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Startup Digest brings you a quick wrap of all the news that matters.
Here are the top headlines from the startup space.
RBI releases first set of norms for digital lending
The Reserve Bank of India has released norms to regulate digital lending to crack down on the growing number of frauds and unlawful activities.
All loan disbursals and repayments have to be executed only between the bank accounts of the borrower and the regulated entity without any pass-through or pool account of the lending service provider (LSP) or any third party, the regulator said.
Any fees or charges payable to LSPs in the credit intermediation process shall be paid directly by the regulated entity and not by the borrower.
The RBI had in January 2021 set up a working group to study issues regarding digital lending and suggest regulations. While the central bank has accepted a few of the regulations, some, accepted in principle, require further examination, the RBI said.
Orange Health acquires diagnostics lab Rapidx
Healthtech startup Orange Health has acquired Gurugram-based diagnostic lab Rapidx for an undisclosed sum to expand its footprints in the NCR region.
As per the firm, the current acquisition is a part of Orange Health’s strategy to accelerate growth, expand its reach and consolidate its position in the $10 billion diagnostic sector in India.
Rapidx has innovated its supply chain and processes to deliver reports from its NABL accredited and ICMR-approved labs in just 6 hours from the moment sample is taken.
“The latest acquisition will now enable them to deliver and expand its flagship service – 60-minute sample collection and 6-hour reporting in the northern region of the country at much ease,” said Orange Health.
OYO acquires Denmark-based holiday home operator Bornholmske Feriehuse
Travel and hospitality technology platform OYO has acquired Denmark-based holiday home operator Bornholmske Feriehuse for an undisclosed sum.
Based out of Bornholm island in Denmark, Bornholmske Feriehuse has 737 holiday homes spread over 30 holiday parks on its platform and expects to clock more than 2.5 lakh guest nights in 2022, OYO said in a statement.
“The acquisition of Bornholm will strengthen OYO’s presence in Europe broadly and Denmark specifically,” it added.
The transaction has been carried out by the company’s subsidiary DanCenter through the ‘Invest in Denmark’ initiative by the Danish government that provides customised one-stop service to foreign firms looking to set up or expand a business in the country, it added. “Bornholm exhibits great potential for tourism in the coming years,” OYO founder and Group CEO Ritesh Agarwal said.
SAVE Solutions acquires SaGgraha Management Services
Banking correspondent network SAVE Solutions has acquired SaGgraha Management Services, with an aim to strengthen its mission for deeper financial inclusion across India. However, financial details of the deal remains undisclosed.
Through this acquisition, SAVE, with its corporate office in Delhi, makes a ready and deep penetration into the diverse south Indian rural markets. The company, last year, had also acquired a housing finance company, New Habitat Housing Finance and Development Limited, to offer its customers all-round financial products, a statement said.
“The acquisition of SaGgraha is transformative in advancing SAVE’s strategic growth priorities in the South Indian financial market. SaGgraha is a renowned regional player, and this association will bring immediate synergies in the areas of governance, technology, operations, and diversification of portfolio,” said Ajeet Kumar Singh, Founder Director, MD & CEO of SAVE Solutions.
Microsoft onboards ONDC to launch shopping app for Indian consumers
Microsoft has onboarded governments open network for digital commerce (ONDC), with an aim to introduce social e-eommerce via its app in the Indian market.
The tech giant plans to launch a shopping app for the Indian consumers, along with their social circle, harnessing the ONDC network to discover the best pricing among retailers and sellers.
“By utilising the strength of our open network users, Microsoft, too, can implement their creative ideas like social commerce swiftly, said T Koshy, MD and CEO, ONDC.
“Initiatives like ONDC can be a game changer amid this boom. Their UPI-like network for digital commerce is a win-win for both buyers and sellers as it will enable them to connect without dependency on any eCommerce solution, said a Microsoft spokesperson.
Companies like Dunzo for Business (D4B), Go Frugal, Paytm, Digit, PhonePe and Loadshare has joined the ONDC network. E-commerce platform Snapdeal is set to debut on ONDC this month.
SoftBank may sell FirstCry stake pushing company valuation to $4 billion: Report
SoftBank and NewQuest Capital Partners are looking to sell shares of IPO-bound FirstCry in the secondary market, valuing the firm in the range of $3.5-4 billion, the Economic Times reported.
SoftBank, which is the biggest investor in the omnichannel company with a 29% stake, wants to reduce its holding to less than 25%, the report added.
The discussions are happening at a time the Pune-based company is looking to pare its foreign ownership while bringing in domestic private equity funding in the runup to filing its initial public offer (IPO) papers in the next few months. FirstCry has held talks with Mumbai-based private equity firm Kedaara Capital, asking it to participate in the secondary round, the report added.
Delhivery’s net loss widens to Rs 399 crore in Q1, revenue grows 32%
Logistics startup Delhivery’s consolidated net loss widened to Rs 399 crore during the first quarter ended June 2022 as compared to loss of Rs 129.6 crore in the same quarter last year.
The company’s revenue rose by over 32% to Rs 1,745.7 crore from Rs 1,317.7 crore year-on-year (YoY).
The startup incurred an Adjusted EBITDA loss of Rs 217 crore in QIFY23 versus adjusted EBITDA loss of ₹58 crore(proforma) in QIFY22.
“Our EBITDA margins were temporarily affected through the integration phase with Spoton as a result of inherent seasonality in the PTL business, slightly slower than planned phasing of customer restarts and retention of capacity to maintain service quality and in anticipation of H2 volumes”, said Abhik Mitra, Chief Customer Experience Officer, Delhivery and CEO of Spoton.
Amazon India partners with COHANDS to promote digital inclusion of over 50,000 artisans
Amazon India has joined hands with the Council of Handicrafts Development Corporations (COHANDS) to encourage digital inclusion of over 50,000 artisans and weavers associated with over 100 craft clusters and specific interventions under the Amazon Karigar program.
The collaboration will impact 55 artisanal clusters which are funded by the Ministry of Micro, Small, and Medium Enterprises’ flagship project Scheme of Fund for Regeneration of Traditional Industries (SFURTI), a statement said.
Sellers joining the Amazon Karigar Program through this association will be able to avail a host of benefits such as reduced referral fees, training support for shipping and delivery of products, imaging and marketing, technical know-how, and business and sales, it added.
Paytm partners with Piramal Finance to offer loans
Paytm has announced a partnership with Piramal Capital & Housing Finance for expanding distribution of merchant loans to the small cities and towns of India. Piramal Capital & Housing Finance is a subsidiary of Piramal Enterprises.
With this tie-up, merchants will be able to avail loans of up to Rs 10 lakh with a tenure of 6-24 months. According to Paytm, personal loans would soon be included in the partnership between the company and Piramal Finance.
“Paytm has acquired a large number of merchants from big and small cities across the country, amassing a large base which Piramal Finance plans to leverage and bring ease of credit to small business owners through data-driven underwriting along with credit sanctions based on business income. Additionally, this partnership will be expanded soon to include personal loans, where Piramal Finance brings its deep understanding of risk and customer segment,” One 97 Communications that owns the brand Paytm, said in a statement.
76% startup founders bullish on business growth in 2022-23 fiscal: 100X.VC Report
Despite the ongoing funding winter, 76% of startup founders in India are optimistic about raising funds and bullish on near-term business growth, according to a report by venture capital firm 100x.VC states.
The “India Sentiment Outlook Survey” highlighted that only 24% of the founders are bearish on their expectation for business growth in the 2022-23 fiscal.
For 49% of the founders, fundraising has improved significantly in the post-pandemic scenario. However, 23% feel that it will be extremely difficult and 28% noted no change. The findings underline that the Companies Bill will provide additional support to entrepreneurs and clarity on corporate structures and governance, the survey noted.
SaaS startups seemed most likely to raise funds, with 23% of investors saying they were closely monitoring the sector. Next came fintech (22%) and deep-tech startups (21%). Agritech, web3, and edtech startups were low priorities for investors, the survey found.
The findings also highlight that 52% of investors plan on investing in less than five companies in the next 12 months, 37% want to invest in 5-15 companies and 11% say they will invest in more than 15 companies in the next 12 months.
Meesho adds 8 Indian languages to tap more users
Social commerce unicorn Meesho is adding eight new Indian languages to its platform as it seeks new users during the festival season, it said in a statement.
Its customers can now use Bengali, Telugu, Marathi, Tamil, Gujarati, Kannada, Malayalam and Odia for accessing accounts, product information, placing and tracking orders, and making payments on Android phones.
“About 50 per cent of our users are new to e-commerce and have probably never transacted on such platforms before. By introducing vernacular languages on the platform, Meesho aims to eliminate language barriers. This is a natural step in our journey of becoming the single shopping destination for the next billion users in India,” said Sanjeev Barnwal, founder and chief technology officer, Meesho.
Glamyo Health and Milaap to provide surgical help to the underprivileged
Glamyo Health, a healthcare brand operating in the fields of elective and cosmetic surgeries, has announced a collaboration with Milaap to provide surgical treatments to marginalised communities earning less than Rs 20,000 per month.
Through this partnership, the firm is looking to facilitate required surgical help to old-age homes and orphans, labourers, migrant workers, rickshaw pullers, auto-rickshaw drivers, house-helps, security guards, drivers, vegetable and fruit vendors, teasellers and anyone who cannot afford the treatment, a statement said.
“At Glamyo Health, we are extremely glad to have joined hands with Milaap to launch an initiative #healthcareforall. While more than 80% of people in India do not have insurance support, they depend on their immediate earnings to cater for daily expenses, leaving no savings to bear the medical costs,” said Archit Garg, Co-founder, Glamyo Health.
ConveGenius collaborates with Uttarakhand govt to set up Vidya Samiksha Kendra
Edtech platform ConveGenius has partnered with Government of Uttarakhand to set up a Vidhya Samiksha Kendras (VSKs) in the next six months to understand the educational impact of various interventions and how different academic and administrative factors contribute to student learning outcome improvement at scale.
The move came after the Prime Minister’s recommendation to establish VSKs across India.
The VSK toolkit developed by ConveGenius includes multiple conversational AI chatbots on the SwiftChat platform that would enable students for personalised learning, teachers for remedial teaching, and administrators for data-driven decision-making, a statement said.
GLOBAL TECHNOLOGY & STARTUP NEWS
SoftBank buyout talk resurfaces after record loss: Report
Talk that SoftBank would be better off as a private company has re-surfaced after the Japanese investment powerhouse posted a record $23 billion loss, Bloomberg News reported.
“There is little reason to be listed on the stock market,” SMBC Nikko analyst Satoru Kikuchi wrote. “We think changes in the very form of the company, for example an MBO, could be coming in the not-too-distant future.”
SoftBank founder Masayoshi Son — the company’s top shareholder with a near-28% stake as of end-March — has debated the idea of going private with his inner circle for at least five years. When SoftBank’s shares tumbled in 2020 at the outset of the coronavirus pandemic, he began conversations with advisers and lenders including Elliott Management Corp. and Abu Dhabi sovereign wealth fund Mubadala Investment, Bloomberg News has reported.
SoftBank to gain $34 billion from cutting Alibaba stake
SoftBank said it would book a gain of $34.1 billion by cutting its stake in Alibaba, as the investment behemoth looks to shore up its cash reserve to weather the market downturn.
As per a Reuters report, the Japanese company will reduce its stake in Alibaba to 14.6% from 23.7% by settling prepaid forward contracts. Alibaba’s US-listed shares were down 1.3% in early trade.
SoftBank booked a $50 billion loss at its Vision Fund investment arm in the first half of the year as its tech bets soured, with Chief Executive Masayoshi Son on Monday pledging to further reduce investment activity and cut costs.
By settling the Alibaba share contracts, SoftBank “will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts,” it said in a filing.
Musk sells Tesla stock worth $6.9 billion as possibility of forced Twitter deal rises
Tesla Chief Executive Officer Elon Musk sold $6.9 billion worth of shares in the electric vehicle maker, saying the funds could be used to finance a potential Twitter deal if he loses a legal battle with the social media platform, Reuters reported.
“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” he said in a tweet late on Tuesday.
Musk in early July tore up his April 25 agreement to buy Twitter for $44 billion. Twitter has sued Musk to force him to complete the transaction, dismissing his claim that he was misled about the number of spam accounts on the social media platform as buyer’s remorse in the wake of a plunge in technology stocks. The two sides head to trial on October 17.
Meta raises $10 billion in first-ever bond offering
Facebook-parent Meta Platforms has raised $10 billion in its first-ever bond offering, as it looks to fund share buybacks and investments to revamp its business, Reuters reported.
The offering would help Meta, the only one among big technology companies without debt on its books, to build a more traditional balance sheet and fund some expensive initiatives, such as its metaverse virtual reality.
Other tech giants such as Apple and Intel also issued bonds recently, raising $5.5 billion and $6 billion, respectively.
In late July, Meta posted a gloomy forecast and recorded its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital ads sales.
Google Fiber plans 5-state growth spurt
Google Fiber plans to bring its high-speed internet service to multiple cities in Arizona, Colorado, Idaho, Nebraska and Nevada over the next several years in its first big expansion since it spun out as an independent Alphabet unit in 2015.
In his first media interview since becoming chief executive of Google Fiber in February 2018, Dinni Jain told Reuters that his team was finally prepared to “add a little bit more build velocity” after over four years of sharpening operations.
The anticipated expansion to 22 metro areas across the United States from 17 today includes previously announced projects to launch in Mesa, Arizona and Colorado Springs, Colorado. The choices were based the company’s findings of where speeds lag.
Some other Alphabet subsidiaries have raised outside funding to independently validate their value, been shut down or subsumed by other entities. Fiber could face similar choices as the expansion materializes over the next three to five years.
Coinbase posts loss as crypto market turmoil hits trading volumes
Coinbase Global has reported a larger-than-expected quarterly loss as investors worried by this year’s rout in risky assets shied away from trading in cryptocurrencies.
As per a Reuters report, trading volumes at the cryptocurrency exchange more than halved to $217 billion in the second quarter, with retail participation sinking 68% and institutional trading falling 46%.
Coinbase said it expects trading volumes to fall further in the current quarter, underscoring the turmoil brought to the sector by the collapse of certain crypto ventures and a broader selloff in financial markets.
First Published: IST
