Tag: Newsletter

What is a Digital Rupee?

December 4, 2022

On 1st Dec, RBI launched the first pilot of retail digital Rupee (e₹-R) in select cities with a closed user group of individuals and merchants. In this newsletter we would discuss the salient features of digital Rupee.

Digital Rupee or e₹ is a centrally backed digital currency (CBDC). In other words, it is just like cash (currency notes) but in digital form. e₹ would be in the form of a digital token that represents legal tender. e₹ would have the same denomination as paper currency and coins in circulation. This means for a balance of Rs 600 you would hold eR in one of the possible combinations. E.g. – 500*1+100*1, 100*6, 200*3, 500*1+50*2 …etc. The digital wallet of the participating banks (four as of now) would allow the user to choose the denominations. Just like cash, e₹ would not earn any interest and can be converted to other forms of money such as bank deposits. Digital Rupee will be distributed through banks and accessed through a digital wallet.

The most obvious question which arises is how is e₹ in practical terms any way different from the money sitting in our UPI digital wallets which we seamlessly transfer either to peers or transact with merchants?

The key difference for e₹ is its ‘settlement finality’. In simple words, if I give cash to enable a transaction with you, it is complete then and there itself. On the other hand, if money is moved through cheques/NEFT/UPI etc, the final settlement is done at the backend by the corresponding banks. Once, I have transferred digital Rupee to you, the transaction is settled just like cash.

There are a few advantages often quoted for CBDRs. First, it may lead to reduction in currency management costs as borne by the central bank. Printing, safekeeping, transporting, issuing currency notes is an operationally complex exercise fraught with safety risks. Digital currency eliminates a lot of steps as only a unique token is to be generated digitally.

Second, is the concept of ‘programmable money’. As of now a currency holder can use the cash in any way he wants. I can either buy medicines or a lottery ticket. On the other hand, digital rupee can be programmed to be used for a limited set of transactions. The argument made is of better targeting of government spending as per the intended purpose.

Third, from the liquidity risk point of view, e₹ would be safer from bank deposits as in case the bank goes bust, only the insured portion deposit amount is statutorily made available to the depositor but since e₹ are digital cash, they have no such risk.

Any advantage should be weighed against the potential of its misuse. It is still a long way for digital transactions to be as ubiquitous as cash transactions, since a substantial portion of the Indian population is still new to it.

The second likely risk is the security of digital transactions and loss of anonymity. Big business and Government inevitably emphasize on centralised systems for want of greater efficiency and control respectively. This is often achieved at the expense of sacrificing individual privacy and autonomy. The biggest advantage of physical cash is its anonymity, whereas any digital transaction is bound to leave a trail. If in long term, digital Rupee replaces physical cash, it leads to increased cybersecurity risk for users.

It would be interesting to see how any ecosystem of new functionalities emerge around the eR, a good opportunity for startups to make the most of it.

Ecosystem Ventures This Week

Key Highlights – Clients

We are delighted to share that we participated in the investment round of Logistics-focused SaaS-based startup “Intugine” that has raised $2.3 Mn (INR 19 Cr) in Pre-Series A funding led by Mela Ventures.

Please click here to read more about Intugine, a multi-modal visibility platform that helps the world’s largest enterprises to build resilience in their supply chains, which has helped 100+ Manufacturers, 3rd-Party Logistics, and E-Commerce companies in the past 4 years, including Flipkart, Xiaomi, Philips, Ultratech Cements, Arvind Fashion, Kuehne + Nagel, SpotOn Logistics.

Startup Funding Summary

KreditBee, Bengaluru-based fintech startup, has raised $80 Mn in Series D funding from MUFG Bank, Premji Invest, Motilal Oswal Alternates, NewQuest Capital and Mirae Asset Ventures – Read More

DeHaat, Patna-based agritech startup, has raised $60 Mn in Series E funding from Sofina Ventures, Temasek, Prosus Ventures, RTP Global India and Lightrock India – Read More

Prismforce, Mumbai-based vertical SaaS platform, has raised $14 Mn in Series A funding from Sequoia Capital India and other HNIs – Read More

MoooFarm, Gurugram-based agritech startup, has raised $13 Mn in Series A funding from Aavishkaar Capital, Accel Partners, Aditya Birla Ventures, Rockstart, Navus Ventures and Alteria Capital – Read More

Blox, Mumbai-based proptech startup, has raised $12 Mn in Series A funding from Kunal Shah and other HNIs – Read More

M&A Snippets

Bengaluru-based biosimilars manufacturing unit Biocon has acquired US-based pharmaceutical company Viatris’ global biosimilars business for $3 Bn – Read More

Hyderabad-based generic injectables maker Gland Pharma will acquire France-based pharma company Cenexi for $124 Mn – Read More

Bengaluru-based manufacturing services marketplace Zetwerk has acquired US-based manufacturing services company Unimacts for $39 Mn – Read More

Kolhapur-based FMCG enterprises Ghodawat Consumer has acquired Mumbai-based beverage startup Coolberg for an undisclosed amount – Read More

Bengaluru-based edtech startup Simplilearn has acquired US-based edtech company Fullstack Academy for an undisclosed amount – Read More

Can there be a Startup Constitution?

November 27, 2022

In 2015, the government of India declared 26 November as the Constitution Day. Since then it is being celebrated in schools, colleges, and government departments across the country. Before 2015, the day was known as the National Law Day. The historical reason being 26th Nov 1949 was the day when the constituent assembly had signed and adopted the Constitution. It came into effect two months later on 26 Jan 1950 which we all celebrate as the Republic Day.

Does it even matter for the startup & investor community to spend time thinking about the lofty idealism of a document which everyone seems to pay lip-service to but rarely put in practice?

Short answer to that question would be – tactically no,it is irrelevant but strategically – an empathetic yes! It matters quite a lot.

Any business, big or small, has to operate within the realms of the society it is located in. Hence, tactical wisdom is to refrain from publically engaging on social or political issues, follow non-confrontational, rather subservient approach, while dealing with the state at any level – be it local administration, state or the union government, maintain silence on the bad actors or inefficiencies within one’s own industry.

Beyond tactical indifference, it can be argued that the constitution is a mega-strategy document, not just for activists or academicians, but for everyone, including startups and the investor community. Let us flip the question to stimulate our thoughts on Constitution’s long term significance-

For investors – Thinking for next 30 years, under what market & societal conditions wealth creation can be maximized?
For startup founders – thinking for next 30 years, under what societal conditions innovation can be maximized?

When we attempt to start thinking about long term societal change, the constitution becomes a guiding document as since inception, it was conceptualized as a transformative constitution, radically reimagining the society it happened to originate from. Reduced to its essence, the constitution is nothing but a profound set of ethics we collectively as individuals attempt to sustain and nurture, in the hope of a better future.

If we imagine a Venn diagram from a bird’s eye view, the niche segment, sector, technology, industry we are working in, can all be subsumed under the circle of ‘markets’. Intersecting with it is a circle of ‘state’, which represents the legitimate structure of power and authority. But both the circles are encircled within the larger societal circle. These abstract circles can now be imagined to be filled with a network of individuals who are constantly engaging within their circles and beyond.

Majorly, the Indian higher education system disincentivizes critical thinking on meta questions about society, state, and markets. It is geared towards hyper competition for the academically bright and diligent students, optimizing for exams. Undoubtedly, it has created an extremely competent class of technology & management professionals, who now command respect across businesses, the world over. But can they articulate a strategic societal imagination is a question worth pondering on.

Hoping that at a personal level, our engagement with the Constitution and the nuances inherent in creating society which maximizes wealth & innovation, I wish you all a happy Constitution day.

Ecosystem Ventures This Week

Key Highlights – Clients

We are happy to onboard a Dubai-based healthcare service provider.

It is a platform for data analytics, training and monitoring in preventive healthcare services. They provide services such as Visa Medical Services, Diagnostics and Travel Vaccinations with the help of an internally integrated system equipped with advanced technology. It is backed by a team of highly qualified healthcare professionals who are setting the latest medical standards across the Middle East, Europe, and Southeast Asia.

We look forward to working with them and wish them all the best for a bright future.

Startup Funding Summary

Bira91, Delhi-based craft beer brand, has raised $70 Mn in Series D funding from Japan’s Kirin Holdings – Read More

Healthkart, Gurugram-based healthtech startup, has raised $65 Mn in a funding from Temasek Holdings and A91 Partners – Read More

Celebal Technologies, Jaipur-based software service provider, has raised $32 Mn in a funding from Norwest Venture Partners – Read More

IndiaGold, Gurugram-based fintech startup, has raised $10 Mn in Series A funding from Alpha Wave, 3one4 Capital, PayU, Leo Capital, Better Tomorrow Ventures, Rainmatter Capital and other HNIs – Read More

ProcMart, Noida-based logistics company, has raised $10 Mn in Series A funding Sixth Sense Venturesfrom – Read More

M&A Snippets

Gurugram-based renewable energy semiconductor manufacturer BluPine Energy has acquired Kolkata-based solar power company Atha Group for $257 Mn – Read More

Bengaluru-based venture capital and private equity firm Lightrock India has acquired Gurgaon-based psychiatric inpatient unit Sukoon Healthcare for $15 Mn – Read More

Bengaluru-based media technology company Amagi has acquired California-based data platform for content distributors Streamwise for an undisclosed amount – Read More

Are drones the new Pushpak Viman? Copy

November 21, 2022

Humans love flying as symbolized in eternal stories such as the Pushpak Viman, before modern aircraft technology arrived. But when we remove the human physically, from the flying object, we enter the realm of drones. In this edition we would discuss the innovation and growth possibilities within the drone ecosystem in India.

Simplistically, drones are mechanical flying objects, either self propelled or remote operated, which can aid humans in certain tasks. Tasks which are typically dirty, dull, hazardous and repetitive are best suited to be operationalized through drones. E.g. When humans have to perform visual inspections in either difficult environments (Electric/telecom towers/mines) or over a large geographical area (agricultural farm/forest). Not only quantitatively, but also qualitatively drones can improve the outcomes. E.g. Urban aerial mapping through drones can be of much higher resolution than commercially available satellite imagery.

A stringent permission driven regime was institutionalized since 2014 for drone operations in India. The knee jerk reaction of de-facto banning use of drones was due to threat perception as assessed by the security agencies. One of the marketing gimmicks, in which a drone was choreographed delivering pizzas in a metro city, set off alarm bells within the security apparatus with the obvious argument of a pizza being replaced with an explosive. The unintended consequence of prioritizing threat mitigation was postponement of creation of a value-adding drone ecosystem in India. It slowed innovation in the sector and caused quite a few drone-focused startups to shut shop or move out of India.

This is likely to change as a new set of liberalized rules were notified in Aug 2021. The rules envision a trust based, self certification, non intrusive monitoring mechanism.. This is enabled by classification of drones based on their weight starting from Nano drones (<250 gms) moving up to Large drones (>150 kgs). All airworthy certified drones would possess a unique identification number upon registering with the ‘digital sky platform’.

Digital sky platform envisions the airspace in green, yellow and red. There is no restriction in flying drones up to 400 ft below a certain weight (< 500 Kg) in the green zone. Red & yellow zones (<12 km) are defined based on the proximity to an airport. Prior permission is required for operating a drone in these zones. If you check the digital sky map here, it appears that the first set of drone implementations would happen outside city areas, as invariably a 12 km radius across a tier 2 city covers almost the whole of it.

The rules have also streamlined the certified ‘remote pilot license’ process. This opens a new avenue for youth to be certified as a drone pilot for a class of drones based on his/her training. Given the drone population is going to increase, correspondingly humans required to operate them would increase.

Apart from the drone operation rules, the government has also initiated a production linked incentive (PLI) for the nascent drone manufacturing industry in India. The eligibility criteria is pegged to be a minimum of 40% value addition to be performed by an Indian manufacturer.

Drone enthusiasts claim long term ROI on drone implementation in an enterprise is not only high but also enables capturing a new set of data. It appears that the drone ecosystem in India is again picking up, after the brief interlude. This week two drone

We at Ecosystem Ventures aim to invest in the latest technologically advanced startups which possess the potential to disrupt sectors. Let us know your thoughts.

Ecosystem Ventures This Week

Key Highlights – Clients

We are happy to onboard a Pune-based hyper intelligence SaaS platform.

It is an Information Digitization Technology and SaaS-based platform that can automate any business process and related documents using the technologies such as Image, Text & Video Analysis, Pattern Recognition, Automation using Web & Windows Recorder, Automation over Citrix Environment and powered with RPA, OCR, NLP, AI & Machine Learning.

We look forward to working with them and wish them all the best for a bright future.

Startup Funding Summary

Amagi, Bengaluru-based media technology provider, has raised $100 Mn in a funding from General Atlantic, Accel, Norwest Venture Partners and Avataar Venture Partners – Read More

Clove Dental, Delhi-based healthtech startup, has raised $66 Mn in a funding from Investcorp, Tybourne Capital Management, SeaLink Capital Partners and other HNIs – Read More

Keka, Hyderabad-based HRtech startup, has raised $57 Mn in Series A funding from WestBridge Capital – Read More

Masai School, Bengaluru-based edtech startup, has raised $10 Mn in Series B funding from Omidyar Network, India Quotient, Unitus Ventures, Mithali Raj and Bhaichung Bhutia – Read More

Supertails, Bengaluru-based pet-care startup, has raised $10 Mn in Series A funding from Fireside Ventures, Saama Capital and DSG Consumer Partners, Kunal Shah, Sanjay Kapoor, Varun Alagh, Ankit Nagori and Shashank Mehta – Read More

M&A Snippets

Riyadh-based a joint stock company SALIC has acquired minority stake in Gurugram-based rice milling company LT Foods for $48 Mn – Read More

Mumbai-based logistics company Allcargo Logistics will acquire Hyderabad-based logistics company Gati Kintetsu for an undisclosed amount – Read More

Can Climate-tech weather human frailties?

November 20, 2022

One of the major world news this week was the conclusion of the 27th annual conference of parties (COP 27) at Sharm el-Sheikh in Egypt. The yearly conference is a continuation of the three decade old global collaborative effort on climate change.

The sustained global effort on climate change makes the climate-tech sector exciting. Climate-tech is a term commonly used for technologies, applications that are focused on reducing green-house gas emissions, or addressing the impacts of global warming.

It would be beneficial to recount the evolution and the inherent paradox of the global climate change mitigation efforts as they would also influence and shape the climate-tech ecosystem.

After decades of climate science research which brought out the alarming long-term effects of fossil fuel powered industrialization, the United Nations Framework Convention on Climate Change (UNFCCC) was formed in 1992. This made every country treaty bound to find ways to reduce GHG emissions globally in an equitable way. To arrive at a consensus about ‘equitable way’ is difficult as historically, the industrialized rich countries of the developed world have been substantially responsible for the carbon emissions rather than the poor and developing ones. Poor & developing countries argued for their right to conventional fossil fuel led economic growth in the short-term rather than limiting their emissions.

After a prolonged period of diplomatic negotiations, amidst worsening climate change impact, global consensus emerged in the 2015 conference, popularly known as the Paris Agreement. It committed to holding global temperature rises to “well below” 2°C above pre-industrial levels, while “pursuing efforts” to limit heating to 1.5°C.

To meet those goals, countries also agreed on non-binding national targets to cut – or in the case of developing countries to curb – the growth of – greenhouse gas emissions in the near term, by 2030 in most cases. These targets are known as nationally determined contributions (NDC), which are to be revisited every five years. This was the context of COP26 last year at Glasgow where countries further committed to focus on the tougher 1.5°C aspirational goal of the Paris agreement. Achieving that would require halving the GHG emissions compared with 2010 levels, in this decade.

Simplistically, the sector wise break-up of global carbon emissions is the following – Mobility & transport (16.2%), Production of Energy (13.6%), Food & Agriculture systems (20%), Industry & Manufacturing (29.4%), Building & construction (20.7%).

If we look at 2021 figures for the clean-tech ecosystem, the Mobility and Transport area continues to receive the largest amount of funding (~$40Bn), as Electric vehicles and transport models captured the investor attention. This was followed by Food & agriculture ($6Bn), Industry & Manufacturing (~$6Bn), Energy (~$4Bn). The lowest of all has been the Building & Construction sector (~$700Mn). Based on the numbers, the construction industry could be the next big climate-tech sector where innovative startups could come up. Apart from these sectors, investments have also moved in the area of capturing, storing and reusing GHGs (~$250Mn) and climate change management & reporting (~$570Mn).

The fundamental paradox in managing climate change is the fact that global commons (optimal land, air, oceanic environment for human life) are public goods. There is no single global authority to enforce rules and provide for these public goods. Each nation state can operate independently prioritizing short term gains over catastrophic long term costs. E.g. Nobody could have predicted last year that a new Russia-Ukraine war would break out disrupting energy markets and supply chains all over the world.

At Ecosystem Ventures, we are closely exploring the climate-tech sector as there exists a potential of Indian startups to disrupt this space. We are doing the fundraising for an innovative EV startup, please read more about the exciting investment opportunity here.

Ecosystem Ventures This Week

Key Highlights – Clients

We are happy to onboard a Mumbai-based AI-backed Video bot Technology platform for professional growth.

It is a platform for personalized guidance from experts in their respective industries. They also provide assistance and help aspirants prepare for their upcoming interviews with colleges and companies along with providing placement in their partnered companies.

We look forward to working with them and wish them all the best for a bright future.

Startup Funding Summary

Lentra, Pune-based fintech startup, has raised $60 Mn in Series B funding from Bessemer Venture Partners, SIG Venture Capital and Citi Ventures – Read More

Lenskart, Bengaluru-based eyewear brand, has raised $40 Mn in a funding from Chiratae Ventures, DSP India Fund and Axis Growth Avenues AIF-I – Read More

BeatO, Delhi-based diabetes care platform, has raised $33 Mn in Series B funding from Lightrock India, Flipkart Ventures, HealthQuad, Orios Venture Partners, Blume Ventures and Leo Capital – Read More

NirogStreet, Delhi-based ayurveda startup, has raised $12 Mn in Series B funding from Jungle Ventures, Spiral Ventures, ICMG Co-Creation Fund, Gokul Rajaram and Rajeev Kannan – Read More

Corrit Electric, Gurugram-based electric mobility brand, has raised $10 Mn in a funding from SphitiCap – Read More

M&A Snippets

Singapore-based urban development company Sembcorp has acquired Mumbai-based renewable energy semiconductor manufacturer Vector Green Energy for $341 Mn – Read More

New Delhi-based super specialty hospital Aakash Healthcare has acquired Uzbekistan-based medical center Taskent Hospital for $4 Mn – Read More

Are drones the new Pushpak Viman?

November 13, 2022

Humans love flying as symbolized in eternal stories such as the Pushpak Viman, before modern aircraft technology arrived. But when we remove the human physically, from the flying object, we enter the realm of drones. In this edition we would discuss the innovation and growth possibilities within the drone ecosystem in India.

Simplistically, drones are mechanical flying objects, either self propelled or remote operated, which can aid humans in certain tasks. Tasks which are typically dirty, dull, hazardous and repetitive are best suited to be operationalized through drones. E.g. When humans have to perform visual inspections in either difficult environments (Electric/telecom towers/mines) or over a large geographical area (agricultural farm/forest). Not only quantitatively, but also qualitatively drones can improve the outcomes. E.g. Urban aerial mapping through drones can be of much higher resolution than commercially available satellite imagery.

A stringent permission driven regime was institutionalized since 2014 for drone operations in India. The knee jerk reaction of de-facto banning use of drones was due to threat perception as assessed by the security agencies. One of the marketing gimmicks, in which a drone was choreographed delivering pizzas in a metro city, set off alarm bells within the security apparatus with the obvious argument of a pizza being replaced with an explosive. The unintended consequence of prioritizing threat mitigation was postponement of creation of a value-adding drone ecosystem in India. It slowed innovation in the sector and caused quite a few drone-focused startups to shut shop or move out of India.

This is likely to change as a new set of liberalized rules were notified in Aug 2021. The rules envision a trust based, self certification, non intrusive monitoring mechanism.. This is enabled by classification of drones based on their weight starting from Nano drones (<250 gms) moving up to Large drones (>150 kgs). All airworthy certified drones would possess a unique identification number upon registering with the ‘digital sky platform’.

Digital sky platform envisions the airspace in green, yellow and red. There is no restriction in flying drones up to 400 ft below a certain weight (< 500 Kg) in the green zone. Red & yellow zones (<12 km) are defined based on the proximity to an airport. Prior permission is required for operating a drone in these zones. If you check the digital sky map here, it appears that the first set of drone implementations would happen outside city areas, as invariably a 12 km radius across a tier 2 city covers almost the whole of it.

The rules have also streamlined the certified ‘remote pilot license’ process. This opens a new avenue for youth to be certified as a drone pilot for a class of drones based on his/her training. Given the drone population is going to increase, correspondingly humans required to operate them would increase.

Apart from the drone operation rules, the government has also initiated a production linked incentive (PLI) for the nascent drone manufacturing industry in India. The eligibility criteria is pegged to be a minimum of 40% value addition to be performed by an Indian manufacturer.

Drone enthusiasts claim long term ROI on drone implementation in an enterprise is not only high but also enables capturing a new set of data. It appears that the drone ecosystem in India is again picking up, after the brief interlude. This week two drone

We at Ecosystem Ventures aim to invest in the latest technologically advanced startups which possess the potential to disrupt sectors. Let us know your thoughts.

Ecosystem Ventures This Week

Key Highlights – Clients

We are happy to onboard a Pune-based hyper intelligence SaaS platform.

It is an Information Digitization Technology and SaaS-based platform that can automate any business process and related documents using the technologies such as Image, Text & Video Analysis, Pattern Recognition, Automation using Web & Windows Recorder, Automation over Citrix Environment and powered with RPA, OCR, NLP, AI & Machine Learning.

We look forward to working with them and wish them all the best for a bright future.

Startup Funding Summary

Amagi, Bengaluru-based media technology provider, has raised $100 Mn in a funding from General Atlantic, Accel, Norwest Venture Partners and Avataar Venture Partners – Read More

Clove Dental, Delhi-based healthtech startup, has raised $66 Mn in a funding from Investcorp, Tybourne Capital Management, SeaLink Capital Partners and other HNIs – Read More

Keka, Hyderabad-based HRtech startup, has raised $57 Mn in Series A funding from WestBridge Capital – Read More

Masai School, Bengaluru-based edtech startup, has raised $10 Mn in Series B funding from Omidyar Network, India Quotient, Unitus Ventures, Mithali Raj and Bhaichung Bhutia – Read More

Supertails, Bengaluru-based pet-care startup, has raised $10 Mn in Series A funding from Fireside Ventures, Saama Capital and DSG Consumer Partners, Kunal Shah, Sanjay Kapoor, Varun Alagh, Ankit Nagori and Shashank Mehta – Read More

M&A Snippets

Riyadh-based a joint stock company SALIC has acquired minority stake in Gurugram-based rice milling company LT Foods for $48 Mn – Read More

Mumbai-based logistics company Allcargo Logistics will acquire Hyderabad-based logistics company Gati Kintetsu for an undisclosed amount – Read More

Who owns the Vijay Chowk in Delhi

November 6, 2022

“The History of the world is but the biography of great men” – Thomas Carlyle

Tech visionary Elon Musk may or may not be a great man, but the answer to the rhetorical question in the subject line – who owns the vijay chowk? – a public square synonymous with the Indian Republic, is at the heart of the paradox inherent in Elon Musk’s winning statement in April 2022, when Twitter board had accepted his buyout offer of $44 Bn.

With quintessential flamboyance, the charismatic founder of futuristic companies Tesla & SpaceX, reportedly said “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated”

To make sense of the grand statement, let us recap the events as they have unfolded since April 2022.

After making an offer, Musk tried to back off from the deal claiming he was misled about the proportion of bots (fake accounts) on twitter. This led to pressure from the Twitter board to honor the deal and ended up in a lawsuit in July. As the trial was likely, which might have enabled termination clause payout of $1 Bn, Mr Musk literally carried a ‘kitchen sink’ to the Twitter headquarters on 27th October to sink-in the fact that he had finally arrived. Within hours he fired the existing top leadership. Mr Musk further suggested that he would be charging a $8 monthly fee for verified ‘blue tick’ accounts which led to an intense online debate.

On the morning of 4 Nov, nearly half of the ~7500 global Twitter workforce woke up with the news of their employment being terminated. The 200+ member Twitter India team has been majorly downsized.

From a business standpoint, does acquiring Twitter translate into a direct benefit for an existing set of companies such as Tesla? Most likely not.

From a corporate finance point of view, Musk becomes answerable to no one for Twitter. On the contrary Musk is raising funds for the deal by pledging the stocks of his other companies.

From a brand perspective, Musk, unlike other billionaires, has brilliantly used Twitter to build his futuristic personal brand. He is unabashed, minces no words, in articulating his thoughts.

Twitter, on the other hand, unlike its giant social media counterparts – Facebook or Instagram, has not been able to crack the advertisement model to post robust revenue growth since going public in 2013. Characteristically, it’s a place where one argues, ridicules, protests, trolls, or campaigns. Simply put, it’s hard to monetize. Though, it possesses a disproportionate influence to globally shape instant public opinion.

It’s likely that Mr Musk, who previously has been a critic of Twitter’s advertising and content moderation policies, has some aces up his sleeve to unlock its hidden value. It appears he wishes for a less-moderated freewheeling Twitter. But if the platform becomes unhinged on speech, it’s likely to drive away advertisers.

That’s exactly what transpired last week as more companies decided to pause their ad spending on Twitter. Companies are super-conscious about their brand image and hence do not want to feature alongside objectionable content. Mr Musk’s tweet on the issue seemed more political than reassurance – Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America.

If the buy-out doesn’t seem to make commercial sense, even after six months when it was made, it leads to the possibility that the richest man on the planet genuinely believes that he is shaping humanity through his hobby endeavors. Nothing wrong with that, may he succeed.

But if Twitter indeed is a digital town-square shaping humanity, then why should it be privately owned by an individual?

A billionaire, however wise, is a human at last. The arch of humanity has gravitated from an unquestionable monarchical order to a messier democratic one, to preempt fallouts from the human frailties of great men.

Democracies are strengthened not by monopolizing control on the avenues of public opinion, but by deepening and diversifying the collective-trust embedded in, and propagated through them.

More often than not, that involves sacrificing profits for patience or efficiency for empathy. Free speech is not a product or a service, waiting to be commoditized. It’s an elusive ethic, beset with the seeds of its own destruction. Unfettered free speech embodies in itself the speech which may end up gobbling all that is cherished by humanity.

In other words Vijay Chowk belongs to all the people who inhabit it and sustain it as a public square, rather than a gated garden for a select elite.

Until next time, please read our abundantly ‘free’ & insightful ‘speech’ on startups and beyond, at our website www.ecosystemventures.in

Ecosystem Ventures This Week

Key Highlights – Events

We are delighted to share that Mr. Abhishek Sanghvi (Partner, Ecosystem Ventures) has been invited as Chief Guest for the Induction Ceremony “Aarohan-2022” of MBA Batch 2022-24 at Acropolis Faculty of Management and Research (AFMR), Indore.

Startup Funding Summary

Amagi, Bangalore-based global media SaaS technology provider, has raised $100 Mn in a funding from General Atlantic – Read More

Hygenco, Gurugram-based green hydrogen company, has raised $25 Mn in a funding from SBICAP Ventures – Read More.

The Sleep Company, Mumbai-based furniture & home decor brand, has raised $21 Mn in a funding from Premji Invest, Alteria Capital and Fireside Ventures – Read More

CashKaro, Gurugram-based cashback and coupons site, has raised $16 Mn in Series C funding from Affle Global – Read More

SolarSquare, Mumbai-based solar startup, has raised $12 Mn in Series A funding from Elevation Capital, Lowercarbon, Good Capital, Rainmatter and Other HNIs – Read More

M&A Snippets

Mumbai-based specialty chemical products and services company Dorf Ketal has acquired Switzerland-based Clariant’s North American (NORAM) Land Oil business for $15 Mn – Read More

Are we going ‘soft’ on Hardware?

October 30, 2022

In the startup space, for reasons of scalability, discussions about ‘tech’ revolve around software. But software or AI algorithms run on a device made up of hardware components, most critical of them being the processing unit, commonly referred to as the chipset.

Beyond the tech world, chips or semiconductors (building material of chipset) have become a discussion point in the geopolitics arena, as nation states strategize to secure the supply-lines of rare-earth elements, and develop design & manufacturing competence in them.

Simplistically, the AI hardware can be classified in two ways, based on type of AI activity – training or inference.

Training refers to the AI component where an algorithm mines through a massive amount of data for long durations in order to ‘learn’ what it is set to learn. Thus, high memory, high computation, longer cycle life would be the required hardware characteristics. Often there is a disconnect between the training device and the eventual deployment device.

Inference refers to the real-time data crunching component of the AI algorithm to generate output. Hardware for this type of activity would demand speed & efficiency over capacity. Inference or output is required at every end deployment device which necessitates the hardware to be of low power consumption.

Hardware can also be classified based on the end application specificity. Industry jargons are – FPGA, GPU, ASIC.

Field programmable gate array (FPGA) can be simply understood as those chips which are flexible, configurable, power efficient, required to perform parallel tasks. Think of chips in our smartphones or laptops. Graphic processing unit (GPU) refers to the chips initially designed for graphics but are now also used for computationally heavy tasks such as video processing, image analysis etc. Application specific integrated circuit (ASIC) refers to a custom designed chip optimized for end application which cannot be used elsewhere.

Another industry jargon worth mentioning is the ‘leading’ edge / ‘trailing’ edge semiconductor manufacturing nodes. In simple terms, a chip is a circuit made up of micro transistors. Over generations, transistors have become smaller and more efficient. Leading edge denotes the smallest manufacturing possible(10-12nm), thus packing more transistors in a unit space for more computing power. But not all chips are meant for advanced computations or the latest laptops. There are less sophisticated devices and applications which rely on ‘trailing’ edge nodes. (older set of chips)

Given that the applications of AI are unfolding and expanding their reach in every sector, there exists a latent opportunity of hardware led innovation. By 2025, AI-related semiconductors could account for almost 20 percent of all demand, translating into about $67 billion in revenue. The Traditional Non AI semiconductor market is estimated to be ~$300 billion.

GPU market (NVIDIA, AMD) and FPGA market (Intel) are dominated by US firms. The US also controls the majority of semiconductor fabrication units (known as fabs) worldwide. China is catching up with the US in manufacturing of the ‘trailing edge’ chips.

India has certain strengths in the form of large human capital which can dominate design capabilities and recent policy initiatives are a step to harness them. The weaknesses of India are the lack of supply-side manufacturing infrastructure, and linkages with larger fab units.

Large-scale low-cost trailing edge chip design & production, geared towards AI hardware might be an interesting space to look out for in the Indian context, provided the market is shifting from general-purpose to application-specific chipsets.

We at Ecosystem Ventures aim to be at the ‘leading’ edge of upcoming startup ‘nodes’. Your insights and valuable comments are no less than the ‘training’ hardware for our ‘inferences’. Please feel free to share your thoughts.

Startup Funding Summary

Udaan, Bangalore-based e-commerce platform, has raised $120 Mn in convertible notes and debt from Existing Investors – Read More

boAt, Delhi-based consumer electronics company, has raised $60 Mn in a funding from an affiliate of Warburg Pincus and Malabar Investment – Read More

Kinara Capital, Bangalore-based fintech platform, has raised $25 Mn in funding from British International Investment, Nuveen and ASN Microkredietfonds – Read More

Devtron, Gurugram-based open-source DevOps platform, has raised $12 Mn in funding from Insight Partners, Leo Capital and Angel Investors  – Read More

EMotorad, Pune-based EV brand, has raised $3 Mn in Pre-Series A funding from Green Frontier Capital, LetsVenture and Ivy Growth Associates  – Read More

M&A Snippets

Ghaziabad-based FMCG company Dabur will acquire Mumbai-based foodtech company Badshah Masala for $73 Mn  – Read More

Why are board games sacred?

October 23, 2022

Why are board games sacred?

As you might have guessed by the wordplay in the title on the popular Netflix series ‘Sacred Games’, in this edition we would be discussing the fascinating world of board games.

One might be tempted to think that with ubiquity of smartphones, table-top board games have become a relic of the past as all the famous board games have multiple digital versions of them available either free or paid on the internet.

Board games are a segment of the larger games & toys market. The Indian toys industry is estimated to be $1.5 Bn making .5% of the global market share. There is a significant opportunity as domestic demand is forecasted to grow at 10-15% against the global average of 5%.

The board games can further be segmented into mainstream and hobby games. Mainstream would include our all time favorites such as scrabble and monopoly. The high-ticket hobby games segment has a dedicated customer base of its own. In advanced economies such as the US, board game enthusiasts on average may spend over $500 and purchase around 10 hobby games in a year. The most popular hobby games include – Settlers of Catan, Warhammer, and Dungeons & Dragons.

It is important to realize that board games are an integral part of the larger Content-Intellectual property ecosystem. The well crafted board game can have multiple spin-offs, merchandise, movies, TV shows and media opportunities. Further, the board games have a natural extension, to bring their imagined world to a close real life experience, through AR-VR technologies.

The board games sit at a unique cross section of creative-storytelling and entertainment. In my view a successful board game would be such which understands and caters to human behavioral psychology. We all have competitiveness inherent in us. Secondly, we as humans seek rewards or gratification in the real world. These rewards are a product of our intellect and sustained efforts to achieve them. Moreover they are dependent on the role of chance or luck in our lives.

A successful board game would balance ‘personal effort’ and ‘randomness’ in a compelling story-based narrative. At Ecosystem Ventures, we are working closely with one such company which has an eclectic mix of content IP, impressive game design skills, and integrated media capabilities.

Please feel free to message me if you are tempted to roll the dice on reading about board games.

Startup Funding Summary

Byju’s, a Bangalore-based edtech firm, has raised $250 Mn in a funding from QIA and Existing Investors – Read More

Ather Energy, a Bangalore-based EV startup, has raised $50 Mn in a funding from Caladium Investment and Herald Square Ventures – Read More

Snapmint, a Mumbai-based fintech startup, has raised $21 Mn in a funding from Prashasta Seth, Kae Capital, 9 Unicorns, Anicut Capital and Negen Capital – Read More

GlobalFair, a Gurugram-based cross border trading platform, has raised $20 Mn in Series A funding from Lightspeed Venture Partners, Saama Capital, India Quotient, AUM Ventures and Stride Ventures  – Read More

Drivetrain AI, a Bangalore-based financial planning and monitoring platform, has raised $15 Mn in Series A funding from Elevation Capital, Jungle Ventures, Venture Highway, Akshay Kothari, Amit Singhal, Khadim Batti, Amit Sharma, Krish Subramanian, Karthik Srinivasan and Kushal Nahata  – Read More

M&A Snippets

Gurugram-based retail platform V-mart has acquired Gurugram-based fashion brand LimeRoad for an undisclosed amount  – Read More

 

Can Intelligence be Artificial?

October 16, 2022

Can Intelligence be Artificial?

Humans as a species possess a monopoly on Intelligence. This ‘natural’ intelligence is a consequence of billions of years of evolution, where single celled organisms evolved into complex beings like you and me.

Due to our human-centric world, we often tend to attribute ‘end goal’ to the natural process of evolution of life on earth. There is none. Evolution didn’t happen because it was destined to produce an intelligent species such as homo sapiens.

Evolution has remarkably enabled humans to perceive, comprehend, interpret the ‘nature’ around them. Humans then collate, structure and classify what they have perceived. This is the cumulative corpus of ‘knowledge’ humans have created. We further have a unique ability to make inter-linkages between different knowledge blocks, either in an imaginatively creative way or in a logically deductive way. This way knowledge gets transformed into actionable intelligence.

The word ‘artificial’ is an antonym of natural, something which doesn’t exist on its own. Artificial Intelligence (AI) refers to the ability of a non-human entity to mimic human-like intelligent thinking. Since AI is not natural, it can have an ‘end-goal’ or objective.

Would AI be able to break or supersede the human monopoly on intelligence?

This question fascinates a lot of people. Techno-futurists certainly believe so. In order to attempt an answer we should classify AI’s caliber, as this prescient article from 2015 does, into three kinds – ANI, AGI and ASI.

ANI refers to Artificial Narrow Intelligence or Weak AI. Cars, ticket-booking, personalized recommendations on apps, email spam filters, translation engines, chess programs are common examples of ANI. As you would have noticed, the results of ANI engines have been refined over a decade. Recall the clunky computer generated translations or the speech-to-text programs. Basically, the AI has enhanced its ‘predictive power’ after multiple iterations of algorithms running endlessly over massive amounts of data.

AGI refers to the Artificial General Intelligence or strong AI. In simple terms it is the ability of an algorithm to understand and create abstract linkages between knowledge blocks, an innate characteristic of ‘natural intelligence’ as discussed above. Machines can easily beat a human on brute computation power and repetitive tasks. Hece making a chess program is an easy task. But machines have a hard time figuring out ‘abstractions’ or ‘meaning’ out of the words, images, and speech generated by humans.

A step in the direction of AGI can be this latest version of DALL.E. This AI tool is capable of interpreting descriptions in natural language and creating realistic images out of it.

The third stage of AI is ASI or Artificial super intelligence. Super intelligence not only in terms of speed but also quality. This is the realm of the ‘unknown unknowns’. Futurists debate over the timelines when this could become an eventuality. The argument made is – as humans we are limited by our natural brain, which had the ability to create a self-learning algorithm and it did, but it lacks the ability to imagine how AI would exponentially enhance itself in times to come. Simply put, ASI would be synonymous with God.

“Hey Google, next Sunday, compose and send the partners’ message wishing everyone on account of Diwali, with a creative message which denotes prosperity and happiness, based on my aesthetic preferences.”

Pondering when the commands like above may become a reality, I take your leave.

Ecosystem Ventures This Week

Key Highlights – Events

We are happy to share that Mr. Abhijeet Bhandari (Partner, Ecosystem Ventures) has been invited as a jury at the Bharat Pitchathon event, #HSX2022, an Entrepreneurship Conclave 2022 presented by Headstart, held in Bangalore.

 

 

Startup Funding Summary

Adda247, a Gurgaon-based edtech startup, has raised $35 Mn in funding from WestBridge Capital, Google, Info Edge (India) and Asha Impact – Read More

Isthara CoLiving, a Hyderabad-based premium co-living brand, has raised $10 Mn in funding from Eagle Investments – Read More

Good Health Company, a Hyderabad-based healthtech startup, has raised $10 Mn in Series A funding from Left Lane Capital, Khosla Ventures, Quiet Capital and Weekend Fund – Read More

Flickstree, a Mumbai-based content and marketing technology startup, has raised $5 Mn in Pre-Series B funding from Venture Catalysts Group  – Read More

Explorex, a Bangalore-based foodtech startup, has raised $5 Mn in Pre-Seed funding from Taher Savliwala, Kevin Lin, James Park, Harpreet Rai and Liron Shapira  – Read More

M&A Snippets

Bangalore-based edtech platform Vedantu has acquired Bangalore-based test prep platform Deeksha for $40 Mn  – Read More

Delhi-based e-commerce company Moglix has acquired Chandigarh-based security system supplier ADI for an undisclosed amount  – Read More

Delhi-based edtech startup Physics Wallah has acquired Delhi-based edtech platform PrepOnline.in for an undisclosed amount  – Read More

Mumbai-based real estate broking platform Homesfy Realty has acquired Mumbai-based property brokers EQServ for an undisclosed amount  – Read More

Is Ramayana a Metaverse?

October 9, 2022

I hope you had a joyous celebration on the occasion of Dussehra or Vijayadashmi.

Ramayana, for centuries, has defined the contours of cultural conscience as a victory of good over evil, dharma over adharma. One is expected to self-introspect and overcome his lesser traits to evolve into a better individual. But is an ‘individual’ separate from the ‘unified reality’ of the universe we inhabit?

‘Our universe’ was created through a Big-Bang explosion and has been expanding ever since. There may be multiple universes, we have no means to prove or disprove them. But what we cannot prove does not mean we cannot imagine. Imagination is the definitive human trait. Imagination makes us futuristic, linking the past, such as Ramayana, with the likely future – Metaverse.

The Greek word ‘meta’ means beyond or after. Thus, what is beyond the knowledge of physical science becomes metaphysical. Meta also denotes self referential identity or category.

Being added to the lexicon is Metaverse. Meta + Universe. Simplistically, a universe ‘beyond’ or ‘after’ our physical universe. A shared three dimensional space which ‘transcends’ our reality. How do we create that?

Well, poets and writers for centuries have ‘transcended’ reality through their words. Can we not create a bridge from Jambudweep to Lanka? Can a vanar sena not cross it? Have we not flown in a Pushpak viman? Through Metaverse one may look, feel, sense to a greater degree than just imagining these stories. Metaverse would enable real-life visualization of our thoughts.

Starting with Virtual reality (VR) and augmented reality (AR) technology, the metaverse aims to create a three-dimensional (3D) digital environment which we all can cohabit, think, and transact in.

This is enabled either through personal wearable devices such as the VR headsets or goggles and creation of dedicated spaces to take us into a simulated world. A tremendous scope of possibilities open up as we move beyond the traditional two-dimensional screen-spaces of our mobiles and laptops. Brands can leverage user experience (UX) to mimic the real world. Team collaboration may become realistic as individual ‘avatars’ would interact with each other just like a meeting room. Education & knowledge creation becomes far more interactive in 3D space.

It has applications in the manufacturing sector to increase productivity and occupational safety, reduce travel and training costs. Similarly, it has streamlined workflows in construction by reducing infrastructure inspection time and in complex engineering design by reducing the iteration time. In healthcare, doctors can go beyond 2D X-Ray or scans and remotely operate an arm in through a 3D space.

Metaverse is still in the conceptual stage though big tech companies have been working on it for quite some time. A new set of startups have come up which aim to capitalize on early mover advantage in this nascent space whose contours are yet to be defined and agreed on.

It would be interesting to observe the practical implementation or uses of Metaverse in times to come.

Ecosystem Ventures This Week

Key Highlights – Events

We are happy to share that Mr. Vinay Bhandari (Partner, Ecosystem Ventures) has been invited as a jury along with Vinay Bansal, Inflection Point Ventures and Susmit Patodia, Antler at ISB PGPMax CATAPULT, a Leadership Summit 2022 organized by the Indian School of Business, Hyderabad.

Startup Funding Summary

Euler Motors, a Delhi-based EV startup, has raised $60 Mn in Series C funding from GIC Singapore, Blume Ventures, Athera Venture Partners, QRG Holdings, ADB Ventures and Moglix – Read More

Vance, a Bangalore-based global neo-banking platform, has raised $6 Mn in Seed funding from Hummingbird Ventures, Global Founders Capital, YCombinator, Soma Capital, Alan Rutledge and Gokul Rajaram – Read More

Mufin Finance, a Delhi-based NBFC, has raised $5 Mn in Series A funding from Incofin India Progress Fund – Read More.

HROne, a Noida-based HR tech startup, has raised $4 Mn in Series A funding from Insitor Partners and Prudent Investment Managers – Read More

FALCA, a Bangalore-based agritech startup, has raised $3 Mn in Pre-Series A funding from Inflection Point Ventures, LetsVenture, Mumbai Angels and other HNIs – Read More

M&A Snippets

Noida-based premier online classifieds company Info Edge has acquired Delhi-based edtech platform Coding Ninjas for $17 Mn  – Read More

Mumbai-based children-focused robotics startup Miko has acquired California-based AI-enabled gaming startup Square Off for an undisclosed amount – Read More

Delhi-based IT services and consulting company RattanIndia Enterprises has acquired Haryana-based EV manufacturer startup Revolt Motors for an undisclosed amount – Read More

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