Tag: Newsletter

Where lies ESV’s Ecological Niche?

October 2, 2022

I hope you are enjoying a prosperous Navratri celebration this year. After being subdued for two years due to the pandemic, it appears the festivities have returned to their former glory.

The startup ecosystem appears to await its celebratory times, given the total reported funding for the week stood at ~$140 Mn, a decline of $48 Mn from last week.The funding stood at $245 Mn in the previous week.

Coming back to the question posed in the title. Ecological niche is defined as ‘the functional role and position (micro-habitat) of species in its ecosystem’. In this edition, I would like to talk about two of our company’s strengths , our ‘functional role’ or ‘micro-habitat’ within the broader Startup ecosystem.

Couple of days back, in one of his insightful posts, well regarded Linkedin columnist Rajan Singh, founder of Habitstrong, shared his insights for young professionals, on the pros and cons of joining the best-known management consulting firms, such as Mckinsey.

To summarize his argument, management consulting firms quickly develop you to be a structured thinker. Clear thinking is inseparable from clear communication, which when coupled with managing client’s team dynamics, results in a final client presentation, which is hard to disagree with.Majority of the consulting mandates end at this juncture of final presentation.

Here lies our first strength. I am pleased to share that this is the point where the challenging work at ESV begins. Our short term strategic consulting assignments or even fund raise mandates evolve into long term implementation support mandates to the founder/startup.

Needless to say, it is a difficult task and often an invisible one. What may be a bullet point on the final strategy-deck requires a whole arsenal of weapons, in the form of skills or being resourceful, to bear fruition. The problem is compounded given that startups are cash starved and do not have a war-chest like big corporations.

One may wonder how a seemingly simple task of structuring organization-wide Google drive folders, results in substantial productivity gains? Similarly, streamlining internal communication of a geographically-dispersed team with ad hoc & irregular communication channels is a huge task in itself. Next you may be optimizing the product development plan with the tech team while making digital marketing strategy more outcome driven. In short, one has to adorn all functional hats as per the exigencies, which happen daily in startup operations.

Mr Rajan in his post further commented that if you wish to become an entrepreneur or an investor (witness innovation or learn investing), you are better off doing it yourself, rather than joining a consulting firm.

Therein lies the second strength of our company. Ecosystem Ventures brings the best of both worlds. Consulting on one hand and entrepreneurship & investment banking on the other.

ESV continues to nurture innovative product ideas which are scalable. Also brings on board the nuances of investing with our funding arm.

Let me end by requesting you to share this newsletter with ambitious and intellectually curious professionals in your network who may be looking to find their ‘career niche’ – whether consulting, investing or entrepreneurship.

Startup Funding Summary

Molbio Diagnostics, a Goa-based healthtech startup, has raised $85 Mn in a funding from Temasek and Motilal Oswal Alternates – Read More

Signzy, a Bangalore-based fintech startup, has raised $26 Mn in a funding from Gaja Capital, Vertex Ventures and Arkam Ventures – Read More

Indel Money, a Kerala-based NBFC, has raised $6 Mn in a funding from Market-Linked debentures – Read More

Saveo, a Bangalore-based B2B marketplace for pharmacies, has raised $5 Mn in a funding from Matrix Partners, Gunosy Capital, 4point0 Health Ventures, LC Nueva AIF, Jetty Ventures, Ocgrow Ventures and RTP Global – Read More

Preimage, a Bangalore-based 3D reconstruction platform, has raised $2 Mn in Seed funding from pi Ventures, Better Capital, Java Capital and HNIs – Read More

M&A Snippets

Ahmedabad-based pharmaceutical company Torrent Pharmaceuticals has acquired Chennai-based skincare products manufacturer Curatio Healthcare for $245 Mn – Read More

Ahmedabad-based IT startup Aarav Solutions has acquired Pune-based AI-powered startup Froot Research for $4 Mn – Read More

Bangalore-based healthtech and insurtech company Medi Assist will acquire Mumbai-based insurtech company Medvantage Insurance TPA for an undisclosed amount – Read More

Bangalore-based fintech company Razorpay has acquired Bangalore-based fintech startup PoshVine for an undisclosed amount – Read More

Noida-based IT giant, HCL Group has acquired Chennai-based edtech platform GUVI for an undisclosed amount – Read More

What is the Ethereum blockchain trying to ‘merge’?

September 25, 2022

One of the major news before last week was the expected completion of a major software upgrade of the Ethereum blockchain called “The Merge” by Sep 15.

In this newsletter we would be discussing cryptocurrency and blockchain in simple terms for someone completely new to this world. Given the multiple jargon and complexity associated with them, there is no easy way around it, but let us give it a shot.

Visualize a ₹ 2000 currency note from your wallet. It has an alpha-numeric code – OBQ545781 as the serial number. You are giving me this currency note with a defined serial number as a paid annual subscription to this newsletter. Similarly, there are five hundred other subscribers to this newsletter who would hand me the same INR 2000 denomination notes. Each with their respective serial numbers.

In the world we operate, the responsibility of not having a fake note rests with the RBI. In other words, the repository of valid codes or serial numbers, on the currency notes in circulation, rests with the central bank of the issuing country. In our case, the Reserve Bank of India.

But now think of a different world.

Imagine the crisp currency note OBQ545781 in your wallet to be fragmented into 500 pieces of a jigsaw puzzle and each of the 500 subscribers has one. You have one piece too. Similarly, there would be 499 pieces or jigsaw puzzles of other subscribers’ currency notes in your wallet, assuming each one has ₹2000 in their account.

Visualize further, you wish to take an annual subscription of this newsletter and have to pay me. To do so, 500 jigsaw puzzle fragments magically come out of the 500 subscriber wallets and instantly reassemble to form a Rs 2000 note with OBQ545781 serial number, ready to be posted to me. In this way, the collective network of this newsletter’s subscribers have authorized a transaction between you and me.

In other words, the repository of valid serial numbers on the currency notes in circulation is decentralized. You don’t own it. I don’t own it. No one person holds it. No one bank holds it. No central bank holds it.

This is what blockchain is. The underlying database (repository of information) which is stored across all the nodes of the network. For our example, each of the 500 subscribers is a node in this imaginary ‘Venture pulse newsletter network’, where ‘blocks’ (jigsaw puzzle pieces of your 2000 note) are added and updated to authorize a transaction, resulting in a chain of blocks. Hence, the name blockchain.

A currency like ₹ or $ serves as a medium of exchange. Bitcoin is the oldest currency based on the blockchain technology. Just like a regular currency note has a host of security/authentication marks embedded in it, the digital currency has security/authentication codes (read algorithmic problems) embedded, which are encrypted. At the time of a transaction (such as you paying for this newsletter) these codes would be decrypted, updated and encrypted again, to reflect the latest transaction exchange, across the whole network. Hence, it is called crypto-currency. But Bitcoin, rather than becoming a widely accepted transactional currency, evolved into a speculative commodity. Maybe we would delve into reasons for it in another issue of this newsletter.

Like Bitcoin, Ether is a crypto currency on the Ethereum blockchain. Ethereum blockchain went a step further than Bitcoin and created a platform.

Recall the fragmented 500 jigsaw pieces of the ₹2000 currency note in your wallet. Can we replace the currency note with land records, insurance policy, health card, degree certificates? Obviously, we can. In other words, the application of blockchain can go beyond recording currency transactions. That’s what Ethereum enables users to do in the web3 space.

Seems surreal? It surely is! But as you might have guessed, there are quite a few challenges with blockchain and crypto applications built over it.

One of the challenges, ethereum seems to have solved with what it calls “the merge”. Hence, it was in the news. Let us look at their solution.

Recalling our thought experiment – the magical reassembly of a ₹ 2000 note to authorize and process the transaction between you & me. This is known as ‘validating a transaction on blockchain’. Some or the other computing machine actually has to do this task in the background. In crypto parlance it is known as ‘mining’ or ‘proof of work’. In ethereum lingo it is called ‘gas fees’. The term is inspired from gas, American for fuel, which is required for a car to run. Similarly, ethereum requires fuel to run i.e. to make transactions.

Simplistically, till now, this task can be understood to be performed by someone on the blockchain network who volunteers for it. E.g. You are paying me for the subscription, this is validated by another Mr ABC on the venture pulse subscriber network, who opts to do so, and earns INR 50 for it. This process is time consuming and has become computationally expensive. Rs 50 as ‘gas fees’, at times could become Rs 500 or more which was unsustainable and the reason for less adoption of the Ethereum platform.

Ethereum has switched the validation process on their platform from ‘proof of work’ to ‘proof of stake’ model.

Ethereum argues this is cost effective as it is not dependent on existing computing infrastructure or ‘miners’. Instead, the transactions would be validated by people who stake their existing ether coins, and get rewarded with more coins.

Continuing with our example, It is like saying, HDFC Bank is one of our newsletter subscribers and it assures us that let them handle the subscription transactions for all of us in crypto since that’s what they efficiently do in other currencies. They are pledging an initial sum of 10 lacs and would bring down the transaction cost (gas fees) from Rs 50 to Rs 15 or even lower.

Decentralized blockchain makes way for decentralized finance. This move would help existing ethereum owners to use their coins and earn returns on it. Second, it would allow finance professionals to compare crypto assets with traditional assets.

In a way it should be viewed as Ethereum trying to create a link between the old established financial world and the new one which is yet to shape up. Hence the name of the software upgrade – ‘the merge’.

Ecosystem Ventures This Week

Key Highlights – Events

We are happy to share that Mr. Shailesh Jain (Vice President) and Mr. Kinjalk Pancholi (Associate) have represented Ecosystem Ventures being a part of the judging panel at AvantGarde business plan competition organized by IPM students, held at IIM Indore.

 

Startup Funding Summary

Zopper, a Noida-based insuretech startup, has raised $75 Mn in Series C funding from Creaegis, ICICI Venture, Blume Ventures, Tiger Global and Bessemer Venture Partners – Read More

Light Microfinance, a Ahmedabad-based microfinance company, has raised $26 Mn in Series B funding from British International Investment, Nordic Microfinance Initiative, Triple Jump BV and Incofin IM – Read More

Join Ventures, a Mumbai-based house of D2C brands, has raised $24 Mn in Series B funding from MO Alternate Investment Advisors, Convivialité Ventures, DSG Consumer Partners, Venture Catalysts, ZNL Growth and other HNIs – Read More

KukuFM, a Mumbai-based Audio platform, has raised $22 Mn in funding from The Fundamentum Partnership Paramark, KRAFTON Inc, 3one4 Capital, Vertex, Verlinvest and FounderBank Capital – Read More

Bhanzu, a Hyderabad-based math learning platform, has raised $15 Mn in Series A funding from Eight Roads Ventures and B Capital – Read More

M&A Snippets

Mumbai-based green energy business Reliance Industries will acquire minority stake in US-based research and development firm Caelux Corporation for $12 Mn – Read More

Mumbai-based ecommerce furniture company Pepperfry has aqui-hired Mumbai-based architecture and planning firm Brandmakerr for an undisclosed amount – Read More

Is Byju’s revenue overstated?

September 18, 2022

The biggest newsmaker of the week has been the world’s most-valued Indian Ed-tech unicorn – Byjus. In this week’s newsletter we would analyze the reasons behind it. For brevity & readability, rather than quoting actual financial figures or terse accounting jargons, let us look at the underlying argument.

Byjus, started in 2011 as a CAT focused coaching institute which evolved into a full stack K12 education app, last raised ~$2.8 Bn at a valuation of ~$22 Bn. Byjus has made a series of acquisitions, the most notable of them being a billion dollar buy-out of physical JEE & NEET coaching brand Aakash Institute. This was on expected lines of other pure-play online players expanding their offline presence, after the pandemic induced enthusiasm and necessity for online learning had tapered off. Other big-ticket acquisitions in the past three years include Epic, Great learning, Toppr, GradeUp, Osmo, TutorVista, Whitehat Jr, LabinApp, Scholr, Tynker and GeoGebra.

From an investor standpoint, the growth story of Byjus or any other startup drills down to one single metric – IRR – Internal rate of return on the capital invested. IRR is dependent on the valuation jump the startup makes through successive fund raise rounds. In simple terms, investing 1 Cr at 10 Cr valuation brings me 10% stake in a business. In the next fundraise if the valuation jumps to 50 Cr, then simplistically, after dilution with let us say 8% stake, my 1 Cr becomes 4 Cr. The sooner it becomes, the merrier it is, as higher would be the IRR.

Valuation is the holy grail of the VC world as it is both an art and a science. Often, it is benchmarked as a multiple of the current revenue of the startup. SaaS platforms tend to command higher multiples as compared to operationally heavy service businesses. Thus, a software company with an ARR of ₹1 Cr, may command a valuation of ₹10 Cr (10x multiple) but a physical service business, such as a coaching institute, with an ARR of ₹1 Cr would not be valued the same.

Secondly, with a focus on hyper growth and scale, to command a dominant market position in the shortest possible time, profitability (unit economics) is given a miss. The focus on profitability is postponed to the future by founders & VCs alike, for short-term gains.

In the case of Byjus, both its revenue and costs (revenue drivers) for past financial years (FY 20 & 21) have been revised on the insistence of its auditor Deloitte. The old revenue figure for FY20 was reported to be ₹2800 Cr. The figures for FY21, due since Apr 21, also led to revision of FY20 figures, were released last Wednesday, hence the chatter in startup WhatsApp groups. The revised FY20 revenue is ₹2512 Cr and for FY21 is ₹2428 Cr. The total expenditure has increased from ₹2873 Cr in FY20 to ₹7028 Cr in FY21.

The expected reasons for the delay have been in the news since June as this report from The Ken argues.

At the heart of the matter is the accounting principle of revenue recognition. Should the revenue be booked completely as soon as sales happen or should it be spread over the delivery period of the services? E.g. If this newsletter was a paid subscription and I had taken an amount of ₹9000 from you for the next three years. As per the conventional accounting, INR 3k would be put as the revenue in the current financial year, as I have to write and ensure it reaches your mailbox every Sunday for the next two years. This entails a cost in terms of time & effort which goes beyond the current year.

On the other hand, if I was a tech startup, and had sold you a personalized AI newsletter bot for ₹90k for the next three years, which would have automatically sent a randomly generated newsletter to your contacts on your behalf, I would make an argument to book the whole or substantial part of the 90k amount in current financial year. I would argue the software is completely developed and works on an autopilot mode. Hence, there are no future efforts (costs) required to cater the offered service to the customer.

Byju, like other tech companies, made and persisted with a similar argument on revenue recognition. Specifically, for revenue classified as ‘education streaming services’. You can read Raveendran’s (Byjus’ founder) latest interview here. But Byjus’ argument becomes a bit unconvincing as ‘streaming services’ entails conducting live classes or sessions by teachers across grades. An operationally heavy service component.

Secondly, a major portion of Byjus’ subscriptions are financed through lending partners who transfer the complete subscription amount to Byjus after the down-payment made by parents. Byjus pays interest to the financiers on behalf of the parents and books the whole subscription amount as revenue whereas the interest paid is accounted as a finance cost. This has also been revised and now the interest component would be subtracted from the revenue figures itself.

Revenue recognition and its classification across various streams is of utmost importance. At ESV, as part of our startup scouting, investment due diligence, and long-term consulting engagements, we emphasize on segmenting revenue across identifiable streams and match direct costs attributable to each revenue stream. This makes the derived valuation multiple realistic. If one of the startup’s revenue streams is a low-margin business with significant direct cost, it should not be grouped together with a stream which isn’t.

Ecosystem Ventures This Week

Key Highlights – Events

We are happy to share that we were a part of the Central India Startup Summit, an event conducted by Headstart, a volunteer-driven organization supporting entrepreneurship and startups in India. Mr. Abhishek Sanghvi (Partner, Ecosystem Ventures) represented the jury and was also a speaker at the event, held in Indore (M.P.).

The major topics for discussion were how capital as a commodity is reachable in tier 2 cities and how experience is one of the major factors when a startup looks for funding.

Startup Funding Summary

Yulu, a Bangalore-based shared mobility startup, has raised $82 Mn in Series B funding from Magna International – Read More

DotPe, a Gurgaon-based fintech platform, has raised $55 Mn in a funding from Temasek, PayU Fintech Investment, Info Edge Ventures, MUFG Bank Ltd and Naya Global Investments – Read More

EPACK, a Noida-based outsourced design manufacturer, has raised $40 Mn in a funding from Affirma Capital – Read More

Nobel Hygiene, a Mumbai-based hygiene products manufacturer, has raised $17 Mn in a funding from Sixth Sense Ventures – Read More

Rephrase.ai, a Bangalore-based AI startup, has raised $11 Mn in Series A funding from Red Ventures, Silver Lake, 8VC and other HNIs – Read More

M&A Snippets

Mumbai-based beauty e-commerce platform Nykaa has acquired Delhi-based digital content platform Iluminar Media (LLB) for an undisclosed amount – Read More

Bangalore-based thrasio style startup Mensa Brands has acquired Silvassa-based peanut butter brand MyFitness for an undisclosed amount – Read More

Mumbai-based edtech startup upGrad has acquired Delhi-based corporate training platform Centum Learning for an undisclosed amount – Read More

Ecosystem Weekly | 11th Sep’22

September 11, 2022

The total reported funding this week stood at ~$132 Mn across 39 deals, a decline of around 33.6% from $199 Mn in the previous week. The highlights were Tata 1mg (ePharmacy platform) becoming a unicorn by raising $40 Mn at $1.25 Bn valuation, Akshaykalpa Organics (Organic dairy) raising $15Mn, GroMo (tier 2 / 3 towns focused fintech) raising $11 Mn in Series A round.

If you notice, all three of them are in different categories of ecommerce – pharmacy, groceries and financial products. In this newsletter let us understand the buzzword ‘ONDC’ which is supposed to transform ecommerce as we know it today.

Branded as ‘UPI for ecommerce’, ONDC stands for Open Network for Digital Commerce. ONDC is an open network and not a centralized platform. Amazon & Flipkart, the current e-commerce giants are centralized platforms, which means the seller and the buyer both have to be on Amazon app/platform to do a transaction, the rules for which are dictated by the platform.

On the other hand, ONDC aims to make ecommerce platform agnostic through a network of interconnected buyer-side apps and seller-side apps. E.g. Tata 1mg, Akshayakalpa Organics and GroMo may be onboarded as seller apps on ONDC network. Similarly, there is PayTM which has already been onboarded as a buyer-side app on the network. So, you and I, as PayTM app users, would be able to buy medicines from Tata 1 mg, dairy products from Akshayakalpa, and register for a GroMo loan, within the PayTM app itself.

Similarly, there can be multiple user-entry points (buyer side apps), like PayTM to the ONDC network. Nine banks have already bought stakes in ONDC, incorporated as a Not for profit company, to integrate their customers. Google and Payment aggregators can be another customer entry point to the network.

On the other hand, seller apps on the network would keep on adding new products and categories. This would be supplemented and catered through onboarding of logistic delivery partners on the network. More transactions lead to more deliveries leading to more business for them.

It appears it’s a win-win situation for everyone and the duopoly of existing giants Amazon and flipkart is bound to be broken in near future! Maybe, it’s not that simple.

Two strategic challenges arise. Is it so seamless to bring users from one app and sell them products on another? Second, what if Amazon & Flipkart themselves are on the network, as this news suggests? Would their dominance not translate on the new ONDC network as well?

In order to think about the first question, let me draw a physical world analogy, to emphasize on the sticking power of closed integrations.

Most likely, while shopping in a big city mall, you would have been approached by a young sales executive, selling great credit card offers, and on all occasions you would have excused yourself. Because you were in the mall to entertain yourself with a movie and a treat and not buy a financial product.

Somewhat similar consumer behavior is likely to play out in ‘digital malls’ of the future (interconnected buyer seller apps on ONDC). In my opinion, It is less likely for a person buying medicines on his preferred e-pharmacy app to explore and buy an insurance policy or shoes in the same session.

Closed integration – right from customer acquisition funnel, in-app buying experience, seamless payment integration, fast delivery, refunds and robust customer-care processes – has a lot of moving pieces, all of them have to be conquered.

ONDC is likely to open up new opportunities for all stakeholders. How they would evolve would be interesting to watch.

Startup Funding Summary

Tata 1mg, a Gurgaon-based e-pharmacy platform, has raised $40 Mn in a funding from Tata Digital, MPOF Mauritius Ltd, HBM Healthcare and KWE Beteiligung – Read More

iBus Group, a Bangalore-based telecom infrastructure and technology company, has raised $16 Mn in a funding from Nomura and global financial services group – Read More

Akshayakalpa Organic, a Bangalore-based dairy enterprise, has raised $15 Mn in Series B funding from British International Investment, Rainmatter Foundation and Venture Dairy – Read More

GroMo, a Gurgaon-based fintech startup, has raised $11 Mn in Series A funding from SIG Venture Capital, Y-Combinator, Das Capital, Goodwater Capital, Beyond Next Ventures, Soma Capital, Ace & Company, Hauz Khas Ventures, Kunal Shah, Niraj Singh, Ramakant Sharma, Alok Mittal, Utsav Somani, Ashish Sharma, Abhishek Goyal and Nitin Gupta – Read More

ZippMat, a Bangalore-based SCaaS platform, has raised $10 Mn in a funding from Matrix Partners India, Zephyr Peacock, HDFC bank and TradeCred – Read More

M&A Snippets

Navi Mumbai-based conglomerate company Reliance Industries has acquired US-based solar software startup SenseHawk for $32 Mn – Read More

Mumbai-based building materials supplier Aris Infra has acquired Bangalore-based real estate solution provider Unitern Advisors for an undisclosed amount – Read More

Chennai-based payment gateway firm IppoPay has acquired Chennai-based risk management startup Tutelar for an undisclosed amount – Read More

Ecosystem Weekly | 04th Sep’22

September 4, 2022

I hope you have had a joyous Ganesh Chaturthi celebration. May the lord be kind and shower you and your team with prosperity in times to come.

This week, it appears, Ganesh ji has been a bit reticent to facilitate the flow of funds in the overall startup ecosystem. Total funding reported has been ~$ 199 Mn, a decline of around 23 % from the previous week inflow of ~$260 Mn.

The biggest newsmakers have been Early Salary (an instant cash loans fintech) and Skyroot Aerospace (a small-satellite launch services startup). Early Salary has raised $110 Mn in Series D round at a valuation of $300 Mn whereas Skyroot Aerospace has raised $51 Mn in Series B round. Regular readers of our newsletter would recall, we had shared a brief note on challenges & opportunities for Fintechs and we made a comment on the immense possibilities of the Aerospace sector.

There’s never a dull moment in the startup ecosystem. Let us look forward to next week, as to what it has in store for us?

Startup Funding Summary

EarlySalary, a Pune-based fintech startup, has raised $110 Mn in Series D funding from TPG’s The Rise Fund, Norwest Venture Partners, Piramal Capital and Housing Finance Limited – Read More

Skyroot Aerospace, a Hyderabad-based spacetech startup, has raised $51 Mn in Series B funding from GIC, Mukesh Bansal, Anil Chalamalasetty, Mahesh Kolli, Sherpalo Ventures, Neeraj Arora, Solar Industries, Wami Capital and other HNIs – Read More

Bike Bazaar, a Pune-based two-wheeler services provider, has raised $21 Mn in Series D funding from Women’s World Banking Asset Management, Elevar Equity and Faering Capital – Read More

4B Networks, a Mumbai-based broker network platform, has raised $11 Mn in a funding from Info Edge – Read More

Metalbook, a Delhi-based digital supply chain platform, has raised $5 Mn in a funding from Axilor Ventures, Foundamental, RTP Global, Stride Ventures and other HNIs – Read More

M&A Snippets

US-based talent solutions platform Hudson Global has acquired Chennai-based HR services company Hunt & Badge Consulting for an undisclosed amount – Read More

Mumbai-based packaging and containers manufacturer Ansapack has acquired Kolkata-based packaging and Containers manufacturer Teximco Group for an undisclosed amount – Read More

Ecosystem Weekly | 28th Aug’22

August 28, 2022

It has been an eventful week in the startup ecosystem. The total funding reported is of $260 Mn across 24 deals, around an increase of ~192% from $135 Mn in the previous week. The uptick is attributed to the fact there were three deals of over $50 Mn.

The biggest deal of the week, $65 Mn in an ongoing Series D round, has been of Servify, which brands itself as the World’s smartest device ownership and service management platform. As per the news reports, the investing firm, Singularity pegs the addressable market of after sales device protection to be over $ 100 Bn. The company is poised to be profitable and is at an ARR of $130 Mn, as per the quoted statement of Servify’s founder.

Those numbers, if true, are impressive which would most likely make Servify a unicorn in near future. A report here estimates the company’s valuation to be over $800 Mn and is suggestive of an IPO in the next 18-25 months. But beyond numbers why would Servify claim to be the world’s smartest device ownership & service management platform?

Over 75 OEMs, nearly all of the top mobile phone brands, have partnered with Servify. The key differentiator has to be the automated decision making tool which the company has developed. The automated claim agent instantaneously approves or denies a consumer claim based on ‘sentiment & system + fault AI’ derived from device intelligence. This also leads to targeting and acquiring right customers and rewarding honest consumers. Thereby, the company claims to significantly drive down the operational costs for OEMs.

Whether Servify is the smartest platform is a redundant question. I would rather pick another phrase from their website which sounds more apt and the regular readers of our newsletter would find convincing – ‘Redefining service experience at scale.’

Startup Funding Summary

Servify, a Mumbai-based product lifecycle management startup, has raised $65 Mn in Series D funding from Singularity Growth Opportunity Fund, AmTrust, Pidilite, Iron Pillar, BEENEXT, Blume Ventures and DMI Sparkle Fund – Read More

Hector Beverages, a Bengaluru-based food & beverages company, has raised $50 Mn in a funding from GIC Special Investments – Read More

Mojocare, a Bengaluru -based health and wellness startup, has raised $20 Mn in Series A funding from B Capital, Chiratae Ventures, Sequoia India’s Surge, Better Capital, Vineet Jain, Kunal Shah, Ankit Nagori, Adrian Auon, Sajid Rahman, Ravi Bhushan and Vivekananda HR – Read More

Awign, a Bengaluru-based HR tech startup, has raised $15 Mn in Series B funding from Bertelsmann India, Amicus Capital Partners, Mynavi Corporation, Michael & Susan Dell Foundation, Client Associates and Unitus Ventures – Read More

XYXX, a Surat-based apparel brand, has raised $11 Mn in Series B funding from Singularity Growth Opportunities Fund, Trifecta Capital, DSG Consumer Partners and Sauce Venture – Read More

M&A Snippets

Mumbai-based furniture marketplace Pepperfry has acquired Mumbai-based interior solutions company Brandmakerr for an undisclosed amount – Read More

Ecosystem Weekly | 21st Aug’22

August 21, 2022

I hope you had an enjoyable Raksha Bandhan followed by an inspiring 75th independence day celebration last week,

Though the total funding raised this week ( $135 Mn) was subdued by around 45% as compared to the previous week, on account of the lesser average ticket size of the deals. The highlight of the week has been the minting of a new unicorn – Shiprocket – which has raised $ 32.6 Mn at a valuation of $1 Bn.

Shiprocket, founded in 2017, is a logistics aggregator platform. This news follows a trend in the logistics industry, starting with the biggest player Delhivery acquiring unicorn status as early as 2020 and finally being listed in May 2022. Another major player in the space ExpressBee became a unicorn in Feb 2022 when it had raised $300 Mn. In another development, Amazon is in talks to acquire a majority stake in Ecom Express, to strengthen its own logistics arm, which would most likely lead to Ecom Express valuation over $1 Bn. Here is a good infographic on the logistics space.

The likely reasons for favorable investor sentiments on logistics sector are – the ecommerce space as a fraction of total commerce is still in nascent stage, the existing digital commerce has been dominated by the horizontal platforms like Amazon & flipkart, there has been an observable trend that D2C companies are aiming to increase their ecommerce share and shorten the delivery time for their brands, the ONDC may open up new avenues for smaller players in ecommerce.

All of these factors contribute to the growth of the logistics sector and Shiprocket is making the bets in accordance with it. It would be interesting to watch the developments in the coming months.

For the benefit of our new readers, I would end by sharing about one of our portfolio companies, a last mile logistics intelligence startup, which we have invested in, last year.

Startup Funding Summary

Sunstone Eduversity, a Gurgaon-based edtech platform, has raised $35 Mn in Series C funding from WestBridge Capital and Alteria Capital – Read More

Shiprocket, a Delhi-based logistics enablement platform, has raised $33 Mn in Series E2 funding from Lightrock India Fund, Temasek Holdings, Bertelsmann, Moore Strategic Ventures, March Venture Capital, Huddle Collective and Paypal – Read More

Exponent Energy, a Bangalore-based EV rapid charging startup, has raised $13 Mn in Series A funding from Lightspeed, YourNest VC, 3one4 Capital and AdvantEdge VC – Read More

Rusk Media, a Delhi-based digital entertainment company, has raised $10 Mn in Series A funding from DAOL Investment, Audacity Ventures, InfoEdge Ventures , Mistry Ventures and Survam Partners – Read More

Prolance, a Bangalore-based interior design companies, has raised $2 Mn in Pre-Series A funding from Foundamental, Axilor, Arali Ventures and Force Ventures – Read More

M&A Snippets

Bangalore-based payment solutions provider Razorpay will acquire Bangalore-based payment solutions provider Ezetap Mobile Solutions for $126Mn – Read More

Delhi-based edtech platform PhysicsWallah has acquired Agra-based edtech startup FreeCo for an undisclosed amount – Read More

Ecosystem Weekly | 14th Aug’22

August 14, 2022

As India celebrates Azadi ka Amrit Mahotsav, the Indian startup ecosystem continues to be fuelled by innovation, enthusiasm and entrepreneurial spirit. In its 75 years’ rich legacy, transformations have put India on par with leading economies.

One can view India’s Independence as the birth of a startup too. The people of the country, who adopted a problem-solving approach to gain independence have set the premise for the national culture to initiate, be self-reliant and help the country flourish.

Since its Independence, India has shown stellar growth in various sectors. Today, the country holds the world’s highest rate of recognition start-ups per day, out of which, around 12% cater to IT services, 9% to Healthcare and Life Sciences, 7% to education, 5% to professional and commercial services, and 5% to agriculture.

Currently, there are 75,000 start-ups in the country, where, India reported its 100th unicorn in May this year. According to the ‘Decoding India’s 100 unicorns’ report, the 100 Indian unicorns have raised over $90 billion collectively, and have a combined valuation of about $333 billion. A milestone that coincides with the 75th year of Independence.

Technology leaders from across verticals have shared their views on the progress made so far and their vision for the next 25 years.

Ecosystem Ventures This Week

Key Highlights – Clients

We are pleased to inform you that Mr. Prateek Bhargava founder of one of our Edtech portfolio companies Mindler, has received BW Education 40 under 40 Award!

Many congratulations to Prateek and Mindler team! We wish them success in their journey of adding immense value to the career coaching industry.

Startup Funding Summary

upGrad, a Mumbai-based edtech platform, has raised $210 Mn in a funding from ETS Global, Bodhi Tree, Singapore’s Kaizen Management Advisors, Bharti Airtel, Narotam Sekhsaria, Artian Investments, Temasek, IFC and IIFL – Read More

SquadStack, a Noida-based talent marketplace, has raised $18 Mn in Series B funding from Bertelsmann India Investments, Chiratae Ventures and Blume Ventures – Read More

Jodo, a Bangalore-based fintech startup, has raised $15 Mn in Series A funding from Tiger Global, Elevation Capital and Matrix Partners – Read More

Lenskart, a Bangalore-based eyewear brand, has raised $13 Mn in a funding from Ravi Modi Family Trust – Read More

Lysto, a Bangalore-based gaming platform, has raised $12 Mn in Pre-Series A funding from Square Peg, BEENEXT, Hashed, Tiger Global, Better Capital, Balaji Srinivasan, Paul Veradittakit, Binny Bansal, Bobby Ong, TM Lee and other HNIs – Read More

M&A Snippets

Mumbai-based electric supply company JSW Neo Energy will acquire Hyderabad-based renewable energy company Mytrah Energy for $1 Bn – Read More

Bangalore-based healthtech startup Orange Health has acquired Gurugram-based diagnostic lab Rapidx for an undisclosed amount – Read More

Bangalore-based retail aggregator William Penn has acquired America-based consumer goods company Sheaffer for an undisclosed amount – Read More

Ecosystem Weekly | 07th Aug’22

August 7, 2022

Ideal startups are tech-driven scalable businesses poised to achieve exponential growth. The building block of such an endeavor in the internet economy is – Data.

‘Data being the new oil’ would rank among the most cliched phrases, used by corporations, business leaders & governments alike.

On Wednesday, the union government announced the withdrawal of the ‘Data Protection Bill 2019’ (DPC 19) which it had introduced in the parliament two years ago. This decision turns the clock back to four years when serious public discourse on data & privacy began to emerge in India.

Let’s use the ‘data is the new oil’ corollary to examine this event. A century ago, when oil extraction would have become mainstream, with its commercial and personal applications transforming human habits or lifestyles, no one bothered to care about the CO2 emission levels. The reason being there was no knowledge of climate change. It was only in the early 90s, after decades of research on global climate models, and observable climate change patterns were noted, that the nations were alarmed about the bleak future. A global consensus emerged, a framework was evolved, and environmental legislations were passed. Thereby, some steps, however inadequate, were taken in the right direction.

All public policies — indeed, all actions by humans — have two kinds of effects: the effects that are intended, and visible; and unintended consequences, which are invisible.

Climate change is a classic example of an invisible effect of the oil. An unseen effect can be accounted for as a substantial long-term cost in the future. Data is at a similar cusp to oil. It has transformed human habits & lifestyles. With every passing minute, data generation & consumption is increasing manifold. But with the absence of a regulatory framework, we enhance the probability of incurring long-term costs.

The government would do well to bring a comprehensive data protection framework at the earliest. Here is a credible source to understand the regulatory nuances of the ‘new oil’, which are bound to impact businesses and personal lives in times to come

Startup Funding Summary

Dezerv, a Mumbai-based wealth management platform, has raised $20 Mn in Series A funding from Accel Partners, Elevation Capital, Matrix Partners, Whiteboard Capital and GTM Ventures – Read More

WebEngage, a Mumbai-based adtech startup, has raised $20 Mn in Series B funding from Singularity Growth Opportunities Fund, SWC Global, India Quotient, IAN Fund, Blume Ventures, Unmaj Corporation, NB Ventures, Shashwat Nakrani, Gopal Srinivasan and other HNIs – Read More

Twid, a Bangalore-based fintech startup, has raised $12 Mn in Series A funding from Rakuten Capital, Google, ICMG Partners, JAFCO Asia, January Capital, Surge, BEENEXT and Reddy Futures Fund – Read More

River, a Bangalore-based EV startup, has raised $11 Mn in Series A funding from Lowercarbon Capital and Toyota Ventures – Read More

Jify, a Mumbai-based fintech startup, has raised $10 Mn in Series A funding from Accel and Nexus Venture Partners – Read More

M&A Snippets

Mumbai-based banking firm Axis bank will acquire minority stake in Mumbai-based fintech platform CredAble for ~$7 Mn – Read More

Mumbai-based edtech startup upGrad has acquired Noida-based edtech startup Exampur for an undisclosed amount – Read More

Mumbai-based online beauty and personal care retailer Nykaa will acquire New Delhi-based lifestyle discovery platform Little Black Book for an undisclosed amount – Read More

                                                                                                                                       

Ecosystem Weekly | 31st July’22

July 31, 2022

One of the biggest funding news of the week is of Jai Kisan raising $50 Mn as part of the first tranche of its ongoing Series B round. The startup aims to be a full fledged solution for rural financing requirements.

The company’s flagship app is Bharat Khata, available in 9 regional languages, which the company claims is used by over 100,000 rural businesses. The company claims to possess unique insights to over $1Bn worth of rural commerce and 5 Mn individuals.
No one would disagree that there exists a lot of opportunities to unlock growth in rural India. Reams of analysis, articles, posts are written every month, on how to go about bringing a transformation in rural hinterlands.
Often the prescriptions tend to be top-down, laden with a patronizing bureaucratic overhang. The government, and the companies, focused on the rural economy, should do well to avoid the predictable trap. The biggest example being – the unceremonious repeal of the hurriedly imposed farm laws. The government, policy experts, and the corporate sector, were not able to communicate the perceived advantages of the said laws to a substantial set of stakeholders whose livelihood depended on it.
In that context, the fact that Bharat Khata app is already present in 9 vernacular languages, would be a step in the right direction. But only a step, as it would need to be in 20 more dialects, to be truly available to the end user.
Out of curiosity, I downloaded the app and selected the Hindi language. Rather than native Hindi words, it appears the app has transliterated the English interface in the devanagari script. For example, the phrases “To collect”, “Stock Value”, “Overdue” are written as टू कलेक्ट … rather than the appropriate equivalent.
This might be a small UI related observation but it reveals a scope of empathy in designing for the user base quite different from the conventional one.
At Ecosystem Ventures, we tend to maximize empathetic conversations with our consulting & investing clients, fitting ourselves in their shoes, to deepen the quality of our shared insights
Ecosystem Ventures This Week
Key Highlights – Clients

We are pleased to share that one of our healthtech portfolio companies – Navigene – India’s first diagnostic venture focused on Non-invasive Preventive Testing through Proprietary Technology, has shown growth of 91% in Q1 of FY23 as compared to Q1 of FY22 with 220+ total hospitals onboarded. It has processed 16000+ samples in the last 12 months.

With transforming preventive diagnostics by Identifying 5x more bio-markers, 40% lower cost and 80% simpler logistics it has also started associating with the Government for projects of testing Sickle Cell disease and other diseases that are now beginning to reflect in the revenues.

With both Government and private businesses growing, they are looking to grow 2.5x in monthly revenues in the next 3 months.

We wish them All the best in future endeavors.

Startup Funding Summary

Jai Kisan, a Mumbai-based rural fintech startup, has raised $50 Mn in Series B funding from GMO Venture Partners, Yara Growth Ventures, DG Daiwa Ventures, Blume Ventures, Arkam Ventures, Mirae Asset, Snow Leopard Ventures, Northern Arc, Alteria and MAS Financial – Read More

SuperShare, a Bangalore-based content sharing app, has raised $7 Mn in Series A funding from Lachy Groom, Accel India, Lightspeed, Tanmay Bhat, MythPat and other HNIs – Read More

ChattyBao Technologies, a Delhi-based e-commerce startup, has raised $5 Mn in Seed funding from Vertex Ventures, Info Edge Ventures, 7Square Ventures and other HNIs – Read More

Threado, a Gurugram-based community management platform, has raised $3 Mn in Seed funding from Vertex Ventures, Gemba Capital, Speciale Invest, PointOne Capital, Deepinder Goyal, Pankaj Chaddah, Krish Subramanian, Rajaraman Santhanam, Abhishek Goyal, Aneesh Reddy, Tonmoy Shingal, Archana Priyadarshini and Sri Rajan – Read More

Wify, a Mumbai-based tech platform, has raised $2 Mn in Pre-Series A funding from Blume Founders Fund, Unitus Ventures, Singularity Ventures and HePo NL – Read More

M&A Snippets

Bangalore-based digital payments platform PhonePe has acquired New York-based software development OSLabs for ~$60 Mn – Read More

Mumbai-based financial services company InCred has merged with America-based private equity firm KKR, for an undisclosed amount – Read More

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