The Week that Was: Indian Startup News Overview (21-25 June)

 The Week that Was: Indian Startup News Overview (21-25 June)

The week was busy with the investments in diverse category startups, expansion of their products, scaling up of the teams and upgrading the technologies, and also there were new IT policies for the tech platforms. With all the investments happening indigenously this week, we can also see our Finance Minister Nirmala Seetharaman urging for the long lasting relationship with the US investors.

This week saw the financing technology firms raisng the funds and one such is Progcap, the pioneer in Corporate led last mile retailer financing solutions in India. The company has raised $25 million equity capital as part of its Series B investment round led by Tiger Global and existing investor, Sequoia Capital India.

The company will deploy these funds to enhance its services and expand the brand's presence across existing geographies and also to scale up the team, strengthen the technology differentiation and diversify into new products.

Founded by Pallavi Shrivastava and Himanshu Chandra, Progcap has scaled to 300k retailers across 50 corporates and disbursed over INR 1500 cr of loans on its uniquely designed product for India’s multi-tiered supply chains. Working at the intersection of software and financial services, Progcap aims to be the first full stack retailer focused digital bank which enables capital flow across the supply chain to underserved retailers. With a promising vision, strong growth capabilities supported by an outstanding portfolio quality, the company is aiming to impact over 5 million enterprises by the end of 2023.

Along with the funding news there was also IT rules announced this week. In order to comply with those Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which went into effect on May 26, the companies had appointed nodal officers.

The new IT policies necessitate the appointment of a local grievance officer, a nodal officer, and a chief compliance officer for these Tech platforms with over 50 lakh users. 

With the effect of the IT Rules 2021, The companies may see an increase in their domestic tax bills beginning this year, according to people familiar with the situation. Because top digital companies do not have a presence or permanent establishment (PE) in India, they do not pay domestic taxes on their entire income.

As per the reports, Big Tech could be asked to pay taxes on its income generated in the country—at least 25%, but possibly as much as 42%.

Female Indian Venture Capitalist Vani Kola led Kalaari Capital has invested in Home fitness and wellness startup Portl. The undisclosed funds raised will be used by the startup to expand the team across hardware, engineering, and AI domains, as well as expand sales and marketing efforts for the Portl range of products in India, according to the Hyderabad-based startup.

Portl is a fully-integrated, multi-functional, smart fitness and health system founded in March 2021 by second-time entrepreneurs Indraneel Gupta and Vishal Chandapeta. The company combines fitness, technology, and media.

The devices use advanced artificial intelligence to provide real-time exercise form analysis and correction feedback, ensuring that each exercise is performed correctly and preventing injuries.

Following the addition of Neobank to the Super App last week, Tata approaches Global Investors to raise $2-2.5 billion for its Super App.

According to a report, Tata Sons chairman N Chandrasekaran met with many investors during his recent US trip in May to showcase the group's new venture. PE funds are likely to be approached in the early stages, followed by strategic investors once the business has matured.

Mukesh Bansal, co-founder of fitness startup Curefit and president of Tata Digital, is a key member of the fundraising team. Bansal previously worked for Myntra before joining Curefit. He was Flipkart's head of commerce after Myntra was acquired by the company in 2014.

Tata intends to broaden the company's digital footprint across industries in order to compete with Amazon, Flipkart, and Reliance's JioMart.

Amidst these investments, there was a programme launched by an Non-Governmental Organisation, Action for India (AFI). The programme WISE is its first business accelerator programme, to aid in the implementation of the United Nations' Sustainable Development Goals. It is intended for high-potential female social entrepreneurs on their way to becoming the next impact unicorns.

AFI-WISE ignites the minds of female social entrepreneurs by exploring, networking, and funding opportunities, as well as partnering with AFI and launching new ventures. The programme provides extensive mentoring and handholding with the most select leaders through critically designed learning spaces via mentorship sessions, webinars, and podcasts.

Through targeted interventions, AFI aims to close investment gaps and accelerate growth. AFI has received funding from the eBay Foundation USA to expand its mission in recognition of its unwavering support for female entrepreneurs.

CommerceIQ, an ecommerce management platform, has raised $60 million in a Series C round led by Insight Partners. Trinity Ventures, Shasta Ventures, and Madrona Venture Group, all existing investors, also participated in the funding round. With this round the company valuates to a total of $81 million.

The funds raised will be used to fund international expansion as well as product research and development aimed at increasing brand revenue and profitability on Amazon, Walmart, Instacart, Target, and other online marketplaces, according to the company.

CommerceIQ will also use the new funds to expand its India team, which is in charge of the company's technology stack.

The current situation has accelerated the growth of Healthtech startups and the investors are gushing out the money into these startups. IvyCap Ventures & Others invests $4.2 million in Health tech firm Synapsica that is based in Delhi. Y Combinator, a Sialicon Valley-based incubator, and other angel investors also participated in the funding round.

Synapsica's Radiolens platform claims to enable radiologists and clinicians to create reports with illustrations and objective evidence of disease, bringing transparency and thus better patient care to the community. Radiolens contains a number of artificial intelligence-based algorithms that help radiologists describe the precise location and extent of spine-related pathologies.

Though the education system has come to halt, there was investments in edtech startups this week. Classplus, a B2B edtech startup, announced a $65 million in Series C round led by Tiger Global. GSV Ventures, an edtech-focused fund, joined existing investors Alpha Wave Incubation (AWI), Blume Ventures, and RTP Global in the round.

This is the company's fourth round of funding in the last 15 months. Classplus has also received early support from Sequoia Capital's Surge and Times Internet.

Classplus, founded in 2018 by Mukul Rustagi and Bhaswat Agarwal, is a mobile-first SaaS platform that enables private coaching institutes and their tutors to streamline content distribution, payments, communication, and online assessments through an app.

At the Global Investors Roundtable hosted by the US-India Strategic Partnership Forum (USISPF), Nirmala Seetharaman spoke to foreign investors such as Mastercard, MetLife, Prudential, Dell, SoftBank, and Warburg Pincus, she stated that 15 new unicorns in 2021 reflects India's growing startup ecosystem to be among the best in the world.

Asserting that continuous reforms make India a great place to do business, Finance Minister Nirmala Sitharaman invited global investors to take advantage of recent FDI reforms, privatisation policy, and performance linked incentive (PLI) scheme.

According to the minister, the country is committed to long-term relationships with US investors and plans to meet twice a year.