The Week that Was: Indian Startup News Overview (08 - 13 November)
In the last year-and-a-half, India has seen an escalation in dollars invested. Total investment in India in the third quarter outpaced that seen in China, for the second time in the last six quarters, with $16.2 billion coming into the startup ecosystem in Q3 compared to $12 billion in China. By the end of 2021, the country is on pace to surpass the record level of total investment it saw last year. In the first three quarters of this year, Indian startups received $26.7 billion, putting the nation on track for well more than $35 billion in investment. 17 companies have been newly minted, including PharmEasy with a $4 billion valuation and Digit Insurance at the $3.5 billion mark.
Zomato, the online meal delivery company, became an investor this week, announcing plans to invest $175 million in three startups: Shiprocket, Curefit, and Magicpin. This week, large-scale fundraises totaling $450 million were announced by startups on a various platforms. Nykaa IPO was the highlight of the week; it reached a high of INR 2,129 on both bourses, causing its market capitalization to surpass INR 1 Lakh Cr minutes after the stocks were launched.
Down below are the key details of this week:
BYJU's, the edtech decacorn that has had a golden year in terms of acquisitions and fundraising, has made headlines once again after securing a term loan B (TLB) capital round. In a TLB round, BYJU's garnered $1.2 billion.
BYJU's became the country's second company to raise a TLB fundraising round. OYO, the IPO-bound hotel incubator, received $660 million from worldwide institutional investors in July. The firm reported at the time that its offering had been oversubscribed by 1.7 times and that it had received pledges totaling about $1 billion from major institutional investors.
BYJU's will use the new funds to expand its offshore corporate operations, which means the company will likely buy other companies.
The Indian food delivery firm Zomato is in talks to back logistics firm Shiprocket, health and fitness firm CureFit and savings app Magicpin, four people familiar with the matter told.
All these investment talks are at the final stages and some may close as soon as this week, one of the sources said.
Singapore’s Temasek is leading the investment in Shiprocket which is part of a broader round.
Curefoods, which operates the ‘EatFit' cloud kitchen, is in discussions to raise $30 million in an equity fundraising round headed by Accel and Chiratae.
The money will be used by the Iron Pillar-backed company to buy almost half a dozen smaller companies in the industry, as well as for additional inorganic development opportunities, they said.
“Given the inbound interest from investors, the company is likely to raise an extended Series B round, taking the total funding in the round to $75 million,” said a person aware of the company's plans. “The remaining fund raise will be at a higher valuation,” he said.
Zoomcar announced in a news release that it has raised $92 million through a private sale of shares to investors led by SternAegis Ventures, with participation from worldwide family offices and institutional investors.
“Zoomcar intends to use the proceeds from this financing to grow its car-sharing marketplace in India and various select markets across Asia and the MENA (Middle East and North Africa) region,” it said.
Zoomcar plans to list as a special purpose acquisition company in the United States in the next nine to twelve months, so the money comes ahead of that. These special-purpose corporations are founded only for the purpose of raising funds through initial public offerings (IPOs).
Millet snacks firm Troo Good which is based in Hyderabad, has raised $7.4 million in Series A funding from OAKS Asset Management.
According to a senior official, the cash would be used to grow the company's business across the country and to improve its research and development and manufacturing skills.
This is the company's first institutional capital round since its inception in 2018. In 2018, it had raised $1 million from angel investors.
“We have come a long way in creating a robust pipeline of products and corresponding expertise and are now looking to scale rapidly,” says Raju Bhupathi, founder of Troo Good. “We expect to have a significant ramp-up in the millet-based snacking segment over the next decade.”
Trade Financing Platform Vayana Network Secures Fund INR 283 Crore from Chiratae Ventures & Others
Vayana Network, a trade financing platform, secured INR 283 crore Series C fundraising round headed by Chiratae Ventures, CDC Group, Jungle Ventures, March Capital, Marshall Wace, and various offices in India and overseas.
Vayana is a B2B trade finance intermediary that links SMEs and corporations with financial institutions for low-cost trade loans. It was founded in 2017. The business claims to have helped over 22,000 MSMEs get $8 billion in financing for over 1,000 supply chains in 25 different industries.
Ram Iyer, founder and CEO of Vayana said, “we have strongly believed that every segment of the supply chain and for every type of trade, there needs to be a relevant product that allows the business to grow sustainably. Given our strong presence in credit enabling infrastructure such as GST and e-invoicing coupled with the launch of our Good Business Score (GBS), we have managed to reach the smallest of businesses, connecting them to the largest lenders”.
Startups and their IPO's
Nykaa goes public at INR 2,018 with a 79 % premium and a market capitalization of INR 1 lakh crore.
FSN E-Commerce, Nykaa's parent business, had a blockbuster debut on Wednesday, with its shares going live on the stock markets at an almost 80 % premium.
Its shares were launched on the National Stock Exchange (NSE) at INR 2,018, up 79.37 percent from the issue price of INR 1,125. It was listed on the BSE for INR 2,001 per share.
It reached a high of INR 2,129 on both bourses, causing its market capitalization to surpass INR 1 Lakh Cr minutes after the stocks were launched.
India will see its largest-ever IPO, with digital payments giant Paytm aiming to raise over $2.5 billion. Paytm is funded by Chinese entrepreneur Jack Ma's Ant Group, SoftBank of Japan, and Warren Buffett's Berkshire Hathaway, which hold approximately a third of the firm.
Vijay Shekhar Sharma, the son of a teacher who claims to have learnt English by listening to rock music, launched the company little over ten years ago.
At the age of 38, he was named India's youngest dollar billionaire four years ago, and he currently has a net worth of $2.4 billion, according to Forbes.
With the IPO set to begin on Monday, his roughly 14% ownership will almost certainly make him even wealthier.
API Holding, the digital healthcare platform PharmEasy’s parent company, has filed for an initial public offering (IPO) of up to Rs 6.250 crore.
TPG Growth, Temasek, Prosus Ventures and CDQP are among PharmEasy’s top investors.
PharmEasy is also considering a pre-IPO fundraise. It will reduce the raised amount from the IPO issue size, once the pre-IPO round is complete. PharmEasy has raised over $1.2 billion in debt and equity funding to date. The firm had acquired Thyrocare Technologies, in a bid to diversify its operations. To become the country’s largest online pharmacy and healthcare aggregator, in May 2021, it completed the acquisition of smaller rival Medlife. The company acquired a majority of healthcare supply chain startup Aka Medical in September 2021.
The proceeds will be used for the prepayment of outstanding debt to the tune of Rs 1,929 crore.