy, Bangalore-based healthtech startup, has raised $18 Mn in a funding from Quadria Capital, Lightrock and TEAMFund – Read More

SatSure, Bangalore-based spacetech startup, has raised $15 Mn in Series A funding from Baring Private Equity Partners India, Promus Ventures, Force Ventures, Luckbox Ventures and IndigoEdge Advisors – Read More

CredRight, Hyderabad-based fintech startup, has raised $10 Mn in a funding from Michael & Susan Dell Foundation, YourNest, Spearhead Capital, 9Unicorns, Accion Venture Lab, Blacksoil, Caspian Debt, RevX Capital and Westen Capital – Read More

ShipEase, Gurugram-based logistics company, has raised $1 Mn in Pre-Series A funding from Inflection Point Ventures – Read More

M&A Snippets

Bangalore-based traveltech startup Holidify will merge with Mumbai-based travel marketplace TripCrafters – Read More

Chandrayaan-3: A Symbol of India’s Space Prowess and Startup Collaboration

August 27, 2023

India achieved a significant space milestone with the successful landing of Chandrayaan-3 on the moon’s south pole. This accomplishment not only reinforces India’s space prowess but also highlights the growing role of spacetech startups in the country. The collaboration between established institutions like ISRO and innovative startups, such as Paras Defence, MTAR Technologies, and Ananth Technologies, underscores India’s ascent in space exploration.

The successful lunar landing of Chandrayaan-3 on the moon’s south pole solidifies India’s position as the fourth nation to achieve this feat. This accomplishment is particularly noteworthy due to its scientific importance and national pride, inspiring unity and aspiration among Indians.

The Chandrayaan-3 achievement signifies more than a space victory; it marks a significant boost for India’s spacetech startups. Over the years, a robust ecosystem of around 400 private companies has evolved, supporting ISRO’s space missions by providing specialized components, materials, and fabrication.

Private companies have played a pivotal role in ISRO’s lunar missions. The Chandrayaan series, led by ISRO, received essential contributions from the private sector, showcasing ISRO’s vision in nurturing capable suppliers. The recognition of their capabilities by Lt Gen (Retd) Anil Kumar Bhatt, Director General of the Indian Space Association (ISpA), reflects the significance of private sector participation.

Notable startups like Paras Defence, MTAR Technologies, and Ananth Technologies have been instrumental in Chandrayaan-3’s success. Paras Defence provided the navigation system, MTAR Technologies crafted the lander’s propulsion system, and Ananth Technologies contributed the lander’s camera. These partnerships demonstrate startups’ vital role in critical space missions.

Established companies like Larsen & Toubro, Bharat Heavy Electricals Ltd (BHEL), Kerala State Electronics Development Corp. (KELTRON), and Walchand Industries also played crucial roles in Chandrayaan-3. They supplied components ranging from launch vehicle booster segments to electronic power modules, showcasing the collaborative efforts of the public and private sectors.

Chandrayaan-3’s successful lunar landing exemplifies India’s leadership in space exploration and the spirit of collaboration between startups and established players. This achievement sets the stage for India’s continued growth in the space sector and underscores the nation’s ability to reach for the stars through unity and innovation.

Startup Funding Summary

Zepto, Mumbai-based e-grocery company, has raised $200 Mn in Series E funding from StepStone Group, Goodwater Capital, Nexus Venture Partners, Glade Brook Capital and Lachy Groom – Read More

SuperBottoms, Mumbai-based baby care startup, has raised $5 Mn in Series A1 funding from Lok Capital and Sharrp Ventures – Read More

Wootz.work, Pune-based engineering procurement platform, has raised $4 Mn in Seed funding from Matrix Partners India, Nexus Venture Partners, AdvantEdge Mars Shot Ventures, Ramakant Sharma, Sanjiv Rangrass, Vikrampati Singhania and the founders of Zetwerk – Read More

Zaggle, Hyderabad-based fintech firm, has raised $3 Mn in Seed funding from ValueQuest Scale Fund – Read More

Yummy Plate, Bangalore-based food-tech startup, has raised $2 Mn in seed round from K12 Techno Services – Read More

The Turnaround Story of Café Coffee Day

August 20, 2023

In the dynamic landscape of business, stories of resurgence and strategic brilliance serve as guiding beacons. The remarkable turnaround of Café Coffee Day (CCD) under the leadership of Malavika Hegde is one such tale. With a staggering debt of INR 7000 crore threatening its existence, her visionary approach not only rescued CCD but also highlighted the path to effective debt recovery.

The journey of Café Coffee Day, founded by V.G. Siddhartha, began as a cultural phenomenon but soon succumbed to financial challenges. By mid-2019, the company was weighed down by an overwhelming debt, casting shadows over its future.

In the face of adversity, Malavika Hegde emerged as the driving force behind CCD’s revival. She was uniquely positioned to understand the company’s struggles and aspirations. She stepped up to lead the charge, determined to secure the legacy and survival of the iconic brand.

The debt recovery strategy was marked by a multifaceted approach that required a combination of financial acumen, strategic partnerships, and a strong resolve to restore CCD’s financial health. Some key components of her approach included:

  • Asset Monetization is one of the first steps Malvika took to identify non-core assets that could be monetized to generate liquidity. This included the sale of real estate, shares, and other assets held by the company.
  • Malvika recognized the importance of forging strategic alliances to infuse much-needed capital. She explored partnerships with investors and organizations that aligned with CCD’s values and vision, creating avenues for capital infusion
  • Operational efficiency to recover from massive debt was paramount. She focused on optimizing costs, streamlining operations, and enhancing the customer experience to ensure the business generated sustainable revenues.
  • A significant portion of CCD’s debt was restructured to make the repayment terms more manageable. This approach allowed the company to alleviate immediate financial pressure while charting a course for long-term debt reduction
  • Recognizing that the people behind the brand were instrumental in its success, she prioritized employee morale and customer trust. By fostering a positive work environment and maintaining consistent quality and service, CCD managed to retain customer loyalty.

Malavika Hegde’s unwavering determination bore fruit as CCD embarked on a transformative journey. The debt that had once threatened its existence began to diminish, illustrating the power of strategic thinking and innovation in navigating challenging circumstances.
As a result, debt was reduced by 93.3% (7000 cr. brought down to 465 cr.).

Malavika Hegde’s saga with CCD exemplifies entrepreneurial spirit. Her approach in rescuing the brand from a colossal debt emphasizes the significance of adaptability and commitment to values. Through partnerships, efficiency, and resilience, Hegde not only rescued CCD but also offered a valuable lesson in overcoming financial challenges.

Startup Funding Summary

Shaktimaan.ai, Bangalore-based AI-driven edtech startup, has raised $2 Mn in Seed funding from YCombinator, Fundersclub, Goodwater Capital, Misbah and Nishchay and other HNIs – Read More

Contiinex, Bangalore-based AI speech startup, has raised $2 Mn in Pre-Series A funding from YourNest and Refex Capital – Read More

Vegapay, Gurugram-based fintech startup, has raised $1 Mn in Pre-Seed funding from Eximius Ventures, DSP HMK, Capri Global, Upsparks Capital, MGA Ventures, Climber Capital, Arun Venkatachalam, Pratekk Agarwaal and other HNIs – Read More

Aretto, Pune-based kids footwear startup, has raised $550K in Seed funding from Hardik Pandya, Abhineet Singh, Shyam Raichura, Raunak Munot, Vermont Advisors, Vinayak Shrivastav and Kunal Sumaya – Read More

Teleport, Bengalore-based travel tech startup, has raised $500K in Pre-Seed funding from Kunal Shah, Vidit Aatrey, Kishore Ganji, Appreciate Capital, Superb Capital, 888VC and The FAAD network – Read More

M&A Snippets

Pune-based logistics firm Xpressbees has acquired Delhi-based supply chain startup Trackon Couriers for an undisclosed amount – Read More

Navigating India’s DPDP Bill 2023: Impact on Startups

August 13, 2023

In a world increasingly driven by technology and data, the need for robust personal data protection has become a paramount concern. Governments across the globe are recognizing the importance of safeguarding individuals’ privacy and controlling the flow of personal data. India’s Digital Personal Data Protection (DPDP) Bill of 2023 is a significant legislative endeavor aimed at achieving these objectives. As this bill takes center stage, it is essential to assess its potential impact on the startup ecosystem, which often thrives on innovation, agility, and data-driven strategies.

The DPDP Bill 2023 is a comprehensive legislative proposal that seeks to regulate the collection, processing, storage, and sharing of personal data in India. With an emphasis on protecting individual privacy, the bill introduces several critical provisions

The bill proposes the establishment of a Data Protection Authority (DPA) to oversee and enforce data protection regulations. The DPA will play a pivotal role in ensuring compliance and addressing grievances.

Organizations will be required to obtain explicit and informed consent from individuals before collecting and processing their data. Moreover, personal data must be collected only for specific and legitimate purposes.

The DPDP Bill introduces the concept of data localization, potentially mandating certain categories of sensitive personal data to be stored within India’s borders. This measure aims to enhance data security and prevent unauthorized access. Organizations transferring personal data outside India will need to adhere to stringent regulations to ensure the data’s protection and privacy rights.

Non-compliance with the DPDP Bill could result in substantial fines, signaling the government’s intent to ensure strict adherence to data protection standards.

While the DPDP Bill 2023 is a significant stride toward data protection, startups, often characterized by their resource limitations and rapid innovation cycles, could face both opportunities and challenges:

  • Implementing the technical and operational changes mandated by the bill may strain startups’ already limited budgets. The costs associated with data protection officers, compliance audits, and data localization efforts could pose challenges.
  • Startups thrive on rapid innovation, agility, and experimentation. Stricter regulations might hinder their ability to quickly adapt and evolve, potentially slowing down their growth trajectory.
  • Startups often leverage user data to refine their products, services, and marketing strategies. The DPDP Bill’s consent and purpose limitation provisions could impede their data-driven decision-making processes.
  • Investors will likely scrutinize startups’ data protection practices more closely, given the potential legal and financial repercussions of non-compliance. Startups that prioritize data protection could gain a competitive edge in attracting investment.
  • For startups eyeing international markets, adhering to different data protection regulations across borders could present complexities and challenges.

While challenges are evident, startups can take proactive measures to ensure compliance and maintain their innovative edge:

  • Startups should anticipate and prepare for compliance with the DPDP Bill from the outset. Integrating data protection principles into their business models can mitigate challenges down the line.
  • Engaging legal experts, data protection consultants, and technology professionals can help startups navigate the complexities of compliance and implement effective strategies.
  • Embracing privacy-preserving technologies, encryption techniques, and secure data-sharing frameworks can enable startups to innovate while safeguarding user data.
  • Investing in educating employees about data protection practices and promoting a culture of privacy can reduce compliance risks.

India’s DPDP Bill 2023 is a milestone in the country’s journey towards ensuring data protection and privacy rights. While startups might face challenges in adapting to the new regulatory landscape, they also have an opportunity to champion data protection practices, fostering consumer trust and responsible innovation. By striking a balance between compliance and agility, startups can not only navigate the complexities of the DPDP Bill but also demonstrate their commitment to user privacy while continuing to drive India’s vibrant startup ecosystem forward.

Startup Funding Summary

Waaree Energies, Mumbai-based green energy firm, has raised $120 Mn in funding from ValueQuest – Read More

Credgenics, Delhi-based financial service platform, has raised $50 Mn in Series B funding from WestBridge Capital, Accel, Tanglin Venture Partners, Beams FinTech Fund and other HNIs – Read More

Disprz, Chennai-based edtech startup, has raised $30 Mn in Series C funding from Lumos Capital and 360 ONE Asset – Read More

Harmony Organics, Pune-based chemical manufacturer, has raised $27 Mn in a funding from Piramal Alternatives – Read More

Stable Money, Bengaluru-based fintech startup, has raised $5 Mn in Seed funding from Matrix Partners India and Lightspeed – Read More

 

M&A Snippets

California-based IT services company Xoriant has acquired Bengaluru-based consulting firm Thoucentric for an Undisclosed amount – Read More

Chat GPT Variants: Exploring the Diverse Landscape of Conversational AI

August 6, 2023

Conversational AI has experienced a meteoric rise in recent years, transforming the way humans interact with technology. Among the pioneers of this revolution are Chat GPT variants. Generative Pre-trained Transformers (GPT) have become synonymous with state-of-the-art language models, capable of generating coherent and contextually relevant responses. In this article, we will delve into the fascinating world of Chat GPT variants, exploring their diverse applications, unique features, and the impact they have on our daily lives.

Before we embark on our journey through the landscape of Chat GPT variants, let’s briefly acknowledge the GPT-3, the trailblazer in the NLP domain. Developed by OpenAI, GPT-3 boasts an astonishing 175 billion parameters, making it one of the largest language models to date. Its large size and diverse training data enables it to perform an extensive array of language-related tasks, including translation, summarization, chatbot functionalities, and more.

One of the exciting Chat GPT variants is Kundali GPT. This variant is tailored to understand and respond to conversations in multiple languages. Trained on a diverse dataset encompassing linguistic variations, Kundali GPT excels in cross-lingual communication, transcending language barriers and providing seamless interactions for users worldwide.

Kundali GPT’s applications are far-reaching, from facilitating international business communications to aiding travelers during their journeys. By accommodating regional languages and idiomatic expressions, Kundali GPT fosters a sense of inclusion and accessibility in the global conversational landscape.

PPT GPT, or Productivity and Personalized Transformer, is designed to enhance efficiency and productivity for individual users. This variant is adept at assisting with personal organization, time management, and task-related endeavors. Through continuous learning from user behavior and preferences, PPT GPT tailors its responses and recommendations to suit individual needs.

As a virtual assistant, PPT GPT can manage schedules, set reminders, provide personalized news updates, and even aid in creative writing or content generation. Its ability to streamline workflows and save time makes it an indispensable tool for busy professionals and individuals seeking to optimize their daily routines.

Emotional GPT is a variant that focuses on incorporating emotional intelligence into conversational AI. This model is trained on vast datasets containing emotional cues and responses, allowing it to understand and respond empathetically to users’ emotional states. The model’s ability to detect sentiment and provide appropriate support enables more human-like interactions.

Emotional GPT finds applications in mental health support, customer service, and educational environments. By displaying empathy and understanding, Emotional GPT builds trust with users and establishes a more meaningful connection.

Codex GPT is a variant specialized in understanding and generating code. Trained on extensive programming languages and code repositories, Codex GPT empowers developers by offering code suggestions, debugging assistance, and code completion services.

This variant accelerates the software development process, reduces errors, and fosters collaboration among developers. With Codex GPT, even those with limited coding experience can efficiently engage with complex codebases.

Chat GPT variants have revolutionized the world of conversational AI, bringing forth a plethora of specialized models tailored to diverse needs. From Kundali GPT’s multilingual prowess to PPT GPT’s productivity-driven approach, and Emotional GPT’s empathetic engagement, each variant enriches the user experience in its unique way.

As the landscape of NLP and AI continues to evolve, we can expect even more sophisticated and domain-specific Chat GPT variants to emerge. However, alongside the excitement, it is vital to address ethical concerns, data privacy, and transparency to ensure these powerful language models are harnessed responsibly for the betterment of society. The journey of Chat GPT variants has only just begun, and the future holds boundless possibilities for the realm of conversational AI.

Startup Funding Summary
Vistaar Financial Services, Bengaluru-based financial service provider, has raised $50 Mn in funding from International Development Finance Corporation (DFC) – Read More
Unstop, Delhi-based community engagement and hiring platform, has raised $5 Mn in a funding from Mynavi, Coursera, Venture Catalysts, 9Unicorns and Caret Capital – Read More
FincFriends, Bengaluru-based digital lending platform, has raised $4 Mn in a funding from Digital Finance International – Read More
The Fuel Delivery, Mumbai-based fuel delivery platform, has raised $2 Mn in Pre-Series A funding from Drake Trade and Investment – Read More
Dil Foods, Bengaluru-based virtual restaurant operator, has raised $2 Mn in Pre-Series A funding from V-cube Ventures and Mount Judi Ventures – Read More
M&A Snippets
US-based conglomerate retail company Walmart has acquired Tiger Global’s stake in Bengaluru-based e-commerce firm Flipkart for $1.4 Bn – Read More

Can you afford to ignore your finances?

July 30, 2023

What might be the most overlooked function in an early-stage startup?

It can’t be product or tech as it shapes the core story of what the startup intends to solve. It can’t be sales as revenue is needed to sustain the operations. It can’t be marketing as consumer facing apps can’t do without it.

Finance is often the most critical-yet-ignored function in early stage startups. While founders are busy in product, sales, team-building and ops, finance is commonly relegated to accountants. Accountants generally are good with the accounting software, most likely Tally in India, but view the finance operations from a traditional business lens rather than the metrics required for a growth oriented startup.

Second, in the early stage of the startup, financial compliance does not receive the attention it deserves. As the famous quip goes – “If you think that compliance is expensive, try non-compliance!” – inefficiently managed books of accounts, compliance related documentation, has the potential of wreaking a hard-won fund-raise deal in future, when large VC funds and seasoned investors start probing deep on financial due diligence.

Third, without the CFO or a financial controller, which is often the case in early stage startups, the founders lack a critical layer of strategic financial planning over and above the accounting team which is primarily manned by junior accountants. This often leads to inadequate cash flow management overlooking unforeseen situations, incomplete debtor & creditor management, unavailability of readily reportable financial data, lack of governance of commercial contracts leading to financial risks.

Ultimately, all this leads to sucking up precious founders’ bandwidth in tactical firefighting tasks, which could otherwise be better utilized in strategic tasks of building the core business.

At ESV, we have found a solution for these entrenched yet easily avoidable startup inefficiencies, which we call FinStack.

FinStack is a full service financial services for business ventures. As investors, entrepreneurs and finance experts, we understand how to truly unlock the power of strategic financial planning, analysis and oversight –in order to help scale the business exponentially.
Our full-stack of capabilities are designed to work as partners, not service providers, in the journey of scalability & profitability. Through FinStack, the founders would not have to worry about the common pain points such as – how to plan for and control money, how to ensure 100% compliance with all regulations, how to balance between growth & profitability, How to optimize financial decisions (e.g.risk-reward, debt-equity, buy-vs-make), and finally how to tie all decisions to financial implications based on the overall business strategy.
To know more about our FinStack proposition, its engagement models, and the stellar team behind it, I invite you to have a look at our FinStack overview deck.

I would be pleased to answer your comments and questions.

Startup Funding Summary

GreenCell Mobility, Mumbai-based EV startup, has raised $41 Mn in a funding from REC Limited – Read More

Wiom, Delhi-based telecom startup, has raised $17 Mn in Series A funding from RTP Global, YourNest, Omidyar Network India, Global Brain, Blume Founders Fund, Alteria Capital, Stride Ventures, Stride One and 9 Unicorns – Read More

Ethereal Machines, Bengaluru-based CNC machines manufacturer, has raised $7 Mn in Pre-Series A funding from Peak XV’s Surge, Blume Ventures, Ganapathy Subramaniam, Mathew Cyriac, Lip-Bu Tan, Finvolve, 9Unicorns, Venture Catalysts and T2D3 Capital – Read More

Kapture CX, Bengaluru-based customer support automation platform, has raised $4 Mn in Series A funding from Cactus Venture Partners – Read More

Varashakti Housing Finance, Chennai-based fintech startup, has raised $4 Mn in Series A funding from Incofin India Progress Fund – Read More

M&A Snippets

Mumbai-based financial services provider Pantomath Financial Services Group has acquired Mumbai-based fintech platform Fundgini for an undisclosed amount – Read More

UK-based SaaS platform InVentry has acquired Krishnapura-based workplace management solutions provider Hipla Technologies for an undisclosed amount – Read More

 

What happens in a founder’s office?

July 23, 2023

What would be the most precious commodity for a growth oriented startup. Is it funds in the banks, dedicated team, access to the best tech, or an inspiring office space?

I would argue that the most precious thing would be – Founder’s time.

How and where the founder(s) allocate their time, based on the size and funding-stage of the venture, differentiates outperforming startups from the lesser successful ones. This becomes even more profound in the case of single founder startups.

Recently, there has been a significant amount of discussion and interest on how to unlock founders’ bandwidth from low priority low-impact tasks to high-priority high-impact ones. This has resulted in creation of a new set of roles, which we commonly referred to as – ‘Founders’ office’ or ‘Strategic Planning and Coordination’.

There can be more than one job description for a founders’ office role, due to the ambiguity and dynamism inherent in the working of any startup. This inevitable ambiguity, conflicting priorites, and everyday fire-fighting is led by the founders themselves. It sounds convincing if there is someone to whom the founder can offload these unavoidable tasks to. Hence, the role of the founders’ office is gaining traction.

There can be three major tasks attributable to the founders’ office role. One of them would be to become the champion of the Eisenhower Matrix (fig below) or to put it in simple words – enabling super-priortization of the founder’s time.

This involves optimizing the calendar for the founder and aligning leadership teams’ bandwidth around it. Clearly, this goes beyond scheduling and coordinating meetings, as decisions would have to be made on prioritization and relevance of calls.

In our informal discussions with founders, we overwhelmingly come across founders claiming to spend around two-thirds of their time on tasks, such as tracking updates, and doing follow ups,  ideally which could have been delegated. Nothing better than an email update over an avoidable meeting, it saves everyone’s time. Moreover, shifting non-planned adhoc activities to planned ones lead to greater productivity.

Second would the cross functional project management role for strategic initiatives. This would require cultivation of excellent working relationships with the functional heads in the startup team. The role again goes beyond taking updates and nudging others as one would have to contribute intellectually in problem solving and get the work done.

Third important function would be to establish and own a proper MIS process and reporting cadence for the startup. Reporting and data gathering is often adhoc, unstructured and incomplete. This is often the case in accounts and financial reporting, which gets overlooked when the scale of operations and revenue is low. But it creates bottlenecks during later fundraise or compliance related issues.

Beyond these definable roles, the founders’ office evolves to become the sounding board for the founders and contribute to shaping the strategy with the leadership team.

The value of a founders’ office increases furthermore if the individual(s) manning it can view the startup from an investor standpoint. He/she can then establish workflows and best practices, keeping in mind all of the key-metrics, which are bound to be asked by the VCs and strategic investors in a large round.

At ecosystem ventures, we prioritize safeguarding investor interests as ultimately it leads to value creation for everyone in the ecosystem. This requires working closely with the founders, like the founder’s office, and ensuring the success of each investment.

Ecosystem Ventures This Week

We are happy to share that Mr. Abhijeet Bhandari (Partner, Ecosystem Ventures) was invited as a speaker in Nath Valley School, Aurangabad. He underscored the significance in the session for students, aiming to assist them in thinking methodically about commencing a new business.

Startup Funding Summary

RenewBuy, Gurugram-based digital insurance aggregator, has raised $40 Mn in Series D funding from Dai-ichi Life Holdings Inc. – Read More

LetsTransport, Bengaluru-based commercial EV aggregator, has raised $25 Mn in a funding from Bertelsmann and other HNIs – Read More

Ati Motors, Bengaluru-based industrial robotics startup, has raised $11 Mn in Series A funding from True Ventures, Athera Ventures Partners, Blume Ventures, Exfinity Ventures and MFV Partners – Read More

Solethreads, Gurugram-based casual footwear startup, has raised $4 Mn in Series A funding from Fireside Ventures – Read More

Jimmy’s Cocktails, Gurugram-based F & B startup, has raised $3 Mn in Pre-Series A funding from Prath Ventures and other HNIs – Read More

M&A Snippets

Bikaner-based F & B company Bikaji Foods International Ltd has acquired 49% stake in Bikaner-based F & B company Bhujialalji Pvt. Ltd for $621K – Read More

Bengaluru-based retail apparel & fashion brand Styched has acquired Bengaluru-based footwear brand Flatheads for an undisclosed amount – Read More

Bengaluru-based fintech API Firm Decentro has acquired Mumbai-based debt collection SaaS platform Neowise Technologies for an undisclosed amount – Read More

India’s Digital Transformation Fuels Hyper Growth

July 16, 2023

India is experiencing a momentous phase of hypergrowth driven by its ongoing digital transformation. The convergence of several favorable factors, including financial inclusion initiatives, a mobile revolution, digital payments, robust infrastructure, a thriving startup ecosystem, and transformative policy reforms, has positioned India as a ripe ground for exponential expansion. As the nation embraces the digital age, it is poised to unlock its true potential and emerge as a global powerhouse.

India’s commitment to financial inclusion, exemplified by the Jan Dhan program, has empowered millions of previously unbanked individuals. Simultaneously, the mobile revolution, facilitated by affordable data plans and smartphone adoption, has connected the masses, opening doors to digital services, information, and opportunities. Mobile connections increased from 302.33 million in 2015 to 851 million in 2023. This combination of financial inclusion and mobile connectivity lays a strong foundation for India’s hyper-growth.

India’s digital payments landscape has been revolutionized by the Unified Payments Interface (UPI), the world’s most extensive digital payment system. UPI’s user-friendly interface, affordability, and compatibility with various applications have made it an integral part of everyday life for Indians. UPI transactions increased from 127 crore in 2013-14 to 12,735 crore in 2022-23. This widespread adoption of digital payments has accelerated economic transactions, driving productivity and efficiency and setting the stage for rapid expansion.

India’s robust digital infrastructure catalyzes hyper-growth, facilitating innovation and connectivity across the country. Digital public goods, such as Aadhaar, Fastag, and DigiLocker, provide a seamless framework for integration and interoperability. This interconnected ecosystem fosters combinatorial innovation, offering entrepreneurs fertile ground to develop new services and solutions. The transition from a cash-driven to a digital-first economy has unlocked immense opportunities, promoting transparency, efficiency, and inclusivity.

India’s startup ecosystem has experienced a remarkable surge, attracting global attention and investment. The convergence of digital technology, supportive policies, and access to venture capital funding have nurtured a thriving innovation ecosystem. Startups are disrupting traditional industries, introducing novel solutions, and driving employment growth. The entrepreneurial spirit and India’s market potential and digital transformation create a breeding ground for hyper-growth in the startup sector.

India’s proactive government has implemented transformative policy reforms to foster hypergrowth. Initiatives, like Make in India, Digital India, and Startup India, have created an enabling environment for businesses, attracting investments and promoting innovation. Streamlined tax systems, such as the Goods and Services Tax (GST), have simplified compliance, enhancing efficiency and ease of doing business. The Atmanirbhar Bharat (Self-reliant India) initiative aims to boost domestic manufacturing and reduce import dependence. These policy reforms demonstrate India’s commitment to unleashing its full potential and accelerating hypergrowth.

In the backdrop of India’s remarkable digital transformation, Ecosystem ventures has emerged as catalysts for nurturing and supporting transformative startups. With their expertise, resources, and network, these ventures empower the next generation of innovators and entrepreneurs, fueling India’s growth. By fostering an enabling environment and providing the necessary infrastructure, Ecosystem ventures is playing a pivotal role in driving India’s growth story and propelling the nation towards a future of unprecedented opportunities and prosperity.

Startup Funding Summary

SmartDukaan, Delhi-based retail tech startup, has raised $10 Mn in Pre-Series A funding from Findoc Finvest – Read More

Clensta, Delhi-based personal care startup, has raised $10 Mn in Pre-Series B funding from TradeCred – Read More

Adcount Technologies, Noida-based supply chain management startup, has raised $2 Mn in Series A funding from Venture Catalysts and Artesian – Read More

Hectar Global, Chennai-based agri commodity procurement platform, has raised $2 Mn in Seed funding from Powerhouse Ventures – Read More

OneStack, Gurugram-based fintech startup, has raised $2 Mn in Pre-Series A funding from GrowX, Stride Ventures, 9Unicorns and Venture Catalyst – Read More

M&A Snippets

Gurugram-based F&B company DSM Fresh Foods has acquired Bengaluru-based retail startup Dr. Meat for an undisclosed amount – Read More

Regulating Online Gaming

July 9, 2023

Humans by nature are competitive beings. But they also tend to be greedy, often giving in to the lure of making a quick buck without any mental or physical efforts.

Since ancient times, the culture of gaming has evolved, channelizing the above two human traits. A lot of games are played across the globe. These different games can be classified into two categories – games of skill or games of chance.

A game of skill is one where success primarily relies on the player’s expertise, knowledge, and strategic decisions. Our popular physical sports such as cricket, volleyball and mental sports such as chess would be good examples of games of skill. One can argue these games provide Intellectual stimulation, challenge, and opportunity for self-improvement.

A game of chance, on the other hand, relies on luck and randomness to determine the outcome. Popular examples include roulette, slot machines, lottery, and bingo. It can be said that these games tend to foster an element of escapism and allure of instant fortune.

But, often the classification of games, as skill-based or chance-based, becomes contested. The classic example is Poker, which is viewed alternately across various jurisdictions. This has major regulatory implications as often games of chance (which include betting or gambling) are strictly regulated with winnings taxed at much higher rates than those applied to the game of skills.

The key question to ascertain a game’s classification is whether skill dominates chance in it? The differentiating factor for a game of skills is that performance is predictable. In a game of chance there would be no correlation in the winnings of players across successive periods, whereas there would be in a game of skill. More skilled players are more likely to win and a less-skilled player, through practice and patience, can better his chances of winning with time.

The problem of classification is compounded when the online variants or spin-offs of popular offline games emerge. There has been a proliferation of many illegal betting/gambling apps/websites with questionable sources of funding or country of origin, which aim to lure users.

In India, betting and gambling is a state subject, with states legislating their specific laws, modeled on the old public gambling act 1867, prohibiting all forms of gambling and betting in their respective states. Only Goa, Sikkim and Meghalaya permit it under specific regulations. Since most of the gambling legislations which have been enacted were done prior to the advent of online or virtual gambling or betting, thus, the gambling legislations primarily refer to gambling activities in physical form.

This regulatory ambiguity often leads to penalizing legitimate online gaming businesses as argued by Mr. Gullapalli (CEO, Head Digital Works, which operates popular gaming apps such as rummy, carrom and pool) here.

As the gaming sector continues to see rapid growth, one can hope that the government would focus on promoting legitimate gaming firms and advocate for increased compliance measures, including the establishment of self-regulatory bodies, will create opportunities and avenues for more online businesses in gaming to flourish.

Startup Funding Summary

Leverage Edu, Delhi-based ed-tech startup, has raised $40 Mn in Series C funding from Educational Testing Service and other HNIs – Read More

Battery Smart, Delhi-based EV startup, has raised $33 Mn in Pre-Series B funding from Tiger Global, Blume Ventures, The Ecosystem Integrity Fund and British International Investment – Read More

GIVA, Bengaluru-based jewellery brand, has raised $33 Mn in Series B funding from Premji Invest, Alteria Capital and A91 Partners – Read More

KaarTech, Chennai-based consulting firm, has raised $30 Mn in funding from A91 Partners – Read More

Smartstaff, Bangaluru-based worker management platform, has raised $6 Mn in Series A funding from Nexus Venture Partners, Arkam Ventures, Blume Ventures and Alteria Capital – Read More

M&A Snippets

Bengaluru-based ed-tech startup Toprankers has acquired Indore-based ed-tech startup The Lex Guru for an undisclosed amount – Read More

Pune-based digital entertainment and gaming company, JetSynthesys has acquired Mumbai-based media company KidzByte for an undisclosed amount – Read More

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