Reasons Why Non-Traditional Investors are Funding Indian Start-ups

These include sovereign wealth funds, hedge funds, PE firms and family offices, according to data sourced from venture capital firm Sequoia Capital …
September 13, 2019 2 min read
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With the number of start-ups ballooning in India requiring higher dose of capital infusion, new categories of investors are coming to the fore.

These include sovereign wealth funds, hedge funds, PE firms and family offices, according to data sourced from venture capital firm Sequoia Capital and cited by The Economic Times in a report. Some of the investors include Facebook, Ikea and Qatar Investment Authority, among others.

The Non-Traditional Route

The non-traditional investors have cracked several funding deals in India. For instance, Facebook invested in social commerce start-up Meesho, Ikea invested in home design start-up Livspace and Qatar Investment Authority pumped US$150 million in edtech unicorn Byju’s.

Apart from big companies and giants, many companies started off as non-traditional investors and took their game seriously, thereafter. SoftBank being a classic example of the same. It started off as telecom firm and went to establish the Vision Fund, becoming the biggest investor in the world.

Despite the number of start-ups going up in the country, a recent report by TiE and Zinnov recommended an urgent need to significantly increase the seed and early stage funding, which has tapered since 2017. But, the need for funding at these stages is increasing given that companies are preferring to remain private. Only a handful of companies such as Druva, Mobikwik and Freshworks have shown the intent to go public.

The Big Gaps

India is undervalued, underpenetrated and underbanked. With no dearth of a pool of talent and skill, it is lagging behind US and China despite having a solid and robust start-up ecosystem. There are gaps in the funding stages as well. According to a report by accelerator and VC, 9Unicorns, India gets 20x less funsing than US in Series A. in 2018, India had only US$ 4.1 billion pumped in Series A deals whereas US had a staggering US$84.1 billion pumped.

Additionally, Indian start-ups absorb US$12 billion-US$14 billion ever year as compared with China which has receives almost double the amount in the very first half of the year at US$23.2 billion, leaving the Indian market underpenetrated.

With over 17000 start-ups in India, the demand for capital infusion is bound to rise and here comes the role of non-traditional investors.

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Paytm introduces bulk payments for its merchants through its payment gateway

Indian digital payments major Paytm, which is owned by One97 Communications, has announced the launch of bulk payments facility for its merchants …

Indian digital payments major Paytm, which is owned by One97 Communications, has announced the launch of bulk payments facility for its merchants. This service enables large and small businesses to send money instantly to over as many accounts of various banks at one go.

With this, the company aims to simplify and digitise payments for both B2B and B2C players who make bulk payments on a regular basis to its vendors, employees, customers, and partners. For the financial year 2019-20, Paytm is aiming to process disbursements worth $1 billion, said a release.

Paytm

The gateway provides an easy-to-use dashboard, an API solution, which can be easily integrated with merchant’s existing systems. Businesses can choose to transfer into various destinations including bank account, UPI, and wallet. Further, they can send any amount into as many bank accounts.

Puneet Jain, Vice-President of Paytm Payment Gateway, said,

“There is a large number of regular payments made by businesses (both B2B and B2C) such as salaries, reimbursements, incentives, instant refunds, prize money for winning games, vendor payouts, and meal allowances. We have introduced ‘Bulk Payments’ which is a revolutionary product that enables businesses to automate and centralise these payments, thereby moving from an operationally complex and fragmented method to an efficient and digital way of managing their business finances.”

Keeping different businesses and their specific requirements in view, this secure API solution has been developed, said the company in a release.

The company says the gateway is already enabled with modules such as beneficiary management, name validation service, and bulk disbursement among others.

In April this year, the company also announced the launch of a recurring payment feature for merchants using Paytm’s payment gateway.

The payment gateway also allows merchants to receive payments through different channels including email, SMS, and chat. The company claims that several large online businesses such as IRCTC, Zomato, OYO Rooms, Grofers, Swiggy, Bigbasket, and Idea leverage its payment gateway.

The Noida-based company isn’t the only consumer payments brand that operates a payment gateway. It’s arch rival, Gurugram-based MobiKwik, also owns its proprietary gateway, which counts brands including Uber and Dominos Pizza as clients.



Source: Yourstory

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[Funding alert] MobiKwik raises Rs 8.7 Cr from Trifecta Capital and NDTV

… raised a little more than $120 million from investors including Sequoia Capital, American Express, and Net1, across four rounds of funding to date.

Gurugram-based digital payments company MobiKwik recently raised Rs 8.67 crore in funding earlier this month from venture debt fund Trifecta Capital as well as media company NDTV, according to filings with the Ministry of Corporate Affairs, assessed by YourStory

According to the filings, Trifecta Venture Debt Fund invested close to Rs 3 crore, picking up 3,643 Series E4 CumulativeCompulsory Convertible Preference Shares (CCCPs) at a premium of Rs 8,133.50 per share.

On the other hand, NDTV invested around Rs 5.67 crore, picking up 6,972 Series E5 CCCPs share at the same premium. 

MobiKwik

MobiKwik founders: Upasana Taku and Bipin Preet Singh



Founded in 2009 by Bipin Preet Singh and Upasana Taku, MobiKwik has raised a little more than $120 million from investors including Sequoia Capital, American Express, and Net1, across four rounds of funding to date.

In December, Entrackr, while citing sources, reported that the startup has kicked off a new round, raising close to $3 million (about Rs 24 crore) in a bridge round from existing investors including Sequoia Capital, Net1 UEPS, and GMO Venture Partner.   

Last month, MobiKwik said that it will offer its services in 150 countries through its partnership with global B2B network for a mobile top-up solution DT One. As per this agreement, MobiKwik will offer international mobile recharge services, which is the first of its plans to tap customers in international markets.

At present, MobiKwik claims to have a user base of over 107 million users, as well as three million merchants, and over 200 billers. The payments startup says that it is enrolling at least 10 million users by FY 2020 to avail at least three financial services on the MobiKwik platform.

The startup has three key businesses units including digital payments, financial services, and payment gateway.

In May this year, MobiKwik reported revenue of Rs 184.6 crore for FY19 against Rs 85.6 crore in FY18. The startup added that it has processed $3 billion through its payment gateway, and disbursed $55 million across 3.5 lakh loans.

(Edited by Saheli Sen Gupta)


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India monthly roundup of Start-up world in June

Avail Finance, a leading startup, has raised $9 Million in the second round of funding led by Matrix Partners India. It had earlier raised $17.2 million.

India monthly roundup of Start-up world in June, funds, funding and investments

India monthly roundup of Start-up world in June, funds, funding and investments. Here is a roundup of India monthly roundup of Start-up world, funds, funding, and investments in June.

  • Naspers’s talks to invest around $200 Million in Capital Float have fallen through.
  • China’s biggest electric car maker company, BYD Auto Co. Ltd is set to make an investment in India to develop and produce electrical vehicles.

‘India monthly roundup of Start-up world in June

  • IFCI is looking to raise around Rs.2000 Crores by selling its stakes in the National Stock Exchange and Clearing Corporation of India.
  • An RBI panel has proposed Rs10000 crore government fund to develop MSMEs.
  • Mahindra Finance is looking to raise around $460 million from offshore markets.
  • RIL has entered into an agreement with some offshore lenders for getting long term loans of around $1.85 billion.
  • Open Financial Technologies has raised $30 million in a Series B round led by Tiger Global. The firm offers banking services to businesses.
  • Startup India fund fell short by around Rs.1000-1200 Crores of its targeted funds allocation.
  • Dewan Housing Finance is yet to repay Rs.225 crores out of the total Rs.375 crore due to its investors. DHFL defaulted on interest payment of Rs.850 crore on its NCSs on June 4 also, after which its credit rating was downgraded.
  • Oyo hotels has announced to invest $300 million in the US over the next few years.
  • Alteria Capital has made its single largest investment of Rs.80 crore in Lendingkart.

Do read:Latest India Business News 15th July 2019

India monthly roundup of Start-up world in June funds, funding and investments

  • Razorpay has raised $75 million in a series C round of funding led by Ribbit Capital and Sequoia Capital.
  • Druva, a US and Pune based software firm, has raised $130 million in a fresh round of funding led by Viking Global. Sequoia Capital is an early investor in the firm.
  • Reliance Industries is planning to invest Rs.20, 000 crores in Reliance Jio to fuel its broadband and e-comm business and enter 5G services in the future.
  • Biryani By Kilo has raised Rs.30 crores in a series A round of funding led by IvyCap Ventures.
  • Amazon is said to be in early-stage talks with Ninjakart for investing in the fresh produce supply chain company.
  • SoftBank Vision is reportedly in discussions with CureFit to invest around $200 million.

Must read: Best mobile phones under 20000

  • GIC, Singapore’s sovereign wealth fund, is planning to deploy up to $1 billion in India to acquire operating toll and annuity roads.
  • Mobikwik is said to be looking for an investor who will help it go public in the next three years.
  • Postman, a platform for managing and developing APIs, has completed its Series B round of funding worth $50 million led by Charles River Ventures.
  • NCLT has approved a resolution plan of Deccan Chronicle Holdings submitted by Srei Multiple Asset Investment to invest Rs.408 Crores in the firm. DCHL has a debt of around Rs.8180 Crores.
  • GIC Holdings and Abu Dhabi Investment Authority have agreed to invest $495 million in Greenko Energy Holdings at an enterprise value of around $6 billion.

Do read: Top 10 Delhi University Colleges

India monthly roundup of Start-up world in June, funds, funding and investments

  • NoBroker.com, a brokerage-free real estate platform, has raised $51 million in a Series C round of funding led by General Atlantic. Its existing investors SAIF Partners and BEENEXT also participated in the round. The firm has so far raised $71 million.
  • Swiggy is in advanced talks to raise around $1 billion from its existing investors including $300-500 million from SoftBank.
  • Milkbasket has raised $10.5 million in a funding round led by Unilever Ventures.
  • Advent International has completed raising funds for its ninth global PE fund, GPE IX, with commitments of $17.5 billion, surpassing its target of $16 billion.
  • Avail Finance, a leading startup, has raised $9 Million in the second round of funding led by Matrix Partners India. It had earlier raised $17.2 million.
  • An informal ministerial group including Amit Shah reviewed Bharat Petroleum Corp’s $2.2-2.4 billion investment proposal in a gas field in Mozambique. The government is attempting to do deeper scrutiny of overseas investments.
  • Piramal Group and Lone Star Funds are in advanced talks to set up an investment platform to acquire operating road assets. They plan to invest $600-700 million in the platform.

Must read: International Cricket Council: ICC cricket rules and regulations

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India Dealbook: NDTV, Trifecta invest in Mobikwik; Caspian, Hivos-Triodos back Ecozen

The startup had kicked-off its Series E round in December last year when it raised $2 million from Sequoia Capital, Net1 UPES and GMO Venture …

Mobikwik has raised about $1.3 million in funding from New Delhi Television Ltd (NDTV) and venture debt firm Trifecta Capital while Ecozen has raised an undisclosed amount from Caspian and the Hivos-Triodos Fund.

NDTV, Trifecta invest in Mobikwik

Digital payments companyMobikwik has raised Rs 8.74 crore ($1.3 million) in funding from New Delhi Television Ltd (NDTV)and venture debt firm Trifecta Capital, Entrackr reported.

While NDTV has pumped in Rs 5.74 crore against equity in Mobikwik, Trifecta has subscribed to Series E5 CCPS worth Rs 3 crore. The startup had kicked-off its Series E round in December last year when it raised $2 million from Sequoia Capital, Net1 UPES and GMO Venture Partners.

Mobikwik, which competes with bigger players in the payments space including Paytm, Google Pay and PhonePe, has been struggling to raise a larger round. According to Crunchbase, Mobikwik has raised $117.1 million in funding till date.

Caspian, Hivos-Triodos Fund back Ecozen

Pune-based agritech startupEcozen has raised an undisclosed amount in Series A funding round from Caspianand theHivos-Triodos Fund.

Existing Investor Omnivore partners also participated in the round, the company said.

“We plan to use this funding to launch new cold chain products, enter new geographies for irrigation sales, and accelerate the growth of our market linkage platform for pre-cooled perishables. We plan to be back in the market soon, to raise our next round, as both our irrigation and cold chain businesses are scaling rapidly,” Devendra Gupta, co-founder and chief executive officer at Ecozen said.

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