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Here are the top headlines from the startup space.
Byju’s $800 million fundraise off the track as Sumeru Ventures payment goes missing: Report
At a time when the macroeconomic headwinds have slowed the pace of deal-making in the startup ecosystem, edtech giant BYJU’s had announced a mega $800 million fundraise in March this year. While, founder Byju Raveendran had invested $400 million, the rest came from other investors, including Sumeru Ventures, Vitruvian Partners and BlackRock.
However, a Morning Context report published on Monday morning, has revealed that the money from Los Angeles-based Sumeru Ventures has not come in yet.
The company’s filings with the Union Ministry of Corporate Affairs show that 16,031 Series F preference shares were allotted to Vitruvian Partners on March 29 for Rs 571 crore. There has been no such filing in the case of either Sumeru Ventures or BlackRock since the March announcement. This means Byju’s is looking at a Rs 2,500 crore-sized hole in the funding, the report added.
As per the report, things came light when one of the investors initiated a probe by corporate investigation and risk consulting firm Kroll, which found “serious discrepancies with Sumeru Ventures, which has derailed the entire investment”.
When CNBC-TV18 reached out to BYJU’s, the edtech giant refused to comment specifically on the Morning Context story. A company source said, “We are not commenting on this… You can reach out to Sumeru or Kroll.”
Meanwhile, against the backdrop of reports suggesting delayed payments for the acquisition of Aakash Educational Services, BYJUs’ has said it will be filing its FY21 results in the next 10 days and said that the company has closed its balance payments to Aakash Educational Services.
“Our payments to Aakash are closed and the audited financial results are going to be announced in the next 10 days,” Byju’s said in a statement to CNBC-TV18.
Byju’s had said that the company had agreed mutually with Aakash to extend the payments to August this year. “Our fundraising efforts are on track and majority of the 800 million (dollars) has been already received. The balance is also expected soon,” Byju’s told CNBC-TV18.
Amagi aims to IPO in India, says co-founder Baskar Subramanian: Report
“India’s become a very robust economy. I’m sure all of us have seen the IPOs and hopefully, this downturn comes back eventually. But we think there’s a lot more understanding of these business models that’s starting to happen,” Subramanian said in an episode of CNN-News18’s Bits to Billions.
“The sophistication of the retail investors as well as the availability of FIIs (Foreign institutional investors) from across the globe in India right now is as good as NASDAQ to an extent. So we see that the robustness of the market exists here to go for a public listing in India itself,” he said.
This remark comes at a time when several Indian startups, especially those in the SaaS industry, are flipping to the United States with an ambition to eventually list in the United States.
Iron Pillar to raise $400 million to empower tech startups: Report
Leading investment company Iron Pillar, which backs tech startups in India, is reportedly raising nearly $400 million to further help boost the country’s startup ecosystem. Iron Pillar provides growth capital to help Indian startups expand their global footprint.
According to Deal Street Asia, citing sources, the VC firm is in advanced talks with limited partners (LPs) to raise about $400 million in its second fund.
The VC firm has startups like FreshToHome, Uniphore, Curefoods and others in its portfolio.
Investors write to SEBI, accuse Zomato of late Blinkit disclosure: Report
Several Mumbai-based high-networth investors have complained to the Securities and Exchange Board of India (SEBI) that food delivery giant Zomato didn’t make disclosures in time about its purchase of Blinkit to the stock exchanges, the Economic Times reported.
Zomato informed the bourses on June 24 that its board had approved the acquisition of Blinkit for Rs 4,447 crore. The investors said they had suffered losses as a result of the delay and that timely disclosure would have helped them be better prepared, as per the report.
The investors said in a June 29 letter to the SEBI chairman that news about the potential acquisition had been reported in the press and was doing the rounds on social media for more than a month before the deal was announced. But Zomato, they alleged, neither confirmed nor denied the reports, the report added.
Karnataka and Gujarat developed best startup ecosystems for budding entrepreneurs
Gujarat and Karnataka were ranked the best among big states for developing a startup ecosystem for budding entrepreneurs, as per the Department for Promotion of Industry and Internal Trade’s (DPIIT) ranking of states and Union Territories released on Monday.
Among smaller states — those with a population of less than one crore —Meghalaya was the top performer. The DPIIT’s states’ startup ranking 2021 was released by Commerce and Industry Minister Piyush Goyal.
A total of 24 states and seven Union Territories (UTs) participated in the exercise and ranked the states and UTs under five categories — best performers, top performers, leaders, aspiring leaders and emerging startup ecosystems.
Bihar and Andhra took the lead in emerging startup ecosystems among big states and Mizoram and Ladakh were at the forefront among small states/UTs.
Over 1,500 women entrepreneurs across India have received support from states and UTs for their startups, Goyal said at the event in Delhi, adding that efforts should be made to make India the best ecosystem for startups.
Piyush Goyal also stressed the need to use online tech to reach out to children in remote areas to expose them to opportunities and also called for event management startups to come up with sustainable solutions to save money.
South Africa-based H2O Water Securities launches world-first crypto water token, receives $150 million investment from GEM
H2O Water Securities, a South Africa-based company that combines finance, infrastructure and expertise in the deployment and operation of water plants, has launched a world-first crypto water token.
The crypto token, called H2ON (Water Network) is simply a means to raise capital to finance global water projects. H2ON has already attracted investment of $150 million from GEM Digital, a digital asset investment firm based in the Bahamas that invests in utility tokens listed on over 30 centralised and decentralised exchanges around the world.
It will be listed on global cryptocurrency exchange Bitmart on Monday. It will be available on secondary markets by Thursday, allowing people to invest in water infrastructure. The token has been available on decentralised cryptocurrency exchanges for the past few months.
Yatra Angel Network secures SEBI nod to launch Rs 90 crore fund to invest in fintech startups
Yatra Angel Network has received approval from the Securities and Exchange Board of India (SEBI) to launch its Rs 90 crore early-stage fintech-focused Alternative Investment Fund (AIF).
The fund would primarily invest in 25-30 early-stage fintech startups. With the fund, the firm would participate in the seed stage funding rounds over the next three years, with an average cheque size of Rs 1.5 crore to Rs 3.5 crore, it said in a statement.
Yatra Angel Network has previously invested in M2P Fintech, One Card, Payglocal, ShopSe, Riskcovry, among others.
“YAN aims to be a catalyst for early-stage fintech founders to support them with guidance on business models, growth capital and network access with investors adding value to the founder’s venture,” said Pankaj Singh, partner at Yatra Angel Network.
Kreedo raises $2.3 million pre-Series A round from UBS Optimus Foundation, Spectrum Impact and others
Kreedo Early Childhood Solutions, a Bengaluru-based company that provides end-to-end solutions to transform the way early learning is delivered, has raised $2.3 million in pre-Series A funding led by Switzerland-based UBS Optimus Foundation, Spectrum Impact, Gray Matters Capital and 1Crowd.
The round also saw participation from Innospark Ventures, IIM-CAN and The Chennai Angels. The fund will be utilized towards accelerating the company’s next phase of growth and expansion, the firm said in a statement.
“We have an overwhelming response from our partner schools who are looking for the most affordable and simplest way to improve foundational learning. The new round of funding will enable us to take Kreedo to 7000+ schools across multiple cities in India,” said Mridula Shridhar, CEO, Kreedo
Unicommerce plans to add 800 warehouses this fiscal
Supply chain Saas technology platform Unicommerce is planning to add 800 warehouses to its network this fiscal amid the e-commerce boom in the country. The company is also mulling to come up with multiple new categories and business models.
The platform, currently, provides its warehousing management solutions to over 7,200 warehouses and managing more than 96 million stock-keeping units (SKUs) in various sectors, such as FMCG, beauty and wellness, fashion and accessories, and eyewear.
Besides, the integrated order, inventory and warehouse management platform processes over 20 percent of India’s e-commerce volumes with over 1 million daily transactions and over $5 billion GMV annual run rate, as per the company.
“Over 8,000 warehouses will be leveraging Unicommerce’s warehouse management platform by March 2023, while more than 7,200 warehouses are already live on it,” the company said.
EV logistics startup EVIFY gets Rs 80 lakh in seed round
EVIFY, an electric vehicle logistics startup, has raised Rs 80 lakh in a seed-funding round led by angel investors like We Founder Circle.
The fresh capital raised will be utilised for technology development, team building and scaling up the company’s operations, a statement said.
The firm is looking to develop its platform more extensively by adding Geofencing, customised BMS, telematics, client insights and driver & fleet management. The platform counts around 3,00,000+ green kilometres and 50,000+ green deliveries till April 2022.
“This is a great start to the fiscal year for the company. Through this funding capital, we plan to upgrade and integrate technological advancements into our delivery operations such as geofencing, BMS, and fleet management,” said Devrishi Arora, Founder and CEO, EVIFY.
Over 22,000 techies lose job in US, 12,000 employees fired by Indian startups: Chrunchbase Report
As the tech and startup sector gets hammered by economic meltdown, more than 22,000 workers in the sector have lost jobs in 2022, along with more than 12,000 in the Indian startup ecosystem.
Startups, especially the ones who benefited from a pandemic boom, are feeling the pressure as valuations, particularly at the late stage, have started to dip, according to Crunchbase. Startups now say it is much more difficult to raise new funding in this gloomy environment.
As startups in India keep firing their staff to navigate through the ‘funding winter’, the country may see more than 60,000 job losses in 2022 alone, led by edtech and e-commerce platforms.
Nearly 12,000 startup employees have been shown the door to date, let by companies like Ola, Blinkit, BYJU’s (White Hat Jr, Toppr), Unacademy, Vedantu, Cars24, Mobile Premier League (MPL), Lido Learning, Mfine, Trell, farEye, Furlanco and more.
Industry experts say that at least 50,000 more startup employees are likely to be thrown out this year alone in the name of “restructuring and cost management” while certain startups keep receiving millions in fundings.
India’s D2C market estimated to touch $60 billion in size by 2026-27: Shiprocket, CCI & Praxis Global Report
D2C brands are estimated to be $60 billion industry by the 2026-27 fiscal, registering a CAGR of about 40 percent, according to a report by logistics startup Shiprocket, CII (Confederation of Indian Industry) and Praxis Global Alliance.
The report said that D2C is a $12 billion market today and several D2C brands in India have crossed Rs 100 crore revenue in 3-5 years after the launch.
“We’ve seen that almost all pin codes in India are using e-commerce. Many of these transactions and orders come from tier two cities and smaller towns. By FY30, India will also have more than 1.3 billion smartphone users and more than 500 million online shoppers. The growing e-commerce sector positively influences the growth of D2C brands in India. With more people shopping online and more money being spent by consumers, the market is likely to increase over the next five years,” said Mohit Mittal, Partner of Praxis Global Alliance.
Consumer spending is in fact estimated to reach $4 trillion by 2030. Spending on categories like food, apparel, transport and communication and personal care is expected to double by 2030, the report added.
GLOBAL TECHNOLOGY & STARTUP NEWS
Chinese tech giants Tencent and Ant Group pledge to ban NFTs, crypto marketplaces
Chinese internet and tech giants have signed an initiative to ban cryptocurrency and digital collectibles (NFTs), along with a promise not to establish secondary marketplaces.
According to the South China Morning Post, Tencent and Ant Group joined a self-driven industry initiative to ban cryptocurrency and fight speculation.
Platforms that sell digital collectibles “shall require real-name authentication of those who issue, sell and buy” the assets and “only support legal tender as the denomination and settlement currency”, according to the document signed by China’s biggest tech firms.
British Army’s Twitter and YouTube accounts restored after hack
The British Army regained control of its Twitter and YouTube accounts after they were briefly hacked and used to post about cryptocurrencies and non-fungible tokens.
“Apologies for the temporary interruption to our feed. We will conduct a full investigation and learn from this incident,” a post on the @BritishArmy Twitter handle said. Earlier the account had retweeted several posts about NFTs.
The army’s YouTube account, which had been renamed ‘Ark Invest’ and showed several videos relating to cryptocurrency, was also restored to its original state, as per a Reuters report.
Its Twitter feed currently has 362,000 followers, while the YouTube channel has 177,000 subscribers. Ark Invest is the name of a global investment firm.
Hacker claims to have stolen 1Bn records of Chinese citizens from police
A hacker has claimed to have procured a trove of personal information from the Shanghai police on one billion Chinese citizens, which tech experts say, if true, would be one of the biggest data breaches in history.
The anonymous internet user, identified as “ChinaDan”, posted on hacker forum Breach Forums last week offering to sell the more than 23 terabytes (TB) of data for 10 bitcoins, equivalent to about $200,000, Reuters reported.
“In 2022, the Shanghai National Police (SHGA) database was leaked. This database contains many TB of data and information on Billions of Chinese citizen,” the post said.
“Databases contain information on 1 Billion Chinese national residents and several billion case records, including: name, address, birthplace, national ID number, mobile number, all crime/case details.” Reuters was unable to verify the authenticity of the post.
TikTok seeks to reassure US lawmakers on data security
Chinese-owned social media site TikTok told US senators it was working on a final agreement with the Biden Administration that would “fully safeguard user data and US national security interests,” according to a TikTok letter seen by Reuters.
The letter dated Thursday came in response to questions raised in a June 27 letter by a few senators including Republicans Marsha Blackburn and Ted Cruz, TikTok said.
TikTok Chief Executive Shou Zi Chew told senators in the letter the short video app was working with Oracle on “new advanced data security controls that we hope to finalize in the near future.”
TikTok’s letter acknowledged that China-based employees “can have access to TikTok US user data subject to a series of robust cybersecurity controls and authorization approval protocols overseen by our US-based security team.”
TikTok said it expected “to delete US users’ protected data from our own systems and fully pivot to Oracle cloud servers located in the US”
Singapore-based crypto lender Vauld suspends withdrawals
Singapore-based crypto lending and trading platform Vauld said on Monday it would suspend withdrawals and trading and seek new investors, the latest sign of stress in the embattled crypto industry.
Vauld CEO Darshan Bathija said in a blog post that it was facing “financial challenges” due to: “the volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate which has led to a significant amount of customer withdrawals in excess of a $197.7 million since June 12.”
Bitcoin, the world’s largest cryptocurrency, has lost around half its value since early May, and was last trading at just under $20,000.
Vauld said it had appointed legal and financial advisers, was in discussions with potential investors, and would also apply to the Singapore courts for a moratorium that would have any proceedings against it halted to give it time to carry out a restructuring.
Digital banking startup YAP raises $41 million, to expand into Saudi Arabia
YAP, a digital bank in the United Arab Emirates has raised $41 million in funding and has targeted raising another roughly $20 million to finance its expansion plans.
The investors so far included Saudi Arabia’s Aljazira Capital, Abu Dawood Group, Astra Group and Audacia Capital. YAP said it intends to complete it Series A by the end of the year.
YAP will use the funds to expand the business into Saudi Arabia, Egypt, Pakistan and Ghana, Chief Executive and co-founder Marwan Hachem told Reuters in an interview.
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